Jomo Kwame Sundaram’s Blog

Many argue that China’s impressive growth for last four decades has been due to deliberate exchange rate undervaluation, promoting exports and discouraging imports. In August last year, the Trump administration accused China of engaging in currency manipulation. Apparently as part of the first phase of their latest trade deal, on 13 January, the US no longer designates any major trading partner, including China, of being a currency manipulator. However, Switzerland has been added to the US watchlist which also includes China, Germany, Ireland, Italy, Japan, Korea, Malaysia, Singapore and Vietnam. Post-war US hegemony When the US Treasury Department accuses a…

The latest November 2019 UBS/PwC Billionaires Report counted 2,101 billionaires globally, or 589 more than five years before. Earlier, Farhad Manjoo had seriously recommended, ‘Abolish Billionaires’, presenting a moral case against the super-rich as they have and get far, far more than what they might reasonably claim to deserve. Manjoo also argues that unless billionaires’ economic and political pwer is cut, and their legitimacy cast in doubt, they will continue to abuse power to further augment their fortunes and influence, in ways detrimental to the economic, social and public good. Benign billionaires? In defence of billionaires, Josef Stadler, head of ultra-high net worth at…

Malnutrition remains a formidable challenge in most societies, with less than a tenth of countries in the world not experiencing at least one major malnutrition problem. In relatively more food secure countries, where almost everyone has enough to eat, and few live in fear of a sudden loss of access to food, micronutrient deficiencies and diet-related non-communicable diseases (NCDs) often still loom large. One such country is Malaysia where rice is, by and large, available and affordable to almost everyone. However, what else Malaysians eat is quite problematic, causing to undernutrition in terms of micronutrients and other food-related health problems.…

China’s gross domestic product (GDP) grew by 14%. Since then, its growth rate has declined by more than half to 6.6% in 2018. The five-year moving average growth rate is at its lowest since reforms began in 1978, although annual growth briefly fell lower during 1989, the year of the Tian An Men incident. China’s growth slowdown Economists have suggested various factors slowing China’s growth, including its lower population growth and ageing population. These demographic factors are real, but their significance has been exaggerated. The working age population and employment both grew at 2% annually at the end of the…

Any balanced assessment of the so-called Chinese economic miracle will recognize that it was extremely successful, not only during the reform period from 1979, but also since Liberation in 1949 despite the setbacks of the Great Leap Forward and the Cultural Revolution. The Chinese economy grew at about 5% on average during 1949-1979 and at almost 10% in 1979-2019. Five percent growth was impressive, higher than in most countries of the world at that time, but ten percent growth over the last four decades is quite unprecedented. Miracle of economic liberalization? The conventional explanation of this miracle is liberalization, or more accurately,…

Almost nine decades ago, newly elected US President Franklin Roosevelt introduced the New Deal in 1933 in response to the Great Depression. The New Deal consisted of a number of mutually supportive initiatives, of which the most prominent were: a public works programme financed by budget deficits; a new social contract to improve living standards for all working families, including creation of the US social security system; and financial regulation to protect citizens’ assets and channel financial resources into productive investments. The New Deal was effectively a fiscal stimulus for recovery, employment, development and environment goals. The Citizens Conservation Corps (CCC) created two million…

The International Monetary Fund (IMF), the World Bank and the World Trade Organization (WTO), all dominated by rich countries, have long promoted trade liberalization as a ‘win-win’ solution for “all people—rich and poor—and all countries—developed and developing countries”, arguing that “the gains are large enough to enable compensation to be provided to the losers”. Yet, the IMF’s 2016 World Economic Outlook has warned that free trade is increasingly seen as only or mainly benefiting the well-off. The help and compensation needed by those disadvantaged by trade liberalization has rarely if ever been forthcoming, even in most developed economies. Dubious claims In 2001, World…

The OECD Secretariat published its proposed ‘unified approach' to reform international tax rules to address tax challenges posed by digitalization on 9 October 2019. Under current rules, there is little chance of a company being taxed without its physical presence in the country concerned. But digitalization enables many businesses to remotely conduct economic activities affecting a national economy without a direct physical presence. The OECD proposal aims to ensure that highly profitable large transnational enterprises (TNEs), including digital companies, pay tax wherever they generate profits from significant ‘consumer-facing activities'. ‘Consumer-facing' refers to any role, service, technology or information directed at…

Two decades into the 21st century, all too many people still associate being ‘overweight’ with prosperity, health and wellbeing, mainly because being thin has long been associated with being emaciated due to hunger, undernourishment and malnutrition. Overweight and obesity can easily be assessed by anthropometric measures, including the body mass index (BMI) and waist circumference. But BMI thresholds for overweight and obesity may differ by ethnic group or country. The standard World Health Organization (WHO) BMI cut-off for overweight is 25, while the threshold for obesity is 30, understood as an abnormally high percentage of fat, which can be either…

The United Nations (UN) Sustainable Development Goals (SDGs) can only be achieved by 2030 with the political will to change international economic rules and mobilize resources needed for a massive public sector-led investment push to reinvigorate world economic progress sustainably, says UNCTAD’s Trade and Development Report 2019 (TDR 2019). Global Green New Deal Existing international economic rules enhance market forces, corporate power and national policies which sustain, if not increase economic disparities and environmental destruction. TDR 2019 calls for a Global Green New Deal (GGND) which would at least reverse the austerity, stagnation and vulnerability since the 2008-2009 global financial…