Category Archives: Globalization

IMF warns storm clouds are gathering for next financial crisis

Deputy head David Lipton says global banking system is not prepared for another downturn

IMF photoCrisis prevention is incomplete more than a decade on from the financial crisis, the IMF’s deputy head, David Lipton, said. Photograph: Eddie Mulholland/Rex

Richard Partington Economics correspondent

The storm clouds of the next global financial crisis are gathering despite the world financial system being unprepared for another downturn, the deputy head of the International Monetary Fund has warned.

David Lipton, the first deputy managing director of the IMF, said that “crisis prevention is incomplete” more than a decade on from the last meltdown in the global banking system.

“As we have put it, ‘fix the roof while the sun shines’. But, like many of you, I see storm clouds building and fear the work on crisis prevention is incomplete.”

Lipton said individual nation states alone would lack the firepower to combat the next recession, while calling on governments to work together to tackle the issues that could spark another crash.

“We ought to be concerned about the potency of monetary policy,” he said of the ability of the US Federal Reserve and other central banks to cut interest rates to boost the economy in the event of another downturn, while also warning that high levels of borrowing by governments constrained their scope for cutting taxes and raising spending.

Lipton said the IMF went into the last crash under-resourced before it was handed a war chest worth $1tn (£790bn) from governments around the world, while adding that it was important that national leaders had agreed to complete a review of the fund’s financial firepower next year.

“One lesson from that crisis was the IMF went into it under-resourced; we should try to avoid that next time.”

Speaking to an audience at Bloomberg in London, Christine Lagarde’s deputy called on China to take urgent steps to open up its economy to global competition.

Against a backdrop of Donald Trump engaging in a bitter trade dispute with Beijing, he said China needed to lower trade barriers, while also impose tougher rules to protect intellectual property – a key complaint of the US president.

Lipton suggested that Chinese trade policies that were once considered acceptable when it joined the World Trade Organization in 2001 as a $1tn economy may now be inappropriate as it had become a $16tn international superpower.

However, he did warn that the US should not take an overly heavy-handed approach to reform, adding: “China has many reforms that it could carry out that would be in its own interest and in the interest of countries around the globe. But China feels they can’t take those steps, as they put it, with a gun to their head, in the midst of trade tensions.”

The warning from the IMF marked the latest intervention from the Washington-based fund as the outlook for the global economy deteriorates, with particular flashpoints being the US-China trade dispute and central banks raising interest rates.

Global growth is forecast to slow as a result of the trade war, while financial markets have also been rattled in recent weeks. The FTSE 100 recorded its worst day since the Brexit vote last week, prompted by fears over the dispute, wiping more than £56bn off the value of the UK’s leading companies.

After almost a decade of low interest rates, the total value of global debt, both public and private, has risen by 60% to hit a record high of $182tn, so if central banks raise borrowing costs that would create difficulties for businesses and governments.

Lipton warned that sustained trade conflict between the US and China would be likely to trigger “far-reaching and long-lasting consequences” for the global economy, with a risk that Trump’s rhetoric could encourage China to shift its economy away from the rest of the world.

“Trade barriers if they are sustained could lead to a fragmentation of the global economy.”

“If this [trade dispute] leads to stalemate, China may decide to reorientate its economy not to trade with the US. To accept sustained trade barriers … could lead to a slowdown [for the global economy],” he said.
https://www.theguardian.com/business/2018/dec/11/imf-financial-crisis-david-lipton

US Bishops warn ‘without nuclear disarmament, world is in great danger’

ICN

Nagasaki Bomb
Nagasaki Bomb

The US Bishops’ International Justice and Peace Committee has urged Secretary of State, John Kerry, to step up efforts to advance nuclear disarmament and ensure the success of a multilateral conference being held in New York. The comments were made in a May 12 letter issued as the Ninth Review Conference of the Treaty on the Non-Proliferation of Nuclear Weapons (NPT) meeting continues at the United Nations.

“For most Americans, there is an assumption that the nuclear threat receded with the end of the Cold War. Unfortunately, nothing could be further from the truth,” said Bishop Oscar Cantú of Las Cruces, New Mexico, chairman of the Committee. “In a multi-polar world where there are risks of nuclear proliferation and even nuclear terrorism, it is imperative that the world move systematically and relentlessly toward nuclear disarmament and the securing of nuclear materials. Preserving the NPT is a cornerstone of this effort.”

The International Justice and Peace Committee also urged bold and concrete commitments to “accelerate verifiable nuclear disarmament, including taking weapons off ‘launch on warning’ status to prevent a catastrophic accident, deeper cuts in nuclear arsenals, ratification of the Comprehensive Test Ban Treaty, and serious negotiations on a fissile material cut-off treaty and other prudent measures.” Read full text of the letter…

The secret corporate takeover of trade agreements

THE GUARDIAN
by Joseph Stiglitz

Rural workers in a potato field in Villapinzon, Colombia. Increasingly, free-trade agreements meant to protect countries are leaving them at the mercy of rich and litigious corporations. Photograph: Fernando Vergara/AP
Rural workers in a potato field in Villapinzon, Colombia. Increasingly, free-trade agreements meant to protect countries are leaving them at the mercy of rich and litigious corporations. Photograph: Fernando Vergara/AP

The US and the world are engaged in a great debate about new trade agreements. Such pacts used to be called free-trade agreements; in fact, they were managed trade agreements, tailored to corporate interests, largely in the US and the EU. Today, such deals are more often referred to as partnerships, as in the Trans-Pacific Partnership (TPP). But they are not partnerships of equals: the US effectively dictates the terms. Fortunately, America’s “partners” are becoming increasingly resistant.

It is not hard to see why. These agreements go well beyond trade, governing investment and intellectual property as well, imposing fundamental changes to countries’ legal, judicial, and regulatory frameworks, without input or accountability through democratic institutions.

Perhaps the most invidious – and most dishonest – part of such agreements concerns investor protection. Of course, investors have to be protected against rogue governments seizing their property. But… More…

‘Stop TTIP’: Global Day of Action Draws Tens of Thousands

Common Dreams

Thousands march against the planned free trade agreement TTIP between the European Union and the USA in Stuttgart, Germany on April 18, 2015. Negotiations on TTIP are due to resume in New York on Monday April 20, 2015. (EFE/EPA/Michael Latz)
Thousands march against the planned free trade agreement TTIP between the European Union and the USA in Stuttgart, Germany on April 18, 2015. Negotiations on TTIP are due to resume in New York on Monday April 20, 2015. (EFE/EPA/Michael Latz)

‘Rising anti-American sentiment linked to revelations of U.S. spying and fears of digital domination by firms like Google’

Demonstrators marched around the globe Saturday to protest the Transatlantic Trade and Investment Partnership (TTIP), a ‘free trade’ agreement currently being negotiated between the European Union (EU) and the United States.

Opponents fear that TTIP will erode food, labor and environmental standards particularly with regard to the EU’s strict regulations on food additives, genetically modified crops and the use of pesticides. “There is a very big risk: TTIP will restrict our democratic rights. In the future, large corporations will have an even greater influence on the legislative process,” said Thilo Bode of Foodwatch. Continue reading ‘Stop TTIP’: Global Day of Action Draws Tens of Thousands

Here’s How Global Warming Is Already Worsening Extreme Deluges In The U.S.

Think Progress
by Joe Romm
env2
Decadal index of two-day precipitation totals that are exceeded on average only once in a 5-year period. Changes are compared to the period 1901-1960. As data show, such once-in-five-year events have become much more common (via NCA.)

One of the most robust scientific findings is the direct connection between global warming and more extreme deluges. Scientists have observed a sharp jump in monster one- and two-day rainstorms in this country. Continue reading Here’s How Global Warming Is Already Worsening Extreme Deluges In The U.S.

Haitian Sweatshop Workers Speak: Sub-Poverty Wages and Sexual Coercion

haiti
Ruth Jean-Pierre, left, and Aluta Marcelin, right. For both, sex with the supervisor was a condition of their job in a factory. Photo: Ansel Herz.

Common Dreams

Beverly Bell
Haitian women workers tell of their experiences in sweatshops. These interviews, gathered over the past two years, are among many dozens that this writer has collected from Haitian sweatshop workers since the early 1980s. Not one has ever diverged from the narrative of miserable working conditions and the inability to feed, shelter, and educate their children on insufficient wages. Below, womentell of their experiences as sweatshop workers and offer their analysis on better types of jobs for Haiti. Continue reading Haitian Sweatshop Workers Speak: Sub-Poverty Wages and Sexual Coercion