The Global Realm

Catfight – and it’s US vs EU

By Pepe Escobar
The Roving Eye
Asia Times
May 17, 2013

PARIS – Lovers of turbo-neoliberalism, rejoice – and take your bottles of Moet to a prime ringside seat; there won’t be a nastier catfight this summer than the opening rounds opposing two Western giants. Forget about the Pentagon “pivoting” to Asia without ever abandoning the Middle East; nothing compares with this voyage in the entrails of turbo-capitalism, worthy of a neo-Balzac.

We’re talking about a new Holy Grail – a free-market deal between the United States and the European Union; the advent of a giant, internal transatlantic market (25% of global exports, 31% of global imports, 57% of foreign investment), where goods and services (but not people) will “freely” circulate, something that in theory will lead Europe out of its current funk.

The problem is that to reach this Brave New World presided by the Market Goddess, Europe will have to renounce some of its quite complex juridical, environmental, cultural and health norms.

In that Kafkaesque/Orwellian bureaucratic paradise also known as Brussels, hordes of faceless equivalents of the bowler hat men in a Magritte painting openly complain about this “adventure”; there’s a growing consensus Europe has everything to lose and little to gain out of it, in contrast with the much-derided enemies of the European integration, as in the fanatics of a “pro-American” and “ultra-liberal” Europe.

That yellow peril again
It gets curioser and curioser when one observes that the great majority of European nations actually have wanted a free-market deal for quite a while, unlike the much more protectionist US. By now, at least officially, not a single EU nation is opposed to the deal. Here’s the non-official reason; none can afford to be blamed an enemy of the United States.

The European Commission (EC) estimates that the gross national product growth of the EU as a whole will grow by 0.5% – not exactly a Chinese target. The Americans, on the other hand, are way more excited; the US Senate estimates that without custom duties, US exports to Europe will grow by almost 20%.

The meat of the matter in clinching the deal will be harmonizing rules that are blamed for blocking the much-vaunted totally free circulation of goods. “Harmonizing” means diluting European rules. And there’s the rub; Washington does not want just a transatlantic deal.  The final countdown is to set in stone a global free for all that would later be imposed everywhere; that’s code for totally opening the Chinese market, with absolutely no restrictions, for Western corporations.

The German Marshall Fund of the United States goes straight to the point; Western capitalism must remain the universal norm, against the “threat” of state-managed Chinese capitalism. Reduced to ashes is the irony that Chinese capitalism has been -  and will continue to be – the savior in the massive ongoing crisis of Western capitalism.

The US-EU deal is also supposed to be the icing on a cake of deals already being struck by the US with individual nations in Asia. There’s absolutely no question about who the stronger side is. US President Barack Obama is already engaged in high-stakes PR, spinning on every possible occasion that Europe has been in trouble trying to find a recipe for growth. And the US may count on fifth column elements such as the European Commissioner for Commerce, Karel De Gucht, for whom the French – who defend a lot of exceptions – are already isolated.

Make no mistake; Washington will go for broke, Iron Man 3-style – as in smashing European norms of sanitation and phyto-sanitation, and “liberalizing” food, everything genetically modified from meat enhanced with hormones to chlorine chicken. The pesky rules established by the faceless men in Brussels have been routinely derided in Washington as “non-scientific”, unlike the American non-rules.

The ultimate bowler hat man
Startled European citizens are only now coming to grips with the fact that the EU proposed the deal to the US -  and not the other way around. EU here means the European Commission. And that’s where the juice hits the throat; it’s all about the ambition of one man (a Portuguese) against the pride of a whole country (France).

Compounded to the fact that the negotiation was personally green-lighted by Obama, and with the US Congress interfering at every level, the bottom line is that for the Americans, “everything is on the table” -  code for we want it all, and we’re willing to give no ground.

France -  already supported by the ministers of culture of 12 nations -  wants the audiovisual industry to be excluded from all negotiations, in the name of its much-prized “cultural exception”. This is one of the few countries in the world -  China is a different matter altogether -  not totally swamped by Hollywood products.

If that’s not the case, Paris will veto everything – even if, off the record, French officials admit they don’t have the power to veto anything; the French corporate world also badly wants the deal.

Still, Paris will battle for everything ranging from the “cultural exception” to the most crucial sanitary/environmental norms. It will be joined by Italy on many fronts; there’s already open revolt in sublimely artisanal Italy about a bleak future where people all over the world will be consuming Made in USA Parmesan cheese, Parma ham and Brunello wines.

On a different front, it’s certain that Washington will not open the US market to European financial services or maritime transportation. That’s just one example of how much Europe has to lose and practically nothing to gain.

In the end it all amounts to the blind ambition of an astonishing mediocre European career functionary -  the Portuguese EC head, Jose Manuel Barroso. Barroso expects to get a mandate to negotiate in the name of all member-states on June 14. And he expects the negotiations to finish before the end of his current mandate, on November 2014.

Some audibly furious EU diplomats confirmed off the record to Asia Times Online that Barroso mounted this formidable operation virtually by himself, eyeing a handsome future reward from his masters – in Brussels? Forget it; Washington. Barroso wants either to become the secretary general of either the United Nations of the North Atlantic Treaty Organization. Neither  of these posts can be had without Washington’s green light.

That would explain Barroso’s chief of cabinet being nominated EU ambassador in Washington, furiously lobbying the Americans alongside Portugal’s ambassador to the US and Portugal’s ambassador to the EU.

All bets are off on the winner of this monstrous catfight. EU member-states may vote against their own interests; but another thing entirely would be an overwhelming eruption of anger by already beleaguered European citizens. This new saga of Western turbo-capitalism has all the elements to be, well, quite revolutionary.

Pepe Escobar is the author of Globalistan: How the Globalized World is Dissolving into Liquid War (Nimble Books, 2007) and Red Zone Blues: a snapshot of Baghdad during the surge. His also wrote  Obama does Globalistan (Nimble Books, 2009). He may be reached at  pepeasia@yahoo.com. 

http://www.atimes.com/atimes/World/WOR-01-170513.html

UN Urges Westerners To Get Over ‘Disgust’ At Eating Bugs

By Heather Maher
Radio Free Europe/Radio Liberty
May 14, 2013

WASHINGTON – To more than 2 billion people around the world, the soothing sound of crickets chirping might also signal the availability of a delicious snack. That’s the number of people around the world, mainly in Asia and Africa, who eat insects as part of their regular diet, according to the United Nations.

A new report from the UN’s Food and Agricultural Organization (FAO) says Western societies should get over their “disgust” at the idea of eating bugs and join in. Wasps, bees, beetles, ants, grasshoppers, and, yes, crickets are protein-rich, abundant, and have a small environmental footprint compared to other animal food sources, says the report, titled “Edible Insects: Future Prospects For Food And Feed Security”.

The FAO says insect farming could address food shortages for both humans and livestock and be especially useful in the fight against childhood malnutrition because insects are nutrient dense.

Ounce for ounce, grasshoppers have three times as much protein as beef and contain essential nutrients like zinc and iron. That’s not news in places like Southeast Asia, where insect farms already exist and larger-scale industrial production is being tried.

Eva Muller, the director of the FAO’s Forest Economics Policy and Products Division, says that “insects are pretty much untapped for their potential for food, and especially for [animal] feed”.

And she’s optimistic about their future acceptability, even in Western countries. She points out that insects are already on some menus at restaurants in European capitals and says humans’ dietary preferences are constantly evolving, as evidenced by the fact that when Japanese sushi was introduced to the West, people rejected the idea of eating raw fish. Now many people will pay top dollar to eat it.

Muller is also counting on the fact that eating insects can have health benefits.

“In the longer term, I think insects could also be eaten in Western countries,” Muller says. “And why this would be good? Well, we know that the [world] population is growing and there is going to be an increased demand for food and protein in general and insects offer one option of providing this protein. And in Western cultures, where we have a huge problem of obesity and overweight, insects are a very nutritious element that could provide a healthy diet.”

In the United States, groups like Insects Are Food, Creepy Crawly Cooking, and Bay Area Bug Eating Society are already aware of the benefits of bugs and are trying to convince others.

But insects as food will probably only catch on if people see them on menus. The UN has called on chefs and restaurant owners to “raise the status” of bugs by serving them in dishes.

In a few spots around Europe and the United States, that’s already happening. Famed Spanish chef Jose Andres serves a popular grasshopper taco at his Washington, DC, restaurant, Oyamel. At Typhoon, a flashy restaurant in Santa Monica, California, that serves food from the Pacific Rim, a dish called “Taiwanese Crickets” is stir fried with raw garlic, chili pepper, and Asian basil. The restaurant’s “Silk Worm Larvae” is sauteed with soy sauce, sugar, and pepper.

The owner of Guelaguetza, a Los Angeles restaurant serving Mexican dishes like “Chapulines a la Mexicana” (grasshoppers sauteed with onions, hot peppers, and tomatoes ) boasted to The New Yorker magazine that diners consider it fashionable to eat bugs.

“Eating grasshoppers is a thing you do here. … There’s more of a cool factor involved,” Bricia Lopez said.

The FAO report comes as people on the East Coast of the United States are bracing for a rare invasion of cicadas – giant winged beetlelike bugs that emit a high-pitched whine. Billions are crawling out of the ground this spring after 17 years of dormancy. During their brief adult lifespan, the swarms are expected to be so thick that drivers in some areas will need to use windshield wipers.

That delights Isa Betancourt, a curatorial assistant of entomology at Philadelphia’s Drexel University Academy of Sciences, who likes to snack on young, soft cicadas that have just emerged from the ground. To her, it’s no different than eating a soft-shell crab.

“I’m calling them the ‘shrimp of the land’ because they are in the same biological group as crustaceans,” Betancourt says. “They’re all arthropods, which means they all have exoskeletons protecting them. And so, we eat lobsters, we eat shrimp, we eat crabs all the time.”

She also points out that cicadas, which feed on plant water, are much cleaner than shrimp, which are sometimes called “the cockroaches of the ocean” because they will eat virtually anything.

But cleanliness is not something most Westerners associate with bugs. Flies, maggots, and cockroaches are indelibly linked with filthy conditions. Betancourt says plenty of insects live in clean, pure forest environments and dine on plants, which gives them an almost bland taste when cooked.

“Usually insects taste kind of how you make them because they have a very mild flavor,” Betancourt says. “I’ve eaten crickets, wax worms, and I’ve also eaten dragonflies. The dragonflies were sauteed on mushrooms and breaded, and that was really delicious. Crickets – you can make chocolate chip cookies with them.”

There is one hurdle for people to get over, she admits: “I think the part that probably [disgusts] people the most when they’re eating insects is the ‘pop’ that you kind of feel when you’re biting down. That happens when the exoskeleton breaks, because of the insect’s structure.” Once you get past that, she says, “it’s tasty.”

http://www.rferl.org/content/eat-insects/24985330.html

The phase that launched a thousand bubbles

By Chan Akya
Asia Times
May 17, 2013

This concludes a three-part series.

Part 1:  Keynes stole your ship

Part 2:  Bernanke stole your pension

Bubbles last just as long as it takes for technical to become fundamentals.

Helen of Troy had the face that launched a thousand ships while Federal Reserve chairman Ben Bernanke and his compatriots have presided since 2007 over the economic phase that launched a thousand bubbles.

In the previous two parts of this trilogy, the focus was on real-world businesses and pension planning that have been adversely affected by monetary policies over the past few years and particularly since 2009.

Have these efforts at quantitative easing produced any tangible (positive) economic results at all – not that anyone would notice really. Key figures such as retail sales and capital investments still vastly lag levels seen before the crisis; and even the figures that look like improvements don’t quite stack up when you look closer.

For example, US non-farm payrolls for April showed an increase of 165,000 jobs against market expectations of 150,000 jobs for the period. However, once the average work hours were taken into account, payrolls were actually down – the quantum has been estimated from 300,000 to 500,000 based on the measure.

What about the other major focus of Keynesian measures namely to propel inflation in Group of Seven  economies with a view to increasing consumption and investment while cutting real debt burdens? Well, that hasn’t panned out yet either.

There is no inflation – at least in the way that it is popularly measured, nor have yields on Treasury Inflation-Protected Securities (TIPS)  moved in any fashion that would suggest sticky, higher prices. This is because the fear of lower real returns and increased government debt (as suggested in the previous two articles) have pushed people to cut consumption even further and instead attempt to save money even if that means going for speculative investments. This is covered in the next section.

Bubbles galore
So if the intended consequences of the Keynesian stimuli haven’t panned out as per plan, what about the unintended consequences? Typically, when central banks fail in their policies, one would expect to see the following:  i) Asset bubbles
ii) Rising systemic risk
iii) Random correlations

On the subject of asset bubbles, we don’t have much to complain about with, at a minimum, stocks and real estate around the world moving sharply higher without any basic support from fundamentals. In the rest of the article, some details about the asset bubbles will follow.

The issue of systemic risk is germane to any consideration of how central bank policies have panned out. With organic growth proving elusive even as intervention helped to obviate the need for taking significant balance sheet hits, banks as well as the shadow banking sector have plunged headlong into funding of highly risky transactions, be it US sub-prime mortgages (remember those? Apparently  caused some crisis in our history) or highly leveraged investment mechanisms such as collateralized debt obligations and collateralized loan obligations (remember those?).

Banks are once again at the forefront of risky investment strategies. Capital levels haven’t risen to the extent required for the scale of assets in the pipeline, while falling margins have disallowed banks from recuperating their reserves.

A key highlight of financial crises tends to be the emergence of random correlations – random in this case referring not so much to financial history but overall investment logic; but this also goes into the heart of rising systemic risk being mentioned above.

For example, all the investment talk now is of the Japanese yen levels against those of dollar-denominated assets such as US stocks and real estate. Granted that as the low-yielding currency of choice, increased positions in the yen are normal, but this time around, the explicit weakening strategies of the Bank of Japan have meant that more investors have piled into this trade, usually by borrowing in yen from their local banks and then purchasing US dollars and other hard-currency assets.

In effect, while banks today show the risks to be low thanks to this random correlation, the fact of the matter remains that this correlation can go the other way too – a quick reversal in the yen back towards 90 for example will create massive investment losses and in turn create hedging losses for banks, while the yen movements may not match the credit quality characteristics of their borrowers (seeing as we know hedge funds go bust all the time).

To consider an example closer to home of how asset bubbles end up creating massive problems for banks, let’s go back to the point about ships as previously discussed in the article “Keynes stole your ship”. Rising ship prices since 2008 were seen as “fundamental” by the sector and therefore soon enough by the banks; typically a number of new ship purchases were funded to the extent of 70% or above by the banks.

Today, with that bubble bursting spectacularly, both banks and the sector are left praying for time. Large tankers – VLCCs – that commanded prices of over US$150-175 million barely four years back, can now be purchased for under $50 million.

So even if you were the smart banker who lent “only” $100 million against this ship back then, there is still a potential loss of $50 million staring you in the face now. No wonder the European banks that focus on shipping have all been under pressure – at sea, so to speak – despite the broader recovery in other asset prices over the past few quarters.

Even worse than these European shipping banks are the Asian banks – Chinese, South Korean and Japanese – who are being asked by their governments to support the shipping sector at current levels, both in terms of rolling over existing maturities of loans and funding new loans for buying ships.

Already a number of Japanese and Korean shipping companies are bankrupt; add to the list a host of unknown Chinese companies that are suffering the same fate; and in all cases the banks are being told to continue lending money to the sector to avoid a “bigger” blow up that could imperil trade terms for these exporting countries.

The anatomy of asset bubbles
Bubbles last just as long as it takes for technical to become fundamentals.

A key element of asset bubbles is that the primary impetus of irrational money chasing too few assets is always recognized; what follows is that thanks to the index-weighting focus of various investors – mutual funds and pension asset allocators to name a few – pretty soon real measures of value are assigned as reasons for increased asset prices – say for example in the Internet bubble era: folk  started going for top-line revenues as the key measure on the logic that while these companies were losing money initially they would eventually turn around as long as the top line grew.

Then any improvement in the top line whether by organic means or acquisition was hailed as evidence of the investment thesis and so on.

Similarly for the US sub-prime lending bubble, there was the commonly held fundamental that house prices in the US “never” fell; this meant that all the testing mechanisms for CDOs and other investments tied to mortgages were never tested for falling asset prices. Thus, when the inevitable happened, investors ended up being exposed to more losses than would otherwise be the case.

The reason for delving into that drab history lesson is that today we are back in the same paradigm. Almost all of the world’s asset bubbles are underpinned by a single variable, namely interest rates, and particularly that of the US dollar. Take that up a few notches for whatever reason and suddenly the complex of not just bonds  but also equities, real estate and consumer spending all fall off a cliff rather quickly.

From US indices that are at record levels to real estate markets in places as varied as Monte Carlo and Hong Kong, the existence of asset bubbles is obvious. Stocks are trading at price earnings ratios that are simply unsustainable – ask anyone who held Apple stocks this time last year and they’ll tell you a lot of stories about the number of opportunities that were given to them to exit the position before the collapse.

One reason why most folk haven’t sold these under-growing stocks is that, compared to interest rates, dividend yields are still superior whilst allowing capital appreciation from time to time. When people want to reduce risks, they go for real estate, as seen in the cases of Hong Kong, Singapore, Monte Carlo and of course, Australia for the past few years.

It is easy to see the fundamental drivers of such moves, whether it’s from Chinese mainlanders cutting risks of asset seizures by purchasing apartments in Hong Kong  or Australians unemployed due to the high currency rate turning around and punting on their domestic housing asset to make a living from speculation.

Ironically such rising asset prices also make it more difficult for engendering a real economic recovery. This has been the case in Australia, where even the strategies that could offset high currency values have been pushed away by the rising cost of real estate in the country.

Another example is in Britain, where nascent reinvestment in the financial sector has been cut short by the strength in London home prices that has in turn fed into commercial rents, acting as a serious disincentive for firms looking to increase their operations from the city.

Perhaps the worst of all the bubbles though is in the former tier 2 and tier 3 cities in the US where house flipping is back on – the practice  before the crisis where people bought then sold  houses on high leverage and high  frequency. The treatment of housing stock as a trading good  has potentially serious consequences for longer-term investments, as well as the systemic risk of US banks.

This then is the worst of all the unintended effects of central bank involvement in the markets;   instead of ushering in investors who could help turn around economies across the Group of Seven countries, the central banks have created a class of traders who roil asset prices, maximize leverage, but produce no lasting benefits for the underlying economies.

http://www.atimes.com/atimes/Global_Economy/GECON-01-170513.html

Developing World to Dominate Global Investment by 2030

By Carey L. Biron
IPS – Inter Press Service
May 17, 2013

Over the next decade and a half, a major global shift will result in the developing world controlling roughly half of the world’s capital, up from less than a third today.

According to new scenarios released Thursday by the World Bank, developing countries could control some 158 trillion dollars (at 2010 rates) by 2030, particularly in East Asia and Latin America. By that time, the developing world could account for 87 to 93 percent of global growth.

Under certain scenarios, “financial markets in economies like Brazil, India, and those of the Middle East will develop considerably, with these countries attaining, by 2030, a level of financial development comparable to the United States in the early 1980s,” a new report from the Washington-based development lender states. “Similarly, the quality of institutions in developing countries will tend to improve significantly.”

This analysis suggests that developing countries will soon gain the resources necessary to bankroll the major investments that the bank says will be necessary, particularly in infrastructure and services. This would mark a stark contrast with the past.

Further, World Bank analysts foresee a massive escalation of global investment from these countries. Whereas in 2000 international investment from developing economies constituted just a fifth of the global total, this could now triple over the next decade and a half.

“We found that developing economies will come to dominate investment,” Maurizio Bussolo, a World Bank lead economist and author of the new Global Development Horizons report, told reporters Thursday.

“By 2030, for every dollar invested around the world, 66 cents will be in developing countries. That’s a dramatic change, as for almost four decades such investments made up just 20 cents on the dollar.”

In fact, Bussolo suggests that developing countries will overtake the developed world in this regard much sooner, perhaps by the end of this decade.

Fast-strengthened systems

China and India are expected to be the largest investors by 2030, accounting for 38 percent of all global investment, almost as much as all high-income countries combined. In fact, China alone could be responsible for nearly a third of global investment by that time, the bank says, while Brazil, India and Russia will together constitute a larger investment bloc than the United States, at around 13 percent.

This means that total investments in the developing world could be half again as large as among developed countries, at 15 versus 10 trillion dollars.

Such changes will require the exponential development and strengthening of financial sectors in developing countries, as emerging economies inevitably move to quickly integrate with the international financial system in a way never before seen.

“Developing countries are currently almost absent from international financial markets, so you can see that we have a very long way to go in a historically short time period – 15 or 20 years for developing financial markets is not long,” Hans Timmer, director of the Development Prospects Group at the World Bank, told reporters.

“But we have seen in high-income countries that if you deregulate too rapidly you have a very dangerous situation. So we have a dilemma: the role of developing countries is increasing very rapidly, but we must deepen these financial markets only very gradually.”

Already, weak financial systems across the developing world are allowing for illicit outflows of capital that are at times far greater than the countries’ external debt, inexorably impacting on those countries’ ability to finance their public sector.

One report last year estimated that North African countries alone lost nearly a half-trillion dollars over the past four decades, almost the equivalent of their combined gross domestic product for 2010.

“It’s important to note that the World Bank is only talking about recorded capital here, but there’s so much illicit capital currently sloshing around that the multilateral institutions haven’t yet gotten their heads around,” Dev Kar, formerly with the International Monetary Fund (IMF) and currently the chief economist with Global Financial Integrity, a Washington advocacy group, told IPS.

“Our studies suggest that the unrecorded capital coming from developing countries is absolutely huge – the losers are losing far more than the gainers are gaining. As a result of these developments, you can understand why the North African countries blew up, as that kind of massive outflow of resources must have some kind of social impact.”

A level field

Of potentially considerable concern in the bank’s projections is where this new wealth will end up being concentrated.

“It’s one thing for the pie to be increasing, but how equitably is it being distributed?” Kar asks.

“Equity is a huge problem, as the rich seem to be getting richer and the poor getting poorer. Further, it seems the nouveau riche in the developing countries are a bit more callous than the established rich in developed countries.”

Kar notes that income inequality is generally not being helped through current redistribution mechanisms aimed at ensuring broader equal opportunity. Meanwhile, the poor, being unable to take advantage of globalisation, are being left behind across the globe.

According to the World Bank and numerous other analysts, wealth in developing countries is today largely locked up among the elite.

“For most of these countries, the first quarter of the population provides almost no savings. The bulk of savings comes from the richest quarter – there is lots of concentration,” the World Bank’s Bussolo told IPS.

In a separate statement, he noted: “Even if wealth will be more evenly distributed across countries, this does not mean that, within countries, everyone will equally benefit. Policymakers in developing countries have a central role to play in boosting private saving through policies that raise human capital, especially for the poor.”

In particular, the new report places significant focus on increasing government funding for education. It points to analysis from Mexico suggesting that changes in education could result in a five percent greater household saving rate by 2050.

“If the distribution of education among workers of future generations were to remain as unequal as it is today, this would perpetuate inequality of earning capacity, saving, and wealth in the future,” the report states.

“Leveling the playing field in terms of educational opportunities could thus be supported not just in terms of fairness but also – given the positive effect on private saving – in terms of efficiency.”

http://www.ipsnews.net/2013/05/developing-world-to-dominate-global-investment-by-2030/

Profits vs. Disaster in Arctic Meltdown

By Stephen Leahy
IPS – Inter Press Service
May 16, 2013

Many eyes are turning north to the Arctic, some in horror at the rapid decline of a key component of our life support system, others in eager anticipation at the untapped resources beneath the vanishing snow and ice.

“I’ve worked in the north for 21 years and the scale and speed of change up there is astonishing,” said Douglas Clark of the University of Saskatchewan.

“These changes, taken as whole, and reflected in our report, keep me awake at night,” Clark told IPS.

Rapid and even abrupt changes are occurring on multiple fronts across the Arctic, according to the Arctic Resilience Report (ARR).

And what happens in the Arctic does not stay in the Arctic.

“It’s the first international report to tell the world to buckle up, we’re on a wild roller coaster ride and we don’t know what’s coming,” he said.

The ARR report is a two-year collaboration between experts in the Nordic countries, Russia, Canada and the United States, and includes indigenous perspectives. It is a cutting edge assessment of how changes in climate, ecosystems, economics, and society interact.

The report was prepared for and released at the Arctic Council Ministerial Meeting in Kiruna, Sweden on Wednesday.

“What is happening in the Arctic has profound implications for every part of the world,” said Sarah Cornell, lead author of the study.

Global warming is not only melting snow and ice, it is warming the Arctic ocean and the surrounding lands. Seasons are changing, permafrost is thawing, new species are invading, Arctic species are struggling, lakes are vanishing, and rivers are being redirected by the melting landscape, the report documents.

Some Arctic ecosystems are undergoing catastrophic changes, and some of these are large-scale and irreversible, Cornell, a scientist at the Stockholm Resilience Centre, told IPS.

While the Arctic is as remote as the moon for many people, it is intimately interconnected with the rest of the world. Weather is driven largely by the cold Arctic and Antarctic regions balanced by the hot tropics. But the Arctic is rapidly defrosting – last summer the sea ice shrunk to half of what it was less than 30 years ago. The ice decline and the heating up of the Arctic have been accelerating in recent years.

“This has and will have spectacular consequences for the rest of the world. We don’t know what they’ll all be,” Cornell said.

The Arctic is home to cultures and species found nowhere else and they can’t go any further north to escape the rising temperatures. It is a real struggle to survive, said Tero Mustonen, president of Snowchange Cooperative, a network of local and indigenous cultures around the world.

“The Arctic is undergoing fundamental changes. Moose are showing up in the tundra for the first time along with new insects, plants and even trees,” Mustonen told IPS from his home in eastern Finland.

Mustonen, a co-author of the ARR, works with Chukchi reindeer herding communities from northeastern Siberia who have roamed those remote lands for hundreds of the years. Like many indigenous communities living on the land, they have a deep ecological, cultural and spiritual connection to their landscape. And that landscape is changing so much they sometimes don’t recognise their own home, he said.

“The Chukchi don’t easily share their thoughts. But the elders have a clear and powerful message to convey to the world: ‘Nature doesn’t trust humans any more’.”

However, the focus of the eight-nation Arctic Council was primarily on future shipping opportunities, access to oil, gas and mineral resources, and geopolitics, with China, Japan, India, South Korea, Singapore and Italy granted observer status on the Council while Canada blocked the European Union’s application.

The Council is the world’s main international forum on northern issues and will be led by Canada for the next two years. Canada said it will focus on economic development. Estimates show that the region may have 13 percent of the world’s undiscovered oil, 30 percent of undiscovered gas deposits, and vast quantities of mineral resources.

The Council’s much-lauded scientific research will now be focused on how to develop northern resources for the benefit of northerners. Canada recently drew criticism for re-directing its own scientific research to supporting business and industry.

Secretary of State John Kerry represented the U.S. at the Arctic Council, demonstrating Washington’s renewed interest in the Arctic. The White House also released its new National Strategy for the Arctic Region. While acknowledging the profound impacts of global warming on the region and indigenous people, the U.S. strategy says the region will help to supply U.S. energy needs well into the future.

At the meeting, members adopted an agreement on marine oil pollution preparedness. Some indigenous and environmental groups urged the Council to place a moratorium on drilling for oil in the Arctic given the dangerous conditions and difficulties of clean up.

Greenpeace International said the oil pollution agreement offered no specific practical minimum standards and had no provisions to hold companies liable for the full costs and damages.

“There were two conferences going on here — one that warned of the dangers of climate change and rapid industrialisation in this fragile region, and another, attended by foreign ministers, that took almost no concrete steps to address them,” said Ruth Davis, Greenpeace International senior policy advisor.

Arctic peoples aren’t necessarily opposed to economic development but they do want to be in control of what happens. However, Arctic nations and local communities are at very different stages. In Finland and Russia, indigenous people have no official land or water rights, unlike Canada or Alaska, said Mustonen.

“The rights and cultures of indigenous peoples in these regions have to be taken seriously in order to integrate their needs into any form of development,” he said.

http://www.ipsnews.net/2013/05/profits-vs-disaster-in-arctic-meltdown/

Mexican Communities Sue Pemex for Environmental Justice

By Emilio Godoy
IPS – Inter Press Service
May 16, 2013

Fed up with oil spills from facilities belonging to Mexico’s state oil company Pemex, residents of two communities in the southeastern state of Tabasco are taking the country’s largest company to court in a bid for compensation for damage to the environment and agriculture.

The people of Cunduacán and Huimanguillo, which have a combined population of 300,000, will present a class action lawsuit against Pemex in June.

“There have been several harmful effects; we have carried out tests on soils, sediments and water and we are about to receive the results,” Marisa Jacott, the head of Fronteras Comunes (Common Borders), an environmental NGO, told IPS.

Fronteras Comunes and the Asociación Ecológica Santo Tomás (Santo Tomás Ecological Association) are providing legal advice to the local population, mainly small farmers and fisherfolk, who have incurred great losses due to oil spills and gas explosions.

Mexico’s 2011 Class Action Law allows individuals and the federal consumer protection agency to sue state and private companies. However, the law does not provide for reparations.

The oil industry has been active in Tabasco since the early 1950s, and expanded there from the 1970s onwards with the construction of petrochemical plants, pipeline networks and storage facilities, sparking an economic boom.

But the boom did not result in benefits for the local communities. Instead, the oil industry displaced traditional activities like banana farming and cattle ranching.

The oil industry is active in 13 of Tabasco’s 17 municipalities, producing 500,000 barrels per day (bpd) – of a national total of 2.5 million bpd – according to the Mexican Petroleum Institute (IMP).

“There is environmental pollution and crop destruction, and there are soils that have lost their fertility. This means that harvests are not as abundant as they were before,” Lorena Sánchez, head of the Tabasco Human Rights Committee (CODEHUTAB), an NGO that has received complaints from local people about these problems, told IPS.

“It has affected people’s diets and caused respiratory health problems as well as blood and skin diseases,” she said.

Since 2011, CODEHUTAB has brought four lawsuits to the federal environmental protection agency, PROFEPA, that have resulted in fines for Pemex, but not in reparations for victims in local communities.

The most recent case, this year, was related to seven gas flares burning in the municipality of Paraíso, where CODEHUTAB took blood samples from 50 children between the ages of seven and 15. Ten percent of the samples had chromosome alterations, linked by the epidemiologists to oil industry activity.

PROFEPA estimates there are an average of 20 crude spills a year in Tabasco. Between 2008 and 2012, the environment ministry recorded 102 sites contaminated by environmental emergencies in the country caused by Pemex, including three in Tabasco.

In addition to Tabasco, the eastern and southeastern states of Veracruz, Tamaulipas, Hidalgo and Puebla and the highways connecting them to Mexico City are regarded as vulnerable to oil industry activity.

The oil industry in this region produces pollution with heavy metals, ozone, sulphur dioxide, nitric oxide, volatile aromatic compounds like benzene, hydrogen sulphide, salts, ammonia, cadmium and acids, all of which are harmful to the environment and human health, the NGOs complain.

Manuel Pinkus-Rendón and Alicia Contreras, academic researchers at the Autonomous University of Yucatán, concluded in a study published last year that “the social and environmental fabric of Tabasco reflects a regional development potential considerably below that which existed over 60 years ago, as a result of environmental degradation.”

For their study “Impacto socioambiental de la industria petrolera en Tabasco: el caso de Chontalpa” (Social and environmental impact of the oil industry in Tabasco: The case of Chontalpa), the authors interviewed 200 residents of four towns in the municipality of Cárdenas, 65 percent of whom expressed negative views about oil industry activity, especially because of the pollution and destruction it causes.

“It is a case that has not been addressed. We want the judges to have the fewest possible reasons to reject it,” said Jacott, of Fronteras Comunes.

In April, the local residents presented a complaint to the National Commission on Human Rights. In 2004 they had filed a legal complaint against Pemex in the attorney general’s office, but it went nowhere.

The environmental organisations and local residents have spent two years building their case. The next step will be legal action over damage suffered in the adjacent state of Veracruz, another major oil-producing region.

“We want them to take the required preventive measures. All Pemex does is supposedly carry out remediation of the damage, but it does not invest in maintaining the pipelines and guarding the area,” CODEHUTAB’s Sánchez complained.

The organisations are asking for an assessment of the state of ecosystems in Tabasco, and the dissemination of Pemex’s policies and guidelines for preventing leaks, addressing environmental contingencies and cleaning up polluted sites.

They are also calling for the gradual replacement of fossil fuels with alternative energy sources, as well as regular measurements of the main atmospheric pollutants in affected areas.

http://www.ipsnews.net/2013/05/mexican-communities-sue-pemex-for-environmental-justice/

U.N. General Assembly Condemns Syria as Sceptics Multiply

By Thalif Deen
IPS – Inter Press Service
May 15, 2013

When the 193-member General Assembly voted Wednesday to condemn the beleaguered government of Syrian President Bashar al-Assad, there was an increase in the number of sceptics who neither supported nor opposed the tottering regime in Damascus.

The resolution, which is legally non-binding, was adopted by a vote of 107-12, compared with 133-12 last August.

As the number of supporters to the resolution declined, from 133 to 107, the abstentions increased significantly, from 31 to 59, including a mix of Asian, African and Latin American countries.

The abstentions included Algeria, Bangladesh, India, Brazil, South Africa, Indonesia, El Salvador, Eritrea, Fiji, Kenya, Lebanon, Myanmar, Singapore, Sudan, South Sudan and Uruguay.

Asked for a response, Jose Luis Diaz, Amnesty International’s U.N. representative in New York, told IPS, “I think the number of abstentions – and the divisions in the General Assembly – are the consequence of political considerations.”

He said some countries would have preferred to give space to a renewed push for negotiations in the wake of the recent agreement between Russia and the United States, including a proposed international conference on Syria.

“They abstained because to vote ‘no’ would have been to side openly with Assad and to ignore the appalling crimes taking place in Syria,” Diaz said.

“All in all,” he said, “I don’t think there’s much disagreement among the vast majority of the General Assembly members – not counting the Syrian government and its supporters, like Russia, China and North Korea – about what is needed in Syria.”

As expected, China and Russia voted against the resolution, as they did in the Security Council when they exercised their vetoes on three Western-sponsored resolutions condemning the Syrian regime and the killing of civilians.

Besides Syria, China and Russia, the countries voting against the resolution included Bolivia, Belarus, Cuba, North Korea, Ecuador, Iran, Nicaragua, Venezuela and Zimbabwe.

The resolution, drafted by Qatar and co-sponsored or backed by most of the Arab countries and Western powers, recognised the Syrian National Coalition as “effective representative interlocutors needed for a political transition” in Syria.

Unlike resolutions adopted by the Security Council, General Assembly resolutions are not legally enforceable.

Asked if the resolution will have any impact, Luis Diaz told IPS, “It probably won’t have an immediate impact, but one good thing would be if it builds pressure on the Security Council to take up the issue again and press for binding action.”

Lost in the highly political debate on the resolution text, he said, was the fact that it has the strongest language on accountability of any of the previous General Assembly resolutions on Syria.

Russia, which lobbied last week against the resolution, described it as “very harmful and destructive”.

Russia’s deputy permanent representative Ambassador Alexander Pankin said, “It’s particularly irresponsible and counterproductive to promote this when the United States and Russia reached a very important agreement … and need a unified approach.”

Early this week, U.S. Secretary of State John Kerry and Russian Foreign Minister Sergey Lavrov met in Moscow and agreed on a proposed international conference on Syria.

U.S. Deputy Permanent Representative Ambassador Rosemary DiCarlo told delegates Tuesday that over the last 26 months “we have witnessed a brutal conflict in Syria”.

She said the Assad regime, drawing upon an arsenal of heavy weapons, aircraft, ballistic missiles, and potentially chemical weapons, has killed or injured untold numbers of civilians who for many months manifested their opposition purely through peaceful protest.

She said the sustained violence has created a severe humanitarian crisis with more than 1.4 million refugees and 4.25 million internally displaced persons within Syria.

“The consequences of this crisis are growing more dire not only within Syria, but across the region,” DiCarlo said.

She singled out the generosity of the governments and people of Lebanon, Jordan, Turkey, Iraq and others who host large numbers of refugees “which has been extraordinary.”

“But these countries now face grave threats to their security and an overwhelming economic burden. It is clear that we need a Syrian-led peaceful political transition,” she added.

http://www.ipsnews.net/2013/05/u-n-general-assembly-condemns-syria-as-sceptics-multiply/