Month: February 2009

The 2008 financial crisis: Implications for developing economies

This paper examines the 2008 financial crisis and implications for developing countries, especially for Africa. It examines some of the causes of the financial crisis especially in the United States where the dilemma originated. Implications for a global recession and impacts for Africa are highlighted. However, the implications of the financial crisis for the African continent cannot be addressed in detail in this paper; rather this paper will focus on a few key examples of the financial crisis and its impacts on a few African countries for understanding. The paper ends with recommendations and ways forward for African governments to combat the current and future financial impacts.

The term financial crisis is applied broadly to a variety of situations in which some financial institutions or assets suddenly lose a large part of their value. Situations that are often called financial crises include stock market crashes (i.e. a sudden dramatic decline of stock prices) and the bursting of other financial bubbles (i.e. trading in high volumes at prices that are considerably at variance with the value of a property of a good or a commodity), and currency crises (i.e. when the value of a currency changes quickly, undermining its ability to serve as a medium of exchange) to name a few. Examples of commodities include crude oil, wheat, precious metals, property as well as currencies which are the unit of exchange that facilitates the transfer of goods and/or services. The world financial system is a complex collection of institutions established with the intention of bringing together people who want to borrow and those who want to lend to ensure and enhance the transfer of funds. The world financial crisis could thus be viewed as a systematic meltdown of the various institutions as well as constituents of the world’s complex financial system. The 2008 financial crisis was mostly related to flawed regulatory regimes and sub-prime mortgage lending, especially in the United States. However, the developing world in general and Africa in particularly has always been most affected by almost every other global economic crisis that has occurred in recent history, although the 2008 financial crisis has so far, not had such an immediate impact on the developing countries, including those in Africa.

Much has been reported on the 2008 financial crisis which was stated by many to be the worst since the Great Depression in 1929. The Great Depression was an economic slump in North America, Europe, and other industrialised areas of the world that began in 1929 and lasted until 1939. It began with a catastrophic collapse of stock-market prices on the New York Stock Exchange and during the next three years, stock prices in the United States continued to fall. By late 1932 prices had dropped to only about 20 percent of their value in 1929. By 1933, 11,000 of the United States’ 25,000 banks had closed. The failure of so many banks, combined with a general and nationwide loss of confidence in the economy, led to much-reduced levels of spending and demand and hence of production, thus aggravating the downward spiral. The Depression hit hardest those nations that were most deeply indebted to the United States (i.e. Germany and Great Britain). In Germany, unemployment rose sharply beginning in late 1929 and by early 1932 it had reached 6 million workers or 25 percent of the workforce. Britain was less severely affected, but its industrial and export sectors remained seriously depressed until World War II. Many other countries had been affected by the slump by 1931. Developing countries that were dependent on the export of primary products, such as those in Latin America, were already suffering a depression in the late 1920s. More efficient farming methods and technological changes meant that the supply of agricultural products was rising faster than demand, and prices were falling as a consequence. Initially, the governments of the producer countries stockpiled their products, but this depended on loans from the USA and Europe. When these were recalled, the stockpiles were released onto the market, causing prices to collapse and the income of the primary producing countries to fall drastically. Clearly, with the 2008 financial crisis, world governments (especially the industrialised nations) did not learn lessons from the Great Depression. However, the current financial crisis is not necessarily following the pattern of the Great Depression, since the two disasters are very different, although lessons could have been learnt from this incident.

Causes of the 2008 financial crisis?
It is clear that the United States as during the Great Depression is indisputably undergoing a financial crisis and is perhaps headed for a deep recession, but what caused the financial crisis of 2008? The answer to this question is multi-fold including the introduction of trade liberalisation policies by the global elite, financial speculation and personal greed by many individuals and organisations. Firstly, financial liberalisation was implemented by global elite states across the world to assist corporations to find new ways of making money, which has contributed to the financial crisis. By the 1970s, profits in the manufacturing sector were declining, the economy was stagnating, and the elite wanted more profitable ways to make money that didn’t require hiring much workforce. A need to reduce investments in manufacturing for profit gain was required. With declining profits, capital reacted by promoting economic restructuring with the aim of increasing profit margins at the expense of workers’ wages, reduced social welfare spending, squeezing underdeveloped countries with the help of the IMF. Elites begin speculating on anything, including commodities and gambled on the fluctuations in stock, bond and currency values. Banks and corporations ran up trillions in debt and then resold this debt onto investors to reduce risk. Indeed, debt drove the whole system and without it, there would not have been the explosion in the financial sector. Manufacturing companies also restructured and, in a sense, became investment and financial institutions in their own right. Blind greed, arrogance and short-sightedness drove this system and a handful of people made trillions.

Another reason for the financial crisis was precipitated by government manipulations and greed by lenders. From January 2001 to June 2004, the Federal Reserve System (i.e. Fed) sharply lowered the interest rate for federal funds. In response, mortgage rates plummeted from almost 8 percent in 2002 to 4-6 percent in 2006. Hence, banks issued mortgages to all kinds of buyers and speculators, some of whom were allowed to put down no collateral for risky home loans. Mortgage lenders were happy to lend money to people who couldn’t afford their mortgages. A mortgage is a secured loan used to purchase property and is financially agreed between the lender and borrower. One of the largest mortgage lenders in the US, Countrywide, founded in 1969 offered exotic mortgages to borrowers with a questionable ability to repay them. Generally, lenders who approved these loans absolved themselves of responsibility by packaging these bad mortgages with other mortgages and reselling them as “investments.” Lenders had no reason not to sell homes as they made a cut on the sale, then packaged the mortgage with a group of other mortgages and erased all personal responsibility of the loan. Thousands of people took out loans larger than they could afford in the hopes that they could either make a profit from the house or refinance later at a lower rate. A lot of people got rich quickly and people wanted more. Lenders lent money regardless because there was supposedly no risk to them, and were able to charge higher interest rates and make more money on sub-prime loans. If the borrower’s default, they simply seized the house and put it back on the market. On top of that, they were able to pass the risk off to a mortgage insurer or package these mortgages as mortgage-backed securities. Higher house values mean that lenders could lend out even bigger mortgages, and it also gave lenders some protection against foreclosures. All of this translates into more money for the lenders, insurers, and investors. When too many buyers couldn’t afford to make their payments, it causes these lenders to suffer from liquidity issues and to sit on more foreclosures than they could sell.

However, the US economy is more complex than made out to be, so blame should not fall only on a single sector. The problem is one of layered irresponsibility between many parties. Those alleged to be at fault include the following: The US Federal Reserve (as above), which slashed interest rates making credit cheap; Home buyers, who took advantage of easy credit to bid up the prices of homes excessively; Congress, which continues to support a mortgage tax deduction that gives consumers a tax incentive to buy more expensive houses; Real estate agents, most of whom work for the sellers rather than the buyers and who earned higher commissions from selling more expensive homes; The Clinton administration, which pushed for less stringent credit and down payment requirements for working and middle-class families; Mortgage brokers, who offered less-credit-worthy home buyers subprime, adjustable rate loans with low initial payments, but exploding interest rates; Former Federal Reserve chairman Alan Greenspan, who in 2004, near the peak of the housing bubble, encouraged Americans to take out adjustable rate mortgages; Wall Street firms, who paid too little attention to the quality of the risky loans that they bundled into Mortgage Backed Securities, and issued bonds using those securities as collateral; The then Bush administration, which failed to provide needed government oversight of the increasingly dicey mortgage-backed securities market; An obscure accounting rule called mark-to-market, which can have the paradoxical result of making assets be worth less on paper than they are in reality during times of panic; Collective delusion, or a belief on the part of all parties that home prices would keep rising forever, no matter how high or how fast they had already gone up. However, not to divert from the root cause of the problem which has been the functionality of the financial and banking system, along with the roles of the US capitalist government in this functionality. Unfortunately, in the UK and US government is using tax payer’s money to help out greedy bankers. Example, the US government also agreed that the Federal Reserve would supply $85 billion to bail out American International Group (AIG), the world’s largest insurance company. Since mortgage lenders have made substantial sums of money leading to the crisis, does this mean that they will get away? Why should taxpayers have to pay for somebody else’s mess? Do developing countries such as in Africa also indirectly pay for the failings of banks?

Impacts on developing countries
What began as a slump in the US housing sector is now a global crisis, spreading to both developed and developing economies. The poorest countries, including many in Africa, will be significantly affected by the crisis even though the channels of transmission are likely quite different from those operating in emerging markets. Financial sectors in low-income countries are less integrated into global financial markets; as a result, the direct impact of the crisis is likely to be more limited. However, this does not mean that they will not be affected.

As Dadush (2008), Director of Development Prospects Group noted:
“The direct impact of the crisis is less dramatic in the financial sectors of the poorest countries…but they will be hit nevertheless by slower export growth. Global trade is expected to decline by 2.5 percent in 2009 reduced remittances by migrant workers, and lower commodity prices that will affect commodity-exporting countries.”

Developing countries at first sheltered from the worst elements of the turmoil are now much more vulnerable, with dwindling capital flows, huge withdrawals of capital leading to losses in equity markets, and towering interest rates. GDP growth in developing countries only recently expected to increase by 6.4 percent in 2009 is now likely to be only 4.5 percent, according to economists at the World Bank. The poorest countries will be harmed through slower export growth (e.g. Cameroon’s exports of wood to the US have collapsed, putting over 40,000 jobs at risk). Other impacts for developing countries include reduced remittances, and lower commodity prices (which will reduce incomes in commodity exporters). The crisis may also lead to a reduction in private investment flows, making weak economies even less able to cope with internal vulnerabilities and development needs. According to the World Bank, the effects of financial crisis on the African continent could manifest through drying up of liquidity and capital inflows, aids programmes and trade. Many African banks that may be planning to seek funds from the developed economies may not be able to source capital. Some developing countries will be hit much harder than the average experiencing growth which is negative in per capita or even absolute terms. Sharply tighter credit conditions and weaker growth are likely to cut into African government revenues and governments’ ability to invest to meet education, health and gender goals to name a few. The poor will be hit hardest. Current estimates suggest that a one percent decline in developing country economic growth rates traps an additional 20 million people into poverty. Already 100 million people have been driven into poverty as a result of high food and fuel prices. Of the 20 developing countries whose economies have reacted most sharply to the deterioration in conditions (as measured by exchange rate depreciation, increase in spreads, equity market declines and large current account deficits), seven come from Europe and Central Asia, and eight from Latin America. Africa, however, is still very vulnerable to the economic crisis being one of the poorest continents in the world.

Food, fuel and job insecurity in Africa
High food prices from 2007 through mid-2008 also had serious implications for food and nutrition security, macroeconomic stability, and political security. The global financial crisis and economic slowdown have pushed food prices to lower levels by decreasing demand for agricultural commodities for food, feed, and fuel. The availability of capital has also decreased at a time when accelerated investment in agriculture is urgently needed. The food and financial crises have strong and long-lasting effects on emerging economies and poor people. As capital becomes scarcer and more expensive, the expansion of agricultural production to address the food crisis has been cut short. Africa is on the receiving end of food tariffs and subsidies by the US, EU and Japan and this has distorted the economics of its food production and caused some viable crops not to be grown locally. The price of petrol has roughly doubled in the past year and in addition to the direct effects on the cost of travel, there are knock-on effects on the price of products, such as food, which need to be transported. The world financial crisis has pushed aside the attention of policymakers from the threat of rising food prices. Across the developing world, the purchasing power of poor and middle-income families has declined with slowing economic growth. The collapse of the financial system which held the wealth of individuals and corporations meant an overnight sharp fall in different kinds of incomes, particularly permanent income. These developments resulted in sharp fall in demand (as demand even depends more on permanent income) and corresponding fall in supply and hence production. Cuts in production necessitated cuts in employment as well as income and hence demand. All these have dynamic implications for Africa.

The global financial crisis and the resultant job and food insecurities have affected bushman poaching in Africa due to food shortages. People have turned to wildlife as their source of food because other food sources become inaccessible. Due to the global financial crisis, the logging companies in Cameroon are now retrenching their workers and which has intensified poaching. The spiral of unemployment so created has led the jobless to turn to poaching as an alternative means to survive. The shrinking of demand in richer economies suggests a cut in production levels at plants that are located in Africa, potentially reducing consumption of fuel, metallic and other primary products. Hence, the earnings of African companies (and it’s people – if included in wealth production) will decline.

The global food price crisis in 2007-08
Nigeria and the financial crisis
The persisting global financial meltdown is adversely affecting Nigeria to the extent that the nation’s economy is now in deep crisis. With a sharp drop in market capitalisation on the Nigeria Stock Exchange, this has plummeted government revenues. Nigerian representatives who attended the sixty-third General Assembly, Second Committee 24th Meeting of the United Nations on the 4 November 2008, noted that the financial crisis had compounded matters by inducing fears over aid delivery. The unprecedented fall by 40 per cent in the international prices of oil, attendant of the global financial crunch compounded by the persistent Niger Delta Crisis of Nigeria, signals that, if the global financial meltdown persists, Nigeria could suffer a major setback. The effects of the crises on agricultural and rural development and the economy of Nigeria may contribute to a lack of foreign investments arising from the cash crunch; decaying infrastructures likely to weaken the supply side of the nation’s food market, food unavailability, low rate of domestic food supplies and imports; with reduced foreign exchange earnings from oil, the prospects of the government to invest in agricultural programmes within the next four years is bleak. In addition, there could be the collapse of infrastructures (energy, water, communication and transportation) due to funding inadequacy. Bad economic conditions and high international food prices might result in worsening market conditions in the coming months. There is no doubt that Nigeria’s integration into the world economy and markets due to its oil reserves has placed the country into difficulties. Had Nigeria rather nationalised its natural resources (i.e. oil), the country would have been in a more stable position. The impact of the recession is not uniform across the continent and is dependent on country respective levels of integration into the global economy and position in the international division of labour.

Way forward
Although the financial crisis is affecting African countries, there are some measures that African governments can take to limit future impacts on their nations. There is no doubt that developing country budgets will need to adjust to a new fiscal reality. Therefore it is essential that African governments exercise caution and invest in their countries. Governments need to increase budgets for social development and public expenditure rather than decrease budgets. This will be essential for restoring high-quality economic growth over the longer term. However, in order for this to occur, we need good governance in Africa. This will also be important in developing African responses and solutions that meet the demands of African people instead of corrupt African officials and the interests of western economies. African governments must, therefore, build capacity and fast-track the movement towards the economic and political integration of the continent.

The dependence on commodity export earnings (i.e. oil, agriculture) and potential volatility through global economic instability means that Africa’s approach to the current volatile state of the world’s major economies should be more visionary. Example, benefits of its oil reserves such as in Nigeria and recently Uganda must be secured for the interest of citizens through nationalisation, similar to countries such as Venezuela which has reduced the power of international corporations from extracting resources from the country that do not benefit locals. Similarly for food, instead of Africa being on the receiving end of food tariffs and subsidies by the US, EU and Japan and which has distorted the economics of its food production. It is essential that African government create subsidies for local farmers so that viable crops can be grown locally for people. There must be an explicit recognition of the basic right to sustain food production and promote food sovereignty at the local level through re-nationalisation of agricultural produce and the end to trade-distorting subsidies in developed countries. However, pressure on developed countries for financial assistant and aid must continue due to decades of western corporate resources plundering and increased African poverty, since these finances rightfully belong to Africa and should not be seen as a ‘donation’ from the west. In addition, any debt that African countries are said to own to developed countries through previous loans must be cancelled.

Finally, unlike the United States and other western nations who did not learn from their mistakes of the Great Depression, African governments can learn from the mistakes of the west. If there is a bank failure, government intervention should be via preference shares and loans and not via tax payer’s money that should rightfully be used for the interest of nationals and poverty alleviation. It is essential that African governments increase co-operation within Africa and ensure the development of its people rather that relying on subsidies and trade with western nations under western rules (i.e. IMF/WTO) that pose a risk to national interests. Not to say that there are no benefits that can arise from economic globalisation, but the problem is that when political interest are involved, this can be damaging for poor nations. As Nelson Mandela noted, on November 16, 2000, during a lecture at the British Museum, “…if globalisation is to create real peace and stability across the world, it must be a process benefiting all. It must not allow the most economically and politically powerful countries to dominate and submerge the countries of the weaker and peripheral regions. It should not be allowed to drain the wealth of smaller countries towards the larger ones, or to increase inequality between richer and poorer regions.” Unfortunately, globalisation currently is failing as can be seen from the financial crisis of 2008 as individuals are motivated by self-interest and greed expressed best through the pursuit of financial gains. Globalisation is also failing as signalled through the concerns from citizens globally against an unequal playing field and in the interest of the finance community. It is, therefore, essential that governments look towards African solutions for African problems and listen to its people if the continent is limit the impact of global insecurities and prosper for the interests of its own people.

Leonard, L. (2009) The 2008 financial crisis: Implications for developing economies, Ugandan Parliamentary Briefing, Royal African Society, United Kingdom, 26 February

Emerging trends in regard to Global Warming: Any effective interventions in place or just rhetoric debates / workshops / seminars?

This paper briefly reviews some of the emerging trends regarding global warming, especially implications for the African continent. It then explores some of the meetings and discourses taking place internationally and within Africa on global warming and climate change that aim to tackle the crisis. It critically examines if the two largest international interventions on climate change (e.g. annual conferences/ meetings such as the United Nations Framework Convention on Climate Change (UNFCCC) Conferences of the Parties (COP) and the Annual G8 summits) have had any effective impacts and interventions in tackling the crisis of global warming. The paper also explores weak African representation at climate change meetings in Africa, as well as domestic political interests (nationally and internationally) that weaken negotiations to combat climate change. Ways forward to strengthen meetings for African governments to move ahead in tackling the crisis are provided.

Global warming in Africa
Global warming refers to an average increase in the Earth’s temperature, which in turn causes climatic changes. A warmer Earth may lead to changes in rainfall patterns, a rise in sea level, and a wide range of impacts on plants, wildlife, and humans. The world ocean has experienced a net warming of 0.06 degrees Celsius from the sea surface to a depth of 3000 meters over the past 35-45 years. More than half of the increase in heat content has occurred in the upper 300 meters, which has warmed by 0.31 degrees Celsius. Warming is occurring in all ocean basins and at much deeper depths than previously thought. Scientists predict that the oceans are taking up the excess heat as the atmosphere warms. Unfortunately, Africa is the continent that will suffer most under climate change and global warming. The continent of Africa warmed by 0.5 degrees Celsius during the past century, and the five warmest years in Africa has all occurred since 1988. In addition to developed industrialised nations such as the United States continuing to spew greenhouse gases into the atmosphere, the penetration of multinational corporations from these developed nations into Africa due to rapid economic globalisation have also set up operations and extracted the continents fossil fuels and wealth while simultaneously emitting further greenhouse gases. The tragedy is that Africa has played virtually no role in global warming with the problem caused mainly by the economic activity of the rich northern industrial countries. For example, Africa’s carbon dioxide emissions, predominantly from the energy and transport industries, amount to approximately 650 million tonnes per annum, which is even less than Germany, which emits approximately 800 tonnes of carbon dioxide. The main sources are power generation from coal in South Africa (approximately 350 million tonnes) and gas flaring in the Niger Delta (approximately 100 million tonnes). The majority of African countries emit only minimal quantities of 0.1-0.3 tonnes of CO2 per inhabitant. The US produces 24% of the world’s CO2 emissions yet has only 4.5% of the world’s population.

The impacts of global warming on the African continent are widespread and have varied in African countries to experience either extreme rainfall or extreme drought. Southern Africa experienced its warmest and driest decade on record from 1985-1995. Average temperature increased almost 0.5 degrees Celsius over the past century. Extreme rains and floods have also made for a very wet summer in Africa. Since June 2007, Uganda, Sudan, Ethiopia and Kenya have had hundreds of thousands of people uprooted from their homes, with many having died. West Africa has seen its worst floods in years since 2007, with 300,000 fleeing the earth-coloured waters of northern Ghana. The United Nations Intergovernmental Panel on Climate Change (IPCC) has warned that the effects of global warming are already being felt in Africa. The IPCC’s has predicted a minimum 2.5-degree centigrade increase in the continent’s temperature by 2030.

Impacts of global warming around Africa have been devastating. Cairo, Egypt witnessed heat waves and periods of unusually warm weather in 1998. Senegal has also experienced coastal flooding due to ocean warming and sea-level rise, which is causing the loss of coastal land at Rufisque, on the South Coast of Senegal. In Lake Chad, Nigeria, the surface area of the lake has decreased from 9,650 square miles (25,000 km2) in 1963 to 521 (1,350 km2) today. Modelling studies indicate the severe reduction results from a combination of reduced rainfall and increased demand for water for agricultural irrigation and other human needs. Since the 1990’s, in the Rwenzori Mountains, Uganda, the glacier area has decreased by about 75%. The ice caps on the Rwenzori Mountains have receded to 40 percent of their 1955 recorded cover and are set to disappear within the next two decades, affecting wildlife species and increasing the erosive power of River Semliki. The warming of mountainous areas will drastically affect wildlife species. The Mountain Gorilla is under threat. Equally endangered are the Rwenzori leopard and the Rwenzori Red Duiker, which usually live at altitudes above 3,000 meters, corresponding with colder climates. The dwindling of wildlife will affect tourism. Mt. Kenya’s largest glacier is disappearing with ninety-two percent of the Lewis Glacier having melted in the past 100 years. Ice on Mount Kilimanjaro, Tanzania, is predicted by scientists to disappear by 2020 with 82 percent of Kilimanjaro’s ice having disappeared since 1912, with about one-third melting in just the last dozen years. At this rate, all of the ice will be gone in about 15 years.

Kenya in 2001 saw the worst drought in sixty years, with over four million people affected by a severely reduced harvest, weakened livestock, and poor sanitary conditions. In the summer of 1997, Kenya also witnessed a deadly malaria outbreak. Hundreds of people died in the Kenyan highlands where the population had previously been unexposed. Around almost the same time in Tanzania, higher annual temperatures in the Usambara Mountains were linked to expanding malaria transmission. In Uganda, the highlands, which were malaria free, are now invaded by the disease. There has also been an increase in malaria cases of 43 percent in Ntungamo, 51 percent in Kabale and 135 percent in Mbarara.

In January 2000, South Africa witnessed one of the driest Decembers on record and temperatures over forty degrees fuelled extensive fires along the coast in the Western Cape Province. The intensity of the fires was exacerbated by the presence of invasive vegetation species, some of which give off 300 percent more heat when burned compared to natural vegetation. Coral reef bleaching due to global warming has already occurred in the Seychelles, Kenya, Reunion, Mauritius, Somalia, Madagascar, Maldives, Indonesia, Sri Lanka, Gulf of Thailand (Siam), Andaman Islands, Malaysia, Oman, India, and Cambodia. Corals are very sensitive to temperature changes and thrive within a narrow band of heat and cold. A temperature increase of one degree Celsius can trigger them to bleach. After severe bleaching, they often die. In addition to the stress of warming ocean temperatures, oceans are becoming more acidic, thus slowing coral growth and hindering the ability of corals to build their skeletons. As the ocean takes up carbon dioxide from the atmosphere, water becomes more acidic. Global warming, therefore, has the potential to impact on tourism in Africa.

(For more information on climate change and implications for Africa (i.e. conflict and human rights abuse, drought, violence over scarce resources, rising temperatures and increased diseases, food insecurity and species extinction) refer to previous Ugandan parliamentary briefing: Climate change in Africa and implications for Uganda)

Meetings and Conferences – effective or rhetorical debating?
Kyoto treaty and United Nations Climate Change (UNFCCC) Conferences
Neglecting African’s interest
Africa has been largely overlooked in much of the global discourse and policy development relating to global warming and climate change. Africa as a continent itself has no official mention in the UNFCCC or in the Kyoto Protocol, the two principal documents formulated by the United Nations to tackle global climate change. The UNFCCC is an international environmental treaty produced at the United Nations Conference on Environment and Development (UNCED), informally known as the Earth Summit, held in Rio de Janeiro in June 1992. The treaty is aimed at stabilising greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system. The Kyoto Protocol the principle update has become much better known than the UNFCCC itself. With the UNFCCC Conferences of Parties (COP) meetings, the assumption is that Africa’s interests are covered as part of the wider group of developing countries. Africa’s interests, for example, were hardly noticeable in the world climate negotiations (COP13) in December 2007 in Bali. Indigenous expertise has also been neglected and normally gets little political attention. African heads of state admitted recently that the consequences of climate change increasingly need to be put onto the national and international agenda, and in Bali, they demanded a large share of the funds made available for adaptation to climate change.

In addition, while the industrialised countries have numerous experts attending meetings, African delegations are made up of one to a maximum of ten members. This has hindered African representation and presence in the numerous working and contact groups, such as in Bali and so to effectively combat climate change. If Africa is the continent that will be hardest hit due to climate changes, it would be common sense to increase African representation at meetings. Even when African governments may try to prepare for climate change meetings and debates to combat climate change, insufficient capacities remain a decisive problem. Unfortunately, there are also weaknesses in African governments making sufficient use of the African scientists’ and civil society organisations’ expertise. These two groups have now acquired more knowledge on climate policy than ever before. Unfortunately, the US one of the main contributors to climate change did not join the Kyoto Protocol of 1997 but proposed a plan with incentives for U.S. businesses to voluntarily reduce greenhouse gas emissions. This sets no binding agreements that would force US industry to reduce emissions, but continue with business as usual.

Climate change protests: An unfair deal
There have been numerous protests due to a lack of partnerships and strong measures to tackle climate change, with an international civil society expressing failures of climate change meetings to tackle the crisis effectively. The 12th annual global summit of the UNFCCC (COP12) in 2006 held for the first time in Africa saw 2000 people protesting outside the meeting from across Kenya. Protestors also included a group of Maasai herders, marching and demonstrating against climate change, and specifically against local impacts of drought, loss of livelihood and conflict over resources. Other concerns included climate change endangering centuries old cultures and traditional ways of life. Protestors also slammed Kenya’s environmental minister for not extracting anything meaningful from the talks and stated that delegates to the conference had failed to agree on urgent measures to address the problem of global warming.

The Annual G8 Summit
The Group of Eight (G8) is a forum for governments of eight nations of the northern hemisphere. These include Canada, France, Germany, Italy, Japan, Russia, the United Kingdom, and the United States. Largely echoing the 2005 G8 summit in Scotland 2005 where the summit’s outcomes were always likely to fall foul of the realpolitik of the leaders’ domestic agendas, the annual G8 summit 2007 in Heiligendamm ended in a series of meaningless statements on climate change and aid to Africa. The G8 members were also divided on political positions. The G8 has been criticised by environmental groups for failing to take serious measures to address global warming. The G8 statements are said to be non-binding, with countries like the US only ‘considering’ steps taken by other countries to reduce emissions. Not surprisingly, protests were witnessed at the summit due to frustrations to tackle global warming. Protests targeted both the G8 and capitalism. Protesters blockaded the summit for two days, forcing delegates to enter via helicopter. Protests in solidarity were also held in cities of Portland, Chicago and San Francisco. The US-led climate talks in Hawaii in January 2008 also opened amid protests pointing out Hawaii’s vulnerability to climate change.

All of these protests also signal a failure of meetings to effectively come up with concrete measures to tackle climate change. Unfortunately, G8 summit meetings have not been opportunities to generate additional momentum for solving problems at the other multilateral conferences that meet throughout the year. The G8 summit sets the stage for what needs to be done and establishes an idea of how to do it. The summit also deals with a range of complex and inter-related issues and does not specifically aim to tackle issues of climate change. The G8 continues to be sites for protests by the anti-globalisation movement opposed to the unregulated political power of multi-national corporations, and the powers exercised through trade agreements, which contribute to climate change.

Weak African representation at climate change meetings within Africa
A roundtable meeting in West Africa on sustainable finance, May 2008 hosted by the United Nations Environment Program Finance Initiative (UNEP FI), conducted a panel discussion on climate change and carbon financing in Africa. The session discussed opportunities and challenges arising from climate change. Although the panel meeting agreed that climate change contributes to global warming, which impacts ecosystems and human health, no effective interventions were made to tackle the climate crisis (e.g. the need to place pressure on northern countries to reduce emissions to tackle the problem effectively, Africa’s adaptation to climate change, local economic development opportunities, renewable energy as opposed to polluting industries, etc). Participation was limited to international bankers, asset managers, government officials and academics with no input from civil society representatives. Solutions to the climate crisis were thus limited to finance opportunities to achieve adaptation and mitigation. The meeting noted that The Kyoto Protocol facilitates the transfer of finance, technology, and development to counteract climate change through the mechanisms of Joint Implementation, and the Promotion of Clean Development Mechanisms. Unfortunately, the disadvantage of carbon trading is that it continues to allow developed nations to pollute without tackling the root problems of the climate crisis. The outcome is not sustainable, as most countries will benefit from free riding on other countries emission reductions. If the aim of meetings and conferences are to reduce climatic change, then CDM’s do not present an optimistic solution.

Divergent African and international interests weaken partnerships to combat climate change at meetings
Disputes over environmental discourses such as global warming and climate change should also not be underestimated. Since discourses reflect power there are many struggles for control over discourses. Discourse is a site for struggle when people get together and stakeholders (i.e. world leaders, business) can easily slip into a rhetorical mode when debating environmental discourses with no real effective interventions to solve environmental problems.

African governments have worked through a number of regional and global institutions to strengthen their responses to climate change, having attended many conferences at the African level (e.g. African Ministerial Conference on the Environment – AMCEN, New Partnership for African Development – NEPAD) as well as international level (e.g. Kyoto Protocol and UNFCCC). Besides the weaknesses of some of these initiatives, within Africa, there may be weaknesses in a united African position at national and international meetings. Within Africa, Nigeria, South Africa, Kenya, and Egypt play leading roles, but even within this small group, it is evident that the interests differ considerably. Only little is known in concrete terms about the divergences in political interests. South Africa assumes the function of a bridge between industrialised and developing countries and thereby plays a constructive role in the North-South negotiations on reduction commitments. The first reactions to the latest South African energy crisis, mining had to be reduced by up to 20 percent, indicate that more renewable energy will be employed. However, massive investments in nuclear energy and national coal production are being undertaken. Other African countries may also have different interests, e.g. with Uganda’s newfound oil reserves, Uganda has become a new focus for China to secure oil deals threatening US domination. The United States War on terror also provided justification for the invasion of Iraq, with oil said by many to be the reason behind the motive. All of these unknowing and divergent individual interests weakening commitments to combat climate change during meetings and conferences. Thus, participants may attend meetings and conferences with divergent individual (i.e. domestic) interests rather than more altruistic (i.e. global) interests creating unequal international climate negotiations. The fact that climate change is a global problem and that solutions require cooperation amongst all stakeholders means that transparency and fairness must be the cornerstone to tackle global warming.

As Kenyan Maasai leader of Practical Action, Sharon Loorrmeta noted in 2006 at the 12th Conference of the Parties (COP12) of the UNFCCC, referring to diplomats negotiations over what to do about global warming in Nairobi and ineffective measures in tackling the crisis,

“…Climate change tourists…You come here to look at some climate impacts and some poor people suffering, and then climb on your airplanes and head home”

Although the previous Bush administration refused to sign the Kyoto Protocol, it is not until the US supports the treaty that international negotiations can move forward to really tackle global warming and impacts on Africa. At the US climate meeting in Montreal, 2005, the US agreed to launch a ‘dialogue’ on climate change that would specifically not involve negotiations and partnerships. However, newly elected president Barak Obama did pledge to act on climate change, and after eight years of American obstructionism, “re-engage” with the international negotiations to reduce greenhouse gas emissions. However, Obama has since shifted his position in global warming and will not commit the US to meet the emissions target, a cut to 6 per cent below 1990 levels by 2012. Instead, his goal is to get back down to 1990 levels by 2020. Obama has since embraced the coal industry as part of his quest for state wide office. When he ran for U.S. Senate in 2004, he was flanked by mineworkers to proclaim that “there’s always going to be a role for coal” in Illinois. Employees of coal companies and electric utilities contributed $539,597 to Obama’s U.S. Senate and presidential campaign. Nevertheless, for any solution to climatic change, the US needs to be part of the talks and an equal partner to avoid impacts of climate change. Unfortunately, continued domestic US interest may see further challenges between world leaders in being able to effectively combat climate change and shape political discourse at meetings.

Options for governments to consider strengthening meetings:
Ways forward to tackle global warming
African nations must not be swayed by developed countries like Australia, the US and Japan to name a few who are normally stronger on not committing to reduce emission in their own countries due to domestic interest, and who normally push for non-binding agreements at meetings. Under the Kyoto Protocol, only developed countries are legally obliged to reduce their emissions. If climate change is to be truly tackled African nations who suffer the most from climatic change need to force heavily industrialised nations to commit to emission reductions. Developing countries must therefore strongly push for new binding commitments at meetings and should not be swayed to implement CDM’s which present no real solution to the climate crisis.

African governments must push developed nations to address problems of adaptation to climate change in Africa and bring local expertise to meetings. Africa is likely to suffer some of the greatest impacts of climate change despite its people having contributed among the least to the human impact on climate. At meetings it is essential that African countries push for concrete strategies that could practically help learn more about what “adaptation” means, and how to strengthen local capacity to cope in ways which brings positive rewards to local people. For this governments need to also include civil society and external experts in meetings and who have built up a wealth of knowledge on adaptation techniques and local livelihood strategies. Rather than government excluding representation, NGOs and other civil society groups can play a major role to support local action and bring knowledge to meetings by way of alternative expertise. Local representation and expertise must be included in climate change meetings.

African nations must push for renewable energy and financial assistance from developed nations at meetings to tackle climate change. African countries (and especially the developing countries under the Group of 77 and China) must push for rich countries to meet their commitment, made 16 years ago, at the Earth Summit in Rio de Janeiro, with the signing of the UNFCCC to get finance and technology to the poorer countries, enabling them to act against climate change. The promised help has not yet materialised. Developing countries cannot take climate action and at the same time maintain economic development without this assistance, so finance and renewable technology must be pushed for at meetings by African leaders and civil society. The best way of stopping global warming is to gradually reduce the amount of coal and other non-renewable energy sources that we burn. The energy sector (in both developed and developing nations) needs to adopt renewable sources of power such as the use of biomass, methane and solid waste as fuel, solar power, wind power, geothermal energy and wave power. This multi-faceted approach will allow each region to meet its own power needs, with surplus energy fed back into the power grid and coal left safely in the ground. Projects fixated on carbon trading are protecting the market system of capitalism and are profit driven that serve the interest of a few. Carbon trading encourages the industries most dependent on coal, oil and gas to delay shifting away from fossil fuels and reduce greenhouse gas emissions in developed nations. There is little incentive for redefining production processes and questioning the need for such facilities but rather a continuation of pollution via the right to pollute. The apathy of some African authorities such as in Nigeria to implement effective solutions to tackle global warming is due to government corruption and global economic opportunities (i.e. via oil infrastructure and resources). African nations need to focus on local economic development at meetings that will help the continent adapt to climate change. This will also require stemming out greed, corruption and self interested leaders.

Finally, all stakeholders need to move away from continued ‘talk-shops’ that are rhetorical in nature to actually implement positive changes (as above) that will effectively tackle global warming. Time frames must be added to meeting agreements and implemented effectively. However, this will require co-operation and equal partnerships to combat the crisis of climate change. Nation states (especially developed countries) will need to move beyond domestic interest for national profits and power, to implement internal procedures to reduce emissions, and agree to provide the necessary support at meetings to help the African continent adapt to climate change. It will be up to African governments to agree on a common framework to place pressure on the international world leaders at gatherings.

Leonard, L (2009) Emerging trends in Global Warming: Any effective interventions in place or just rhetoric debates/workshops/seminars? Ugandan Parliamentary briefing, Royal African Society, United Kingdom, 16 February.