The Continuing Need for Industrial Policy Jayati Ghosh

A panel discussion in Doha, Qatar, as part of the Thirteenth UN Conference on Trade and Development (UNCTAD XIII) brought together some economists and policy makers to provide new perspectives on industrial policies in the South. It became evident that industrial policies have been significant, if unsung, forces behind the much trumpeted “emergence” of some developing economies as major players in the world stage. For some time now, in different parts of the world, industrial policy has been making a comeback. Indeed, as participants in the panel noted, it never really went away, especially in the more successful countries, even…

Employment shifts after the Global Crisis C.P. Chandrasekhar and Jayati Ghosh

For more than a year now, it has been evident that the ''recovery'' from the Great Recession, which has been visible if sputtering in terms of output growth in the core capitalist countries, has not delivered anything like the increases in employment that were expected. A recent report of the ILO (''Short-term employment and labour market outlook and key challenges in G20 countries'', ILO and OECD September 2011, page 1) points out: ''With economic activity slowing in several major economies and regions, earlier improvements in the labour market are now fading, hiring intentions are softening and there are greater risks…

Should ‘‘Open innovation’’ Change Innovation Policy Thinking in Catching-up Economies? Considerations for policy analyses Erkki Karo and Rainer Kattel

This paper provides a review of the current state of academic and policy-level debates on ‘‘open innovation’’ by elaborating on the relevance of the concept of open innovation for innovation policy-making in catching-up economies. The paper shows that paradoxes and contradictions exist between the ‘‘mainstream’’ innovation discourse and the development challenges of the catching-up countries that have lead to ‘‘de-contextualization’’ of the innovation policy discourse. open_innovation (Download the full text in PDF format)

Modernizing Russia: Round III Erik S. Reinert and Rainer Kattel

Looking at Russian economic dynamics through evolutionary and Schumpeterian Other Canon lenses, the authors provide alternative explanation as to why Russia is still lagging behind other BRIC and leading catching-up economies. In this context they argue that learning from successful cases of managing industrial policy under the WTO – what the rest of the BRIC economies have long been doing – is perhaps the main issue for Russia’s economic policy-making in the near future. Modernizing_Russia  (Download the full text in PDF format)

Rethinking Investment Provisions in Free Trade Agreements Smitha Francis

Developing country governments are increasingly resorting to comprehensive trade agreements involving profound commitments in public policy, which have wide-ranging adverse consequences on food security, industrial development, financial stability, etc. This paper analyses investment disciplines in FTAs in order to come to an understanding of their overall impact on a developing country FTA partner’s policy space, and therefore, on its development prospects. It is argued that given the links between trade and investment commitments within and across different FTAs, South-South FTAs have become as problematic as North-South FTAs. Rethinking_Investment_Provisions  (Download the full text in PDF format)

The Impact of Trade Liberalization and the Global Economic Crisis on the Productive Sectors, Employment and Incomes in Mexico Alicia Puyana

Analysing the impact of trade reforms on the performance of the Mexican economy, specifically in the aftermath of the crisis, the author discusses the advantages and disadvantages of liberalisation, gives concrete policy recommendations and identifies the role of development cooperation, particularly aid for trade, to improve Mexico’s post-crisis development strategies. incomes_mexico (Download the full text in PDF format)

Combining Bad Economics with Proto-geography Sumanasiri Liyanage

The article analyses a recently released World Bank report on Sri Lanka, titled, ''Sri Lanka: Connecting People to Prosperity''. It points out that the main weakness of the report stems from its neo-liberal premise that places market and market forces at a pre-eminent position. Further, it argues, that economic development anywhere in the world, with the exception of a handful of countries, has resulted from correct industrial policy rather than from unconditional faith in market forces. Combining_Bad_Economics (Download the full text in PDF format) (This article has appeared in The Island, 22 August 2010)

South –South Regionalism and Trade Cooperation in the Asia-Pacific Region Mehdi Shafaeddin

This study of regional South-South (S-S) trade and cooperation in East, South and South-East Asian countries (ESSEA) aims to provide an economic rationale for S-S trade; shed some light on the extent and pattern of S-S trade in the ESSEA region. The study also examines the dynamic forces behind the expansion of such trade, its shortcomings and vulnerabilities and proposes policies for enhancing and strengthening regional cooperation. The main conclusion of the study is that, while the rapid expansion of trade among ESSEA countries has been mainly the result of industrialization and industrial collaboration in the form of production sharing,…

WTO: One more failure C.P. Chandrasekhar

On July 29, a meeting of ministerial representatives of a large group of members of the World Trade Organisation ended without result. The meeting itself should not have been held in the first place. It was unscheduled, and was convened to clinch a deal on the modalities that should govern the Doha Round of trade negotiations, even though there was no evidence that members were anywhere near agreement in a number of areas that mattered. Ministerials work when countries are near agreement. However, with the terms of the Bush administration and of the WTO Director General Pascal Lamy nearing their…

The Global Oil Price Story Jayati Ghosh

It may seem hard to believe now, but for more than half a century, world oil prices have not moved much around the average figure of US $27 per barrel in 2007 price terms. The occasional shifts away from this average have been few and the periods of oil price spikes were relatively short, with the most notable being the OPEC-induced “shocks” of 1970s. Between the mid-1980s and 2003, the real price (that is adjusted to inflation) of crude oil on the major international trading exchanges was typically less than $25 per barrel. The recent rise in the price of…