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Development prospects for Latin America and the Caribbean in a post-COVID-19 world

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In May 2020, Latin America and the Caribbean became the epicenter of the global COVID-19 pandemic, and the number of positive cases and deaths related to the SARS-CoV-2 virus continues to grow at a fast pace. The severity of the health crisis is exacerbated by the structural problems that characterize the region in areas such as health, social and economic inequality, political strife, violence and insecurity, as well as environmental degradation. The outbreak of COVID-19 threatens to reverse economic and social progress achieved in the region over the last decade; moreover, it compromises prospects of achieving the Sustainable Development Goals (SDGs) by 2030.

In this context, the United Nations Industrial Development Organization (UNIDO) and the Latin American Network for the study of Learning Systems, Innovation and Skills Construction (LALICS) together organized a webinar titled: “Technological revolutions, changes in lifestyles and sustainable industrial development in Latin America and the Caribbean in a post-COVID-19 world”. The webinar served as platform where more than a hundred researchers, policymakers and practitioners discussed pressing challenges and opportunities, taking into account both the current health and economic crises, and the aforementioned structural problems faced by the region.

In his opening remarks, Diego Masera, Chief and Deputy Director Regional Coordination Division – Latin America and the Caribbean, highlighted the severity of the pandemic. According to the Economic Commission of Latin America and the Caribbean (ECLAC), in 2020, the region’s GDP will fall by 9.1% in annual terms, with a drastic decline in manufacturing production. Masera emphasized the pertinence of identifying alternative development models that would reduce the risk of falling into an even greater crisis due to climate change. He endorsed the UN General Secretary, Antonio Guterres who, in his recent report on the impact of COVID-19 in Latin America and the Caribbean (July 2020), asserts that the crisis calls for a reassessment of the roles of the State, the market and of civil society, in order to improve equality, transparency and democracy in the region.

In the search of long-term solutions, Masera stressed that the promotion of sustainable and inclusive industrial policies, the integration of informal workers into formal and decent work, as well as investment in research and development are crucial factors to consider. SDG9, which promotes inclusive and sustainable industrial development, innovation and resilient infrastructure, should be a central element in the development agenda of countries in the region. He stated that UNIDO, in accordance with its mandate to promote sustainable and inclusive industrial development, is ready to assist member states in the region to achieve a fast recovery from this crisis, and to prepare and build the strengths needed to give local populations a better future. 

Prof. Gabriela Dutrénit, Professor at the Department of Economics and the Postgraduate Programe in Economics and Management of Innovation Policies at the Autonomous Metropolitan University Xochimilco in Mexico City, and President of the Scientific Board of LALICS, described the current events as an historical moment marked by changes in various areas that highlight the challenges of building innovation capacities in order to reduce dependencies on external technologies and knowledge, while also opening new development opportunities. Latin America, in particular, faces new possibilities for closing gaps and contributing to an inclusive and sustainable development. She appealed to the LALICS network to rethink and propose new courses of action driven by innovation policy and productive transformation while, at the same time, building the necessary resilience to confront future crises. 

The main speaker for the webinar was Prof. Carlota Pérez, British-Venezuelan researcher, lecturer and international consultant specializing in technology and socio-economic development. Addressing the question of what influence the COVID-19 pandemic could have on the growth prospects of Latin America and the Caribbean, Pérez noted that, based on historic experience, such influence would depend on how much the pandemic can affect the pace and direction of the ongoing technological revolution in industrialized countries. In her opinion, the present situation is comparable to the post-war era, and we are moving to a situation requiring an active and omnipresent state. The challenge however, is not to replicate the past but to take a leap forward. In a scenario where Asia dominates the manufacturing of products, the opportunity for Latin America is to focus on processing industries and in the valorization of natural resources, targeting increasingly specialized, high-value markets. However, because processing industries tend to be labour-saving, she proposed a dual but integrated strategy, one that realizes potential productivity in every part of the territory, tapping into hyper-segmented markets and capitalizing on new forms of communication, transport and logistics.

According to Pérez, demand for natural resources-driven innovation will continue to grow, as production methods and lifestyles increasingly orientate towards environmental sustainability. She asserted that success in implementing this dual strategy depends on the ability to build private-public consensus framed by appropriate supporting institutions at the two ends of the strategy.

Lastly, during her intervention, Professor Helena Lastres, Associated Professor at the Institute of Economics, Federal University of Rio de Janeiro, noted that the pandemic is worsening the already complex political, economic and social situation experienced in Brazil and other countries in Latin America and the Caribbean. In her opinion, the situation is best described in the words of the late Brazilian economist Celso Furtado: “In no other moment in our history is the distance between where we are, and where we expected to be, as great as it is today.”

According to Lastres, addressing the crisis and fostering development in a post-pandemic future for Latin America and the Caribbean requires a strengthening of the role of the State, and a recovery of its development-promoting functions in the region. At the same time, she noted the growing importance of digitalization and the rapid adoption of information and communication technologies (ICT), together with the relevance of building national consensus around the pressing development needs affecting the future of Latin America. Lastres said the pandemic is reinforcing the need to prioritize the development of manufacturing systems oriented towards the provision of goods and services that are essential for the life, well-being and security of people in the region, with a special emphasis on ICTs for health and education.

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The Caribbean is ‘ground zero’ for the global climate emergency

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Suriname is the most forested country in the world, but its pristine rainforests are being threatened, among others, by mining for gold, bauxite and kaolin. Photo: UN News/Laura Quiñones

The UN Secretary-General’s final day in Suriname began on a small plane and ended at a podium. A 90-minute flyover from Paramaribo into the Central Suriname Nature Reserve revealed to António Guterres the astounding beauty of the Amazon but also spotlighted the threats the rainforest is facing from mining and logging activities, and climate change. 

The Reserve, a UNESCO World Heritage Site, is an immense protected area covering around 11 percent of the national territory, is recognized for its tabletop mountains and endless biodiversity – some believed to be undiscovered – and remains for the most part inaccessible and unaffected by human activity.

From above, the rainforest canopy was painted with countless shades of green, with some treetops covered in waves of orange or even purple flowers. Along the way, the mighty Coppename River, as well as the upstream parts of the Lucie, Saramacca, and Suriname Rivers flowed by the trees in what looked like a landscape painting.

However, before reaching the protected area, the UN chief could see that Suriname’s forests are seriously threatened by the activities of the mining sector and timber production, both fuelled by incentives to boost economic activities. Strikingly visible above the deep green canopy, the brownish patches of deforestation, evidence of destructive gold mining and flooding were difficult to miss.

A moment of ‘maximum peril’

Although Suriname is part of the South American continent, it is considered a Caribbean nation due to its history, culture, and the similar challenges it faces with the small island nations.

Later on Sunday, the UN chief arrived at the Assuria Event Centre in Paramaribo, to attend the opening of the 43rd Caribbean Community and Common Market (CARICOM) Conference.

Mr. Guterres’s arrival was met with four distinct music and cultural performances. The short walk showcased Suriname’s unique ethnic diversity, a product of its long history and Dutch colonization. Afro-Surinamese, East Indian, Indigenous natives, Chinese and Javanese descendants presented their traditional dances and folkloric sounds

At the podium, the Secretary-General highlighted the region’s diversity and climate action leadership, while outlining a series of actions to be taken in the face of the planetary crisis, the ongoing COVID-19 pandemic, and global financial challenges. 

“Rich in diversity, uniting land and sea, and protecting fragile coastal ecosystems, mangroves are a fitting symbol of Caribbean nations – facing challenges, seizing opportunities, preserving natural gifts,” the UN chief told the region’s Heads of State and Government on Sunday, inspired by his isit to these coastal carbon-sink wonders in Paramaribo a day before.

Mr. Guterres recognized that the small island low-lying coastal states of the Caribbean are especially vulnerable to what he called “the biggest challenge facing our world today” — the climate crisis.

“The Caribbean is ground zero for the global climate emergency,” he said, underlining that unfortunately, it is not the only challenge that the region is facing.

“This year’s CARICOM summit comes at a moment of maximum peril – for people and planet alike,” he added, referring to the devastating effect of the COVID-19 pandemic on health systems and tourism, as well as on economic growth and foreign investment, now exacerbated by the war in Ukraine.

Bold solutions

The Secretary-General told the CARICOM leaders that bold solutions were necessary to tackle these issues, highlighting three.

1. Match climate action to the scale and urgency of the crisis

Mr. Guterres called for urgent and transformative emissions reduction to halt global warming at a 1.5C, support for adaptation from climate impacts, and financial assistance to secure resilience.

“I thank Caribbean leaders for helping to show the way. I am inspired by your many efforts to safeguard your incredible biodiversity and natural gifts, including by the efforts of the indigenous communities,” he said.

He added that more ambition and climate action are needed by all, but specially the G20 who account for 80 per cent of global emissions.

“The war in Ukraine cannot lead to short-sighted decisions that shut the door on 1.5C. With the commitments presently registered, emissions are still predicted to grow by 14 per cent through 2030. This is simply suicide – and it must be reversed.”

The UN chief stressed that wealthier countries need to lead the way in a just and equitable “ renewables revolution ”, and they need to fulfil their promise to deliver $100 billion in climate finance for adaptation starting this year.

“And it is time for a frank discussion and space for decision-making regarding the loss and damage that your countries are already experiencing,” he emphasised.

2. Reform ‘morally bankrupt’ global financial system and spur sustainable recovery

The Secretary General underlined that developing economies need access to financing at no or low costs, as well as debt relief and restructuring.

“On the debt side, we need immediate relief for developing countries whose debt is about to become due,” he said.

The UN chief added that he fully supports the creation of a Caribbean Resilience Fund and the reform of the international financial system to help the region better respond and prevent massive vulnerability to external shocks.

“Clearly, our old metrics have failed us. It’s time to change them,” Mr. Guterres said, proposing to move beyond the financial system’s preoccupation with per capita income, and establishing a ‘multidimensional vulnerability index’ to determine access to financial support.

“For your countries, this would mean ensuring that the complex and interdependent factors of debt and climate change impact are captured in any eligibility analysis for debt relief and financing,” he told the Caribbean Heads of State and Government.

3. Keep up the combat against the COVID-19 pandemic

The Secretary-General made a push for governments, organizations and pharmaceutical companies to work better together to locally produce tests, vaccines and treatments.

“We’re not out of the woods yet… And we need to continue working closely together to stop the spread of the virus across the Caribbean through proven public health measures and prepare for future pandemics through bold investments in preparedness and training,” he stated, and stressed that countries must never again be so unprepared.

Finally, Mr. Guterres reaffirmed the support of the United Nations to the Caribbean to work towards these solutions.

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World News

In Afghanistan, women take their lives out of desperation

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Seven-year-old Ayesha is the sole survivor of her family after a devastating earthquake struck the central region of Afghanistan and destroyed her home. © UNICEF/Ali Nazari

The situation for women is so desperate in Afghanistan that they are committing suicide at a rate of one or two every day, the Human Rights Council has heard.

It comes as the top UN rights forum in Geneva agreed to Member States’ request for a rare Urgent Debate on the issue this Friday.

Addressing the Council, Fawzia Koofi, former deputy speaker of the Afghan Parliament, said lack of opportunity and ailing mental health, was taking a terrible toll: “Every day there is at least one or two women who commit suicide for the lack of opportunity, for the mental health, for the pressure they receive.

“The fact that girls as young as nine years old are being sold, not only because of economic pressure, but because of the fact that there is no hope for them, for their family, it is not normal.”

Bachelet highlights ‘progressive exclusion’

Echoing widespread international concern for ordinary Afghans, UN human rights chief Michelle Bachelet condemned the massive unemployment of women, the restrictions placed on the way they dress, and their access on basic services.

Women-owned and operated businesses have been shut down, Ms. Bachelet added, saying that 1.2 million girls no longer have access to secondary education, in line with a decision by the de facto authorities who took power in August 2021.

“The de facto authorities I met with during my visit in March this year, said they would honour their human rights obligations as far as [being] in line with Sharia law.

“Yet despite these assurances, we are witnessing the progressive exclusion of women and girls from the public sphere and their institutionalised, systematic oppression”.

Ms. Bachelet encouraged the re-establishment of an independent mechanism to receive complaints from the public and protect victims of gender-based violence.

“Beyond being right, it is also a matter of practical necessity”, said the High Commissioner. “Amid the economic crisis, women’s contribution to economic activity is indispensable, which itself requires access to education, and freedom of movement and from violence”.

Women made ‘invisible’

Also speaking at the Human Rights Council, its Special Rapporteur for Human Rights in Afghanistan, Richard Bennett, described a chilling attempt by the Taliban to make women “invisible, by excluding them almost entirely from society”.]

As an example of the de facto authorities’ intentions to impose “absolute gender discrimination”, the independent rights expert also noted that women are now represented by men at Kabul’s Loya Jirga, or grand assembly of religious scholars and elders.

Such measures contravene Afghanistan’s obligations under numerous human rights treaties to which it is a State party, Mr. Bennett insisted before adding that the situation for women “massively diminish(ed) women’s lives, deliberately attack women and girls’ autonomy, freedom and dignity, and create a culture of impunity for domestic violence, child marriage and sale and trafficking of girls, to name but a few of the consequences”.

Promises broken

Despite public assurances from the Taliban to respect women and girls’ rights, they are reinstituting step by step the discrimination against women and girls. Said Ms. Koofi, a former member of the peace negotiation team with the Taliban said that the fundamentalists “obviously have not kept their promises of what they were telling us during the negotiations, in terms of their respect for Islamic rights for women”.

Ms. Koofi added that “in fact, what they do is in contradiction to Islam. Our beautiful religion starts with reading. But today, Taliban under the name of the same religion, deprive 55 percent of the society from going to school”.

Afghanistan’s response

For Nasir Andisha, Ambassador and Permanent Representative of Afghanistan to the UN in Geneva, “the situation of women and girls in Afghanistan demands nothing less than a robust monitoring mechanism to collect, consolidate, and analyse evidence of violations, to document and verify information, to identify those responsible to promote accountability and remedies for victims, and to make recommendations for effective prevention for future violations”.

A draft resolution on the situation of women and girls in Afghanistan is being negotiated at the Human Rights Council and will be considered on 7 July.

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Finance

Potanin’s core business unfazed by personal sanctions

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The news agencies’ report that Vladimir Potanin the president of MMC Norilsk Nickel PJSC was first mentioned in the UK government’s restrictive measures caused an immediate increase in the price of metals used by electric car production clusters around the world and, as a consequence, worries about the labor market.

Great Britain on Wednesday announced sanctions against Potanin, news agencies reported.

Potanin, known as Russia’s “Nickel King”, was included in the latest wave of sanctions by Britain which included entrepreneurs, banks and other entities.

Potanin is one of Russia’s richest people, although his net worth depends largely on the value of his stake in Nornickel, the world’s largest producer of palladium and refined nickel.

Bloomberg reports that, palladium rose as much as 7.7% on the news, while nickel prices jumped 9.2% before paring gains.

The turnover of Norilsk Nickel in finnish Harjavalta last year amounted to about 1.2 billion euros, and the raw materials it processes come mainly from Russia, according to the Finnish business outlet Kauppalehti.

The Harjavalta Refinery is the main reason why the value of Russian nickel imports to Finland has outstripped oil imports, according to the Finnish customs data.

At Harjavalta, Norilsk Nickel produces about 5% of the world’s pure nickel supply.

In Finland, Norilsk Nickel is closely linked to the industrial center of Harjavalta, which employs a total of 1,000 people. Nornickel Harjavalta employs about 300 people.

If the EU and the US follow the UK’s lead, Nornickel could face a production freeze and nickel prices could soar. This, in turn, jeopardizes EU’s planned investments in battery factories, according to Kauppalehti.

As explained by the law firm Neuschwil and Bayer, unlike US sanctions, British sanctions apply to companies only if the sanctioned person owns 50 percent of its shares or over.

The other two big shareholders of the Russian nickel giant, Oleg Deripaska and Roman Abramovich, are under UK and US sanctions, and together with Potanin, their combined stake exceeds 50 percent.

As Neuschwil and Bayer explained, as long as only Potanin is involved in the operational management of Norilsk Nickel, there is no risk of sanctions for the company, even if other countries introduce sanctions against Potanin.

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