May » 2010 » TripleCrisis

Getting Ready for Rio+20

Officially speaking, the preparatory process for the Rio+20 Earth Summit to be held in Brazil in 2012 begins on Monday, May 17. But by real measures the discussions – even negotiations – on Rio+20 have now been going on for many weeks.

Certainly, the recent meeting of the Commission on Sustainable Development (CSD-18, 3-14 May, 2010) was largely consumed by the shadows of Rio+20.

The world has already decided that there will be a “Rio+20” conference: the official title is “The United Nations Conference on Sustainable Development.” They seem hesitant to call it a “Summit,” let alone an “Earth Summit” just yet, but it is nearly certainly that eventually they will. It is, after all, the 20^th year commemoration of the Rio Earth Summit of 1992, which itself had marked 20 years since the 1972 Stockholm conference.

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Stop Gambling on Hunger

Jayati Ghosh

The US Senate is currently debating an important financial reform bill that has the potential to rein in excessive speculation in commodities. That speculation drives up the price of food all around the world, and helped contribute to the food crisis in 2008. Some Wall Street lobbyists are working to weaken the bill, but its important for global food security that they aren’t successful. To learn more visit StopGamblingonHunger.com and watch my videos on the subject:

Seeing Development: India in the Latin American Mirror

Matías Vernengo

China and India are often seen around the world as examples of successful developing strategies that should be emulated by other developing countries. They are also often lumped together with Brazil and Russia, as part of the BRICs, the group of countries that would overtake the developed world by mid-century. Brazil and Russia, however, are to great extent commodity exporters, and the Brazilian success story has been over-hyped.

The case of India is of particular interest for developing countries, since it suggests that high rates of growth are possible, in the context of a multicultural, multiethnic, democratic society. Also, India seems to provide an alternative model in terms of the pattern of structural transformation of the productive sector, with a pronounced acceleration in the growth of the service sector in an early stage of the industrialization process. The growth in services is, in part, associated with the expansion of services exports, which, in turn, are related to the offshoring process.

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Big Finance and the Greek Drama

C.P. Chandrasekhar

The Financial Times reports that banks in Europe have appealed to the European Central Bank to become a “buyer of last resort” of eurozone government bonds, to prevent another financial crisis. Though the European Central Bank (ECB) is yet to take a decision on the matter, the option has not been ruled out. The ECB is also planning on launching a loan facility which will offer funds to the tune of €600 billion to banks at a one per cent rate of interest to tide over the current funds crunch.

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Lessons from NAFTA: Interview with Gallagher and Wise

Kevin Gallagher and Timothy A. Wise were interviewed in March 2010 about two recent reports they helped co-author on the impacts of the North American Free Trade Agreement (NAFTA) on Mexico and the reforms needed to ensure that U.S. trade agreements have a positive impact on its developing country trading partners. In a Policy Outlook paper with the Carnegie Endowment’s Eduardo Zepeda, they offer a detailed look at Mexico’s poor economic performance under the “NAFTA model.” In a Task Force Report with other NAFTA experts assembled by Boston University’s Pardee Center, they detail the needed reforms to current and future trade agreements in the areas of manufacturing, agriculture, services, intellectual property, investment, labor, environment, and migration. In this interview at the Pardee Center, they outline the main findings of the reports, with a particular emphasis on NAFTA’s controversial investment chapter (one of Gallagher’s ongoing research areas) and the impacts on agriculture (Wise’s specialty). The work is based on ten years of research by the Global Development and Environment Institute on the Lessons from NAFTA.

Global Financial Crisis: Hardest on the Least Developed

Mehdi Shafaeddin

The recent global economic crisis has been unprecedented since the great depression of 1929-32. The low-income countries have been affected by the crisis severely, particularly because of their low capacity to take external shocks. The commodity boom of 2003-08 allowed increases in national savings, investment and the acceleration of GDP and market value added (MVA) of low-income countries. Nevertheless, it was followed by a “bust” with detrimental impact on their long-term industrialization and development. Food and fuel importing countries, in particular, suffered from both the “boom” and the “bust”; the emergence of the financial crisis took place at the time they were facing high international prices of food and petroleum. In other words, they faced three ‘F’(food, fuel, financial) crises.

As a result of the global economic crisis, the prices of non-oil primary commodities and petroleum fell, from the peak to the trough, by over 36 per cent and 68 per cent, respectively. Nevertheless, food prices did not fall as much as the prices of other commodities and have picked up faster than other commodities after they reached their trough in December 2008.

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Going Beyond Immigration Policy

Timothy A. Wise

Democratic Party leaders recently introduced their latest proposal to reform U.S. immigration policy. The proposal, which is given little chance of passage in a polarized election year, offers carrots and sticks in an attempt to bring some semblance of order to a broken and outdated policy that has left nearly 12 million people in the United States without legal documents.

The carrots are few and shriveled: an arduous path to U.S. citizenship for those already in the country. The sticks are large: a further crackdown on border enforcement and increased policing to catch and punish those without papers. No combination of carrots and sticks will address the immigration issue unless reform efforts also take up the agricultural, trade, and labor policies that feed migration.

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Defending the Indefensible: Behind the Alleged Financial Fraud at Goldman Sachs

Jeff Madrick

Goldman Sachs’ arrogant public response to the Securities & Exchange Commission accusation of fraud is another example of self-righteous overconfidence on Wall Street. Not that the SEC suit will be won by the government. In fact, that’s partly what’s given Goldman its chutzpah. Odds are pretty high the investment bank will prevail in court. Whether it told investors that the hedge fund manager John Paulson shorted the portfolio of mortgage bonds in which they invested—or synthetically invested, so to speak — may be beside the point legally.

What is not defensible ethically or economically were the ratings on the collateralized debt obligation (CDO) itself — the structured investments that Goldman repeatedly sold, and the likes of which Merrill Lynch and Citigroup sold more of.

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