A Global Partnership For a Just Transition. Kevin P. Gallagher, Director

Transcription

1 A Global Partnership For a Just Transition Kevin P. Gallagher, Director

2 What is his point? The multilateral system stemming from the UN Charter and the United Nations Monetary and Financial Conference is breaking down. The system s social foundations were eventually replaced with the globalization of capital as an ends rather than a means to achieve social goals. Time for a new multilateralism that puts the SDGs and a just transition as the core goals of the system and deliver as one.

3 Foundations of 20 th Century Multilateralism: Embedded Liberalism Pursuit of full employment New Deal ethic of rights, bargaining, justice Anti colonial and imperialist Finance national, trade globalized Prosperity will bring peace

4 The Kindleberger Five: and the Post War order 1. Relatively stable exchange rate system 2. Lender of Last Resort 3. Long term counter cyclical lending 4. Maintaining open markets in recessions 5. Ensuring macroeconomic coordination Charles Kindleberger (1986) The World in Depression: , University of California Press.

5 United Nations Monetary and Financial Conference: and the international economic order

6 State of the Monetary System Dollar bias: dollar dominated world requires EMDs to constantly adjust to US monetary policy Inequity: EMDs have to sell local currency and buy USD in order to avoid excessive exchange rate appreciation and asset bubbles major transfer of wealth from S to N. Governance bias: lack of voice and representation in IMF/GFSN; lack of resources relative to size of system Contractionary bias: EMDs forced to adopt procyclical adjustment policies that are unfair and drag global growth. Source: Ocampo, Jose Antonio (2018), Resetting the International Monetary (Non) System, New York and Oxford, Oxford University Press.

7 State of the Development Banking System Lacks scale: China's to National lead Development markets Banks toward in Context: a just transition Global Assets (bn USD) Export Import Bank of China (CHEXIM) 199 Poor coordination: competition for bankable China Development Bank (CDB) European projects Bank for Reconstruction trumps and Development (EBRD) collective 52.4 goal acheivement European Investment Bank (EIB) 66 Inter American Development Bank (IADB) 106 Poor governance: MDBs lack adequate voice and African Development Bank (AfDB) 22.9 Asian Development Bank (AsDB) 115 representation from borrowers and affected World Bank (WB) 177 communities Poor performance: impact on growth and development very mixed

8 State of the Trade and Investment System Large economy bias: large economies leverage their market power to create rules in their interest Financial and corporate interest bias: Rules favor firms and financial interests today over consumers, households, and employees Mission creep: has moved beyond goods to financial flows, banking, intellectual property and beyond. Governance bias: asymetric bargaining power; increasing shift toward investor state dispute systems

9 (Hyper) Globalization GDP* Trade* 4 44 FDI (stock)* Financial Markets* Carbon emissions 18 (kt) 36 (kt) Labor Share Industrialized 55 (%) 40 (%) Developing 50 (%) 37 (%) *US$ trillions *US trillions

10 Capital Flows to Emerging Markets (1980 to 2013) 7% 6% 5% 3% Mexico 2% % % 1980 non FDI financial flows %GDP 4% 1% GFC 2% 3% Mexico/LAC EURO AFC, Brazil, Argentina 4% Please update Figure 1.9 from latest TDR WITH arrows pointing to a financial crisis at every point when K flows go negative this illustrates how footloose finance destabilizes the world economy.

11 A World Fit for the Few Share of National Income, Top 1% v Bottom 50% in the US, Share of National Income % Top 1 % Bottom 50% Share of Global Income (%) Global Top Global Bottom 50%

12 Global greenhouse gas emissions under different scenarios

13 21 st Century Foundations

14 Geneva Principles: New foundations for 21 st Century Multilateralism Delivering full and decent employment at livable wages Closing socio economic gaps, within and across generations, nations, households, and gender Democratising markets and extending economic rights Ensuring healthy and zero net carbon environments

15 Principles for a New Multilateralism Shared goals for a just transition Common but differentiated responsibility Policy Space for national sovereignty Limit beggar thy neighbor policies Balanced and open dispute resolution