For many, putting ‘green economy’ and ‘China’ in the same sentence is an oxymoron. Push the idea to ‘leader in global climate governance’ and eyebrows will start raising. A new report from LSE’s Grantham Research Institute stands to do just that. It suggests that as part of this new role, China would champion a shift away from pursuing growth purely in GDP terms towards a wellbeing economy, both kinder to ourselves and the planet.

Is China then such an unlikely contender to lead the next stage of the global response to climate change? President Xi Jinping announced at the 75th general assembly of the UN that China would commit to reaching peak emissions by 2030 and carbon neutrality by 2060. With pollution levels dropping rapidly in the capital, and China becoming one of the leading producers of renewable energy, there are signs that we should take its eco-credentials seriously.

Yet the idea is ridden with complications, not least in the suggestion that China could lead a transformation to a global wellbeing economy. Since its economic reform period in the late 1970s, few countries have been such strong adherents to the cult of GDP as China. In its case, GDP growth has appeared to mirror better standards of living, with cities modernising and poverty plummeting. In the meantime, pollution and environmental degradation proliferated. One must question whether the incentive for a new growth paradigm exists for China.

GDP does not measure wellbeing

Mainstream economics would lead us to believe that wellbeing should be a natural result of market systems. Our actions, being rational and in purely of our own preferences mean that our ‘wellbeing’ is ensured. In practice this is not the case. GDP is merely a measure of the market value of goods and services, not of progress towards societal wellbeing (Zhu, 2023).

Indeed, it can have the opposite effect. To deliver those goods and services, productivity must be kept high, and market competition compels it to grow. This translates into ever growing resource use, which increasingly pressures our environment — ultimately to the detriment of wellbeing.

The failings of GDP as a measure of wellbeing are probably most striking in the US. In GDP terms it is the most successful country in the world, but it suffers from crippling inequality. In terms of emissions, that most ‘successful’ country pumps almost double as much Co2 into the atmosphere per capita than China. Canada, often presented as a green champion, is worse than the US.

Should we blame China for its emissions?

This is not to tiptoe round the reality that China has a real emission problem — anyone visiting Beijing until a few years ago would be familiar with its toxic air (though recent years have seen an astounding improvement). We should however take a few nuances into account:

China did not choose to be the polluter it became. As Malm (2012) highlights, China’s liberalisation of markets allowed for FDI inflows wishing to exploit the mass of cheap labour suddenly available. The search for cheap labour brought the pollution of wealthy industrialists to China — and the emerging dogma that ‘to get rich is glorious’ toted by Deng Xiaoping was willing to oblige.

There certainly has been a lack of action until now, but China really has been following the core advice of the IFIs — GDP growth will lift developing countries out of poverty and should be their key priority, so goes the tale. This is paired with the incessant promotion of export-oriented growth which further compels the overextraction of resources. The 2060 carbon neutrality targets must change this by necessity, hence promotion of wellbeing over GDP.

The wellbeing-economy

Bringing wellbeing to the centre of development is not new, but it is far from the dominant strain of thought.

Hayden and Dasilva (2022) state that a wellbeing economy (WE) can be seen as a ‘post-growth perspective’, that is inherently sufficiency oriented. Fioramonti et al (2021) explore what a wellbeing economy would look like in practice. They suggest a system that would not only look at what should increase, but also what factors should be reduced. Value shifts away from material production and consumption, and attempts to more holistically take into account what raises happiness and wellness — which isn’t necessarily anything to do with material accumulation.

“A WE approach would ask: is a banker more productive in terms of wellbeing creation than a teacher or a nurse?” (Fioramonti et al, 2021). Health, education, social life and other social factors become the goals, instead of attempting to model such factors through associations with monetary value. No longer are social factors seen to merely contribute to a more important project of material outputs.

Perhaps the best known example of a WE approach is Bhutan’s ‘Gross National Happiness’ (GNH) indicator, first coined by King Jigme Singye Wangchuck in 1972, when he contested “Gross National Happiness is more important than GDP”. The GNH is disaggregated into social indicators including health, living standards and ecological diversity — the last of these an essential factor in tackling climate change.

New Zealand offers a more recent example in the shape of its new ‘Wellbeing budget’, which has set out to reframe the government annual budget better towards addressing social needs. People, environment and social cohesion take centre stage over creeping up the GDP figures. Capital and finance are oriented more towards public good than profit.

Governmental support for the idea is growing, with six countries — Canada, Finland, Iceland, New Zealand, Scotland and Wales joining the Wellbeing Economy Governments partnership (WEGo). The group is committed to promoting the concept of a wellbeing economy and moving towards making it a reality.

Global implications of China’s call.

If China were to step up to global climate leadership and adopt a wellbeing economy there are issues to keep in mind.

First to consider is China’s dominance of the renewable energy industry. China is at the heart of the global solar energy industry, supplying about 90% of the world’s photovoltaic industry modules. It is also the largest producer of wind turbines, representing half of the international market. (Zhu et al, 2023). This represents tremendous political leverage for China, but also shows its potential to truly lead green development. On one hand its capability to deliver so much renewable energy technology could provide the world with clean energy. On the other hand, it represents a dependency structure with potential for political exploitation.

Economic and infrastructure relations along China’s Belt and Road Initiative (BRI) could simultaneously be a blessing and a curse. It represents an obvious way for China to lead a green revolution through clean energy projects in BRI partner states, but it poses the risk of deepening debt burdens already growing along the initiative.

There is also the question of how China intends to drop its emissions. Just as China became the fossil emission importer of the world, there is significant risk of it becoming the new exporter. The easiest way for it to domestically shrink emissions would be to move them to BRI countries, as Europe once did to it. That would result in an apparent ‘wellbeing economy’ at home, while burdening BRI countries further and making little mark on real global emissions.

The unlikely eco-hero

Optimistic scepticism is needed in considering China as a potential leader in the global climate response. While Xi Jinping has committed to admirable climate targets, and the country truly is improving in many respects on its environmental track record, placing it at the forefront of international climate politics comes with new structural challenges. Regardless of the future of international climate politics, a China championing the emerging wellbeing economy will no doubt give real legitimacy to an important reframing of the role of economics in society.

References

Fioramonti, L. et al. (2022) Wellbeing economy: An effective paradigm to mainstream post-growth policies? Ecological economics. 192107261.

Hayden, A. & Dasilva, C. (2022) The wellbeing economy: Possibilities and limits in bringing sufficiency from the margins into the mainstream. Frontiers in sustainability (Lausanne). 3.

Malm, A. (2012) China as Chimney of the World: The Fossil Capital Hypothesis. Organization & environment. 25 (2), 146–177.

Zhu, M. et al. (2023) Embracing the new paradigm of green development: China carbon neutrality policy framework research report. Grantham Research Institute on Climate Change and the Environment. Available at: https://www.lse.ac.uk/granthaminstitute/wp-content/uploads/2023/02/Embracing-the-New-Paradigm-of-Green-Development-in-China.pdf

Is China an unlikely climate and wellbeing hero? was originally published in The Political Economy Review on Medium, where people are continuing the conversation by highlighting and responding to this story.

Amid a faltering protest momentum, French Prime Minister Elisabeth Borne announced that the government would bypass Parliament and make into law a controversial pension reform proposal. The pensions law, a campaign promise of President Emmanuel Macron, was controversial even before the use of the executive powers afforded by the article 49.3 of the Constitution. Macron and Borne have put their reputation on the line, and faced two failed motions of no-confidence, in the hope of finalising their pension reforms.

In his second presidential term, it seems like Emmanuel Macron is ready to risk it all to tick off the objectives set out by the government for 2027. In its latest report, the French Court of Account has made it clear: France is behind its European counterparts when it comes to public debt. Emmanuel Macron committed to dragging down the government’s deficit under 3% of the GDP by the end of his term: one potential explanation for the urge to pass this reform.

While the critics of the government are getting louder, it seems like the French president is looking away, stepping back from the storm of the Assembly and the streets. Article 49.3 of the French Constitution is a sensitive topic in the country. The parliament emitted two censure motions as response on Monday but failed to dissolve the government.

An essential measure, what for exactly?

The current system relies on the working population to pay for the retirees. However, according to projections from France’s Council of Pensions Planning, with a declining birth rate on a national scale and growing shares of workers entering their retirement years, this system will eventually run short.

Emmanuel Macron made the reform of the pension system a flagship policy of his 2022 campaign. He did not react to any of the protests, sending a clear message: voters knew he would pass the text and they should not act surprised.

The French legacy of socialism and redistributive schemes is not the only reason why this pill is hard to swallow. Many agree on the fact that reforming the system is necessary, however, the government’s plan is either criticised for relying extensively on the working class or, as being counter-productive because of the concessions made in Parliamentary debates.

Furthermore, the reform has shown many weaknesses and incoherence along the way, diminishing the credibility of the government. A revalorisation of the minimal pension from 1100€ to 1200€ was a core argument in favour of the text. Experts state that only 10% of the population would actually benefit from this increase. In addition, Franck Riester, MP of the majority, declared in a live interview that women will be “a little penalised” by the reform as they are more likely to experience career breaks. He then added that “not everyone can be a winner”.

On this bumpy road, one main issue remains communication. Within six months, the government justified the text as a way to fund the country’s education; save the pension system and protect France from a financial risk. It is still unclear to the French why such a cut is essential. What remains limpid is that the government will say anything to push the reform forward.

The Union Coalition: standing strong.

For the first time since 2010, two of the main French trade unions (CGT & CFDT) are standing side by side, in opposition to the government. This alliance between Laurent Berger (CFDT) and Phillipe Martinez (CGT) is symbolic of the break between the workforce and the government.

Mobilisation reached an all-time high on the 7th of March, after which the trade unions called for a renewable strike. Garbage collectors in Paris also joined the movement. Protests were already taking place in Paris when Elisabeth Borne used the 49.3 in the Assembly. The trade union leaders reacted quickly after the event, calling for new demonstrations.

Laurent Berger denounced “a failed political compromise”, while Phillipe Martinez firmly affirmed that “a response needs to match the despise that has been shown to the people”.

Trade unions are calling for stronger mobilisation, they are however condemning the recent turn that took the protests. On Thursday evening, some streets were on fire, and violent confrontation between protesters and the police led to significant numbers of arrests.

This shifting climate acts as a significant turning point: the government has gone too far in pushing its reform forward; neither the parliament nor the public opinion will let it slide.

Article 49.3, an undemocratic tool?

Article 49.3 of the French Constitution allows the government to bypass the Parliament and force the text through legislation. By doing so, the government takes accountability for the law it introduces and exposes itself to a vote of no confidence. The later will be dissolved if the censure motion obtains the absolute majority.

This constitutional tool is unpopular among the public opinion and is perceived as a way to avoid standard democratic voting. This topic is especially sensitive as the majority already used the article in October to force a text on public finance.

The government is struggling to find allies to push legislation through parliament: the far-right and far-left are against the proposed reforms. Since 2022, Macron has been governing with a minority government formed by three centrist parties, which fall just short of a majority in the National Assembly. Instead, he has had to rely on deputies from the right-wing Les Républicans (LR) to pass legislation. Despite ongoing debates with LR, Macron has failed to convince the party to back the pension reform.

It is with no surprise that using the 49.3 appeared to the government as the least bad option. As the days passed, LR MPs willing to vote the reform became fewer and fewer. On the evening of the vote, knowing that the text will fail to pass at the majority, the government decided to push through, avoiding humiliation and defeat for the French president; at the cost of its reputation.

MPs from the majority are still claiming that the government had hoped for a vote. However, the opposition denounces the decision and is voicing its concerns. For many, the situation is profoundly anti-democratic. Mathilde Panot, a member of the left political party La France Insoumise, even declared that the country was entering “an authoritarian turnover”.

It is however in the Constitutional right of the government to use this article and has been brought up multiple times in previous presidencies. The conflict between the executive and the assembly had to be expected as both parties are defending their piece of cake. The article can be considered anti-democratic, in the way that it ignores the vote of the lower chamber, it is however a perfectly legal political tool.

For the constitutionalist Dominique Rousseau, using the article 49.3 shifts the debate. The vote will not be on the pension reforms but on the government’s legitimacy. This situation is also a continuation of the debates around the text. The opposition, by submitting absurd amendments to delay the discussions, played in a way, into this anti-democratic game.

The cost of the pension reform: a credibility crisis

Using the article 49.3 comes at a cost: facing a confidence vote and the loss of all credibility in the president and its government. Booed by most of the Assembly and facing signs “64 ans, c’est non.”, Elisabeth Borne announced on Thursday that there will be no vote on the pension reform.

Since then, two censure motions have been emitted but none of them found sufficient voter to dissolve the government in place. Mobilisations in the streets, on the other side, are becoming more radical and intense. Emmanuel Macron will now have to carry out the reform in a context of social, political, and what is now perceived democratic crisis.

The president’s popularity has never been lower since the yellow vest movement. Emmanuel Macron, in his last presidential term, is not scared to impose his reform by using violent constitutional methods in a tense social atmosphere.

The majority is defending the legitimacy of the article 49.3. However, in a situation where the public opinion and the parliament is profoundly opposed to the reform, solely relying on the French Constitution might not be enough to justify the democratic aspect of this decision.

It will now be very difficult for the current government to gain its credibility back, as it seems to be more and more disconnected from its middle and working class. Trade unions will continue to fight and want to be heard; something that seems quite out of Emmanuel Macron’s sight these days.

If the majority faces too much distrust from the streets and its political counterparts, the remaining option for the French president will be to dissolve the Assembly and call for an early parliamentary election. This scenario is still far ahead but needs to be kept in mind.

As of last night, Emmanuel Macron was 9 votes away from having to step down and dissolve its government. With no time to spare, he already called for numerous meetings with central figures of the majority. A few hours after the failed confidence vote, many protesters were back in the streets and significant strikes are to be expected.

The pension reform has gone through without a vote, but the French president will struggle to bypass the dissent felt towards his government in a context of growing civil unrest.

Pension reform: a tipping point for a French government in crisis? was originally published in The Political Economy Review on Medium, where people are continuing the conversation by highlighting and responding to this story.

The multifaceted threats around the Mekong River uncover how the proliferation of international institutions hinders the coherence and efficiency of each organisation. A closer look at the involved actors reveals how the Mekong is part of a broader pattern of international rivalry. Between regional geopolitical ambitions, international tensions and climate change, the Mekong River is entering uncharted waters.

The Damned River

The regional race for hydropower has driven the different states to build impressive dams along the 4,35o km of the Mekong. China alone has constructed 11 hydropower dams within its borders and two of them are large storage dams. As of 2019, Chinese hydropower represented a production capacity of 21,310 MW, with an estimated value at $4 billion per year. Dam construction is also part of the riparian states’ economic and development strategies. There are 89 hydropower projects on the Mekong stream with a total production capacity of 12,285 MW split between the different countries. The most prolific builder is Lao PDR with 65 hydropower projects, followed by Vietnam with 14 important infrastructures, Thailand (7) and Cambodia (2).

Despite the heavy infrastructures already built on the river, the prospect of hydropower is pushing the countries to invest further in dams and other hydro-projects. According to the Mekong River Commission, the plans for 2040 are the construction of 11 more hydropower dams on the main current and 120 dams on tributary rivers. This burdensome development should allow these South-East Asian countries to gain approximately more than $160 billion from the river. Laos is the main instigator, and with the direct funding and support of China, it is aiming to become the “battery of Asia” and expects to export 2/3 of its energy from hydropower. China is effectively sponsoring the design of additional dams along the river and its tributaries, which is part of its Belt and Road Initiative launched in 2013. Half of the Laotian hydro-electric infrastructures are owned by a dozen Chinese power companies

The heavy construction of dams and the irregular flows of water from upstream are irrevocably damaging the livelihoods of the people, the wildlife and the flora. International Waters issued a report in 2019 about worrying foresights in the Mekong river caused by the dams construction and management. At this rate, by 2040, 97% of the sediments of the river will disappear. These sediments are protecting the water quality, agriculture and the fisheries which ultimately support the local economies. Additionally, food insecurities are looming. The disrupted flows of water are perturbing the migrations of fishes and their sustainability. International Water foresees a reduction of 40 to 80% of the fishery biomass in 20 years, Thailand would lose 55% of its current catches, Laos 50%, Cambodia 35% and Vietnam 30%. This situation risks stressing the populations as fishes are their main source of protein and crucial to the local economy.

Human Rights Watch is also highlighting how the dams of the Belt and Road Initiative are a “rights disaster” for the villagers along the river and especially the indigenous and ethnic groups in Cambodia. The NGO interviewed the inhabitants coerced to leave the lands of their ancestors with poor compensations, inadequate to replace their income or their house. They are finding that the construction of the Lower Sesan 2 dam (up the Sesan and Srepok Rivers, two tributaries of the Mekong River) displaced approximately 5,000 people. Nat Sota, a 64-year old inhabitant of Srekor, a Cambodian village emptied because of the dam, said “I cannot leave my ancestors here. I can’t abandon their spirits. If I do that, I will lose my identity. If I abandon them, I won’t know who I am.”

The Rising Waters

Further south, in the Mekong Delta, the most populated area on the river, climate change is creating new challenges and exacerbating the existing ones. The repeated droughts and the rising sea levels are replacing freshwater by salted water which is poisoning the rice paddies. The equivalent of 42,000 football fields of rice cultivation have disappeared but also lands for vegetables and fruits cultivation. Salt is threatening the “rice bowl” of the whole region which will critically weaken the lives of the population, food security-wise but also economically, the Mekong Delta being an important rice exporter. Global warming is also impacting the source of the Mekong, and the Himalayan glaciers are melting faster than expected and one can wonder until when they will have the resources to sustain the whole river.

This year the Mekong environmental leader and activist Newt Roykaew (Thailand) won the Goldman Environmental Prize. After a decade of campaigning and resistance, he managed to make the Thai government stop the Upper-Mekong rapids blasting project and avoid the destruction of 248 miles of the Mekong. Despite the South-East Asian tendency to undermine environmental activists, new voices are rising and the governments can’t ignore the importance of the Mekong’s health.

The Institutionalized River

To tackle those multifaceted threats, cooperation across the River is crucial to share and coordinate the governance of the Mekong to ensure the sustainability of the water and the people but also to preserve the interests of each country. A closer look at the institutional actors operating in the region reveals a pattern of great power rivalries beyond the immediate environmental and human insecurities and beyond South East Asia.

The most prolific and active governing institution to manage and monitor the river is the Mekong River Commission (MRC). Established in 1995 under the aegis of the United Nations, the RMC regroups the riparian countries and aims to monitor, manage and gather data from the basin for forecasting and promoting good governance. The RMC is mainly financed by the US, the EU, Australia, Japan and the World Bank. In parallel to the RMC there have been a dozen partnerships, summits and cooperation around the Mekong River. They involve the riparian countries and external actors such as India, South Korea and Japan. China launched its own initiative in 2016: the Lancang-Mekong Cooperation (LMC). With Lancang referring to the Chinese name of the upper River, China is arguing that the LMC is the only institutional body that involves all the countries the Mekong is crossing. China also has the natural advantage to have the source of the River within its borders.

This LMC is sustained by a Chinese “special fund” and additionally to the principles of good governance, the organisation emphasizes on “political and security” issues and it is directed by the Chinese ministry of Foreign Affairs. Four years later in 2020, the United-States also initiated an enhanced Mekong-US Partnership with an 2021–2023 action plan currently running. The mission statement is also highlighting the importance of “non-traditional security”. The mutual exclusion of either the US or China from each other’s institutions can reveal an attempt to influence the Mekong River countries in the landscape of a broader rivalry between the two powers. The Mekong River countries are then involved in a careful hedging strategy between the US and China.

This can be further explored by looking at a report from the American Stimson Centre, entitled “How China Turned Off the Tap on the Mekong River”. The report argues that the severe drought during the 2019 wet season was induced by Chinese inconsistent dam management. It finds that the “snowmelt and rainfall was normal to high for much of China’s portion of the basin for the entirety of 2019” while the downstream countries suffered abnormal levels of aridity and the worst drought in decades. The report also finds that after the construction of the Dachaoshan dam (2002) and the Nuozhadu dam (2014), Chinese dams are also suddenly releasing heavy volumes of water. These abrupt releases are overflowing the villages and the agriculture zones downstream which harm the population and the environment.

While Chinese Foreign minister Wang Yi attributed the low levels of the Mekong simply to low levels of rainfall and denied the claims of the Stimson report. None of the riparian countries have reacted to those findings and the political and security implications of the report’s conclusion. After the publication of the Stimson report, only a call for more transparency about the River water data has been made.

The Mekong seems to attract the attention of different powers and the different sources of fundings will be directed to a better management of the River. Yet, the multiplicity of institutions and the similarity in their missions and engagement can hinder an effective and efficient governance of the Mekong. Climate change is exacerbating the urgency to coordinate all the different policies, there is little time left for talks, summits and agreements. The countries of the Mekong must start to act coherently and consistently together to safeguard their river and navigate cleverly between the United States’ influence and China’s ambitions.

Navigating the Mekong River: between Geopolitics and Climate Change was originally published in The Political Economy Review on Medium, where people are continuing the conversation by highlighting and responding to this story.

On February 25th, 2023, millions of people across Nigeria made their way to the voting booths to decide which candidate would take the country’s reigns by the end of May. Just a couple of days later, the polls would point to Bola Ahmed Tinubu of the All Progressive Congress (APC) party as the victor of a historical election for the African country. The former Lagos governor entered the election race as somewhat of a clear favourite, with a broader network and support group, a larger budget to run mass advertising and a significant amount of political experience. Tinubu even received the backing of the current president, Muhhamadu Buhari, who reacted quite positively to the news of the results: “Elected by the people, he is the best person for the job.”

At the age of 70, Tinubu is quite a controversial figure in Nigerian politics, and his election was sure to bring a lot of questions and doubts. There are worries about his health, forcing him to cancel a number of campaign events, as well as doubts about his public speaking skills. Many compare him to the current president, since they are part of the same political party, who did not live up to expectations. Additionally, there are concerns about his reputation, with people pointing to the time where he settled a case where he had been accused of laundering drug money by the American government.

Tinubu had to face some surprisingly fierce competition from opposing candidates Atiku Abubakar of the People’s Democratic Party (PDP) and Peter Obi of the Labour Party, with the former accumulating almost 7 million votes. With the closure of the voting booths, and the ballots tallied up, the Independent National Electoral Commission (INEC) has received lots of backlash regarding the validity of the outcome. In fact, with an alarmingly low voter turnout rate of just 26%, along with alleged corruption and technical failures happening around the country, many are not convinced that Tinubu was the candidate chosen by the people.

The low voter turnout rate can be tied to a problem with unprinted voter cards and fuel shortages which made it difficult for many Nigerians to cast their votes. Those that did manage to reach voting stations were sometimes met with violent attacks and intimidation from local gangs and groups, or even the absence of election officials who decided not to show up. The Election Observation Mission of the European Union stated that although fundamental freedoms of assembly and movement were “largely respected”, a lack of transparency and operational failures reduced trust in the electoral process and “challenged” the right to vote.

Source: Ben Curtis/The Associated Press

So far, the INEC has denied all allegations and claims regarding the alleged corruption and the integrity of the recent presidential elections, with chairman Mahmood Yakubu stating that the votes were cast and counted legitimately, in a democratic manner. With these results, Tinubu is set to be sworn into office on May 29, becoming the fifth Nigerian president since the democratisation of the country and the shift towards the Fourth Republic in 1999. Despite this historical victory, the president-elect does not have much time to celebrate, as his country is still feeling the effects of the recession caused by the COVID-19 pandemic.

Crisis after crisis

Nigeria is in a sticky situation at the moment. Despite being Africa’s most populous country with over 200 million people, along with being the continent’s largest economy with a GDP of over $440 billion in 2021, the country finds itself in a crisis, which many claim stems from the oil production shortages. In 2019, the oil industry was responsible for 80% of its budget revenues, and 95% of its foreign exchange earnings. However, between 2020 and 2022, crude oil production decreased by 23%, reaching its lowest point since 1990. This problem, which puts the Nigerian economy and financial situation on the ropes, not to mention the lack of revenue diversification, stems from increased oil theft, often incited by regional terrorist groups such as Boko Haram and criminal gangs from around the country.

At the end of 2022, inflation was recorded at 21.5%, the highest it’s been since September 2005, while the Nigerian Economic Summit Group estimated that unemployment rates will reach 37% this year. Meanwhile, the value of the Nigerian currency, the naira, has plunged, causing a deepening fiscal crisis, paired with shortages of domestic and foreign currency. At the beginning of February, the Central Bank attempted to replace old banknotes with new ones, a move that would prove to be catastrophic and cause cash shortages, mass protests, vandalism, and violence. To make matters even worse, the rationing of dollars, paired with the adoption of multiple exchange-rate regime makes the African country a very unattractive one for foreign direct investment at the moment.

Nigerians are even having trouble with transportation, having to wait hours at gas stations due to acute fuel shortages caused by a gasoline subsidy that allows for the price of fuel to reach as low as $0.5 per litre, making it one of the lowest rates in the world. Consequently, this will cost the government the equivalent of roughly $13 billion in 2023, directly impacting the amount of funding the country can afford to place in other crucial sectors such as health and education.

What likely frustrates the people of Nigeria the most is the fact that lots of these problems date back to the 2015 elections, where current president Buhari pledged to take action in order to deal with debt that has done nothing but grow exponentially since then. Samuel, an electronic engineer based in the city of Maiduguri, told local media outlet HumAngle that, “people are unhappy, and when unsatisfied, you don’t expect their full participation. People are getting hungrier, people are in pain, and you are talking about elections (…) the government watches people crying, and it refuses to listen to those cries.”

Source: Ben Curtis/The Associated Press

Looking ahead

Tinubu, as part of his presidential campaign led by the slogan “It’s my turn”, committed to redirecting government funding towards the sectors that need it the most: health and education, along with infrastructure and social welfare projects. He also guaranteed the removal of fuel subsidies which cost his country billions of USD last year. Additionally, the president-elect pledged to limit the nation’s exposure to foreign-currency debt, making use of this mechanism only in a situation where the project which derives from the non-naira loan generates enough to repay the debt in full and benefit the national economy in the medium to long term.

Whatever path the president-elect decides to take, he needs to act sooner rather than later. With the mountain of problems that Nigeria is dealing with, the first couple of months in office will be crucial in dictating the future of the nation. In addition, with the current controversies surrounding the legitimacy of the election process, and opposing candidates pushing for a revote, the fiscal and social problems waiting for him from May 29 onward seem like the least of his worries. In fact, it is difficult to foresee a future where Nigeria climbs out of this hole when the country is as divided as it is at the moment. With the election results split almost evenly between the three candidates and rising levels of violence and theft on a national level, there is only so much a newly elected president can do in response to these issues.

Nigeria finds itself in a very dark place, and the most that the new president-elect can hope to do is to guide their people towards the light at the end of the tunnel which, at the moment, is very dim. It will take a firm push towards fuel subsidy and foreign-exchange reforms in order to attract international investment, which could eventually be used in an effort to invest in sectors such as health, education, security, and more generally in nationwide industrial development projects. But, again, there is no magic bullet. Whichever path the president-elect decides to take, it will have to be with the objective of long-term, rather than short-term, success and prosperity. This might involve a period of initial struggle for the people of Nigeria, something most would be hesitant on doing. However, if the president-elect does not take action quickly, the country might end up more divided and impoverished in the long-run than it has been in many years.

Votes, Money, and Fuel: The Nigerian Presidential Election was originally published in The Political Economy Review on Medium, where people are continuing the conversation by highlighting and responding to this story.

In the summer of 2022, then prime minister Liz Truss introduced a multi-million pound aid package for African countries struggling with food shortages triggered by Russia’s war in Ukraine. This seemingly altruistic act exposes a deep hypocrisy at the core of almost all wealthy countries’ agricultural policies. When politically convenient, short-term solidarity with the developing world is loudly proclaimed. When meaningful long-term assistance is requested, time and time again pleas for help fall on deaf ears.

Via their excessive use of agricultural subsidies, higher income nations continue to worsen poverty and exacerbate food insecurity in the world’s least developed countries. Meanwhile, their own government budgets are drained and local environments damaged. If the UK government genuinely cares about developing countries, and its own citizens, it must acknowledge that short-term media friendly aid packages will not suffice. Agricultural subsidy reductions across the developed world are imperative.

Good intentions, bad consequences

The basic case for some state intervention in agriculture is relatively strong. The price of agricultural goods — like any primary commodity — is highly volatile. The need to ensure production, despite periods of low prices, is vital given the obvious role food plays as a primary good and basic need. It therefore makes sense that the state should provide farmers with some level of assistance. Subsidies ensure that farmers maintain a certain level of production and stay in the industry, regardless of domestic or global market trends.

In the wake of war in Ukraine and the on-coming climate crisis, defenders of government policy may additionally argue that in an increasingly tense geo-political environment, protecting domestic food production is key to preserving national security. If Putin’s Black Sea blockade has taught us anything, it’s that an over-reliance on food imported from abroad risks vulnerability to extortion.

These foundational arguments legitimising some state intervention are undeniably valid. However, when we consider the size of existing subsidies, their harmful excess becomes apparent. In total, OECD countries spent just under $300 billion on agricultural support in 2021, $107 billion of which came from the US. In 2019 the EU spent €57.9 billion on agricultural subsidies. This accounted for 56% of their total budget. Despite being relatively smaller than these giants, the UK still spent $8.2 billion last year on the same policy.

The Harmful Reality of Excessive Agricultural Subsidies

The damaging consequences of excessive subsidies are four-fold: they inhibit the state’s ability to provide vital public services. They harm local environments by promoting inefficient farming practices. They artificially lower global food prices, negatively impacting farmers themselves, especially in the developing world. And finally, they lead to wealthy countries dumping underpriced food in poorer countries’ markets, putting poor countries’ farmers out of business, increasing global inequality.

We see this drain on government services when considering the UK’s contemporary budgetary constraints. Due to consistent real-term reductions in funding, and subsequently pay, NHS nurses were on strike throughout the first month of 2023. This could have been avoided if government expenditure on agricultural support was only slightly reduced. The planned cuts to the NHS in England for 2023 amount to £5.3 billion. It would only require a 30% reduction in agricultural subsidies to free up enough money to half this underfunding. This would greatly contribute to ending industrial action and could prevent the oncoming collapse in health service provision.

Beyond government services, agricultural subsidies harm the environment by encouraging inefficient farming practices. Providing farmers with extensive financial assistance reduces the incentive to cut costs and minimise input use. These inputs are often scarce natural resources and their extraction has serious environmental consequences. In India, for example, the state pays for energy costs associated with pumping water to irrigate crops. Consequently, Indian farms have become some of the most water intensive and least water efficient in the world. This has increased water scarcity and damaged biodiversity in the country’s fluvial ecosystems.

As well as keeping costs and inefficiencies high, excessive agricultural support keeps food prices artificially low. Subsidies allow farmers to sell the food they produce below cost without making a loss. The UN reports that two thirds of all agricultural support has this effect. Some may argue that this helps consumers, who pay less for the food they buy, and even assists farmers, who are ensured a minimum revenue. However, farmers ultimately lose in the long run as prices, and thus revenue, are kept low. Consumers also suffer as state dependent farms rely on their taxes to stay in business.

Moreover, farmers in developing countries are harmed disproportionately. In the international market they too are forced to sell their products at the artificially low prices created by wealthy countries’ subsidies. However, unlike wealthy farmers, they receive little to no government assistance. We see this evidenced in the global cotton trade. West African cotton producers are exposed to the brutality of the free market, meanwhile Chinese firms enjoy excessive state protection. Both sell their exported cotton at the same price. Thus, West African farmers make less profit from the same volume sold. We therefore see why agricultural subsidies are a source of inequality; despite harming all farmers eventually, they harm developing countries’ farmers disproportionately.

Agricultural subsidies further trigger inequality via their tendency to promote dumping. Dumping occurs when subsidised food, that is priced below cost, is exported to foreign markets. This drives down food prices in said markets and puts domestic farmers out of business. Due to unequal access to subsidies, this is almost exclusively a phenomenon where wealthy countries victimise poorer nations. In 2017 alone, 38% of wheat, 4% of soybeans, 12% of rice, and 9% of corn produced by the US was dumped on foreign markets, often in the world’s least developed countries. Some may argue here that low food prices are a source of poverty relief. However, in countries like Sierra Leone, where agricultural output accounts for 57.4% of total GDP, unemployment in the farming sector caused by dumping worsens poverty to a far greater extent.

In summary, some state assistance in agriculture is undoubtedly beneficial. Subsidies ensure sufficient food production and protect national security interests. Their excessive use, however, has meant that they are undeniably harmful overall. Domestically, they contribute to the underfunding of government services and harm local ecosystems. Internationally, they exacerbate global inequality and increase poverty in some of the world’s least developed countries. The subsequent question is therefore: why has such a harmful policy persisted?

Why Governance is Failing

Despite national-level government having the final say on agricultural policy, de facto power lies at the international level. No single state is willing to expose their farmers to free market forces without assurance that the same will be done to their competitors abroad. Consequently, substantive reform is only possible within international institutions, the most important of which being the World Trade Organisation (WTO). With 160 members, representing 98% of global trade, the WTO is the pre-eminent forum for multilateral trade governance. Unfortunately, the WTO also acts as the main impediment to meaningful reform in agricultural policy.

Since its conception, initially as the General Agreement on Tariffs and Trade (GATT), the WTO has been dominated by the interests of a select group of wealthy nations and their agro-business lobbies. Its legislative process of competition amongst members of unequal power has led to the US, EU and developed countries more broadly, dominating the organisation. Due to their economic might, wealthy nations have successfully repressed dissenting developing countries by threatening them with the use of independent trade sanctions. Agriculture has therefore been consistently excluded from the WTO’s broader liberalising agenda.

The WTO continues to permit the use of protectionism, in the form of subsidies, within agricultural production. Why? Because wealthy nations fear that their farmers will be outcompeted by foreign farmers. Wealthy countries, knowing that they can out-spend developing countries through the use of agricultural subsidies, continue to intervene in markets and ensure that their farmers prevail. This is despite evidence that subsidies produce inefficient and dependent domestic farming industries, drain government funds, harm the environment, and entrench global economic inequality.

It is nothing more than short-term thinking and self-interested nationalism that is therefore preventing us from reforming global agricultural policy and reducing excessive government expenditure in the sector. Unfortunately, short-term thinking and self-interested nationalism are very powerful forces, especially at the WTO. Beyond agriculture we have seen this demonstrated recently via the organisation’s abject failure to provide an equitable ruling on covid-vaccines.

For two years developing countries have been trying to get the WTO to waive its TRIPS agreement and loosen the intellectual property rights afforded to the covid-19 vaccine. Succumbing to the will of their pharmaceutical lobbies, wealthy countries stalled this process, leading to hundreds of thousands of unnecessary deaths in the developing world. Despite a watered down agreement having been reached in August of last year, the vaccine remains unaffordable in many impoverished countries and the resolution unsatisfactory for the majority of the developing world. Thus, we see how wealthy countries continue to dominate global trade governance, painting a pessimistic picture for possible agricultural policy reform in the future.

In combination with the historic economic rivalry fought between developed and developing countries, a new impediment to agricultural reform is emerging at the WTO: great power conflict. Due to China’s rapid growth, and the US’ subsequent scramble to contain the rising power, negotiations at the WTO have all but collapsed. Conflict over agricultural policy has been central to this impasse. In 2007, the WTO’s last multilateral trade round in Doha broke down because of this very issue.

At Doha, a coalition of developing countries pushed the US and EU to allow them legal access to import tariffs that could offset the harms of wealthy countries’ agricultural subsidies. China, despite having an enormous economy in aggregate terms, argued that it too should be allowed to use these tariffs as its GDP per capita remains low. The US, unwilling to provide China the same exemptions offered to the developing world, walked away from negotiations. Since then substantive talks to reduce subsidies, or offset their harms by allowing the use of import tariffs, have consistently failed to materialise. Neither China nor the US are willing to compromise. Consequently, the probability of future reform, as tensions between these two powers continues to increase, is depressingly low.

We could all be better off

Since the GATT and now under the WTO economic nationalism in the production of agricultural goods continues unregulated. In recent years this has taken the form of agricultural subsidies. A somewhat reasonable policy when applied moderately, is being abused by the world’s wealthiest states for purely selfish purposes. To ensure that they maintain economic superiority — and to satisfy the short-term profit seeking of their agro-business lobbies — developed countries spend enormous sums of money every year to give their farmers an unfair advantage.

This policy is greatly harmful domestically. Subsidies drain government budgets and inhibit the provision of state services. They also cause environmental damage by encouraging inefficient production. Internationally, however, they are even more damaging. By encouraging overproduction in wealthy countries, subsidies lower global food prices and lead to agricultural goods being dumped on poor countries’ markets. Both these factors put developing countries farmers out of work. Subsequently, excessive agricultural support from the developed world directly contributes to poverty production in some of the world’s least developed countries. If wealthy nations like the UK genuinely care about the plight of the world’s poor then they are morally obliged to greatly reduce their excessive, wasteful, and immensely harmful agricultural support.

Food Matters: How The Agricultural Subsidies of Wealthy Nations Hurt the Global South was originally published in The Political Economy Review on Medium, where people are continuing the conversation by highlighting and responding to this story.

Protesters across France take to the streets in response to Macron’s pension reform proposal. Photo source: Roland Godefroy

More than 1 million people took to the streets on Thursday, 16th of January in France in what would prove to be a historic day for the country. Reports from labour unions have come out stating that roughly 400 000 people were present at the Place de la République in Paris for the occasion. French news outlet OBS reported that roughly 26 000 protesters were counted in Marseille. Police task forces were spread out and ready to contain any sort of violence that, in France, typically comes with these mass protests. Overall, roughly 30 individuals were arrested in Paris as a result of the protest. The numbers above are staggering and have surprised people from around the world, leading to question the real cause of this upheaval.

It seems as though Emmanuel Macron, the current President of the French Republic, and his government have taken steps towards tarnishing his already unpopular reputation. Recently, his administration proposed a very controversial reform to the pension scheme in France. This reform would see the official retirement age increase by 2 whole years, from 62 to 64. Additionally, it would imply that individuals would have to work 43 years in order to qualify for a full pension instead of 42, starting in 2027.

Pension plans: a controversial topic

At first glance, one could think that this reform has validity when looking at the current official retirement age in France, which is significantly lower compared to other European countries such as Italy, Spain, and even the UK. Additionally, with life expectancy numbers increasing on a global scale and the workers-to-retirees ratio alarmingly plummeting in the past years it would seem that raising the retirement age would make sense. However, the French seem to think otherwise.

In fact, France uses a share-out pension system, which means that the current workforce pays for the current pension plan system. This is unlike the pensions scheme of some countries, where a majoritarily private system is in place which entails that workers pay for their own retirement fund. France has historically refused to adopt the latter as it has generally attempted to reach equal and fair social redistribution on a national scale, especially when it comes to pensions. With a share-out pensions system, all retirees receive relatively consistent funding which comes directly from the younger generation of workers, which makes for a system based on solidarity and egalitarianism. In contrast, a private pension scheme allows members of the higher classes to retire earlier, receiving larger retirement funds, but without contributing to the general workforce and the classes below them; making this a system based on individualism and inequality.

However, what makes the French pension scheme unsustainable in the long run is very simple. With declining birth rates on a national scale, and the generation of baby boomers (people born from the mid-20th century baby boom) slowly entering their retirement years, the demographic scenario in France simply does not favour a share-out pension system. Eventually, the workers-to-retirees ratio will decrease too much to support national retirement funds. On the bright side, because this is a demographic issue, this makes the problem relatively easy to predict, analyse, and handle; which is essentially what President Macron is attempting to do, a change that many claim to be ahead of schedule.

A historical fight

The fight over the reform of the pension system in France has been the root of much debate for decades now, specifically upsetting the French population throughout the last couple of presidential terms as numerous administrations attempted to build a pension plan that drew more similarities with those of neighbouring countries. Nicolas Sarkozy, who served as the President of France from 2007 to 2012, managed to raise the official retirement age from 60 to 62 back in 2010; a move that had provoked similar reactions to those that were witnessed this past Thursday. With constant and heavy backlash led by the unions across France, the pension system seems to be an extremely touchy subject.

An initial proposal for the reform of the pension scheme was put forward by Macron in 2019, which was eventually interrupted and significantly postponed due to the recent global pandemic. What has seemed to infuriate a large part of French workers is the real reason as to why the retirement age needs to be changed. The pension scheme in France, which costs the government over 300 billion euros on a yearly basis, is a fully functioning system that is not in deficit in the present day; a status it will statistically not be able to retain if no changes are made in the long term. Protesters affirmed that there are other ways of tackling the deficits that the general social security system in France is facing, with the pension scheme being one of the lesser problems to attend to at the moment.

Interestingly, what made Thursday particularly historic is also the fact that all of the major unions across France, from those on the far left to those on the far right, agreed on the principle of rejecting this reform and unitedly protesting it on the streets. This is important due to the power that the major trade union federations hold in France. Firstly, there are eight of them, which is the most that can be found in any Western industrial country. Secondly, the major ones are considered ‘umbrella’ unions, meaning they are not single industry unions but have semi-independent branches in every industry. Although these unions do not have an incredible amount of members, they have many supporters and voters who help them become part of the governing structure of France. Receiving the support and the votes of the people proves to be crucial when it comes to workplace elections as it decides which unions get to negotiate with and sit in the bodies that effectively run the welfare state. To make matters worse for Macron, he has also faced opposition from the National Assembly and even from some of the conservative Republican party members of parliament, whom he will eventually have to try and rely on in order to have this reform see the light of day.

Inequality and disapproval

Furthermore, there is an overwhelming fear that the proposed pension scheme will increasingly penalise the lower classes of French society compared to the middle and upper classes. In fact, lower-class workers tend to start working at an earlier age, in fields that are typically more physically and mentally demanding, which currently allows them to earn a full pension by the age of 62, if not earlier. Some companies, such as the state-owned railway company SNCF, allow their workers to retire even before the retirement age. With the proposed reform, these exceptions would be almost entirely annulled, forcing lower-class employees to work for additional years, without reaping any sort of significant benefit in the process. This does not fare well for Macron as he has already built up a generally negative reputation with the people living outside of the major French cities, home of a large majority of these lower-class workers. More generally, his approval rating is not something to be proud of, with recent polls showing that only 34% of people surveyed were satisfied with Macron and his government.

Essentially, what makes this a particularly sensitive subject which causes mass protests comes down to policymaking and historic societal structure. The French governing model has, throughout modern history, attempted to promote equality and fair redistribution. This is what the French typically believe to be the right road to take and what they are accustomed to. What Macron has been repeatedly criticised for is his decision-making when it comes to these fiscal and social policies. He has traditionally pushed a more neoliberal and capitalist model of society onto the French population through, for example, his controversial tax reforms from just a few months ago, making his approval rating drop on numerous occasions.

Consequences

The people of France can expect to see strikes across a multitude of sectors including hospitals, transport, and education, which poses a real problem for the coming weeks. On the 16th of January, it was reported that roughly a third of all teachers in Paris decided to join the protests, and the metro in the French capital was running a severely limited service throughout the day. The situation has not shown any signs of improvement for now, with the unions declaring a second national strike day (which will take place on the 31st of January) after the overwhelming and perhaps unexpected success and turnout they saw just a few days ago.

It is important to acknowledge that this is a general problem that many other governments are having to face at the moment — not just Macron. The fiscal and demographic perils that France is facing are generational, making issues that many other countries have to deal with on a daily basis. It was just a few months ago that the United Kingdom almost suffered from a total pension scheme collapse, fueled by a sharp decline in funded ratio. It is interesting to see however the differences in public opinion between the UK and France when these populations undergo similar situations and changes. On one side, the French take to the streets and form protests. On certain occasions, like we have seen with the Yellow Vest Protests since 2018, these have the ability to build an extraordinary platform for many years, provoking international unity through shock and heavily influencing policymaking and European affairs on a matter of subjects. On the other side however, the British population, along with its trade unions, does not react in a similar way — rarely do we see millions of people protesting in the streets of major cities like London and Manchester for potential policy reforms. Indeed, this is a typical characteristic of French society that is not replicated in many parts of the world (if any).

Amidst the backlash and confusion that has risen from the situation in France specifically, one could make the argument that this reform is both necessary but impossible at the moment. Due to the predicted failure of the French pension plan in the long run, it is clear that a reform is necessary in order to avoid having a social security system that runs on a significant deficit. However, it has proven to be almost impossible to change the minds of millions of workers in France who focus on the data that points to the fact that, currently, no reform is economically obligatory. Whatever the case may be, the message Macron has received these past days has been loud and clear: ‘if it ain’t broke, don’t fix it’.

Non merci! Why the French refuse Macron’s pension reforms was originally published in The Political Economy Review on Medium, where people are continuing the conversation by highlighting and responding to this story.

Three weeks ago, over 123 million Brazilians voted in the first round of what has been called the most important presidential election of the world’s fourth-largest democracy. Though voters were given twelve options for their vote — including a null vote — it was no surprise that the two frontrunners were current president Jair Bolsonaro and former president Luiz Inácio Lula da Silva, known mononymously as Lula. The two candidates couldn’t be more different and are at the centre of the country’s polarising political divide.

Far-right populist and former army captain Bolsonaro has been dubbed the ‘Trump of the tropics’. As the first president to be elected since Dilma Rousseff’s impeachment in 2016, he promised to return Brazil to stability after some tumultuous years, yet the past four years of his presidency have been marked by a gross mismanagement of the pandemic, a surge in fires in the Amazon rainforest and deadly police raids in Brazil’s most impoverished favelas.

Lula’s 2003 to 2010 presidency, in contrast, was characterised by its far-reaching welfare measures and social programs that curbed poverty in Brazil and increased access to health care and education. Born in a working class family, Lula worked several manual labour jobs from the age of 12, yet he managed to leave the presidential office as one of the most popular politicians in the world. Nevertheless, his administration faced several corruption scandals, coming to a head when, in 2018, he was imprisoned on money laundering and corruption charges. The ruling was later reversed by the Supreme Court on grounds of a biased judge.

The results of Sunday’s election shocked many carefully optimistic Lula supporters, who believed Lula could take the win with an outright majority in the first round of elections. While Lula led with 48.4% of votes, Bolsonaro outperformed previous opinion polls, which had predicted 35% for the incumbent, with 43.2% of votes. The two are set to face off in a second round of elections on 30 October to determine the winner.

Polls have also shown that Bolsonaro is much less popular amongst female voters as compared to male voters. While 39% of male voters had planned on voting for Bolsonaro, only 29% of female voters wanted to vote for the current president. In comparison, 43% of male voters and 46% of female voters had planned to vote for Lula. Undecided voters are twice more likely to be women than men. Reaching these voters could make or break the election for either candidate, provided that polls haven’t failed again in assessing Bolsonaro’s popularity.

Bolsonaro’s reputation amongst women is perhaps not surprising considering his history of misogynist statements. Most famously, a 2003 video published in 2014 shows Bolsonaro, at the time the Federal Deputy of Rio de Janeiro, telling congresswoman Maria do Rosario that he wouldn’t rape her because she “is not worthy of it”.

Yet it is in the best interest of either candidate to appeal to this undecided voter base. In a more recent TV interview, Bolsonaro pointed to increased land ownership among women during his presidency in an attempt to become more favourable amongst female voters in the run-up to the elections. He also remarked that of the 20 million families taking part in Auxílio Brasil, a social welfare programme, 25% of families were headed by women. This appears in stark contrast to some of the president’s other decisions during his term — for instance, his vetoing of an increase in COVID-19 aid for single mothers, as well as for the provision of free period products to low-income women.

Journalist Vera Magalhães, who was attacked verbally by Bolsonaro on national TV in August, told TIME that appealing to women’s issues would be going against his long-standing image. By trying to attract undecided female voters, Bolsonaro could deter his traditional male supporters.

His bold and inflammatory comments also extend beyond gender issues and intersect with other social problems in Brazil. In a display of misogynoir — a term coined by Black feminist Moya Bailey to describe misogyny directed at Black women — Bolsonaro claimed his sons would never fall in love with a Black woman, because they are “very well educated”.

Bolsonaro’s questionable policy decisions and harmful comments could not have gone unchallenged. Brazilian women have a longstanding tradition of organised protest and resistance that traces back to the 19th Century. Today, women in Brazil carry on this feminist legacy through various forms of in-person and online activism. The most famous and far-reaching of these is the #EleNão (#NotHim) movement.

Ahead of the 2018 elections, Black feminist activist Ludimilla Teixeira organised the largest women-led protest in Brazilian history. Across the country, over 2.5 million women hit the streets, urging voters to vote against Bolsonaro. The movement also became viral online, with Teixeira’s Facebook group amassing over 4 million female followers in the matter of a few days and the hashtag used widely across various social media platforms. Despite Bolsonaro’s victory in the elections, the #EleNão movement continues to represent a sentiment of resistance against the incumbent amongst women, and particularly Black women.

In Brazil, political resistance can turn dangerous. A poll by the Brazilian Forum on Public Security revealed that almost 70% of Brazilians feared being attacked for their political opinions. Before the 2018 elections, Marielle Franco, a Black and queer councilwoman for Rio de Janeiro, was murdered. She was known for associating with women’s, Black and favela movements and fiercely opposing incessant police brutality. Instead of being intimidated, Black women organised once again in solidarity and protest. Following Franco’s murder and in large part led by the Mulheres Negras Decidem (Black Women Decide) collective, 1,000 Black women ran for federal office in the elections that year — 60% more than in the previous elections.

Similarly to Black women, Indigenous women in Brazil have resisted Bolsonaro’s presidency, both through political action and through activism. In large part because of the president’s exploitation of the Amazon rainforest, more Indigenous leaders than ever ran for federal office in these elections. Of the 60 Indigenous candidates, 31 are women.

Female Indigenous voices were also central at International Women’s Day marches in Brazil on March 8. Critiques included the federal government’s undermining of legislation which protects Indigenous lands and the defunding of FUNAI, the governmental protection agency for Indigenous people. Similar issues were addressed at the Indigenous Women’s Marches in September, which were organised by the Articulation of Indigenous People of Brazil (APIB) — the leading organisation for Indigenous Brazilian. The marches highlighted a combination of Indigenous, women’s and environmental issues. This is not incidental.

A 2019 study in the Proceedings of the National Academy of Sciences of the United States of America reveals a direct correlation between agriculture-led deforestation and inequality in Latin America. Given that Brazil is one of the most unequal societies in the world, this suggests that addressing inequality will be key in maintaining the Amazon Rainforest. An important part of this may be the empowerment of Indigenous groups.

Unfortunately, the opposite is currently taking place in Brazil. Although Indigenous people are at the forefront of protecting the rainforest from illegal mining and logging, they are doing so at the risk of their lives; Brazil is currently one of the most dangerous countries to be an environmental activist.

A government report on violence against Indigenous people reveals that in 2019, 113 Indigenous people were murdered, a majority of them in relation to their environmental activism. With the Amazon rainforest quickly approaching an irreversible tipping point in its degradation, the next years of policymaking are fundamental in protecting both the rainforest and Indigenous people in Brazil.

The past four years of Bolsonaro’s administration may make Lula the obvious alternative for many Brazilian voters, but the former president’s stances and approaches to many of these issues are not ideal either. Lula has refused to commit to gender parity in his cabinet, and has plans to continue exploration for new oil deposits and invest in new oil-refinery infrastructure.

Nevertheless, he also promised more representation for women, Black people and Indigenous people in his new administration, and pledged to scale up Brazil’s clean energy production. During his presidency, policies addressing the needs of mothers, women’s access to welfare and healthcare, and the availability of childcare were enacted, resulting in an increase of women’s workforce participation.

While the results of the elections on October 30 are still undecided, it is clear that much is at stake — for Brazil’s 109 million women and girls, for its Black and Indigenous communities, and for the world’s lungs. As both candidates try to appeal to an undecided voter base in the final weeks before the election, it becomes apparent that female voters may have the last word.

The female vote: how women can make or break Brazil’s future was originally published in The Political Economy Review on Medium, where people are continuing the conversation by highlighting and responding to this story.

Shocked by the death of its longest reigning monarch, the United Kingdom has woken up to a prime minister that is likely to break the record for the shortest time in office. As we all know by now, Liz Truss and her outgoing chancellor Kwasi Kwarteng recklessly introduced the fairy-tale mini-budget that crashed the pound, scared investors and overwhelmingly lost the trust of the British public.

In a classic case of have your cake and eat it too, Lis Truss thought she could both cut taxes and increase public spending. By spooking precisely the market she dearly depended on to cover the fiscal deficit, she raised borrowing costs and put the UK in a trajectory of stagnation — the complete opposite of what she sought to do. The irony is even greater if we consider that Truss, a small-state ideologue, was defeated by the same free market she adores so much.

It has therefore long become clear that Liz Truss’s premiership is at an end. The question is not whether she will be replaced by the Tory leadership but rather when that will happen. The conservative party is in impasse not knowing which is the path of least pain. It can decide to stubbornly stick with probably the least popular prime minister, or it can choose to pick yet another prime minister not even two months since Boris Johnson resigned. The latter is much likelier; either way, the damage has already been done. Not only has the market lost all faith in the British government — something that the sacking of chancellor Kwasi Kwarteng has not fixed — but the electorate is also unlikely to forget the poor governance of the Tories.

Although Truss sought to reinforce its conservative base by reducing income taxes for the rich, she might have alienated the same voters the most. ‘Sensible’ economic policy and responsible ‘statesmanship’ used to be the main selling point of the conservatives. This may have been less of an issue under Corbyn’s Labour, but plain-old Keir Starmer may in fact prove to be more dangerous than any mass-exciting socialist. Boris Johnson briefly got away with reckless policy, no care for expertise and at times outright rejection of reality, but he was lucky to ride on the optimism of finally ‘getting Brexit done’ and then benefited from an aura of national unity in face of the Covid-19 pandemic and its aftermath.

Unfortunately for Liz Truss and whoever will be the next PM, the fairy tale is now over. We are now faced with a low-growth economy, seemingly persistent inflation, already high and still increasing borrowing costs, an NHS on its knees, and a cold winter ahead. Not long ago, in the aftermath of the Covid-19 pandemic, the British economy had an impressive rebound, and the future of Britain seemed much brighter. One could have therefore been excused to think that the UK not only ‘got Brexit done’ but also that it got away with it. This could not be further from the truth.

Estimates suggest that the introduction of trade barriers between the United Kingdom and the European Union have led to significantly lower levels of growth than the counterfactual of staying in, as illustrated by the higher growth of all other G7 countries. Even before Brexit, the UK economy had been stuck in a low productivity trap for more than a decade. Despite the best wishes of Liz Truss, cutting taxes do not seem to be the solution.

More worryingly, a less productive economy, with less trade with its largest economic partner, will likely mean quite the opposite. Given the same fiscal burden, a smaller economy will need even higher levels of taxation. Even worse, keeping government spending constant in times of high inflation in fact represent cuts in real terms — a type of silent austerity. On top of that, the Bank of England, despite its best intentions, will likely lead to further troubles as ever-increasing interest rates will lead to further rises in borrowing rates.

To avoid the slow and agonising death of the British economy, the new PM and Chancellor, whoever may they be, will have to stabilise the financial markets and lower government spending, or somehow increase revenues. It remains unclear whether the Conservatives are still fit for the job. Finding a replacement for Liz Truss — the necessary first step — may not be easy. Choosing any of the leadership candidates that were rejected by the vote of the conservative membership is not a wise choice — all to Rishi Sunak’s dismay. Currently it may seem that newly-appointed Chancellor Jeremy Hunt is the de facto leader, notwithstanding his official stance, so he might be in charge for the near future.

Regardless of who will have the tax to fix the public finances, there is no easy solution. Macroeconomic projections done by Citi and analysis done by the Institute for Fiscal Studies suggest that in order to balance public debt by 2027, the government would have to cut spending by around £62 billion — so even reversing the tax cuts of Kwasi Kwarteng will not be enough. Cutting public spending could be an option, although still a painful one, and one that the British public may be unlikely to stomach. Increasing revenue would not be easy either, as it would go against the spirit of conservatism, if not even the manifesto.

Labour may therefore wish to think that it finally has a shot. After all, it has never been this popular, or at least the Conservatives have never been this unpopular. Unfortunately, between Keir Starmer and the PM’s office there is a clear obstacle — the unlikely scenario that conservative MPs will risk their seats by calling an early election. Yet Labour may still offer a glimpse of hope if it manages to convince the public that the path to growth is not the path of lower taxation, but of higher spending on health, education, and a greener future. Until then, the future is open, yet the present outlook is rather bleak.

Opinion. What’s next for Britain? was originally published in The Political Economy Review on Medium, where people are continuing the conversation by highlighting and responding to this story.

US dollar hegemony poses a difficult trade-off for the world’s economies. Increasingly exposed to exchange rate fluctuations and shifting trade patterns, a broad spectrum of countries will have to accept persistent inflation or risk painful recessions.

The US’s historic and contemporary economic dominance has perpetuated an outsized importance in the world economy, with the vast majority of global trade, investment, and credit all valued in dollar terms. Commercial banks use the dollar as an intermediary and a benchmark when exchanging most currencies, while central banks in developing countries hold a large proportion of their foreign reserves in USD to prevent domestic currency fluctuations. Often, international companies not only borrow and lend in dollars, but settle trade contracts in dollar terms.

As US interest rates rise, the USD’s unique position may force smaller economies to choose: continuing inflation, or stunted growth?

After a period of high inflation, the US Federal Reserve has begun to tighten monetary policy by sharply raising interest rates. This is at a pace exceeding that of most other central banks, such as the ECB. Consequently, smaller economies must respond in kind to avoid large dollar appreciations and subsequent relative increases in the cost of US imports, dollar-denominated liabilities, and dollar-denominated asset values.

Exchange rates provide an insight into the economic relationships between countries. The USD exchange rate — simply the relative price of dollars — is determined by supply and demand. While supply is mostly decided by the Federal Reserve, demand is determined by international trade patterns and investor speculation. When central banks raise interest rates they lower the future supply of their domestic currency; crucially, they also increase the future return that investors will receive on domestic interest-accruing assets. These factors appreciate the relative value of the dollar: supply is reduced, increasing price; returns are magnified, increasing demand, and therefore price.

Consider the economic consequences of an appreciation of the dollar relative to the pound. A stronger dollar has greater purchasing power in the UK, allowing Americans to pay relatively less for British assets, goods, and services. Conversely, British consumers and investors will face relatively higher costs when purchasing anything dollar-denominated. Costs for firms which import American goods will rise, which may then be imparted to domestic consumers, increasing price levels and stoking inflation.

Compared to an index of world currencies, the USD has already appreciated to historic highs. For smaller economies, permitting this change in exchange rates risks further fuelling inflation and increasing borrowing costs to unsustainable levels. However, aggressively raising interest rates to mitigate currency depreciations and reduce inflationary pressures risks stifling domestic prosperity.

Central banks must strike a delicate balance between various macroeconomic objectives: easing inflation, maintaining growth and employment levels, and maintaining a stable exchange rate vis-à-vis the US. Finding the optimal policy requires reliable forecasts of inflation, growth, and unemployment.

Unfortunately, the post-pandemic — and now embattled — world economy is increasingly unpredictable. The persistence of inflation has wrought chaos, and forecasters, including central banks themselves, have seen their macroeconomic projections fail repeatedly.

The Hegemon; the Hawk

The US holds a unique position with regards to inflation. The US dollar is the most important currency in the world, serving as a means of interaction with the world’s largest economy. Moreover, the strength and reliability of the US economy anchors international markets.

Subsequently, the dollar functions not only as a powerful means of exchange, but also as a benchmark of value. A large proportion of trade is, and other countries’ foreign reserve holdings are, made in dollar terms. This reinforces the US’ position as hegemon: the reliability and usefulness of the dollar ensures its use and its use compounds its importance.

The dollar’s position consequently self-perpetuates. As world crises occur or seem imminent, USD denominated assets form a ‘safe haven’ for international and institutional investors, exemplified by the increasing value of US treasuries in times of turbulence. This is a rational tendency, as the strength of the US economy makes it a reliable store of value, but is also fuelled by contagious investor sentiment. When domestic governmental policy seems unreliable, or a nation seems poorly prepared to face economic shocks, investors tend to flee en masse to a more dependable market.

This often magnifies what would be a limited market response to domestic events. For example, the recent collapse of the GBP/USD exchange rate stemmed from investor fear of reckless British debt accumulation. This implied that the current UK government was fiscally irresponsible, and damaged the image of British debt as a reliable asset. Investors fled to the US in particular, exchanging their GBP for USD, fuelling a dollar appreciation and weakening the pound.

Moreover, increasingly hawkish US Federal Reserve policy is likely to strengthen the dollar further. Responding to historically high inflation, the Fed has begun to move towards higher interest rates, hoping to reel in remaining demand-driven inflation. The Fed is now a leader in raising interest rates in the developed world, with the Bank of England and many European central banks mimicking US rate rises. Similarly, nations with stringent pegs to the dollar, such as Saudi Arabia and Vietnam, must also copy US monetary policy to maintain their exchange rate regimes.

The strength of the US economy implies that hawkishness may be effective in reducing their domestic inflation, as demand and employment factors appear to be a sufficiently large proportion of their inflationary makeup. As increasing interest rates drag on demand, the economy should begin to disinflate.

However, the dollar’s position means that US interest rate hikes cannot easily be ignored by other countries. Any nation with free capital flows to the US will be forced — to which degree will be dependent on their involvement with the hegemon — to raise rates in tandem, as increasing Federal Reserve interest rates imply an increased rate of return on dollar denominated assets. Therefore, an unmitigated increase in the federal rate will increase US asset returns, attracting investors in other countries to hold these assets. In order to purchase these, investors will be required to exchange their domestic currency for dollars, leading to a relative domestic currency depreciation. This would be contrasted by a relative appreciation in the dollar.

In attempting to avoid this, other economies would be forced to import hawkish American monetary policy, irrespective of its domestic impacts.

The combination of interest rate rises and investor sentiment, and how these reliably interact to propagate USD hegemony, reinforces the expectation that US assets will always be reliable and fare well in the future. This may lead to further US-bound investment, coupled with progressive dollar appreciation. This perpetuates the problem: the world is forced to react to a powerful dollar, whether it is macroeconomically beneficial or not.

Trade and debt

If trade partners decide not to mimic US interest rate hikes, the dollar will be relatively strong, making trade in dollar terms nominally more expensive for these other countries. Simultaneously, the dollar would command greater purchasing power abroad. US inflation would fall as imports become cheaper. Importing US goods would become more expensive, driving inflation higher for trade partners.

This complicates the industrialisation of developing nations, dependent as they are upon imports of complex manufacturing technology from the west. Energy trade, undertaken globally in dollar terms, would become increasingly expensive for importing countries, while producing nations — the US included — would generate a windfall from the exchange rate changes. This threatens further inflationary pressure as these necessary imports become more expensive.

Without intervention, sovereign debt burdens would also be magnified by US rate rises. American-provided loans are denominated in dollars and many foreign investors often expect national debt repayments in dollar terms. An appreciating dollar threatens to increase the real repayment burden of nominally valued loans, as the cost of exchanging a now weaker domestic currency for dollars implies a premium to interest repayments which had not existed when the loan was agreed.

This is especially relevant after the expansion of sovereign debt overhangs throughout the COVID-19 pandemic, and may forewarn of national debt defaults in the future if federal reserve rates are not responded to.

Follow the leader?

Dependent countries therefore face an unappealing trade-off.

They can choose inaction, and face even greater energy and import costs, driving ever higher inflation. As expectations of inflation entrench over time, wage-price spirals are likely to occur in response. Their inflation would worsen, with the US position strengthening as most other countries face economic instability. Sovereign debt repayments would be increasingly burdensome and eat into tax revenues as dollar-term loans become more expensive to service.

Alternatively, nations can act to increase interest rates in line with the fed. This seems logical; interest rates are supposed to cool an overheating economy, so why should they not be raised?

The answer lies in inflation composition. Tightening monetary policy in the US is likely to reign in the strong post-pandemic economy. However, in economies where demand is less of a factor, it is hard to see how interest rate rises will be truly curative to high inflation.

In the EU, price levels are largely accounted for by energy and food costs, but are entrenching, as reflected by steadily-increasing core inflation. Germany, long reliant on Russian gas, is experiencing agonising shortages as Russia severs Nord Stream 1, the pipeline transporting natural gas from Russia to Germany through the Baltic Sea. Similarly, the UK is experiencing an acute cost of living crisis as energy costs have skyrocketed. Ukrainian wheat exports remain fragile and permitted exports are limited, pushing up global food prices.

As monetary tightening does little to influence these cost-push causes of inflationary pressures, it appears they would simply signal some form of central bank action.

However, the real economic effects would be more consequential. Tightening monetary policy would drive up mortgage repayment costs, squeezing those on variable rates. Those paying for energy or other goods with loans will see rates rise for these also. Defaults may then follow, decreasing the value of mortgages and debt more generally. The subsequent fall in asset prices may well reverberate across international housing and debt markets. Firms, forced to service higher interest repayments, may need to postpone expansions and even downsize. This would be reflected in increasing unemployment and stunted consumer/investor confidence. Inflation would remain high, but economic activity would stagnate.

The likely result is stagflation: a depressing echo of the 1970's. While there is some macabre hope that asset prices and consumer sentiment could be depressed enough to mitigate inflationary pressures, driving destructive deflationary effects, this appears misguided.

By failing to account for the true cause of inflation, depressing the economy would likely worsen short-term economic outcomes for the poorest in societies, while ignoring the long-term solutions necessary for bottlenecks and other cost-push factors to be remedied. Moreover, stunted growth would provide fewer opportunities for these interventions, while draining public revenues when they are most needed to reduce the real impacts of energy-price pressures.

In following the dollar, many economies may sign themselves into recession at no true benefit to price stability.

No easy answer

These relationships, and their potential outcomes, are worth reflection.

Europe’s reliance on Russian energy has thrown into stark relief the dangers of interdependency, especially with nations which do not share otherwise commonly held values. Yet the world’s dependence on the dollar provides another example of poisoned connectedness in a completely different context. In struggling to respond to the new era of instability, countries may find themselves trapped by their connections not only to a belligerent Russia, but to an indifferent dollar as well.

This does not have to be the case. If the US Federal Reserve were to better cooperate with other central banks before setting monetary policy, the shock factor of US rate rises could be removed. The problems inherent in these rate rises would still remain, but monetary policymakers would be better able to organise to assist one another with the side effects.

Whether this is likely is uncertain. Part of the appeal of surprising rate rises is that the shock factor reiterates the seriousness of policymakers. If consumers and investors are convinced the Fed will do everything they can in order to reduce inflation, the effectiveness of Reserve policy will be greater. Shock and awe as an instrument may be too tempting to abandon, foreign economies be damned.

Why the World Struggles with US Dollar Hegemony was originally published in The Political Economy Review on Medium, where people are continuing the conversation by highlighting and responding to this story.

In a world of heightened political discourse, trafficking victims, particularly those who have been sexually exploited, occupy a unique space outside the traditional area of topical discussion. National rows persist over healthcare, taxation and culture wars yet, when it comes to topics like sex trafficking, there is a sense in which ‘the public’ can unite itself and universally condemn such atrocities. For many of us from more privileged backgrounds the impacts of human trafficking are certainly an issue, but an issue located in a place and time different to ours. We can feel the rise in costs of living hit our purses with every hiked up energy bill, but the problem of (by and large) women and children being forced into sexual services with no means of escaping exists elsewhere: On special news bulletins, in dramatised television and movies, and the charity campaigns of celebrity philanthropists.

However, for many, the portrayal of a typical victim underlies the discussions over what human trafficking is, and how we go about solving it, with several misconceptions. This informs a push towards arguments that suggest a clearer, more instrumentalised understanding of how the mechanisms of sex trafficking function. Recently, scholars and activists alike have argued that to coordinate a more coherent international response to sex trafficking, we need to understand that the issue of sex trafficking has several, often ignored economic undertones.

Ratified at the 2000 Convention Against Traditional Organised Crime as one of three adoptions of the Palermo Protocol, the Protocol to Prevent, Suppress and Punish Trafficking in Persons, especially Women and Children is the UN’s most explicit policy action taken against sex trafficking, and has gone on to inform the majority of political and academic definitions of the topic:

“Trafficking in persons” shall mean the recruitment, transportation, transfer, harbouring or receipt of persons, by means of the threat or use of force or other forms of coercion… for the purpose of exploitation. Exploitation shall include, at a minimum, the exploitation of the prostitution of others or other forms of sexual exploitation… The consent of a victim of trafficking in persons to the intended exploitation set forth [above] shall be irrelevant where any of the means set forth [above] have been used.”

A debate has arisen over the extent to which the protocol has been successful in its aim of providing a clear definition of human trafficking. These criticisms extend to the policies adopted towards trafficking, and sexual exploitation specifically, in a variety of countries. For most states, the trafficking of humans more broadly is an issue of security and border control. These are often the institutions responsible for dealing with both victims and perpetrators. Human Trafficking: The Government’s Strategy outlines the British Conservative government’s policy response. The document’s purported key focus is ‘multi-agency action at the border’ and ‘coordination with law enforcement.’ In 2000, the US Department of State issued the Trafficking Victims Protection Act. Largely following the same definitional outline as the Palermo Protocol, and with a focus on prevention at the border, it generated a minimum standard of protection for trafficking victims. This year, the Report to Congress on 2022 Trafficking in Persons Interim Assessment Pursuant to the Trafficking Victims Protection Act suggested that 45 countries, including many with relatively developed economies with larger GDPs, such as South Africa, Hong Kong, Ireland and Pakistan, appeared on a watchlist for states that do not comply with the TVPA’s minimum standards.

Even without compliance to universal standards, trafficking policy responses being located within the domain of security can be a source of harm to victims. In 2016, Dr Haezreena Abdul Hamid conducted a series of interviews with 29 trafficked women in Kuala Lumpur. Although Malaysia is not included in the list of 45 countries, she found that victims whose journey was intercepted by the Malaysian border authorities often found themselves essentially detained in “semi-carceral rescue centres.” Arguably, policy prevention of human trafficking, for sexual or other forms of exploitation, will always include border enforcement at some level, as the existence of borders is required for the process to be illegal in the first place. Yet security policy seems to prioritise dealing with criminal activity rather than alleviating the suffering of victims. Thus, what academics like Dr Hamid (2016) and activists, including the prolific Siddharth Kara (2007) have argued is for policymakers to expand beyond the domain of security and border control.

Like any business, profit is the main driver of sex trafficking’s persistence across the world. And sex trafficking is indeed profitable. On the supply side, the millions of people in extreme poverty provide an abundant source of labour. There are numerous modes of transport available to perpetrators, and the recent ease of freedom of movement keeps transaction costs extremely low. Yet the continual conception of trafficking as a problem for “other” places often prevents policymakers from recognising the familiar business organisation and methods that underlie the inner workings of sex trafficking. Smaller business-enterprise groups, rather than either the territorial governance of some organised crime syndicates or the actions of individual perpetrators, seem to pervade identified instances of human trafficking. These business structures consist of three or more criminals collaborating on the trafficking of victims as a central element of their activities. This contrasts governance-style organised crime, most commonly portrayed as associated with trafficking operations, where criminals control a particular territory and have involvement in multiple illicit markets beyond trafficking.

Kara specifically asks us to acknowledge that trafficking for sexual exploitation has its own economic mechanisms that can be intervened with. According to the UNODC’s 2020 Global Report On Trafficking In Persons, out of the court cases analysed for the report, 57% of victims involved in the cases were reported to have been trafficked by a business-enterprise type criminal group, rather than an individual trafficker or a ‘formal’ governance-type criminal organisation with territorial control. Using the UN protocol’s definition, that same report found that, among the total number of court cases analysed, 50% of victims were trafficked for the purposes defined as sexual exploitation, with forced labour accounting for 38%, criminal activity for 6% and forced marriages, begging and mixed forms accounting for 1–1.5% each. Among women victims, 77% were trafficked for sexual exploitation out of the 12,162 detected, compared to 3,762 men, of which 17% were sexually exploited.

Globalisation has not only provided these incredibly advanced developments in freedom of movement but has plunged vast regions of the world into deep poverty, creating an immeasurable number of vulnerable potential victims. Impoverishment certainly existed before the advent of globalisation, but the unignorable prospect of a ‘better life’ elsewhere did not. Such prospects are essential for the role of luring trafficked humans. Statistics are not easy to quantify when it comes to the methods by which traffickers acquire their victims. Given the legal implications of acquiring information, first-hand accounts are among the few forms of evidence available to researchers. As such, it is difficult to identify common practices through which trafficking takes place. What is apparent, according to Kara, is that abduction is just one of many forms of acquisition by criminal groups (2007).

Other methods of acquisition by these groups include recruitment by former trafficked victims, deceit, and sale by families. According to Kara, many victims are subject to grooming and promises of better prospects by ‘loverboys’, whose sole purpose is seduction. The UNODC report found that violence was only used by larger-scale operations, the court cases analysed showing that direct contact, fake advertisements and operating under the guise of ‘recruitment agencies’ were more common methods of acquisition, with harm increasing after the victim was trafficked. It seems then, either for the victims or families themselves, the allure of a better life is what largely informs the methods of acquisition besides abduction. It is not uncommon for victims to be forced into a form of debt bondage, where traffickers incur the initial transportation costs, in return for the victims to repay from future earnings. Based on 233 court cases analysed for the report, economic need was cited as accounting for 51% of pre-existing factors taken advantage of by traffickers. It may be that this economic element contributes to other factors cited by the report, including immigration status and lack of education, which accounted for 10% and 6% respectively.

On an economic analysis of the industry, this makes sense. Abduction limits criminal organisations with unnecessary transportation costs and significant obstacles to freedom of movement. To minimise external costs, criminals instead use the vulnerabilities and impoverishment of victims to their advantage. It seems evident, therefore, that the economic conditions of trafficking victims play an essential role in their exploitation. The tactics employed by perpetrators depend on these conditions. Debt bondage, seduction and even sale by families are all methods contingent on the concept of a ‘better life’ which itself builds upon a deprived initial situation. Yet our conception of sex trafficking remains welded to the imagery explored at the start of this essay and the notion that sex trafficking is a problem for elsewhere. We can see the divide between international perceptions of sex trafficking and the actual nature of the problem, which is situated in and shaped by a global political economy we all participate in.

Understanding the economic undertones of sex trafficking allows us to re-conceptualise certain domestic political questions. There may be an emphasis on sex trafficking through heightened security and border control, but the same governments who employ this language successively slash foreign aid, certainly not assisting the economic conditions of potential victims. It seems therefore that definitions should recognise the economic nature of sex trafficking to a much greater extent. Several specific policy recommendations have arisen from this notion. The 2020 UNODC report argues that regulating global procurement and supply chains is essential for curtailing the recruitment and subcontracting loopholes abused by traffickers. This entails recognising that tactics beyond abduction are widely used. Were supply chains more regulated, trafficking methods would be faced with significant transaction costs.

The report also argues for the introduction of social ties and safety nets for the groups most susceptible to sex trafficking, along the lines of economic and gender inequality, including international cooperation with grassroots organisations. Implicitly, this includes recognising that, unlike the dominant media narratives, sex trafficking is not just a problem elsewhere. Rather, the extreme inequalities created by globalisation play an essential role in the recruitment and acquisition of trafficking victims, from allowing subcontracting loopholes in unregulated markets to creating an image of a ‘better life’ used by perpetrators to force victims into debt bondage. To truly end sex trafficking seems to require more than just the regulation of supply chains, but instead a comprehensive, coordinated and international effort to reduce the deep gender and economic inequalities that shape the problem’s existence.

The Political Economy of Sex Trafficking was originally published in The Political Economy Review on Medium, where people are continuing the conversation by highlighting and responding to this story.