OKEx adds real-time Ether dashboard to skew's crypto derivatives data platform

VALLETTA, Malta, Oct. 06, 2020 (GLOBE NEWSWIRE) — OKEx, a world–leading cryptocurrency spot and derivatives exchange, is enhancing its partnership with skew, by adding a second dashboard on the platform where users can view Ether trading data from OKEx, including trading volume of ETH futures, perpetual swaps and options. OKEx is the first exchange to launch a real–time analytics dashboard for Bitcoin and Ether derivatives on skew, highlighting its commitment to exchange transparency.

As the crypto derivatives market has grown in popularity, so has the need for reliable data for traders. Skew has made a name for itself as a trusted authority in its niche, providing leading crypto data with a focus on derivatives trading and being cited by world–class financial media such as Bloomberg.

In May, OKEx became the first Bitcoin exchange to provide such transparency over its Bitcoin derivatives trading data by announcing its real–time BTC dashboard with skew. The partnership with skew has since strengthened with advanced charts for traders, such as BTC futures aggregated open interest, and BTC perpetual swap price vs. spot. Now, OKEx is providing the same in–depth level of analytics and transparency on its Ether derivatives markets.

“We're pleased to advance our partnership with skew, the most trusted source of crypto derivatives trading data, and we continue to share the same values when it comes to promoting industry transparency,” commented Lennix Lai, OKEx's head of financial markets.

“As with our Bitcoin dashboard and the inclusion of more complex analytical charts, we will be helping sophisticated traders understand how to interpret the information on the Ether markets by publishing an in–depth guide that makes the charts useful rather than intimidating and helps them at the time of making their trading decisions.”

In addition to the guide for Ether derivatives traders, Lennix Lai and OKEx's VP of financial markets, Quentin Issele, will be holding a fireside chat along with skew's co–founder and CEO Emmanuel Goh on Oct. 8.

About OKEx

A world–leading cryptocurrency spot and derivatives exchange, OKEx offers the most diverse marketplace where global crypto traders, miners and institutional investors come to manage crypto assets, enhance investment opportunities and hedge risks. We provide spot and derivatives trading "" including futures, perpetual swap and options "" of major cryptocurrencies, offering investors flexibility in formulating their strategies to maximize gains and mitigate risks.

Poverty, Official Complicity Hampers Human Trafficking Fight in Malawi

A group of youths engaged in various activities in Machinga, Malawi, to prevent and help in fighting trafficking of children from the area to Mozambique. Credit: Charles Mpaka/IPS

A group of youths engaged in various activities in Machinga, Malawi, to prevent and help in fighting trafficking of children from the area to Mozambique. Credit: Charles Mpaka/IPS

By Charles Mpaka
BLANTYRE, Malawi, Oct 6 2020 – In August, police intercepted the trafficking of 31 people to Mozambique. The victims, all Malawians, included 17 children and 6 women. Their two traffickers, also Malawians, had coerced them from their rural village in Lilongwe district with a promise of jobs in estates in neighbouring Mozambique. But they were saved in large part thanks to their own community.

According to Malawian police, they incepted the trafficking after a tip-off from members of the community. This, the police say, is one of the fruits of using community policing to fight crime in Malawi. National spokesperson for the Malawi Police Service, Assistant Superintendent James Kadadzera, says the police owe many of their crackdowns on trafficking to the community policing system.

In Malawi, community policing is not vigilantism. It is a system where the police organise voluntary members of the community to form groups to detect crime and alert police for action.

“They are our eyes in places we are not present. They complement the efforts of our detectives. They sensitise fellow community members on safety and security issues,” Kadadzera tells IPS.

The Trafficking in Persons Act of 2015 provides for increased participation of individuals, institutions and communities in preventing human trafficking.

Involving communities in anti-human trafficking efforts means the crime can be tackled at its source and that trafficking transit routes are shut down.

However, after years of campaigning and a raft of frameworks and initiatives such as community policing, Malawi still ranks high as a source, destination and transit country for human trafficking.

A 2020 Trafficking in Persons Report for Malawi by the United States’ Department of State recognises Malawi’s “significant efforts” to combat human trafficking. But it says Malawi “does not fully meet the minimum standards for elimination of trafficking”.

The report highlights the case of Nepali women who were trafficked into Malawi last year, which  illustrates the fraudulent white-collar practices that are aiding trafficking here.

According to the report, there are credible reports of official complicity by police and immigration officials in the trafficking of the women into Malawi.

Even worse, the government transferred the whistleblower in the case, reportedly to prevent him from further investigating the crime and exposing the officials involved.

“In two sensitive cases,” says the report, “judges granted traffickers bail, and, in one case, there were credible reports that the trafficker continued to recruit women for labour trafficking in the Middle East while awaiting trial.”

McBain Mkandawire is executive director for Youth Net and Counselling (YONECO), which works with youth who are prime targets for traffickers for labour and prostitution purposes.

He says Malawi is struggling to combat human trafficking because of “a combination of the complicity of government officials and the rich at the top and high poverty levels at the bottom”.   

Human trafficking is a lucrative business for the rich and the powerful, Mkandawire says.

“This is a big money industry. High profile people facilitate it in one way or another. They finance it and frustrate justice because they profit from the misery of the poor,” Mkandawire tells IPS.

For example, he says, the estates where these people are trafficked to are not owned by poor people.

“Those estates are owned by the rich and the powerful. They know how their labourers are recruited. They facilitate the crime because they are profiting from the poor through cheap labour and poor working conditions. And they will do anything to frustrate efforts to eradicate human trafficking,” Mkandawire says.

He adds that through his organisation’s work on youth programmes around the country, apart from the public ignorance on how human trafficking works, high levels of poverty make Malawians easy prey for traffickers who lure them with false promises of better lives elsewhere.

In Machinga district in southern Malawi, child trafficking is one of major concerns for the community-based Youth Response for Social Change (YRSC). The youth organisation is located in a rural town in Machinga district on the border between Malawi and Mozambique. The remote town is the exit point out of Malawi via the main railway line to Nacala Port in Mozambique. 

Here, together with traditional leaders and the police, YRSC battles the trafficking of Malawian children to work in tobacco estates in Mozambique. Executive director for YRSC Lamecks Kiyare tells IPS the problem worsens during the months of August to November when the farming season begins in Mozambique.

He admits they face daunting challenges.

“It’s not easy. We face a barrage of challenges such as poor stakeholder coordination, lack of political will among community leaders and no financial resources to support the repatriated children,” Kiyare tells IPS.

According to Maxwell Matewere, the national project officer in the United Nations Office on Drugs and Crime (UNDOC) in Malawi, combating trafficking remains a pipe dream as long as Malawi does not address the underlying causes.

“The problem continues due to lack of strategies to deal with the root causes of trafficking in persons. We cannot successfully fight trafficking in persons unless the country deals with poverty, unemployment and public ignorance on human trafficking,” Matewere tells IPS.

Matewere says while the police have demonstrated some positive responses in arresting offenders of human trafficking and taking them to court for prosecution, the courts themselves are not swift and bold in handling trafficking cases.

“The lower courts continue to apply the law with kindness and favour on the offenders. We are registering increasing number of cases whose convicts have received suspended sentences other than imprisonment. No one can learn anything,” he says.

YONECO has its own experience with the courts. It has been pursuing the trafficking of a young woman to a hospitality facility within Malawi. 

The suspects first appeared court in February 2019 but to date the magistrate is yet to set a date for trial. 

“We are not told the reasons for this lack of progress. Meanwhile, the trafficker is on bail, roaming around, perhaps trafficking more people in his freedom,” says Mkandawire of YONECO.

The Registrar of the High Court and Supreme Court of Appeal, Agness Patemba, did not respond to IPS’ questions regarding complaints about the courts’ handling of human trafficking cases. 

However, issues of frustration over the delivery of justice in general by Malawi’s court system are well known. The Judiciary itself admits this in its Strategic Plan (2019-2024). It highlights poor work ethics among judicial officers and members of staff, corruption and delayed judgements among the threats to justice delivery.

But perhaps a more stirring and direct expose of the malpractices in the fraternity has come from the judiciary’s own senior judge, Esmie Chombo. In January 2018, the High Court Judge and Judge President for the Lilongwe Registry wrote a strong letter to the Malawi Law Society, outlining abuses of court processes by lawyers.    

Chombo accused lawyers of “judge shopping” and frequenting court premises at night to execute corruption schemes.

She further accused them of bribing court clerks to prioritise their work and remove from court files documents from opposing parties in order to mislead the court. There were also accused of bribing clerks to misplace or destroy case files in order to frustrate court proceedings.

She therefore called on judges and the lawyers’ body to swiftly uproot “these obnoxious practices before they take deep roots”.

Mkandawire says challenges of this kind are endemic and entrenched in the levels that hold the key to ending injustices in Malawi.

He says communities and other low-level groups can do their part. But official collusion makes Malawi’s fight against human trafficking a complex task.

“Until we get rid of corruption at every level and in every place, until we comprehensively tackle the root causes of human trafficking, this crime will remain a serious problem for us for a long time,” he tells IPS.

 


This is part of a series of features from across the globe on human trafficking. IPS coverage is supported by the Airways Aviation Group.

The Global Sustainability Network ( GSN ) is pursuing the United Nations Sustainable Development Goal number 8 with a special emphasis on Goal 8.7 which ‘takes immediate and effective measures to eradicate forced labour, end modern slavery and human trafficking and secure the prohibition and elimination of the worst forms of child labour, including recruitment and use of child soldiers, and by 2025 end child labour in all its forms’.

The origins of the GSN come from the endeavours of the Joint Declaration of Religious Leaders signed on 2 December 2014. Religious leaders of various faiths, gathered to work together “to defend the dignity and freedom of the human being against the extreme forms of the globalisation of indifference, such us exploitation, forced labour, prostitution, human trafficking” and so forth.

 

 


!function(d,s,id){var js,fjs=d.getElementsByTagName(s)[0],p=/^http:/.test(d.location)?’http’:’https’;if(!d.getElementById(id)){js=d.createElement(s);js.id=id;js.src=p+’://platform.twitter.com/widgets.js’;fjs.parentNode.insertBefore(js,fjs);}}(document, ‘script’, ‘twitter-wjs’);

Caribbean Communities Building Resilience through Water Harvesting

A program to provide funds to purchase and install new water harvesting and storage equipment in St. Vincent and the Grenadines has proved successful. Courtesy: Zadie Neufville

By Zadie Neufville
BELMOPAN , Oct 6 2020 (IPS-Partners)

On the Eastern Caribbean (EC) islands of St KittsNevis, hotter and fewer rainfall days have begun to impact everyday life. 

Conservation officer Cheryl Jeffers explained that during dry spells, children are often sent home from school because there is not enough water for sanitation purposes. The COVID-19 pandemic had also begun putting more pressure on an already stretched system, she said.

Down in St Vincent and the Grenadines, many people have no public water system and no access to rivers or streams. On Canouan, the more than 1,600 residents must harvest rainwater or purchase potable water for their household use and other needs. The same is true for the more than 2,000 residents on Union Island and 350 or so on Mayreau. Locals complained that with noticeably fewer rainfall days, the water situation is getting worse.

The people always say, 30, 40 years ago they could plant their crops year-round because rainfall was plenty. These days, most of the food comes from neighbouring islands,” Katrina Collins Coy, president and founder of the Union Island Environmental Attackers said. 

Residents complain that the lack of water is also driving up the cost of living since food is ferried in by boat or planes, and in the dry season, water is also brought in by boat from mainland St Vincent.

Both St Kitts and Nevis and St Vincent and the Grenadines are described as water-scarce by the World Resources Institute, a global research organisation. They are among the most water-stressed countries in the world, seven of which are in the Caribbean, and six of them are in the EC. Water-scarce is the term given when a country has less than 1,000 cubic meters of freshwater resources per resident. 

For some time, and certainly, since the 2015 droughts that affected most of the Caribbean, regional scientists have warned that countries, particularly those in the Eastern Caribbean could see declines of between 30 and 50 per cent in their average annual rainfall. And, as the region faces more periods of drought, things are expected to get worse in the two island states. 

But, the Caribbean Community Climate Change Centre (CCCCC), with the help of United States Agency for International Development (USAID) was able to assist by way of a regional project, the USAID Climate Change Adaptation Program (CCAP).

CCCCC is the regional institution of CARICOM (the Caribbean Community) with the responsibility for leading climate change mitigation and resilience building among member nations.

One of the roles of the CCCCC is to engage with relevant partners to help countries with adaptation and mitigation challenges,” said CCCCC’s Keith Nichols. 

CCAP was developed to help these and other vulnerable countries in the Eastern and Southern Caribbean to adapt and build resilience to the impacts of climate change. We were happy to add these small water systems to the portfolio and also to provide solar systems as a power source for the pumps as demonstrations of how the Centre works with countries to reduce the region’s dependency on fossil fuels,” he explained.  Nichols heads the Programme  Development and  Management Unit at the CCCCC and is the USAID-CCAP project manager.

The Program provided funds to purchase and install new water harvesting and storage equipment in SVG. And in St Kitts and Nevis, 18 schools have been out-fitted with similar systems to ease the disruptions of the childrens education due to water shortages. 

Here, Collins Coys organisation partnered with the SVG Government and CCCCC to pilot the water harvesting project. So far, theyve installed 178 water harvesting systems – 15, 1,000-gallon water tanks on Mayreau, 58 water tanks of the same size on Canouan and 105 in homes on Union Island. Theyve refurbished and covered the Papa Land (aka Bottom Well) and Top Wells on Union, installing solar panels and pumps to make it easier for residents to get water. The Attackers have also refurbished one of the two main reservoirs and catchment on Union Island and replaced the ageing and leaky pipelines serving the system.

It has been a pleasure to see the completion of the well, which makes it easier for us to get water, we just use the tap. No more struggling with the buckets and rope, Union Islander Gerald Hutchinson said of the improvements. 

Many islanders like Susan Charles, agree that the project has made significant and life-altering changes to their access to water, easing the work of drawing water from the well”. She pointed to the gate and fence which were built, and the covers that keep the water clean.

She added: We are truly appreciative for the tank, the rains are coming so I no longer have to buy water, or wait for the bucket, you simply turn on the pipe.”

Over in St Kitts, water storage systems are being installed in primary and secondary schools as well as in nurseries in the two-island federation. The systems will ease the water problems experienced by the more than 4,000 students plus faculty in the beneficiary institutions. The project aims to build resilience by improving access to water by installing, refurbishing and enhancing water storage facilities to improve sanitation in 18 schools -11 in Nevis and seven in St Kitts. 

Jeffers works with the islands climate change focal point, the Ministry of Environment, which is piloting the water project. She explained, in Nevis, where water shortage is more pronounced, six cisterns used to capture and store rainwater are being refurbished”.

Charlestown High School, Nevislargest with 778 students and faculty was the recipient of a 6,000-gallon storage system. The new system will help to improve water storage capacity and end the disruptions to the educational institutions during times of drought, and times of emergencies.  

The new installations and retrofitting of the existing systems helps teachers to maximise teaching time,” Kevin Barrett Permanent Secretary in the Ministry of Education in the Nevis Island administration said, noting: Too often we have to dismiss school because of maintenance or there is some emergency repair of the line”.

The project has also trained members of the beneficiary communities in both countries and staff of the institutions to carry out essential maintenance and servicing, and well as in simple water purification methods. As guardians of the wells in the beneficiary islands, the Attackers have undertaken to maintain the newly refurbished systems.

CCAP has delivered critical equipment to countries across the EC since the project began in 2016. These include 50 terrestrial automatic weather stations (AWS), five Coral Reef Early Warning Systems (CREWS) stations, a Light Detection and Ranging (LIDAR system) housed at 5Cs in Belize for use by the region, as well as related data storage equipment. 

The seven are from the Caribbean: Dominica, Jamaica, St. Vincent and the Grenadines, Trinidad and Tobago, Antigua and Barbuda, Barbados and St. Kitts and Nevis.

** The following article was contributed by the Caribbean Community Climate Change Centre (CCCCC)

Forging Resilient Regional Supply Chains and Connectivity

Armida Salsiah Alisjahbana is the United Nations Under-Secretary-General and Executive Secretary of the UN Economic and Social Commission for Asia and the Pacific.

By Armida Salsiah Alisjahbana
BANGKOK, Thailand, Oct 6 2020 – Participation in global and regional supply chains has been one of the most reliable economic growth strategies, especially for developing countries in Asia and the Pacific. Smooth and efficient connectivity in both trade and transport has been indispensable to the region’s pursuit of the 2030 Agenda for Sustainable Development.

Armida Salsiah Alisjahbana

Yet, containment measures for the COVID-19 pandemic have significantly interrupted production, transport, and distribution of essential goods. They exposed vulnerabilities in supply and underscored the costs of border procedures for transport and trade, which require extensive human contacts and increase the risk of infection. Small and medium-sized enterprises (SMEs), which worked hard to enter supply chains, saw their livelihoods gone.

As COVID-19 crisis forced us to catch up with the digital future much faster than usual, there have been tremendous opportunities offered through digitalization. Trade and supply connections still functioned during lockdowns as customs and other government institutions not only streamlined their procedures but also turned to contactless and paperless trade. SMEs surviving the crisis did so because of their agility to speedily move to digital business operations. Businesses in textile, apparel, footwear, transport, and other sectors have almost entirely converted to digital operation.

Though a partial digital transition has occurred, supply chains face challenges in economies grappling with inferior quality and costly digital connectivity. The public sector now must catch up with the private sector to speed up moving government services to digital platforms. Creating enabling legal environment and investing in hard digital infrastructure must be prioritized in COVID-19 recovery packages.

Businesses, supported by their associations, are keen to adopt environmental sustainability principles as an innovation mindset by taking opportunity of global reshoring and redrafting of supply chains. Re-enabling trade and investment and strengthening connectivity can only be done with coordinated and collaborative government actions at the regional level based on mutual trust, solidarity, and sustainability.

Trade, connectivity and global supply chains, particularly sustainable and green trade, is not a zero-sum game. To achieve that, platforms on trade and transport initiatives to rally regional solutions to cross-border challenges are essential.

Developing appropriate provisions in Regional Trade Agreements (RTAs) can address crises like the pandemic. Despite countries in Asia and the Pacific having more than half of the world’s RTAs, not many have specific provisions to govern trade policy in situations like COVID-19 pandemic. With a relatively weak multilateral trading system, a “free for all” behavior has developed, with many countries imposing trade restrictions without any regard for the international rules or those under the RTAs they have signed. The ongoing UN-wide initiative to develop model provisions in RTAs to address a pandemic-like crisis is a significant step forward.

Enhanced support for trade facilitation, trade digitalization and development of paperless and contactless trade remains a priority. Accelerating trade digitalization is key to progress. The Framework Agreement on Facilitation of Cross-border Paperless Trade in Asia and the Pacific is expected to cut trade costs by 25 per cent.

Finally, we must move forward rapidly to achieve digital, resilient, and decarbonized regional connectivity. The platforms provided by the Asian Highway Network and the Trans-Asian Railway Network have already brought countries together to capture and analyze their policy responses and impacts on regional connectivity. This resulted in concrete proposals on collaborative actions to improve its pandemic response in Asia and the Pacific.

Despite standing at a difficult crossroads, we can ensure that the path ahead is stronger, smoother, and well-connected than before. Through ongoing partnerships among the United Nations family, the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) is working together with member States and the private sector to accelerate achievement of the Sustainable Development Goals and realize a sustainable recovery from the COVID-19 crisis.

 


!function(d,s,id){var js,fjs=d.getElementsByTagName(s)[0],p=/^http:/.test(d.location)?’http’:’https’;if(!d.getElementById(id)){js=d.createElement(s);js.id=id;js.src=p+’://platform.twitter.com/widgets.js’;fjs.parentNode.insertBefore(js,fjs);}}(document, ‘script’, ‘twitter-wjs’);

World Peace is Not Only Possible But Inevitable

Women hold Somali flags at a Women’s Peace Forum in Mogadishu, November 2018. Credit: UNDP Somalia/Arete/Ismail Taxta

By Nika Saeedi
UNITED NATIONS, Oct 6 2020 – COVID-19 has shifted our world. Over the last six months, no matter where we live, our lives, assumptions, and relationships have changed. Now, more than ever, we have witnessed people from all backgrounds and all ages rise to assist each other.

While communities have formed networks of mutual support, many of the institutions mandated to support them have failed to fully harness and amplify the wealth of capacities and support structures that already exist.

In international development in particular, a key blind spot that limits the effectiveness of our work exists in the rhetoric we use to understand the communities we work with.

UNDP, along with many other partners, continues to advance new approaches to achieve the Sustainable Development Goals, but our continued use of terminology that fails to fully embrace the power of people impedes the transformative potential of our work.

This can also lead to inadequate policy and programming, or to insufficient – or inappropriate – action. One of the most prominent examples of this is our tendency to target support to individuals and communities facing poverty, conflict, or other sources of instability by identifying them as ‘vulnerable’ people.

For example, the problem with categorizing women as vulnerable group project women’s passivity and helplessness, denying them agency and power in the processes of change. A radical reaction to portraying women as vulnerable in recent years has been an over glorification of women’s role as fighters in support of violent extremist groups, hindering their capacity and role as peacebuilders.

Words matter. They shape mindsets, and mindsets shapes approaches and outcomes. There is an important distinction between a vulnerable person and a person living in a vulnerable circumstance.

When we define people by their circumstances, we fail to engage with them as multidimensional beings. It’s time for UNDP to move from using ‘vulnerability’ as a means of defining the people it supports, to considering all people as protagonists for change.

Nika Saeedi

This might allow us to meet people’s aspirations and assist us in assessment and conceptualization of where inequality stems from and who has a role in combating it.

By moving away from a deprivation perspective, which leads to divisive mentalities about the capacity of particular groups of people, we are better positioned to recognize the reality of humanity’s common journey in building a peaceful world, and the role of each individual as a protagonist in it.

We can start this journey by changing the words we use and therefore the whole narrative from vulnerability to empowerment and constructive resilience.

Whether this reconceptualization of what unites us to be reached only after a global crisis such as this pandemic has revealed the cost of humanity’s stubborn clinging to old patterns of behaviour, or is to be reached through consultation and dialogue, is the choice before all.

We can choose to graduate from the idea of labeling women, youth, racial, religious and ethnic minorities as ‘vulnerable groups in the discussions that guide our decision-making. We can embark on a journey with greater clarity of vision and determination to question and reflect on how our policy and programming promote the nobility of them and draw on their experience.

To accept that the individual, the community, and the institutions of society are the protagonists of civilization building, and to act accordingly, opens up great possibilities for human happiness and allows for the creation of environments in which the true powers of the human spirit can be released.

Several opportunities to enhance our work with peacebuilders, activists, and other populations in bringing about sustainable change and to ensure we recognize and articulate with greater clarity their latent capacity may include the following:

The innovation and resilience shown by communities amidst the pandemic have underscored the need for more expansive understandings of human relationships, and to place more emphasis on identifying the latent capacities and desires of those we hope to serve.

This means believing in people and their desires to be sources of peace and justice. This means opening our eyes to the extent of people’s capacity so that we can see more peacebuilders and changemakers in more places.

This means embracing the oneness of humankind and human nobility as a foundation for how we develop our policies and programmes.

 


!function(d,s,id){var js,fjs=d.getElementsByTagName(s)[0],p=/^http:/.test(d.location)?’http’:’https’;if(!d.getElementById(id)){js=d.createElement(s);js.id=id;js.src=p+’://platform.twitter.com/widgets.js’;fjs.parentNode.insertBefore(js,fjs);}}(document, ‘script’, ‘twitter-wjs’);

Stop Blaming Industrial Policy

By Vladimir Popov and Jomo Kwame Sundaram
BERLIN and KUALA LUMPUR, Oct 6 2020 – Industrial policy – or the promotion of particular investments, technologies, industries, regions and enterprises – has been practiced by a variety of governments to try to accelerate economic growth and transformation.

The ascendance of the Washington Consensus, inspired by the neoliberal counter-revolution in economics, focused on alleged national macroeconomic mismanagement in developing countries and later, transition economies. This was typically blamed on ‘soft budget constraints’ (SBCs) in socialist states and enterprises, macroeconomic populism and industrial policy.

Vladimir Popov

Blaming industrial policy
Enterprise-level SBCs have also been wrongly blamed on industrial policy to promote certain economic activities, usually manufacturing with more advanced technologies. In practice, most industrial policy was quite selective, i.e., involving support of some industries, regions and enterprises at the expense of others.

While such selective support may or may not have been successful in promoting targeted industries, industrial policy has been wrongly, and sometimesdeliberately blamed for both enterprise and national level fiscal SBCs. Fiscal SBCs have been wrongly blamed on enterprise-level SBCs in socialist states, macroeconomic populism and industrial policy.

But contrary to many economists’ presumptions, in most economies, including many centrally planned ‘socialist’ ones, few enterprises were exempted from budgetary discipline. SBCs were therefore the very rare exception, not the rule, to promote desired new economic activities.

Enterprise-level SBCs did not “permeate all organizations” in socialist countries, as often claimed and assumed, but were instead quite selective, i.e., subsidies were provided to some enterprises, industries or regions, typically at the expense of others.

All centrally planned economies had both explicit and implicit subsidies. In most Eastern European and Soviet countries during 1989-1992, on the eve of transition, direct subsidies in the government budget amounted to 10-15% of national income.

In addition to direct subsidies for public utilities, housing and food, there were implicit price subsidies, particularly for users of fuel, energy and raw materials. Besides explicit subsidies from government budgets, rents from unsustainable, non-renewable resource extraction were shared with industries and consumers via lower prices.

Jomo Kwame Sundaram

Dwarf infant industries
The fiscal problem was not due to subsidization per se, or even to subsidization of manufacturing – at the expense of resource industries, trade and financial services. Rather, the problem was in the way such subsidization was carried out, i.e., by maintaining higher domestic prices for manufactured goods.

Such import-substituting industrialization (ISI) typically created industries which rarely became internationally competitive and viable. There have been all too many examples of failed ISI requiring ongoing subsidization of ‘infant industries’ incapable of ever becoming internationally uncompetitive.

These industries were exposed as unviable and unsustainable with trade liberalization and the end of Soviet era trade arrangements in the 1990s. Soviet industrialization from the 1930s had survived before that due to its insulated economic environment, with the ratio of Soviet exports to GDP not rising until fuel sales abroad rose with higher prices from the 1970s.

Perestroika reforms, initiated by reformist Soviet leader Gorbachev after the mid-1980s, failed to accelerate needed enterprise reforms or economic growth, but instead led to the ‘transformational recession’ of the 1990s, greatly exacerbated by the reforms during Boris Yeltsin’s first presidential term.

Many other enterprises – mainly in heavy industries, and often relying on Soviet technology, advice and aid – in other ‘socialist’ economies and developing countries subject to Soviet influence, experienced similar fates.

Thus, nations which tried to challenge Western hegemony met similar fates despite trying to make a virtue of ‘self-reliance’ compelled by the need to cope with Western-led trade and investment sanctions.

Successful industrial policy
Most countries trying to industrialize or to accelerate industrialization started with ISI, with effective protection enabling new enterprises to produce for domestic markets by keeping out imported foreign substitutes with prohibitively high tariffs and non-tariff trade barriers.

But many IS enterprises continued to survive, even profit from such supposedly temporary tariff protection and other government support, never becoming internationally competitive as promised by the ISI strategy.

In more successful ‘late developing’ economies, government support was conditional on meeting performance criteria which effectively attracted private investments. Such investors sought more handsome ‘rents’ by accelerating technological progress, productivitand international competitiveness.

Thus, for example, ‘effective protection conditional on export promotion’ enabled the emergence of internationally competitive enterprises in some East Asian economies. Export orientation has been especially important in improving output quality to meet internationally competitive product quality and performance standards while achieving cost competitiveness.

Without more effective means for disciplining enterprises to accelerate development, export-orientation – promoted by government policy, incentives and other support – has contributed to successful catch-up growth. East Asian economies subsidized competitive export-oriented industries which accelerated economic growth and transformation, some more successfully than others.

In China, for instance, exports compared to GDP increased from 5% in 1978 to 35% in 2006, before declining to 20% in 2018, while its GDP grew at an average of 10% annually, with its population rising slower than in most other developing countries due its ‘one child’ policy.

Appropriate industrial policy needed
Budget constraints in socialist economies were generally stronger than in developing countries and no less strict than in developed countries on average. SBCs in socialist economies were never pervasive, as widely believed, but selective, i.e., subsidizing some enterprises or industries at the expense of others.

Such selective support, while typical of industrial policy, may or may not successfully promote internationally competitive enterprises, but certainly provides no empirical support for the claim of pervasive SBCs in ‘socialist’ economies.

With state-owned enterprises, strict fiscal and enterprise-level discipline, including budget constraints, have led to restructuring, and more rarely, closures. But even when budget constraints have been less than strict, they have not been pervasive, as fiscally disciplined ‘socialist’ economies could not afford otherwise.

National-level macroeconomic mismanagement in developing countries and transition economies has all too often by ideologically defined by neoliberal economics. In so far as macroeconomic challenges are real and demand pragmatic policy attention, they should not be defined by distracting neoliberal chimera of alleged SBCs variously blamed on socialism, populism and industrial policy.

Unfortunately, the mythology surrounding SBCs has been used to throw the industrial policy baby out with the bathwater of ISI cul de sacs. Much more appropriate, yet pragmatic industrial policy is needed for developing countries and transition economies to ‘catch up’, as achieved by some East Asian and other economies.

 


!function(d,s,id){var js,fjs=d.getElementsByTagName(s)[0],p=/^http:/.test(d.location)?’http’:’https’;if(!d.getElementById(id)){js=d.createElement(s);js.id=id;js.src=p+’://platform.twitter.com/widgets.js’;fjs.parentNode.insertBefore(js,fjs);}}(document, ‘script’, ‘twitter-wjs’);