Financialization – 51本色

Decolonising for Whom? Recentring grassroots struggles and voices in the 鈥榙ecolonising fintech鈥� narrative

August 5, 2024August 30, 2024 serenanatile1 Comment

By and

Over the last few years 鈥榙ecolonisation鈥� has become an increasingly popular subject in Western academia. Broadly considered the process of recognising and undoing the intellectual and institutional structures that enabled and maintain the reproduction of imperial power, calls for decolonisation have opened uncomfortable debates about epistemological privilege, forcing us to confront biases and injustices and to revisit hidden histories and visions for the future. While these debates remain essential, particularly at a time of political authoritarianism, racism, and violence, they also highlight the contradictions in Western academia between decolonisation as a fashionable conceptual trend and its real commitment to justice.

In formerly colonised communities, generational consciousness of colonial oppression and struggles to recover land, property, wealth, and political institutions have created a lived experience of the long-term consequences of colonialism, usually conceptualised as 鈥榗oloniality鈥�, that is not a concept but a reality. This experience has shaped movements and protests in the Global South, including within universities. An example is the movement in South Africa, which followed the significant decline of government subsidisation of universities with discriminatory consequences for the disadvantaged Black population without historical wealth and economic privilege. Similar protests concern the recognition of and fight against pillars of colonial power including philanthropists such as British colonialist Cecil , who accumulated wealth by appropriating land, enslaving people and extracting resources, and used that wealth to shape knowledge production.

Other significant protests involve resistance against such as Western financial infrastructures, corporations and international institutions i.e. the International Monetary Fund (IMF) and the World Bank. A recent example is the ongoing youth-led (Gen Z) round of protests in Kenya , motivated by demands to reject the IMF-supported that, if approved, would have imposed a fresh round of government cuts to basic services and austerity measures on Kenyans. The young people protesting in the streets of Nairobi showed awareness of the colonial legacy and long-term impact of the 1980s structural adjustment policies (SAPs) on the lives of people 鈥� particularly those at the lower end of the income distribution, and demanded economic sovereignty as the only way to achieve social justice. The protests were successful in impeding the adoption of the Bill, but many young people paid with their lives, as the government deployed a deadly military response to the protests.

The demands for decolonisation are based on ending economic and epistemological oppression, two interrelated aims, each grounded in colonialism. Reclaiming knowledge and the economic means that allow its production and dissemination has always been at the centre of decolonisation as an opportunity to remake societies, nations, and the world itself for the better. In its fight for justice, decolonisation is a grassroots struggle against colonial and neo-colonial rulers and rules, as well as against all global and local actors and structures that enable and reinforce those rules. For this reason, grassroots voices need to be at the centre of any decolonisation project.

Financial Statecraft and its Limits in the Semi-Periphery

September 12, 2023August 31, 2023 karasgdavidLeave a comment

Over the past decade, two, intertwined research agendas on (IFS) and (SF) have proposed to identify how an increasingly finance-dominated global capitalism incorporates the (Semi-)Peripheries.

The IFS research agenda recognizes that a 鈥渟ubordinate鈥� national currency comes with a risk premium increasing the costs of financing public debt 鈥� in other words, the current, US dollar-based currency hierarchy acts as a structural fiscal constraint in the Global South, limiting the scope for badly needed public investments. Foreign capital 鈥� in the form of foreign currency-denominated sovereign and private debt-, foreign aid, and foreign direct investment – is then to this artificial and unfair developmental constraint.

The SF agenda examines how this straightjacket on fiscal space has been further compounded with the liberalization of global capital mobility over the past forty years, diffusing credit-based accumulation strategies from the Core to the Peripheries: from socially and environmentally vital public goods and transformative industrial policies towards developmentally regressive strategies of accumulation driven by speculation and asset-price inflation.

Programmatic visions for liberating (semi-) peripheral economies from the dual constraints of a national fiscal space suffocated by the global currency hierarchy and globally mobile capital flows which deepen financialization are underdeveloped. Two scales of action are plausible: At the international level, , but it remains uncertain what forms of international financial solidarity and collaboration, if any, will materialize under its aegis. The national level comprises an alternative scale as the State continues to be perceived as the most likely candidate for ringfencing domestic social, environmental, and developmental objectives from the pressures of global capital mobility and the structural constraints of the global currency hierarchy.

In a with P谋nar E. 顿枚苍尘别锄, we study the politics governing the management of money in Hungary and Turkey, two semi-peripheral economies where the executive has built a vast array of direct and indirect tools to intervene in monetary policy, retail banking and credit allocation to manage financial subordination.

Exploring the Platform Political Economy of Self-Help in Africa

May 15, 2022May 13, 2022 daivirtLeave a comment

Informal savings group in Tarime district, Tanzania. Photo: Daivi Rodima-Taylor

Self-help groups can be found in many areas of Africa鈥攊ncluding the chama groups of Kenya, isusu of Nigeria, and stokvels of South Africa (Ardener and Burman 1995). Their customary rotating credit arrangement is also popular among African diaspora communities (Hossein 2018; Ardener 2010). A significant rise has occurred in these groups at the wake of the neoliberal restructuring reforms of the 1980s-90s, with a decline in formal sector employment and state-funded producer cooperatives. At present, these mutual support groups are targeted by FinTech platforms as well as conventional banks with various financial products and software apps. My recent research explores of the contentious interplay between the formal and informal finance in these emerging digital interfaces in Africa. It studies the intersection of FinTech with the social economies of African mutual help groups in Kenya and South Africa, situating this dynamic in longer-term colonial legacies and present-day policies of extractive financialization (Rodima-Taylor 2022).

Informal mutual support groups with their saving-credit patterns have long served as an inspiration for the development industry. The initially successful micro-finance model drew on pre-existing reciprocities and mutually negotiated liability in largely informal contexts. However, as the microfinance formula shifted from socially situated lending towards 鈥榝ast-scaling鈥� and universalizing group lending in an expanding range of localities, the industry was faced with repayment crisis (see Haldar and Stiglitz 2016). The recent conceptual shift from microfinance to digital financial inclusion foregrounds mobile payments and fee-based service delivery, with payment industry also experimenting with new sources of value such as customer data (Maurer 2015). Microloans have remained an important part of the digital financial inclusion enterprise, with poorly regulated lending apps fueling over-indebtedness. As informal savings groups and mutual support associations have become central in the livelihoods in many low-income communities, I suggest that more attention is needed to the intersection between the self-help groups and FinTech initiatives in the global South.

Green financialization and de-risking in Zambia鈥檚 renewable energy transition

December 16, 2021December 10, 2021 Simone ClaarLeave a comment

By Simone Claar and

Zambia鈥檚 has a history full of hopeful prospects and broken dreams. In the 1980s and again in the early 2010s, Zambia experienced an economic upswing. Labelled as an emerging middle-income country and called the new 鈥�, a mix of copper extractivism, an aspiring tourism sector, as well as political stability led to an impressive rise. However, the phase was short-lived, as Zambia’s political economy remains fragile: dependent on the price of copper and the world market, it is regularly on the verge of state bankruptcy due to a significant burden. A history of structural adjustment programs in exchange for IMF loans and dependency on billion-scale Chinese loans means that Zambia became the first African country to declare bankruptcy in the wake of the Covid pandemic, first asking for a moratorium, and later for restructuring its Eurobond loans and Chinese loans. In this context, Zambia’s dependence on development financing is highly evident and deeply anchored in the state structures. Zambia’s political economy of energy and the ongoing energy transition reflect this tedious situation. Rising energy demands and lack of investment mean that widespread load shedding has become a frequent phenomenon. Climate change and recurring droughts negatively affect hydropower performance, which makes up 95 per cent of installed capacity. The current roll-out of renewable energy is a beacon of hope. Nevertheless, its financial structures give rise to the assumption that Zambia may also be the first African state where the miracle of green capitalism and “white magic” () is becoming manifest, resulting in both shiny solar panels and a loss of political and economic sovereignty. Analyzing Zambia’s energy transition’s political and financial toolbox, we delineate how green financialization and de-risking are executed based on blended development finance.

The聽Geopolitics of聽Financialisation聽and Development: Interview with Ilias Alami

October 19, 2021October 13, 2021 Ilias ALAMI3 Comments

This聽interview聽was originally聽published in German in the special issue on聽financialisation聽and development policies of the journal聽Peripherie, September 2021, No. 162/163. Frauke Banse and Anil Shah聽(both based at Kassel University)聽spoke with political聽economist聽Ilias Alami聽(Maastricht聽University)聽about聽some of his recent work聽on the relationship between geopolitics, financial flows for development and emerging forms of聽鈥榮tate capitalism,鈥櫬燼s well as related new imperialist formations. The聽interview was conducted via email in May 2021.聽聽

The interview covers a聽series聽of聽International Political Economy聽topics.聽Ilias聽first locates the emergence of the聽Wall Street Consensus in the long and turbulent histories of the relation between finance and development聽as well as in聽secular聽capitalist transformations. He then聽outlines聽some of the conceptual tools he鈥檚 developed聽in his work聽in order to make sense of the聽contemporary聽interconnections聽of money and finance聽and the reproduction of聽imperialism and race/coloniality.聽Next,聽he situates these interconnections within broader scholarly debates about聽financialisation聽and聽highlights聽the similarities and differences between ongoing sovereign debt crises in the global South and the so-called 1980s 鈥楾hird World debt crisis.鈥� Finally,聽Ilias聽discusses the聽recent聽emergence of new forms of聽鈥榮tate capitalism鈥櫬燼nd their聽complex relation聽to the extension聽and deepening聽of market-based finance.聽

Does financialization provoke increasing prices? The case of Brazilian private health insurance聽

September 24, 2021September 14, 2021 carlosockLeave a comment

Since the Brazilian Regulatory Agency for Supplementary Health鈥檚 (ANS) creation in 2000, health insurance inflation has grown at a much greater pace than general inflation. Indeed, after eighteen years the private health insurance price index was close to double the official inflation index, with its 382% (see ).

The upward course of prices can be interpreted as a response to the problems arising from the escalating costs. Baumol (2012) calls this phenomenon 鈥渃ost disease鈥�, designating that labor relates differently to production: in the case of the goods, work would be incorporated into the product; in the case of services, labor would be the product being exchanged, making difficult to substitute factors.

Neoliberalism and Resistance in South Africa: Economic and Political Coalitions

June 1, 2021May 18, 2021 ans012Leave a comment

In the first quarter of 2021, amidst the social and economic devastation wrought by the Covid-19 pandemic, the , and subsequently defended, its decision to refrain from increasing the country鈥檚 extensive social grant payments鈥攚hich now reach 18 million impoverished citizens鈥攂eyond the growth in inflation. Treasury officials have argued that a larger increase in social welfare protection is simply not currently feasible given the country鈥檚 rapidly rising public debt鈥攚hich has now breached 80% of the debt/GDP ratio鈥攁nd investor demands for fiscal consolidation. This type of fiscal restraint is unfolding in a context of heightened wealth inequality and an official unemployment rate now above 30%.

Those familiar with the financialization scholarship pertaining to developing countries鈥攖hat strand which portrays the global financial markets as a force that can alter committed policy trajectories on a whim ( 2004), as well as the more nuanced literature ( 2000; 2017; 2014; 2017)鈥攎ay recognize the Treasury鈥檚 framing of South Africa鈥檚 fiscal dilemma. However, as much of the international development literature on industrial upgrading and state policy has noted ( 2018; 2019; 2006), there is a third option available to policy-makers in developing countries beyond the binary of debt build-up vs. austerity; namely, comprehensive, employment generating state-led development.

This is precisely the case I make in my new book, published by Palgrave (2021), . In addition to documenting the onset of a financialized accumulation regime in post-apartheid South Africa since the democratic transition and the ANC鈥檚 adoption of economic liberalization, the monograph also highlights the missed opportunities that could have allowed the country to embark on a self-sustaining path of industrial up-grading, inclusive development, and internal revenue generation. Such missed opportunities include the early rejection by party leaders of the heterodox 鈥淢acro-Economic Research Group鈥� (MERG) policy cluster, the removal of the trade unions from broader macro-policy-making processes, the rejection of a modest reconstruction and wealth tax, and the abandonment of much of the 鈥淩econstruction and Development Program鈥� (RDP) platform in favor of the orthodox 鈥淕rowth, Employment, and Redistribution鈥� (GEAR) package in 1996. Had some of these missed opportunities been pursued, South African state officials would likely be in a much better position to currently adopt expansionary fiscal policies, and perhaps could have lifted their citizens out of poverty via inclusive development instead of cash-transfers.

Yet, as my monograph further documents, since the democratic transition Treasury officials have continued, despite recommendations from other government ministries such as the Department of Trade and Industry (DTI), to veto or oppose heterodox policy proposals that could potentially offer South Africa a path away from the current neoliberal quagmire. Such proposed polices include capital controls, export taxes on raw materials, the utilization of foreign exchange reserves to capitalize State-Owned-Enterprises (SOEs), and targeting specific industrial sectors for subsidies and state promotion.

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