3. MMT & Economic Development: The Case for Sustainable Prosperity
Fadhel Kaboub
Associate Professor of Economics, Denison University
President, Global Institute for Sustainable Prosperity
@FadhelKaboub @GISP_Tweets
Global-ISP.org
The 3rd International MMT Conference, Stony Brook University
September 28, 2019

4. What is Monetary Sovereignty?
A monetarily sovereign government:
issues its own currency,
collects taxes in that same currency,
only issues bonds denominated in that same currency
operates under a flexible exchange rate regime
An important distinction between:
Currency Issuer vs. Currency Users
Modern Monetary Theory, or MMT

5. The Spectrum of Monetary Sovereignty

6. A bit of History – Economic Development Recap
Post-independence state-led development
Import Substitution Industrialization (1950s-60s)
Export-led growth (1970s)
The Debt Crisis (1980s)
SAPs and Neoliberal reforms (1990s-present)

9. Neoliberal Economic Model
Austerity
Debt restructuring
Privatized SOEs
Labor Market Flexibility
FDI & Export-led growth ( negative terms of trade)
Financial liberalization ( Speculative bubbles)
Tourism ( resource sustainability)
Remittances ( brain drain)
Race to the bottom
More external debt …
There Is No Alternative?

10. Most Developing Countries have
Structural trade deficits
High external debt
Major root causes:
Energy deficit
Food deficit
Low value-added industrialization
Trade deficits
 Currency devaluation
 Food & Fuel price inflation
 Social Unrest unless Food/Fuel subsidies are maintained (forces the country to continues to borrow from foreign lenders: bandaid solution)

11. The only way out
Renewable energy policy
Sustainable agriculture policy
Water/Energy management/conservation policy
South-South Trade Policy
Value-added-driven industrial policy
A Job Guarantee path to reclaiming monetary sovereignty

12. Focus on Specific Inflation pressure points:
What about inflation?
Focus on Specific Inflation pressure points:
Food deficit
Energy deficit
Low value-added industrialization
Housing
Healthcare
Banking/finance
Powerful price setters
Cross boarder trafficking
Corruption
Capital controls

13. Some Practical Solutions
Sustainable Food
Sustainable Housing
Cultural Heritage Preservation

15. Aquaponics Farming

17. 100% Organic. No Pesticides. No Fertilizers. No Fertile Land
100% Organic. No Pesticides. No Fertilizers. No Fertile Land. 90% Water Savings!

18. Lettuce, Tomatoes, Mint, Parsley, Cilantro, Oregano, Basil, Strawberries … all leafy greens

19. Rapid Growth

21. Tilapia

22. Adobe Homes, Community Centers, Clinics, Classrooms, Stores, Restaurants, Hotels, Cultural Heritage Museums….

27. Tataouine, Tunisia