Human Rights, the Global Economy, and the Arab World, Part 4

Ali Kadri

This is the fourth of a five-part series by regular Triple Crisis contributor Ali Kadri, Senior Research Fellow at the Middle East Institute, National University of Singapore, and author of Arab Development Denied: Dynamics of Accumulation by Wars of Encroachment (Anthem Press).

The series is based on an interview he granted to the Center for the Study of Human Rights at the London School of Economics (LSE). The full interview is available here.

Is “Arab socialism” viable? And if so, is it desirable?

One must critically analyse “Arab socialism” within its historical context. In times of immediate post-independence autonomy (the 1960s to the late 1970s), state dirigisme, high public investment rates, and more egalitarian redistribution characterised all Arab states. A particular set of Arab states followed the path of “Arab socialism”—they nationalised industry and finance and implemented agrarian reform as in Egypt, Iraq, Algeria, Libya, and Syria—which resulted in significant welfare gains. However, half-hearted Arab socialist egalitarian processes, initiated from the top down, excluded the working class from participating actively in defending their gains, deepened labour-process regimentation, suppressed autonomous labour representation, and exacted differential gains accrued to the state bourgeoisie via wage system exploitation.

On the opposite side of Arab socialism, in the monarchic Arab states—the Gulf, Morocco and Jordan—regime stability was ordained by the extension of U.S.-tailored security arrangements and the not-so-hidden fact that the monarchs practically owned national resources and managed redistribution solely for the purpose of stabilisation in relation to the U.S.’s anti-Soviet positioning. In Arab socialist states, which sided with the USSR, a colonially-weakened national bourgeoisie that was short on financing and cornered into commercial practices, could not deliver in terms of development. Moreover, its tainted reputation as a colonial subsidiary had not provided it with the necessary ideological support to govern. Single-party Arab socialist regimes rose to power and supplanted the rise of bourgeois democratic governments. The Arab socialist state, through populist appeal and the capacity to generate its own finance, acted as a surrogate industrial bourgeoisie in handling capital’s production and appropriation measures. The state rose as the principal owner of the means of production and appropriator/distributor of the social product. The private sector shrank but still absorbed a significant chunk of the labour force in artisanal and petty farming undertakings. State ownership existed side-by-side with a constrained private sector. In hindsight, it was inevitable that private sector expansion would recommence when the state bourgeois class required more economic space to grow and the political climate ripened for ‘free market’ policies and openness—as happened since the early 1980s, or more conclusively, in the early 1990s as the Soviet Union fell.

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Chicken Comes Home to Roost

Sunita Narain

What should I eat now? Is there nothing that is safe?” This is what I am asked every time the Centre for Science and Environment (CSE) does a study on toxins in food. It is a fact that our food is becoming unhealthy—not because of deliberate adulteration but because we are choosing to produce it in unsafe ways. India is at the beginning of industrial food production focused on efficiency and profits, and not on consumer safety, so it still has a choice to get it right. Why should the country not exercise its right to food that secures livelihoods and nutrition?

This time CSE has looked at antibiotics in chicken. Its laboratory bought 70 samples of chicken from different markets across the National Capital Region. It analysed each animal for six antibiotics: oxytetracycline, chlortetracycline and doxycycline (class tetracyclines);enrofloxacin and ciprofloxacin (class fluoroquinolones) and neomycin, an aminoglycoside. All these antibiotics are critical for humans. These are the same medicines we are prescribed when we are taken ill. These are life-saving drugs.

Today we know antibiotic resistance is almost a health pandemic. It is said that humans are headed towards a post-antibiotic era, where these miracle medicines will not work. No new class of antibiotics has been discovered for the past 20-odd years, so what we have is what we should keep for critical treatment. It is well known that resistance is growing because of our overexposure to antibiotics. A drug is no longer effective for treatment when microbes become resistant to it.

But we do not realise that our overexposure to antibiotics is also growing because of the food we eat.

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New Climate Bill Would "Shrink Government," Reward Taxpayers

James K. Boyce

Regular Triple Crisis contributor James K. Boyce, director of the Program on Development, Peacebuilding, and the Environment at the Political Economy Research Institute (PERI) and Professor of Economics at the University of Massachusetts-Amherst, addresses a new “cap-and-dividend” climate bill before the United States congress. This interview originally appeared at The Real News Network. Prof. Boyce’s detailed views on climate policy appeared earlier, in five parts, on Triple Crisis and its sister publication Dollars & Sense. It is available in full here.

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New Climate Bill Would “Shrink Government,” Reward Taxpayers

James K. Boyce

Regular Triple Crisis contributor James K. Boyce, director of the Program on Development, Peacebuilding, and the Environment at the Political Economy Research Institute (PERI) and Professor of Economics at the University of Massachusetts-Amherst, addresses a new “cap-and-dividend” climate bill before the United States congress. This interview originally appeared at The Real News Network. Prof. Boyce’s detailed views on climate policy appeared earlier, in five parts, on Triple Crisis and its sister publication Dollars & Sense. It is available in full here.

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China's Government Land Exposé

Sara Hsu

A farmer works the land in Southern Guangxi Province.  Source: Author.

China’s National Audit Office, under the direction of the cabinet, recently launched an audit to review funds from land sales obtained between 2008 and 2013. The audit is part of the government’s fight against corruption.  Local governments have often used land sales to increase revenue, at times under dubious circumstances, taking land from farmers at extremely low prices and selling the land to developers for a tidy profit.  The audit brings to light ongoing issues with local government revenue and rural land use rights.

Local governments receive a portion of value added and corporate taxes collected in their region, as well as all personal income and business taxes, but this has proven insufficient to generate a steady rate of GDP growth.  In order to combat this problem, officials have used rural residents’ land both as a source of revenue and as collateral in taking out loans via local government financing vehicles.  In this way, they have access to a major asset, unimproved land that promises to gain in value.

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China’s Government Land Exposé

Sara Hsu

A farmer works the land in Southern Guangxi Province.  Source: Author.

China’s National Audit Office, under the direction of the cabinet, recently launched an audit to review funds from land sales obtained between 2008 and 2013. The audit is part of the government’s fight against corruption.  Local governments have often used land sales to increase revenue, at times under dubious circumstances, taking land from farmers at extremely low prices and selling the land to developers for a tidy profit.  The audit brings to light ongoing issues with local government revenue and rural land use rights.

Local governments receive a portion of value added and corporate taxes collected in their region, as well as all personal income and business taxes, but this has proven insufficient to generate a steady rate of GDP growth.  In order to combat this problem, officials have used rural residents’ land both as a source of revenue and as collateral in taking out loans via local government financing vehicles.  In this way, they have access to a major asset, unimproved land that promises to gain in value.

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Banking with a Difference, Part II

C.P. Chandrasekhar

This is the second in a two-part series on the New Development Bank (NDB) founded by the BRICS counties (Brazil, Russia, India, China and South Africa). The first part discussed the NDB’s potential to “shift power relations in the multilateral development-banking infrastructure.” This part considers some of the likely limitations on the changes the NDB will spur. The full article was first published as the H T Parekh Finance column in the Economic and Political Weekly.

The argument that the creation of the BRICS Bank could make a significant difference to the global financial architecture should not be pushed too far. In the final analysis development banks are instruments of state capitalist development. Such specialised institutions are needed because of the shortfalls in the availability of long-term finance for capital-intensive projects in market economies, resulting from the maturity and liquidity mismatches involved. Resources mobilised are from those wanting shorter maturities and greater liquidity, and sums lent are to projects that are large and illiquid with long gestations lags and long-term profit profiles.

In non-market economies, allocations for such investments can be made through the budget and financed with taxes or the surpluses generated by state-owned enterprises. If the instruments are state capitalist, they are unlikely to serve non- or anti-capitalist objectives that sacrifice private profit to deliver social benefit. So the best that can be expected of the NDB is that it would serve better the interests of capitalist development in the less developed countries (with some concern for sustainability and inclusiveness) than would multilateral banks that are dominated by and serve as instruments of the developed countries.

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Savings, Capital Flight, and African Development, Part 2

Léonce Ndikumana

This is the second of a two-part series on capital flight from Africa by regular Triple Crisis contributor Léonce Ndikumana. (Part 1 is available here.) The series is drawn from a Political Economy Research Institute (PERI) working paper, available here, forthcoming in Celestin Monga and Justin Y. Lin (eds.), Handbook of Africa and Economics, Oxford University Press.

Part 2: Fighting capital flight

Capital flight may be one of the causes of low domestic saving in African countries for a number of reasons. The first is a direct effect through allocation of private wealth in foreign assets as opposed to holding domestic assets. Capital flight also affects saving indirectly through its effects on domestic investment and growth. By depressing capital accumulation, growth is retarded as capital flight increases.

Fighting capital flight is, therefore, an essential element of the strategy to stimulate domestic saving in Africa. The discussion here is organized around two sets of strategies: incentive-based strategies, and institutions-based strategies for both fighting capital flight and stimulating domestic saving.

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What Role for Development Finance in the Future of Africa and the Global South?

Francis A. Kornegay, Institute for Global Dialogue, associated with the University of South Africa, and Nancy Alexander, Heinrich Böll Foundation (North America)

At the recent BRICS Summit, leaders announced new initiatives, including a New Development Bank (NDB) for infrastructure and sustainable development. In the same timeframe, China will join with its allies to launch a new Asian Infrastructure Investment Bank (AIIB). These initiatives provide a counter-point to the U.S.-led World Bank and the Japan-led Asian Development Bank.

Not to be outdone, the World Bank aims to double its lending operations within the decade, including an expansion of infrastructure operations and the launch of a Global Infrastructure Facility (GIF) this year. While an initial GIF pilot program will be modestly funded, it has outsized ambitions for mobilizing global pension and sovereign wealth funds to invest in infrastructure as an “asset class.”

To some degree, the Group of 20 has instigated the expansion of infrastructure financing—ostensibly as a means to accelerate global growth and job creation.  Bringing up the “caboose” of this infrastructure juggernaut, the UN declares that public-private partnerships (PPPs) will be a key “means of implementation” of its post-2015 agenda, including infrastructure.

The new-generation development finance institutions (NG-DFIs) are a testament to the failure of the Bretton Woods Institutions (BWIs) to reform their governance and share power with emerging economies.  They also represent pushback against the BWIs’ legacy: imposition of neoliberal policies, including austerity regimes that strangled public spending on infrastructure; de-industrialization (e.g., demolished infant industries through premature trade liberalization); and dismantling of national development banks.

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