Dear friends and colleagues at Recovery,

You should be interested in a comment I have on Capital in the 21st Century, as well as an interview with Trevor Evans of the Economics School in Berlin on the EU elections. I put these together because Thomas Piketty and some of his colleagues have endorsed a softer version of the Maastricht criteria, which is similar to suggestions by the Glienicker Group in Germany. 

More consistent with views expressed in the Recovery is the Modest Proposal 4.0 from James Galbraith and Yanis Varoufakis.

Video: http://therealnews.com/t2/index.php?option=com_content&task=view&id=31&Itemid=74&jumival=11918

Capital in the 21st Century: http://therealnews.com/t2/component/content/article/81-more-blog-posts-from-john-weeks/2086-economics-for-the-99-encounter-in-a-taxi-the-piketty-phenomenon

Best regards.

John Weeks
Professor Emeritus
SOAS, University of London

Dear colleagues,

You may be interested in my response to the Financial Times critique of Piketty  http://brankomi.wix.com/inequality#ixzz336UAUbPD

Best regards.

Branko Milanovic
Visiting Presidential Professor
and Senior Scholar in CUNY's Luxembourg Income Study Center

Dear Colleagues, 

Surely there are high profile ways to galvanize a challenge to the limitations of Piketty, as David Harvey has done here.  Perhaps Piketty's blinkered ways of using his data sets are responsible for the paucity of his ideas regarding how to tackle inequality: http://davidharvey.org/2014/05/afterthoughts-pikettys-capital/

Best wishes,

Nancy Alexander
Director, Economic Governance Program
Heinrich Boell Foundation
1432 K Street, #500
Washington, DC  20005-2540
[email protected]
www.boell.org

Dear colleagues,

This issue of South Bulletin focuses on the deepening economic problems in emerging economies. There is a concern that emerging economies may be the ones facing the next financial and economic crisis. The South Centre’s chief economist, Yilmaz Akyuz, in his article, proposes urgent steps needed to avoid or deal with a potential crisis in these economies.

The Centre’s Executive Director, Martin Khor, in his article, also talks about new problems confronting several developing countries which faced sharp currency depreciation and capital outflows at the start of 2014. He also argues the case for capital controls over capital outflows in countries facing potential flight of capital to avoid a potential crisis.

China seems to be preparing to play a bigger role in global economic affairs, but not at the cost of giving up its developing country status. This was the impression made at the conference Transformative Global Governance: China and the United Nations, held in Shanghai on 13-14 January 2014. An article on this is in the Bulletin.

Other articles in the bulletin include:

•  Latin American and Caribbean Leaders Create a Zone of Peace and Unite Against Poverty and Inequality
• A step forward for Asian Cooperation
• Equity, climate change and sustainable development – South Centre-Ecuador Side Event at COP 19
• WIPO at Crossroads: Results of the General Assembly 2013
• South Centre pledges continued support to the G77 and China
• G15 to be engaged in post-2015 Development Agenda
• Welcome to the real world, by Humberto Campodonic

We hope you find this issue interesting, and we welcome your comments.
With best wishes,

Martin Khor
Executive Director,                  
South Centre and
Editor, South Bulletin

To download the entire South Bulletin, please click here. To read individual articles, please see below.

• Turbulence in Emerging Economies: From Easy Money to Hard Landing?
• Developing countries facing new economic problems
• Policy Dilemmas and the Case for Capital Controls over Outflows
• Latin American and Caribbean Leaders Create a Zone of Peace and Unite Against Poverty and Inequality
• A bigger global role for China?
• A step forward for Asian cooperation
• South Centre pledges continued support to the Group of 77 and China
• G15 to be engaged in post-2015 Development Agenda
• Equity, climate change and sustainable development: Perspectives of Developing Countries – South Centre-Ecuador Side Event at COP 19 Warsaw November 2013
• WIPO at Crossroads: Results of the General Assembly 2013
• Welcome to the real world

Please share your inputs by e-mailing: [email protected] To join or leave this e-discussion, send an email with subscribe or unsubscribe in the subject field. To see all messages http://www.recoveryhumanface.org/  This e-discussion is intended to facilitate the exchange of knowledge and ideas; the views expressed by contributors do not reflect the policies of ILO.  The moderator of the e-discussion is Isabel Ortiz, contact: [email protected]

Friends and colleagues,

Those working to change the EU in progressive direction will be interested in my article in the Social Europe Journal on a recent conference sponsored by the Finnish United Left:

http://www.social-europe.eu/2014/04/alter-european-union-conference-helsinki-progressive-change/

Also, I critique austerity policies in Europe in my new book (see below).

John Weeks
Professor Emeritus
SOAS, University of London

--
NEW Book
Now Published
Economics of the 1%: How mainstream economics serves the rich, obscures reality and distorts policy (Anthem Press)
http://jweeks.org

Dear colleagues,

I am writing to share with you a new report that I believe is relevant to the search for alternatives for a socially-responsive crisis recovery. ATD Fourth World has long been concerned that the MDGs have, in some ways, left many of the most impoverished communities and individuals behind. We therefore embarked on worldwide participatory research project entitled "Challenge 2015 - Towards Sustainable Development the Leaves No One Behind", with the aim of ensuring that the voices of people living in poverty could be brought to the fore of the global discussion on Post-2015 development goals. Project involved 2000 people in 22 countries worldwide, with research seminars in La Paz, Paris, Brussels, Ouagadougou, New York, Beau Bassin (Mauritius) and Antananarivo. The final  report is available here: http://www.atd-fourthworld.org/Challenge-2015

The overall aims of the project, which involved were twofold:

1.      To establish a clear picture of how the Millennium Development Goals, and the projects and policies they have inspired, are seen and experienced by people living in poverty and extreme poverty, and to convey the problems that impoverished communities have identified with current development models.

2.      To generate a series of recommendations based on the experiences of people living in extreme poverty, aimed at creating a more sustainable and inclusive development framework.


Core to this work was the idea that, rather being than just sources of information people living in poverty can offer a meaningful analysis of their situation and the political, economic and social forces affecting them. As one participant in the research said: "Even in extreme poverty, a person has ideas. If these ideas aren't recognized, people fall even deeper into poverty.” During the 7 international seminars organised to feed into the project, it became clear that current policies and programmes aimed at assuring sustainable development and economic recovery have had little positive impact on the lives of some of the most impoverished communities. Participants from Manila noted that "development projects end up displacing thousands of families... [they] aim to rehabilitate railwaysor develop a business, a shopping centre or something else... But their primary goal is never the wellbeing of the affected people. This is what has to change first."

To counteract these tendencies, participants made several key recommendations, one of which, the need to promote an economy that respects people and the environment, is particularly relevant to the search for alternatives for a socially-responsive crisis recovery. As part of this recommendation, participants in the project underlined the need to:

• On the ground, invest private and public funds to create decent jobs that meet people’s essential needs. Providing legal identities, quality education and healthcare services, social housing, drinking water and sanitation for all could help create millions of decent jobs. The transition towards a green economy should be used to create decent jobs accessible to people trapped in poverty. Supporting small agricultural producers and informal economy workers would increase food security and stimulate economic development. The social and solidarity economy should be supported and expanded, whilst procedures should be established in every country so that skills gained on the job can be officially recognised. Labour laws must be improved and implemented, with better access to labour rights for those living in poverty.
• Implement ILO Recommendation n° 202, concerning national social protection floors (SPFs). Ensuring that all individuals, including the most vulnerable, receive a basic level of social protection, will enable them to better cope with unemployment, underemployment and shocks in labour markets. SPFs must be adapted to each country and not jeopardise traditional means of mutual assistance and solidarity. Trade unions, civil society and those living in extreme poverty must be able to participate in their design, monitoring and implementation.
• Create new sources of funding to finance SPFs and development, and new tax national and international systems that foster social and environmental justice.  This implies better regulation of global finance and the application of taxes on financial transactions. A Global Fund should support the establishment of SPFs where available resources are not sufficient. Developed countries must reverse the current contraction of official development assistance, whilst all stakeholders must follow through on commitments to crack down on illicit capital flows, return stolen assets and stem tax avoidance and evasion.
• Align development targets and their implementation with human rights norms and standards. The UN Guiding Principles on Extreme Poverty and Human Rights provide an excellent guide for policy makers seeking to do this. Doing so would help create an environment conducive to eradicating extreme poverty and implementing human rights for all, and counter the tendency for the rights of people living in poverty being undermined by other laws to which governments give precedence, or by the influence of more powerful members of society.
• Develop greater policy coherence at the international level, within and among development, financial and trade organisations (IMF, World Bank, WTO, EU, etc.). This could be achieved by explicitly linking their policies and programmes to internationally agreed human rights principles and standards. Much work has to be done at intergovernmental and governmental levels in matters relating to bilateral and multilateral trade, investment, taxation, finance, environmental protection and development cooperation.

They also contended that people living in poverty must be able to participate fully in the planning, implementation and evaluation of all social and economic policies that affect their day to day lives, including the creation of national social protection floors and programmes meant to ensure decent work. The research project found that, without their participation, even well-meaning policies and programmes risked failure through ill-adapted implementation, lack of local support or a failure to understand conditions on the ground. Equally, research participants found that current international conceptions of extreme poverty  and poverty also hampered good policy making and programme implementation, because they focussed far too much on financial measures without appreciating the multidimensional nature of the poverty. Participants felt that this led to narrow approaches to development that failed to coherently address critical obstacles such as discrimination, social exclusion, poor information provision and geographic isolation from key resources and services.  

The implications of these conclusions for those who wish to encourage alternatives that lead to a socially-responsive crisis recovery are significant. They require the adoption of a coherent, human-rights based approach to crisis recovery, as outlined in the UN Guiding Principles on Extreme Poverty and Human Rights. They also suggest the need for a new conception of the multi-dimensional nature poverty and extreme poverty, which must be built with those who have experienced these phenomena first-hand. Finally, they suggest that, whilst initiatives such as ILO  Recommendation n° 202 are very important, there is a need to fundamentally change the way policies are created, put into place and assessed, and the way international institutions, governments and international CSOs think about people living in poverty. This requires a shift in which impoverished communities are not just seen as beneficiaries or sources of information, but as genuine partners in decision making, analysis and policy formulation.

--

Brendan Coyne

International Policy and Advocacy Officer

International Movement ATD Fourth World

www.atd-fourthworld.org

Tel: +33 (0)130362211

Address: ATD Quart Monde, 8 route de Vaux à Epluches,

95540 Méry sur Oise, France

Dear Colleagues,

Could global growth be stunted by the fact that almost half of the world’s wealth is owned by less than 1% of the population? In other words, the wealth of 85 people is equivalent to that of half of humanity (3.5 billion people), as described by Oxfam International’s report, Working for the Few: Political Capture and Inequality.

The Pope, Barack Obama, the World Economic Forum (WEF) and the IMF decry inequality. The WEF climbed on the bandwagon, declaring that extreme inequality is a top global risk; the IMF endorsed redistributive policies, stating that they seem to have helped support “faster and more durable growth.” But, in fact, the lack of such policies can destroy economies. Nevertheless, the G20 (and the institutions it controls) not only ignore the need for redistributive policies, it actively promotes policies that exacerbate inequality, as this issue of the "G20-BRICS Update" describes.

The G20 is producing too many reports and too little progress. But, to its credit, it is trying to curb the tax avoidance and evasion which rob developing countries of over $1 trillion per year. At the 2013 G20 Summit, Leaders committed to automatically exchange tax information with each other by the end of 2015, but it will take mighty political will to implement this commitment and related ones. The authors in this issue identify dynamics that foster inequality: suppression of returns to labor; speculation in risky infrastructure assets; trade and financial liberalization; and mega-project development.

Our latest G20 Update includes pieces by Sharan Burrow, Manuel Montes, Jayati Ghosh and Mzukisi Qobo.  In her article, “The Global Social Crisis: the Labour 20 Challenges the G20 to Respond,” Sharan Burrow, General Secretary, International Trade Union Confederation (ITUC), calls on the G20 to resume the kinds of economic stimuli that produced a 5% global growth rate in 2010. Ironically, the G20 aims to raise its collective GDP by more than 2% above the current trajectory for the next 5 years. But, since the 2010 growth rate was 2% higher than the 2013 growth rate of 3%, the G20 could resume its stimulus policies and help get people back to work. Burrow identifies the approaches which can reverse the rise in global unemployment, now at more than 202 million, and to begin to fill the 55 million jobs gap in G20 countries.

In his article, “If You Build It, Will They Come? [If the G20 Helps Build Platforms for Trading Infrastructure Assets, Will Investors Care?]” Manuel F. Montes, Senior Advisor on Finance and Development, the South Centre states that decades of financial deregulation have made it impossible for developing countries to receive the long-term funding for infrastructure they need. Now, instead of re-regulating finance, as it should do, the G20 is intervening in markets in an effort to mobilize investment of pension funds in infrastructure assets in emerging and developing countries. Montes warns labor unions about the safety of their pension funds in such ventures and warns governments of G20 schemes which could result in speculators using this new “asset class” to earn excessive profits at their expense.

In her article, “What will it Take? Achieving sustainable industrialization in the BRICS and other developing countries,” Jayati Ghosh, Professor of Economics, Jawaharlal Nehru University (India), identifies flaws in the current growth model: the impact of financial liberalization; the obsession with export-oriented growth model; and inadequate attention to ecological imbalances. She contrasts this model (which fails to produce adequate employment growth, among other things) with the potential for a different set of policies aimed at “sustainable industrialization.”

In his article, “High Ambitions, High Risks: the Programme for Infrastructure Development in Africa (PIDA),” Mzukisi Qobo, Senior Lecturer and Deputy Director, Centre for the Study of Governance Innovation, University of Pretoria describes how PIDA is developing continental infrastructure, especially in energy, transport, and water sectors estimated at US$360 billion up to 2040. These mega-projects provide a destination for rising infrastructure finance from external actors, such as the World Bank (see page 2); new institutions, including the BRICS Bank; and countries, such as China and India. Qobo concludes that PIDA could become a “bane for the continent,” if it fails to create and nurture the governance mechanisms to ensure that infrastructure projects are undertaken with greater sensitivity to the environment and social inclusivity. If, as the World Bank claims, Africa’s infrastructure funding gap is $93 billion per year until 2020, then the G20 should take note: the continent’s recovery of an estimated $50 billion per year in illicit financial flows would go a long way toward filling that gap.

Read the latest issue of the G20 and BRICS newsletter and earlier work of the Boell Foundation on the G20:
http://www.boell.org/web/134-G20-Update-Newsletter.html.

Nancy Alexander
Director, Economic Governance Program
Heinrich Boell Foundation
1432 K Street, #500
Washington, DC  20005-2540
[email protected]
www.boell.org

Dear friends,

Here is the link to the ITUC’s Frontlines report on social protection, launched this week.
http://www.ituc-csi.org/ituc-frontlines-report-april-2014

Please feel free to share the English version with other colleagues and your networks.

It will be posted on the ITUC website in Spanish and French at the time of the ITUC Congress in mid-May.

3rd ITUC World Congress 2014, Berlin 18 – 23 May. 
http://congress2014.ituc-csi.org/Warm regards,

Alison Tate
Director of External Relations
ITUC International Trade Union Confederation
CSI Confédération syndicale internationale
CSI Confederación Sindical Internacional
IGB Internationaler Gewerkschaftsbund

Boulevard du Roi Albert II 5, B 1, 1210 Brussels, Belgium
Tel: +32 (0)2 224 0211
Email: [email protected]
www.ituc-csi.org
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