Jayati Ghosh’s Blog

More than a year after the mass protest movement known as the Aragalaya ousted Sri Lanka’s President Gotabaya Rajapaksa and his brother, Prime Minister Mahinda Rajapaksa, Sri Lankans have once again taken to the streets. The impetus for the resurgence of public discontent is the recent bailout agreement between the International Monetary Fund and President Ranil Wickremesinghe’s government. The deal, which aims to address the country’s ongoing balance-of-payments crisis, offers Sri Lanka less than $3 billion over four years – a tiny fraction of what the country needs to meet its debt-servicing requirements and just one-sixth of its foreign-exchange earnings,…

At the upcoming UN Summit of the Future, the proposed Pact for the Future could generate the necessary political will for countries to commit to a just green transition. Low- and middle-income countries, in particular, could negotiate for fairer multilateral agreements and new financing mechanisms to address climate change. Our collective future hinges on a transformative shift in our relationship with the planet. This week, during the United Nations General Assembly meeting in New York, negotiations will begin at the ministerial level to plan the Summit of the Future in 2024. Coming together to save our common home must be at the…

The dramatic increase in global oil and food prices from the start of the Ukraine War did not reflect real global supply shortages or demand-supply imbalances. Rather, it reflected the impact of market concentration and financial activity in commodity futures markets, which enabled some large private players particularly global agribusinesses and financial companies to make a killing. This is now so evident from the data that it is more widely acknowledged. The agricultural commodity that was most affected by the Ukraine war is wheat. Wheat prices in global trade surged from January to June 2022, then fell, so that by…

Renowned development economist and former Jawaharlal Nehru University professor Jayati Ghosh has been named the 2023 recipient of the Galbraith Award by the Agricultural and Applied Economics Association (AAEA). The award, announced in early March, was formally handed to her on July 25, 2023. Ghosh is currently professor at the University of Massachusetts Amherst. The award’s citation notes that it is being given “in recognition of breakthrough discoveries in economics and outstanding contributions to humanity through leadership, research and service.” The awards are named after John Kenneth Galbraith, an American-Canadian economist, and seek to honour his spirit of integrating scholarship…

The IMF’s estimates of debt stress suggest that as of May 2023, 11 countries were in debt distress (that is, in default or on the verge of default) while 51 countries were in severe moderate debt stress. Typically, a debtor country captures international headlines only when it actually defaults on some or all of its payments, or when it is forced to approach the G20’s Common Framework for a debt relief package, or when it appeals to the IMF for emergency liquidity support. Yet this list of debt emergencies—or even the longer list of debt-stressed countries as estimated by the…

The June 22-23 Summit for a New Global Financing Pact promised to catalyze a revolution in climate finance and empower the Global South. But it failed to meet its lofty goals, concluding without a single firm commitment or concrete proposal to help developing countries reduce their debt burden and move away from fossil fuels. The recent Paris Summit for a New Global Financing Pact was touted by its organizers, including French President Emmanuel Macron, as a groundbreaking initiative to forge a “new contract” between the Global North and South that would address climate change and foster sustainable development. The fact that most G20…

The webinar "Decoding the New Global Financing Pact Summit: Critical reflection from the lens of climate, debt and tax justice" took place on 26 June 2023. On 22-23 June, world leaders, representatives of financial institutions and private sectors and CSOs are gathering in Paris for the New Global Financing Pact Summit, convened by President Macron in response to the Bridgetown Initiative. It calls for an overhaul of the international financial system to fight inequalities, finance the climate transition and bring us closer to achieving the SDGs. The webinar critically assessed the outcomes of New Global Financing Pact (to be held…

Abstract The title of this article is a riff off a publication of G. C. Harcourt’s 1974 piece, ‘The social consequences of inflation’. He wrote this in a period of the global economy that bears some strong similarities to our own contemporary phase when inflation is suddenly back in the global headlines. There is at least one significant difference: at that time, Harcourt highlighted inflation as the outcome of an excess of total demand in real terms over available supplies of goods and services when the potential workforces and existing stocks of capital goods were fully employed. Current inflationary pressures,…

High global prices of food items, especially essential food grains, have terrible consequences around the world, with those living in lower-income food-importing countries typically the worst affected. It is often assumed that when such prices rise, it is the result of changing supply conditions for example, changing climate patterns that affect sowing and harvest, or particular shocks (like the Ukraine War) that reduce production and exports of major exporting countries, or affect transport links between exporting and importing countries. There is no doubt that these can indeed be factors, but in fact their significance tends to be greatly overplayed. Indeed,…

The upcoming Paris Summit on a New Financing Pact once again shines a spotlight on the so-called financing gap. According to an early concept note for the Summit: “Developing countries have large developmental needs and face huge financing gaps due to limited access to international markets, as well as inadequate financing mechanisms including limited concessional finance, hampering their ability to achieve the 2030 Agenda for Sustainable Development and its goals as well as the climate goals.” Such a declaration aligns with the mainstream narrative that – given the insufficiency of official development assistance (ODA), climate finance and public finance more…