The kiss of democracy in Cairo

An inspiring photo by Lefteris Pitarakis of AP: an Egyptian anti-government activist kisses a riot police officer following clashes in Cairo, Egypt, Friday, Jan. 28, 2011. Tens of thousands of anti-government protesters poured into the streets of Egypt Friday, stoning and confronting police who fired back with rubber bullets and tear gas in the most violent and chaotic scenes yet in the challenge to President Hosni Mubarak’s 30-year rule. [Via photoblog on msnbc.com.]

Advertisement

Pakistan floods, six months later

A young girl in Azimabad waits at a flour distribution centre. After the floods, she returned with other residents of her village to discover that entire walls of houses had been washed away. Photo: Al Jazeera/Islamic Relief

AlertNet has reported that six months after the rains and disastrous floods in Pakistan, hundreds of thousands remain in camps and thousands are living in tents beside their destroyed homes. Sub-zero winter temperatures have increased the incidence of chest infections including influenza and pneumonia, with over 200,000 cases reported in the second week of January alone. In the south, swathes of land – both homesteads and agricultural – remain under contaminated water and there are concerns that already worrying pre-flood malnutrition rates have risen.

The crisis in Pakistan is far from over and could get worse, warned Oxfam, the international aid agency and AlertNet partner Oxfam. In a report, ‘Six months into the floods’ the agency warned that millions of people were still in dire need and that the situation could deteriorate further. The report [get pdf here] says that although the aid effort has reached millions, it has struggled to match the immense scale of human need. Oxfam says that although Pakistan’s floods are the biggest emergency of recent times with more than 18 million people affected, the funding for the response has been woefully slow. The UN appeal for $2bn to rebuild Pakistan remains only 56 percent funded.

A girl collects contaminated water from a well in Sabjuzat, Punjab. Agricultural land around Sabjuzat was damaged by the floodwater. Crops like cotton were affected by rising salt levels in the soil. Photo: Al Jazeera/Islamic Relief

Neva Khan, head of Oxfam in Pakistan, said: “Six months on millions of people are still facing flood water, shivering in temporary shelters and struggling to find food. Oxfam is currently helping nearly 1.9 million people – one of our biggest programmes worldwide – but this is dwarfed by the number of people who are in need. The aid community has done a tremendous amount – but given the immense scale of this disaster we have only scratched the surface of human need.” Oxfam is urging the government of Pakistan to extend the emergency period until peoples’ needs are met. The Pakistan government is due to stop emergency relief operations in most areas from 31st January 2011, but Oxfam warned that this could put at risk large numbers of people who still need assistance.

In a related report, AlertNet has emphasised a continuing concern of the International Committee of the Red Cross – the persistent lack of security which affects people. Those displaced by the fighting in Khyber Pakhtunkhwa (formerly the North-West Frontier Province) and the Federally Administered Tribal Areas, including those who have commenced the process of returning to their homes in Orakzai Agency and South Waziristan, are still in need of assistance.

A young boy named Abbas visits the river that brought destruction to his home in Muslimabad, Nowshera. Photo: Al Jazeera/Islamic Relief

In addition to bringing aid to flood victims, the ICRC has provided more than two million one-month food rations over the past 10 months for people displaced by fighting and has also vigorously engaged in many other humanitarian activities. “We have been doing more than merely providing food aid,” said Pascal Cuttat, the head of the ICRC delegation in Islamabad. “The ICRC surgical hospital for weapon-wounded patients in Peshawar has been operating at close to full capacity for several months. In 2010 it admitted more than 1,000 patients and performed more than 3,800 surgical procedures.” Patients with serious weapon-related injuries are frequently referred to the hospital, which is staffed by highly experienced Pakistani and international surgeons.

Nearly six months after monsoon rains caused severe flooding across much of the country, people are trying to rebuild their shattered lives.

As the floods receded in October, a Quran remained open in a Punjab mosque that had been inundated by water. Photo: Al Jazeera/Islamic Relief

United Nations Office for the Coordination of Humanitarian Affairs (OCHA), Pakistan flood situation map, 2011 January 25

In parts of the province of Sindh, progress is painfully slow. Tens of thousands of northern Sindh residents live in a squalid, watery wasteland where stagnant floodwaters still covering fields are a serious health concern and make subsistence cropping impossible. ICRC staff from Jacobabad, working together with the Pakistan Red Crescent, have given one-month food rations to nearly 280,000 people in the province, where the ICRC will continue to provide relief for the foreseeable future.

The Oxfam report, ‘Six months into the floods’, commented: “The huge floods that began in July 2010 have been unprecedented. The people of Pakistan have shown resilience, strength and generosity of spirit against remarkable challenges. Now more than ever, the needs of the people must be put at the heart of the recovery.

“Building on the current humanitarian response, a nationally-led, pro-poor reconstruction and development plan must lead the way. By resetting priorities to tackle underlying inequities that keep so many people poor and vulnerable, the disaster can be turned into a transformative moment for Pakistan. It is time to get down to business: steering the trajectory of Pakistan towards sustainable, comprehensive pro-poor development and growth.”

In Cairo, a roar for reform

Cartoon in Al-Ahram by Fathi Abul Ezz.

Al Jazeera stands out as the news group with the most comprehensive coverage of the unfolding situation in Egypt. It has given readers a frontline taste of the atmosphere on the street in Cairo through the reportage of Ahmed Moor, a Palestinian-American freelance journalist based in the city, and who was born in the Gaza Strip, Palestine.

Moor’s ‘A day with Egypt’s protesters’ can be read here. This is a sample:

“I milled about for a half-hour trying to surreptitiously snap pictures of the scene when I heard the first dim shouts to my right. I shot across the street to get a look and saw a large group of riot guards forming a two-man thick cordon around a group of about 30 demonstrators.

“They were tightening their human noose when some of the protesters pushed back and broke through. Fifty of us joined in and within minutes 300 people were marching down the street away from the square.

“A chant went up: Hurriya! Hurriya! Hurriya! – Freedom! Freedom! Freedom!

“The riot police approached from the rear and formed a barrier several men deep. Ahead of us, a group of sour-looking Mukhabarat men tried to block the group of several hundred protesters in – but we pushed and overwhelmed them.

“Someone holding a cellphone to my left yelled in a heated voice that there were more protesters by the museum. The men at the head of the protest, the ones leading the chants, began to run breathlessly around the corner and we followed, also breathless. I panted as I ran, disbelieving what was happening. Rounding the corner, I came face to face with a crowd of more than 1,000 demonstrators and my heart swelled and my head spun.

“Within 20 minutes there were several thousand of us on the streets, and by the end of the hour several more thousand. The police decided to try to take control at that point and personnel carrier armed with a water cannon tore through the crowd. We split in two and demonstrators began to attack the vehicle. Hundreds of men chased after the truck but rejoined the main protest minutes later.”

Egypt’s veteran and somewhat stodgy Al-Ahram reported that since Wednesday (January 26) morning “police trucks and state security forces could be seen in several areas throughout Egypt, after Tuesday’s unprecedented demonstrations calling for radical political and economic reforms. Spots expecting demonstrations have been guarded by state security after the ministry of interior declared that no demonstrations of any kind will be tolerated”.

“Despite official warnings,” Al-Ahram said, “several demonstrations calls or rumours of some have been spreading on social media sites. Although the government has cracked down on activists’ Internet tools, blocking Twitter, Facebook and a number of Egyptian news websites, online activists have been able to post and discuss possible meeting points as the “Day of Anger” looked set to continue for several more days.”

Al Jazeera has also reported that prime minister Ahmed Nazif made what may have been the government’s first concession to protesters. In a statement to a state news agency, he pledged that the country’s leadership was committed to allowing freedom of expression “by legitimate means.” But his statement came as the interior ministry said that 500 protesters had been arrested on Tuesday and Wednesday in an effort to clamp down on the public unrest. The ministry had said earlier on Wednesday that new demonstrations would not be allowed. Thousands of armoured police had been deployed at key locations around the capital in anticipation of renewed demonstrations on Wednesday, which some have called the most significant in Egypt since massive riots over the price of bread in the 1970s.

The new protests over living conditions and an autocratic government have broken out in Cairo a day after large and deadly demonstrations, calling for the ouster of president Hosni Mubarak, swept across the country. More than 500 protesters were arrested by security forces as the government vowed to crackdown on them. On Wednesday evening, thousands of demonstrators were spread throughout downtown Cairo after being dispersed by security forces. Many had gathered on Gelaa Street, near central Tahrir Square – the site of a violent early morning confrontation between security forces and protesters who had been planning to sleep the night in defiance of the government.

Space for civil society is being contracted in India: UN Human Rights expert

Rights activist Binayak Sen. A Division Bench of the Chhattisgrah High Court has begun hearing Dr Sen's appeal against the life sentence awarded to him in a sedition case. The Hindu has reported that a delegation of European Union observers was on Monday allowed by the Chhattisgrah High Court to witness proceedings on rights activist Binayak Sen's appeal against his life term in a sedition case, which his lawyer and Bharatiya Janata Party MP Ram Jethmalani termed as 'political persecution'. When Dr Sen's appeal came up for hearing, a division bench comprising justices T P Sharma and R L Jhanwar considered the reference on the EU proposal made to it by the State government and decided to allow the eight-member team to attend the proceedings. The request of the EU to be present in the court had earlier been sent by the Ministry of External Affairs to the Chhattisgarh government, which had in turn, referred the matter to the High Court. Photo: The Hindu

The UN Special Rapporteur on the situation of human rights defenders, Margaret Sekaggya, expressed her concern for a contraction of the space for civil society in India, despite the country’s “comprehensive and progressive legal framework as a guarantor of human rights and fundamental freedoms as well as the existence of the National Human Rights Commission as well as a number of state and statutory commissions mandated to promote and protect human rights.”

“I am particularly concerned at the plight of human rights defenders working for the rights of marginalized people, i.e. Dalits, Adavasis (tribals), religious minorities and sexual minorities, who face particular risks and ostracism because of their activities,” Sekaggya said at the end of her first fact-finding mission to India.

(The Hindu has reported on the Sekaggya mission and on the Binayak Sen case here.)

Sekaggya underscored the testimonies she received about human rights defenders and their families, who have been killed, tortured, ill-treated, disappeared, threatened, arbitrarily arrested and detained, falsely charged and under surveillance because of their legitimate work in upholding human rights and fundamental freedoms.

The UN Special Rapporteur on the situation of human rights defenders, Margaret Sekaggya. Photo: The Hindu

In her view, the existing national and state human rights commissions should do much more to ensure a safe and conducive environment for human rights defenders throughout the country. To that end, she urged the Government to review the functioning of the National Human Rights Commission with a view to strengthening it.

The independent expert also noted “the arbitrary application of security laws at the national and state levels, most notably the Public Safety Act and the Armed Forces Special Powers Act, the Jammu and Kashmir Public Safety Act and the Unlawful Activities Prevention Act, as these laws adversely affect the work of human rights defenders”. She urged the Government to repeal the Armed Forces Special Powers Act as well as the Public Safety Act and review the application of other security laws which negatively impact on the situation of human rights defenders.

(The full statement of the UN Special Rapporteur on the situation of human rights defenders is here and is from the UN Office of the High Commissioner for Human Rights website.)

“I am deeply concerned about the branding and stigmatization of human rights defenders, labelled as ‘naxalites (Maoists)’, ‘terrorists’, ‘militants’, ‘insurgents’, or ‘anti-nationalists’,” Sekaggya said. Defenders, including journalists, who report on violations by State and non-State actors in areas affected by insurgency are being targeted by both sides.

“I urge the authorities to clearly instruct security forces to respect the work of human rights defenders, conduct prompt and impartial investigations on violations committed against human rights defenders and prosecute perpetrators”. The human rights expert further recommended that the Government “enact a law on the protection of human rights defenders in full and meaningful consultation with civil society.”

Sekaggya commended the Government for opening its doors to her mandate and for enabling her to visit five states, which assisted her in gaining a clear understanding of the local specificities in which human rights defenders work.

Gauging China’s influence on the world-IMF

Salesperson in a textile shop in Beijing, China. Photo: IMF/Finance & Development

In an article in the International Monetary Fund magazine ‘F&D’ (Finance & Development), Vivek Arora and Athanasios Vamvakidis discuss the ramifications of China’s opening-up policy. They said that the effects are well documented but even so, “the facts are astonishing”. From relatively poor beginnings three decades ago, the authors have said, China’s economy is now second in size only to that of the United States of America.

“Real gross domestic product (GDP) has grown by about 10% annually, implying a doubling every seven to eight years. The resulting 16-fold increase in a major economy’s national income during a single generation is unprecedented.”

China’s opening up has meant increasing linkages with the rest of the world, as reflected in its rising share in world trade, global markets for selected goods, and capital flows. China’s stronger linkages with the global economy have also led to a growing use of its currency, the yuan, abroad, as well as closer correlation of market sentiment in China and the rest of Asia and, more recently, the world. China’s share in world trade has increased nearly tenfold over the past three decades, to about 9 percent, while its share in world GDP has risen to 13% from less than 3%.

“The increase in China’s share of world trade is particularly striking in the markets for certain products. China now accounts for nearly one-tenth of global demand for commodities and more than one-tenth of world exports of medium- and high-technology manufactured goods. China’s rising share in world trade over the past three decades is underpinned by a rise in its share in the external trade of every major region (chart). China’s share is, perhaps unsurprisingly, largest in the trade of other emerging Asian economies (13%), and this share has seen a striking increase over time. But its share of African trade is almost as large, and its share in trade with the Middle East, the Western Hemisphere, and Europe has increased several-fold in recent decades.”

To quantify the effects of China’s growth on the rest of the world, Arora and Vamvakidis conducted an empirical analysis using data from the past few decades (the details are to be found in the paper this article is based upon). Shifting to the longer term, they estimated the impact on the rest of the world of long-term changes in Chinese growth, smoothing over the short-term fluctuations associated with the typical business cycle and focusing on longer-term fluctuations. Their results, based on data for the past two decades, suggest that a 1 percentage point change in China’s growth sustained over five years is associated with a 0.4 percentage point change in growth in the rest of the world (coincidentally the same amount as for the short and medium term).

Unctad’s Global Commodities Forum is here

The United Nations Conference on Trade and Development (UNCTAD), will hold the second Global Commodities Forum in Geneva on 2011 January 31-February 01.

The rationale for the first Unctad Global Commodities Forum 2010 was described last year as centred on developing countries and their dependence on on commodities for their economic well-being. “As demand for commodities in the long term is going to increase, thus posing major challenges for their sustainable and efficient production, there is a very real need to consider how to make the commodities markets more stable and policies better designed, so that the benefits would be more equitably distributed between commodity producers and consumers.” Unctad’s GCF 2010 said then that it was important that an appropriate economic return could be delivered to commodities producers, many of whom are in developing countries.

Policy actions to consider were said to include, inter alia, the development of policies to ensure that countries producing commodities do not face the so-called ‘resource curse’ and, of equal importance, measures that could be taken to mitigate or reduce the adverse effects of price and commodities market volatility, “which cause so much uncertainty and hardship to many of the most vulnerable people in developing countries”.

Moreover, said the Unctad GCF 2010 rationale statement, “there is a clear need to ensure that commodities markets are more effective in serving the interests of the real economy, and that financial market speculators do not, through excessive influx or unwinding of liquidity in commodity futures markets, disturb the performance of commodity producers, consumers and intermediaries”. (We will have to pay close attention to the proceedings of GCF 2011, and not only the statements or resolutions, to judge how far they have progressed from last year’s positions.)

Unctad said then that markets should serve the interests of these stakeholders whose livelihoods are involved in commodities production, shipment, consumption, rather than being subject to manipulation directed at the single-minded purpose of providing a short-term financial return. “Solutions must be found to ensure that the prevailing terms of trade between countries are balanced and that regulatory interventions are optimized, with a view to protect the most vulnerable stakeholders without providing an impediment to trade.”

Now, Unctad has described GCF2011 as focusing on the instability of mineral and agricultural markets and their interconnectedness, the effectiveness of commodity policies and the sustainability of the production and use of commodities, long-term energy and food security, and the role of innovation and early warning systems. “The second meeting of the GCF, organized by UNCTAD with the support of its partners, including the Governments of China, France and Switzerland, as well as Global Fund for Commodities, is a major multi-stakeholder meeting to discuss and find better solutions to perennial problems of the commodity economy,” stated Unctad. “The GCF will also address such key issues as the performance of commodity supply chains and the state of business practices and innovation.”

From the GCF 2011 programme material – themes of the second meeting of this Forum will include the following plenary and parallel sessions:

Plenary A: The State of energy markets: lower volatility and a new price zone for hydrocarbons (A1), The state of agricultural markets: the drivers of increased volatility (A2) The state of selected metals market: fundamentals, non-fundamental factors and terms of trade (A3) Commodity markets’ volatility and interconnectedness (A4), Overcoming market volatility through better regulation, data and transparency (A5); Commodity policy challenges for oil and gas-exporting countries (A6) Commodity policy challenges for minerals and metal exporting countries (A7) Trade and other policy options for modernizing agriculture in developing countries (A8).

Parallels B: Long-term sustainable supply & demand and technological innovation: hydrocarbons and other energy (B1), Long-term sustainable supply & demand in the energy sector: developing early warning systems (B2), New technologies and commodities: agriculture (B3) Long-term sustainable supply and demand and technological innovation and early warning systems for food security (B4), New technologies and commodities: energy (B5); Forecasting trends and strengthening early warning systems for producers, innovators and other supply chain participants (B6).

Parallels C: Current trends and next frontiers for commodity finance (C1), The emerging regulatory environment and trade finance: new challenges and opportunities for banks and other financiers (C2), Support institutions for commodity finance (C3), Shipping and international trade in commodities (C4) Commodity futures markets: do they obscure underlying market realities, or provide long-term signals and management tools? (C5) Risk management in commodity markets: paper and physical markets and the realities of commodity exporters (C6).

WTO, trade, markets, agribiz research-the meeting of agriculture ministers in Berlin

Thou Market, southern Sudan. Across the Sahel, women generate income from balanites seeds, which are about half oil and a third protein. After processing at home, they can be turned into many tasty items, including roasted snacks and a spread not unlike peanut butter. They also supply a vegetable oil that is a prized ingredient in foods as well as in local cosmetics. (From 'Lost Crops of Africa: Volume III: Fruits', The National Academies Press. Photo: Caroline Gullick)

Forty-eight ministers of agriculture from countries large and small, poor and rich, met in Berlin to talk about food and about how people in their countries put two meals on the table. They ought to have got to grips with the prices question, they ought to have called for justice and equity, they ought to have represented what the poorest and most vulnerable in their countries want.

They didn’t. Instead, they have released one of the sorriest, weakest, most unfocused and pointless statements I have seen in recent years on the subject.

This piece of diplomatic puffery is called ‘Final Communiqué of the 3rd Berlin Agriculture Ministers’ Summit 2011 in Berlin on January 22nd 2011’.

It explains: “At the ‘3rd Berlin Agriculture Ministers’ Summit’, agriculture ministers from 48 countries came together to exchange experiences and ideas on how trade at local, regional and global level could contribute towards food security. They are convinced that sustainable and regional production and an integrated, rules-based trading system, are prerequisites for making food security and the right to food a practical reality’.

And there you have it. Trade is the most important ingredient, as far as these ministers can see, for food security. The integration of trade is what is needed, and a trading system (conveniently, such as the one they refer to several times in the following text) is the ultimate answer. The paragraphs of their mercantile output have been added to the agriculture page. When you read it:

Note the heavy-handed propaganda techniques employed in this communiqué. “Economic growth” appears early, in the second para, and is found to be “inextricably linked” with the provision of sufficient and nutritious food.
Note that private investment appears in the third para and the ministers emphasise that it must increase. Of course R&D is all done privately now, and national agricultural research systems must be arm-twisted to turn over their best and brightest to the agribiz giants.
Note that “climate change”, some muddy notion of “responsibility” and an equally muddy notion of “sustainable” comes early in the communiqué. This is done so that the environmentalists cannot fault the ministers for ignoring ground realities, but is not explained by any operational directives arising out of this meeting.
Note that the term “integrated” is used early. I’ll explain the significance below.
Note that “markets” makes its first appearance in the text in para eight, and here “integration” is immediately linked to this term in the following para. This is sought to be justified by invoking ideas of food security and “global economic development”.
Note that “value creation” comes next as a keyword, and is attached to the idea of “producers” (who I am sure are not meant to be smallholder farmers) and the familiar tautology of “fair competition”.
Note that “smallholder” does in fact turn up in the following para (ten) but only as a recipient of “due regard” and only provided they “integrate” themselves with markets.
Note that “trade” is the glue which, in this view of the agricultural world, binds everything together.
Note that “markets” and a “trading system” are important enough to be in a puff para together.
Note that developing countries must be “supported” in the primary quest to remove “technical” and “institutional” “obstacles” to – what else? – trade.
Note that the Doha Development Round (which collapsed unceremoniously) is resurrected in para 14 as the new champion of this global agricultural vision.
Note that in para 15 the Doha Development Round is further held up as being a signal contributor to “global food security” and that this is vital to “the poorest countries”, a precondition of which the World Trade Organization chief negotiators are strongly urged to recognise.
Note that “markets”, “price” and “free and transparent” all appear in the same para (16).
Note that “price volatility” follows immediately thereafter, as being evident throughout the world (now just how did all that happen?) and therefore “risk-protection” measures are required (such as markets, of course).
Note that the statement ends with a hurried hodge-podge of a conclusion and a fireworks of “market” and “price”.

If you have the stomach for such vacuous declaiming, the original statement is here.

How will Tunisia now find itself?

After enduring more than two decades of Ben Ali's rule, Tunisians became fed up with the stagnant social order and the president's tight grip on power. Photo: Al-Jazeera/AFP

The always reflective and eminently readable Al-Ahram Weekly has several commentaries on events in Tunisia. Its writers have discussed the tricky socio-political questions in Tunisia which seem to have remained unasked, they have touched upon the 20th century history of coups and uprisings (and also what the Americans are used to calling ‘regime change’), and on the difficulties of bringing democracy back to a country that has been ruled by a despot for 23 years.

“It is not so much the events leading up to this climax that are revealing as the subsequent developments, which various media personalities were perfectly prepared to ignore, caught up as they were in the “thrill” of change, revolutionary fervour and the application of the verses of Abul-Qassem Al-Shabbi,” wrote Abdel-Moneim Said. “In one television interview after the other one could not help but be struck by how familiar it all sounded. We saw it all before, in Iraq where there was an opposition that knew exactly what it opposed, which was the rule of Saddam Hussein and the Baath Party, but that had no clear idea as to what should come next. Also, as was the case in Iraq, the Tunisians did not possess the means to come to terms over an undeniable fact, which was that the order whose façade had just crumbled has its roots in the nature of the Tunisian state.”

“Simply put, the revolutionaries in Tunisia did not differ greatly from their Iraqi counterparts over, firstly, what to do with the “old order”, and secondly, the need to replace it with a “new order” that would be just and democratic, even though they were far from being in one mind as to what these terms meant. What surfaced was a profound spirit of violence and vengefulness.”

“If the revolution broke out because Mohamed Bouazizi couldn’t find a job, how will the new regime create employment for men like him and the 60 others whose deaths ignited and fed the process of change that has swept Tunisia? Of course, the uprising was not only about unemployment. It was also about corruption, poverty and destitution. There were also more obscure factors, though all pointing to rights that were abused and needs that were unfulfilled by a failed regime. However, will the new revolutionaries be able to alleviate these grievances whose very real existence was confirmed by a whole month’s worth of audio-visual testimony? Curiously, no one in Tunisia seems to be asking that question, let alone venturing an answer to it. There is great euphoria because a brutal man has fled, but there is not a single guarantee that an even more brutal one will not replace him.”

Para-military was called out but the demonstrators would not budge. Instead, they demanded that their president step down from power. Photo: Al-Jazeera/AFP

“For observers chronicling revolutions, the implications of the Tunisian uprising will not be lost on other people who continue to suffer the same agonies in Arab police states, or on their tormenting regimes,” wrote Ayman El-Amir. “The first message from Tunisia was that successful revolutions are now more likely to be undertaken by the masses than by the military. When the military intervened they did so to back the people, not the regime. They better understand their role of safeguarding the country against external threats and, domestically, of preserving the established constitutional order, not to protect the dictator who abused it.”

“The Tunisian people’s revolution would have taken a different course if General Rachid Ammar, chief of staff of the Tunisian Armed Forces, had obeyed the orders of Bin Ali, the commander-in-chief, to crush the uprising. Bin Ali’s paramilitary police had already shot and killed between 60 and 90 demonstrators in different cities but failed to quell the rebellion.”

Within 29 days, Tunisians were able to force their president out of the country from a position he held on to for nearly 23 years. Photo: Al-Jazeera/AFP

“Some political analysts wonder if the Tunisian people’s revolution could be replicated in Arab countries with similar grievances. After all, the 23 July Free Officers’ Movement in Egypt is said to have been the precursor of similar army coups in Iraq, Yemen and Libya, all embellished by the term “revolution”. Everlasting dictatorships chew on the same worries, although their surrounding cronies assure them their countries are far from it because their people enjoy freedom, stability, rising standards of living and are averse to revolutionary violence – the same slogans the Bin Ali regime fed on.”

“It’s not going to be easy to turn Tunisia from a police state into a democracy,” wrote Salah Eissa. “As we have seen in recent years, countries that get rid of their dictators don’t become democracies by default. Two things make me argue that the democratisation of Tunisia would be difficult. One is that the people that took to the streets acted voluntarily and without leadership. Their protests took place in the absence of guidance and participation on the part of organised parties and political movements. As soon as Bin Ali left the country, they went home. The protesters were common people, not versed in the art of politics. They are the average citizens of a country that hasn’t seen democracy for decades. Without the help of the country’s political parties and movements, public discontent may not turn into sustainable democracy.”

“The other thing is that the political parties and movements of Tunisia seem to be out of practice. After years of authoritarianism, Tunisian parties are disconnected from the public and estranged from each other. They need to find something in common, some goals for the entire nation to agree upon, and to pursue them. This, too, is not going to be easy.”

Food production and grain trade, Jan 2011

The International Grains Council (IGC) has released its Grain Market Report for 2011 January. The IGC said that world grains supplies are forecast to tighten in 2010-11 but the outlook is little changed from two months ago. World production is expected to decline by 3.8%, to 1,726m. tons: the wheat estimate is lifted on better than expected southern hemisphere crops but the maize total is cut.

A serious drought has developed in eastern China over the past few months. Total precipitation has been scarce since October 2010, with some locations on the North China Plain receiving less than 10 percent of normal precipitation through December 2011. A lack of snow cover has deprived the dormant winter wheat crop of valuable moisture and protection from frigid temperatures and winds. Seasonably dry and cold weather is expected to continue for the next two weeks. USDA's WASDE said the impact of the drought has been mitigated by the widespread availability of water for irrigation, but crop stress could become serious if the drought continues after the winter wheat emerges from dormancy in February/March 2011.

By far the biggest fall in grains output was in drought-affected Russia, with big reductions too in the EU, the US, Kazakhstan and Ukraine. A further rise in world grains consumption is forecast in 2010-11, to 1,787m. tons. However, at 1.4%, the rise is flatter than in recent years. The expansion in industrial use has slowed markedly, especially in the US ethanol sector, although recent use there has been higher than anticipated. Total feed use will only rise moderately this year.

The forecast fall of 62m. tons in global carryover stocks mirrors the reduction in the major grain exporters, with big declines in Canada, the EU, Russia and the US. World trade in grains is expected to rise by 2m. tons, to 242m., only marginally more than before, with bigger imports by the EU and Russia expected to outweigh reductions in Near East and Far East Asia. Because of the fall of 29m. tons in Black Sea shipments, exports by Argentina, Australia, the EU and the US are expected to climb steeply.

IGC said that international grain and oilseed prices advanced strongly in December and again in January, with some values at their highest for two years. However, export prices remained below the peaks recorded early in 2008. While there has been little fundamental change in the overall supply and demand balance in the past two months, markets were driven higher by concerns about supplies of quality milling wheat and the tightening outlook for maize and soyabeans.

The influence of other commodities, including crude oil, also featured regularly on the major exchanges. For wheat, reports that the extremely wet conditions in eastern Australia would render at least one-third of the country’s large wheat crop unfit for flour milling were especially bullish. More recently, better prospects for US exports and a winter wheat acreage report showing a smaller than expected rise in Hard Red Winter wheat plantings further triggered buying.

USDA Crop Explorer, south India rice coverage, 2011 forecast

IGC said that China was among several recent customers for Australian feed grade wheat. For maize, there were worries about a reduced official US carryover forecast as well as about whether plantings for the next crop would be sufficient to prevent stocks falling further in 2011-12. The impact of dryness, attributed to the La Niña event, on Argentina’s upcoming harvest added to the market’s nervousness. Similarly, despite quite ample current stocks, US soyabean prices moved higher, initially because of continued heavy demand from China but more recently due to a lower official US supply estimate and strength in crude oil. Rice export prices also increased, but while Thai values in late-December climbed to a ten-month peak, they subsequently fell back as the main crop harvest advanced. After mostly declining since June, ocean freight rates for grains firmed slightly in recent months, despite a further slide in the Capesize sector.

The US Department of Agriculture’s World Agricultural Supply and Demand Estimates (WASDE) for 2011 January has said that global 2010-11 wheat supplies are raised slightly this month as increased beginning stocks are mostly offset by lower foreign production. Beginning stocks for Argentina are up 0.9 million tons with upward revisions to 2008-09 and 2009-10 production estimates. Argentina production is also raised 0.5 million tons for 2010-11 as harvest results indicate higher-than-expected yields. Production in Brazil is raised 0.4 million tons as favorably dry harvest weather boosted yields for the 2010-11 crop. EU-27 production is raised 0.3 million tons based on the latest official estimates for Poland. More than offsetting these increases are reductions for Kazakhstan and Australia. Kazakhstan production is lowered 1.3 million tons based on the latest government reports. Australia production is lowered 0.5 million tons as heavy late-December rains and flooding further increased crop losses in Queensland.

According to WASDE 2011 January, world wheat imports and exports for 2010-11 are both raised slightly. South Korea imports are raised 0.4 million tons, mostly offsetting an expected reduction in corn imports. Imports are also raised 0.2 million tons each for Thailand and Vietnam based on the pace of shipments to date and the increased availability of feed quality wheat in Australia. Imports are lowered 0.5 million tons for EU-27 based on the slow pace of import licenses to date. Major shifts among exporters are projected as importers focus on U.S. supplies to meet their milling needs. Australia exports are reduced 1.5 million tons as quality problems limit export opportunities. Kazakhstan exports are reduced 1.0 million tons with lower supplies. While Argentina marketing-year (December-November) exports are raised 0.5 million tons, exports during the remainder of the July-June world trade year are expected to be lower based on the slow pace of government export licensing.

Global 2010-11 wheat consumption is projected 1.2 million tons lower, mostly reflecting reduced wheat feeding in EU-27, the United States, and Kazakhstan. Food use is also lowered for EU-27 and Pakistan. Partly offsetting are increases in feed use in South Korea, Thailand, and Vietnam, and higher expected residual loss in Australia with the rain-damaged crop. Global ending stocks are raised 1.3 million tons with increases for EU-27, Argentina, and Australia, more than offsetting the U.S. reduction.

WASDE 2011 January said that global 2010-11 rice production, consumption, trade and ending stocks are lowered slightly from a month ago. The decrease in global rice production is due primarily to a smaller crop in Egypt, which is down 0.5 million tons (-14%) to 3.1 million. Egypt’s area harvested in 2010-11 is reduced 19 percent from a month ago and is down 30 percent from the previous year. A reduction in the Egyptian government’s support of producer prices has discouraged farmers from planting rice. Additionally, the Egyptian government has imposed water restrictions thus reducing irrigation water availability. Furthermore, government restrictions have reduced exports. Global imports are increased slightly due primarily to increases for Indonesia and Turkey, but partially offset by a reduction for Egypt. Global exports are increased slightly due mostly to an increase for Thailand, partially offset by a decrease for Egypt. World ending stocks are projected at 94.4 million tons, down 0.4 million from last month and last year.

India’s Reserve Bank puts the ‘micro’ back into microfinance

Protesters participate in Khammam, Andhra Pradesh, against microfinance. The MFIs have not been successful in staying the operation of the ordinance but the A.P. High Court has allowed them to continue with their business after registering themselves. Photo: The Hindu/G.N. Rao

From 2010 September, the microfinance sector in India and South Asia has been questioning the basis of ‘growth’ in the sector and suggesting (at times strenuously) that the fundamentals be re-examined. India-based social business advisory firms such as Intellecap had analysed the build-up to the microfinance crisis in Andhra Pradesh, India. Microfinance companies have had to balance their commercial interests with the social and moral expectations of a wide variety of stakeholders.

Muted before the crisis, the allegations became loud and threatening during – of coercive practices, lack of transparency, and usurious interest rates which had led to suicides by borrowers in Andhra Pradesh. The sector had advised against knee-jerk ordinances in response to the crisis as being more damaging to borrowers than punitive to irresponsible or criminal lenders. The solutions they sought are stronger ethical practices, reporting and compliance rules and transparency.

The new Reserve Bank of India measures – now heavily reported and commented on – are the first step towards those solutions. India’s Reserve Bank has released a report to study the issues and concerns in the microfinance sector, which has gone through a major crisis in 2010. The Report of the RBI Sub-Committee of its Central Board of Directors to study issues and concerns in the micro finance institutions (MFI) Sector is summarised here [pdf].

Victims of MFIs display their daily payment cards in Visakhapatnam, Andhra Pradesh. The Reserve Bank of India has appointed a sub-committee to look at governance issues. Photo: The Hindu/C.V. Subrahmanyam

The RBI said: “Credit Support to Micro Finance Institutions (MFIs). The Reserve Bank of India had held discussions with select banks on December 22, 2010 to get an assessment regarding the ground level situation in the microfinance sector in Andhra Pradesh and other States and the need for any interim measures. The banks informed that collections by MFIs in Andhra Pradesh had deteriorated considerably and there were some incipient signs of contagion spreading to other States. Subsequently, IBA based on the feedback received by them from banks had come up with a proposal that there is a need for extending certain relaxations in the restructuring guidelines of RBI for the MFI sector.” The Sub-Committee statement is here [pdf] and RBI’s credit statement is here [pdf].

The financial press has reported the RBI’s intervention extensively.

“S. Bhanu, 48, who runs a tiny textile business in Godavarikhani village in the Karimnagar district of Andhra Pradesh, doesn’t know much about the crisis that has gripped India’s `20,000 crore micro-lending industry,” reported The Mint. “But Bhanu can tell you about how much more she owes the local moneylender in the past two months.”

“India’s central bank Wednesday allowed a special relaxation to banks in restructuring loans to microlenders, a move that will give lenders temporary flexibility in providing credit support to the cash-strapped institutions,” reported the Wall Street Journal.

The Reserve Bank of India (RBI) has asked banks to go easy on microfinance institutions (MFIs) by relaxing certain norms regarding loan restructuring. Banks can now restructure loans extended to MFIs even if they are not fully secured, Business Standard reported.

The Economic Times reported that under the new rules, restructured loans to the microfinance sector, can be classified by banks as standard assets, even though such loans are typically unsecured. The temporary relaxation of asset classification rules for bank loans to the microfinance sector is a move that it said will allow them to continue lending to the industry.

The Hindu reported that to revive the crisis- ridden micro finance sector, a Reserve Bank of India Committee on Wednesday suggested that micro finance institutions (MFIs) be allowed to charge a maximum interest of 24 per cent on small loans which cannot exceed Rs.25,000.

Members of All India Democratic Womens' Association protest against MFIs in front of the Reserve Bank of India office in Hyderabad, Andhra Pradesh. Photo: The Hindu/G.Krishnaswamy

A year ago, in his study ‘Microfinance India: State of the Sector Report 2009′ (published by Sage Publications India, 2009), N Srinivasan of Access Development Services, wrote: “Micro finance sector seems to grow and with no full stop in sight. The sector performed creditably in a year that experienced a widespread liquidity crunch. The Self Help Group (SHG)–bank linkage programme made remarkable progress during the year; provisional data2 indicates that credit to more than 1.716 million SHGs would have been made available during the year. The outstanding SHG loan accounts were 4.14 million representing an estimated membership of 54 million.”

“The MFIs too have recorded an impressive increase of about 8.5 million clients during the year registering a growth of 60 per cent over the previous year. The data collected from 230 MFIs by Sa-Dhan reveals that despite liquidity constraints faced by some MFIs, expansion in client outreach and loan portfolio was vigorous. The MFIs reported a total client base of 22.6 million as at the end of March 2009. The overall coverage of the sector as narrowly defined (outstanding accounts of members of SHGs and clients of MFIs) is estimated to have reached 76.6 million against 59 million last year.”

There’s more on the RBI statements and longer extracts from the reportage here.