Institutions, Governance, and Policy Space Manuel F Montes UNRISD - - PowerPoint PPT Presentation

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Institutions, Governance, and Policy Space Manuel F Montes UNRISD - - PowerPoint PPT Presentation

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Institutions, Governance, and Policy Space Manuel F Montes UNRISD 23 October 2013 Updated: 18 February 2013 Order of Discussion Show graphs, make the argument Discuss the proposals 2 Aid Volatility and Economic Growth 3 Source:

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Updated: 18 February 2013

Institutions, Governance, and Policy Space

Manuel F Montes UNRISD 23 October 2013

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Order of Discussion

  • Show graphs, make the argument
  • Discuss the proposals

2

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Aid Volatility and Economic Growth

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Source: Kharas 2008

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Trade Instability

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Source: UN 2010

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International Finance Instability

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Source: Akyüz 2012

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Long-Term Impact of Crises Episodes: Turkey

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Source: van der Hoeven 2010

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Long-Term Impact of Crises Episodes: Chile

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Source: van der Hoeven 2010

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Concentration of Exports

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Source: UNCTAD 2010

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Re-Primarización in Latin America

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Source: CEPAL 2010

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Investment Volatility and Growth

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Source: UN 2008

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Investment in Fixed Assets - Africa

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Source: UN 2010

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At Stake

  • How to achieve higher investment rates over a

longer time period in developing countries?

  • How to increase patient investment and

financing for long-term projects?

  • Reduce crisis vulnerability from external

economic events

  • How economies/states can validate primarily

long-term investment by the private sector

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Institutions - Malfunctioning and Missing

  • Disciplines over reserve-issuing countries
  • Triffin’s dilemma, over-reliance on US dollar
  • Regulation and supervision of int’l private

financial markets and private capital flows

  • Compensatory financing for commodity

exporters

  • Demand-driven ODA and transiting away from

aid dependence

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Enabling Global Environment - 1

  • Impartial, predictable, timely, comprehensive

sovereign debt restructuring mechanism

  • Elimination of agricultural subsidies in

developed countries - enabling of food security policies in developing countries/ reduced reliance on trade

  • Removal of policy conditionality in ODA
  • Wider tariff ranges, restoration of trade tools

to discipline/harness private sector participation

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2

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Enabling Global Environment - 2

  • Capital controls both on inflows and outflows
  • Reforming investor protection: Removing

policy restrictions from bilateral investment treaties and investment chapters in FTAs

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2

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Is a Deal Possible?

  • Not within sight, but a process can be launched –

– Bretton Woods II – Piecemeal – South-South self-organization (BRICS bank?)

  • Must the Reform Process be outside IMF, OECD ?
  • Extreme global private risk aversion

– Private sector waiting for government guarantees and insurance to risk cash holdings – More state (regulation) means more investment

  • 7-10 years of anemic growth, possibly another

crisis

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montes@southcentre.int www.southcentre.int Tel: +41 22 791 80 50 Fax: +41 22 798 85 31 17-19 Chemin du Champ d'Anier 1209 Petit Saconnex, Geneva

“Boy you’re gonna carry that weight a long time”

  • Lennon and McCartney [1969] “Carry that Weight”

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Rapid Financial Growth not Matched by Fixed Investment

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Source: UN 2010