Contemporary

Capitalism
Development, Dynamics and Issues
[Recap by Riza N. Arfani]
Regime Continuity
• Legacy of the post-World War II international
political economic system
• Regulated capitalism: Legacy of the Bretton
Woods System
• The Global Trinity: IMF, World Bank & WTO
• Shock therapy plans, IMF Austerity Plans, Washington Consensus
• WTO as a product of GATT’s Uruguay Round
• New Institutional Trinity –IMF, the World Bank & WTO– as
absolute monarchs of yore
• Rich-poor nations, developed countries (DCs)-Less
Developed Countries (LDCs) gaps
• Strategies: UNCTAD (United Nations Conference on Trade and
Development), NIEO (New International Economic Order), etc…
• Institutions: North-South Dialogue, OPEC, G77, G15, etc.
Washington Consensus [1]
Adoption of neo-liberal policies in the 3rd World
by way of IMF-guided structural reform
Recipes [1]:
Price Decontrol, i.e. penghapusan kontrol atas harga komoditi, faktor
produksi, dan matauang
Fiscal Discipline, i.e. pengurangan defisit anggaran pemerintah/bank
sentral ke tingkat yang bisa dibiayai tanpa memakai “inflationary
financing
Public Expenditure Priorities: i.e. pengurangan belanja pemerintah, dan
pengalihan belanja dari bidang-bidang yang secara politis sensitif, seperti
administrasi pemerintahan, pertahanan, subsidi yang tidak terarah, dan
berbagai kegiatan yang boros ke pembiayan infrastruktur, kesehatan
primer masyarakat, dan pendidikan
Washington Consensus [2]
Recipes [2]:
Tax Reform, i.e. perluasan basis perpajakan, perbaikan administrasi
perpajakan, mempertajam insentif bagi pembayar pajak, pengurangan
penghindaran dan manipulasi aturan pajak, dan pengenaan pajak pada
asset yang ditaruh di luar negeri.
Financial Liberalization [tujuan jangka-pendek: menghapus pemberian
tingkat bunga bank khusus bagi peminjam istimewa dan mengenakan
tingkat bunga nominal yang lebih tinggi dari tingkat inflasi] [tujuan
jangka-panjang: penciptaan tingkat bunga bank berdasar pasar demi
memperbaiki efisiensi alokasi kapital]
Exchange Rates, i.e. tingkat nilai tukar matauang yang tunggal dan
kompetitif untuk meningkatkan ekspor dengan cepat
Trade Liberalization, i.e. mengganti pembatasan perdagangan luar
negeri melalui kuota (pembatasan secara kuantitatif) dengan tarif (bea
cukai), dan secara progresif mengurangi tarif sehingga mencapai tingkat
yang rendah dan seragam (kira-kira 10% sampai 20%).
Washington Consensus [3]
Recipes [3]:
Domestic Savings, i.e. penerapan disiplin fiskal/APBN, pengurangan
belanja pemerintah, reformasi perpajakan, dan liberalizasi finansial
sehingga sumberdaya negara bisa dialihkan sektor-sektor privat dengan
produktivitas tinggi untuk mencapai tingkat tabungan yang tinggi.
Foreign Direct Investment, i.e. penghapusan hambatan terhadap
masuknya perusahaan asing; perusahaan asing harus boleh bersaing
dengan perusahaan nasional secara setara; tidak boleh ada pilih-kasih…
Privatization, i.e. perusahaan negara hrs diswastakan
Deregulation, i.e. penghapusan peraturan yang menghalangi masuknya
perusahaan baru ke dalam suatu bidang bisnis dan yang membatasi
persaingan; kecuali kalau pertimbangan keselamatan atau perlindungan
lingkungan hidup mengharuskan pembatasan itu.
Property Rights, i.e. sistem hukum yang berlaku harus bisa menjamin
perlindungan hak milik atas tanah, kapital, dan bangunan.
Dynamic Development
 Recent developments in international economy
indicates new ways, techniques in international
economic modes of production
 Capital mobility – export processing zones
 Stateless money – globalization of finance
 Lean production, downsizing, outsourcing, extensive
production networks – restructuring the corporation
 Proliferation of regional ‘free trade’ agreements and
institutions – AFTA, APEC, CACM, ANCOM, MERCOSUR
 “Maquiladoras”– Mexican free trade zones
 New corporate strategies – capital mobility, restructuring the
corporation, corporate agenda
 EU as regional economic and political institution
 Multilateral Agreement on Investment (MAI)
Issues to be Addressed
• Cheap Labor, repressive social control, rapid economic
growth, especially in the context of Newly
Industrializing Countries (NICs)
• Polarizing the Population, growing inequalities, sectors
of low-wage, ‘contingent’ workers, need for
restructuring the corporation
• Corporate agenda: monetarism, deregulation, laissez-
faire, neo-liberalism, supply-side economy
• Reduce costs for labor and government in order to be
more competitive in global economy
What’s on the Table?
What should be done on:
International Production?
International Distribution?
International Allocation?
• Upon world wealth, i.e. Goods, services or other intellectual
properties
---------------
How actors interact in the process?
How its power relations (political context) affect the
process?
International Production
International investment, foreign nvestment: how investment models
are developed? How its power relations?
Multinational enterprises, transnastional corporations: how they
operate? How they employ the existing power relations?
International industrialization, internasional development, global
fordism: how international development models are developed? How
its political context?
Global production chain: how global production chain develops? How
it affects issues on multinational corporations, foreign investment,
international industrialization, etc.? How we benefit from the chain?
How state or national/local governments should respond? What kind
of policies are needed?
International Distribution
International trade, world trade regime/WTO: how
international power relations affect the global
trade regime? Is WTO the final form of a global
trade regime and therefore should be responded as
final?
Protectionism, economic regionalism, btrade
blocks, policy discrimination: how these issues
affect the existing model/regime? How we deal
with them?
International Allocation
Internasional finance, international monetary regime/IMF: how the
model is developed? How its political context?
Foreign aid, foreign debt, World Bank, Asian Development Bank,
Islamic Development Bank: what kinds of financial and monetary
scheme are being developed to allocate world financial resources?
What are the implications?
Collective alliance among Third World/Developing Countries: how
the actors/states design their collective bargaining strategies?
Strategic actions, strategic bargaining: what policy strategies and
models are developed by the state/national/local governments to
survive & get the benefit from the regime?