When the Cold War ended two decades ago, people throughout the world looked forward at last to a period of peace.
A political scientist wrote a book predicting “the end of history”. Conflict between ideologies and big powers was over, as those advocating the free market and democracy had won.
The illusion of the end of conflict is over. Last week, at the annual summit of the United Nations, “global turbulence” was much the theme of the leaders gathered there.
Arthur MacEwan, Guest Blogger
Arthur MacEwan is professor emeritus of economics at the University of Massachusetts-Boston and a columnist for Dollars & Sense magazine.
The Export-Import Bank, created in 1934, is a U.S. federal government agency that supplies loans or guarantees loans to foreign firms to finance their purchases of U.S. exports. Its supporters argue that it strengthens the U.S. economy and creates jobs in the United States by bolstering demand abroad for goods produced here.
For the Export-Import Bank to stay in existence, Congress must reauthorize it by the end of September. Its existence, however, has come under attack by the anti-big-government forces of the right. They claim that there is no justification for the government to provide this support for U.S. firms. If the buyers abroad of U.S. goods cannot get financing for the purchases from regular banks—i.e., in the “free market”—the U.S. exporters are charging prices that are too high. That is, the U.S. firms are not effectively competing in the “free market,” and it is not the job of government to subsidize their inefficient operations.
These critics of the Export-Import Bank claim it is simply “crony capitalism,” where well-connected firms are able to get handouts from the government. This, they argue, is not the way “real capitalism” should and can function. For example, in the June 25 edition of National Review Online, with an article titled “The Ex-Im Bank: Crony Capitalism in Action,” the editors wrote that the Bank “hands out generous loans and credit guarantees to a select number of corporations [and] is corrupt and poorly managed. …The bank has a long history of dealing with dodgy firms and doling out suspiciously large amounts of loans to certain companies.”
Petra Kjell, Guest Blogger
Petra Kjell is the Programme Manager for Environment, Human Rights, and Social Impacts at the Bretton Woods Project.
This week, the Green Climate Fund (GCF) gathers in Barbados for the eighth meeting since its inception. Established in 2010 under the UN Framework Convention on Climate Change (UNFCCC) as the primary vehicle to deliver much needed climate finance, the GCF still has a number of issues to resolve until it becomes fully operational. Slow in motion, the fund received a much needed boost with some pledges during the September climate summit organised by UN Secretary-General Ban Ki-Moon.
As the new financial structure for climate action rises, another funding mechanism is due to sunset. The World Bank-hosted Climate Investments Funds (CIFs) were set up in 2008 in the shadow of the ongoing UNFCCC process as an interim measure to provide new and additional climate finance to pilot “transformational” actions in selected developing countries. Led by developed countries and implemented by multilateral development banks (MDBs), four funds were set up: the Clean Technology Fund (CTF), the Pilot Program for Climate Resilience (PPCR), the Forest Investment Program (FIP) and the Scaling up Renewable Energy Program for Low Income Countries (SREP).
The CIFs were quickly criticised by civil society groups as undemocratic and unaccountable, potentially undermining the official UN process. The leading role of the World Bank, tarnished by its reputation on many fronts, including for its funding of fossil fuels, also created a widespread mistrust of the funds. A few years down the line, civil society has complained about lack of consultation, misguided projects, and a heavy private sector focus. In Indonesia, for example, civil society groups have repeatedly raised concerns about the CIFs, such as lack of consultation on the FIP country investment plan and the risk of deforestation linked to CTF geothermal projects, but with little impact. With CIF-funded projects ranging anything from energy efficient fans in India to airport development in the Caribbean, CIF donors have also repeatedly raised questions on the legitimacy of projects for CIF funding , but few projects have gone back to the drawing board, let alone been stopped.
What We’re Reading
Juan Carlos Moreno-Brid and Stefanie Garry, Forget Me, Forget Me Not: Productivity and the Minimum Wage in Mexico (Originally published in Spanish by El Financiero).
Rania Antonopoulos, Sofia Adam, Kijong Kim, Thomas Masterson, Dimitri B. Papadimitriou, Responding to the Unemployment Challenge: A Job Guarantee Proposal for Greece (Levy Economics Institute of Bard College; Observatory of Economic and Social Developments, Labour Institute, Greek General Confederation of Labor).
Global Development and Environment Institute, 2015 Leontief Prize: Duncan Foley and Lance Taylor.
What We’re Writing
Kevin P. Gallagher and Daniela Magalhães Prates, Financialization and the Resource Curse: The Challenge of Exchange Rate Management in Brazil (GEGI Working Paper #8, Global Economic Governance Initiative, Boston University)
Kevin P. Gallagher, Jose Antonio Ocampo, Min Zhang, and Yu Yongding (Co-Chairs), Capital Account Liberalization in China: The Need for a Balanced Approach (Pardee Center Task Force Report, Boston University).
Jayati Ghosh, Gujarat Model: The Real Story (The Frontline).
Matias Vernengo and Kirsten Ford, Everything Must Change so that the IMF Can Remain the Same.
What We’re Reading
Juan Carlos Moreno-Brid and Stefanie Garry, Forget Me, Forget Me Not: Productivity and the Minimum Wage in Mexico (Originally published in Spanish by El Financiero).
Rania Antonopoulos, Sofia Adam, Kijong Kim, Thomas Masterson, Dimitri B. Papadimitriou, Responding to the Unemployment Challenge: A Job Guarantee Proposal for Greece (Levy Economics Institute of Bard College; Observatory of Economic and Social Developments, Labour Institute, Greek General Confederation of Labor).
Global Development and Environment Institute, 2015 Leontief Prize: Duncan Foley and Lance Taylor.
What We’re Writing
Kevin P. Gallagher and Daniela Magalhães Prates, Financialization and the Resource Curse: The Challenge of Exchange Rate Management in Brazil (GEGI Working Paper #8, Global Economic Governance Initiative, Boston University)
Kevin P. Gallagher, Jose Antonio Ocampo, Min Zhang, and Yu Yongding (Co-Chairs), Capital Account Liberalization in China: The Need for a Balanced Approach (Pardee Center Task Force Report, Boston University).
Jayati Ghosh, Gujarat Model: The Real Story (The Frontline).
Matias Vernengo and Kirsten Ford, Everything Must Change so that the IMF Can Remain the Same.
Robert Pollin, Heidi Garrett-Peltier, James Heintz, and Bracken Hendricks, Guest Bloggers
This is a summary of the report “Green Growth: A U.S. Program for Controlling Climate Change and Expanding Job Opportunities” by researchers at the Political Economy Research Insitute (University of Massachusetts-Amherst) and at the Center for American Progress. A longer article based on the report is available at The Boston Review, here. The full report is available from the Political Economy Research Institute, here.
The question for policymakers, and all other citizens, is no longer whether humans are changing our climate. The question now is, how we can stabilize an already-changing climate in a way that promotes economic prosperity? While recently established domestic policies have made strides toward a lower carbon future, such measures are stepping stones. They prescribe the initial path but will not lead to the final goal of achieving the reductions in greenhouse gas emissions necessary to help stabilize global temperatures. Effectively mitigating climate change requires identifying exactly how the United States will transform its energy economy to attain international goals to help protect our climate.
This report quantifies the level of investment required for the United States to align emissions reductions with international goals in an economically beneficial and technically feasible manner. The specific emissions-reduction goal we explore in this study is what the Intergovernmental Panel on Climate Change, or IPCC, has proposed for the world as a whole: reducing greenhouse gas emissions by 40 percent from 2005 levels by 2035. To do its part to meet this goal, the United States must reduce its carbon dioxide emissions from energy-based sources by 40 percent, to 3,200 million metric tons, or mmt, over roughly the next 20 years. The proposals in this report put the United States on this track to effectively mitigate global climate change.
José Antonio Ocampo and Kevin P. Gallagher
José Antonio Ocampo is a professor and Member of the Committee on Global Thought at Columbia University. Kevin P. Gallagher is a co-director of the Global Economic Governance Initiative at Boston University’s Pardee School for Global Studies and a regular Triple Crisis contributor. This is an excerpt from an article originally published at Project Syndicate. The full article can be read here.
As China’s economy starts to slow, following decades of spectacular growth, the government will increasingly be exposed to the siren song of capital-account liberalization. This option might initially appear attractive, particularly given the Chinese government’s desire to internationalize the renminbi. But appearances can deceive.
A new report argues that the Chinese authorities should be skeptical about capital-account liberalization. Drawing lessons from the recent experiences of other emerging countries, the report concludes that China should adopt a carefully sequenced and cautious approach when exposing its economy to the caprices of global capital flows.
The common thread to be found in the recent history of emerging economies – beginning in Latin America and running through East Asia and Central and Eastern Europe – is that capital flows are strongly pro-cyclical, and are the biggest single cause of financial instability. Domestic financial instability, associated with liberalization, also has a large impact on economic performance, as does the lack of control over non-bank financial intermediaries – an issue that China is now starting to face as the shadow banking sector’s contribution to credit growth becomes more pronounced.
José Antonio Ocampo and Kevin P. Gallagher
José Antonio Ocampo is a professor and Member of the Committee on Global Thought at Columbia University. Kevin P. Gallagher is a co-director of the Global Economic Governance Initiative at Boston University’s Pardee School for Global Studies and a regular Triple Crisis contributor. This is an excerpt from an article originally published at Project Syndicate. The full article can be read here.
As China’s economy starts to slow, following decades of spectacular growth, the government will increasingly be exposed to the siren song of capital-account liberalization. This option might initially appear attractive, particularly given the Chinese government’s desire to internationalize the renminbi. But appearances can deceive.
A new report argues that the Chinese authorities should be skeptical about capital-account liberalization. Drawing lessons from the recent experiences of other emerging countries, the report concludes that China should adopt a carefully sequenced and cautious approach when exposing its economy to the caprices of global capital flows.
The common thread to be found in the recent history of emerging economies – beginning in Latin America and running through East Asia and Central and Eastern Europe – is that capital flows are strongly pro-cyclical, and are the biggest single cause of financial instability. Domestic financial instability, associated with liberalization, also has a large impact on economic performance, as does the lack of control over non-bank financial intermediaries – an issue that China is now starting to face as the shadow banking sector’s contribution to credit growth becomes more pronounced.
Since the food price spikes of 2007-8, global hands have been wringing over the question, how will we feed the world? Population keeps growing, food-producing resources like land and water become more scarce, climate change introduces a dramatic uncertainty.
The images are downright Malthusian. The urgent recommendation is to produce more food, quickly. It is the theme of this year’s World Food Prize.
The question is fundamentally flawed, as is the Malthusian panic. There is no “we” who feed the world. There are, mostly, hundreds of millions of small-scale farmers. And there is no abstract “world” out there needing to be fed. There are about one billion hungry people, nearly all in developing countries. The majority are some of those same small-scale farmers. The rest are poor because they are unemployed or underemployed.
Increasing the industrial production of agricultural commodities does almost nothing for these people. Oddly enough, it can even make them hungrier.
There is no question that India and other parts of the still-under-construction world must build green. The building sector is a major contributor to climate change and local environmental destruction because of construction materials used; energy expended for lighting, heating and cooling; and water consumption and waste discharge. This is the threat. There is an opportunity as well. Most of India is still unbuilt—over 70 per cent of the building stock is yet to be constructed—so unlike the rest of the already developed world, India can build anew in efficient and sustainable manner. But how?
This is an issue that has been troubling us at the Centre for Science and Environment. Over the past few years the idea of green buildings has gained popularity—everybody, it would seem, has turned a new leaf. Across the country large and small constructions are advertised as the greenest of green. To prove that they are indeed environment-friendly, the business of certification has also grown. There are agencies that now rate and award stars to individual buildings based on certain parameters. Many state governments are making these same standards of “greenness” mandatory. Some are even providing incentives, like exemptions on property tax, to those buildings that qualify as environment-friendly.
All this is important but do we know what green means?