TripleCrisis

Biofuels and the Right to Food: Time for the US to get its head out of the sand

Olivier De Schutter, the UN Special Rapporteur on the Right to Food, speaks today (Nov. 27) at 3:00 pm EDT at Tufts University. The distinguished lecture will be webcast live. Click for webcast information and for more information on the event, which is open to the public.

The U.S. Environmental Protection Agency recently decided to keep the nation’s head buried deep in the sand when it comes to biofuels policy, refusing to waive the U.S. ethanol mandate in order to ease price pressures in corn and soybeans following the severe U.S. drought. Europe, the other major market feeding its cars at the expense of the world’s people, lifted its collective head from the depths long enough last month to reduce from 10% to 5% the mandated share of transportation fuel that can come from food sources. No such acknowledgment of reality here, where 40% of our corn crop goes to make ethanol.

The right to food, now recognized worldwide, demands action. So too does Olivier De Schutter, the UN Special Rapporteur on the Right to Food. “It is imprudent to support, let alone to mandate, extra agrofuel production when food prices are high and volatile,” he wrote last month. Indeed, De Schutter has established himself as one of the world’s most passionate and effective advocates for decisive action on biofuels and a wide and impressive range of other issues he has taken on under his UN mandate.

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How can BRICS improve its bargaining position in international trade?

Mehdi Shafaeddin

In my previous blog piece I mentioned that although the member countries of BRICS have exchanged views a number of times to cooperate on trade issues, so far they have taken little concrete measures. The press in the West so far has argued that “big is not the same as cohesive,” rather than discussing how BRICS can mobilize their bargaining power to strengthen their position in trade relations with developed countries.

BRICS need to enhance access to markets for their actual and potential export products, and to obtain access to technology for developing comparative advantage in new products. In both cases, they need to enhance their negotiating/bargaining capacity. I have also shown that together they account for a significant proportion of world trade, and are a significant market for exports and source of imports for developed countries. Imports and exports can be regarded as bargaining assets as well as bargaining liabilities. While bargaining is a complicated issue involving multiple factors, I will confine myself here to the use of trade itself as a means of bargaining. In this piece, I will briefly explain how the net bargaining position of BRICS could be improved by mobilizing their bargaining assets and minimizing their bargaining liabilities. The question then is how trade itself can be used as a means of bargaining: what sort of measures can be taken? How can they shift demand and supply (not through trade restrictions) from one source of supply to another as a tool of bargaining?

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A Turning Point for European Austerity?

Lilia Costabile, Guest Blogger

Massive strikes and demonstrations in Europe last week marked an important turning point in our history, and they may coalesce into an anti-austerity consensus among European citizens. It is as if these masses understood better than their governments the real size of the fiscal multipliers, which, as the IMF has recently pointed out, are large in a recession, implying that fiscal retrenchment has turned the rebalancing of public finances in the Eurozone periphery into a Sisyphean task.

Macroeconomic imbalances are at the root of the Eurozone crisis, which matured after the introduction of the Euro. It is vital to understand the nature of these imbalances in order to devise the proper remedies.

When the sovereign debt crisis exploded, the first to be blamed were the peripheral countries, gently dubbed the PIGS: Portugal, Ireland, Greece, Spain. I will call them GIPS. (NOTE: The PIGS became the PIIGS when Italy joined in as the target of financial speculation in the summer 2011. I will write on the Italian case, which is different from the others, in another post.)

Excessive state spending in these countries, so the narrative went, led to unsustainable levels of public debt and deficits, thus fuelling speculation and opening the stage for the debt crisis. Austerity was the remedy, to be complemented by severe sanctions and finally expulsion from the Eurozone for non-abiding countries: see e.g. Wolfgang Schauble, the Federal Finance Minister of Germany, and Mark Rutte and Jan Kees de Jager, respectively prime minister and finance minister of the Netherlands.

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ACAS Bulletin 87 – Africa's Capital Losses: What Can Be Done?

Africa’s capital losses from illicit financial flows far outweigh inflows from aid or direct foreign investment. But what can be done? Guest edited by Triple Crisis bloggers Léonce Ndikumana and James Boyce, the latest bulletin from the Association of Concerned African Scholars tackles the issue head on, with contributions from a wide variety of leading scholars.
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ACAS Bulletin 87 – Africa’s Capital Losses: What Can Be Done?

Financial Instability as a Threat to Sustainable Development

Yilmaz Akyuz

As seen over and again during recurrent financial crises in both developing and advanced economies (DEs and AEs), financial instability and boom-bust cycles undermine all three ingredients of sustainable development – economic development, social development and environmental protection.

Financial bubbles generate excessive investment, which remains unutilized for an extended period even after full recovery from the ensuing financial crisis. This includes investment in industry, as in Japan in the late 1980s and early 1990s, as well as in property, as seen during the current crisis in the US and Europe. This is the main reason why recoveries from financial crises see little investment.

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Capital inflows to Latin America: Blessing or curse?

Martin Rapetti, Guest Blogger

Since the early 2000s, emerging market economies have attracted growing flows of foreign capital. This trend was briefly interrupted by the eruption of the global financial crisis, but it quickly resumed in mid-2009 with even more impetus. Most Latin American countries have been part of this process. The expansion of liquidity drove risk premia and interest rates down to historical minima in most countries of the region. The EMBI+ index published by JP Morgan is now around 150 basis points in Brazil, Chile, Colombia, Mexico, Peru and Uruguay. Current levels are significantly lower than the 350 basis points that Latin American countries reached in mid-1997 before the South East Asian crises.

The ability to borrow at low cost is certainly beneficial if funds are channeled to productive uses, especially investment in tradable activities and infrastructure. Experience has shown, however, that capital inflows can also end up financing private and public consumption, generating large current account deficits and inflating financial and real estate prices. Latin America has vast experience with boom-and-bust cycles driven by capital inflows that culminated in debt and financial crises with severe economic and social costs. Partly influenced by these experiences, the IMF has recently warned about the potential dangers of capital inflows to Latin America. In its 2011 Regional Economic Outlook , the IMF explicitly pointed to the widening of current account deficits as a source of external fragility that could lead —as it did in the past— to a sudden reversal of capital flows and crises.

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Have You Heard About The “Rolling Jubilee”?

Barry Herman, Guest Blogger

As of 2:00 pm on Friday, November 16, 2012, individual Americans have contributed over $290,000 to an Occupy project called “Strike Debt” that will cancel $5.8 million of defaulted debt owed by US residents to hospitals and doctors in this country, and the amount donated is still growing.

This sentence must make little sense to readers outside the United States, so let me explain.

First, medical debt: in this country, many people have medical insurance through their employers or buy it individually. If they are over 65, they have it through a federal government program called Medicare, or if they are poor through a joint federal and state program called Medicaid. Some insurance, however, covers only part of the cost of medical care or it excludes some illnesses (for example, if you have a “pre-existing” condition when you start the insurance, it may not be covered), and some 44 million Americans have no insurance at all. The situation will be improved—if only partly— after the start of “Obamacare,” the medical insurance reform that the Obama Administration managed to get through the US Congress in 2010 (formally, the Patient Protection and Affordable Care Act). In the meantime, millions of Americans owe large amounts of money to hospitals and doctors. Anyone coming to a hospital in the United States has to be treated, whether they have insurance or not, but hospitals have a rather mixed record when it comes to getting paid by those who are not insured. Medical bills are a main reason for personal bankruptcy in this country.

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What About NYC That Doesn’t Make it To Postcards?

Anna Lekas-Miller, Guest Blogger

A woman walks up and down the dark hallway, holding a cheap transistor radio up to her ear, pressing it closer as it keeps cutting in and out.

“They’re saying that it could be anywhere between two and seven weeks before we get power,” she says, shaking her head. “So who even knows?”

I’m a volunteer with Occupy Sandy—a community relief effort that used the Occupy Wall Street network to coordinate hurricane relief in New York City’s hardest hit areas. I’mon the fifteenth floor of 711 Seagirt Boulevard, a twenty-five story housing complex in Far Rockaway—a neighborhood on the Rockaway Peninsula in Queens, New York that was one of the most devastated by Hurricane “Superstorm” Sandy. Though the building itself is secure, and suffered only a few inches of water during the storm itself, it has been without power and running water for almost two weeks. In a twenty-five story housing complex where many of the residents are elderly and disabled and the elevators no longer work, many of the residents have been trapped in their apartments since the storm.

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From the Suppression of Voters to the Suppression of Economic Analysis: Republicans are at War With Democracy in Defense of Oligarchy

James Crotty, Guest Blogger

That the Republican Party undertook a vigorous campaign in the recent election to suppress voting in those states and localities in which it had effective control of government is widely understood. Pictures of long lines at polling places and reports of long hours waiting to vote in neighborhoods largely populated by African American and Hispanic voters provide clear evidence of this. But to be fully effective, the democratic process must not only make it easy to vote, it must also make it easy for voters to be well-informed about the effects of the policy positions taken by contestants for office and by the Parties they represent.

The Republican Party has been waging a war against both foundations of the democratic process. Along with voter suppression, it has been constructing the infrastructure required to support oligarchy – control of the political process by large corporations and wealthy individuals. The movement toward oligarchy is evidenced by the recent Citizen’s United ruling by our ultra-conservative Supreme Court that allows corporations and the rich to spend without limit to influence elections.

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