my paper on the new Development as Derisking paradigm, or #WallStreetConsensus, or Washington Consensus updated for age of financial globalisation, is now out!
it all started here, a life time ago, when evidence of the portfolio glut chasing development assets in the Global South was not so difficult to come by
every time you read 'gap' or 'partnership' in climate/development conversations, these are code-words for derisking state
this creates safety net for holders of development assets, protecting their profits from
demand/political/climate/liquidity and currency risks.
paper develops the concept of 'green financialization': 1. Financiers as epistemic guardians of green/dirty taxonomies - greenwashing! 2. Strategies to arbitrage dirty finance regulations 3. Strategies to transfer the costs of greenwashing to the state via de‐risking
WSC is also a claim to power - @BJMbraun 's infrastructural power - that private finance wields to new areas of social life
#WallStreetConsensus in @FT today - António Guterres, secretary-general of the UN, calling for Derisking to mobilise private finance for development as a solution to the incoming debt crisis (h/t @AnnPettifor )
we shouldnt assume that ideas baked in Global North travel seamlessly to countries down South - what are local strategies for rolling out derisking state, what role for political elites?
It is no coincidence that 'Liquidity' is now at the core of global debates on debt vulnerability and debt relief
and president of @el_BID calls for derisking to mobilise private finance for development
you know we're in post Trump times when WB president calls for G20 countries to push private creditors in their jurisdictions into debt negotiations, as 'voluntary participation doesnt work'
Speaking of varieties of, and resistance to, derisking
Green(washed) conditionality/structural adjustment is coming soon to a debt distressed country near you, and it will be drawn from the Wall Street Consensus repertoire!
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#WallStreetConsensus & its failure to mobilise trillions in @FT
4 things missing:
a) hegemonic dominance of 'mobilising private finance' in development/climate
b) asking why hegemony
c) mushrooming scaling up initiatives
d) do we want success?
a) Mobilising private finance remains global game - (Bridgetown, Biodiversity COP16, 4th Financing for Development conf) & national game (UK Labour gov, Brazil/Colombia/Chile decarbonisation).
*The world's most powerful political narrative that doesnt deliver
b) hegemonic not (just) because Big Finance is powerful, but postneoliberal, transformative state cant get rid of neoliberal macro - independent central bank dominating fiscal.
without macroinstitutional change- How do we pay for transformation- only one answer: private finance
when Big Finance occupies the state and takes over the social contract, nurses struggle, grandparents struggle, parents struggle, renters struggle, private equity flourishes.
no punches pulled on the Commission's Net Zero Industrial Act, the 2022 attempt to respond to Biden's Inflation Reduction Act with a lot of derisking talk but no money (ahem, European Sovereignty Fund)
Climate policy is industrial policy, and the other way around.
An important reminder that EU's climate policy was once ambitious, state-driven decarbonisation.
the Clean Energy Finance Authority would subsidize foreign demand for US cleantech - or derisk BlackRock renewable assets in say, Kenya with subsidies/guarantees.
nothing in this proposal from a top Kamala Harris advisor suggests US should enable technology transfers to countries wishing to pursue their own domestic cleantech capabilities.
in #WallStreetConsensus, Global South are consumers of American cleantech, with American dollars.
Two amazing Global South progressives and a Nobel prize winner walk into an Oxfam panel on post-neoliberalism
Stiglitz: w neoliberalism, the growth of financial markets changed the political game tremendously
Lula 's special advisor @AAbdenur - clear mismatch - Global North openly exposing industrial policy but pushing IMF/World Bank to continue with austerity and partnerships for hyper-financialisation
missing from this @FT account of the rapid rise of infrastructure as an asset class is the sustained effort that G20 governments have put into derisking infrastructure assets for institutional capital - this is the derisking state in action #WallStreetConsensus
@FT with @BJMbraun we've termed this a weak derisking macrofinancial regime - a set of policies (as in the G20 Infrastructure as an Asset Class agenda, or World Bank Maximising Finance for Development) that seeks to mobilise private capital into infrastructure osf.io/preprints/soca…
BlackRock 's recent acquisition of GIP is a bet that governments - under ideological or real constraints on fiscal space - will not pursue public infrastrucuture projects but instead continue to derisk private capital