UN Role in Reforming International Finance for Development Jomo Kwame Sundaram

Growing global interdependence poses greater challenges to policy makers on a wide range of issues and for countries at all levels of development. Yet, the new mechanisms and arrangements put in place over the past four decades have not been adequate to the growing challenges of coherence and coordination of global economic policy making. Recent financial crises have exposed some such gaps and weaknesses. Multilateral UN inclusive Although sometimes seemingly slow, the United Nations (UN) has long had a clear advantage in driving legitimate discussion on reform because of its more inclusive and open governance. Lop-sided influence in the current…

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…

International Finance and Development Edited by Jose Antonio Ocampo, Jan Kregel and Stephany Griffith-Jones

Publisher: Third World Network (Published in association with the United Nations) ISBN-10: 1842778625 ISBN-13: 978-1842778623 About the Book International Finance and Development offers a comprehensive survey of the major financing issues influencing economic development since the historic Monterrey Consensus of the International Conference on Financing for Development in 2002. As most recent international private capital flows have been unlikely to significantly enhance new productive investments in the developing countries, it is necessary to design appropriate mechanisms to ensure they contribute to development. However, recent trends in official development financing offer some grounds for optimism, although much more needs to be done. External…

International Finance And Development Edited By Jose Antonio Ocampo, Jan Kregel And Stephany Griffith-Jones

Developing Countries and the Dollar Jayati Ghosh

It is now generally recognised that the very large macroeconomic imbalances between the US and the rest of the world, which are associated with very large capital inflows into the US, are unsustainable beyond a point. There is no doubt that the current situation is absurd, and certainly counter to the perceived role of international financial markets, which are supposed to encourage flows of financial resources from capital-rich to capital-poor economies. Two of the richest large economies – the United States and the United Kingdom – are net receivers of financial resources, in the US case amounting to more than…

On Economic and Social Life in Turkey in Early 2005 Independent Social Scientists

The paper traces the change in the economy and society in Turkey, which has been an inevitable result of the IMF and World Bank led structural adjustment policies that the country has been faithfully following for decades. The paper discusses how the resultant unemployment and poverty, coupled with the current dependence on international finance capital, could have significant adverse consequences for the political and economic fabric of the society, the rise of extreme political and religious ideologies among them. tsbd (Download the full text in PDF format)

Regulating Capital Flows Jayati Ghosh

The possibility of volatile movements of capital has become one of the most significant issues in developing countries today. Of course it is a problem in itself, since rapid movements in and out of the country create instability in exchange rates and consequent problems within the economy. But even more than that, the fear of capital flight has posed substantial constraints upon domestic economic policies across the developing world. Governments now worry before engaging in the most basic of fiscal and monetary policies that would be targeted towards improving the welfare of their citizens, simply because they are concerned that…

Basel II and Developing Countries: Diversification and portfolio effects Stephany Griffith-Jones, Miguel Segoviano & Stephen Spratt

Based on empirical evidence, the authors argue that the proposed new Basel Capital Accord risks ‘institutionalising’ the current low levels of international bank lending to developing countries. This is because, by failing to incorporate the benefits of portfolio diversification effects into banks’ capital adequacy requirements while at the same time requiring a significant increase in capital requirements for loans to lower rated borrowers, the current proposals would cause an increase in cost and/or reduction in quantity of bank lending to developing countries. Given that the purpose of the new Basel proposal is to better align regulatory capital with actual risk,…

Globalisation for Whom? A World for All Jomo K.S.

Some issues about globalisation and how it affects developing countries in general, and Southeast Asian economies in particular, namely Malaysia, Indonesia, and Thailand. globalisation_whom (Download the full text in PDF format) (Jomo K.S. raises some issues about globalisation and how it affects developing countries in general, and Southeast Asian economies in particular, namely Malaysia, Indonesia, and Thailand.)

Argentine President Bows to IMF and Banks

On May 30, 2002, the Argentine senate voted to repeal the 1974 economic subversion law criminalising bad business decisions and capital flight in an effort to meet conditions set by the International Monetary Fund (IMF) for issuing new loans to the debt-ridden nation. Senate President Juan Carlos Maqueda broke a 34-34 tie to pass the repeal after weeks of procrastination. Charges pending under the law against several bankers – including one currently in jail – will now be dropped. Those in support of the removal of the law said other existing laws were adequate to protect the bankrupt country against…