South America: The dark side of commodities

Posted by Paula Sánchez de la Blanca / 17th March 2014 / Categories: Analysis / Tags: China, Commodities, Emerging Economies, South America / -

For many, 2013 has been the year of “The Great Deceleration“. Emerging economies worldwide are lowering their expectations. The reasons behind this slow down might be deeper than simply the international economic downturn. The role of raw materials in emerging economies, in combination with short-sighted policy making, made the current situation all but inevitable.

Let’s start with the most obvious example: China. The Middle Empire will be lucky enough if it is currently growing at its official target of 7.5%, which in itself is a far cry from the 10.4% of 2010, and still further away from the 14.2% of 2007. The same is happening to the other BRICS, India (around 5%), Brazil and Russia (around 2.5%) will grow hardly half of what they’ve become used to. Of course, these growth rates might sound miraculous compared to the slothful richer economies, but they represent the slowest speed of the emerging economies in a decade except for the period surrounding the international collapse in 2009. Gone are the days of record-breaking speed in growth rates, and emerging economies’ capacity to play catch-up with their richer counterparts will be limited.

How can this deceleration be explained? If the emerging economies were able to rapidly recover from the financial world crisis of 2009, how is one to understand this relapse? The answer lies precisely in their model of growth. To better understand the height and decline of their boom, it is necessary to consider the role of commodities in some of these economies.

At least, that is definitely the case of South America. According to the Economic Commission for Latin America (ECLAC), South-American economies enjoyed a period of continued rise of commodities prices from the beginning of the century, thanks to demand from other industrializing economies, such as China. These high prices boosted the growth of the region and gave even more incentives to specialize in the export of raw materials. International specialization in commodities can be highly damaging to local economies, both because of South America’s subsequent immersion in globalization, as well as the socio-economic development of these societies.

Starting with the dangers of the dependency on commodity exports, an obvious problem is their volatile price. As extraordinary as they rise, they can collapse just as easily, taking with them the income of the economy that exports them. This makes them a source of instability, reducing their resilience to international economic turbulence. As the demand of raw materials declined, the bubble of their prices bursts This has been the most obvious reason for the deceleration of most commodity-specialized economies.

However, there is more to it than collapsing prices. The focus on commodities endorses a type of structure of national and regional economies that is neither beneficial to their international competitiveness, nor to their internal development.

Firstly, it promotes a weak business chain, with big commodities-exporting companies not incorporating other transformative industries in the process. They do not enhance regional value chains, the key for a beneficial participation in globalization.

Secondly, such specialisation promotes a concentration of large enterprise, crowding-out small-scale companies. At the same time, raw materials business is a low labour-intensive sector compared to other sectors, such as manufacturing. In contrast to other sectors, they are a very limited source of employment. With labour being a key factor in any coherent strategy of economic development, this is a fundamental problem that goes beyond mere export numbers.
Thirdly, it tends to inflate the local currency’s exchange rate, thereby making exports other than the dominant commodities more expensive, and imports cheaper. This “Dutch disease”, as it is known, enhance the concentration on this kind of exports and so the country become finally completely dependent on their primary product exports.

In other words, a commodity-focused exporting economy is not necessarily favourable to socio-economic development. It does not promote significant employment, nor does it guarantee a solid competitive position within the international economy. As a result, it has creates significant weakness, and one that South-American and other emerging countries are suffering from right now.

The verdict would be even more damning if based on other than economic criteria: from a social perspective, commodity focused approaches hurt a wide range of issues such as education, gender equality, and quality of life. For instance, as it requires a qualified labour force, this model will not promote higher education of the workforce; neither high salaries nor good work conditions are encouraged by extractive industries.

It may seem odd, therefore, that political discourse -both from the left and the right- often focus, positively, on the sovereign use of commodities. A topical example is of course Venezuela, i.e. the country with the highest dependence on commodities income, followed by Chile. There are three broad explanations for such destructive political behaviour: short-term economic imperative, political usefulness, and systemic pressures.

Economically, commodities are easily accessible, typically not requiring a highly educated workforce or significant state investments, as financing nowadays can be easily found at an international level. They quickly produce short-term gains, unlike more sophisticated sources for economic growth.

This also explains their political attraction: the boosting of the primary sector often falls neatly into political cycles, offering quick results at the cost of long-term problems. Moreover, the idea of resource independence has historically been an important issue in most societies, and still explains a lot of economically dubious choices governments all over the world make. Natural resources are an easy source of income, especially attractive for “developing” countries. Indeed, they might not require difficult structural adjustments, or large constant investment. Hence, they are often seen as a low cost rapid development.

“Systemic pressures” combines a series of issues related to the allocation of political and economic resources work in practice. These systemic dynamics constitute another dimension of the problem that should not be ignored in the analysis of the actors involved. This includes issues such as corruption –commodities are relatively easily accessed through bribing officials– as well as international network pressures to play the globalisation game.

These factors have allowed the resource curse to be repeated over and over again, especially because of exacerbating conditions around the globe. In the specific case of South America, the role of the emerging China has been such a condition.

In the context of “shifting wealth” to Asia, an important part of the industrial production has moved to this region, especially to China. From there, increased demand for raw material emerged and as a result has been one of the main reasons behind the rising prices of commodities in South America. Exports from Latin America to China tripled from 2000 to 2007, simultaneously to China’s direct investment multiplication in the region. Quite representative of this optimistic trade attitude was the forum “Going to Latin America” that was held last month in Guangdong.

Furthermore, business with China has been enhanced by the desire of emancipation from the Western influence. Whether this desire materializes through direct anti-United States discourse (such as the case of Bolivia), or whether this emancipation happens through a pragmatic attitude of diversification of allies, there is a powerful pull away from dependence on Europe and the United States. The result has been the growing presence of China and its commodities demands in South America.

For both left and right oriented governments, China is seen as a pragmatic actor, mainly relevant because of its economic weight. Besides some isolated complaints of interference, South Americans do not tend to see it as a threat. South American governments seem not worried about its global ambitions, and from a political perspective China has indeed treaded lightly thus far.

The main concern in Latin American capitals has been the deceleration of the Chinese economy during this past year, and its direct effects on local economies. However, the real problems lie deeper. China’s role in South American economies commodity dependence has a dark, destructive edge, and should be recognised as such. Treating development as a short term strategy will only have damaging long term consequences.

Notes on the Ukrainian Battlefield

Posted by Alberto Perez Vadillo / 10th March 2014 / Categories: Analysis / Tags: EU, NATO, Obama, OSCE, Putin, Russia, Ukraine / -

The Russian military is in control of Ukraine’s autonomous region of Crimea. Three months ago, at the Vilnius summit, now ousted president Viktor Yanukovich decided not to sign an Association Agreement (AA) with the European Union and postponed further negotiations. We know that these two events are linked, but often fail to understand the way the situation developed into a full-fledged crisis. There are a number of lessons to be learnt as to how and why the situation unfolded the way it did. The European approach to Ukraine has been flawed from the start, and Brussels did not sufficiently realise how it would impact Ukraine in socio-political terms. As the country spiralled into chaos, European elites assumed a mediating role they could not properly handle. Ultimately, the West has entered into a great, uncertain and dangerous geopolitical confrontation with Russia that nobody wanted and that endangers future cooperation. It all stems from a fundamental lack of awareness about the main features of today’s international system. The West is living in the past and, unfortunately, this is being understood the hard way.

The spark

By itself, the AA had the potential to upset regional relations, but not to the stark geopolitical heights we are witnessing at the moment. The problem became apparent when the Ukrainian political system processed all the elements surrounding the AA, including the practical step of accepting or rejecting it, in a way that amplified existing latent tensions.
Before the AA made it to the headlines, the issue was framed by Moscow in economic terms. With global multilateral channels experiencing exhaustion, the world is veering towards both the regionalization of trade and attempts to establish biregional trade blocks. The former comes in the shape of the Customs Union binding together Russia, Belarus and Kazakhstan, itself part of a bigger integration project called the Eurasian Economic Community (EurAsEc), while the latter is the Transatlantic Trade and Investment Partnership (TTIP), a free-trade agreement being negotiated by the United States and the EU.

The TTIP, if negotiations prosper, would be a game changer in terms of trade, and European economy’s improvement in no small part depends on it. In this scheme of things, Ukraine’s role in EU’s future is secondary. Thus, the recent importance of Ukraine is only due to the European Eastern Partnership (EEP), Brussels attempt to revitalize its approach to the East. Launched in 2009, the aim of this policy is to support political change along the lines of democracy, the rule of law and market economy. However, the EEP is flawed at its core, because it is not adjusted to current realities. Its implementation relies upon a set of economic incentives, much like the EU did in the nineties, when its economic might was on the rise and its integration model run more or less smoothly. Nowadays, this is simply not the case, and the pitfalls of this policy have had an impact on what was offered to Kiev under the AA.

On the other hand, Ukraine is truly important to Moscow. Economic considerations weigh heavily in how Russia relates to its neighbour, with whom it is often said to maintain a ‘fraternal rivalry’.

Global Trade Alert, a think tank monitoring global trade, ranked the Russian economy as the most protectionist of 2013. This protectionism is partly in tune with the failure of multilateral attempts of boosting trade worldwide, but also is instrumental to the privileges of sectors of Russian oligarchy. However, now that players are shifting towards further integration along regional and biregional lines, Russia risks being marginalized. Focusing on the customs union within EurAsEc is Russia’s answer to these changes.

Naturally, Moscow is not only pursuing an economic agenda by creating and leading an Eurasian trade block. There are wider geopolitical issues at play, not the least of which is the Kremlin’s quest to maintain its political influence in its periphery and its own country under tight control. Economic regionalism competes with global dynamics, and thus prevents the usual subtle influences that might generate internal pressure towards regime change.

However, this regional development strategy is also a way for Russia to improve its industrial capabilities and prevent overdependence on exports of primary resources, mostly oil and gas. Without Ukraine, the EurAsEc would be much more Asian than European, and that would run against Russia’s desire to remain close to Europe, with whom it wishes to relate, but from a more robust economic position. The Russian economy would struggle if Ukrainian trade flows- now equally distributed between East and West- start leaning more heavily towards the EU. Ukraine is simply too important for Russia, and the correct functioning of a customs union, by definition, would demand that Ukraine did not enter a free-trade agreement with the EU.

Because of its potential effect on Russia’s development, the AA was bound to generate disputes between Brussels and Moscow. However, these by themselves would have been limited. The current crisis is a failure of the Ukrainian political system and the result of highly questionable behaviour by foreign actors, mainly European political elites and the Kremlin.

Ukraine is a politically, economically and culturally divided country. What seems best for its western regions (or, perhaps, what is positively perceived by its population), is often rejected by the more industrialized and Russia-dependent Ukrainian east, and vice versa. This was precisely one of the problems of the AA. Its free-trade agreement did not account for the complexity of economic conditions within the country because it had not been tailored to Ukrainian needs. Certainly, in a “one-size-fits-all” fashion, the free-trade provisions under the AA with Ukraine were very similar to those also planned for Moldova and Georgia. In other words, the EEP approach to the region is excessively general. A critical question is how the free flow of European goods can pose a threat to local production, but, especially, much more consideration should have been given to Ukraine’s own territorial economic imbalances and their relation with historical differences and sources of political animosity. Also, Ukraine is facing bankruptcy and in need of urgent financial aid, something the EU at the time of the Vilnius summit was not offering and that Putin was keen on giving.

Last but not least, Yanukovich is obviously a factor to be considered. Seen by many as a corrupt politician and the ultimate responsible for the government’s mismanagement of the country, Yanukovich had his own concerns about the AA. While it should not be disregarded that the agreement might have meant a dubious benefit for the Ukrainian economy and that this might have been a factor in Yanukovich’s decision, it is certain that he did not fancy its political conditionality: allowing imprisoned political rival Yulia Timoshenko to receive medical treatment abroad and undertaking political and judicial reforms. Thus, facing an agreement that was not so shiny on economic grounds and that threatened his political position, Yanukovich chose the less costly partner, Putin’s Russia. Looking beyond Ukraine, this seems to be the sign of times for the EU: Europe has lost much of its attractiveness and economic might, so it should come as no surprise that it loses ground to competitors that, like Russia, are less ‘virtuous’ but happier to use their wealth for geopolitical objectives.

The rest of the story is well known and takes us to the beginning of the crisis: the anti-government protests at Kiev’s Maidan square, the so-called ‘Euromaidan’.

The crisis: Phase I

What started as a dispute over policy quickly turned into demands for Yanukovich’s resignation, which created a dangerous political conflict that dragged in regional players with interests at stake. While Russia was working more in the shadows, European political elites were visible, rather outspoken and certainly supportive of the street protests, with EU’s High Representative Catherine Ashton and other European officials visiting Euromaidan. Brussels ruled out the possibility of three-party talks to try to reformulate the AA to account for Yanukovich’s and Putin’s concerns; the Kremlin, on its part, had repeatedly stated that the customs union was not compatible with a free-trade agreement between Ukraine and the EU, which is true. Because of this, the situation has been increasingly portrayed as a ‘civilizational choice’ for Ukraine and a zero-sum game for the rest.

Up until the tragic face-off on 18th and 20th February, there were timid and failed attempts to bridge gaps and stabilize the situation. For example, on 28th January prime minister Nikolay Azarov resigned, and later government posts were offered to opposition leaders, who rejected them. It is also worth noting that on 17th February, a day before the bloody events of that week, an amnesty for all those imprisoned during protests was granted and it was being discussed some meaningful political changes, like a return to 2004 constitution, which would have meant a reduction of presidential powers. At the beginning, this seemed to defuse tensions – several public buildings were abandoned. However, on 18th February clashes erupted in front of the Ukrainian parliament after opposition leaders accused rivals of not being committed to reforms, and eventually the police moved in for a total crackdown on Maidan.

The political climate in Ukraine grew so bitter over time that the spiral of tension and violence stemmed fundamentally from internal political polarization. Nevertheless, external players did not promote stability. Any efforts of international mediation cannot prosper if the mediator is also a stakeholder. This is particularly true if the mediator- the EU in this case- has been very vocal in expressing its alignments.

An analogy from the Cold War might illustrate that conflict resolution is at odds with the intervention of external stakeholders. In the civil conflict that devastated Central America during the eighties, there was no room for dialogue until the US retired its support for Nicaragua’s ‘contras’, which ultimately led to the disentanglement of the conflict from East-West competitive dynamics. It was precisely then when an external actor unrelated to the conflict could mediate to ease the peace. That mediator was the European Community. Bearing this in mind, the question is who can mediate in a European crisis where the EU is part of the problem. The answer is simply that there is not an actor with a profile high enough to take on this task.

In the absence of such a heavy-weight state, the only solution would be a multilateral organization, which brings to mind the Organization for Cooperation and Security in Europe (OSCE). Unfortunately the problem is that this organization, almost since its inception, has been rendered irrelevant.

OSCE, established in 1995 as the institutionalization of the spirit of 1975 Helsinki’s Conference of Security and Cooperation in Europe, was former French president François Mitterrand and Soviet Union’s Mikhail Gorbachev bet to create a genuinely European, neutral and multilateral space for security cooperation in the “greater Europe” area, which includes Russia. However, although OSCE might have suitably filled the gap of security governance in Europe and, judging from current events, it hinted at a considerable sense of forward thinking, the times were that OSCE could not gain enough traction. In a true ‘end-of-history’ fashion, in much of Western Europe and in the US there was the feeling that the international power struggles of the past had gone for good, so Western organizations were all Europe needed to be a peaceful region. Accordingly, NATO added to its military nature a political profile in 1994 with its ‘Partnership for Peace’ programme (PfP). PfP’s objective was to manage the profound transformations in the East and the potential risk of regional stability through a network of NATO-centered political and military contacts with the ex socialist states. Thus, NATO displaced other embryonic regional mechanisms for security cooperation, dealing a blow to OSCE’s aspirations, which since then has had its considerable structure mainly devoted to electoral monitoring, overlapping with the Council of Europe.

Europe does not have a genuinely multilateral institution for security cooperation, and this lack of governance mechanisms has implications. A hypothetically robust OSCE might have had a positive impact on the Ukrainian crisis, provided, of course, it would have been allowed to intervene by local parts. While ex prime minister Azarov said his government would not reject OSCE’s assistance in normalizing the situation, opposition’s Arseniy Yatseniuk, now prime minister, stated the following on 1st February at the Munich Security Conference:

“We believe that at this point we should try to solve the problem in Ukraine via our direct contacts – contacts between Ukraine and our western partners. There are, of course, options such as the OSCE mission and the UN, but those are options that should be used if the situation is completely hopeless. [There should be] bilateral [attempts to settle the crisis], namely with the involvement of our European and American partners.”

Last call

On 21st February a deal between the government and opposition was signed after days of bloodshed. The deal was brokered by the foreign affairs ministers of Germany, France and Poland –the EU, as such, lost protagonism as the violence escalated. The text called for the withdrawal by protesters from public spaces, the formation of an unity government by all the signatories, the restoration of 2004 constitution, political reforms to reduce presidential powers, an investigation into acts of violence and, importantly, presidential elections to be conducted not later than December 2014 (they were scheduled for February 2015).

The agreement, whose terms were favorable to the opposition, signaled the moment for compromise. There was hope for progressive normalization through institutionalized politics and, ultimately, elections. However, the agreement did not last a day. For reasons still unknown, on 22nd February Yanukovich disappeared from Kiev, leaving the governmental district completely unguarded. Days later, at a press conference in Russia, he would say that he did it because he feared for his safety under the threats of “hooligans”. After protesters took control of the presidential administration buildings without resistance, the parliament set presidential elections even earlier, on 25th of May, and voted to oust Yanukovich. With the votes of the opposition and of a number of members or parliament from Yanukovich’s party (probably seeking their political survival) the president was removed from power. With this, the opposition leaders satisfied the demands of protesters, still camped at Euromaidan, who had booed them the day before after they announced an agreement with the president had been reached.

Yanukovich’s removal was a breaking point. Regardless of the quality of democracy in Ukraine, Yanukovich was a democratically elected president with whom an agreement for early elections had been reached. After he vanished from Kiev, the opposition could have acted with more restraint simply giving more time to the situation to become clear, but they chose not to. Western governments, on their part, quickly declared their support for the interim government formed by opposition figures, sanctioning their uncompromising behaviour.

Without time for proper normalization through elections, the inevitable result of this was political disintegration. If democratic politics are devoid of a minimum level of compromise, the situations boils down to a pure political struggle, which, in Ukraine, is built along geographical and ethnic lines. Because democracy was not given time to create a source of legitimacy for any political outcome, the warring parties have come to a point where they simply do not recognize each other. Parts of the Ukrainian population with closer ties with Russia felt threatened. This anxiety was reinforced by the interim government’s decision to ban Russian as an official language, a manoeuver that is as symbolic as harmful and that spurred concerns by the same European officials that, now taken aback by the hectic pace of developments, had brokered the agreement.

This turn of events, of course, infuriated Putin.

The crisis: Phase II

Crimean secessionism is steadily advancing its objectives and, thanks to Russia’s military occupation preventing Kiev from reining in, they might just achieve it. There are many reasons why the Kremlin is so determined to bring about this outcome, and include securing the strategic post of Sevastopol by creating a protectorate over Crimea, gaining additional leverage over Kiev’s new government, sending a message to the West and playing the nationalist card at home. Russian intervention will no doubt affect Kiev’s new government, adding a new factor of political instability to an already troubled situation. Ukraine is facing bankruptcy. Although Western support came along promises of financial assistance, emerging figures are not even close to the amount of money Kiev says it needs. It should also be pointed out that the EU’s decision to financially support Ukraine is a reversal of the position held at the Vilnius summit and before, so its likely motivation is the consolidation of European political gains stemming from Euromaidan.

Kiev does not recognize Crimea’s self-declared referendum to reincorporate to the Russian Federation, scheduled for 16th March, deeming it “illegal” according to Ukrainian constitution. The West, of course, also parallels this criticism. However, before legality it comes, inevitably, the issue of legitimacy or, more precisely, whether the conflicting parties regard each other as legitimate. As we have seen, Kiev’s and Crimean’s authorities simply do not recognize each other. Similarly, the Russian intervention in Crimea is clearly against international law, but this is not a legal problem, but one of politics or, in other words, of a fight of wills. It is in that realm where analysis is urgently needed.

The discussion about law might be more fruitful from a political perspective. As it can be easily seen, in a situation like this international law is nothing more than a discursive weapon of little practical use. Law does not work as a deterrent against big players because its enforcement is highly problematic. For obvious reasons we cannot expect the Security Council to do anything, and those who might take measures against Russia are having second thoughts about it –humiliating themselves given their previous stance. It seems the use of force is out of discussion, economic measures to punish Russia are extremely inconvenient for the likes of Germany, France or the United Kingdom, and the freeze of personal financial assets and travel bans are, at best, cosmetic and face-saving actions; the boycott to Russian membership of the G8 is also a symbolic measure. The EU, that went to Ukraine in a quite bombastic fashion is now showing fractures; in the US, both the White House and much of Congress are reinforcing the recently assumed view that the European periphery is an European business – Obama calling for OSCE involvement speaks volumes about this.

When great powers are not willing, international law is a limited catalyst of cooperation and conflict resolution. However, law is not the only tool to facilitate that. As it has been explained here, there is a need for better governance mechanisms. And again, the OSCE pops into the picture, but if it could not do anything before when the situation was less complex, what can be expected from it now?

Whether the West likes it or not, the concept of ‘sphere of influence’ has returned not only to political discourse, but also to analysis. It was about time. Post-Cold War triumphalism blinded the West to the fact that the nineties and the beginning of the past decade were a historic abnormality: never before there was a sole global superpower running unchallenged, and today we are witnessing a return to the normalcy of the past. Accordingly, Europeans and others have to develop institutions adjusted to this reality. The need for it is acute: NATO’s decision to suspend military-political cooperation with Russia, which was part of the PfP’s philisophy, shows that the cooperation avenues of the immediate post-Cold War tend to break under pressure, turning into fields to stage retaliatory measures –which, in this case, complicates NATO’s withdrawal from Afghanistan, that now would not be conducted through Russia, but hostile Pakistani soil.

By asking Kiev to show restraint and by signaling that it has no appetite for intervention, perhaps the West is starting to show some evolved awareness about its own role. One can only hope the interim government grasps the message and refrain from acting militarily against Crimea, since without NATO support that would be suicidal. Ukrainian new leadership should remember what happened to Saakashvili’s Georgia in 2008. Too bad this sensible behaviour on the part of the West comes now, and not much earlier, when it was time to invest in meaningful and sustainable mechanisms for regional cooperation to accommodate a resurgent Russia.

You might also want to read:

BBC’s Ukrainian Crisis Timeline
Carl Bildt, “Ukraine Has Postponed and Opportunity to Prosper”, Financial Times
Oleg Popadiuk, “Ukraine In Between the Unions: the Customs Union and the EU”, Russian International Affairs Council
Alexey Fenenko, “Russia’s Near Abroad, still Too Far Away”, Russia Direct
Pavel Koshkin, “Ukraine: Battlefield between Russia and the West?”, Russia Direct

International Development: Please Drop the Charity Act

Posted by Balder Hageraats / 5th February 2014 / Categories: Analysis, Polis / Tags: Charity, Development Cooperation, NGO, Polis / -

International development cooperation is typically regarded as politically optional policy. It is the type of public expenditure that makes politicians and voters feel good about themselves during the fat years, but one that can be cut the moment that high national unemployment or budget deficits require sacrificial lambs. It is no surprise therefore, that in countries hardest hit by the economic downturn, such as Spain and Italy, the international cooperation sector is desperate. And, just like any other organism in this world, the sector is showing its true priorities: not the survival of local populations- the supposed beneficiaries- but the sector’s own survival. The survival of the structures, employees and offices in Madrid or Rome, and of job opportunities of expatriates all around the world.

Such a quest for survival is a natural process for any organism that is threatened, and human networks, organisations and economic sectors all across the world mimic these Darwinian instincts. The problem is that the development sector pretends to be something else, something morally better. It pretends to be a source of righteous charitable acts, one in which individuals selflessly dedicate their time to the betterment of humanity. Unlike other economic sectors, or so the pretence goes, development cooperation exists for poor African children, for remote Indian villages or human rights in general. It does not exist for economic profit, but for the greater good. It justifies donor drives, asking ordinary people to contribute to making the world a better place.

This is highly disingenuous. The development sector is just like any other, with its own strengths and weaknesses. It does not deserve any special ethical consideration, neither internally nor from the outside world. If it is to survive, the sector needs to drop the whole charity act and face up to reality: international development cooperation is a service sector, similar to other service sectors in a global, capitalist system, and currently with clients and systemic pressures often completely separate from local “beneficiary” populations.

The demand for international cooperation

There is a true, natural need for international development cooperation in today’s world. Technological and financial resources are bountiful in some places, yet scarce in others. There is a genuine desire among societies worldwide to share parts of their economic wealth, and to balance the immoral income disparities that are formed through amoral systems. Moreover, from a state perspective development cooperation can, and should, be a win-win situation. After all, it is called “cooperation” instead of the supposedly antiquated “aid”. Governments can influence global and local politics through economic support and push forward their agendas through peaceful means.

It is a testament to the state of denial the sector is in that even acknowledging such a simple fact often causes protests and accusations of neo-colonialism or worse. But whenever the terms of reference of a development project mentions “democracy”, “gender equality” or “income equality”, the donor is pushing a particular, non-universal agenda that uses economic support as leverage. Even “universal” human rights are non-universal in practice and take many different shapes and mutations depending on the local circumstances and the donor’s agenda. Without knowing details, the concept is similar to pushing through a for-profit economic agenda; both promote individual, subjective sets of interests with complex origins and consequences.

Moral evaluation can only happen in practice, when specifics are identifiable and outcomes can be assessed. For example, a faith-based organization may have a genuine focus on redistributing income to the poor without ulterior motives. A priest or a nun living among local populations for decades is likely to be an example of that. However, as anyone who has ever visited large African cities knows, many faith-based organisations are simply present in developing countries as part of a continuous battle to convert souls and swell income. Similarly, post 9/11, the US government invested significant resources in development projects throughout sub-Saharan Africa. Much of that money had a positive impact on local populations, but the overall objective was the destructive War on Terror, not development in itself.

The development sector itself is just as guilty of ulterior motives, especially when it comes to its own success, growth and survival. Many donation drives exist primarily to keep NGOs or foundations afloat, and not because of specific concerns about local populations. These two things are not necessarily incompatible, but the difference does need to be recognised. In all such cases, ethics can only be evaluated at a practical, specific level. Conceptually, development cooperation is driven by amoral clients.

If the two types of clients of the development service sector are those with either a genuine interest in income redistribution or in using development as a tool to advance other agendas, what about local populations? This is one of the areas in which the sector is most confused: beneficiaries of development cooperation are those working in the sector, and their clients, i.e. donors. Direct beneficiaries are not local populations, despite claims to the contrary. The fact that local populations can, and often do, benefit does not take away from the basic client-supplier relationship that exists between donors and the sector.

The client-supplier relationship is key. The client in our capitalist world will always be those providing the finances. Parallel to that there is an honorary type of client, the “local beneficiaries”, who mysteriously appear in documents all across the development industry but never seem to change provider or ask for a refund. They hardly ever complain, do not demand higher quality products, and do not ask for input-outcome effectiveness. When a development project fails they do not sue anyone, and they hardly ever start Facebook campaigns denouncing their contractors. Why not? Because they are neither clients nor do they necessarily benefit. The direct beneficiaries are donors (clients) and the development sector itself, and local populations are used to keep that relationship flowing.

Naturally, when marketing itself, the sector never talks about the sources of funding. It always points to positive impact on those that they call beneficiaries. And indeed: objectives in terms of reference do not tend to state “promoting a self-congratulatory Western agenda of keeping the system afloat”. But that is what it does come down to.

From a local population perspective, the best kinds of donors are those that create mechanisms for local populations to steer the dynamics and be in control. But most of the time, the sector and the system focus on satisfying the donor, not the local population. Project evaluation reports are normally written for donors, not for locals. This is all too common: What matters to the system is that the donor believes that the money has been spent according to plan. The supposed beneficiaries should simply be happy being used in order to achieve that plan.

Development cooperation is not ethically above other layers in society. It does, however, have a greater ethical responsibility because it works within an environment of power asymmetry. Typically local populations have neither the legal nor the financial means to defend their interests; they depend on the professionalism of the development actors and the goodwill of donors when it comes to development projects. By acting as if local populations are actually the sector’s clients, development cooperation only adds insult to injury. It creates a perverse charade in which locals have to be grateful even when they are often not the true beneficiaries. To make matters worse, all too often donors simply do not take their own client role seriously, instead focusing on whether administrative conditions are met: Logical Framework established? Check. Money spent? Check. Evaluator satisfied? Check. Feeling good about ourselves? Check.

This leaves most influence and responsibility in the hands of service providers- i.e. the development sector- who are in deep denial about their own purpose. Anyone working in the sector knows that in the end, satisfying administrative conditions is the easiest way to guarantee future funding. And thus the sector is swamped with bureaucratic checks and balances to secure its own survival. The actual outcomes of the work is a secondary issue. Such perverse tendencies are reinforced by the idea that the sector has a charitable basis, something which oddly means that firing people, incentivising people or even simply assessing people’s outputs is frowned upon.

Too often development sector employees claim that they “could be earning double their current wage in the private sector” but they stay because of a drive to make the world a better place. Needless to say, this is not necessarily conducive to a healthy working relationship between employer and employee. It creates a strange, difficult relationship with respect to purpose and consequently with finances. Money is an issue that is not easily discussed, and people are not allowed to think of their work as financially or motivationally driven. Development sector employees are uncomfortable with the fact that they themselves benefit from their position, and employers are loathe to take action when employee performance is subpar; after all, they are all there for charitable purposes. In other words, cooperation actors all too often feel that the justification of their work comes from their very nature, their existence, rather than from their outcomes. Funding for ineffective fundraising campaigns, central structures, networks and administrative dynamics often go unquestioned. Or rather are periodically questioned but, after long processes of introspection and self-evaluation, remain unchanged.

Of course it does not help that most clients and donors are government agencies, themselves not particularly effective in outcome focussed thinking. Nor does it help that a lot of money is to be made by those who know how to play the system. In the shadows of those working pro bono or at minimal remuneration, thousands of consultants, transnational organization employees and governmental diplomats earn more than they could ever receive in other sectors. As an example, the European Union typically pays between 600 and 800 Euros a day for technical assistance and project evaluations by external experts. These are not necessarily elite specialists, but directly benefit from a culture in which money often goes unquestioned, and which is obsessed with systemic and administrative pressures rather than with input-outcome effectiveness.

The irony is that if the development sector were to embrace its true identity of being service providers rather than a charity, it would benefit everyone involved. The sector would become more outcome focussed, with clearer purpose and drive, by simply acknowledging the self-evident basics: they provide a service to clients, and those clients are sources of funding. Currently they include the old lady in the street who gave her last euro to charity, as well as governments with budgets of millions to promote geopolitical interests, but typically not local populations.

Shifting the balance towards local clients

Only if the donor is willing to cede control to local beneficiaries- effectively making them the clients- would the sector’s client-supplier relationship change. Unfortunately, and for obvious reasons, development organisations are not particularly keen on that. Nonetheless, responsible donors need to go down this path. After general objectives and amounts of funding are established- preferably because of local demand- the donor needs to withdraw from the process and let the execution, evaluation and any follow-ups occur through true beneficiary-supplier dynamics. Ideally, this would lead to donors not being in touch with the development sector itself, and instead support local populations in enforcing accountability of development services rendered. An additional advantage would be that donors need to show their colours more clearly: if they have ulterior motives such as geopolitical or industrial agendas, these will need to be negotiated with local populations and cannot be hidden under a generic term such as “international cooperation”. Sadly, that is also the reason why so many donors will never change their current ways.

Interestingly, this change in systemic relationships would allow the sector’s organisations and employees to be much clearer about their own responsibilities. They would be less burdened by administrative hassle and could much more easily monitor their methods and outcomes. In essence, they would compete with other similar organisations to gain favours of beneficiaries, and shift the burden of administration to donors and their local counterparts. By throwing real dynamics out in the open, light can shine on best and worst practices in ways impossible under the current cloak of delusion.

Similarly, governments would need to make a choice. In a demand-driven cooperation sector- rather than the current supply-driven dynamics- governments and international agencies would need to be clearer about whether they are client or donor. If they are donors, they need to negotiate with local populations. If they are clients- for example interested in strengthening ties with local industries or promoting Western values- they will work with development organisations or other suppliers of services who, in their name, could negotiate with local populations. Funnily enough, the idea of NGOs negotiating on behalf of governments will shock many, but it is what the development cooperation is already all about in today’s world. The problem is that no one labels it as such. Naming and institutionalising this already existing dynamic would create a natural transparency, clarifying purpose, that is so obviously lacking right now.

The sector is in deep trouble, being threatened by economic austerity, political populism and valid long-standing concerns about its purpose and effectiveness; its Janus faced identity is now uglier than ever. Scrambling for funds to stay afloat, the general public is being asked to fund survival of large chunks of the sector through donation drives, street campaigns and internet-based crowd funding, but without any significant information about input-outcome effectiveness. This is especially true in a country such as Spain, in which international cooperation was until recently funded through a well-meaning but rudderless public purse. The relatively young sector is unaccustomed to surviving without government funding and is now, after draconian budget cuts, in full-scale panic mode. The kneejerk reaction has been to scramble for funds anywhere possible. Hopefully the longer-term outcome of the current crisis will be one in which the sector evolves into mature, accountable and professional service providers with critical as well as ethical donors who cede responsibility and evaluation to local populations.

Such change would also make working in development cooperation a happier, more satisfying prospect. Potentially the sector can be an amazing employer: one in which people are in touch with global dynamics affecting practical and real social change; one in which highly skilled professionals are paid competitive wages while being inspired by the impact that they have and working together with local experts and leaders to achieve common goals. In order to get there, the sector first needs to recognise that it has a problem unrelated to lack of funds. It needs to acknowledge who it works for, and with what purpose. Only then can true cooperation towards cultural, financial and social wealth for clients, employees and local populations prosper.

The Arctic Indigenous Peoples – the politics of climate change

Posted by Rory Robertshaw / 30th January 2014 / Categories: Analysis / Tags: Arctic, Natural Resources, United Nations / -

The US, by a country mile, has been the world’s biggest contributor to greenhouse gasses, but the cast of the dice has fated the Arctic as the region most severely effected by the resulting climate change. In January the global media buzzed with well warranted concern as a polar vortex wreaked havoc across the US. Dozens of Federal warnings hailed an unprecedented deep freeze posing an economic chill and risk to life. What though of the deeper and more pervasive impact of Arctic climate change on the lifestyles and livelihoods the 400,000 indigenous inhabitants of the polar region?

The UN offers a series of defining criteria for indigenous and tribal people which build on principles of self-identification and of historical continuity with pre-colonial or pre-settler societies. Additionally the criteria include important reference to the special and intimate relationship between indigenous peoples and their environments. This co-existence explains why indigenous culture is especially vulnerable to environmental change.

Given the inhospitable climate, the Arctic is not blessed with a diverse ecosystem – infertile soils, scant rain, hectic winds and short days support only limited and uniform vegetation. In turn, the few inhabiting fauna are relatively specialised and, in general terms abundant. The narrowness of life makes for an ecosystem that is unstable and vulnerable to shocks; explaining why the pace and scale of Arctic climate change is so alarming. In the last few decades Arctic temperatures increased twice as much as global averages. Each aspect of change presents as particular threats to particular species. For example, melting sea ice on which polar bears and walruses are dependent, is driving dramatic declines in their populations. However specific threats have general impact, given high levels of Arctic interdependence, spreading troubles like tumbling dominos through the ecosystem and beyond. Shifts in the region’s climate and ecology question the prospect of sustaining indigenous culture including livelihoods.

Indigenous peoples make up around 10% of the population of the Arctic. Comprising many – historically, economically and culturally – distinct populations. In Russia there are numerous indigenous groups including the Saami, Evenk, and Chucki. Alaska is home to the Inupiat, Yup’ik and Aleut. With Inuit living in the Canadian Arctic and in Greenland. This differentiation suggests no single, monochrome impact will arise from a changing climate. No one outcome, no predictable course that can be planned for in neat documents authored from the capitals of the Arctic states. Impacts crisscross traditional livelihoods; the mainstream economy; physical infrastructure; cultural and social organisation; and health. Nothing is untouched as ice melts; waters rise and warm; snow, wind, rain and storm conditions change or intensify, temperature variations exaggerate; coast lines erode; and permafrost melts. Whether herding reindeer, hunting seal, fishing in Arctic waters, foraging for forest berries or selling skills and labour in the formal economy all bets are off.

Take a single example of ringed seal hunting. Since seals are dependent on pack ice -playing an important habitat for rearing pups – their populations are in decline and moving. Hunters need to travel further distances, for longer, in more dangerous, less predictable weather. Carrying more supplies and equipment over ice that is less secure and in a landscape that is increasingly unidentifiable by traditional landmarks. Dog-pulled sleighs have to be exchanged for snowmobiles – expensive to buy and maintain and, unlike Huskies, not equipped with a natural ability to detect thin ice. Traditional methods for drying and storing meat are now less dependable.

It is however disingenuous only to stress negative impacts, however deep and far reaching they may seem. There are plenty of positives too that can be offered; increases in some caribou herds, fish species migrating to warming Northern waters to name a couple. Also there is the question of perception, whose opinion determines whether change is good or bad? Climate change opens doors to large-scale economic multi-sectoral growth. Opportunities in oil, gas and mineral exploration and extraction, shipping, fishing, forestry, tourism and public administration. It is for Arctic people, expressing their pluralism, to weigh up prospects for jobs, income and portable skills against risks of pollution, land grab, economic exploitation, urbanisation and traditional decline.

Economic and cultural transition is not new to the Arctic, it is the increasing rate of change that makes the eyes water. Seasonal variation of the climate is part of Arctic life and has always required adaptability. Arctic peoples have needed to vary diet, place and type of settlement, hunting, gathering and herding patterns. Historically variable weather patterns however need to be anchored in the broader context of change arising from interaction with and the influence of non-indigenous populations. From at least the beginning of the 20th Century state policies have impinged on indigenous ways of life. New foods and lifestyles, diseases, technology; increasing integration with the national and global economy, and policy directives relating to land rights, settlements and education. These have led to shifts in family structure – away from multi-generational groups, declines in the use of indigenous languages, population concentration and permanent settlement based on private not communal ownership.

The word poverty was absent from the Arctic indigenous lexicon, as it had been possible, until relatively recently, for people to live sustainably from solely traditional livelihoods. For indigenous peoples now, a mixed (traditional and mainstream) economy is the norm with few to able live off the mainstream economy alone and vice versa. This illustrates the risk that people will go hungry where the rate of decline in traditional livelihoods is not perfectly matched by growth in new forms of employment. The timing and nature of the on-going transition from a traditional to mainstream economy and the willingness to accept this will determine whether humanitarian-scale disaster – population displacement as opposed to opted mobility, and forced abandonment of indigenous culture as opposed to willing cultural change – will occur.

The choice implied here is a political project and not one that Arctic people are blind too. Campaigning and advocacy by vocal indigenous elites has been met part of the way by the democratic processes of Arctic states – the seven Arctic states with indigenous peoples are all democracies, long-standing except in the case of Russia.

This political discourse has delivered some impressive gains towards increasing political empowerment of indigenous peoples. The range and depth of these gains varies as much as the local political environments vary for different indigenous groups. The Inuit majority in Greenland looks to independence from Denmark and have secured significant political autonomy propped up by financial subsidies from Copenhagen. Various models for decentralised self-government or increasing political voice within existing systems have been adopted – for example, the sitting of Saami Parliaments across the Scandinavian Arctic and the establishment of Nunavut as new Canadian territory in 1999. Russia is further behind, with indigenous civil society structures only really developing in the post-communist period to challenge population concentration policies and expropriation of traditional lands for industrial projects. At an international level, the indigenous peoples’ agenda has been strengthened through participation in the Arctic Council and through the establishment of the Inuit Circumpolar Council.

In parallel to the political project comes a struggle for recognition of human rights – in this context both individual rights and the more illusive collective rights, such as a right to dispose of natural resources. Article 14 of the International Labour Organisation’s Convention 169 considers land rights of indigenous peoples, but only 20 countries have ratified this and of the Arctic states only Denmark and Norway. Additionally, the Human Rights Committee established Article 27 of the International Covenant on Civil and Political Rights. This creates an obligation on Arctic states to protect the identity of minorities and their traditional ways of life and livelihoods. Finally, although not binding, the United Nations Declaration on the Rights of Indigenous Peoples reinforces collective, individual and political rights promoting ‘full and effective participation in all matters that concern them and their right to remain distinct and to pursue their own visions of economic and social development’

Land ownership as well as mineral, fishing and grazing rights hold a key to the future. Greater progress here would strengthen the hand of indigenous minorities providing real currency to negotiate with governments or with transnational corporations hoping to negotiate mining concerns in lieu of deals for the use of local labour, suppliers contracts, infrastructure and social development programmes. Progress here is also differentiated, Norway, living up to the ILO convention, has created a complicated system to recognise Saami rights to land and water, but this is the exception not the rule.

The writing is on the wall for climate change. Successive failures of the international community to rise above the platitudes of Kyoto and produce a binding low-carbon future is testament to this. The resilience of Arctic peoples is well documented, but can they withstand the seismic change that comes? It is tempting, from a Western perspective, to construct a narrative of victim for Arctic indigenous peoples. The reflex is to then ask what can we do, putting aside good intention, this is ultimately the wrong question. If the future for Arctic people is built on the ashes of traditional culture and livelihoods -a new sedentary, urbanised lifestyle grown on an integrated economy of civil servants, oil tycoons, construction workers or holiday reps – it is for the Arctic people to embrace it, reject it, or re-imagine it.

Climate Change? No, thanks.

Posted by Helga Amenabar Anso / 20th December 2013 / Categories: Analysis / Tags: Climate Change / -

The 19th Climate Change Conference held in Warsaw, last November, was held to start taking new measures on climate change by 2015. As has happened with previous summits, it ended with a minimal agreement to begin negotiations and outline the path towards global and binding arrangements on emissions reductions to be achieved, to be signed in two years in Paris. The conference demonstrated, once again, the unwillingness of certain government to combat climate change in any meaningful way.

By a quirk of fate, the start of the Conference coincided with the disaster caused by Typhoon Haiyan in the Philippines. The opening of the Summit was marked by messages of solidarity and support for the victims, and statements declaring climate change to be a possible cause of the disaster. In conjunction with the opening statements, there was also the event of the Philippines Delegate at the Conference, Naderev Saño, going on hunger strike until November 22nd (last day of the meeting) in an attempt to force real progress on the matter.

This time, the message of the Filipino Delegate was heard around the world; the image of him crying on stage was distributed by all media – but why did nobody pay attention a year ago, when his message was just as desperate? At the Conference held in Doha, Saño addressed the same audience asking for help to combat climate change through urgent action, especially considering the extreme situation of his own country.

The Philippines is the second most vulnerable country in the world to climate change, it faces an annual average of 22 typhoons. The delegate foccused attention on to the constant vulnerability and damage his society faces, but this core message passed almost unnoticed. The various sessions did not produce practical results, and thus repeated the experience of past conferences. Does anyone remember what decisions were adopted in Durban? And in Copenhagen? The answer is probably not, and no wonder, as very little progress has been made since 1992. Very few decisions were adopted during these summits, despite the importance of the issues at hand: issues that affect us all.

Climate conferences have been occurring since 1992, when the Earth Summit was held in Rio de Janeiro within the framework of the UN Framework Convention on Climate Change (UNFCCC). Since then, the most important landmark has been the adoption of the Kyoto Protocol in 1997. That agreement meant that the richest countries committed themselves to reduce emissions by 5% during the period 2008-2012 compared to 1990.

The Copenhagen Climate Conference of 2009, was presented to the world as one of the greatest opportunities to fight climate change. That conference turned out to be a fiasco. No new alternative arrangements were adopted, negotiations were a mess and the media presented it as such. The expectations before the meeting were so high that it was the only one that had media broadcast almost every minute. Consequently, the failure was magnified. A single agreement was reached: the commitment of major world economies, not subject to Kyoto, to set some voluntary goals to reduce greenhouse gases. Needless to say that this was a highly unsatisfactory outcome.

The last conference, held in Doha in 2012, concluded with a resolution to extend the commitment period of the Kyoto Protocol until 2020. A number of countries did not sign, typically the biggest polluters: United States, China, Russia, Japan and Canada. Likewise, this lack of commitment trumped the Warsaw Conference. For the first time, however, the frustration generated was so huge that some of the participating organizations left the city before the official closing of the Summit.

It is clear that within the current system, the adoption of measures and agreements in the field of climate change is very difficult, if not impossible. There is simply insufficient will among participants. Also, the Kyoto Protocol advocates sustainable development through the use of non-conventional energy, thus seeking to reduce global warming. These issues are systematically neglected during summits, which focus on the adoption of agreements and commitments related to emissions of greenhouse gases, while ignoring more practical issues that are equally or more important in achieving this objective. Meanwhile, between conferences and conference, time passes and the consequences of climate change are worsening. Emissions of greenhouse gases continue to rise, and those places where vulnerability is most severe and visible face increasingly difficult challenges.

Among those hardest hit are coastal populations, such as in the Philippines, who are increasingly vulnerable as sea levels continue to rise. This results in periodic flooding , making any reconstruction efforts difficult. But the sea is just one obvious example of what climate change can be and how people affected. Local communities face the problems first-hand, whereas the major global polluters simply participate in the numerous conferences.

By contrast, there some are countries, such as Peru and Ecuador, where states are taking steps to deal with the effects of climate change. In both these examples, national strategic plans have been adopted to reduce vulnerability in areas where the impact of climate change is strongest. These are exceptions to the rule.

On a positive note 190 countries met in Warsaw, but the aim of reaching an agreement to facilitate the next Conference to be held in Paris in 2015 is less impressive. Is it not more important to focus on taking practical decisions that empirically make practical improvements in the most vulnerable countries? Why are there no decisions being taken that are binding for the industrialized countries? The key issue remains the degree of commitment that all parties are willing to assume.

This was the main obstacle encountered by the various participants in the conference of Poland and for that reason, a minimal agreement was reached simply to keep the process alive. The consensus adopted replaces the word “commitments” to reduce emissions of greenhouse gases established nationwide by the non-committal “contributions”. That was the fomula that participants came up with to leave the door open to an agreement to be signed in 2015 and which will (supposedly) establish a defined limit to emissions for greenhouse gases.

That accord ended the obstacles that have hindered negotiations between rich and poor countries when it comes to sharing the problems of the limitation of emissions of greenhouse gases. The Kyoto Protocol only affects the developed countries and that is the reason why the United States refused to accept it, as it considers China and India as similarly responsible. For the same reason, the U.S. special envoy to the conference was not happy with the resolution adopted in Warsaw, as it does not accept that the more developed countries should take more responsibility for climate change and therefore, reiterated that the agreements to be signed in 2015 should be applicable to all countries, without exception.

In other situations, the US often positions itself as world leader, but interestingly enough, in this case, it refuses take up that role. It does not want to engage in the fight against climate change, because it may inevitably lead to it paying a higher price than competing nations, some of which are still developing economically.

Many steps must still be taken to fight climate change, but the clock is ticking. The climate conference in Warsaw was another failure where it demonstrated that the adoption of resolutions on this matter are almost impossible as some countries simply will not budge. For the first time ever, NGOs quit the summit and a special envoy went on strike. These circumstances should give notice to all leaders participating in such summits. Meanwhile, they continue to say: “Climate change? No, thanks”.

Lessons from the Wild West – the US’s approach to taming the Arctic

Posted by Rory Robertshaw / 13th November 2013 / Categories: Analysis / Tags: Arctic, Climate Change, United States / -

How is the US psyche holding up to the prospects of a new and wild frontier? Climate-change is melting Arctic sea-ice at an astonishing rate. With it, a new frontier is opening with the prospects of rich rewards for those who access untapped reserves of oil, gas, minerals and green-energy or those who control new fishing, tourism, construction and shipping opportunities. To date the US appears to be a reluctant player in a significant economic and geo-political game, sitting on the bench as Russia, China, Canada and even Denmark steal a march on them. In order for the US to remain relevant, they will need to learn the lessons from their own past.

‘Taming’ the West

The entrance to the Harry S. Truman Library in Missouri is adorned by a vivid mural by Thomas Hart Benton depicting Independence and the Opening of the West. It is an interesting piece in as much as it captures an edgy tension at odds with the more pervasive, rose-tinted, national narrative celebrating the struggle of pioneering families against the odds of a harsh environment and a belligerent indigenous population.

History, it is said, is written by its victors. Having vanquished the indigenous people, global powers such as France and England and its regional competitor Mexico, Americans have a tendency to embroider the historic record of their Western expansion. The bitter plight of the indigenous people and the diverse environmental impacts – ranging from the decimation of 15 million buffalo to a similar fate for ancient hardwood forests – are relegated to footnotes in a story of conquest. For settlers themselves, their heroism is advanced over their plight. Just imagine how it felt for the 30,000 Forty-Niners who managed the long trek to reach California in 1849 from the East – leaving behind them a trail of dead compatriots whose bones liberally littered the unforgiving Nevada Desert – only to find that the gold that had enticed them was not much more than dust.

In comparison, the Arctic exchanges heat for cold and dust for ice, but also holds interesting parallels begging lessons to be learned. Of its many riches, the Artic holds 20% of the world’s undiscovered oil and gas, and its Boreal forests are home to 8% of global wood reserves. The process of determining power and economic gain in the Arctic will have profound consequences for indigenous people, the environment and the course of global development and governance. In this context, the Arctic offers an uncomfortable truth for the US, unpicking the historical thread, revealing an unresolved past.

Old Cabbage or Cabotage?

Two examples seem to best illustrate the confuddled nature of US Arctic policy and languishing pioneer spirit. First is the question of ice-breakers as a barometer for wider investment in innovative Arctic technologies.

It should be remembered that success in the West was as much the outcome of the pioneering spirit as was the investment and application of new technology. Railways enabled Texan cattlemen to supply markets in the East via Chicago – a city of 30,000 people in 1850 having grown from just 12 families in 1831. Farming of the Great Plains was made possible by deep-water wells, the multi-furrow laying gang plough, specialised harrows, steam threshing machines and mechanical reapers and binders. Mining fortunes were rarely made by the early prospectors. It was big business that benefitted through investment in equipment and technologies for deep mining and efficient refining.

Ice-breakers, not tallies of nuclear warheads or naval fleets, are the means of projecting technological and political power in the Arctic. These highly advanced and hardy ships are more than ice-capable, at a cost of around $1 billion each, they are able to break through and navigate Arctic ice flows that lay waste to other vessels. The maritime annals are full of tales of timber vessels being reduced to kindling as a result of being trapped in ice, so too is the wrecking ball effect of ice on standard steel hulled ships. Their value is in their unrivalled versatility: keeping sea routes open, escorting convoys, coast guarding and military patrolling, rescuing ice-grounded vessels, acting as research platforms or as supply boats servicing polar research stations and Arctic rigs, towing weak or damaged vessels, and even iceberg ‘herding’.

The High Latitude Study presented to Congress by the US Coast Guard suggests that to fulfil its statutory missions it requires six icebreakers, but to deliver the continuous presence requirements of the Naval Operations Concept requires ten icebreakers. Currently the US has, almost, three. Of its two heavy ships, the Polar Star and the Polar Sea, both have surpassed their 30-year service lives. Polar Sea is now mothballed and Polar Ice has had its life extended to coincide with the delivery of a new ship planned for around 2023. The third US ice-breaker, Healy, is medium sized which limits it to, primarily, research.

There are three dilemmas for the US in trying to resolve this. First is timing. If the US ramped up their shipbuilding programme, given the ten year lead time, much of the ice will have disappeared by the time they are ready to break it.

Second is cost. During boom times the US chose not to invest in its 5th Ocean capabilities. At the time climate change sceptics had a stronger voice and the scientific community’s projections, when listened to, anticipated a slower rate of Arctic change. Now, in the time of austerity, getting ahead in the Arctic is all about the Benjamins, as U.S. Navy Commander Blake McBride suggests: “If you don’t have the budget or funds to invest in manpower and equipment then you don’t have anything.”

Third is US shipbuilding capacity. Even if the US had the appetite and the budget, the final hurdle to jump is the Merchant Marine Act, also known as the Jones Act or Cabotage Law. Protectionist in its purpose, it requires vessels transporting cargo or passengers between US ports to be built in the US and to be owned and crewed by US citizens. Coined the ‘maritime boondoggle’ on debut in 1970 (New York Times) the Act has failed to secure a significant US owned merchant fleet that could be commandeered in a time of national need – over 97% of cargo ships using US ports carry foreign flags. Not surprisingly therefore, US naval shipbuilding capacity is lacklustre, and the pipeline for building new icebreakers, without the option of sourcing elsewhere, is excessively long, not to mention costly.

Russia and China, meanwhile, are far less constrained and with far more of a pioneering spirit, producing ice-breakers like Dime bars. China recently unveiled the Xuě Lóng (Ice Dragon) and Russia has three new heavy nuclear vessels on order for 2017-2020.

To Ratify or not to Ratify?

A second illustration of confuddled US Arctic policy and weakening pioneering resolve concerns the question of territorial rights and whether the US should give primacy to the UN Convention on the Law of the Seas.

Stretching back to the early 17th Century a nation’s rights to seabed minerals were restricted by doctrine to a narrow strip of water tracking the national shoreline. This remained the case until 1945 when the US, under Harry S Truman, announced that it was to assume jurisdiction of all natural resources to the edge of its continental shelf. The US’s move was quickly followed by several other states eager to exploit marine resources. Tension rose quickly over fishing and mineral rights, pollution and competing claims. To deal with this, 150 countries came together over 14 years, with the aid of US leadership, to draft the UN Convention of the Law of the Sea, completing in 1982.

In 2013, the landlocked, desert state Niger was the 166th country to ratify the treaty, but the US with its extensive coastline has still not. As a signatory, the US would have final and binding rights over areas of their continental shelf extending up to a maximum of 350 nautical miles from shore. The convention conveys rights that would provide a more secure basis than resting on the vagaries of customary law. For the US, signing up would mean jurisdiction over around 4 million additional square miles of Ocean –a sizeable portion of this in Arctic waters.

Reagan was the first to hold out on signing up – wanting a better deep-mining settlement that was achieved some time later. Subsequent Presidents have put their weight behind the treaty from Bush junior to Obama, but a minority Republican voice in the Senate has used the tools of filibustering to scupper successive legislative attempts.

These decades of delay provide interesting contrast with the acquisitive approach to land assembly demonstrated by the Founding Fathers. Where would the West be without the Louisiana Purchase that saw Napoleon sell French holdings. War with Mexico liberated vast tracks of land including Texas, California and much of the South West.

For those few but belligerent Republicans bent on abrogating the convention, their arguments boil down to an ideological resistance – not wishing to cede power to transnational bodies. Arguments that suggest that accession is not in the national interests have been dismissed by a wide range of defence planners. Admiral Roughhead, for example, specifically states the Arctic will ‘expose the costs of our national reluctance on the Law of the Sea convention and to test our present understanding of customary legal guarantees to the very freedoms behind our global operations today.’

Second term in office, post-Obamacare and buoyed by Republican meltdown over the fiscal cliff debacle, is this the time for the administration to act again on ratification? If it is not, what does this tell us about American hegemony and the health of the nation’s pioneering spirit? The triple Arctic aims of protecting the environment, upholding indigenous rights whilst ensuring wider economic security is fraught with difficulties. It requires strong political leadership that is prepared to grab the bull by the longhorns, or else, other stronger minded pioneers will get on with the job themselves.

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