2021: Year of Living Dangerously?

Goodbye 2020, but unfortunately, not good riddance, as we all have to live with its legacy. It has been a disastrous year for much of the world for various reasons, Elizabeth II’s annus horribilis. The crisis has exposed previously unacknowledged realities, including frailties and vulnerabilities.

Intellectual Property Monopolies Block Vaccine Access

Just before the World Health Assembly (WHA), an 18 May open letter by world leaders and experts urged governments to ensure that all COVID-19 vaccines, treatments and tests are patent-free, fairly distributed and available to all, free of charge.

Urgently Needed Deficit Financing No Excuse for More Fiscal Abuse

Fiscal and monetary measures needed to fight the economic downturn, largely due to COVID-19 policy responses, require more government accountability and discipline to minimise abuse. Such measures should ensure relief for the vulnerable, prevent recessions from becoming depressions, and restore progress.

Will the New Fiscal Crises Improve International Tax Cooperation?

COVID-19 recessions have hit most countries, requiring massive fiscal responses. While most developing countries struggled with mounting debt even before the pandemic, many developed countries also face unprecedented macroeconomic pressures despite earlier spending cuts due to ‘fiscal consolidation’ policies.

World Bank Urges Governments to Guarantee Private Profits

The World Bank has been leading other multilateral development banks (MDBs) and international financial institutions to press developing country governments to ‘de-risk’ infrastructure and other private, especially foreign investments.

COVID-19 Compounding Inequalities

The United Nations’ renamed World Social Report 2020 (WSR 2020) argued that income inequality is rising in most developed countries, and some middle-income countries, including China, the world’s fastest growing economy in recent decades. Inequality dimensions While overall inter-country inequalities may have declined owing to the rapid growth of economies like China, India and East Asia, national inequalities have been growing for much of the world’s population, generating resentment.

Is Development for the World Bank Mainly Doing Business?

The World Bank has finally given up defending its controversial, but influential Doing Business Report (DBR). In August, the Bank “paused” publication of the DBR due to a “number of irregularities” after its much criticized ranking system was exposed as fraudulent.

Economic Trends and What’s Important in Life

US third quarter GDP numbers released two weeks ago delighted stock markets and President Trump. Output had picked up by 7.4%, annualised as 33.1%, the largest quarterly economic growth on record, almost double the old record of 3.9% (annualised as 16.7%) in the first quarter of 1950, seven decades ago.

Finance Covid-19 Relief and Recovery, Not Debt Buybacks

In July, the UN Secretary-General warned that a “series of countries in insolvency might trigger a global depression”. Earlier, the United Nations Conference on Trade and Development (UNCTAD) and the International Monetary Fund (IMF) had called for a US$2.5 trillion coronavirus crisis package for developing countries.

Limited Liability: Profit Without Responsibility

Limited liability protection for shareholders in joint stock companies was introduced to encourage investments in them. However, it has encouraged irresponsibility, causing much harm while generating profits without responsibility. Limited liability limits responsibility Columbia Law School’s Professor Katarina Pistor has extended her critique of the legal system to emphasize the implications of such limited liability. Limited liability encourages shareholders not to pay attention to the harm corporations they invest in may do.

Milton Friedman Versus Stakeholder Capitalism

Milton Friedman was arguably the most influential economist of the second half of the 20th century, associated with promoting ‘neo-liberal’, free-market, shareholder capitalism. Friedman’s monetarist economics is now widely considered irrelevant, if not wrong, especially with the low inflation associated with ‘unconventional’ monetary policies following the 2008-2009 global financial crisis.

Stop Blaming Industrial Policy

Industrial policy – or the promotion of particular investments, technologies, industries, regions and enterprises – has been practiced by a variety of governments to try to accelerate economic growth and transformation.

Shareholder Capitalism’s Ugly Legacy

Milton Friedman’s libertarian economics advocating shareholder capitalism has influenced generations trying to understand the economy, not only in the US, but all over the world.

‘Populist’ Macroeconomic Policy

‘Ethno-populism’ has emerged and spread in recent decades in response to the mixed consequences of neoliberal globalization. It appropriates nationalist rhetoric for narrow ethnic, religious, cultural or other communal ends, typically with a chauvinist, jingoist rejection of selected Others as politically expedient.

Myths of Soft Budget Constraints

In recent decades, many contemporary macroeconomic and financial problems have been blamed on ‘soft budget constraints’ (SBCs), with the term becoming quite popular in the economics lexicon, financial media and political discourse.

Regressive Taxation Must Be Reversed

With many in the world experiencing declining living standards, there has been growing frustration. Many hope that progressive taxation will improve things. While some economies once had progressive tax systems, recent decades have seen regression.

Trump Undermines WHO, UN System

After accusing the World Health Organization (WHO) of pro-China bias, President Donald Trump announced US withdrawal from the UN agency. Although the US created the UN system for the post-Second World War new international order, Washington has often had to struggle in recent decades to ensure that it continues to serve changing US interests.

World Bank’s ‘Mobilizing Finance for Development’ Not Financing Development

The World Bank leadership must urgently abandon its ‘Maximizing Finance for Development’ (MFD) hoax. Instead, it should resume its traditional multilateral development bank role of mobilizing funds at minimal cost to finance developing countries.

ISDS Enables Making More Money from Losses

With the Covid-19 contagion from late 2019 spreading internationally this year, governments have responded, often in desperation. Meanwhile, predatory international law firms are encouraging multimillion-dollar investor-state dispute settlement (ISDS) lawsuits citing Covid-19 containment, relief and recovery measures.

Debt Hawks Detract from Urgently Needed Fiscal Recovery Efforts

Developing country debt has continued to grow rapidly since the 2008-2009 global financial crisis (GFC). Warnings against debt have been reiterated by familiar prophets of debt doom such as new World Bank chief economist, Carmen Reinhart, once dubbed the ‘godmother of austerity’.