tag:theconversation.com,2011:/id/topics/private-sector-11225/articlesPrivate sector – The Conversation2022-03-28T12:36:09Ztag:theconversation.com,2011:article/1790732022-03-28T12:36:09Z2022-03-28T12:36:09ZLocal governments are attractive targets for hackers and are ill-prepared<figure><img src="https://images.theconversation.com/files/454246/original/file-20220324-15-10z04q0.jpg?ixlib=rb-1.1.0&rect=0%2C7%2C5267%2C3587&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Hackers can disrupt local government services, like this library in Willmar, Texas. The town suffered a cyberattack in August 2019.</span> <span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/CyberAttacksCities/55163b1884304986b53bc189883efb6f/photo">AP Photo/Tony Gutierrez</a></span></figcaption></figure><p>President Joe Biden on March 21, 2022, warned that <a href="https://www.whitehouse.gov/briefing-room/statements-releases/2022/03/21/statement-by-president-biden-on-our-nations-cybersecurity/">Russian cyberattacks on U.S. targets are likely</a>, though the government has not identified a specific threat. Biden urged the private sector: “Harden your cyber defenses immediately.” </p>
<p>It is a costly fact of modern life that organizations from <a href="https://www.energy.gov/ceser/colonial-pipeline-cyber-incident">pipelines</a> and <a href="https://www.zdnet.com/article/ransomware-the-key-lesson-maersk-learned-from-battling-the-notpetya-attack/">shipping companies</a> to hospitals and any number of private companies are vulnerable to cyberattacks, and the threat of cyberattacks from Russia and other nations makes a bad situation worse. Individuals, too, <a href="https://theconversation.com/ukraine-conflict-brings-cybersecurity-risks-to-us-homes-businesses-177893">are at risk</a> from the current threat.</p>
<p>Local governments, like schools and hospitals, are particularly <a href="https://www.recordedfuture.com/state-local-government-ransomware-attacks/">enticing “soft targets</a>” – organizations that lack the resources to defend themselves against routine cyberattacks, let alone a lengthy cyber conflict. For those attacking such targets, the goal is not necessarily financial reward but disrupting society at the local level. </p>
<p>From issuing business licenses and building permits and collecting taxes to providing emergency services, clean water and waste disposal, the services provided by local governments entail an intimate and ongoing daily relationship with citizens and businesses alike. Disrupting their operations disrupts the heart of U.S. society by shaking confidence in local government and potentially endangering citizens. </p>
<h2>In the crosshairs</h2>
<p>Local governments have suffered <a href="https://theconversation.com/hackers-seek-ransoms-from-baltimore-and-communities-across-the-us-118089">successful cyberattacks</a> in recent years. These include attacks on targets ranging from <a href="https://www.nbcnews.com/news/us-news/hackers-have-taken-down-dozens-911-centers-why-it-so-n862206">911 call centers</a> to <a href="https://apnews.com/article/coronavirus-pandemic-technology-health-business-hacking-aecb37a35f3677e4f2cc62362a23defa">public school systems</a>. The consequences of a successful cyberattack against local government can be <a href="https://www.vox.com/recode/2019/5/21/18634505/baltimore-ransom-robbinhood-mayor-jack-young-hackers">devastating</a>.</p>
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<span class="caption">A cyberattack on the city of Baltimore disrupted municipal services for weeks in 2019.</span>
<span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/BaltimoreVirusAttack/14bfabf1b4aa444895f0e69a99cb48a4/photo">AP Photo/Patrick Semansky</a></span>
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<p>I and other researchers at University of Maryland, Baltimore County have studied the cybersecurity preparedness of the United States’ <a href="https://www.governing.com/archive/number-of-governments-by-state.html">over 90,000 local government entities</a>. As part of our analysis, working with the <a href="https://icma.org/">International City/County Management Association</a>, we polled local government chief security officers about their cybersecurity preparedness. The <a href="https://www.wiley.com/en-us/Cybersecurity+and+Local+Government-p-9781119788287">results</a> are both expected and alarming.</p>
<p>Among other things, the survey revealed that nearly one-third of U.S. local governments <a href="https://doi.org/10.1111/puar.13028">would be unable to tell</a> if they were under attack in cyberspace. This is unsettling; nearly one-third of local governments that did know whether they were under attack reported being attacked hourly, and nearly half at least daily. </p>
<h2>Ill-equipped</h2>
<p>Lack of sound IT practices, let alone effective cybersecurity measures, can make successful cyberattacks even more debilitating. Almost half of U.S. local governments reported that their IT policies and procedures were not in line with industry best practices. </p>
<p>In many ways, local governments are <a href="https://theconversation.com/equifax-breach-is-a-reminder-of-societys-larger-cybersecurity-problems-84034">no different</a> from private companies in terms of the cybersecurity threats, vulnerabilities and management problems they face. In addition to those shared cybersecurity challenges, where local governments particularly struggle is in hiring and retaining the necessary numbers of qualified IT and cybersecurity staff with wages and workplace cultures that can compare with those of the private sector or federal government.</p>
<p>Additionally, unlike private companies, local governments by their nature are limited by the need to comply with state policies, the political considerations of elected officials and the usual perils of government bureaucracy such as balancing public safety with the community’s needs and corporate interests. Challenges like these can hamper effective preparation for, and responses to, cybersecurity problems – especially when it comes to funding. In addition, much of the technology local communities rely on, such as power and water distribution, are subject to the dictates of the private sector, which has its own set of sometimes competing interests. </p>
<p>[<em><a href="https://memberservices.theconversation.com/newsletters?nl=science&source=inline-science-corona-important">Get The Conversation’s most important coronavirus headlines, weekly in a science newsletter</a></em>]</p>
<p>Large local governments are better positioned to address cybersecurity concerns than smaller local governments. Unfortunately, like other soft targets in cyberspace, small local governments are much more constrained. This places them at greater risk of successful cyberattacks, including attacks that <a href="https://www.theguardian.com/technology/2017/oct/27/nhs-could-have-avoided-wannacry-hack-basic-it-security-national-audit-office">otherwise might have been prevented</a>. But the necessary, best-practice cybersecurity improvements that smaller cities and towns need often compete with the many other demands on a local community’s limited funds and staff attention.</p>
<h2>Getting the basics right</h2>
<p>Whether they are victimized by a war on the other side of the world, a hacktivist group promoting its <a href="https://www.theguardian.com/technology/2012/nov/22/anonymous-cyber-attacks-paypal-court">message</a> or a criminal group trying to extort payment, local governments in the U.S. are enticing targets. Artificial intelligence hacking tools and vulnerabilities introduced by the spread of smart devices and the growing interest in creating “<a href="https://www.nationalgeographic.org/article/smart-cities/">smart cities</a>” put local governments even more at risk.</p>
<p>There’s no quick or foolproof fix to eliminate all cybersecurity problems, but one of the most important steps local governments can take is clear: Implement basic cybersecurity. Emulating the National Institute of Standards and Technology’s <a href="https://www.nist.gov/cyberframework">national cybersecurity framework</a> or other industry accepted best practices is a good start. </p>
<p>I believe government officials, especially at the local level, should develop and apply the necessary resources and innovative technologies and practices to manage their cybersecurity risks effectively. Otherwise, they should be prepared to face the technical, financial and political consequences of failing to do so.</p><img src="https://counter.theconversation.com/content/179073/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Richard Forno has received research funding related to cybersecurity from the National Science Foundation (NSF) and the Department of Defense (DOD) during his academic career, and sits on the advisory board of BlindHash, a cybersecurity startup focusing on remedying the password problem. He is the co-author of Cybersecurity and Local Governments (2022, Wiley).</span></em></p>With Russia poised to launch cyberattacks on US targets, many local governments find themselves without the staff or resources to even recognize when they’re under attack.Richard Forno, Principal Lecturer in Computer Science and Electrical Engineering, University of Maryland, Baltimore CountyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1717582021-11-18T13:59:55Z2021-11-18T13:59:55ZHow the private sector can boost COVID vaccination in Nigeria<figure><img src="https://images.theconversation.com/files/431913/original/file-20211115-15-tq6cio.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The Lagos State government recently approved some private health facilities to administer COVID-19 vaccines in the state</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/medic-administers-a-dose-of-the-moderna-covid-19-news-photo/1234864610?adppopup=true">Olukayode Jaiyeola/NurPhoto via Getty Images</a></span></figcaption></figure><p><em>Nigeria’s Lagos State government recently <a href="https://www.premiumtimesng.com/news/headlines/492149-covid-19-vaccination-to-cost-n6000-in-lagos-as-state-owned-centre-charges-n350000-per-day-for-treatment.html">announced</a> that private health facilities will start administering COVID-19 vaccines within the state. This is part of its effort to accelerate vaccine rollout beyond the 1.2 million doses that had been administered in the state by 27 October. This, <a href="https://www.thecable.ng/covid-19-lagos-vaccination-rate-far-below-who-recommendation-says-sanwo-olu">the state governor admitted</a>, is below the <a href="https://www.who.int/news/item/07-10-2021-who-un-set-out-steps-to-meet-world-covid-vaccination-targets">World Health Organization (WHO) target</a> of 40% of the population of every country by the end of 2021. The private facilities will charge fees to individual citizens for their services. Virologist Oyewale Tomori spoke to The Conversation Africa about private sector involvement in the fight against the pandemic.</em> </p>
<p><strong>How has the government been managing the COVID-19 vaccine roll out so far?</strong></p>
<p>As at 18 November, Nigeria has <a href="https://graphics.reuters.com/world-coronavirus-tracker-and-maps/countries-and-territories/nigeria/">administered</a> at least 9,017,951 doses of COVID vaccines. Assuming every person needs 2 doses, that’s enough to have vaccinated about 2.2% of the country’s population. AstraZeneca/Oxford, Janssen and Moderna are <a href="https://www.afro.who.int/news/nigerians-awaiting-second-dose-astrazeneca-vaccine-heave-sigh-relief-soon">the vaccines</a> Nigeria is administering. The government is doing its best under the circumstances. We still have an insufficient, inadequate, inconsistent and unpredictable supply of vaccines because Nigeria was almost fully dependent on supply through the <a href="https://www.gavi.org/covax-facility">COVAX facility</a>, a worldwide initiative aimed at equitable access to COVID-19 vaccines. It has made limited efforts in procuring supply through other sources. You can only roll out what you have, and we do not have enough vaccines. This Lagos State initiative will still depend on the vaccines procured by the government. </p>
<p><strong>What role has the private sector played in this?</strong></p>
<p>The private sector - principally private faith-based health facilities - has been involved in administering polio, measles and yellow fever vaccines. Given the high level of efficiency associated with the private sector, their involvement in COVID-19 vaccination should enhance government efforts to ensure rapid and efficient rollout of available vaccines. In <a href="https://www.cdc.gov/vaccines/covid-19/retail-pharmacy-program/index.html">the USA</a> and many European countries, private sector pharmacists are actively involved in COVID-19 vaccination. They play major roles in the delivery and administration of vaccines to the public.
One hopes this planned increased involvement in COVID-19 vaccine delivery by the private sector will raise the level of public trust in the current and future vaccination exercises. </p>
<p><strong>What are the other opportunities for private sector involvement?</strong></p>
<p>The <a href="https://www.premiumtimesng.com/news/headlines/492149-covid-19-vaccination-to-cost-n6000-in-lagos-as-state-owned-centre-charges-n350000-per-day-for-treatment.html">goal</a> is to vaccinate four million residents by 25 December in the approved 400 private health facilities. If this experiment succeeds, we can get the private sector more involved in providing other vaccines, especially the routine vaccines like measles and diptheria-tetanus-pertussis. </p>
<p>While there is no law preventing the private sector from administering vaccines, I think there is a government reluctance in fully involving the private sector in mass and routine vaccinations. The reluctance has to do with some unscrupulous elements in the private sector. They are usually interested in profits alone, unlike faith-based organisations. I suspect this is why only one state is allowing the private sector at present. </p>
<p><strong>What are the challenges in involving the private sector?</strong></p>
<p>The private sector will <a href="https://www.premiumtimesng.com/news/headlines/492149-covid-19-vaccination-to-cost-n6000-in-lagos-as-state-owned-centre-charges-n350000-per-day-for-treatment.html">charge some fees</a> administration costs - for the extra services they plan to offer during the vaccination exercises. Though sometimes these services are better than those offered in public facilities. Possibly because of better environment, prompt personal attention and shorter waiting time. It is important to provide clear communication and appropriate information that the charges are for the extra services rendered and not payment for the vaccines.</p>
<p>Secondly, effectively monitoring the performance and service delivery by the private sector might be a challenge. And having insufficient vaccine doses to go round might be another. </p>
<p>Starting with a few private facilities that can be monitored by both the government and the private sector itself will be the right way to go. More facilities can then be included as time goes on and when more vaccines are available. </p>
<p>The vaccines are to be administered by the approved 400 private health facilities, as <a href="https://www.premiumtimesng.com/news/headlines/492149-covid-19-vaccination-to-cost-n6000-in-lagos-as-state-owned-centre-charges-n350000-per-day-for-treatment.html">the governor said</a>. Currently, <a href="https://lagosstate.gov.ng/blog/2017/07/05/lagos-and-equitable-healthcare-services/">there are</a> 26 registered general hospitals, 256 public healthcare centres, 2,886 private hospitals or specialist clinics and laboratories or diagnostic centres in addition to an estimated 160 traditional medicine clinics in the state. So starting with 400 that meet the criteria looks like starting small for easier monitoring and evaluation. </p>
<p><strong>How should the government address these challenges?</strong></p>
<p>Government, in consultation with the private sector, should ensure that the guidelines and standards of operation for both the private and public sectors are effectively implemented and their implementation monitored as the performance of private sector health facilities are evaluated.</p>
<p>The government should also provide adequate vaccine doses and sufficient number of syringes and other requirements for administering the vaccines.</p><img src="https://counter.theconversation.com/content/171758/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Oyewale Tomori does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Properly engaged and monitored, Nigeria’s private sector can do more in COVID vaccination exercise.Oyewale Tomori, Fellow, Nigerian Academy of ScienceLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1661002021-08-27T01:16:04Z2021-08-27T01:16:04ZA year after the Victoria hotel quarantine inquiry, one significant question remains unanswered<p>This time last year, the nation was riveted by the <a href="https://www.quarantineinquiry.vic.gov.au/">Victorian COVID-19 Hotel Quarantine Inquiry</a>, launched to determine the cause of the state’s disastrous second COVID wave. The outbreak led to 768 deaths and a 111-day lockdown of Melbourne. </p>
<p>It didn’t take long before a problem revealed itself. It was not at all clear who made the decision to “contract out” the hotel quarantine enforcement to private security providers, which is what led to the virus seeping into the community.</p>
<p>A long line of senior political and governmental officials denied any association with it. The inquiry’s chair, Jennifer Coate, came to describe the decision as an “orphan”. </p>
<p>We did <a href="https://theconversation.com/hotel-quarantine-interim-report-recommends-changes-but-accountability-questions-remain-147094">learn what went wrong</a> from an infection control standpoint and reset the hotel quarantine system to be safer. But now, the debate has shifted to whether we should have hotel quarantine at all. </p>
<p>The question the inquiry left behind is a different one, and it’s not only about Victoria. Why are governments across Australia so reliant on private contractors in the first place?</p>
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Read more:
<a href="https://theconversation.com/victorias-hotel-quarantine-overhaul-is-a-step-in-the-right-direction-but-issues-remain-151101">Victoria’s hotel quarantine overhaul is a step in the right direction, but issues remain</a>
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<h2>Contracting out is standard practice</h2>
<p>“Contracting out” government functions for delivery by the private sector has become the standard way of doing things across all levels of government in Australia. </p>
<p>Indeed, it has become so standard that decision-makers might not see the matter as involving choice at all. It’s just how things are done. </p>
<p><a href="https://www.griffithreview.com/articles/orphaned-responsibility/">Elsewhere</a>, I have said more about the disintegrating effects this situation can have on the principles of responsible government, around which Australia’s constitutional systems are built. The entrenched status of “contracting out” means the potential for more “orphan” decisions can occur at any time and place.</p>
<p>There’s a long story behind how governments across Australia, of all political stripes, have arrived at a place where everything from defence security to disability services (and much in between) is performed by private contractors. </p>
<p>Yet, justifications for why outsourcing is used to perform the work of government still tend to be based more on assertions than arguments. </p>
<p>One of these assertions is that the private sector is more “efficient” than government. But the reality is outsourcing government service delivery doesn’t necessarily cost less. It just means less is spent on public employees.</p>
<p>But there’s more to it than contestable claims about efficiency. The functions government must perform and the services the private sector can provide are not necessarily the same thing. </p>
<p>For example, was the choice of outsourced “security services” for the hotel quarantine program led by a careful understanding of the nature of quarantine, or by what the private sector could deliver? Too little thought is given to what might get lost in translation.</p>
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Read more:
<a href="https://theconversation.com/hotel-quarantine-interim-report-recommends-changes-but-accountability-questions-remain-147094">Hotel quarantine interim report recommends changes but accountability questions remain</a>
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<h2>Why nobody is looking at this issue</h2>
<p>All of this requires a conversation about the appropriateness of “contracting out” in different contexts that we’ve basically never had. Outsourcing has rarely, if ever, been the subject of significant parliamentary debate in any Australian jurisdiction. </p>
<p>Indeed, sometimes the only way the public finds out about what’s going on with government contracting – in the many forms it might take – is through inquiries launched to investigate something that has gone wrong. </p>
<p>Ombudsmen and auditors-general can be empowered to look at particular instances of outsourcing and make recommendations in relation to them. We might occasionally also see a specific contract questioned in a Senate Estimates hearing. </p>
<p>But it’s important to highlight these “watchdogs” are not there to tell governments how to govern us. Opportunities to have that say are thin on the ground. </p>
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Read more:
<a href="https://theconversation.com/melbournes-hotel-quarantine-bungle-is-disappointing-but-not-surprising-it-was-overseen-by-a-flawed-security-industry-142044">Melbourne's hotel quarantine bungle is disappointing but not surprising. It was overseen by a flawed security industry</a>
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<p>A good illustration of this is the <a href="https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Legal_and_Constitutional_Affairs/ServiceDelivery">2019 Senate Legal and Constitutional Affairs Committee inquiry</a> into the impact of changes to models of government service delivery (including outsourcing). There was little in its terms of reference to suggest it sought views on whether we should be doing these things at all. The changes were going to happen, the inquiry was about their likely “impact”. </p>
<p>Perhaps we’ll also need an inquiry into the vaccine rollout to find out about the contractual arrangements there, given the Commonwealth Department of Health has argued multiple exemptions – including “national security” – in response to freedom of information requests about the agreements in place. </p>
<p>Once, there was an independent body called the Administrative Review Council that kept an eye on the “big picture” developments in government administration. Well ahead of the curve, it published a <a href="https://www.ag.gov.au/legal-system/publications/report-42-contracting-out-government-services-1998">report</a> in 1998 on the possible implications of Australia’s fulsome embrace of “contracting out” for those directly affected by outsourced government service delivery. </p>
<p>The ARC pledged to revisit this question if there was ever a need. But it was effectively abolished before it could do so. It was a casualty of the 2015 “smaller government” reforms that dismantled multiple government agencies and radically reduced the size of the public service, leading to even more outsourcing to private contractors. </p>
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<p>The ARC’s functions were consolidated into the attorney-general’s department, to the extent that they continue to be performed at all.</p>
<p>If the public wants a discussion about how governments govern us - that is not led by governments themselves - it is up to us to pursue it. The silver lining is we at least get to set the terms of the conversation.</p>
<p>While we work out those terms, it would be unwise to relegate the Victorian COVID-19 Hotel Quarantine Inquiry to history. There’s still a whole lot we can learn from it.</p>
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<p><em>This piece is based on a <a href="https://www.griffithreview.com/articles/orphaned-responsibility/">longer essay</a> that appeared in Griffith Review 73, Hey Utopia!</em></p><img src="https://counter.theconversation.com/content/166100/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Kristen Rundle does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>‘Contracting out’ government functions for delivery by the private sector has become the standard way of doing things across all levels of government in Australia.Kristen Rundle, Professor of Law, The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1537862021-02-01T18:57:48Z2021-02-01T18:57:48ZTaking care of business: the private sector is waking up to nature’s value<figure><img src="https://images.theconversation.com/files/381582/original/file-20210201-23-1gj3vjw.jpg?ixlib=rb-1.1.0&rect=11%2C0%2C2485%2C1661&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>For many businesses, climate change is an <a href="https://www.zurich.com/en/knowledge/topics/global-risks/future-proof-your-business-against-climate-change-related-risks">existential threat</a>. Extreme weather can disrupt operations and supply chains, spelling disaster for both small vendors and global corporations. It also leaves investment firms dangerously exposed.</p>
<p>Businesses <a href="https://www.theguardian.com/australia-news/2020/oct/12/net-zero-emissions-target-for-australia-could-launch-63bn-investment-boom">increasingly</a> recognise climate change as a significant financial risk. Awareness of nature-related financial risks, such as biodiversity loss, is <a href="https://impakter.com/nature-risks-are-financial-risks/">still emerging</a>. </p>
<p>My work examines the growth of private sector investment in biodiversity and natural capital. I believe now is a good time to consider questions such as: what are businesses doing, and not doing, about climate change and environmental destruction? And what role should government play?</p>
<p>Research clearly shows humanity is <a href="https://theconversation.com/worried-about-earths-future-well-the-outlook-is-worse-than-even-scientists-can-grasp-153091">severely damaging</a> Earth’s ability to support life. But there is hope, including a change in government in the United States, which has brought new momentum to tackling the world’s environmental problems.</p>
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<img alt="Koala lies dead after a bushfire tears through forest" src="https://images.theconversation.com/files/381583/original/file-20210201-19-7zyfzd.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/381583/original/file-20210201-19-7zyfzd.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/381583/original/file-20210201-19-7zyfzd.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/381583/original/file-20210201-19-7zyfzd.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/381583/original/file-20210201-19-7zyfzd.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/381583/original/file-20210201-19-7zyfzd.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/381583/original/file-20210201-19-7zyfzd.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Now’s a good time to talk about how humans are wrecking the planet.</span>
<span class="attribution"><span class="source">Daniel Mariuz/AAP</span></span>
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</figure>
<h2>Poisoning the well</h2>
<p>An <a href="https://www.climatecollege.unimelb.edu.au/australias-paris-agreement-pathways">expert report</a> released last week warned Australia must cut emissions by 50% or more in the next decade if it’s to meet the Paris Agreement goals. Meeting this challenge will require everyone to do their bit.</p>
<p>Climate change is a <a href="https://www.climatecouncil.org.au/resources/compound-costs-how-climate-change-damages-australias-economy/">major threat</a> to Australia’s financial security, and businesses must be among those leading on emissions reduction. Unfortunately, that’s often not the case.</p>
<p>The finance sector, for example, contributes <a href="https://www.ucl.ac.uk/bartlett/public-purpose/sites/public-purpose/files/final_iipp-wp2020-09-kedward_et_al_nature-related_finance_edited_15_sept.pdf">substantially</a> to climate change and biodiversity loss. It does this by providing loans, insurance or investment for business activities that produce greenhouse gas emissions or otherwise harm nature. </p>
<p>In fact, a <a href="https://www.theguardian.com/australia-news/2020/jul/08/australian-banks-undermining-paris-agreement-with-7bn-in-fossil-fuel-loans">report last year</a> found Australia’s big four banks loaned A$7 billion to 33 fossil fuel projects in the three years to 2019. </p>
<figure class="align-center ">
<img alt="Protest banner on coal pile at terminal" src="https://images.theconversation.com/files/381588/original/file-20210201-19-zuz14s.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/381588/original/file-20210201-19-zuz14s.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/381588/original/file-20210201-19-zuz14s.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/381588/original/file-20210201-19-zuz14s.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/381588/original/file-20210201-19-zuz14s.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/381588/original/file-20210201-19-zuz14s.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/381588/original/file-20210201-19-zuz14s.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Australia’s big banks have been criticised for investing in fossil fuels.</span>
<span class="attribution"><span class="source">Dean Sewell/Greenpeace</span></span>
</figcaption>
</figure>
<h2>A pushback for nature</h2>
<p>Promisingly, there’s a <a href="https://www.unsw.adfa.edu.au/why-ignoring-biodiversity-loss-increasingly-risky-business-1">growing push</a> from some businesses, including in the finance sector, to protect the climate and nature. </p>
<p>Late last year, Australian <a href="https://www.afr.com/companies/financial-services/banks-publish-disclosure-rules-for-extreme-climate-risk-20200911-p55uoc">banks and insurers</a> published the nation’s first comprehensive climate change <a href="https://www.cmsi.org.au/reports">reporting framework</a>. And the recently launched <a href="https://climateleague.org.au/">Climate League 2030</a> initiative, representing 17 of Australia’s institutional investors with A$890 billion in combined assets, aims to act on deeper emissions reductions.</p>
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Read more:
<a href="https://theconversation.com/worried-about-earths-future-well-the-outlook-is-worse-than-even-scientists-can-grasp-153091">Worried about Earth's future? Well, the outlook is worse than even scientists can grasp</a>
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<p>Some companies are starting to put <a href="https://www.theguardian.com/australia-news/2020/aug/27/joint-venture-looks-to-invest-billions-in-natural-capital-projects-to-help-combat-climate-change">serious money on the table</a>.
In August last year, global financial services giant HSBC and climate change advisory firm Pollination announced a joint asset management venture focused on “natural capital”. The venture <a href="https://www.reuters.com/article/us-climate-change-hsbc-pollination-idUSKBN25M1IY">aims to raise</a> up to A$1 billion for its first fund.</p>
<p>Globally too, investors are starting to <a href="https://www.newstatesman.com/business/sustainability/2020/12/businesses-are-realising-huge-cost-nature-loss">wake up</a> to the cost of nature loss. Last month, investors representing <a href="https://www.bloomberg.com/news/articles/2021-01-10/hsbc-shareholders-ask-bank-to-cut-fossil-fuel-lending-exposure">US$2.4 trillion</a> (A$3.14 trillion) in assets asked HSBC to set emissions reduction targets in line with the Paris Agreement. And in September last year, investor groups worth over $US103 trillion (A$135 trillion) issued a <a href="https://igcc.org.au/investor-groups-call-on-companies-to-reflect-climate-related-risks-in-financial-reporting/">global call</a> for companies to accurately disclose climate risks in financial reporting.</p>
<figure class="align-center ">
<img alt="HSBC sign lit at night" src="https://images.theconversation.com/files/381585/original/file-20210201-23-pkhpn7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/381585/original/file-20210201-23-pkhpn7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=398&fit=crop&dpr=1 600w, https://images.theconversation.com/files/381585/original/file-20210201-23-pkhpn7.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=398&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/381585/original/file-20210201-23-pkhpn7.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=398&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/381585/original/file-20210201-23-pkhpn7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=501&fit=crop&dpr=1 754w, https://images.theconversation.com/files/381585/original/file-20210201-23-pkhpn7.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=501&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/381585/original/file-20210201-23-pkhpn7.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=501&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">HSBC’s investors are pushing for stronger climate action.</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
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</figure>
<p>Climate change is not the only threat to global financial security. Nature loss – the destruction of plants, animals and ecosystems – poses another existential threat. Last year, the World Economic Forum <a href="https://www.weforum.org/press/2020/01/half-of-world-s-gdp-moderately-or-highly-dependent-on-nature-says-new-report/">reported</a> more than half of the global economy relies on goods and services nature provides such as pollination, water and disease control.</p>
<p><a href="https://tnfd.info/">Efforts</a> by the finance sector to address the risks associated with biodiversity loss are in their infancy, but will benefit from work already done on understanding <a href="https://www.fsb-tcfd.org/">climate risk</a> </p>
<p>Of course, acknowledging and disclosing climate- and nature-related financial risks is just one step. Substantial action is also needed. </p>
<p>Businesses can merely “greenwash” their image – presenting to the public as environmentally responsible while acting otherwise. For example, a <a href="https://portfolio.earth/campaigns/bankrolling-extinction/">report</a> showed in 2019, many major global banks that <a href="https://www.reuters.com/article/us-climate-change-biodiversity-banks/bank-loans-scrutinized-for-harm-to-wildlife-as-well-as-climate-idUSKBN27D001?_lrsc=7a3de703-09e2-4d22-b9d2-e46aa43ccece&cmp=sm-93">pledged action</a> on climate change and biodiversity loss were also investing in activities harmful to biodiversity.</p>
<figure class="align-center ">
<img alt="Logs felled in timber operation" src="https://images.theconversation.com/files/381587/original/file-20210201-13-1x50rt8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/381587/original/file-20210201-13-1x50rt8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/381587/original/file-20210201-13-1x50rt8.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/381587/original/file-20210201-13-1x50rt8.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/381587/original/file-20210201-13-1x50rt8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/381587/original/file-20210201-13-1x50rt8.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/381587/original/file-20210201-13-1x50rt8.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The global economy depends on the goods and services nature provides.</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
</figcaption>
</figure>
<h2>Getting it right</h2>
<p>In the financial sector and beyond, there are risks to consider as the <a href="https://www.sciencedirect.com/science/article/abs/pii/S0921800917312946">private sector</a> takes a larger role in environmental action.</p>
<p>Investors will increasingly seek to <a href="https://reneweconomy.com.au/prince-charles-launches-new-natural-capital-alliance-to-mobilise-us10-billion/">direct capital</a> to projects that help to reduce their exposure to climate- and nature-related risks, such <a href="https://www.conservationfinancenetwork.org/2020/01/27/mainstreaming-blue-carbon-to-finance-coastal-resilience">ecosystem restoration</a> and <a href="https://www.philanthropy.org.au/stories-Biodiversity-and-Impact-Investing">sustainable agriculture</a>. </p>
<p>Many of these projects can help to restore biodiversity, sequester carbon and deliver <a href="https://www.qld.gov.au/environment/climate/climate-change/land-restoration-fund/co-benefits/overview">benefits</a> for local communities. But it’s crucial to remember that private sector investment is motivated, <a href="https://responsibleinvestment.org/what-is-ri/ri-explained/">at least in part</a>, by the expectation of a <a href="https://hbr.org/2020/07/impact-investing-wont-save-capitalism">positive financial return</a>. </p>
<p>Projects that are highly risky or slow to mature, such as restoring highly threatened species or ecosystems, might struggle to attract finance. For example, the federal government’s Threatened Species <a href="https://www.environment.gov.au/biodiversity/threatened/publications/threatened-species-prospectus">prospectus</a> reportedly attracted <a href="https://theconversation.com/its-not-too-late-to-save-them-5-ways-to-improve-the-governments-plan-to-protect-threatened-wildlife-147669">little</a> private sector interest. </p>
<p>That means governments and philanthropic donors still have a <a href="https://www.natureaustralia.org.au/what-we-do/our-insights/perspectives/closing-nature-funding-gap-global-biodiversity-finance/#:%7E:text=To%20reverse%20the%20decline%20in,US%24824%20billion%20per%20year.&text=We%20could%20close%20the%20nature,a%20year%2C%20or%20soft%20drinks.">crucial</a> role in the funding of research and pilot projects.</p>
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Read more:
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<p>Governments must also better align policies to improve business and investor confidence. It is nonsensical that various Australian governments <a href="https://www.nespthreatenedspecies.edu.au/media/gtpffoch/2018_evans_effective-incentives-for-reforestation-lessons-from-australia-s-carbon-farming-policies.pdf">send competing signals</a> about whether, say, forests should be <a href="https://theconversation.com/australia-needs-better-policy-to-end-the-alarming-increase-in-land-clearing-63507">cleared</a> or <a href="https://theconversation.com/farming-carbon-can-be-a-win-for-wildlife-if-the-price-is-right-40088">restored</a>. And at the federal level, biodiversity loss and climate change come under separate portfolios, despite the issues being inextricably linked. </p>
<p>Private-sector investment could deliver huge benefits for the environment, but these outcomes must be real and clearly demonstrated. Investors want the benefits <a href="https://www.pionline.com/esg/investors-urge-development-biodiversity-metrics">measured and reported</a>, but good data is often lacking.</p>
<p>Too-simple metrics, such as the <a href="https://openlettertowaldronetal.wordpress.com/">area of land protected</a>, don’t tell the <a href="https://www.newscientist.com/article/dn26552-conservation-report-reinforces-fears-over-paper-parks/">whole story</a>. They may not reflect harm to <a href="https://www.nature.com/articles/s41893-019-0423-y">local and Indigenous communities</a>, or whether the land is well managed. </p>
<p>Finally, as the private sector becomes more aware of nature and climate-related risks, a range of approaches to addressing this will proliferate. But efforts must be <a href="https://www.globalcanopy.org/publications/the-case-for-a-tnfd">harmonised</a> to minimise confusion and complexity in the marketplace. Governments must <a href="https://www.theguardian.com/commentisfree/2020/jul/21/the-magic-of-the-market-wont-help-the-environment-unless-government-also-takes-responsibility?CMP=share_btn_tw">provide leadership</a> to make this a smooth process.</p>
<figure class="align-center ">
<img alt="Swift parrot flies through treetops" src="https://images.theconversation.com/files/381589/original/file-20210201-19-lul84o.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/381589/original/file-20210201-19-lul84o.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=338&fit=crop&dpr=1 600w, https://images.theconversation.com/files/381589/original/file-20210201-19-lul84o.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=338&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/381589/original/file-20210201-19-lul84o.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=338&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/381589/original/file-20210201-19-lul84o.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=424&fit=crop&dpr=1 754w, https://images.theconversation.com/files/381589/original/file-20210201-19-lul84o.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=424&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/381589/original/file-20210201-19-lul84o.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=424&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Threatened species habitat restoration may struggle to attract private sector funding.</span>
<span class="attribution"><span class="source">Eric Woehler</span></span>
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</figure>
<h2>The power to change</h2>
<p>Last week, a <a href="https://epbcactreview.environment.gov.au/resources/final-report">major report</a> was released highlighting grave failures in Australia’s environmental laws. The government’s <a href="https://theconversation.com/a-major-report-excoriated-australias-environment-laws-sussan-leys-response-is-confused-and-risky-154254">response</a> suggested it is not taking the threat seriously. </p>
<p>Businesses and governments <a href="https://www.abc.net.au/radionational/programs/latenightlive/corporate-power-in-australia:-do-the-1-rule/11950726">hold disproportionate power</a> that can be used to either delay or accelerate transformative change.</p>
<p>And although many businesses wield <a href="https://grattan.edu.au/report/whos-in-the-room/">undue influence</a> on government decisions, it doesn’t have to be this way. </p>
<p>By working together and seizing the many opportunities that present, business and government can help arrest climate change and nature loss, and contribute to a safer, more liveable planet for all.</p>
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Read more:
<a href="https://theconversation.com/you-cant-talk-about-disaster-risk-reduction-without-talking-about-inequality-153189">You can't talk about disaster risk reduction without talking about inequality</a>
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<img src="https://counter.theconversation.com/content/153786/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Megan C Evans receives funding from the Australian Research Council as part of a Discovery Early Career Research Award. Previously she has been funded by the National Environmental Science Program's Threatened Species Recovery Hub.</span></em></p>There’s a growing push among businesses, including the finance sector, to protect the climate and nature.Megan C Evans, Lecturer and ARC DECRA Fellow, UNSW SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1544282021-02-01T18:33:18Z2021-02-01T18:33:18ZWhy Indian farmers are so angry about the Modi government’s agricultural reforms<p>India’s farmers have been protesting since the autumn, with a growing intensity that culminated in a violent <a href="https://edition.cnn.com/2021/01/26/asia/india-republic-day-farmers-protests-intl-hnk/index.html">breaching of barriers in the Red Fort in Delhi</a> during India’s Republic Day celebrations on January 26.</p>
<p>The protests were spurred by the passing of a set of <a href="https://theconversation.com/india-striking-farmers-close-down-delhi-in-a-show-of-popular-democracy-151925">agricultural reform bills</a> in parliament in September 2020 that aimed to fundamentally transform the way in which farm produce is marketed in the country. India’s farming population of more than 100 million is comprised largely of small farmers who fear that the reforms will add considerable uncertainty to their already meagre livelihoods.</p>
<p>India has historically had a <a href="https://www.jstor.org/stable/pdf/41720551.pdf?casa_token=taRUlNeYO5wAAAAA:QBl93dqlpgRjAMh2lMkRtHFYDXT3F5KY2Mov54G7B0kPJlJrnOWI9eTz3m6FyV3GrhrofLGIt03wm5daqVxNPGjvfhXk8uCUfklk8V8_LYAiFMUb598g">strongly regulated marketing system</a> for agricultural produce, originally devised to enable farmers to sell to the market but at the same time to protect the small, often poor farmers from the vagaries of the open market.</p>
<p>Such regulation is a state-level responsibility in India’s federal governance structure. Accordingly, each state devised a system wherein the initial purchase and sale of agricultural products had to be conducted at state-regulated wholesale markets called <em>mandis</em>. These <em>mandis</em> had licensed middlemen and traders who could be regulated by the government to ensure that farmers were not exploited.</p>
<p>The broader legislative framework also acted to limit private sector storage of key food products (to prevent hoarding) and discourage direct contracting between private agribusiness and farmers. There were important variations in regulations across states, and legislation has changed over time, but the broad intention was to protect farmers by limiting the power of agribusiness.</p>
<p>However, the regulatory system did not always work as intended in practice, and deficiencies became apparent over time. Despite the idea of monitoring, traders and middlemen in wholesale markets were found to often collude to the disadvantage of the farmer. Pricing practices were opaque and farmers too often received a very low share of the price. </p>
<p>Variations in regulations across states also hindered interstate trade opportunities. As the Indian economy was liberalised, private enterprise and agribusiness was growing, but found itself shackled by the regulatory framework. Many commentators agreed that reform was needed.</p>
<h2>The three bills</h2>
<p>A set of <a href="https://www.theindiaforum.in/article/three-farm-bills">three complementary bills</a> was rushed through parliament by the Modi government in September 2020. The first seeks to erode the role of the regulated <em>mandis</em> in marketing farm produce by allowing parallel trade, including electronic trading, outside the mandi system within and across states.</p>
<p>The second loosens the restrictions on private sector storage and stocking of produce, allowing restrictions only in case of strong price spikes when hoarding becomes a strong concern.</p>
<p>The third bill sets up a framework for direct formal contracting between farmers and the agribusinesses that buy from them.</p>
<p>Taken together, these bills are a radical departure from the tightly regulated system for marketing agricultural produce that existed before. The bills would curb the regulatory power of states, allowing the central government to set the agenda more firmly.</p>
<p>The reforms provide a significant fillip to the operation of private enterprise, especially large agribusiness in India. The expectation of the government is that the strengthening of these parallel market channels will create competition for the farmers’ produce from both within and across states, leading to improved remuneration for farmers.</p>
<h2>What are the farmers unhappy about?</h2>
<p>Although the reforms are ostensibly about empowering farmers, there is deep concern that they will largely boost private agribusiness to the detriment of the livelihoods of small farmers. The bills propose new market channels that are largely unregulated, potentially leaving farmers at the mercy of powerful private sector players.</p>
<p>A related concern is that the emergence of these parallel channels will undermine the longstanding regulated <em>mandi</em> system that farmers understand and are used to operating in, despite its numerous flaws.</p>
<p>Contract farming, which would become more commonplace if the bills become law, theoretically offers farmers the option of cutting out middlemen and their fees to deal directly with a downstream buyer. But experience <a href="https://www.jstor.org/stable/pdf/41720555.pdf?casa_token=J5_mbM9MKjgAAAAA:8yiCBYV_EfC4XHDWpevjJquv6OlLePxxNSqiBbb5cNGi8-2mSp4zQJL7IJmO1e_wy8R-0_MbGgmIEqBy179bGjPTkrge3jtZA-Mmbg7CtrPOFT9A5Eul">from India</a> and around the world shows that large buyers often prefer to deal with larger farmers located in well-developed regions who can supply assured large volumes with minimal friction. Thus small farmers from less developed areas with poor infrastructure may find themselves frozen out of such channels.</p>
<p>These serious concerns have led protesting farmers to demand not just alterations to the new bills, but their complete repeal. The direction of travel of the bills – towards private sector entry and government withdrawal – has also left farmers worrying about the future of other government policies that have long supported their livelihoods, such as Minimum Support Prices (MSPs).</p>
<p>MSPs are minimum prices announced periodically by the government for certain essential farm products, and used when the government buys these crops from the farmers for distribution to poor consumers. The MSPs help provide a measure of stability and certainty to prices received by farmers, and the protesting farmers want MSPs to be legally guaranteed in the future. This and a set of other demands, ranging from the cancellation of penalties for crop residue burning that contributes to air pollution, to enhancements to energy subsidies, have now also been added to the farmers’ core demand to cancel reforms.</p><img src="https://counter.theconversation.com/content/154428/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Bhavani Shankar does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>While new Indian agricultural reforms are ostensibly aimed at empowering farmers, there are fears they will have the opposite effect. Here’s why.Bhavani Shankar, Professorial Reseach Fellow in Food Systems and Health, University of SheffieldLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1348692020-04-02T18:18:54Z2020-04-02T18:18:54ZHow the coronavirus recession puts service workers at risk<figure><img src="https://images.theconversation.com/files/323642/original/file-20200327-146678-1e36ygw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Waitress Casey Stewart works at two restaurants, at least one which may have to close for at least a week or more.</span> <span class="attribution"><a class="source" href="http://www.apimages.com/metadata/Index/Virus-Outbreak-New-York/be0d57e1bc3b4802a7284e7fb7ec048f/1/0">AP Photo/Kathy Willens</a></span></figcaption></figure><p>Economic activity is slowing rapidly, both <a href="https://www.forbes.com/sites/sarahhansen/2020/03/26/weekly-unemployment-claims-surge-to-328-million-as-coronavirus-batters-the-economy/">in the United States</a> and <a href="https://foreignpolicy.com/2020/03/26/the-coronavirus-war-economy-will-change-the-world/">around the world</a>.</p>
<p><a href="https://blogs.berkeley.edu/2020/03/10/the-economic-consequences-of-social-distancing/">Social distancing</a>, <a href="https://www.bizjournals.com/sacramento/news/2020/03/13/another-voice-how-the-coronavirus-could-affect.html">stalling global trade</a>, <a href="https://www.technologyreview.com/s/615379/antibody-test-how-widespread-coronavirus-covid-19-really-is/">widespread illness</a> and the closing of <a href="https://www.bloomberg.com/news/articles/2020-03-19/australia-to-ban-all-non-residents-from-entering-country">borders</a>, <a href="https://ny.eater.com/2020/3/13/21179388/nyc-restaurants-closed-coronavirus-pandemic">restaurants</a> and <a href="https://www.usatoday.com/story/opinion/voices/2020/03/26/coronavirus-school-closings-turn-parents-into-teachers-column/2912797001/">schools</a> will all contribute to <a href="https://theconversation.com/we-are-entering-a-recession-but-what-did-we-learn-from-the-last-one-131435">the next Great Recession</a>.</p>
<p>Early estimates suggest that between <a href="https://www.epi.org/blog/states-are-projected-to-lose-more-jobs-due-to-the-coronavirus-14-million-jobs-could-be-lost-by-summer/">14 million</a> and <a href="https://www.jobqualityindex.com/">37 million</a> jobs could be lost during the initial spread of COVID-19. Even the low-end estimates are five times larger than the job losses the U.S. experienced in the first few months of <a href="https://theconversation.com/we-are-entering-a-recession-but-what-did-we-learn-from-the-last-one-131435">the Great Recession that lasted from 2007 to 2009</a>.</p>
<p>Since <a href="https://www.nbcnews.com/business/economy/record-6-6-million-americans-filed-unemployment-last-week-n1174776">nearly 6.6 million jobs</a> were lost in just one week at the end of March, the odds are that unemployment will be very, very high, perhaps as high as <a href="https://www.history.com/news/working-women-great-depression">the 25% range of Great Depression of the 1930s</a>.</p>
<p>As scholars of <a href="https://www.umass.edu/employmentequity/team/swerzenski">communications</a>, <a href="https://sites.google.com/view/erichoyt/home">labor economics</a>, <a href="https://www.umass.edu/sociology/users/tomaskov">inequality</a> and <a href="https://scholar.google.com/citations?user=AfSJBMkAAAAJ&hl=en">equity</a>, we know that recessions generally hit insecure families hardest. That will be true this time as well.</p>
<p>However, this recession will be different in an important way – service sector jobs will be shed first. For the majority of service sector workers, those that are paid poverty-level wages – <a href="https://www.epi.org/publication/raising-the-federal-minimum-wage-to-15-by-2024-would-lift-pay-for-nearly-40-million-workers/">typically defined as those that make below the $15 per hour living wage threshold</a> – this recession will hit fast and hard.</p>
<p>Because they risk exposure to COVID-19 or face unemployment because of it, workers receiving the lowest hourly wages are more likely to lack the financial resources, health care and sick leave to deal with the crisis. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/323641/original/file-20200327-146678-84vsyf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/323641/original/file-20200327-146678-84vsyf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/323641/original/file-20200327-146678-84vsyf.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/323641/original/file-20200327-146678-84vsyf.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/323641/original/file-20200327-146678-84vsyf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/323641/original/file-20200327-146678-84vsyf.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/323641/original/file-20200327-146678-84vsyf.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Restaurants, bars and other venues keep parts of their services going while closing others.</span>
<span class="attribution"><a class="source" href="http://www.apimages.com/metadata/Index/Virus-Outbreak-Colorado/e66f03c7d4c64dc8a4cee8a33f63d421/10/0">AP Photo/David Zalubowski</a></span>
</figcaption>
</figure>
<h2>The risks to service workers</h2>
<p><a href="https://www.bls.gov/emp/tables/employment-by-major-industry-sector.htm">Almost 80%</a> of all U.S. private sector employment is in the service sector, totaling some 129 million jobs. The coronavirus pandemic poses a unique threat, both of eliminating jobs and putting workers at risk of infection. </p>
<p>These workers are among the least equipped to deal with these risks. About 69% of service workers are low-wage, meaning they make less than $15 an hour, as shown in our research.</p>
<p>Some 58% do not have paid sick leave, 61% have no or inadequate health insurance and very few have paid family leave to care for the sick and dying.</p>
<p><iframe id="d3lcL" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/d3lcL/1/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
<p><a href="https://www.umass.edu/employmentequity/covid-19-recession-opportunity-reform-our-low-wage-economy#overlay-context=user">Our analysis</a> pinpoints the states, industries and demographic groups where these low-wage workers are most likely to be found, and provides recommendations for better assisting those most at risk.</p>
<h2>By industry</h2>
<p>Most U.S. service and retail <a href="https://www.cnbc.com/2017/04/20/wal-mart-still-front-and-center-of-debate-over-minimum-wages.html">employers pay low wages</a>. As is well known, the U.S. has <a href="https://www.pewresearch.org/fact-tank/2020/02/07/6-facts-about-economic-inequality-in-the-u-s/">the highest inequality</a> among high income countries, meaning there is the broadest gap between the salaries of the best and worst paid workers.</p>
<p>We found that restaurants and bars are the worst employers, paying less than $15 per hour to 79% of all employees. Hotels also employ a lot of low-wage workers, paying about 63% of their workers less than $15 per hour. Many workers in the business of direct customer services are likely to be fired as their workplaces close.</p>
<p><a href="https://www.umass.edu/employmentequity/covid-19-recession-opportunity-reform-our-low-wage-economy#overlay-context=user">Our report</a> estimates that 57% of nursing home workers, 69% of grocery store workers and 74% of cleaning employees are low-wage workers. </p>
<p>These types of service workers are less likely to lose their jobs, having been deemed essential during the crisis – but they risk exposure to the virus. <a href="https://www.nytimes.com/interactive/2020/03/15/business/economy/coronavirus-worker-risk.html">A recent New York Times report</a> cites cashiers, janitors, messengers and food service employees as among the most at-risk workers based on their exposure to possible carriers of the virus.</p>
<h2>By demographic</h2>
<p>Women and people of color <a href="https://www.umass.edu/employmentequity/covid-19-recession-opportunity-reform-our-low-wage-economy#overlay-context=user">hold a disproportionate share of service industry jobs</a>, and will likely bear the brunt of the economic recession as a result.</p>
<p>Women hold 60% of all service jobs in the U.S. Among these female service workers, 70% earn less than $15 an hour. Broken down by race, 69% of white, 71% of black and 76% of Latina women workers are paid wages below the living wage threshold of $15 per hour.</p>
<p>Men do only marginally better, with 58% percent of men working in service occupations paid less than $15 an hour. The low-wage nature of these jobs does not vary much by race: The majority of white, black and Latino men in service occupations – 55%, 63% and 62% respectively – are in low-wage jobs.</p>
<p><iframe id="MDEeH" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/MDEeH/3/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
<p>The high proportion of women in low-pay, high-risk industries such as house cleaning, nursing and store retail <a href="https://www.umass.edu/employmentequity/sites/default/files/CEE_Private%2BSector%2BIndustry%2BDisparities%2B2012.pdf">further increases their economic and health vulnerability</a>.</p>
<h2>By state</h2>
<p>The majority of service workers in every state — with the lone exception of Hawaii — earn less than $15 per hour. Arkansas <a href="https://public.tableau.com/profile/rodrigo.dominguez.villegas#!/vizhome/shared/R2P74XHX9">has the highest percentage of low-wage service workers</a> in the U.S. at 77.6%, a figure that rises to 81.4% among women.</p>
<p><iframe id="Z37XW" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/Z37XW/1/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
<p>States like Arkansas, Mississippi, Idaho, New Mexico and South Carolina that have the highest percentage of low-wage workers <a href="https://www.umass.edu/employmentequity/covid-19-recession-opportunity-reform-our-low-wage-economy#overlay-context=diversity-reports">will likely fare the worst</a> in the coming economic recession.</p>
<p>Among these, the citizens of Mississippi and South Carolina, both of which <a href="https://www.kff.org/medicaid/issue-brief/status-of-state-medicaid-expansion-decisions-interactive-map/">rejected the extension of Medicaid</a> under Obamacare to their working poor, will likely fare even worse.</p>
<p>States with higher urban density and costs of living are also at increased risk. In New York, California and Washington, currently the states hardest <a href="https://www.npr.org/sections/health-shots/2020/03/16/816707182/map-tracking-the-spread-of-the-coronavirus-in-the-u-s">hit by the pandemic</a>, more than 57% of service workers make less than $15 an hour, but have to pay more than the national average for rent, food and housing.</p>
<h2>Hopeful signs for service workers</h2>
<p>The U.S. is <a href="https://worldpopulationreview.com/countries/richest-countries-in-the-world/#undefined">the richest country in the world</a>, yet 40% of its jobs pay poverty-level wages. Paying low wages and low or no health benefits <a href="https://www.rsfjournal.org/content/rsfjss/5/4/56.full.pdf">is business as usual</a> for many firms, particularly in retail, service, warehousing and agriculture.</p>
<p>The COVID-19 pandemic – and its economic consequences – presents the U.S. with an opportunity to reject our low-wage labor market structure and transition to an economy similar to that of other high-income countries, one characterized by jobs that deliver living wages and a society that insures universal health care and job security in the face of illness, <a href="https://www.theatlantic.com/ideas/archive/2020/03/denmark-freezing-its-economy-should-us/608533/">such as Denmark</a>.</p>
<p>The new federal economic stimulus <a href="https://www.nytimes.com/article/coronavirus-stimulus-package-questions-answers.html">legislation</a> contains useful short-term reactions to this enormous crisis. It expands access to unemployment benefits and sends money to households, but does little to keep workers on the job. There are already widespread <a href="https://www.washingtonpost.com/business/2020/03/31/worker-retaliation-mistreatment-coronavirus/">reports</a> of employers putting profits over the welfare of their employees.</p>
<p>Importantly, there are also some hopeful signs that <a href="https://www.bostonglobe.com/2020/03/21/metro/stop-shop-gives-union-employees-raises-additional-sick-leave/?event=event25&fbclid=IwAR0q4RpqPoVPgNgGSDBD_KcUePtt71VgDkicIm410HB7Jn0kfkHHXmrET3Y">service workers are demanding and gaining additional pay and benefits</a> even during the COVID-19 pandemic.</p>
<p>We believe <a href="https://www.theatlantic.com/ideas/archive/2020/03/denmark-freezing-its-economy-should-us/608533/">Denmark’s recent measures</a> to combat the crisis, which include paying 75% of employees salaries, along with proposals championed by Sens. Bernie Sanders and Elizabeth Warren are closer to what the country needs in the longer run: <a href="https://finance.yahoo.com/news/minimum-wage-warren-143549362.html">high minimum wages</a>, <a href="https://www.cnbc.com/2019/04/10/bernie-sanders-unveils-medicare-for-all-bill-amid-2020-democratic-primary.html">universal health care</a> and a strengthened <a href="https://jacobinmag.com/2020/03/bernie-sanders-unions-vermont-labor-movement-cwa-ibew/">labor movement</a>. </p>
<p>[<em>You need to understand the coronavirus pandemic, and we can help.</em> <a href="https://theconversation.com/us/newsletters?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=upper-coronavirus-help">Read The Conversation’s newsletter</a>.]</p><img src="https://counter.theconversation.com/content/134869/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Eric Hoyt is affiliated with the Center for Employment Equity, which receives funding from the W.K. Kellogg Foundation.</span></em></p><p class="fine-print"><em><span>JD Swerzenski receives funding from the W.K. Kellogg Foundation.</span></em></p><p class="fine-print"><em><span>Rodrigo Dominguez-Villegas receives funding from the W.K. Kellogg Foundation</span></em></p><p class="fine-print"><em><span>Donald T. Tomaskovic-Devey does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Service workers are some of the most at risk of both the coronavirus and financial woes.Donald T. Tomaskovic-Devey, Professor of Sociology; Director, Center for Employment Equity, UMass AmherstEric Hoyt, Research Director of the Center for Employment Equity, UMass AmherstJ.D. Swerzenski, Ph.D. Candidate in Communication, UMass AmherstRodrigo Dominguez-Villegas, Research Assistant, Center for Employment Equity, UMass AmherstLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1114562019-02-26T14:36:04Z2019-02-26T14:36:04ZDespite barriers, South Africa is a good place for impact investments<figure><img src="https://images.theconversation.com/files/259276/original/file-20190215-56208-1vrcldi.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Impact investments focus on projects with social or environmental value.</span> <span class="attribution"><span class="source">wk1003mike/Shutterstock</span></span></figcaption></figure><p>There’s no doubt that the world faces tremendous challenges. There is enough food in our world to feed the hungry – but it’s not <a href="https://www.cnbc.com/id/100893540">evenly distributed</a>. There’s sufficient medicine available to treat a number of dread diseases – but this often doesn’t reach those <a href="https://www.who.int/features/factfiles/health_inequities/en/">who need it</a>. There are innovative ways to supply water and generate energy – but they cost money.</p>
<p>It’s clear that governments alone cannot fix these problems. The private sector has a critical role to play, too. However, generating financial returns from investments in social and environmental projects can at times be difficult, but impact investments have provided <a href="https://thegiin.org/assets/documents/pub/Introducing_the_Impact_Investing_Benchmark.pdf">competitive returns</a>. And the private sector, by its nature, wants to make money.</p>
<p>Impact investing has been posited as a possible solution to this conundrum. It’s <a href="http://scholar.sun.ac.za/handle/10019.1/103283">defined</a> as an approach where the investors’ goal is to create a measurable social or environmental impact while generating financial return. A prime example of an impact investment that has achieved both the motives is the International Finance for Immunisation Fund. This fund was established in 2006 to finance immunisations in the world’s 70 poorest countries. With support from the Gates Foundation, <a href="http://www.bridgesfundmanagement.com/wp-content/uploads/2017/10/Investing-for-Impact-Case-Studies-Across-Asset-Classes.pdf">213 million children</a> have been immunised, preventing more than 3.4 million premature deaths. Over <a href="http://www.bridgesfundmanagement.com/wp-content/uploads/2017/10/Investing-for-Impact-Case-Studies-Across-Asset-Classes.pdf">US$1.6 billion</a> has been raised through this fund and it retained its premium AAA credit rating. The fund provided returns slightly higher than market returns when compared to similar government bonds.</p>
<p>Impact investors are increasingly investing in social enterprises that offer products and services that benefit society and the natural environment. Examples include micro loans, affordable housing, renewable energy and sustainably grown crops. </p>
<p>More than <a href="https://openscholarship.wustl.edu/cgi/viewcontent.cgi?referer=https://www.google.com/&httpsredir=1&article=1878&context=law_journal_law_policy">two thirds</a> of existing impact investments have been made into emerging markets such as South Africa and India. Given this focus, South Africa is perfectly positioned as a gateway for impact investors wishing to target the African continent. The country has <a href="http://www.treasury.gov.za/pu">strong financial systems</a>. It’s also <a href="http://impactinvestingsouthafrica.co.za/">looking for new ways</a> to mobilise capital for small businesses, address unemployment, strengthen key economic sectors and lay the groundwork for impact investors in the country. </p>
<p>But is South Africa ready to accept and work with impact investors? We conducted <a href="http://scholar.sun.ac.za/handle/10019.1/103283">a study</a> to find out. This investigated the views of a sample of seasoned local impact investors and other role players in the market. By doing this, we were able to identify the barriers and opportunities which investors face.</p>
<p>The empirical evidence showed that there were more challenges than benefits. According to the interviewees, the most important barriers centred on the shortage of investment ready deals and the lack of detailed and clearly formulated social or environmental impact objectives. </p>
<h2>What the experts said</h2>
<p>We interviewed 13 experts – among them asset managers, academics and consultants – who confirmed that there is a growing acceptance and awareness of impact investment in the South African market. </p>
<p>However, the interviewees identified several barriers to growing the market, many of which were interrelated. One of these was how new and unknown the idea of impact investment was in the country.</p>
<p>Another was the lack of investment ready deals in South Africa where impact investors could get involved. </p>
<p>Our interviewees also worried that there wasn’t enough financial and technical support for small and medium-sized social enterprises. Investors are currently all competing for the same pipeline of bankable social enterprise-based projects. They expressed the need for more support from among others, the development banks, to grow these enterprises so they become mature enough to have a lower risk profile.</p>
<p>Other barriers included the lack of standardised, detailed reporting measures. One of the key elements of an impact investment is the need to measure and report social and environmental change. In contrast to financial reporting, the guidelines available to entities to report on environmental, social and corporate governance management are less sophisticated. Some guidelines do exist <a href="https://iris.thegiin.org/">in the global arena</a>. Initiatives like the <a href="https://impactmanagementproject.com/">impact management project</a> are also useful: the project aims to create worldwide consensus in measuring and managing impact.</p>
<p>Much work, however, remains to be done. Measuring changes in human behaviour at a beneficiary level is not as easy as measuring data points. One also has to be cognisant of the context in which an impact investment initiative exists because a developed world perspective is often different from that in the developing world.</p>
<h2>Opportunities exist</h2>
<p>The good news is that, despite these barriers, there is a lot of <a href="https://thegiin.org/knowledge/publication/southern-africa-report">evidence</a> to suggest South Africa has a growing impact investment market. </p>
<p>There is a <a href="http://impactinvestingsouthafrica.co.za/">growing call</a> in contemporary market economies for ethical, socially inclusive capitalism. So now is a good time for South Africa to get ahead of the curve and prioritise this sort of capitalism.</p>
<p>Asset owners and asset managers are also becoming more receptive to the notion that they can affect social and environmental change through the financing they extend. Members of President Cyril Ramaphosa’s special economic envoy have <a href="https://www.businesslive.co.za/bd/business-and-economy/2018-10-25-impact-investing-task-force-created-to-draw-in-the-private-sector/">recognised</a> impact investing’s potential influence.</p>
<p>We would suggest that transparency will be key in growing impact investment. Those in South Africa who are already involved in impact investment must be more willing to share their success stories of how they matched their financial and impact objectives as well as the techniques used to effectively report their impact. This will encourage others to follow suit, seeing the benefits to both the country and their own bottom line.</p><img src="https://counter.theconversation.com/content/111456/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Suzette Viviers has received funding from the National Research Foundation in the past. </span></em></p><p class="fine-print"><em><span>Stephen McCallum received funding from Harry Crossley Foundation to conduct this research. </span></em></p>There’s a lot of evidence to suggest South Africa should grow its impact investment market.Suzette Viviers, Academic in the Department of Business Management, Stellenbosch UniversityStephen McCallum, Lecturer, Stellenbosch UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1098562019-01-15T11:28:53Z2019-01-15T11:28:53ZWhy privatizing the VA or other essential health services is a bad idea<p>The Trump administration <a href="https://www.nytimes.com/2019/01/12/us/politics/veterans-administration-health-care-privatization.html">wants to shift</a> billions of dollars from government-run veterans’ hospitals to private health care providers. That’s true even though earlier this year the administration <a href="https://www.politico.com/story/2018/03/29/david-shulkin-veterans-affairs-secretary-privatizing-491590">vehemently denied</a> it would privatize any part of the Department of Veterans Affairs.</p>
<p>The privatization of essential government services is nothing new, of course. Over the years, countries have <a href="https://www.downsizinggovernment.org/privatization">privatized dozens of services and activities</a> that were once the sole domain of governments, such as the provision of electricity and water, road operations and prisons and even health care, with the ostensible aim of making them more efficient. </p>
<p>But before going down that road, the question needs to be asked whether privatizing essential human services such as those for military veterans serves the public interest. New research <a href="https://academic.oup.com/jpart/advance-article/doi/10.1093/jopart/muy009/4938536">we recently published</a> suggests that privatization may come at a social cost. </p>
<h2>Economic incentives of privatization</h2>
<p>Privatization theory assumes that organizations, including those that <a href="https://academic.oup.com/jpart/article/17/3/501/943117?searchresult=1">deliver social services</a>, thrive on competition and monetary gain. </p>
<p><a href="https://onlinelibrary.wiley.com/doi/abs/10.1111/1540-6210.00157">Supporters of privatization</a> argue that companies can perform government functions more efficiently. More competition and more choice for clients are expected to put pressure on providers to be more innovative and aware of financial costs. </p>
<p>In the public sector, however, competition is almost by definition absent, either because users of services cannot be excluded from the service – breathing clean air, for example – or because there is little monetary gain to be made – such as with services to the homeless. </p>
<p>So in situations where there is no real market, governments have attempted to mimic their conditions, such as by giving citizens the freedom to choose a public service provider or negotiating contracts that include certain performance incentives. </p>
<p>But this reliance on performance contracts <a href="https://academic.oup.com/jpart/article/17/2/189/894972?searchresult=1#15497641">can lead business providers</a> to focus on short-term financial targets – such as the number of people processed per dollar spent – often at the expense of long-term outcomes for those served. </p>
<p>This gives business providers a strong incentive to <a href="https://onlinelibrary.wiley.com/doi/abs/10.1002/pam.21695">concentrate on serving</a> people who are most likely to help them achieve these goals by either focusing on those clients who are most likely to succeed or disregarding the ones that are harder to serve. By focusing on easier-to-serve clients and shunning the ones who are costly, service providers are more likely to make a profit.</p>
<p>However, it’s often difficult to know in advance who’s going to cost more than someone else. As a result, many service providers end up relying on imperfect, discriminatory cues to help them weed out potential cost burdens. <a href="https://academic.oup.com/qje/article/133/1/191/4060073">Companies do something similar</a> when they use stereotypes about race or ethnicity as discriminatory proxies for unobserved characteristics in job applicants.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/253750/original/file-20190114-43529-13r93kd.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/253750/original/file-20190114-43529-13r93kd.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/253750/original/file-20190114-43529-13r93kd.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/253750/original/file-20190114-43529-13r93kd.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/253750/original/file-20190114-43529-13r93kd.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/253750/original/file-20190114-43529-13r93kd.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/253750/original/file-20190114-43529-13r93kd.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The seal affixed to the front of the Department of Veterans Affairs building in Washington.</span>
<span class="attribution"><a class="source" href="http://www.apimages.com/metadata/Index/Veterans-Affairs/3aa69f27e60a47d7b946bf672f481000/80/0">AP Photo/Charles Dharapak</a></span>
</figcaption>
</figure>
<h2>Kenny and Mohammed</h2>
<p>To learn more about whether for-profit service providers treat people of marginalized ethnic backgrounds differently, <a href="https://doi.org/10.1093/jopart/muy009">we ran a field experiment</a> in the Belgian elderly care sector. We chose Belgium because the industry includes both public and private homes, and one of us is based there. </p>
<p>We sent basic information requests to all public and for-profit nursing homes in Flanders, the Dutch-speaking part of Belgium. Half of the requests, randomly assigned, appeared to come from a Belgian citizen (Kenny Maes), while the rest bore the signature of someone with a North African name (Mohammed El Makrini). The names were chosen based on the results of a separate survey we sent out to 2,000 Belgians asking them to rate several names on their perceived ethnicity, age, level of education and wealth. </p>
<p>In the requests, we asked nursing homes for advice on how to subscribe for a place in their facility. Withholding such information would make it harder for a prospective client to apply for a spot.</p>
<p>Of the 223 nursing homes we contacted, 71 percent responded, with public facilities being a little more likely than for-profit ones to get back to us. In general, each type of home responded to our two senders at similar rates. For example, 76 percent of public facilities replied to “Kenny,” compared with 79 percent for “Mohammed.” The response rate of for-profit homes was a bit more lopsided, but it was not what we’d consider a significant difference given the sample size: 66 percent for Kenny and 57 percent for Mohammed. </p>
<p>The really interesting finding was when we analyzed the actual responses. Upon closer inspection, we found that for-profit nursing homes were significantly less likely to provide information to Mohammed on how to enroll. Only about 43 percent of the for-profit homes that responded offered him the info, compared with 63 percent for Kenny. There was basically no difference among public facilities.</p>
<p>This is direct proof of for-profit providers discriminating against prospective clients based on their perceived ethnicity. But they’re not doing it simply out of ethnic animus. If it was, we’d have seen the same discrimination at the public facilities as well.</p>
<p>Rather, the motivation seems to be primarily economic. This is what economists call “<a href="http://www.nber.org/papers/w15860">statistical discrimination</a>.” In other words, average characteristics of the minority group – such as language barriers and having different cultural needs and habits that make them more difficult to serve – are used to stereotype individuals who belong to that particular group.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/253751/original/file-20190114-43535-10hwom.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/253751/original/file-20190114-43535-10hwom.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/253751/original/file-20190114-43535-10hwom.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/253751/original/file-20190114-43535-10hwom.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/253751/original/file-20190114-43535-10hwom.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=502&fit=crop&dpr=1 754w, https://images.theconversation.com/files/253751/original/file-20190114-43535-10hwom.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=502&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/253751/original/file-20190114-43535-10hwom.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=502&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">For-profit service providers may use discrimination as a way to make more money.</span>
<span class="attribution"><span class="source">wavebreakmedia/Shutterstock.com</span></span>
</figcaption>
</figure>
<h2>Unintended consequences</h2>
<p>The <a href="http://www.governing.com/topics/mgmt/pros-cons-privatizing-government-functions.html">public debate about privatization</a> tends to almost exclusively focus on its supposed financial and managerial advantages – which are <a href="http://www.pogo.org/our-work/reports/2011/co-gp-20110913.html#Executive%20Summary">hardly clear cut</a>. Meanwhile, the potential social costs of privatization are commonly neglected. </p>
<p><a href="https://scholar.google.com/citations?user=PA7TqeEAAAAJ&hl=en&oi=ao">Our</a> <a href="https://scholar.google.com/citations?user=mniink4AAAAJ&hl=en&oi=ao">research</a> suggests that privatizing human services such as health care can result in less access for groups perceived as harder to serve because of language barriers and cultural differences. </p>
<p>Unfortunately, they also happen to be the groups that need such services the most.</p>
<p><em>This is an updated version of an <a href="https://theconversation.com/privatizing-essential-human-services-like-the-va-can-come-at-a-high-social-cost-96092">article originally published</a> on May 18, 2018.</em></p><img src="https://counter.theconversation.com/content/109856/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The Trump administration is preparing to shift billions in veterans’ health care spending to private providers. Research suggests privatizing essential services comes with a social cost.Sebastian Jilke, Assistant Professor, Rutgers University - NewarkWouter Van Dooren, Professor of Public Administration, University of AntwerpLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1021402018-10-14T10:36:40Z2018-10-14T10:36:40ZThe private sector, agriculture and climate change. Connecting the dots<figure><img src="https://images.theconversation.com/files/240021/original/file-20181010-72130-1yih4iq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Rice fields in Madagascar. There is a project in the country to increase climate resilience in the rice sector. </span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>Agriculture plays a key role in food security in Africa. It is also crucial to the economic sector, accounting for between 40%-65% <a href="https://agra.org/aasr2016/public/assr.pdf">of jobs</a>. Farming is expected to remain an important livelihood for decades to come. </p>
<p>At the same time, agriculture in sub-Saharan Africa is <a href="https://theconversation.com/climate-change-is-hitting-african-farmers-the-hardest-of-all-40845">very vulnerable to climate change</a>. Agriculture was <a href="http://www.fao.org/3/a-i5687e.pdf">a priority</a> under the <a href="https://unfccc.int/process/the-paris-agreement/nationally-determined-contributions/ndc-registry">commitments</a> made by sub-Saharan countries to the <a href="https://unfccc.int/process-and-meetings/the-paris-agreement/the-paris-agreement">Paris Agreement</a>. </p>
<p>The widely held view is that the public sector alone <a href="https://www.tandfonline.com/doi/abs/10.1080/17565529.2013.821053">can’t meet the cost of the continent’s commitments</a>. Already there’s a mismatch between the investment needs for adaptation and the finance available. As a result, there is increasing interest in bringing in capacity and resources from the private sector to achieve countries’ climate change commitments. </p>
<p>Against this background, <a href="https://www.sei.org/wp-content/uploads/2017/08/what-roles-could-private-actors-play-in-agricultural-adaptatation-in-sub-saharan-africa.pdf">our recent research</a> examined the role of private-sector players in helping agriculture in sub-Saharan Africa adapt to a changing climate. This work is part of <a href="https://www.sei.org/projects-and-tools/projects/prindcissa-private-sector-finance-for-ndc-implementation-in-sub-saharan-africa/">wider research</a> that looked at ways to give the private sector incentives to help countries in the region achieve their Paris Agreement goals. </p>
<p>Our work shows that these projects for agriculture vary widely. Some use public finance to raise awareness of climate risks and adaptation opportunities. Their aim is to stimulate future private investment. Others channel public finance through private players which are hired to provide goods and services. </p>
<p>Our analysis suggests that the public sector could do more to engage the private sector. Enabling and encouraging private investment, particularly in infrastructure, is expected to have <a href="http://www.fao.org/3/a-i5778e.pdf">high pay-offs</a>.</p>
<h2>Some examples</h2>
<p>We found that private actors – smallholder farmers as well as small and medium-sized private businesses – are beginning to play a role in a wide variety of key adaptation strategies. Their actions include:</p>
<ul>
<li><p>Introducing irrigation and water management systems </p></li>
<li><p>Improving weather and seasonal forecasting systems – and ensuring that farmers can use them</p></li>
<li><p>Introducing drought- and heat-resistant crop varieties, </p></li>
<li><p>Adopting new “climate-smart” farming techniques, and </p></li>
<li><p>Expanding finance insurance options for farmers.</p></li>
</ul>
<p>In Namibia, a <a href="https://www.greenclimate.fund/-/climate-resilient-agriculture-in-three-of-the-vulnerable-extreme-northern-crop-growing-regions-crave-">project</a> is showing how small-scale farmers can pay for agricultural index-based insurance. The aim is to develop a viable business model. The insurance policy uses a parameter (or index), such as rainfall estimates or vegetation cover, to determine when a payment should happen to cover the loss after an extreme event, like drought.</p>
<p>In Mozambique, a <a href="http://projects.worldbank.org/P131049/climate-resilience-transforming-hydro-meteorological-services?lang=en&tab=overview">project</a> is strengthening hydrological and meteorological information services to deliver climate information at the local level. Services include hydro-meteorological information for farmers; flood forecasting and early-warning systems, and weather service alerts in coastal areas. Television, radio and telephone companies are crucial as they deliver the forecasts and warnings. And, as the users, commercial farms and maritime transport companies are part of the design and implementation of new hydro-met services.</p>
<p>In Madagascar, a <a href="https://www.adaptation-fund.org/project/madagascar-promoting-climate-resilience-in-the-rice-sector/">project</a> is increasing climate resilience in the rice sector. Through public-private partnerships, it promotes the use of modified fertilisation practices and drought and pest-resistant varieties of seeds. </p>
<p>These examples suggest that the private sector is getting involved in agricultural adaptation to climate change in sub-Saharan Africa. </p>
<p>But there are still two important barriers to overcome.</p>
<p>First, <a href="https://www.sei.org/publications/will-private-finance-support-climate-change-adaptation-in-developing-countries-historical-investment-patterns-as-a-window-on-future-private-climate-finance/">developing countries can find it difficult to attract private investment</a> to meet their most urgent needs. Second, low awareness of climate risk is also <a href="https://www.sei.org/publications/private-finance-rwanda/">a barrier for private involvement in adaptation</a>. But business opportunities do exist, and a growing number of adaptation projects are now demonstrating their potential.</p>
<h2>Getting the private sector involved</h2>
<p>There are five ways in which policymakers could make it more attractive for private actors to engage in agriculture adaptation in sub-Saharan Africa.</p>
<p><strong>Provide more clarity.</strong> Policymakers should be clear in stating which private actors – and in which capacity – they want involved in their agriculture adaptation projects and programmes. This would help accelerate and scale up private investment. The private sector is, obviously, diverse. Different actors respond to different incentives. Without clarity, projects may struggle to identify opportunities for private-sector involvement. </p>
<p><strong>Involve private actors at the design stage.</strong> By identifying ways to involve private actors already at the design stage, project developers can create stronger partnership and more effective ways to promote investment.</p>
<p><strong>Look for opportunities along the value chain.</strong> Increasing agricultural productivity is not the only possible target. Improvements in the harvest and commercialisation stages also offer potential for involving private sector actors.</p>
<p><strong>Demonstrate potential.</strong> Demonstrating the commercial viability of adaptation strategies is vital. Public funding should therefore be focused on feasibility assessments or arranging pilot projects.</p>
<p><strong>Scrutinise results.</strong> Monitoring and evaluation of adaptation projects should include ways to assess private-sector involvement – when it works and when it fails. Transparency in this kind of information can help identify future opportunities.</p>
<p>Private actors already play a role in agriculture adaptation projects in sub-Saharan Africa. But more work is needed to identify effective policies to increase their involvement, and remove existing barriers.</p>
<p><em>Nella Canales, a research fellow at the Stockholm Environment Institute was a co-author on this article.</em></p><img src="https://counter.theconversation.com/content/102140/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Richard J.T. Klein leads the project PRINDCISSA, which is funded by the Swedish Energy Agency.</span></em></p>The private-sector plays an increasing role helping agriculture in sub-Saharan Africa adapt to a changing climate.Richard J.T. Klein, Senior Research Fellow and Professor of Geography, Climate Policy and Development, Stockholm Environment InstituteLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1007122018-09-18T10:48:38Z2018-09-18T10:48:38ZTrump should wage a war on waste instead of battling the world over trade<figure><img src="https://images.theconversation.com/files/236767/original/file-20180917-158213-63ervb.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Instead of fighting other countries, we should be fighting our overflowing landfills.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/truck-working-landfill-birds-looking-food-169420184?src=tBJTZucNQ5HHgAxz1sDUug-1-14">Huguette Roe/shutterstock.com</a></span></figcaption></figure><p>President Donald Trump is fighting the wrong fight in his ongoing <a href="https://theconversation.com/us/topics/trade-wars-50746">trade war</a> with the rest of the world. </p>
<p>That’s because it’s premised on the old-school notion of the linear economy in which someone in another country, such as China, digs up raw materials and sends them to a factory, where they get turned into the finished product and shipped to the U.S. In exchange, <a href="https://www.washingtonpost.com/business/2018/08/03/trump-hates-trade-deficit-its-track-be-biggest-decade/?noredirect=on&utm_term=.83c540dd4382">money leaves the U.S. economy</a> and flows to the countries where the product was made – creating the <a href="https://www.nytimes.com/2018/03/05/us/politics/trade-deficit-tariffs-economists-trump.html">trade deficit Trump despises</a>.</p>
<p>And here’s the important bit. Americans use the product for a while, throw it away, and it ends up in a dump. And then we buy another import. </p>
<p>The long-term effect? Our money goes to a foreign economy, and Americans end up with piles of garbage. Then we pay <a href="https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&ved=2ahUKEwi76bT9hLvdAhVyc98KHbDWB7sQFjABegQIBRAB&url=https%3A%2F%2Fwww.omicsonline.org%2Fopen-access%2Feffects-of-electronic-waste-on-developing-countries-2475-7675-1000128.php%3Faid%3D88750&usg=AOvVaw3M_1XDBboG9MhanJSttUSG">a foreign economy one more time to take the garbage off our hands</a>. China is one country that used to take a lot of our garbage, but <a href="https://www.sciencedirect.com/science/article/pii/S1364032115011855">India, Pakistan and Nigeria</a> are also big in this business. </p>
<p>A circular economy, by contrast, starts with the finished product, which can then be recycled domestically and reused, often at <a href="http://circularfoundation.org/sites/default/files/tce_report1_2012.pdf">a fraction of the cost of manufacturing them new elsewhere</a>. This <a href="http://circularfoundation.org/sites/default/files/tce_report1_2012.pdf">keeps the money at home</a>, which produces more domestic jobs and wealth. </p>
<p>As a researcher of corporate social responsibility, <a href="https://doi.org/10.1007/978-3-319-66023-3_178">I’ve been exploring</a> whether consumers are willing to buy more goods that have been remanufactured. My research suggests the answer is yes – if companies can figure how to produce more of them. And that’s where Trump and the federal government could play a big role. </p>
<h2>Companies leading the charge</h2>
<p>For now, companies and others in the American private sector are trying to lead the way, such as construction and mining equipment maker Caterpillar and automaker General Motors.</p>
<p>Caterpillar, for example, currently <a href="https://www.rit.edu/research/sites/rit.edu.research/files/research-magazines/RIT-Research-Magazine-Spring-Summer-2018.pdf">remanufactures 85 million tons</a> of material a year, while GM has 142 manufacturing and other facilities <a href="http://media.gm.com/media/us/en/gm/news.detail.html/content/Pages/news/us/en/2018/feb/0228-landfill-free.html">that don’t produce any garbage</a> by recycling, reusing or converting all waste to energy. GM also participates in a new <a href="https://pathway21.com/about-2/">online exchange</a> that has about 1,000 partner companies buying and selling their recycled waste as raw material. </p>
<p>The nonprofit sector has also been playing a role, both in terms of research and practical efforts. Since 1991, the <a href="https://www.rit.edu/gis/remanufacturing/">Center for Remanufacturing and Resource Recovery</a> at my own Rochester Institute of Technology in upstate New York, for example, has been working with organizations such as the U.S. Marines Corps and Staples to take advantage of circular economy principles. </p>
<p>The center helped the Marines <a href="https://www.rit.edu/research/sites/rit.edu.research/files/research-magazines/RIT-Research-Magazine-Spring-Summer-2018.pdf">remanufacture defective drive shafts</a> for light armored vehicles, which has saved the military force 78 percent versus the cost of buying them new. It also partnered with Staples to cut the use of non-recycled materials in office furniture by almost 90 percent while reducing the cost to the customer by over 40 percent. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/236766/original/file-20180917-158228-1acaf2r.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/236766/original/file-20180917-158228-1acaf2r.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/236766/original/file-20180917-158228-1acaf2r.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/236766/original/file-20180917-158228-1acaf2r.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/236766/original/file-20180917-158228-1acaf2r.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/236766/original/file-20180917-158228-1acaf2r.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/236766/original/file-20180917-158228-1acaf2r.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The U.S. could reuse more of their plastics, like Kenya did when they sailed the first dhow boat made entirely of recycled plastic.</span>
<span class="attribution"><a class="source" href="http://pictures.reuters.com/C.aspx?VP3=SearchResult&VBID=2C0FCIB6AB2MS&SMLS=1&RW=1264&RH=744&POPUPPN=6&POPUPIID=2C0FQEQ5SKOCG">Reuters/Baz Ratner</a></span>
</figcaption>
</figure>
<h2>Benefits of circular logic</h2>
<p>The benefits can add up quickly. </p>
<p>General Motors, for example <a href="https://www.greenbiz.com/article/materials-matchmaking-how-gm-drives-1-billion-annual-revenue">boasts revenue and savings</a> of US$1 billion a year from its circular economy initiatives. </p>
<p>That’s just one company. Scaling up could yield over <a href="http://thebusinessleadership.academy/wp-content/uploads/2016/03/Circular_economy.pdf">$1 trillion a year</a> in savings globally – and that’s just in terms of mining and processing fewer raw materials. More broadly, were the European Union, for example, to replace all its imports with locally reused or recycled alternatives, it alone <a href="http://circularfoundation.org/sites/default/files/tce_report1_2012.pdf">could generate</a> $300 billion to $600 billion a year in savings, according to a 2012 report by the Ellen MacArthur Foundation, a U.K. charity focused on promoting the transition to a circular economy. </p>
<p>Remanufacturing in the U.S. is already responsible for <a href="https://www.rit.edu/gis/remanroadmap/docs/Technology%20roadmap%20for%20remanufacturing%20in%20the%20circular%20economy.pdf">180,000 jobs across sectors</a> as diverse as aerospace, consumer products, office furniture and retreaded tires. Given how much the <a href="https://www.bea.gov/data/intl-trade-investment/international-trade-goods-and-services">U.S. currently imports from abroad</a> – and that remanufacturing is still less than 2 percent of total manufacturing in the U.S. – there’s room to create hundreds of thousands more jobs. </p>
<h2>How Trump could help</h2>
<p>While there are many ways the U.S. government could marshal its tremendous resources behind this effort, there are two in particular I think would pay dividends. </p>
<p>Both revolve around a core problem in remanufacturing: Most things we currently make <a href="https://www.rit.edu/gis/remanroadmap/docs/Technology%20roadmap%20for%20remanufacturing%20in%20the%20circular%20economy.pdf">can’t be remanufactured</a>. That’s partly because of social barriers — customers may confuse remanufactured with used, which is a very different thing — and partly because they’re not made to be remanufactured.</p>
<p>Plastics in particular pose a significant problem to moving toward a circular economy. Globally, <a href="http://www.doi.org/10.1126/sciadv.1700782">we only recycle or reuse</a> about 9 percent of the plastic produced each year, with 79 percent going to landfills and 12 percent being burned. </p>
<p>Trump could support two ways to help solve this problem. Basically, with a carrot and a stick. The carrot involves setting a standard of design to ensure all products are made with future use in mind, as well as using his influence to encourage Americans to buy goods remanufactured in the U.S.</p>
<p>The stick is tax policy. Specifically, the government could tax products that can’t be converted into raw materials after they are used, as well as those that are made with less than a certain percentage of reused components – a minimum that would be set to gradually increase. Money raised through this tax could be used to support research into remanufacturing, community efforts to reach higher recycling and reuse targets, or other purposes.</p>
<h2>Remanufacturing for the win</h2>
<p>Some countries are already reducing their imports by going circular, putting the United States at risk of falling behind.</p>
<p>China, for one, <a href="https://doi.org/10.1111/jiec.12597">has been systematically expanding</a> its efforts in this area for over 20 years, while the <a href="https://doi.org/10.1111/jiec.12597">EU is beginning</a> to invest in a circular economy as well with a formal action plan, <a href="http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52015DC0614">most recently revised in 2015</a>.</p>
<p>In an entirely circular economy, the U.S. would most likely still import stuff from abroad, such as steel from China. But that steel would wind up being <a href="https://www.greenbiz.com/article/materials-matchmaking-how-gm-drives-1-billion-annual-revenue">reused in American factories</a>, employing tax-paying American workers to manufacture new goods. </p>
<p>In other words, the more circular Americans make their economy, the fewer products they’ll wind up importing and the more things that could bear the “Made in the USA” label.</p><img src="https://counter.theconversation.com/content/100712/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Clyde Hull is a Professor of Management at the Saunders College of Business at RIT. He is also an associate faculty member of RIT’s Golisano Institute for Sustainabilty, which includes the Center for Remanufacturing and Resource Recovery. He is not involved in the Center’s operations.</span></em></p>Trump’s plan to slap $200 billion more in tariffs on Chinese goods is premised on yesterday’s waste-fueled economy. Tomorrow’s economy is ‘circular.’Clyde Eiríkur Hull, Professor of Management, Rochester Institute of TechnologyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/904872018-01-24T10:49:13Z2018-01-24T10:49:13ZPFI has been a failure – and Carillion is the tip of the iceberg<figure><img src="https://images.theconversation.com/files/202867/original/file-20180122-182941-13sye2q.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/construction-site-workers-aerial-top-view-406114573?src=yxyQMlbc2HPQ5z_q2a2s-A-1-3">shutterstock.com</a></span></figcaption></figure><p>Carillion’s collapse has brought with it wider scrutiny of the way that UK public services are contracted out to businesses – particularly through the use of Private Finance Initiative (PFI) schemes. The UK’s second largest construction business <a href="https://www.ft.com/content/0b97c676-fd3e-11e7-9b32-d7d59aace167">had a network of these contracts</a>, worth billions of pounds, providing essential public services across government departments. The NHS, defence, education, energy, and prisons have all been left exposed by its collapse.</p>
<p>While the winter crisis <a href="https://www.theguardian.com/society/2018/jan/11/nhs-winter-crisis-hospital-felt-like-something-out-of-a-war-zone">tightens its grip on the NHS</a>, two urgently needed hospitals – the Midland Metropolitan and the Royal Liverpool – that were supposed to be constructed by Carillion under PFI arrangements, <a href="https://www.theguardian.com/business/2018/jan/19/carillion-collapse-expected-to-further-delay-building-at-two-major-hospitals">now await state rescue</a>. In addition, the fire service <a href="https://www.theguardian.com/business/2018/jan/15/fire-services-ready-to-deliver-school-meals-after-carillion-collapse">must now stand by</a> to deliver the school meals Carillion was contracted to provide.</p>
<p>But the company’s collapse is the tip of the iceberg when it comes to the failure of PFI to give the public good value for money. </p>
<h2>PF why?</h2>
<p>These financing schemes were originally devised as a means by which governments (both Conservative and Labour) could construct prisons, schools and hospitals with private sector finance – rather than directly burdening the government with the debt of the infrastructure costs. <a href="https://theconversation.com/why-private-finance-initiatives-are-so-addictive-and-yet-offer-such-poor-value-for-money-40421">In some ways</a>, the PFI process was successful: many regions of the country benefited from new hospitals and other public infrastructure. </p>
<p>But in return for the upfront capital costs being financed by private investors, the hospital trusts (or other public bodies) were then often burdened with contractually onerous financial payments for the following 25-30 years. The payments to these investors meet their capital development, service and financing costs; and provide a high return, in some cases of <a href="https://www.ncbi.nlm.nih.gov/pubmed/23332120">up to 60% to their shareholders</a>. </p>
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Read more:
<a href="https://theconversation.com/why-private-finance-initiatives-are-so-addictive-and-yet-offer-such-poor-value-for-money-40421">Why private finance initiatives are so addictive – and yet offer such poor value for money</a>
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<p>All governments since 1992 contributed to the expansion of PFI, <a href="http://blogs.lse.ac.uk/politicsandpolicy/the-move-from-pfi-to-pf2-is-likely-to-make-it-more-rather-than-less-expensive-to-deliver-new-healthcare-facilities-in-the-future/">culminating in its rebrand as PF2</a> under David Cameron’s leadership in 2012. There are currently more than 700 PFI and PF2 schemes, with capital values of about £60 billion. Altogether they are set to cost the taxpayer about <a href="https://www.nao.org.uk/wp-content/uploads/2018/01/PFI-and-PF2.pdf">£200 billion to service over the next 25 years</a>.</p>
<h2>The costs outweigh the benefits</h2>
<p>The evidence shows that PFI is always more costly relative to its publicly funded alternative – a recent government report found that some are <a href="https://www.nao.org.uk/wp-content/uploads/2018/01/PFI-and-PF2.pdf">as much as 40% more expensive</a>. These extra costs, meted out to the private sector, go on to line the pockets of shareholders – many of which hold their earnings <a href="https://www.european-services-strategy.org.uk/news/2017/new-evidence-of-the-scale-of-uk-pfippp-equity-offshoring-and-tax-avoidance">in offshore companies</a>, therefore paying little to no tax on these earnings in the UK. </p>
<p>Meanwhile, there is little to no evidence that PFI delivers operational efficiencies. Nor that it is the only route through which public assets can be maintained to a high and acceptable standard throughout the life of the asset. At the time of the rebrand of the PFI as PF2, the Treasury found and reviewed evidence that budgetary and accounting incentives also cause public bodies to choose the route of PFI, even if it didn’t offer superior benefits over a publicly funded option. Yet, the Treasury <a href="https://www.nao.org.uk/wp-content/uploads/2018/01/PFI-and-PF2.pdf">refused to close those loopholes</a>.</p>
<p>The primary justification given for why PFI/PF2 is pursued is that it allows risk to be transferred from the public sector to the private sector and hence demonstrates value for money by being a less costly alternative to public financing. So central is the assumed transfer of risk to PFI schemes that virtually no PFI scheme is seen as less costly than its public counterpart, until the assumed risks involved are costed up and added to the public counterpart.</p>
<p>The notional transfer of risk is, however, undermined by PFI failures such as that of <a href="http://news.bbc.co.uk/1/hi/england/london/8544491.stm">London Underground’s Metronet in 2007</a>, and now Carillion. Public agencies might seek to transfer risk through PFI, but they ultimately remain responsible for the delivery of public services. In failed schemes, it is the taxpayer that ends up picking up the tab for the private sector’s mistakes. All the while, more is paid for the luxury.</p>
<p>It demands a rethink of the way that the government outsources essential services, especially through PFI. The central arguments in the outsourcing of public services are those of gaining expertise and efficiency savings. These could still be paid for and cultivated within the public sector – especially given how much money is currently paid to the private sector through the PFI schemes that do not fail. Let alone the cost of salvaging those that do.</p><img src="https://counter.theconversation.com/content/90487/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The evidence shows that PFI is always more costly relative to its publicly funded alternative – and by as much as 40% in some cases.Iqbal Khadaroo, Professor of Accounting, University of SussexEkililu Salifu, Lecturer in Accounting, University of ReadingLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/874052017-11-28T05:43:21Z2017-11-28T05:43:21ZBusiness schools have a role to play in fighting corruption in Africa<figure><img src="https://images.theconversation.com/files/196097/original/file-20171123-17988-1bdoym3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Corruption pollutes the African business environment.</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>In 2002, the African Union reported that Africa lost about <a href="http://news.bbc.co.uk/1/hi/world/africa/2265387.stm">USD$148 billion</a> through corruption every year. This represented 25% of the continent’s combined GDP at the time. Nothing much has changed.</p>
<p>Last year, the global business advisory firm KPMG estimated that if South Africa reduced its corruption by one point, as measured by Transparency International’s <a href="https://www.transparency.org/cpi2015">corruption perception index</a>, it could add <a href="https://assets.kpmg.com/content/dam/kpmg/za/pdf/2017/03/Corruption-TL.pdf">R23 billion to its GDP</a>. </p>
<p>The thrust of these facts is that the lost monies could have been used to finance institutional development and reduce the <a href="http://www.doingbusiness.org/reports/%7E/media/WBG/DoingBusiness/Documents/Profiles/Regional/DB2018/SSA.pdf">constraints to doing business in Africa</a>.</p>
<p>In spite of the effects of corruption on the private sector, businesses in Africa are relatively silent about the menace. Efforts to combat corruption are largely championed by <a href="http://uncaccoalition.org/en_US/get-involved/africa-region-anti-corruption-platform/">civil service</a>, non-governmental organisations and <a href="https://www.uneca.org/publications/combating-corruption-improving-governance-africa">international development agencies</a>. </p>
<p>A new <a href="http://www.tandfonline.com/doi/abs/10.1080/23322373.2017.1379825?journalCode=rajm20">study</a> has linked the private sector’s silence to the inadequacy of business education in the region. It notes that business schools can play a vital role in the fight against corruption. They can do this by nurturing business students to become <a href="http://www.tandfonline.com/doi/abs/10.1080/23322373.2017.1379825?journalCode=rajm20">institutional entrepreneurs</a> – people who will bring about institutional change – not only in Africa’s economic domain, but also in the political arena. </p>
<p>Schools can equip students and managers with knowledge and expertise to advocate for public accountability and good governance, as <a href="https://www.weforum.org/agenda/2017/03/5-ways-universities-can-join-the-fight-against-corruption/">advocated</a> by the World Economic Forum. </p>
<h2>Why the private sector is silent</h2>
<p>There are several reasons why private companies often remain silent about corruption. One is that some of them indulge in and benefit from corruption. </p>
<p>In Ghana, for example, a <a href="http://www.myjoyonline.com/opinion/2017/May-29th/why-wont-we-be-poor-when-create-loot-and-share-is-the-new-norm.php">“create-loot-share”</a> model of corruption persists. Politicians, public officers and businesses collude to create and profit from <a href="http://www.myjoyonline.com/news/2015/July-11th/create-loot-and-share-agenda-confirmed-in-shocking-expos-on-woyome-scandal.php">fraudulent</a> acts, including <a href="http://www.myjoyonline.com/politics/2016/May-16th/smarttys-bus-branding-contract-awarded-before-procurement-process.php">inflated contracts</a>. This is also common in Nigeria, where between 2009 and 2014, about <a href="https://www.premiumtimesng.com/news/more-news/188972-contract-inflation-bpp-has-saved-nigeria-n659-bn-says-dg.html">USD$2 billion</a> was salvaged from inflated contracts by the government agency set up to vet procurement.</p>
<p>Even multinational companies from the <a href="https://www.transparency.org/news/feature/corruption_perceptions_index_2016">least corrupt</a> countries gain from Africa’s corrupt political elite. For example, in 2011, UK’s Shell and Italy’s ENI paid <a href="https://www.theguardian.com/sustainable-business/shell-nigeria-oil-payment-corruption-scandal">USD$1.1 billion</a> to Nigerian officials for access to an oilfield currently <a href="http://www.bbc.co.uk/news/business-39544761">worth USD$500 billion</a>. US tyre firm Goodyear paid more than <a href="http://www.bbc.co.uk/news/business-31610495">USD$3.2 million</a> in bribes to Angolan and Kenyan government officials in order to win supply contracts. </p>
<p>The <a href="http://www.tandfonline.com/doi/abs/10.1080/23322373.2017.1379825?journalCode=rajm20">pressure on companies to indulge in corruption</a> is considerable in Africa. According to <a href="http://www.enterprisesurveys.org/data/exploretopics/corruption#sub-saharan-africa">data</a> from the World Bank, 71% of enterprises in Sierra Leone, 66.2% in Tanzania, 64% in Angola, 75.2% in Congo and 63% in Mali expect to give “gifts” to secure government contracts.</p>
<p>The ethical dilemma for business managers is that refusing to pay bribes can <a href="https://theconversation.com/can-businesses-succeed-in-a-world-of-corruption-without-paying-bribes-51777">cost</a> their companies contracts, licences and revenues. Essentially, good companies which do not yield to extortion <a href="http://www.corruptionwatch.org.za/wp-content/uploads/2015/12/Africa-survey-2015-Global-Corruption-Barometer.pdf">may lose out to bad competitors</a> who do. Consequently, most companies yield to corruption or stay silent. Speaking up can make them targets for political witch hunts and discrimination.</p>
<p>A much deeper reason for the private sector’s inactivity is that managers simply <a href="http://www.tandfonline.com/doi/abs/10.1080/23322373.2017.1379825?journalCode=rajm20">lack the political skills</a> required to shape their business environments. This deficiency arises because the link between political institutions and economic markets has not received adequate attention in business schools. So the schools are turning out managers with good knowledge of business but <a href="https://www.mckinsey.com/industries/public-sector/our-insights/how-business-interacts-with-government-mckinsey-global-survey-results">inadequate understanding of public governance </a> and inability to influence public institutions. </p>
<p>Most people, including business managers, feel <a href="https://books.google.co.uk/books?id=yE55DQAAQBAJ&pg=PA131&lpg=PA131&dq=citizens++powerless+against+corruption+in+africa&source=bl&ots=6_16WK5c-o&sig=Fw90KBKtVP8pe8gEVsx_ZHg98xE&hl=en&sa=X&ved=0ahUKEwjLqYnw-rrXAhUDyqQKHQ1tCH4Q6AEIXDAJ#v=onepage&q=citizens%20%20powerless%20against%20corruption%20in%20africa&f=false">powerless</a> when dealing with corrupt government officials. They regard official institutions as too powerful to take on and see corrupt practices, such as bribery, as unchangeable. But with <a href="http://www.tandfonline.com/doi/abs/10.1080/23322373.2017.1379825?journalCode=rajm20">good education and training,</a> this can change. </p>
<h2>African business schools can help</h2>
<p>Corruption is <a href="https://books.google.co.uk/books?id=wM6dBQAAQBAJ&pg=PA34&lpg=PA34&dq=corruption+is+a+multi+faceted+problem&source=bl&ots=INAbTqw9LW&sig=aZAKzdUdrUZ01WDMwVWpY4CPh8c&hl=en&sa=X&ved=0ahUKEwj74daH87nXAhWHyKQKHYiYAPkQ6AEIPDAF#v=onepage&q=corruption%20is%20a%20multi%20faceted%20problem&f=false">multi-faceted</a>. So there is <a href="http://www.tandfonline.com/doi/abs/10.1080/23322373.2016.1275942?journalCode=rajm20">no simple solution</a> for it. It must be battled on all fronts. Business schools can do their part by developing competence to confront corruption. </p>
<p>Some in Africa have <a href="https://theconversation.com/africas-business-schools-must-champion-anti-corruption-education-44380">already done so</a>: three business schools introduced an anti-corruption programme sanctioned by the United Nations into their classrooms.</p>
<p>But much more can be done. Business schools should teach business-government relations, or corporate political activity. This is crucial because many business managers don’t know how to <a href="https://www.mckinsey.com/industries/public-sector/our-insights/how-business-interacts-with-government-mckinsey-global-survey-results">influence their political environments</a> even though they are affected by government policies. Students and managers may be taught ethics in schools, but ethical values are <a href="http://www.tandfonline.com/doi/abs/10.1080/23322373.2017.1379825?journalCode=rajm20">difficult to uphold</a> in contexts where corruption is highly endemic, such as Africa. </p>
<p>If the fight against corruption in Africa is to <a href="http://www.tandfonline.com/doi/abs/10.1080/23322373.2017.1379825?journalCode=rajm20">succeed</a>, business managers must learn to engage public officers differently. The ability to do this can be developed in business schools. </p>
<p>Students and managers need to learn about political strategies that can change the way institutions work. Techniques for ad hoc management of bribery are no longer enough. Companies can, for example, present a <a href="http://www.tandfonline.com/doi/abs/10.1080/23322373.2017.1379825?journalCode=rajm20">united front</a> against corruption so that none can be singled out for <a href="https://rsf.org/en/news/ethiopian-governments-witchhunt-against-privately-owned-media">“punishment”</a>.</p>
<p>The business community could also learn to self regulate by refusing to deal with corrupt companies, as was <a href="https://www.cnbc.com/2017/10/12/south-africa-firms-are-now-taking-a-stance-on-corruption-central-bank-governor-says.html">recently reported in South Africa</a>. Collective campaigns for public procurement transparency can also prevent politicians from using the private sector to plunder State funds. Inaction breeds corruption, as seen in Kenya’s <a href="https://www.ft.com/content/bf75a7ee-c7f9-11e4-8210-00144feab7de">USD$1 billion Anglo Leasing scandal</a>.</p>
<p>African business schools are valuable in the fight against corruption. They can take bold steps to review their curricula and promote active corporate citizenship. When they see what a difference they can make, the continent may begin to shake off a <a href="http://edition.cnn.com/2015/12/24/africa/africa-corruption-transparency-international/index.html">major hindrance</a> to its development.</p><img src="https://counter.theconversation.com/content/87405/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Tahiru Azaaviele Liedong does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Public sector corruption is a major challenge to doing business in Africa and players are mostly ill-equipped to deal with it. Business schools can teach the skills to tackle it.Tahiru Azaaviele Liedong, Assistant Professor of Strategy, University of BathLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/857012017-11-21T14:29:51Z2017-11-21T14:29:51ZWhat needs to be done to give Africa’s smallholder farmers access to machinery<figure><img src="https://images.theconversation.com/files/195596/original/file-20171121-6061-1svo30x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Promoting mechanisation for small scale farmers in Africa is proving incredibly difficult.</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>Mechanisation of agricultural has become a priority across many African countries as the continent gears up to exploit its well recognised potential to become the world’s food basket.</p>
<p>This comes on the back of the fact that African farming systems remain the least <a href="http://www.sciencedirect.com/science/article/pii/S1574007206030544">mechanised of all continents</a>. 70% of the farmers cultivate parcels of less than two hectares by hoe.</p>
<p>According to the Food and Agriculture Organisation, Africa has less than <a href="http://www.sciencedirect.com/science/article/pii/S1574007206030544">two tractors per 1000 ha of cropland</a>. This number has sharply increased in all other continents, reaching ten tractors per 1000 hectares in South Asia and Latin America.</p>
<p>Mechanisation can help unlock underutilised agricultural potential. The challenge is to develop arrangements that enable smallholder-farmers – who can’t afford to buy their own equipment – to access equipment like tractors.</p>
<p>We <a href="https://link.springer.com/article/10.1007/s12571-017-0716-9">looked</a> at mechanisation efforts in Ghana. We wanted to get a better understanding of the challenges involved in government and private sector efforts to promote mechanisation among smallholder farmers.</p>
<p>Our study shows that alongside well-known problems like access to spare parts and credit, mechanisation is constrained by the fact that there aren’t enough skills being developed. This includes people who can operate tractors as well as technicians.</p>
<p>Other constraints include the fact that the private sector’s involvement is severely hampered because of government resistance, and corruption that affects imports of tractors and machinery. </p>
<p>The findings suggest that instead of focusing on supplying subsidised machinery – for example by simply giving farmers tractors – it would be better if governments invested in building institutions that can deliver skills as well as innovation in the sector, and that they opened the door to private sector initiatives.</p>
<p>But we found that governments tend to provide private goods, such as tractors, rather than public goods such as training. This is because private goods can be targeted to large and influential farmers who are often political supporters, and can generate media attention. </p>
<h2>Lessons learnt</h2>
<p>What’s the best way of promoting mechanisation for small scale farmers? According to the Food and Agricultural Organisation, past state-led and donor-backed mechanisation efforts have “<a href="http://www.fao.org/docrep/017/k2584e/k2584e.pdf">failed miserably</a>”. For example, most of the 30 mechanisation schemes set up before 1980 in sub-Saharan Africa <a href="https://tci.cornell.edu/wp-content/uploads/2017/06/2007-Pingali-Agricultural-Mechanization-Adoption-Patterns-and-Economic-Impact-The-Neverlands-Elsevier.pdf">collapsed</a>. The programmes failed because of governance challenges such as rent seeking and lack of access to spare-parts, qualified operators and technicians.</p>
<p>Are today’s state-led mechanisation efforts more successful? We looked at one of them in Ghana. </p>
<p>The government provides tractors at subsidised rates to entrepreneurs who run a 89 centres that rent out, and service tractors. The approach could be a promising model of a public- private partnership. But we found several challenges. </p>
<p>The distribution of machinery by state agencies opened opportunities for political misuse. For example, <a href="http://onlinelibrary.wiley.com/doi/10.1111/agec.12201/abstract">82%</a> of the centres were established in districts aligned with the same party as the ruling government. In some districts, centres never actually opened up – even though they were officially registered – and tractors disappeared.</p>
<p>Another challenge was the fact that due to donor requirements, the government had to select from whom they sourced stock from lists of pre-selected machinery producers. This precluded the selection of the most appropriate brands and also led to frequent shifts of brands, making private investment in spare parts difficult. Combined with a lack of maintenance and the absence of qualified operators and technicians, this resulted in frequent and long breakdowns and, consequently, a decline in the acreage served by the centres.</p>
<p>One of the centres studied ploughed 200 ha with nine tractors in its first year, 2008, but only 40 ha with the only two tractors that remained functioning in 2014. </p>
<p>Community organisations such as cooperatives can also provide machinery, but they also face challenges. In Ghana, farmers raised the concern that group members will dispute who can use machinery first. Also, <a href="https://books.google.de/books?hl=de&lr=&id=hAbFZdaBaF8C&oi=fnd&pg=PR5&dq=Birner,+R.,+%26+Anderson,+J.+(2007).+How+to+make+agricultural+extension+demand-driven%3F+The+case+of+India%E2%80%99s+agricultural+extension+policy.+IFPRI+Discussion+Paper+00729.+Washington,+DC:+International+Food+Policy+Research+Institute.&ots=CFVT_i-nNn&sig=VoOUFfXiPUu6eTX7viFUuh89wyY&redir_esc=y#v=onepage&q&f=false">experiences</a> from countries such as India have shown that wealthy farmers often dominate farmer-based organisation while smallholders have less of a voice. </p>
<h2>Private sector is the key</h2>
<p>Given these challenges, could private actors do better? The <a href="http://onlinelibrary.wiley.com/doi/10.1111/agec.12308/abstract">rise of medium scale farmers</a> in Africa suggests that there maybe many opportunities for the private ownership of tractors. </p>
<p>But we found that private tractor owners were reluctant to provide services in areas where farms are small and scattered because of the high servicing costs involved. </p>
<p>Policymakers thus need to find ways to nudge tractor owners to serve smallholders and to reduce servicing costs. Organising smallholders in groups or promoting <a href="https://www.nytimes.com/2016/10/18/world/what-in-the-world/trringo-app-india.html">mobile tools</a>, which allow smallholders to hire nearby tractors, may help improve access to mechanisation. </p>
<p>But all models of mechanisation, from state- to market-led, need a supportive environment to thrive. This is particularly true when it comes to knowledge and skills development. </p>
<p>In Ghana, <a href="https://pdfs.semanticscholar.org/d300/d99f3dc66caa52d336c4584e5765308a0d2e.pdf">more than 80%</a> of tractor-owners regularly face long machinery breakdowns because they don’t have adequate mechanical knowledge. Governments should play their part by stepping in and training operators and technicians. </p>
<h2>Next steps</h2>
<p>To exploit Africa’s potential to become the world’s food basket and to safeguard that profits are made by African smallholder farmers requires careful consideration of how different actors interact. Governments, private actors, community-based organisations and development partners can all contribute. Such a combination would help to create the appropriate checks and balances for mechanisation. </p>
<p>Instead of focusing on the supply of subsidised machinery, governments should provide public goods and services to support the emerging private markets. Such support includes strengthening the capacity of the education and training domain, improving the customs process, maintaining market stability, and focusing on institutional solutions for smallholders.</p><img src="https://counter.theconversation.com/content/85701/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Thomas Daum receives funding from the “Program of Accompanying Research for Agricultural Innovation” (PARI), which is funded by the German Federal Ministry of Economic Cooperation and Development (BMZ). The Deere & Company has funded parts of the fieldwork for this study.</span></em></p><p class="fine-print"><em><span>Regina Birner receives funding from the “Program of Accompanying Research for Agricultural Innovation” (PARI), which is funded by the German Federal Ministry of Economic Cooperation and Development (BMZ). The Deere & Company has funded parts of the fieldwork for this study.
Regina Birner is a member of the Social Democratic Party (SPD) of Germany.</span></em></p>Mechanisation of agricultural activity can help many African countries unlock underutilised agricultural potential. But there are serious obstacles which must be removed.Thomas Daum, Agricultural Economist, University of HohenheimRegina Birner, University of HohenheimLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/794032017-06-16T11:25:12Z2017-06-16T11:25:12ZThe World Bank reinvents itself – and puts poverty reduction at risk<figure><img src="https://images.theconversation.com/files/174005/original/file-20170615-23508-ebvwg4.jpg?ixlib=rb-1.1.0&rect=55%2C55%2C4500%2C2817&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/glass-globe-over-stock-data-on-95769487?src=RrZ5CKQxEzKlVfBmFBN2Zg-1-41">REDPIXEL.PL/Shutterstock</a></span></figcaption></figure><p>The World Bank’s relationship with US president Donald Trump has raised concerns about its <a href="https://www.ft.com/content/5c9f7f16-45f4-11e7-8d27-59b4dd6296b8">political neutrality</a> in recent weeks, but a larger and potentially much more important shift in how the Bank operates is underway. The World Bank is reinventing itself, from a lender for major development projects, to a broker for private sector investment.</p>
<p>In April 2017, World Bank Group President <a href="https://en.wikipedia.org/wiki/Jim_Yong_Kim">Jim Yong Kim</a> outlined his vision <a href="http://www.lse.ac.uk/website-archive/newsAndMedia/videoAndAudio/channels/publicLecturesAndEvents/player.aspx?id=3802">in a speech</a> given at the London School of Economics. He argued that development finance needs to fundamentally change in speed and scale, growing from billions of dollars in development aid <a href="http://siteresources.worldbank.org/DEVCOMMINT/Documentation/23659446/DC2015-0002(E)FinancingforDevelopment.pdf">to trillions in investment</a>. </p>
<p>Kim said that there are significant financial resources readily available, literally trillions of dollars “<a href="http://www.lse.ac.uk/website-archive/newsAndMedia/videoAndAudio/channels/publicLecturesAndEvents/player.aspx?id=3802">sitting on the side-lines</a>” on capital markets, generating little in the way of returns, particularly compared to what they could make if invested in developing countries. Private investors’ lack of knowledge about these countries, and their tendency to remain generally risk-averse, mean that these funds remain largely untapped.</p>
<h2>New role</h2>
<p>In Kim’s view, the World Bank should therefore be a broker between the private sector and developing countries. Its future top priority should not be to lend money, but to “systematically de-risk” development projects and entire developing countries. To do that, it will promote policies that make countries and projects attractive for private investment. </p>
<p>Kim hopes that this will enable private sector financing, while at the same time benefiting poor countries and their populations. In his view, the bank would mediate between the interests of a global market system, developing country governments, and people in poverty.</p>
<p>Kim provides several examples of this catalytic role: the bank’s International Finance Corporation (<a href="http://www.ifc.org/wps/wcm/connect/corp_ext_content/ifc_external_corporate_site/home">IFC</a>) enabled private sector involvement in building and managing Jordan’s <a href="http://documents.worldbank.org/curated/en/817031468040509631/Jordan-Queen-Alia-international-airport">Queen Alia International Airport</a>; the IFC and the bank’s investment guarantee agency <a href="http://documents.worldbank.org/curated/en/817031468040509631/Jordan-Queen-Alia-international-airport">MIGA</a> <a href="http://documents.worldbank.org/curated/en/817031468040509631/Jordan-Queen-Alia-international-airport">helped privatise Turkey’s energy sector</a>; and the IFC’s <a href="http://www.ifc.org/wps/wcm/connect/d3011c804717ee8aa34def57143498e5/MCPP+Factsheet+for+Investors.pdf?MOD=AJPERES&id=1422400453272">new risk mitigation program</a> covers private sector investment risk with public money. As a broker, the World Bank thus provides a mixture of services that range from investment and insurance to business advice and policy lobbying.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/174009/original/file-20170615-32257-sodg30.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/174009/original/file-20170615-32257-sodg30.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/174009/original/file-20170615-32257-sodg30.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=407&fit=crop&dpr=1 600w, https://images.theconversation.com/files/174009/original/file-20170615-32257-sodg30.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=407&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/174009/original/file-20170615-32257-sodg30.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=407&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/174009/original/file-20170615-32257-sodg30.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=511&fit=crop&dpr=1 754w, https://images.theconversation.com/files/174009/original/file-20170615-32257-sodg30.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=511&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/174009/original/file-20170615-32257-sodg30.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=511&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Magic money tree?</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/proimos/7497164864/in/photolist-cquVVb-akmH9L-hJEJC5-9ygZu2-rfdkoK-9ygYTr-k682Ge-9ygYjK-k674na-ogpipc-mYxuF3-9yjXKS-9yjWLL-hJEhdF-ohjRjV-k66qup-hxMh9K-5tth1y-dZFDEj-dZJQFj-dZD9ot-hJEfge-k675FT-mYxnry-dZD948-dZD9eM-rUyMkn-mYxAuC-9yjYXq-dZD988-9yjWYw-7EfdUS-9yjX9Q-TRFas1-SLv1vS-FuaSFg-TRFaEf-TRoDqM-SLuZQd-zkS4xc-TRoKHr-rfbmwk-SLuZTE-SLv4q9-TP2SSG-TRoNJB-TRoNhe-MXmKCY-MSUWse-TRF9w3">Alex Proimos/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc/4.0/">CC BY-NC</a></span>
</figcaption>
</figure>
<h2>Power shifts</h2>
<p>Kim’s vision would shift power away from the traditional lending arms of World Bank operations, the International Bank for Reconstruction and Development (IBRD) and International Development Association (IDA), and towards the private sector arm of the bank, the IFC.</p>
<p>The IBRD, formed in 1948, provides loans and advice to middle-income and low-income countries which are deemed creditworthy. These loans are profitable, even if the IBRD does not work to maximise its income but aims instead to <a href="http://siteresources.worldbank.org/EXTABOUTUS/Resources/ibrd-articlesofagreement.pdf">foster global socioeconomic development</a>. The IBRD is largely financed via capital contributions it receives from its 188 member states <a href="http://globalhealthgovernance.org/blog/2017/5/11/so-what-is-the-world-banks-business-model">as well as via the issuance of World Bank bonds</a>. In 2016 it disbursed US$22.5 billion (<a href="http://www.ifc.org/wps/wcm/connect/corp_ext_content/ifc_external_corporate_site/annual+report/2016+online+report/printed+version">almost half of World Bank Group disbursements overall</a>).</p>
<p>The IDA was created in 1960 and provides low-interest loans and grants to the world’s poorest countries. It is funded by so-called “<a href="http://ida.worldbank.org/financing/replenishments/replenishments">replenishments</a>”, or donor commitments, generally every three years. Broadly speaking, it does not make a profit, but works mostly towards the goals of poverty alleviation and economic growth. In 2016 it disbursed US$13.2 billion (slightly over a quarter of group disbursements).</p>
<p>The IFC, created in 1956, aims to <a href="http://www.ifc.org/wps/wcm/connect/corp_ext_content/ifc_external_corporate_site/about+ifc_new/ifc+governance/articles/about+ifc+-+ifc+articles+of+agreement+-+article+i">foster private sector involvement</a> in development projects around the globe. In 2016 its disbursements amounted to US$10.0 billion (one-fifth of group disbursements). Its work has been severely criticised by activists, academics and civil society organisations. They argue for example that the IFC has exacerbated <a href="https://go.oxfam.ca/docs/investing-for-few-ifc-health-in-africa-2014-09.pdf">inequality in health</a> and famously, concerns persist about the fallout from its <a href="http://www.ft.com/cms/s/0/4bf9ea0a-1a84-11da-b7f5-00000e2511c8.html?ft_site=falcon&desktop=true">attempts at water privatisation</a>.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/174013/original/file-20170615-23518-1j0iwoo.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/174013/original/file-20170615-23518-1j0iwoo.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/174013/original/file-20170615-23518-1j0iwoo.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=399&fit=crop&dpr=1 600w, https://images.theconversation.com/files/174013/original/file-20170615-23518-1j0iwoo.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=399&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/174013/original/file-20170615-23518-1j0iwoo.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=399&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/174013/original/file-20170615-23518-1j0iwoo.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=502&fit=crop&dpr=1 754w, https://images.theconversation.com/files/174013/original/file-20170615-23518-1j0iwoo.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=502&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/174013/original/file-20170615-23518-1j0iwoo.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=502&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Carrying the can?</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/dfataustralianaid/10679187463/in/photolist-hgFCnM-pEBTTh-kvkfe1-5TYu1j-3qzaxr-5jtjwB-56Fu89-pQiyEx-pUQGQb-kn9W7M-bm6Rfb-eUGZZh-bz1JDn-781b1h-bf6h48-knWYg-9XtC26-gzuRJQ-8mjKWF-4NDytx-e7ojMu-bzg8Sa-bSpsVx-7GD8ka-gzuRSL-bv9ddF-mozU9-cwUzB7-bzg7dM-bCdtqR-V3yW8W-cgYhry-8tQaFg-97tghY-new7Bi-bz1JpK-dKagg7-64LhH-cRMYY1-e7hEhX-eAgDy6-bmmfaL-tHEwS-7DhxA2-e18nn8-yRcn-bm6Ray-4CfftU-4UfEWm-q7RTXU">Department of Foreign Affairs and Trade/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<h2>The rise of private finance</h2>
<p>The role of investment broker makes sense from the World Bank’s own perspective, if we take into account the larger political economy context of development. Low and middle-income countries <a href="https://www.project-syndicate.org/commentary/saving-the-world-bank-by-ngaire-woods-2016-01?barrier=accessreg">have become less reliant on World Bank lending</a>, given increasingly attractive alternative sources of financing; the current US and UK administrations <a href="https://www.ft.com/content/72b6d08c-25ac-11e7-a34a-538b4cb30025">favour trade and business over development aid</a>, and private finance has in past decades <a href="https://pdfs.semanticscholar.org/3a23/fc53714484cdcfb21aaa8695cccef3246a52.pdf">rapidly outgrown other parts of economic activity</a>. </p>
<p>The World Bank therefore risks becoming irrelevant unless it reacts to these trends. Moreover, since its <a href="http://web.worldbank.org/WBSITE/EXTERNAL/EXTABOUTUS/ORGANIZATION/BODEXT/0,,contentMDK:50004943%7EmenuPK:64020045%7EpagePK:64020054%7EpiPK:64020408%7EtheSitePK:278036,00.html">founding articles of agreement</a> define the bank as an institution that facilitates private sector investment, its role as a finance broker does correspond to its core mandate.</p>
<p>However, making the private sector its first port of call may fit less well with the goal of making development <a href="http://www.worldbank.org/en/about/what-we-do">work for the world’s poorest people</a>. Two major concerns are worth highlighting. First, why exactly should assessment of the value and effectiveness of development activities primarily be made with reference to their profitability for the private sector? As French economist Thomas Piketty has shown, when left to its own devices the rising power of private capital markets is a <a href="http://www.hup.harvard.edu/features/capital-in-the-twenty-first-century-introduction.html">force for, rather than against, income and wealth inequality</a>. Surely, the most important question to ask is thus whether the private sector does enough for people living in poverty or in highly unequal societies, rather than <em>vice versa</em>.</p>
<p>Second, what makes this renewed turn towards private sector solutions so much more promising today than during previous decades <a href="https://www.theguardian.com/news/2016/aug/11/world-bank-jim-yong-kim">when Kim himself had vigorously criticised them</a>? In his LSE speech, he remarked that the bank has learned from past mistakes. Yet, “de-risking” entire countries for private sector investors is likely to include policies such as strict inflation controls, large-scale privatisations, rapid trade liberalisation and strong government cutbacks on social spending. These have in the past made World Bank lending activities notoriously destructive for developing countries. </p>
<p>In Bolivia, for example, structural adjustment policies imposed as part of World Bank lending conditions from 1985, led not only to a <a href="http://www.sciencedirect.com/science/article/pii/S0962629801000786">rise in unemployment and a reduction in public revenues</a>, but eventually to <a href="http://www.newyorker.com/magazine/2002/04/08/leasing-the-rain">countrywide riots</a> over water privatisation and resulting price hikes.</p>
<p>Even if we leave aside <a href="https://www.nytimes.com/2016/06/06/us/panama-papers.html">concerns over the financial transparency</a> of the corporations which will be involved, the bank’s changing role reflects a worrying shift in how the development sector operates more widely. There may well be vast amounts of capital waiting in the wings, but putting development work in the service of private capital creates a new risk altogether – that of people in poverty being pushed out of sight.</p><img src="https://counter.theconversation.com/content/79403/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Felix Stein works as a Postdoctoral Researcher at the University of Edinburgh. See <a href="http://globalhealthgovernance.org/team-1/">http://globalhealthgovernance.org/team-1/</a> His work is funded by the Wellcome Trust. Grant number 106635/Z/14/Z</span></em></p><p class="fine-print"><em><span>Devi Sridhar directs the Global Health Governance Programme at the University of Edinburgh. Part of her work is funded by the Wellcome Trust. Grant number 106635/Z/14/Z.</span></em></p>A dubious deal with the Trumps has sparked criticism of the World Bank, but attention should be focused elsewhere.Felix Stein, Research affiliate, University of CambridgeDevi Sridhar, Professor of Global Public Health, The University of EdinburghLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/744482017-03-21T09:45:35Z2017-03-21T09:45:35ZSouth Africa’s student funding scheme should be strengthened<figure><img src="https://images.theconversation.com/files/161287/original/image-20170317-6100-vcjyiu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">South Africa's government is trying to approach student funding differently.</span> <span class="attribution"><span class="source">EPA/NIC BOTHMA</span></span></figcaption></figure><p>In mid-December 2016, the South African Minister of Higher Education and Training released <a href="http://www.dhet.gov.za/SiteAssets/Gazettes/MTT_Report.pdf">the report</a> of a ministerial task team set up to investigate student funding for those who can’t afford higher education. </p>
<p>The timing of the report’s release coincided with the start of the annual holiday season which precluded public scrutiny and engagement. This was a missed opportunity. The report is a welcome contribution to the debate on student funding in South Africa. </p>
<p>Its main recommendations provide a realistic framework for rethinking approaches to student funding. These include grants for very poor students and a combination of grants (progressively reduced as household income increases) and loans for the poor and “<a href="https://theconversation.com/in-south-africa-university-is-open-to-rich-and-poor-but-what-about-the-missing-middle-36801">missing middle</a>” – students whose parental income is above the cut-off point to qualify for loans from the <a href="http://www.nsfas.org.za/content/">National Student Financial Aid Scheme</a> (NSFAS) but insufficient to meet the full costs of higher education. This approach reduces the repayment burden. </p>
<p>The report also recommends the mobilisation of private sector funds through various tax incentives. And it suggests that loan recovery mechanisms could be improved through direct deductions by the South African Revenue Service (SARS).</p>
<p>But there’s one key flaw in the report. It recommends that a new agency, the <a href="https://www.businesslive.co.za/rdm/news/2017-01-11-applications-open-for-new-student-funding-scheme/">Ikusasa Student Financial Aid Programme</a>, be established to replace the NSFAS. It was established in 1999 to ensure that funding is not a barrier to access to higher education for poor students. It has successfully discharged this mandate and supported just more than one million students in the past 18 years.</p>
<p>The report presents a jaundiced view of an important organisation that has opened the doors of higher education to many who would otherwise have been left out.</p>
<h2>Myths and realities</h2>
<p>One of the report’s recommendations is that Ikusasa should establish a special purpose vehicle run by the private sector to manage student funding on the government’s behalf. </p>
<p>It argues that this is necessary to counter the private sector’s apparent lack of confidence in the NSFAS, which is ascribed to the scheme having weak accountability structures and inefficient processes, especially its poor loan recovery record. The NSFAS has as a result apparently <a href="http://www.dhet.gov.za/SiteAssets/Gazettes/MTT_Report.pdf">lost</a> “most of the funding it used to receive from the private sector”.</p>
<p>There’s no evidence provided to support this assertion. This is because there has been no private sector funding of the NSFAS other than its administration of bursaries on behalf of one of the major banks. </p>
<p>The NSFAS was also remarkably successful in recovering loans between 1997 and 2008, increasing <a href="http://www.che.ac.za/sites/default/files/CHE%20Presentation%20to%20Commission%20of%20Inquiry%20into%20Higher%20Education%20and%20Training%2017%20August%202016.pdf">from R30 million to R636m</a>. After that <a href="http://www.che.ac.za/sites/default/files/CHE%20Presentation%20to%20Commission%20of%20Inquiry%20into%20Higher%20Education%20and%20Training%2017%20August%202016.pdf">the amount decreased</a>: only R248m was recovered in 2014, as against projections of R1 711m. This was because of the promulgation of the National Credit Act in 2005. </p>
<p>This legislation made it illegal to recover loans from debtors through automatic deductions by employers, which was provided for in the <a href="http://www.nsfas.org.za/content/downloads/NSFAS%20Act.%20No%2056%20of%201999.pdf">NSFAS Act</a>. This has severely impacted on the funding available to the NSFAS.</p>
<h2>The role of funding agencies</h2>
<p>The report is also on weak ground in its attempt to deal with broader skills and educational issues. </p>
<p>It proposes that funding should prioritise professional and vocational programmes in scarce skills and high demand occupations to “grow the economy”. This refers to the need to grow enrolments in science, engineering and technology. </p>
<p>The scarce skills focus would adversely impact on poor students’ access to higher education. They are the main recipients of low quality schooling, especially in gateway subjects like maths and science which are essential for access to the programmes in question. </p>
<p>The report also proposes that Ikusasa should develop a “wrap-around” student support programme. Social, life skills and academic support to improve throughput and graduation rates would be provided using external service providers. This betrays a lack of understanding of the challenges of teaching and learning in higher education. The fact that such support has been successfully provided on a small scale by NGOs and private sector bursary programmes does not necessarily mean it can be taken to scale. </p>
<p>What is needed is systemic intervention to address the knowledge and skills gap between school and university. This requires restructuring the curriculum and qualifications structure in higher education, as has <a href="http://www.che.ac.za/sites/default/files/publications/4YD%20proposal%202013_CHE%20seminar_2013-00-17.pdf">been proposed</a> by the Council on Higher Education. This is the joint responsibility of government and higher education institutions – not funding agencies.</p>
<h2>A crucial body</h2>
<p>The report’s uncritical focus on enhancing the role of the private sector in student funding is cause for concern. It ignores the fact that the private sector is risk averse. In the absence of collateral in the form of government guarantees, it’s unlikely to come to the party. And at any rate, it projects that direct private sector investment will comprise of no more than one-fifth of the total funding required to implement the proposed model.</p>
<p>The private sector has a role to play in student funding. But this can best be done through an expanded NSFAS, with a separate and dedicated sub-structure established to deal with private sector contributions and investments.</p>
<p>There’s no denying that administrative and governance challenges have had an impact on the NSFAS’ efficiency and effectiveness. This is largely due to the rapid growth of the funds it administers without a concomitant development of administrative systems. There has been progress in addressing these challenges and no doubt more needs to be done. But its real challenge is too little funding to meet demand. The private sector can contribute to alleviating this. </p>
<p>However, ultimately it’s the government’s responsibility to ensure that student funding is adequate to meet demand. </p>
<p>The NSFAS, despite its challenges, has played a critical role in opening the doors of higher education to the poor. It has been one of success stories of the post-1994 commitment to social justice and the redress of past inequalities. The NSFAS cannot be wished away by the whims of a task team which seems have little or no understanding of the social and political context that gave rise to it.</p><img src="https://counter.theconversation.com/content/74448/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Ahmed Essop does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The ministerial task team’s report presents a jaundiced view of an important organisation that’s opened the doors of higher education to many who would otherwise have been closed out.Ahmed Essop, Research Associate in Higher Education Policy and Planning, Ali Mazrui Centre for Higher Education Studies, University of JohannesburgLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/686162016-11-15T02:55:20Z2016-11-15T02:55:20ZWhy Trump’s vow to kill Obama’s sustainability agenda will lead business to step in and save it<p>During the campaign, then-candidate Donald Trump <a href="http://www.forbes.com/sites/ericmack/2016/11/11/donald-trump-says-climate-change-is-a-hoax-lets-discuss/#59431bd41d50">called climate change a hoax</a>, threatened to <a href="https://www.theguardian.com/environment/2016/feb/26/republican-candidates-donald-trump-eliminate-epa-law-experts">dismantle the Environmental Protection Agency</a>, committed to <a href="http://money.cnn.com/2016/05/26/investing/donald-trump-energy-plan/">easing restrictions</a> on drilling and mining on federal lands, and promised to <a href="http://www.bloomberg.com/politics/articles/2016-09-22/trump-vows-to-speed-energy-projects-as-obama-halts-pipeline">push for oil pipelines and other controversial energy infrastructure</a>.</p>
<p>Perhaps most troubling to the sustainability community, however, is his vow to abolish President Barack Obama’s executive actions on climate change, such as the <a href="https://www.epa.gov/cleanpowerplan/clean-power-plan-existing-power-plants">Clean Power Plan</a>. He also promised to withdraw from the <a href="http://unfccc.int/paris_agreement/items/9485.php">Paris climate accord</a>, which he claimed was bad for business and threatened U.S. sovereignty.</p>
<p>Now President-elect Trump has appointed a noted denier of climate change – and of the <a href="https://theconversation.com/the-things-people-ask-about-the-scientific-consensus-on-climate-change-59243">scientific consensus</a> behind it – to <a href="http://www.newsweek.com/2016/10/14/donald-trump-epa-myron-ebell-climate-change-505546.html">lead the EPA’s transition team</a>. This has wiped away the faintest glimmer of hope that Trump would <a href="http://grist.org/politics/donald-trump-climate-action-new-york-times/">revert to his view in 2009</a>, when he agreed that climate change was a problem worthy of urgent action. </p>
<p>It’s hard to pretend that any of this will bode well for either the natural environment that society collectively depends upon or the climate and environmental protection agenda set in motion by the Obama administration. Indeed, scientists of all stripes and nationalities are <a href="http://www.nature.com/news/donald-trump-s-us-election-win-stuns-scientists-1.20952">dismayed</a> by what has happened in the days since the election and are <a href="https://www.washingtonpost.com/news/speaking-of-science/wp/2016/11/09/what-will-president-trump-mean-for-science/">worried</a> about what is likely to happen in coming years.</p>
<p>Many times since Election Day I’ve been asked how Trump might lead when it comes to issues like climate change and the environment. <a href="http://policyoptions.irpp.org/2016/01/17/the-riskiest-of-public-performances/">My answer has been the same since his campaign began</a>: Don’t hold your breath because, in my view, he won’t lead at all.</p>
<p>However, all may not be lost. Here’s why.</p>
<h2>Business wants it</h2>
<p>Since President Obama took office in 2009, the private sector has helped take responsibility for advancing the nation’s sustainability agenda. </p>
<p>As many businesses have discovered, <a href="http://www.theatlantic.com/magazine/archive/2015/11/the-planet-saving-capitalism-subverting-surprisingly-lucrative-investment-secrets-of-al-gore/407857/">decoupling economic progress from resource use and environmental decline</a> can also be one of the biggest drivers of future success. In other words, <a href="https://www.greenbiz.com/article/state-green-business-money-flows-where-sustainability-grows">money flows where sustainability grows</a>.</p>
<p>Even before that, businesses – from airlines and auto manufacturers to the oil and gas industry – were beginning to recognize that their long-term viability would depend upon their ability to better account for the environmental costs associated with production. <a href="https://assets.kpmg.com/content/dam/kpmg/pdf/2012/02/building-business-value-exec-summary.pdf">For example</a>, the external environmental costs of 11 key industry sectors, including their upstream suppliers, increased by an estimated 50 percent from 2002 to 2010. This amounted to a loss of approximately 40 cents on every dollar in earnings across a diverse array of businesses, from beverage producers to manufacturers. </p>
<p>Continued attention by companies to these environmental costs is helping to keep some of the barriers to a more sustainable future in check. For example, 2016 marks the second-consecutive year in which <a href="https://www.iea.org/newsroom/news/2016/march/decoupling-of-global-emissions-and-economic-growth-confirmed.html">the rise of climate warming greenhouse gas emissions has been decoupled from economic growth</a>. Sustained progress along similar lines will help to ensure that President Obama’s vision for sustainability stands a chance of enduring despite the relaxed regulatory environment expected under a President Trump.</p>
<h2>Consumers want it</h2>
<p>A related factor, which may help to stem the tide of environmental degradation under Trump, is consumer demand. Consumers in both mature and emerging markets are coming to <a href="http://www.tandfonline.com/doi/full/10.1080/08911762.2015.1133869?scroll=top&needAccess=true">expect</a> businesses to produce products and services in a manner that addresses broad sustainability objectives. These include personal health and wellness, social fairness and inclusion, economic stability, ethical production, and the protection of natural resources and the environment. </p>
<p>Likewise, consumers are increasingly <a href="http://www.nielsen.com/content/dam/nielsenglobal/dk/docs/global-sustainability-report-oct-2015.pdf">willing to pay more</a> for goods and services that are being produced with sustainability concerns in mind. Approximately 66 percent of global consumers surveyed by Nielsen report that they are willing to pay more for sustainable goods, up from 50 percent in 2013.</p>
<p>This trend is especially important for consumer-facing brands and companies. <a href="http://media.gm.com/media/us/en/gm/news.detail.html/content/Pages/news/us/en/2016/sep/0914-renewable-energy.html">General Motors</a>, for example, has indicated it will generate or source all electrical power for its 350 operations in 59 countries with 100 percent renewable energy – wind, solar and natural gas from landfills – by 2050. <a href="http://www.apple.com/environment/">Apple</a> already receives over 93 percent of its electricity from renewable sources, and <a href="http://there100.org/ikea">IKEA</a> has committed to producing as much renewable energy as it consumes by the year 2020.</p>
<p>Commitments like these are also trickling down to suppliers. Across the United States, utilities have <a href="http://www.wri.org/blog/2016/05/new-us-map-shows-companies-where-buy-renewable-energy-they-want">increased their investments</a> in renewable energy projects, in part to attract new businesses and to meet the demand of current ones. For example, Consumers Energy in Michigan <a href="https://www.google.fr/search?client=safari&rls=en&q=michigan+switch&ie=UTF-8&oe=UTF-8&gfe_rd=cr&ei=TAoqWLK4C6ek8wfwjanoCw#q=michigan+switch+data+center+renewable">recently promised</a> to provide 100 percent renewable energy in order to lure Las Vegas-based Switch Communications Group and their cloud-based data centers to Michigan. This helps to explain why corporate officers from Consumers Energy were behind the Michigan Senate’s <a href="http://www.freep.com/story/news/local/michigan/2016/11/10/energy-bills-michigan-senate/93589258/">recent approval</a> of a new energy bill that would set a renewable energy standard of 15 percent for state utilities by 2021. </p>
<p>Consumers Energy CEO Patricia Poppe told me recently that her company’s commitment to adding renewable capacity is being driven as much by customer demand as it is by federal regulations like the Clean Power Plan. If this trend continues, and I have no reason to believe it won’t, the private sector can help fill some of the sustainability leadership vacuum created by a Trump administration.</p>
<h2>Workers want it</h2>
<p>There’s also a third factor, which will motivate the private sector to lead where President-elect Trump likely won’t: labor. The long-term success of companies ultimately rests with the visionary thinking of their current employees and – importantly – the next generation of business talent.</p>
<p>In a <a href="http://cbey.yale.edu/programs-research/rising-leaders-on-environmental-sustainability-and-climate-change">recent study</a>, business students currently enrolled in top-tier programs around the world say they are more willing to work for companies exhibiting good sustainability performance. Moreover, of the more than 3,700 students surveyed, respondents indicated that they’d be willing to accept lower salaries from companies that were strong performers on the sustainability front. </p>
<p>And, when holding factors like corporate culture and job responsibility constant, nearly 20 percent of those students surveyed indicated they would refuse job offers entirely from companies that perform poorly in terms of sustainability. Results like these strongly suggest that businesses with poor sustainability performance will suffer through an inability to attract top-end talent, as well as through demands for higher salaries from employees who are willing to work them when compared to their more sustainable competitors.</p>
<h2>Election irony</h2>
<p>We shouldn’t be so naïve as to think that, when it comes to sustainability, the private sector can act alone to save the proverbial world. </p>
<p>At this month’s <a href="http://www.nytimes.com/2016/11/07/business/energy-environment/business-leaders-support-steps-to-rescue-climate.html">New York Times Energy for Tomorrow</a> meeting, which I attended, a dominant sentiment expressed by CEOs of some of the world’s most profitable companies was that, when it comes to sustainability, government regulation and action by business must work hand-in-hand. </p>
<p>It’s true that some companies, many in the oil and gas industry, seem like they don’t care about sustainability. However, their true position on the issue is more complicated. Because a majority of companies are obliged to maximize profits for their shareholders, it is difficult to <em>voluntarily</em> curtail profits in the name of sustainability. However, if government <em>requires</em> them to do it, the hard sell to shareholders becomes much softer. This is why many companies have been <a href="https://www.bloomberg.com/view/articles/2015-06-01/even-big-oil-wants-a-carbon-tax">lobbying government</a> to introduce a carbon tax. In the eyes of many companies, the ends justify the means.</p>
<p>But, it appears as though – for at least the next two years before midterm elections – action on this front from the executive and legislative branches of government will be limited at best. </p>
<p>Many voters claimed they cast their ballots for Trump because of his <a href="http://www.gallup.com/poll/189773/trump-support-built-outsider-status-business-experience.aspx">experience as a businessman</a>. One of the biggest ironies of the election may end up being that the private sector becomes a firewall between a Trump-led White House and President Obama’s strong pro-sustainability leadership that preceded it. </p>
<p>Time will tell.</p><img src="https://counter.theconversation.com/content/68616/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Joe Arvai has received funding from organizations like the National Science Foundation, and from corporations, to conduct research on, and to develop guidelines for decision-making processes that balance social, environmental, and economic objectives. He also serves as the Director of the Fredrick A. and Barbara M. Erb Institute for Global Sustainable Enterprise at the University of Michigan.</span></em></p>Trump has promised to abolish Obama’s Clean Power Plan and back out of the Paris climate accord. But business could become a key firewall that won’t let Obama’s sustainability legacy die.Joe Árvai, Max McGraw Professor of Sustainable Enterprise, and Director of the Erb Institute for Global Sustainable Enterprise, University of MichiganLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/646662016-09-01T02:19:59Z2016-09-01T02:19:59ZAustralia needs to follow the US in funding urban rail projects<p>Australia should look at examples from the US in finding private funding for urban rail development because the present model depends on government providing the capital, <a href="https://theconversation.com/want-to-build-better-cities-get-the-private-sector-involved-in-rail-projects-52204">which it mostly doesn’t have</a>. </p>
<p>A new rail line in Florida called <a href="http://www.gobrightline.com">Brightline</a> is the first American example to show this can be done. This rail project is entirely privately funded and is due for completion in June 2017. It will link the Atlantic coastal cities of Miami, Fort Lauderdale, West Palm Beach and Orlando, which can be seen as one long narrow city. </p>
<p>According to the company, the project is designed to take three million cars off the road. It is likely to succeed, bringing US$6.4 billion in economic impact to the Florida region.</p>
<p>The project uses a model where money is raised via land development through a consortia who can build, own and operate the rail line. The consortia creates funds through fares and the land opportunities unlocked by the rail line. </p>
<p>In Australia all urban rail projects have been fully funded by government. Some American rail projects have used value capture, where governments set aside a stream of extra tax money generated by the new rail lines, due to the <a href="http://islandpress.org/book/the-end-of-automobile-dependence">increase in land values around stations</a>. Australia is yet <a href="http://www.tandfonline.com/doi/abs/10.1080/08111146.2014.968246">to try this process.</a> </p>
<p>The Brightline project is being financed by a New York hedge fund and the consortium will pay this back with money from land development around stations and train fares. The process for creating this project did not have to be set up by any government as the company proposed it as an unsolicited bid. The company actually owns the right of way, as it has operated a freight line for 120 years that runs along most of the proposed line as the new project. </p>
<p>The remarkable thing is that the company building this railway is the same group that 120 years ago, under the direction of Henry Flagler, was able to build these coastal cities entirely through the same mechanism: building a railway to make urban land development attractive enough to pay for the railway. The history of tram and train development in most cities is similar - they were all land development projects. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/136200/original/image-20160901-26176-13rsgvq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/136200/original/image-20160901-26176-13rsgvq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=518&fit=crop&dpr=1 600w, https://images.theconversation.com/files/136200/original/image-20160901-26176-13rsgvq.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=518&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/136200/original/image-20160901-26176-13rsgvq.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=518&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/136200/original/image-20160901-26176-13rsgvq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=651&fit=crop&dpr=1 754w, https://images.theconversation.com/files/136200/original/image-20160901-26176-13rsgvq.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=651&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/136200/original/image-20160901-26176-13rsgvq.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=651&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">A depiction of what a station would look like in the Brightline project.</span>
<span class="attribution"><span class="source">Brightline</span>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<p>The Brightline project did not need capital from the various levels of government, but it did need their support in the process of implementing the proposal. Significant land assembly and detailed urban design assistance was needed to enable the stations to be integrated into the cities and the land development around them needed to be suitably zoned and approved. </p>
<p>The consortium generated community support through not just ensuring that a good railway service could be provided, but that the urban development contained opportunities for living, working, shopping and provision of services. An innovative approach was adopted to ensure the trains (both passenger and freight) were silent when they went through residential areas and city centres. It did this using smart safety devices for drivers that eliminated the use of train horns. </p>
<p>Integrated design into all surrounding buildings was included in the build from the start. The model means there are returns generated from the buildings and the train fares as soon as the train line begins operating. Most new government funded rail lines do this after they are built, sometimes very poorly. </p>
<p>The company building Brightline has plans to expand their model into 100 other cities across the world. It’s also developing plans to build light rail east-west through the Brightline stations from Miami to Orlando. This would also be privately provided. </p>
<p>So now Australia has an American example to go by, in addition to the example set by the Japanese rail system, which is fully based on <a href="http://www.curtin.edu.au/research/cusp/local/docs/Rail_Model_Report.pdf">this private funding approach</a> and two new light rail lines in Canada that are also privately funded. </p>
<p>The Brightline project is better at integrating land development into rail lines than top down government projects. In Australia, these often start out with a focus on land development, <a href="http://islandpress.org/book/the-end-of-automobile-dependence">but end up being dominated</a> by transport issues only, ensuring the fastest route of public transport and not focussing on the stops along the way. The US project is also fairer, as it eliminates the windfall profits made by those who just happen to own land near a new rail line built with government capital. </p>
<p>Who will be the first city in Australia to put this model into practice? There have been suggestions coming from those responsible in Brisbane for Cross City rail, in Sydney for the Metro, Parramatta Light Rail and West Sydney Rail (to Badgerys Creek), in Melbourne for their Metro, in Adelaide for their Light Rail extensions, in Hobart for a potential Light Rail along an old freight line similar to Brightline, in the Sunshine Coast for their proposed Heavy Rail and Light Rail projects and in Perth for their Heavy Rail extensions and proposed Light Rail. </p>
<p>Rather than just watch others doing this, we should take the opportunity provided by our lack of public capital to embrace alternatives.</p><img src="https://counter.theconversation.com/content/64666/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Peter Newman does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The Australian government should look to the private sector to fund, develop and run more urban rail projects.Peter Newman, Professor of Sustainability, Curtin UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/634012016-08-03T20:07:41Z2016-08-03T20:07:41ZThere’s work (and life) outside of universities for PhD graduates<figure><img src="https://images.theconversation.com/files/132739/original/image-20160802-17177-e3b9fl.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">PhD graduates should aim for careers in industry.</span> <span class="attribution"><span class="source">Shutterstock/Syda Productions</span></span></figcaption></figure><p>The number of PhD students graduating from Australian universities continues to rise, with <a href="https://docs.education.gov.au/documents/2014-award-course-completions">more than 8,000 in 2014</a> and about one in three in science, technology, engineering and mathematics (STEM) disciplines.</p>
<p>Our best estimates are that about half of these students will begin an academic career as postdoctoral research fellows or research assistants.</p>
<p>But over time most will move out of – and much less frequently back into – academic jobs.</p>
<p>Only around 2% of PhD graduates are expected to reach professorial levels and enjoy the privilege of an <a href="https://royalsociety.org/%7E/media/Royal_Society_Content/policy/publications/2010/4294970126.pdf">uninterrupted academic career</a>.</p>
<h2>Options and expectations</h2>
<p>Most PhD graduates are driven by a passion for their field and commit years to study. Some are sold on the promise that they will one day have an independent research career, like their supervisors.</p>
<p>The reality of fierce competition for grants, intense pressure to perform, inflexible funding regulations and 12-month contracts is often <a href="http://www.abc.net.au/radionational/programs/scienceshow/the-perilous-road-for-graduating-phds/7652818">a stark and unwelcome revelation</a>.</p>
<p>But the modern PhD is not only a training to conduct specialised research. It is also a wider preparation for diverse employment.</p>
<p>A PhD equips people with the ability to think critically, to assess a problem in the context of the wider body of knowledge, and to produce original solutions independently. It also gives them the ability to communicate and articulate solutions. </p>
<p>Irrespective of whether they find careers in academia, graduates with STEM PhDs are more likely to be employed and <a href="http://acola.org.au/PDF/SAF13/SAF13%20RTS%20report.pdf">will earn higher salaries</a> than bachelors and higher-degree graduates from most other disciplines within five years of graduation.</p>
<p>This is seen by those in government as a positive for the economy. People with STEM PhDs are increasingly seen by employers in government, industry and the community sector as some of the best generalist graduates on the market. </p>
<p>So we need to do more to help PhD students understand that their training opens up a wide range of possibilities, with academic research being just one, and we need to support PhD students to explore what fits best for them.</p>
<p>We need better enrolment processes, supervision, skills development and internship opportunities. That way our most highly trained graduates would be better prepared to embrace the many opportunities that a PhD will bring.</p>
<h2>For those who stay in academia</h2>
<p>One key issue we need to address is how to plan for and achieve a healthy balance of senior, junior and mid-career researchers across the disciplines. We need to do this with equal opportunities for men, women and those from diverse groups to nurture a healthy pipeline of talented new scientists for the future.</p>
<p>But both the National Health and Medical Research Council (<a href="https://www.nhmrc.gov.au/">NHMRC</a>) and the Australian Research Council (<a href="http://www.arc.gov.au/">ARC</a>) have struggled to develop schemes that build and nurture research careers while simultaneously supporting proposals judged by peer-review to be the best and most worthwhile research ideas. </p>
<p>One scheme that has changed the game to an extent is the <a href="http://www.arc.gov.au/future-fellowships">ARC Future Fellowship</a> scheme. The Academy of Science <a href="https://www.science.org.au/supporting-science/science-policy/submissions-government/response%E2%80%94arc-future-fellowships">advocated strongly and instrumentally for</a> prior to its establishment in 2009, and for its continuation when <a href="https://theconversation.com/if-we-want-to-be-a-smart-nation-we-should-keep-future-fellowships-39323">threatened by budget cuts</a> more recently.</p>
<p>But with funding for just 100 Future Fellowships each year, this scheme is only a drop in the ocean. There is clearly much to be done.</p>
<h2>Investing in capability</h2>
<p>Australia is starting to recognise that to be a successful player in the world economy we do need to move into the innovation age. Prime Minister Malcolm Turnbull’s <a href="https://theconversation.com/turnbull-seeks-ideas-boom-with-innovation-agenda-experts-react-51892">National Innovation and Science Agenda</a>, released last year, started that process.</p>
<p>Many have argued Australia needs to <a href="http://www.smh.com.au/business/federal-budget/federal-budget-scientists-push-for-more-research-funding-20160411-go3uaa.html">invest about 3% of GDP</a> in science and research to be on par with countries which have strong and successful innovation performance.</p>
<p>To achieve this, Australia would have to commit in the order of A$5 billion a year of additional public funding of research to leverage an additional A$10 billion a year in industry research and development. This is not an easy task and not something that will happen quickly.</p>
<p>Only when there is a firm commitment to investing in the research sector can the focus shift to building capacity in the longer term.</p>
<p>But the financial quadrant of government (and the industry sector) is often reluctant to make longer-term commitments, and wherever possible tends to retreat to short term programs because this maximises the flexibility to shift resources in response to the demands of the day. </p>
<p>The message that we need to reinforce is that good research is not done in little bites. Moving away from an environment where short-term funding cycles for research are the norm and towards a framework which commits to larger, deeper and longer-term programs would instantly provide a vehicle in which career structures for researchers can be embedded.</p>
<h2>Review of research training</h2>
<p>Looking at research training itself, we need to make sure the many thousands of PhD graduates produced each year are both better prepared for (and less shocked by) the reality that many will end up working in government or industry, and not in academia.</p>
<p>There is also a need to help students to attain and/or recognise their transferable skills. Industry, government or community sector placements can both expose students to those opportunities and to employer needs outside of academia. It also shows to employers the skill sets of PhD graduates.</p>
<p>We need to do more both to support and encourage the most intellectually and experimentally capable scientists at all levels to flourish in the research sector. That way we better prepare our most highly-trained graduates to contribute to society through a variety of rewarding occupations and careers, outside of academia.</p><img src="https://counter.theconversation.com/content/63401/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Professor Les Field is the Secretary of Science Policy, Australian Academy of Science. He receives funding from the Australian Research Council and is Senior Deputy Vice-Chancellor at UNSW.</span></em></p><p class="fine-print"><em><span>Andrew Holmes has received funding from UK (EPSRC and BBSRC) research councils, from the ARC, the European Commission, the Australian Government, the Victorian State Government, and various industrial research companies. These funding sources have all been acknowledged in peer-reviewed publications.
He has supervised some 100 doctoral candidates and 100 postdoctoral research collaborators. </span></em></p>Australia produces thousands of PhD graduates every year but many will find it hard to secure a university career. So we should do more to help them consider a career outside of academia.Les Field, Secretary for Science Policy at the Australian Academy of Science, and Senior Deputy Vice-Chancellor, UNSW SydneyAndrew Holmes, President of the Australian Academy of Science, Laureate Professor Emeritus, The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/618462016-08-03T03:07:55Z2016-08-03T03:07:55ZIt’s not ‘corporate poaching’ – it’s a free market for brilliant people<figure><img src="https://images.theconversation.com/files/128898/original/image-20160630-30655-1fdeszs.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">When brains are able to go where their interests lie, everyone benefits.</span> <span class="attribution"><a class="source" href="http://www.shutterstock.com/pic-334604402/stock-photo-brain-with-legs-walking-with-two-luggage.html">Brain with luggage via shutterstock.com</a></span></figcaption></figure><p>When Uber decided to develop its own self-driving car, it went big. The company came to <a href="https://www.scs.cmu.edu/">Carnegie Mellon University</a>, the epicenter for <a href="https://www.sciencedaily.com/releases/2007/11/071105230951.htm">autonomous driving research for three decades</a>, and hired away four professors and 36 technical staff members.</p>
<p>A lot of news reports described that as “<a href="https://www.engadget.com/2015/05/20/uber-poached-carnegie-mellon-robotics-lab/">poaching</a>.” I call it embracing the free market for brilliant people.</p>
<p>As dean of CMU’s School of Computer Science, I don’t take lightly the loss of 40 valued employees. We in academia are in a fight with industry for top computer scientists – and the competition gets more bruising by the year. But ultimately this is great for our school, for academia and for industry: The best scientists in the world have the freedom to pursue their careers as they choose.</p>
<p>Let’s face it: There’s no way to hire professors in dynamic fields such as computer science and robotics and expect them to stay put for three or four decades. In our school, we typically see five to 15 faculty members take leaves of absence each year and disappear into industry for a while. Our most recent such departure was a <a href="http://blog.smola.org/post/145983963411/leaving-cmu">highly successful machine learning researcher</a> who decided he wanted to deploy some of his ideas in industry.</p>
<p>Some never return, but many do. I did. Ten years ago, Google recruited me to establish its Pittsburgh engineering center. Two years ago, <a href="http://www.post-gazette.com/business/tech-news/2014/04/15/CMU-taps-Google-VP-as-new-dean-of-computer-science/stories/201404150176">I returned to CMU</a> as computer science dean. If we in academia play our cards right, many faculty members will be following that same career path – teach and perform research in academia for five or 10 years, then launch a startup or work for a tech firm for a few years, return to academia for another five or 10 years, and so on.</p>
<h2>Competition for bright minds</h2>
<p>People often ask me how a university can compete when industry compensation for brilliant people is so high, but money actually is a secondary concern. Yes, researchers send their kids to college and save for retirement just like everyone else, but money is less of a motivator than most people think. </p>
<p>What tech innovators in both industry and academia want even more is to change the world. In academia, they can explore and develop disruptive ideas; in industry, they can make that technology available to millions of people. Who wouldn’t want a career that included both?</p>
<p>An academic researcher who moves to industry can represent a big win for society. The federal government makes significant investments in academic research, and local governments provide crucial support for nonprofit universities; both should <a href="http://www.cccblog.org/2012/12/02/tire-tracks-poster-and-brochure-continuing-innovation-in-information-technology/">expect a return on that investment</a>. One of the most effective ways to capitalize on the innovations spawned in academia is for the innovators themselves to carry their knowledge into industry. This is of immense importance to our tech-driven economy and to our national interest in general.</p>
<p>Losing faculty and staff can mean that the university loses the research grants and contracts that supported those people. But we’re nonprofit institutions. Financially, it’s largely a wash if we lose the money, because we’re no longer paying those salaries.</p>
<p>So finances are not my biggest headache if a professor takes a leave of absence. The thing that’s top-of-mind is making sure that the school still fulfills its existing research obligations to the government agencies and companies who depend on us to explore critical technologies. Happily, our faculty and staff pitch in to complete work when colleagues leave, as occurred at our National Robotics Engineering Center last year following the Uber hirings. With much pitching in all around, nothing was dropped. For example, the celebrated participation of <a href="http://www.cmu.edu/news/stories/archives/2015/june/CHIMP-finishes-third.html">CMU’s rescue robot</a> in <a href="http://spectrum.ieee.org/automaton/robotics/humanoids/darpa-robotics-challenge-amazing-moments-lessons-learned-whats-next">DARPA’s Challenge competition</a> went ahead as planned.</p>
<h2>Supporting the exchange</h2>
<p>With departures come opportunities to bring in new blood and new ideas, which are essential to academia. Last year, even as those four professors were heading out the door to Uber, we were hiring <a href="http://www.cs.cmu.edu/%7Eawm/2016_scs_cmu_new_faculty_profiles.pdf">27 new robotics and computer science faculty members</a>. Our teaching mission never missed a beat. <a href="http://www.eurekalert.org/pub_releases/2016-03/cmu-cmr030816.php">With the announcement of more large projects</a>, funding has never been higher.</p>
<p>Of course, we need to make ourselves as attractive to top researchers as possible. When people depart, what we hear most often is “I love what I do here, but there are <a href="http://www.scientificamerican.com/article/dr-no-money/">too many bureaucratic obstacles</a> to getting things done.” So we’re making it a priority to ease those administrative headaches.</p>
<p>This is where money – federal money – actually would help. To keep top researchers in or coming back to academia, we might follow the lead of Japan and Europe. Both have been able to retain talent by identifying the best researchers, regardless of institution, and providing them the equivalent of “<a href="https://erc.europa.eu/funding-and-grants/funding-schemes">genius grants</a>.” These are substantial monetary grants with few strings attached, reserved for researchers with proven track records.</p>
<p>Decades ago, a similar approach from the Pentagon helped Carnegie Mellon and a handful of other institutions establish the field of computer science. Our early work includes innovation in <a href="http://www.acm.org/press-room/news-releases/2015/ssa-14/">computer operating systems</a>, handling of <a href="https://en.wikipedia.org/wiki/Andrew_File_System">files by shared servers</a>, <a href="http://www.ri.cmu.edu/pub_files/pub2/lee_k_f_1990_1/lee_k_f_1990_1.pdf">speech recognition</a> and even an <a href="http://www.ri.cmu.edu/publication_view.html?pub_id=1727">autonomous vehicle in the mid-1990s</a>. Those projects helped create the internet and other important technologies now driving our economy. And they underpin research into the future of self-driving cars, artificial intelligence and machine translation.</p>
<p>So at a place like CMU’s School of Computer Science, I expect to see more and more ebb and flow of the planet’s top roboticists, theorists and algorithmists. I don’t see the “ebb” part of this as defeat. It just means we’re living in a free market for brilliant people.</p><img src="https://counter.theconversation.com/content/61846/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Andrew W. Moore is the dean of the School of Computer Science which receives funding from numerous government funding sources, industry sources and foundation sources. Andrew is also on the boards of InnovationWorks (a Pittsburgh startup support organization) and Duolingo (a well known language-teaching app). </span></em></p>Professors in dynamic tech fields won’t stay in academia for three or four decades. The best scientists in the world should have the freedom to pursue their careers as they choose.Andrew W. Moore, Dean, School of Computer Science, Carnegie Mellon UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/553592016-02-25T09:58:41Z2016-02-25T09:58:41ZSouth Africa’s 2016 budget: long on promise but short on detail<figure><img src="https://images.theconversation.com/files/112881/original/image-20160225-15182-1jva6k.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">South Africa's Finance Minister Pravin Gordhan's budget fell short on cost-cutting details</span> <span class="attribution"><span class="source">REUTERS/Mike Hutchings</span></span></figcaption></figure><p><em>A great deal was at stake for South Africa when its Finance Minister Pravin Gordhan delivered his much-anticipated 2016 <a href="http://www.treasury.gov.za/documents/national%20budget/2016/default.aspx">Budget</a> speech. Jabulani Sikhakhane, deputy editor of The Conversation Africa, asked Jannie Roussouw, Uma Kollamparambil and Ingrid Woolard for their views.</em></p>
<p><strong>Are the measures announced by the minister of finance adequate to deal with South Africa’s most pressing economic problems, such as removing stumbling blocks to greater investment by the private sector and higher levels of job creation?</strong></p>
<p><em>Jannie Rossouw</em>: The minister of finance is clearly relying heavily on expected savings to balance this budget. I want more details on these expected savings. There was insufficient detail provided and therefore their realism cannot be assessed.</p>
<p><em>Uma Kollamparambil</em>: Although the budget succeeded in avoiding the much-dreaded increase in personal income and corporate taxes, the increase in the fuel levy is likely to have a knock-on effect on inflation. This will make further increases in interest rates inevitable which won’t bode well for greater investment by the private sector. Steps to minimise regulatory red tape are welcome but the biggest concern for investment is the state of the economy. There can be no better way to promote investment than by promoting economic growth. Explicit measures to promote growth and steer the economy on a new growth trajectory were missing. The market was disappointed as was evident from the sharp depreciation of the rand following the budget speech.</p>
<p><em>Ingrid Woolard</em>: I think the minister did a good job under very difficult macro conditions. But the focus is on fiscal consolidation rather than doing anything new and innovative. He’s probably done enough to calm the jitters in the market but there’s nothing here that is going to radically improve growth or job creation.</p>
<p><strong>What was missing?</strong></p>
<p><em>Jannie Rossouw:</em> The Minister had room to raise personal income tax and should have used the opportunity. Personal tax increases were widely expected and the opportunity should have been used.</p>
<p><em>Uma Kollamparambil</em>: The budget missed the opportunity for ringing in big bang reforms. Given the sense of urgency among policy makers and the citizenry alike, this may have been the right time to undertake structural reforms in the economy. These could have included aggressive divestment of state-owned enterprises as well as reductions in the high level of market concentration that exists in most industries in South Africa. Increased competition in the private sector is essential to increase its international competitiveness.</p>
<p><em>Ingrid Woolard</em>: There is almost no discussion of the carbon tax which I found surprising given that we’ve just had <a href="http://www.cop21paris.org/">COP21</a> in Paris. The Budget Review says that the Draft Bill on <a href="http://www.treasury.gov.za/comm_media/press/2015/2015110201%20-%20Media%20Statement%20Carbon%20Tax%20Bill.pdf">Carbon Tax</a> will be revised, but gives no hint as to what is being reconsidered. I had also hoped for a much stronger signal on the timelines for implementation of <a href="http://www.health.gov.za/index.php/gf-tb-program/109-national-health-insurance">National Health Insurance</a>.</p>
<p><strong>Has South Africa done enough to avoid a sovereign <a href="http://www.economist.com/news/middle-east-and-africa/21679693-mismanagement-and-magical-thinking-are-driving-rainbow-nation-debt">downgrade</a>?</strong> </p>
<p><em>Jannie Rossouw:</em> Enough has been done at the moment, but the focus will be on the government’s ability to implement the budget. The deficit before borrowing of 3.2% of GDP will be a focus point. A downgrade might be triggered if this is exceeded. Clearly the <a href="http://www.bloomberg.com/news/articles/2016-02-24/gordhan-taxes-wealthy-cuts-jobs-to-curb-south-african-budget">financial markets</a> did not like the budget, with the exchange rate of the rand weakening and the bond rate increasing. The final test will therefore be the 3.2% test: before borrowing, will this budget deficit be achieved in the final outcome of the budget?</p>
<p><em>Uma Kollamparambil</em>: The budget has succeeded in reigning in the fiscal deficit and yet finding resources for high priority sectors like tertiary education, social and welfare grants, and health care reforms. This can be said to be its success. But it is not enough to convince the rating agencies about the immediate prospects of the country. To be fair to the minister of finance, not all the remedies required could have come from his jurisdiction. Reducing the size of the cabinet is really the prerogative of the president. </p>
<p>If the government is serious in its efforts to prevent a downgrade it must follow up the budget with further announcements.</p>
<p><em>Ingrid Woolard</em>: Yes, I think so. It’s a prudent, credible budget. Debt and government spending are both being brought under control. I think the certainty around spending limits over the next three years will send a positive signal to the rating agencies.</p>
<p><strong>Budgeting is always about balancing competing demands on limited resources. The most pressing demands in South Africa can broadly be grouped into higher economic growth and equity, including redress for the effects of apartheid on the majority. How well did the minister strike such a balance? If not, in which direction - growth or equity - is the budget tilted?</strong></p>
<p><em>Jannie Rossouw:</em> The minister managed to strike a balance, but more focus could have been placed on initiatives to stimulate economic growth and reduce unemployment. But the appropriate balance has been achieved under current difficult circumstances. Nevertheless I would have liked to hear about a clearer strategy on the way forward out of our current <a href="http://www.bloomberg.com/news/articles/2016-02-02/south-african-economy-flirting-with-recession-world-bank-says">low-growth trap</a>. Vague promises about expenditure reductions will not alleviate the constraints that have led to low growth. </p>
<p><em>Uma Kollamparambil</em>: The budget really has not shaken the boat in any way to move it from the current trade-off between growth and equity. A tax on the super-rich to finance the tertiary education sector or the national health insurance initiative could have achieved greater equity with minimal impact on growth.</p>
<p><em>Ingrid Woolard</em>: I don’t think there’s been much shift at all. I expected a little more of the redistributive side – the increase in the inclusion rate for <a href="http://www.sars.gov.za/TaxTypes/CGT/Pages/default.aspx">capital gains tax</a> is in that direction but I thought we were going to see an increase in the personal income tax rates at the top end in order to create a little more fiscal space for increasing social spending on education and health. </p>
<p>I’m a bit worried about the hiring freeze in the public sector. It’s not that easy to identify “non-critical” posts and it sounds like there will be lots of paperwork required to unfreeze posts. We don’t want departments hamstrung by HR paperwork and endless ‘processes’. Surely we need to see braver plans for restructuring to enhance efficiency rather than hoping that the ‘right’ jobs will be vacated through resignations and retirements?</p>
<p><strong>Since 1994 South Africa has been announced numerous new policies to increase growth and improve government’s performance. It’s always fallen short on implementation. Does this budget signal any step change? Is there anything that shows a greater sense of urgency?</strong> </p>
<p><em>Jannie Rossouw:</em> The budget shows some sense of urgency but still falls short on details of the implementation plans. In short, I expected more from the budget, specifically details of cost-cutting initiatives.</p>
<p><em>Uma Kollamparambil</em>: The reallocaton of funds from historically under-utilised needs to new urgent needs - such as funding tertiary education - is indicative of the minister of finance’s no-nonsense approach. But ultimately the efficacy of how money is used is as important as how much is allocated. An emphasis on minimal expenditure with maximum impact should be prioritised much more urgently. </p>
<p>The centralised online <a href="http://www.gov.za/speeches/launching-central-supplier-database-and-etender-publication-portal-8-apr-2015-0000">procurement</a> that will kick-start soon is an attempt to root out grassroots corruption and increase economies of scale in procurement. Whether this can fight corruption on a larger scale is yet to be seen. It is inevitable though that there will be hiccups at the beginning and these need to be addressed urgently.</p><img src="https://counter.theconversation.com/content/55359/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jannie Rossouw receives funding from the NRF as a C2 researhcer </span></em></p><p class="fine-print"><em><span>Ingrid Woolard and Uma Kollamparambil do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The budget showed some sense of urgency but still fell short on implementation plans. There should have been more, particularly details on cost-cutting initiatives.Jannie Rossouw, Head of School of Economic & Business Sciences, University of the WitwatersrandIngrid Woolard, Professor in the School of Economics and a Research Associate of the Southern Africa Labour and Development Research Unit (SALDRU) , University of Cape TownUma Kollamparambil, Professor of Economics, University of the WitwatersrandLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/542692016-02-19T03:59:18Z2016-02-19T03:59:18ZSouth Africa’s civil servants are the country’s new labour elite<figure><img src="https://images.theconversation.com/files/111470/original/image-20160215-22560-py11bi.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Public sector trade unions now dominate union membership in South Africa.</span> <span class="attribution"><span class="source">Reuters/Siphiwe Sibeko</span></span></figcaption></figure><p><em>Foundation essay: Our foundation essays are longer than usual and take a wider look at a key issue affecting society.</em></p>
<hr>
<p>The rise of public sector employment in South Africa has a much greater potential import than the private sector for the future trajectory of the economy’s employment path. We find that a key new facet of the South African labour market is an estimated wage wedge between unionised public sector workers and other formal non-agricultural workers in the labour market.</p>
<p>The total number of public sector employments increased from 2.16 million in 2008 to 2.69 million at the end of 2014. Public sector employment’s share of total jobs had risen to 17.5% by the end of 2014, up from 14.5% at the beginning of 2008. The growth was driven by employment in national, provincial as well as local government.</p>
<p>The fastest period of public sector employment growth was during 2009, immediately following the global financial crises. This suggests that the state possibly acted as an unintended creator of jobs during a period of extreme labour market distress.</p>
<h2>Who is being hired?</h2>
<p>The large contributors to public sector job growth are occupations that fall under the category of unskilled workers. These include sweepers, farmhands and labourers, helpers and cleaners, construction and maintenance labourers, and garbage collectors.</p>
<p>The other major contributors are medium-skilled workers. These are police and traffic officers, institution and home-based care workers, other protective services, prison guards, technikon teacher training, cooks and childcare workers.</p>
<p>Higher-skilled jobs such as primary and secondary school teachers, finance and administrative managers and legislators have also contributed to public sector job growth.</p>
<p>It would seem that the government’s Expanded Public Works Program is an important driver of public sector job creation. Launched in 2004, it focuses on providing income relief through creating jobs for the unemployed and unskilled that involve socially useful activities.</p>
<p>The programme creates jobs through government funded infrastructure projects. It does this through non-profit organisations and community work programs, as well as public environment and culture programs. As such, much of the public sector job growth relates to the construction industry, the protection and safety sector, public sanitation and personal care industries.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/111963/original/image-20160218-1274-1wnomrt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/111963/original/image-20160218-1274-1wnomrt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=399&fit=crop&dpr=1 600w, https://images.theconversation.com/files/111963/original/image-20160218-1274-1wnomrt.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=399&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/111963/original/image-20160218-1274-1wnomrt.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=399&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/111963/original/image-20160218-1274-1wnomrt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=502&fit=crop&dpr=1 754w, https://images.theconversation.com/files/111963/original/image-20160218-1274-1wnomrt.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=502&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/111963/original/image-20160218-1274-1wnomrt.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=502&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Higher-skilled jobs, among them legislators, also contributed to public sector job growth.</span>
<span class="attribution"><span class="source">Reuters/Rodger Bosch</span></span>
</figcaption>
</figure>
<h2>More representative</h2>
<p>The public sector has clearly been able to transform its labour force at a faster pace than the private sector. It has hired a higher proportion of both women and African workers in the sector, groups that were discriminated against under apartheid.</p>
<p>Africans make up 77% of public sector employment compared with 66% the private sector. Females make up 52% of the workforce, compared to 44% in the private sector.</p>
<p>In terms of the skills profile, the public sector is more skills intensive. Almost 45% of all public sector employees fall into the top three occupational categories, compared to 26% in the private sector. Both sectors, however, have a similar proportion of unskilled workers. This indicates that private sector workers are concentrated in the medium-skilled occupations.</p>
<p>Interestingly, the proportion of the two most skills-intensive occupations did not change in the public sector between 2008 and 2013, but the proportion of professionals in the private sector increased by 25%. This is consistent with the shift towards more skilled workers.</p>
<p>Growth in public sector jobs was driven by the medium-skilled occupation of service workers, as well as in elementary occupations. The share of medium-skilled workers grew by 31% and and elementary occupations by 23%.</p>
<p>Again, this may point to the state being able to absorb excess unskilled and medium-skilled labour at times of economic and labour market distress.</p>
<h2>Bargaining power</h2>
<p>Another feature of the public sector labour market is the relatively higher rate of unionisation, which is often associated with a wage premium. Union members made up almost 70% (1.4 million workers) of all public sector’s formal workers in 2014, up from 55% in 1997 (834,000 workers).</p>
<p>This compares with the private sector where union density declined from 36% in 1997 to 24% in 2013. Unlike in the public sector too, the absolute number of private sector unionised workers has remained fairly constant.</p>
<figure class="align-left ">
<img alt="" src="https://images.theconversation.com/files/111471/original/image-20160215-22560-r0k9n1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/111471/original/image-20160215-22560-r0k9n1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=370&fit=crop&dpr=1 600w, https://images.theconversation.com/files/111471/original/image-20160215-22560-r0k9n1.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=370&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/111471/original/image-20160215-22560-r0k9n1.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=370&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/111471/original/image-20160215-22560-r0k9n1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=466&fit=crop&dpr=1 754w, https://images.theconversation.com/files/111471/original/image-20160215-22560-r0k9n1.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=466&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/111471/original/image-20160215-22560-r0k9n1.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=466&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Public sector labour market is relatively more unionised.</span>
<span class="attribution"><span class="source">Reuters/Mike Hutchings</span></span>
</figcaption>
</figure>
<p>The rise in public sector unionisation is commensurate with the increase in public sector employment. Public sector trade unions now dominate union membership in South Africa.</p>
<p>Powerful labour unions are often associated with creating a wage premium for their members. This is based on their ability to mobilise industrial action and negotiate in favour of their members during times of wage negotiations. There is extensive literature on the union wage gap in South Africa, but slightly fewer studies on the bargaining council premium.</p>
<p>Taking account of this, we found that:</p>
<ul>
<li><p>union members outside of the bargaining council system earned a premium of 7.04%; and</p></li>
<li><p>those members of private and public bargaining councils not belonging to unions earned an 8.97% and 10.5% premium over non-union workers outside of the bargaining council system.</p></li>
</ul>
<p>The total estimated premium to union workers within the public bargaining council stands at 22%. Therefore, there is evidence that belonging to either unions or bargaining councils is associated with statistically significant wage premia. Furthermore unions may negotiate at the plant level for additional gains for their members within the bargaining council system.</p>
<p>When comparing wage levels, both the median and mean wages of the public sector are significantly higher than private sector’s. The real monthly wage of an average public sector employee is R11,668 (US$1209) compared to R7,822 (US$811) for an average private sector worker. In addition, public sector wages have less dispersion than private sector wages, indicating a lower level of wage inequality within the public sector.</p>
<p>Most importantly though, non-unionized public sector workers are concentrated in elementary occupations (30%), service and sales occupations (16%), and technical and associate professional occupations (16%). While it remains uncertain, the non-unionised workers in the first two occupational groups are likely to be those employed under the public works program.</p>
<h2>More nuanced labour market view</h2>
<p>Ultimately though, these wage distributions suggest that, at least in terms of earnings, a dual labour market may indeed be prevalent in the South African labour market. Previous models of segmentation have commonly referred to the distinction between the employed and the unemployed. More recently the formal and informal sector has been used as the key identifying segmentation markers.</p>
<p>We suggest a nuance to South Africa’s segmented labour market.</p>
<p>In particular it would appear that the distinction between public and private sector, in terms of earnings and employment, is a new form of segmentation which has evolved in the post-apartheid South African labour market.</p>
<figure class="align-right ">
<img alt="" src="https://images.theconversation.com/files/111473/original/image-20160215-22545-1frdppp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/111473/original/image-20160215-22545-1frdppp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=852&fit=crop&dpr=1 600w, https://images.theconversation.com/files/111473/original/image-20160215-22545-1frdppp.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=852&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/111473/original/image-20160215-22545-1frdppp.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=852&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/111473/original/image-20160215-22545-1frdppp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1071&fit=crop&dpr=1 754w, https://images.theconversation.com/files/111473/original/image-20160215-22545-1frdppp.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1071&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/111473/original/image-20160215-22545-1frdppp.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1071&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Unionised public sector workers earn a premium as high as 20.7% over private sector colleagues.</span>
<span class="attribution"><span class="source">Reuters/Mike Hutchings</span></span>
</figcaption>
</figure>
<p>Our econometric results show that for unionised workers, the public sector wage premium is 20.7%. In particular, for government workers in the public sector, the wage premium within the group of workers belonging to a union, is 23.5%, whereas there is no significant wage premium for employees of state owned enterprises.</p>
<p>Given the rising membership of public sector unions, together with the growing political influence of these unions, these results possibly allude to the role played by unions in driving higher returns for their members in the post-2000 period. This pattern of wage returns potentially suggests segmentation between unionised public sector workers versus all other formal, non-agricultural workers.</p>
<p>In one conception, we could argue that the post-2000 period has generated new labour elite in the labour market, namely the unionised public sector employee.</p>
<hr>
<p><em>This article is an extract from a <a href="https://www.wider.unu.edu/publication/demographic-employment-and-wage-trends-south-africa">working paper</a>, which is part of a <a href="https://www.wider.unu.edu/project/understanding-african-lions-growth-traps-and-opportunities-six-dominant-african-economies">collaboration</a> between UNU-WIDER, the Brookings Institution and the Development Policy Research Unit (DPRU) at the University of Cape Town on Understanding the African Lions: Growth Traps and Opportunities in Six Dominant African Economies.</em></p>
<p><em>Since the publication of the working paper Kavisha Pillay has resigned from the Development Policy Research Unit (DPRU) at the University of Cape Town</em></p><img src="https://counter.theconversation.com/content/54269/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Haroon Bhorat receives funding from various government departments. </span></em></p><p class="fine-print"><em><span>Karmen Naidoo and Kavisha Pillay do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Rising membership of public sector unions and the growing political influence of these unions have led to government workers earning a premium over their private sector counterparts.Haroon Bhorat, Professor of Economics and Director of the Development Policy Research Unit, University of Cape TownKarmen Naidoo, Senior Researcher, Development Policy Research Unit, University of Cape TownKavisha Pillay, Junior Researcher, Development Policy Research Unit, University of Cape TownLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/421922015-06-22T04:45:45Z2015-06-22T04:45:45ZHow nurses who moonlight and do agency work strain the health system<figure><img src="https://images.theconversation.com/files/85361/original/image-20150617-23246-1wzlmf2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The nursing profession has a profound shortage of nurses, which is compounded by nurses who moonlight, work overtime or work for agencies.</span> <span class="attribution"><span class="source">Jon Hrusa/EPA</span></span></figcaption></figure><p>Between 2009 and 2010, the South African government spent over US$212.6million (about R1.49 billion) hiring nurses for the public health sector from nursing agencies. </p>
<p>In the same period, the provincial spend on agency nurses ranged from a low of just under US$5.2million (R36.45 million) in Mpumalanga Province to a high of US$50.92million (R356.43 million) in the Eastern Cape Province. </p>
<p>In that financial year, more than 5300 registered nurses could have been employed instead of agency nurses, according to <a href="http://dx.doi.org/10.3402/gha.v7.25053">our research</a>. </p>
<p>The government’s spending on agency nursing is a result of nursing vacancies, poorly managed staff absenteeism, sub-optimal planning for patient loads, and not involving nurses in decisions on their shifts or how best to cover hospital wards.</p>
<p>Nursing agencies provide a vehicle for nurses to moonlight, as they could be employed concurrently in a public or private sector hospital as well as the nursing agency. These agencies are not obliged to ask nurses whether they have concurrent employment. </p>
<h2>The problems with nursing</h2>
<p>The nursing agency spending is, however, an indication of the bigger crisis in South African nursing. The profession is plagued with problems of too few new nurses, insufficient nurses with specialised qualifications (for example, in intensive care), and an ageing workforce that is unequally distributed between urban and rural areas, and between the public and private health sectors. </p>
<p>South Africa’s public health sector faces major challenges in producing, recruiting and retaining health professionals. This is especially true for nurses, who form more than 70% of the professional health work force. The nursing workforce includes professional nurses with four years of training, enrolled nurses with two years of training and nursing assistants, who only have one year of training. </p>
<p><a href="http://www.sanc.org.za/stats/stat2010/age%20stats%202010.pdf">Statistics</a> from the South African Nursing Council show that not enough nurses are being produced to match the health and service demands for nurses and midwives in the country. </p>
<p>The severe shortage of professional nurses across all health care services came to the fore in 2010. Although more than 3500 professional nurses had registered with the South African Nursing Council, in the same year, the National Department of Health estimated that 44 780 professional nurses were needed in the public health sector. </p>
<p>The council’s statistics also show there has been a decrease in the number of new nurses with specialist qualifications. </p>
<p>And although nurses are more equitably distributed between urban and rural areas than other health professionals such as doctors, there is still a gross mal-distribution between the two areas. In 2014, the urban areas of Gauteng and Western Cape combined produced 1234 professional nurses. In comparison, only 501 professional nurses were produced in the three rural provinces of Limpopo, North West and the Northern Cape.</p>
<p>Another challenge is an ageing nursing workforce. Currently, more than 43% of professional nurses are aged 50 and above. </p>
<h2>After hour activities</h2>
<p>To add to this crisis, nurses in South Africa are also turning to extra work after hours through moonlighting, working overtime and doing agency work. </p>
<p>This means that nurses work excessive hours, which in turn affects the way they perform, thus impacting negatively on patient care. </p>
<p>Some of the significant <a href="http://www.globalhealthaction.net/index.php/gha/article/view/28205#a6">health system consequences</a> include that nurses are too tired when they are on duty, that they sometimes stay away from work without authority, and these impact on the quality of care provided to patients.</p>
<p>There has been limited information on moonlighting and agency nursing in the country and sub-Saharan Africa. <a href="http://www.globalhealthaction.net/index.php/gha/article/view/28205">Our study</a> was the first large cross-sectional survey on the extent of agency nursing, moonlighting and overtime in South Africa. </p>
<p>The <a href="http://www.globalhealthaction.net/index.php/gha/article/view/28205">survey</a> was done with 3784 nurses at 80 hospitals across four provinces in South Africa. The nurses worked in critical care, emergency units, the operating theatre, maternity, general and surgical wards in both public and private hospitals. Each were asked to fill out a questionnaire.</p>
<p>Close to 70% of the nurses interviewed were moonlighting, working overtime or doing agency nursing in the year before the study. Of these, one-fifth did all three. </p>
<p>The survey shows these practices are widespread in the South African health care system. However, it showed that more nurses from the private sector were moonlighting compared to those in the public sector. </p>
<p>More critical care nurses were moonlighting compared to those in maternity units. More nurses were moonlighting in Gauteng – the country’s economic hub – than any of the other three provinces. Nearly 40% of nurses had worked through a commercial nursing agency in the 12 months before the survey. </p>
<p>The impact on the health system was serious. Of all participants, half said they felt too tired to work and 10% admitted to paying less attention to their nursing work on duty. Another 10% took sick leave when they were not sick. </p>
<p>At least 10% also took their holiday leave to do agency work or moonlighting, and just under 10% reported conflicting schedules between their primary and secondary jobs. </p>
<p>Although the majority of nurses said they did the extra work to take care of patients, learn new skills and because of their relationships with their co-workers, more than 70% agreed that more <a href="http://www.globalhealthaction.net/index.php/gha/article/view/28205#a6">money was a factor</a>.</p>
<p>Of the nurses interviewed, almost one-third of participants indicated that they <a href="http://www.globalhealthaction.net/index.php/gha/article/view/28205#a5">planned to leave their jobs</a> within the year following the study. Nurses who were moonlighting expressed the strongest intention to leave.</p>
<h2>Changing the status quo</h2>
<p>The heavy reliance of critical care (intensive care) units on agency nurses and the high rate of moonlighting among critical care nurses reflect the demand for skilled nursing care in the public and private health sectors.</p>
<p>Moonlighting needs to be addressed and there needs to be better regulation of commercial nursing agencies. Professional nursing bodies need to give nurses better support and guidance. </p>
<p>The new health sector reform policies will further increase the demand for professional nurses with specialised skills. At the same time, the absence of national norms and standards makes it difficult to determine the real shortage and the number of nurses required of all categories. Hence, the development of national staffing norms and standards must receive the utmost government priority.</p><img src="https://counter.theconversation.com/content/42192/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Laetitia Rispel received funding for the study from the Atlantic Philanthropies. She is employed by Wits University. </span></em></p>Nurses who moonlight admit they feel too tired to work and don’t provide the best quality of care on duty.Laetitia Rispel, Head of the School of Public Health, University of the WitwatersrandLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/417822015-05-14T05:07:57Z2015-05-14T05:07:57ZFour critical NHS issues that could keep Jeremy Hunt awake at night<figure><img src="https://images.theconversation.com/files/81545/original/image-20150513-2452-1x84kcb.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Is the NHS 'a wretched bowl of alphabetti spaghetti', as David Cameron put it?</span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/jamarmstrong/5121476750/in/photolist-5aUv4W-8NyUBh-9SsEdC-8TJXdY-4GazBr">James</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span></figcaption></figure><p>The NHS has faced numerous struggles in its 66-year history, from the financial crisis of the late 1980s, which <a href="http://chpi.org.uk/wp-content/uploads/2014/02/At-what-cost-paying-the-price-for-the-market-in-the-English-NHS-by-Calum-Paton.pdf">prompted the Thatcher Review</a> and led to the introduction of the NHS internal market in 1991, to the more recent <a href="http://www.telegraph.co.uk/news/health/news/8550618/QandA-Andrew-Lansleys-NHS-reforms-explained.html">Lansley reforms</a> and the debacle of the 2012 Health and Social Care Act. </p>
<p>But surely none will compare with the challenges over the next five years. These include:</p>
<p><strong>1. More reconfiguration of services</strong></p>
<p>In a health system funded out of general taxation, it is important that politicians are held accountable to the public for the £115 billion NHS budget. Promises or pledges of up to £8 billion (equivalent to a funding increase of 1.1% a year) have been in response to <a href="http://www.bbc.co.uk/news/health-29726934">a £30 billion shortfall by 2020</a>, identified by NHS England in 2014. The “missing” £22 billion <a href="https://theconversation.com/radical-proposal-to-safeguard-the-nhs-fails-to-tackle-problem-of-productivity-33389">is supposed to come from productivity improvements</a> and cost savings. </p>
<p>To achieve this, significant reconfiguration of services will be required. Although the Conservatives promised not to introduce a “top-down re-organisation” in 2010, the Health and Social Care Act introduced two years later resulted in the biggest ever NHS reorganisation (costing about £3 billion), implemented at the same time as financial cuts (for example, 35% of management costs). </p>
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<p>The debacle of the 2012 act is salutary for all parties. But the absence of pledges of further reorganisation in 2015 may also be explained by other factors. First, staff <a href="http://www.telegraph.co.uk/news/health/news/9155178/NHS-staff-overworked-survey-finds.html">workloads have increased</a>, pay <a href="http://www.bbc.co.uk/news/uk-politics-26556047">has been constrained</a>, morale <a href="https://theconversation.com/nhs-guardians-wont-help-whistleblowers-unless-theyre-protected-from-bullying-too-37543">has declined</a>, and “reform fatigue” is endemic. The consequences of these and other factors are being felt in the <a href="https://theconversation.com/uk/topics/aande-crisis">A&E crisis</a>, <a href="https://theconversation.com/fact-check-are-aande-waiting-times-in-england-the-shortest-in-the-world-40774">longer waiting times</a>, and poorer patient experience. </p>
<p><strong>2. Further devolution of health budgets</strong></p>
<p>Developments on the ground have often been moving ahead of the political debate. For example, NHS England’s <a href="http://www.england.nhs.uk/wp-content/uploads/2014/10/5yfv-web.pdf">Five Year Forward View</a>, published in autumn 2014, presented new models for the future organisation of primary and secondary care services, which have been broadly accepted. Also, proposals to integrate health and social care in Manchester, announced rather hastily earlier this year, have prompted much debate elsewhere in the country. </p>
<p>It remains to be seen whether this <a href="https://theconversation.com/uk/topics/devo-manc">“Devo Manc”</a> model <a href="https://theconversation.com/devo-manc-can-it-make-the-nhs-a-success-38133">will work</a> and whether its governance model is robust. Whether or not it is feasible, further integration of health and social care is desirable, not least because cuts in social care <a href="https://theconversation.com/uncertainties-over-the-nhs-will-continue-amid-further-tory-cuts-to-local-government-41582">have knock-on consequences</a> in the health sector.</p>
<p><strong>3. Competition vs integration</strong></p>
<p>The use of competition and the private sector in NHS service provision has long been contentious. The latest model of NHS commissioning – the Clinical Commissioning Groups (CCGs), a product of the 2012 act – sought to put GPs in charge of the majority of the NHS budget on the assumption that they were best placed to know the needs of their patients. However, only a minority of GPs were involved in CCG decision-making, and this clinical engagement <a href="http://www.primarycaretoday.co.uk/commissioning/gps-lack-engagement-threatens-ccg-continuity">seems to be waning</a>. With challenging decisions ahead, the weak public accountability of CCGs may become exposed. </p>
<p>However privatisation is defined, the involvement of the private sector in delivering health services <a href="http://journals.cambridge.org/action/displayAbstract?fromPage=online&aid=9281493&fulltextType=RA&fileId=S0047279414000269">has increased in recent years</a>, and the potential for further incursions in the future remains. The Labour Party and others have expressed their opposition to further growth of the private sector in the NHS, although <a href="https://www.opendemocracy.net/ournhs/kailash-chand/moment-of-honesty-is-required-new-labour-began-dismantling-of-our-nhs">its record in office</a> from 1997 to 2010 did foster private companies. </p>
<p>Significantly, the public seem <a href="http://www.health.org.uk/public/cms/75/76/313/5503/Public%20attitudes%20to%20the%20NHS.pdf?realName=ivdT6t.pdf">to be more relaxed</a> about private providers delivering health services, as long as services remain free at the point of delivery. Given markets’ propensity for fragmentation, it will be challenging to continue with competition while also promoting integration. Also, it is significant that alternative organisational forms (such as social enterprises or mutuals) <a href="http://www.mhpc.com/health/shot-by-both-sides-social-enterprises-and-mutuals-in-the-nhs-and-social-care/">have been largely absent</a> from the current debate. </p>
<p><strong>4. Public and health inequality</strong></p>
<figure class="align-left ">
<img alt="" src="https://images.theconversation.com/files/81546/original/image-20150513-2470-1whzlmq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/81546/original/image-20150513-2470-1whzlmq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=900&fit=crop&dpr=1 600w, https://images.theconversation.com/files/81546/original/image-20150513-2470-1whzlmq.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=900&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/81546/original/image-20150513-2470-1whzlmq.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=900&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/81546/original/image-20150513-2470-1whzlmq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1131&fit=crop&dpr=1 754w, https://images.theconversation.com/files/81546/original/image-20150513-2470-1whzlmq.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1131&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/81546/original/image-20150513-2470-1whzlmq.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1131&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">What’s local government got to do with it?</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/fabiovenni/429164528/">Fabio Venni</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span>
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<p>Focus of debate on health services has largely overshadowed discussion about public health and health inequalities. Although the previous coalition government adopted a voluntary system of regulation – so-called <a href="https://responsibilitydeal.dh.gov.uk/">Responsibility Deals</a> – between the government and the food and drink industry, they did transfer public health functions <a href="http://www.kingsfund.org.uk/projects/verdict/has-government-delivered-new-era-public-health">from the NHS to local government</a>. This means that the end of ring-fenced public health funds in local authorities in 2016 will present a challenge to keep public health on the agenda in the face of cutbacks elsewhere in local government.</p>
<h2>Promises now made</h2>
<p>The impact of these challenges on public expectations of the NHS remains uncertain. Despite current <a href="https://theconversation.com/public-satisfaction-with-nhs-at-second-highest-level-in-30-years-but-are-we-really-happier-36859">high levels of public satisfaction</a> with the NHS, how will the public react to politicians’ pledges of extra funding if services do not appear to improve in the coming years? Individuals’ own experiences of the NHS have traditionally been positive despite being concerned about the overall system. With such a challenging environment from now until 2020 (and beyond), will the public still subscribe to the notion of a publicly funded health service by the next election? Possibly – but it’s not guaranteed.</p>
<p>So, the NHS will face unprecedented challenges over the next five years. And it is certain that Jeremy Hunt, who keeps his brief as secretary of state for health, will have a full agenda.</p><img src="https://counter.theconversation.com/content/41782/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Mark Exworthy has previously received funding from the Department of Health, Joseph Rowntree Foundation, and the Commonwealth Fund of New York
</span></em></p>The paradox of competition and integration other key challenges facing the re-appointed health secretary.Mark Exworthy, Professor of Health Policy and Management, University of BirminghamLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/236552014-06-29T21:26:04Z2014-06-29T21:26:04ZHow private funding influences GM research<figure><img src="https://images.theconversation.com/files/51275/original/j8t87xp3-1402972220.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The private sector has driven GM research – but in whose interests?</span> <span class="attribution"><a class="source" href="http://www.flickr.com/photos/cimmyt/4616167679">International Maize and Wheat Improvement Center/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc-sa/4.0/">CC BY-NC-SA</a></span></figcaption></figure><p><em>In this fifth instalment of <a href="https://theconversation.com/topics/gm-in-australia">GM in Australia</a> – a series looking at the facts, ethics, regulations and research into genetically modified crops – Sky Croeser outlines how most GM research is profit-driven.</em></p>
<hr>
<p>Most of the debate around genetically modified (GM) foods has focused on health and nutrition, or the potential impact on the Australian agricultural industry. There has been less attention to the role of private, profit-driven investment in shaping GM and biotechnology.</p>
<p>Research into GM crops has always been largely driven by the private sector, even though a <a href="http://www.cbd.int/doc/measures/abs/msr-abs-au4-en.pdf">2000 report</a> from the Commonwealth Biotechnology Ministerial Council emphasised the need for government support for an emerging, and potentially lucrative, industry. </p>
<p>The report noted high levels of private investment in biotechnology in North America, Canada and Japan, and calls for government support to help Australia compete. According to the authors this should include intellectual property protection, and work to “build community confidence in biotechnology” as well as increase funding. </p>
<p>Subsequent governments have largely followed these recommendations. In 2009, in the wake of the global financial crisis, the Labor government spent <a href="http://lifescientist.com.au/content/lab-technology/news/what-the-government-is-doing-for-biotech-656089387">A$390 million</a> on research and industrial support, noting the importance of the industry to Australia’s economy.</p>
<h2>Teaming up</h2>
<p>Much of the research into biotechnology carried out by academics, public research institutions and even non-profit organisations is shaped by the push towards “public-private partnerships”. </p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/51267/original/jffyq7jf-1402971029.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/51267/original/jffyq7jf-1402971029.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/51267/original/jffyq7jf-1402971029.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=803&fit=crop&dpr=1 600w, https://images.theconversation.com/files/51267/original/jffyq7jf-1402971029.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=803&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/51267/original/jffyq7jf-1402971029.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=803&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/51267/original/jffyq7jf-1402971029.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1010&fit=crop&dpr=1 754w, https://images.theconversation.com/files/51267/original/jffyq7jf-1402971029.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1010&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/51267/original/jffyq7jf-1402971029.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1010&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="attribution"><a class="source" href="http://www.flickr.com/photos/jmwoolfe/6905940160">Jamie Woolfe/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc/4.0/">CC BY-NC</a></span>
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<p>The CSIRO, for example, is required to raise a significant proportion of its own funding from royalties, “sales of goods and services”, and private partnerships (as outlined in the <a href="http://www.industry.gov.au/AboutUs/Budget/Pages/PBS-2014-15.aspx">latest budget statements</a>), and has been working closely with biotechnology companies including <a href="http://www.csiro.au/Outcomes/Food-and-Agriculture/Sustainable-Cotton-Industry.aspx">Monsanto</a>.</p>
<p>Defenders of GM crops position critics as irrational and anti-science, implying that they either don’t understand the technology or are driven by shadowy motives. But if a <a href="https://theconversation.com/was-canola-case-shows-gm-crops-are-still-being-demonised-23123">proponent</a> of GM crops can question the motives of activists because they receive funding, it is reasonable to ask similar questions about how private funding affects biotechnology research as well.</p>
<p>This is particularly the case given the effort going into public relations around GM crops in Australia and <a href="http://mcs.sagepub.com/content/24/3/325.short">overseas</a>. CSIRO even briefly and <a href="http://www.australasianscience.com.au/article/issue-may-2013/how-tobacco-lobbyist-won-over-csiro.html">controversially</a> hired a former tobacco industry lobbyist as Director of Communications.</p>
<h2>How green was the Green Revolution?</h2>
<p>In order to more fully understand the importance of seeing biotechnology primarily as an industry, it’s useful to look at alternative models of agricultural research. The “<a href="http://www.agbioworld.org/biotech-info/topics/borlaug/borlaug-green.html">Green Revolution</a>” is the most obvious example. </p>
<p>The Green Revolution took place after World War II, and was driven in large part by the hope that increased food security would stop the spread of communism. Public funding and national security considerations played a key role in shaping the technology.</p>
<p>There are important criticisms of Green Revolution agriculture, including its impacts on the water table, soil fertility and social inequality, but it does demonstrate that different political contexts lead to different outcomes. The focus during the Green Revolution was on increasing yields for cereal crops, such as wheat and rice.</p>
<p>In contrast, the priority for current biotechnology research – particularly into GM – is generating profits. </p>
<p>Even <a href="https://theconversation.com/was-canola-case-shows-gm-crops-are-still-being-demonised-23123">Golden Rice</a>, which is usually held up as the poster-child for benevolent GM research for the public good, will be sold commercially through <a href="http://goldenrice.org/Content1-Who/who4_IP.php">public-private partnerships</a>.</p>
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<h2>Profits and public interest</h2>
<p>Private investment does not guarantee poor outcomes, but we should also be sceptical of claims that it has no effect on technological development. The drive for profits encourages:</p>
<ul>
<li>a reliance on monocultures</li>
<li>a focus on cash crops rather than food crops</li>
<li>legislation against comprehensive food labelling</li>
<li>restrictive intellectual property regimes.</li>
</ul>
<p>This is happening at a time when the world needs resilient, sustainable food systems that preserve crop biodiversity, responsive democratic legislation and a massive overhaul of restrictive national and international intellectual property law. </p>
<p>We can’t simply accept at face value claims that private interests will align neatly with public needs.</p>
<p>Any realistic and rational evaluation of technologies must take into account the political and economic context from which they emerged. Technologies exist as part of systems, and their impacts often have unintended consequences which we can only begin to understand once we move beyond a narrow view of science as somehow existing outside of society. </p>
<hr>
<p><strong><em>Further reading:<br>
<a href="https://theconversation.com/gm-techniques-from-the-field-to-the-laboratory-and-back-again-25753">GM techniques: from the field to the laboratory (and back again)</a><br>
<a href="https://theconversation.com/setting-the-standards-who-regulates-australian-gm-food-25533">Setting the standards: who regulates Australian GM food?</a><br>
<a href="https://theconversation.com/safety-first-assessing-the-health-risks-of-gm-foods-26099">Safety first – assessing the health risks of GM foods</a><br>
<a href="https://theconversation.com/because-we-can-does-it-mean-we-should-the-ethics-of-gm-foods-28141">Because we can, does it mean we should? The ethics of GM foods</a></em></strong></p><img src="https://counter.theconversation.com/content/23655/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Sky Croeser does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>In this fifth instalment of GM in Australia – a series looking at the facts, ethics, regulations and research into genetically modified crops – Sky Croeser outlines how most GM research is profit-driven…Sky Croeser, Researcher and teacher, Curtin UniversityLicensed as Creative Commons – attribution, no derivatives.