Jomo Kwame Sundaram’s Blog

Privatization has been one of the pillars of the counter-revolution against development economics and government activism from the 1980s. Many developing countries were forced to accept privatization as a condition for support from the World Bank while many other countries have embraced privatization, often on the pretext of fiscal and debt constraints. Privatization generally refers to changing the status of a business, service or industry from state, government or public ownership to private control. It sometimes also refers to the use of private contractors to provide services previously delivered by the public sector. Privatization can be strictly defined to include…

Why do people go hungry? Mainly because they do not have the means to get enough food, whether by producing it themselves or by purchasing it. There is more than enough food to feed the world. All those who currently go hungry can be adequately fed with about two percent of current food production, much more of which is wasted or lost. The main problem is one of distribution or access, rather than production or availability. Inequality and poverty, and increasingly, ‘natural disasters' and armed conflict in the world are at the core of the problem of world hunger. While…

The Trans-Pacific Partnership (TPP) agreement between the US and eleven other Pacific Rim countries was under negotiation for the first seven years of the Obama presidency. For the first four years, Hilary Clinton was the Secretary of State, directly supervising the negotiations. Even after she quit her cabinet position to launch for her second presidential bid, she continued to tout it in superlative terms. Yet, by early 2016, most presidential aspirants, including Mrs. Clinton, had disowned the TPP. No new information about the TPP had come to light to prompt this volte face. Nor had the then new Secretary of…

The Trans-Pacific Partnership Agreement (TPPA) involves twelve Pacific Rim economies of varying sizes and structures. Although often portrayed as a free trade agreement, the TPPA can, at best, be expected to deliver paltry overall growth gains from trade liberalization. The much higher figures touted by TPPA advocates are largely due to dubious ‘non-trade measures’, most of which have been rejected by the US International Trade Commission (ITC). Nevertheless, the ITC expects significant growth due to greatly increased foreign direct investment, which is exaggerated. The TPPA also brings costs and risks to developing countries threatening their development prospects as well as…

The new US census data released in late September show that 3.5 million people in the US climbed out of poverty, as the tepid economic recovery continues. Employers are finally creating more jobs and paying higher wages than seven years after the Great Recession started following the 2008 financial crisis. This progress, while modest, debunks the claims of those who predicted a dire outcome following the increase in the legislated US minimum wage, especially without a robust recovery. The data show large employment and wage gains, particularly for the lower end of the jobs spectrum. Raising the legal minimum-wage and…

October 1st is the International Day of Older Persons. Just another day? Perhaps, but it should remind us that the world’s population is ageing, brought about by the combined effects of declining mortality and fertility rates and longer longevity. By mid-century, one out of five people will be over 65 compared to over one in ten now. This is dramatic enough. What is equally compelling is that eighty per cent of older persons in the world will be living in developing countries by then – within two generations. This ageing of the world’s population is one of humanity’s major achievements.…

At the UN Millennium Summit in September 2000, world leaders committed to halve the share of people living on less than a dollar a day by 2015. The World Bank’s poverty line, set at $1/day in 1985, was adjusted to $1.25/day in 2005, an increase of 25% after two decades. This was then re-adjusted to $1.90/day in 2011/2012, an increase by half over 7 years! As these upward adjustments are supposed to reflect changes in the cost of living, but do not seem to parallel inflation or other related measures, they have raised more doubts about poverty line adjustments. The…

Why do some countries grow faster than others? How do we engineer an economic miracle? Some economists believe that manufacturing growth is like cooking a good dish—all  the needed ingredients should be in the right proportion; if only one is under- or over represented, the ‘chemistry of growth’ will be sub-optimal. Rapid economic growth can only happen if several necessary conditions are met at the same time. Rapid growth is a complicated process requiring a number of crucial inputs— infrastructure, human resources, relatively low economic inequalities, effective state institutions and economic stimuli among others. As ‘binding constraints’ may hold back…

The US Wall Street crash of 1929 was followed by the Great Depression, which in turn engendered two important policy responses in 1933 with lasting consequences for generations to come: President Franklin Roosevelt's New Deal and the Glass-Steagall Act. While massive spending following American entry into the Second World War was clearly decisive in ending the Depression and for the wartime boom, the New Deal clearly showed the way forward and would have succeeded if more public money had been deployed consistently to revive economic growth. Although Michal Kalecki and others had anticipated some of his work, it took a…