August 24 2016

Japan enters the SIB frey – hooray!

Meanwhile the American hard left continues to attempt to despoil the notion of PFS.

Japan Development Agency To Issue Social Impact Bonds


Some 20 billion yen ($199 million) in social impact bonds will be issued by the government-affiliated Japan International Cooperation Agency as early as September, a move that could give momentum in the country to socially conscious investment.

So-called ESG investing — a strategy focusing on environmental, social and corporate governance issues — has taken off in the U.S. and Europe. ESG investment worldwide is said to be in the tens of trillions of dollars.

The International Capital Market Association, an industry group comprising major global financial institutions, set out guidelines for social bonds in June, and the JICA bonds will be the first in Japan to adhere to the rules.


Wall Street’s Latest Public Sector Rip-Off: Five Myths About Pay for Success

Kenneth J. Saltman – CounterPunch

Pay for Success/ Social Impact Bonds appeal to banks for their capacity to generate profits from public tax money for education, juvenile justice, and other services and they represent a form of economic redistribution from desperately needed public money for the most vulnerable citizens such as poor youth to business.   They also appeal to banks who have gotten caught defrauding investors and that can now promote themselves as doing good works while turning a profit. Pay for Success also appeals to neoliberal politicians such as Mayor Emanuel in Chicago who can claim they are doing “innovative finance” in the interest of taxpayers instead of raising taxes or issuing educational bonds. The reality is that politicians like Emanuel are just kicking the can down the road as Pay for Success does not solve the historical failure to adequately fund public education or other social services (like the mental health services he gutted), just adding to the longstanding debt burden. In fact, because it costs more, Social Impact investing raises this debt burden while delaying it, thereby destabilizing the public system further. In this sense, Pay for Success is an elaborate form of public relations that makes a failure to address a public problem look like innovative action.

Pay for Success/Social Impact Bonds ought to be understood as simply one of the latest efforts of the private sector to exploit and to pillage the public sector for profit at a historical moment of uncertain economic growth and a crisis of capital accumulation. New legislation and policy must be developed to limit the access of investment banks to determining, running, and profiting from social programs.