Inter Press ServiceFinancial Crisis – Inter Press Service http://www.ipsnews.net News and Views from the Global South Thu, 27 Jul 2017 00:01:54 +0000 en-US hourly 1 https://wordpress.org/?v=4.8 Migrant Contributions to Development: Creating a “New Positive Narrative”http://www.ipsnews.net/2017/07/migrant-contributions-development-creating-new-positive-narrative/?utm_source=rss&utm_medium=rss&utm_campaign=migrant-contributions-development-creating-new-positive-narrative http://www.ipsnews.net/2017/07/migrant-contributions-development-creating-new-positive-narrative/#respond Wed, 26 Jul 2017 14:42:44 +0000 Tharanga Yakupitiyage http://www.ipsnews.net/?p=151437 Despite the “undeniable” benefits of migration, barriers including public misconceptions continue to hinder positive development outcomes, participants said during a series of thematic consultations here on safe, orderly, and regular migration. At a time where divisive rhetoric on migration can be seen around the world, member State representatives, UN agencies, and civil society gathered at […]

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Pakistani migrant workers build a skyscraper in Dubai. Credit: S. Irfan Ahmed/IPS

By Tharanga Yakupitiyage
UNITED NATIONS, Jul 26 2017 (IPS)

Despite the “undeniable” benefits of migration, barriers including public misconceptions continue to hinder positive development outcomes, participants said during a series of thematic consultations here on safe, orderly, and regular migration.

At a time where divisive rhetoric on migration can be seen around the world, member State representatives, UN agencies, and civil society gathered at the UN for a two-day meeting to discuss migrants’ contributions to sustainable development as well as the challenges in harnessing such contributions.

In her opening remarks, Special Representative for International Migration Louise Arbour noted that though the benefits of migration outweigh the costs, public perception is often the opposite and negatively impacts migration policy.

“This must be reversed so that policy is evidence-based and not perception-driven. Policies responding to false perceptions reinforce the apparent validity of these erroneous stereotypes and make recourse to proper policies that much harder,” she added.

Among such evidence is the 575 billion dollars in global remittances transferred by international migrants to their families, almost 430 billion of which went to developing countries.

These essential lifelines, which are are three times larger than official development assistance (ODA) and more stable than other forms of private capital flows, have contributed to progress on key aspects of the 2030 Agenda for Sustainable Development in migrants’ countries of origin, including poverty reduction, food security, and healthy families.

Benefits can also be seen in the countries where migrants reside as 85 percent of migrant workers’ earnings remain in the countries of destination.

Migrants also tend to fill labour market gaps at all skill levels in countries of destination, advancing economic growth, job creation, and service delivery.

Participants noted that this contributes to a “triple win” scenario for the country of origin, country of destination, and the migrants themselves.

“When migrants succeed, societies do too,” said Assistant Foreign Minister for Multilateral Affairs and International Security of Egypt and one of the sessions’ moderators, Hisham Badr.

Contributions of migrants to development in origin and destination countries go beyond financial remittances and include transfers of skills and knowledge and entrepreneurship.

Despite representing 13 percent of the overall population in the United States, immigrants made up over 20 percent of entrepreneurs, building businesses from popular search engines to environmentally-friendly cars.

In fact, 40 percent of Fortune 500 companies in 2016 had at least one founder who immigrated to the U.S. or was the child of immigrants. According to the New American Economy, those firms alone employed almost 20 million globally and generated more than 5 trillion dollars in revenue.

This diaspora is also often “bridge-builders,” maintaining strong links to their countries of origin.

However, participants noted that inadequate policies stand in the way of positive development outcomes.

“The crucial issue is not that migration and development are linked, but how they can be leveraged to create positive development outcomes,” Badr told delegates.

Arbour noted that that cost of sending and receiving remittances remains excessively high. Currently, the global average cost of transactions is over 7 percent, significantly greater than the Sustainable Development Goals (SDG) target of 3 percent.

The lack of access to financial services also poses a major obstacle as it prevents the investment of remittances into productive activities and sustainable development in remittance recipients’ communities.

Arbour stressed the need to boost financial inclusion, calling it “low hanging fruit.”

Participants particularly highlighted the importance of integrating migration into development planning, including the need to engage with the diaspora to create more effective migration and development policies.

Numerous UN member States have already launched initiatives to include the diaspora, including Jamaica, which hosts a biennial conference to motivate greater involvement in the country’s socio-economic development.

During the consultations, the International Organisation for Migration (IOM) launched a similar platform for diaspora communities to contribute to the Global Compact for Safe, Orderly, and Regular Migration (GCM), the UN’s first intergovernmentally negotiated and comprehensive agreement on international migration, which is expected to be adopted in 2018.

“Diaspora communities have emerged as key influencers in global development practices,” said iDiaspora Forum moderator Martin Russell.

“The iDiaspora Forum is a platform designed to initiate ideas, learn lessons, and share best practices. Diaspora engagement is a booming industry,” he added.

In the final panel of the meeting, which aims to gather input and recommendations to feed into the GCM, Overseas Development Institute’s (ODI) Managing Director Marta Foresti pointed to the compact as a unique opportunity that the international community cannot afford to miss.

“With the global compact, we can create a new positive narrative,” she concluded.

Organized by the president of the General Assembly and co-facilitators including the Permanent Missions of Mexico and Switzerland, the informal session is the fourth in a series of six to take place this year.

The last two consultations will take place in Vienna from 4-5 September and Geneva from 12-13 October on the issues of smuggling of migrants and irregular migrants, respectively.

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Alcoholism Cannot Explain Russian Mortality Spikehttp://www.ipsnews.net/2017/07/alcoholism-cannot-explain-russian-mortality-spike/?utm_source=rss&utm_medium=rss&utm_campaign=alcoholism-cannot-explain-russian-mortality-spike http://www.ipsnews.net/2017/07/alcoholism-cannot-explain-russian-mortality-spike/#respond Tue, 25 Jul 2017 14:42:49 +0000 Vladimir Popov and Jomo Kwame Sundaram http://www.ipsnews.net/?p=151424 Vladimir Popov was a Senior Economics Officer in the United Nations Secretariat. Jomo Kwame Sundaram was UN Assistant Secretary General for Economic Development.

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In Russia, the simultaneous increase in the total death rate, deaths due to external causes, and alcohol consumption were all driven by stress. Credit: Pavol Stracansky/IPS

By Vladimir Popov and Jomo Kwame Sundaram
MOSCOW and KUALA LUMPUR, Jul 25 2017 (IPS)

The steep upsurge in mortality and sudden fall in life expectancy in Russia in the early 1990s were the highest ever registered anywhere in recorded human history in the absence of catastrophes, such as wars, plague or famine. The shock economic reforms in the former Soviet economies after 1991 precipitated this unprecedented increase in mortality, shortening life expectancy, especially among middle-aged males.

Shock therapy
During 1987-1994, the Russian mortality rate increased by more than half, from 1.0% to 1.6%, as life expectancy fell from 70 to 64 years! Economic output fell by almost half during 1989-1998 as wealth and income inequalities as well as crime, murder and suicide rates soared.

The dramatic increase in mortality – most pronounced for middle-aged men, mostly due to cardiovascular diseases – has been explained in terms of various factors like falling real incomes, poorer nutrition, environmental degradation, the collapse of Soviet health care, and surges in alcoholism and smoking.

However, dietary changes – less meat and dairy products, yet more bread and potatoes – could not have quickly increased cardiovascular diseases.

Deterioration of health care, smoking and changes in diet would require much more time to increase mortality by so much, while increased pollution is not an acceptable explanation due to the collapse of industrial output.

While deterioration of the Russian diet, the collapse of its health care system as well as increased deaths due to accidents, murders and suicides undoubtedly contributed to increased mortality in Russia, they cannot explain the sudden magnitude of the increase. This leaves two major competing explanations for the mortality crisis – either increased alcohol consumption or heightened stress factors.

Alcoholism

The major explanation popular in the West, as it absolves the West of responsibility, attributes the mortality spike to increased alcohol consumption in the late 1980s and early 1990s after Gorbachev’s anti-alcoholism campaign.

Deaths due to alcohol poisoning are generally considered a better indicator of actual alcohol consumption as some alcohol consumed is produced illegally or smuggled into the country. Such deaths per 100,000 inhabitants increased from 10 in 1990-1991 to nearly 40 in 1994, exceeding the number of deaths due to suicide and murders.

The increased intake of alcohol can, in turn, be attributed to the lower prices of spirits in the early 1990s. But this alcohol explanation does not stand up to critical scrutiny. After all, as with most other goods, demand for alcohol is inversely related to price and positively to personal income and spending capacity.

First, during some periods, per capita alcohol consumption and death rates moved in opposite directions, e.g., alcohol consumption rose or remained stable during 2002-2009, while death rates – also due to external causes, accidents, murders, suicides and poisoning – fell.

Second, per capita alcohol consumption levels in the 1990s were equal to or lower than in the early 1980s, whereas the total death rate increased by over half and deaths due to external causes doubled!

Although strongly correlated with the mortality rate, higher alcohol consumption was not an important independent cause, but also exacerbated by the same stress factors as the mortality rate itself.

The simultaneous increase in the total death rate, deaths due to external causes, and alcohol consumption were thus all driven by another factor, namely stress.

Stress
What were these sources of increased stress and why did they increase premature deaths? Stress factors due to the economic ‘shock therapy’ following the demise of the Soviet Union are associated with the rise in unemployment, labour mobility, migration, divorce, wealth, and income inequalities.

A stress index incorporating these variables turns out to be a surprisingly good predictor of changes in life expectancy in post-communist economies, especially in the Russian Federation.

The evidence shows that many men in their 40s and 50s – who had lost their jobs or had to move to another job and/or another region, or experienced increases in inequalities in their country/region, or had divorced their wives – were more likely to die prematurely in the 1990s.

To reiterate, the Russian mortality crisis of the 1990s was mainly due to the shock economic reforms that led to mass, especially labour dislocations, much greater personal and family economic insecurity and sharp increases in inequalities. The resulting dramatic rise in stress factors was therefore mostly responsible for the sharp rise in mortality.

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The G20 Needs To Go Back to its Rootshttp://www.ipsnews.net/2017/07/g20-needs-go-back-roots/?utm_source=rss&utm_medium=rss&utm_campaign=g20-needs-go-back-roots http://www.ipsnews.net/2017/07/g20-needs-go-back-roots/#respond Mon, 24 Jul 2017 21:36:56 +0000 Inge Kaul http://www.ipsnews.net/?p=151418 Inge Kaul is adjunct professor at the Hertie School of Governance, Berlin, Germany; advisor to various governmental, multilateral and non-profit organizations; and the first director of UNDP’s Human Development Report Office, a position, which she held from 1989 to 1994, and director of UNDP’s Office of Development Studies from 1995 to 2005

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Inge Kaul is adjunct professor at the Hertie School of Governance, Berlin, Germany; advisor to various governmental, multilateral and non-profit organizations; and the first director of UNDP’s Human Development Report Office, a position, which she held from 1989 to 1994, and director of UNDP’s Office of Development Studies from 1995 to 2005

By Inge Kaul
BERLIN, Jul 24 2017 (IPS)

When the finance ministers of the G7 countries proposed the G20 in the late 1990s, a good sense of realism prevailed. They recognized that addressing issues of global finance required the political support from—and involvement of—emerging market economies.

Inge Kaul

This view proved prescient in seeking policy responses to the 2007–08 global financial crisis. The leaders of the G20 met at their first summit in Washington D.C. in 2008 to agree on measures to resolve the crisis through dialogues among the “systemically relevant” countries.

At its creation, the G20 was thus meant to facilitate coordination, cooperation and problem-solving among key actors in a specific policy field, which then was global financial stability. The G20 was not meant to be a jack-of-all-trades, offering welcoming words and restating support for long-accepted and previously reconfirmed goals, as most subsequent G20 summits did.

Why had there been so little real progress? What concrete measures would be taken? Neither question was asked let alone answered—to avoid a spiral of reiterations at subsequent summits.

Not solving the most pressing problems

So far, the G20’s record of practical follow-up to its communiqués has been less than sterling. But this could reflect its shift from solving the most pressing problems to considering all possible facets of a more desirable world.

Forget for a moment the failure to clearly add value. What would the 2017 Hamburg summit have done, if it had stuck to the original G20 idea and approach? Which one or two global key challenges could it have focused on to suggest concrete measures?

One focus could have been mass starvation in Africa, with a clear promise to augment, in a meaningful way and within a few days, financial and other support for the UN Refugee Agency and the World Food Programme. A second could have been mitigating and adapting to climate change.

Even if only 19 of the 20 had stated what concrete breakthroughs they would make on the Monday morning following the Hamburg summit, much could have been gained by inspiring others to ratchet up their corrective measures. Why was such a determination to lead not in evidence?

Trend away from multilateralism

Many factors come into play. Among them might be that the G20 has increasingly been promoted as a core element and driving force of the ongoing trend away from genuine multilateralism to increasing minilateralism and club-based global governance.

The G20 agenda has been loaded with diverse issues, and the preparatory processes have accordingly been broadened to afford many parties a chance to raise their pet topic and see it in the summit communiqués. That would also give them a sense of importance as they commented on how to run the world, while the other 173 countries and their people could only observe the summits from the sidelines.

Would the world miss something if such G20 summitry were stopped? Not really. It is important for world leaders to talk and to consult each other. However, plenty of opportunities exist for that.

Just think of the high-level segment of the United Nations General Assembly each September, or the regular Bretton Woods meetings, or the many global conferences convening heads of state or government, or such informal meetings as the Syrian Peace Talks.

There is no scarcity of opportunities for world leaders to announce intentions and explore common ground. What is rare is translating words into action—and into action that is up to the challenge.

Time to revisit the role of the G20

Despite nearly 10 years of G20 summitry, the list of unmet global challenges is lengthening and the human, political, environmental and economic costs of global crises are mounting. So wouldn’t this be the time to revert to the original G20 concept as a global forum for announcing concrete measures to resolve—not just chat about—the most pressing global challenge?

Any other challenges could be taken up in other multilateral forums. And if leaders feel that these challenges also deserve attention and solution, they could instruct their representatives at those forums to announce their country’s ongoing or planned corrective actions—to lead by example and make a real difference that all would perceive as fostering sustainable and inclusive growth and development. How, then, to engineer such a return of the G20 to its original purpose?

Argentina, as the host of the next G20 summit, would be well positioned to initiate debate on this issue and to invite views and suggestions on what should be the basic features of a system of global governance fit for the 21st century and on what should be the potential role of the G20 within this system alongside other informal bodies of various groups of state and non-state actors. Perhaps, it could do so together with the hosts of the last two G20 summits, China and Germany.

The best outcome would be for the G20 leaders to recognize that the G20 is not the right forum to decide on a new, reformed system of global governance that will affect all countries and to instead encourage debate on this issue at the United Nations. This could also be a way for the G20 to clarify its future role and eventually, in whatever form it may continue, to invite less opposition and enjoy more political acceptance, legitimacy and effectiveness.

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Prepare Now for the Next Financial Crisishttp://www.ipsnews.net/2017/07/prepare-now-next-financial-crisis/?utm_source=rss&utm_medium=rss&utm_campaign=prepare-now-next-financial-crisis http://www.ipsnews.net/2017/07/prepare-now-next-financial-crisis/#respond Sat, 22 Jul 2017 20:24:08 +0000 Martin Khor http://www.ipsnews.net/?p=151403 Martin Khor is Executive Director of the South Centre, a think tank for developing countries, based in Geneva.

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The developing countries went through the 2008 financial crisis without much harm, because of certain conditions, which no longer exist. Credit: Bigstock

The developing countries went through the 2008 financial crisis without much harm, because of certain conditions, which no longer exist. Credit: Bigstock

By Martin Khor
PENANG, Malaysia, Jul 22 2017 (IPS)

The Asian financial crisis started 20 years ago and the global financial crisis and recession 9 years back. When a new global financial crisis strikes, the developing countries will be more damaged than in the last crisis as they have become less resilient and more vulnerable.  They thus need to prepare from being overwhelmed.

A debate is taking place as to whether the time is now ripe for a new crisis.  Most economists and commentators think not, as an economic recovery, admittedly weak, appears to be taking place in developed economies.

On the surface, the present situation seems quite good.  The US stock market continues to hit new highs, and the head of the Federal Reserve recently testified the US economy is robust and job growth is good.

There has been a rebound of foreign capital flows to emerging economies in the first half of 2017, after two years of outflows.

The G20 leaders focused on climate change, trade and disagreements with the United States in their Hamburg summit, and seemed complacent about the world’s economic condition; they didn’t worry about any looming crisis.

But below the surface calm, the waters are boiling and churning.  As Shakespeare wrote in his play Hamlet:  “Something is rotten in the state of Denmark.”

Whether the deep-seated problems boil over shortly into full-blown crisis, or continue to fester for some time more, is hard to predict.  But the world economy is in trouble.

Amidst a weak global economy recovery, many serious risks remain, wrote  Martin Wolf, the Financial Times’ chief economics commentator, on 5 July.

“The possibly greatest danger is a collapse in global cooperation, perhaps even an outbreak of conflict,” he said.  “That would destroy the stability of the world economy on which all depend…

“We in the high-income countries allowed the financial system to destabilise our economies.  We then refused to use fiscal and monetary stimulus strongly enough to emerge swiftly from the post-crisis economic malaise.

When a new global financial crisis strikes, the developing countries will be more damaged than in the last crisis as they have become less resilient and more vulnerable. They thus need to prepare from being overwhelmed, says Martin Khor

Martin Khor

“We failed to respond to the divergences in economic fortunes of the successful and less successful.  These were huge mistakes.  Now, as economies recover, we face new challenges: to avoid blowing up the world economy, while ensuring widely shared and sustainable growth.  Alas, we seem likely to fail this set of challenges.”

The Star (Malaysia) on 12 July reported that the possibility of the US Federal Reserve raising interest rates and reducing its balance sheet of US$4.5 trillion is causing regional stock markets and currencies to fall and funds to flow out of the region.

Is this another blip that will be corrected soon, or the start of a turn of the boom-bust cycle in capital flows to and from emerging markets?

A comprehensive and in-depth analysis of the global economic situation and how it affects developing countries is given in a recent paper by the South Centre’s chief economist Yilmaz Akyuz, assisted by Vicente Yu.

The US and Europe have wrongly managed the aftermath of the 2008 crisis by policies that will have very adverse effects on most developing countries, according to the paper, “The financial crisis and the global South:  impact and prospects.”   (South Centre Research Paper 76;)

The developing countries went through the 2008 crisis without much harm, because of certain conditions, which no longer exist.

Meanwhile, these countries have recently built  up new and dangerous vulnerabilities which expose them to serious damage when the next crisis strikes.

It is thus imperative that the developing countries review their precarious situation and act to protect their economies to the extent possible to reduce the effects of the new turmoil.

It is thus imperative that the developing countries review their precarious situation and act to protect their economies to the extent possible to reduce the effects of the new turmoil.
Akyuz says the post-2018 crisis has moved in a third wave to several emerging economies after having swept from the US to Europe. A central reason is the wrong crisis response policies of the US and Europe.

“There are two major shortcomings:  the reluctance to remove the debt overhang through orderly restructuring, and fiscal orthodoxy,” adds Akyuz.

“These resulted in excessive reliance on monetary policy, with central banks going into uncharted waters including zero and negative interest rates and rapid liquidity expansion through large bond acquisitions.

“These policies not only failed to secure a rapid recovery but also aggravated the global demand gap by widening inequality and global financial fragility by producing a massive build-up of debt and speculative bubbles.  They have also generated strong deflationary and destabilising spillovers for developing economies.”

When a new crisis comes, developing countries will be harder hit than in 2008.  Their resilience to external shocks is now weak, due to three factors.

First, many developing economies deepened their integration into the international financial system, resulting in new vulnerabilities and high exposure to external shocks.

Their corporations built up massive debt since the crisis, reaching US$25 trillion (95% of their GDP);  and dollar-denominated debt securities issued by emerging economies jumped from $500 billion in 2008  to $1.25 trillion in 2016, carrying interest rate and currency risks.

Moreover, foreign presence in local financial markets reached unprecedented levels, increasing their susceptibility to global financial boom-bust cycles.

Second, the current account balance and net foreign asset positions of many developing countries have significantly deteriorated since the crisis.  In most countries, foreign reserves built up recently came from capital inflows rather than trade surpluses.  They are inadequate to meet large and sustained capital outflows.

Third, the countries now have limited economic policy options to respond to adverse developments from abroad.  Their “fiscal space” for counter-cyclical policy response to deflationary shocks is much more limited than in 2009;  they have significantly lost monetary policy autonomy and lost control over interest  rates due to their deepened global financial integration; and flexibile exchange rate regimes are no panacea in the face of financial shocks.

“Most developing economies are in a tenuous position similar to the 1970s and 1980s when the booms in capital flows and commodity prices ended with a debt crisis as a result of a sharp turnaround in US monetary policy, costing them a decade in development,”  warns Akyuz.

It would be hard for some of them to avoid international liquidity or even debt crises and loss of growth in the event of severe financial and trade shocks.

Unfortunately, the South has not been effective in reflecting on these problems nor in taking collective action.

Global reforms are required to prevent the major countries from transmitting the effects of their wrong policies to developing countries; and global mechanisms are needed to prevent and manage financial crises.

There have been many proposals for reform in the past but hardly any action taken due to opposition from developed countries.

“Now the stakes are too high for developing countries to leave the organisation of the global economy to one or two major economic powers and the multilateral institutions they control,” concludes Akyuz.

If his wide-ranging analysis is correct, then the crisis that started in 2008 will enter more dangerous territory due to new factors fanning the flames.

The underlying  causes are known, but what is yet unknown is the specific event that will trigger and ignite a new phase of the crisis, and when that will happen.

When the new crisis takes place, developing countries will in a less fortunate position to ride through it compared to 2008, so there is ever less reason for complacency.

Each country should analyse its own strong and weak spots, its vulnerabilities to external shocks, and prepare actions now to mitigate the crisis in advance, rather than wait for it to happen and overwhelm its economy.

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Early Death in Russiahttp://www.ipsnews.net/2017/07/early-death-russia/?utm_source=rss&utm_medium=rss&utm_campaign=early-death-russia http://www.ipsnews.net/2017/07/early-death-russia/#respond Thu, 20 Jul 2017 16:09:37 +0000 Vladimir Popov and Jomo Kwame Sundaram http://www.ipsnews.net/?p=151376 Vladimir Popov was a Senior Economics Officer in the United Nations Secretariat. Jomo Kwame Sundaram was UN Assistant Secretary General for Economic Development.

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The Russian mortality crisis underscores the impact of stress on life expectancy. Credit: Alexey Yakushechkin/IPS

By Vladimir Popov and Jomo Kwame Sundaram
MOSCOW and KUALA LUMPUR, Jul 20 2017 (IPS)

The transition to market economy and democracy in the Russian Federation in the early 1990s dramatically increased mortality and shortened life expectancy. The steep upsurge in mortality and the decline in life expectancy in Russia are the largest ever recorded anywhere in peacetime in the absence of catastrophes such as war, plague or famine.

During 1987-1994, the Russian mortality rate increased by 60%, from 1.0% to 1.6%, while life expectancy went down from 70 to 64 years. Although life expectancy declined from 1987, when Mikhail Gorbachev was still in charge, its fall was sharpest during 1991-1994, i.e., during Boris Yeltsin’s early years.

In fact, mortality increased to levels never observed during the 1950s to the 1980s, i.e., for at least four decades. Even in the last years of Stalin’s rule (1950-1953), mortality rates were nearly half what they were in the first half of the 1990s.

Economic output fell by 45% during 1989-1998, while negative social indicators, such as the crime rate, murder rate, suicide rate and income inequalities, rose sharply as well, but even these alone cannot adequately explain the unprecedented mortality spike.

Distress
This Russian mortality crisis underscores the impact of stress on life expectancy. Anne Case and Angus Deaton have linked deteriorating American white male real incomes to various distress indicators since the turn of the century. Their careful work helps us better understand the election of US President Trump, thanks to the electoral majorities he secured in the ‘rust belt’ states, so crucial in the American ‘electoral college’ system.

During the Enclosure movement and the Industrial Revolution in Britain from the 16th to the 18th century, mortality increased and life expectancy fell by about a decade – from about 40 to slightly over 30 – due to lifestyle changes, increased income inequalities and mass impoverishment.

Other instances of life expectancy reduction due to social changes – without wars, epidemics and natural disasters – are very few and never involved a fall in life expectancy by five years, from 69 to 64 years, in the three years from 1991 to 1994 for the entire population of a large country like Russia!

This dramatic fall has been obscured in much of the Western media coverage, although some academic research has been more accurate. Thus, the Economist implied that the fall was greater during Gorbachev’s final years (1987-1992) compared to Yeltsin’s early years (1992-1997).

Why premature death?
What kinds of stress did the transition induce, and why did they lead to premature death? Stress is correlated to the rise in unemployment, labour mobility, migration, divorce, and income inequalities.

These stress indicators turn out to be good predictors of changes in life expectancy in Russia during the ‘post-Soviet’ transition. Men in their forties and fifties who had lost their jobs, or had to move to another job and/or region, or lived in regions with greater inequality or higher divorce rates, were more likely to die prematurely in the 1990s.

The major popular alternative ‘explanation’ is increased alcoholism, which does not stand up to closer critical scrutiny for several reasons. First, during some periods, per capita alcohol consumption and death rates moved in opposite directions, e.g., during 2002-2007, death rates due to external causes – including murders, suicides and poisoning – fell as alcohol consumption rose.

Second, according to both official statistics and independent estimates, per capita alcohol consumption levels in the 1990s were equal to or lower than in the early 1980s, whereas death rates due to external causes doubled, and the total death rate increased by half. This simultaneous increase in indicators (total death rate, death rate due to external causes, and alcohol consumption) appear to be driven by another factor, namely stress.

Post-communist transitions varied
But not all post-communist transitions had equally traumatic consequences. Countries which proceeded more gradually – such as China, Uzbekistan and Belarus – managed to preserve institutional capacities and capabilities, thus avoiding or at least mitigating the output collapse and the sudden, dramatic increase in socio-economic stress indicators.

China and Vietnam did not experience any recession during their transitions, while life expectancy in both these countries continued to rise, although more slowly in China compared to before the 1980s, and to other countries with similar per capita GDPs and life expectancy levels.

In the case of Cuba, the 40% output reduction during 1989-1994 did not result in a mortality crisis. Instead, life expectancy in Cuba increased from 75 years in the late 1980s to 78 years in 2006.

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Reforming the International Financial Systemhttp://www.ipsnews.net/2017/07/reforming-international-financial-system/?utm_source=rss&utm_medium=rss&utm_campaign=reforming-international-financial-system http://www.ipsnews.net/2017/07/reforming-international-financial-system/#respond Thu, 13 Jul 2017 15:27:43 +0000 Jomo Kwame Sundaram http://www.ipsnews.net/?p=151294 Jomo Kwame Sundaram, a former economics professor and United Nations Assistant Secretary-General for Economic Development, received the Wassily Leontief Prize for Advancing the Frontiers of Economic Thought in 2007.

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The 1997-1998 East Asian crises provided major lessons for international financial reform. Two decades later, we appear not to have done much about them

In Southeast Asia, existing mechanisms and institutions for preventing financial crises remain grossly inadequate. Credit: Sandra Siagian/IPS

By Jomo Kwame Sundaram
KUALA LUMPUR, Jul 13 2017 (IPS)

When we fail to act on lessons from a crisis, we risk exposing ourselves to another one. The 1997-1998 East Asian crises provided major lessons for international financial reform. Two decades later, we appear not to have done much about them. The way the West first responded to the 2008 global financial crisis should have reminded us to do more. But besides accumulating more reserves, Southeast Asia has not done much else.

Crisis prevention and management
First, existing mechanisms and institutions for preventing financial crises remain grossly inadequate. Financial liberalization continues despite the crises engendered. Too little has been done by national authorities and foreign advisers to check short-term capital flows while unwarranted reliance has been put on international adherence to codes and standards. There is also little in place to address the typically exaggerated effects of movements among major international currencies.

Second, existing mechanisms and institutions for financial crisis management are grossly inadequate. The greater likelihood, frequency and severity of currency and financial crises in emerging market economies in recent times — with devastating consequences for the real economy and innocent bystanders — makes speedy crisis resolution imperative.

Economic liberalization has also compromised macro-financial instruments available to governments for crisis management and recovery. Instead, governments have little choice but to react pro-cyclically, which tends to exacerbate economic downturns. Governments thus fail to act counter-cyclically to avoid and overcome crises, which have been more devastating in developing countries.

There is a need to increase emergency financing during crises and to establish adequate new procedures for timely and orderly debt standstills and work-outs. While IMF financing facilities were significantly augmented in 2009, little else has changed.

Only governance reform of international financial institutions can ensure more equitable participation and decision-making by developing countries. The concentration of power in some apex institutions can be reduced by delegating authority to others, and by encouraging decentralization, devolution, complementarity and competition with other international financial institutions, including regional ones.
International financial institutions, including regional institutions, should be able to provide adequate counter-cyclical financing, including for ‘social protection’. Instead of current arrangements which mainly benefit foreign creditors, new procedures and mechanisms can help ensure that they too share responsibility for the consequences of their lending practices.

Developmental reforms
Third, international financial reform needs to go beyond crisis prevention and resolution to improve provision of development finance, especially to small and poor countries that face limited and costly access to funding their development priorities. For years now, the World Bank and other multilateral development banks have abandoned or cut industrial financing.

Fourth, powerful vested interests block urgently needed international institutional reforms. Only governance reform of international financial institutions can ensure more equitable participation and decision-making by developing countries. The concentration of power in some apex institutions can be reduced by delegating authority to others, and by encouraging decentralization, devolution, complementarity and competition with other international financial institutions, including regional ones.

Fifth, reforms should restore and ensure greater national economic authority and autonomy, which have been greatly undermined by national level deregulation as well as international liberalization and new regulation. These can enable more effective, especially expansionary and counter-cyclical macroeconomic management, as well as adequate development and inclusive finance facilities.

One size clearly cannot fit all. Policy ownership will ensure greater legitimacy, and should include capital account regulation and choice of exchange rate regime. As likely international financial reforms are unlikely to adequately provide what most developing countries need, national policy independence in regulatory and interventionist functions must be assured.

Regional cooperation
Finally, appreciation is growing of the desirability of regional monetary cooperation in the face of growing international financial challenges. The Japanese proposal for an Asian monetary facility soon after the outbreak of the 1997 crises could have helped check and manage the crises, but US opposition blocked it. With its opposition to more pro-active global initiatives, alternative regional arrangements cannot also be blocked.

Such regional arrangements also offer an intermediate alternative between national and global levels of action and intervention, besides reducing the monopoly power of global authorities. To be effective, regional arrangements must be flexible, but also credible and capable of both crisis prevention and management.

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G20’s Record Does Not Inspire Hopehttp://www.ipsnews.net/2017/07/g20s-record-not-inspire-hope/?utm_source=rss&utm_medium=rss&utm_campaign=g20s-record-not-inspire-hope http://www.ipsnews.net/2017/07/g20s-record-not-inspire-hope/#respond Fri, 07 Jul 2017 13:35:33 +0000 Anis Chowdhury and Jomo Kwame Sundaram http://www.ipsnews.net/?p=151199 The G20 leaders meeting in Hamburg, Germany, on 7-8 July comes almost a decade after the grouping’s elevation to meeting at the heads of state/government level. Previously, the G20 had been an informal forum of finance ministers and central bank governors from advanced and emerging economies created in 1999 following the 1997-1998 Asian financial crisis. […]

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By Anis Chowdhury and Jomo Kwame Sundaram
SYDNEY and KUALA LUMPUR, Jul 7 2017 (IPS)

The G20 leaders meeting in Hamburg, Germany, on 7-8 July comes almost a decade after the grouping’s elevation to meeting at the heads of state/government level. Previously, the G20 had been an informal forum of finance ministers and central bank governors from advanced and emerging economies created in 1999 following the 1997-1998 Asian financial crisis.

Expectations of the Hamburg G20 summit are now quite modest, and there is greater media and public interest in the bilateral meetings around the event. It is a sad reminder that needed reforms to improve the world economy and the welfare of its people are unlikely to come from the G20, and tragically, from any other quarter for some time to come.

Anis Chowdhury

The new grouping’s record in steering the global economy since the first summit in Washington, DC in November 2008 after the global financial crisis (GFC) was acknowledged by financial markets to have begun a couple of months before.

London Summit’s high point
At the following April 2009 London Summit, hosted by Gordon Brown, the G20 leaders demonstrated unprecedented solidarity in confronting the global meltdown with financial packages for the IMF, World Bank and others worth USD1.1 trillion. The London financial package included USD250 billion to help developing countries secure trade finance in the face of financial uncertainty.

These measures succeeded in turning the tide, with world economic growth recovering robustly from minus 2.1% in 2009 to plus 4.1% in 2010, exceeding the pre-crisis 2007 level of 3.8%. G20 boosters are inclined to claim that the London Summit pulled the global economy from the cusp of the first post-Second World War “great depression”.

However, there has been little evidence of how the funds may have saved the world economy. There has been modest trade growth since 2008 — after earlier sustained trade expansion — as most G20 member countries introduced essentially ‘protectionist’ trade measures despite their declared commitment to the contrary. The leaders also agreed to develop new financial regulations and improve financial supervision, but the patchwork which emerged has had limited and mixed consequences.

Toronto U turn
G20 leadership, evident at the April 2009 London summit, was abdicated with its U turn at the June 2010 Toronto summit while claiming success for its earlier collective efforts. The Canadian hosts trumpeted its own strong recovery from around -3% in 2009 to +3% in 2010 as the G20 exaggerated hints of recovery to pave the way for ‘fiscal consolidation’ instead.

Expectations of the Hamburg G20 summit are now quite modest, and there is greater media and public interest in the bilateral meetings around the event. It is a sad reminder that needed reforms to improve the world economy and the welfare of its people are unlikely to come from the G20, and tragically, from any other quarter for some time to come.

Jomo Kwame Sundaram. Credit: FAO

Canada received strong support from Germany and Japan which also claimed strong recoveries. Further support came from the International Monetary Fund (IMF) and the European Central Bank (ECB) which invoked the ‘expansionary fiscal consolidation hypothesis’ to claim that urgent U turns would boost investor confidence to sustain economic recovery.

The U turn from Keynesian-style debt-financed fiscal stimulus measures deprived the modest recovery of the means for sustaining renewed expansion, thus ensuring the GFC’s ‘Great Recession’, which has dragged on in much of the North for almost a decade since, dragging down world and developing country growth in recent years.

Recession self-inflicted
Despite warnings from the United Nations and a few others against premature fiscal consolidation, G20 leaders at the Toronto Summit agreed to cut budget deficits in half by 2013, and to eliminate deficits altogether by 2016! The decision triggered a double dip recession in Japan and some Eurozone countries.

Canada and Germany, which pushed for rapid fiscal consolidation, have since experienced significantly slower growth averaging 1.8% and 1.2% respectively. The global economy thus began a prolonged period of anaemic growth averaging around 2.5% per annum.

Clearly, G20 economic growth continues to be modest. They are still unable to attain the 2010 growth rate, giving the lie to the ‘expansionary fiscal consolidation’ claim. The IMF has since acknowledged that its initial recommendation of rapid fiscal consolidation was based on “back of the envelope” calculations!

Research also shows that fiscal consolidation has exacerbated income inequality while fiscal consolidation basically began once financial sectors had been rescued from the consequences of their own greedy operations.

Ersatz substitute
Lack of accountability to the rest of the world has also meant that the G20 continues to undermine multilateralism. Inclusive multilateralism is now being threatened on many other fronts as well, not least by the Trumpian turn in the White House and the growing tendency for the Europeans to act as a bloc.

The G20’s broader membership has made negotiations and consultations more difficult than those involving the G7 grouping of major developed economies. But its greater inclusion and diversity has also ensured its superior record compared to the G7, which continues to decline in relevance.

As the Toronto U turn and its devastating legacy remind us, the G20’s finest moment after its London summit in 2009 was easily reversed through host country efforts although the US and China were acting quite differently in practice.

Expectations of the Hamburg G20 summit are now quite modest, and there is greater media and public interest in the bilateral meetings around the event. It is a sad reminder that needed reforms to improve the world economy and the welfare of its people are unlikely to come from the G20, and tragically, from any other quarter for some time to come.

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1997 Asian Crisis Lessons Losthttp://www.ipsnews.net/2017/07/1997-asian-crisis-lessons-lost/?utm_source=rss&utm_medium=rss&utm_campaign=1997-asian-crisis-lessons-lost http://www.ipsnews.net/2017/07/1997-asian-crisis-lessons-lost/#respond Wed, 05 Jul 2017 07:27:42 +0000 Jomo Kwame Sundaram http://www.ipsnews.net/?p=151164 Jomo Kwame Sundaram, a former economics professor and United Nations Assistant Secretary-General for Economic Development, received the Wassily Leontief Prize for Advancing the Frontiers of Economic Thought in 2007.

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Washington Consensus policy advocacy of financial liberalization from the 1980s had uneven consequences for the East Asia region. Credit: Kara Santos/IPS

By Jomo Kwame Sundaram
KUALA LUMPUR, Jul 5 2017 (IPS)

After months of withstanding speculative attacks on its national currency, the Thai central bank let it ‘float’ on 2 July 1997, allowing its exchange rate to drop suddenly. Soon, currencies and stock markets throughout the region came under pressure as easily reversible short-term capital inflows took flight in herd-like fashion. By mid-July 1997, the currencies of Indonesia, Malaysia and the Philippines had also fallen precipitously after being floated, with stock market price indices following suit.

Most other economies in East Asia were also under considerable pressure. In November 1997, despite South Korea’s more industrialized economy, its currency also collapsed following withdrawal of official support. Devaluation pressures also mounted due to the desire to maintain a competitive cost advantage against the devalued currencies of Southeast Asian exporters.

Blind spot
Mainstream or orthodox economists first attempted to explain the unexpected events from mid-1997 in terms of orthodox theories of currency crisis. Many made much of current account or fiscal deficits, real as well as imagined.

When the conventional wisdom clearly proved to be unconvincing, the East Asian miracle was turned on its head. Instead, previously celebrated elements of the regional experience, e.g., government interventions and ‘social capital’, were blamed for the crises.

The media emphasized ‘cronyism’, i.e., government favouritism for particular business interests, and poor corporate governance. These were real problems, but irrelevant to explaining the crisis. Increasingly, blame was put on poor sequencing of financial liberalization, but not on capital account liberalization itself.

This blind spot has helped ensure that the most important lessons from the crisis have been largely lost. Other currency and financial crises from the 1990s make clear that key lessons have not been appreciated. Instead, erroneous lessons drawn by orthodox economists, financial analysts and the media have muddied the policy discourse. Also, the policies and policymakers responsible for the crisis need to be identified and addressed as they have come back, albeit in different guises.

Wrong lessons have diverted attention away from the intellectual and ideological bases of the erroneous thinking, analyses and policies responsible for the crises. Such ideas are largely, though not exclusively associated with Washington Consensus’ advocacy of economic liberalization at both national and global levels. Thus, drawing critical lessons would undermine the intellectual, analytical and policy authority of the interests and institutions involved.

Finance rules
Although there was analytical work critical of East Asia’s ‘miracle’ before the crisis, none actually anticipated the debacle or saw its roots in financial liberalization. Meanwhile, transnational dominance of industry in Southeast Asia facilitated the ascendance and consolidation of financial interests and politically influential rentiers, later deemed ‘cronies’ after 1997.

This increasingly powerful alliance successfully promoted financial liberalization in the region, both externally and internally. Southeast Asian financiers were quick to identify and capture rents from arbitrage and other opportunities offered by international financial integration. Little caution was urged in the face of greater foreign capital flows in Southeast Asia, which became more pronounced in the 1990s.

Washington Consensus policy advocacy of financial liberalization from the 1980s had uneven consequences and implications for the region. This eventually led to new kinds of currency and financial crises due to easily reversed capital inflows, including foreign bank borrowings and portfolio capital flows.

As the interests of domestic financial capital did not fully coincide with those of international finance, the impact of financial globalization was partial and uneven. For instance, both Malaysia and Thailand wanted capital inflows to finance current account deficits. This was largely due to their service account deficits, mainly for imported services and investment income payments abroad. Such deficits grew with imports for consumption and construction, as well as greater ease of investment, including speculation, abroad.

There is no evidence that such capital inflows contributed significantly to accelerating the growth of export earnings. Instead, they blew up asset price bubbles, which inevitably burst with devastating economic, social and political consequences.

Lessons not learnt

Two decades later, there is apparently still no consensus on the East Asian crises and their causes. But contrary to the impression conveyed by the Western media, most serious analysts now agree that the crises essentially began as currency crises of a new type, different from those previously identified with current account deficits, or fiscal profligacy, or even macroeconomic indiscipline more generally.

They also agree that the crises started off as currency crises and quickly became more generalized financial crises, before affecting the real economy. Reduced financial liquidity, inappropriate official policy responses and ill-informed, ‘herd’-like market responses then exacerbated this chain of events.

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Southeast Asia: From Miracle To Debaclehttp://www.ipsnews.net/2017/06/southeast-asia-miracle-debacle/?utm_source=rss&utm_medium=rss&utm_campaign=southeast-asia-miracle-debacle http://www.ipsnews.net/2017/06/southeast-asia-miracle-debacle/#respond Thu, 29 Jun 2017 14:40:13 +0000 Jomo Kwame Sundaram http://www.ipsnews.net/?p=151104 Jomo Kwame Sundaram, a former economics professor and United Nations Assistant Secretary-General for Economic Development, received the Wassily Leontief Prize for Advancing the Frontiers of Economic Thought in 2007.

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For many, the "Southeast Asian" has turned out to be nothing more than a misleading illusion. Credit: IPS

For many, the "Southeast Asian" has turned out to be nothing more than a misleading illusion. Credit: IPS

By Jomo Kwame Sundaram
KUALA LUMPUR, Jun 29 2017 (IPS)

The World Bank and other influential international financial institutions and development agencies have been touting Southeast Asian (SEA) newly industrializing countries as models for emulation, especially by African developing countries seeking to accelerate their development transformations. But these recommendations are usually based on misleading analysis of their rapid growth and structural transformation.

Sub-regional differences
Typically, various cultural and other justifications are offered to justify recommending SEA, rather than Northeast Asia (NEA), as the better sub-region for emulation. Consequently, important lessons from East Asian experiences have been misrepresented, drawing erroneous lessons from the region’s undoubtedly impressive economic performance during its high growth periods.

Despite SEA’s much greater resource wealth, NEA’s growth performance was superior over the long term in the second half of the 20th century until the 1990s, when Japanese economic growth collapsed following its financial liberalization ‘big bang’ shock and the strong yen (endaka) decade from 1985. For over two decades, growth in Japan, Korea and Taiwan averaged 8 percent, compared to 6 percent in Malaysia, Thailand and Indonesia.

Population growth has been much lower in NEA, increasing per capita differences over at least a quarter century. While income inequalities have grown in most of SEA, they have remained lower in NEA. Hence, economic welfare improvements have been much greater in NEA.

Education
Most accounts of the ‘East Asian miracle’ emphasize education. But educational achievements in Indonesia, Malaysia and Thailand have been greatly inferior to NEA’s. Ironically, the Philippines, which long had the highest share of tertiary educated in East Asia, has not had an impressive economic growth record.

Thus, actual experience compels scepticism about the facile policy recommendations that governments should enhance human resources, but only subsidize primary schooling. Instead, there is now compelling evidence that industrialization and productivity gains have been slowed by the region’s modest progress on education.

Foreign direct investment
Greater SEA dependence on foreign direct investment (FDI) has impeded the development of industrial and technological capacities and capabilities, raising concerns as to whether their industrialization processes were sustainable.

The region has become less attractive for new FDI in the face of growing competition from alternative locations seeking to be part of ‘global value chains’. Meanwhile, the supposed ‘middle income country’ trap in SEA is essentially due to limited development of indigenous industrial and technology capacities owing to modest ‘technological learning’ from the presence of ‘foot-loose’ FDI temporarily locating parts of their ‘value chains’ in the country.

Investment policy reform to promote more sophisticated industries in SEA is long overdue and needs to be coordinated with technology policy reform. SEA governments have not been conducive to elaborating and implementing appropriate investment and technology policies. The rest of SEA has not emulated Singapore’s pro-active technology policy attracting desired investments in line with its own national development priorities besides developing capacities and capabilities using government investments.

Financial havoc

Favouring FDI has weakened the influence of domestic industrial capital in the region, allowing financial interests, both domestic and foreign, to become more influential. Finance capital has developed symbiotic relations with other politically influential rentiers, dubbed ‘cronies’ following the 1997-1998 (mainly Southeast) Asian financial crisis. This powerful alliance successfully promoted partial financial liberalization in the region before the crisis.

Although capital account liberalization greatly increased short-term capital flows, which precipitated the 1997 crisis without increasing FDI, the region has opened up again to short-term capital inflows after accumulating reserves believed sufficient to withstand future crises. This is wrongly referred to as ‘self-insurance’ although there is no insurance element involved. Meanwhile, regional monetary cooperation has advanced beyond earlier bilateral swap arrangements, but there has been little progress beyond that.

Policies
After 1997, the ‘Asian model’ fell into disrepute as the East Asian miracle was written off as a debacle. Hence, it is crucial to also recognize the reasons for its inferiority and vulnerability during the high growth period from the 1960s to the 1990s when the Asian financial crisis exposed its new vulnerabilities.

But it would be a mistake to throw the baby out with the bathwater as there are undoubtedly important lessons to be learnt from SEA as well. Also, some of the very policies that the West has criticized were actually crucial for rapid growth and structural transformation in East Asia.

NEA has generally had more sophisticated and effective industrial policy compared to SEA. This accounts, in no small way, for the major differences in industrial and technological capabilities between the two East Asian sub-regions. Of course, there have also been different industrial policy orientations, emphases and instruments within SEA, sometimes involving discernible contrasts in investment and technology policies.

As these policies were inappropriately or prematurely undermined or terminated, the ‘miracle’ ended, often rather abruptly, due to the financial crises precipitated by liberalization. Contrary to popular Western narratives of the debacle, East Asia’s previously successful ‘catch-up’ efforts had in fact been undermined by financial liberalization promoted by the Washington Consensus.

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Putting the Spotlight on Women Migrant Workershttp://www.ipsnews.net/2017/06/putting-spotlight-women-migrant-workers/?utm_source=rss&utm_medium=rss&utm_campaign=putting-spotlight-women-migrant-workers http://www.ipsnews.net/2017/06/putting-spotlight-women-migrant-workers/#respond Sat, 24 Jun 2017 22:25:30 +0000 Roshni Majumdar http://www.ipsnews.net/?p=151040 Migrant workers, and their economic contribution to the development of both the country of origin and the host country, have caught the eye of governments and policymakers worldwide. But the hardships faced by women migrants, who disproportionately bear the brunt of discrimination at work, are often swept under the rug. This is why, experts from […]

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Eni Lestari Andayani Adi (Indonesia), Chairperson of the International Migrants Alliance (IMA), addresses the opening segment of the United Nations high-level summit on large movements of refugees and migrants. Credit: UN Photo/Cia Pak

By Roshni Majumdar
UNITED NATIONS, Jun 24 2017 (IPS)

Migrant workers, and their economic contribution to the development of both the country of origin and the host country, have caught the eye of governments and policymakers worldwide.

But the hardships faced by women migrants, who disproportionately bear the brunt of discrimination at work, are often swept under the rug.

This is why, experts from UN Women and the United Nations University (UNU) in New York came together this week to discuss and raise awareness about migrant women workers’ rights.

In 2015, female migrant workers, who number 117 million, contributed about half of the world’s total remittance flow.

As labour markets shuffle in the new world order, two distinct patterns have emerged. Women have increasingly moved to hospitality and nursing industries, or the “domestic” economy, as well as areas previously dominated by men, such as agriculture. Demand has continued to rise in developed countries, but women’s contributions have been severely underappreciated.

By contributing to the gaps of the labour economy, women have lifted the working age population, and contributed to technological and human capital. By virtue of their soft skills, they have closed the gaps of a receding tax base, undermined by an aging population, and have come to the assistance of the elderly in the chaos of cutbacks in the health sector.

In the Philippines, for instance, which is the world’s third highest remittance receiving country, women migrant workers have been the sole breadwinners for their family. Typically, women largely migrate to Europe and North America.

Still, with the change in the world order and the growth of newer economies, this flow is likely to change. Experts predict that the flow from the Global North to the Global South will shift, as migrants move into the fast growing economies of Asia, like China and India.

“Migration is going to continue because a single country will not have all the resources in and of itself. Even if technology advances, we are not going to put our children in the hands of a robot,” Dr. Francisco Cos Montiel, a senior research officer at UNU, told IPS.

Inkeri Von Hase, an expert on gender and migration issues, told IPS that “we have to prioritise women’s empowerment so they are able to realise their full potential.” The New York Declaration for Refugees and Migrants, which was adopted in 2016 with this very aim to protect and empower migrant workers, has largely failed to take into account specific rights for women’s protection.

Still, all this is not to say that all women migrant workers are necessarily victims of sexual assault and discrimination at work. Many have found a renewed sense of agency and purpose, for instance, the women who have fled violence in Guatemala and El Salvador. To ensure they can continue to tread this path, however, it becomes crucial to adopt newer policies today.

It is also significant that many migrants have become de-skilled in the process of migration, and have settled for the first jobs they found, in a bid to earn money to send home.

The new recommendations by experts in the Global Compact for Safe, Orderly, and Regular Migration report could be crucial to ensure the autonomy and independence of women migrant workers across the world.

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UN Response Teams Underfunded as Costs Hit Staggering $23.5 Billionhttp://www.ipsnews.net/2017/06/un-response-teams-underfunded-costs-hit-staggering-23-5-billion/?utm_source=rss&utm_medium=rss&utm_campaign=un-response-teams-underfunded-costs-hit-staggering-23-5-billion http://www.ipsnews.net/2017/06/un-response-teams-underfunded-costs-hit-staggering-23-5-billion/#respond Fri, 23 Jun 2017 05:24:11 +0000 Roshni Majumdar http://www.ipsnews.net/?p=151009 UN response teams that help the most vulnerable people in the world are still largely underfunded, a new status report has revealed. The funding available to the teams is no match for the record number of people—141 million—who need assistance today. Newer and protracted conflicts have raised the bar of funding requirements to a staggering […]

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A wide view of a briefing on the humanitarian affairs segment (scheduled to take place in Geneva, 21 to 23 June) of the 2017 session of the Economic and Social Council (ECOSOC). Credit: UN Photo/Manuel Elias

By Roshni Majumdar
UNITED NATIONS, Jun 23 2017 (IPS)

UN response teams that help the most vulnerable people in the world are still largely underfunded, a new status report has revealed.

The funding available to the teams is no match for the record number of people—141 million—who need assistance today.

Newer and protracted conflicts have raised the bar of funding requirements to a staggering 23.5 billion dollars. International donors, since the launch of Humanitarian Appeal in 2016 by the UN and its partners, have contributed to a total of 6.2 billion dollars.

The lack of funding is especially worrying as many countries have seen a resurgence in violent conflicts – for instance, rapid escalation of fighting in the Democratic Republic of Congo’s central Kasai province. Many others are threatened by natural disasters, such as the drought in Kenya, or flooding in Peru. Still others, almost 20 million people, are at risk in countries at the brink of a famine, such as northeastern Nigeria, Somalia, South Sudan and Yemen.

However, teams have worked hard to reach people, and have provided crucial assistance to many. The numbers, although small in comparison to the people who need aid, is worthy of recognition to the commitment of the UN Humanitarian Appeal. Some 5.8 million people in war-torn Yemen, and 3 million people in famine-struck South Sudan have, for instance, received life-saving assistance.

“Funding to response plans is a high-impact investment as they are prioritized on the basis of thorough needs assessment and analysis. Supporting the plans also provides the most neutral and impartial aid,” said Stephen O’Brien, the Under Secretary-General for Humanitarian Affairs and Emergency Relief Coordinator.

The report highlights the pressing need for financial aid to support people across 37 countries, and urges donors to step up their contributions.

“With generous donor support, humanitarian partners have swiftly scaled up to deliver record levels of life-saving assistance in challenging and often dangerous environments. Donors have invested in these efforts but we are in a race against time. People’s lives and well-being depend on increasing our collective support,” said O’Brien.

The Economic and Social Council (ECOSOC) brings together Member States, United Nations entities, humanitarian and development partners, private sectors and affected communities at the Humanitarian Affairs Segment (HAS) to discuss urgent humanitarian issues each year in June. The event this year runs from 21st until 23rd June

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East Asia’s Real Lessonshttp://www.ipsnews.net/2017/06/east-asias-real-lessons/?utm_source=rss&utm_medium=rss&utm_campaign=east-asias-real-lessons http://www.ipsnews.net/2017/06/east-asias-real-lessons/#respond Wed, 21 Jun 2017 17:20:45 +0000 Jomo Kwame Sundaram http://www.ipsnews.net/?p=150996 Jomo Kwame Sundaram, a former economics professor and United Nations Assistant Secretary-General for Economic Development, received the Wassily Leontief Prize for Advancing the Frontiers of Economic Thought in 2007.

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International recognition of East Asia’s rapid economic growth, structural change and industrialization ("East Asian Miracle") grew from the 1980s.

To better learn from ostensible miracles, it is necessary to demystify them. Credit: IPS

By Jomo Kwame Sundaram
KUALA LUMPUR, Jun 21 2017 (IPS)

International recognition of East Asia’s rapid economic growth, structural change and industrialization grew from the 1980s. In Western media and academia, this was seen as a regional phenomenon, associated with some commonality, real or imagined, such as a supposed ‘yen bloc’.

Others had a more mythic element, such as ‘flying geese’, or ostensible bushido and Confucian ethics. Every purported miracle claims a mythic element, invariably fit for purpose. After all, miracles are typically attributed to supernatural forces, and hence, cannot be emulated by mere mortals. Hence, to better learn from ostensible miracles, it is necessary to demystify them.

The World Bank’s 1993 East Asian Miracle (EAM) volume is the most influential document on the subject. It identified eight high-performing Asian economies: Japan, Hong Kong, three first-generation newly industrialized economies, namely South Korea, Taiwan and Singapore, and three second-generation South East Asian newly industrializing countries, viz, Malaysia, Thailand and Indonesia. Despite a title implying geo-spatial commonality, the study denied the significance of geography and culture, and specifically excluded China, the elephant in the region.

Strategic interventions?

The book identified six state interventions as important, approving of four ‘functional’ interventions, but sceptical of two ‘strategic’ interventions. Functional interventions supposedly compensated for market failures, while strategic interventions were deemed more market-distortive.

These two ‘strategic’ interventions are in the areas of finance, specifically what it calls directed (targeted) and subsidized credit, and international trade, particularly what is often referred to as ‘industrial policy’, or more rarely as ‘investment and technology policy’.

Careful consideration of the accelerated East Asian growth and transformation experiences underscore that such interventions were mainly responsible for the superior performance of the Northeast Asian HPAEs compared to their Southeast Asian counterparts.

Industrial investments

Debates over Northeast Asian industrialization continue, but the pioneering work of American political economists Chalmers Johnson and Alice Amsden was undoubtedly seminal. Both showed that Japanese, Korean and Taiwanese government measures were quite different from typical World Bank development policy advice.

Successful finance ministry and central bank efforts to keep interest rates positive, but low, were crucial for accelerating industrial investments. From the mid-1970s, more orthodox Western economists began to characterize this as constituting ‘financial repression’, for depressing interest rates, the incentive to save and funds available for investment.

Only later did other Western economists explain this Korean anomaly in terms of ‘financial restraint’ to overcome financial market failures. But few have noted that savings rates actually follow, rather than determine investment rates. Meanwhile, cultural explanations have also been invoked to explain East Asia’s high savings and investment rates.

Ownership matters
Subsidized and directed (or targeted) credit also promoted desired investments. Fiscal and other policies also encouraged reinvestment of profits, rather than maximizing ‘shareholder value’, while other incentives encouraged desired investments. Where private investments were not forthcoming, the governments themselves made needed investments despite active discouragement by international development banks.

Strict controls on capital outflows, especially when foreign exchange resources were still scarce, also served to discourage capital flight. Northeast Asian economies were also careful to distinguish between long-term foreign direct investment (FDI) and short-term portfolio investment, or ‘hot money’.

Perhaps owing to Bank preference for FDI, ostensibly to close both the ‘savings-investment’ and ‘foreign exchange’ gaps, the EAM also favoured FDI and did not consider ownership important. However, during the early decades of high growth before the 1990s, Northeast Asian governments encouraged national ownership of industrial enterprises.

This policy served to promote vertically and horizontally integrated industrial conglomerates in the case of Korean chaebol and Japanese keiretsu. (Zaibatsu were suppressed after the Second World War as they were held responsible for the pre-war Japanese military industrial complex.) Instead of FDI, South Korea encouraged licensing and, if necessary, joint-ventures to promote technology transfer.

Singapore and Malaysia in Southeast Asia have especially sought to attract FDI, initially for political reasons. Singapore desired strong Western support after establishing a new state in 1965. Since then, FDI has been attracted as part of a pro-active technology policy complemented by government policies, including investments. Attracting FDI to accelerate technology development is quite different from capital account liberalization enabling short-term financial inflows.

Trade policies
The Japanese, Korean and Taiwanese governments pursued import substituting industrialization policies from the 1950s, but later encouraged export orientation as well. Infant industries were provided with effective protection conditional on export promotion, effectively requiring firms to quickly become internationally competitive.

By protecting firms temporarily, depending on the product to be promoted, and by requiring certain output shares be exported within pre-specified periods, discipline was imposed on firms in return for the support provided. Such policies forced firms to achieve greater economies of scale and accelerate learning to reduce production costs quickly.

Requiring exports has also meant producers have had to achieve international consumer quality standards quickly, which accelerated progress in product and process technology. This ‘carrot and stick’ approach induced many firms to rapidly become internationally competitive.

Thus, the very industrial, trade and financial policies rejected by the Bank were in fact necessary for East Asia’s achievements. Some policies were inappropriately and prematurely undermined or terminated, e.g., with Japan’s financial ‘big bang’, with disastrous consequences.

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UN Work Stoppage in Geneva Halts Human Rights Meetinghttp://www.ipsnews.net/2017/06/un-work-stoppage-geneva-halts-human-rights-meeting/?utm_source=rss&utm_medium=rss&utm_campaign=un-work-stoppage-geneva-halts-human-rights-meeting http://www.ipsnews.net/2017/06/un-work-stoppage-geneva-halts-human-rights-meeting/#respond Mon, 19 Jun 2017 21:53:10 +0000 Thalif Deen http://www.ipsnews.net/?p=150960 As UN staffers in Geneva threaten a strike, protesting a proposed salary cut of over 7.5 percent, a token two-hour “work stoppage” last week forced the Human Rights Council to suspend its meeting. But there is more to come, warned Ian Richards, President of the 60,000-strong Coordinating Committee of International Staff Unions and Associations (CCISUA). […]

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UN Work Stoppage in Geneva Halts Human Rights Meeting

Credit: UN Photo

By Thalif Deen
UNITED NATIONS, Jun 19 2017 (IPS)

As UN staffers in Geneva threaten a strike, protesting a proposed salary cut of over 7.5 percent, a token two-hour “work stoppage” last week forced the Human Rights Council to suspend its meeting.

But there is more to come, warned Ian Richards, President of the 60,000-strong Coordinating Committee of International Staff Unions and Associations (CCISUA).

Richards told IPS that a strike would only ever be the last resort. But he accused the United Nations of failing to practice in its own backyard what it preaches to the rest of the world, particularly on labour and human rights.

“Had there been a proper negotiation system in place for staff to have a say in their salaries as the UN preaches to countries, we could have avoided all this.”

“Having said that”, he pointed out, “if there is no avenue for meaningful dialogue, UN staff will have no choice but to escalate their actions.” At the end of the day this isn’t about a budget cut, he noted.

Currently, the UN staff in Geneva number over 5,400 in the professional category of employees.

A resolution adopted by the Geneva staff, at an “extraordinary general meeting” early June, blamed the New York-based International Civil Service Commission (ICSC) for “failing to address the deep concerns and questions raised by staff federations and the heads of 10 Geneva-based agencies over the proposed cut to post adjustment that would result in a reduction in take-home pay of 7.5 per cent (or more).”

The agencies based in Geneva include the International Labour Organization (ILO), the World Health Organization (WHO), the UN Conference on Trade and Development, (UNCTAD), the World Intellectual Property Organization (WIPO), the UN High Commissioner for Refugees, the UN Conference on Disarmament and the Office of the UN High Commissioner for Human Rights (OHCHR), among others.

The ICSC, which determines UN salary structures, has awarded staff in New York a pay rise of 2.2 percent, which they rightfully deserve, said Richards. “In the end it’s about some pushing to see what they can get away with,” he added.

The CCISUA will be joined by the 30,000-strong Federation of International Civil Servants Association (FICSA) in any collective action.

The Human Rights Council, the primary UN body dealing with human rights, was forced to suspend its sittings last Friday, but the Geneva staff decided not to disrupt a meeting negotiating an end to the long-drawn-out Syrian civil war which has triggered one of the world’s major humanitarian crises.

Rolando Gómez, Public Information Officer of the Human Rights Council Branch of the Office of High Commissioner for Human Rights (OHCHR) in Geneva confirmed to IPS about the suspension of the Human Rights Council meeting, resulting from the work stoppage.

“It was the first time such a suspension took place at the Council for such a reason,” he added.

Gomez said the Human Rights Council recognises the right of UN staff to demonstrate against the proposed pay cut and did not wish to take any action that would prevent them from doing so.

“The Council also reiterates its immense gratitude to UN staff at Geneva for the first-rate, indispensable assistance they provide in servicing their meetings throughout the year,” he declared.

Meanwhile, in a letter to staff unions in Geneva, Michael Møller, Director-General of the UN Office at Geneva (UNOG), said staff representatives have informed the Executive Heads of all Geneva-based common system organizations that they are “planning actions throughout this summer, including work stoppages” with respect to the recent decision of the ICSC on post adjustment levels in Geneva.

This is also refers to an email last week from the UNOG Staff Council with the heading: “Upcoming work stoppage”.

“UN Geneva recognizes and respects the right of staff to freedom of association. Staff are allowed to meet on the UN Geneva premises in a non-disruptive representative manner. UN Geneva also acknowledges the dissatisfaction of staff resulting from the ISCS’s determination on post adjustment for Geneva.”

The letter further warned: “Notwithstanding the above, staff are reminded that actions which disrupt or otherwise interfere with any meeting or other official activity of the Organization, may be considered in contravention to the obligations under staff rule 1.2 (g). This includes any and all conduct which is intended, directly or indirectly, to interfere with the ability of staff or delegates to discharge their official functions.”

Based on guidance from UNHQ (in New York), staff are also reminded that action, such as work stoppage or other collective action, may be considered as unauthorized absence in line with staff regulations and rules, the letter added.

He also said that staff should take note that discussions are still ongoing with the ICSC regarding the implementation of the post adjustment changes, “and we should all ensure that we do not to jeopardize the outcome of such discussions.”

“This is also to call on all of us to act professionally and in a manner befitting our status as international civil servants,” the letter added.

Richards told IPS: “We’re disappointed that UN management should have resorted to threatening staff.”

Asked for his comments, UN spokesperson Stephane Dujarric told reporters last week: “The guidance we have from our colleagues in Geneva is that they fully acknowledge the right of staff to freedom of association, which is a basic right. Staff were allowed to meet on the UN… on the premises in Geneva in a non disruptive manner.”

“I think our colleagues in Geneva have acknowledged the dissatisfaction of staff resulting from the issues having to do with the International Civil Service Commission on post adjustments in Geneva. My understanding is that negotiations are still going on, on the implementation of these issues, but we’re all international civil servants, and we need to respect the rules,” he noted.

Richards also said that staff from organizations across Geneva took part in the work stoppage, with the aim of sending a strong message to New York management and the ICSC, that Geneva staff won’t allow their pay to be cut on the basis of absence of negotiations and numerous questions raised about the data and calculations.

“During the stoppage we held a staff meeting, attended by a large number of staff, including directors and staff from HR and security. We have a video which shows a lot of anger.”

Asked what the next step would be, Richards said: “Next steps are the report from a group of statisticians who visited the ICSC last week to check their data and calculations. The ICSC will revisit the issue in Vienna in July and we hope will change their conclusions.”

“It is important to note, he said, that this isn’t about budget cuts, as New York, where ICSC is based, recently got a 2.2 percent pay rise. However, the un-transparent approach used by the ICSC means that another 85 duty stations could be in line for a cut,” he added.

The writer can be contacted at thalifdeen@aol.com

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Migrant Workers Pour Trillions into World Economyhttp://www.ipsnews.net/2017/06/migrant-workers-pour-trillions-world-economy/?utm_source=rss&utm_medium=rss&utm_campaign=migrant-workers-pour-trillions-world-economy http://www.ipsnews.net/2017/06/migrant-workers-pour-trillions-world-economy/#respond Thu, 15 Jun 2017 16:54:12 +0000 Roshni Majumdar http://www.ipsnews.net/?p=150891 A new report by the International Fund for Agricultural Development (IFAD) says the flow of money from migrants—commonly located in developed countries—to their families in lower income countries has doubled over the last decade. Dubbed the remittance flow, it increased by 51 percent—from 296 billion dollars in 2007 to 445 billion in 2016—lifting families out […]

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Press Conference on IFAD report at the UN Foundation (06/14/17)

By Roshni Majumdar
UNITED NATIONS, Jun 15 2017 (IPS)

A new report by the International Fund for Agricultural Development (IFAD) says the flow of money from migrants—commonly located in developed countries—to their families in lower income countries has doubled over the last decade.

Dubbed the remittance flow, it increased by 51 percent—from 296 billion dollars in 2007 to 445 billion in 2016—lifting families out of poverty across the world.

Migrants in the United States typically send the largest amount of money, making the U.S. the biggest benefactor, closely followed by Saudi Arabia and Russia, according to the report.

In fact, the top ten countries, largely in Europe and the Gulf Council, account for half of the annual flows.

The increase in flow of money brings good news. First, it increases the leverage of migrant workers all over the world. Second, it boosts sustainable development in countries which benefit from the money, notably China, India and the Philippines, which tops this list.

Asia receives nearly 55 percent of the total money sent from developed countries.

The money sent is used by families to achieve personal goals, such as improving healthcare, educa-tion and food security. This is why, despite the seemingly staggering numbers, Gilbert F. Houngbo, the President of IFAD, said “It is not about the money being sent home, it is about the impact on people’s lives.”

Still, even if the leading blocs account for half of the flow, they represent a tiny fraction of their country’s GDP.

For instance, migrant earnings in the U.S. account for almost 4 percent of the GDP, while the money they send back to their families represents only 0.65 percent of the GDP.

Generally, 85 percent of a migrant’s income remains within the host country.

The value of the money sent back cannot be underestimated—most families rely on this income, which can make up to 60 percent of the household income in rural areas.

However, many criticize the high costs of transactions, especially in rural areas which receive the bulk of remittances.

Pedro de Vasconcelos, lead author of the IFAD report speaks at a press conference (06/14/17).

Speaking about the prospect of building better infrastructure to ensure easy and cheap flow of money, Pedro de Vasconcelos, the lead author of the report, told IPS that it was particularly im-portant in rural areas, “where remittances count the most, and where we can have them count more.” He added that “simply opening a saving account can transform the lives of people” and can go a long way towards eradicating poverty.

In the end, there is a lot of room for innovation and growth as the demand for migrant labour will continue to grow in developed countries.

To understand the scale of this flow, it is important to understand the number of people involved: one in every seven people in the world is directly impacted—either as a sender or a beneficiary. This means that a billion people in the world are involved in the transaction in some way. Even when times get tough, as during the financial crisis of 2008, remittance flows remained steady.

There are two overarching reasons that explain the growth of the flow, and why it’ll continue.

First, it reflects the demand for migrant labour as populations in high-income countries grow older with advances in medicine.

Second, migrant workers are committed to make ends meet for their families at home, and readily make sacrifices—such as eating fewer meals—to ensure money they can send home. This is why this corridor of money has been increasingly referred to as “Family Remittances.”

The flow of money has greatly exceeded migratory flow, which only grew by 28 percent over the last decade. This means that there are as many 800 million people across the world who are reliant on migrant workers, who are about 200 million in number.

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East Asian Miracle Myth Makinghttp://www.ipsnews.net/2017/06/east-asian-miracle-myth-making/?utm_source=rss&utm_medium=rss&utm_campaign=east-asian-miracle-myth-making http://www.ipsnews.net/2017/06/east-asian-miracle-myth-making/#respond Wed, 14 Jun 2017 10:28:19 +0000 Jomo Kwame Sundaram http://www.ipsnews.net/?p=150876 Jomo Kwame Sundaram, a former economics professor and United Nations Assistant Secretary-General for Economic Development, received the Wassily Leontief Prize for Advancing the Frontiers of Economic Thought in 2007.

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At the World Bank, the Japanese Executive Director argued that the Washington Consensus menu of policy advice and conditionalities had resulted in the 1980s’ ‘lost decade’ in Latin America and Africa. In contrast, the East Asian region had seen rapid growth and industrialization. Credit: IPS

By Jomo Kwame Sundaram
KUALA LUMPUR, Jun 14 2017 (IPS)

Even before the term ‘Washington Consensus’ (WC) was popularized, it was already coming under great criticism despite the ‘counter-revolutions’ against ‘development economics’ and Keynesian economics associated with Thatcherism and Reaganomics. At the World Bank, the Japanese Executive Director argued that the WC menu of policy advice and conditionalities had resulted in the 1980s’ ‘lost decade’ in Latin America and Africa. In contrast, the East Asian region had seen rapid growth and industrialization.

At Japanese government expense, the Bank published the East Asian Miracle (EAM) volume in 1993. But instead of recognizing that the WC was in fact the problem, the volume contributed to the myth-making which ensured its continued influence for years thereafter.

The EAM study’s eight high-performing Asian economies (HPAEs) consisted of Japan, Hong Kong and three first-generation newly industrializing economies (NIEs), namely South Korea, Taiwan and Singapore, and three second-generation South East Asian newly industrializing countries (NICs), namely Malaysia, Thailand and Indonesia, but excluded China.

It identified six types of state interventions in East Asia, only approving four ‘functional’ interventions, said to compensate for ‘market failures’, namely:
– ensuring macroeconomic discipline and balances;
– providing physical and social infrastructure;
– raising savings and investment rates; and
– providing good governance.

Macroeconomic balance
Although no one recommends reckless macroeconomic policies, there is little consensus on what constitutes sound macroeconomic policy. Although most ‘neoliberal’ economists insist on maintaining macroeconomic balances, they rarely agree on what this implies, while Keynesian economists favour counter-cyclical policies to address business cycles.

For instance, inflation was generally kept under 20 per cent in the HPAEs, but certainly not always below 10 per cent. Single digit inflation was not a common and consistent policy priority of all HPAEs during their high-growth periods. Hence, for example, Indonesia depreciated its currency regularly for many decades.

Similarly, the fiscal balance and the current account of the balance of payments were not always strictly maintained as the Bretton Woods institutions came to insist for the developing world. Many HPAEs ran large fiscal deficits to ensure high growth.

Infrastructure
Since the 1980s, the Bank has increasingly urged private provision of physical infrastructure. Except in Hong Kong, a British colony until 1993, most physical infrastructure in East Asia was provided by governments until fairly recently. HPAEs privatizing physical infrastructure provision became the basis for powerful private monopolies associated with ‘cronyism’, later blamed for the 1997-1998 Asian crisis.

Governments have been extremely important in providing social services in East Asia. But the Bank recommends universal and free primary education, and does not recommend subsidization beyond the primary level, when students should bear the full costs. Hence, about half the young people of age in Korea get tertiary education, while the shares are well over a quarter in other first-generation East Asian NIEs. If East Asian NIEs had listened to the Bank, their progress would have been slowed considerably.

Savings and investments
For some, the region’s rapid growth and industrialization were simply due to high investment and labour participation rates, rather than productivity gains: ‘perspiration rather than inspiration’. While conventional economic wisdom attributes high investment rates to high savings rates, savings rates have, in fact, followed – rather than determined – investment rates in East Asia.

After all, much of the high East Asian savings rates are due to firm savings, rather than just household savings. East Asian firms were generally able to enjoy high profits due to government interventions, subsidies, tax breaks and other incentives for favoured investments. Government policy also induced high reinvestment of these profits.

And contrary to the myth that East Asians are ‘culturally’ thrifty, unlike others, household savings in East Asia are not significantly higher than elsewhere, except for ‘forced savings’ – for employees’ retirement as mandated by law – and for children’s education.

Good governance
The notion of good governance is often used ambiguously, even tautologically. When the economy is doing well, it is attributed to good governance, and when it is not, governance is deemed to have been poor. Hence, governance does not really explain economic performance.

Instead, Mushtaq Khan has shown that developed countries generally score well on good governance indicators while developing countries do not. Governance indicators do not clearly distinguish developing countries growing rapidly from those which do not.

In the late 1960s, economics Nobel laureate Gunnar Myrdal argued, in his three volume Asian Drama, that ‘strong government’ was good for development. However, his notion of strong government is often misunderstood or misrepresented, and associated with despotic government rather than developmental governance, i.e., governance arrangements prioritizing acceleration of development.

Peter Evans’ notion of the ‘embedded autonomy’ of the developmental state has been used to explain developmental governance. Autonomy from powerful and influential ‘vested interests’, ‘distributional coalitions’ and ‘rent seekers’ ensures that ‘special interest groups’ do not usurp government for their own ends. Thus, Evans’ notion tries to explain conditions for developmental governance to better co-ordinate rapid progress.

Thus, the very policies that the Bank endorsed as ‘market friendly’ were actually quite ‘distortive’. Market outcomes had to be modified to support East Asia’s rapid growth and structural transformation. However, while some policies became less effective or even dysfunctional as circumstances changed, the Washington Consensus menu of economic liberalization and privatization largely undermined the region’s rapid progress.

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Post-Soviet Russian economic collapsehttp://www.ipsnews.net/2017/06/post-soviet-russian-economic-collapse/?utm_source=rss&utm_medium=rss&utm_campaign=post-soviet-russian-economic-collapse http://www.ipsnews.net/2017/06/post-soviet-russian-economic-collapse/#comments Tue, 06 Jun 2017 14:24:17 +0000 Vladimir Popov and Jomo Kwame Sundaram http://www.ipsnews.net/?p=150769 Vladimir Popov was a Senior Economics Officer in the United Nations Secretariat. Jomo Kwame Sundaram was UN Assistant Secretary General for Economic Development.

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Was the post-Soviet transition the greatest 'man-made' economic disaster ever?. Credit: IPS

By Vladimir Popov and Jomo Kwame Sundaram
MOSCOW and KUALA LUMPUR, Jun 6 2017 (IPS)

Wide-ranging economic reforms following the demise of the Soviet Union at the end of December 1991 mainly resulted in economic collapse in most successor states. By the mid-1990s, output had fallen by about half compared to 1989.

Meanwhile, income inequalities rose sharply as real incomes declined dramatically for most, while death rates increased by over half as life expectancy declined dramatically.

In Russia, output fell by 45% during 1989-1998, as death rates increased from 1% in the 1980s to over 1.5% in 1994, equivalent to over 700,000 additional deaths annually. In some former Soviet states embroiled in military conflicts, such as Armenia, Azerbaijan, Georgia, Moldova, Russia and Tajikistan, GDP in 2000 was 30-50% of pre-transition levels! Even without military conflict, Ukraine’s GDP fell by nearly two thirds. In Eastern European countries, output fell less, averaging 20-30% over 2-4 years, whereas growth accelerated in China and Vietnam following reforms.

The huge collapses in output, living standards and life expectancy in the former Soviet Union during the 1990s without war, epidemic or natural disaster was unprecedented. During the Great Depression, GDP in Western countries fell by some 30% on average in 1929-1933, but then recovered to pre-recession levels by the end of the 1930s.

Transition debate

Why was the decline in output and incomes in the former Soviet Union so deep and protracted? To what extent was it due to ‘initial conditions’, and to what extent was it due to poor economic policy choices? If the latter was mainly responsible, the post-Soviet transition was the greatest ‘man-made’ economic disaster ever.

Many believe that “things went terribly wrong”, and that it would have been possible to avoid the fate of the former Soviet republics in the 1990s with different policies. After all, most other transition economies did better than them, and no Russian seriously believes that the exceptional length and depth of its post-Soviet recession was inevitable.

The question of the most appropriate post-Soviet economic transition policies is the subject of considerable debate, not least between those who advocate comprehensive ‘shock therapy’ and others who believe that pragmatic, gradual, piecemeal reforms, rather than policies driven by ideological dogmas, would have had much better consequences.

World Bank policy advice
The World Bank’s 1996 World Development Report (WDR), From Plan to Market, argued that differences in economic performance were mostly associated with ‘good’ or ‘bad’ policies, particularly in terms of economic liberalization and macroeconomic stabilization. “Consistent policies, combining liberalization of markets, trade, and new business entry with reasonable price stability, can achieve a great deal even in countries lacking clear property rights and strong market institutions”.

However, contrary to mainstream Western coverage, there is no evidence that rapid economic liberalization and macroeconomic stabilization would have improved post-Soviet economic performance. The apparent link between liberalization and performance is due to the greater depth of the recession in the former Soviet republics compared to Eastern Europe.

Attempts to correlate differences in output changes during transition to the cumulative liberalization index and to inflation rates have no explanatory value. Once a number of ‘initial conditions’ are taken into consideration, the liberalization index becomes insignificant. Although the Chinese index of ‘economic freedom’, as measured by the Heritage Foundation, has been about the same as Russia’s in recent years, the economic performance of the two countries have differed markedly.

Deep recessions
The depth of the recession was mainly due to three sets of factors. First, greater distortions in industrial structure and external trade on the eve of transition. Second, the collapse of state and non-state institutions in the late 1980s and early 1990s which resulted in chaotic transformation. Third, poor policies worsening macroeconomic instability.

The post-Soviet economic recessions were due to the high costs of the distortions – including excessive militarization and over-industrialization, ‘perverted’ trade flows among the former Soviet republics and with Eastern European countries, excessively large industrial enterprises and agricultural farm sizes – as well as efforts to correct them. In most cases, Soviet distortions were more pronounced than in Eastern Europe. Apparently, the larger the distortions, the greater the output reduction.

The greater collapse of state institutions also explains the severity of post-Soviet recessions. Differences in the depth of transformational recessions between Eastern Europe and the former Soviet republics appear to be due to their greater institutional collapses. Poorer government ability to collect taxes, check the shadow economy, and uphold ‘law and order’, e.g., by enforcing contracts, undermined creation of a business climate conducive to investment and growth.

Post-Soviet transitions (except in Uzbekistan, Belarus and Estonia) involved unfavourable initial conditions, institutional degradation, and poor economic policies, which were less problematic in Eastern Europe. Thus, the Gorbachev reforms of 1985-1991 failed, not because they were gradual, but due to weakened state institutional capacity. However, the Yeltsin reforms had catastrophic consequences due to inappropriate policy reforms for the Russian transition after Gorbachev.

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Global South Calls for International Body to Fight Tax Havenshttp://www.ipsnews.net/2017/06/global-south-calls-for-international-body-to-fight-tax-havens/?utm_source=rss&utm_medium=rss&utm_campaign=global-south-calls-for-international-body-to-fight-tax-havens http://www.ipsnews.net/2017/06/global-south-calls-for-international-body-to-fight-tax-havens/#comments Fri, 02 Jun 2017 12:56:30 +0000 Tharanga Yakupitiyage http://www.ipsnews.net/?p=150712 Tax havens are “one of the worst enemies of our democracies,” said state representatives during a meeting at the United Nations. Due to concerns over the impacts of illicit financial flows, the Missions of Ecuador, South Africa, and India convened an informal workshop to discuss the issue and potential solutions. “Tax revenues are said to […]

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Illicit financial flows. Credit: IPS

By Tharanga Yakupitiyage
UNITED NATIONS, Jun 2 2017 (IPS)

Tax havens are “one of the worst enemies of our democracies,” said state representatives during a meeting at the United Nations.

Due to concerns over the impacts of illicit financial flows, the Missions of Ecuador, South Africa, and India convened an informal workshop to discuss the issue and potential solutions.

“Tax revenues are said to be the lifeblood of a state. With integration of economies in a globalized world, actions taken on taxation in one country affect practically everybody within borders and across borders,” said Permanent Representative of India to the UN Syed Akbaruddin, adding that the trends in illicit financial flows are alarming.

While Oxfam suggests that 7.6 trillion dollars is held in offshore accounts, others estimate a much higher figure, including UN expert Alfred de Zayas who found that up to 32 trillion dollars could be in secret jurisdictions around the world.

This deprives developing nations of essential resources needed to achieve major social and economic goals as laid out in the internationally agreed 2030 Agenda for Sustainable Development, whose motto is to leave no one behind.

“[In] the commitment to leave no one behind…the issue of taxation is fundamental in that effort,” said Deputy Permanent Representative of South Africa to the UN Mahlatse Mminele.

According to the UN Conference on Trade and Development (UNCTAD), illicit financial flows cost developing countries more than 100 billion dollars per year. Africa bears the brunt of such outflows as it is estimated to be equivalent to all official development assistance received by the continent in the last 50 years.

In one case revealed by the Panama Papers in 2016, a company dodged a tax bill of 404 million dollars in Uganda, a figure representing more than the East African nation’s annual health budget.

Ecuadorian Foreign Minister Guillaume Long painted a similar picture in his country, estimating that one-third of its GDP is being “robbed” and stowed away in tax havens which limits opportunities for the creation of wealth and further widens societal inequality.

Long, whose country currently chairs an intergovernmental group of developing nations known as the Group of 77, called for international cooperation on tax issues.

“The issue of international tax cooperation is of crucial importance and is directly linked to the right of development and the possibility of implementing Agenda 2030, a link to guarantee human rights,” he told attendees.

Akbaruddin similarly noted the necessity of international cooperation in a world of cross-border trade and finance and criticised the lack of multilateral efforts on the issue, stating: “Those who champion multilateralism in areas such as biodiversity, in areas such as human rights, in areas such as peace and security, decide to stop championing them when it comes to matters of international tax cooperation…what accounts for this enigma?”

Currently, the Committee of Experts on International Cooperation on Tax Matters provides a framework for dialogue and cooperation on tax issues. Though it helped create the UN Code of Conduct on Cooperation in Combating International Tax Evasion, the committee has been insufficient. Long noted that the committee works in individual capacities rather than on a governmental level and does not have sufficient resources to tackle the issue.

The three representatives therefore called to strengthen and upgrade the committee, transforming it to an intergovernmental body that represents all.

Of the 25 seats in the committee,12 are occupied by the 35-member Organization for Economic Cooperation and Development (OECD) which includes countries like the United Kingdom and the United States, leaving the other 158 countries with only 13 seats.

“Every country, every state – rich or poor, big or small – does have the right to an inclusive place at the table to decide on an issue that impacts all of us,” said Akbaruddin.

The representatives called the UN and Secretary-General to take urgent action on the issue.

“The international community needs to urgently address this global test…the status quo should no longer be allowed to persist,” said Mminele.

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Why Do International Financial Crises Happen?http://www.ipsnews.net/2017/05/why-international-financial-crises/?utm_source=rss&utm_medium=rss&utm_campaign=why-international-financial-crises http://www.ipsnews.net/2017/05/why-international-financial-crises/#comments Wed, 31 May 2017 16:25:13 +0000 Jomo Kwame Sundaram http://www.ipsnews.net/?p=150686 Jomo Kwame Sundaram, a former economics professor and United Nations Assistant Secretary-General for Economic Development, received the Wassily Leontief Prize for Advancing the Frontiers of Economic Thought in 2007.

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Am underlying cause of international financial crises has been the ascendance, transformation and hegemony of the financial sector over the past three to four decades. Credit: IPS

By Jomo Kwame Sundaram
KUALA LUMPUR, Malaysia, May 31 2017 (IPS)

International currency and financial crises have become more frequent since the 1990s, and with good reason. But the contributory factors are neither simple nor straightforward. Such financial crises have, in turn, contributed to more frequent economic difficulties for the economies affected, as evident following the 2008-2009 financial crisis and the ensuing Great Recession still evident almost a decade later.

Why international coordination?
Why is global co-ordination so necessary? There are two main reasons. One big problem before the Second World War was the contractionary macroeconomic consequences of the ‘gold standard’.

In 1944, before the end of the Second World War, President Franklin Delano Roosevelt convened the United Nations Conference on Monetary and Financial Affairs – better known as the Bretton Woods Conference – even before the UN itself was set up the following year in San Francisco. After almost a month, the conference established the framework for the post-war international monetary and financial system, including the creation of the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD), or World Bank.

To be sure, the Bretton Woods system reflected sometimes poor compromises made among the negotiating government representatives. Nevertheless, it served post-war reconstruction and early post-colonial development reasonably well until 1971.

In September of that year, the Nixon Administration in the US – burdened with mounting inflation and unsustainable budget deficits, partly due to the costly Vietnam War – unilaterally withdrew from its core commitment to ensure full US dollar convertibility to gold at the agreed rate. Thus, the unilateral US action did not involve a transition from the Bretton Woods system to any coherent, internationally agreed alternative.

Birth of a ‘non-system’
The pre-1971 post-Second World War period has often been referred to as a Golden Age, a period of rapid reconstruction, growth and employment expansion after the devastation of the Second World War. It was also a period of development and structural transformation in many developing countries.

All this came to an end when coordination and multilateralism collapsed following President Nixon’s decision to renege on 1944 US commitments at Bretton Woods which became the basis for the post-war international monetary system.

The leading international monetary economist of the post-war period, Robert Triffin, described the post-1971 arrangements as amounting to a ‘non-system’. Now, with the international monetary system essentially the cumulative outcome of various, sometimes contradictory and ad hoc responses to new challenges, the need for coordination is all the more urgent.

A strong case for co-ordination has long been made by the United Nations. For example, soon after the global financial crisis exploded in late 2008, the 2009 mid-year update of the UN’s World Economic Situation and Prospects showed how better coordinated and more equitable fiscal stimuli would have benefited all parties – developed countries, developing countries, transition economies and, most of all, the least developed countries.

Anarchy and fragility

Since the collapse of the Bretton Woods system in 1971, a small handful of currencies – especially the US dollar, the international favourite by far – have been held by others as reserve currencies. This has allowed the issuers of these currencies – especially the US – to run massive trade deficits, contributing to unsustainable global imbalances in savings and consumption.

A second underlying cause of international financial crises has been the ascendance, transformation and hegemony of the financial sector – termed ‘financialization’ – over the past three to four decades. Partly as a consequence, many decision-makers are now often more concerned with short-term financial indicators than other key economic indicators, often presuming that the former reflect the latter despite the lack of such evidence.

A third factor has been growing ‘financial fragility’, partly due to the global financial ‘non-system’ in place since the collapse of the Bretton Woods system. Referring to this ‘non-system’ as an international financial ‘architecture’ is really insulting to architects. The lack of coherence and coordination has been exacerbated by financial deregulation, liberalization and globalization over the past three decades.

Finance calling the shots

The growing and spreading subordination of the real economy to finance in recent decades is a fundamental part of the problem. While finance is indeed a very important, if not an essential hand-maiden for the functioning of the real economy, the subordination of the real economy to finance has transformed macro-financial dynamics, with unproductive, contractionary, even dangerous consequences.

So, to address the root causes of crises, much better, including more appropriate regulation of the financial system is needed to ensure consistently counter-cyclical macro-financial institutions, instruments and policies, and to subordinate the financial sector to the real economy.

The 2008 financial crisis has catalyzed many debates on these issues – some old, some new – for instance, between Keynesian/Minskyian economists and their opponents; between Anglo-American and continental European worldviews; and between the global North and South. Any sustainable solution will clearly require much better international cooperation and co-ordination.

Hence, almost a decade since the 2008 global financial crisis began, there is no shared political commitment to much needed international financial reforms. It took fifteen years from the beginning of the Great Depression, a world war and Roosevelt’s extraordinary leadership before the world was able to reform the international financial system in 1944. But sadly, there is no Roosevelt for our times.

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Proposed UN Pay Cuts Threaten Work Stoppage in Genevahttp://www.ipsnews.net/2017/05/proposed-un-pay-cuts-threaten-work-stoppage-in-geneva/?utm_source=rss&utm_medium=rss&utm_campaign=proposed-un-pay-cuts-threaten-work-stoppage-in-geneva http://www.ipsnews.net/2017/05/proposed-un-pay-cuts-threaten-work-stoppage-in-geneva/#respond Tue, 30 May 2017 15:30:40 +0000 Thalif Deen http://www.ipsnews.net/?p=150659 Facing significant reductions in US financial contributions from a politically-unpredictable Donald Trump administration, the UN Secretariat is gearing itself for a rash of austerity measures and budgetary cuts, including downsizing peacekeeping operations and cuts in development aid, reproductive health and overseas travel. But UN staffers in Geneva, numbering over 5,400 in the professional category of […]

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UN staff in Geneva protesting proposed pay cuts. Credit: UN photo

By Thalif Deen
UNITED NATIONS, May 30 2017 (IPS)

Facing significant reductions in US financial contributions from a politically-unpredictable Donald Trump administration, the UN Secretariat is gearing itself for a rash of austerity measures and budgetary cuts, including downsizing peacekeeping operations and cuts in development aid, reproductive health and overseas travel.

But UN staffers in Geneva, numbering over 5,400 in the professional category of employees, are already on the warpath because of a proposed 7.5 percent reduction in their take-home pay triggering a strong backlash and public demonstrations—and perhaps leading to a possible work stoppage.

The proposed salary reductions in Geneva aren’t related to the impending US cuts to the UN’s regular and peacekeeping budgets in New York.

A resolution adopted by the Geneva staff, at an “extraordinary general meeting” last week, blames the International Civil Service Commission (ICSC), which presides over salary structures, for “failing to address the deep concerns and questions raised by staff federations and the heads of 10 Geneva-based agencies over the proposed cut to post adjustment that would result in a reduction in take-home pay of 7.5 per cent (or more).”

The staff federations include the 60,000-strong Coordinating Committee of International Staff Unions and Associations (CCISUA) and the 30,000-strong Federation of International Civil Servants Association (FICSA)

The resolution says the ICSC has refused three times to meet with staff and explain the proposed cuts despite ongoing and serious questions about its data-handling and statistical analysis.

Ian Richards, President of CCISUA, told IPS the resolution was unprecedented and “shows how angry staff in Geneva are at the ICSC’s manipulation of its own methodology to cut pay in what unfortunately is one of the world’s most expensive cities where local salaries rose almost six percent in the last five years”.

“We’re under huge pressure from staff to get the work stoppages going,” he warned.

He said the decision to cut pay was taken by ICSC, but given its failure to provide convincing explanations to the heads of human resources of the organizations in Geneva, most organizations will not implement it for now.

“Those same organizations have also sent a team of statisticians to New York to go through the ICSC’s calculations. Unfortunately the UN secretariat has decided to break ranks, meaning staff in Geneva will be paid different salaries for the same work.”

Richards said pay cuts are also poor employment practices and are only taken by employers in crisis and after negotiating with staff unions.

“The fact that the ICSC increased pay in New York and Washington DC shows we aren’t there right now,” he added.

UN staff in Geneva protesting proposed pay cuts. Credit: UN photo

UN staff in Geneva protesting proposed pay cuts. Credit: UN photo

Geneva is the first UN duty station to be affected by the new rules, but there are 85 duty stations to follow. This summer, several European Union duty stations such as Paris, Vienna, Rome and Madrid, will be up before the ICSC.

According to the staff unions, New York salaries went up by 2.2 percent in February.

“This isn’t about a choice between a pay cut or preserving jobs in Geneva. Organizations did not factor in the pay cut while setting their budgets. Meanwhile Swiss salaries increased 5.7 percent between 2010 and 2015, the same period over which the ICSC is trying to cut ours,” says CCISUA.

There is also a widespread belief that Geneva was victimized first because UN member states aren’t happy at having to pay $1 billion on a new building, which they were strong-armed into paying for, and particularly with possible cost overruns.

Meanwhile, since Washington is the largest single contributor both to the UN’s regular and its peacekeeping budgets, a proposed 29 percent in US foreign assistance by the Trump administration is expected to have a heavy impact on the United Nations in New York.

Currently about 22 percent of the UN’s biennium regular budget of $5.4 billion comes from the US. So does 28 percent of the UN’s peacekeeping budget of about $8 billion.

Asked about the impending cuts proposed in the US budget, UN Spokesman Stephane Dujarric told reporters last week: “We’re obviously studying the (US) budget, going through some of the numbers. I think, from where we stand and looking at the budget, as proposed now, would make it simply impossible for the UN to continue all of its essential work advancing peace, development, human rights, and humanitarian assistance around the world”

He said the budgetary process in the US is what it is. “It is going through a legislative process. So we will wait to see what comes out of that legislative process.”

“I think it goes without saying it, but it bears repeating that we’re obviously extremely grateful for the financial contributions the United States has been making and is making to the United Nations over the years as its largest financial contributor”.

Dujarric said that even before the proposed US cuts were announced, Secretary-General Antonio Guterres has remained engaged in bringing out reforms in the UN system “ensuring that the UN is fit for purpose, delivers what it’s meant to deliver”.

He said Guterres has put out a number of directives to staff and the Secretariat– over which he has authority– on limiting the amount of travel to necessary-travel only.

He has also asked the Department of Peacekeeping Operations (DPKO) and the Department of Field Support (DFS) to look at how the UN uses its air assets in peacekeeping missions, which would also include the cutting down as much as possible on the number of special flights.

“I think the Secretary General is extremely aware of the cost… of the monies that is entrusted to us, and he would like to see a reduction in the number of expenditures, and he’s asked his managers to look at that. As for himself, he has also cut down drastically on the delegations and the number of people that travel with him.”

But still, said Dujarric, the UN needs resources to deliver on its mandates laid out by the 193-member General Assembly.

On cuts, Richards said reducing the size of UN staff delegations is probably a good idea. “But at the end of the day, travel is only a small part of the regular, Trump-affected budget. Much travel is paid from extra-budgetary sources, such as projects and events that require travel,” he noted.

Reflecting on the situation in Geneva, Richards pointed that what was noteworthy is that the ICSC decided to remove mitigating measures that would have softened the impact of the cut just before it started working on Geneva.

“The ICSC has agreed to review its decision at its next meeting in July and we hope it will put things right. Many staff have told us they will return from their holidays if need be to take collective action”, he warned.

The writer can be contacted at thalifdeen@aol.com

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Why the G7 Must Fund Health & Nutritionhttp://www.ipsnews.net/2017/05/why-the-g7-must-fund-health-nutrition/?utm_source=rss&utm_medium=rss&utm_campaign=why-the-g7-must-fund-health-nutrition http://www.ipsnews.net/2017/05/why-the-g7-must-fund-health-nutrition/#respond Thu, 25 May 2017 21:42:57 +0000 Grace Virtue http://www.ipsnews.net/?p=150593 Grace Virtue, Ph.D., is a social justice advocate and senior communications advisor for ACTION global health partnership.

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By Grace Virtue
TAORMINA, Italy, May 25 2017 (IPS)

The G7 Summit, held annually among the leaders of the world’s most powerful economies (Canada, France, Germany, Italy, Japan, the United Kingdom, the United States, and the EU), plays an important role in shaping responses to global challenges—theoretically at least.

The format of the Summit continues to be modeled off the first one, held in 1975 when French President Valéry Giscard d’Estaing invited his counterparts to an informal meeting in Rambouillet to discuss the economic crisis triggered by the oil shock of 1973–1974. Leaders adopt a relaxed approach, discussing candidly the main issues on the international agenda.

Their aides (the so-called Sherpas) draft a joint declaration which is signed by the leaders and enshrined as high-level political pledges. Before and during, the Sherpas are lobbied fiercely by civil society trying to get their issues of concern in the joint communiqué released by the Summit.

This year’s Summit begins May 26 in Taormina, Italy. It is arguably one of the most charged and uncertain atmosphere for a meeting of traditional western democratic political leaders. The United States, which normally plays a leading role, is hamstrung by its government, led by Republican President Donald Trump, who, among his many challenges, is currently under investigation by his own law enforcement agencies to determine whether his campaign was complicit in Russian interference in the general election of 2016, which landed him a shock victory over former secretary of state Hillary Clinton, the Democratic nominee.

Outside of ethical and perhaps legal challenges, Trump, since his inauguration in January, has unleashed a set of policy proposals deliberately targeted at rolling back social justice gains under Barack Obama, his predecessor and even before. From proposed cuts to signature programs like the Affordable Care Act and food stamps for needy families, and hostile policies toward immigrants, the administration’s programs are causing deep uncertainty and anxiety at home and abroad. Trump’s lack of interest and understanding of the outside world, rounds off a list of flaws that justifies completely questions about his capacity or suitability to lead the free world toward any progressive end.

This year’s summit also comes with the shadow of Brexit—the United Kingdom’s decision to exit the European Union; a French President, the youngest in the country’s history and a mere three weeks in his presidency; looming elections in the UK and Germany; a continued migrant crisis as desperate people flee wars and famines in Africa and the Middle East, and this week’s horrific terrorist attack in Manchester, England. Volatility, uncertainty, complexity and ambiguity like we have not seen since the height of the Cold War, are the watchword of this G7 Summit.

So, when the leaders gather at their hilltop hideaway tomorrow, there is much that is new and worrying to be discussed and great energy will likely be consumed navigating these new and unpredictable dynamics. This does not augur well for those concerns that are so devastating but so old and entrenched, that they are not news anymore—no longer sexy enough grab the headlines, if they ever were. I speak here of diseases of poverty like tuberculosis and chronic starvation and malnutrition in parts of Africa.

In 2015, 10.4 million people were sickened with TB; 1.8 million of them died—more than HIV and malaria combined. Tuberculosis is the world’s only airborne drug-resistant epidemic and is responsible for one-third of the world’s antimicrobial resistance (AMR) deaths. By 2050, estimates show drug-resistant TB (DR-TB) will claim an additional 75 million lives at a global economic cost of US$16.7 trillion.

Since its establishment in 2002 by G7 countries, the Global Fund to Fight AIDS, Tuberculosis and Malaria (Global Fund) has saved more than 20 million lives through its support for AIDS, tuberculosis (TB), and malaria programs in countries and communities most in need. Vulnerable communities, including migrants and refugees, are at increased risk of diseases like TB and HIV/AIDS because of overcrowded living and working conditions, poor nutrition, and lack of access to care. The Sustainable Development Goals (SDGs), which all G7 countries signed on to, called for the eradication of HIV/AIDS, TB, and malaria by 2030.

To achieve this, G7 leaders must continue to invest in the Global Fund. Concerned civil society groups like ACTION global health partnership in Taormina advocating to the end, are hoping they will. Other major ask of G7 leadership include accelerated efforts to eradicate malnutrition and ensure proper nutrients for every child, particularly in the first 1000 days of life. Coupled with the inability to access proper healthcare by the world’s poorest people, malnutrition is one of the greatest barrier to human development and global prosperity

It is obvious that there are many complicated issues facing the G7 leaders, but, investing in health and nutrition should not be controversial—it should be fundamental.

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