Trade Archives - Curtis Research

How Have ‘Developing’ Countries Actually Developed? Alternatives to Neoliberalism

June 2018

This paper reviews how several developing countries which can be considered successes (with qualifications) have progressed economically, briefly capturing what policies and institutions might explain their performance. The analysis considers Mauritius, South Korea, Ecuador, Cuba, and the Nordic model/Norway. It also briefly considers Chile – a country whose ‘success’ is sometimes explained by neoliberal policies – and Botswana – often held up as Africa’s most successful developer.

In recent decades, the British and US governments, in particular, have largely promoted neoliberalism in developing countries as a supposed strategy to reduce poverty and promote economic development. Perhaps better described as ‘market fundamentalism’, neoliberalism has tended to involve: privatising key areas of the economy; reductions in state spending and the general role of the state; de-regulation of the financial sector and of corporate activities (relying on voluntary ‘corporate social responsibility’); strong promotion of foreign investment with few barriers, often accompanied by cutting taxes, promoting tax incentives for foreign investors; and failing to address rising inequality. Some of these policies are beginning to change, given the obvious failures of this model, but its general thrust is often still in evidence in the economic policies and aid strategies (not to mention domestic policies) of Western states such as the UK and the US.

Countries which have successfully developed in the postwar world do not owe their progress to neoliberalism. It is more accurate to say that the kinds of policies promoted by relatively successful states have generally tended to involve the opposite: a strong, interventionist role for the state; privileging domestic over foreign investors; liberalising only once the domestic economy and local firms can compete in world markets; periods of trade protection; and explicitly pro-poor state spending.

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Categories: Companies, Food & Agriculture, Health, Other, Tax, Trade, UK

The Alternatives: Approaches Towards a Life in Full

Report for Health Poverty Action (April 2018)

This research collates some of the evidence of alternative approaches to market fundamentalism, or neoliberalism, from a range of countries which have – to varying extents – successfully promoted inclusive development or indeed, alternatives to Western ideas of development itself. They include South Korea, Cuba, Mauritius, Ecuador and the Nordic countries. The report analyses the economic and other policies that have been used by these governments to improve health and reduce poverty. It shows that market fundamentalism is a political choice and that the poverty, poor health and inequality it creates are not natural phenomena. There are a range of alternative policies that have contributed to improving people’s wellbeing and health and reduced poverty. Although there is no one size fits all, there is an urgent need to challenge those promoting market fundamentalism and look to these alternatives

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Categories: Companies, Health, Tax, Trade

Honest Accounts 2017: How the world profits from Africa’s wealth

Report for group of NGOs led by Global Justice Now, Jubilee Debt Coalition & Health Poverty Action (May 2017)

Research for this report calculates the movement of financial resources into and out of Africa and some key costs imposed on Africa by the rest of the world. We find that the countries of Africa are collectively net creditors to the rest of the world, to the tune of $41.3 billion in 2015. Thus much more wealth is leaving the world’s most impoverished continent than is entering it. African countries received $161.6 billion in 2015 – mainly in loans, personal remittances and aid in the form of grants. Yet $203 billion was taken from Africa, either directly – mainly through corporations repatriating profits and by illegally moving money out of the continent – or by costs imposed by the rest of the world through climate change.

African countries receive around $19 billion in aid in the form of grants but over three times that much ($68 billion) is taken out in capital flight, mainly by multinational companies deliberately misreporting the value of their imports or exports to reduce tax.
While Africans receive $31 billion in personal remittances from overseas, multinational companies operating on the continent repatriate a similar amount ($32 billion) in profits to their home countries each year.
African governments received $32.8 billion in loans in 2015 but paid $18 billion in debt interest and principal payments, with the overall level of debt rising rapidly.
An estimated $29 billion a year is being stolen from Africa in illegal logging, fishing and the trade in wildlife/plants.

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Categories: Aid, Companies, Mining, Tax, Trade

TTIPing Away the Ladder: How the EU-US Trade Deal Could Undermine the Sustainable Development Goals

Report for Trade Justice Movement (September 2015)

The United Nations has developed a set of Sustainable Development Goals (SDGs) that world governments are expected to use to frame their political policies over the next 15 years. At the same time, the world’s two largest trading blocs – the European Union and the United States – are negotiating a major trade pact – the Transatlantic Trade and Investment Partnership (TTIP) – aimed at achieving ambitious cuts in trade barriers and investment regulations. This briefing argues that these two processes are incompatible and that TTIP could undermine the world’s ability to achieve the SDGs. Developing countries have not been involved in the TTIP negotiations – a scandal in itself – but TTIP will revise trade and investment rules between the US and EU that are very likely to become global standards; these will undermine developing countries by further forcing open their markets to US and European companies.

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Categories: Climate, Health, Tax, Trade

Profiting from Poverty, Again: DFID’s Support for Privatising Education and Health

Report for Global Justice Now (April 2015)

Britain’s overseas aid programme is being reconfigured to promote the privatisation of education and health in developing countries. The Department for International Development (DFID) has become the world’s leading donor in spearheading a push for profit making companies to manage and deliver schooling and health care in Africa and Asia. British taxpayers’ money is increasingly being used to pave the way for private companies to access new markets in basic services and thus to profit from the current gaps in the public provision of these services. This briefing exposes DFID’s strategy and warns of the dangers to the real need – which is to ensure better public education and health services that genuinely serve poor people.

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Categories: Companies, Education, Health, Trade, UK

Honest Accounts? The True Story of Africa’s Billion Dollar Losses

Report for Health Poverty Action, War on Want, World Development Movement, Jubilee Debt Campaign and others (July 2014)

This report is a first comprehensive attempt to measure the financial flows in and out of sub-Saharan Africa. It shows that Africa is being drained of resources, losing far more each year than it receives. While $134 billion flows into the continent each year (mainly in the form of loans, foreign investment and aid) $192 billion is taken out (mainly in profits repatriated by multinational companies, tax dodging and the costs of adapting to climate change). The result is that Africa suffers a net loss of $58 billion a year. Thus the idea that we are aiding Africa is flawed; it is Africa that is aiding the rest of the world. While we are led to believe that aid from the UK and other rich countries is a mark of our generosity, the research shows that wealthy countries benefit from many of Africa’s losses.

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Categories: Climate, Companies, Food & Agriculture, Health, Tax, Trade

Milking the Poor: How EU Subsidies Hurt Dairy Producers in Bangladesh

Report for MS/ActionAid-Denmark (September 2011)

For decades, European dairy farmers have been given massive subsidies under the EU’s Common Agricultural Policy, which have enabled them to export cheap milk powder, among other products, on international markets at low prices. In 2005, the EU decided to change the nature of those subsidies by ‘decoupling’ them from the production levels of farmers. This report shows that the EU’s decoupled subsidies are continuing to hurt dairy farmers in Bangladesh, where millions of poor people support their low incomes through milk production. Dairy farming is a potential pathway out of poverty for millions of Bangladeshis, but imported milk powder is undermining Bangladesh’s dairy farmers by undercutting local producers of fresh milk and domestic processors of milk powder.

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Categories: Trade

Cocoa Commodity Briefing

Briefing for the Fairtrade Foundation (August 2011)

Around 50 million people globally depend on cocoa for their livelihoods. This briefing offers an overview of the industry, including the main country producers, companies and the prices paid to small-scale growers. It shows that world cocoa processing and chocolate production and sales are dominated by ten companies. Cocoa growers receive only around 6 per cent of the price of chocolate paid by consumers in rich countries, compared with around 16 per cent in the late 1980s.

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Categories: Food & Agriculture, Trade

The New Resource Grab: How EU Trade Policy is Undermining Development

Report for Traidcraft (UK), Oxfam-Germany, Comlamh (Ireland), WEED (Germany) and AITEC (France) (November 2010)

The European Union is making a big push to help its companies access raw materials in developing countries. The EU’s Raw Materials Initiative heralds a new scramble for raw materials such as platinum, rare earths, wood, chemicals and hides and skins. The trade policies accompanying the initiative are likely to impoverish poor countries. In particular, the EU is trying to curb developing countries restricting the exports of these raw materials. Yet many developing countries apply export taxes on their raw materials exports to develop their local industry, raise revenue or protect the environment. The EU is also trying to negotiate new investment rules with poor countries to give European companies unprecedented access to raw materials on the same or even better terms as local businesses. This EU push will make it more difficult for developing countries to regulate investment to promote local development.

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Categories: Trade

Developing the Leather Sector in Kenya through Export Taxes: The Benefits of Defying the EU

Case Study accompanying The New Resource Grab (November 2010)

The government of Kenya has in recent years levied a 20 per cent and then 40 per cent export duty on raw hides and skins in order to develop the leather processing industry. The indications are that this policy has contributed to increasing the number of tanneries in the country, created seven thousand new jobs, increased incomes for another 40,000 people and boosted earnings from the sector by over €8 million, with the potential for much more. Despite this success, the EU is still calling for major restrictions on their use in Kenya as elsewhere. The leather sector in Kenya shows how a developing country can achieve benefits for its people by defying the EU’s ideological commitment to ‘free trade.’

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Categories: Trade

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