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Walking the Tightrope: UNCTAD, Development and Finance-Driven Globalization: Assessment: UNCTAD Trade and Development Report 2015
... Alarm bells have sounded from OECD-focused scholars and practitioners concerned over the G20 and World Bank's shift away from ODA and its traditional mission of development assistance to the use of public money to 'trigger' or provide risk guarantees for private sector actors to invest in filling development financing 'gaps' in an envisioned 'Maximizing Finance for Development' (MFfD) agenda, or turning 'billions to trillions' to finance the SDGs (Mawdsley 2018). Concerns have been raised over how uneasily the profitability of private finance sits alongside social and environmental development goals (Saad-Filho and Tomkinson 2017); how resource flows from finance-driven globalization are often highly concentrated geographically and sectorally, bypassing the poor and the long-term investment needs of the poorest developing countries (UNCTAD 2015); how this contributes to interconnected risk, potential for volatility and financial fragility (Akyuz 2017; Gabor 2018b); and how this constitutes a subsidy to the private sector at the expense of taxpayers in donor countries and potential public beneficiaries in developing countries ( Mawdsley et al. 2018). ...
... There is a need then to distinguish between the relative advantages and disadvantages between developing countries of the south, and yet scholarship consistently lumps together 'emerging'/middle income countries with lesser 24 On debt-financed development and a rebuttal to neo-developmentalists, see: (Fischer 2018) 25 (Horner and Hulme 2019) For a more thorough political economy take, see: (Saad-Filho 2014) developed countries which are far from such levels into the same acronyms such as EMDs (emerging and developing countries) (Grabel 2019); DTCs (developing and transition economies) (Saad-Filho and Tomkinson 2017); and DECs (developing and emerging countries) (Gabor 2018a). This is not merely a semantic issue, but an analytic, conceptual, and descriptive matter which shapes how people think about forms of coupling and integration or polarization within the 'south' and between certain 'southern' states and the global 'north.' ...
This thesis offers a detailed study of the disadvantages of post-Cold War late development at the confluence of shifting regimes of development finance. As Lao PDR emerged from relative isolation at the end of the Cold War, it was quickly integrated into a Bretton Woods-led regional and global development regime that was itself undergoing a shift from aid to private-sector led development. This thesis contends that liberalizing reforms initiated by the Asian Development Bank and driven further under the aegis of the World Bank in its bid to re-enter the global hydrolending landscape through its landmark NT2 project in Laos led to the introduction of tools of modern finance into contemporary Lao infrastructure building. Seemingly small and innocuous institutional innovations brought to Laos and installed by OECD-DAC agencies, some for the purposes of environmental conservation, led to perverse outcomes and momentously facilitated a watershed of financialized regional infrastructure investment by state-coordinated business groups from neighbouring Thailand, Malaysia and China in the aftermath of the Asian (1997) and Global (2008) financial crises. The installation of financial instruments and practices by Bretton Woods institutions intending to further the public-private-partnership (PPP) paradigm and business interests of corporations established in OECD states has instead paved the way for the expansion and deepening of financial markets in the name of development led by emerging Asian business actors eager to transition from ‘national champions’ to international powerhouses. This historical account demonstrates both continuity and change as the neomercantilist aspirations of East and Southeast Asia’s emerging economies beneficially utilize the liberalizing environment spearheaded by Bretton Woods institutions to further their own interests while creating parallel governance institutions and divergent lending and environmental practices to the Development Assistance Committee. Based on over fifteen months of in-country research and interviews, this thesis sheds light on the ways in which state elites internalize ideologies of development in pursuit of autonomous economic development while reinforcing conditions of dependency through external economic reliance. Building on insights gleaned from early dependency scholars, this thesis provides a critical contribution by adapting their observations concerning constraints to development for a post-Bretton Woods development landscape which has shifted from MNC-led industrial investment to finance-driven portfolio investment. In doing so, this thesis upends the traditional ‘centre-periphery’ framing of asymmetric exploitation by introducing the notion of ‘proximate dependency’ to capture the pernicious dynamics of exploitation between (post-WWII) late developers and their even later (post-Cold War) brethren, cutting against popular discourses of south-south development.
This article examines the theories and practices of neoliberalism across 13 aspects of (‘things you need to know about’) neoliberalism. They include the argument that neoliberalism is not reducible to a cogent ideology or a change in economic or social policies, nor is it primarily about a shift in the relationship between the state and the market or between workers and capital in general, or finance in particular. Instead, neoliberalism is a stage in the development of capitalism underpinned by financialization. Neoliberalism by its nature is highly diversified in its features, impact and outcomes, reflecting specific combinations of scholarship, ideology, policy and practice. In turn, these are attached to distinctive material cultures giving rise to the (variegated) neoliberalization of everyday life and, at a further remove, to specific modalities of economic growth, volatility and crisis. Finally, this paper argues that there are alternatives, both within and beyond neoliberalism itself.
Political Economy and Global Capitalism? is a timely and unique collection by a group of esteemed authors who explore the present and future of the global political economy.
Neoliberalism has lost much of its political legitimacy and nearly all its popular appeal during the last decade. Apologias of privatization, fiscal restraint, high interest rates, capital account liberalization, trade union-bashing and other policies overtly associated with the neoliberal reforms are in retreat. After sailing triumphantly to world domination in the eighties and nineties, neoliberalism has become a political liability. Its strident rhetoric has grown tired, and no longer brings votes – quite the contrary; neoliberal platforms must now be disguised. The political shrivelling of neoliberalism has been especially evident since the East Asian crises and the collapse of the dot.com bubble. The corruption scandals that came to light under Bush II have helped to unmask the regressive nature of the neoliberal project and its organic links with the reconstitution of US imperialism. The political retreat of neoliberalism is startlingly evident in any reputable bookshop: the number of titles purporting to defend the neoliberal reforms has declined precipitously both in quality and in market appeal, while a large number of critical works have become available to growing numbers of readers. 1 In spite of these political defeats, neoliberalism continues to be not only the dominant economic policy, but also the dominant modality of social and economic reproduction in most countries. It could easily be argued that the economic grip of neoliberalism is becoming stronger even as its political legitimacy wanes. This disconnect is examined below, through a specific angle: the sources, significance and political implications of the Keynesian and Marxist critiques of neoliberalism.
This article views the history of the Group of 77 through the lens of its relations with unctad’s establishment in 1964, its unsuccessful struggle for the nieo in the 1970s, and the subsequent loosening of ties. The debt crisis of the 1980s, the Uruguay Round negotiations, and the arrival of the wto are seen as crucial forces unravelling the previously close links. Growing differentiation among developing countries and the changing leadership of the G77 are also cited as important influences on its current relationship with unctad.
Within the framework of Marxist political economy, financialization is understood through the prisms of logical, theoretical, and historical perspectives. It is defined in terms of the increasing presence of interest bearing capital, as distinct from credit as such, the role this plays in real as opposed to fictitious accumulation of capital, and how this has underpinned the period of neoliberalism, including the global crisis. Financialization is seen as the expansion of interest bearing capital in intensive and extensive forms. The first is notable in terms of the growth and proliferation of financial assets themselves with increasingly distant attachments to production and exchange of commodities themselves, and the second involves the extension of interest bearing capital to new areas of economic and social life in hybrid forms with other types of capital. An appendix draws out the differences between the approach taken herein and the approach on financialization taken by Costas Lapavitsas.
This article offers a political economy review of the literatures and the empirical evidence concerning the ‘Rise of the South’. The study focuses on global convergence (in the long-term, in the last 30 years, and in the aftermath of the 2008 global crisis), economic decoupling between developing and advanced economies, and the economic strategies which may help catching-up, especially the ‘flying geese’ paradigm and industrial policies supporting manufacturing sector growth. It shows that the mainstream literature suffers from significant weaknesses; that empirical claims concerning convergence and decoupling have been exaggerated, and that flying geese-type strategies are severely limited. Examination of the drivers of growth in the South and the policies implemented in key converging countries support the claim that political economy approaches can offer valuable policy insights to countries grappling with the challenges of long-term growth and development.
Deindustrialisation is typically conceptualised as a decline in manufacturing as a share of total employment. From a Kaldorian perspective deindustrialisation could have negative implications for long-run growth, given the special growth-pulling properties of manufacturing. However, defining deindustrialisation purely in terms of employment share is conceptually limiting given that some of the Kaldorian processes operate primarily through output rather than employment, as well as blunting empirical analysis by not focussing enough on changes in manufacturing share of gross domestic product (GDP). This study develops a new method using decomposition techniques to analyse changes in manufacturing employment levels and shares in 48 countries over periods of 'deindustrialisation'. The analysis separates out changes in the levels and shares of employment manufacturing into components associated with changes in the share of manufacturing in GDP, the growth of manufacturing value-added, the labour intensity of manufacturing production and economic growth. The results indicate that in most cases the decline in manufacturing employment is associated primarily with falling labour intensity of manufacturing rather than an overall decline in the size or share of the manufacturing sector. We suggest that deindustrialisation should appropriately be defined in terms of a sustained decline in both the share of manufacturing in total employment and the share of manufacturing in GDP. Copyright The Author 2008. Published by Oxford University Press on behalf of the Cambridge Political Economy Society. All rights reserved., Oxford University Press.
Financial instability has been a consistent feature of neoliberal global capitalism, and when this instability has taken the form of a major financial crisis, as it did in East Asia in 1997, the consequences for the economies involved have been severe. Economic contractions, leaving economies in ruin and populations traumatized by increases in unemployment, poverty and inequality, have been the typical results. The liberalization and internationalization of capitalist production relations have created an economic system in which recurrent financial crises set the pace and rhythm of economic activity and change within the centre as well as at the periphery. This chapter examines this financial and economic turmoil and the role that it has played under neoliberalism. It also explores the role that the state has played in regulating, but not eliminating, the turmoil. Some readers may find the argument surprising. It is that financial instability and the economic hardship that it creates play an essential role in reproducing capitalist and imperial social relations. The financial instability is functional. It disciplines world capitalism. This is where the state comes in. The various national banking and financial systems are regulated and supervised and, where appropriate, supported by injections of official liquidity, in such a way that the damage caused by the turmoil is directed away from the dominant classes and the centre towards the subordinate classes and the periphery.
UNCTAD was created in 1964 as a forum for strategic thinking about international trade and development issues and for identifying mutually beneficial opportunities for policy coordination and international cooperation with the participation of both developing and industrialized countries. The history of UNCTAD, with its successes and failures, therefore, is closely intertwined with the history of ideas on trade and development and the interplay of political power and ideological manipulation in international trade and development policy making. This article focuses on the intellectual traditions in economics which underpinned the formation of UNCTAD and examines the way in which such intellectual traditions have informed — both in method and substance — the subsequent thinking and research output by the institution and helped define its objectives. It compares UNCTAD's methods and research output on a number of international development issues with the positions taken by other international institutions. These findings are used to reflect on the ideological element in development economics thinking.
Is the United States really losing power to developing countries, even China? This political scientist says the West's power, led by the United States, is still preeminent. He presents five case studies to make his point.
Editorial Reviews Product Description As a result of the liberalization of the 1980s, the financial system has acquired a prominent role in developing economies. It is now conventional wisdom thafinancial liberalization' is the means to stimulate economic development. Investment Finance in Economic Development challenges this assumption and offers an alternative view. The book presents a post-Keynesian approach to the role of banks, financial markets and savings in economic development. It departs from the conventional belief that financial institutions are mere intermediaries between savers and investors, to show that banks have a key, active role in the process of investment finance and growth. Further, financial markets, as the loci of allocation of financial savings, are shown to have an important role in supporting financial stability during the process of growth.
This paper argues that the unprecedented acceleration of growth in the developing world in the new millennium in comparison with advanced economies is due not so much to improvements in underlying fundamentals as to exceptionally favourable global economic conditions, shaped mainly by unsustainable policies in advanced economies. The only developing economy which has had a major impact on global conditions, notably on commodity prices, is China. However, growth in China has been driven first by a rapid expansion of exports to advanced economies and more recently, after the global crisis, by an investment boom, neither of which is replicable or sustainable over the longer term. To maintain a rapid growth, export-led Asian economies need to reduce their dependence on foreign markets. For Latin American and African commodity exporters, gaining greater autonomy and achieving rapid and stable growth depend on their success in reducing reliance on capital flows and commodity earnings – the two key determinants of their growth which are largely beyond national control.
This paper examines the contribution of exports to growth in China since the early years of the decade. It is estimated that, despite a high import content ranging between 40 and 50 percent, approximately one-third of Chinese growth before the global crisis was a result of exports, due to their phenomenal growth of some 25 percent per annum. This figure increases to 50 percent if spillovers to consumption and investment are allowed for. The main reason for excessive dependence on foreign markets is underconsumption. This is due not so much to a high share of household savings in GDP as to a low share of household income and a high share of profits. It is argued that China can no longer maintain such high growth rates for its exports, and, therefore, needs to turn to consumption-led growth by expanding the share of wages and household income in GDP and accelerating public spending in social infrastructure.
After World War II a select number of countries outside Japan and the West--those that Alice Amsden calls "the rest"--gained market share in modern industries and altered global competition. By 2000, a great divide had developed within "the rest", the lines drawn according to prewar manufacturing experience and equality in income distribution. China, India, Korea and Taiwan had built their own national manufacturing enterprises that were investing heavily in R&D. Their developmental states had transformed themselves into champions of science and technology. By contrast, Argentina, Brazil and Mexico had experienced a wave of acquisitions and mergers that left even more of their leading enterprises controlled by multinational firms. The developmental states of Mexico and Turkey had become hand-tied by membership in NAFTA and the European Union. Which model of late industrialization will prevail, the "independent" or the "integrationist," is a question that challenges the twenty-first century. Available in OSO: http://www.oxfordscholarship.com/oso/public/content/economicsfinance/0195139690/toc.html
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