This second podcast of the year hosts the 2020 Global Public Policy Network Competition (GPPN)’s winning team. In a casual interview, the five participants from the Master of Public Administration at the London School of Economics introduce their project, discuss their experience during the GPPN conference and provide advice for future participants.
Antonia Ramm is part of the first-year MPA cohort. She holds a bachelor degree in Economics from Maastricht University. Before coming to the LSE, she worked in Public Consulting and Telecommunication.
Carmen Mira is a first year MPA student at the LSE. Before coming to the LSE, she completed her bachelor's degree at Sciences Po and worked on transport policy at the International Air Transport Association.
Born and raised in Italy in 1997, Filippo Bandini graduated in International Politics and Government from Bocconi University. He’s now a first-year MPA student at the LSE.
Victoria Suarez, previously entrepreneur in Spain working on bridging the gap between companies and the needs and expectations of youth. She studied Law & Business as her bachelor's degree and is now a first year MPA student at the LSE.
Zakaria Bekkali is an Italian-Moroccan firstyear MPA student at the LSE. Prior to attending the LSE, he majored in Politics and Economics at Bocconi University, Italy.
The interview is hosted by Arthur Pendaries, a second year MPA student and Lead Podcast Editor for the Public Sphere Journal of Public Policy.
Posted on 05 Mar 2020
This first podcast episode of 2020 introduces a new format for the PSJ Podcast! This episode aims to discuss the 2019-2020 Chilean protests.
Three MPP students engage in a lively debate on topics such as the use of violence as a legitimate tool of protest; mistakes from both the government and civil society; as well as critical gender imbalances present during the event. The students represent and efficiently cover different opinions and bring light on the importance of opposing divergent viewpoints in constructive debates. The PSJ Podcast looks forward to building on the experience to provide future pertinent debates.
This episode is hosted by Arthur Pendaries, a 2nd year Master of Public Administration (MPA) student in International Development at the LSE who has a background in International Law, Engineering and Philosophy and Arushi Bedi, a Master of Public Policy (MPP) student and Indian public health worker having worked on the access for healthcare for women and children. The team is indebted to Nicolas Benkel Brander, an MPA 2nd year student at the LSE and who has worked with the United Nations Development Programme (UNDP) in Latin America for several years, for his help in making this debate happen and editing the episode.
Posted on 28 Feb 2020
by Enrique Jose Garcia
In Colombia, the topic of entrepreneurship has found its way into the national conversation as a key policy tool to accelerate economic integration among the incoming migrant labour pool. As this migration flow is set to become the largest in the world in 2020, it is important for international organisations and industry leaders to promote the implementation of reactionary supply chains to better prepare these delicate communities for challenges that are set to amplify across the region during the next few years. Increasing the entrepreneurial network of Colombia can address two major challenges being felt nationwide: the growing sense of ‘aporophobia’ and the integration of the incoming labour force.
Aporophobia has become a widely used term in the Venezuelan-Colombian context since the beginning of the most recent migration wave in 2016-2017. While xenophobia has been well documented for years, aporophobia differs in that it is the social rejection or fear of “poorer people” in particular. In Colombia it is difficult to attribute any social tension to ethnic or racial differences given the cultural and demographic similarities between both countries. The source of new social tension is therefore being attributed to the resentment caused by the economic and social status of the migration population.
Colombia is currently dealing with the presence of over 1,8M Venezuelans, almost 1M of whom have arrived in the last twelve months alone, while 50% are estimated to be of irregular or undocumented status. It has been very difficult for Colombian authorities to compile concise data on the immigration population, not only because of the scale of undocumented crossings, but also due to the transient nature of border communities. As Arturo Rodriguez, local administrator for the United Nations Development Program (UNDP), describes it, “we estimate that around 25,000 Venezuelans cross the border every day using the two official border bridges and the more than 300 illegal crossings (known as ¨trochas”) we know of; of that amount we estimate around 20% are ‘caminante’ migrants starting their journey to other South American countries, 40% are ‘pendular’ migrants who engage in temporary commerce and return to Venezuela, and the remaining 40% are looking to stay in Colombia permanently.” This segmentation suggests that approximately 80% of all Venezuelan migrants entering Colombian territory are statistical candidates to receive subsidised or free health and education, humanitarian aid, and labour integration services in the short-medium term. In a report by the Organization for Economic co-operation and Development (OECD) in 2019, the World Bank estimates that the fiscal impact of this migration wave is currently 0.4% per year and could grow to 0.4-0.6% in the short run.
Yet, in that same report the World Bank also estimates that long term this migration injection could represent a 0.2% boost to GDP with a stimulation in aggregate consumption demand of 0.3% and an investment increase of 1.2%. If properly communicated and implemented, this potential economic boost can be the antidote to facilitate social cohesion and minimise the aforementioned migration frictions, such as aporophobia. Juan Sebastian Aljure, Director of the new local think tank ProCucuta, explains that “as more public policies and incentives are launched to accelerate the integration of the migrants into the productive economy, the faster social cohesion will be between the two communities.” The logic is that as Colombians begin to see the economic benefits of a productive migration force, they will divert their attention away from the negative noise currently circulating around fiscal crunching and employment crowding out effects. It would be an effective solution to bridge the local and migrant community and reduce the presence of aporophobia.
So, what are some of the initiatives that are currently being seen in Colombia to promote entrepreneurship? Here are three that merit recognition:
Frontera de Oportunidades (Border of Opportunities): An initiative between the United Nations Development Program (UNDP) together with local foundation Fundacion Hablemos in the North Santander region of Villa del Rosario. The goal of this initiative is to support local entrepreneurs who are employing Venezuelan and Colombian-Venezuelan migrants. The strategy of the program is to re-direct formerly approved humanitarian aid funds towards small businesses and to establish a training curriculum. As Dalia Delgado, Regional Director of UNDP, explains: “When we started working with these micro-businesses, we realised that the best strategy was not to offer grants but rather strengthen their business fundamentals to promote their productive capacity and generate more employment.” The pilot program, launched in Q1 2019, identified over 200 micro-enterprises in the Villa del Rosario and Cucuta communities, and filtered the selection to twelve entities responsible for approximately 130 jobs. The selected small businesses received approximately $600 USD and participated in an eight-month curriculum program with marketing, accounting, sales, and networking modules.
ProCucuta: One of the fundamental challenges this border region has always faced, since before migration wave surged in 2016, is the lack of reliable data on the local labour pool and migration flows. Cucuta has always been a de facto terminal for border commerce, and because the geography makes it very difficult and economically impractical to build more robust border infrastructure, the migration fluidity between Venezuela and Colombia has always been difficult to measure. In this context, it has always been near-impossible for local authorities to manage up to date statistics and census data, which by default creates an impenetrable asymmetric information challenge for national and local authorities when designing policies of labour integration, fiscal enforcement, and welfare. One could almost identify these challenges as being structural market failures of border communities which merit their own analysis and contextualization. ProCucuta is a local think tank that is focused on controlling for these informality variables and creating a network of collaboration between the private, public, and institutional sectors to improve regional data-collection methods. With 2019 being a year of projection and preparation, ProCucuta is officially launching in January 2020 in partnership with Fundacion Hablemos, the UNDP, and Open Society Foundations.
Migracion Productiva: The migration wave from Venezuela does not stop in the border regions, and often represents only the first step for hundreds of thousands which begin their journey to other corners of Colombia and beyond. As soon as they cross the border, their local designation becomes ‘caminantes,’ or walkers, which is the name given to this pool of people seen across hundreds of national highways and roads. Within Colombia the majority of these caminantes head towards Bogota, where the Bogota Chamber of Commerce (BCC) launched a program to train 60x micro-entrepreneurs with Venezuelan or Colombo-Venezuelan nationalities. The training program includes an initial productivity diagnostic session, a mentor assignment from corporate partners, and a six month intensive training curriculum. The initial pilot program yielded positive results, with a net-increase in sales of 27% and with 19% of the cohort ramping up employment after the program. The head coordinator of the pilot program, Roberta Chirumbolo, is hoping to “expand the program in 2020 by partnering with other Chambers of Commerce around the country, with initial interest already being expressed by the cities of Bucaramanga, Cucuta, Medellin, and Cartagena, and a goal of training up to 750 migrant entrepreneurs in 2020.”
Enrique Jose Garcia, was born from Cuban parents and was raised in Venezuela until moving to the U.S. for university at Boston College. He has spent the last six years as an entrepreneur in the beverage sector, both in the U.S. and in Cambodia, and most recently started a Master’s Degree at London School of Economics in Public Administration and concentrating his studies on social entrepreneurship. He currently writes part-time for a UK-based publication on economics and entrepreneurship in Latin America. Enrique can be reached at email@example.com, firstname.lastname@example.org and https://www.linkedin.com/in/enriquejosegarcia/
OECD. (2019). OECD Policy Note on the Venezuelan migration shock in Colombia and its fiscal implications. https://www.oecd.org/economy/surveys/Colombia-migration-shock-note-english-2019.pdf
Corugedo, Emilio Fernandes & Guajardo, Jaime. (11/19) For Venezuela´s Neighbors, Mass Migration brings Economics Costs and Benefits. IMFBlog: Insights & Analysis on Economics & Finance. https://blogs.imf.org/2019/11/21/for-venezuelas-neighbors-mass-migration-brings-economic-costs-and-benefits/
Franco, Alexandra Castro. (04/09) Venezuela Migra: Aspectos Sensibles del Exodo hacia Colombia. [Translation, Venezuela migrates: Sensitive aspects of the exodus towards Colombia].
IMF. (04/19). IMF Country Report No. 19/106, Colombia, International Monetary Fund, D.C, file:///Users/enriquejosegarcia/Downloads/1COLEA2019001.pdf
Posted on 30 Jan 2020
It’s that time of the year! Join us for our first PSJ Podcast episode of the year as our very own Reshma casually interviews Sally Jenkis and Emma Joliffe at the recent LSE School of Public Policy Women’s Network's slam poetry night.
Sit by the fire, grab a hot drink and let the artistic discussion give your thoughts a jumpstart for 2020!
N.B: We had some minor issues with the mics for this recording, so please be indulgent on the sound quality.
Posted on 29 Jan 2020
A strong rules-based international trade system is an indispensable condition to address global inequalities. Brexit, the U.S.-China trade war, and the North American Free Trade Agreement’s (NAFTA) renegotiation have triggered a conversation on the future of the international trade system. Next month the World Trade Organization’s (WTO) appellate body will effectively cease to operate after the Trump administration blocked all new appointments.
The future of the system appears grim.
Free trade is an essentially contested concept. Trade skepticism has been fueled by the emergence of inequality as a cornerstone of public debate. Inequality has come to be seen as a direct consequence of free trade. However, as imperfect as it is, openness is more desirable than the alternative.
Since the conclusion of the WTO’s Kennedy Round in 1967, trade global governance has not been about tariffs, but rather about principles and disciplines. Harvard Kennedy School economist Dani Rodrik states that there is no clear-cut answer on whether trade agreements can systematically alter domestic political equilibria. Rodrik believes that the “global community” should not influence national goals and priorities. This view is misleading, at least partly. Principles and disciplines need to be strengthened and enforced at the national level for international trade to reduce global inequalities.
The Case for a Rules-Based System
Modern free trade agreements (FTAs) possess certain characteristics that promote a reduction in global inequalities. This essay discusses three of them: the rule of law, economic competition and labour rights.
The laureates of the 2019 Nobel Prize in Economics, Abhijit Banerjee and Esther Duflo, underline that trade openness “has almost gone in the opposite direction of what the basic Stopler-Samuelson logic would suggest.” That is to say, the income gap between low-skilled workers in developing economies and their better-off counterparts has increased. They point to evidence from trade liberalization in Mexico, Colombia, Brazil, India, Argentina, and Chile during the late 1980’s and 1990’s to sustain their argument.
Nonetheless, this view may not be wholly accurate if we assess the broader implications of trade global governance on global inequalities.
Rule of Law
The WTO and regional trade agreements establish a set of rules that are predictable and enforceable. The binding nature of these instruments forces states to adhere to the rule of law in order to integrate themselves into global value chains. When countries decide to open up for international trade, they accept playing by the rules.
Extortion is tightly linked to rule of law. While not traditionally considered in inequality studies, extortion is one of the main burdens that hinder competition and overall economic development. By doing so, it reduces the possibilities of redistribution and promotes inequality.
FTAs allow foreign industries to enjoy a privileged regime vis-à-vis domestic industries, where they are not subject to extortion. Two underlying reasons explain this. First, by entering into an FTA with stringent and enforceable dispute settlement mechanisms, governments agree to wear a straitjacket that eliminates their capacity to extort foreign industries. Second, governments have an incentive to promote the establishment of foreign industries in an environment that respects property rights. This is the case of industrial parks, which can serve as ‘islands’ of rule of law in areas where the state has otherwise little control.
Both, state-state and investor-state dispute settlement procedures are the main mechanisms to enforce the rule of law in trade regimes. These procedures need to be fine-tuned to make them more enforceable. Some amendments could include avoiding situations in which one party is able to block the establishment of an international panel. Likewise, other proposals could include a reform to the WTO’s appellate body and even considering moving forward with the implementation of Canada-EU’s Comprehensive Economic and Trade Agreement’s (CETA) investment court in other multilateral trade agreements.
It is out of the question that market concentration promotes inequality. A 2017 study by the OECD concludes that market power increases the wealth of the richest 10 percent of the population by 12 percent to 21 percent for an average country. The report also states that “redistribution from eliminating market power would occur mainly from the wealthiest 10 percent of the population to the bottom 80 percent.” In this context, FTAs emerge as one of the most powerful instruments to promote economic competition at the national level.
This is achieved by lifting tariff and non-tariff barriers to promote the free flow of goods, services and investment. There is a further range of instruments, however, which are designed to promote economic competition in specific sectors. Modern trade agreements include provisions regarding competition policy. These disciplines may include ensuring the independence of competition authorities (NAFTA), telecommunications (Comprehensive and Progressive Agreement for Trans-Pacific Partnership, CPTPP) and energy regulators (Mexico-European Union FTA). Additionally, provisions regarding government procurement guarantee a minimum degree of competition in public purchases and intellectual property rights protections provide a level playing field for the creative and pharma industries, among others.
The trade and labour debate has been one of the most contentious issues in international negotiations at least since the enactment of NAFTA’s labour side agreement in 1994. Trade critics argue that multinationals take advantage of the cheap labour and the lax, and seldom enforced, labour protections in emerging economies. Still, labour provisions in FTAs force states to pass law amendments and comply with certain international standards, for example the International Labour Organization’s Declaration on Rights at Work. CPTPP’s labour provisions compel Vietnam to take measures against the infamous “sweatshops” and the United States-Mexico-Canada Agreement (USMCA, NAFTA’s potential replacement) urged Mexico to amend its labour laws in a pro-worker reform. Probably, the most extreme example is the Labor Value Content (LVC) provisions in the USMCA, which enforce a minimum hourly wage for a percentage of workers directly involved in the production of vehicles and auto parts in North America. Rather than making a race to the bottom, FTAs are an instrument for upward harmonisation of labour standards.
The Road Ahead
Attempting to reduce inequalities with protectionist measures is a costly mistake. The way forward is to strengthen trade institutions to make them less subject to blockades and promote enforcement mechanisms when a party does not comply with its obligations.
It is possible to think of a broader agenda with disciplines that ultimately address global inequalities from a trade policy perspective. In a recent interview, Rodrik gives light on some issue areas:
Additionally, a more ambitious proposal could include:
Despite the protectionist wave in recent years, there are reasons to believe the outlook for global trade is not so grim. The main argument to sustain this view is the enactment of CPTPP last year and the imminent passing of the USMCA on Capitol Hill. Most likely the U.S. will eventually rejoin CPTPP and although trade frictions with China will likely prevail, they likely will not distort the basic foundations of global trade governance. States have a narrow margin to significantly revert the openness achieved so far, and this is good news for the fight against inequality.
Oscar Ocampo is an MPP student at the LSE. Before moving to London, Oscar served as an advisor to the board of directors of Mexico’s Federal Electricity Commission and as a public affairs consultant at De la Calle, Madrazo, Mancera, a Mexico City based firm, where he participated in policy design, legislative and regulatory analysis and political-electoral analysis, as well as international trade projects. Previously he worked as a legislative staffer at the Legislative Assembly of Mexico City and as research assistant at the University of Hamburg’s Center for Global Governance. Oscar holds a BA in Political Science from the University of Hamburg, Germany, where he graduated with a thesis that analyzed the impact of the North American Free Trade Agreement (NAFTA) and trade openness on the Mexican transition to democracy.
Banerjee, A.J. & Duflo, E. (2019/11/06). Does free trade reduce inequalities, ask Abhijit Banerjee and Esther Duflo in their new book. Bilaterals, in https://www.bilaterals.org/?rcep-does-free-trade-reduce. Last accessed: 20/11/2019
Blenkinsop, P. (2019/11/19). Global trade umpire: the next casualty of Trump's tariff war? Reuters, in https://uk.reuters.com/article/uk-wto-trade/global-trade-umpire-the-next-casualty-of-trumps-tariff-war-idUKKBN1XS1SU. Last accessed: 20/11/2019
Comprehensive Economic and Trade Agreement. Global Affairs Canada, in https://www.international.gc.ca/trade-commerce/trade-agreements-accords-commerciaux/agr-acc/ceta-aecg/text-texte/18.aspx?lang=eng. Last accessed: 18/11/2019
Comprehensive and Progressive Agreement for Trans-Pacific Partnership. Global Affairs Canada, in https://www.international.gc.ca/trade-commerce/trade-agreements-accords-commerciaux/agr-acc/tpp-ptp/text-texte/17.aspx?lang=eng. Last accessed: 18/11/2019
De la Calle, L. (2019). Extortionomics and ideas to leverage the digital revolution. Woodrow Wilson Center for International Scholars, Washington D.C., in https://www.wilsoncenter.org/sites/default/files/ldc_-_extortionomics_and_ideas_to_leverage_the_digital_revolution.pdf. Last accessed: 18/10/2019
Gough, N. (2017/03/01). The workers who regret Trump’s scrapping of a trade deal. The New York Times, in https://www.nytimes.com/2017/03/01/business/trump-tpp-trade-vietnam-labor-environment.html. Last accessed: 18/11/2019
New EU-Mexico agreement. The agreement in principle. EU Trade Commission, in https://trade.ec.europa.eu/doclib/docs/2018/april/tradoc_156791.pdf. Last accessed: 18/11/2019
North American Free Trade Agreement. NAFTA Secretariat, in https://www.nafta-sec-alena.org/Home/Texts-of-the-Agreement/North-American-Free-Trade-Agreement. Last accessed: 18/11/2019
Rodrik, D. (2018). Putting global governance in its place. Paper prepared for the World Bank ABCDE conference on June 17‐18, 2019 in Washington, D.C., in http://pubdocs.worldbank.org/en/660121560870623534/Putting-global-governance-in-its-place-June-17.pdf. Last accessed: 20/11/2019
Rodrik, D. & Milanovic, B. (2018). The fuel of discontent: hyper globalization causing a growing income inequality. PWC, in https://www.pwc.nl/en/topics/economic-office/conversations-with-top-economists/the-fuel-of-discontent-hyper-globalization-causing-a-growing-income-inequality.html. Last accessed: 20/11/2019
United States-Mexico-Canada Agreement. Office of the United States Trade Representative, in https://ustr.gov/sites/default/files/files/agreements/FTA/USMCA/Text/22_State-Owned_Enterprises.pdf. Last accessed: 18/11/2019
Organisation for Economic Co-operation and Development. (2017). Inequality: A hidden cost of market power in https://www.oecd.org/daf/competition/Inequality-hidden-cost-market-power-2017.pdf. Last accessed: 18/11/2019
Header Image: Getty Images 2018
Posted on 29 Nov 2019