Group items tagged

There are increasing efforts with global value chains, and a stronger mandate to work on their governance, so as to address unfair distribution of gains across the chain and the resulting detrimental impacts on employment conditions and inclusive growth .

Shockingly, developed countries even opposed inclusion of the issue of policy space. What is policy space? By this we mean that developing countries must be free from imposed international strictures and rules that go against their development needs.

After this conference, no country from the EU, nor the US or other developed countries, can claim to be in favor of developing countries’ escaping the debt treadmill.

Unfortunately, the rich countries’ club of the OECD has thus far dominated international discussions on taxation, which leave out developing countries and their development concerns. On taxation, UNCTAD 14 sadly became yet another example of how determined rich countries are to ensure the exclusion of developing countries, not just from decision making on tax matters, but also from the possibility of getting independent advice on how to stop the enormous losses of money they suffer from illicit financial flows,

The former staff of UNCTAD were so concerned about the earlier drafts that they alerted the public through a letter, pointing out the spuriousness of the OECD countries’ objections, and highlighting the importance of UNCTAD’s role: This is neither a cost-saving measure nor an attempt to “eliminate duplication” as some would claim. ... [W]e all fervently believe in the value of maintaining an independent research capability that serves to focus inter-governmental debates on how the workings of the global economy affect developing countries.

Lobbying was also a key strategy. Jubilee USA and other allies successfully lobbied the U.S. to improve language on debt sustainability, and several European groups were able to mitigate the EU’s position through appealing to the Norwegian and Finnish governments.

On the third day of negotiations “upstairs” where the tough issues were being handled, Ambassador Wasescha made a surprising announcement. He said the JUSCANZ and the EU were prepared to accept the main controversial Paragraphs 16 and 17, if the G77 would give up the paragraphs supporting Cuba and Palestine. Delegates were outraged. It is common knowledge that countries utilize leverage in negotiations, and horse-trading is the norm. But rarely in diplomatic group negotiations is such tit-for-tat so explicitly expressed.

Next, the Palestinian negotiator took the floor. “I would like to inform you that a few minutes ago, the Israeli representative and I came to agreement on the text on Palestine. After futile meetings with the Europeans and the JUSCANZ in Geneva for months, we have come to agreement on language in fifteen minutes. So you cannot use this issue to obtain something else you want,” he said. Shortly after, the Cuban negotiator made a similar announcement that an agreement had been reached between his delegation and the United States.

Recovery driven by fiscal policy would have involved an increase in the shares of public investment and social welfare spending in national income, reducing the share going to the rich.

Recovery based on a "rebalancing" of the economy would have required policies that hurt the financial sector. The financial system would have to be re-engineered to channel more money into long-term investments that raise productivity. Exchange rates would have to be maintained at a competitive level on a permanent basis, rather than at an over-valued level that the financial sector favours.

There would have to be greater public investment in the training of scientists and engineers, and greater incentives for them to work in and with the industrial sector, thus shrinking the recruitment pool for the financial industry.

Given all this, it is not a big surprise that those who benefit from the status quo have persisted with QE. What is surprising is that they have actually strengthened the status quo, despite the mess they have caused. They have successfully pushed for cuts in government spending, shrinking the welfare state to the extent that even Margaret Thatcher could not manage. They have used the fear of unemployment in an environment of shrinking social safety nets to force workers to accept more unstable part-time jobs, less-secure contracts (zero-hour contracts being the most extreme example), and poorer working conditions.

Greece, Spain, and other eurozone periphery countries could explode any day, given their high unemployment and deepening strains of austerity. In the US, which is considered the home of quiescent workers, the call for living wages is becoming louder, as seen in the current strikes by fast-food restaurant workers.

All of these stirrings may amount to little, especially given the weakened state of trade unions, except in a few countries, and the failure of the parties on the left of centre to come up with a coherent alternative vision. But politics is unpredictable. Five years after the crisis, the real battle for the future of capitalism may be only just beginning.