How China is reshaping global development finance

The BRICS Development Bank, the AIIB and the Silk Road Fund – recent initiatives spearheaded by China that symbolize its growing influence in development funding and potential new sources of financing, says Rajiv Biswas.

Deutsche Welle, 19 Nov 2014

Over the past couple of months, China has played a major role in launching initiatives to increase infrastructure financing for developing countries. In July 2014, China, together with the other BRICS nations - Brazil, Russia, India and South Africa - agreed to create a new development bank (NDB) that would have initial capital of 50 billion USD.

More recently, in October, 21 Asian countries agreed to establish a new Asian Infrastructure Investment Bank (AIIB) for which China will provide up to 50 percent of initial capital. The bank's aim is to provide funding for infrastructure projects such as roads in underdeveloped Asian countries. Just last week, at the APEC Leaders Summit in Beijing, President Xi also announced the creation of a new Silk Road Fund to improve connectivity in Asia, for which China will provide USD 40 billion of capital funding.

While the initiatives have been criticized by some as a way for China to simply challenge Western-backed institutions such as the World Bank or International Monetary Fund (IMF) - as a result of Beijing's growing discontent with these bodies - there are others who believe the new development banks might have a positive impact on emerging economies.

Biswas: 'China wants to substantially
 increase the role it plays in multilateral
development financing'

Rajiv Biswas, Asia-Pacific Chief Economist at the analytics firm IHS, says in a DW interview that with the correct design, these new institutions could become important new sources of financing to address the economic development and infrastructure financing needs of developing countries worldwide.

DW: What are the main differences between these new development banks and what role does China play in them?

The NDB has been established by the BRICS, with a global remit to lend to developing countries. The AIIB is focused on Asia, with the 21 founding members all Asian countries and a mandate to provide infrastructure financing for Asian developing countries. Both banks will be headquartered in China, with the NDB headquartered in Beijing and the AIIB headquartered in Shanghai. Clearly, China will play a major role in both banks as a key source of capital, but the decision-making structure will comprise a governing board with representatives from other developing countries.

Why is China helping create all these development banks?

Although these initiatives were all launched in 2014, the decisions reflect the growing discontent which has been developing for many years amongst developing nations that the governance structure of the IMF and World Bank has not evolved to reflect the increasing weight of emerging markets in global GDP. These new institutions, if successfully implemented, could give developing nations greater influence in global development financing.

Doesn't Asia already have a development bank, the ADB?

Although the ADB does have significant representation from developing countries in its governance, the balance sheet of the ADB is relatively moderate compared to the infrastructure financing needs of Asia. Therefore, the new AIIB and other Asian financing initiatives will help to boost total development financing for Asia.

What role does China aim to play in development finance and why?

China's rapid growth has transformed it into the world's second largest economy, but its ability to play a proportionate role in development finance through the World Bank has been constrained by the low voting rights currently allocated to China. Although China has been playing an increasingly significant role in international development financing through its Chinese state-owned banks such as the Development Bank of China, it also wants to substantially increase the role it plays in multilateral development financing flows through the creation of the NDB, AIIB and the Silk Road Fund.

What influence would China have on the financial system by doing this?

China's new development finance initiatives have the potential to significantly reshape the global development finance architecture that was originally established under the Bretton Woods system established in 1944. This structure has remained largely unchanged until now, and China's new initiatives have the potential to create a revolution that will transform the shape of the global development finance architecture.

Where is the Chinese money to fund these institutions coming from?

China has accumulated foreign exchange reserves of USD 3.9 trillion dollars, so the capital it is prepared to subscribe for the NDB, AIIB and Silk Road Fund would amount to only around five percent of its total foreign exchange reserves. Moreover, since these institutions will be providing infrastructure lending rather than grants, the return on capital from these investments could be significantly higher than the current returns China is getting from its foreign exchange reserves, with a large share currently invested in low-yielding US government bonds.

Development aid usually comes with some strings attached. What could these be in the case of China?

The governance structure of the NDB and AIIB will be much wider than just China, since other emerging markets are also members of both of these new development banks. However, as a major provider of capital for both banks, it is likely that China will want to have a significant role in the governance of both banks. Beijing will want to be seen as an inclusive member of both banks though, since it will not want to repeat the mistakes of the IMF and World Bank governance which became perceived by developing countries as overly dominated by the US and EU.

Nevertheless both banks will need to put in place rigorous management structures and lending processes to ensure that their infrastructure loans are subject to risk management and other lending quality controls. A key focus of the lending will be for infrastructure development in emerging markets. The NDB will have a global remit, while the AIIB will focus on Asian developing countries.

What are the reasons for China's discontent with institutions such as the IMF or World Bank?

The status quo in terms of the current distribution of voting rights remains distorted, most notably for China amongst the BRICS nations. China, the world's second largest economy, has 3.81 percent of voting rights in the IMF but it accounts for 12.4 percent of world GDP. As China continues to account for a larger share of the world economy, this disparity will continue to widen. By 2024, IHS forecasts that China will account for around 20 percent of world GDP, so unless China's share of voting rights increases dramatically, it will be heavily underrepresented in the governance and decision-making of the IMF and World Bank.

What are the main concerns about these new institutions?

The institutions will face considerable hurdles, including establishing efficient governance and a world-class prudential regulatory structure that will avoid the pitfalls of overt politicization of the new institution. However, with the correct design, the new BRICS Development Bank and AIIB could become important new sources of financing to address the economic development and infrastructure financing needs of developing countries worldwide.

Biswas: 'The institutions will
 face considerable hurdles'

Will these new banks compete with the role of the World Bank?

The establishment of these institutions at approximately the same time has the potential to generate large new sources of development funding for infrastructure projects in developing countries. In Asia alone, it has been estimated by the Asian Development Bank that eight trillion USD in infrastructure financing will be required in this decade.

A significant share of this will be funded by domestic government and private sector financing, but this still leaves a large shortfall which requires international financing from other governments, multilateral institutions such as the World Bank, or foreign private investment. The new institutions such as the NDB, AIIB and Silk Road Fund will help to raise significant new flows of development finance to help to meet this large need for infrastructure funding.

Will these new banks compete with the role of the World Bank?

The impact on development financing flows to developing countries from these initiatives could be very substantial. The NDB will have initial authorized capital of USD 100 billion and initial subscribed capital of USD 50 billion and also a Contingent Reserve Arrangement (CRA) with capital of USD 100 billion. The AIIB will have initial authorized capital of USD 100 billion, with subscribed capital likely to be around USD 50 billion.

Furthermore, both the NDB and AIIB will be catalysts for other sources of government and private sector funding for infrastructure projects. Both the NDB and AIIB are likely to benefit from having good access to funding from the state-owned banks of the BRICS countries, notably from Chinese state-owned banks, which would provide a very large potential source of financing for the NDB.

Rajiv Biswas is Asia-Pacific Chief Economist at IHS, a global information and analytics firm. He is responsible for coordination of economic analyses and forecasts for the Asia-Pacific region.

World Bank Whistle-Blower: “Precious Metals to Serve as an Underpinning for Paper Currencies"

Silver Doctors, 7 May 2013

I had the opportunity yesterday to speak with one of the western world’s most courageous and astute women, Karen Hudes, Former Senior Counsel to the World Bank—now turned whistle-blower.

It was a powerful conversation, as Karen spent 20 years with the World Bank as an attorney and economist, before being “let-go” after reporting internal fraud and corruption.

During the interview Karen indicated that the world is rapidly changing, with western power structures breaking down, economic & political influence gravitating to BRICs nations, all amid a pending currency transition which will highly favor precious metals.   Hudes stated: “All of the countries of the world are going to allow precious metals to serve as currency, and this will be an underpinning for paper currency, as we’ll have both systems at the same time.”

From Tekoa Da Silva:

Starting out by discussing the shocking centralized power she witnessed while working at the World Bank, Karen explained that, “A study done by three [Swiss] systems analysts who used mathematical modeling [shows] how the [world's] 43,000 transnational corporations were being controlled through interlocking corporate directorates. There’s a group of 147 companies, most of them are financial institutions, and what they’ve done, is through the interlocking directorates, they control 40% of the net worth of these [43k] companies, and 60% of their earnings…so that group has been using the presidency of the World Bank as kind of a puppet to dominate the world—that’s [now] finished.”

A major shock to that centralized power base, according to Karen, was the recent move by BRICs nations leaders to bypass the World Bank for their financing needs, by establishing their own development bank. “As the BRICs [nations] economic power grows,” she explained, “they’re not going to be strangled anymore through the grabbing [of] their resources…So their decision to start their own development bank was their way of letting [world] governments know…that its time to end this corruption.”

Major moves toward monetary independence are also being made by growing numbers of U.S. states, Karen added. She explained that, “The states are starting to have legislation recognizing gold and silver bullion as legal currency. This is [also] a very strong signal the states are sending to the federal government, that the time to get serious about ending the corruption in the financial system is now here.”

When asked her thoughts on what this all means for the world monetary system, Karen said, “What’s going to happen, is we’re going to have all the countries of the world, sit down and figure out what’s going to be the best, most orderly transition from the current system that we have, [which has] profound imbalance and unsustainable deficits…[this change] is going to happen as each country makes its preference known, because the system we have now is not transparent, and the biggest change [in the new system], is that there’s going to be transparency.”

That transparency may be found through a gold-backed currency system, Karen noted, as, “All of the countries of the world are going to allow precious metals to serve as currency, and this will be an underpinning for paper currency, [as] we’ll have both systems at the same time. This is my guess, as I mentioned—I am an economist.”

As a final comment speaking towards her difficult journey as a World Bank whistle-blower, Karen said, “I’ve been struggling now for years, to tell the American public what’s [been] going on. I haven’t gotten through, because this [financial] group has bought up the press and has been spreading disinformation systematically. That undermines the whole point of a democracy. How can voters vote without an informed opinion, without the information that they’re entitled too? So this strangle-hold on information is going to end in very short order.”

——

This was a powerful interview conducted with a great American patriot and honorable world citizen. Karen is setting an example for the history books, and her interview is required listening for global thinkers and market students.

To listen to the interview, left click the following link and/or right click and “save target as” or “save link as” to to your desktop:

>>Interview with Karen Hudes (MP3)

To learn more about Karen and support her work, visit: Kahudes.net

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World Bank Whistle-blower. Confidence in the Dollar as an International Currency Is Waning.

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Archangel Michael on the World’s Movement into the Golden Age, March 24, 2013 – Part 2/2

“… GW: Shifting to events that are taking place in Europe at this point in time, it seems that the events in Europe are reaching or about to hit a breaking point of some kind. Several leaders, including Nigel Farage and allegedly Russian Prime Minister Medvedev have suggested that people should be removing their money from their accounts as the cabal may attempt a last ditch grab for money.

Now, I know, and perhaps many know, that the current system is corrupt and that there will have to be a degree of change in the current system before people will be willing to embrace the new system.

I don’t wish this question to sound alarmist to people, but is what is happening now one of the final, if not the final, straw that will help expose the banking cabal and allow the new system to be implemented? Is this new system ready? Or is it already being implemented? Or is it still only limited to preparatory work?

AAM: No, it is already underway. It is already being implemented. And yes, we do not wish to sound alarmist either, and so we also wish people to know that their resources, what they think of as their money, for those who have saved and put their faith in banking systems, they will be protected to a certain extent. So do not think that you have need to run out and remove all your monies, or that it will be completely gone. But yes, this is the beginning of a transition.

The expression of the lack of faith in particularly the European banking system causes enormous disruption, more significant perhaps than anywhere else. And so yes, it does have a domino effect, but it is not one simply shutting down [the old system] and a new system emerging. It is coming into balance with the new emerging as the old simply fades away.

Is it a last ditch effort on the part of those who have clung to the old paradigm of the 3rd, what you call the cabal? Yes, it is. But it matters not, because it is not going to work for them. Seldom are things such as this situation so black and white. There is always room for free choice and free movement and adjustment.

But in this situation it is simply evolution and expansion. And the expansion of the new, of the new paradigm, of what you think of as Fifth-Dimensional financial systems does not allow for systems that are based on greed and theft and control — and unfairness, basic unfairness, usury.

So, it is rather clearly defined. You have an expression that you use on Earth, “Out with the old.” And this is one of those situations where it is, in fact, the truth.

GW: Okay. So, along the lines of the leadership, or at least some of the leadership of what’s taking place in the financial sector globally, it has been reported that the apartment of the IMF managing director Christine Lagarde was raided last week.

Was this an attempt to expose her as part of the banking cabal, or was it an attempt to stop her from fulfilling the reforms that she is allegedly trying to bring to the international banking system?

AAM: It was an attempt to gather information and perhaps even destroy documentation that she is trying to bring forth for the reform of the financial situation. It was an unsuccessful raid.

GW: Okay. So what I’m hearing in your answer, then, is that Christine Lagarde is working for, I guess, the forces of light to bring the greater change to the IMF. Am I correct?

AAM: Yes. This one has had a real turn-around. No, we do not ever categorize individuals or groups or people as light or dark. But this one has truly committed herself to reformation.

She sees and she has the experience very clearly of knowing what does not work. And therefore she has committed her mission, her purpose to this reformation.

GW: Okay. And could the same be said about the new US Secretary of the Treasury Jack Lew? Is he on board with all the changes and working for the reformation as well with Lagarde?

AAM: He is an agent and an angel of change. He could not be simply on board. He is a moving force. ‘…‘’

"The U in Kundalini"- Oct 18, 2012 (Kryon channeled by Lee Carroll) - (Subjects: Kundalini, Unification, EU, Nobel Peace Prize 2012, Middle East, South America, Only 5 Currencies on Earth, Old Souls, Duality will dismiss, 3D Humanity will melt with Multi dimensional higher self, Global Unity… etc.)

BRICS nations thrash out World Bank alternative

Want China Times, Xinhua 2012-10-02

The 2012 BRICS Think-Tanks Forum in Chongqing, Sept. 26. (Photo/Xinhua)

Experts from five emerging world economic powers have told how a two-day forum for thinktanks this week reached consensus on creating a BRICS development bank designed to complement existing global financial institutions such as the World Bank.

Liu Youfa, deputy director of the China Institute of International Studies, said, "At the previous forum before the BRICS summit meeting in March, we were still discussing whether to create this bank, but now we are talking about how to create this bank."

The 2012 BRICS Think-Tanks Forum, held in southwest China's Chongqing municipality on Wednesday and Thursday, was part of efforts by the five countries — Brazil, Russia, India, China and South Africa — to create a BRICS development bank. Its establishment joined the official agenda when BRICS leaders agreed at the organization's summit in India's New Delhi in March to consider the possibility of creating a new development bank. They decided to convene expert meetings on the matter.

Being the first think-tank forum of its kind, briefed to advise governments of each BRICS country, experts at the event said in follow-up interviews that their agreement on the necessity and practicality of creating the bank would be presented to officials, who would advance the governments' decision making.

Ideas that carry weight

Liu Youfa said thinktanks are a preliminary step in government policy-making and the influence of their ideas in part depends on their feasibility and thoroughness.

According to Liu, the consensus from the forum has three main aspects: the need to build a legal framework, the need to establish a theoretical framework and the need to further discuss technical issues. The first of these concerns defining the legal status of the bank, the second was to explain its purpose, and the third was about how the bank should be run and capitalized and other specific matters.

Leonid Grigoriev, deputy director of the Russian Energy Agency and professor of the Higher School of Economics, said, "We generally agreed to create this bank. We scanned all the related issues to be further discussed and formed our opinions on them, issues such as the mode, the capitalization, the purpose of the bank.

"What we did is groundwork and solving technical issues. The rest is for political negotiations, but the governments need ideas in making decisions, especially those from other countries."

Such think-tank forums are usually held right before BRICS leader meetings, as they were before the summit in New Delhi this year and the one in Sanya, China, last year. Interviewed experts said much of the content of the reports formed at the two forums eventually appeared on the summit declarations.

According to HHS Viswanathan, a distinguished fellow of India's Observer Research Foundation, this week's event did not produce a report, but its discussion will surely be included in the report of the next forum, set to take place in South Africa before the next summit there in 2013.

Viswanathan told Xinhua that India expects to see the bank established as soon as possible. Although no timetable was set, a road map has become clear after this week's forum and all five sides are clear what to do next: figuring out the bank's form of organization, equity shares, head office and other issues.

At March's summit, the BRICS leaders also directed finance ministers to examine the feasibility and viability of the bank, set up a joint working group for further study, and report back to them before the next summit.

Experts at the forum clarified that the study by the working group was not as thorough as their discussion and that finance ministers usually focus on domestic issues.

The experts said in interviews that they believe a detailed plan that covers the issues mentioned above could be forwarded to the five governments in a year and that, if the plan is adopted, the governments will probably later set up a preparatory committee to kick off the bank's establishment.

Alternative to World Bank

The Delhi Declaration, issued after the BRICS summit, said the new development bank's aim was "mobilizing resources for infrastructure and sustainable development projects in BRICS and other emerging economies and developing countries, to supplement the existing efforts of multilateral and regional financial institutions for global growth and development."

When explaining why the BRICS countries need a development of their own, many experts found fault with the existing global financial institutions, in particular the World Bank, for not providing adequate capital for much-needed large infrastructure projects in BRICS and other developing countries.

Yaroslav Lisovolik, member of the Management Board of Deutsche Bank Russia, said the bulk of world savings and financial resources was concentrated in the developing world, but the pattern of the past decade had seen developing countries channelling a significant part of their reserves into the developed world.

For the BRICS, the creation of a development bank may support the institutional base of BRICS integration. For other developing nations, the bank could address one of the greatest reserves for growth in the world economy — the development of infrastructure, Lisovolik said.

Since the word BRIC was coined 10 years ago to group four leading emerging economies — later expanded to include South Africa — its member countries have consistently grown faster than developed nations. By the end of 2011, the BRICS account for 42% of the world's population, 20% of GDP, and 15% of international trade.

Despite that, experts at the meeting said BRICS countries did not have a corresponding role in global governance, particularly in a world financial system dominated by the United States and Europe.

BRICS and other developing countries have continuously called for reform of the World Bank and the International Monetary Fund. The Delhi Declaration said, "We welcome candidatures from the developing world for the position of the President of the World Bank. We reiterate that the Heads of the IMF and the World Bank be selected through an open and merit-based process."

"Furthermore, the new World Bank leadership must commit to transform the Bank into a multilateral institution that truly reflects the vision of all its members, including the governance structure that reflects current economic and political reality."

The developing world's reform efforts have not made much progress yet. Most noticeably, in 2011, developing countries failed to agree to a powerful alternative to Christine Lagarde, who eventually won the nomination to IMF chief.

Oliver Stuenkel, a professor of international relations from Brazil, said at the forum that the United States and Europe remained reluctant to fully include emerging powers into existing financial structures, and a BRICS development bank could indeed become an effective tool to serve emerging powers' needs, while bypassing restrictions and political pressures from US- and Europe-funded banks.

Forum delegates generally agreed the BRICS banks should be a supplement to the World Bank and other multilateral or bilateral financial institutions, and its creation was not intended to subvert the current Bretton Woods system. However, they said the BRICS bank could put pressures on the current system and compete with the World Bank.

Related Articles:

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BRICS nations thrash out World Bank alternative

Want China Times, Xinhua 2012-10-02

The 2012 BRICS Think-Tanks Forum in Chongqing, Sept. 26. (Photo/Xinhua)

Experts from five emerging world economic powers have told how a two-day forum for thinktanks this week reached consensus on creating a BRICS development bank designed to complement existing global financial institutions such as the World Bank.

Liu Youfa, deputy director of the China Institute of International Studies, said, "At the previous forum before the BRICS summit meeting in March, we were still discussing whether to create this bank, but now we are talking about how to create this bank."

The 2012 BRICS Think-Tanks Forum, held in southwest China's Chongqing municipality on Wednesday and Thursday, was part of efforts by the five countries — Brazil, Russia, India, China and South Africa — to create a BRICS development bank. Its establishment joined the official agenda when BRICS leaders agreed at the organization's summit in India's New Delhi in March to consider the possibility of creating a new development bank. They decided to convene expert meetings on the matter.

Being the first think-tank forum of its kind, briefed to advise governments of each BRICS country, experts at the event said in follow-up interviews that their agreement on the necessity and practicality of creating the bank would be presented to officials, who would advance the governments' decision making.

Ideas that carry weight

Liu Youfa said thinktanks are a preliminary step in government policy-making and the influence of their ideas in part depends on their feasibility and thoroughness.

According to Liu, the consensus from the forum has three main aspects: the need to build a legal framework, the need to establish a theoretical framework and the need to further discuss technical issues. The first of these concerns defining the legal status of the bank, the second was to explain its purpose, and the third was about how the bank should be run and capitalized and other specific matters.

Leonid Grigoriev, deputy director of the Russian Energy Agency and professor of the Higher School of Economics, said, "We generally agreed to create this bank. We scanned all the related issues to be further discussed and formed our opinions on them, issues such as the mode, the capitalization, the purpose of the bank.

"What we did is groundwork and solving technical issues. The rest is for political negotiations, but the governments need ideas in making decisions, especially those from other countries."

Such think-tank forums are usually held right before BRICS leader meetings, as they were before the summit in New Delhi this year and the one in Sanya, China, last year. Interviewed experts said much of the content of the reports formed at the two forums eventually appeared on the summit declarations.

According to HHS Viswanathan, a distinguished fellow of India's Observer Research Foundation, this week's event did not produce a report, but its discussion will surely be included in the report of the next forum, set to take place in South Africa before the next summit there in 2013.

Viswanathan told Xinhua that India expects to see the bank established as soon as possible. Although no timetable was set, a road map has become clear after this week's forum and all five sides are clear what to do next: figuring out the bank's form of organization, equity shares, head office and other issues.

At March's summit, the BRICS leaders also directed finance ministers to examine the feasibility and viability of the bank, set up a joint working group for further study, and report back to them before the next summit.

Experts at the forum clarified that the study by the working group was not as thorough as their discussion and that finance ministers usually focus on domestic issues.

The experts said in interviews that they believe a detailed plan that covers the issues mentioned above could be forwarded to the five governments in a year and that, if the plan is adopted, the governments will probably later set up a preparatory committee to kick off the bank's establishment.

Alternative to World Bank

The Delhi Declaration, issued after the BRICS summit, said the new development bank's aim was "mobilizing resources for infrastructure and sustainable development projects in BRICS and other emerging economies and developing countries, to supplement the existing efforts of multilateral and regional financial institutions for global growth and development."

When explaining why the BRICS countries need a development of their own, many experts found fault with the existing global financial institutions, in particular the World Bank, for not providing adequate capital for much-needed large infrastructure projects in BRICS and other developing countries.

Yaroslav Lisovolik, member of the Management Board of Deutsche Bank Russia, said the bulk of world savings and financial resources was concentrated in the developing world, but the pattern of the past decade had seen developing countries channelling a significant part of their reserves into the developed world.

For the BRICS, the creation of a development bank may support the institutional base of BRICS integration. For other developing nations, the bank could address one of the greatest reserves for growth in the world economy — the development of infrastructure, Lisovolik said.

Since the word BRIC was coined 10 years ago to group four leading emerging economies — later expanded to include South Africa — its member countries have consistently grown faster than developed nations. By the end of 2011, the BRICS account for 42% of the world's population, 20% of GDP, and 15% of international trade.

Despite that, experts at the meeting said BRICS countries did not have a corresponding role in global governance, particularly in a world financial system dominated by the United States and Europe.

BRICS and other developing countries have continuously called for reform of the World Bank and the International Monetary Fund. The Delhi Declaration said, "We welcome candidatures from the developing world for the position of the President of the World Bank. We reiterate that the Heads of the IMF and the World Bank be selected through an open and merit-based process."

"Furthermore, the new World Bank leadership must commit to transform the Bank into a multilateral institution that truly reflects the vision of all its members, including the governance structure that reflects current economic and political reality."

The developing world's reform efforts have not made much progress yet. Most noticeably, in 2011, developing countries failed to agree to a powerful alternative to Christine Lagarde, who eventually won the nomination to IMF chief.

Oliver Stuenkel, a professor of international relations from Brazil, said at the forum that the United States and Europe remained reluctant to fully include emerging powers into existing financial structures, and a BRICS development bank could indeed become an effective tool to serve emerging powers' needs, while bypassing restrictions and political pressures from US- and Europe-funded banks.

Forum delegates generally agreed the BRICS banks should be a supplement to the World Bank and other multilateral or bilateral financial institutions, and its creation was not intended to subvert the current Bretton Woods system. However, they said the BRICS bank could put pressures on the current system and compete with the World Bank.

Related Article:

Taiwan hopes to add RMB to foreign reserves within a year

Russia tightens laws on the right to protest

Deutsche Welle, 6 June 2012

Against the backdrop of new anti-Putin protests, the Russian parliament has tightened the laws on the right to assembly and protest. Opposition members and human rights activists have criticised the move.

The Russian Internet is seething. Whether on Facebook, Twitter or on the blogger platform LiveJournal, the Russian parliament's decision to tighten laws on the right to assembly is being hotly debated.

"It's just a pyrrhic victory," wrote the blogger Andrej Malgin on the website of the Kremlin-critical radio broadcaster Echo of Moscow. The implementation of the changes to law will allow the domestic political situation in Russia "to explode." The co-founder of the civil society group League of Voters, Dmitri Oreskin is of a similar opinion. "It's clear that those in power have no concrete answer to the call for fair trials and fair elections and are simply trying to silence protestors," Oreskin told DW.

Penalties softened

Putin is likely to sign the new
legislation on the right to assembly

The ruling party United Russia pushed through multiple changes to the law during a nine-hour marathon sitting in the State Duma, all of which relate to the right to assembly. Participators in public protests and other gatherings can now expect a fine of between 250 and 7000 euros ($310 - $8,760) if, for example, people are injured during a demonstration or damage to property occurs. Civil servants can expect fines double this amount. Businesses can also be fined up to 25,000 euros ($31,300).

As an alternative to the fines, community work is also being proposed in future. Whoever can't or won't pay the fine will be forced to work 200 hours for the community - for example, sweeping the streets of Moscow. The punishments were much harsher in the original proposals. But after a wave of criticism from the public, plans for higher fines were abandoned. A member of congress from United Russia, Saled Omarov, said that this indicated the "humane attitude" of those in power.

Criticism from the human rights council 

The State Duma passed the new
legislation unusually quickly

The State Duma appeared to be short on time. The changes to the law were pushed through unusually quickly, according to observers. The opposition party A Just Russia had already made a failed attempt to delay the process with hundreds of amendments. But the new laws were already signed off by the Federation Council - the upper house of the Russian parliament - just a few hours after the Duma had passed them.

At the last minute, the Human Rights Council tried to get the Russian President to stop the new laws beings passed. The Council leader Mikhail Fedotov wrote that the decision by the Duma was an "error." Tighter laws on the right to assembly would lead to "grave human rights abuses and the further entrenchment of existing conflicts within society." But the leader of the Federation Council, Valentina Matviyenko, said that "for some reason or other," Fedotov's letter had not been received on Wednesday.

The new laws will now be handed to President Vladimir Putin to sign. His press officer explained that Putin would check them in detail. In the opinion of the President, the rights and freedoms of citizens should not be limited, Putin's spokesman said.

Adding fuel to the fire 

There was a March of Millions at
the beginning of May

The tightening of laws on the right to assembly were agreed just a few days before a massive protest is due to take place in Moscow. The opposition has plans for a new "March of Millions" on Russia Day on June 12. It probably won't be millions, but it could well be tens of thousands.

The wave of protests, stemming from the allegations of fraud following the parliamentary elections in December 2011, has died down in the past few months. The tightening of laws relating to the right of assembly may well give protestors new incentive, according to observers in Russia. "People shouldn't be prevented from airing their views publically," the leader of the Left Front and protest organizer Sergei Udaltsov told DW. He's certain that the protests could well lead to mass unrest.

Moscowlawyer Vadim Prochorov, who repeatedly represents the opposition in court, believes that sections of the opposition movement could become radicalized. However, a section of the urban middle-classes could also retreat from the protests due to the threat of harsher penalties, he said.

Author: Roman Goncharenko / hw

Editor: Michael Lawton

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JM Coetzee and Nadine Gordimer among those who say bill is country's first attack on democracy since apartheid ended

guardian.co.uk, Stewart Maclean and David Smith in Johannesburg, Wednesday 6 June 2012

Nadine Gordimer: 'The intention of the bill is to aid the government in the
cover up of corruption.' Photograph: Tiziana Fabi/AFP/Getty Images

Secrecy laws planned for South Africa fundamentally threaten free speech and investigative journalism, and could have a chilling effect on the rest of Africa, a united front of human rights lawyers, newspaper editors and Nobel prize-winning writers have warned in interviews with the Guardian.

The protection of state information bill – dubbed the "secrecy bill" – envisages draconian penalties of up to 25 years in prison for whistleblowers and journalists who possess, leak or publish state secrets. It has been described as the first piece of legislation since the end of apartheid in 1994 to undermine South Africa's democracy.

Opponents of the bill fear that, with South Africa often regarded as a beacon of democracy and freedom on the continent, it could be used as an excuse by repressive African regimes for renewed crackdowns on journalists and activists.

Among those to attack the proposed legislation is JM Coetzee, the Nobel laureate and double Booker prize winner, making a rare public intervention.

"The legislation is transparently intended to make life difficult for pesky investigative journalists, and generally to save incompetent or corrupt bureaucrats from being embarrassed," Coetzee, born in Cape Town but now resident in Australia, said in an email. "Its sponsors have very likely been emboldened by the push that has taken place all over the western world since 2001 to erect a wall of secrecy around the more dubious actions of the state, and to make it a crime to breach that wall."

Coetzee joins fellow Nobel laureate Nadine Gordimer in calling global attention to measures they believe are calculated to help the government conceal evidence of corruption. Gordimer, whose books were banned under white minority rule, said: "It is quite obvious why this bill has come about – the government is making no attempt to hide the truth that its intention is to aid the cover-up of corruption.

"I wrote during the apartheid regime and I fought against the apartheid regime. Three of my books were banned. What we are doing now is going back to apartheid censorship under a new guise."

Today, South Africa boasts arguably the freest press in Africa, with no shortage of revelations about shady deals or satirical cartoons lampooning politicians' foibles. Freedom of expression, including freedom of the press and other media, has been protected under the constitution. But opponents of the bill believe the gains of the past 18 years are under threat and warn that the rest of the continent is watching. In neighbouring Zimbabwe, journalists continue to be harassed and arrested, while state broadcasters remain firmly under President Robert Mugabe's control.

Andrew Feinstein, a former African National Congress (ANC) MP whose exposure of a corrupt multibillion-pound arms deal might have resulted in his prosecution under the new laws, said: "I think that if this democracy continues to weaken – and I believe it has over the past few years – there is no doubt that that has a knock-on effect, because I think for many countries in Africa the comparison is always made with South Africa as this bright shining star of democracy. If that comparison no longer holds, it lets a lot of other countries off the hook in many ways."

Nic Dawes, editor of South Africa's Mail & Guardian newspaper, said: "We're already hearing from people elsewhere on the continent that their politicians and government officials are saying to them: 'You see, they're even doing this in South Africa, so there's no reason why we shouldn't be doing it here.'

"That's one of the most dangerous things about the bill: the excuse it will give to other countries elsewhere in the region, that had been opening up, to begin to tip in the other direction. It's really very disturbing."

South Africa, in turn, is feeling the repercussions of the phone hacking saga and debate over press regulation in Britain, Dawes added. "Almost every time that I have a discussion with someone about either the protection of state information bill or the ANC's proposals for statutory media regulation, the British phone hacking scandal is brought up as an example of why these kinds of moves are necessary."

The governing ANC defends the bill as a necessary update to laws made 30 year ago during apartheid. The party claims it will tighten national security and is not aimed at the media. The bill is under review by South Africa's parliament and, following pressure from activists, has already been subject to many revisions.

But hopes of a climbdown on the bill were dashed on Wednesday when the state security department rejected amendments proposed by the ANC. Dennis Dlomo, the department's acting director general, rejected calls to limit the power of the ministry to delegate classification powers, reduce penalties and limit the heavy onus placed on the accused.

Dlomo also shrugged off pressure from campaigners to include a public interest defence clause, saying: "They want a post-disclosure test of public interest. We want a pre-disclosure test. The last point on this is really simple. What if a whistleblower gives away top secret, legitimately classified information?"

In response Alf Lees, an MP for the main opposition party, the Democratic Alliance, asked: "The department surely does not want to create the impression that it wishes to protect alleged criminals or punish those who earnestly expose corrupt and criminal behaviour?"

Keeping up pressure for reform is vital, according the civil society alliance Right2Know, which has organised protests against the bill. Murray Hunter, one of its coordinators, said: "The secrecy bill has united people across the boundaries of space, race, class and ideology – from leafy suburbs to townships and informal settlements, shop floors and office blocks, university campuses and old-age homes. We can't stop pushing now; in fact, now's the time to start."

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CNN News, by Marilia Brocchetto and Maria P. White, March 18, 2012

STORY HIGHLIGHTS

• Among those asked to surrender their passports is an American
• "We will defend the company," a Chevron spokesman says
• The spill occurred in November off the coast of Rio de Janeiro
• A thin sheen is spotted in the area

(CNN) -- A federal court in Brazil has issued an order barring 17 executives from U.S. oil giant Chevron and Transocean Ltd. from leaving the country while it mulls criminal charges against them for an oil spill last year.

Among the 17 who were ordered Saturday by a federal judge in Rio de Janeiro to give up their passports is an American: George Buck, the chief operating officer of Chevron's Brazil division.

Kurt Glaubitz, a Chevron spokeman, said the company has not received a formal notification of the order.

"Any legal decision will be abided by the company and its employees," he said. "We will defend the company and its employees."

The oil spill occurred in deep water off the coast of Rio de Janeiro in November.

The next month, Brazilian federal prosecutors filed a suit against Chevron and oil rig operator Transocean for 20 billion reais, about $11 billion.

The civil suit also seeks to halt the operations in Brazil of the oil giant and its rig operator, according to federal prosecutors in the state of Rio de Janeiro.

"Chevron and Transocean were not able to control the damages caused by the spilling of almost 3,000 barrels of oil, which shows a lack of environmental planning and management by the companies," the prosecutors office said in a statement at the time.

The damages would be by far the largest sought so far by Brazilian officials for the November leak. However, experts on the Brazilian legal system are saying the suit is not likely to be won.

The spill was tiny when compared to the Deepwater Horizon disaster in 2010 when some 4 million barrels of oil leaked into the Gulf of Mexico off the U.S. coast.

But it drew attention to environmental risks as Brazil develops its so-called "subsalt region" in extreme depths off the coast of Rio.

It also heightened tensions with Chevron and other foreign companies operating in the country's oil sector.

On Friday, the Brazilian navy and Chevron officials spotted a thin sheen of oil in the same area where the spill occurred. The sheen extended about 1 kilometers (0.6 mile), Chevron said.

As a result, Chevron suspended production at the Frade offshore field -- about 60,000 barrels a day -- and was using special containment devices to capture the seep.

The company was studying the new seep and trying to determine the geological features in the area that would have caused it, Glaubitz said.

"Once we determine that we will re-start production," he said.

Brazil aims to be the world's largest fifth largest oil producer by 2020.

"By some estimates, the oil you recently discovered off the shores of Brazil could amount to twice the reserves we have in the United States," U.S. President Barack Obama said during a trip to Brasilia in March 2011.

Saying that the United States wants to help Brazil with technology and support to develop such oil reserves, Obama added America "could not be happier with the potential for a new, stable source of energy."

"And when you're ready to start selling, we want to be one of your best customers," he said.

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