Monthly Archives: December 2016

Big Men, Small Lands: owning property in Africa

Evictions are almost routine for the Ogiek,  a group of around 80,000 indigenous hunter-gatherers who have suffered repeated expulsions since being moved by the British colonial government in the 1930s. Yet this one still came as a surprise: the community is in the middle of negotiating a settlement with the local government that should see formal recognition of its right to live, graze livestock and forage on land it has inhabited for centuries.

In all rich countries, property rights are secure. Formal, legal title makes it easier to buy, sell and develop land. Buyers can be confident that the seller really has the right to sell what he is selling. Owners can use their property as collateral, perhaps borrowing money to buy fertiliser and better seeds. Legally recognising land ownership has boosted farmers’ income and productivity in Latin America and Asia.

But not yet in Africa. More than two-thirds of Africa’s land is still under customary tenure, with rights to land rooted in communities and typically neither written down nor legally recognised. In 31 of Africa’s 54 countries, less than 5% of rural land is privately owned. So giving peasants title to their land seems like an obvious first step towards easing African rural poverty.

However, it has proven extremely hard. Rwanda, for example, rolled out a programme over three years, whereby local surveyors worked with land owners and their neighbours to demarcate and register 10.3m parcels of land.,,,But even a relatively well-organised place like Rwanda has had problems keeping records up to date when land is sold or inherited.

In Kenya a large-scale titling programme was carried out in colonial times and carried over to independence. The first president, Jomo Kenyatta, and his cronies bought the huge estates of white settlers who left. But the system is costly and ill-run. Most Kenyans cannot afford to update titles, and the government has not maintained the registry. Recognising land rights, whether customary or titled, needs to be done as cheaply and simply as possible, says Ruth Meinzen-Dick of the International Food Policy Research Institute (IFPRI). “The more you increase the cost, the more likely it is that urban elites and men with more ed

Being able to prove you own your land may be a necessary condition for using it as collateral, but a title deed does not guarantee that anyone will lend you money. As Abhijit Banerjee and Esther Duflo, two economists, observe in their book “Poor Economics” (2011), banks need a lot more information to judge borrowers’ creditworthiness and be sure of repayment. And the administrative costs of offering very small loans to very small farmers, even those with collateral, are often prohibitive.

And legal property rights offer less protection in countries where big men can flout the law with impunity—a particular problem in Africa.  In recent years land grabs have sometimes made a mockery of customary ownership.

Excerpt from Land ownership: Title to come, Economist, July 16, 2016

 

Escaping 9 oil spills per month

The oil-rich Niger Delta has generated billions of dollars for Shell over the past 60 years, but the company’s operations have been plagued by sabotage, theft and oil spills that ravaged the local environment.  Though Nigeria was one of its most prolific regions for crude production in 2015, Shell has sold off tracts of onshore oil fields. Its new focus—sealed with the mammoth $50 billion acquisition of BG Group PLC this year—is deep-water wells off the coasts of the U.S. and Brazil and a historic shift toward natural gas that puts it at the forefront of oil companies offering a more climate-friendly image to investors.

The hearings in London’s High Court on November 2016 represented an early test for cases brought by the community of Ogale and a group from the Bille Kingdom. The communities are hoping to hold Shell accountable for environmental damage they claim has been caused by spills from infrastructure operated by Shell’s Nigerian subsidiary, Shell Petroleum Development Co. of Nigeria Ltd., or SPDC.  Shell is expected to argue that only the subsidiary should be held liable and that the cases should be heard in Nigeria, SPDC’s base and where the incidents took place…

But the communities and their lawyers say seeking justice in Nigeria won’t hold Shell responsible for the actions of its subsidiary and is extraordinarily difficult...“You cannot fight Shell in Nigeria,” the king of Ogale, Emere Godwin Bebe Okpabi, said in a phone interview. “Shell is Nigeria, Nigeria is Shell.

It is a point Shell has already contested in The Hague, where four Nigerian farmers and Friends of the Earth successfully appealed a ruling that was largely in Shell’s favor in 2015, allowing them to pursue a case against the company in the Netherlands.

In 2015, the company said it experienced on average nine oil spills a month caused by sabotage or theft, with a handful of additional spills caused by operational issues. An uptick in violence this year has knocked important export terminals out of action for months at a time, though divestments onshore have helped reduce the overall number of spills Shell has recorded…

The company has already paid out £55 million, or roughly $80 million, to compensate another Niger Delta-based community in a settlement reached last year after they brought a separate lawsuit in London. In that instance, Shell admitted the spills were caused by operational failures.

Excerpts from Shell Fights Lawsuits Over Environmental Record in Nigeria, Wall Street Journal, Nov. 19, 2016

The Search for Smart War

[T] he Global Positioning System (GPS) of orbiting satellites on which they rely was originally—and, indeed, remains—a military technology. The system is, for instance, relied upon by the JDAM (joint direct-attack munition) kits that America’s air force attaches to its free-fall bombs to turn them into smart weapons that can be guided with precision to their targets.

But JDAM and similar systems work only when they can receive signals from GPS satellites. And such signals are weak—approximately as powerful as a standard television transmission would be if the transmitter were five times as far away as the Moon is. They are thus easily jammed. For obvious reasons, details of the capabilities of jammers are hard to come by, but a Russian system called Pole-21, for instance, may be able to suppress GPS signals as much as 80km (50 miles) away.

One way to get around this—and to guide weapons automatically to their targets without relying on satellites—is to give weapons a map…. Israel is in the forefront, with a system which it calls Spice. Like JDAM, Spice is an add-on kit that turns unguided bombs into smart ones. It is designed and built by Rafael Advanced Defense Systems, an Israeli weapons company, and comes into service this month.

Spice contains an “electro-optical scene matching system” … [I]ts memory is loaded with pictures of the target area, taken beforehand by aircraft (piloted or unpiloted) or by satellite. …Spice can operate in darkness, and can penetrate smoke and fog. Moreover..Spice stores enough data to cover the entire route to a target.

Spice’s claimed performance is impressive. Rafael says it can guide a bomb released 100km from a target to a strike point within two metres of that target. The firm says, too, that its device is not confused by minor changes in the scenery around a target, which it can find even if some nearby areas have been obscured—say, by camouflage. Spice also has the advantage over GPS-guided weapons of working when a target’s exact position is unknown, or if the co-ordinates have been misreported. All you need is a picture of what is to be hit, and an approximate location, for Spice to find and hit it.

Other countries, in particular America, are following Israel’s lead. In January of this year, America’s air force signed a contract with Scientific Systems, a firm in Woburn, Massachusetts, to develop what that company calls its Image-Based Navigation and Precision Targeting (ImageNav) system….The initial plan is to fit ImageNav to the air force’s Small Diameter Bomb, a free-fall weapon at present guided by GPS. If this is successful, deployment on cruise missiles and drones will follow.

Meanwhile Lockheed Martin, the world’s biggest aerospace firm, is working on an optical-navigation system called Northstar.

Fitting bombs and missiles with vision in this way thus looks like the future. That does not mean GPS will not be used as well—a belt-and-braces approach is often wise in war. But bombs that can see their targets, rather than blindly following their noses to a set of co-ordinates, are always likely to have the edge.

Excerpts Bombs that can recognise their targets are back in fashion, Economist, Dec. 3, 2016

To Own a Water Right

Aflaj irrigation systems of Oman

Rights regimes that are well designed and implemented are among the most effective tools for distributing water fairly and sustainably. Under one such system, Australian states began reforming water management in 1994. Few others have followed, though attempts at reform in Chile and Yemen have met with varying degrees of success.

To create tradable water rights, Australia first drew up a baseline for water use, taking into consideration past commercial, social and environmental needs. Next, old water rights were replaced with shares that granted holders (usually landowners) a proportion of any annual allocations. Clever formulae take account of the seniority of pre-existing rights. Different classes of shares determine who gets what and when to balance the competing claims of upstream farmers and downstream urbanites. After that a regulatory board makes sure that all users get as much as they are entitled to.

Allocations made to shareholders are tradable, but those receiving them can also store them for the future. This prevents any sudden wasting of water at the end of each year and encourages thrift during a drought. Issuing shares in perpetuity ensures that a holder can have more water only if someone else is prepared to have less. A centralised register holds everything together. Two markets for trading have been created: one in which shares are exchanged, and another for allocations of water in a given year. The idea is not a new one. In places such as Oman, aflaj systems involve villages trading in shares and in minutes of water flow.

Such regime change originally met strong resistance from farmers and other big users in Australia. But trading allocations reaped enormous rewards for shareholders. During the first decade of reform the annual internal rate of return from owning a water right was over 15%; those who held water shares saw the value of their rights double every five or so years. But following this example elsewhere will be tough. Even rich countries will struggle to unbundle rights that have accumulated over decades.

Excerpt from Liquidity Crisis, Economist, Nov. 5, 2016, at 17

Dashing the Japanese Dream: nuclear self-sufficiency

Mihama Nuclear Plant, at Fukui Japan

Japan on December 21, 2016 formally pulled the plug on an $8.5 billion nuclear power project designed to realize a long-term aim for energy self-sufficiency after decades of development that yielded little electricity but plenty of controversy.  The move to shut the Monju prototype fast breeder reactor in Fukui prefecture west of Tokyo adds to a list of failed attempts around the world to make the technology commercially viable and potentially cut stockpiles of dangerous nuclear waste.

“We do not accept this,” Fukui Governor Issei Nishikawa told ministers involved in the decision.”…Nishikawa strongly backed the project because of the jobs and revenue it brought to a prefecture that relies heavily on nuclear installations. He said decommissioning work for Monju would not start without local government approval.  Four conventional commercial nuclear stations lie in close proximity to Monju, earning Fukui the nickname “nuclear alley.”

The Fukushima crisis sparked strong anti-nuclear sentiment in Japan, making it harder to pursue projects like the Monju facility which has faced accidents, cover-ups and regulatory breaches since construction began in 1985.  The plant was built to burn plutonium derived from the waste of reactors at Japan’s conventional nuclear plants and create more fuel than it used, closing the so-called nuclear fuel cycle and giving a country that relies on overseas supplies for most of its energy needs a home-grown electricity source.

Excerpts from  Japan pulls plug on Monju, ending $8.5 bln nuclear self-sufficiency push, Reuters, Dec. 21, 2016

Hunt and Kill them All: Saudi Arabia Uses Cluster Bombs

BL 755 cluster bomb

A Saudi-led Arab coalition will halt its use of British-made cluster munitions in Yemen, the Saudi government said on on December 19, 2016, after 20 months of war in which thousands of civilians have been killed and injured in airstrikes.  In London, Britain’s defense minister, Michael Fallon, confirmed in Parliament that the coalition had dropped “a limited number” of British-supplied cluster munitions in Yemen.   Britain, a signatory to an international convention that prohibits use of the munitions, has been investigating whether the coalition dropped the munitions, BL-755 bombs, in Yemen after a report in May 2016 by the rights group Amnesty International…Mr. Fallon stressed that Britain had sold the munitions to Riyadh in the 1980s, long before the convention in 2008.

They pose a particular risk to children, who can be attracted by their toylike appearance and bright colors.  Amnesty International said in May 2016 that civilians returning home in northern Yemen risked injury and death from “minefields” of deadly cluster bombs.

Excerpt from Saudi Arabia Says It Will Stop Using British-Made Cluster Bombs in Yemen, Reuters, Dec. 19, 2016

The Nationalization of Internet

Seeking to cut dependence on companies such as Google, Microsoft, and LinkedIn, Putin in recent years has urged the creation of domestic versions of everything from operating systems and e-mail to microchips and payment processing. Putin’s government says Russia needs protection from U.S. sanctions, bugs, and any backdoors built into hardware or software. “It’s a matter of national security,” says Andrey Chernogorov, executive secretary of the State Duma’s commission on strategic information systems. “Not replacing foreign IT would be equivalent to dismissing the army.”

Since last year, Russia has required foreign internet companies to store Russian clients’ data on servers in the country. In January 2016 the Kremlin ordered government agencies to use programs for office applications, database management, and cloud storage from an approved list of Russian suppliers or explain why they can’t—a blow to Microsoft, IBM, and Oracle. Google last year was ordered to allow Android phone makers to offer a Russian search engine. All four U.S. companies declined to comment.

And a state-backed group called the Institute of Internet Development is holding a public contest for a messenger service to compete with text and voice apps like WhatsApp and Viber. Russia’s Security Council has criticized the use of those services by state employees over concerns that U.S. spies could monitor the encrypted communications while Russian agencies can’t,,

On Nov. 10, 2016, Russia’s communications watchdog said LinkedIn would be blocked for not following the data-storage rules….. That same day, the Communications Ministry published draft legislation that would create a state-controlled body to monitor .ru domains and associated IP addresses. The proposal would also mandate that Russian internet infrastructure be owned by local companies and that cross-border communication lines be operated only by carriers subject to Russian regulation…

The biggest effect of the Kremlin’s internet campaign can be seen in the Moscow city administration, which is testing Russian-made e-mail and calendar software MyOffice Mail on 6,000 machines at City Hall. The city aims to replace Microsoft Outlook with the homegrown alternative, from Moscow-based New Cloud Technologies, on as many as 600,000 computers in schools, hospitals, and local agencies….“Money from Russian taxpayers and state-controlled companies should be spent primarily on domestic software,” Communications Minister Nikolay Nikiforov told reporters in September. “It’s a matter of jobs, of information security, and of our strategic leadership in IT.”

Excerpts from Microsoft Isn’t Feeling Any Russian Thaw, Bloomberg, Nov. 17, 2016