Oil and the Tenuous Global Balance C.P. Chandrasekhar and Jayati Ghosh

High and rising levels of the prices of oil have stoked dormant fears of a global economic shock comparable to those experienced in the 1970s. However, early evidence points to a strengthening of growth in the US, despite the current tenuous equilibrium in which global surpluses finance an ever widening US current account deficit.  The authors discuss the possible reasons for this tendency. Oil_Tenuous_Global _Balance (Download the full text in PDF format)

Do Missed WTO Deadlines Matter?

Another deadline has been missed in the perpetually "ongoing" negotiations to further liberalise world trade. The 149 members of the World Trade Organisation were to arrive at agreement on the "modalities" for reducing various forms of support to agriculture and increasing market access for non-agricultural commodities by the 30th of April. An end-April mini-ministerial had been announced by Pascal Lamy, the organisation's Director General, which was expected to clinch an agreement. But as deadline day neared, all that came to nought. With no hope of agreement between the US and the EU and the "leading" developing countries like Brazil and…

Hong Kong Ministerial Declaration and Export Competition in Agriculture: What has it really achieved? Parthapratim Pal and Deepika Wadhwa

It is generally perceived that the Paragraph 6 of the Hong Kong Ministerial declaration has taken some major strides towards disciplining all forms of export supports. This paper takes a look at the Paragraph 6 of the Hong Kong declaration analyzes its implications for international agricultural trade.  HK_Ministerial_Declaration (Download the full text in PDF format)

How Did the West Get Rich? Alternative Stories and Alternative Lessons Luiz Carlos Bresser-Pereira

(Prepared as a bases for remarks delivered at the panel on "The New Development Economics: Critical Perspectives," at the Left Forum, New York, March 11, 2006.) The new development economics – and, more generally, the neo-liberal approach to economics – is based on certain ideas about markets and private property, in particular the idea that when property rights are secure and markets are allowed to function economic growth will be the salutary result. The condition that "markets are allowed to function" includes international markets, and an advocacy of free trade is certainly one of the hallmarks of the new development…

Taming Predatory Capitalism James K. Galbraith

In 1899 Thorstein Veblen described predation as a phase in the evolution of culture, "attained only when the predatory attitude has become the habitual and accredited spiritual attitude...when the fight has become the dominant note in the current theory of life." After an entire century's struggle to escape from this phase, we've suffered a relapse. The predators are everywhere unleashed; and the institutions built to contain them, from the United Nations to the AFL-CIO to the SEC, are everywhere under siege. Predation has again become the defining feature of economic life. Our first problem is to grasp this reality in…

Appreciating Argentina Jayati Ghosh

It used to be called the "Paris of the South" – and there is no doubt that Buenos Aires is a beautiful city with a very European feel. To the outside observer, it does not even appear to be in a developing country, not least because the resident population is almost completely dominated by relatively recent European migrants of the past century and a half. Indeed, Argentina is still much richer and more developed than most countries in the world, and in Buenos Aires the evidence of past splendour still dominates in the wide boulevards and imposing classical architecture that…

Privatizing the World Bank?

In a recent article entitled Reforming the World Bank: Creative Destruction (Foreign Affairs, January/February 2006), Jessica Einhorn, dean of the Paul H. Nitze School of Advanced International Studies (SAIS, Johns Hopkins University), called for the disbandment of the International Bank for Reconstruction and Development (IBRD). Addressing her remarks to the World Bank's new president, Paul Wolfowitz [1] and its major funders, she called for an end to the bank's lending to middle-income countries, and for a focus instead on the poorer countries which have little or no access to private capital markets as credit sources for development financing. Einhorn, who retired in…

The Costs of War in Iraq Jayati Ghosh

It is no secret that the occupying powers in Iraq have destroyed the country's infrastructure. The output of Iraq's national electrical grid is lower than it was prior to the invasion. The average urban Iraqi household has electricity for only half the day at best. Even in the capital Baghdad, there is electricity for no more than six hours a day. Safe water supply - once available to all of Iraq's population - is now accessible by only a tiny proportion of the country 26 million people, and the majority of the population is forced to buy water at exorbitant…

Pointing Fingers at Davos C.P. Chandrasekhar

The turnaround was near complete. A year back the annual World Economic Forum meeting at Davos of political, social and business leaders was overcome with gloom. This year, most participants were complacent, if not upbeat. Last year's gloom was directly related to America's seemingly unsustainable current account and budgetary deficits that were widening because of a consumption splurge induced by the wealth bonanza that a speculative housing boom was delivering. To finance those deficits the US was relying on inflows of the large foreign exchange surpluses accumulating in countries like China and India, who seemed to be growing wary of…

The Disaster of Relief Jayati Ghosh

How quickly and easily those in power manage to divert our attention from the real issues of the day, and from the questions that are more inconvenient for themselves. Consider, for example, the extraordinary fallout of the Volcker Report, the peculiar result of an exercise which was stage-managed from beginning to end by a US government that has shown its complete contempt for both international law and the UN itself. Quite apart from its other effects, this has completely diverted the attention of national and international media from the huge and ongoing corruption in Iraq. Currently the real scam is…