Saturday, July 5, 2008

Food and Energy Shortages: "A Man-Made Castrophe"; What, If Anything Has NonProfit Law Got To Do With It?

On the eve of the 34th G8 Summit, which will take place in Tokyo, Japan, July 7-9, 2008. World Bank Group President, Robert Zoellick, and U.S. President George W. Bush are calling on the G8 countries to follow through with their promises to help alleviate poverty and disease in Africa and to address the devastating effects of food and fuel shortages in the developing world.  Responding to these calls will require overcoming both political and legal obstacles. 

Promises have been made, but not of a legally binding nature.  For example, President Bush's plan to renew the global AIDS initiative, pledging $50 billion over the next five years, is being challenged by some Republican senators as being too expensive. Further, there is speculation that the G8 countries may back out on their promise to double development assistance to Africa by 2010 for an increase of $25 billion.  The New York Times reports that the communiqué being prepared for this year’s meeting in Japan says the G8 countries are “firmly committed” to doubling the assistance, but does not mention the $25 billion amount.

Concerned about this backsliding, on Wednesday, World Bank Group President Robert Zoellick sent a letter to the head of the 2008 G8 Summit calling on the G8 countries to follow through with the commitment they made in 2005 to increase overall development aid, particularly to Africa, which accounts for two thirds of the countries most affected by the food and energy crises.  Mr. Zoellick also called on major oil producers to deal with rising food and energy prices, warning that the world is now "entering a danger zone."  The World Bank, World Food Program and International Monetary Fund estimate that $10 billion is needed to provide short term help to those hit hardest by the food and energy crises.

"What we are witnessing is not a natural disaster - a silent tsunami or a perfect storm: It is a man-made catastrophe, and as such must be fixed by people," Mr. Zoellick wrote in his letter.

The law cannot create the political will to address these catastrophies but, where that will exists, the law plays a crucial role in providing mechanisms to facilitate solutions.  Since these crises developed, Mr. Zoellick's letter reports that the World Bank has provided 12 countries with funding from a $200 million grant fund, which is part of a $1.2 billion rapid financing facility to provide immediate assistance.  New requests from 31 countries for almost $400 million have poured in.  These are  beyond the Bank's available grant resources but, according to Mr. Zoellick, the Bank has a multi-donor trust fund in place that donors can use  to provide immediate help.

Enter the role of non-profit and charitable trust law.  The gaping needs created by these crises appear far beyond what sovereign donors alone will be able (for political or other reasons) to fill.   This mandates looking to other sources of funding such as foundations, charities, philanthropists and the private sector.  A diverse group of sources are desperately needed to fund the kind of multi-donor trust fund and rapid financing facility to which Mr. Zoellick's letter refers.  Yet the legal principles and framework for creating and governing such pooled financing mechanisms for international development aid  are hopelessly under-developed.  What law would govern a public-private trust fund to address world hunger?; who would have standing to police it?; and in what forum would such standing be exercised?  Some food for thought for the charitable trust/nonprofit law scholar as the developing world starves .......


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