Discussion about climate change and the management of CO2 emissions constitute a global debate for humanity. The causes and effects are the object of intense scientific study by experts who urge immediate and large-scale action. The conversation is largely expressed in terms of economics and development with little contemplation of the ethics of the present predicament.

Until now the proposed solutions have usually relied on the application of market instruments to the scarce capacity of the atmosphere – a global public good – to cycle greenhouse gases. Less discussed are the asymmetries among countries regarding excessive emissions and the consequences suffered. Almost absent is the perspective of political economy.

Into this scenario arrives The Economics of the Yasuní Initiative. It offers a fresh vision, holistic and substantiated, to the dilemmas of climate change. Ethics infuse every page and the tone is defiant. Official discourse is vigorously questioned and thermodynamics is shown to matter, indeed. Physics explains how the atmospheric sink was appropriated in the North and economics, how payment for foregoing petroleum extraction in the South can lead to both efficiency and equity.

The Yasuní-ITT Initiative emerges from Ecuador where the concept of buen vivir (good living) is forging a new relationship for government, society, nature and the market. The proposal finds itself in a milieu unimaginable just a few years ago: the conferring of rights to nature under the Ecuadorian Constitution of November 2008 – an earnest attempt to restore our environment.

When Manmohan Singh was Finance Minister of India, his critics pointed out that (a) his early writings had given the impression of his being a left-oriented economist who would wield his pen in favour of the underdog in any context, be it international politics or domestic policy debate; whereas, (b) once he became Finance Minister, he tried to liberalize the economy, encourage free trade, and make more room for market-based policies. To many, especially to the Indian Left, these facts seemed contradictory. They criticized Singh for not living up to his writings.

This was a mis-assessment. There is no real contradiction between (a) and (b). In fact, I supported Singh's reforms precisely because he combined both (a) and (b). Economic liberalization without concern for the disadvantaged gives rise to right-wing policies of the kind seen in Ronald Reagan's America and Margaret Thatcher's Britain—and to a certain extent even in India in the 1980s. I have no sympathy for it.

On the other hand, compassion without the ability to conduct clear-headed analysis can prove to be very costly. The world economy today is extremely complex; but there is also a large amount of analysis and statistical information available on this intricate organism. To ignore this information and to live by slogans and rhetoric is to court disaster. By failing to distinguish between Singh's reforms and rightwing economics, which ought to be abhorred, the Left has done us a great disservice.

Introduction

In this chapter, I argue for the global civil society as normatively and theoretically a new paradigm of global governance and also a possible emancipatory ‘cosmopolitan political project’ to the emerging challenges of democracy, justice and inclusive governance at the global level. Though global civil society is often perceived as a multilayered, contested and decentred space of associtionalism, I consider it an epic and irreversible ‘double movement’ of people seeking to transform hegemonic structures of global governance, protect human rights, minimize violence and increase the sphere of democratic life across the borderless world. And I suggest that this argument can be further explored, expanded and defended by offering at least four reasons.

First, I argue that globalization, benign or regressive, has created unique ‘political opportunity structures and processes’ rendering state-centric conventional theories of international relations and global governance completely irrelevant. Fuelled by the twin processes of associational and informational revolutions in the 1980s, global civil society has slowly and sturdily emerged as ‘a supranational sphere of social and political participation’ for a vast majority of people who have had not opportunity in the past to be heard in the hegemonic structures of international organizations. It is clear from the scope, reach and velocity of globalization that sovereignty of the modern nation-state has exhausted its imaginative power to continually secure the consent and allegiance of the population living under its shadow.

Introduction

In part I of this volume, it was argued that interactive learning in national systems of innovation (NSI) is strongly affected by the specific institutional set-up (chapter 2) and the specialisation in production structure (chapter 4). In chapter 3, the notion of user-producer interaction was introduced as a critical parameter for innovative success thus forming a micro-foundation for innovative industrial complexes and an important determinant for the performance of NSI's. The interaction between firms in user-producer relationships is not the only important type of interactive learning in innovative processes. In chapter 5 the interaction between various departments and functions within the firm were discussed.

Introducing now the notion of ‘industrial networks’, we set out to specify further, conceptually, the relationships between NSI's and industrial complexes/development blocks on the one hand and user-producer relationships on the other. The application of the network concept can serve as a qualitative as well as a quantitative specification of the micro-structure and micro-behaviour in NSI's.

However, the national level of systems of innovations will not be explicitly analysed in the present chapter. Its focus is on conceptual problems and on empirical illustrations mainly from Danish and Swedish industry. In this context, it should be mentioned that the concept of industrial networks also applies to international relationships (Imai and Baba, 1991). International industrial networks and inter-firm alliances will be discussed in chapter 13.

On the face of it there should be nothing contentious about the International Labour Standards (ILS) movement. It is meant to be a global effort to raise the working conditions and living standards of workers, primarily in developing countries. What is curious is that the biggest opposition to ILS has come from its alleged beneficiaries—to wit, Third World workers, unions, and governments. The fear in the South is that once such a global monitoring scheme is brought into existence, it will get diverted into an instrument of protection for the North. In the name of ILS, arbitrary and inflexible trade sanctions will be imposed on Third World countries. This fear gets heightened if the labour standards are imposed through the World Trade Organization (WTO), via a ‘social clause’ provision, which would allow the WTO to use trade sanctions against any nation that violates minimal labour standards. The other concern stems from the adjective ‘international’, which suggests a uniform global standard for all nations.

Recently, Archon Fung, Dara O'Rourke, and Charles Sabel have come up with an ingenious suggestion for international labour standards to get around some of these criticisms. They call their scheme ‘Ratcheting Labour Standards’ (RLS). They try to bring in flexibility by keeping labour standards away from formal global organizations.

Introduction

The acceleration of globalization in the 1980s began with the revival of classical liberal economics, as Keynesian policies reached their demise. Faced with the stagflation crisis of the 1970s and the first oil crisis, Ronald Reagan and Margaret Thatcher restarted economic growth by freeing trade and investment. They cut income taxes, especially for the wealthy, deregulated and privatized the economy, reduced the power of trade unions, weakened the welfare state and lifted barriers to trade and investment at home and abroad, therefore raising incentives for investment. Many underdeveloped countries faced similar crises at the time, especially those following import substitution models, and fell into debt through rising interest rates and oil prices. Essentially the same macroeconomic and growth policies were applied in underdeveloped countries, following what became known as the Washington Consensus (Williamson 1990). In addition, when the Berlin Wall fell in 1989, the end of the Cold War created a global market economy. As free trade and investment treaties proliferated, globalization accelerated. In particular, foreign direct investment (FDI) increased worldwide at an average rate of almost 28 per cent a year from 1983 to 1998. Thus, freer markets and a reduced government role in both developed and underdeveloped countries released a fresh wave of globalization. The new schools of economic thought produced theories implying that free trade and FDI would lead to the equalization of growth rates and production levels across countries.

Abstract

Like many developing countries that liberalized their capital account, Turkey has been at the mercy of short term capital inflows accompanied by a continuous real appreciation of the domestic currency since 1989. Open foreign exchange positions and increasing foreign exchange related assets in residents' portfolios have been the inevitable side affect. The recent inflation targeting policy is claimed to have reversed this trend. However the currency substitution measure developed in this study suggests an alternative interpretation of the situation. Although the share of TL denominated assets in total monetary assets has been increasing relative to the share of foreign currency related assets, the liquidity services of TL denominated assets is in fact not increasing. In this study distinct measures of asset substitution and currency substitution, as opposed to the generic FCD/M2Y, are developed and the different degrees of liquidity provided by alternative monetary assets are distinctly measured. These AS and CS measures follow the conventional intuition as to their driving factors and suggest the existence of hysteresis in currency substitution in Turkey. From a policy standpoint, this provides evidence that targeting and decreasing the inflation rate alone may not be sufficient to overcome the structural problems of the economy that have been in the making for decades.

Keywords: currency substitution; asset substitution; Turkey; Divisia aggregates.

JEL Classification: E5, E6, F3.

Introduction

The widespread experience in most developing countries of the use of foreign currencies and foreign currency denominated assets has been an issue of vast academic interest since the 1970s.

The numbers are quite stunning. In 1998-9 the volume of India's software exports was $2.7 billion, in 1999-2000 it was over $4 billion and in 2000–1, from the estimates coming in, it is expected that the exports will be $6.2 billion. This trend has been there for the last eight years—an annual growth rate of approximately 40 per cent. This, given the compounding involved, means that every two years India's exports get virtually doubled. A study by NASSCOM and McKinsey in 1999 predicted that India's exports will reach $50 billion by the year 2008. Since India's total current exports are around $35 billion, and nothing like this has happened in any other sector in India in living memory, these estimates and predictions are giving rise to much scepticism.

Are the numbers a result of jugglery? I myself was initially sceptical, but having checked and compared various sources I am convinced that, give or take a margin of 5 per cent, the figures of the volume of exports are right—the performance in this sector has been spectacular over the last eight or ten years.

What about the forecast? This has met with harsh criticism. One argument has to do with pure deduction. If we assume that India's current export growth rate will persist, it is easy to check that in about sixteen years our exports will exceed our national income (assuming that income also grows at the current rate).

‘The Registrar of Assurances, Government of West Bengal, Kolkata, Office of the Additional Registrar of Assurances III’. As I stand outside the office thus labelled, surveying the milling crowds and waiting for my turn, I have a sinking feeling that I am in a Kafka novel and will never be able to emerge from it.

I had sold a small property some time ago and the buyer asked me to accompany him and his lawyer to the Additional Registrar's Office to have the sale registered. I agreed, partly to be helpful and partly out of curiosity about how the bureaucracy works. That explains my predicament, though the thought of being here all day is beginning to make me regret the decision.

The building complex in Kolkata's office district, where the Additional Registrars' offices are situated, is interesting. There is an L-shaped building, twelve storeys high. On the open face of the L is another building, five-storeyed and crescent-shaped. These two buildings enclose a yard that looks like a truncated D. In that small yard someone has had the sense to plant leafy green trees—palm, and what to my botanically untrained eyes look like giant money-plants.

There are rows and rows of women sitting in the corridors of the crescent-shaped building, signing in people like me who are waiting to have a property transaction registered with the Offices of the Additional Registrar III, and filling in ledgers while taking care not to have their elbows jogged by home buyers and registrars.

The Hindi/Urdu word dosti encompasses greater intensity and devotion than the comparable English term, ‘friendship.’ Bollywood's treatments of dosti entail physical intimacy and a moral code not necessarily shared in friendships between men in the West. Ruth Vanita elaborates, ‘The continuum between romantic friendship and love is a slippery space where affection slides into or is coded as erotic without being overtly depicted as sexual.’ She draws parallels to Hollywood buddy films and remarks that Bollywood representations of dosti are also influenced by ‘older Indian traditions of same sex love.’ Cinematic dosti is a fusion of Hindu mythology, Muslim ghazals, Sanskrit and Parsi theatre, Hollywood cinema and music video. India's economic liberalization in the mid 1990s led to the introduction of satellite television on the subcontinent and a subsequent increase in imported Western pop culture. The shift from dosti as normative homosocial relationship towards the current trend of comic acknowledgement of the homoerotic undertones of dosti is tied to the recent influx of Hollywood film and American television in which homosexuality is a popular theme. Post-2000 depictions of dosti via its coupling with gay jokes is reflective of national concerns about how economic liberalization, the burgeoning middle class, Western style consumer capitalism and diasporic populations impact Indian national and diasporic values, culture and traditions.

An examination of Bollywood dosti films from the 1970s through 2004 demonstrates how the newly queered homoerotic dosti points to a possible national move away from a hegemonic heteronormativity that enforces marriage and reproduction.

Introduction

In a period characterised by increasing internationalisation and transnational political regulation the traditional role of national government in relation to industrial policy and technology policy is challenged. In this context it becomes important to understand which role the public sector has played in the past and can play in the future in relation to innovation and technical change within nations.

In many ways, the central role of the public sector in creating, maintaining and developing modern national systems of innovation is comparable with the one played by a pacer in a bicycle race. If public sector demand in both qualitative and quantitative terms races ahead it loses contact with the innovative capability of national suppliers. On the other hand, if public sector demand slows down too much, national suppliers may slow down their process of renewal and stick to pure routinising. As optimal pacing in a bicycle race requires a mutual understanding between the racing cyclist and the pacer, optimal pacing leading to an upgrading of national systems of innovation requires a mutual understanding between the public and private participants in interactive learning and searching processes.

In many countries the public sector actually tries to play the role of a pacer via technology programmes, public procurement policies, and so on. Sometimes it succeeds, and sometimes it fails or comes out with only modest success.