“Free trade” in trouble in the United States
By Martin Khor
As free trade reaches a crossroads in the US, developing countries have to rethink their own trade realities for their own development interests. “Free trade” seems to be in deep trouble in the United States, with serious implications for the rest of the world. Opposition to free trade or trade agreements emerged as a big theme among the leading American presidential candidates. (more…)
Implications of Argentina’s Deal with “Super holdouts”: Need for an Urgent Revision to Bond Contracts and a Debt Workout Mechanism
By Yuefen Li
Argentina signed an agreement in principle on 29 February 2016 with four “super holdout” hedge funds including NML Capital Ltd, Aurelius Capital, Davidson Kempner and Bracebridge Capital. Buenos Aires would pay them a total of about $4.65 billion, amounting to 75 percent of the principal and interest of all their claims of Argentina’s bonds that were defaulted on during the 2001 debt crisis. The payment is to be made in cash before 14 April 2016, provided that Argentina’s Congress approves the repeal of Argentina’s domestic laws, namely the Lock Law and the Sovereign Payment Law, which prohibit the country from proposing terms to the holdouts that are better than those Argentina offered to its creditors in earlier restructurings. This deal would allow the return of Argentina to the international capital market after more than 15 years of exclusion, something that is imperative for the government to try to put the economy on a more sustainable path even though this would mean having to use a substantial part of its foreign currency reserves to pay off the holdout bond holders. Nevertheless, there are systemic implications of this deal to future sovereign debt restructurings which deserve careful examination and remedial actions. (more…)
Boutros Boutros-Ghali – The Nobility of Ideas and Ideals
By Roberto Savio
In memory of the former United Nations Secretary-General and former Chair of the Board of the South Centre.
It is no coincidence that Boutros Boutros-Ghali (BBG), who died on February 16, was the only Secretary-General in the history of the United Nations to have served only one of the two terms that have always been allowed. The United States vetoed his re-election, in spite of the favourable vote of the other members of the Security Council. He was considered too independent. (more…)
FDI – myths and realities
By Yılmaz Akyüz
Foreign direct investment (FDI) is perhaps one of the most ambiguous and the least understood concepts in international economics. Common debate on FDI is confounded by several myths regarding its nature and impact on capital accumulation, technological progress, industrialization and growth in emerging and developing economies. It is often portrayed as a long term, stable, cross-border flow of capital that adds to productive capacity, helps meet balance-of-payments shortfalls, transfers technology and management skills, and links domestic firms with wider global markets. (more…)
COP21: Great start but how will it end?
By Martin Khor
The climate change conference in Paris had a grand start last week, with high profile speeches from host French President Francois Hollande, American President Barack Obama, Britain’s Prince Charles and many other leaders. Immediately after the opening, the negotiators got down to work and they have not stopped. They realised that their task, to produce the Paris agreement on climate action after 2020, is all-important, whatever good rhetoric the political leaders may come up with. At the half-way mark of the two-week conference, there is no certainty that a final deal can be reached. The conference, known as COP21 (21st Conference of the Parties of the United Nations Framework Convention on Climate Change), is scheduled to end this Friday but could stretch till Saturday or even Sunday. (more…)
The rich world must take greater responsibility for climate change
By Narendra Modi
In the next few days in Paris, the world will decide the fate of our planet. I hope the climate conference that begins there today will produce an agreement that restores the balance between ecology and economy — between our inheritance and our obligation to the future. The conference will also, I hope, reflect a collective global commitment balancing responsibilities and capabilities on one hand with aspirations and needs on the other. It should recognise that, while some face a choice between lifestyles and technologies, others stand between deprivation and hope. (more…)
The grant of patents and the exorbitant cost of “lifesaving” drugs
By Germán Velásquez
The important relationship between the examination of patents carried out by national patent offices and the right of citizens to access to medicines hasn’t always been well understood. Too often these are viewed as unrelated functions or responsibilities of the state. And the reason is clear: patentability requirements are not defined by patent offices, but frequently by the courts, tribunals, legislation or treaty negotiators. This is the case when patent policy is implemented in isolation from, rather than guided by, public health policy. (more…)
China’s boost to South-South cooperation
By Martin Khor
Two new Chinese funds totalling US$ 5.1 billion to help developing countries tackle climate change and development problems could be a game changer in South-South cooperation and international relations. China gave a big boost to South-South cooperation when its President, Xi Jinping, made two unprecedented mega pledges totalling US$5.1 billion to assist other developing countries, during his visit to the United States in September. (more…)
Past Mistakes and Current Joint Responsibilities: the Greek debt crisis
By Yuefen Li
With the Greek debt crisis raging on, another round of blame exercise has started. It is not really unhealthy to do so, as with it comes the responsibilities for fixing the crisis. Looking back over the years since Greece joined the euro zone in 2001, it would be correct to say that the Troika -the European Central Bank (ECB), the International Monetary Fund (IMF), the European Commission (EC) – as well as the Greek government all have had their share of misjudgments, illusions, technical errors and political prejudices, though some parties more than the others. (more…)
Climate Change — The Rocky Road to Paris
By Martin Khor
A new climate change agreement is to be adopted in Paris in December, but there are big differences on how to reach a fair deal, and the negotiations are tough. The UN Climate Conference in Paris in December may become a Climate Summit if many top political leaders accept an invitation to attend. What role they are to play is not yet known, or even the dates they are requested to come. A new agreement to tackle climate change is expected to be adopted. But there are many hurdles to overcome before a deal is reached. (more…)
Development Finance with Chinese Characteristics?
By Richard Kozul-Wright and Daniel Poon
After a late flurry of additions to the founding membership of the Asian Infrastructure Investment Bank, attention now turns to setting the China-led AIIB’s rules and regulations. But important questions remain – most important, whether the AIIB is a potential rival or a welcome complement to existing multilateral financial institutions like the World Bank. Since China and 20 mostly Asian countries signed the AIIB’s initial memorandum of understanding last October, 36 other countries – including Australia, Brazil, Egypt, Finland, France, Germany, Indonesia, Iran, Israel, Italy, Norway, Russia, Saudi Arabia, South Africa, South Korea, Sweden, Switzerland, Turkey, and the United Kingdom – have joined as founding members. (more…)
The West and Its Self-Assumed Right to Intervene
By Roberto Savio
The author argues that the West, led by the United States, has taken on itself the right to intervene in the affairs of others and, in the case of the Arab world, has created situations that justify subsequent military interventions which have had a high cost in both human and financial terms. (more…)
