LONDON, May 16--Free-trade development strategies designed by the International Monetary Fund (IMF) and the World Bank have devastated poor countries and left their farmers worse off, a British aid group said in a report released Monday, AFP reported.
The hardline policies of liberalization and privatization, backed by Britain and other western governments, have led to a suicide “epidemic“ among Indian farmers and inflicted terrible social costs in other developing countries, Christian Aid said.
In its report, the London-based group urged Prime Minister Tony Blair to use Britain’s temporary presidency of the G8 group of leading industrial countries and, from July, of the European Union to “bring about a radical change of direction“ in development policy.
“It is a scandal that the British government has backed policies and pumped British taxpayers’ money into schemes which have contributed to poor Indian farmers killing themselves and Indian workers being laid off in huge numbers,“ Christian Aid director Daleep Mukarji said in a statement.
Three case studies in the report illustrate the costs of what the group termed the “free market credo“: in India, the crop farmers are driven to suicidal despair; in Ghana, it has crushed poultry producers and threatened democratic institutions; and in Jamaica sugar cane production has plummeted, sending women into drug-running and prostitution.
When the IMF and World Bank stepped in to help India in 1991, they encouraged the government to devalue the rupee in a bid to boost exports, while farmers were told to produce cash crops for export, like cotton and sugar, at the expense of staple crops like rice and wheat.
But the move pushed farmers into debt, as they borrowed money to pay for seeds, fertilizers, pesticides, water and power while state subsidies on fertilizers and other needed products were cut.
Meanwhile, liberal banking reforms meant that interest rates grew unchecked, making it harder to get loans and easier to have property seized when farmers could not pay back debts.
Emphasis on exports, of both cash crops and staple foods, led to a sharp decline in food stocks for domestic consumption and increased hunger at home, Christian Aid said.
Furthermore, under IMF-inspired measures, India gradually withdrew measures protecting its market from cheap, subsidized foreign palm oil, which in turn caused the crash of India’s production of oilseed.

Mahathir Mohamad

DUBAI, UAE, May 16--Muslim countries must develop Islamic banking institutions in order to create non-usurious sources of funding, former Malaysian prime minister Tun Mahathir Mohamad said, Bernama reported.
Countries borrowing from usurious foreign banks and institutions such as the International Monetary Fund (IMF) and the World Bank risk becoming “a kind of debt-slave to the lenders,“ he told an Islamic finance conference here Sunday.
Mahathir said governments should first look at interest-free sources in their quest for project financing.
“There is no reason why Muslims and Muslim countries cannot have access to Islamic finance for whatever needs. The skills in the management of Islamic banking have already been developed,“ he said.
He said now Muslim countries needed the political will to develop their Islamic financial institutions.
“The means and systems are there. It is for us to decide whether we should apply our wealth in accordance with our religion or not,“ Mahathir said.
He called on rich Muslim countries to “consider it their duty to provide Islamic banking facilities to save Muslims from any form of debt-slavery.“
Mahathir said he would not “pass any judgement on anyone if such facilities are not available in Islamic countries.“
Islamic finance experts point out that many Muslim countries are still not ready to create legal frameworks for the sector, which is growing in popularity among populations and has witnessed phenomenal growth.
“Today Islamic banking has developed new instruments in order to compete with usurious banking and to provide better alternatives. As a result Islamic banking has become more attractive,“ Mahathir said.
He warned that “borrowing beyond our capacity to repay can result in our being debt-slaves to other nations.“
Some poor debtor countries use up to 85 percent of government revenue to pay the loans, and to ensure payments international agencies such as the IMF would “literally take over the management of the country’s economy,“ the former prime minister told the conference.
Taking a dig at the huge US foreign debt, Mahathir said if a country is powerful, then it can “go on spending borrowed money“ without worrying about defaulting repayments. “You don’t have to pay because your lenders dare not bankrupt you. The US is not in trouble despite owing the world US$8 trillion. If it is bankrupted, it and the lenders would lose all their money.“

Investors monitor share prices at a securities company in Shanghai, China. (Reuters File Photo)

BEIJING, May 16--China may soon expand the role of foreign institutional investors in its securities markets, more than doubling the combined amount they can invest to $10 billion, state media said Monday, AFP reported.
Qualified foreign institutional investors (QFIIs) have nearly reached the current limit of $4 billion, making it necessary to lift the cap, the China Securities Journal reported.
Citing China Banking Regulatory Commission (CBRC) deputy director of policy and regulation Li Fuan, the newspaper said the government will raise the combined investment quota by $6 billion this year.
The Chinese government launched the scheme in 2003 in a move to attract fresh capital into the struggling local equity markets and to introduce advanced investment management experience from foreign investors.
It initially set $4 billion as the combined quota but since then 26 QFIIs have entered the market and the quota has been used up, according to the report.
The report said the government will also allow QFIIs to invest in the interbank bond market and asset-backed securities products.
Currently, QFIIs are only permitted to invest in A-shares, which are denominated in yuan, and in treasury bonds and corporate bonds.

KUWAIT CITY, May 16--The Organization of Petroleum Exporting Countries has a current spare production capacity of more than two million barrels per day (bpd), an OPEC official said Sunday, AFP reported.
“We are very close to 32.7 million bpd,“ of production capacity by all OPEC members including Iraq, the organization’s acting secretary general Adnan Shihab-Eldin said.
“We are currently producing just over 30 million bpd and we think we have (over) two million bpd of spare capacity, and that (output capacity) will increase further by the end of the year perhaps to around 33 million bpd,“ he said.
Speaking to reporters at the conclusion of the third annual one-day joint workshop between OPEC and the International Energy Agency (IEA), Shihab-Eldin said most of the organization’s spare capacity was in Saudi Arabia.
“We think that by the end of the year some of the additional production capacity will come from Iraq--assuming that there will be improvement in stability and security,“ he said.
He said OPEC will be able to meet all the expected growth in demand for the fourth quarter.
“We are confident that OPEC will be able to meet all demand in the fourth quarter,“ Shihab-Eldin said, ruling out a shortage in supplies like in 2004.
“We now have a spare capacity much more than what we had in October 2004 ... because we have brought on stream and we have speeded up production capacity in a number of OPEC countries,“ he said.
IEA estimated on Wednesday that world demand for oil was set to rise by 2.2 percent this year to 84.3 million bpd, revising up by 0.1 percentage points its April forecast.
The agency said that demand pressures in China and the United States had continued to ease, and that it had revised downwards its estimate of demand in Europe, but consumption in some other regions had risen.
Earlier Sunday, Shihab-Eldin said in a speech at the workshop that OPEC was committed to expand production capacity and “present expectations are for the addition of another 3.5 to four million bpd between 2006 and 2010“.
“Therefore, we are confident that the market will continue to be well-supplied with crude throughout the year, and, for that matter, in the coming year,“ he said.

Director of the agricultural research and development center in the northeast of Thailand, inspects genetically modified papaya in an enclosed test site at the center in Khon Kaen. (AFP File PhotoÓ)

KHON KAEN, Thailand, May 16--Here in Thailand’s bread basket, behind a barbed wire fence with a padlocked gate in a government-run research centre, lies the most controversial plot of cropland in the kingdom, AFP reported.
The half-hectare (1.5-acre) area in northeastern Thailand is fallow. The center’s authorities argue they were nurturing hope for thousands of papaya farmers, but activists saw a dangerous and failed experiment, and last year took action that led to the plot’s plants being yanked out by their roots.
The trees in question were genetically modified (GM) papaya, and for some they represented the future of Thai agriculture.
Thailand is under pressure to resume field trials of genetically altered crops, sometimes known as GMOs, as it seeks to maintain its role as the region’s agricultural power.
Environmental watchdogs such as Greenpeace, as well as consumer and rights groups, are vehemently opposed, fearing unknown environmental and health risks.
Thailand has conducted greenhouse and station field trials of modified papaya since the late 1990s.
Last year Greenpeace announced it had uncovered the illegal spread of the papaya seeds to Thai farms, some of them hundreds of kilometers (miles) from Khon Kaen.
It believes Thailand’s department of agriculture was complicit in the contamination.
The government, caught in a media glare, scrapped the station field trials. But it also quietly took two Greenpeace activists to court on charges of trespassing, theft and destruction of property after a media stunt at the Khon Kaen research centre. They face five years in prison.
“This is the opening of the GMO door in Thailand,“ defendant Patwajee Srisuwan warned in an interview with AFP at the Khon Kaen court. “They are trying to stop us from exposing more information about what they’re doing with GMO papaya, because the department has tried to push for its commercialization.“
Thailand’s cabinet four years ago banned GMO farm field trials, but debate rages over the research’s future.
US multinational Monsanto, which owns several patents for genetically modified organisms and has funded research in Thailand, insists biotech crops are safe, having undergone “more extensive testing than any other plants in the history of agriculture“.
But head of the Confederation of Consumer Organizations of Thailand, Sairung Thongploon, said, “The government must not put Thai consumers at risk and must ensure GMOs do not enter the food chain,“.

LONDON, May 16--Transport outside Paris was expected to be hard hit by the strike, BBC reported.
Millions of French workers were to stay at home on Monday in protest against the scrapping of a traditional holiday.
France has previously observed the Pentecost holiday along with several other European countries, but the government has now cancelled it.
Disgruntled trade unions are holding strikes across the country, just as political parties start their campaigns over the European constitution.
The unions were expected to protest against the constitution as well.
Sweden has also scrapped the Pentecost holiday, replacing it with a day off on the country’s flag day of 6 June.
The idea in France was to make the former bank holiday a day of solidarity with the old and the infirm, following the deaths of 15,000 mainly elderly people in a heatwave two years ago.
A penitent nation promised that would never happen again, so the government decided that the income generated by this extra day’s work--public sector staff are expected to forego their pay--would be put into a special fund for the care of the elderly.
But it has not quite worked out that way.
While many would be taking this as a day off, others were expected to join strikes across the country to protest against the loss of a day’s holiday and the government’s plans to loosen the rules on France’s 35-hour working week.
The rallies would also offer trade unionists a chance to demonstrate against the European constitution.
Many in the unions see the proposed constitution as a threat to the French social model.
They believe it offers the French workforce too little protection and enshrines a more Anglo-Saxon economic approach.