TripleCrisis

Aileen Kwa on Europe's EPAs

In its Economic Partnership Agreements with ACP countries, the EU has pushed for African countries to significantly reduce tariffs in return for having access to the EU market. In an interview with Triple Crisis blogger Timothy A. Wise, Aileen Kwa of the South Centre discusses the dangers of the EPAs for African economies and offers possible solutions.

For background and more on the issue, see:

EPAs: The Wrong Development Model for Africa And Options for the Future
Need for Africa to Re-think the EPAs in Light of the Economic Crisis
Legal Analysis of Services and Investment in the Cariforum-EC EPA: Lessons for other Developing Countries

Aileen Kwa on Europe’s EPAs

For background and more on the issue, see:

New Estimates of China’s Foreign Investment in Latin America

Kevin P. Gallagher

China’s foreign investment into Africa has been generating a great deal of controversy. Some argue that China is becoming the new colonial power over Africa, others see China as a key source of foreign exchange that may finally help spur long-run economic growth in Africa.

There has been relatively less discussion about China’s investment in Latin America, because it was thought that there was so little of it. A closer look reveals that Chinese FDI is larger than previously thought, and growing fast.

According to official Chinese statistics, foreign direct investment (FDI) to Latin America has been relatively limited—averaging just over $4 billion per year between 2003 and 2009. That is 3-4 percent of total FDI into the region over the same period. What is more, according to China, 96.7 percent of all Chinese FDI into Latin America during that period went to the Cayman Islands or the British Virgin Islands—two countries that would sink into the ocean if they had $3 billion per year in such investment. Peal away these two financial havens and the Latin American region only received about $126 million in Chinese FDI, or less than 1 percent of the annual total.

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Going Green Gets Dirty

Jayati Ghosh

Periods of economic recession are known to foster protectionist tendencies. This has been especially marked after the global crisis, when trade openness has become a useful battering ram in the developed world, skillfully used by policy makers and employers to pass the buck on to the threat posed by foreign producers. The significantly increased threat of unemployment is then seen – even by Northern workers – not as the result of domestic macroeconomic policies that prevent employment from rising as it feasibly could, but as something determined by trade patterns, especially exports from the developing world.

Even so, the recent trade wars over the use of “green” technologies are surprising in how extreme and openly self-contradictory the positions have been. And what is most surprising – and even alarming and distressing – is how such thinking has permeated to the working classes in the North, who now openly identify their own interests with those of their employers rather than with workers in developing countries.

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What We're Reading

Alan Beattie on (lack of) progress on the MDGs
New York Times: 43 million poor in US
UNCTAD’s World Investment Report 2010: Investing in a low-carbon economy

What We’re Reading

Alan Beattie on (lack of) progress on the MDGs
New York Times: 43 million poor in US
UNCTAD’s World Investment Report 2010: Investing in a low-carbon economy

Food Security and India: The unwelcome surprise

The National Advisory Council of India recently proposed a Food Security Bill. In an article published by Frontline, Triple Crisis blogger Jayati Ghosh examines the proposed Bill and argues that in pushing for a greatly truncated public distribution system (PDS), the Bill undermines the PDS itself.

“It seems that the obsessive desire to keep the price of subsidised foodgrain at the level that was promised – even if only for some chosen sections and at the cost of large-scale exclusion and possible diversion – has dominated over the goal of ensuring a viable and vibrant system of public procurement and distribution.”

“If any system of food procurement and distribution has to cope with varying situations, it has to allow for the possibility of some people moving in and out of the system, choosing to use the ration shops when market prices are high and opting out when market prices are low. Only when the food security of the entire population is secured in a coherent manner can we be sure that we are securing the food security of its most deprived sections.”

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Patent Concerns: compulsory licensing of patents in India

India’s Department of Industrial Policy and Promotion (DIPP) recently unveiled a discussion paper on licensing of patents. In an article published by Frontline, Triple Crisis blogger C.P. Chandrasekhar analyses the paper and argues that the discussion paper on compulsory licensing of patents will have achieved its purpose if it can lead to a proactive policy in the area of drugs and health.

“India having signed on to the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) under the World Trade Organisation (WTO), having suitably modified its Patents and Trade Marks Acts and having enacted the Designs and Geographical Indications Act, has a transparent regime for the protection of intellectual property (IP). However, any regime that protects IP must provide for ways to prevent the misuse of that protection or of its use in situations where it obviously hurts the public interest. One of the accepted and tested mechanisms to deal with situations of improper use is compulsory licensing. The paper claims to be motivated by the desire to “develop a predictable environment” for the use of such measures.”

“While the DIPP’s immediate concern is the issue of compulsory licensing, the implications of its analysis go beyond that. The effort to initiate this debate and set its tone needs to be lauded.”

Read the full Frontline Article

Recovery: Back to Normal?

Alejandro Nadal

The history of the United States is rather exceptional. This is the only country that has always lived under the aegis of capitalism. No slavery as the organizing principle, nor feudal lords in their castles. Just the anxious eye of capital. Maybe this is why, more than in other country, the most important source of political legitimacy resides in the ability of the power elite to maintain high living standards. And when the system that allows for this is in trouble, the power elite needs to renovate its source of political legitimacy.

This sometimes has implied the redefinition of the social compact, as in the Thirties, when Roosevelt’s New Deal established a new foundation for income distribution and for labor relations. The American right never forgave that affront and was always ready to revert that social pact. The favorable conjuncture presented itself in the Seventies and Eighties.

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What is Social Wealth?

Triple Crisis blogger James K. Boyce discusses the concept of social wealth: