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1. Dark Spots in the International Commodity Value Chain: The Case of Copper in Zambia

Author:
Dale Mudenda and Léonce Ndikumana
Publication Date:
01-2024
Content Type:
Working Paper
Institution:
Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:
This paper investigates mineral export misinvoicing in Zambia as a channel of capital flight, with a focus on copper, gold, and gemstones. The analysis reveals major discrepancies between Zambia’s recorded exports and imports as recorded by its trading partners. In the case of copper, a large share of exports recorded in Zambia as headed to Switzerland does not appear in Swiss imports. The ‘missing copper’ cannot be traced through analysis of trade between Switzerland and its major partners either. Gaps in the opposite direction are observed in Zambia-China trade, suggesting export underinvoicing, a common mechanism of capital flight. These do not offset the gaps observed in mirror trade statistics between Zambia and Switzerland, which remain a mystery. Similarly, whereas the primary destination recorded for Zambian gold exports is South Africa, these do not appear in gold imports recorded by South Africa. The gemstones sector is characterized by high informality that enables smuggling and export underinvoicing. Zambia must implement measures to curb misinvoicing of mineral exports and address structural opacity in the trade value chain if it hopes to maximize the gains from the exploitation of its mineral resources.
Topic:
Political Economy, Commodities, Exports, Global Value Chains, and Minerals
Political Geography:
Africa and Zambia

2. The Impact of the 21st Century Commodity Supercycle on Natural-Resource Dependent Economies: The Case of Bolivia and Peru

Author:
Daniel Agramont-Lechín
Publication Date:
01-2024
Content Type:
Working Paper
Institution:
Postgraduate Program on Sustainable Development and Social Inequalities in the Andean Region (trAndeS)
Abstract:
In the early 21st century, Bolivia and Peru experienced remarkable economic growth, coupled with notable reductions in poverty and inequality. However, the subsequent economic slowdown triggered by declining international commodity prices raised concerns about the sustainability of their progress. Historically, both nations have been vulnerable to fluctuations in global commodity prices, often resulting in social unrest and political instability. This study examines whether the significant influx of resources to Bolivia and Peru from 2003 to 2013, attributed to the commodity boom, fostered structural transformation or, on the contrary, reinforced their dependence on the global economy. Analyzing macroeconomic and productivity data, the research indicates a strong correlation between their economic performance and the commodity supercycle trend. A primary finding suggests that rather than fostering a more self-reliant economic integration, the 21st-century economic boom exacerbated the reliance of both nations on natural resource extraction. However, a more nuanced examination reveals divergent medium-term impacts driven by each nation’s development model. Peru, through diversification of international revenue streams and prudent macroeconomic policies, managed to mitigate the effects of declining commodity prices. In contrast, Bolivia’s economy bore the brunt of diminishing income, not only due to the end of the commodity boom but also due to insufficient investments in productive sectors.
Topic:
Natural Resources, Economy, Neoliberalism, Commodities, Extractivism, Economic Dependence, and Post-Neoliberalism
Political Geography:
South America, Peru, and Bolivia

3. A Generalised Commodity Theory of Exploitation

Author:
Photis Lysandrou
Publication Date:
01-2024
Content Type:
Working Paper
Institution:
City Political Economy Research Centre (CITYPERC), University of London
Abstract:
This paper argues that the conceptual framework of Marx's Capital allows for the extraction of a commodity-based theory of capitalist exploitation that is distinct from the traditional labour-value based theory. The rationale for extracting such a theory is that it allows for an explanation of the current rise in global economic inequality in a way that shows this development to be entirely consistent with the fundamental laws of capitalism as it enters its globalised and financialised stage of development.
Topic:
Globalization, Capitalism, Commodities, Exploitation, and Financialized Capitalism
Political Geography:
Global Focus

4. Impact of economic sanctions on net commodity-producing and net commodity-consuming countries

Author:
Sergio R. Vale and Eduardo Viola
Publication Date:
01-2023
Content Type:
Journal Article
Journal:
Revista Brasileira de Política Internacional (RBPI)
Institution:
Instituto Brasileiro de Relações Internacionais (IBRI)
Abstract:
The war in Ukraine has had a marked economic impact. However, since Russia is a net producer of important commodities, the impact of sanctions on its economy was less than expected. But what would happen if there was a war involving a country that was a net importer of commodities? In the case of a possible China-US conflict over Taiwan, the impact on the world economy would be different, with a deeper recession around the world, but the impact on the Brazilian economy would still be positive on account of the possibility that would remain of agricultural exports to China.
Topic:
Agriculture, Economics, International Trade and Finance, Sanctions, Commodities, and Exports
Political Geography:
Russia, China, Europe, Ukraine, Taiwan, Asia, North America, and United States of America

5. Book Review: Javier Blas and Jack Farchy, The World for Sale: Money, Power, and the Traders Who Barter the Earth’s Resources (Oxford University Press, 2021)

Author:
Hüseyin Pusat Kildiş
Publication Date:
12-2023
Content Type:
Journal Article
Journal:
Uluslararasi Iliskiler
Institution:
International Relations Council of Turkey (UİK-IRCT)
Abstract:
The World for Sale: Money, Power, and the Traders Who Barter the Earth’s Resources sheds light on commodity traders, crucial yet often overlooked actors in the global economy. The book is a collection of stories about them, how they get involved in political affairs, where they get their power, and how they work in the shadows. These stories from different times and places show the immense power of commodity traders. Methodologically, the book is mainly based on interviews with more than a hundred traders. Blas and Farchy also collected thousands of pages that detail the finances, business networks, and structure of commodity traders’ organizations (p. 11-12). The book consists of 13 chapters. Chapters 2, 3, and 4 are particularly important since they reveal how commodity traders operate by addressing the energy crisis that arose due to waves of nationalization in the Middle East in the 1970s and 1980s. The book’s main purpose is to reveal the role of despots and tyrants in the global economy by pointing out the unsavory aspects of their businesses, such as bribery and offshore banking. Since most of these methods are illegal and cannot be used by official companies and institutions, such commodity traders come to the fore.
Topic:
History, Economy, Book Review, Commodities, and Trade
Political Geography:
Middle East and Global Focus

6. Interest Rate Dynamics and Commodity Prices

Author:
Christophe Gouel, Qingyin Ma, and John Stachurski
Publication Date:
10-2023
Content Type:
Working Paper
Institution:
Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
Abstract:
In economic studies and popular media, interest rates are routinely cited as a major factor behind commodity price fluctuations. At the same time, the channels of transmission are far from transparent, leading to long-running debates on the sign and magnitude of interest rate effects. Purely empirical studies struggle to address these issues because of the complex interactions between interest rates, prices, supply changes and aggregate demand. To move this debate to a solid footing, we extend the competitive storage model to include stochastically evolving interest rates. We establish general conditions for existence and uniqueness of solutions, as well as providing a systematic theoretical and quantitative analysis of the interactions between interest rates and prices.
Topic:
Economy, Commodities, and Interest Rates
Political Geography:
Global Focus

7. Analysing India’s Economic Security Challenges

Author:
Gateway House
Publication Date:
06-2022
Content Type:
Research Paper
Institution:
Gateway House: Indian Council on Global Relations
Abstract:
Low global commodity prices, strong FDI inflows, and sustained growth have boosted the Indian economy in the preceding decade. This favourable economic climate, however, was disrupted by the pandemic and the crisis in Ukraine, exposing vulnerabilities in the global economic system. This paper focuses on India’s economic security challenges, particularly in six sectors - Food, Energy, Finance, Data, Space & Undersea Cables and Critical Minerals - and suggests possible courses of action.
Topic:
Food, Finance, Space, Commodities, Data, COVID-19, Minerals, Economic Security, Energy, and Russia-Ukraine War
Political Geography:
South Asia and India

8. Ana María Otero-Cleves and writing about the Global from the Periphery: Interview with the Winner of the Toynbee First Book Manuscript Workshop Competition

Author:
Ana María Otero-Cleves and Nicole CuUnjieng Aboitiz
Publication Date:
09-2022
Content Type:
Commentary and Analysis
Institution:
The Toynbee Prize Foundation
Abstract:
Ana María Otero-Cleves’s book manuscript examines how Colombian peasants, artisans, formerly enslaved people, bogas (river boatmen), market women, and small landholders became the largest consumers of foreign commodities between the mid-nineteenth century and early twentieth century (1850–1910). It is the first study to argue that the consumption of foreign goods was not solely, nor primarily, an upper-class phenomenon and that the tastes and demands of the country’s popular sectors changed nineteenth-century patterns of production abroad. The manuscript demonstrates that far from being indigenous, the material culture of broad sections of the country’s population was inextricably intertwined with global trends by the end of the nineteenth century. It shows that the appropriation of imported commodities by Colombian popular sectors was in great part due to foreign manufacturers’ willingness to alter or redesign their products to satisfy their demands. Thus, by following the preferences of the popular sectors for English textiles, American machetes, and French patent medicines, among many other foreign commodities, the book demonstrates how, in their capacity as free citizens, Latin American consumers became active agents in the construction of the nation’s marketplace as well as dynamic participants in the global circulation of modern commodities. By methodologically and narratively shifting from the periphery to the centre, the book offers an exciting and original perspective on global interconnectivity in the nineteenth century, where the taste of the popular sectors of apparently isolated countries, such as Colombia, played a key part. Historians, scholars, and students interested in the global history of consumption will find this seemingly marginal case study ideal for testing theories proposed by social scientists on global relationships and on the ability of “peripheral” subjects to transform global dynamics. By examining how popular consumers’ demands affected patterns of exchange and production in Europe and the United States, Otero-Cleves contests the presumption that Colombia’s global relationships in the nineteenth century were dictated solely by outsiders and, even more so, the country’s elites. Moreover, this case study forcefully challenges ongoing stereotypes about Latin America’s peripheral role in the world economy and its unquestionable “dependency” and, furthermore, the lack of agency in the marketplace of the popular classes. By showing how popular consumption was a key broker between political economy and citizenship in the mid-nineteenth century, the manuscript also engages with the burgeoning historiography on subaltern groups and popular politics in nineteenth-century Latin America. The manuscript shows how popular sectors participated in the market economy not only as part of the country’s labour force but as individuals engaged in the consumption and adoption of new needs and comforts; it also explores the extent to which their role as consumers shaped ideas and practices of citizenship in mid-nineteenth-century Colombia. The study not only suggests that citizenship was formed, contested, and recognised in fairs, streets, plazas, tiendas, and local markets but argues that men’s and women’s entry into the market economy and their pursuit of material betterment gave meaning to ideas of citizenship and fashioned practices of political recognition in the second half of the century.
Topic:
History, Citizenship, Economy, Commodities, and Historiography
Political Geography:
Colombia, South America, and Latin America

9. Chinese coercion, Australian resilience

Author:
Richard McGregor
Publication Date:
10-2022
Content Type:
Commentary and Analysis
Institution:
Lowy Institute for International Policy
Abstract:
Australians have grown in confidence about the country’s ability to withstand economic coercion from China since the imposition of punitive trade measures in 2020. Beijing suspended high-level political exchanges and imposed a range of informal sanctions and trade blockages against Australia in the wake of a series of escalating disputes, culminating in Canberra’s call for an independent inquiry into the origins of Covid-19 in April that year. Two years on, it is prudent to plan on the basis that it is still early days in China’s use of trade measure against Australia. Canberra and Beijing resumed ministerial-level dialogue after the election of the Albanese Labor government in May 2022. But given the long-term structural divide between the United States and China, and Australia’s position as a strong US ally, Australian governments of all persuasions should assume that China’s trade policies against Australia will remain largely in place. Beijing may tactically retreat now and again to fill shortfalls or if it wants for political reasons to present itself as a conciliatory partner. But a solution to the fundamental bilateral political tensions driving trade disruptions is not on the horizon. The sectors in which bilateral trade with China have continued to prosper are not those in which Australian producers are dependent on China but rather where the two countries are interdependent. Australia cannot find alternative markets to match China for commodities such as iron ore, liquefied natural gas, and wool. Nor can China wean itself off a substantial reliance on Australia as a supplier. For this reason, the core elements of bilateral trade will remain reasonably resilient for some years. However, absent a huge change in the structure of the Australian economy and its export profile, the longer-term picture for exports to China looks worse. As China’s economy grows and its structure changes and becomes less resource intensive, Australia will likely get a decreasing share of a growing pie. Over time, the cost of trade bans and other punitive measures will likely mount as Chinese investment in Australia diminishes and the cost of diversifying from the region’s largest economy grows. Australia has maintained its reputation as a reliable supplier of commodities throughout the downturn in bilateral relations with China. It is imperative that it continue to do so — both to benefit the Australian economy and to maintain leverage of its own. Control over critical commodities carries considerable strategic value, as the role of gas and oil in the Ukraine war has shown.
Topic:
Foreign Policy, Bilateral Relations, Commodities, Trade, Resilience, and Coercion
Political Geography:
China and Australia

10. The Russia-Ukraine Conflict: Economic Consequences on Europe and the World

Author:
Philip Fwaldin Kasuwa
Publication Date:
09-2022
Content Type:
Journal Article
Journal:
Nowa Polityka Wschodnia
Institution:
Faculty of Political Science and International Studies, Nicolaus Copernicus University in Toruń
Abstract:
A number of international sanctions have been placed on Russia since it launched an attack on Ukraine on February 24, 2022, in order to persuade the country to de-escalate the conflict. The sanctions imposed on Russia, while designed to harm the Russian economy, had unintended consequences on the world economy, primarily through the disruption of global supply chains. Energy supply shocks, commodities and trade supply shocks were all caused by the conflict. In many nations, this resulted in an increase in worldwide inflation. Despite the fact that Israel and Turkey were instrumental in mediating a peaceful end of the conflict between Russia and Ukraine, the economic fallout from the crisis continued to reverberate throughout Europe and beyond.
Topic:
Economics, Sanctions, Commodities, Trade, Supply Chains, and Russia-Ukraine War
Political Geography:
Russia, Ukraine, and Eastern Europe