Financing for Development: Time for the UN to Take Centre Stage Again

Jesse Griffiths, Guest Blogger

Jesse Griffiths is Director of the European Network on Debt and Development (Eurodad).

Little progress has been made since the last conference of the United Nations Financing for Development (FfD) process, held in Addis Ababa in July 2015, which agreed the Addis Ababa Agenda for Action (AAAA) – the framework for how the world would finance the Sustainable Development Goals (SDGs). Since Addis, however, there has been little headway and last year’s UN FfD Forum was disappointing, with few concrete outcomes achieved. As the FfD Forum outcome document highlighted, that current policies are not delivering the economic step-change needed to achieve the SDGs.

Given the slow rate of reform since Addis, it is clear that global leaders need to work towards a major new set of concrete actions on financing for development. The European Network on Debt and Development (Eurodad) recently launched a short paper setting out three key tests that this year’s UN FfD Forum should pass if it is to be regarded a success:

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Worst Case Economics

Frank Ackerman is principal economist at Synapse Energy Economics in Cambridge, Mass., and the author of Worst Case Economics: Extreme Events in Climate and Finance (Anthem Press, 2017). He spoke to Triple Crisis co-editor Alejandro Reuss in late December 2017 about the main themes in the book. To learn more, you can also visit the book page on Dr. Ackerman’s website here.

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Selling Out Argentina’s Future—Again

Alan Cibils and Mariano Arana[1]

In Argentina’s 2015 presidential run-off election, the neoliberal right-wing coalition “Cambiemos” (literally, “lets change”), headed by Mauricio Macri, defeated the populist Kirchnerista candidate by just two percentage points. Macri’s triumph heralded a return to the neoliberal policies of the 1990s and ended twelve years of heterodox economic policies that prioritized income redistribution and the internal market. The ruling coalition also performed well in the October 2017 mid-term elections and has since begun implementing a draconian set of fiscal, labor, and social security reforms.

One of the hallmarks of the Cambiemos government so far has been a fast and furious return to international credit markets and a very substantial increase in new public debt. Indeed, since Macri came to power in 2015, Argentina has issued debt worth more than $100 billion. This marks a clear contrast to the Kirchner administrations, during which the emphasis was debt reduction.

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Have Financial Stability Proposals Been Implemented Properly?

Philip Arestis and Malcolm Sawyer

Many countries have developed policies to address financial stability since the Global Financial Crisis (GFC) and the Great Recession (GR). How far these policies have been fully implemented and how far those policies can contribute to avoiding the next financial crisis, or mitigating its effects, are interesting questions.

The focus of policies to ensure financial stability should be on proper regulation of the financial sector. Proposals that aim to ensure financial stability have been put forward and we briefly comment on them. The main proposals are the US Dodd-Frank Act, the UK Vickers Report, the European Liikanen Report, the IMF Report, and the Basle III Report.

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The Fight Against Mining Companies Goes Global

Can an Historic Victory Over Irresponsible Mining in Central America Spur a Win in Asia?

Robin Broad and John Cavanagh

Robin Broad, a professor of development studies at American University in Washington, D.C., is writing a book about mining as a John Simon Guggenheim Fellow.  John Cavanagh directs the Washington-based Institute for Policy Studies. They are co-authors of (among others) Plundering Paradise: The Struggle for the Environment in the Philippines.

In March 2017, the small nation of El Salvador took a huge step towards protecting its environment for present and future generations when its legislature passed a law outlawing all metals mining. It was a momentous vote — a vote heard round the world.

Indeed, that vote ricocheted across the Pacific to the Philippines, which has emerged as one of the hot spots in the global fight of “water protectors” to end destructive industrial mining.  In November 2017, Philippine President Rodrigo Duterte surprised many by listening to the call of strong peoples’ movements as he declared that a ban on new open pit-mining in that country would remain in place. This, despite a concerted campaign by the country’s mining interests to end that ban.

The open pit ban is a significant victory for communities across the Philippines, especially in the southern island of Mindanao where groups have waged a decades-long battle to block the construction of what would be one of the largest gold and copper mines in Southeast Asia. And it gives a boost to groups fighting to shut down the destructive mining activities of the very same Australian-Canadian mining giant, OceanaGold, that sued El Salvador in an effort to mine gold there.  As a result, OceanaGold has become a symbol of irresponsible mining around the world and a prominent target of global anti-mining movements.

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WTO and Food Security: Biting the Hand that Feeds the Poor

Timothy A. Wise

Since 2013, controversy has swirled around India’s National Food Security Act (NFSA), the most ambitious food security initiative in the world, with its plans to buy food grains from small-scale farmers to distribute to some 840 million poor Indians, two-thirds of the country’s people. The controversy came at the World Trade Organization (WTO), where the U.S. government accused India of unfairly subsidizing its farmers by paying a support price above market prices.

At the WTO biannual ministerial conference in Bali, India stood firm, questioning the subsidy calculation as an artifact of old WTO rulemaking and asserting that, in any case, such programs that are used for legitimate food security purposes should be exempt from such restrictions. The conflict nearly torpedoed the WTO’s modest negotiated agreements in Bali, but a “Peace Clause” granted India and other developing countries with such programs a grace period while negotiators tried to reach a permanent solution. (See my coverage of the controversy here.)

That grace period is up now, as trade ministers from across the globe board planes for the December 10 opening of the WTO’s 11th Ministerial Conference in Buenos Aires, Argentina. With no progress on the matter at the 2015 conference in Nairobi, Kenya, India and other developing countries have called for a simple exemption of such programs from WTO restrictions. U.S. negotiators, themselves under fire for “dumping” agricultural surpluses on global markets at prices below the costs of production, are demanding more restrictive measures and further concessions from developing countries.

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E-Com at MC11 is effort to hijack basic internet governance issues

Chakravarthi Raghavan

As issues relating to the monopolistic/oligopolistic control over information and data by the Silicon Valley technology giants and their platforms are beginning to attract adverse public and political attention around the world, these technology platforms (Google, Facebook, Twitter) are attempting to hijack the issue of internet governance and democracy by writing trade rules at the WTO under the rubric of “e-commerce”.

Scholars and specialists in communication issues have been studying and focussing on this issue for a while, but some recent “incidents” and actions by these platforms have now brought the issue to the centre of political debate in various countries in relation to issues of Democracy, pluralism and democratic governance.

The latest example is that the “tweets” from The Hindu were not appearing in Twitter’s search results. The Hindu is a leading English language daily newspaper of India printed and published from several centres, and its Twitter handle has over 4.5 million verified followers. And when The Hindu’s attention was drawn to this, and its internet desk took up the matter with Twitter, its tweets began appearing again in the “search results”. (See article here by The Hindu’s Readers’ Editor A. S. Panneerselvan.)

Twitter admitted to The Hindu digital team that @the_hindu handle got “inadvertently” caught in its spam filter. Funnily though, real spams seem to escape the “spam filters” of most email service enterprises/platforms, and flood the regular in-boxes of email users, often resulting in recipients’ mailboxes “becoming full, and unable to accept new genuine messages”.

So much for the ability of these tech giants and platforms (Google, Facebook, Twitter, Microsoft) to filter out spams!

In an email communication to this writer, Prof. Dean Baker, Co-Director of the Washington DC-based Center for Economic and Policy Research (CEPR), comments that it is an “amazing story” of The Hindu’s tweets not appearing on Twitter’s search results, and Twitter’s explanation that The Hindu’s tweets “inadvertently” got caught in its spam filter.

“There are a variety of different issues here,” Prof. Baker says. “But most immediately, these huge platforms (Google, Facebook, Twitter) need to be regulated in the same way the phone company was regulated when it had a monopoly.”

“The phone company could not ‘accidentally’ deny service to a political party or organization it didn’t like. We need similar rules for these platforms. They also should not be allowed to use their platforms as springboards to other lines of business. That isn’t the whole story of a democratic media, but it seems a simple first step.”

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Digital Superpowers Poised To Increase Global Inequities Under the Label of E-Commerce

Lynn Fries of The Real News—reporting from the World Trade Organization (WTO)—describes how high-tech giants are “determined to achieve in WTO what they have yet to secure in any other deal: new rules that will lock in profit-making opportunities in the digitalized economy of the future.” What will this mean for developing countries and global inequities?

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Not With a Bang But With a (Prolonged) Whimper

Jayati Ghosh

It is probably obvious to everyone that global capitalism is in dire straits, notwithstanding the brave talking up of output recovery that now characterises almost every meeting of the international governing elite. Even so, discussions of the end of capitalism still typically seem overstated and futile, not least because those hoping and mobilising for bringing in an alternative system are everywhere so scattered, weak and demoralised. In effect, capitalism is the only game in town, which is why even in its current debilitated and even decrepit state, it fears no rivals.

But maybe that is really not the point. Maybe economic systems can die without actually being killed by other competing systems. “How will capitalism end?” is the title of a brilliant book by the German thinker Wolfgang Streeck. (Verso, London 2016, published in India by Juggernaut Books.) It provides a cogent and persuasive critique of the nature of contemporary capitalism, and describes its ongoing extended demise, without surrendering to any optimism that as it fails to deliver even in terms of its own logic, all the nastiness and injustice it has generated must inevitably change for the better.

As may be fitting for a work with this combination of scope and profundity, it is difficult to pigeonhole either the author or the book into simple disciplinary categories. It straddles economics, politics and sociology, with forays into moral philosophy: in other words, political economy at its best. But even if it is beautifully written, it makes for tough reading – simply because the message is so stark, at once depressingly dystopic and terrifyingly plausible.

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Why Does the Euro Area Have Such Low Growth and High Unemployment?

Philip Arestis and Malcolm Sawyer

Since the euro was adopted as a virtual currency in 1999 (and the exchange rates between the currencies of the then 11 countries fixed en route to adopting the euro), growth among the euro-area countries has been lacklustre. The euro-area annual growth rate was just under 2% in 2002 to 2007, followed by 0.3% in 2008, -4.5% in 2009, then 2% in 2010, and an average of 0.8% 2011 to 2016. Over the period 1999 to 2016, the average was 1.1%. Unemployment declined through to 2007 down to  7.5%, then rose in the aftermath of the financial crises and the effects of fiscal austerity programmes to 12% in 2013, and has gently declined since to 10% in 2016 and likely to come close to 9% at the end of October 2017. There are notable disparities between different countries’ experiences, with Italy’s growth 1998 to 2016 being an annual average rate of 0.2%, and unemployment in Greece over 23% and Spain close to 20% in 2016.

The economic difficulties of many of the now euro-area counties had been noted in the early 1990s. In the late 1980s, all the talk was of the “single market” and the removal of non-tariff barriers to boost trade between member countries and to stimulate economic activity. The EC forecast a 6% boost to GDP following the single market. The launch of the single currency had a whole range of political forces behind it, but was viewed as enhancing economic integration and giving some boost to trade between member countries. “Structural reforms” of labour and product markets (for which read de-regulation and liberalisation) have been frequently promoted as lowering unemployment and improving economic performance. Writing in 2008, the European Commission (2008, p. 6) claimed that “the bulk of these improvements [in the reduction of unemployment] reflect reforms of both labour markets and social security systems carried out under the Lisbon Strategy for Growth and Jobs and the coordination and surveillance framework of EMU, as well as the wage moderation that has characterised most euro area countries.” The ECB amongst others has been consistent in its calls for “structural reforms,” and the promotion of “structural reforms” have become as a significant part of the “fiscal compact.”

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