Few disputed the unfair weightings in the IMF and World Bank of the BRICS companies. But Rajat Nag, a former Managing Director of the Asian Development Bank, warns of the pitfalls that await their Shangai-based New Development Bank
Arguing the case for the BRICS Bank was the easier part; China, though soon to be the world’s largest economy, has a shareholding at the IMF smaller than the Benelux countries. Brazil, with an economy almost three times the size of Belgium’s and a population about 18 times bigger, also has a smaller IMF shareholding.
As a group, the BRICS countries account for about 42% of the world’s population and about a fifth of the global GDP, yet just over a tenth of the shareholdings in the IMF. It is true that reforms are under way to give developing countries a slightly greater voice, particularly the BRICS countries, but the pace has been slow and rather hesitant.
No wonder then that the BRICS countries keenly desire a new international financial institution where they will have a strong say in keeping with their growing economic weight. There is also the issue of huge and largely unmet needs for the financing of infrastructure projects in the developing world, to the tune of almost a trillion dollars a year in Asia alone. The new BRICS institution could help to supplement the resources already being provided by international financing institutions like the World Bank and the regional development banks.
It wasn’t an easy or straightforward road that led to the clasping of hands of the five BRICS leaders at the Fortaleza Summit in Brazil in mid-2014, when they announced the creation of two institutions, first, the BRICS Bank itself, formerly named the New Development Bank, or NDB, with an initial capital base of $50bn, and second, the $100bn Contingency Reserve Arrangement (CRA).
A number of potentially very disruptive issues had first to be dealt with. China had initially suggested an ownership structure in proportion to each of the five countries’ economic size but this would have created a very lop-sided institution as China’s GDP is greater than the combines economies of the other four countries. After a drawn-out and difficult bargaining process, an equal shareholding arrangement was agreed on. In return, China would host the institution in Shanghai. The others were not left empty-handed as it was agreed that an Indian would head the institution for the first six years, a Brazilian would chair the Board of Directors, a Russian the Board of Governors and South Africa would host a Regional Office of the NDB.
Now comes the hard part: implementation. As well as the usual challenges that any newly-created institution faces, there are some critical issues the NDB still has to contend with. First, diversity. There is no denying that the five BRICS countries have more that differentiates them than they have in common. China’s economy is about 16 times that of South Africa; per capita GDP in Russia is about six times that of India. Two of the BRICS are permanent members of the UN Security Council, and have been every bit as reluctant as the U.S., the UK and France to admit others to permanent membership. Three BRICS countries are vibrant and often chaotic democracies, and have to contend with very different and demanding processes of consensus building.
In light of their diversity, it’s still far from clear how the NDB will formulate operational policies. Nor is it clear who the NDB will lend to and what its priorities will be. Will it be only to the BRICS countries themselves or will other developing nations be eligible to borrow? If the latter, how will those countries be selected? And within the BRICS, what will be the banks’ criteria for lending?
On top of that, there’s the thorny question of the cost of borrowing from the NDB. International financial institutions like the World Bank or the Asian Development Bank (ADB) operate on a very simple financial model; backed by the collective economic strength of their members, which include most of the advanced economies, these institutions enjoy AAA prime credit ratings – often better than the terms enjoyed by individual member countries. They therefore borrow on international capital markets at highly competitive terms, add a small margin and on lend those funds at rates lower and for longer maturities than national borrowers could have mustered on their own. With the NDB currently owned by only five countries, it is not clear what credit rating it will enjoy and thus both the volume and price of the debt funds it will be able to raise in the international capital markets remain uncertain.
There is also the matter of credibility. An important factor influencing the cost of borrowing is the NDB’s credibility. Its track record as a lender that upholds the highest standards in its lending operations has yet to be established; so nothing is still known of its governance methods or its respect for social and environmental safeguards. The new bank also has to establish its credibility as a borrower that repays its debt and enjoys sound financial health.
The demand for funds, particularly to finance infrastructure projects, is enormous in all five BRICS countries and throughout the developing world. The NDB will need to lend at a meaningful level each year, but its relatively limited initial equity base of only $50bn means its lending volume will be determined by the level of debt funds it is able to mobilize. That in turn will depend on the credit rating it can command.
The need will be for great attention by the NDB for its due diligence processes regarding projects, including on social and environmental safeguards. The long-term viability of NDB as an institution will depend on the viability of the projects it finances; so these will need to be technically and economically viable while upholding best practices in social and environmental safeguards. The financial viability of projects will need to be assured either by the direct beneficiaries or by the borrowing government. Any compromises on the project quality at entry and during implementation would over time compromise the NDB’s own integrity and its financial health.
How well the BRICS’ new institution builds a pipeline of bankable projects will determine the credibility of the NDB, and there should be no illusions that doing so will need painstaking efforts and time-consuming development of staff skills and operational policies. The new institution will need to guard against any relaxation of its the standards of due diligence, or in the design and preparation of projects out of a desire to respond to borrowing countries’ needs.
The rationale for the NDB is strong, and it should start to take shape in the coming months so as to be ready for business in 2016. But the rationale for the Contingency Reserve Arrangement is not so strong and still needs careful review. The idea is that the $100bn CRA’s pooling of the five countries’ foreign exchange reserves will be available for BRICS members to draw on in a crisis. The two major challenges are that, first, in a genuine crisis a fund as small as $100bn will be insignificant even for the smallest of the giant BRICS countries. Second, any doubts about the repayment capacity of a borrower would mean that the other BRICS countries might well be unwilling to lend without imposing tough conditions. This would be politically very difficult between sovereign states of a club whose members are deemed to be equal partners. Conditionalities and the monitoring of compliance would exacerbate the tensions of a partnership whose diverse interests risk making their working harmoniously together difficult under the best of circumstances.
An instructive footnote could be that the similar Asian arrangement of swap lines and credit was established with the Chiang Mai Initiative following the 1997 Asian financial crisis, but was never used, even during the 2008 global financial crisis. There is no reason to believe that the CRA will be any more successful. The architects of the arrangement themselves recognised the CRA’s potential pitfalls by including in its design a provision that any country drawing more than 30% of their swaps will also need to negotiate an IMF programme. In short, it may be better for the BRICS to focus their attention on the NDB rather than pursue the CRA too.
First published by the Europe’s World under title ‘The BRICS bank: Now for the hard part’. Reposted per author’s permission.
Upholding Dharma by Mob lynching?
Label any Muslim a cow smuggler, accuse him of carrying beef and then lynch in the name of protecting religion. These premeditated barbaric acts seem to have become the order of the day. According to “Hate Crime Watch”, around 90% of religious hate crimes have occurred after the change of Central government in India in 2014. Although Muslims are victims in 60% of incidents, people from all religious faiths have suffered hate crimes.
India’s constitution promises its citizens justice, liberty and equality, but the shattering of social life through mob violence triggers an inescapable sense of powerlessness among its citizens. After the 2015 gruesome Dadri lynching, Mohammad Azam was lynched in July 2018 by a mob in Karnataka after a series of WhatsApp messages had warned locals that child kidnappers were on the loose. The mob assumed that Azam, who worked for Google, and his friends were co-conspirators and lynched him. In 2019, Tabrej Ansari became the first victim of the gruesome hate crime in the second term of the current regime led by proponents of Hindutva. He was lynched by a mob that forced him to chant Hindu religious slogans. In June this year, three people were lynched on suspicion of cattle smuggling in Tripura.
It needs to be recalled that lynching was used to terrorize black community for generations in the United States; blacks were lynched on dubious and false criminal accusations but this was put to an end through NAACP (National Association for the Advancement of Coloured People). In a similar fashion today, there is a growing perception that mob lynching happens with disturbing regularity in India to terrorize not only minorities but also dissenters in the name of religion and culture.
Violence against those who dissent is sought to be rationalized as nationalistic. The killings of Mohammad Akhlaq, Govind Pansare, M M Kalburgi, Narendra Dabolkar and Gauri Lankesh were masterminded by religious bigots masquerading as nationalists. In fact, the recent murder of George Floyd at the hand of a racially bigoted policeman in the United States, and custodial torture and death of a father-son duo in Tamil Nadu are hate crimes which are blots on the conscience of democratic societies.
Contemporary India has witnessed a surge in right-wing Hindu extremism, and crimes committed in the name of Love Jihad, beef eating, child kidnapping, cow slaughter and anti-Muslim fake news are aimed at normalizing this disturbing phenomenon. This right-wing propaganda usually spreads like a wildfire on the internet, particularly on the so-called Whatsapp University where it has become quite common to see pictures and videos of dead cows lying in a puddle of blood. It has been noticed that such videos and images on social media platforms are always of questionable veracity whose primary purpose is to incite fear, anger and violence. Very often, the text accompanying the videos appeals that everyone should spread it as much as possible in order for it to reach at the highest political executives. When this damaging and dangerous content is continuously circulated, the resulting fear in the minds of majority community gets converted into hatred toward the minority community.
These are nothing but politically motivated polarizing tactics and diatribes which only feed off pre-existing demeaning stereotypes of minorities. Technology has become an enabler of violence for various political and cultural reasons. There are many parties and stakeholders involved in these hate crimes but victims are only innocent people and invariably from vulnerable socio-economic groups. But the most shameful is the attitude of India’s politicians and police officials who justify these crimes, garland the lynchers, deny it ever happened or shrug off their responsibility by preferring to watch as mute spectators. Even delayed or muted condemnation of communal violence, by those in positions of power, only signal tolerance of such activity. Unfortunately, both the mob violence and the official response to it are symbolic of the Indian state’s rising incompetence in countering religious intolerance.
In recent years, the alarming idea that the ‘nation’ belongs only to the majoritarian community has made global strides as many countries like Poland, Hungary, Brazil and Turkey have come under its sway. Even many long-established democracies, including the United States, are feeling the pressure of this authoritarian tendency. The emergence of Hindu nationalist ideology in India, which is seen as replacing Indian civic nationalism, promotes the notion of a unique national culture grounded in Hindu cultural supremacy. The proponents of Hindu right-wing extremism are trying to radicalize their children and youth with ultra-conservative and fictional thoughts which often re-assert historical prejudices and ungrounded hatred toward Muslims.
One may be wrong, but cynical indifference shown by the middle class citizens tends to breed servitude and perpetuate complacency. When the victim of mob violence dies a death, shockingly there is no remorse from the crowd. Only the victim’s family remembers the event even as the societal silence is spine chilling. Actually, one should not ignore the performance aspect to mob lynching. Those indulging in mob lynching or public beatings ensure that their acts are recorded and then the potential circulation of such videos is targeted to send a strong message of the majoritarian men terrorizing minority men into humiliation and subjugation.
The dominant mainstream assumptions that cattle slaughter and beef trade directly concerns only Muslims, Dalits, Adivasis and Christians is also far from reality. Unfortunately, framing of the debates around bovine trade along communal lines has been sustained by provincial media which acts as an echo chamber to propagate Islamophobia. It has also been observed that the messages of hate get intensified after any terror attack, and instigate people to act against specific communities, primarily Muslims.
In July 2018, a landmark judgment given by the Supreme Court had condemned the incidents of mob lynching and cow vigilantism as ‘horrendous act of mobocracy’, asking the government to enact strict law to counter them. Nevertheless, in spite of comprehensive guidelines and anti-lynching laws in some states such as Rajasthan, Manipur and West Bengal, the mob violence continues unabated. In many states where the right-wings groups feel emboldened such as Assam, Uttar Pradesh and Karnataka, there is widespread feeling that the enactment of stringent cattle preservation legislation has further exacerbated such crimes. Those who think that the lynch squad is a thing of the past are wrong.
Indian Penal Code (IPC) and Criminal Procedure Code (CrPC) do not have specific provision dealing with the mob lynching because this was never seen as a crime in India. It is similar to terrorism for which we have the most stringent laws. But mob lynching causes more than just a death; it kills the spirit and substance of democracy. We are told that Hindus and Muslims share the same DNA in India. How can the cold-blooded lynching of one’s brethren make one a hero rather than a murderer? How can a policeman’s lynching and alleged cattle lifter’s lynching possess different form of bestiality? In fact, the time has come to brand mob lynching as ‘domestic terrorism’ and a serious threat to India’s internal security.
Does glory to Lord Rama be restored through unruly mob justice? Does the path to righteousness come through killing innocent people in the name of Cow? Does circulation of derogatory and hateful projection of Muslims bring glory to Hindus? Are those calling publicly for violence against Muslims and Christians are real friends of the Indian State and government? Is not hate crime the prelude to genocide? These uncomfortable questions shake the core of India’s multi-religious and pluralist democracy. India’s timeless civilization has unflinchingly celebrated the foundational principles of humanity such as non-violence, tolerance, peaceful-coexistence and ‘Vasudhaiva Kutumbakam’ which is one of the most important moral values engraved in the heart of every Indian. These eternal principles come under violent assault whenever a mob kills an innocent Indian.
International Criminal Court and thousands of ignored complaints
The civil war in Donbass has been going on for more than seven years now. It broke out in 2014, following Kiev’s decision to launch a military operation against the local militia in Donbass, who did not accept the Maidan coup that had happened in February of that same year. More than 10,000 civilians were killed in the conflict.
Correspondents of the French newspaper L’Humanité Vadim Kamenka and Jean-Baptiste Malet, French historian Vincent Boulet, as well as a MEP and a member of the Spanish Communist Party Willie Meyer took part in the international conference “Topical Issues of Human Rights Violations in Donbass.”
Moderating the conference, organized by the Society of Friends of L’Humanité in Russia (the French leftist newspaper’s Russian office), was the head of the interregional public organization “For Democracy and Human Rights” Maxim Vilkov.
The conference was also attended by the deputy foreign minister of the Lugansk People’s Republic Anna Soroka, human rights activist Yelena Shishkina, director of the Society of Friends of L’Humanité Olesya Orlenko, and head of Donetsk National University’s department of political science Artyom Bobrovsky.
The participants discussed numerous cases of human rights violations by the Ukrainian security forces and paramilitary units in the course of the civil war in Donbass. The left-minded European participants paid special attention to the fact that none of the 6,000 complaints about the actions of Ukrainian security officials and nationalists had actually been taken up by the European Court of Human Rights (ECHR).
Small wonder too, since the atrocities committed in Donbass immediately bring to mind the Spanish Civil War of the 1930s when leftwing antifascists from across the world fought supporters of fascists and Nazis. Let’s not forget that even DW (foreign agent) admits that the share of neo-fascists in Kiev’s Azov regiment is very significant.
The participants called upon the ECHR to pay attention to the non-investigation of crimes committed in Donbass.
Human rights activists and public figures from Russia, France and the unrecognized republics of Donbass called on European international human rights organizations to pay attention to the failure to investigate crimes committed during the armed conflict in Ukraine. This is stated in the statement, which was sent to European international organizations after the conference.
The statement also calls attention to obstacles created to prevent citizens from filing applications to investigate crimes, as well as to attempts to ignore pertinent complaints from international bodies.
The latter, according to the authors of the statement, is especially important since “10,650 applications have so far been submitted to the ECHR concerning violations of citizens’ rights during the civil armed conflict in Ukraine. Of these, 8,000 come from Crimea and Donbass, including 7,000 from Donbass alone. Moreover, 6,000 are complaints made against Ukraine proper. However, during the past seven years, not a single complaint pertaining to the conflict in Donbass has been considered.”
Human rights activists called on the ECHR and the International Criminal Court (ICC) “to ensure that the crimes committed in Donbass are investigated in full compliance with the ECHR and ICC charter, as well as to bring pressure to bear on the political leadership of Ukraine to fulfill its obligations to protect the rights of its citizens.”
Crime of Ecocide: Greening the International Criminal Law
In June 2021, an Independent Expert Panel under the aegis of Stop Ecocide Foundation presented a newly-drafted definition for the crime of ‘ecocide.’ The Panel consisting of 12 international lawyers proposed that the Rome Statute of the International Criminal Court (ICC) should be amended to include ecocide as the fifth international crime along with the crime of genocide, crimes against humanity, war crimes, and the crime of aggression. The inclusion of the crime of ecocide in the Statute will entitle ICC to investigate, prosecute, and try individuals accused of causing grave harm to the environment.
The term ecocide comprises the Greek word ‘oikos,’ meaning house or environment, and ‘cide,’ meaning an act of killing. Premised upon the term ‘genocide,’ ecocide means the significant destruction of the natural environment by human actions. In 1970, it was first used by Arthur Galston, an American biologist, at the Conference on War and National Responsibility in Washington DC. The term was further quoted by the Swedish Prime Minister Olof Palme in his opening speech at the 1972 United Nations Conference on the Human Environment (UNCHE) in Stockholm. Since then, multiple efforts were made to include ecocide within international law. Interestingly, it was adopted as an additional crime in the early drafts of the Rome Statute; however, later, it was dropped due to the lack of an adequate definition. If succeeded this time, it will be a significant victory for the environment since none of the existing international criminal laws secures it as an end-in-itself.
Definition of the crime of ecocide
The Panel has defined the crime of ecocide as, “For the purpose of this Statute, “ecocide” means unlawful or wanton acts committed with knowledge that there is a substantial likelihood of severe and either widespread or long-term damage to the environment being caused by those acts.”
The definition comprises two thresholds that should be fulfilled to constitute a crime of ecocide. Firstly, there should exist a substantial likelihood that the ‘acts’ (including omissions) will cause severe and either widespread or long-term damage to the environment. In other words, along with the damages causing severe harm to the elements of the environment, such damages must have an impact on a wider geographical location or for an unreasonably longer duration.
It is appreciable that the Panel has widened the scope of the definition by incorporating spatial and temporal dimensions to its meaning. However, they have changed their position adopted in the previous legal instruments to employ a mix of conjunctive and disjunctive formulations in the definition. In addition to its severe nature, such harm could be either widespread or long-term to constitute a crime of ecocide. Thus, any severe and widespread activity, such as chopping down huge rainforests, could be attributed to ecocide. Similarly, any severe activity whose consequences prevail for a longer duration, for example, causing the extinction of a plant or animal species, could also amount to the crime of ecocide.
Instant reading of the first threshold indicates that the ecocide definition might include day-to-day human activities that contribute to greenhouse gas emissions and other environmental damages. It raises a question – Whether humans are environmental criminals? Though, it might be true that most human actions, directly or indirectly, are continuously degrading the ecosystem around us. However, the definition of ecocide is primarily concerned with the large polluters whose irresponsible activities at a massive level are a threat to the environment. Thus, to narrow down the ambit of the definition and identify criminal activities precisely, the Panel added a second threshold, that is, the ‘acts’ causing damage to the environment must be unlawful or wanton.
It means, only when the actions are either prohibited under national or international laws or indicate a reckless disregard for excessive destruction of the environment in achieving social and economic benefits will they amount to the crime of ecocide. The second threshold hints towards an anthropocentric approach of the definition and protects a range of human activities deemed necessary, desirable, and legitimate for human welfare. To determine the lawfulness of the acts, the actions should be seen with their potential social and economic values. The ecocide definition relies upon the principle of sustainable development to balance environmental destruction with human development and prohibits all destructive activities that outweigh their social and economic benefits. It also means that the definition places a ‘limited’ environmental harm outside the scope of the definition, which cannot be avoided for achieving social welfare that includes housing developments or establishing transport links.
The proposed definition is more concerned with the massive instances of environmental damages. It does not consider small ‘necessary’ ecological harms caused by day-to-day human activities. However, it is equally essential these negligible-looking destructive contributions of humans, made in their individual capacity, should not go unnoticed. These small contributions combined with each other also significantly impact the environment in the form of climate change, biodiversity loss, and other hazards. Thus, the reckless human lifestyle is a significant issue and needs to be regulated through some international code of conduct, if not as ecocide.
Undoubtedly, the proposed ecocide definition is a remarkable effort that should be appreciated for multiple reasons. First of all, the release of this definition indicates that the time has come to start penalizing environmental offenders and create deterrence so that such destructive activities can be minimized. It establishes the responsibility and accountability of big corporate houses and political leaders whose regular investments are causing substantial harm to the environment. Moreover, this definition founds its bases upon many core principles and concepts of public international law, international environmental law, international humanitarian law, and international criminal law. For instance, the principle of no transboundary harm, sustainable development, proportionality, and necessity are aptly referred to in the ecocide definition. Moreover, it also provides a sufficiently broad definition of the term ‘environment’ to primarily include any damage committed towards the earth, its biosphere, cryosphere, lithosphere, hydrosphere, atmosphere, and outer space.
Though the ecocide definition is a significant development, it still has to go a long way to be included in the list of international crimes. For this purpose, any of the 123 member states to the Rome Statute can officially submit the definition to the UN Secretary-General. The proposal has to be accepted for further consideration by the majority of the members through voting. Further, the text will be subjected to debates and deliberations and must be passed by a two-thirds majority of the members. Moreover, the member states need to ratify or accept the proposed text. Only after one year of such ratification or acceptance ICC may exercise its jurisdiction over the crimes of ecocide committed afterward. This entire process can take many years or even decades to get completed. It is also possible that the structure of the current definition might change in due course of its acceptance.
Today, it is unclear that whether this definition will succeed in amending the Rome Statute or not, but what can be said with certainty is that this definition will play a crucial role in building awareness and discourse around ecocide among the governments, corporate houses, professionals, and masses across the globe. With the pressing needs of humans and prevailing threats to the environment, it is the right time that the actions of the offenders should be regulated through the prism of international criminal law.
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