Commodity cycles – 黑料社区

Copper and Economic Sovereignty

October 8, 2024October 2, 2024 robrechtdeclercqLeave a comment

By Robrecht Declercq & Duncan Money

7 January 1968 was a day of celebration across the Congolese Copperbelt, marked with marches and festivities in the mining towns, bonuses for mineworkers and medals for those who had labored many years in the industry. All this marked the one-year anniversary of the foundation of G茅camines, the state-owned company that was established when the Congolese government nationalized the operations of Union Mini猫re du Haut Katanga (UMHK).

Early in 1967, the Democratic Republic of Congo (DRC) had decided to nationalize the largest and most powerful colonial company that still operated on its soil, after a dispute about where the headquarters of the company should reside. But deeper concerns stemmed from the fact that a former colonial business still controlled the most important natural treasures of the newly independent Congo. The Congolese had high hopes that the new company would propel economic growth through significant expansion of production. Ultimately, these hopes met with bitter disappointment.

It was not only Congolese people who entertained such hopes, however. What happened in Congo was part of what we term a post-colonial world of copper (1960-1980) in our edited collection . The book is a history of the global production of copper, its labour relations, technologies and the international political economy across the 19^th and 20^th century. The transition, and ultimately, failure of this unique albeit brief episode of postcolonial control is one of the focuses of the book. We assert that the national fragmentation of copper production in the postcolonial world, was in fact deeply intertwined with transnational influences and exchanges. It expressed an agenda that was shared in the Global South: to straighten out the huge economic imbalances with the Global North.

Want to understand industrialisation in resource-rich countries such as Uzbekistan? Read Marx (and I帽igo Carrera)

October 21, 2022October 15, 2022 fgaldini1 Comment

The commodity supercycle of the 2000s and 2010s gave rise to a rich debate in the academic literature about the possibility for resource-rich countries to muster the primary commodity price bonanza for development. As in past debates on the rise of Asia as the 鈥榳orld鈥檚 factory鈥�, industrial policy was once again at the forefront of discussion.

On the one hand, orthodox scholars insisted that the use of market distortions to channel resources towards industrialisation would be a risky gamble with little guarantee of success. Instead, as the Asian 鈥榯igers鈥� and China before them, developing countries would do well to make good use of the market to identify their comparative advantages. In this view, industrial policy continues to be inefficient and wasteful, especially as it creates plenty of opportunities for corruption rather than development. On the other hand, heterodox researchers argued that state intervention was crucial to divert resource rents to specific nascent industries that would never be able to withstand international competition without sustained support. As both the Asian 鈥榯igers鈥� and China more recently used robust industrial policy to develop globally competitive industries, developing countries should also use targeted policy intervention to 鈥榰pgrade鈥� to higher value-added manufacturing for export.

Still, one question that eludes both orthodox and heterodox literature concerns why, for decades, multinational corporations would consistently invest in manufacturing in resource-rich countries such as, for instance, Argentina, Brazil, and Egypt. This has been the case despite the small scale and high costs of production in these markets (making them inefficient, per orthodox scholars), whose output is mostly sold domestically rather than exported (pace heterodox scholars).

In a in Competition & Change, I applied Argentinian scholar 鈥檚 on Marx to the under-researched case study of the car industry in Uzbekistan to answer precisely this question. I found this same orthodox-heterodox binary to dominate the literature on 鈥榯ransition鈥� from the command to the market economy in Uzbekistan, too. Orthodox researchers averred that state-owned auto company UzAvtoSanoat failed to develop due to inefficiency and corruption, in particular due to the distortions of the government鈥檚 industrial policy. Heterodox scholars instead found industrial policy to be the very reason behind the creation of a successful export-oriented car industry, in particular during the commodity supercycle when part of total output was exported mostly to Russia. Neither, however, could explain why Korean Daewoo Motor Company (DMC) and American General Motors (GM) entered into a joint-venture with UzAvtoSanoat, despite the small domestic scale (hence high costs) of automobile production in the country, which is mostly purchased domestically.

Price Wars: How the Commodities Markets Made Our Chaotic World: Q&A with Rupert Russel

April 29, 2022April 29, 2022 Farwa Sial1 Comment

In Price Wars: How the Commodities Markets Made Our Chaotic World, sociologist and filmmaker Rupert Russell travelled to some of the world鈥檚 most chaotic places: war zones in Ukraine, Iraq, and Somalia, the climate wars in Kenya and Guatemala, and Venezuela鈥檚 economic catastrophe. Told as gonzo investigation into what made the 2010s so tumultuous, Russell links each of these eruptions to swings in commodity prices, and the financial speculators whose bets set their prices.

Rethinking the Failures of Mining Industrialisation in the African Periphery

May 31, 2019May 31, 2019 Ben Radley1 Comment

The remains of one of SOMINKI鈥檚 industrial gold mines (author photo).

The World Bank interpreted the failure of mineral extraction to drive structural transformation in the early decades of African Independence as due to badly managed state-owned enterprises (SOEs), excessive state intervention in the economy, and government corruption. To right these wrongs, since the 1980s, the Bank has loaned hundreds of millions of dollars to the governments of mineral-rich (and mostly low-income) African countries to privatise and liberalise their mining sectors. Spurred on by the most recent commodity super-cycle beginning in the late 1990s, foreign direct investment poured in, and for many low-income African countries today, 鈥渢he mining sector represents one of the most crucial sources of investment and income in their economies鈥� (Farole and Winkler 2014: 177). A major theoretical assumption underpinning this process has been a belief in the superior expertise and efficiency of experienced transnational corporations (TNCs) compared to corrupt and mismanaged SOEs. In this post, I unpack and question the validity of this assumption, by drawing on some of the findings from my doctoral thesis on mining reindustrialisation in South Kivu Province of the Democratic Republic of the Congo (DRC). 聽聽聽 Read More »

Is Development Possible In Capitalism?

August 1, 2016February 5, 2017 黑料社区Leave a comment

By Douglas McDonald [re-blog from ]

Last Friday was the Debating Development conference, organized by the titular scholars of , a group coordinated by NSSR鈥檚 own Ingrid Kvangraven. The conference put many scholars of different regions and different theoretical perspectives in conversation. Although it was titled 鈥渄ebating development,鈥� as NSSR economics professor Sanjay Reddy noted in his opening remarks, most of the perspectives presented were more intersecting than mutually exclusive, so the conference could also be understood as a means to compound or complexify perspectives, rather than adopt or discard them.

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