Central bank policies have often worsened economic crises instead of resolving them. By raising interest rates in response to inflation, they often exacerbate, rather than mitigate business cycles and inflation.
As China increases
lending to other developing countries, ‘debt trap’ charges are growing quickly. As it greatly augments financing for development while other sources continue to decline, condemnation of China’s loans is being weaponized in the new Cold War.
“If your only tool is a hammer, every problem looks like a nail”. Still haunted by the clever preaching of monetarist guru Milton Friedman’s ghost, all too many monetary authorities address every inflationary threat or sign they see by raising interest rates.
Finger pointing in the blame game over Russia’s Ukraine incursion obscures the damage it is doing on many fronts. Meanwhile, billions struggle to cope with worsening living standards, exacerbated by the pandemic and more.
Losing sight in the fog of war
US Secretary of State Anthony Blinken insists
, “the Russian people will suffer the consequences of their leaders’ choices”. Western leaders and media seem to believe their unprecedented
” will have a “chilling effect
” on Russia.
All too many developing countries have been persuaded or required to prioritize inflation targeting
(IT) in their monetary policy. By doing so, they have tied their own hands instead of adopting bolder economic policies for growth, jobs and sustainable development.
Inflation hawks are winning the day. The latest ‘beggar thyself’ race to raise interest rates has begun. This ostensibly responds to the spectre of runaway inflation, supposedly retarding economic growth and progress, and thus threatening central bank ‘credibility’.
Funding for developing countries to address global warming is grossly inadequate. Very little finance is for adaptation to climate change,
the urgent need of countries most adversely affected. Also, adaptation needs to be forward-looking rather than only addressing accumulated problems.
Carbon offset markets allow the rich to emit as financial intermediaries profit. By fostering the fiction that others can be paid to cut greenhouse gases (GHGs) instead, it undermines efforts to do so.
The planet is already 1.1°C warmer than in pre-industrial times. July 2021 was the hottest month
ever recorded in 142 years. Despite the pandemic slowdown, 2020 was the hottest year
so far, ending the warmest decade
Betrayal in Glasgow
Summing up widespread views of the recently concluded Glasgow climate summit, former Irish President Mary Robinson
observed, “People will see this as a historically shameful dereliction of duty,… nowhere near enough to avoid climate disaster”.
Quickly enabling greater and more affordable production of and access to COVID-19 medical needs is urgently needed in the South. Such progress will also foster much needed goodwill for international cooperation, multilateralism and sustainable development.
Addressing global warming requires cutting carbon emissions by almost half by 2030! For the Intergovernmental Panel on Climate Change, emissions must fall by 45%
below 2010 levels by 2030 to limit warming to 1.5°C, instead of the 2.7°C now expected.
Current climate mitigation plans will result in a catastrophic 2.7°C world temperature rise
. US$1.6–3.8 trillion is needed
annually to avoid global warming exceeding 1.5°C.
“The outlook for LDCs is grim”. The latest United Nations (UN) assessment
of prospects for the least developed countries (LDCs) notes recent setbacks without finding any silver lining on the horizon.
Half a century ago, LDCs were first officially recognised by a UN General Assembly resolution
. It built on research, analysis and advocacy by the UN Conference on Trade and Development (UNCTAD).
The bogey of inflation has been revived. Dubious pre-pandemic economic progress, fiscal constraints and vaccine apartheid were bad enough. Now, ostensibly anti-inflationary measures also threaten recovery and sustainable development.
Despite facing the world’s worst pandemic of the last century, rich countries in the World Trade Organization (WTO) have blocked efforts to enable more affordable access to the means to fight the pandemic.
‘No one is protected from the global pandemic until everyone is’ has become a popular mantra. But vaccine apartheid worldwide, due to rich countries’ policies, has made COVID-19 a developing country pandemic
, delaying its end and global economic recovery.
As rich countries have delayed contagion containment, including mass vaccination, in developing countries, much weaker fiscal efforts in the South have worsened the growing world pandemic apartheid
Too many have swallowed the myth that lowering corporate income tax (CIT) is necessary to attract foreign direct investment (FDI) for growth. Although contradicted by their own research, this lie has long been promoted by influential international economic institutions.
Last week, the largest rich countries, home to most major transnational corporations (TNCs), agreed to a global minimum corporate income tax (GMCIT) rate. But the low rate proposed and other features will deprive developing countries of their just due yet again.
Failure to sufficiently accelerate comprehensive efforts to contain COVID-19 contagion has greatly worsened the catastrophe in developing countries. Grossly inadequate financing of relief, recovery and reform efforts has also further set back progress, including sustainable development.
US Treasury Secretary Janet Yellen has urged
all governments to support a global minimum corporate tax rate of at least 21%. The US is working with other G20 nations to get other countries to end the “thirty-year race to the bottom on corporate tax rates”.