The Corporate Top 1% Control Over 50% of International Trade

Via The Real News Network; Part 1 of 2.

RICHARD KOZUL-WRIGHT: We know that debt fueled booms tend to end badly. We don’t know when they end, and we don’t exactly know how they end. But we do know that they’re not sustainable. And that, I think, should cause pause for very serious thought in terms of the stability and sustainability of the current global growth path. For us behind that is a series of policy measures that have come to dominate the post crisis period which have not produced inclusive and sustainable growth. That began with a major effort to save the banks after 2008, 2009. One can justify that, although there are issues about exactly how that was done. But that was far too quickly followed by a push for austerity.

We talked about that in last year’s Trade and Development Report, the toleration, as I said, of shadow banking, the encouragement of mega-mergers which have hit, again, historic highs in recent months, and the endless beating of the free trade drum has provided what we see as the economic beat for- and I will use the term from the Chicago economist Luigi Zingales, the “Medici vicious circle” in which growing economic power and rent-seeking behavior has reinforced and captured political power, reinforcing economic power.

Argentina: More Lending Guarantees Creeping Austerity

By Gino Brunswijck

Cross-posted at Eurodad. 

Against a backdrop of public protests, on 25 October the Argentinian government approved the 2019 budget including US$10 billion worth of cuts in essential areas such as education and public works. The next day, the Executive Board of the International Monetary Fund (IMF) completed the first review of a loan agreement paving the way for the disbursement of a tranche of US$5.7 billion to the debt-stricken country. At the same time, the Board gave the green light to increase Argentina’s bailout loan to US$56.3 billion. However, this loan comes with a significant price tag.

The higher the bailout, the greater the austerity

The IMF review calls for stronger and faster fiscal consolidation in Argentina. The budgetary targets for the short and medium term were tightened compared to the initial agreement. Initially, the IMF allowed Argentina to maintain a 1.3 per cent deficit for 2019. Following the first review, the Fund is now demanding a zero deficit, which must be turned into a surplus above one per cent from 2020.

A range of budget cuts and increased taxation will seal the deal, while the insurance policy is provided by new structural conditionalities that promise to lock in these fiscal targets for the foreseeable future. For instance, the Argentinian government was required to present a budget in line with the zero deficit target to Congress to secure the next tranche of the IMF bailout loan. Unsurprisingly, one new conditionality gave Congress a November deadline for approving this budget – which it did last Thursday, representing a clear restriction on the parliament’s budgetary rights.

To satisfy the terms of the agreement, Argentina also has to pursue a restrictive monetary policy, complemented by keeping interest rates above 60 per cent as long as inflation is high. The bottom line is that Argentina will get more funding in exchange for more belt-tightening measures.

Seeds of Resistance, Harvests of Hope: Farmers halt a land grab in Mozambique

Timothy A. Wise

On July 26, 2018, farmers in Xai-Xai, Mozambique, achieved a milestone. They met to formalize their new farmers’ association, elect leaders, and prepare a petition to the local government for land. The association, christened Tsakane, which means “happy” in the local Changana language, was the culmination of six years of resistance to a Chinese land grab that had sparked protest and outrage. The association now has a request pending for its own land.

With the Chinese rice plantation floundering, the Tsakane farmers offer a vivid demonstration that perhaps the best way to grow more food is to give poor food producers more land.

The rise and fall of a land grab

I first visited the vast rice fields of Xai-Xai, three hours up the coast from the capital city of Maputo, in 2017. Since 2008, Mozambique had been one of the leading targets of large-scale agricultural investment projects, widely denounced as land grabs by critics. Community resistance had halted most such projects in Mozambique, including ProSAVANA, the controversial Brazil-Japan initiative, which was intended to be the largest land grab in Africa.