World’s Poor Hit by Double Jeopardy: a Deadly Virus & a Devastating Debt Burden

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Credit: UNFPA

UNITED NATIONS, May 7 2020 (IPS) – The world’s poorer nations, reeling under an unrelenting attack on their fragile economies by the COVID-19 pandemic, have suffered an equally deadly body blow: being buried under heavy debt burdens.

Abiy Ahmed, prime minister of Ethiopia who was awarded the Nobel Peace Prize in 2019, said last week that in 2019, 64 countries, nearly half of them in sub-Saharan Africa, spent more on servicing external debt than on health.

Ethiopia alone, he said, spends twice as much on paying off external debt as on health. “We spend 47 percent of our merchandise export revenue on debt servicing”, he wrote in an oped piece in the New York Times.

According to the UK-based Jubilee Debt Campaign, some of the countries battling debt burdens include Lebanon, which spends about 41% of its revenue on debt service; El Salvador, which spends 38% of its revenues on debt service; and South Sudan, which spends 29%.

And these are not necessarily the most highly-indebted poor countries in the world — Sri Lanka pays 48% of its revenue in debt service, and Angola 43%.

On April 15, the Group of 20 countries (G20) offered temporary relief to some of the world’s lowest-income countries by suspending debt repayments until the end of the year.

But, regrettably, their best offer fell far short of expectations.

Secretary-General Antonio Guterres has called for a “debt standstill” across all developing countries affected by debt vulnerabilities. This includes external public and commercial debt.

“The private sector’s voluntary and well-coordinated engagement in debt relief discussions is crucial”, he adds.

In 2020, “we expect to lose the equivalent of more than 300 million jobs; a decline in global trade between 13 and 32 per cent; remittance flows to low‐ and middle‐income countries to drop by around 20 per cent; and foreign direct investment to decline by 35 per cent,” the United Nations warned last week.

Clemence Landers, a Policy Fellow at the Washington-based Center for Global Development (CGD), told IPS the G20 bilateral debt suspension is a good start, but it’s only a temporary stopgap measure.

In the months ahead, she pointed out, it will be clear that some countries need deeper and more permanent relief.

“The global community should use this time to establish the broad contours of an orderly debt relief process that distributes the burden equitably between all bilateral and commercial creditors”.

In parallel, argued Landers, the international financial institutions should find ways to deploy financing packages above levels that they have already announced to ensure that net flows to countries are robust. But an effective and orderly process is far from a given.

“It will largely hinge on the G20’s ability to provide an ambitious plan and maintain strong political pressure to achieve a coordinated approach,” she declared.

Professor Kunal Sen, Director United Nations University– World Institute for Development Economics Research (UNU-WIDER), told IPS the recent announcement by the governments of the G20 countries of a debt moratorium for the poorest countries is a welcome initiative as it allows these countries to allocate the funds that would have gone to service external debt to deal with the immediate needs of the pandemic.

According to Jubilee Debt Campaign, the suspension covers debt payments by 77 countries to G20 and other governments, from 1 May to the end of 2020, estimated to be $12 billion.

The payments will not be cancelled but come due to be paid between 2022 and 2024, along with interest accrued in the meantime. There will be a review by the G20 before the end of 2020 as to whether further action will be taken.

The G20 announcement also calls on private creditors to similarly suspend debt payments, and calls on multilateral creditors to explore options for doing so.

The G20 members are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Republic of Korea, Russia, Saudi Arabia, South Africa, Turkey, the United Kingdom, the United States and the European Union (EU).

The Ethiopian Prime Minister said at the very least, the suspension of debt payments should last not just until the end of 2020 but rather until well after the pandemic is truly over.

“It should involve not just debt suspension but debt cancellation. Global creditors need to waive both official bilateral and commercial debt for low-income countries,” he declared.

Richard Ponzio, Senior Fellow and Director of the Stimson Center’s Just Security 2020 Program, told IPS the G20 Finance Ministers wisely agreed on a ‘time-bound suspension of debt service payments’, between now and the end of the year, for 77 of the world’s poorest countries.

“Now it’s time for private creditors, who are owed USD $3 billion (or a quarter of total debt), to step up and participate in this initiative,” he noted.

Since the COVID-19 pandemic continues to affect countries in different ways, once they begin to transition from the current emergency to a full recovery phase, the G20 should revisit the need to sustain this policy, in 2021 and 2022, on a country-by-country basis, with the goal of helping all countries adversely affected by the pandemic to get back-up on their feet, Ponzio declared.

Anuradha Mittal, Executive Director at the Oakland Institute, a leading US-based policy think tank, told IPS the Covid-19 pandemic has unleashed a crisis of untold proportions – the disastrous impact of which is being felt by the poorest and poor nations.

According to the World Bank itself, COVID has pushed about 40-60 million people into extreme poverty, with best estimate being 49 million.

Bank’s projections suggest that Sub-Saharan Africa will be the region hit hardest in terms of increased extreme poverty, she said.

“At such a time, an inclusive bailout requires that united global response should ensure a just recovery and transition to a better future for those most in need.”

She pointed out that Central African Republic has just three ventilators, Sierra Leone has 13, Liberia has three, South Sudan has four.

Mittal said developing countries should be boosting healthcare systems to defend against the virus and protecting their economies and the poor, instead of using precious resources to pay off external debt, which anyway never benefitted the communities.

“These loans were often generated for so called “development” projects which have failed to bring development to the countries or populations that were intended to benefit”.

At this time, she argued, it is pertinent to cancel bilateral, multilateral and private debt for this year and instead, emergency additional finance should be provided. This time also calls for real negotiations around debt cancellation.

Above all, it is important to ensure removal of loan leverage to open up markets and force reforms such as the opening of land markets in Ukraine. Loan programs intended to control economies and natural resources have to stop, said Mittal.

Sarah-Jayne Clifton, Director of Jubilee Debt Campaign said the G20 offer is a first step in dealing with the magnitude of the coronavirus debt crisis, but much more needs to be done.

The G20 deal keeps vital money in countries for now, but today’s suspension will soon become tomorrow’s debt crisis unless payments are cancelled in full.

“We urgently need a UN-led process to cancel external debt owed to all creditors, for all countries in crisis,” said Clifton.

“The suspension of debt payments to private creditors is only voluntary. The UK and New York can make sure it happens by introducing emergency legislation to prevent any lender suing a country for stopping debt payments during the current crisis”.

Otherwise, she argued, “the real beneficiaries of today’s deal could be rich speculators who keep being paid thanks to debt suspensions by other lenders.”

Meanwhile, several Asian countries, including Sri Lanka, India, Pakistan, Bangladesh and the Philippines, have taken a severe beating primarily because of a sharp fall in migrant earnings resulting from the closure of industries and construction work in the Middle East and Gulf nations due to COVID-19.

According to the New York Times, millions of Indians who work in the Arab world — particularly in the oil-rich countries of the Gulf — have lost their jobs in recent weeks as Arab economies have contracted under lockdown.

“We have been getting distress calls from the Gulf,” said Mahesh Kumar, a spokesman for India’s foreign ministry.

The Times said Indian media have reported more than 150,000 Indians in the United Arab Emirates requesting to be evacuated — and that several large naval warships have already been dispatched to the UAE and the Maldives.

The writer can be contacted at thalifdeen@ips.org

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Coronavirus Hasn´t Slowed Down Ecological Women Farmers in Peru’s Andes Highlands

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Women & Economy

Quechua indigenous farmers from the town of Huasao, in the Andes highlands of Peru, cut insect repellent plants in front of Juana Gallegos' house, while others prepare the biol mixture, a liquid organic fertiliser that they use on their vegetable crops. CREDIT: Mariela Jara/IPS

Quechua indigenous farmers from the town of Huasao, in the Andes highlands of Peru, cut insect repellent plants in front of Juana Gallegos’ house, while others prepare the biol mixture, a liquid organic fertiliser that they use on their vegetable crops. CREDIT: Mariela Jara/IPS

HUASAO, Peru, May 6 2020 (IPS) – It’s eight o’clock in the morning and Pascuala Ninantay is carrying two large containers of water in her wheelbarrow to prepare with neighbouring women farmers 200 litres of organic fertiliser, which will then be distributed to fertilise their crops, in this town in the Andes highlands of Peru.

“We grow healthy, nutritious food without chemicals,” she tells IPS, describing the sustainable agriculture she practices in Huasao, a town of about 1,500 people in Quispicanchi province, 3,300 metres above sea level, in the department of Cuzco in south-central Peru.

It will take them four hours to prepare the “biol”, a liquid fertiliser composed of natural inputs contributed by the local farmers as part of a collective work tradition of the Quechua indigenous people, to which most of the inhabitants of Huasao and neighbouring highlands villages in the area belong.

“Between all of us we bring the different ingredients, but we were short on water so I went to the spring to fill my ‘galoneras’ (multi-gallon containers),” explains Ninantay.

The women, gathered at the home of Juana Gallegos, work in community. While some gather insect repellent plants like nettles and muña (Minthostachys mollis, an Andes highlands plant), others prepare the huge plastic drum where they will make the mixture that includes ash and fresh cattle dung.

They keep working until the container is filled with 200 litres of the fertiliser which, after two months of fermentation in the sealed drum, will be distributed among them equally.

Making organic fertiliser is one of the agro-ecological practices that Ninantay and 15 of her neighbours have adopted to produce food that is both beneficial to health and adapted to climate change.

They are just a few of the almost 700,000 women who, according to official figures, are engaged in agricultural activities in Peru, and who play a key role in the food security and sovereignty of their communities, despite the fact that they do so under unequal conditions because they have less access to land, water management and credit than men.

That is the view of Elena Villanueva, a sociologist with the Flora Tristán Centre for Peruvian Women, a non-governmental organisation that for the past two years has been promoting women’s rights and technical training among small-scale women farmers in Huasao and six other areas of the region, with support from two institutions in Spain’s Basque Country: the Basque Development Cooperation agency and the non-governmental Mugen Gainetik.

“During this time we have seen how much power the 80 women we have supported have gained as a result of their awareness of their rights and their use of agro-ecological techniques. In a context of marked machismo (sexism), they are gaining recognition for their work, which was previously invisible,” she told IPS.

A group of women farmers are ready to head out to the plots they farm on the community lands outside of Huasao, a rural town in Peru's Andes highlands department of Cuzco. They are wearing masks to prevent the spread of COVID-19, because they depend on their production for food and income from the sale of the surplus, to cover their household expenses. CREDIT: Nayda Quispe/IPS

A group of women farmers are ready to head out to the plots they farm on the community lands outside of Huasao, a rural town in Peru’s Andes highlands department of Cuzco. They are wearing masks to prevent the spread of COVID-19, because they depend on their production for food and income from the sale of the surplus, to cover their household expenses. CREDIT: Nayda Quispe/IPS

This group of women farmers is convinced of the need for nutritious food that does not harm people’s health or nature, and they are happy to do their small part to make that happen.

“We want to have a variety of food constantly available, but taking care of our soil, water, plants, trees and air,” says Ninantay.

“We no longer use chemicals,” says Gallegos. “Thanks to the training we have received, we understood how the soil and our crops had become so dependent on those substances, we thought that only by using them would we have a good yield. But no, with our own fertilisers we grow lettuce, tomatoes, chard, artichokes, radishes and all our big, beautiful, tasty vegetables. Everything is organic.”

Once they were producing their fresh produce using agro-ecological techniques, the women decided to also begin growing their staple crops of potatoes and corn organically. “I see that the plants are happier and the leaves are greener now that I fertilise them naturally,” says Ninantay.

Villanueva says these decisions on what to plant and how to do it contribute to new forms of agricultural production that meet the food needs of the women and their families while also contributing to the sustainable development of their communities.

“With agro-ecology they enrich their knowledge about the resistance of crops to climate change, they carry out integrated management of pests and diseases, and they have tools to improve their production planning,” she explains.

And even more important, “this process raises their self-esteem and strengthens their sense of being productive citizens because they are aware that they are taking care of biodiversity, diversifying their crops and increasing their yields,” she adds.

Thanks to this, these peasant women are obtaining surpluses that they now market.

Three times a week, Ninantay and the other women set up their stall in Huasao’s main square where they sell their products to the local population and to tourists who come in search of local healers, famous for their fortune telling and cures, which draw on traditional rituals and ceremonies.

The agro-ecological women farmers set up their stall three times a week in the main square of the rural municipality of Huasao to sell lettuce, tomatoes, Chinese onions, radish and other fresh produce. They are now marketing their wares in compliance with the health regulations put in place in response to the coronavirus pandemic, for which they have received training from the municipal authorities. CREDIT: Nayda Quispe/IPS

The agro-ecological women farmers set up their stall three times a week in the main square of the rural municipality of Huasao to sell lettuce, tomatoes, Chinese onions, radish and other fresh produce. They are now marketing their wares in compliance with the health regulations put in place in response to the coronavirus pandemic, for which they have received training from the municipal authorities. CREDIT: Nayda Quispe/IPS

Coronavirus alters local dynamics

However, the measures implemented by the central government on Mar. 15 to curb the spread of the COVID-19 pandemic have reduced trade, by not allowing outsiders to visit Huasao, known locally as “the village of the witchdoctors” because of its healers.

But the work in the fields has not stopped; on the contrary, the women are working harder than ever.

“We used to have the income of my husband who worked in the city, but because of the state of emergency he can no longer leave,” says Ninantay. “My fellow women farmers are in the same boat, so we continue to harvest and sell in the square and what we earn goes to buying medicines, masks, bleach and other things for the home.”

Initially, she says, the husbands didn’t want their wives to participate in the project and stay overnight away from home to attend the training workshops. But after they saw the money they were saving on food and the income the women were earning, “they now recognise that our work is important.”

Their husbands, like most Huasao men, do not work in the fields. They work in construction or services in the city of Cuzco, about 20 km away, or migrate seasonally to mining regions in search of a better income.

So the community lands, where each family has usufruct rights on three-hectare plots, were left in the hands of women, even though the title is usually held by the men. With the opportunity offered by the Flora Tristán project, they have increased their harvests and are no longer merely subsistence farmers but earn an income as well.

Despite the pandemic, the women obtained permission from the authorities and received training on the care and prevention measures to be followed in order to market their products under conditions that are safe for them and their customers.

Their stall at the open-air market in the town’s main square is already known for offering healthy food, and on Mondays, Tuesdays and Thursdays they run out of vegetables and other products they offer. They also sell their wares in other fairs and markets.

Their stall in the municipal market is also seen as an alternative to return to more natural foods in the face of the increasing change in eating patterns in rural areas.

“Many people don’t want to eat quinoa or ‘oca’ (Oxalis tuberosa, an Andean tuber), they prefer noodles or rice,” says Ninantay. “Children fill up on sweets and junk food and they are not getting good nutrition, and that’s not right. We have to educate people about healthy eating if we want strong new generations.”

She stresses the importance of people understanding that nature, “Mother Earth”, must be respected.

“We have to recover the wisdom of our ancestors, of our grandmothers, to take care of everything that we need to live,” she warns. “If we do not do this, our grandchildren and their children will not have water to drink, seeds to plant, or food to eat.”

Flora Tristán’s Villanueva announced that the 80 women farmers in the programme would participate in initiatives for the recovery of agricultural and water harvesting practices based on forestation and infiltration ditches, using native trees known as chachacomas (Escallonia resinosa) and queñuas (Polylepis).

The women hope that their experience and knowledge will be extended on a large scale, because although they share with their families, neighbours and relatives what they are learning, they believe that the authorities should help expand these practices.

“We would like not only Huasao, but all of Cuzco to be an agro-ecological region, so that we can help nature and guarantee healthy food for the families of the countryside and the city,” says Gallegos, convinced that if they could do it, everyone can.

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Financial Scams Rise as Coronavirus Hits Developing Countries

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David Medine is Senior Financial Sector Specialist at the Consultative Group to Assist the Poor (CGAP). He is also CGAP’s lead on data protection and security and works to develop novel, consumer-oriented approaches to data protection and to encourage the creation of cyber security resource centers for developing countries.

Credit: County of Los Angeles

WASHINGTON DC, May 5 2020 (IPS) – In the Philippines, Peru, India, Kenya, South Africa and many other developing countries, poor people who are already struggling with the health impact of the coronavirus pandemic have been targeted by online fraudsters trying to take unfair advantage of them.

There is the risk that these scams could undermine confidence in digital technologies that are proving so very important in keeping people informed and connected during the pandemic.

In particular, trust in digital financial services, which have been useful in advancing financial inclusion efforts, could be damaged at the very time that they have proven to be an effective means of getting payments to poor people quickly and efficiently.

Here are some examples of virus-related scams:

phishing

    • attack is offering housebound people in India a free Netflix subscription during the lockdown if they click on a survey link and forward the message to 10 WhatsApp users.
    • • Emails with suspicious links have also been sent purporting to be from the World Health Organization, United Nations and Centers for Disease Control and Prevention.

Scammers

    • have been visiting homes in South Africa to “recall” banknotes and coins they say are contaminated with the coronavirus, providing receipts for “clean” cash that is never delivered.

Fake

    • offers of emergency money for essentials have been reported in India.
    • • INTERPOL

warns

    • that criminals have been calling victims pretending to be clinic or hospital officials, reporting that a relative has fallen sick with the virus and requesting payments for medical treatment.
    • • People desperate to protect themselves are falling for offers of

fake

    • medical products, such as masks, vaccines and

testing kits

    • Education and COVID-19: UN helps children continue their learning

There have even been false claims that the coronavirus is related to exposure to new technologies (such as 5G, which can be used to deliver money mobiles services). There are measures authorities can take in response to better protect consumers.

Regulators, providers and consumer protection agencies can alert people to the risks; providers can make sure they have adequate consumer complaint mechanisms in place; and law enforcement can coordinate firm action, not only in country but across borders.

Credit: United Nations

Preying on vulnerable populations in developing countries at a time of crisis is unconscionable. A multi-pronged effort is needed to protect more people from becoming victimized at a time when many are struggling with lost income as a result of being forced to stay at home to combat the illness.

A concerted effort by the public and private sectors is needed to protect customers through educational efforts and high visibility law enforcement actions.

In the short term, education is key, and governments are often best positioned to take the lead. For instance, the South African Banking Risk Information Centre (Sabric) has been warning bank customers about criminals exploiting the virus to engage in phishing.

Similarly, the Philippines Department of Information and Communications Technology has asked Filipinos to be mindful of their safety online and to be wary of unverified COVID-19 websites or applications that require consumers to provide their personal data.

There is a need for governments to continue to identify consumer protection threats — initially, by reaching out to banks, microfinance institutions, fintechs, NGOs and other entities to find out what they are seeing in their markets. Efforts should then be made to warn people how to identify potential scams.

The Central Bank of South Africa has stated that neither banknotes nor coins have been withdrawn from circulation, so anyone offering to “recall” currency should be met with a skeptical eye.

While there is a natural instinct to provide financial support for friends and family in need of medical care, it is important to follow INTERPOL’s warning and confirm that unknown callers are really acting on their behalf. Such consumer warnings could be sent via SMS, WhatsApp or along with other governmental communications.

The private sector must also play a critical role in protecting consumers during the crisis. In the course of providing financial services, trusted firms can educate customers about how to avoid pitfalls, such as responding to fraudulent communications.

There is also the need for digital financial services companies to have effective consumer complaint and resolution centers so that customers who have been scammed have some recourse.

Prosecuting digital scam artists promptly and meting out harsh punishments will send a strong message. One recent example is the response to a brazen attempt by a fraudster in India purporting to sell the world’s tallest statue, the Statue of Unity, for $4 billion to raise money for the Gujarat state to fund its fight against coronavirus.

This action led the Indian police to lodge a case. Similarly, Indian police have registered cases against fake offers of discounted Jio and Netflix services. Such enforcement actions help further educate members of the public about protecting themselves against fraudulent actors.

In the connected world in which we live, it is often easier to commit fraud across borders than inside one’s own country. There is no better time than now for governments to work with their neighbors and go after criminals in each other’s countries.

Such an effort has been led by INTERPOL, an inter-governmental organization with 194 member countries, including many developing countries. INTERPOL has been receiving information from member countries on a near-daily basis regarding coronavirus fraud cases, along with requests to help stop fraudulent payments.

While targeted victims have been primarily located in Asia, criminals have used bank accounts in other regions such as Europe. INTERPOL has helped national authorities to block some of the payments, assisting with some 30 COVID-19 related fraud scam cases.

Where cooperative agreements between countries do not exist, perhaps a silver lining of the current crisis would be to promote such cross-border consumer protection efforts.

Collectively, we can combat the outrageous attempts by some to take advantage of this crisis for their financial benefit. Of course, to survive many people will need more medical and financial help, not just tips on how to avoid scams.

Many countries have undertaken wide-ranging relief efforts. Digital financial services, such as mobile money, are proven mechanisms for getting financial aid quickly to the poorest and neediest in times of crisis.

Let’s take steps now to ensure digital technology is used as a force for good.

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Impact of COVID-19 on Tourism in Small Island Developing States

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Opinion

Pamela Coke-Hamilton, Director, Division on International Trade and Commodities, UN Conference on Trade & Development (UNCTAD)

Small island developing states are most vulnerable to the impact of COVID-19 on tourism not only because they are highly dependent on tourism, but also because any shock of such magnitude is difficult to manage for small economies

An undersea restaurant in the Maldives, a Small Island Developing State (SIDS)

GENEVA, May 4 2020 (IPS) – The COVID-19 pandemic and the measures put in place to contain its diffusion are taking a heavy toll on the tourism sector. According to the United Nations World Tourism Organization (UNWTO), the COVID-19 pandemic will result in a contraction of the tourism sector by 20% to 30% in 2020.

This estimate is likely to be conservative for countries relying on foreign tourists, as the recent data on daily air traffic indicate a drop of almost 80% since January 2020.

While many economic sectors are expected to recover once restrictive measures are lifted, the pandemic will probably have a longer lasting effect on international tourism. This is largely due to reduced consumer confidence and the likelihood of longer restrictions on the international movement of people.

According to the World Travel and Tourism Council (WTTC), in previous viral epidemics the average recovery time for visitors to a destination was about 19 months.

Highly vulnerable countries

The sudden, deep and likely prolonged downturn in the travel and tourism sector has made countries that rely heavily on foreign tourism very concerned about their finances.

Among these, small island developing states (SIDS) are most vulnerable not only because they are highly dependent on tourism, but also because any shock of such magnitude is difficult to manage for small economies.

On average, the tourism sector accounts for almost 30% of the gross domestic product (GDP) of the SIDS, according to WTTC data. This share is over 50% for the Maldives, Seychelles, St. Kitts and Nevis and Grenada.

Overall, travel and tourism in the SIDS generates approximately $30 billion per year. A decline in tourism receipts by 25% will result in a $7.4 billion or 7.3% fall in GDP. The drop could be significantly greater in some of the SIDS, reaching 16% in the Maldives and Seychelles.

It is expected that for many SIDS, the COVID-19 pandemic will directly result in record amounts of revenue losses without the alternative sources of foreign exchange revenues necessary to service external debt and pay for imports.

Devastating economic consequences

In general, countries may be able to weather economic storms by relying on additional debt or using available foreign reserves.

However, access to global capital markets is increasingly tight, more so for small countries such as SIDS, which are often highly indebted and not well diversified.

The external debt of the SIDS as a group accounts for 72.4% of their GDP on average, reaching up to 200% in the Seychelles and the Bahamas.

Foreign reserves are also generally low, with many of the SIDS possessing only the reserves sufficient for a few months of imports. Given these statistics, it is evident that without international assistance, the economic consequences of the pandemic will be devastating for many of the SIDS.

Immediate financial needs

By considering the economic impact of reduced tourism revenues (assuming a 25% decline in tourism receipts and restoring the minimum level of import coverage (three months), it is possible to provide a rough estimate of each country’s immediate financial needs to offset the damage of the pandemic.

Currently, the SIDS would need about $5.5 billion to counteract the adverse effects of the pandemic on their economies.

The Maldives stands out with a need of $1.2 billion due to its reliance on tourism revenues, followed by the Bahamas and Jamaica.

Many of the SIDS, like Jamaica and the Bahamas, also face high external debt burdens which require complementary external debt suspension or relief programmes.

Table 1: Tourism, Debt and Foreign Currency Reserve Indicators

International response

While governments all over the world have announced fiscal measures totalling $8 trillion to combat the pandemic, the international community has also mobilized funds through international financial institutions to counteract the economic crisis in the most vulnerable countries.

The International Monetary Fund (IMF) created a $50 billion fund through its rapid-disbursing emergency financing facilities for low-income and emerging market countries. It has earmarked $10 billion to serve its poorest members with a zero-interest rate. Regional banks have also created response facilities aimed at financially supporting their members.

What options are available for SIDS?

The IMF has just revamped the Catastrophe Containment and Relief Trust (CCRT) to offer short term debt reliefs to some of its members.

While some SIDS such as Comoros, São Tomé and Príncipe, and the Solomon Islands have already requested and obtained debt relief, there is room for more SIDS to take advantage of this option. While many of the SIDS are not among the poorest countries, they are vulnerable. This is further compounded by high levels of external debt many SIDS experience.

It is critical that SIDS have access to funding at zero interest rates and can suspend existing debt payments until they are financially ready to service their external debt obligations.

Ultimately, this can help blunt the impact of external shocks such as COVID-19 and equip them with the necessary financial resources to plan their next steps for their economic development.

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Citizen Action is Central to the Global Response to COVID-19

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NEW YORK and MANILA, Apr 22 2020 (IPS) – The coronavirus (COVID-19) pandemic has created an unprecedented human and economic crisis. Governments are taking strong actions, enforcing quarantines to reduce contagion, testing populations, building emergency intensive care units. Governments have also launched large fiscal stimulus plans to protect jobs and the economy, as well as temporary social protection programs such as income/food support, subsidies to utilities and care services.

Isabel Ortiz

But in many countries, even stronger actions are needed if we are to protect lives and jobs. States must respond adequately to this public emergency. Citizens must question if the measures implemented by their governments are sufficient and adequate.

The following are important issues for citizens and civil society organizations (CSOs) to watch out at the country level:

    1. It is time to invest in universal public health, not only emergency support. Given COVID-19, governments are advised to ramp up public health expenditures. Indeed, respirators, tests and masks are necessary, but countries need more than just emergency support. There is a risk that, as governments will become indebted, they continue with austerity cuts and privatizations that have been eroding public health systems in recent years, returning to a situation where millions are excluded from healthcare.
    2. Stimulating the economy and employment. This is much necessary to support job-generating enterprises during the COVID-19 lockdown. However, citizens need to be vigilant that fiscal stimulus do not go to the wrong hands, to large corporations avoiding taxes, to cronies, to the untaxed financial sector. If public funds are given to companies, it should be with strict conditions to stop tax evasion and share buybacks, undergo adequate regulation, cut obnoxious management bonusses, pay living wages and preserve employment.
    3. Providing social protection, income and food support to people. These measures are extremely urgent if people are to be quarantined and are unable to telework. In developing countries, most work precariously in the informal economy and isolation is not possible, households will suffer hunger with no income. Given the low living conditions in most developing countries, policymakers should consider the need for universal social protection floors.
    4. Governments need more executive powers to implement these measures. States and public policies have been weakened over the last decades by deregulations, privatizations and budget cuts. Better planning, better resources and better public policies for all citizens are needed, but it is important to ensure that far right and authoritarian leaders do not use the need for decisive executive action to grab more power for their own ends (eg. Brazil, Hungary, India, Philippines, US).

Additionally, it is important for citizens and CSOs to push for the following measures at the global level:

Walden Bello

    5. Support for global public health, at stake is the survival of the planet. The coronavirus pandemic has revealed the weak state of global public health systems – generally overburdened, underfunded and understaffed because of earlier austerity policies and privatizations. There is urgent need to improve the global governance of health, including the strengthening the WHO and UN agencies that support the extension of public health systems, as well as CSOs monitoring progress.
    6. Put pressure on the international financial institutions such as the IMF and the development banks, so their policies support universal public health systems, jobs and social protection floors at present as well as after the COVID-19 emergency, including resources and fiscal space to finance them.
    7. Given high sovereign debt levels, continue lobbying for debt forgiveness or radical debt relief to ensure that countries get the needed financing; or at least a debt moratoria, and later debt restructuring/relief.
    8. Watch out that new debt and fiscal deficits created to respond to COVID-19 do not result in a new round of austerity cuts with negative social impacts that will undermine public health systems, jobs and social protection.
    9. Ensure capital controls. Capital is flying North to safety, to the US, to Europe. Developing countries are going to be hard hit, not only because of the capital drain but also from the fall of commodity prices and others. Capital controls are easy to implement, with immediate results.
    10. A Global Marshall Plan, or a Global Green New Deal. Global problems require global solutions; after the WW2, the US implemented a Marshall Plan to rebuild Europe. This time, no country alone can or should finance a global plan, it can be built as part of a progressive multilateralism. There are many ways to finance it, solidarity taxes to wealth may well be a best way to reduce inequalities and even up world’s development. It can be complemented by other measures such as issuing more Special Drawing Rights (SDRs) at the international organizations.

The coronavirus pandemic has provided stark evidence of the weaknesses and extreme injustices of our world. We must not return to “normality”, a world where half of its population is living below the poverty line of $5.50 a day. We must move away from an inequitable model based on unregulated finance and corporate power, blind to harmful social and environmental impacts. We must back away from a system that disregards the work of health staff, cleaners, garbage collectors, farmers, and instead reward with huge salaries corporate managers, football players, and others who do not perform any essential activity. Now citizens have the opportunity to move forward.

As countries and enterprises recuperate from the crisis, they will have to rethink their economic model, including fewer links with global supply chains, and more links closer to home. It will be an important time for citizens and CSOs to press for “deglobalization”, making the domestic market again the center of gravity of the economy by preserving local production with decent jobs and green investments, and question global supply chains based on taking advantage of cheaper wages, lesser taxes and environmental regulations elsewhere.

Now is the time for citizens to ensure that world leaders forcefully respond to the COVID-19 crisis, in accordance with human rights. This time it cannot be like many earlier crisis experiences, where insufficient support was provided, or ended in the wrong hands, bailing out banks not the population. Citizens and CSOs have a very important role to play to ensure that governments respond to people.

Isabel Ortiz is Director of the Global Social Justice Program at the Initiative for Policy Dialogue, Columbia University, and former director of the International Labour Organization (ILO) and UNICEF.

Walden Bello is senior analyst at the Bangkok-based Focus on the Global South and the International Adjunct Professor of Sociology at the State University of New York at Binghamton.

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Coronavirus, New Threat for Mexican Migrant Workers in the U.S.

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Migration & Refugees

Considered essential to the U.S. economy, as Donald Trump himself now acknowledges, Mexico's seasonal farmworkers are exposed to the coronavirus pandemic as they work in U.S. fields, which exacerbates violations of their rights, such as wage theft, fraud, and other abuses. CREDIT: Courtesy of MHP Salud

Considered essential to the U.S. economy, as Donald Trump himself now acknowledges, Mexico’s seasonal farmworkers are exposed to the coronavirus pandemic as they work in U.S. fields, which exacerbates violations of their rights, such as wage theft, fraud, and other abuses. CREDIT: Courtesy of MHP Salud

MEXICO CITY, Apr 21 2020 (IPS) – As the high season for agricultural labour in the United States approaches, tens of thousands of migrant workers from Mexico are getting ready to head to the fields in their northern neighbour to carry out the work that ensures that food makes it to people’s tables.

But the SARS-CoV-2 (COVID-19) pandemic, of which the U.S. has become the world’s largest source of infection, threatens to worsen the already precarious conditions in which these workers plant, harvest, process and move fruits and vegetables in the U.S.

Exposed to illegal charges for visa, transport and accommodation costs, labour exploitation, lack of access to basic services and unhealthy housing, Mexican seasonal workers driven from their homes by poverty must also now brave the risk of contagion.

Evy Peña, director of communications and development at the non-governmental Centro de los Derechos del Migrante (Migrant Rights Centre – CDM), told IPS from the city of Monterrey that the COVID-19 pandemic is exacerbating violations of the rights of migrant workers.

“Temporary visa programmes are rife with abuse, from the moment workers are recruited in their communities. They suffer fraud, they are offered jobs that don’t even exist in the United States. It’s a perverse system in which recruiters and employers have all the control. There are systemic flaws that will become more evident now,” the activist said.

In 1943, the United States created H2 visas for unskilled foreign workers, and in the 1980s it established H-2A categories for farm workers and H-2B categories for other work, such as landscaping, construction and hotel staff.

In 2019, Washington, which had already declared them “essential” to the economy, granted 191,171 H-2A and 73,557 H-2B visas to Mexican workers, and by January and February of this year had issued 27, 058 and 6,238, respectively.

Two emergencies converge

Now, the two countries are negotiating to send thousands of farmworkers within or outside of the H2 programme, starting this month, to ensure this year’s harvest in the U.S. The Mexican government has polled experts to determine the viability of the plan, IPS learned.

The migrant workers would come from Michoacan, Oaxaca, Zacatecas and the border states. The plan would put leftist President Andres Manuel López Obrador in good standing with his right-wing counterpart, Donald Trump; generate employment for rural workers in the midst of an economic crisis; and boost remittances to rural areas.

For his part, Trump, forced by a greater need for rural workers in the face of the pandemic and under pressure from agriculture, abandoned his anti-immigrant policy and on Apr. 1 even issued a call for the arrival of Mexican migrant workers.

“We want them to come in,” he said. “They’ve been there for years and years, and I’ve given the commitment to the farmers: They’re going to continue to come.”

U.S. authorities can extend H-2A visas for up to one year and the maximum period of stay is three years. After that, the holder must remain outside U.S. territory for at least three months to qualify for re-entry with the same permit.

On Apr. 15, Washington announced temporary changes allowing workers to switch employers and to stay longer than three years.

A Mexican migrant worker works at a vineyard in California, one of the U.S. states most dependent on seasonal labour from Mexico in agriculture, and which has now urged President Donald Trump to facilitate the arrival of guest workers from that country so crops are not lost. CREDIT: Kau Sirenio/En el Camino

A Mexican migrant worker works at a vineyard in California, one of the U.S. states most dependent on seasonal labour from Mexico in agriculture, and which has now urged President Donald Trump to facilitate the arrival of guest workers from that country so crops are not lost. CREDIT: Kau Sirenio/En el Camino

The most numerous jobs are in fruit harvesting, general agricultural work such as planting and harvesting, and on tobacco plantations, according to the U.S. Department of Labor.

Migrant workers traditionally come from Mexican agricultural and border states and their main destinations are agricultural areas where there is a temporary or permanent shortage of labourers.

Jeremy McLean, policy and advocacy manager for the New York-based non-governmental organisation Justice in Motion, expressed concern about the conditions in which migrants work.

The way the system works, “it’s not going to be easy to follow recommendations for social distancing. Hundreds of thousands of people are going to come and won’t be able to follow these recommendations, and they will put themselves at risk. It could spell another wave of infection and transmission,” he warned IPS.

“This population group has no health services and no medical insurance. If they fall ill in a remote area, what help can they get?” he said from New York.

On Mar. 26, the U.S. Embassy in Mexico reported that it would process without a personal interview the applications of those whose visas had expired in the previous two years or who had not received them in that time, under pressure from U.S. agribusiness.

Trapped with no way out

The migrant workers’ odyssey begins in Mexico, where they are recruited by individual contractors – workers or former workers of a U.S. employer, fellow workers, relatives or friends, in their hometowns – or by private U.S. agencies.

Although article 28 of Mexico’s Federal Labour Law, in force since 1970 and overhauled in 2019, regulates the provision of services by workers hired within Mexico for work abroad, it is not enforced.

It requires that contracts be registered with the labour authorities and that a bond be deposited to guarantee compliance. It also holds the foreign contractor responsible for the costs of transport, repatriation, food for the worker and immigration, as well as the payment of full wages, compensation for occupational hazards and access to adequate housing.

In addition, it states that Mexican workers are entitled to social security benefits for foreigners in the country where they are offering their services.

Although the Mexican government could enforce article 28 of the law in order to safeguard the rights of migrant workers who enter and leave the United States under the visa programme, it has failed to do so.

In its recent report “Ripe for Reform: Abuse of Agricultural Workers in the H-2A Visa Program”, the bi-national CDM organisation reveals that migrant workers experience wage theft, health and safety violations, discrimination, and harassment as part of a human trafficking system.

Recruitment without oversight

For Mayela Blanco, a researcher at the non-governmental Centre for Studies in International Cooperation and Public Management, the problem is the lack of monitoring or inspections of recruiters and agencies.

“In Mexico there are still many gaps in the mechanisms for monitoring and inspecting recruitment. There is still fraud,” she told IPS. “How often do they inspect? How do they guarantee that things are working the way they’re supposed to?”

There are 433 registered placement agencies in the country, distributed in different states, according to data from the National Employment Service. For the transfer of labour abroad, there are nine – a small number considering the tens of thousands of visas issued in 2019.

For its part, the U.S. Department of Labor reports 239 licenced recruiters in that nation working for a handful of U.S. companies.

Data obtained by IPS indicates that Mexico’s Ministry of Labour only conducted 91 inspections in nine states from 2009 to 2019 and imposed 12 fines for a total of around 153,000 dollars. Some states with high levels of migrant workers were never visited by inspectors.

Furthermore, the records of the federal labour board do not contain any reports of violations of article 28.

Mexico is a party to the Fee-Charging Employment Agencies Convention 96 of the International Labour Organisation (ILO), which it violates due to non-compliance with the rights of temporary workers.

Peña stressed that there is still a gap between the U.S. and Mexico in labour protection and said workers are being left behind because of that gap.

“Countries like Mexico see temporary visas as a solution to labour migration and allow the exploitation of their citizens. The H2 programme is about labour migration and governments forget that bilateral solutions are needed,” she said.

In response to the pandemic and its risks, 37 organisations called on the U.S. government on Mar. 25 for adequate housing with quarantine facilities, safe transportation, testing for workers before they arrive in the United States, physical distancing on farms and paid treatment for those infected with COVID-19.

Blanco emphasised the lack of justice and reparation mechanisms. “The more visas issued, the greater the need for oversight. Mexico is perceived as a country of return or transit of migrants, but it should be recognised as a place of origin of temporary workers. And that is why it must comply with international labour laws,” she said.

McLean raised the need for a new U.S. law to guarantee the rights of migrant workers, who are essential to the economy, as underscored by the demand reinforced by the impact of COVID-19.

“We pushed for a law to cover all temporary visa programmes so that there would be more information, to avoid fraud and wage theft. But it is very difficult to get a commitment to immigration dialogue in the United States today,” he said.

But the ordeal that migrant workers face will not end with their work in the U.S. fields, because in October they will have to return to their hometowns, which will be even more impoverished due to the consequences of the health crisis, and with COVID-19 in all likelihood still posing a threat.

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