Analysis

Battery Supremacy

In the Summer of 2022, Viktor Orbán sparked international outrage by lamenting that countries where Europeans and non-Europeans mingle were “no longer nations.” Amid the uproar, a dramatic pronouncement in the same speech largely escaped notice: Orbán declared his ambitions to make Hungary a “superpower” in electric vehicle (EV) battery production, with the world's third-largest manufacturing capacity.

Driving Capital

Since President Biden signed the Inflation Reduction Act (IRA) into law in August 2022, the Mexican auto assembly and parts industries have been booming. Tesla and the Chinese state-owned carmaker Jetour announced the construction of new factories for electric vehicles (EVs) and gasoline cars, spurring investments down the supply chain. Tesla’s glass supplier AGP Group plans to open a factory accompanying Tesla’s in Santa Catarina, Nuevo León.

Kishida’s New Capitalism

In September 2021, Japanese Prime Minister Kishida Fumio was elected on an ambitious platform: “New Form of Capitalism.” As leader of the Liberal Democratic Party, he promised to achieve a new and better economic system where economic growth and income distribution form a virtuous cycle. The Japanese government has presented several plans to promote this new capitalism, but the Japanese people remain dissatisfied with the current economic reality. Despite the Japanese stock market soaring and the Nikkei index briefly surpassing levels only seen during the bubble period about 34 years before, economic growth has been stagnating since mid-2023. Kishida’s approval has steadily declined, dropping to 25 percent in February 2024 from over 50 percent in early 2022.

A Safe Haven for Hidden Risks

Perceptions are shifting regarding the US fixed-income market. In September 2019, interest rates on overnight repos unexpectedly spiked, leading the Federal Reserve Bank of New York to inject $75 billion in liquidity. In March 2020, the Covid-19 pandemic triggered a wave of securities selling, prompting the Fed to purchase over $1 trillion in securities. These events have raised concerns about market stability.

Border Traffic

The rise of Ecuador in the transnational network of organized crime is a relatively recent phenomenon. Although the country has supplied chemical inputs for cocaine production in Colombia since the 1990s, there were few spikes in violence or power struggles between criminal organizations fighting over control and access to drug trafficking routes. In early 2024, however, Ecuador captured global attention when an organized criminal group (OCG) took over national TV channel TC Television, holding staff hostage in Guayaquil. Violence escalated dramatically the year prior, leading Ecuador to be classified as the most violent country in Latin America. 

The Productivity Gap

Standard development economics anticipates that the composition of a country’s labor force will go hand in hand with the composition of output, reflected in the division between the primary, secondary, and services sectors. But contemporary India, as well as several other countries across the global South, are challenging this expectation: changes in output between the sectors have preceded changes in the composition of the labor market. 

Underdevelopment and War

In the 1960s and 70s, the Colombian national government embarked on an ambitious agrarian reform program to address poverty in the increasingly violent countryside. Under the bipartisan project of the National Front, which alternated power between the Conservative and Liberal parties, these efforts sparked domestic and international debates around the nature of developmentalism in the Colombian state, especially since they coincided with a series of economic missions meant to tackle underdevelopment. Such interventions were influenced by international institutions like the World Bank and the United Nations Economic Commission for Latin America and the Caribbean (ECLAC), as well as by discussions around economic growth and capitalism taking place in North America and Europe. Amid regional development debates, the Colombian approach would be determined by entrenched inequality in rural areas and the emergence of armed resistance against the state. 

Supply-Side Healthcare?

In 2019, Florida Governor Ron DeSantis signed a bill into law that deregulated new hospital construction and unleashed a “hospital-building boom.” Some 65 new hospitals were planned in the three years after DeSantis signed the bill ending decades-old regulations on hospital construction called “certificate of need” (CON) laws, which could amount to as much as a 20 percent increase in total hospitals in the state. And it isn’t just Florida: Ohio repealed its own CON laws for hospitals in 2012. Today, Ohio is experiencing its own hospital boom. In 2019, the Cleveland Clinic planned a new facility within seven miles of two other hospitals and two other health systems. “The Columbus area seems sick with medical construction,” reports the Columbus Dispatch, “Every week, it seems, another major project gets underway.” In 2022, the largest and wealthiest hospital system in Massachusetts—Mass General Brigham—received approval for an enormous $2 billion expansion. Nationally, total private construction spending on healthcare facilities has nearly doubled in the past decade, rising from $28.9 billion in 2014 to $50.4 billion in 2023.

Partners in Growth?

With general elections continuing into early June, Indian Prime Minister Narendra Modi and his ruling Bharatiya Janata Party (BJP) are poised to begin a second decade in power. In the realm of political economy, it is meant to be the decade of Atmanir Bharat or “Self-Reliant India,” Modi’s ambitious agenda of enhancing domestic manufacturing, infrastructural development, and international competitiveness—rhetorically packaged together in the idiom of Hindutva or Hindu nationalism. To realize this vision, as the Wall Street Journal reported last year, the government depends on “six giant companies,” including Reliance (led by Mukesh Ambani, one of the twenty richest billionaires in the world) and the infamous Adani group (who has seemingly recovered its fortunes in the wake of a scandal sparked by the publication of a report by short-seller Hindenburg Research). 

The Iron Farm Bill

Agriculture directly accounts for 10 percent of US greenhouse gas emissions. These emissions, which do not include onsite fossil-fuel use, come from soil and manure management and the digestive processes of ruminants, mostly cattle. Worse, there is a substantial “carbon opportunity cost” to keeping land in crops when it could instead be turned into forest, a powerful carbon sink.

Illiberal Developmentalism

The election of Prabowo Subianto to the Indonesian presidency two months ago has been warmly welcomed by business and political elites in the country. The day following the result, the Jakarta composite index rose by 1.3 percent, a tacit sign of assent for President Joko Widodo’s chosen successor, who was always expected to win the vote. Prabowo (as he is popularly known) has promised continuity with Jokowi’s (as he is popularly known) ten-year regime, emphasizing infrastructural development and downstream industrialization.

The Origins of Conditionality

Contemporary debates around the governance of the global economy often center on the role of the International Monetary Fund (IMF), arguably the most powerful international organization that—among other responsibilities—provides loans to countries in economic crisis. The most recent iteration of these debates took place in Marrakesh in October 2023, where IMF member-states agreed on increases to its lending capacity, while preserving the current allocation of votes, which overwhelmingly favors large Northern economies. This perpetuated the widespread perception that the IMF is the enforcer of creditor countries, a concern bound to reemerge at the IMF and World Bank Spring meetings, taking place this week in Washington, DC. While the IMF’s loans carry low interest rates, their true cost for debtor countries is the obligation to implement far-ranging economic reforms. 

The Electric Vehicle Developmental State

The rise of the Chinese EV industry has been enabled not only by generous government subsidies but also by profound changes in strategy and organization, and in particular by a distinctive revival of vertical integration—at both individual firm and national levels. The approach is perfectly exemplified by BYD, which has sought to bring virtually all aspects of the value chain under its control: from battery technology—which was its initial core business—to microchips and even expanding to ownership of lithium mines and car carrier ships.

Inflation as Distributive Struggle

On January 24, 2024, Argentina’s General Confederation of Labor (CGT) called for a twelve-hour general strike—the first in almost five years—just forty-five days into President Javier Milei’s term. This action was a direct response to the first measures proposed by the new administration which threatened to dismantle the pillars of workers’ rights. A week after the strike, one of the main union leaders, Pablo Moyano, warned of future intensified actions in response to debate around the “Omnibus Law” in Congress. The CGT is “more united than ever” after the strike, he stated, signaling a strengthened and highly alert unionism.

The Debt Poor

The 2008 financial crisis was an unprecedented demonstration of financialization in capitalism today. In the US, the collapse of real estate values revealed how formal credit channels—imagined as mechanisms of wealth creation—had brought unsustainable levels of household indebtedness down into new layers of American society. But if the experience showed how central household credit had become for low-income families to access housing in the US, it serves as just one example of how credit and debt shape not only business but household life globally. This is particularly evident in Brazil, where the cost of debts and debt service make up a growing share of annual household income. 

The Visible Hand

China has transformed into a leading force in science, technology, and innovation (STI). With rapidly rising research and development (R&D) expenditure, a larger and increasingly high-quality talent pool, and impressive scientific publication and patenting statistics, the country is set to become a global STI superpower.  

The First New Deal

The National Industrial Recovery Act is commonly counterposed to antitrust. But at the time, the antitrust camp had little truck with the self-coordinating market ideal. Resistance to public price coordination experiments, meanwhile, particularly among conservative jurists, was also not based on a preference for unplanned markets but on ideas of freedom of contract—which were in many respects inconsistent with unplanned markets. And the Supreme Court’s ultimate rejection of the NIRA as unconstitutional was not even based upon freedom of contract (much less an embrace of unplanned markets), but instead upon the conclusion that the scheme did not involve enough planning.

Offshore Treasure

Since the discovery of some of the world’s largest oil reserves in 2015, Guyana has entered a period of economic and geostrategic reconfiguration. According to the Energy Information Administration (EIA), Guyana holds the sixth-largest oil reserves in the Americas and the nineteenth largest in the world. With high quality product, below average production costs, and low local consumption, the reserves have enormous export potential—per capita, Guyana has quickly become the highest producer of oil in the world. 

100 Days of Milei

Javier Milei’s election to the Argentine presidency in November sent shockwaves throughout the country. While the media personality was not altogether an outsider, his party La Libertad Avanza (LLA), formed in 2021, fundamentally lacked political experience. Until Milei’s inauguration in December, the LLA had no governors or representatives in the Senate, and only three seats in the Chamber of Deputies.