Financial Crisis

Reflecting Back and Imagining Forward

What a challenging year 2020 has been! A year of living dangerously – “Tahun vivere pericoloso”- perhaps these words of late President Soekarno of Indonesia are the best description. Fortunately, I managed to remain sane, reading and writing op-eds (mostly about the pandemic, here, here).

2020: A Yet More Devastating Year Closes With At Least Some Signs Of Hope

Despite its grim record of multiple natural disasters and a deepening climate crisis, one could be forgiven for looking back on 2019 with a degree of nostalgia. There is no disguising the extent of the calamity wrought this year by COVID-19, yet as we approach the end of 2020 we may also draw strength from positive developments emerging.

The World in 2021

The year 2020 is ending with the world caught up in an unprecedented human and economic crisis. The pandemic has contaminated 75 million people and killed 1.7 million. With the lockdowns, the global economy has suffered the worst recession in 75 years, causing the loss of income for millions of people. In such a bleak environment, what will the new year bring? Whilst uncertainty is the only certainty, eight points are likely to be key in the year ahead:

The Impact of COVID-19 on Child Marriage and Other Gender-Based Violence

I recently visited rural areas of Bangladesh amid the COVID-19 pandemic and returned to Dhaka with a new understanding of the impact that COVID-19 is having on child marriage, a harmful practice that is a global challenge. The fundamental shift that I saw was that child marriage, which has typically been encouraged by struggling parents, is now being encouraged by struggling girls. This worrisome trend underscores a new burden of the pandemic on the poor.

Getting Children in Lebanon Back to School Amongst Multiple Crises

Education and health care were high on the agenda when the United Nations vowed to work toward a better future by setting 17 Sustainable Development Goals (SDGs) to be met by 2030.

Urgently Needed Deficit Financing No Excuse for More Fiscal Abuse

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

Will the New Fiscal Crises Improve International Tax Cooperation?

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

World Bank Urges Governments to Guarantee Private Profits

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

Is Development for the World Bank Mainly Doing Business?

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

Is the IMF Encouraging World Financial Leaders to Walk Blindly Towards More Austerity?

This week the world’s Ministers of Finance and Central Bank Governors meet virtually at the 2020 Annual Meetings of the International Monetary Fund and the World Bank and decide on the fate of the world. This year’s gathering is particularly important, given that the world is confronting an unprecedented crisis. Governments are struggling to finance emergency care and urgent socioeconomic support to cope with the COVID19 pandemic.

Milton Friedman Versus Stakeholder Capitalism

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

Scaling Up SDG4 in Crises

Out of global crises spring opportunities for change. In crisis, change is not an option. It is a necessity. And, as Plato famously noted: “Necessity is the mother of invention.” Education Cannot Wait (ECW) is an invention that sprang out of crisis and was borne of necessity.


Shareholder Capitalism’s Ugly Legacy

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

No More Excuses – Time for Global Economic Solutions

On 29 September, the world’s heads of state will come together (virtually) at an extraordinary meeting to discuss financing for development during the 75th UN general assembly. This will be crucial in the battle to address the Coronavirus crisis.

‘Populist’ Macroeconomic Policy

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

Myths of Soft Budget Constraints

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

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

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

ISDS Enables Making More Money from Losses

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

Enough Is Not Enough – Call for Urgent Change in Mexican Economic Policy

A group composed by women and men, called Nuevo Curso de Desarrollo (New Course for Development) based at the National University of Mexico recently published a document to propose a set of measures to change the current economic policy in Mexico. This proposal responds to a diagnosis of the current situation: at this point of the year, the serious social damage inflicted by the health and economic crisis can already be observed. As we know, in Mexico as in many other countries, there was a great economic disruption caused by COVID. Millions of people ceased to receive income from their work. However, the Mexican government has not carried out sufficient support measures to compensate for these losses. The result is easy to guess: many households have been rapidly impoverished. It is estimated that between 10 and 16 million people in April earned much less to the point of not being able to acquire the basic food basket , a situation that has continued for many of them during May, June and July. And while it is true that more and more workers are returning to their jobs, the losses caused have not been repaired.

Debt Hawks Detract from Urgently Needed Fiscal Recovery Efforts

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

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