Jomo Kwame Sundaram’s Blog

The commodity boom early this century was mainly driven by mineral prices. Yet, mining’s contribution to developing countries’ revenue has been modest, largely due to massive tax evasion and avoidance. Less mining royalties Decades of well-supervised mineral extraction prove resource extraction by accountable and effective states can accumulate more ‘resource rents’ to enhance sustainable development and social welfare. Well-regulated, progressive resource rent taxation can greatly enhance such extractive industries’ fiscal contribution to public wellbeing and national development. But mining royalty rates fell significantly at the end of the 20th century to a range up to 30 per cent. Mineral revenue rates must…

The debt crises looming in developing countries are being exacerbated by changing debt composition. Declining net foreign exchange earnings have worsened their predicament. As concessional development finance declined, many governments turned to riskier forms of borrowing from international capital markets. Concerted interest rate hikes are supposed to stem inflation; however, given that prices have mainly risen due to supply chain disruptions caused by war, sanctions and pandemic, interest rate increases are likely to trigger more debt crises, much worse than before. Current discourses, for example about China's ‘debt trap’ diplomacy, distract from urgently needed international and national measures to avert…

After decades of resistance by rich nations, African governments successfully pushed for the United Nations to lead on international tax cooperation. All developing countries and fair-minded governments must rally behind this initiative. UN leadership The official UN Secretary-General’s Report (SGR) was mandated by a UN General Assembly resolution, unusually adopted by consensus in late 2022. All countries must now work to ensure progress on financing to achieve the Sustainable Development Goals (SDGs) and climate justice after major setbacks due to the pandemic, war and illegal sanctions. Rich countries had blocked an earlier tax cooperation initiative at the Addis Ababa Financing for Development (FfD) summit…

The United Nations Secretary-General’s Dialogue on Financing for Development on 20 September may well be the world’s last chance to save the Sustainable Development Goals (SDGs) and curb global warming in time. The UN and International Finance Many features of the international financial system – including multilateral arrangements developed over many decades – have been overtaken by new developments, sometimes resulting in multidimensional crises. The month-long 1944 Bretton Woods gathering was convened as a UN conference to create conditions conducive to post-war recovery and post-colonial development. But the systemic concerns of John Maynard Keynes and others from developing countries were…

International governance arrangements are in trouble. Condemned as ‘dysfunctional’ by some, multilateral agreements have been discarded or ignored by the powerful except when useful to protect their interests or provide legitimacy. Economic multilateralism under siege Undoubtedly, many multilateral arrangements have become less appropriate. At their heart is the United Nations (UN) system, conceived in the last year of US President Franklin Delano Roosevelt’s presidency and World War Two. The 1944 UN conference at Bretton Woods sought to build the foundations for the post-war economic order. The International Monetary Fund (IMF) would create conditions for lasting growth and stability, with the…

Jomo K.S. warns US policies are driving the world to war and depression leaving developing countries with a strong vested interest to reconvene a new non-aligned movement and strengthen democratic institutions of global governance. Link to transcript: https://gpenewsdocs.com/nam-2-0g77-vs...

Rich nations have contributed most to the current climate crisis. They are primarily responsible for the historical emissions and greenhouse gas (GHG) accumulation of the last two centuries. Developing countries, especially in the tropics and sub-tropics, are the main victims of global warming today. Most need finance and other means to build resilience and to develop in the face of the climate crisis. But the rich have resisted major efforts to help developing nations better cope with the crisis. Climate finance lacking But recent international climate finance flows fall far short of developing countries’ needs, not only in the aggregate, but also…

The primary commodity price boom early this century has often been attributed to a commodity ‘super-cycle’, i.e., a price upsurge greater than what might be expected in ‘normal’ booms. This was largely due to some minerals as most agricultural commodity price increases were more modest. This minerals boom improved many developing country growth records, not least in Africa. With growing pressures to act urgently in response to accelerating global warming, mitigation efforts have been stepped up, promising energy transitions to reduce greenhouse gas emissions. These require major shifts from fossil fuel combustion to renewable energy and complementary (e.g., transport) technologies.…

To achieve universal health coverage, people need public healthcare systems providing fair access to decent health care. This should be an entitlement for all, regardless of means, requiring adequate, appropriate and sustainable financing over the long term. Appropriate arrangements can help ensure a financially sustainable, effective and equitable healthcare system. However, insurance-based systems – both private and social – not only incur unnecessary costs, but also undermine ensuring health for all. Private health insurance Voluntary private health insurance (PHI) is not an acceptable option for both equity and efficiency reasons. Those with lower health risks are less likely to buy…

Currency values and foreign exchange rates change for many reasons, largely following market perceptions, regardless of fundamentals. Market speculation has worsened volatility, instability and fragility in most economies, especially of small, open, developing countries. US Fed pushing up interest rates For no analytical rhyme or reason, US Federal Reserve Bank (Fed) chairman Jerome Powell insists on raising interest rates until inflation is brought under 2% yearly. Obliged to follow the US Fed, most central banks have raised interest rates, especially since early 2022. The US dollar or greenback’s strengthening has been largely due to aggressive Fed interest rate hikes. Undoubtedly,…