Jomo Kwame Sundaram’s Blog

Greater government reliance on consulting companies has greatly enriched them while also undermining state capacities, capabilities, national economies, progress, governance and legitimacy. The Big Con Over recent decades, policy consultancy has gradually gained more public attention. With the COVID-19 pandemic, consultancies were paid billions, with meagre results, leaving even less for millions of others desperately struggling to cope. In The Big Con: How the Consulting Industry Weakens our Businesses, Infantilizes our Governments and Warps our Economies, Mariana Mazzucato and Rosie Collington explain how consultancies persuade governments and corporations to use their services, with problematic consequences. Many argue that governments and corporations…

US President Joe Biden’s Indo-Pacific Framework for Prosperity (IPEF) is the economic arm of his administration’s Indo-Pacific Strategy, aimed at countering China’s influence in the region. Despite its lofty pronounced goals, IPEF’s shortcomings expose a disconcerting lack of political will, inconsistent trade policies, and US inability to match China’s infrastructure initiatives. Bull in a China shop? Launched in Japan in May 2022, IPEF was widely touted as the Biden administration’s better follow-up to Trump’s withdrawal from Obama’s Trans-Pacific Partnership (TPP). Many had anticipated a robust reply to China’s growing economic influence in the region, particularly following US depiction of the…

Public-private partnerships (PPPs) for infrastructure and service provision are both costly and risky. Worse, PPPs typically fail to ensure universal, let alone fair access to public amenities. Public-private partnerships? PPPs usually involve long-term contractual arrangements in which private businesses provide infrastructure and services traditionally provided by governments. In recent years, PPPs have built or run hospitals, schools, prisons, roads, airports, railways, water and sanitation. Risk-sharing between public and private sectors has long been widespread. In recent years, more than two dozen different types of PPPs have been identified. Such variations reflect differences in deals between governments and commercial partners. Most international financial…

Governments the world over are worried about investor-state dispute settlement (ISDS) rules. These allow foreign investors to sue them for billions over new laws or policies reducing their profits. Typically favouring powerful transnational corporations (TNCs), ISDS blocks policy changes needed to address new challenges. Companies have successfully sued governments for policy changes which allegedly reduce their profits. The wicked of Oz Tobacco giant Philip Morris tried to block the Australian government’s demand for ‘plain packaging’, with larger and more graphic health warnings on cigarette packs, by suing under ISDS and also in Australian courts. In the domestic case, Australia’s highest court ruled the legislation…

Policy approaches relying solely on voluntary actions to address urgent needs are unlikely to succeed. Depending on optional compliance to address global warming will not fix things in time. Regulation for transformation Tariq Fancy, former Chief Investment Officer for Sustainable Investing at BlackRock, had created a storm with his criticisms of ESG (environmental and social governance) ‘greenwashing’, remaining wary of voluntary corporate-led reforms. Nevertheless, judicious and effective regulation based on ESG principles, combined with changing incentives and increased public awareness, can incentivize companies to do better. Fancy believes changing rules for better regulation is essential for better outcomes. Limiting greenhouse…

A senior manager of the world’s largest investment firm has ‘blown the whistle’ on ESG (environment, social and governance) ‘greenwashing’, especially on supposed climate finance. Wall Street whistle-blower Tariq Fancy was Chief Investment Officer (CIO) for Sustainable Investing at BlackRock, managing over $9 trillion in assets. Founded in 1988, headquartered in New York City, and with the world’s largest investment portfolio, BlackRock can move financial markets. Hence, Fancy’s insider critique of corporate ESG pretensions – often associated with ‘responsible’ and ‘impact investing’ – has had a major impact. It has been seen as confirming and even elaborating on longstanding criticisms of…

Finance has increased, not reduced, greenhouse gas (GHG) emissions. Meanwhile, funding for mitigation, and especially adaptation, is grossly inadequate, with little for climate losses and damages. Global Warming Accelerating Rich countries are mainly responsible for the fast-worsening global warming as developing nations suffer more of its adverse effects. Worse, they are much more financially constrained, e.g., due to the higher costs of and poorer access to credit. Before the 2009 UN Climate Change Conference of Parties (CoP) in Copenhagen, rich countries promised to provide $100 billion yearly to developing nations until 2020 for climate finance, after which such assistance would…

Ajay Banga was anointed World Bank president for promoting financial inclusion. Thanks to its success and interest rate hikes, more poor people are drowning in debt as consumer prices rise. Meritocratic leadership? Since the International Monetary Fund (IMF) and World Bank were set up by the United Nations Conference at Bretton Woods in 1944, the US president’s nominee has been automatically appointed Bank president. By convention then, the Bank president is a US citizen, while the IMF head is European. The official IMF historian noted US authorities believed “the Bank would have to be headed by a US citizen in order to…

In recent years, public-private partnerships (PPPs) have spread rapidly. While usually profitable for the private partners, PPPs have generally not served the longer-term public interest. PPPs as miracle all-purpose solution As Eurodad has shown, PPP financing has grown in recent years, particularly in the Sustainable Development Goals (SDGs) funding discourses. Adopted by the UN in September 2015, the SDGs endorsed PPP financing. Earlier, the mid-2015 Third UN Conference on Financing for Development in Addis Ababa had failed to ensure adequate financing. This was mainly due to rich nations opposing a UN-led international tax cooperation initiative. Instead, PPPs were strongly endorsed…

The growing and changing material requirements for new technologies have triggered natural resource scrambles for strategic minerals, generating dangerous rivalries fought out in the global South. Scrambles for resources Jayati Ghosh, Shouvik Chakraborty and Debamanyu Das have analyzed these new scrambles for mineral resources in developing countries triggered by major new innovations since the electronics boom. Natural resources here refer to naturally occurring solid, liquid or gaseous materials in or on the Earth’s crust. When extracted and exported commercially, they are considered primary commodities. All technologies – both peaceful and military – have specific material requirements. For example, energy transitions…