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The publication builds on the Summary by the President of the Economic and Social Council of the forum on financing for development follow-up (A/72/114–E/2017/75) held in New York on 22-25 May 2017. It also provides more detailed coverage of the ministerial and expert segments of the forum, as well as summaries of the side events held during the forum.

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The South Centre is pleased to announce the publication of Policy Brief No. 43 entitled "The Financial Crisis and the Global South: Impact and Prospects" by Yılmaz Akyüz, Chief Economist, and Vicente Paolo B. Yu III, Deputy Executive Director, of the South Centre.

The world economy has not still recovered from the effects of the financial crisis that began almost a decade ago first in the US and then in Europe.  Policy response to the crisis, the combination of fiscal restraint and ultra-easy monetary policy, has not only failed to bring about a robust recovery but has also aggravated systemic problems in the global economy, notably inequality and chronic demand gap, on the one hand, and financial fragility, on the other. It has generated strong destabilizing spillovers to the Global South.  Major emerging economies that were expected a few years ago to become global locomotives have not only lost their momentum, but have also become highly vulnerable to trade and financial shocks.  Policies proposed by the new administration in the US could entail a double blow to emerging and developing economies which have become highly dependent on foreign markets, capital and transnational corporations.  The EU remains a global deadweight, generating deflationary impulses for the rest of the world economy.  The jury is still out on whether the second largest economy, China, will be able to avoid financial turmoil and growth collapse.  This state of affairs raises serious policy challenges to the Global South in responding to external shocks and redesigning the pace and pattern of their integration into the global economy so as to benefit from the opportunities that a broader economic space may offer while minimizing the potential risks it may entail.

To access the policy brief directly, go to this webpage: https://www.southcentre.int/policy-brief-43-august-2017/

Learning from people powered movements

In the '80s a neoliberal tide swept across the West with the idea that welfares states had become too expensive and that privatizing public goods was better for stimulating the economy. During this era of fiscal conservatism, Western governments basically confined themselves supervisory roles over the economy, reduced to watchdogs enforcing norms and standards. But research has shown that as the government progressively pulls out of public life, many people lose access or experience the deterioration of services that improve their quality of life such as affordable housing, education, public transportation and health care.

 

Interesting report of the Independent Evaluation Office of the IMF on actions concerning social protection.

 

Three important points need to be mentioned: first,  the report does not cover what it calls ‘long term poverty reduction measures’ such as health and education; secondly, while questions may arise on whether social protection falls under the mandate of the IMF, the report confirms it is part of macro-economic stability. The IMF should ‘avoid excessive stress on vulnerable people’. Thirdly and most importantly, the IEO points to a possible conflict with the World Bank which has signed a joined statement with the ILO on the universalism of social protection, based on the fact it is a human right. While cooperation with the World Bank has been smooth (contrary to work with the ILO and UNICEF …), this may change if the World Bank moves indeed towards a rights-based approach and universalism.

 

A full analysis of the report will follow soon

 

Read the report

 

We need social protection systems that are based on solidarity, sharing of risks, and built on collective bargaining and social dialogue, democratic structures and long-term strategies to combat poverty and address inequalities and inequity. Universal social protection is essential to achieve gender equality and there is a strong link between the provision of public services and the ability of women to enter the labour market, to address unpaid care work responsibilities and to ensure that children have access to health and social services.

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