Dispute Settlement Becomes Speculative Financial Asset Jomo Kwame Sundaram

Investor-state dispute settlement (ISDS) provisions in bilateral investment treaties (BITs) and free trade agreements (FTAs) have effectively created a powerful and privileged system of protections for foreign investors that undermines national law and institutions. ISDS allows foreign corporations to sue host governments for supposedly causing them losses due to policy or regulatory changes that reduce the expected profitability of their investments. Very significantly, ISDS provisions have been and can be invoked, even when rules are non-discriminatory, or profits come from causing public harm. ISDS will thus strengthen perverse incentives for foreign investors at the expense of local businesses and the…

Economic Recovery Crucial to Sustainable Development Jomo Kwame Sundaram and Anis Chowdhury

More than eight years after the global financial crisis exploded in late 2008, economic growth remains generally tepid, while ostensible recovery measures appear to have exacerbated income and other inequalities. Yet, despite the G-20 group of the world's largest economies raising the level, frequency and profile of its meetings, effective multilateral cooperation and coordination remains a distant dream. Little reason to cheer The United Nations' recent World Economic Situation and Prospects (WESP) 2017 offers little cause for comfort: the world economy has not yet emerged from the protracted slow growth following the 2008 financial crisis; significant uncertainties and risks weigh…

Can the SDGs be financed? Jomo Kwame Sundaram and Anis Chowdhury

Investment in the least developed countries (LDCs) will need to rise by at least 11 per cent annually through 2030, a little more than the 8.9 per cent between 2010 and 2015, in order for them to achieve the Sustainable Development Goals (SDGs). The United Nations' World Economic Situation and Prospects (WESP) 2017 focuses on the difficulties in securing sufficient financing for the SDGs given e global financial system and current economic environment. Big financing gaps The United Nations Conference on Trade and Development (UNCTAD)'s 2014 World Investment Report estimated that developing countries would need US$2.5 trillion annually until 2030…

Sweetened Research, Sugared Recommendations Jomo Kwame Sundaram and Tan Zhai Gen

In 2015, Coca Cola's chief scientist was forced to resign after revelations that the company had funded researchers to present academic papers recommending exercise to address obesity and ill health, while marginalizing the role of dietary consumption. Coca-Cola, the world's largest producer of sugary beverages, had provided millions of dollars to fund researchers to downplay the links between sugar and obesity, tooth decay and non-communicable diseases (NCDs). Corrupt research This was not new. In September 2016, a New York Times article highlighted a JAMA Internal Medicine research article showing that sugar industry interests had paid scientists in the 1960s to…

Most Financial Inflows Not Developmental Jomo Kwame Sundaram and Anis Chowdhury

Recent disturbing trends in international finance have particularly problematic implications, especially for developing countries. The recently released United Nations report, World Economic Situation and Prospects 2017 (WESP 2017) is the only recent report of a multilateral inter-governmental organization to recognize these problems, especially as they are relevant to the financing requirements for achieving the Sustainable Development Goals (SDGs). Resource outflows rising Developing countries have long experienced net resource transfers abroad. Capital has flowed from developing to developed countries for many years, peaking at US$800 billion in 2008 when the financial crisis erupted. Net transfers from developing countries in 2016 came…

Another Somalian Famine Jomo Kwame Sundaram

Last month, the United Nations declared another famine threat in Somalia due to yet another drought in the Horn of Africa. Important lessons must be drawn from the Somalia famine of 2010-2012, which probably killed about 258,000 people, half of whom were under-five. This was the greatest tragedy in terms of famine deaths in the 21st century, and in recent decades since the Ethiopian famine of the late 1980s. A 2013 report, for the Famine Early Warning Systems Network (FEWS Net) and the Food Security and Nutrition Analysis Unit (FSNAU), used a variety of sources to estimate the likely death…

Stemming Illicit Financial Outflows Jomo Kwame Sundaram

International capital flows are now more than 60 times the value of trade flows. The Bank of International Settlements (BIS) is now of the view that large international financial transactions do not facilitate trade, and that excessive financial ‘elasticity' has been a major cause of recent financial crises. Illicit financial outflows  Illicit financial flows involve financial movements from one country to another, especially when funds are illegally earned, transferred, and/or utilized. Some examples include: A cartel using trade-based money laundering techniques to mix legal money, say from the sale of used cars, with illegal money, e.g., from drug sales; An…

Free trade agreements, Trade Policy and Multilateralism

  The rapid, if sometimes unsteady expansion of international trade from the late 1980s came to an abrupt end from 2009[1] as many large developed economies adopted more ‘protectionist’ policies to address balance of payments problems exacerbated by the 2008-2009financial crisis. This U-turn brought a halt to an extraordinary period of rapid trade expansion due to much greater international specialization, especially with the spread of ‘international value chains’ in production.   Free trade agreements Freetrade agreements (FTAs) are generally presumed to promote trade liberalization. While FTAs typically reduce some barriers to the international trade in goods and services, various provisions…

Tax Evasion Lessons From Panama Jomo Kwame Sundaram

Unlike Wikileaks and other exposes, the Panama revelations were carefully managed, if not edited, quite selective, and hence targeted, at least initially. Most observers attribute this to the political agendas of its main sponsors. Nevertheless, the revelations have highlighted some problems associated with illicit financial flows, as well as tax evasion and avoidance, including the role of enabling governments, legislation, legal and accounting firms as well as shell companies. The political tremors generated by the edited release of 1.1 million documents were swift. No one expected Iceland's prime minister to resign in less than 48 hours, or that the then…

Washington Rules Change, Again Jomo Kwame Sundaram

Over the last four decades, the Washington Consensus, promoting economic liberalization, globalization and privatization, reversed four decades of an earlier period of active state intervention to accelerate and stabilize more inclusive economic growth, associated with Franklin Delano Roosevelt and John Maynard Keynes. The Golden Age The US Wall Street Crash of 1929 led to the Great Depression, which in turn engendered two important policy responses in 1933 with lasting consequences for generations to come: US President Roosevelt’s New Deal and the 1933 Glass-Steagal Act. While massive spending following American entry into the Second World War was clearly decisive in ending…

Major Crisis, Minor Reforms Jomo Kwame Sundaram

The 2008-2009 financial breakdown, precipitated by the US housing mortgage crisis, has triggered an extended stagnation in the developed economies, initially postponed in much of the developing world by high primary commodity prices until 2014. Yet, the financial crisis and protracted economic slowdown since has not led to profound changes in the conventional wisdom or policy prescriptions, especially at the international level, despite global economic integration since the 1980s. To be sure, the spread of the crisis caused the G20 group of US-selected important economies to convene for the first time at a heads of government level in a mid-November…

US Trade Hawks and the China Bogey Jomo Kwame Sundaram

New US President Donald Trump has long insisted that its major trading partners having been taking advantage of it. Changing these trade terms and conditions will thus be top priority for his administration, and central to overall Trump economic strategy to ‘Make America Great Again'. Quit WTO solution Candidate Trump's trade policy paper was written by Peter Navarro and Wilbur Ross. Ross will now be Commerce Secretary while Navarro will head the National Trade Council. They view economic policy as integrated, including tax cuts, reduced regulations as well as policies to lower energy costs and cut the chronic US trade…

Trade War Threat Grows Jomo Kwame Sundaram

New American President Donald Trump has long insisted that the United States has been suffering from poor trade deals made by his predecessors. Renegotiating or withdrawing from these deals will be top priority for his administration which views trade policy as key to US economic revival under Trump. What will that mean? The new administration promises ‘tough and fair agreements' on trade, ostensibly to revive the US economy and to create millions of mainly manufacturing jobs. The POTUS is committed to renegotiating the North American Free Trade Agreement (NAFTA), signed in 1994 by the United States, Canada and Mexico. And…

Trump Trade Strategy Unclear Jomo Kwame Sundaram

US President-elect Donald Trump has announced that he will take the US out of the Trans-Pacific Partnership (TPP) Agreement on the first day of his presidency in January 2017. Now, it is widely expected that Trump's presidency will increase US trade protectionism, and consequently by others in retaliation, possibly triggering serious trade conflicts with difficult to predict consequences. After decades of denial by ‘free trade' advocates, it is now widely agreed that many manufacturing jobs in the US have been lost to both automation and offshore relocation by US corporations. Free trade agreements (FTAs) are also being blamed for the…

Free Trade Agreements Promote Corporate Interests Jomo Kwame Sundaram and Anis Chowdhury

So-called free-trade agreements (FTAs) are generally presumed to promote trade liberalization, but in fact, they do much more to strengthen the power of the most influential transnational corporations of the dominant partner involved. While FTAs typically reduce some barriers to the international trade in goods and services, some provisions strengthen private monopolies and corporate power.Not surprisingly, FTA processes are increasingly widely seen as essentially corrupt. They are typically opaque, especially to the producer and consumer interests affected. The eventual outcomes are often poorly understood by the public and often misrepresented by those pretending to be experts. For example, many economists…

Lessons from the Demise of the TPP Jomo Kwame Sundaram & Anis Chowdhury

President-elect Donald Trump has promised that he will take the US out of the Trans-Pacific Partnership Agreement (TPPA) on the first day of his presidency. The TPP may now be dead, thanks to Trump and opposition by all major US presidential candidates. With its imminent demise almost certain, it is important to draw on some lessons before it is buried. Fraudulent free trade agreement The TPP is fraudulent as a free trade agreement, offering very little in terms of additional growth due to trade liberalization, contrary to media hype. To be sure, the TPP had little to do with trade.…

How the US Government Subsidizes Obesity Jomo Kwame Sundaram

Until the turn of the century, the United States of America (US) was the country with the highest share of overweight and obese people. Soon after the former president of Coca-Cola Mexico became the new president of his country, Mexico overtook the US. In late 2014, the McKinsey Global Institute announced that 2.1 billion of the 7.3 billion people in the world were overweight or obese. This represented a fifty per cent increase over the previous WHO estimate of 1.4 billion less than a decade earlier. The Institute also estimated that about 2.8 percent of world income is spent dealing…

Stop worrying about ‘Doing Business’ ranking Jomo Kwame Sundaram and Anis Chowdhury

Without any hint of irony, the World Bank's most recent Doing Business Report 2017 promises ‘Equal Opportunity for All'. Bangladesh ranked 176th among 190 economies, below civil war-ravaged Iraq and Syria! Bangladesh even slipped two places from 174 in the 2016 ranking and is three places below its 2015 ranking. Malaysia, too, slipped five places. The Doing Business Report (DBR) 2017 ranked Malaysia at 23, down from 18 in the previous two reports for 2015 and 2016. Incredibly, this had nothing to do with news of the biggest scandal ever in the country's history. Malaysia seems to have slipped because,…

How to fix Malaysia? Jomo Kwame Sundaram

The Malaysian economy is in bad shape, but so is the world economy. Being a very open economy, it is difficult to do better unless Malaysia has an appropriate development and macroeconomic strategy appropriate for our circumstances. This is certainly lacking, but even more importantly, we are going down the wrong track. Take the TPP, which now seems dead in the water, thanks to Trump, and not to our own efforts. The TPP is fraudulent, offering very little in terms of additional growth due to trade liberalization. The purported gains are mainly from strengthening intellectual property rights, mainly in the…

More of the Same: World Bank Doing Business Report Continues to Mislead Jomo Kwame Sundaram and Anis Chowdhury

The World Bank's Doing Business Report 2017, subtitled ‘Equal Opportunity for All', continues to mislead despite the many criticisms, including from within, levelled against the Bank's most widely read publication, and Bank management promises of reform for many years. Its Foreword claims, "Evidence from 175 economies reveals that economies with more stringent entry regulations often experience higher levels of income inequality as measured by the Gini index." But what is the evidence base for its strong claims, e.g., that "economies with more business-friendly regulations tend to have lower levels of income inequality"? Closer examination suggests that the "evidence" is actually…

Fiscal austerity has been blocking economic recovery Jomo Kwame Sundaram

Instead of concerted and sustained efforts for a strong, sustained economic recovery to overcome protracted stagnation, the near policy consensus on fiscal austerity in the G7 and the G20 OECD countries, except for the US and Japan, has dragged down economic recovery in developing countries. After seven years of lackluster economic performance and rising tensions over the Eurozone straightjacket on fiscal stimuli, there are signs of a growing willingness to reconsider earlier policies. While it is not yet clear whether this will lead to significant enough policy changes, this may well led to the long awaited turning point the world…

ISDS Corporate Rule of Law Jomo Kwame Sundaram

Investor-state dispute settlement (ISDS) provisions in ostensible free trade agreements (FTAs) and bilateral investment treaties (BITs) have effectively created a powerful, privileged system of protections for foreign investors that undermine national law and institutions. ISDS allows foreign corporations to sue governments for causing them losses due to legal or regulatory changes.A law unto themselvesISDS cases are decided by extrajudicial tribunals composed of three corporate lawyers. Although ISDS has existed for decades, its scope and impact has grown sharply in the last decade. As ISDS has been written into over 3,000 BITs and numerous FTAs, the opportunities for ISDS claims are…

Ensuring Shared Progress for Sustainable Development and Peace Jomo Kwame Sundaram

International inequality has grown over recent centuries, especially the last two. Before the Industrial Revolution, between-country inequalities were small, while within-country inequalities accounted for most of overall global income inequality. Now, inter-country income inequalities account for about two-thirds of world inequality with intra-country inequality accounting for a third. Concern about inequality has grown as every major economic, social and political crisis has been preceded by rising inequality. World War II was no exception. Thus, on 10th May 1944, the International Labour Congress adopted the historic Philadelphia Declaration which asserted that "lasting peace can be established only if it is based…

Changing Determinants of Global Income Inequality Jomo Kwame Sundaram

Global income inequality among different regions began to increase about five centuries ago, before accelerating two centuries ago. The data suggest a brief reversal during the Golden Age quarter century after the Second World War, and in the last decade, with higher primary commodity prices once again, and protracted stagnation in much of the North following the 2008-2009 financial crisis. From class to geography Before the Industrial Revolution, between-country inequalities were relatively small, while within-country inequalities accounted for most global income inequality. Inter-country income inequalities now account for about two-thirds of world inequality, with intra-country inequality accounting for the remaining…

Privatization Cure Often Worse Than Malady Jomo Kwame Sundaram and Anis Chowdhury

Privatization of SOEs has been a cornerstone of the neo-liberal counterrevolution that swept the world from the 1980s following the economic crisis brought about by US Fed's sharp hike in interest rates. Developing countries, seeking aid from the International Monetary Fund (IMF) and the World Bank, often had to commit to privatization as a condition for credit support. The World Bank and the IMF then attributed developing countries' inability to adjust to the external shocks of that time, inter alia, to their import-substituting industrial policy initiatives and the inefficiency of the state-owned enterprises (SOEs). Hence, their support came with conditions…

Are Public Enterprises Necessarily Inefficient? Jomo Kwame Sundaram

From the 1980s, various studies purported to portray the public sector as a cesspool of abuse, inefficiency, incompetence and corruption. Books and articles with pejorative titles such as ‘vampire state’, ‘bureaucrats in business’ and so on thus provided the justification for privatization policies. Despite the caricature and exaggeration, there were always undoubted horror stories which could be cited as supposedly representative examples. But similarly, by way of contrast, other experiences show that SOEs can be run quite efficiently, even on commercial bases, confounding the dire predictions of the prophets of public sector doom. SOE inefficiency To be sure, unclear and…

Privatization the Problem, Rarely the Solution Jomo Kwame Sundaram

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…

We Can Eliminate Hunger and Poverty Quickly with Greater Commitment Jomo Kwame Sundaram

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…

Trump, Clinton, Obama and the TPP Jomo Kwame Sundaram

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: Some Critical Concerns Jomo Kwame Sundaram

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…

Wage and Fiscal Policies for Economic Recovery Jomo Kwame Sundaram and Anis Chowdhury

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…

Pensions for All Jomo Kwame Sundaram and Rob Vos

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.…

Poverty Cut by Growth Despite Policy Failure Jomo Kwame Sundaram

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…

Chancellor’s Lecture Series: Public Lecture on ‘Trans-Pacific Partnership Agreement (TPPA): Future or Fraud’, Wawasan Open University Jomo Kwame Sundaram, May 14, 2016

https://www.youtube.com/watch?v=YCi1zn9uyYg   To listen to the audio podcast of the lecture, click here.

Can the Middle East Make Economic and Social Progress? Vladimir Popov and Jomo Kwame Sundaram

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 Neoliberal Counter-revolution in Retreat? Jomo Kwame Sundaram

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…

Expansionary fiscal consolidation myth Jomo Kwame Sundaram, Anis Chowdhury

KUALA LUMPUR, Malaysia, Aug 11  - The debt crisis in Europe continues to drag on. Drastic measures to cut government debts and deficits, including by replacing democratically elected governments with ‘technocrats', have only made things worse. The more recent drastic expenditure cuts in Europe to quickly reduce public finance deficits have not only adversely impacted the lives of millions as unemployment soared. The actions also seem to have killed the goose that lay the golden egg of economic growth, resulting in a ‘low growth' debt trap. Government debt in the Euro zone reached nearly 92 per cent of GDP at…

Free Trade’s Diminishing Returns Jomo Kwame Sundaram and Vladimir Popov

KUALA LUMPUR/MOSCOW – In its May 2010 “Global Survey,” McKinsey & Company reported that, “the core drivers of globalization are alive and well.” In an April 2014 report, the firm went further, declaring that, “to be unconnected is to fall behind.” But now McKinsey seems to have changed its tune. In a new report, “Poorer Than Their Parents? Flat or Falling Incomes in Advanced Economies,” the McKinsey Global Institute asserts that developed countries should not expect further gains from the process of globalization. Income growth has stalled since the 2008 financial crisis and “even a return to strong GDP growth…

Poverty, Vulnerability and Social Protection Jomo Kwame Sundaram

According to the World Bank, the MDG target of halving the share of the poor was achieved by 2008, well in advance of 2015, the target year. However, increased unemployment and lower incomes in recent times remind us that poverty is not an unchanging attribute of a shrinking group, but rather, a condition that billions of vulnerable persons risk experiencing. Despite the various shortcomings of money measures of poverty, they nevertheless reflect the extent of vulnerability. For example, the estimated number of poor globally in 2012 more than doubles from 902 million to 2.1 billion when one raises the poverty…

US Government Report Exposes Exaggerated TPPA Growth Claims Jomo Kwame Sundaram

A US government agency acknowledges that the Trans-Pacific Partnership (TPP) will not deliver many economic benefits promised by its cheerleaders. The 2016 report by the United States International Trade Commission (ITC) acknowledges that the TPP will not deliver many gains claimed by the US Trade Representative (USTR) and the Peterson Institute of International Economics (PIIE) although it uses similar methodology and assumes that the TPP will not change the US trade deficit as a share of GDP. The ITC’s credibility has declined over the years as it earned a reputation for cheer-leading FTAs. It had grossly underestimated US trade deficit…

Economic Recovery Needed To Enhance Food Security Jomo Kwame Sundaram

After a half century of decline, agricultural commodity prices rose with oil prices in the 1970s, and again for a decade until 2014. Food prices rose sharply from the middle of the last decade, but have been declining since 2012, and especially since last year, triggering concerns of declining investments by farmers. Earlier predictions of permanently high food prices have thus become less credible. Higher prices were said to reflect slowing supply growth as demand continues to grow with rising food needs for humans and livestock, and bio-fuel mandates introduced a decade ago on both sides of the North Atlantic.…

Is Sustainable Development Hindering Economic Recovery? Jomo Kwame Sundaram

The global economic and employment situation is alarmingly protracted, with recovery not expected any time soon. In October 2012, then IMF chief economist Olivier Blanchard indicated he did not see a global economic recovery before 2016. Now, in mid-2016, it is clear that the global crisis has dragged on for several reasons; many governments, especially in advanced economies, still prioritize fiscal austerity and tough labour market reforms, even though such measures undermine livelihoods, incomes, the social fabric and economic recovery prospects. Meanwhile, despite ‘quantitative easing', investments remain depressed, blocking employment creation. Easy credit before the crisis led to over-investment in…

How to End Hunger Hilal Elver and Jomo Kwame Sundaram

Last September, world leaders made a commitment to end hunger by 2030, as part of the United Nations Sustainable Development Goals (SDGs). It sounds like a massive undertaking. In fact, the world already produces enough food to feed everyone. So why does the problem persist? Poverty and hunger are intimately connected, which is why the SDGs target elimination of both. For someone living at the World Bank’s poverty line of $1.90 per day, food would account for some 50-70% of income. The Bank estimates that almost four-fifths of the world’s poor live in rural areas, though those areas account for…

The UN and Global Economic Stagnation Jomo Kwame Sundaram

When the financial crisis preceding the Great Recession broke out in late 2008, attention to the previously ignored UN Secretariat’s analytical work was greatly enhanced. This happened as the UN and the Bank of International Settlements (BIS) had been almost alone in warning, for some years, of the macroeconomic dangers posed by poorly regulated financial sector developments. In contrast, most other international organizations – the IMF, World Bank and OECD – which monitor developments in the world economy have failed to see the crisis coming. Until the third quarter of 2008, they were still predicting continued robust growth of the…