Global Economic Crises and Conditions

SouthViews No. 168, 12 June 2018

Warnings of a new global financial crisis

By Martin Khor

There are increasing warnings of an imminent new financial crisis, not only from the billionaire investor George Soros, but also from eminent economists associated with the Bank for International Settlements, the bank of central banks. The warnings come at a moment when there are signs of international capital flowing out of some emerging economies, including Turkey, Argentina and Indonesia. Some economists have been warning that the boom-bust cycle in capital flows to developing countries will cause disruption, when there is a turn from boom to bust. All it needs is a trigger, which may then snowball as investors in herd-like manner head for the exit door. Their behaviour is akin to a self-fulfilling prophecy: if enough speculative investors think this is the time to move back to the global financial capitals, then the exodus will happen, as it did in previous “bust” phases of the cycle. (more…)

SC Lunch Briefing with the Executive Director, 17 April 2018

Title:                 The Global South Facing a New Era of Unilateralism and Protectionism: Challenges and                                            Prospects

Date:                 Tuesday, 17 April 2018, 13h00-15h00

Venue:              Room XXIII, Palais des Nations, Geneva

Organizers:      The South Centre

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Policy Brief 47, June 2018

Renewed crises in emerging economies and the IMF ‒ Muddling through again?

As recognised by the International Monetary Fund (IMF), the global financial safety net including international reserves, Fund resources, bilateral swap arrangements, regional financing arrangements is “fragmented with uneven coverage” and “too costly, unreliable and conducive to moral hazard”.  Given the aversion of emerging economies to the IMF and unilateral debt standstills and exchange controls, the next crisis is likely to be even messier than the previous ones.  Some countries may seek and succeed in getting bilateral support from China or some reserve-currency countries according to their political stance and affiliation.  In such cases, crisis intervention would become even more politicised than in the past and a lot less reliant on multilateral arrangements.  By failing to establish an orderly and equitable system of crisis resolution, the IMF may very well find its role significantly diminished in the management of the next bout of crises in emerging economies.  In other words, multilateralism, however imperfect, could face another blow in the sphere of finance after trade.

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SouthViews No. 166, 16 March 2018

Trump’s launch of a global trade war

By Martin Khor

Last week’s action by President Donald Trump has ended the United States’ leadership on liberal trade and may trigger a global trade war with major damaging consequences. On 8 March, Trump signed a proclamation to raise tariffs of steel by 25% and aluminium by 10%. It sent shockwaves across the world not only because of the losses to metal exporters, but due to what it could well signify: the start of a global trade war causing economic disruption in many countries, and that may also damage if not destroy the multilateral trade system. (more…)

SouthViews No. 163, 12 February 2018

Stock market turmoil may expose flaws in global finance

By Martin Khor

Was last week’s global stock market sell-off only a “correction” or does it signify a new period of financial instability, caused by major flaws in the world financial system? (more…)

Research Paper 84, February 2018

Playing with Financial Fire: A South Perspective on the International Financial System

By Andrew Cornford

Playing with Fire (PWF) is a continuation of the analysis of the integration of Emerging and Developing Economies (EDEs) into the international financial system which Yılmaz Akyüz has carried out in his roles as senior economist for many years responsible for UNCTAD’s Trade and Development Report and Chief Economist at the South Centre. The treatment covers cross-border financial flows, increased commercial presence of foreign financial institutions in EDEs and their increased participation in their local financial markets as well as policy and regulatory issues. PWF deploys data on major cross-border financial flows on a gross as well as a net basis. This innovative approach facilitates identification of financial stability issues posed by the increased participation of EDEs in international financial markets.

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Research Paper 83, November 2017

China’s Debt Problem and Rising Systemic Risks: Impact of the global financial crisis and structural problems

The fast expansion of China’s debt, in particular corporate and local government debt, has attracted international attention and has also become a major concern of China’s policy makers. Even though China can tolerate a higher debt level than many other emerging and developing economies owing to the sheer size and other special features of the Chinese economy, systemic risks for financial stability have been rising since the global financial crisis and the cushions built in the past decades to withstand a higher debt level have also been weakened. (more…)

Statement, November 2017

South Centre Statement for the UNCTAD Intergovernmental Group of Experts on Financing for Development

Below is the statement by the South Centre during the first session of the UNCTAD Intergovernmental Group of Experts on Financing for Development (IGE Ffd) held in Geneva on 8-10 November 2017.

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SC Book Launch, 10 November 2017

Title:               “Another Crisis in the Making?” Book Launch of Dr. Yilmaz Akyuz’s Playing with Fire,

                          Deepened Financial Integration and Changing Vulnerabilities of the Global South

Date:                Friday, 10  November 2017, 13h00-15h00

Venue:             Room XXII, Palais des Nations, the United Nations Office in Geneva

Organizers:   The South Centre

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Research Paper 80, October 2017

The Commodity-Finance Nexus: Twin Boom and Double Whammy

International commodity prices and capital inflows to developing countries are increasingly synchronized, subjecting commodity-dependent economies to double boom-bust cycles.  (more…)

Statement, October 2017

South Centre Statement to the Ministerial Meeting of the Group of 24

Below is the statement by the South Centre’s Executive Director Mr. Martin Khor which was distributed during the Ministerial Meeting of the Group of Twenty-four held in Washington DC on 12 October 2017.

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