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61. Capital Flight from South Africa: A Case Study

Author:
Léonce Ndikumana, Karmen Naidoo, and Adam Aboobaker
Publication Date:
06-2020
Content Type:
Working Paper
Institution:
Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:
This paper examines the mechanisms, actors, enablers, and the institutional environment that facilitate capital flight from South Africa and the resulting accumulation of private wealth in offshore financial centers. We estimate that from 1970 to 2017, South Africa lost over $300 billion through capital flight, including through overinvoicing of imports and underinvoicing of exports. Net trade misinvoicing amounted to $146 billion over the 1998-2017 period alone. Export underinvoicing appears to be especially rampant in the case of mineral resources such as gold, silver, platinum and diamonds. While capital flight is not a new phenomenon in South Africa, it has accelerated substantially over the past decades, a period marked by aggressive liberalization of the national economy and rapid integration into the global economy. Capital flight is a concern in a country such as South Africa that faces deep financing gaps, high multidimensional poverty, inequality and unemployment. An important challenge faced by South Africa in its quest to tackle capital flight and the associated problems such as tax evasion, base profit shifting, and money laundering is the threat of erosion of the public confidence in state institutions in light of the emerging phenomenon of state capture orchestrated by an intricate network of private ‘enablers’ with deep connections within the state and in the global economy. The adverse effects of capital flight on economic development, state institutions and governance call for urgent attention to prevent even more devastating consequences for the country’s political and social instability.
Topic:
Governance, Global Political Economy, Institutions, Capital Flight, Tax Evasion, Instability, and Money Laundering
Political Geography:
Africa and South Africa

62. Generating new employment opportunities in Yemen

Author:
Sana'a Center for Strategic Studies
Publication Date:
10-2018
Content Type:
Policy Brief
Institution:
Sana'a Center For Strategic Studies
Abstract:
Decades of political instability and cyclical armed conflict have curtailed Yemen’s economic growth, job creation and labor productivity. Before the current conflict, much of the country’s working population was engaged in unskilled labor, working in rural agriculture or informally employed in small businesses. More recently, the ongoing conflict has destroyed normal commerce and left millions of Yemenis without a means of supporting themselves or their families. Even those not directly affected by the fighting now face brutal economic hardship. The economic crisis has become the primary driver of what the United Nations has called the world’s largest humanitarian catastrophe. In the midst of this crisis, the need for job creation is paramount. As part of the “Rethinking Yemen’s Economy” initiative, 22 of Yemen’s leading socioeconomic experts convened in Amman, Jordan on July 14–16, 2018 for the third Development Champions Forum. Sharing a collective sense of urgency to address Yemen’s worsening economic and humanitarian crises, the Champions discussed job creation in Yemen and developed potential strategies to combat increasing levels of unemployment and economic hardship. This policy brief presents the outcome of their discussions. The Development Champions recommend that policy makers seek to create jobs immediately by investing in sectors that have historically been neglected in favor of oil and gas activities. This includes investing in agriculture, developing the fishing industry, expanding mining operations, and linking reconstruction efforts to the local construction sector. In the medium term, policy makers should look to new initiatives, such as constructing a free zone on the Yemen-Saudi border. By providing these livelihood opportunities in the immediate and medium term, policy makers will also help limit the number of Yemenis who feel forced to join an armed party to conflict because of economic necessity.
Topic:
Development, Employment, Economic Growth, Armed Conflict, and Instability
Political Geography:
Middle East and Yemen

63. Fragile States Index 2017 – Annual Report

Author:
J. J. Messner, Nate Haken, Hannah Blyth, Christina Murphy, Amanda Quinn, George Lehner, and Daniel Ganz
Publication Date:
05-2017
Content Type:
Special Report
Institution:
The Fund for Peace
Abstract:
The Fragile States Index, produced by The Fund for Peace, is a critical tool in highlighting not only the normal pressures that all states experience, but also in identifying when those pressures are pushing a state towards the brink of failure. By highlighting pertinent issues in weak and failing states, The Fragile States Index—and the social science framework and software application upon which it is built—makes political risk assessment and early warning of conflict accessible to policy-makers and the public at large.
Topic:
Fragile States, Economic Growth, Domestic Politics, Coup, Instability, and Autocracy
Political Geography:
Africa, United Kingdom, Turkey, Middle East, South Africa, Brazil, Colombia, South America, North America, Ethiopia, Mexico, South Sudan, Global Focus, and United States of America

64. A View from the United States on ROK-U.S. Relations

Author:
Mark Tokola
Publication Date:
08-2017
Content Type:
Journal Article
Journal:
Joint U.S.-Korea Academic Studies
Institution:
Korea Economic Institute of America (KEI)
Abstract:
For the proverbial visitor from Mars, the political situation in Northeast Asia is inexplicable. Sitting amidst a group of relatively stable, wealthy, and powerful countries, is a small, poor, belligerent nation that all agree is a threat to regional stability. Furthermore, the rogue state has been sanctioned and its behavior condemned by the United Nations for its weapons programs and its human rights abuses. Why can the Republic of Korea (ROK), Japan, the United States, Russia, and China not combine their considerable leverage to do something about North Korea?
Topic:
Human Rights, Nuclear Weapons, Politics, Bilateral Relations, Instability, and Regional Security
Political Geography:
Asia, South Korea, North America, and United States of America

65. Intro | Establishing Triangular Talks Among Washington, Beijing, and Seoul

Author:
Gilbert Rozman
Publication Date:
08-2017
Content Type:
Journal Article
Journal:
Joint U.S.-Korea Academic Studies
Institution:
Korea Economic Institute of America (KEI)
Abstract:
Of five alternative approaches to addressing the North Korean threat to stability in East Asia and beyond, this section is concerned with the possibility of just one—a diplomatic approach via Three-Way Talks among China, South Korea, and the United States. We single out this approach as the golden mean for reconciling the conflicting interests among the parties best positioned to reshape the calculus of Pyongyang. It represents the path to compromise. Among the alternatives, there is the Chinese appeal for a dual-track approach through Six-Party Talks, aimed at a peace treaty on terms attractive to North Korea and greatly transformative to the security architecture in Northeast Asia. This could hardly be called a compromise, since Seoul and Washington regard this as a win for Pyongyang and evidence that Beijing actually has been siding with Pyongyang. Another alternative is Strategic Patience, which is a misnomer for the policy of the Obama administration, but, in any case, refers mainly to reliance on increased deterrence as pressure is ratcheted up. In fact, Obama was seeking a pathway to three-way talks, giving China time to shift in that direction bolstered by new sanctions, while in 2016 also moving closer to a fourth approach: Unilateral Sanctions targeted at the Chinese firms assisting North Korea. A fifth option is Alliance Triangularity to force change in Pyongyang.
Topic:
Foreign Policy, Diplomacy, Sanctions, Instability, and Regional Security
Political Geography:
China, Asia, South Korea, North Korea, North America, and United States of America

66. Learning, Expectations, and the Financial Instability Hypothesis

Author:
Martin Guzman and Peter Howitt
Publication Date:
11-2015
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
This paper analyzes what assumptions on formation of expectations are consistent with Minsky’s Financial Instability Hypothesis (FIH) and its corollaries. The FIH establishes that financial relations evolve over time turning a stable system into an unstable one. Financial crises would be more likely to occur, and more severe if they occur, the longer the previous crisis recedes into the past. We show that the hypothesis is consistent with assumptions on formation of expectations that imply learning from realization of states and inconsistent with the assumption of full information rational expectations.
Topic:
Financial Crisis, Finance, Economic Theory, and Instability
Political Geography:
Global Focus

67. Fragile States Index 2015 – Annual Report

Author:
J. J. Messner, Nate Haken, Patricia Taft, Kendall Lawrence, Felipe Umana, Sebastian Pavlou, and Hannah Blyth
Publication Date:
06-2015
Content Type:
Special Report
Institution:
The Fund for Peace
Abstract:
The Fragile States Index, produced by The Fund for Peace, is a critical tool in highlighting not only the normal pressures that all states experience, but also in identifying when those pressures are pushing a state towards the brink of failure. By highlighting pertinent issues in weak and failing states, The Fragile States Index—and the social science framework and software application upon which it is built—makes political risk assessment and early warning of conflict accessible to policy-makers and the public at large.
Topic:
Reform, Ebola, Democracy, Fragile States, Domestic Politics, Sustainability, Health Crisis, Instability, and Uprising
Political Geography:
Africa, Russia, Iran, Ukraine, Middle East, Finland, Eastern Europe, Greece, Libya, Cuba, North Africa, Lebanon, West Africa, Nigeria, Central African Republic, Global Focus, and United States of America