Jomo Kwame Sundaram’s Blog

Capital flight from the global South is immense, with widespread adverse effects. A new book proposes measures to curb, even reverse capital flight from Africa. It also offers pragmatic lessons for many developing countries. Out of Africa On the trail of capital flight from Africa extends pioneering work begun much earlier. The editors – Leonce Ndikumana and James Boyce – estimate Sub-Saharan Africa (SSA) has lost more than US$2 trillion to capital flight in the last half century! SSA currently loses US$65 billion annually – more than yearly official development assistance (ODA) inflows. The book’s studies carefully investigate natural resource exploitation – of South African…

Western sanctions on Russia, a major global exporter of grain (esp. wheat), energy and fertilizers will have negative implications on developing and poor countries on their debt, food security and nutrition. These price rises from supply-side disruptions cannot be solved by raising interest rates at the national level, as many countries are attempting today. Full video available at: https://www.youtube.com/watch?v=rI9Wt0WWP94

Modern Monetary Theory (MMT) gains traction and calls for increased central bank financing to solve the lack of fiscal space, especially in SE Asia, Indonesia & Philippines. The existing international and national monetary order constrains development due to inflation targeting for example. Full video available at: https://www.youtube.com/watch?v=rI9Wt0WWP94

Multilateralism which broke down post-Cold war has remained so during this pandemic as well. Countries dealt with the pandemic differently. South Africa & India spoke up for a WTO TRIPS waiver on testing equipment and vaccines and was opposed mainly by the EU. There has been enormous resistance to compulsory licensing as well, contributing to worsening health indicators. Full video available at: https://www.youtube.com/watch?v=rI9Wt0WWP94

The spectre of ‘stagflation’ threatens the world once again. This time, the risk is the direct consequence of political provocations and war, and not simply due to inexorable economic forces. Stagflation? Stagflation is a composite word implying inflation with stagnation. Stagnation refers to weak, ‘near zero’ growth, inevitably worsening unemployment. Inflation refers to price increases – not high prices, as often implied. The term ‘stagflation’ was supposedly first used in 1965 by Iain Macleod, then UK Conservative Party economic spokesperson. He later became Chancellor of the Exchequer, or finance minister, in 1970 for little over a month, the shortest tenure in…

“Si tu única herramienta es un martillo, cualquier problema parece un clavo”. Todavía perseguidos por la predica del fantasma del gurú monetarista Milton Friedman, demasiadas autoridades monetarias abordan subiendo las tasas de interés cada amenaza o señal inflacionaria que ven. El dictamen del estadounidense Friedman, uno de los fundadores de la neoliberal Escuela de Chicago, de que «la inflación es siempre y en todas partes un fenómeno monetario» aún sigue definiendo la ortodoxia. A pesar del cambio de circunstancias en el mundo actual, para los “friedmanistas”, la inflación debe ser frenada mediante un endurecimiento monetario, especialmente con subidas de los…

“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. Friedman’s dictum that “inflation is always and everywhere a monetary phenomenon” still defines the orthodoxy. Despite changed circumstances in the world today, for Friedmanites, inflation must be curbed by monetary tightening, especially interest rate hikes. No central banker consensus The threat of higher inflation has risen with Russia’s Ukraine incursion and the punitive Western ‘sanctions from hell’ in…

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 “crushing sanctions” will have a “chilling effect” on Russia. With sanctions intended to strangle Russia’s economy, the US and its allies somehow hope to increase domestic pressure on Russian President Vladimir Putin to retreat from Ukraine. The…

All over the world, people expect policies by central bankers trained in economics to have a sound scientific base. But in fact, inflation targeting is an article of faith with neither theoretical nor empirical basis. Policy inspiration The two per cent (2%) inflation target is now virtually an “economic religion”. US Federal Reserve chairman Jerome Powell noted it had become a “global norm”. In 1989, New Zealand became the first country to adopt a 2% inflation target. “The figure was plucked out of the air”, acknowledged Don Brash, then Governor of the Reserve Bank of New Zealand (RBNZ), its central bank.…

According to the UN Framework Convention on Climate Change, climate finance refers to local, national, or transnational financing that supports mitigation and adaptation efforts to address climate change (UNFCCC). It might come from governmental, private, or nontraditional funding sources. While climate financing is essential for mitigation, adaptation, 'losses and damages' (L&D), and overall risk management, many poor nations' climate plans and activities are conditional on receiving the necessary financial support. Unsurprisingly, one of the most divisive issues in climate politics is assisting poorer nations in addressing climate change. Download full article (This article was originally published in SpringerLink on February…