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POLITICAL ECONOMY
IMF ties environment to restoring European growth
by Staff Writers
Washington (AFP) June 12, 2012


IMF chief Christine Lagarde tied saving the environment to restoring growth in Europe, saying Tuesday that green development cannot get going while advanced countries are stuck in crisis.

Speaking ahead of the June 20-22 UN Conference on Sustainable Development, the Rio+20 Summit, Lagarde said that environmentally friendly growth cannot be disconnected from restoring fiscal health and growth in the advanced countries.

"Today, I believe that we are facing a triple crisis -- an economic crisis, an environmental crisis, and, increasing, a social crisis," she said in an address at the Center for Global Development in Washington.

"The global economy is still rocked by turmoil, with uncertain prospects for growth and jobs."

"We must start with the basics -- from a platform of restored economic stability and growth. From that base, we can achieve green growth and inclusive growth -- the building blocks of our sustainable and equitable economic future."

Lagarde, whose main burden in the past year has been wrestling with the eurozone's financial crisis -- and the tensions between stabilizing weak euro area countries and restoring growth -- admitted the International Monetary Fund is not an environmental organization.

But, she added, "We cannot ignore the extensive human suffering and the misallocation of resources that leads us down the wrong path."

More deterioration of advanced economies could damage currently fit developing countries, setting back their attempts at sustainable growth.

To foster sustainable, green economies, she said, "First and foremost, we need to get growth going again."

"This must start with the advanced economies, especially in Europe. Policymakers need to take decisive steps to break free of the crisis."

The IMF managing director conceded that economic growth "can potentially harm the environment and that environmental degradation can in turn hurt economic performance. We need to get the green economy right."

A key then is fostering policies that are "good for stability and good for growth," including properly pricing the costs of pollution and other destructive activities.

Getting such prices right is "the best and most comprehensive route to reducing environmental damage."

She also stressed "inclusive growth" that creates jobs and helps reduce inequality.

"Options here include reducing tax evasion and avoidance," she said, repeating an issue she has made repeatedly about Greece as it struggles to implement its 130 billion euro ($160 billion) EU-IMF bailout.

On Monday she told CNN television: "I think that tax compliance is a necessary tool to restore any country's situation -- Greece, like others."

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Clinton to lead US at Rio Summit
Washington (AFP) June 12, 2012 - The United States said Tuesday that Secretary of State Hillary Clinton will head to Rio de Janeiro for the Earth Summit's 20-year follow-up, which is drawing wide global participation.

Clinton will lead the US delegation to the June 20-22 conference and also meet with world leaders on the sidelines, State Department spokeswoman Victoria Nuland said.

Other US officials heading to Rio will include Environmental Protection Agency chief Lisa Jackson and Todd Stern, the US special envoy on climate change who will serve as the chief US negotiator in Rio.

The landmark 1992 summit, where then US senator Al Gore played a high-profile role, set the ball rolling in UN-led efforts to tackle problems facing the planet including climate change and species loss.

As many as 50,000 activists, policymakers and business executives are expected for the 20-year follow-up. But expectations for major achievements are low, with much of the world more focused on present economic woes.

The conference also comes as President Barack Obama pursues a tough re-election battle. The 1992 Earth Summit and the blueprint it produced, Agenda 21, have been longstanding targets of US right-wing activists and conspiracy theorists.



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POLITICAL ECONOMY
World Bank warns developing countries over Europe
Washington (AFP) June 12, 2012
The World Bank on Tuesday warned developing countries to boost their defenses against Europe's debt crisis, predicting years of volatility in a flailing global economy. In its semiannual report on worldwide economic conditions, the World Bank forecast the global economy would have "weak growth" of 2.5 percent in 2012, while developing countries' pace would slow to 5.3 percent, the most slugg ... read more


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