Jomo Kwame Sundaram’s Blog

Developing country governments are being blamed for irresponsibly borrowing too much. The resulting debt stress has blocked investments and growth in this unequal and unfair world economic order. Money as debt Myths about public debt are legion. The most pernicious see governments as households. Hence, a ‘responsible’ government must try to run a surplus like an exemplary household head or balance its budget. This analogy is simplistic, unfounded and misleading. It ignores the fact that governments and households are not equivalent monetary entities. Unlike households, most national governments issue their currencies. As currency is widely used for economic transactions, government…

Since 2008, farmland acquisitions have doubled prices worldwide, squeezing family farmers and other poor rural communities. Such land grabs are worsening inequality, poverty, and food insecurity. Squeezing land and farmers A new IPES-Food report highlights land grabs (including for ostensibly ‘green’ purposes), the financial means used, and some significant implications. Powerful governments, financiers, speculators, and agribusinesses are opportunistically gaining control of more cultivable land. The report notes the 2007-08 food price spike and financial crash catalysed more land acquisitions. Quantitative easing and financialization after the 2008 global financial crisis enabled even more land grabs. Investors, agri-food companies, and even sovereign…

Africans have long been promised trade liberalisation would accelerate growth and structural transformation. Instead, it has cut its modest production capacities, industry and food security. Berg helped sink Africa The 1981 Berg Report was long the World Bank blueprint for African economic reform. Despite lacking support in theory and experience, Africa’s comparative advantage was supposedly in export agriculture. Once obstructionist government interventions were gone, farmers’ previously repressed productive potential would spontaneously achieve export-led growth. But there has been no sustained African agricultural export boom since. Instead, Africa has been transformed from a net food exporter in the 1970s into a net importer.…

Carbon dioxide emission taxes, prices and markets have been touted as key to stopping global heating. However, carbon markets have failed mainly because they favour the rich and powerful. Market Solutions Better? Mainstream economists believe the best way to check global heating is to tax greenhouse gas (GHG) emissions. Equivalent ‘carbon prices’ have been set for the other significant GHGs. But many have been revised due to their moot, varied and unstable, arguably incomparable nature. High carbon prices for GHG emissions are expected to persuade emitters to switch to ‘cleaner’ energy sources. Higher prices for energy-intensive goods and services are…

Developing countries are being blamed for having borrowed and spent irresponsibly. But they have only been doing what foreign powers and financial interests have urged them to do. Since the 2008 global financial crisis, developing nations have been told to borrow massively from private finance, even at exorbitant interest rates, to scale funding up ‘from billions to trillions’. With progress towards sustainable development often in reverse, servicing external debt now blocks progress. Many governments have cut back spending in line with conditions or advice from powerful foreign economic agencies. Current account tales Many still believe all national economies should have…

Developing countries wanting to pursue industrial policy were severely reprimanded by advocates of the ‘neoliberal’ Washington Consensus. Now, it is being deployed as a weapon in the new Cold War. Industrial policy vs colonialism Industrial policy is often seen as pioneered by Friedrich List. But List was inspired by George Washington’s first Treasury Secretary, Alexander Hamilton. He advocated promoting manufacturing as the Industrial Revolution was beginning in England. For List, post-colonial national development required tariffs. Despite a title deceptively similar to his earlier Principles of the Natural Economy, List’s Principles of the National Economy was quite different, clearly inspired by Hamilton. The Meiji…

Much higher interest rates – due to Western central banks – are suffocating developing nations, especially the poorest, causing prolonged debt distress and economic stagnation. US Fed-induced stagnation After the greatest US Fed-led surge in international interest rates in more than four decades, developing countries spent $443.5 billion to service their external government and government-guaranteed debt in 2022. The World Bank’s last International Debt Report showed most of the poorest countries in debt distress as borrowing costs began to surge. The increase has cut into scarce fiscal resources, reducing social spending on health and education. Debt-servicing costs for all developing countries in 2022 increased…

Viable, popular national economic alternatives require conditions to help build and sustain them. An independent, accountable government can ensure supportive institutions, including laws. National Economies For the Global South, globalisation has often meant renewed foreign domination. While dating back to the age of empire, foreign domination is less evident in post-colonial times, making it more difficult to organise against it. National sovereignty and independence are necessary to develop and sustain viable popular economic alternatives. This requires addressing contemporary realities. Some unexpected opportunities may even emerge from the new challenges faced. Cooperation among significant national social forces must be maintained for…

As dire economic predictions for 2023 did not materialise, pundits began 2024 far more optimistically. But policy ghosts from the last half-century will likely undermine such wishful thinking. Optimistic forecasts As New Year celebrations of different cultures decline with the coming of spring in the northern hemisphere, it is useful to review and reconsider various end-of-2023 and early-2024 economic prognoses against what happened in the previous year. Macro-financial economist Nouriel Roubini agrees that worst-case scenarios – including a “severe recession, leading to a credit and debt crisis”, stagflation, and other financial crises – are unlikely for now. But he acknowledges this can easily be “derailed…

Imperialism continues to dominate the world. Globalisation is losing to some of its anti-theses, but imperialism still rules, increasingly by law, albeit in changing even contradictory ways. Hence, we live in challenging times. It is often difficult to see the main challenges we face as there seem to be so many. Also, the new or the unusual gains far more attention than what appears commonplace. Power and Empire Our histories and cultures are often quite different despite our common, but varied experiences of foreign domination, even rule. Such power involves varied mixes of socioeconomic and political relations, involving governance and…