Download The Destination of Australian Development Assistance.

A Submission
to the
Independent Review of Aid Effectiveness
Made on 2/2/2011
From Phil Jones
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Table of Contents
Summary. ....................................................................................................................................3
The Carrying Capacity of Planet Earth ........................................................................................3
The Capacity to Exchange Goods and or Services ......................................................................7
Dependence of Aid Recipients on the Export of Primary Products ............................................8
Energy Resources. .......................................................................................................................9
The Green Fund........................................................................................................................ 10
The Destination of Australian Development Assistance. ......................................................... 11
Searching for an Appropriate Development Model. ............................................................... 11
The Fair Trade Model for Development. ................................................................................. 12
Climate Change and the Millennium Development Goals ....................................................... 12
The Fundamental Argument for the Support of Overseas Development Assistance.............. 13
Where to From Here. ............................................................................................................... 14
Recommendations ................................................................................................................... 15
Conclusion ................................................................................................................................ 15
Appendix A: Limits to Growth Scenarios. ................................................................................ 17
Appendix B – Overview and Key Indicators according to the CIA............................................ 26
Appendix C – National Oil Reserves ......................................................................................... 32
Appendix D – Major Aquifers ................................................................................................... 33
Bibliography. ............................................................................................................................ 37
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Summary.
This submission argues that the effectiveness of Australian International Development
Assistance relies upon the recognition that there is a limit to the traditional economic
growth, that nations of the world must aim for and promote the concept of the “Steady
State Economy” (changing the language – sustainable development), must aim for national
and local self sufficiency in food and energy, use the concept of human rights in discussions
of development and redirect its assistance focus to countries of greatest need.
The Carrying Capacity of Planet Earth.
The steady increase in the World’s population is widely known. It is also widely
acknowledged that population numbers continue to rise at a significant rate in “Developing
Nations” and that decline in birth rates occur with rising living standards and education
levels, particularly among women.
In recent years there has also been an every increasing demand for energy, a trend the
International Energy Organisation expects to continue.
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Growth trend are also evident in World GDP and Trade.
Nature Reports Climate Change (2008) Published online: 20 March 2008
This exponential growth is occurring at the expense of our environment, not just in terms of
Climate Change, but in forest reduction, acidification of oceans, reduction in biodiversity,
reduction in fish numbers, water shortages and so on. An emblematic example of that is
demonstrated in the loss of forests, particularly in some of the poorer equatorial countries of
the world, often enough at the expense of indigenous, relatively subsistent communities.
These trends represent a danger not only to these poorer nations but to the world
community generally.
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Source: NASA
These trends are all linked to “economic growth”, something that seems almost universally
regarded as positive in value. Negative growth is similarly regarded as negative in value.
While economic growth has varied, it also has the general tendency to increase, rather than
remain stable or decrease.
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During the 1970s, the “Club of Rome” studied the impact of exponential growth presenting
the report, “Limits to Growth”. More recently the 30-Year Update was published exploring
the same questions, “Are current policies leading to a sustainable future or to collapse?
What can be done to create a human economy that provides sufficiently for all?”
While the limitations of the computer modelling are outlined in the report, it would seem
that a collapse of devastating proportions is a distinct possibility sometime this century,
possibly around the middle of this century.
Such growth is not a conspiracy but a natural consequence, and evidently a desirable
consequence, of the private enterprise economic system in operation almost entirely
throughout the globe. It is classed as necessary by the UN.
“Experience has shown that economic growth alone is necessary, but not
sufficient, to greatly reduce poverty in its many dimensions. Indeed, the mixed
record of poverty reduction calls into question the efficacy of conventional
approaches involving economic liberalisation and privatisation”.
UN Report “Rethinking Poverty - Report on the World Social Situation 2010”, Department of
Economic and Social Affairs of the United Nations Secretariat, New York, 2009, pvi.
A growing awareness that there are limits to growth has lead to a language and culture of
the oxymoron “sustainable growth” and one that appear to be close to it, “sustainable
development”. Little to no serious consideration is being given to the notion of the Steady
State economy within media, political, educational circles and very little within academic
circles, perhaps because moving to the Steady State economy is not easily done and the
benefits are not inline with the short term self interest of a vast majority this generation.
“Sustainable development” is too easily mistaken or misused for “sustainable growth”, or
seen as business as usual but with a green tinge.
The Scenarios outlined by the Limits to Growth are presented in brief in the Appendix.
Recent research by the CSIRO has established that we are progressing along the “business as
usual” path. It must be acknowledged that there are difficulties in accessing the reliability of
the various scenarios. However, it is the only respected study of its kind and the
consequences are unimaginably devastating. There is a tendency that in the face of
uncertainty to proceed along the familiar path. There is also a temptation to go along with
the present out of curiosity just see if devastation will actually happen. Satisfying curiosity is
a human tait that slows people down as they pass traffic accidents, brings visitors to flood
ravaged areas and has TV crews racing to cover earthquakes, fires and tsunamis. Dismissing
the prospect as real becomes easier the less power we have to prevent it.
In 2008 Graham Turner of the CSIRO compared recently collated historical data for 19702000 with scenarios presented in the Limits to Growth. “The analysis shows the 30 years of
historical data compares favourably with key features of the business-as-usual scenario
called the “standard run” scenario, which results in collapse of the global system midway
through the 21st Century. The data does not compare well with other scenarios involving
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comprehensive use of technology or stabilising behaviour and policies. The results indicate
the particular importance of understanding and controlling global pollution”.
Neither Turner nor Limits to Growth insist that a time for a collapse is predictable with
accuracy. “These graphs are not exact predictions of the values of the variables at any
particular year in the future. They are indications of the behavioural tendances only”,
(Medows, et al. 1972, pp92-3). The inadequacy of the computer modelling is acknowledged
in the book. The absolute minimum that can be claimed is that the figures can not continue
to rise exponentially and that animal populations that overrun their carrying capacity in
nature experience a sudden decrease in numbers.
Serious concern is now being raised over the viability of important aquifers, such as India and
the less so, the North Plain of China. Other countries are also a concern. (See Appendix C).
“Since 1965, the water table under Beijing has fallen by nearly 59 m, dropping 2.5
m in 1999 alone. Competition for water has usually seen farmers lose out to the
much more profitable industrial sector. While figures may be imprecise, they do
point to the drastic shortage China is facing and the direct implications for grain
production. Falling groundwater levels could imply dire consequences for China’s
food security. .. China could be forced to import as much as 370 million tonnes of
grain per year to feed its population in 2025 (above), with consequent steep
increases in cereal prices and disruption of the world market. The country’s vast
size, growing population, and increasing affluence point to the critical need to make
accurate assessments of China’s patterns of grain production and water demand.
Although the above analysis may be compelling, its accuracy is limited by the
available data”.
FAO, 2001
Escalating prices of food or energy could well be factors that trigger an worldwide economic
collapse or depression. An uncontrollable depression would be far more serious that any of
the Scenarios of “Limits to Growth”.
The Capacity to Exchange Goods and or Services.
Trade interdependence is another factor to be considered in a review of the effectiveness of
Australian Development Assistance.
Specialisation and trade are also features of the world’s economy both within national
economies and between national economies. And while this has led to an increase in
material well being for a considerable portion of the human population it has created a
situation of mutual dependencies. National economies and now linked to the economies of
other nations in what could be describes as one “giant economic system”. It is suggested
that nations that isolate themselves from international trade such as North Korea and Burma
are reported to be struggling. Similarly within nations, people unconnected to the national
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economy, (subsistence farmers), struggle for survival. Others, on the fringes of the
“economic system” such as the unemployed and those who for a range of reasons are
unemployable and are dependent on social welfare, (in countries such as Australia where it
exists), or on their families or charities, (in countries where social welfare does not exist) are
still essentially, although tenuously, connected to the “giant economic system”. In today’s
interconnected world access to sufficient food, water, education and health largely depend
on having the capacity to exchange a product or service.
Borrowing both at an international level or individual level is the means by which nations and
people retain a capacity to exchange. However, there is always the general expectation that
it will be repaid and with interest, a process that leaves the recipient of the loan vulnerable.
On a national level debt easily leads to a vulnerability to foreign investors who are able to
purchase resources such as timber, palm oil, fossil fuels and minerals relatively cheaply, with
the capacity to play one nation off against another. National governments then find
themselves in the humiliating position of “negotiating” the level of royalties or taxes to be
paid to the host country, minimising loan repayments and restricting the spending on desired
or required social services within their borders. This reduces their capacity to repay debt,
and develop required social services such as educational and health facilities. Appendix B
provides background data on a number of typical developing countries. The CIA’s ideological
perspective, typical of the fashionable laissez-faire, neo-capitalist perspective of
development is very much indicated in its Overview.
The dangers of “Structural Adjustment Programs”, the widely accepted “cure” for struggling
Developing Nations must also be recognised. Their strong potential of adding further to the
dependency of those countries and pushing more people into poverty and margins of the
“giant economic system” needs to be acknowledged as they have been in the UN “Rethinking
Poverty - Report on the World Social Situation, 2010”.
The ideology that the market forces can be relied upon to achieve ideal outcomes must be
rejected and its threat to national food and energy security recognised.
Even if the free market alone was somehow able to achieve sufficient levels of income to “lift
the vast majority out of poverty”, it would clearly create such a situation of mutual
dependency that when economic growth reach its limits the collapse would be far more
destructive than one in which countries had the vision to prepare for it. The UN
Dependence of Aid Recipients on the Export of Primary Products
Those who depend on primary products both internationally and domestically are vulnerable
to price fluctuations and weather or climate variations. The parallel between small farmers
(even in Australia for example) and the nations largely reliant on primary products is
obvious. Primary producers are generally on the edge of the economic system.
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The destruction of forest, the pollution of waterways and fishing grounds resulting from
mining, the replacement of forests with export oriented plantations crops are growing
disadvantages that are occurring with the traditional form (or growth focused) economic
development.
Traditionally Australian Development Assistance has been extended in largest proportion to
Papua New Guinea and Indonesia, both being heavily dependant for export earnings on
primary products. A similar situation exists for other Developing Nations in our region,
recipients of smaller levels of Australian Aid.
A review of OSA effectiveness must look at the situation that is possible or probable in
around 40 year’s time. None of the doomsday scenarios may develop as suggested.
However, if factors within the world economy trigger a global a depression some time needs
to be focused on how best people will survive. Nations and communities that are self
sufficient in energy and food will be most ideally placed in such as situation in which nations
and individuals lose their capacity to exchange. Accordingly, the effectiveness of Aid must
be assist according to these two indicators. Here, the declining capacities of aquifers in
India, Africa and the North Plain of China are of particular concern.
Energy Resources.
While Indonesian oil has declined as an export earner, natural gas reserves remain to be
developed. Coal is also a major source of energy for this country. However, given the widely
accepted concern over CO2 levels, coal production and consumption is not a desirable
activity. Fossil fuels remain a potential earner for Timor Leste and Papua New Guinea.
However, most or all of our recipients of Aid are destined to be energy importers in the
relatively near future if present trends and exponential economic growth continue. A similar
pattern regarding trade and energy apply to the Philippines, Cambodia, Thailand and Sri
Lanka. This underlines the need to focus on energy self sufficiency via renewable resources.
While the recent Cancun conference on Climate Change agreed to a commitment of $30B for
mitigation and adaptation in support of developing nations, the development of renewable
resources must be made the focus of such funding, in particular solar and geothermal in
equatorial countries such as Indonesia and PNG in particular. Any financing of the
development of natural gas reserves should be recognised as an opportunity to target the
development of renewable resources. The decision of the present Australian Government to
extend a $500m loan to a consortium to develop a deposit of natural gas, seemingly without
guarantees that the poor will benefit or that revenues gained by PNG will not be wastefully
dissipated or that it will be not cause conflict within the local population is an instance in
which confidence in the effectiveness of financial assistance in resource development comes
under question. While it is not the role of Australia to dictate to another country how such
money should be spent, it is appropriate for Australia to dialogue with recipients over
projects that we are involved with.
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The Green Fund
Australia’s contribution to the $30B Green Fund is not something that the Australian
Government can consider to be part of its ODA commitment. The question remains
however, as to how to raise our share and how it will be raised internationally. The capacity
of Developed Nations to make commitments at UN conferences and then fail to deliver is
well known, the commitment to the MDGs and to relief in Haiti being two examples. Reliable
sources of funding are required. The “Robin Hood Tax” might well be the simplest and
fairest. Accordingly the Department of Foreign Affairs and Trade should press for its
implementation at any forum it can.
Similarly, the REDD+ scheme (Reduce Emissions from Deforestation and Forest Degradation),
where by Developed Nations pay Developing Nations for preserving their forests, may seem
to be an attractive source of income for the tropical, Developing countries as well as
Australia, Australia needs to be aware of the pitfalls as well as the advantages of such a
scheme. If it results in the denial of local people dependent upon and using the forest in a
sustainable way and fails to address large scale deforestation, as appears evident in Central
Kalimantan (according to Aid/Watch), then it would seem to be an ineffective form of
assistance to say the least and at worst, add to the number of disposed, reduce the level of
self sufficiency. The whole concept of REDD, must be challenged if it simply provides a
licence for affluent nations to continue polluting. It may become effective if it prevents
“industrial deforestation” and promotes self sufficiency. According to AID/Watch:
“Of Indonesia’s population of 216 million, it is estimated that 100 million
people depend on forests and environmental goods and services for their
livelihood. However, many forest dependent people in Indonesia lack secure
land tenure largely as a result of President Suharto’s 1967 declaration that all
forested land, 70 percent of Indonesia’s land mass, was owned by the State.
This act of legal dispassion paved the way for the granting of logging and
plantation licences that have enabled the bulk of Indonesia’s forest
destruction. In the words of the Asian Development Bank, ‘in Indonesia, the
government often treats the indigenous people or forest villagers living in and
close to the forest in the outer islands (like the Dayak of Kalimantan) as if they
did not exist’”.
No doubt the Indonesian situation has it’s parallels in other Developing Nations where
human desires and pitted against environmental necessities. The political difficulty of
introducing water restrictions in the Murray-Darling Basin is another example in which
humans are in tension with their environment and there is a political struggle as to what
should be done. Here the necessity of having the “the steady state economy” as a goal
becomes much more constructive than “sustainable development”.
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The Destination of Australian Development Assistance.
While ODA should be focussed on nations and communities of greatest need, the questions
needs to be raised as to whether or not Indonesia and PNG should be the major recipients,
simply because they are close. It would seem that countries that have the considerable
natural resources possessed by these two nations, and a country such as the Philippines that
is similarly endowed, have the potential to be self sufficient in food and energy. The factors
that prevent them from doing so must be examined, in particular, the question of debt.
Once nations are struggling to meet debt repayments and must adapt their economies
according to World Bank and IMF “Structural Adjustment Programs” then, like losers in the
game of Monopoly, they are forever landing on Mayfair or Park Lane while it is laden with
hotels. They pay higher interests rates for loans, they are in a reduced bargaining position in
dealing with international extraction companies and they are prevented from adding value
to their exports from secondary processing.
If aid has been going to countries in our region in order to maintain economic and social
stability within those countries, then an alternate approach may be more suitable and
increase aid effectiveness. Campaigns such as “Publish What You Pay” need to be supported
as the failure of the corporate sector to contribute its fair share in international exchange
may benefit the shareholders in Developed countries, but it fails to appropriately support
legitimate aspirations of host developing nations.
It would seem that if the primary aim of ODA is to assist the poorest people then the AusAID
should look to developing partnerships with those nations that have least capacity to assist
themselves. The Australian Government, either through AusAID, or some other component
of the DFAT, should be actively supporting the Extractive Industries Transparency Initiative
(EITI), the work of the Revenue Watch Institute. Recently, President Sarkozy promised
French leadership in passing a European Union law based on the transparency principles of
Publish What You Pay.
Searching for an Appropriate Development Model.
While the Paris Declaration and Accra Agenda for Action is to be acknowledged, respected
and as far as possible, adhered to, there must be room for dialogue and flexibility over the
projects supported.
The movement towards the Steady State Economy is not only to be promoted within
Developing Nations but within industrialised, affluent nations as well. Affluent nations
proposing Developing nations aim for a Steady State Economy is likely to provoke the same
response as the proposition that Developing nations reduce their development aspirations in
response to the Climate Change largely induced by the Developed nations. Clearly, what is
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good for Developing nations in this regard is just as good and just as much required for
Industrialised countries. Therefore the appropriate development model to facilitate Aid
Effectiveness must incorporate a mutual agreement on the movement towards the Steady
State Economy and a movement away from the expression as “sustainable development” as
such language fails to convey the radical nature of the changes in thinking and acting
required.
The Fair Trade Model for Development.
Recent years has seen the development of the Fair Trade Movement.
“Fairtrade is about better prices, decent working conditions, local
sustainability, and fair terms of trade for farmers and workers in the
developing world. By requiring companies to pay sustainable prices,
Fairtrade addresses the injustices of conventional trade, which
traditionally discriminates against the poorest, weakest producers. It
enables them to improve their position and have more control over their
lives.”
www.fta.org.au/about
While the Fair Trade Movement may well want to stay totally independent of government,
there should be nothing to stop the DFAT providing NGOs with assistance to establish similar
outlets for the products of Developing Nations. AusAID would certainly improve Aid
Effectiveness by contributing to the advertising of fair trade products.
Climate Change and the Millennium Development Goals
Strategies to be adopted in moving towards a Steady State Economy very much overlap
those that need to be implemented to mitigate Climate Change and implement the
Millennium Development Goals. They also highlight the difficulty in respecting the Paris
Declaration as they can easily do whenever there is a question mark over the matter of
governance and development policy in a Developing country.
Similarly, Aid need not finance development assistance directly. The Fair Trade movement
offers a model of assistance that promotes both self reliance and a capacity to enter into the
“giant economic system” with a greater measure of justice and security. AusAID should
consider ensuring aid effectiveness by either setting up such schemes itself, or, if this is
considered not to be the role of government or a government agency, then either
commissioning other agents with the task or providing seeding finance for NGO willing to
manage such projects.
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The Fundamental Argument for the Support of Overseas
Development Assistance.
While my personal motivation for supporting ODA may be based on my Christian beliefs, I
recognises that in the pluralist largely secular society of Australia these values and not
necessarily accepted by the wider community or even by other Christians. However, the
Christian influence within Australia must be regarded as a significant one in support of ODA.
A more secular motivation might well be that ODA is given from the principle of enlightened
self interest, expressed in the terms of the “National Interest”. Alternatively, it could be seen
as expression of the Australian democracy, in which citizens pay their taxes and are therefore
entitled to have tax payers money spent in the manner in which they choose.
An element of the Christian motivation is not only charity but justice and the recognisable
dignity that comes with being human. Justice and dignity are also recognised outside of
Christian circles as components of human life. Humanitarian assistance seems to have broad
social support in times of disasters and is politically saleable, so long as there is not a disaster
in Australia occurring at the same time.
Yet as a community and Government, we do seem to have mixed approaches to
development issues. The decision to process oil from Timor Leste in the Northern Territory
rather than in Timor Leste itself is not viewed with the same values when its impact is to
deny Timor Leste of national income and deny its government and people of needed funds
for development. It is not viewed in the “mind” of the public as being contrary to human or
Christian values. It is also an instance where the commercial decision of a company may be
in conflict with national sentiment or democratic aspirations. Situations in which commercial
decisions have an impact on human rights should be seen as such. DFAT and AusAID should
be prepared to proclaim and defend the human rights of others as well as its own.
Similarly, prices paid for cocoa, tea, coffee and other primary products of developing
countries can be so low as to ensure local producers remain struggling in poverty and denied
the basic services that secure human dignity.
The Australian public often remains ignorant of such issues or remains unmoved because
they benefit from the status quo. This implies that the thrust of ODA, be it from Australia or
elsewhere, can not only be undermined by commercial transaction and what are considered
acceptable trade practices but by the very notion that it is the role of government to pursue
national interest.
The approach which views poverty, marginalisation, a deficiency of
food/water/education/health services as a denial of human rights would have a stronger
appeal and be more defendable within the community than that of either enlightened self
interest or the desire to be a charitable neighbour. If Australians are paying an insufficient
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amount for tea, coffee or chocolate, we are rightly accused of assisting in the process of
denying the people who harvest such products, or make our cheap clothes, their human
rights.
Where to From Here.
The UN Report, “Rethinking Poverty – Report on the World’s Social Situation 2010”
establishes that it is Sub Saharan Africa that is of most concern and therefore the most
needy. For this reason, Australian ODA needs to be redirected. It should be allocated on a
needs and human rights basis rather than the traditional “ensuring stability among our
neighbours basis.
Those the national government that have resources must be supported in international
forums and every other possible way, to ensure they receive just returns for natural
resources they produce. As a nation that produces many raw materials, Australia should
become a leader in that endeavour.
At the same time, Australian Development Assistance needs to be focussed on those
programs that help bring the world, individual nations and local communities towards the
Steady State Economy and self sufficiency.
Such programs include those that:
 Move towards self sufficiency in renewable energy,
 Promote self sufficiency, as locally as possible, in food and water,
 Establish basic health, education and communication facilities,
 Reduce mining to a minimum,
 Facilitate maximum recycling,
 end deforestation of native forests and support timber farming
 end the expansion of the fishing industry apart from the development of fish farms
 Foster the development of skills for the maintenance of technology i.e. the repair
industry
 Reduce planned obsolescence both at home and abroard.
 Ensure, as far as possible, that manufactured products have maximum ability for
recycling.
 The use of any technology that promote any or all of the above.
Many of these goals are measurable and can be monitored at the national and international
level.
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Recommendations
1
2
3
4
5
6
7
8
9
10
Aus AID be retained within the Department of Foreign Affairs and Trade to ensure
that there is consistency in policy direction between ODA goals and trade, and that
the policy direction for foreign policy, trade and ODA is in line with developing the
Steady State Economy.
The Australian Government pass appropriate “Public What You Pay” legislation.
All projects must be conditional on the goal of assisting those is greatest need and be
effective in moving communities towards the Steady State Economy.
The moral argument in support of Development Assistance, trade and finance
policies be strengthened through the use of human rights terminology thereby
recognising that living with the essential components of human dignity is a matter of
justice and not of charity.
The expression “Steady State Economy ” be incorporated into the discussion of
progress and justice for marginalised countries and peoples.
The features of and the and need for the “Steady State Economy” be explored and
promoted in the media, political, academic and social circles and the expressions
“sustainable growth” and ambiguous term “sustainable development” be phased
out.
The pursuit of Free Trade Agreements with Developing Nations (e.g. PACER + ) be
negotiated on the basis that outcome are consistent with moves toward the “Steady
State Economy”, i.e. that a dependency for food, energy and basic services in
particular, be avoided.
The concept of the fair trade movement be promoted and facilitated by AusAID
within Australia, (not necessarily using the brand name already established).
Increase of ODA to 0.7% of GDP by 2015 in recognition of our obligations.
The Department of Foreign Affairs and Trade work for the implementation of the
“Robin Hood Tax” as a reliable source of funding rather than relying on ad hoc
commitments at incidental UN Conferences.
Conclusion
Now that it is clear that present indicators are that our world community has a serious
problems ahead of it and that the economic model of exponential growth is unsustainable
and failing the needs of the human community, a more realistic path must be taken. It is
impractical to establish a final goal. It is realistic to begin changing direction. The
effectiveness of our Assistance program has to be judged against its objectives. So having the
correct objectives is most important.
Changing the language we use to describe it is one step. Confronting issues related to trade
and financing is another as these so strongly influence development outcomes. They must be
seen as integrated.
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Aiming at self sufficiency for all will provide the least devastating scenario when the period
of economic collapse arrives.
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Appendix A: Limits to Growth Scenarios.
The 30 Year Update, (Meadows, Randers, Meadows).
FIGURE 4-11 Scenario 1: A Reference Point
The world society proceeds in a traditional manner without any major deviation from the policies pursued during most of the twentieth century. Population and production increase until growth is halted by
increasingly inaccessible nonrenewable resources. Ever more investment is required to maintain
resource flows. Finally, lack of investment funds in the other sectors of the economy leads to declining
output of both industrial goods and services. As they fall, food and health services are reduced,
decreasing life expectancy and raising average death rates.
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FIGURE 4-12 Scenario 2: More Abundant Nonrenewable Resources
If we double the non renewable resource endowment assumed in Scenario I, and furthermore postulate
that advances in resource extraction technologies are capable of postponing the onset of increasing
extraction costs, industry can grow 20 years longer. Population peaks at 8 billion in 2040, at much higher
consumption levels. But pollution levels soar (outside the graph!), depressing land yields and requiring
huge investments in agricultural recovery. The population finally declines because of food shortages and
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negative health effects from pollution.
FIGURE 6-1 Scenario 3: More Accessible Nonrenewable Resources and Pollution Control
Technology
In this scenario we assume the same ample resource supply as in Scenario 2 as well as increasingly
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effective pollution control technology, which can reduce the amount of pollution generated per unit of
output by up to 4 percent per year, starting in 2002. This allows much higher welfare for more people
after 2040 because of fewer negative effects from pollution. But food production does ultimately
decline, drawing capital from the industrial sector and triggering a collapse.
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FIGURE 6-2 Scenario 4: More Accessible Nonrenewable Resources, Pollution Control
Technology, and land Yield Enhancement
If the model world adds to its pollution control technology a set of technologies to increase
greatly the food yield per unit of land, the high agricultural intensity speeds up land loss. The
world's farmers end up trying to squeeze more and more food output from less and less
land. This proves unsustainable.
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FIGURE 6-3 Scenario 5: More Accessible Nonrenewable Resources, Pollution Control
Technology, Land Yield Enhancement, and Land Erosion Protection
Now a technology of land preservation is added to the agricultural yield-enhancing and
pollution-reducing measures already in place. The result is a slight postponement of the
collapse at the end of the twenty-fIrst century.
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FIGURE 6-4 Scenario 6: More Accessible Nonrenewable Resources, Pollution Control
Technology, Land Yield Enhancement, Land Erosion Protection, and Resource Efficiency
Technology
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Now the simulated world is developing powerful technologies for pollution abatement, land
yield enhancement, land protection, and conservation of nonrenewable resources all at
once. All these technologies are assumed to involve costs and to take 20 years to be fully
implemented. In combination they permit a fairly large and prosperous simulated world,
until the bliss starts declining in response to the accumulated cost of the technologies.
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Appendix B – Overview and Key Indicators according to the CIA
A - Papua New Guinea
Economy - overview:
Papua New Guinea is richly endowed with natural resources, but exploitation has been
hampered by rugged terrain and the high cost of developing infrastructure. Agriculture
provides a subsistence livelihood for 85% of the population. Mineral deposits, including
copper, gold, and oil, account for nearly two-thirds of export earnings. Natural gas reserves
amount to an estimated 227 billion cubic meters. A consortium led by a major American oil
company is constructing a liquefied natural gas (LNG) production facility that could begin
exporting in 2013 or 2014. As the largest investment project in the country's history, it has
the potential to double GDP in the near-term and triple Papua New Guinea's export revenue.
The government faces the challenge of ensuring transparency and accountability for
revenues flowing from this and other large LNG projects. The government of Prime Minister
SOMARE has expended much of its energy remaining in power. He was the first prime
minister ever to serve a full five-year term. The government has brought stability to the
national budget, largely through expenditure control; however, it relaxed spending
constraints in 2006 and 2007 as elections approached. Numerous challenges still face the
government, including providing physical security for foreign investors, regaining investor
confidence, restoring integrity to state institutions, promoting economic efficiency by
privatising moribund state institutions, and balancing relations with Australia, its former
colonial ruler. Other socio-cultural challenges could upend the economy including an
HIV/AIDS epidemic, with the highest infection rate in all of East Asia and the Pacific, and
chronic law and order and land tenure issues. The global financial crisis had little impact
because of continued high demand for Papua New Guinea's commodities exports.
GDP (purchasing power parity):
$14.93 billion (2010 est.)
country comparison to the world: 136
$14.06 billion (2009 est.)
$13.33 billion (2008 est.)
note: data are in 2010 US dollars
GDP (official exchange rate):
$8.809 billion (2009 est.)
GDP - real growth rate:
6.2% (2010 est.)
country comparison to the world: 34
5.5% (2009 est.)
6.7% (2008 est.)
GDP - per capita (PPP):
$2,500 (2010 est.)
country comparison to the world: 177
$2,400 (2009 est.)
$2,300 (2008 est.)
note: data are in 2010 US dollars
GDP - composition by sector:
agriculture: 32.2%
industry: 35.7%
services: 32.1% (2009 est.)
Labor force:
3.809 million (2009 est.)
country comparison to the world: 91
Labor force - by occupation:
agriculture: 85%
industry: NA%
services: NA% (2005 est.)
Unemployment rate:
1.8% (2004)
country comparison to the world: 11
Population below poverty line:
37% (2002 est.)
Household income or consumption by
percentage share:
lowest 10%: 1.7%
highest 10%: 40.5% (1996)
Distribution of family income - Gini index:
50.9 (1996)
country comparison to the world: 19
Investment (gross fixed):
17.3% of GDP (2009 est.)
country comparison to the world: 117
Budget:
revenues: $2.917 billion
expenditures: $2.765 billion (2009 est.)
Public debt:
27.8% of GDP (2010 est.)
country comparison to the world: 90
29.7% of GDP (2009 est.)
Inflation rate (consumer prices):
6.8% (2010 est.)
country comparison to the world: 175
6.9% (2009 est.)
Central bank discount rate:
6.92% (31 December 2009)
country comparison to the world: 58
Page | 26
7% (31 December 2008)
Commercial bank prime lending rate:
10.09% (31 December 2009 est.)
country comparison to the world: 101
9.2% (31 December 2008 est.)
Stock of narrow money:
$2.551 billion (31 December 2010 est)
$2.263 billion (31 December 2009 est)
Stock of broad money:
$4.726 billion (31 December 2010 est.)
$4.14 billion (31 December 2009 est.)
Stock of domestic credit:
$2.796 billion (31 December 2010 est.)
country comparison to the world: 122
$2.424 billion (31 December 2009 est.)
Market value of publicly traded shares:
$NA (31 December 2008)
$NA (31 December 2007)
$6.632 billion (31 December 2006)
Agriculture - products:
coffee, cocoa, copra, palm kernels, tea,
sugar, rubber, sweet potatoes, fruit,
vegetables, vanilla; shell fish; poultry, pork
Industries:
copra crushing, palm oil processing,
plywood production, wood chip
production; mining of gold, silver, and
copper; crude oil production, petroleum
refining; construction, tourism
Industrial production growth rate:
10% (2009 est.)
country comparison to the world: 16
Electricity - production:
2.885 billion kWh (2007 est.)
country comparison to the world: 125
Electricity - consumption:
2.683 billion kWh (2007 est.)
country comparison to the world: 129
Electricity - exports:
0 kWh (2008 est.)
Electricity - imports:
0 kWh (2008 est.)
Oil - production:
35,090 bbl/day (2009 est.)
country comparison to the world: 68
Oil - consumption:
36,000 bbl/day (2009 est.)
country comparison to the world: 110
Oil - exports:
32,490 bbl/day (2007 est.)
country comparison to the world: 85
Oil - imports:
14,380 bbl/day (2007 est.)
country comparison to the world: 127
Oil - proved reserves:
170 million bbl (1 January 2010 est.)
country comparison to the world: 62
Natural gas - production:
100 million cu m (2008 est.)
country comparison to the world: 79
Natural gas - consumption:
100 million cu m (2008 est.)
country comparison to the world: 102
Natural gas - exports:
0 cu m (2008 est.)
country comparison to the world: 144
Natural gas - imports:
0 cu m (2008 est.)
country comparison to the world: 103
Natural gas - proved reserves:
226.5 billion cu m (1 January 2010 est.)
country comparison to the world: 44
Current account balance:
-$99 million (2010 est.)
country comparison to the world: 77
-$446.4 million (2009 est.)
Exports:
$5.976 billion (2010 est.)
country comparison to the world: 104
$4.392 billion (2009 est.)
Exports - commodities:
oil, gold, copper ore, logs, palm oil, coffee,
cocoa, crayfish, prawns
Exports - partners:
Australia 30.05%, Japan 7.48% (2009)
Imports:
$3.547 billion (2010 est.)
country comparison to the world: 135
$2.871 billion (2009 est.)
Imports - commodities:
machinery and transport equipment,
manufactured goods, food, fuels,
chemicals
Imports - partners:
Australia 43.27%, China 13.29%,
Singapore 9.59%, US 6.4%, Japan 4.62%
(2009)
Reserves of foreign exchange and gold:
$3.017 billion (31 December 2010 est.)
country comparison to the world: 85
$2.607 billion (31 December 2009 est.)
Debt - external:
$1.548 billion (31 December 2010 est.)
country comparison to the world: 145
$1.436 billion (31 December 2009 est.)
B - Indonesia
Indonesia, a vast polyglot nation, has weathered the global financial crisis relatively smoothly
because of its heavy reliance on domestic consumption as the driver of economic growth. Although
the economy slowed significantly in 2009 from the 6%-plus growth rate recorded in 2007 and 2008,
by 2010 growth returned to a 6% rate. During the recession, Indonesia outperformed its regional
neighbours and joined China and India as the only G20 members posting growth. The government
made economic advances under the first administration of President YUDHOYONO, introducing
significant reforms in the financial sector, including tax and customs reforms, the use of Treasury
bills, and capital market development and supervision. Indonesia's debt-to-GDP ratio in recent years
has declined steadily because of increasingly robust GDP growth and sound fiscal stewardship.
Indonesia still struggles with poverty and unemployment, inadequate infrastructure, corruption, a
complex regulatory environment, and unequal resource distribution among regions. YUDHOYONO's
re-election, with respected economist BOEDIONO as his vice president, suggests broad continuity of
economic policy, although the start of their term has been marred by corruption scandals and the
departure of an internationally respected finance minister. The government in 2010 faces the
ongoing challenge of improving Indonesia's insufficient infrastructure to remove impediments to
economic growth, while addressing climate change mitigation and adaptation needs, particularly
Page | 27
with regard to conserving Indonesia's forests and peatlands, the focus of a potentially trailblazing $1
billion REDD+ pilot project.
GDP (purchasing power parity):
$1.033 trillion (2010 est.)
country comparison to the world: 16
$974.6 billion (2009 est.)
$932.6 billion (2008 est.)
note: data are in 2010 US dollars
GDP (official exchange rate):
$695.1 billion (2009 est.)
GDP - real growth rate:
6% (2010 est.)
country comparison to the world: 39
4.5% (2009 est.)
6% (2008 est.)
GDP - per capita (PPP):
$4,300 (2010 est.)
country comparison to the world: 157
$4,100 (2009 est.)
$3,900 (2008 est.)
note: data are in 2010 US dollars
GDP - composition by sector:
agriculture: 14.9%
industry: 46.8%
services: 38.3% (2009 est.)
Labor force:
114.9 million (2009 est.)
country comparison to the world: 5
Labor force - by occupation:
agriculture: 42.1%
industry: 18.6%
services: 39.3% (2005 est.)
Unemployment rate:
7.1% (2010 est.)
country comparison to the world: 74
8.1% (2009 est.)
Population below poverty line:
13.3% (2006)
Household income or consumption by
percentage share:
lowest 10%: 3%
highest 10%: 32.3% (2006)
Distribution of family income - Gini index:
39.4 (2005)
country comparison to the world: 66
37 (2001)
Investment (gross fixed):
30.8% of GDP (2009 est.)
country comparison to the world: 14
Budget:
revenues: $117.2 billion
expenditures: $127.4 billion (2009 est.)
Public debt:
26.4% of GDP (2010 est.)
country comparison to the world: 91
27.4% of GDP (2009 est.)
Inflation rate (consumer prices):
5.2% (2010 est.)
country comparison to the world: 148
4.8% (2009 est.)
Central bank discount rate:
6.46% (31 December 2009)
country comparison to the world: 40
10.83% (31 December 2008)
Commercial bank prime lending rate:
14.5% (31 December 2009 est.)
country comparison to the world: 57
13.6% (31 December 2008 est.)
Stock of narrow money:
$65.47 billion (31 December 2010 est)
$49.63 billion (31 December 2009 est)
Stock of broad money:
$276.8 billion (31 December 2010 est.)
$205.8 billion (31 December 2009 est.)
Stock of domestic credit:
$253.1 billion (31 December 2010 est.)
country comparison to the world: 37
$192.3 billion (31 December 2009 est.)
Market value of publicly traded shares:
$178.2 billion (31 December 2009)
country comparison to the world: 36
$98.76 billion (31 December 2008)
$211.7 billion (31 December 2007)
Agriculture - products:
rice, cassava (tapioca), peanuts, rubber,
cocoa, coffee, palm oil, copra; poultry, beef,
pork, eggs
Industries:
petroleum and natural gas, textiles, apparel,
footwear, mining, cement, chemical
fertilizers, plywood, rubber, food, tourism
Industrial production growth rate:
4% (2009 est.)
country comparison to the world: 85
Electricity - production:
134.4 billion kWh (2007 est.)
country comparison to the world: 27
Electricity - consumption:
119.3 billion kWh (2007 est.)
country comparison to the world: 28
Electricity - exports:
0 kWh (2008 est.)
Electricity - imports:
0 kWh (2008 est.)
Oil - production:
1.023 million bbl/day (2009 est.)
country comparison to the world: 22
Oil - consumption:
1.115 million bbl/day (2009 est.)
country comparison to the world: 18
Oil - exports:
85,000 bbl/day (2008 est.)
country comparison to the world: 69
Oil - imports:
671,000 bbl/day (2007 est.)
country comparison to the world: 20
Oil - proved reserves:
4.05 billion bbl (1 January 2010 est.)
country comparison to the world: 28
Natural gas - production:
70 billion cu m (2008 est.)
country comparison to the world: 12
Natural gas - consumption:
36.5 billion cu m (2008 est.)
country comparison to the world: 23
Natural gas - exports:
33.5 billion cu m (2008 est.)
country comparison to the world: 7
Natural gas - imports:
0 cu m (2008 est.)
country comparison to the world: 174
Natural gas - proved reserves:
3.001 trillion cu m (1 January 2010 est.)
country comparison to the world: 14
Current account balance:
$8.532 billion (2010 est.)
country comparison to the world: 25
$10.75 billion (2009 est.)
Exports:
$146.3 billion (2010 est.)
country comparison to the world: 30
$119.5 billion (2009 est.)
Exports - commodities:
oil and gas, electrical appliances, plywood,
textiles, rubber
Exports - partners:
Japan 17.28%, Singapore 11.29%, US
10.81%, China 7.62%, South Korea 5.53%,
India 4.35%, Taiwan 4.11%, Malaysia 4.07%
(2009)
Imports:
$111.1 billion (2010 est.)
country comparison to the world: 30
$84.35 billion (2009 est.)
Imports - commodities:
machinery and equipment, chemicals, fuels,
foodstuffs
Imports - partners:
Singapore 24.96%, China 12.52%, Japan
8.92%, Malaysia 5.88%, South Korea 5.64%,
US 4.88%, Thailand 4.45% (2009)
Reserves of foreign exchange and gold:
$83.58 billion (31 December 2010 est.)
country comparison to the world: 16
$66.12 billion (31 December 2009 est.)
Debt - external:
$155.9 billion (31 December 2010 est.)
country comparison to the world: 30
$156.7 billion (31 December 2009 est.)
Stock of direct foreign investment - at
home:
$81.21 billion (31 December 2010 est.)
country comparison to the world: 41
Page | 28
$72.84 billion (31 December 2009 est.)
Stock of direct foreign investment - abroad:
$33.71 billion (31 December 2010 est.)
country comparison to the world: 36
$30.18 billion (31 December 2009 est.)
Exchange rates:
*0Indonesian rupiah (IDR) per US dollar 9,169.5 (2010), 10,389.9 (2009), 9,698.9
(2008), 9,143 (2007), 9,159.3 (2006)
Page | 29
C – Chad.
Economy - overview:
Chad's primarily agricultural economy will continue to be boosted by major foreign direct
investment projects in the oil sector that began in 2000. At least 80% of Chad's population relies on
subsistence farming and livestock raising for its livelihood. Chad's economy has long been
handicapped by its landlocked position, high energy costs, and a history of instability. Chad relies on
foreign assistance and foreign capital for most public and private sector investment projects. A
consortium led by two US companies has been investing $3.7 billion to develop oil reserves estimated at 1 billion barrels - in southern Chad. Chinese companies are also expanding exploration
efforts and are currently building a 300-km pipleline and the country's first refinery. The nation's
total oil reserves are estimated at 1.5 billion barrels. Oil production came on stream in late 2003.
Chad began to export oil in 2004. Cotton, cattle, and gum Arabic provide the bulk of Chad's non-oil
export earnings.
GDP (purchasing power parity):
$18.56 billion (2010 est.)
country comparison to the world: 128
$18.2 billion (2009 est.)
$18.49 billion (2008 est.)
note: data are in 2010 US dollars
GDP (official exchange rate):
$7.592 billion (2009 est.)
GDP - real growth rate:
2% (2010 est.)
country comparison to the world: 148
-1.6% (2009 est.)
10.7% (2008 est.)
GDP - per capita (PPP):
$1,800 (2010 est.)
country comparison to the world: 193
$1,800 (2009 est.)
$1,800 (2008 est.)
note: data are in 2010 US dollars
industry and services: 20% ((2006
est.))
NA% (31 December 2009 est.)
NA% (31 December 2008 est.)
Unemployment rate:
NA% est.)
Stock of narrow money:
$920.9 million (31 December 2010 est)
$937.8 million (31 December 2009 est)
Population below poverty line:
80% (2001 est.)
Household income or consumption by
percentage share:
lowest 10%: 2.6%
highest 10%: 30.8%
Investment (gross fixed):
14.8% of GDP (2009 est.)
country comparison to the world: 131
Budget:
revenues: $1.972 billion
expenditures: $2.859 billion (2009
est.)
GDP - composition by sector:
agriculture: 50.5%
industry: 7%
services: 42.5% (2008 est.)
Inflation rate (consumer prices):
4% (2010 est.)
country comparison to the world: 114
10% (2009 est.)
Labor force:
4.293 million (2007)
country comparison to the world: 83
Central bank discount rate:
4.25% (31 December 2009)
country comparison to the world: 93
4.75% (31 December 2008)
Labor force - by occupation:
agriculture: 80% (subsistence farming,
herding, and fishing)
Commercial bank prime lending rate:
Stock of broad money:
$1.257 billion (31 December 2010 est.)
$1.008 billion (31 December 2009 est.)
Stock of domestic credit:
$943.8 million (31 December 2010
est.)
country comparison to the world: 152
$566.9 million (31 December 2009
est.)
Market value of publicly traded
shares:
$NA
Agriculture - products:
cotton, sorghum, millet, peanuts, rice,
potatoes, manioc (tapioca); cattle,
sheep, goats, camels
Industries:
oil, cotton textiles, meatpacking,
brewing, natron (sodium carbonate),
soap, cigarettes, construction
materials
Industrial production growth rate:
3% (2009 est.)
Page | 30
country comparison to the world: 114
country comparison to the world: 186
$2.539 billion (2009 est.)
Electricity - production:
100 million kWh (2007 est.)
country comparison to the world: 191
Natural gas - consumption:
0 cu m (2008 est.)
country comparison to the world: 198
Imports - commodities:
machinery and transportation
equipment, industrial goods,
foodstuffs, textiles
Electricity - consumption:
93 million kWh (2007 est.)
country comparison to the world: 192
Natural gas - exports:
0 cu m (2008 est.)
country comparison to the world: 190
Electricity - exports:
0 kWh (2008 est.)
Natural gas - imports:
0 cu m (2008 est.)
country comparison to the world: 192
Electricity - imports:
0 kWh (2008 est.)
Oil - production:
115,000 bbl/day (2009 est.)
country comparison to the world: 51
Oil - consumption:
1,000 bbl/day (2009 est.)
country comparison to the world: 205
Oil - exports:
157,900 bbl/day (2007 est.)
country comparison to the world: 55
Oil - imports:
1,571 bbl/day (2007 est.)
country comparison to the world: 180
Oil - proved reserves:
1.5 billion bbl (1 January 2010 est.)
country comparison to the world: 38
Natural gas - production:
0 cu m (2008 est.)
Imports - partners:
France 17.74%, Cameroon 12.7%,
China 11.23%, US 7.59%, Italy 6.54%,
Ukraine 5.33%, Netherlands 4.37%
(2009)
Reserves of foreign exchange and
Natural gas - proved reserves:
0 cu m (1 January 2010 est.)
country comparison to the world: 193
gold:
$868 million (31 December 2010 est.)
country comparison to the world: 112
$685 million (31 December 2009 est.)
Current account balance:
-$2.6 billion (2010 est.)
country comparison to the world: 163
-$2.305 billion (2009 est.)
Debt - external:
$NA (31 December 2010 est.)
$1.749 billion (31 December 2008 est.)
Exports:
$3.036 billion (2010 est.)
country comparison to the world: 124
$2.709 billion (2009 est.)
Stock of direct foreign investment - at
Exports - commodities:
oil, cattle, cotton, gum arabic
Stock of direct foreign investment -
Exports - partners:
US 90.06%, France 4.81%, China 1.6%
(2009)
Imports:
$2.631 billion (2010 est.)
country comparison to the world: 144
home:
$NA (31 December 2010)
$4.5 billion (2006 est.)
abroad:
$NA
Exchange rates:
Cooperation Financiere en Afrique
Centrale francs 506.04 (2010), 472.19
(2009), 447.81 (2008), 480.1 (2007),
522.59 (2006)
Page | 31
Appendix C – National Oil Reserves
Page | 32
Appendix D – Major Aquifers
NASA
Page | 33
Deep wells
Page | 34
Source: Agenda for Water Sector Strategy for North China. Ministry of Water Resources, World Bank
and AUSAID, 2001
Page | 35
Shallow Wells
Source: Agenda for Water Sector Strategy for North China. Ministry of Water Resources, World Bank
and AUSAID, 2001
Page | 36
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“The Reality of Aid 2010 Report” (Abridged), Alex Wilks, IBON Books, 2010.
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“No Ordinary Deal, Unmasking the Trans-Pacific Partnership Free Trade Agreement”, Jane Kelsey
(Ed), Allen & Unwin, 2010
“Common Wealth – Economics for a Crowded Planet”, Jeffrey D Sachs, Penguin Books, 2008
US Central Intelligence Agency, https://www.cia.gov/library/publications/the-worldfactbook/geos/pp.html
World Bank, http://data.worldbank.org – Indicators
“Submission: EFIC Loan to PNG LNG Project”, L. Fletcher and D. Norlen, Jubilee Australia and Pacific
Environment, 2009
“Deep waters, slowly drying up”, http://www.economist.com/node/17199914, Oct 7th 2010
“The Encyclopaedia of Earth”, Lester Browy, http://www.eoearth.org/article/Aquifer_depletion,
January 23, 2010.
“Rethinking Poverty - Report on the World Social Situation 2010”, Department of Economic and
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“Australia’s REDD Aid in Practice”, Ellen Roberts, Friends of the Earth Australia, “Aid/Watch No. 36”,
May 2010
“Publish What You Pay”, www.publishwhatyoupay.org
“Revenue Watch Institute”, www.revenuewatch.org
Deep waters, slowly drying up “Depletion of aquifers is a looming tragedy. New agreements offer
hope”, www.economist.com /node /17199914, Oct, 2010.
“Is North-western India's Breadbasket Running Out of Water?”, Scientific American, David Biello,
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“Rethinking the Approach to Groundwater and Food Security”, Natural Resources Management and
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Page | 37