Category: ECONOMY

By Martin Khor* | IDN-InDepth NewsAnalysis

GENEVA (IDN) – The world waited with bated breath as the deadline neared. And breathed a sigh of relief when at the last minute the United States avoided crossing its “debt ceiling” and a default on its debts.

The debt ceiling was raised, and the government shutdown also ended, after weeks of a high-profile standoff between U.S. President Barrack Obama and the Republicans in Congress. But this relief was mixed with incredulity and frustration.

Firstly, the respite is only temporary; the can is just kicked down the road. The deadlines for government shutdown and debt ceiling are shifted some weeks away to January and February 2014.

By J C Suresh | IDN-InDepth NewsAnalysis

TORONTO (IDN) – A new report has highlighted the importance of funds remitted home by migrants, which are now nearly three times the size of official development assistance given by rich developed nations and larger than private debt and portfolio equity flows to developing countries. They exceed the foreign exchange reserves in at least 15 developing countries, and are equivalent to least half of the level of reserves in over 50 developing countries, says the latest issue of the World Bank’s Migration and Development Brief.

Five years have passed since the Lehman Brothers collapse triggered U.S. and global financial crisis with grave consequences. But effective financial regulations are not yet in sight in developed countries. At the same time, the developing countries are confronted with huge new challenges.

By Martin Khor* | IDN-InDepth NewsViewpoint

GENEVA (IDN) – Lehman was the tip of the iceberg. Below the surface were many contributory elements. They include financial deregulation, the conversion of finance from serving the real economy to a beast that thrived on speculation, creaming layers off the productive sectors and unsuspecting consumers through new manipulative instruments.

By J C Suresh | IDN-InDepth NewsAnalysis

TORONTO (IDN) – Though the world is increasingly intertwined, the U.S. plays a unique role in the global economy, accounting for 11 percent of global trade and 20 percent of global manufacturing. The country’s global financial ties also run deep. Foreign banks hold about $5.5 trillion of U.S. assets, and U.S. banks hold $3 trillion of foreign assets.

While these interconnections have great benefits for the United States, they are not without risks, IMF Managing Director Christine Lagarde has warned, referring to the collapse of Lehman Brothers five years ago that ushered in “a harsh new reality” across sectors, countries, and the world.

By R. Nastranis | IDN-InDepth NewsAnalysis

BERLIN (IDN) – Economic austerity is spreading its tentacles to rich and poor countries around the world threatening to impact 5.8 billion citizens this year, and 6.3 billion or 90 percent of global population by 2015, warns a new report and calls for a Global New Deal to stave off the menacing situation.

A Global New Deal involves public investments to boost employment, catalyse sustainable development, improve living standards, reduce inequalities and promote political stability, says the report, titled ‘The Age of Austerity – A Review of Public Expenditures and Adjustment Measures in 181 Countries’.

By Martin Khor* | IDN-InDepth NewsViewpoint

GENEVA (IDN) – The issue of foreign debt has made a major comeback. This is due to the crisis in Europe, in which many countries had to seek big bailouts to keep them from defaulting on their loan payments. Before this, debt crises have been associated with African and Latin American countries. In 1997-99, three East Asian countries also joined the indebted countries’ club.

European countries, notably Germany, insisted that private creditors share the burden of resolving the Greek crisis. They had to take a “haircut” of about half, meaning that they would be repaid only half the amount they were owed.

By J C Suresh
IDN-InDepth NewsReport

TORONTO (IDN) – As part of a wider strategy to support concessional lending to poorer countries that are combating the effects of the global economic crisis, the International Monetary Fund (IMF) has approved a two-year extension to the zero interest rates charged on loans to low-income countries

Subsequent to further weakening of global growth and low-income countries’ declining ability to withstand the crisis, the IMF approved a second extension to the exceptional interest waiver on loans under its Poverty Reduction and Growth Trust (PRGT).

A spate of lawsuits triggered by transnational corporations against Argentina, Ecuador, India. Indonesia, Uruguay, Vietnam, Australia and Canada, involving compensation worth billions of dollars is causing grave public concern and preparing the ground for reviewing so-called bilateral investment treaties.

By Martin Khor* | IDN-InDepth NewsAnalysis

GENEVA (IDN) – A growing number of international law suits has highlighted an emerging global crisis: the nature and effects of investment treaties signed between governments, which are allowing private companies and investors to sue countries for millions or even billions of dollars.