Why global value chains should be called global poverty chains

January 13, 2023January 8, 2023 benjaminselwyn1 Comment

Global value chains (GVCs) “boost incomes, create better jobs and reduce poverty,” according to the World Bank. Since the collapse of the Eastern Bloc in 1991 and the reintegration of China into the global economy, world trade has become increasingly organized through GVCs. For example, the components and inputs for Apple’s iPhone, an icon of contemporary capitalist globalization, are made by millions of workers in over fifty countries.

Transnational corporations (TNCs) — labeled “lead firms” in the academic literature — established GVCs as part of their competitive strategies, outsourcing existing work or starting up new activities in countries where labor costs were cheap. State managers across the Global South increasingly gave up on establishing integrated domestic industries and sought instead to enter GVCs as component suppliers. Today, over four hundred fifty million workers are employed in GVC industries.

Many prominent figures suggest that these systems of production and distribution represent radically new development opportunities. As the former secretary general of the Organisation for Economic Co-operation and Development (OECD), Ángel Gurría, claimed:

Everyone can benefit from global value chains . . . encouraging the development of and participation in global value chains is the road to more jobs and sustainable growth for our economies.

The academic Gary Gereffi, the intellectual father of GVC analysis, asserts that development across the Global South requires supplier firms “linking up with the most significant lead firm in the industry.”

In reality, GVCs are a great boon for some of the world’s biggest companies, but not for their workers. It would be more accurate to describe many GVCs as global poverty chains.

Layers of compounding pressure: the gendered experiences of rural migrant youth in Addis Ababa, Ethiopia

January 9, 2023January 10, 2023 elizabethdessieLeave a comment

“I have lived everything there is to be lived in this city. Now I need to leave because all that is left for me here is misery and I want a better life for my child.”

It is with these words that Tizita, a 21-year-old mother-of-one from Gojjam in northern Ethiopia, described her dismay at life in Addis Ababa when I interviewed her in 2022. After living in the Ethiopian capital for eight years, she had had enough. Tizita was set on moving to one of the Gulf States, a part of the world from where many of the women she met on the street had returned from and were planning to re-migrate to. Having previously worked as a domestic worker in Addis Ababa, and having learnt that sex work was the only way to make “real money” in the city, the young woman remained focused on meeting the fundamental purpose of her migration project: transforming her life.

For Fikadu, a 27-year-old man from Wollega in western Ethiopia, the strain of life in the city is similar, yet different. Unlike for young women like Tizita, whose income-earning activities are overwhelmingly limited to domestic work, petty street work, commercial sex work and begging, the fractions of the informal economy available to migrant men are slightly wider. Nevertheless, this is not to say that times have not been hard. Having previously worked as a street vendor selling second-hand clothes, Fikadu has had to downscale his work and is struggling to meet the rising costs of food, rent, sending money to his family of origin, and realising his plans for the future:

“Our supplies disappeared and when they were back, the price went up by more than double. That was the end of it. Now I pay for my life here by selling socks, but I don’t let that dismay me. I remain focused on my plans of transforming my life here, and once things improve I will start saving for my own metalwork shop.”

The testimonies of Tizita and Fikadu form part of a longitudinal qualitative research project that maps the livelihood strategies of a sample of migrant youth in Addis Ababa at two points in time between 2018 and 2022. Drawing on these findings, this blog outlines some of the ways in which rural-urban migrant youth between the ages of 15-27 experience and counteract pressure. Through an exploration of migrants’ everyday strategies of navigating the city, findings presented here show how dealing with the intricacies of urban life relates intimately to the lives rural youth left behind and the imaginary futures they aspire towards, the ways in which youth relate to the social and economic responsibilities they carry, and the manner in which subjective pressure experienced by women and men has a compounding effect that further exacerbates the challenges migrant youth face.

The pressure to provide and perform: Anti-feminism, masculinity consultants, and the threat of male expendability in contemporary Nairobi

December 22, 2022December 22, 2022 marioatschmidtLeave a comment

Women are the reason why men have changed because women are hard on men. […] The expectations they come with into a relationship, and generally how they have been brought up, or the life they live, that is what gives some men stress. […] When someone is living with a woman in the house, you find that issues are many because money is little.

Wellington Ochieng, 36-year old labor migrant from western Kenya

During almost three years of ethnographic fieldwork among male migrants in Pipeline, an over-populated high-rise estate in Nairobi’s chronically marginalized east, I heard complaints like Wellington’s almost daily. Migrant men, in my case predominantly Luo from western Kenya who came to Nairobi with high expectations of a better future, bemoaned a life full of pressure caused by the romantic, sexual, and economic expectations of their girlfriends, wives, and rural kin. The blame often lay on ‘city girls’ who were portrayed as materialistic ‘slay queens’who ‘finish’ men by leaving them bankrupt only to suck away the next sponsor’s wealth after grabbing him with their ‘Beelzebub nails’ as Wellington called the colorful nails sported by many Nairobi women. Soon, so a fear expressed repeatedly by my interlocutors, most men would no longer be needed at all and Kenya’s economy would be ruled by economically powerful women who raise chaotic boys brought up without an authoritative father figure. Such fears of male expendability also manifested in imaginations about a future in which more and more men and women would live in homosexual relationships or ‘contract marriages’ that replace trust and love with contractual agreements. When my flat mate Samuel, a student of economics divorced from the mother of his baby son, returned to our apartment after passing the neighbor’s house where a group of women celebrated a birthday, for instance, he just shook his head and sighed: ‘We live like animals in the jungle. Women and men separately. We only meet for mating and making babies. Maybe that’s where we’re heading to.’ Overwhelmed by their wives’ and girlfriends’ expectations, many migrant men who spoke to me in Pipeline decided to spend as little time as possible in their marital houses. Instead, they evaded pressure by lifting weights in gyms, stockpiling digital loans and informal credits, placing bets in gambling shops, gulping down a cold beer in a Wines & Spirits, playing the videogame FIFA, or catcalling ‘brown-skinned’ Kamba women on the roads. Some men who could no longer cope took even more drastic measures involving murder and suicide. One man, for instance, cut the throat of his girlfriend only to try to kill himself, while another tried to poison himself, later quoting the wife’s actions and character as the cause. Anything appeared better than spending time with the ‘daughters of Jezebel’ who were waiting for them in the cramped houses of Pipeline, sometimes demanding migrant men to engage in romantic and sexual practices they were unfamiliar with as expounded upon by Wellington:

When you come to Nairobi, our girls want that you hold her hand when you are going to buy chips, you hug her when you are going to the house, I hear there is something called cuddling, she wants that you cuddle, at what time will you cuddle and tomorrow you want to go to work early? […] you don’t go to meet your friends so that you show her you love her, you just sleep on the sofa and caress her hair, to me, this is nonsense because that is not romantic love, I think that romantic love, so long as I provide the things I provide, and we sire children, I think that’s enough romance. […] Another girl told me to lick her, and I asked her ‘Why do you want me to lick you?’ She said that she wanted me to lick her private parts. Are those places licked? […] Those things are things that people see on TV, let us leave them to the people on TV.

Figure 1: Pipeline

Agricultural production, sectoral imbalances and inflation in Albania: A Kaleckian view

December 12, 2022November 25, 2022 mimozashabaniLeave a comment

The current remarkable surge in inflation is considered to be a nearly global phenomena (Reinhart and Lucker 2022), affecting both developed and developing nations. While there may be common drivers of inflation, such as factors associated with the Covid-19 pandemic followed by Russia’s invasion of Ukraine, there are considerable variations in the causes of it, especially with reference to developing countries, including Albania. Drawing on Kalecki’s (1976) Essays on Developing Economies, I argue that there are also domestic factors attributed to the increase in inflation that resides in the structural sectoral imbalances of the Albanian economy.

Rising prices in Albania sparked protests across the country in March 2022. The protests highlighted the rise in food prices which increased by more than 9% compared to March in the previous year; with the price of bread being the main contributor to such increase. With Albanians spending more than 42% of their total budget on food, rising prices of ‘necessities’ adds more pressure to the poor households to make ends meet. Nearly a quarter of Albanians, 640,000 people, already live in poverty (Kote 2022) and soaring prices in the economy could push people further into poverty. But what is pushing food prices to soar in a country where agricultural land accounts for 24% of overall land, a good Mediterranean climate, and water resources, all of which are crucial for agricultural development? Despite these favourable conditions, the productive capacity of Albania’s agriculture sector to meet domestic demand for food and feed meets is only one third (World Bank, 2022a).

Dependence and ecology in contemporary Latin America, part 2: Limits to sub-imperial autonomy

December 6, 2022December 6, 2022 georgeshepherd1867Leave a comment

Brazilian agribusiness’s fervour for Soybean cultivation has manifested itself domestically as much, if not more so, than externally, with deforestation accelerating as plantations abound with similar velocity in both the Brazilian Amazon and the Paraguayan Chaco. The domestic intensification of Soybean cultivation can, in large part, be attributed to growing demand from China, the world’s primary soybean consumer (Song et al, 2009). China is the largest market for both Paraguayan and Brazilian soy, with both nations essentially relying on continued Chinese imports to balance their trade deficits (Giraudo, 2020). Accordingly, the impact of Chinese demand on Brazilian agriculture, and on other resource sectors across the region (Ganchev, 2020; Oviedo, 2015), replicates many of the dynamics previously mentioned with regards to Brazilian ‘Subimperialism’ in Paraguay.

As soybeans are typically exported with minimal processing, and monocrop agriculture generates comparatively little employment (Giraudo, 2020), few of the benefits of the soybean supply-chain are appropriated within Brazil. Meanwhile, cheap Brazilian soybeans indirectly support the Chinese labour system by lowering the price of staple foods, especially pork, allowing Chinese manufacturers to keep wages low, thereby maintaining the competitiveness of Chinese exports (Wise & Veltmeyer, 2018). With Chinese demand likely to remain high, it seems inconceivable that either the Brazilian or the Paraguayan economies will wean themselves off of soy and will instead remain conditioned by, and dependent on, the whims of the Chinese industrial system

Furthermore, this integration of soybeans into the Chinese industrial economy exacerbates the existing China-Brazil trade imbalance. 98.4% of Chinese exports to Brazil are manufactures, whilst the majority of Brazilian exports to China are primary-resources, with soybeans representing the single most valuable export-commodity (Jenkins, 2012). Low-price Brazilian commodities thereby fuel an industrial system which exports value-added goods back to Brazil, creating a trade-deficit which entrenches the nation’s dependence on the industrialised core, reproducing the fundamental dynamics observed by dependency theorists in the mid-twentieth century (Frank; 1966; Prebisch, 1962).

Dependence and ecology in contemporary Latin America, Part 1: The colonization of Paraguayan soy cultivation by Brazilian business

December 5, 2022November 25, 2022 georgeshepherd18671 Comment

Though its influence may have waned in recent decades, dependency theory remains an indispensable prism through which to regard the bifurcated, or polarized, development of national economies within the capitalist world-system. This framework, in which the persistence of uneven development is attributable to the interrelation between the industrialised core and the underdeveloped periphery, admits both the geographic and historical scope to adequately tackle the hard problems of political economy and to accurately trace the chains of dependency which inhibit peripheral economies. Through two blog posts, I wish to explore how dependency theory can help us understand various ecologies of dependence in Latin America, including Brazilian agribusiness in Paraguayan soy (this blog post) and the role Chinese industrial demand plays in constraining Brazilian subimperial autonomy in soy cultivation (in the second blog post). In this post, the colonization of Paraguayan soy cultivation by Brazilian agribusiness is used to demonstrate that Sub-imperialist powers can achieve relative autonomy within the periphery by making dependent weaker states in their vicinity.

Gendering the debt crisis: Feminists on Sri Lanka’s financial crisis

December 2, 2022November 28, 2022 kanchanaruwanpuraguse1 Comment

By Kanchana N. Ruwanpura, Bhumika Muchhala and Smriti Rao

Countless images of women carers flitted through April-July 2022 on Sri Lankan television screens, social media, and newspapers. Carers with young children, mothers with new-borns leaving them with equally young children while they stood in queue for gas or kerosene, children doing their homework on tuk-tuks while their parents got in line for petrol and diesel. Yet, Sri Lankan policy pronouncements rarely mention working-class women. In a country where women comprise 52% of the population, this is astounding. Especially so when the dominant three foreign exchange earners for the country – garments, tea exports and migrant workers to the Middle East – rest on the efforts of women workers.

In the current response to Sri Lanka’s debt crisis, the voices and needs of working-class women are once again being ignored by policymakers, despite the evidence all-around of women intensifying their unpaid labour even as the conditions under which they perform paid labour deteriorate.

As feminist economists, our argument is straightforward: debt justice is a feminist value and principle. And at the core of our understanding of debt justice is the principle that working class women cannot be made to pay for the ‘odious debt’ generated by the recklessness and corruption of (almost entirely male) Sri Lankan political elites.

Developing Economics

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