Meeting the President of the Republic of Korea in September 2019, President Donald J Trump bragged
that the “US economy is the envy of the world”. Trump reiterated such claims in his State of the Union address
in early February, hailing his own policies with typical humility.
In an annual ritual early in the year, most major economic organizations have released forecasts for the global economy in 2020
. Incredibly, almost as a reminder of where financial power resides in this day and age, the International Monetary Fund
(IMF) released its forecasts at the World Economic Forum’s 50th annual meeting in Davos.
Many medicines and medical tests are unaffordable to most of humanity owing to the ability of typically transnational pharmaceutical giants to abuse their monopoly powers, enforced by intellectual property laws, to set prices to maximize profits over the long-term.
Financialization has worsened inequality through various channels, including macroeconomic policies. For example, quantitative easing and low, if not negative interest rates have fuelled credit and asset price bubbles, while fiscal spending cuts have adversely affected those depending on government assistance.
One mercantilist view is that exchange rate undervaluation – e.g., via accumulation of foreign exchange reserves in China’s case – is ‘industrial policy’ to promote export-led growth, benefiting producers of exports while discouraging imports.
If well planned, coordinated and implemented, a government funded school feeding programme for all primary school children can be progressively transformative. Such a programme, involving government departments and agencies working together, can benefit schoolchildren, their families, farmers and public health, now and in the future.
Many argue that China’s impressive growth for last four decades has been due to deliberate exchange rate undervaluation, promoting exports and discouraging imports. In August last year, the Trump administration accused China of engaging in currency manipulation.
The latest November 2019 UBS/PwC Billionaires Report
counted 2,101 billionaires globally, or 589 more than five years before. Earlier, Farhad Manjoo
had seriously recommended, ‘Abolish Billionaires’, presenting a moral case against the super-rich as they have and get far, far more than what they might reasonably claim to deserve.
China’s gross domestic product (GDP) grew by 14%. Since then, its growth rate has declined by more than half to 6.6% in 2018. The five-year moving average growth rate is at its lowest since reforms began in 1978, although annual growth briefly fell lower during 1989, the year of the Tian An Men incident.
Much recent unrest, such as the ‘yellow-vest’ protests in France and the US ‘Abolish the Super-Rich’ campaign
, is not against inequality per se, but reflects perceptions of changing inequalities. Most citizens resent inequalities when it is not only unacceptably high, but also rising.
Historically, most social security systems have developed in the formal sector of rich economies. However, most of the poor and hungry in the world live in rural areas, surviving in the informal economy.
Any balanced assessment of the so-called Chinese economic miracle
will recognize that it was extremely successful, not only during the reform period from 1979, but also since Liberation in 1949 despite the setbacks of the Great Leap Forward and the Cultural Revolution.
Almost nine decades ago, newly elected US President Franklin Roosevelt introduced the New Deal
in 1933 in response to the Great Depression. The New Deal consisted of a number of mutually supportive initiatives, of which the most prominent were: a public works programme financed by budget deficits; a new social contract to improve living standards for all working families, including creation of the US social security system; and financial regulation to protect citizens’ assets and channel financial resources into productive investments.
The International Monetary Fund (IMF), the World Bank and the World Trade Organization (WTO), all dominated by rich countries, have long promoted trade liberalization as a ‘win-win
’ solution for “all people—rich and poor—and all countries—developed and developing countries”, arguing that “the gains are large enough to enable compensation to be provided to the losers”.
Industrial policy refers to the promotion of new investments and technology by governments to encourage the growth and development of specific economic sectors. However, scepticism
persists about the feasibility and desirability of using industrial policy, especially of the ability to ‘pick winners’, often accused of leading to ‘propping-up failing industries’.
Public or state development banking will be vital to achieving the Sustainable Development Goals, argues UNCTAD’s Trade and Development Report 2019
Ongoing World Bank led efforts
seek to leverage private finance via shadow banking by using public money to guarantee handsome returns managed by giant investment houses
. Such financialization introduce new costs and risks
to financing investments for sustainable development, decent work and renewable energy.
The OECD Secretariat published its proposed ‘unified approach
’ to reform international tax rules to address tax challenges posed by digitalization on 9 October 2019.
Under current rules, there is little chance of a company being taxed without its physical presence in the country concerned. But digitalization enables many businesses to remotely conduct economic activities affecting a national economy without a direct physical presence.
Two decades into the 21st century, all too many people still associate being ‘overweight’ with prosperity, health and wellbeing, mainly because being thin has long been associated with being emaciated due to hunger, undernourishment and malnutrition.
Overweight and obesity can easily be assessed by anthropometric measures, including the body mass index (BMI) and waist circumference. But BMI thresholds for overweight and obesity may differ by ethnic group or country.
A conjuncture of developments, short- and medium-term, have conspired to further slow the world economy. In recent months, the International Monetary Fund (IMF), among others, has acknowledged that global economic prospects are worsening, forcing it to make not one, but at least five consecutive growth forecast revisions, all downward.
The United Nations (UN) Sustainable Development Goals (SDGs) can only be achieved by 2030 with the political will to change international economic rules and mobilize resources needed for a massive public sector-led investment push to reinvigorate world economic progress sustainably, says UNCTAD’s Trade and Development Report 2019
Rapid financial globalization is due not only to financial innovations, but also to choices made by national policymakers, often with naïve expectations, trusting promoters’ promises of steady net inflows of financial resources.