World Bank’s IFC Suspends Investment in Agrofuels in Indonesia

From The Third World Institute’s Choike program, here’s a recent report that World Bank and International Finance Corporation (IFC) head Robert Zoellick has agreed to suspend World Bank/IFC financing of the agrofuel sector (oil palm, in this case) in Indonesia, in response to activists’ concerns about environmental degradation and social troubles:

“In response to an appeal by a global coalition of NGOs, IFC / World Bank President Robert Zoellick has agreed to suspend IFC funding of the oil palm sector pending the development of a revised strategy for dealing with the troubled sector.

The response follows a highly critical audit by the IFC’s independent ‘complaints advisory ombudsman’ which had shown that, as claimed by the NGOs, IFC funding of the Wilmar Group had violated the IFC’s own procedures, and commercial concerns had been allowed to override the IFC’s environmental and social standards.”

My Comment:

The IFC is an arm of the World Bank group and is based in Washington, DC. It differs from the World Bank in being entirely private and for-profit and in not being backed by sovereign (i.e. government) guarantees. It’s focus is on investment in the private sector in emerging markets.

This will be a big blow to top agro-fuels producer Singapore-based Wilmar International, whose business activities in Sumatra and Kalimantan have provoked complaints from some 19 environmental groups, plantation small holders, and indigenous people’s organizations:

“IFC’s ombudsman had conducted an audit following the NGO complaints and found that IFC funding of Wilmar International, listed on the Singapore Stock Exchange, had violated IFC’s procedures and commercial concerns had been allowed to override IFC environmental and social standards.

The ombudsman’s report was released earlier this month and focused on four financing arrangements made by the IFC between 2003 and 2008 in favor of Wilmar International, which runs more than 200,000 hectares of palm oil plantations in Indonesia and Malaysia.

IFC had earlier agreed to provide the company with US$33.3 million in investment guarantees and $17.5 million in loans over five year.” (Jakarta Post, Sept 14, 09)

Wilmar is also the supplier of cheap palm kernel that’s used to feed cows by New Zealand dairy giant Fonterra. Fonterra uses 1/4 of the world’s palm kernel – a trade that has drawn fire from NZ environmental groups, which  call it a national scandal that a company in a country known for its environmental quality should be doing business with a corporation they describe as destroying Malaysian and Indonesia rain-forest at unsustainable rates.

Argentina Farmland Troubles

Here’s a clip from early in the year that might interest libertarians who’ve been looking outside the US for farmland, in anticipation of any further worsening of the economy.
The video depicts the effects of drought in Santa Fe province….and makes a rather vague (and likely, insubstantial) reference to global warming.

But there are many other problems in Argentina besides drought – bad government policies, problems with squatters, the depletion of the soil from soy monoculture, the influx of genetically modified foods, and the relatively high prices of land in recent years.

And now there’s also increasing social unrest.

I was talking to some American friends who live in one of the north-eastern provinces, Misiones. They liked where they were, but there were certainly problems. Foreigners couldn’t own the land outright, since it was on the border. And the little enclave of immigrants didn’t always get on with other foreigners. On the good side, they thought the land itself was a natural paradise….

Libertarian Living: Argentina, Chile, and Uruguay as Libertarian Destinations“

I promised some of you a few tips about countries you might be considering fleeing to.

Here’s a quick guide to how three of them might work for runaway libertarians:

1. Cheap Living:

Forget what you’re reading about Chile being expensive and Uruguay being cheap. It all depends on where and how you’re living and what you’re doing. Comparing capitals, Santiago has more and cheaper living options than Montevideo. So does Buenos Aires. But you can find cheaper living in a smaller town in Uruguay. On the other hand, in smaller towns, don’t expect to find the variety of accommodation you find in a city like Buenos Aires. You may not find youth hostels, camping, budget hotels, or house-shares. In general, the more of an international crowd a place draws, the more and better your options.

If you are planning to live off the earth, farmland is relatively cheap and high-quality in all three countries, with Brazil and Uruguay being the cheapest. Soil quality is high in all these southern countries.

For organic growing, Chile and Uruguay are the places to go..

2. Eating/Shopping

But rent is not the only consideration. What about food and clothes?

Uruguay isn’t as cheap as Argentina, especially with the Uruguayan peso so much stronger than the Argentine peso.

Brazil is also more expensive.

In general, you’re wise to buy whole food in the markets and leave international brands alone in the supermarket aisles. Eating out is still cheap in Argentina, but less so elsewhere.

Again, you can always find a deal if you look. Brazil has the most variety. I had an all-you-can-eat meal in the border town of Chuuy, where the variety and quality of the asado was far superior to anything I’d eaten in Argentina.

Clothes tend to be relatively expensive, but again, if you look around, you can find places where there are sales, just as you have them in the US. A recent find, a jacket for about $4.

Electronic items like computers are more expensive. Make sure to buy the correct equipment for electronic appliances. Ask at a web forum before you visit.

3. Investment: Buying an apartment in Santiago, Buenos Aires, or Montevideo requires a lot of thinking right now. It all depends on whether you are buying it to live here or as an investment.

Prices are high in Buenos Aires, but evidence of the global crisis is everywhere, and the expectation is that prices will come down soon – perhaps sharply.

Santiago realtors are expecting a 15-20% drop in the next 6 months.

In Montevideo, the general feeling is that any price-drop in the other markets won’t be felt as sharply there. But everyone knows that even in Montevideo, prices have climbed as much as 30% in good areas, as rich Argentines move their money out of Argentina and put it into the stabler Uruguay economy.

That’s true not only of apartments but of land as well, although that’s a topic that would take too long a post to do justice to.

In general, don’t let anyone rush you into buying. Nothing is ever the dead certainty it’s made out to be, and getting in and out of a real estate transaction has costs. None of the property here is very liquid at all, in my opinion.

Also, don’t forget that old houses require constant maintenance and that if local currencies strengthen against the dollar, your labor costs for maintenance or renovation may end up being higher than your budget. Same goes for labor costs for management. You really might be better off buying a condo in Miami, no matter what Faber or Rogers thinks, if economic reasons are your only ones for living abroad.

Right now, you can find a waterfront apartment in Florida for a lower price than a comparable one in Uruguay. So if cheaper living is your only criterion, you might want to chew on that.

4. Privacy:

Uruguay is no longer on the black-list for tax havens, which is a good thing. On the other hand, it’s been a bit too compliant with US demands for transparency. Chile is a morass of bureaucracy, but predictable. Argentina is the least reliable, as far as banking goes.

This might not be something libertarians are going to like to hear. But the chances are that these societies too are going to be moving toward greater control. This is more true of Argentina than of Uruguay in my opinion.

5. Business Culture:

Chile gets top marks for a culture that is business positive, for those libertarians hoping to start a new life here. With English widely-spoken, low corruption and good property laws, it’s the best place to build a business. But watch out for a cultural problem – Americans I meet seem to find Chileans rude.

Brazil and Colombia (of which I know nothing else) are also good places for starting a business. Uruguay has some problems in this respect. It doesn’t have as much of a market or a business culture and the market also relies too much on foreigners. You’d have to know exactly how to work that. As Brazil, Argentina, and Chile go, so goes Uruguay. On the other hand, Uruguay seems to be the most accessible and easy-going culture of the three.

Businessmen I met uniformly thought Argentina was a terrible place to do business – and some even called it the most corrupt country in South America, much to my surprise. Portenos (those who live in Buenos Aires) were singled out for blame – although for myself, I had nothing but a positive experience of them. People in the provinces were said to be more honest.

But then, I wasn’t doing business, I was trying to find out more about Monsanto….and in my off-time, figuring out salsa. People saw me as an Indian, assured me they loved India, and spent their time complaining about America to me, as though I wasn’t from there. So much for the liberal view of citizenship as purely political and cultural….

Brazil gets good marks, but with plenty of warnings about corruption and street crime…
I found the Brazilians I met more politically aware than the others., for what that’s worth. A lot of fans of Chomsky and much discussion of 9-11.

So there you have it…a quick guide to selecting what you can do where..
In three important countries very far south of the border..

Record Prices for Rarities at Auction Sales

High prices at auctions are an indication that investors are avidly interested in high quality tangible assets which will hold onto their value and are ready to pay extraordinary prices for them even in this market. Two illustrations from the auctions houses:

In Namure in southern Belgium, on Sunday, demand for Tintin, the cartoon reporter, broke national and world sales records, AFP reports. Five hand-drawn pages by Herge raised 1, 172,000 euros (1.57 million dollars) a world record for Herge as well as a national record for cartoon strips books. Buyers came from all over Europe, the United States, Lebanon and China.

Meanwhile, Reuters reports that at Sotheby’s semi-annual sale at Geneva, a virgin blue diamond straight from South Africa, weighing 7.03 carats, sold to any anonymous buyer on May 12, Tuesday, for a record 10.5 million Swiss francs ($9.49 million), including commission, the highest price paid per carat for any gemstone at auction and a new world record price for blue diamonds. The sale price without commission, a record, was $1,349,752, Sotheby’s said.