Are the SDGs effective in enabling climate resilience among the B40?

The Sustainable Development Goals fail to identify that the entrenched economic, political and institutionalised privileges of the global 0.1% is a major impediment to the climate resilience, writes Jeyakumar Devaraj.

I will have to give an unconventional answer to the above question – no, the SDGs do not build climate resilience among the B40 whether in Malaysia or elsewhere.

I realise that this goes against the beliefs of many well-meaning liberals and social democrats who keep repeating the SDG mantra.

In this paper I will attempt to explain why SDGs are of no great help to the B40 in handling the adverse effects of climate change and offer some thoughts as to how climate resilience among the B40 in Malaysia and elsewhere might be enhanced.

Vulnerability of the Malaysian B40 to climate change

Malaysia is not as vulnerable to the negative effects of climate changes when compared with the drought-prone countries of South Asia and Africa and low-lying countries like Bangladesh and the island states in the South Pacific. We are also insulated by our relative wealth – our per capita GDP is seven times that of Bangladesh and 10 times that of Senegal. Our relative wealth will provide us some space in dealing with rising prices of food should there be crop failure in any part of the world.

Table One: Selected Statistics of Several Countries.

1. CIA website. The figures are estimates for 2017 (PPP = Purchasing Power Parity)
2. data.worldbank.org
3. Wikipedi. The data is from 2015.

However, like many other countries, we cannot escape the adverse effects of climate change. In Malaysia these adverse effects would include:

Extreme weather events

• Much heavier rains leading to flash floods
• Storms with high velocity wind leading to damage to roofs and houses
• Hotter than normal spells.

These weather events will hit the B40 Malaysians hardest as a higher proportion of them live in flood-prone areas, inhabit houses that are not strong structurally and do not have the means to change roof material from zinc to material that can reflect the sun’s heat or build effective ceilings or put in air conditioning.

Rising prices of food due to crop failure either in Malaysia or in any part of the world

Malaysia imports a lot food as we only produce 70% of the rice we consume, 30% of beef and less than 10% of dairy milk. A lot of our animal feed is also imported.

Table Two: Malaysia self-sufficiency levels for food

According to the Minister for Agriculture then, our food import bill was RM45bn in 2015 (The Star Online, 15 March 2016). This constitutes about 40% of our total expenditure on food [The World Data Atlas states that Malaysia’s per capita expenditure on food was US$1,121.60 in 2014. (1,121.6 x 3.6 x 28m = RM113.1bn)].

Crop failure in any part of the world will push up the prices of food. Again the B40 will be more affected as they are already on a tight budget now. If the prices of foodstuff go up, their budgets will be severely strained.

Flooding of coastal areas due to rising sea-water levels especially during tidal surges that coincide with rainfall in the interior. This phenomenon will again affect the families that do not have the financial means to shift to homes on higher ground.

Enhancing climate resilience in the B40

We have the technology to ameliorate many of the adverse effects of climate change. A sample of the steps we could take are tabulated below –

From the table above it should be clear that achieving greater “climate resilience” requires policy decisions and an outlay of funds. It is a societal issue and not something that individual B40 families can attain on their own if they have the “right attitude”. Measures to make us more climate resilience will require funds and government intervention.

Funds to enhance climate resilience

The shortage of funds to mitigate climate change is a major problem in developing countries. Though we are a middle-income country, we are constantly trying to reduce our budget deficit. Our federal budget for 2018 is RM280bn, which is about 22.3% of the Malaysian GDP. Maintaining the level of services we already have in place takes up a lot of the current budget of the government.

We would need to augment government income if we wish to embark on ambitious programmes to reduce our carbon footprint (eg switch to renewable sources of energy) and to enhance climate resilience in our population.

But we are in a quandary. We can’t raise taxes too sharply. The international economic system that we are a part of has engendered competition among Asean countries to reduce corporate taxes and taxes on really wealthy individuals.

Our corporate tax rate was 40% of profits in the 1980s. It has been reduced in stages to its current 24% of profits.[The standard corporate tax rate is 24%, while the rate for resident small and medium-size companies (ie companies incorporated in Malaysia with paid-up capital of RM2.5m or less and that are not part of a group containing a company exceeding this capitalisation threshold) is 18% on the first MYR 500,000 of profits – deloitte.com]

And our government plans to bring it even lower so that businesses and the super-rich will see Malaysia as a business-friendly country and come in with investments. Singapore’s corporate tax rate is 17% of profits and Thailand’s, 20% for 2018. That puts further pressure on our government to abstain from increasing corporate taxes.

Given the liberalisation of the economy promoted by the IMF and the World Bank, corporations and the super-rich can move to lower tax nations in Asean but still continue all their business activities in Malaysia – courtesy of the Asean Free Trade Agreement, which that allows tariff-free trade between Asean members. So the government’s anxiety that corporation and high-value individuals might shift to other countries is not unfounded.

At present only the T20 pay personal income tax, and the total amount collected is only about half that collected via corporate taxes. We could of course increase the tax rates for the T20, but 1-3% of the richer among them will then seriously consider relocating to a neighbouring country.

The other option is to look to developed countries for funds. They have pledged to contribute funds for climate-related projects in the developing countries. But the reality is that they have all under-performed in meeting this obligation.

At the latest Climate Change Conference that took place in Bonn, Germany on 6–18 November 2017, there was major tussle over funding for developing countries (Meena Raman, Third World Resurgence, Issue 326–327).

Article 9.5 of the Paris Agreement (2015) requires developed countries to communicate biennially the quantum of financial resources that would be made available to developing countries to deal with climate change. A total of US$10bn per year has been agreed to as the minimum amount, and this should be made available to developing countries from 2020 onwards (Wikipedia).

South Africa wanted to initiate discussions on the operational details of Article 9.5 and this call was supported by the African group of countries, the G77 and China. But countries in the EU and the USA objected strongly.

The compromise reached was the issue would be discussed at the next meeting of the Subsidiary Body for Implementation that was scheduled to meet in May 2018.

But if we wish to be fair to the governments of the OECD countries, we must take cognisance of the fact that they too are in a similar quandary as our government when it comes to taxing their corporations or their super-rich. The liberalised global economy allows the large corporations to establish headquarters in low tax countries and thus avoid paying taxes in their home country.

The super rich too can play a similar game. George Soros once commented that something must be wrong with the system if he paid even less tax than his secretary did!

According to the RT newsletter (13 November 2017):

In 2015 Bloomberg reported that Soros’ hedge fund paid $962 in tax in Ireland on $3,851 net income through 2013, while the remaining $7.2bn operating income was allocated to investors.

A year later, Soros shut down the Irish company and set up another in the tax-friendly Caymans. By the time the new company in the Caymans was created, Soros had reportedly funnelled $13.3bn in fees, which means he had dodged almost $7 billion in taxes if his business had been entirely located in the United States.

And all this is “kosher” – it is legal under the liberalised rules of the global economy!

Why the SDG approach is not helpful in enhancing climate resilience

The SDGs obfuscate! (Note: obfuscate = make obscure, unclear or unintelligible). The SDGs are fine as a wish list. They constitute a comprehensive set of targets that all well-meaning people should support. But the problem with the SDG approach is that it has been so “sanitiSed” that it completely omits to point out the underlying causes of global poverty.

Examples:

• The international system of trade has underpriced primary commodities for the past 60 years. One of the main reasons for this is that there are millions of primary producers selling to an oligarchy of five to 20 huge firms buying that particular commodity. The market power of the oligarchy is immense. It sets up its own stockpiles and uses this to leverage the prices downwards.
• The large multinationals outsource parts of the production process to third world countries and then use competition between multiple third world contractors to keep the prices of the intermediate products sold back to them as low as possible. This forces the third world contractors (the comprador capitalists) to squeeze their workers so as to keep costs as low as possible so that they can win more contracts. The MNCs make huge profits, and the compradors don’t do badly either!
• The international financial institutions like the World Bank and the International Monetary Fund have played a major role in impoverishing African nations by insisting on “Structural Adjustment Programmes”. They make emergency loan provision to desperate indebted countries contingent on the borrowing country agreeing to reduce social services – health, education, water – for its population so that the budget can be balanced and the loan paid back.

I could go on with a few more examples. But the crux of the matter is this – poverty amongst 50% of humankind is causally related to the structure of the global economy that permits the super accumulation of wealth in the coffers of the richest 0.1% of the world’s population. But the SDGs keep very quiet on this issue. As Jason Hickel puts it in an issue of the Jacobin:

Basically the SDGs want to reduce inequality by racheting the poor up, but leaving the wealth and power of the global 1% intact. The SDG proponents fail to accept that mass impoverishment is the product of extreme wealth accumulation by a few. You can’t solve the problem of poverty without challenging the pathologies of accumulation.

SDG goal 1 talks about poverty eradication; Goal 6 focuses on clean water and sanitation; Goal 7 is about affordable and clean energy and Goal 13 is on Climate Action. All laudable goals. But the facts of the matter are:

• There is an urgent need to act on these issues and
• Humankind now has the necessary technology to address these issues, but
• The surplus funds of humankind are in the hands of the global 0.1%.

According to Oxfam’s 22 January 2018 report:

Eighty two percent of the wealth generated last year went to the richest one percent of the global population, while the 3.7 billion people who make up the poorest half of the world saw no increase in their wealth, according to a new Oxfam report released today. The report is being launched as political and business elites gather for the World Economic Forum in Davos, Switzerland.

‘Reward Work, Not Wealth’ reveals how the global economy enables a wealthy elite to accumulate vast fortunes while hundreds of millions of people are struggling to survive on poverty pay. Billionaire wealth has risen by an annual average of 13 percent since 2010 – six times faster than the wages of ordinary workers, which have risen by a yearly average of just 2 percent.

It takes just four days for a CEO from one of the top five global fashion brands to earn what a Bangladeshi garment worker will earn in her lifetime. In the US, it takes slightly over one working day for a CEO to earn what an ordinary worker makes in a year.

It would cost $2.2 billion a year to increase the wages of all 2.5 million Vietnamese garment workers to a living wage. This is about a third of the amount paid out to wealthy shareholders by the top 5 companies in the garment sector in 2016.

Oxfam’s report outlines the key factors driving up rewards for shareholders and corporate bosses at the expense of workers’ pay and conditions. These include the erosion of workers’ rights; the excessive influence of big business over government policy-making; and the relentless corporate drive to minimize costs in order to maximize returns to shareholders.

Winnie Byanyima, Executive Director of Oxfam International said: “The billionaire boom is not a sign of a thriving economy but a symptom of a failing economic system. The people who make our clothes, assemble our phones and grow our food are being exploited to ensure a steady supply of cheap goods, and swell the profits of corporations and billionaire investors.”

This is the crux of the issue – the resources to finance a campaign to slow global warming and to mitigate for its adverse effects are in the investment funds of the super-rich and cannot be drawn upon to address climate-related problems.

We need to address the entrenched power – both economic and political – of the richest 0.1% on humankind if we wish to release funds for the causes that really matter such as addressing global poverty, reducing carbon emissions and enhancing climate resilience.

This is where the SDG approach fails us. The SDG approach pretends that these systemic causes of third world poverty do not exist. It does not call out the imbalances in wealth and income distribution. Instead some SDG proponents are happy to rub shoulders with the global elite whenever they use a miniscule amount of their huge funds for some well publicised CSR program. If this isn’t obfuscation, what is?

What is to be done?

• First of all we need to accept that the sanitised SDG approach is not going to solve the problems of climate change or help in enhancing climate resilience. We can accept the SDG goals for they are good targets for us all. But we need to recognise that the failure to identify the entrenched economic, political and institutionalised privileges of the global 0.1% is a major impediment to the solution of the problems we are facing.
• We need to work on Bandung II. A project for the 99% (including the ordinary citizens of the EU and the US) to dismantle some of the privileges of the 0.1% and to reset the balance between the super-rich and the rest of us so that resources of the world can be used for the benefit of the 99%.
• But we need to work on climate change right here and now. We cannot wait for fairer income distribution to begin our efforts. And being a middle income country we have considerable wriggle room as compared with countries like Bangladesh and Senegal.
• In Malaysia we should allocate some resources to address flooding.

a. We should do simulation stress tests in all the districts in Malaysia to assess the risk of severe flooding if rainfall that is twice as intensive as ever recorded before were to take place. The local population should be involved in this process, and medium-term plans to reduce erosion and siltation of rivers, build and maintain detention ponds, ensure proper storm water management protocols in new projects, etc should be set into motion.

b. Deforestation. This must be stopped whether it is due to logging or because of plantation activity. This will help preserve the carbon sink as well as reduce flooding downstream. Perhaps there is a need for a federal fund to give an annual grant to the states based on the acreage of unlogged forests in the state. (Often, the excuse for approving logging licences is that the state needs money for development.)

c. Rehabilitation of deforested areas must be given top priority. The banks of rivers and streams need to be planted with trees and shrubs so that erosion and siltation can be addressed at source. Wherever possible the local population should be enlisted in this activity.

• Enhancing food security should also be given very high priority. Among other initiatives,

a. The existing vegetable and cattle farmers who are using government land should be registered and serious efforts should be made to grant them leases to the land they are using, but with the caveat that the land leased to them has to be used for food production. Our current trend of development is leading to progressive eviction of this category of farmers.

b. Suitable land currently under oil palm cultivation should be acquired from plantation companies to boost paddy production to 100% self-sufficiency and to produce at least 60% of the animal feed that we need in Malaysia.

c. Many traditional farmers complain that monkeys, wild boar and elephants make cultivation of vegetables and fruits very difficult. This has to be handled. Would building giant cages spanning a few acres within which food crops can be grown be a viable option? This, and other options have to be explored. There is also a need to look into the marketing of the fruit and vegetables being produced.

d. Our fishing resources have to be protected. There is currently over-fishing in our coastal waters. There has to be stricter enforcement. GPS technology should be implemented to ensure that trawlers stay out at sea and do not encroach into coastal waters. Replenishment of fish through the building of artificial reefs and other measures have to be undertaken.

e. Peri-urban farming of vegetables should be popularised. This mode of vegetable production has been used with great success in Cuba. We need to see if it can be replicated here. The Consumers Association of Penang is already taking steps in this direction.

• We need to strengthen our social safety net. That would play a part in enhancing climate resilience as with a more comprehensive safety net, people would be able to handle higher prices of food if this was to occur. Specifically, we should consider:

a. Protecting and strengthening our public healthcare system so people do not need to take expensive insurance packages to cover treatment in the private sector.

b. Old age pension of RM300 monthly for each person above 70 who is not receiving a pension from any other source.

c. Expanding Socso coverage to all informal workers and to small farmers. This would provide much needed relief if they happen to be injured in accidents or are rendered disabled by illness.

d. State level non-profit housing boards to provide low-cost houses for first-time buyers. One of the conditions should be that the buyer must sell back to the board if he or she wishes to sell the house.

• We need to promote greater awareness of climate change, climate resilience and other environmental issues. The Malaysian public must be drawn into a discussion on these issues. This dialogue by Cetdem is a good step in this direction, and I would like to congratulate Cetdem for taking the effort to organise this event.

The views expressed in Aliran's media statements and the NGO statements we have endorsed reflect Aliran's official stand. Views and opinions expressed in other pieces published here do not necessarily reflect Aliran's official position.

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