Global economic recovery is being held hostage by the ideological dogma of the last three and a half decades. After long contributing to neo-liberal conventional wisdom, in its October 2015 World Economic Outlook
, the IMF identified the vicious circle undermining global recovery and growth. Low aggregate demand is discouraging investment; slower expected potential growth itself dampens aggregate demand, further limiting investment.
Debt anxieties are not new, often fanned by political competition. But so is a double dip recession due to premature deficit reduction. For example, to seek re-election, President Roosevelt backed down from his New Deal in 1937, promising that “a balanced budget [was] on the way”. In 1938, he slashed government spending, and unemployment shot up to 19 per cent.
For over a decade, much of the international development community, led by the OECD and the World Bank, promoted ‘good governance’ as a pre-requisite for economic development and poverty eradication. Good governance became the explanation for the failure of the structural adjustment programmes (SAPs) to deliver economic growth and poverty reduction. The link between good governance and poverty eradication is premised on the presumption that good governance promotes economic growth and development. It was presumed that SAPs were good for growth and the poor.
It is now generally agreed that the Trans-Pacific Partnership (TPP) has served US foreign policy objectives well. For this purpose, the Peterson Institute of International Economics (PIIE) has provided the fig-leaf for the empire’s new clothes with exaggerated projections of supposed growth gains from the TPP.
Since the 1980s, the world has been moving once again to the greatest level of national level income inequalities observed in recorded human history. A study by the Credit Suisse Research Institute suggested that the income share of the rich has increased at the expense of the ‘middle class’ in most of the world.
International capital flows are now more than 60 times the value of trade flows. The Bank of International Settlements (BIS) is now of the view that large international financial transactions do not facilitate trade, and that excessive financial ‘elasticity’ was the cause of recent financial crises.
Unlike Wikileaks’ exposes, the recent Panama revelations were quite selective, targeted, edited and carefully managed. Most observers attribute this to the political agendas of its mainly American funders. Nevertheless, the revelations have highlighted some problems associated with illicit financial flows, as well as tax evasion and avoidance, including the role of enabling governments, legislation, legal and accounting firms as well as shell companies.
While the main US motivation for the Trans Pacific Partnership (TPP) has been to counter China’s influence in the region, it has also been used to undermine the Doha ‘Development’ Round of trade negotiations to better advance politically influential US corporate interests. Hence, it has become all the more necessary to legitimize the TPP in terms of its ostensible benefits. Touted as a ‘gold standard’ 21st century trade deal, it is nonetheless necessary to ascertain what gains can really be expected and whether these exceed its costs.
In the wake of releasing the IMF’s latest assessment of the global economy, Chief Economist Maurice Obstfeld noted in his blog, “Global growth continues, but at an increasingly disappointing pace that leaves the world economy more exposed to negative risks. Growth has been too slow for too long.”
The Chinese character for crisis combines the characters for ‘danger’ and ‘opportunity’. Our ability to improve the human condition depends critically on our ability to recognize and address dangers, but also to seize opportunities made possible by recognizing that crises offer rare opportunities to pursue extraordinary options not normally available.
Many well-meaning people believe that “good governance” is key to inclusive development. But research claiming that “good governance” is essential for rapid growth suffers from serious methodological or conceptual limitations. Existing definitions are extremely broad, suffer from functionalist tautology, or mainly refer to corruption.
Creating healthy and sustainable food systems is key to overcoming hunger and all forms of malnutrition (undernourishment, micronutrient deficiencies, obesity) around the world. Food production has tripled since 1945 while average food availability per person has risen by 40 per cent. Current food systems are not delivering well on ensuring healthy diets for all. We have to fix the problem. The most efficient and sustainable approach will be to reshape and strengthen food systems that support healthy diets for all.
About 2.1 billion people are regarded as overweight or obese today, or almost thirty per cent of the world’s population. With over 800 million people estimated to be chronically hungry in the world, it appears that the number of overweight is more than 2.5 times the number of undernourished.
Nutrition is complex and multi-dimensional. Micronutrient deficiencies or ‘hidden hunger’ are much more widespread than chronic undernourishment or hunger, understood as inadequate dietary energy. Micronutrient deficiencies refer to the lack of essential vitamins, minerals and other substances required over the human life cycle by the body in small amounts. Micronutrient undernutrition has long-term effects on health, learning ability and productivity, leading to high social and public costs, reduced work capacity in populations due to high rates of illness and disability, and loss of human potential.
2015 proved challenging for multilateralism, especially in relation to development concerns. July’s Addis Ababa third Financing for Development (FfD) conference delivered little real progress. Nevertheless, the September Sustainable Development Goals summit redeemed hopes with an ambitious and universal Agenda 2030.