Normative Narratives


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Green News: Properly Managing Natural Resource Revenues–A Focal Point of Sustainable Development

Following the adoption of the Sustainable Development Goals (SDGs) by the UN General Assembly, I would like to highlight a focal point of sustainable human development–utilizing natural resource revenue as a tool for sustainable human development.

Post-2015 Development Financing:

“There’s only so much amount of aid countries can rely on. Indeed, often you can’t rely on aid in the sense of relying on certain amounts every single year… it goes up, it goes down… governments fall in and out of love with the donors… so it’s not so reliable,” said Mr. Nolan.

“At the end of the day, a State operates on the basis of its own revenue collection. And a developmentally-oriented State, a State that actually wants to promote development through infrastructure, health, education spending, needs to raise most of the money itself.”

He added that raising revenue does not necessarily mean going into the rural areas and heavily taxing people. “It actually means taxing the better off in the society and also taxing companies, both domestic and foreign, more effectively.”

Tax rates, he noted, are very low in many low-income countries, in some cases under 15 per cent of gross domestic product (GDP). This could easily be increased by a series of reforms, as well as by better structuring of taxation in the extractive industries and greater attention to the transfer of money out of the country.

Meeting UN-backed climate goals requires leaving the vast majority of natural energy resource in the ground. But sustainable development is contingent on both the intrinsic (electricity) and market value of natural resources; one would be hard pressed to find a development practitioner that does not believe this revenue source is an essential piece of the development financing puzzle.

Developed countries have had decades, if not centuries, of using natural resources limitlessly in their pursuit of development; reliable access to energy is an indispensable part of poverty alleviation, economic growth, and modernization. We are essentially asking the worlds poorest countries to forgo the cheapest form of electricity available in the name of environmental sustainability (do as I say, not as I did). To reconcile this clear mismatch between ability to pay and necessity, the developed world must do more to reach it’s target of $100 billion per year by 2020 to help poorer countries fight climate.

The “Natural Resource Curse“:

The “Natural Resource Curse”–the misappropriation of resource revenue–robs the worlds poorest countries of a needed source of development finance. Often times the natural resource curse finances armed conflicts, which cause immeasurable human suffering, roll back development gains, and make future development much more difficult (conflict is often associated with poverty and malnutrition which stunts physical and cognitive development, can prevent children from going to school, and can cause trauma that leads to lifelong psychological issues).

The Natural Resource Curse is not inevitable, but fighting it requires good governance and the security capacity to counter those who wish to extract revenues for their own privilege. Battling the Natural Resource Curse also requires effective sanctions regimes–by driving ill-gotten natural resource revenues to the black market, and attacking that black market and related international money laundering, international criminals and terrorists would lose an important source of funding.

Sanctions, of course, require broad based cooperation. There is a risk that in this era of disorder and instability, the international community might “ease up” on bad-but-stable governments. The importance of good governance of natural resource revenues shows this would be a short-sighted and ultimately counter-productive strategy for fighting international crime and promoting sustainable human development.

If the world is to simultaneously address the needs of Least Developed Countries (LDCs) and reach climate targets, we must focus on making sure LDCs leverage all the resources they do extract to maximize social welfare. Effective “South-South Cooperation“–the sharing of best practices between developing countries–would greatly enhance this effort.

Given the importance of the source, the propensity for corruption (“Resource Curse”), and the need to leave much of the existing deposits in the ground, when it comes to properly managing natural resource revenues for sustainable human development, there is little margin for error.

Natural Resources and the SDGs:

Fortunately, proper natural resource revenue management is addressed many times throughout the proposed SDG text:

Goal 1. End poverty in all its forms everywhere

1.4 by 2030 ensure that all men and women, particularly the poor and the vulnerable, have equal rights to economic resources, as well as access to basic services, ownership, and control over land and other forms of property, inheritance, natural resources, appropriate new technology, and financial services including microfinance.

Goal 5. Achieve gender equality and empower all women and girls

5.a undertake reforms to give women equal rights to economic resources, as well as access to ownership and control over land and other forms of property, financial services, inheritance, and natural resources in accordance with national laws

Goal 12. Ensure sustainable consumption and production patterns

12.2 by 2030 achieve sustainable management and efficient use of natural resources

Goal 16. Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels

16.4 by 2030 significantly reduce illicit financial and arms flows, strengthen recovery and return of stolen assets, and combat all forms of organized crime

16.5 substantially reduce corruption and bribery in all its forms

16.6 develop effective, accountable and transparent institutions at all levels

16.7 ensure responsive, inclusive, participatory and representative decision-making at all levels

Goal 17. Strengthen the means of implementation and revitalize the global partnership for sustainable development

Finance

17.1 strengthen domestic resource mobilization, including through international support to developing countries to improve domestic capacity for tax and other revenue collection

17.3 mobilize additional financial resources for developing countries from multiple sources

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Economic Outlook: Malnutrition and Sanitation in India

https://i0.wp.com/www.livemint.com/rf/Image-621x414/LiveMint/Period1/2013/08/13/Photos/rural_sanitation--621x414.jpg

Original article:

So why was Vivek malnourished?

It is a question being asked about children across India, where a long economic boom has done little to reduce the vast number of children who are malnourished and stunted, leaving them with mental and physical deficits that will haunt them their entire lives. Now, an emerging body of scientific studies suggest that Vivek and many of the 162 million other children under the age of 5 in the world who are malnourished are suffering less a lack of food than poor sanitation.

Like almost everyone else in their village, Vivek and his family have no toilet, and the district where they live has the highest concentration of people who defecate outdoors. As a result, children are exposed to a bacterial brew that often sickens them, leaving them unable to attain a healthy body weight no matter how much food they eat.

“These children’s bodies divert energy and nutrients away from growth and brain development to prioritize infection-fighting survival,” said Jean Humphrey, a professor of human nutrition at Johns Hopkins Bloomberg School of Public Health. “When this happens during the first two years of life, children become stunted. What’s particularly disturbing is that the lost height and intelligence are permanent.”

“Our realization about the connection between stunting and sanitation is just emerging,” said Sue Coates, chief of water, sanitation and hygiene at Unicef India. “At this point, it is still just an hypothesis, but it is an incredibly exciting and important one because of its potential impact.”

Half of India’s population, or at least 620 million people, defecate outdoors. And while this share has declined slightly in the past decade, an analysis of census data shows that rapid population growth has meant that most Indians are being exposed to more human waste than ever before.

Other developing countries have made huge strides in improving sanitation. Just 1 percent of Chinese and 3 percent of Bangladeshis relieve themselves outside compared with half of Indians. Attitudes may be just as important as access to toilets. Constructing and maintaining tens of millions of toilets in India would cost untold billions, a price many voters see no need to pay — a recent survey found that many people prefer going to the bathroom outside.

One analysis found that government spending on toilets pays for itself in increased tax receipts from greater productivity, but the math works only if every member of a family who gets a toilet uses it.

“We need a cultural revolution in this country to completely change people’s attitudes toward sanitation and hygiene,” said Jairam Ramesh, an economist and former sanitation minister.

India now spends about $26 billion annually on food and jobs programs, and less than $400 million on improving sanitation — a ratio of more than 60 to 1.

The present research on gut diseases in children has focused on a condition resulting from repeated bacterial infections that flatten intestinal linings, reducing by a third the ability to absorb nutrients. A recent study of starving children found that they lacked the crucial gut bacteria needed to digest food.

Just building more toilets, however, may not be enough to save India’s children.

Phool Mati lives in a neighborhood in Varanasi with 12 public toilets, but her 1-year-old grandson, Sandeep, is nonetheless severely malnourished. His mother tries to feed him lentils, milk and other foods as often as she can, but Sandeep is rarely hungry because he is so often sick, Ms. Mati said.

“We all use the bathroom,” she said.

The effluent pipe that served the bathroom building is often clogged. Raw sewage seeps into an adjoining Hindu temple, and, during the monsoon season, it flooded the neighborhood’s homes. The matron of the toilet facility charges two rupees for each use, so most children relieve themselves directly into open drains that run along a central walkway.

Much of the city’s drinking water comes from the river, and half of Indian households drink from contaminated supplies.

“India’s problems are bigger than just open defecation and a lack of toilets,” Dr. Laxminarayan said.

When determining the efficacy of social programs, one must consider both supply and demand side factors:

Supply Side — Investment in public toilets, clean water / sanitation infrastructure.

Demand Side — People in India do not seem to think funding for sanitation is a priority. An Educational / media / social media campaign to increase demand is required alongside greater investment (supply side). Furthermore, even a small fee can be enough to discourage toilet use when an alternative (public defecation) exists, particularly in a country such as India where extreme poverty makes such fees prohibitory to society’s most vulnerable.

My World 2015 survey results show global demand for nutritious foods and sanitation / clean water at roughly same priority level across level development / education level–this is clearly not the case in India.

In a democracy such as India, supply side impediments can sometimes be caused by (or blamed on) inadequate demand (voters do not think the issue is important). Therefore, people must be better educated about the costs of open defecation and benefits of modernized sanitation systems.

There are temporal / necessity reasons that nutritional support receives such greater attention and resources compared to sanitation support. There is no substitute for food–without food, people die relatively quickly (typically 10-14 days). One can always defecate in public, with little immediate risk to their health (although, as the article highlights, there are real health problems and externalities associated with public defecation).

Furthermore, compared to food delivery, the upfront costs associated with sanitation infrastructure may seem very high (even if, as the article proposes, these costs “pay for themselves” in the long run). One potential solution could be the proliferation of composting toilets, which do not need to be attached to plumbing systems.

Sanitation is, of course, not a substitute for nutritious / vitamin fortified foods. Even with perfect sanitation services, people can still go hungry / be malnourished. They are compliments; investing in sanitation yields greater returns on investments in nutrition, education, etc. Public resources must more closely reflect that (reduce the 60:1 discrepancy).

For example, providing school meals has been a popular program in developing countries, meant to improve attendance rates. But the ultimate goals of education, human development and social mobility,  are decidedly less effective if parasites and infections divert nutrients from cognitive / physical development towards survival.

This article highlights a general realization in the field of development economics, the need for a context-sensitive, human rights based approach to poverty alleviation and human development.

Without taking into consideration cultural attitudes towards public defecation present in India (but not in many other developing countries), and providing a wide variety a basic services (sanitation, nutritional support, healthcare, education, etc.–a human rights based approach to development that recognizes human rights violations as interconnected), the malnutrition epidemic in India might never improve, regardless of the amount of resources dedicated to nutritional support alone.

The situation in India also presents an prime opportunity for information sharing, what those in the field of development call “South-South cooperation“. This concept is simple; by sharing experiences of what has worked (and failed) in other developing countries, a country may be able to avoid common policy mistakes (and the subsequent misallocation of scarce financial resource). At first this may seem antithetical to a context sensitive approach to human development, but it is not. While lessons learned from other countries through south-south cooperation must be amended to reflect the context of the country considering them (in this case India), this does not mean that there is not real value in the information shared through South-South cooperation.