Jan Pronk joins ISS
DevISSues DevelopmentISSues
Volume5/Number1/May 2003
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CONTENTS
From the Institute Board A new style Though it seems far more recent, it is now almost three and a half years since the launch of Development Issues. Set up initially on something of an exploratory basis, much has happened in the meantime. It has grown in stature and it has become a well-established and familiar part of ISS correspondence and communications. We are told time and again by contacts from different parts of the world that it keeps a wide and encouragingly diverse audience of alumni, other scholars and professionals, interested business people, diplomats and many old friends in touch with the Institute's substantive concerns and with in-house developments. For many, it has provided a forum for the exchange of views and contrasting opinions that fits well with our growing idea of ISS as a public platform where policy alternatives and the pros and cons of different positions can be openly explored and debated.
approach, to emphasise fresh insights into development debate, possibly bringing out thematic issues, and eliciting contributions and reactions from readers based on their own insights and experience. They tell me they would like it, much more than in the past, to be a two-way channel, with input and feedback from the field, suggestions for new themes, for new fields or new emphases where research or training is needed, interest in contacting other colleagues in a particular field, in institutional cooperation or institution-building. In short, they want to hear more from you and I think that, in reaching out further and looking for dialogue, they have the right idea. So here's the new style. The Editors would like feedback and reactions and new suggestions for the future and I wish them every success. I think they have to be congratulated. David Dunham, Deputy Rector
But, sometimes, old friends also appreciate change! The Editors have therefore decided, after a good deal of thought, to alter the format, make it even more up-to-date, rather more snazzy and more appealing. They are looking for a new look, not just in the layout (which is becoming more identifiable with the general ISS house style), but also in content. The aim is to bring a new look into the whole
Visit by Professor Edward Said Edward Said, Professor of Comparative Literature at Columbia University, will be visiting ISS on Wednesday 21 May. Professor Said will give an address entitled ‘Orientalism and the Present Crisis’, after which he will be presented with the Honorary Doctorate awarded to him on the occasion of the 50th Anniversary of the Institute in October 2002. The programme will take place in the ISS auditorium and start at 4 pm.
Given the astonishing cultural diversity of the ISS alumni, the Arts Committee of SCHOLAS would like to invite you to write and send us a folktale, expressing the identity of your specific country. Please send your contribution to artscom@iss.nl before 1 August 2003, citing the country and regional origin of the tale.
4 / Always a student Interview with Jan Pronk
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8 / Alumni News
Page 10 / Should developing countries have their own currency? Rob Vos Page 13 / Project News Page 14 / Social justice and the global economy
Calling all ISS alumni! Folktales
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The tales should be no longer than 1500 words and you are encouraged to come up with illustrations. The Arts Committee of SCHOLAS will do its utmost to appropriate ways to sponsor this publication. Hoping to receive your valuable contribution, with kind regards, the Arts Committee of SCHOLAS.
The Institute of Social Studies As an institute for advanced international education and research, ISS generates, accumulates and transfers knowledge and know-how on human aspects of economic and social change, with a focus on development and transition. ISS is a leading centre in this field.
Development ISSues is also available on the ISS website at www.iss.nl
Interview with Noreena Hertz Page 16 / Poverty as global entitlement failure Bas de Gaay Fortman Page 18 / The Sharia in Nigeria Maarten Barends Page 20 / PhD News
4 / INTERVIEW JAN PRONK
INTERVIEW JAN PRONK
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‘I always try to stay a student, to keep learning and to spend time on ref lection’
Interview Jan Pronk Professor Jan Pronk was Dutch Minister for Development Cooperation in the 1970s and again for most of the 1990s. From 1998-2002 he was also Minister of Housing, Spatial Planning and the Environment. He has held several international posts, including Assistant Secretary General of the United Nations. In October of last year, Professor Pronk was awarded an Honorary Degree at ISS, and since 1 January 2003 he has been Professor of Theory and Practice of International
in implementation. There was a lot of theory about development processes but little feedback from the field. And, at that time, there was a lot of compartmentalization between economists, development economists, researchers in the field and all the others. That is no longer the case, the boundaries are less clear. What we see now is abstract analysis in economics, while the other disciplines are too project-oriented. A lot of good work is performed at local level, but there needs to be more emphasis on the meso and macro levels too.
Development at the Institute. Interview by René Bekius. Congratulations on your appointment as Professor of Theory and Practice of International Development at ISS. What issues do you intend to discuss in your lectures?
Well, of course, I have to be gradually integrated into the existing course, which has already long been planned. I have a large number of interests, but it has to be demand-oriented, so I am talking to the ISS leadership about the best way to identify specific needs. My personal and political interest is international affairs in the broadest sense, which of course implies globalisation. And I am particularly interested in the cross-references between economic, political, social and
cultural developments. I also have quite a history in international negotiations and am interested in that aspect, so I am not concerned purely with theoretical issues. Your chair comprises two components: theory and practice. You won your spurs in practice as a minister for development and of the environment. What do you think are now the main gaps between theory and practice in international development?
I think the gaps are bigger than they ought to be, and bigger than they have been in the past. In the 1950s and 1960s, perhaps the biggest gap was
The emphasis on micro-level studies is understandable. There were perhaps too many sweeping analyses in the past, and it was a good reaction. But I believe you have to return to a cumulative analysis of impact studies at micro level. To give an example: cultural or religious analysis, or conflict studies, are very strongly local-specific, but there are always lessons to be learned for situations elsewhere in the world.
I disagree with both. When I was Minister for Development Cooperation, we were the first to set up an inspection unit which aimed at much more than just monitoring how the money was spent. It was intended to look at the local or regional impact of our activities on development. I’m actually very proud of it, and it produced a very large number of reports. There is a general belief in some political parties that development impact is nil, but they don’t read the reports. In my view, development was the most thoroughly researched area of policy in the Netherlands. Better than, for example, health care or education. The inspection
There is a general belief in some political parties that development impact is nil, but they don’t read the reports
How do you respond to the often heard criticisms that, after more than 50 years of development aid, there are still no adequate instruments in place for measuring the effects of aid, and no longterm vision for development?
unit operated independently. Although, as a minister, I could ask it to study a certain area of activity, it had its own work programme, and its findings and recommendations were independent.
All the reports were public and were sent to parliament, accompanied by a policy reaction. It was a serious exercise, which had a definite impact on the substance of policy and on development activities. And that structure is still in place. As for a long-term vision on development, again I don’t agree. When I returned as minister for development in 1989 I took it on myself to renew the whole policy, which resulted in three memoranda: A World of Difference, a major study which appeared in 1990; A World in Dispute, which followed a year later and incorporated the conflict dimension, which was becoming more manifest in the early 1990s; and Aid in Progress, which was smaller and a kind of implementation follow-up of the other two. Those documents presented a long-term view which I think it is still valid today, although it did not address a number of issues adequately. Globalisation, for example, was not on the agenda in the early 1990s. And although there was a lot on the environment in that long-term vision, the concept of sustainable development became a lot clearer, in terms of its consequences, during the 1990s. And, of course, conflict: we learned a
lot more about that in the nineties, and that has to be taken into account, too. You always have to reflect and change. I see my major policy statements as a process of showing a certain accountability for what has gone before. So there was a long-term view, which was well researched and well thought through, and which responded to change. But it has not remained the basis for policy. There has been a U-turn in policy-making, which I do not agree with. It was a political U-turn, not based on a complete overhaul of the analytical basis of the policy. But that is democracy. Any new minister has a right to make a U-turn. There is a debate in the media at the moment, in which ministers and senior civil servants are also taking part, about whether development cooperation should stay under the wings of the Ministry of Foreign Affairs, have a ministry of its own, or perhaps be done away with altogether. What is your standpoint on this?
I’m certainly not in favour of doing away with development cooperation, not even in the positive sense of mainstreaming continued on next page
6 / INTERVIEW JAN PRONK
it into all the other ministries. It has to carry some weight of its own, so it must remain a distinct area of policy within the cabinet. But there is also a risk that, if development has its own ministry, it will become less important. My own experience as a development minister within the Ministry of Foreign Affairs – not in terms of implementation, but of policy-making – was positive. I see development as an integrated issue. You cannot discuss it only in economic terms – the political dimension is also extremely important. Perhaps more than it used to be. And the moment development is brought under a separate ministry, the minister is denied any political analysis. That is the realm of the foreign minister. If you talk about trade and finance you are encroaching on the
The problem is that not every country has a separate development cooperation minister policy area of the minister of economic affairs. So you end up fighting with everybody. And you become a project-oriented implementation machine. It’s much better to be part of an overall strong ministry. But you have to make sure that you can influence the policy of that ministry in the direction you want it to go. So you need a strong minister who knows what he or she is talking about. There are always potential disadvantages: you may have a conflict with your fellow minister, but that is a political problem and not related to development as such. Separate means marginalised. Do you think that there is effective cooperation between development ministers as European level and, if not, how could it become more effective?
It is not so necessary to cooperate very closely on the implementation of development assistance. It is more important to coordinate in terms of policy-making at the macro level. You need each other. The problem in Europe is that not every country has a separate development cooperation minister. I was development minister for many years and I learned to live with that. But I had a very positive experience when I became minister for the environ-
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ment. All 15 member states did have an environment minister, and they all worked together a lot. You were not adversaries – that was your minister of economic affairs or of finance at home. And that was true for all 15, so you helped each other to overcome domestic problems and negotiated operational solutions. Of course, you negotiated compromises – in the way that the European agriculture ministers do. We were not that strong but we did work together a lot. That helped me, for example, when I was chairing the international climate negotiations. University staff are expected to publish regularly. As a minister you used to have text-writers. Is it going to be difficult to get used to writing your own material again?
No, not at all. As a minister, I didn’t use text-writers very often. I like to draft my own texts. Of course, I had help, but I think I helped my assistants more than they helped me. Particularly in the field of development, where I have many years of experience. When I became minister of the environment, I had to learn a lot more – and I did. Even as a minister, I always tried to stay a student, to keep learning and to spend time on reflection. I have always put things down in writing, so even in my speeches, it was a way of helping me to renew my own ideas. I didn’t just stick with the ideas I had in the sixties and seventies. And when I’m speaking, I’m much more interested in building up a kind of rapport with my audience than just reading from a prepared text. Quite often, I only put the speech down on paper afterwards. If you had to name a political economist or political scientist who had a great influence on your work, who would it be?
Well, of course, I was a student of Jan Tinbergen. This year is the centenary of his birth and I will be delivering a major speech in Rotterdam as part of a full week of activities to mark the occasion. I am very pleased to be taking part in that. I was a student of Tinbergen’s when I was young, and I still feel that I am today, for many reasons. Thank you
Staff News
International Conferences 2003
New staff
June
Dr Richard Robison has been appointed Professor of Political Economy in Staff Group II (States, Society and World Development) as of 1 January 2003.
6-7 9 13 - 14
Dr Jan Pronk, former Dutch minister for development cooperation and for the environment, joined Staff Group I (Economics of Sustainable Development) as Professor of Theory and Practice of International Development on 1 January 2003. Dr Jan Kees van Donge will be joining ISS on 1 May as Senior Lecturer in Public Policy and Development Management in Staff Group II (States, Society and World Development).
Congratulations On 6 March 2003, the Board for Directorates at Utrecht University awarded Dr Enrique V. Iglesias, President of the Inter-American Development Bank, an Honorary Doctorate to mark the 50th Anniversary of ISS and to strengthen the links between ISS and Utrecht University. The official ceremony was held at the Dom Church in Utrecht.
19 - 24
25 28 - 1
July
July 7-8
11 - 12
7 - 25
On 22 April, Rob Vos delivered his inaugural speech as Professor of Development Economics at the Vrije Universiteit Amsterdam. The speech was entitled ‘Macroeconomic policy and poverty eradication’.
Ulanbator, Mongolia. International Security and the Asian Heartland. In cooperation with the IIAS and the Netherlands Institute of International Relations Clingendael. Information: bayasakh@hotmail.com or pmeerts@clingendael.nl Bonn, Germany. The Restructuring of Old Industrial Areas in Europe and Asia. ASEF-Asia workshop. University of Bonn and National University of Singapore. Information: hassink@giub.uni-bonn.de or www.asia-alliance.org/workshopseries Norwich, United Kingdom. Conflict Resolution and Peace Building in War-torn Societies. Course, University of East Anglia. Contact: Sarah Scott. Email: sarah.scott@uec.ac.uk/pages/training.html
August 19 - 22
Singapore. Third International Convention of Asia Scholars. National University of Singapore. Information: icas3sec@nus.edu.sg
September 17 - 20 18 - 20
Professor Mansoob Murshed is the first appointee to the new Prince Claus chair in international development. The chair is a joint initiative of ISS and Utrecht University and will rotate annually. Professor Murshed will be delivering his Inaugural Address, entitled ‘The Decline of the Development Contract and the Development of Violent Internal Conflict’ at Utrecht University on 12 May. (See the ISS website for further details).
Halmstad, Sweden. Women and Politics in Asia. Contact: Dr Kazuki Iwanaga Email: kazuki.iwanaga@hos.hh.se or http://eurasia.nias.ku.dk/Halmstad02 Almaty, Kazachstan. Advances in Statistical Inferential Methods: Theory and Applications. Contact: Prof. V. Voinov. Email: voinov@kimep.kz Wageningen, the Netherlands. Governing Environmental Flows: Re-Inventing the State in Global Modernity, Contact: sander.vandenbrug@wur.nl Spa, Belgium. The Second Demographic Transition in Europe: Euro Conference on Implications of Family and fertility. Change for Individuals, families and Societies. Contact: Dr Josip Hendekovic or Anne-Sophie Gablin. Email: asgablin@esf.org Amsterdam, the Netherlands. The future of countries and democracies. Contact: info@clubofamsterdam.com Singapore. Asia in the New Millennium: Development, Democracy and Scutiny. Asian Political & Intern. Studies Ass. Congress. Contact: Prof. Lee Lai To. Information: apisa@nus.edu.sg or www.apisa.org
22 - 24 26 - 27
Kunming, PR China. Opening Up to the Future: the Role of Visual Anthropology in the 21st Century. International conference on visual anthropology. Email: eaivakk@pulic.km.yn.cn or www.eaiva.org Cambridge, United Kingdom. Chinese Commercial Law. Information: Patricia Mirrlees. Email: pw229@cam.ac.uk or www.eai.cam.ac.uk/conferences Veldhoven, the Netherlands. Globalisation and National Environmental Policy: Taking Stock of Changes in Government Interventions in Response to Globalisation. Contact: Frank Wijen. Email:ank.wijen@uvt.nl Canberra, Australia. Indonesia Update 2003: Changes and Challenges in Business. Indonesia Project, Australian University. Convenor: Dr Pierre van der Eng. Contact:pvandereng@econ.seikei.ac.jp
October 2-5 24 - 26
Boston, USA. CESS, Fourth Annual Meeting. Contact: John Schoeberlein. CEESconf@fas.harv.edu Cairo, Egypt. Religious Networks between the Middle East and Southeast Asia. IIAS/KNAWE/ CNSW/ ISIM workshop of the research programme ‘Ïslam in Indonesia’ in collaboration with the American University in Cairo. Contact: Dr Mona Abaza and Dr Nico Kaptein. Information: iias@let.leidenuniv.nl or www.iias.nl
November 7-8 28 - 30
London, United Kingdom. Central Asia – Perspectives from the Field. Organisers: Central Asia Research Network (CARN). Information: conference@pobox.com Matara, Sri Lanka. Sri Lanka at the Crossroads: Continuity and Change. Ninth International Conference on Sri Lanka Studies. Contact: Prof. Sarath Amarasingh, University of Ruhuna. Information: sarathamarasingh@hotmail.com or www.icsls.org
Please send your conference announcements in good time to the editors of DevISSues
8 / ALUMNI NEWS
ALUMNI NEWS
Alumni News
Alumni News Profile
News from Alumni Associations
What is life after ISS? For me, it
INDIA
is about having more chances to influence development activities Augustus P. Tiambeng, M.A. Development Studies, Regional Development Planning 1981-82 Immediately on returning to the Philippines, I was given greater responsibilities, as second in command in a rural development project funded by the government, the World Bank and Australian Aid. This complex project, located in the country’s third poorest region, comprised several components: roads, a port, a village water supply, irrigation, agriculture, health and community development. Here, my ISS research on evaluation methodology, which included outcome indicators and input-output monitoring, proved its worth. Its application improved our accounting and implementation and, to the delight of our Department of Finance, the utilisation rate of loan funds reached almost 100%. At that time, the Philippines was suffering from political turmoil and massive capital flight, and was in desperate need of foreign currency. Introducing and seriously enforcing accountability systems, however, was far from popular with project personnel and met with a lot of resistance from the very start. But thanks to my new position (largely attributable to ISS) I was able to ensure that these systems were soon in place. My Regional Development Planning course also equipped me to prepare the first master plan for a province in the same region. From this project, I then moved on to organisations dealing with international development cooperation. In the Department of Agriculture, together with a number of other ISS alumni, I coordinated project preparation and negotiations with international lending and grant aid institutions for the funding of priority agriculture sector projects. I also had the chance to initiate a coastal resource management project with a novel concept of private business partnership in official development assistance-funded projects. Eventually, the European Union and the private corporate sector funded the project to the tune of more than $26 million. Currently, I am in Turkey working on a number of projects, including the preparation of the UN Development Assistance
Framework for Turkey (2001-2005), the UNICEF and UNFPA Country Programmes, and the Earthquake Rehabilitation Programme. My biggest thrill thus far has been my involvement with the private sector in the 1990s, when I headed the Pioneer Development Foundation for Asia and the Pacific. The Foundation was part of a corporate philanthropy programme set up by Pioneer Hi-Bred International, an agricultural technology company from Iowa. Here, the Foundation successfully implemented crop diversification in a traditionally tobacco-growing region through corn production and forward contract marketing projects. The project strategy centered on contractual agreements among farm communities, socially oriented private business corporations, local government units, a commercial bank, an agriculture university and NGOs. The mainstreaming of the poor communities to the market through their partnership with these market and economic services institutions ensured the project’s sustainability. Corn production, from an initial area of 110 hectares in 1994, grew to cover about 10,000 hectares in 2002. The national government, it is reported, will now support the project and is targeting 30,000 hectares for 2003. It is amazing that a small community project centered on multi-sector partnerships could restructure a regional economy more effectively and less expensively than a topdown regional master plan. The project was cited as a model for ‘business as partners in development’ in a 1998 case study for the Prince of Wales Business Leaders Forum. My experience with this project, together with that gained in my other local area-based projects, is now the subject of a guide I am writing entitled ‘Win-win’ Community Solutions: The Essentials of Networks, Accountability Systems and Communications.
On 19 December 2002, the Netherlands Alumni Association of India met at the India Centre, New Delhi. The meeting was presided over by S.P. Jakhanwal (ISS alumnus 1970/1) and addressed by Dr L.M. Singhvi, presently Chairman of the Non-resident Indians Committee. At the meeting, Pankaj Jain (ISS alumnus 1984) was elected President of the NAAI. The meeting was also addressed by the Dutch ambassador, P. Koch. It was announced at the meeting that an ISS Alumni Association is to be set up in India, with chapters in New Dehli, Ahmedabad, Bombay and Madras. The objectives will be more or less the same as those of the Netherlands Alumni Association of India, with an emphasis on contact and closer cooperation with ISS and its programmes and activities. As part of the 400th Anniversary of Indo-Dutch relations, the NAAI is planning to organise a regional meeting early next year. Contact address: spjakhanwal@yahoo.com.
INDONESIA The Holland Education Fair in Jakarta on 25 and 26 January 2003 provided a welcome opportunity to organise an informal get-together with ISS alumni. Fourteen alumni, including a Japanese alumnus working at the Japanese Embassy in Indonesia, took the opportunity to meet their former peer students. From ISS, Professor Ben White and Wieke Blaauw of the Executive Office were there to meet the alumni and to tell them about recent developments at the Institute.
There were 24 ISS alumni in attendance and two others who are former students of other institutions in the Netherlands. Addresses were given by Professor Gerrie ter Haar of ISS and Chris Brugman of the Dutch Embassy. Contact address: Rubvuta Elijah at rubvuta@yahoo.com
NIGERIA The Network of ISS Alumni in Development (NISSAD) was formed in 2001 and held its inaugural meeting in March 2002. There are currently 20 members, with the Secretariat residing at the Development Research and Projects Centre (DRPC) in Kano. Dr Judith-Ann Walker has taken on the responsibility of coordinating the Network. NISSAD's mission is to enable the women and men who studied at ISS and who are working with civil society organisations to up-lift Nigeria's poor and vulnerable to share knowledge and build capacity for development. A working plan has been submitted to ISS by NISSAD, which is currently under discussion. Dr Judith-Ann Walker can be contacted at: drpc@ecnx.net
JAPAN
The alumni liked the idea of being more organised. Those who graduated from the MA Programme in 2001 and 2002 already have regular email contact, and would like to see this develop further into a more or less formal ISS alumni association. We passed on our alumni address list, so if you live in Indonesia, you will probably be hearing from fellow alumni. IKANED, the Netherlands Alumni Association in Indonesia, helped us to organise this alumni meeting and also would like to maintain close contact with ISS alumni. You can contact them either via Anastasia Veni, alumni coordinator (ikaned@nec.or.id) or by visiting their website at www.ikaned.com. For more information about organising alumni meetings, setting up ISS alumni associations or other questions regarding ISS alumni policy, please contact René Bekius (alumni@iss.nl) or visit our website at www.iss.nl.
ZAMBIA Augustus Tiambeng can be contacted at aptiambeng@hotmail.com
Association. The Association was formed to facilitate linkages, information exchange and networking among ISS alumni based in Zambian and the SADC region.
On 27 February, a group of ISS alumni based in Zambia met at the Fairview Hotel in Lusaka to establish an ISS Alumni
On 26 March, ISS alumnus Tetsuya Kakuhashi, chair of the ISS Japanese Alumni Association, obtained his PhD from the Graduate School of Science and Technology at Kobe University. His PhD thesis is entitled ‘A Study of Specificities of Spatial planning in the Netherlands’. Dr Kakuhashi can be contacted at: Tetsuya.Kakuhashi@mb7.seikyou.ne.jp
Congratulations ISS alumna Dr Kornvipa Boonsue has received an award for her outstanding contribution to the understanding of gender relations in Buddhism in research and practice. Her MA thesis, written at ISS in 1987, is considered a landmark in Buddhist studies.
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1 0 / D O L L A R I S AT I O N
D O L L A R I S AT I O N
Dollarisation – Should developing countries have their own currency?
Since 1999, Ecuador, El Salvador and Guatemala have made the bold move to abolish their national currency and introduce the dollar as official means of exchange. During 2000 and 2001, there were fierce discussions in larger countries like Mexico and Argentina to follow suit, but eventually these countries decided to stay with their own currency. How much sense does it make for developing countries to adopt the dollar (or the euro for that matter) as their means of payment?
We are moving towards a world with two soft drink companies, two major aeroplane manufacturers, three toothpaste producers and an increasing concentration of international banking and insurance companies. So why have all those different bank notes? Should we not be moving towards a world with only a few currency zones?
Rob Vos
The recent currency and financial crises in the emerging-market economies have revived the debate about exchange- rate regimes. Many observers see the management of a faulty exchange-rate regime as one of the main causes of Mexico’s peso crisis in 1994 and of the Asian financial crisis of 1997-98. Prior to 1994, Mexico had officially announced a crawling band within which the exchange rate was allowed to fluctuate. The Mexican government had made a strong commitment to keep the exchange rate stable within the given range so as to provide a nominal anchor to its macroeconomic policies and to keep inflation low. Mexico was highly praised internationally for its strategy. For all the wrong reasons – or so it appeared at the end of 1994, when it was criticised for holding on too long to its promise to defend the peso. When Mexico finally devalued it was too little and too late. A crisis was born. Of course, other factors than the management of the exchange rate were to blame. Nevertheless, when the crisis later hit the fast-growing economies in East Asia, many observers quickly put a major part of the blame on the de facto peg of the Asian currencies to the dollar. These countries had been receiving large capital inflows during the 1990s, many of which were shortterm in nature. Due to the currency peg, foreign investors perceived little exchange-rate risk. Of course, when the pressure on the exchange rates mounted, the ‘hard’ peg turned out to be ‘soft’. Ventures in Asia became much
more risky in the minds of investors and, as they pulled out en masse, another crisis was born. FLEX OR FIX? Many economists argue these days that we are reaching a consensus regarding optimal exchange-rate regimes and that the central question is: to fix or not to fix? That is, either you choose a hard peg of your currency to some strong foreign currency (such as the dollar) or you keep your exchange rate fully flexible (independent floating). The countries mentioned above nearly all moved to a floating exchange-rate regime in response to the crisis. Under such a regime, it is better for investors to incorporate the exchange-rate risk in their profitability calculations. Brazil, Mexico and several of the East Asian countries have shown a good degree of economic recovery of late. So those that prefer flex to fix have been quick to assert that the move to a fully flexible exchange rate was the right one.
The examples show that miracle stories easily turn into horror stories However, when Indonesia followed its neighbours and switched to a floating exchange rate in August 1997, this turned out for the worse. The exchange rate collapsed, domestic inflation ran high and the economy imploded, leading to mounting social unrest and political instability. Indonesia’s economy is still struggling and its authorities are now considering another exchange regime switch, this time back to a truly fixed regime, more in particular a currency board and even dollarisation. Ecuador also tried to avert the danger of an imminent currency and banking crisis by switching from a crawling peg to a floating regime in early 1999. It proved to be a recipe for disaster. The financial system collapsed and the economy plunged into crisis. A year later it decided
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on an even bolder move to the other extreme by switching to full dollarisation. Like in Indonesia, a president was forced out of office along the way and it has left the country much impoverished. Argentina has been a recent victim. During the 1990s, it maintained a truly fixed exchange rate regime (known as a currency board), pegging the peso one-to-one to the dollar. The regime resembled that of a dollarised economy. For almost a decade Argentina had the appearance of an unlikely oasis of macroeconomic stability. However, when capital flows slowed down and export competitiveness was increasingly undermined by the fixed exchange rate, social unrest mounted with rising unemployment and the government’s priority to paying off the huge external debt. Argentina contemplated full dollarisation along Ecuadorian lines but decided to move to a flexible exchange rate, like neighbouring Brazil. It was not been a recipe for recovery, as the Argentine economy plunged into a deep crisis from which it has yet to emerge. The examples given show that conventions can quickly change and miracle stories easily turn into horror stories. In this context, an increasing number of economists have come to the conclusion that in the present age of high global capital mobility the balance should tilt towards ‘fix’. And if it is to be ‘fix’, why not fix once and for all by adopting the currency of a strong and stable foreign partner, most typically the dollar? SILVER BULLET? Much of this debate focuses on reducing the vulnerability of developing countries to external shocks. Dollarisation is an option at one extreme. Vulnerability to shocks and the danger of financial crises can have enormous social costs and set back development for decades. A large number of emerging- market continued on next page
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PROJECT NEWS
economies have suffered such consequences in recent years. The debate about exchange-rate regimes is therefore also important from a perspective of development and poverty reduction. But have economists found a silver bullet? Is dollarisation the magic trick that will safeguard developing countries from large upheavals in the short run and help them to focus on long-term development and poverty reduction? The answer is no.
Dollarisation puts governments on a strict and inescapable diet The point is that the exchange-rate regime is but one aspect of economic policies. Dollarisation puts governments on a strict and inescapable diet. Governments with structural problems in keeping their fiscal balances and inflation under control could be in need of such a diet. But dollarisation doesn’t only put you on a diet, it also demands a change in lifestyle which many countries will not be able to make very easily. Ecuador certainly did not comply with many of the basic conditions; hence requiring a profound lifestyle change.
Did a dollarising country like Ecuador lose weight and change its lifestyle? Yes, to some extent. It has been able to cut back on inflation, even though three years after introduction of the dollar, it is still much higher than in the US, at 10% per year. The economy has recovered slowly and real wages have recovered somewhat. However, the economic situation remains very fragile. Exports have lost competitiveness as inflation remains above that of competitors and the fiscal deficit has been rising. The country has had to run to the IMF again for a standby loan. Ecuador’s experience shows that dollarisation as such is no panacea. ‘To dollarise or not to dollarise’ – that is not the question. A change in the exchange-rate regime will not singlehandedly solve all your macroeconomic policy-making problems. Rob Vos is Professor of Finance and Development at ISS and of Development Economics at the Free
Poem
you have written about me sirs... I am so grateful to you all. Every time you came to me with those... I answered them all, I did not hide even those secrets
of the Centre for Gender and Development of the
Which were so dear to me. Not even those which made me look ugly.
UN Economic Commission for Africa (ECA), to develop
Because, I thought you were my mirror… And you would reflect me…
an index to measure the progress of African women.
My pain, my anguish, my sorrow, my confusion and my anger… I did not look deep into your eyes sirs… I trusted you all, like a child would trust its mother… I did not bother to read your mind sirs… For, how could I distrust my weapon?
I smile because I know…
Colour of Money: Should Developing Countries
It would do no good to cry more…
have their own Currency?’, can be obtained by
I smile because it is really funny…
sending an e-mail to promotions@iss.nl or may be
My mirror was tainted.
downloaded from the ISS website (www.iss.nl)
Where I thought I would be seen, It sees a different world. I sympathise with you sirs… You have so many problems of your own… You have to publish papers, you have to fight with your colleagues, you have to get promotions, you have to make money and you have to become big. I did not know, people who have nothing… Can make someone’s living. When you came… I felt my stomach was quarter full… So that I may share the other quarter with you… You, who would not relent until it is full… Now I know it will remain… Half empty for a long time. Or may be not… If you could do me a favour sirs… Please do not come back…
In the mid-1990s, Dr Wieringa had coordinated a project to assess two indices developed by UNDP to measure the progress of the world’s women: the Gender-related Development Index (GDI) and the Gender Empowerment Measure (GEM). Together with French statistician Jacques Charmes, she produced an index consisting of two components: the quantitative Gender Status Index, and the African Women’s Progress Scoreboard, which captures qualitative issues, such as women’s rights. Wieringa and Charmes started by summarising all the criticisms of the GDI and the GEM. Several major points emerged. Apart from the dependence on GDP, these included the preference for the use of international data rather than national data, an insufficient conceptualisation of both the concepts of gender and power, and the use of a proxy derived from data in the developed world on the gender gap in income for African countries. Another problematic issue was arithmetic used by UNDP, which is so complicated that UNDP effectively controls the computation of the GDI and the GEM. Most of these criticisms were incorporated in the original design of the African Gender and Development Index, enriching the index in the process. It was considered particularly important that the AGDI should be transparent, and should be an instrument for both policy-makers and NGOs. Its arithmetic should therefore be as simple and
transparent as possible, so that most NGOs working in the field of gender and development would have no problem working with it. There were two phases of reflection during the design phase. The first was a workshop of gender experts, in which some members of the original team who had formulated the first critique on the GDI and the GEM were involved. The second was a workshop, at the beginning of November 2002, in which policy-makers on gender issues were present. In the course of the second workshop, the participants gradually stopped talking about the ECA’s index and referred to ‘our’ African index. Apart from the very useful comments received from the participants in these two workshops, there were also very constructive suggestions from the World Bank, UNIFEM, UNDP, UNFPA and the UN Statistical Bureau. A training workshop at the end of November 2002 trained the leaders of research teams in the 13 countries where the AGDI was be tested out. In a few months time, some 50 researchers from all those countries will go into the field and collect all the data. Dr Wieringa and Jacques Charmes will then analyse the data and draft the African Women’s Report 2003/4, in which the AGDI will be formally presented for the first time. Dr Saskia Wieringa is Associate Professor in Women and Development Studies at ISS. She can be contacted at wieringa@iss.nl
For you are people of words sirs… You can pour down jargon of concern… And my son is a fool like me… At least he should know the truth… Though the magical papers rattle… We have to fight our own battle! Thank you, People who have nothing.
www.mscdevecon.nl
was asked by Thokozile Ruzvidzo, programme officer
Without hiding anything.
I look back and smile…
To apply or for further information please contact us via one of the following: Programme Administrator, MSc. Development Economics, Institute of Social Studies, P.O. Box 29776, 2502 LT The Hague, The Netherlands Tel: +31 70 426 0460, Fax: +31 70 426 0799, E-mail: mscdevecon@iss.nl,
At the beginning of 2002, Dr Saskia Wieringa of ISS
magical papers with questions...
The full text of the address ‘Development and the
This one-year programme provides solid training in economics, with a special focus on micro-macro linkages and policy-making for development. Teaching of advanced academic knowledge is combined with training in empirical research skills to tackle the complex issues facing a developing world. Experienced staff provide specialisation courses based on current research. Handson computer assignments, seminars and research papers equip students with the knowledge and skills to become accomplished analysts. The programme aims at students with a good Bachelors degree in Economics or related discipline, who seek a career in international companies and organisations, governments or NGOs, or want to proceed to do a PhD.
Development Index
For over the years...
Today after so many years…
Next start September 2003
The African Gender and
Dear Sirs,
on his Inaugural Address at ISS in December 2000.
MSc. in Development Economics
Project News
To Academicians, With...
University Amsterdam. This contribution is based
Three distinguished academic institutions in The Netherlands jointly offer an
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From ‘Fire so Serene, a Collection of Poems’, by ISS PhD student Vijay Gudavarthy. This collection is a tribute to 50 Years of ISS and is dedicated with deep respect to Vijay’s teacher, Prof. D. Narasimha Reddy.
Short Project News The Dutch Ambassador in Bangladesh has granted a subsidy of 2,276,564 euros to ISS for the project ‘Institutionalising the Department of Women’s Studies at the University of Dhaka’. The project will run until March 2008. The Board of the Netherlands Foundation for the Advancement of Tropical Research (WOTRO) has awarded Professor Bert Helmsing a grant for a project entitled ‘Community currency systems in Argentina: an innovation in poverty alleviation?’ The project will start on 1 April
2003 and will last until 2006. The Phd student involved in the project is Georgina Gomez from Argentina. In January 2003, the project ‘Implementation of the UNIDO Strategic Research Programme: Making Social Capital an Operational Concept for Industrial Development’ got under way. The project is funded by UNIDO (budget $ 99,407) and will run until June 2004. Field studies will be carried out in Vietnam and Ethiopia. For further details, please contact orpas@iss.nl
14 / INTERVIEW NOREENA HERTZ
INTERVIEW NOREENA HERTZ
/ 15
An ever-widening chasm between social justice and the global economy
Interview Noreena Hertz
In November 2002, the Feminist Economics Network in the Netherlands held a seminar at ISS, entitled ‘Gender Tools for Development: a feminist economics perspective on globalisation’. The seminar was organised to stimulate the discussion on the effects of globalisation on women in developing countries. Dr Noreena Hertz, Associate Director of the Centre for International Business and Management at the University of Cambridge, played a key role at the seminar. Here she is interviewed by Brigitte Holzner about her new book ‘The Silent Takeover: global capitalism and the death of democracy’ and why globalisation is not in itself a bad thing. Your recent book ‘The Silent Takeover’ has added to your fame as a critic of globalisation. Could you summarise your critique of globalisation and the neoliberal paradigm?
Let me start by saying that globalisation does not have to be a bad thing. But unfortunately, it is having very negative outcomes, especially increased income inequalities not only within but also between countries. Power is being con-
solidated in the hands of multinational corporations and economic institutions. There is an ever-widening chasm between social justice and the global economy. Trade interests subordinate human rights, the environment and labour standards. We in the developed world are not addressing these assymetries. We are maintaining policies that have been shown to exacerbate inequalities and injustice. We are not providing debt
relief or significantly increasing aid, even though it is clear that developing countries need more of both. The North is pushing forward a very hypocritical form of globalisation, demanding that developing countries open up their markets to Western products and yet imposing and maintaining huge subsidies in agriculture and textiles that are costing developing countries several billion dollars a day in lost revenue. You seem to believe in policy dialogue. For example, you addressed the World Economic Forum, where you pointed out the injustices resulting from the neoliberal policy prescriptions of the IFIs and the WTO. Yet you also believe in the importance of the protest movements against those institutions. Aren’t these contradictory positions?
Well, I believe in a multi-strand approach. I support the protest movement because I think that it has already shown that it is effective in beginning to change the arena in which political decisions are made. Historically, the protest movement has had quite some success in bringing about change: in the US, for example, the protests at the time of Roosevelt against the exploitation of workers led to changes in policy and the introduction
of the New Deal politics. And the Green movement in Europe in the 1960s and 1970s also led to changes in policy. I don’t see the success of the protest movement in terms of how many people it can mobilise onto the streets. Its success can only be measured by its ability to impact the political agenda. I believe in representative democracy, and democracy needs to be strengthened. We can glorify civil society, but we must not forget that civil society includes anti-abortionists as well as pro-abortionists. If it works properly, representative democracy is able to mitigate different interests, but most importantly to protect minority interests too. So for me, this agenda is about reestablishing politics and making politics the right forum within which these decisions can be made. I decided to attend the World Economic Forum because I didn’t want the participants to get past the protesters and then escape into a safe enclave and congratulate each other on how wonderful globalisation was. I wanted there to be voices of dissent inside, and I made a commitment that, if I attended, I would speak at every session I went to and actually challenge the position from the floor. And I did that. So I feel that today you can be an activist in many ways, through the traditional political channels and on the streets. With much of Europe moving to the right, and increasingly adopting a neoliberal agenda, where would you carve out that room for changing politics?
One very disturbing fact is that it has been disproportionately unemployed and blue-collar workers who have been voting for extreme-right parties in Europe. I interpret that by the fact that the left – which traditionally championed the working class, the unemployed, the marginalised and the excluded – has moved so far to the right that no one has been representing the interests of this constituency. And what we have seen in most countries in the past two decades, since the Thatcher-Reagan project became the
Today you can be an activist in many ways, through the traditional political channels and on the streets world’s neoliberal project, is a striking correlation between economic status and voter turnout. The poor have disproportionately not been voting. And now we have seen the rise of extreme-right politics, with politicians cleverly targeting groups that might in the past have been the constituency of the left, and saying we will look after you if no one else will. A question specifically for ISS alumni: most ISS students come from government offices and NGOs in the South, and return there when they have finished their studies. What would you advise them on returning to their own countries?
I think there should be a lot more coalition building on the part of developing countries so that they can unite to address some of the key issues, such as the lack of attention paid to the environment, or human rights, or labour standards within the WTO. Or the proposed General Agreement on Trade and Services, or the issue of debt. We’ve already seen them uniting around these issues to add a voice that will be heard in a geopolitical environment dominated by hegemonic powers such as the United States, or even the EU. And they should align with NGOs and activist groups in the North. It is also important for ISS alumni to push forward a domestic line that, despite IMF and World Bank policies, despite the threat of footloose multinationals leaving, their governments can still make political choices. About the redistribution of wealth, about how much of their budget should go on military expenditure as opposed to health and other public services, about protecting individuals, workers, women, etc. They should not to lose sight of the fact that, in a global world, the more links that can be forged, the more we can speak in one voice on these issues, the greater the effect it will have. Dr Brigitte Holzner is Senior Lecturer in Women, Gender and Development at the ISS. She can be contacted at holzner@iss.nl
1 6 / B A S D E G A AY F O R T M A N
B A S D E G A AY F O R T M A N
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Poverty as Global Entitlement Failure On 20 November 2002, Bas de Gaay Fortman, Emeritus Professor of Political Economy at ISS, gave his Valedictory Address at Noordeinde Palace in The Hague, in the presence of Her Majesty Queen Beatrix. The full text of the address, entitled ‘Power and Protection: Productivism and the Poor’ is available from ISS at promotions@iss.nl. Below, Professor de Gaay Fortman presents his views on the state of development cooperation in the twenty-first century. In the 30 years that I have been associated with this Institute, development cooperation has not seen many improvements. In the 1970s, there were special sessions at the United Nations to discuss the New International Economic Order. There was a growing awareness that the structures of world trade worked to the detriment of the developing nations. That is still very much the case, but it is no longer at the forefront of the agenda. The inequality in the world has increased enormously. I always use one statistic as a yardstick of inequality: how much income has the top 20% of the population and how much has the bottom 20%? In Brazil, the ratio is 30 to one. The top fifth of the population gets 60% of total income, while those at the bottom have to survive on only 2%. In the world as a whole, the ratio is 80 to one. That means that the world is two to three times as unequal as the most unequal country. Naturally, inequality means polarisation. If I were a hard working inhabitant of a Third World country, why should I accept that you get 80 times as much as I do? I might be able to accept two or three times as much, if I could see that you
accepted a lot of responsibility and that you were also doing your best to help me to find work, too. But 80 times? I sometimes get a little despondent, but I do think there are small signs of improvement. At the World Bank, for
‘Politically correct’ is
drinking water, to be able to sell their products for a good price, rather than leaving them to rot. But if you have rights, you have to take action yourself to make sure they are respected. If that does not work, others have a duty to take action. This is the core of the rights approach to poverty: identifying the duty-bearers.
no longer seen as a compliment, I find that hard to accept example, the poor have finally moved into the picture in recent years. We are starting to see more clearly that, despite all the development programmes and aid, there are still poor in the world, and their situation is deteriorating. As a professor at this Institute, I have developed a methodology that tries to see what is behind all this poverty. Poverty has a lot to do with power relations. The challenge is to analyse the entitlement systems behind entitlement failure. It is no good thinking in terms of charity, that we should really do something to help all those poor people. The poor also have rights: the right to a roof over their heads, to clean
Take the Netherlands. The poverty situation here is far better than it was 150 years ago. Why is that? Growth, you might say. Well, that’s true, together we certainly produce a lot more than we used to. But don’t forget about emancipation, of women, workers and the less well-off. They have acquired rights and they have learned to stand up for those rights. They have made sure that they themselves benefit from the increase in prosperity, and are active participants in the process. And that is exactly the issue now at stake globally. Non-governmental organisations are increasingly concerned about the unequal balance of power in the world. But how about the rest of us? Electoral campaigns in the Netherlands are not fought over human rights, poverty, the environment, or peace and security.
Bas de Gaay Fortman
Security only becomes an issue if it is close to home, when people are concerned about violence on the streets. I find that a terribly sad state of affairs. Development cooperation in the Netherlands now has a state secretary instead of a minister. Anyone who supports the cause of development in this country, who wants more aid for the poor, or calls for human rights to be respected, is considered ‘politically correct’. And that is no longer intended as a compliment. It is the spirit of the times to say that political correctness is a thing of the past. Even the rule of law is seen as a kind of abject political correctness, and I find that hard to accept.
The capacity to look further than the time and place you live in now is less than impressive, to say the least. The verve of the 1960s and 1970s, when we did care about what was happening, is long gone. Why? Then, like now, we had just been through a period of strong economic growth. We could afford to put our ideals at the top of the agenda. The past decade was also a time of prosperity and you would think we could once again permit ourselves to be left-wing, but it has not happened. We have been shocked by a number of historical events. The fall of the Berlin Wall did not lead to the end of violence in the world. On the contrary. There have since been terrible civil conflicts, which have put masses of people to flight. That increases our feelings of insecurity and makes us feel threatened.
Address. But little will change. I will continue to work here at the Institute and to hold my chair at Utrecht University, where I am Professor of Political Economy of Human Rights. Professor De Gaay Fortman can be contacted at fortman@iss.nl This article is based on an interview which first appeared in full in the daily newspaper Trouw on 20 November 2002.
A Liber Amicorum for Bas de Gaay Fortman has recently been published by Kluwer Law
For many years I was active in Dutch politics, but in 1977, I stepped down as leader of the Radical Party (PPR). I was afraid of losing touch with my own field of work, development economics. I could easily go back into politics, but I won’t. I am now 65 and no longer need to have a paid job to earn a living. That is why I am holding my Valedictory
International. The volume includes essays by past and current ISS staff, a judge from the International Court of Justice and staff members of Utrecht University. Karin Arts and Paschal Mihyo (eds.), Responding to the Human Rights Deficit: Essays in Honour of Bas de Gaay Fortman, Kluwer Law International, The Hague/London/Boston, ISBN 9041120211.
18 / THE SHARIA IN NIGERIA
THE SHARIA IN NIGERIA
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Fears of a civil war in Nigeria may not be unfounded
The Sharia in Nigeria Maarten G. Barends The recent revival of the Islamic Sharia law in the northern states of Nigeria is causing problems for the federal government of President Olusegun Obasanjo. Maarten Barends believes the crisis may even lead to civil war between the north and the south of the country.
The Sharia has its origins in the tribal societies on the Arabian Peninsula in the seventh century. Traces of Bedouin custom and the Jewish Talmud are to be found in Islamic law, which expanded along with the rapid spread of Islam itself. Islam arrived in West Africa via the trade routes to Chad and Sudan. In northern Nigeria, the Sharia was therefore a traditional element of the legal system. The English colonial administration restricted Islamic criminal law, but did not outlaw it completely. The Sharia could be applied as long as it was not incompatible with ‘natural justice, equity and good conscience’. It was treated in the same way as other local forms of customary law. The English did, however, forbid corporal punishments that involved physical mutilation. In this restricted form, the Sharia continued to be applied until the 1959 Penal Code Law for the Northern Region came into force. The Code did, however, contain a number of passages that took account of the sense of justice of the Muslims in the north of the country. Unlawful sexual intercourse and the consumption of alcohol remained prohibited for Muslims. After Nigeria became independent in 1960, the Penal Code Law for the Northern Region remained in force.
On 27 January 2000, Islamic criminal law was revived in the state of Zamfara in northern Nigeria. The re-introduction of the Sharia was founded on political motives: state governor Ahmad Sani knew he could count on the support of the largely Islamic population. Other states – Bauchi, Kebbi, Jigawa, Kano, Niger, Katsina, Sokoto, Yobe, Gombe and Kaduna – soon followed, mostly in response to popular pressure. The new laws – known as the Sharia Penal Codes – were introduced in great haste, as witnessed by the countless omissions in the text. SYMBOL OF ISLAM AND INDEPENDENCE The Sharia law thus serves political rather than legal ends. The north feels neglected, and has a greater affinity with Chad, Sudan and Saudi Arabia
than with Ghana, Ivory Coast or Liberia. The Sharia was introduced as a symbol of Islam and the independence of Islamic Northern Nigeria. It is regarded as a panacea against the corruption and licentiousness that threaten Nigeria. It is a call for the return of norms and values. Even Christians appeal to the Sharia courts, where they can count on a quick and effective decision, free of formalities and bureaucracy. Since 2000, the federal government in Abuja has been wrestling with the problem of the Sharia law in the north. The government wishes to establish closer ties with the West, play a leading role in Africa and develop its domestic economy. However, the new Nigerian Constitution, dating from 1999, makes criminal law a matter for the states themselves, as in the USA, where individual states can decide on whether to impose capital punishment. The northern states presented the federal government with a fait accompli: the social debate on the Sharia was conducted after it had been introduced. Legislation can in theory be appraised by the Nigerian Supreme Court in Abuja to see if it complies with the Constitution, but Obasanjo’s federal government must move very cautiously. Every word uttered in relation to this thorny issue is highly sensitive and a
Supreme Court judgement on the Sharia law could have catastrophic consequences. And it is by no means certain that Obasanjo would get the support of the Supreme Court, where most of the judges are Muslims. POLARISATION The largely Christian south of the country observes the developments in the north with grave concern. Many refer to the Constitution and claim that, in certain areas, it conflicts with Islamic law. But the legal argument has become a political one, where the dividing lines are geographical and religious. The polarisation of the debate is threatening the very survival of the nation. The reluctance of the police to act against those who uphold the Sharia and the strength of religious feeling amongst the people have led to the formation of hisba groups. These groups take the law into their own hands, resulting in violence and chaos. Religious riots, especially in Kaduna, have already claimed more than 3,000 lives. The fears of many Nigerians that a new civil war could break out may not be unfounded.
to constantly complain about these shortcomings. Instead of consistently hammering on about human rights, the West would be better advised to enter into a constructive dialogue. So far, no one has actually been punished by stoning in Nigeria, and training judges and raising awareness can help to keep it that way. Research has shown that stoning was extremely rare in the Ottoman Empire and in nineteenth century Egypt. That must be possible in twenty-first century Nigeria, too. The West should try and ensure that the Sharia remains a symbol, and is kept at a distance from the daily practice of law enforcement. Nigerian society is very heterogeneous and unstable. It takes little to set off a spiral of violence, as the religious riots in Kaduna clearly prove. Nigeria is well aware of this – now the West, too, must be convinced. A civil war must be avoided at all costs. Maarten G. Barends studied the Sharia in Nigeria on behalf of the European Commission. He currently works for Amnesty International, specialising in West Africa. He wrote this article
The West should make a much greater effort to recognise the difficult position in which the federal government finds itself. That Sharia violates universal human rights on several counts is undeniable, but it does Nigeria little good
in his personal capacity. He can be contacted at maartenbarends@hotmail.com.
20 / PHD NEWS
PHD NEWS
PhD News PhD Thesis
The EU market for banana imports is neither competetive nor contestable On 27 January 2003, Claudius Preville was awarded his PhD at ISS for his thesis, ‘Trade Liberalisation under Imperfect Competition’, in which he analyses the case of the European Union’s market for banana imports. In his thesis, Preville argues that, contrary to the mainstream view shared by neoclassical economists, the European Union’s market for banana imports is neither competitive nor contestable, but the transnational corporations which dominate the market are engaged in Cournot-Nash type behaviour. The major implications of this is that liberalising trade under such circumstances will simply serve as an instrument for monopoly surplus appropriation by transnational corporations, while widening the wealth gap between the exporting countries that survive and the importing EU members states. Preville views oligopolistic interdependence among a few transnational corporations as an instrument for control, and monopoly surplus appropriation, which also has perverse implications for the division of wealth among nations if trade is liberalised. Market structure and firm behaviour are hardly ever taken into account by neoclassical economists, who have been the main proponents of the liberalisation of trade policy in general. The EU market for banana imports is perhaps the most topical example, in which exponents of the neoclassical approach have advocated laissez-faire in the belief that it will bring about significant gains to consumers and producers. Yet, the empirical evidence shows that the market is neither competitive nor contestable, but that transnational oligopolists are engaged in Cournot-Nash type behaviour. The study began with a critical review of the neoclassical arguments for liberalisation, which typically predict windfall gains in consumer and producer welfare. In particular, Borrell and Yang, two World Bank economists, have repeatedly utilised the neoclassical approach to tell the world
how perverse European Commission intervention has been, and how much better off the world would be if the European Union would liberalise its banana trade. Since their analysis has been largely in accord with traditional trade theory the world appears to have believed them, as their approach seems to have guided the trade policy stance in the World Trade Organisation. However, since the empirical evidence does not support such a theory the study sought alternative explanations through more appropriate methodologies for simulating the welfare effects of liberalisation and the division of wealth among nations. CONCEPTUALIZATION OF TRADE – THE ‘INSULATE CONTAINER’ Preville draws on theories of industrial organisation, transnational corporations and the commodity chain to construct a methodological framework that takes the empirical evidence on firm behaviour into account. He conceptualises the transnational banana trade as taking place within an ‘insulated container’ under the control of a few transnational oligopolists, and the banana as a physical good embodied within a ‘vector’ of services, the value of which changes over space and time. The basis of the long-run stability of the oligopoly has been the tacit, strategic interdependence among transnationals and their ability to exercise some degree of strong monopoly power due to imperfect competition, notably through economies of scale, common governance and branding. As such, it is seen that both product and process innovation are important as a means for controlling the transnational banana trade.
which dominates the European Union’s banana trade. All transnationals enjoy monopoly power due to branding and advertising, and there is a distinctive and stable hierarchy in the price formation process. Therefore, oligopolistic interdependence serves as an instrument for control and for monopoly surplus appropriation by transnationals. Moreover, when the degree of market power actually exercised is quantified, it emerges that despite the presence of laissez-faire in Germany and protectionism in France prior to the implementation of the SEM, firms in both these countries exercise comparable degrees of market power. In fact, the econometric results confirm that transnationals in the German market exercise slightly more market power than transnationals in the French market. Therefore, market-induced instruments of imperfect competition have been even more perverse than the Commission-induced tariff quotas, although the neoclassical methodology has focused exclusively on the latter.
TRADE AND THE DIVISION OF WEALTH AMONG NATIONS On the division of wealth among nations, Preville finds that, despite the fact that protectionism existed in France and Britain while laissez-faire existed in Germany in the pre-SEM period, wealth was most progressively divided along the protected commodity chains and least progressively divided between Germany and its exporting partner countries. Moreover, the same patterns have been maintained since the SEM took effect. So, the division of wealth is determined less by the type of trade policy than by the governance structure of commodity chains. Control of the entire commodity chain by transnationals allows them to exploit economies of scale and common governance and to transfer prices in such a manner that their profits at the high-value stages of the chain are maximised, while returns to producers at the low-value end are minimised. And, it is through such mechanisms, that the division of global wealth is
becoming more and more regressive. In terms of the welfare effects of trade liberalisation under imperfect competition, Preville finds that consumers are deprived of nearly twice as much surplus due to imperfect competition than to Commission intervention. Preferential producers and the Commission also suffer substantive losses in revenue. Yet, while liberalisation eliminates welfare losses due to Commission intervention, those due to imperfect competition are systemic. So, liberalisation under imperfect competition seems to serve as an instrument for more efficient surplus appropriation by transnational oligopolists and not consumer welfare gains, as neoclassical theory predicts. Therefore, liberalisation under imperfect competition is not self-evidently desirable. Claudius Preville is an economist and computer professional with several years experience working on computerised trade information systems and trade policy reform. He is presently engaged in postdoctoral research at ISS and can be contacted at preville@iss.nl or c_preville@yahoo.co.uk.
New PhD Theses 2003 Sarah Gammage
Mathew Kurian
The Financial Cost of Being Green:
From Projects to Process: Participatory
Macroeconomic Policy, Investment and
Watershed Management in the Himalayan
Environmental Degradation in El Salvador.
Foothills.
Maastricht: Shaker, 2003, 331 p. ISBN 90- 423-0211-9
Maastricht: Shaker, 2003, 282 p. Dissertation,
Dissertation, Institute of Social Studies, The Hague.
Institute of Social Studies, The Hague.
Omu KakujahaMatundu Common Pool Resource Management. The Case of Eastern Communal Rangelands in Semi-arid Namibia. Maastricht, Shaker Publishing BV, 2003, 326 p. ISBN 90- 423-0218-6 Dissertation, Institute of Social Studies,
N.C. Narayanan
Claudius Preville
The Hague
Against the Grain: the Political Ecology and
Trade Liberalization under Imperfect
Land Use in Kerala Region, India.
Competition. An Analysis of the European
Maastricht: Shaker, 2003. 397 p.
Union's Market for Banana Imports.
ISBN: 90- 423-0216-X. Dissertation,
Maastricht: Shaker, 2002, 364 p. ISBN: 90-42320
Institute of Social Studies, The Hague
Dissertation, Institute of Social Studies, The Hague
The thesis concludes that there is long-run stability in the nature and composition of the transnational oligopoly continued on next page
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Theses can be ordered from: Shaker Publishing BV, St. Maartenslaan 26, 6221 AX Maastricht. Fax: +31 43 325 50 90. See also: www.shaker.nl
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Refresher Courses Accounting for Sustainable Economic and Social Development With Special Reference to Latin America and the Caribbean This refresher course, organized by ISS in cooperation with La Facultad Latinoaméricana de Ciencias Sociales Sede Costa Rica (FLACSO), will take place in October-November 2003. The course aims at providing participants with fully up-todate knowledge of national and social accounting concepts and practices and to show how these can be integrated with systems of global economic accounting and environmental accounting in particular, and sustainability in general. Participants will also become familiar with the application and use of these accounting methods for policy analysis, including the use of socioeconomic modelling techniques for sustainable development, population and education. TARGET GROUPS • Former ISS alumni whose professional work could benefit from improved knowledge of sustainability, socioeconomic accounting and policy simulation techniques and concepts • Professionals of statistical offices, central banks and other agencies engaged in the compilation of national, social and environmental accounts and social indicators • Professionals of policy formulation agencies, central banks and other agencies engaged in the analysis, design and simulation of sustainable social and environmental policies • Researchers and policy-makers in the field of sustainable and macroeconomic policies, social development and environmental protection • Agencies interested in the process of institutionalising the development and use of such tools MAIN AREAS COVERED • Concepts of sustainability, poverty, the environment and human development • Updated national accounting methods grounded in the SNA 1993, including environmental extensions, concepts and applications of Social Accounting Matrices (SAMs) • The application of World Accounting Matrices (WAM) for the analysis of global and regional trade and financial linkages • Extensions of the SAM framework with social and environmental indicators • Applications of accounting methods for social and economic policy analysis through Computable General Equilibrium models, including models with specific emphasis on analysing sustainable human development • Development of a policy support monitor The course will consist of lecture sessions, computer-based workshops, applied exercises and conferences. Participants should have a (postgraduate) degree in economics, statistics or other social sciences and at least five years of experience in research, as a policy-maker or statistician in fields related to the course. As many recent developments in accounting
Conference Reports methods for development are presented, the course is also highly recommended for ISS alumni of the MA Programme of Economics of Development, the Diploma Programme in Development Planning Techniques, and other ISS MA and Diploma Programmes. In addition, applicants for the course should be living and working in the Latin American and Caribbean region. ISS alumni attending the course will be financed by the Dutch Minister of Development Cooperation. Additional sponsoring for the participation of non-ISS students is being requested from FLASCO, UNDP and the Inter-American Development Bank. The total number of participants will be between 35 and 40. APPLICATIONS The application form can be requested by sending an email or fax to: Annet van Geen, email: vangeen@iss.nl, fax: +31 70 4260507. This form must be returned to the ISS before 1 June 2003.
Integrating Good Governance, Democracy and
International Symposium Governance and Adjustment in an Era of Globalisation On 8 and 9 November 2002 the Institute of Social Studies, in collaboration with the Department of Economics of the University of Manitoba, co-hosted an international symposium entitled ‘Governance and adjustment in an era of globalisation’. Held in Winnipeg, Canada, the symposium honoured the life and work of John Loxley, Professor of Economics at the University of Manitoba. Among the many speakers at the Symposium were Wicky Meynen, Martin Doornbos and Haroon Akram-Lodhi from ISS. The collected papers of the Symposium will be published later in the year by Arbeiter Ring Publishing under the title ‘Economic Reform in the 21st Century: Neoconservative Failures, Governance and Alternative Budgets’. Further details on the Symposium, along with a full set of papers, are available from Haroon Akram-Lodhi. He can be contacted at haroon@iss.nl.
Integrity in Curricula on Development Studies and Development Management in Africa Counterpart/Location: Human Rights and Peace Centre (HURIPEC), Makerere University, Kampala, Uganda Date: 12-26 July 2003 Convenor: Paschal Mihyo Target Group/Considerations: Lecturers and trainers from institutes of development studies and institutes of development management who are ISS Alumni. These institutions would benefit from joint curriculum development activities in the areas of good governance, democracy, accountability and transparency. The course should help them to form a network for networking on the Internet and other means for curriculum development and innovation on new and emerging issues, starting with good governance. The 20 participants will be directly involved in training on good governance or curriculum development and management of training in their respective institutions. The focus will be on the qualitative aspects of the transformation, factors that support or undermine good governance, indicators and measurements of democracy and good governance and capacity building at various levels for good governance and peace. The course will provide ISS with an opportunity to work closely with HURIPEC. At the same time, the two institutions will use the course to foster wider links between the African Great Lakes Universities Network (AGLUN) project and African institutes of development studies and development management. For more information contact Paschal Mihyo at mihyo@iss.nl
Round Table Meeting The Role of Academic Institutes in Strengthening Civil Society On 22 November 2002, together with Novib (Oxfam NL), ISS organised a round table meeting on the relationship between academic institutes and non-governmental organisations in the Netherlands. As the chair of the meeting, Ria Brouwers from ISS stated, the meeting was convened in response to a cry from the heart by Novib director Sylvia Borren. At the opening ceremony of the ISS Diploma Programmes, she had addressed the gap she sees between the academic world and the world of practitioners in development organisations. In her keynote speech, Sylvia Borren said that Western development organisations deal with a complicated web of stakeholder relationships. They receive money from their governments and the public, they deal with partner organisations and their work is affected by events beyond their power, like political instability. The ministry – their back donor – looks at the aid chain from a top-down perspective, whereas Novib wants to start at the other end of the chain. She pointed to the dilemma of how other factors (social, political) than the chain from development agency through partner organisations to programme participants are taken on board by researchers. She wondered what understanding researchers have of the complex reality of social change
interventions in a specific culture and stated that they are advising beyond the scope of their competency. This was really an introduction to put the cat among the pigeons. Not surprisingly, it provoked a vehement reaction from the academics around the table. The first discussant, Leo de Haan from the University of Nijmegen, stated that Sylvia Borren was arguing from the viewpoint of civil society. The NGOs expect quick results, cheap research and practical reports. The discussant from ISS, Bert Helmsing, compared the situation of organisations like Novib with that of researchers. Like NGOs, academics also have to contend with back donors, independent evaluations and pressure to obtain results: they have to publish, most of all in internationally recognised journals. He agreed with Sylvia Borren’s point that the aid chain is vertical and relations are unequal. Information asymmetries are generated and maintained. He argued that this is asking for a broader research question. Organisational theory and management studies are an integral part of any curriculum of public policy, alongside public policy analysis and evaluation (this also applies to non-profit organisations). Even if the ‘client’ wants a very specific and narrowly defined evaluation, it pays to start broadly. So, he stated, maybe back donors should simply be more careful about whom they select as researchers: qualified ones are available. Bert Helmsing advised that academic researchers should have a long-standing relationship with an NGO group, rather than being involved only at the end. This requires far-reaching policy research from the beginning. In the discussion that followed, everyone acknowledged there is a gap to be bridged between academics and practitioners. But there are also people from both sides who are standing on the bridge. We should make better use of those people, and we need long-term structural relations to bridge the difference in culture. The discussion then focussed on the question how to structure the cooperation between different actors in the field of development cooperation. The idea was to create centres of learning in which academics and staff from Northern and Southern NGOs would be involved. The different parties could start with an inventory, to make the different interests clear and to explore ways of matching these themes to capacity. This stimulated ISS to draw up an inventory of all contacts with civil society and research areas in which ISS staff are involved. ISS is now exploring the possibilities to form a kind of centre or think tank which shares knowledge, experiences and contacts and makes the existing knowledge at the Institute accessible to others. For further details, please contact Wieke Blaauw at blaauw@iss.nl.
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Working Papers ISS Working Papers can be found
ISS Working Papers General Series * ISSN 0921-0201
on the ISS website at: www.iss.nl, Publications/Working Papers.
373
Sebastián Torres Ledezma, An empirical analysis of economic growth for Uruguay and the Latin American region:1950-2000
374
Mathew Kurian and Ton Dietz, Irrigation and collective action: a study in method with reference to the Shiwalik Hills, Haryana
They can also be ordered in hard copy from The Bookshop, PO Box 29776, 2502 LT The Hague, the Netherlands
Development and Change The journal Development and Change is published five times a year by Blackwell Publishers (Oxford, UK) on behalf of the Institute of Social Studies. For more information, see the ISS website or email us at d&c@iss.nl. Available online at http://www.blackwellpublishers.co.uk/online
Volume 34 / Number 1 / January 2003 Jane Turnbull
South Pacific Agendas in the Quest to Protect Natural Areas
Ann Marie Choup
Limits to Democratic Development in Civil Society and the State: The Case of Santo Domingo
Kees Jansen
Crisis Discourses and Technology Regulation in a Weak State: Responses to a Pesticide Disaster in Honduras
Vani K. Borooah
Births, Infants and Children: An Econometric Portrait of Women and Children in India
Howard White and Edoardo Masset
The Importance of Household Size and Composition in Constructing Poverty Profiles: An Illustration from Vietnam
Jeemol Unni and Uma Rani
Social Protection for Informal Workers in India: Insecurities, Instruments and Institutional Mechanisms
Glyn Williams, René Véron, Stuart Corbridge and Manoj Srivastava
Participation and Power: Poor People’s Engagement with India’s Employment Assurance Scheme
Volume 34 / Number 2 / January 2003 Gerard Clarke and Marites Sison
Voices from the Top of the Pile: Elite Perceptions of Poverty and the Poor in the Philippines
Vupenyu Dzingirai
The New Scramble for the African Countryside
Steven Robins
Whose Modernity? Indigenous Modernities and Land Claims after Apartheid
E. E. Watson
Examining the Potential of Indigenous Institutions for Development: A Perspective from Borana, Ethiopia
Gaim Kibreab
Household Headship among Refugees and Returnees from Eritrean Perspective
Josh M. McDaniel
History and the Duality of Power in Community-based Forestry in Southern Bolivia
Colofon Development ISSues is published three times a year with a circulation of 11,000 by: Institute of Social Studies PO Box 29776, 2502 LT The Hague, The Netherlands, Tel: +31 (0)70 4260 443 or 4260 419, Fax: + 31 (0)70 4260 799, ISS website: www.iss.nl, Email: DevISSues@iss.nl Editors René Bekius, Andy Brown Editorial Board Karin Arts, Erhard Berner, Kristin Komives, Sandra Nijhof, Peter de Valk, Emily Clair Wilkinson (Scholas) Editorial assistants Karen Shaw, Marie-Louise Gambon Design and Production MUNTZ Amersfoort bv Photos Unless otherwise stated, all photographs are by courtesy of Jager & Krijger. Material from Development ISSues may be reproduced or adapted without permission, provided it is not distributed for profit and is attributed to the original author or authors, Development ISSues and the Institute for Social Studies. ISSN 1566-4821. The views expressed are those of the original authors and do not necessarily reflect those of the Institute.