Be Prepared – a good motto for 2012

Martin Khor

At this time 12 months ago, this column had highlighted how the dying year 2010 could be labeled the year of natural calamities, and predicted more on the way.

Sure enough, the year that has just passed witnessed even worse disasters. If 2010 was marked by the Haiti earthquake, 2011 surpassed that in impact (if not in deaths) by the Fukushima triple tragedy of earthquake, tsunami and nuclear accident.

But Fukushima was only the worst of the calamities that included hurricanes in Central and Latin America, drought in parts of Africa, massive floods in Thailand and elsewhere, and many typhoons and storms in the Philippines.

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Greece – no cheap and easy way out

Daniela Schwarzer

Almost two years into dealing with the sovereign debt crisis in the Euro area, the problems in Greece are far from being solved. In fact, the free fall of the Greek economy has made the troika’s plans obsolete. Once again the assumptions about GDP development have proven to be overly optimistic. The economy will probably shrink more than the assumed 3%, current estimates actually see the recession as being twice as strong in 2012 than assumed. Given rising internal tensions, growing protests against further reforms, a disorderly default of the Greek state can no longer be excluded. Greece is encountering increasing pressure to fulfill the conditionality attached to the loans provided by the EU and the IMF. The scenario that the troika of IMF, European Commission and European Central Bank actually does not pay out the next tranche of credit in order to keep up pressure on the government to reform and to consolidate is no longer unrealistic.

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The Caribbean and Climate Change: not in the same boat

Elizabeth A. Stanton and Ramón Bueno, guest blogger

Greenhouse gas emissions are a global problem. Regardless of who emits them, these gases impact everyone, everywhere around the world: raising average temperatures and sea levels, and changing historical weather patterns. But climate change will not affect everyone equally. The two dozen island nations of the Caribbean are a case in point. With 40 million people living on islands in a small geographic area, it would be easy – but incorrect – to expect that they will all face the same climate damages. In fact, according to new research from the Stockholm Environment Institute (SEI), Caribbean residents are not all “in the same boat” and should expect to face a very wide diversity of climate impacts.

Yes, each person living in the Caribbean will experience about the same change in climate – temperature increase and shift in weather patterns – and degree of sea-level rise as her neighbors over the next decades. And her children and grandchildren can expect about the same changes to weather and sea levels as their neighbors. But these changes in the physical world will not impact all Caribbean residents in the same way.

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The ‘Fiscal Compact’ Has Not Solved the Euro Crisis

Philip Arestis and Malcolm Sawyer

The Triple Crisis Blog is pleased to welcome Philip Arestis and Malcolm Sawyer as regular contributors. Philip Arestis is the Director of Research at the Cambridge Centre for Economic & Public Policy and Senior Fellow in the Department of Land Economy at the University of Cambridge, UK, and Professor of Economics at the University of the Basque Country, Spain. Malcolm Sawyer is Professor of Economics at the University of Leeds, UK.

In a recent post (19th December 2011) we argue that the recent ‘fiscal compact’ agreed upon by the European Union (EU)/European Monetary Union (EMU) at their meeting of 8th/9th December 2011 would not deliver. Now that further details have emerged, it is clear that the situation is even far worse than what appeared to be in the first instance. It is now clear that neither the governments of the EMU countries nor the European Central Bank (ECB) have committed themselves to doing enough let alone satisfactorily. The ECB is not prepared to perform the proper role of any central bank, namely the ‘lender of last resort’ function. EMU governments have not made progress on the ‘eurobond’ idea, whereby the EMU members would share the troubled economies burden of debt.

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Triple Crisis partners with INESC, blog posts now available in Portuguese

The Triple Crisis Blog is pleased to announce a new partnership with the Instituto de Estudos Socioeconômicos (INESC – Institute for Socioeconomic Studies) in Brazil. INESC is a non-profit research and advocacy organization covering a wide variety of topics, including fiscal and budget policy, human rights, international policy, food sovereignty, socio-environmental rights, and land reform.

As part of this partnership all original Triple Crisis posts will be available in Portuguese on the INESC Blog. (See Fander Falconi’s recent post in Portuguese.) We are also pleased to begin featuring contributions from INESC economists, translated into English. Triple Crisis posts will soon also appear in Spanish. Triple Crisis is able to translate posts thanks to our blog partners at the Heinrich Boell Foundation.

Spotlight Durban: Durban, Another Failure

Fander Falconí

In Durban, South Africa, world officials and diplomats decided to do nothing about climate change. Although China produces per capita emissions that are four times lower than those of the United States,  it should not ignore the fact that these emissions are already above the world average. Meanwhile, the US blames China for the rise in its aggregate emissions and refuses to make any commitments to reduce its own emissions. In Durban, rich countries pledged money, but also more carbon dioxide. Latin American countries took a variety of positions.

The Seventeenth International Climate Change Summit (Conference of Parties (COP-17)), which ended last month in Durban, should have forged a strong international agreement to replace the Kyoto Protocol, which will expire in 2012.

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China’s coming crises

Patrick Bond

With economic crashes and ecological calamities so prevalent in 2011, concluding with a do-little November G20 meeting in Cannes and a do-nothing December climate summit in Durban, January has opened with intense fear of eurozone deterioration. In this uncertain context loom the two most potent forces shaping the period ahead: China’s capital accumulation process and class struggle.

Because of the country’s uneven and combined development, within an extraordinary boom we can see the beginnings of a potentially world-scale bust, plus prodigious socioeconomic battles from below alongside brutal attacks on the environment such as coal-fired power and the Three Gorges Dam (notwithstanding exceptional ‘green economy’ advances).

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China on the verge?

Matías Vernengo

It has become increasingly common to suggest that on top of the European debacle and the sluggish recovery in the United States, China might be on the verge of a collapse, and with it the last bastion of economic growth in the world economy would also be gone. Not only the center is stagnant, but also the periphery of the global economy is very fragile. But the probability of a Chinese slowdown is greatly exaggerated.

Paul Krugman, who has been correct about the need for fiscal expansion in the United States, and about the European Central Bank (ECB) mismanagement of the Greek crisis, for example, has suggested that China is in the middle of a housing bubble that can burst at any time (see also Jayati Ghosh and C. P. Chandrasekhar here for a similar, but broader view of the dangers in 2012). This view insinuates that growth in China is fundamentally dependent on domestic demand, but that the sources of the expansion are fragile. It, further, suggests that China now looks very similar to the US before the Lehman Brothers crisis in September 2008.

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