Omar al Bashir has fallen in Khartoum. Beyond regime change–managed by the military– there’s a deeper economic crisis.
Sudan鈥檚 national salvation
Category: Crises
Currency crisis in Argentina or the IMF鈥檚 tango
By Roberto Lampa and聽狈颈肠辞濒谩蝉 贬别谤苍谩苍 Zeolla
The Argentinian government has requested financial assistance from the IMF to tackle the consequences of a serious currency crisis. Last Wednesday, the government emphatically announced the new terms of such an agreement. However, unpacking the terms of those agreements and the current situation reveals serious concerns about the country’s future .
A few months back (), we provided an analysis of the current Argentinian crisis, highlighting the excessive vulnerability of the economy produced by the abrupt financial deregulation carried out by Macri鈥檚 administration.聽Three aspects in particular threatened the country’s future prospects: the deregulation of foreign exchange that failed to stop capital flight, a boom in foreign debt (at a record level among emerging market economies) and the promotion of speculative capital inflows to carry trade (buying financial instruments issued by the Central Bank聽called LEBAC in order to pursue carry trade operations).
When international conditions worsened and the carry trade circuit came to an end, the 鈥淟EBAC bubble鈥� exploded and produced a tremendous foreign exchange crisis that shook the Argentine economy, causing a sharp rise in inflation and a severe recession from which the country has not yet managed to escape. Read More »
The Financialization Response to Economic Disequilibria: European and Latin American Experiences
Book review of N. Levy-Orlik & E Ortiz (2016), The Financialization Response to Economic Disequilibria: European and Latin American Experiences, Edward Elgar Publishing: Cheltenham UK
Levy and Ortiz鈥檚 is a timely book. It critiques mainstream economic theory and its limitations in explaining how economic conditions change or the transition from one state of equilibrium to another. Its analyses rely on Keynes, Kalecki, Kaldor, Minsky, Prebish, Furtado, and Marxists such as Luxemburg, Marini and Lapavitsas. Macroeconomic teachers interested in a heterodox approach may benefit from Levy and Ortiz鈥檚 book as complementary material with experiences showing the dysfunctionality of the global economy from the specific prism of financial disequilibria.
How Racist Rhodesia Did It And 鈥業ndependent鈥� Zimbabwe Is Getting It Wrong: Comparing Currency and Finance Under Sanctions
Although Zimbabwe was the victorious outcome of a nationalist struggle against Rhodesia, there were significant continuities in the country鈥檚 economic structures in the first two decades of independence. The government exhibited limited commitment to land reform and economic indigenisation. Even though the ZANU PF government needed to be tactful not to upset historical structures of Zimbabwe鈥檚 economic inheritance, it needed to strike a delicate balance and undertake some form of transformation to maximise the country鈥檚 future prospects. However, limited progress was achieved in terms of economic transformation in the first twenty years of independence, resulting in political disaffection in the 1990s.
To retain political support at the turn of the twenty first century, the state undertook sudden and radical measures aimed at transforming the racial structure of the economy, resulting in the Fast Track Land Reform Programme. However, the racial undertone and process of this overdue exercise was problematic. Moreover, land reform did more than destabilise race relations. Although a steady decline had started in the early 1990s under the weight of the Economic Structural Adjustment Programme (ESAP), land reform prompted rapid economic collapse. The most visible symptom of this was inflation. With its Special Drawing Rights (SDR) suspended at the World Bank and with its government officials facing European Union and American sanctions, these challenges ushered in a deepening political and economic crisis. By comparison, Rhodesian history had also been characterised by political conflict and international sanctions between 1966 and 1979.Read More »
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