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Following the unknown route: The world in searching of dollar substitute

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The ongoing escalation of trade wars and competition among the world’s top economies makes it imperative to consider institutionalizing several currency zones to form a sort of currency “multipolarity”.

The forthcoming “currency multipolarity” became the subject of disputes in the 1990s, after the launch of a project to create a EU currency. Robert Mundell, the author of Optimum Currency Areas and winner of the Swedish National Bank’s Nobel Memorial Prize in Economic Sciences, predicted in 2000 that by 2010 the euro would cover at least 50 countries. The dollar would de facto become a common currency for Latin American countries, while Asia would move towards a currency area under the aegis of the Japanese yen. Being within such zones, under the cover of strategic alliances, countries can carry out a coordinated currency policy and put up a joint resistance to market fluctuations.

However, the history of a battle between the euro and the dollar has turned out to be controversial. On the one hand, by 2019 the euro had made a tangible contribution to the weakening of the positions of the US dollar in global economy. According to the European Commission, at that time one fifth of global currency reserves were linked to the single European currency. «340 million people use it on a daily basis, 60 countries and territories link their currencies to it».

On the other hand, sanctions and tariff strikes by the Trump administration  against nominal allies over the past two years have demonstrated that Europe is still highly dependent on the financial system which hinges on the US dollar. In general,  despite its successes of the past 20 years, the euro has yet to go beyond the “clearly set” boundaries of a regional currency.

Unexpectedly for many financial experts, the early 2010s saw the speedy arrival on the global financial and economic scene of China. According to The Economist, the results of 2019 say that yuan-denominated debt instruments outnumbered the pound, the euro and the Japanese yen. But not the dollar. The share of the dollar revolves around 52-55 percent throughout the years that have passed since the 2008 financial crisis.

In the course of the coronavirus crisis the Chinese bond market demonstrated the best resilience. By the end of the first six months capitalization of the market exceeded 14 trillion dollars, the world’s second position (capitalization of the US bond market is around 42 trillion dollars). The yields of the Chinese government’s bonds exceeded the American ones more than fourfold.

In recent years China has considerably strengthened its position of a world creditor, by far overtaking the USA. By early 2020, direct and trade loans, issued by Chinese state-run and privately owned businesses to more than 150 countries, exceeded 1.5 trillion US dollars. China has officially assumed the position of the world’s number one creditor, leaving behind the World Bank, the IMF, and the governments of OECD taken together.

A third factor that, according to the economic theory, must contribute to the promotion of national currency as a global one, is leadership in financial technologies. The Chinese financial technology is already one of the most advanced worldwide. At its disposal is the billion-worth market at home and nearly 2.5 billion people in “third world” countries which have no access to the  traditional financial services of western companies and banks.

Finally, a fourth factor facilitating the rise of national currency is the coronavirus pandemic, which provided a powerful impetus for millions of employees to switch to online work. Next to come were the financial services and Internet trade, in which China holds equally top positions. Beijing’s progress in dealing with the pandemic, along with an ever greater number of countries expressing distrust of the US policies, fuels interest in the yuan. Meanwhile, the transition of the USA and China to a “cold” financial, technological and economic war appears inevitable. All these factors combined create the prerequisites for currency division. According to Nihon Keizai Shimbun, “in a divided world it is extremely unadvisable for one currency to become a model one”.

Discontent over the current position of the dollar is felt inside the United States as well.  In May Foreign Affairs complained that the dollar, which has become very costly due to the influx of “superfluous” capital, is inflicting damage on the production sector, “eliminates” jobs in unstable states, aggravates political polarization inside the country. If the influx of capital into the USA continues to increase, “……it will be more and more difficult to ensure a balanced and even growth”. “ At some point the USA will have no choice but introduce restrictions on the import of capital in the interests of national economy – even if it means a voluntary rejection of the global supremacy of the dollar as a reserve currency”.

On August 27 the US Federal Reserve Service issued a statement on changes in its monetary and credit policy, which observers deem as “destruction” of the existing system. The new policy of the American Central Bank can be viewed as a signal of readiness for reconsidering the international role of the dollar in the direction of downgrading its stance.

Some experts believe, however, that an abrupt departure of the dollar from the position of a top global currency, including a “sudden” arrival of a fairly strong alternative reserve currency, can provoke a «large-scale economic crisis in China», «a fall of oil prices by several times», and a rapid reduction of “economic activity across the globe”.

In addition, any currency that claims a reserve status, even if at a regional level, will have to overcome several obstacles. The first one deals with the logic of economic entities. According to The Economist, one hypothesis maintains that denomination of prices in one currency, particularly on highly competitive markets, makes it possible for companies to avoid sharp fluctuations of prices compared to their competitors. The other assumption argues that using the same currency for both imports and exports protects against losses in case of denomination of national currency.

It is highly probable that it is these factors that explain correlation between the share of dollar and euro “blocs” in the global gross product (approximately 60 and 25%) with their share in currency reserves (in September 2014  — 60,7 and 24,2%). Also,  they account for “a relative stability of the volume of dollar currency reserves despite ……a reduction in the share of the USA in global economy in the past decades”. This logic can also explain the low percentage of yuan transactions in global trade. In different estimates, the share of payments in yuan in trade transactions made up 1.5-2 percent in early 2020.  For comparison, China’s share in global commodity trade is 10 percent.

The second obstacle has to do with the “historical” linkage of many commodity prices, in the first place, oil prices, to the dollar. At present, the global oil market is a single and spot one. Transactions on this market are short-lived and are clinched in dollars, to minimize risks and cut costs. There is a viewpoint under which the main purpose of the American “slate revolution” is to preserve such a state of things on the oil market. Also, to bring the world gas market to the “spot” format. Such a reformatting of markets will make it possible to preserve the linkage of oil and gas market to the US dollar.

Finally, the third obstacle, the most fundamental one, is of geopolitical nature.  It tests the ability of the emitter of global reserve currency to create and maintain a stable world order, in the center of which it resides. The temporary lag, from the 1880s, when the United States surpassed the British Empire in production, to 1944, when the agreements in Bretton-Woods were signed, demonstrates the importance of geopolitics in the process of replacing the British pound with the American dollar as a leading world currency.

On the whole, so far playing against the yuan are the high costs of “carrying out financial transactions, related to obtaining and disseminating information”; the limited capacity of “China to produce political influence on other global economic centers, mainly the United States and the EU”; “China’s dependence on Hong Kong as a regional offshore financial center”. Beijing cannot afford free movement of capitals in the absence of “fundamental” and “politically challenging” structural reforms in the economy.

Speaking against the euro is the absence, unlike the main competitors, the dollar and the yuan, of a “solid foundation”. The EU common budget is set to pay subsidies to member countries, while years-long disputes about establishing a common ministry of finance all but fuel discord in relations between 19 governments of eurozone countries. The growth of Eurozone “strongly depends” on export “and on the corresponding export of capital”.

The optimistic way out of the current situation is agreement between three top economies, the USA, China and the EU, on forming a currency basket, similarly to the IMF rules of drawing loans. In this situation, the function of regulating “the basket” goes to either the IMF, or “a new international financial institute set to this  end”. In case the events follow an unfavorable scenario, “given the world’s division into blocs currencies could also split into sectors”.

However, in Eurasia and in the Middle East the idea of “optimum currency area” would be particularly hard to put into practice. The author of the concept, Robert Mundall, insisted that for a successful currency integration “it was necessary to guarantee maximum economic openness; close trade ties with partner countries: correlation of economic cycles which develop in separate countries with a cycle that is inherent in the major economic integration potential”. Russia is demonstrating a good example of policy for countries which are not ready to enter either the dollar zone or the euro area.

Moscow has been diversifying its currency reserves in recent years, focusing on the yuan as well. Amid the aggravation of trade wars, gold is becoming an alternative to the existing reserve currencies. Gold will do a good service to countries in case of the arrival of a currency basket, to strike a compromise between the dollar, the euro and the yuan.

The Russian Central Bank has been systematically purchasing gold since 2005. The purchase of gold reserves has been gaining pace since the second half of the 2010s, which is largely “due to the political and economic situation in the world and Russia’s determination to reduce dependence on the unpredictable US policy and the dollar”. China too, has been buying gold, just as many “developing economies”. The coronavirus crisis has changed radically the formerly skeptical attitude of western politicians and commentators to the policy of purchasing gold.  Particularly after the price of gold exceeded an 11-year maximum at the end of July. At the same time, gold does not earn interest but requires spending on storage.

In general, if the formation of currency multipolarity is accompanied by rate fluctuations and chaotic transition of capitals from one  currency into another and back, it will surely lead to either a new global crisis, or will dramatically aggravate the current one, should it linger for several years. Meanwhile, China or the EU are hardly interested in an early fall of the dollar: an excessively high yuan or euro rate will undermine the positions of Chinese and European producers and conversely, provide American exporters with unjustified advantages.

Financial markets today are a system of communicating vessels. Also, the years following the 2008 crisis saw the return of interest in “Keynesian methods”, which envisage a substantial control of the economy on the part of the government.  The corona crisis has fueled political moods in favor of currency sovereignty. Presumably, changes in the distribution of power among reserve currencies will hardly run ahead of changes on the geopolitical scene.

From our partner International Affairs

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COVID-19, major shifts and the relevance of Kondratief 6th Wave

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Covid-19 has changed the global strategic equations, it has impacted each part of human life so has it let us to ponder upon the Kondratieff cycles, as with Covid-19 there has started a new debate about sixth wave, which is about the importance of health sector, especially the biotechnology which is crucial for progress of society in future.

Henceforth, the countries that are working on these sectors know that the most important engine for our economic and social development will be health in the 21st century. For example we have USA that focused on these and now has created around 2/3rd of its jobs in health sectors along with that has invested about $3,500 billion on health sector back in 2017. Also a 2008 report said about 4,700 companies all across worked in  field of biotechnology whereby 42% were in North America, and 35% in Europe, which depicts these states long-term understanding of the emerging scenario as seen from the emergence of Coronavirus. But then the on the other side if we look into the health structure of underdeveloped states, we can easily conclude that these states will suffer the most if a global health issue emerges, and in the contemporary world it has emerged in the form of COVID-19.

COVID-19 has brought changes in the political and economic arrangement. It has not limited itself to the China from where it has been started but has impacted the whole world. The virus that is itself unseen has shaken the structure, with severe consequences for all states. No matter if it’s the USA that is the super power or any small states, the pandemic has divulged the capability and integrity of all in their response to the Covid-19. With some having the capabilities to deal with it, but most lacking in these sectors which resulted in huge loss not only of human life but also of resources. Time has come when the world is criticizing globalization at one hand because globalization is the reason for the spread of COVID-19. This has marked the end of one era with the emergence of a new one.

Mention below are some of the major shifts which Covid-19 has resulted in economic sectors in both the developed and the underdeveloped states, along with the major political shift that has led many to debate about the new structure of world after the crisis would be over.

The Covid-19 that was first reported in China, in November has changed the world completely and resulted in a lot of economic and political changes all across. For example the global economy due to Covid-19 crisis have a setback of $590 trillion. Apart from this many people lost their jobs, the household incomes have reduce, moreover World Bank report say nearly 49 million people will move into extreme poverty because of pandemic. Then World largest real estates are having economic problems, the Tourism industry has declined. An estimate showed the loss of about $1.2 to $3.3 trillion in this area of tourism all over world. Also report of International Air Transport Association predicted a loss of $63-$113billion. Moreover the oil sector also faced problem as it was for the first time that its price has gone negative. Henceforth, it can be predicted that once the pandemic is over the world will have a lot to calculate.

The impact of this crisis is seen in both core and periphery states. In core states like the US and china COVID-19 has brought huge economic impact but along with this also a question of who will act as the world saviour. As Chinese economy is expected to decline by 13% in February also the Belt and toad initiative is at halt, but still apart from the economic problem this pandemic has helped a core state like china to use the situation and move towards the status of Global power. Thus this struggle of Global saviour resulted in US and China at odds with each other. Indeed, COVID-19 has brought political repercussions along with economic consequences. When it comes to Europe the industrial production decline by 17%. Likewise USA is also effected by COVID-19 as by this pandemic about 39 million American have lost their jobs, also US economy seen to decline by 20% so US health sector has been in the eye of analyst for its failure to curtail the coronavirus. Then covid-19 has more devastating impact on peripheral states as there health care facility is not well developed. For example the GDP of Bangladesh fell by 1.1%, then many African states that look for tourism as a source of economy faced a loss of about $50 billion. Also 29 million in Latin America fell into poverty. Though they have been exploited in past but the need of the hour is that the world must help them.

Global dynamics are showing transformation amid coronavirus. The pandemic has shown how China is using its trump cards to transform the contemporary situation in its favour while bolstering its image as the “global saviour”. China’s emergence from the sick man of Asian to the positing of global saviour has opened the prospect of a tilt in the global status of Hegemon from US towards China. The question is that will the Chinese strategy amid COVID-19 will hinder the prestige of US who instead of acting as the global leader has shown a deterioration in its role in global governance.

The future of China’s pre-eminence in the global spectrum has been widened by the pandemic. All of this has been further bolstered by the broad rejection of Trump to engage in Europe and elsewhere. COVID-19 not only emerged as an impetus to shift the global dynamic but has helped China to strengthen its position. In response to the confident play by China, US hasn’t come up with any convincing tactics to prevent the increasing role of China in achieving its interest. Recently, a move by Trump administration to withhold US funds of around $400million will surely leave a gap, moreover will be an opportunity for china to bolster its position in WHO. Taking backseat in its global role amid pandemic, then the withdrawal from global treaties, and withholding of funds from WHO shows a pattern which will further create a vacuum for China to take advantage of the prevailing situation. 

The current international order set by US will be subject to testation as the changing shifts in the geopolitics have to be catalyzed by the COVID-19. For it is now the right time for us all to ponder the relevance of Kondratieff 6th wave in current scenario of Covid-19. As now the focus has diverted towards the health care system and biotechnology since the world has in current situation saw a blame game between states with few called corona virus as naturally occurring but some regarded it as ‘Chinese virus’. This has led to the realization that that warfare scenario has entered into discussion over biotechnology. So after the Covid-19 pandemic, the policy makers of both periphery and core state will work on new technological area which has the Medical technologies, Nanotechnologies, Biotechnologies etc. for the improvement in health sector will be crucial for the progress in future.

Conclusively, the current COVID-19 as a bioweapon has resulted in a clear impetus and will definitely bring a shift in the states attitude towards medical research and the multiple fields of technology in future, this is so because COVID-19 has created a ground for relevance of Kondratieff 6th wave.

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How U.S.’s Response to Covid-19 Could Precipitate 2nd Great Depression

Eric Zuesse

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On March 10th of this year, there were 290 daily new U.S. cases of Covid-19 (coronavirus-19).

On March 13th, U.S. President Donald Trump declared a pandemic national emergency, because the number of daily new cases was now suddenly doubling within only three days. However, no lockdown was imposed. The policy-response was instead left to each individual. This is in accord with America’s libertarian idelogy. Trump even announced that “he was allowing his health secretary to bypass certain regulations to provide more flexibility to doctors and hospitals responding to the outbreak” — outright reducing, insead of increasing, federal regulations, this being his way to address the matter. That’s the libertarian response.

Covid-19 (coronavirus-19) cases started soaring in the U.S., from 600 daily new cases on March 13th, to 25,665 on March 31st. Americans were scared to death, and facemask-usage soared, and independent small businesses started laying people off en-masse. (Restaurants, hair salons, travel agencies, inns, dental offices, etc., were hard-hit.)

Immediately, the alarming rise in new cases halted on April 4th (at 34,480), and the daily new cases remained approximately flat, but slightly downward, from March 31 to June 9th (when it reached bottom at 19,166), but then soared yet again, to 78,615, on July 24th.

But, then, it again declined, so that, on September 8th, it was at only 28,561. This was already returning to around what the new-cases rate had been back on March 31st. So: despite peaking again on July 24th, the rate of daily new cases was little changed between March 31st and September 8th. And, all during that 5-month period, people were coming back to work.

The key immediate and direct economic variable affected by Covid-19 is the unemployment rate. Here, that economic effect is clearly shown:

U.S. unemployment: March 4.4%, April 14.7%, May 13.3%, June 11.1%, July 10.2%, August 8.4%

Though the daily-new-cases rate went down after March 31st and after July 24th, the unemployment rate progressed far more gradually downward after March 31st: the small businesses that had been panicked by the explosion of new cases during March were now gradually re-opening — but they remained very nervous; and, so, unemployment still was almost twice what it had been during March.

Here, that experience will be compared with two Scandinavian countries, starting with Denmark, which declared a pandemic national emergency on March 13th, just when Trump also did. “Starting on 13 March 2020, all people working in non-essential functions in the public sector were ordered to stay home for two weeks.” The daily new cases fell from the high of 252 on March 11th, down to the low of 28 on March 15th, but then soared to 390 on April 7th, and gradually declined to 16 (only 16 new cases) on July 9th. Then it peaked back up again, at 373, on August 10th, plunged down to 57 on August 26th, and then soared yet again back up to 243 on September 8th. The new-cases rates were thus irregular, but generally flat. By contrast against the experience in U.S., Denmark’s unemployment-rate remained remarkably stable, throughout this entire period:

Denmark: March 4.1, April 5.4, May 5.6, June 5.5, July 5.2

Sweden’s Government pursued a far more laissez-faire policy-response (“The government has tried to focus efforts on encouraging the right behaviour and creating social norms rather than mandatory restrictions.”), and had vastly worse Covid-19 infection-rates than did the far more socialistic Denmark, and also vastly worse death-rates, both producing results in Sweden more like that of the U.S. policy-response than like that of the Danish policy-response, but far less bad than occurred on the unemployment-rate; and, thus, Sweden showed unemployment-increases which were fairly minor, more like those shown in Denmark:

Sweden: March 7.1, April 8.2, May 9.0, June 9.8, July 8.9

That was nothing like the extreme gyration in:

U.S.: March 4.4%, April 14.7%, May 13.3%, June 11.1%, July 10.2%, August 8.4%

Why was this? 

Even though Sweden’s policy-effectiveness was more like America’s than like Denmark’s at keeping down the percentages of the population who became infected, and who died from Covid-19 (i.e., it was not effective), Sweden’s policy-effectiveness at keeping down the percentage of the population who became unemployed was more like Denmark’s (i.e., it was effective, at that). Unlike America, which has less of a social safety-net than any other industrialized nation does, Sweden had, until recently, one of the most extensive ones, and hasn’t yet reduced it down to American levels (which are exceptionally libertarian). Therefore, whereas Swedes know that the Government will be there for them if they become infected, Americans don’t; and, so, Americans know that, for them, it will instead be “sink or swim.” Make do, or drop dead if you can’t — that is the American way. This is why Swedish unemployment wasn’t much affected by Covid-19. When a Swede experienced what might be symptoms, that person would want to stay home and wouldn’t be so desperate as to continue working even if doing that might infect others. Thus, whereas Sweden’s unemployment-rate rose 27% from March to May, America’s rose 202% during that same period. Americans were desperate for income, because so many of them were poor, and so many of them had either bad health insurance or none at all. (All other industrialized countries have universal health insurance: 100% of the population insured. Only in America is healthcare a privilege that’s available only to people who have the ability to pay for it, instead of a right that is provided to everyone.)

On September 9th, Joe Neel headlined at NPR, “NPR Poll: Financial Pain From Coronavirus Pandemic ‘Much, Much Worse’ Than Expected”, and he reported comprehensively not only from a new NPR poll, but from a new Harvard study, all of which are consistent with what I have predicted (first, here, and then here, and, finally, here), and which seems to me to come down to the following ultimate outcomes, toward which the U.S. is now heading (so, I close my fourth article on this topic, with these likelihoods): 

America’s lack of the democratic socialism (social safety-net) that’s present in countries such as Denmark (and residual vestiges of which haven’t yet been dismantled in Sweden and some other countries) will have caused, in the United States, massive laying-off of the workers in small businesses, as a result of which, overwhelmingly more families will be destroyed that are at the bottom of the economic order, largely Black and/or Hispanic families, than that are White and not in poverty. Also as a consequence, overwhelmingly in the United States, poor people will be suffering far more of the infections, and of the deaths, and of the laying-off, and of the soon-to-be-soaring personal bankruptcies and homelessness; and, soon thereafter, soaring small-business bankruptcies, and ultimately then big-business bankruptcies, and then likely megabank direct federal bailouts such as in 2009, which will be followed, in the final phase, by a hyperinflation that might be comparable to what had occurred in Weimar Germany. The ceaselessly increasing suffering at the bottom will ultimately generate a collapse at the top. Presumably, therefore, today’s seemingly coronavirus-immune U.S. stock markets, such as the S&P 500, are now basically just mega-investors who are selling to small investors, so as to become enabled, after what will be the biggest economic crash in history, to buy “at pennies on the dollar,” the best of what’s left, so as to then go forward into the next stage of the capitalist economic cycle, as owning an even higher percentage of the nation’s wealth than now is the case. Of course, if that does happen, then America will be even more of a dictatorship than it now is. Post-crash 2021 America will be more like Hitler’s Germany, than like FDR’s America was.

The Democratic Party’s Presidential nominee, Joe Biden, is just as corrupt, and just as racist, as is the Republican nominee, Donald Trump. And just as neoconservative (but targeting Russia, instead of China). Therefore, the upcoming November 3rd elections in the U.S. are almost irrelevant, since both of the candidates are about equally disgusting. America’s problems are deeper than just the two stooges that America’s aristocracy hires to front for it at the ballot-boxes.

Author’s note: first posted at Strategic Culture

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Democracy in the doldrums

Samudrala VK

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It is clear that during the COVID-19 pandemic  times, Democracy has gone pear shaped throughout the world. Power and Political activity are considered as alpha and omega of the modern day democracy.
The Modern state(political authority),which is based on legitimacy and a tool to deliver political, economical and social justice, has been rendering yeoman service to
corporates, both domestic and foreign. The ruling dispensations all around the globe have resorted to authoritarianism under the guise of health emergency. In addition, the topsy turvy of Democracy, through excessive centralisation and the iron curtain imposed on political activities during this pandemic, has left minimal space to raise the concerns of the urban poor. The pandemic, a bolt from the blue, has caught our health systems off guard. In India, the labour class has caught between the devil and the deep sea, thanks to the recent twin moves of the central government, privatization and the helter-skelter lockdown. The pernicious effects of the lockdown are yet to hit the masses. Seemingly, the rudderless policies of central government have created enough space to further pauperization of masses, mostly have-nots.
Now, the federal governments of third world countries have to walk on razor edge by meeting the fiscal deficit targets on one hand and by connecting the welfare dots on the other.It is not surprising to say that the big corporates are making good fortunes with the relaxation of tax rates and new labour codes. As unemployment is hanging like the sword of domacles over the working class, the corporate class would expect this surplus labour to be at their beck and call.The early warnings of intelligentsia on the consequences of disastrous lockdown  were remained as the voices crying in the wilderness. The ruling elite has been trying to enshroud the general despondency among the civic force by shifting the propaganda machinery to sensitive elements like religion, hyper nationalism and sloganeering-not to mention self aggrandizement.

Neo-liberalism and corporatisation

The diktats of the world bank and the IMF(International monetary fund) on the third world nations like pruning the subsidies, roll back of welfare measures and the abatement of labour laws as an essential sina qua non for any sort of relief package during the crisis of BOP(Balance of payments) have left labour class of the thrid world nations in quandary. The US with the support of the WTO( World Trade Organization)had exhorted all these countries to provide untrammeled access its products. Apparently, the aims and paths of federal governments of these nations ,the WTO and the IMF are congruent with regard to free trade and the globalization of capital. The lawful protections for the working class under the labour laws have proved disastrous for the interests of the capitalist class and being viewed as shackles for the exploitation. The decades-long struggle to retain these labour rights in independent nation states has been ending in smoke due to weakened trade unions and the decline of social capital. The time has come to fight tenaciously and move heaven and earth to restore their rights which are otherwise go to the dogs. When the market space is being dominated by Monopoly or Duopoly or Tripoly, the free and fair competition which the unhindered market guarantee is an absolute sham. Extolling the virtues of Neo-liberalism, the modern nation states have centred their development agenda in and around urban centres. Economically, in the post-liberal era of India, the upward mobility is largely confined to a few sections of the urban middle class.

Welfare economics

It is wrong to mention that welfare economics is based on “Rob Peter to pay paul principle” when Peter has direct access to resources(natural, political, economical and social) vis-a-vis Paul. It is not the Peter but the Paul who is running from the pillar to post in search of opportunities. The notion of political equality of liberal ideological stream revolves around freedom and liberty of an individual and overlooks the core elements of equality like social and economical justice. The central governments all over the world have successfully repudiated the pro-poor agenda and this volte face from welfare state to pro-capitalist state has pushed the labour class out of the frying pan into the fire.

Nexus between political class and biggies

The unholy nexus between the political class  and corporates has been riding roughshod over the interests of poor. This alliance behooves the political class to safeguard the vested interests of corporate bigwigs. It is apposite to mention that representative democracy has been metamorphosing into a turncoat democracy. Back in the day, Politicians were known for their erudition, statesmanship and uncompromising ideological commitment. On the contrary, present day representatives are turning into snollygosters for their personal gains. There are several voluminous reports from different corners on rising economical disparities in the post-liberal era on which no political party is keen to act upon. As Michael Jackson, king of pop, penned in one of his famous tracks “All I want to say is that they don’t really care about us”-the lyrics are still relevant in this pandemic times.

Globalization and dependency

The South Asian nations have started their LPG (Liberalisation, privatization and Globalization) path at the same time, with the exception of Sri Lanka which had opened its economy by fits and starts.They had adjusted their economical apparatus with a new global integration process at a time when the global economical architecture was dominated by unipolar power, the US.
The lopsided globalization process has been converting many third world countries as dependents and in some cases almost to a level of aid recipients upon the erstwhile colonial powers or the US. Under the banner of global integration, all these nations were dragged into this complex whole, in most of the cases through persuasion. In the name of free trade, the Western powers have been  bleeding these nations white of their resources. The asymmetrical globalization has also challenged the sovereignty of these nations while the same has remained intact in case of developed nations. The US has been playing a rigged game of globalization under the auspices of the WTO, the world bank and other agencies. The time has come for these players to bury their hatchet and rise as a one voice to have a just order at the international sphere.

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