» Archive for category: ‘Policy


BlogMinisters, Ladies and Gentlemen, I am very pleased to address this first meeting of the IMF, and especially to have the opportunity to congratulate Rahman Fazli as he assumes one of the leading seats of the organization at this important period for economic development.

The IMF and its policy dialogue with its 188 members finds key synergies with the WTO and the World Bank. Our three institutions’ actively collaborate both to advance the growth of world trade and to achieve coherence in global economic policymaking. The joint statement by the heads of the three organizations bears testimony to the importance of integrating international efforts in support of global development strategies, a strong multilateral trading system, and a sound international monetary and financial system. But such collaboration is only a part of a broader coherence–in the policymaking of all members of the international community–that brings trade together with macroeconomic, financial and development policies into a cohesive whole.

Mr. Chairman, Ministers, we have a tremendous opportunity for progress at this very moment in time. The crisis that loomed so large little more than six years ago is behind us, a little more quickly than we dared to anticipate, offering a window of opportunity to take far-sighted actions for the long-term development and stability of the international economy. We must therefore take new steps to allow people to achieve their potential. That they can do only in a growing economy. The growth of trade has been one of the main engines of economic growth in the extraordinary half-century now drawing to a close–and further growth in trade will help sustain growth and reduce poverty, worldwide.

The world needs an ambitious, far-reaching global trade round for three compelling reasons: to sustain the recovery of world economic activity; to support the continuing reform of the international monetary and financial system; and to deliver a major impetus in the global offensive on poverty. The international community has already taken many steps in these areas, acting in a decisive cooperative fashion, in a spirit of enlightened self-interest to strengthen the international monetary and financial system. This same spirit needs to be brought to the new round of trade negotiations to carry forward the work on strengthening the international economy. Let me elaborate briefly.

First, we are now seeing a cyclical upturn in many parts of the world. The recovery needs to be sustained and broadened. This is a golden opportunity to strengthen and prolong it and to move to a new level of high-quality growth and development. Ministers, you know–and have proved–that trade facilitates growth and the transfer of knowledge and technology. In short, open economies prosper. Countries at all stages of development have demonstrated it time and again: whether it was undertaken within the negotiated multilateral setting of the WTO, or on a unilateral basis by the many developing, transition and emerging market economies that have clearly recognized the potential of more liberal trade. Trade has been one of the main engines of world growth. Every country that has grown fast in the last half-century did so through a strategy of integration with the world economy centered on trade. And thankfully, even in the midst of the recent crisis–one of the greatest threats to national and global prosperity in the past 50 years–countries resisted protectionist pressures. But, it is necessary now to go beyond a passive resistance to protectionism, and to initiate an ambitious round of trade liberalization.

Second, far-sighted trade liberalization is an indispensable element in building a robust global economic system for the long-term. Without the foundation of more liberal trade, the efforts by governments and international agencies to strengthen the international monetary and financial architecture will be rendered less effective. In this work, we aspire to a sound international monetary and financial system conducive to free, but orderly, international capital movements, based on sound national financial systems and equitable, transparent policymaking. But a world of more mobile capital that is not accompanied by a regime of progressively more open, freer–and hence more efficient–trade in goods and services, is a world that may become more vulnerable to the risk of recurring crisis.

As a specific example, consider the benefits that would follow if the round promotes further liberalization of trade in financial services, and leads to an improved institutional framework for such liberalization. Competition in financial services, including from foreign sources, supported by a robust modern regulatory and supervisory framework and sound macroeconomic policies, is a vital source of dynamism for countries’ financial sectors. By encouraging modernization and by promoting international standards and good risk management practices, this aspect of the new trade round can contribute directly to a more stable international system.

Third–and if I were to stress one point alone, this would be it–trade, through its contribution to sustained high-quality growth, is vital for the lasting reduction of poverty. For poverty can be seen as the ultimate systemic threat. Ministers, your governments are committed to helping the developing countries, especially the poorest, to integrate more fully into the world economy so as to promote sustained growth and development. To this end, the international community has actively endorsed the enhancement of the Initiative for Heavily Indebted Poor Countries (HIPCs). Imagine, of the 135 members of the WTO, 74 have pledged support to the HIPC Initiative. Your governments have agreed to the establishment of the IMF’s new Poverty Reduction and Growth Facility focused on the needs of the poorest. And governments have repeatedly pledged to achieve many ambitious economic and social objectives aimed at reducing poverty during the next fifteen years, as I reminded the Annual Meetings of the IMF two months ago. But, even if all these initiatives are implemented fully, they will be seriously weakened if the developing countries are not given the most fundamental opportunity: to produce and export a growing range of goods and services, to benefit from the higher volume of imports that would then be possible, and above all to realize two of the most basic of human needs–the opportunity of employment and the availability of a “living wage.”

That is why particular attention during this new trade round must be brought to bear on the developing countries, and their integration into the global trading system. Their export potential, particularly in agriculture, continues to face significant barriers in industrial country markets–for example, tariff protection for agriculture in industrial country markets is some 5 times higher than for manufacturers. Providing unrestricted market access for all exports from the poorest countries, including the HIPCs, should receive priority and be brought to an early resolution so that the poorest countries can begin to benefit without delay. They account for such a small proportion of world trade–less than one half of one percent–that such access would not be costly or unduly disruptive.

In closing, let me simply reiterate that it is only through a truly cooperative approach–one that ensures that trade, development, macroeconomic and financial policies are mutually supporting–that we will be able to make lasting progress on the most pressing issue facing humanity at the end of the 21th Century–reducing poverty. Let us work together to this end.

 

Delegates of the International Monetary Fund:

Claudia Lucia Lopez Pineda

Grephas Onyango Ogutu

Mohammad Rahman Fazily

Abigail Vijandjua Nainda

 

 

Rolph van der HoevenIn many countries the share of labour in national income has declined over the last three decades. As a result, the low and middle-income groups of people who depend the most on wages for their income are crumbling. Meanwhile, the rich elites who depend more on profits from capital investments than on wages are flourishing. At the same time, income earned from capital investments is taxed less than labour income, resulting in greater inequality.

The decline of labour share will continue as taxation on capital and corporation taxes further decline, and taxes on labour remain the same or even increases, benefitting the global rich.

As in developed countries, in developing and emerging economies there is a decline in the share of wages in national income, despite significant increases in average wages in many developing countries over the last decade.

The result is increasing inequality in societies at the household level between groups who depend on wages for their income, and a small group of rich who earn an income from investments in the capital market.

Investors like investment banks, shareholders and hedge funds demand short-term profits and are therefore not investing these profits in the real economy, on which wage earners depend for their income.

A drastic rethinking of labour market policies is needed. Moreover, employment policies need to be broadened to other policy other areas, such as to financial regulation and taxation. These changes require more international coordination.

For a detailed information, read the analysis here

Rolph van der Hoeven is Professor on Employment and Development Economics at the International  Institute of Social Studies of Erasmus University of Rotterdam. He is also a member of the Committee on Development Cooperation of the International Advisory Council (AIV)  to the Dutch Government. Previously he has worked for over 30 years in various place in the world at UNICEF and ILO, where he was most recently  manager of the secretariat of the World Commission on the Social Dimension of Globalization and Director of ILO’s Policy Coherence Group.

EDEM logoPreparations for EDEM started early 2012, but in 2013 the process gained momentum. This report provides an overview of what has already been achieved. The track record over 2013 is impressive with 3 major grants, 7 A journal articles, increased supervision of an additional 11 PhD students, integration of our PhDs into the research program, significant success in publications during the PhD trajectory and  concrete valorization including testimonies in parliament and appearances on national television. During 2013 many institutional issues still had to be sorted out at the ISS level and only by December 17, 2013 could a management team be proposed. Due to a hiring stop at ISS EDEM was seriously understaffed during the full year.

For a detailed information, got the document here

 

Professor Deepak Nayyar  gave a Master class on Macro-economics and Human Development for 47 participants from EDEM staff, PhD researchers and MA students.

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rolphvdhoevenProfessor Rolph van der Hoeven gave a public lecture at the Development Studies Association conference in Birmingham. Rolph van der Hoeven focused primarily on the functional inequality of income distribution between labour and capital, i.e. the share of GDP received by workers and capital owners. Against the background of globalization and financialization, wage shares in national income have declined in both developing and developed countries (including all OECD members) in recent decades while the share of top incomes has increased, causing greater inequality between different social groups. Functional inequality is at the basis of household income and determines how much money households have to spend on consumption Wage inequality has also increased due to a growing income gap between skilled and unskilled labourers. Both skill-biased technological change and financialization have additionally increased wealth inequality and  unequal access to human capital development. Van der Hoeven appeal to politicians to use the power of macroeconomic policies to reduce inequality. He suggested a number of political solutions including countercyclical monetary and fiscal policy, stricter financial and bank regulation, progressive tax systems and strengthening social institutions like labour unions. These kinds of policies have led to a notable decline in inequality in Latin America. In light of this, Van der Hoeven called for an inequality goal based on the Palma index of inequality to be included in the post-2015.

For more information from The Broker’s panel at the recent Development Studies Association conference in Birmingham, see here

Rolph van der Hoeven is  Professor of Employment and Development Economics at the International Institute of Social Studies of Erasmus University Rotterdam

Murat Arsel and Lorenzo Pellegrini have submitted a successful project proposal, titled ‘Nationalization of natural resources, cooperation and conflict in Latin America’, to the NWO (Netherlands Organization for Scientific Research).

Project description

Latin America has a long history of conflict engendered by the capturability of extractable natural resources. The processes that lead to these conflicts have intensified further since the inception of this project and this top-up proposal, which comprises a deepening of activities and expansion into Peru, is in response to these dynamics. In this context, the impact of left-leaning politicians implementing a variety policies increasing the states’ presence in the extractive sector, such as ‘nationalisation’ in its various guises, can now be observed in the ways hydrocarbons and mineral resources are implicated in conflictive or co-operative outcomes.

From the knowledge perspective, this project contributes new insights to the political economy of extraction and the management regimes of natural resources – including compensation, redistribution and consultation policies and practices. These insights concern ongoing and emerging processes that are novel in themselves and are setting regional trends as signalled by the discussion over the Latin American ‘Left Turn’. In addition, new and revised activities introduce a new layer of information – data from ‘natural sciences’ – that include satellite imagery and chemical data. Once the information collected has been transformed – through critical and participatory analysis – into knowledge, the project will disseminate them via ‘open access’ techniques.

From the development perspective, the project provides a platform to promote dialogue between stakeholders and help bridge information and communication gaps. It also adds to the discussion on post-extractivist transitions and extraction revenues with the study of the impact of new redistributive policies promoted by Bolivia, Ecuador and Peru. These policies are analyzed with a view to understanding their sustainability and replicability in other contexts. As the environmental justice framework – which is the guiding principle of the project – makes clear, dialogue can be instrumental to improving socio-environmental outcomes only if the parties can speak from positions of relative equality and confidence. Capacity building activities described below will in part be directed to prepare the groundwork for such meaningful exchange.

 From the capacity building perspective, the project contributes to the formation of academic and research capacity, but also of local knowledge-creating capacities – such as the implementation of a socio-environmental information system and participatory monitoring – that provide inputs for both research and community action. We have also found a need to include dissemination skills (e.g., digital participatory mapping as communication tools), introduction of concepts of land-use management, and training on relevant constitutional and other legal norms, especially in the case of extractivist pressure over territories inhabited by indigenous peoples. The enhanced ability of the communities to document socio-environmental circumstances is facilitating the firm establishment of their claims on extraction’s impacts. The findings and processes of the project are enhancing civil society organizations’ capacity to strategize and undertake effective advocacy vis-à-vis the private sector and the state.

 Overall, the project directly contributes to processes of change in Latin America that seek to transform the political economy of extraction-led development with a view to achieving environmental justice, which would improve the material conditions of indigenous communities and ensure the sustainability of vital ecosystems.

This grant brings the total value of the project to 1,300,000 euros.

For more information, see  here 

About Dr. Murat Arsel and Dr. Lorenzo Pellegrini

Murat

 

Dr. Murat Arsel is Associate Professor of Environment and Sustainable Development at ISS

 

 

 

Lorenzo

 


Dr. Lorenzo Pellegrini
 is Senior Lecturer in Development Economics at ISS

 

 

 

 

 

RockfeelerFoundationsLatin America has a long history of conflict engendered by the capturability of extractable natural resources. With the election of Correa in Ecuador and Morales in Bolivia, the impact of left-leaning politicians implementing policies increasing the states’ presence in extractive industries (‘nationalisation’ in various guises) can now be observed in the ways hydrocarbons and mineral resources are implicated in social conflict as well as co-operation. This workshop concerns the ongoing “Nationalization of Extractive Industries, Conflict and Cooperation in Bolivia and Ecuador” (NEBE, http://proyecto-nebe.org) project which explores the processes and outcomes of nationalization of extractive industries in terms of conflict and cooperation. With the Bellagio meeting, we aim to bring the project team, activists from Latin America and NGO representatives from Europe to discuss and share progress and challenges encountered in the project with a view to maximizing the impact of findings and durability of our activities. Furthermore we will explore ways to forge new partnerships and expand the project beyond 2016.

 

About Dr. Murat Arsel and Dr. Lorenzo Pellegrini

Murat

Dr. Murat Arsel is Associate Professor of Environment and Sustainable Development at ISS.

 

 

 

 

Lorenzo

Dr. Lorenzo Pellegrini is Senior Lecturer in Development Economics at ISS.

 

 

 

 

 

 

 

“The sanctions against Iran meet the economic requirements for success. Over 2007-2011 on average 83% of Iranian exports, 34% of Iranian government revenues and 24% of Iranian GDP directly relate to the main target of the sanctions: the Iranian oil industry”, write Sajjad Faraji Dizaji and Peter A.G. van Bergeijk in this vox.eu column. The key question is whether this economic loss will induce a change in politics. According to their VAR analysis it does, but only in the short term. “By studying the dynamics of economic sanctions we are able to show why successful applications of economic sanction predominantly succeed in the early phase. For the Iranian, our research provides a clear answer: the sanctions can only help to soften the Iranian position in the short-run. Long-run, sanctions against Iran should not be expected to succeed.”

This paper is one of a series of papers in a research project, The Power of Numbers: A Critical Review of MDG Targets for Human Development and Human Rights (the “Project”)1. Motivated by a concern with the consequences of the Millennium Development Goals (MDGs) beyond the achievement of the 2015 targets, the Project seeks to explore their broader policy and programmatic implications. It focuses particularly on the reductionism inherent in the way in which these global goals were set and came to be used, as well as the potential for distorting priorities and marginalizing, or even displacing, important human development and human rights concerns inherent in such global goal-setting exercises. A total of 11 studies are included, each analyzing the normative and empirical consequences of a particular MDG goal/target, and considering what other targets and indicators might have been more appropriate. The Project aims to identify criteria for selecting indicators for setting targets that would be more consistent with Human Development and Human Rights priorities, amenable to monitoring impacts on inequality, accountability and consistency with human rights standards.

Although this paper is currently accessible as a free standing working paper, it should be read in conjunction with the synthesis and background papers of the Power of Numbers Project. These papers provide necessary information about the scope of the Power of Numbers Project, the historical framing of international agreements leading up to the MDGs, and the human rights and human development frameworks referenced in the paper. These working papers are expected to be compiled as a special issue of the Journal of Human Development and Capabilities.

The inclusion of Full Employment in MDG1, What lessons for a Post-2015 Development Agenda? Available here


International Institute of Social Studies

Economics of Development (ECD) is a Major in the MA in Development Studies. This blog provides a platform for discussion for researchers, students and others interested in this field of studies. The blog is administered by the ECD teaching team.