Transcript Folie 1 - lehrerfortbildung

Large-scale projects to enhance development
1. Dams
positive effects: - meets demand for electricity for industries and housholds
- no CO2 emissions
- more irrigation
more food production
- prevention of flooding
- water reservoir for cities
- more jobs in rural areas
negative effects: - people are forced to leave their land and homes
- loss of farmland
- flooding of historic sites
- loss of natural habitats and species
- restricted migration of fish
-change of microclimate
2. Exploitation of resources
(Stiglitz: "The resource curse")
 natural resources (oil, diamonds, gold and other metals)
problems: - MNCs pollute the land and don't pay for the damage
- destruction of other jobs, e.g. dangerous run-offs destroy fishing waters
- most of the profit goes to MNCs
 agricultural products
e.g. – tropical wood
– roses from Africa
– palm oil
– Victoria perch
Immanent problem
with all big projects:
corruption
problems: – indigenous people lose their livelihood
(forced displacement/loss of land/biodiversity)
poverty and hunger
– less arable land for food production
imports?
– dependence on foreign investors and capital
– dependence on only one crop
– dangers of monocultures:  decreasing yields
 heavy use of pesticides
 contamination of ground water
– loss of rain forests: negative impact on world climate
– erosion of soils
possible advantages:
- growth of GDP  problem: uneven distribution of new wealth (disparities remain)
- higher tax revenues: can be used for improved education and health care facilities etc.
- more jobs in the manufacturing sector and on plantations/fishing sites etc.
How can the "resource curse" be fought?
- state-owned companies (possibly as joint ventures) can keep the wealth in the country
 successful cases:
- Malaysia (oil)
- Chile (copper), with stabilization fund
- Russia Putin era
- Norway (oil), with stabilization fund
- Botswana (diamonds), with stabilization fund
- stabilization funds: help to stabilize the economy in case of price slumps
(volatility of prices of natural resources)
- setting up of independent institutions to fight corruption
- exploiting resources must result in good investments for the future
otherwise: once the resources are gone, the country will be poorer (not sustainable)
instrument: accounting framework with depreciation of assets (resources)
 Green Net National Product (Green NNP)
destructive IMF accounting: "countries get good marks if they reduce their deficits
by cutting down forests etc. at a fraction of the full value"
 also: IMF only accounts debts without regarding investments
- "Extractive Industries Transparency Initiative":
 no tax deduction for payments to foreign governments
without disclosure of what was paid and how much the resource was extracted
- reduction of arms sales
- certification:  diamonds: no uncertified "conflict diamonds" (certificate of origin from the
government)
 tropical wood
- limiting of financial assistance to countries that sell their resources below value
(why should taxpayers here pay for such bad management?)
- setting norms: some international body (e.g. World Bank) could check/survey contracts
of MNCs with DCs to make sure DCs get better value for their resources
- MNCs must guarantee for any environmental damage they cause
- effective enforcement of all these measures