On 14 September, the governing Trade and Development Board (TDB) of the United Nations Conference on Trade and Development (UNCTAD) began its fifty-sixth session with UNCTAD Secretary-General Dr Supachai Panitchpakdi stressing that the global financial and economic crisis presents an opportunity to find long-term, multilateral solutions to the cycle of financial crisis and unsustainable global imbalances. Amongst others, this year's TDB session will also be holding a high-level discussion on the global economic crisis and the necessary policy response. The mega-stimulus packages introduced by many governments appear to have had a decisive impact in slowing the global economy's descent, but Dr Panitchpakdi nevertheless ‘believes we must still continue to be cautious about the evidence for recovery, and in particular what this means for developing countries.’ He also referred to the so-called 'shadow banking system', which at its peak, held assets in the US of approximately $16 trillion, the collapse of which kick-started the global economic crisis.
Health equity in economic and trade policies
As poor countries face a possible swine flu pandemic with only enough Tamiflu to treat a tiny fraction of their populations, some experts are calling for a simple but contentious solution: massive production of generics. Indian pharmaceuticals giant Cipla said it would charge about $12 per course of a generic Tamiflu. One course of Roche Tamiflu can sell for up to $100. That has led critics to question why the World Health Organization (WHO) hasn't ordered up batches of generic Tamiflu or encouraged poor countries to do so Some suspect WHO is reluctant to anger drug companies, which supply the agency with stockpiles of drugs, by encouraging the use of generics. Despite WTO rules, Western pharmaceuticals have long fought to keep generics out of the market in all circumstances. There needs to be a better system in place so that WHO does not have to rely on the goodwill and charity of drugmakers to get medicines for poor countries.
At the December 2005 Hong Kong ministerial meeting, developed countries forced through a controversial set of services demands thay prepared the ground for a final push to expand the GATS. This new paper analyses benchmarks, plurilateral request-offer, domestic regulation and other pressure tactics so that non-governmental organizations, elected representatives, developing countries and ordinary citizens can intervene to counter them.
In this study, economy-wide and hydrological-crop models are combined to estimate and compare the impacts of current and future climate trends in Zambia. Accounting for uncertainty, simulation results indicate that, on average, the trends may reduce gross domestic product by 4% over a ten-year period and pulls over 2% of the population below the poverty line. Socio-economic impacts are larger during drought years, and climate variability is projected to be a binding constraint on development in Zambia, at least over the next few decades.
This paper discusses policies that have inhibited the achievement of the Millennium Development Goals in the Southern African Development Community (SADC) regions. Specifically, the paper argues that neo-liberal structural adjustment policies (SAPs) have exacerbated poverty in the region and that there is a need to balance the role of the private and public sector if the MDGs are to be achieved. The paper points to a number of negative experience and outcomes of structural adjustment in the 1980s. It describes that economic growth is stagnant or declining in many countries and poverty is increasing the context of rising inflation and unemployment. In addition, food shortages have increased particularly in Southern Africa, due to the combination of natural and policy related factors, and HIV and AIDS has ravaged the sub-continent. The paper outlines a number of economic alternatives to structural adjustment which have emerged in the region.
The author highlights through a case study the pattern of reckless lending, high interest rates that, over time, significantly inflate the sum of the original loan, strong-arm debt recovery tactics such as threats of legal action and telephone harassment, that is argued in this article to be cases of 'economic violence'. She describes how the extreme distress induced by these practices was manifested in 2012, when thousands of desperate, poorly paid, over-indebted Marikana mineworkers, while striking for a R12 500 per month living wage, refused to back down and chose to face bullets to escape the suffocating squeeze of the omashonisa (money lenders). The article proposes that debt for an increasing number of South Africans has literally become life threatening, and that there is as yet no meaningful challenge to it.
In 2012, the World Health Organisation’s Consultative Expert Working Group on Research and Development: Financing and Coordination (CEWG) proposed a binding convention that would mandate every signatory country to invest a minimum of 0.01% of its gross domestic product (GDP) in research and development (R&D) falling within the established scope. In this article, the author explores the proposed convention’s possible ramifications. In its narrowest interpretation, the convention would only address R&D gaps in areas where no suitable products exist. This would involve funding a publicly-driven pharmaceutical effort since, by definition, no commercial incentive exists in these areas. But even this approach leaves room for interpretation, the author argues. If narrowly interpreted, coverage would be limited to R&D gaps for Type II and III diseases; if more broadly interpreted, coverage would also extend to R&D gaps in Type I products suitable for developing countries. The author argues that, despite advances in global health, developing countries continue to have a shortage of appropriate tools to prevent, diagnose and treat many diseases. The proposed convention is intended to address this problem, but lack of clarity in the convention’s remit has left its scope open to interpretation. He calls for this uncertainty to be resolved in order for discussions to move forward.
Debt swaps exchange debt for some other asset or obligation. In the context of development, they normally involve countries negotiating cancellation of external debts in return for commitments on internal resource mobilization or some other government action. There has been considerable international interest in debt swaps and their potential to create a new and additional financing mechanism to help overcome long-standing barriers to development. The impact of AIDS on many developing countries, including many of the most indebted, has been severe. In the worst cases, AIDS has caused development progress to be set back by decades. There is therefore emerging interest in examining whether debt swaps are potentially useful new instruments to apply to the problem of AIDS and development. This is according to a UNAIDS policy brief on the issue.
Rising inequality, along with financial deregulation, has spurred the significant increase in global debt levels. Although much of the media spotlight has focused on Greece recently, the fact is that more than 90 countries are either in or at risk of a new debt crisis. This articles presents the executive summary of a new report by the Jubilee Debt Campaign which highlights this phenomenon. Debt crises have become dramatically more frequent across the world since the deregulation of lending and global financial flows in the 1970s. An underlying cause of the most recent global financial crisis, which began in 2008, was the rise in inequality and the concentration of wealth. This made more people and countries more dependent on debt, and increased the amount of money going into speculation on risky financial assets. International debt has been increasing since 2011, after falling from 2008-11. The total net debts owed by debtor countries, by both their public and private sectors, which are not covered by corresponding assets owned by those countries, have risen from $11.3 trillion in 2011 to $13.8 trillion in 2014. We at the Jubilee Debt Campaign predict that in 2015 they will increase further to $14.7 trillion. Overall, net debts owed by debtor countries will therefore have increased by 30% - $3.4 trillion - in four years. Alongside this increase in global debt levels, there is also a boom in lending to impoverished countries, particularly the most impoverished - those called 'low-income' by the World Bank. Foreign loans to low-income-country governments trebled between 2008 and 2013, driven by more 'aid' being provided as loans - including through international financial institutions, new lenders such as China, and private speculators searching overseas for higher returns because of low interest rates in Western countries.
This report is the last in a series from NEF designed to stimulate progress towards a comprehensive and fair treatment of the crisis of sovereign debt. With the end of an unprecedented period of low interest rates now in sight, such a goal is needed more than ever. Debt relief isn’t working. Current approaches (HIPC and MDRI for poor countries and Paris and London Club renegotiations for middle-income countries) are not solving the problems of Third World indebtedness. HIPC and MDRI are indeed reducing debt burdens, but for a small range of countries, and at a high cost in terms of loss of policy space and after long delays, but non-HIPC poor countries also have major debt problems. Middle-income countries’ indebtedness continues to grow. There is a clear need for a new approach to resolving sovereign debt problems that is comprehensive, systematic, fair and transparent and above all, just. Responses from the creditors so far to criticisms such as those in the previous paragraph have been grossly inadequate. There is as yet no consensus about the way forward. This report aims to stimulate debate and help find a just solution to the debt crisis.