Martin Khor
A key threshold measuring the march of global warming was crossed recently, when the concentration of carbon dioxide in the atmosphere topped 400 parts per million.
On 10 May scientists announced that 400.03ppm had been measured at a climate-observing station in Hawaii that is often used as a benchmark. The global average is expected to cross the 400ppm mark in the next year.
This means that there in for every one million molecules in the Earth’s atmosphere, there are 400 molecules of carbon dioxide.
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C.P. Chandrasekhar and Jayati Ghosh
In the desperate search for evidence that the global recession has bottomed out and the recovery has arrived, the story told by the long-term trend in unemployment levels and rates is being missed.
Early this year, the International Labour Organisation (ILO) had noted that the global unemployment rate was close to 6 per cent, implying that 197 million people were unemployed, even ignoring the 39 million who had dropped out of the workforce, discouraged by persistent failure in job search.
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Matias Vernengo
The expression of ‘dollarization’ has at least two different meanings. In the narrow sense, it refers to massive currency substitution, in which a country, most likely a developing one, supplements its domestic unit account of fiduciary reserve assets with a foreign currency, more often than not the United States dollar or, in some cases, the euro. Note that currency substitution could be complete and might even imply the elimination of a domestic token. Full dollarization in that sense has taken place in small countries, mostly in Latin America, the Caribbean and the Pacific which are heavily dependent on the United States. Dollarization, in this sense, is the exemplification of a country foregoing its national ‘monetary sovereignty’ (Mundell 1961, p. 661).
In the broader sense, dollarization refers to US hegemony in the world economy as a result of the US dollar being the numeraire currency in international markets. This christens the United States as the premier international monetary authority that regulates and dictates the flows of international financial commitments for global economic activity. Of particular importance in this context is the fact that the key international commodities, including oil, are priced in US dollars in international markets. The former conception of dollarization can be described as dollarization strictu sensu, while the latter as latu sensu dollarization, i.e. not the specific use of the dollar by a country, but by the whole world economy—an international system in which the dollar is de facto a global fiat money.
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Jayati Ghosh
Since her death, many eulogies of Thatcher have spoken of her as a revolutionary. Thatcherism (along with the associated Reaganomics) is seen as a radical transformative agenda that changed the face of economy and society. But seen from the developing world decades later, much of this agenda appears familiar, in the form of structural adjustment policies that have been forced upon different countries at different times by international institutions.
Given the broad contemporaneity of these strategies, it is a moot point who “inspired” whom, or just how original those ideas were. But it is certainly true that they contributed to shaping policy dialogue in fundamental ways, and thereby left a continuing (if unfortunate) legacy. Consider just five significant elements of this legacy, most features of which are now found across the world and especially in developing countries.
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Martin Khor
It was almost like Penang – in the early seventies, that is.
The sea was not only green-blue in colour in the distance but crystal clear near the shore, the beach was pure white, and bright stars filled the clear sky at night.
On the road along the Coral Coast to the nearest small town there was hardly any traffic. Like the small winding road in Penang’s northern coast to Batu Ferringhi, before the coming of the high-rise apartment blocks and the big hotels.
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Aaron Schneider, Guest Blogger
For the first time in history, a perpetrator has been found guilty of genocide in a court in his or her own country. In 1982, General Efraín Rios Montt seized power in a coup and guided a counter-insurgency strategy of genocide against the Ixil Mayans of the Guatemalan highlands until a coup deposed him 17 months later.
In the civil conflict that tore this small Central American country apart, more than 2,50,000 of a population of 6.5 million are estimated to have been killed. The genocide of the Ixil Mayan population eliminated approximately five per cent of that ethnicity in Rios Montt’s short reign. For 30 years, he evaded justice, accused by various human rights and indigenous groups of war crimes but securing election as a member of Congress where he was granted parliamentary immunity from prosecution. Just under two years ago, he lost his seat for the first time, and human rights organisations and indigenous groups pressed for justice.
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Cornel Ban
In the aftermath of the economic crisis that began in 2008 it has become fashionable to say that the BRICS buried the Washington Consensus with their state-led economic models. This rhetoric has been supported by BRICS countries themselves and has made ripples in the international financial press. But is there solid evidence for such assertions? A closer look at the empirical reality suggests a more mixed picture. As Marion Fourcade put it, in the BRICS the Washington Consensus is in fact “more invisible than irrelevant.”
The life of BRICS has had interesting turns. First, they were known as a group via Goldman Sachs investment product more than a decade ago, responding to the insatiable demands for accountability, and profit, that emanates from the financial nebulae. Then, BRICS became one of the few beacons of the global economy during the Great Recession and they did so unmoored from the institutional enforcers of the Washington Consensus. In a demonstration of the performative effects of financial marketing, the BRICS governments picked on the new acronym and formed an inter-governmental alliance of South-South cooperation with an ambitious agenda in international economic institutions. A decade after the term BRICS was coined by investment bankers, Robert Wade noted that the economic map of the world had the United States, the European Union and the BRICs as the three poles of the emerging economic multipolarity. In all the BRICs, the liberal economic drive of the Washington Consensus dramatically altered their ideational and institutional landscape but that the commands of this development paradigm were only selectively institutionalized. The most important pattern the role of the state as a critical actor in development has been rediscovered in ways that go beyond the modest institutionalist turn experienced by the Consensus after the East Asian crisis but without crafting a consummate counter-hegemonic “state capitalist” economic model.
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Martin Khor
Leaders of several Latin American countries have set up a new coalition to coordinate actions to face the growing number of international legal suits being taken against governments by transnational companies.
A ministerial meeting of 12 countries held in Guayaquil, Ecuador, decided on several joint actions to counter the threat posed by these law suits, which have claimed millions or even billions of dollars from governments.
“No more should small countries face law suits from big companies by themselves,” said Ecuador’s Foreign Minister Ricardo Patino, at a media conference after the meeting which he chaired. “We have now decided to deal with the challenges posed by these transnational companies in a coordinated way.”
Seven of the countries, mostly represented by their Ministers of Foreign Affairs, Trade or Finance, adopted a declaration with an agreement to form a conference of states affected by transnational interests. They are Ecuador, Bolivia, Cuba, Nicaragua, Dominican Republic, St. Vincent and Grenadine and Venezuela.
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