The notion of the BRICS (Brazil, Russia, India, China, and later, South Africa) was concocted by Goldman Sachs’ Jim O’Neill. His 2001 acronym was initially seen as a timely, if not belated acknowledgement of the rise of the South.
But if one takes China out of the BRICS, one is left with little more than RIBS. While the RIBS have undoubtedly grown in recent decades, their expansion has been quite uneven and much more modest than China’s, while the post-Soviet Russian economy contracted by half during Boris Yeltsin’s first three years of ‘shock therapy’ during 1992-1994.
Unsurprisingly, Goldman Sachs quietly shut down its BRICS investment fund in October 2015 after years of losses, marking “the end of an era”, according to Bloomberg.
Growth spurts in South America’s southern cone and sub-Saharan Africa lasted over a decade until the Saudi-induced commodity price collapse from 2014. But the recently celebrated rise of the South and developing country convergence with the OECD has largely remained an East Asian story.
RICHARD KOZUL-WRIGHT:Here’s a big question that I think needs to be honestly and frankly addressed. If state ownership, technology transfer agreements and subsidies work to sustain growth and eliminate poverty and these policies have taken 500 million people out of poverty in China, and by implication, because of China’s connections to other developing countries, another 100 million people out of poverty in other parts of the developing world: Why do advanced economies want to deny their use to other developing countries? Given their success, given what they have achieved in terms of economic performance and social performance, why would you want, why would you want to eliminate these options from the policy toolkit of developing countries? It’s a very serious question that needs to be, I think, asked in a more frank and honest way than has so far been the case.
Obviously, for us least in terms of the TDR, it’s about rethinking multilateralism in progressive ways. It’s a plague on both your houses This is not an issue of do we support regressive nationalism, which we’ve already seen in various formations. Nor is it a support for the kind of corporate cosmopolitanism that has dominated the multilateral discussion for the last…We need some kind of alternative that is neither of these options. And I’ll finish here. We, in the Trade and Development Report this year, have gone back to the Havana Charter, which as many of you know, was the forerunner of the GATT, indeed more ambitious of the multilateral discussions in 1947 and 1948 than the GATT, that was signed up to by 50 odd countries, both developed and developing. Indeed, the majority of countries that signed up the Havana Charter were from the developing world. It was eventually rejected by the U.S. Congress and was shelved, but it is a remarkable document.
On 24 October 1945, the world’s most inclusive multilateral institution, the United Nations, was born to “save succeeding generations from the scourge of war, … reaffirm faith in fundamental human rights, … establish conditions under which justice and respect for the obligations arising from treaties and other sources of international law can be maintained, and to promote social progress and better standards of life in larger freedom” (UN Charter: Preamble).
Thus, one major purpose of the UN is to foster international cooperation to resolve the world’s socio-economic problems and to promote human rights and fundamental freedoms (UN Charter: Article 1.3).
Hence, all Members are obliged to “refrain in their international relations from the threat or use of force against the territorial integrity or political independence of any state” (Article 1.4), and to give the UN “every assistance in any action it takes in accordance with [its] Charter” (Article 1.5).
For many, however, the world today is increasingly at odds with the ideals of the UN Charter. Wars and conflicts are causing unprecedented humanitarian crises, worsened by rising intolerance and xenophobia.
Important international organizations and treaties are being threatened by unilateral withdrawals, non-payment of dues, virtual vetoes and threats of worse. Meanwhile, bilateral and plurilateral trade and other agreements are undermining crucial features of the post-Second World War order.
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.
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.
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.
A new United Nations report warns that the potential benefits to developing countries of digital technologies are likely to be lost to a small number of successful first movers who have established digital monopolies.
According to the Trade and Development Report 2018 (TDR 2018), subtitled ‘Power, Platforms and the Free Trade Delusion’, while developing countries need to invest more in digital infrastructure, they must also address the ownership and control of data and their use.
Developing countries will need to protect, and extend, available policy space to successfully integrate into the global digital economy. Stronger competition and regulatory frameworks will also require multilateral cooperation.
This article was published in September at Common Dreams, before Canada’s negotiators signed onto the “new NAFTA” (officially, the United States-Mexico-Canada Agreement, or USMCA). The agreement still needs to be ratified by the legislatures of each country, and opposition by Mexico’s farm movement could induce the new president, López Obrador, to oppose it. –Eds.
The smooth ride to a new North American Free Trade Agreement (NAFTA) may have just hit the bumpy roads of rural Mexico. On Tuesday, leaders of Mexico’s farm movement strongly condemned the new agreement announced between the United States and Mexico, calling on the new president they supported in recent elections to get involved and slow the race to the new agreement.
“We need to push our new president to stop the signing of this agreement,” said farm leader Gerónimo Jacobo in an interview. “This is life or death for us. With NAFTA it will be a slow death. Our national sovereignty is at stake here!”
On August 27, U.S. President Donald Trump announced he had reached a deal with the Mexican government on a new version of the NAFTA. In a garbled televised phone call, the president congratulated lame duck Mexican President Enrique Peña Nieto, claiming he had fulfilled his campaign promise to “replace NAFTA” and christening the new deal “The U.S.-Mexico Free Trade Agreement.” For his part, Peña Nieto, whose party was trounced in July 1 elections, claimed the agreement as his legacy.
Via the Real News Network; Pt. 2 of a series, “US Policy Toward Global Internet Governance Is Misguided Says Richard Hill.”
LYNN FRIES: It’s The Real News. I’m Lynn Fries. We are continuing our discussion with Internet governance expert Richard Hill. Richard Hill is president of the Association for Proper Internet Governance and a former official at the International Telecommunication Union. Welcome back, Richard.
RICHARD HILL: Thank you.
LYNN FRIES: Let’s pick up where we left off in Part 1. Your concluding point was that there should be no discussion of free flow of data at the World Trade Organization until certain preconditions are met; notably, global agreement on antitrust regulation and on data privacy protections. Talk now about the background to this. Talk more about this U.S.-led push.
Via the Real News Network; Pt. 1 of a series, “US Policy Toward Global Internet Governance Is Misguided Says Richard Hill.”
LYNN FRIES: It’s The Real News. I’m Lynn Fries.
The U.S. and the private companies it backs have far more say regarding the global internet than anybody else, and they use this power for political ends, mass surveillance; and for economic ends, the very high profits reaped by companies such as Google. The U.S. and its allies have systematically blocked discussion on Internet governance as it pertains to public policy at any United Nations forum that might not conform to U.S. expectations. The U.S. largely denies that certain internet services should be public services, or public goods, and rejects any intergovernmental role in supervising, much less regulating, the Internet.
These are all points related to internet governance raised by Richard Hill. Here to talk to us about all this is Richard Hill. Richard Hill is president of the Association for Proper Internet Governance, and a former senior official at ITU, the International Telecommunications Union. Dr. Hill holds a Ph.D. in statistics from Harvard, and is author of The New International Telecommunication Regulations and the Internet. Welcome, Richard.
RICHARD HILL: Thank you.
LYNN FRIES: What do you make of this call by Microsoft for governmental regulation of face recognition software?