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No struggle for social justice that lacks a grounded understanding of how wealth is accumulated within society, and by whom, is ever likely to make more than a marginal dent in the status quo. Much work has been done over the years by academics and activists to illuminate the broad processes of wealth extraction. But a constantly watchful eye is essential if new forms of financial extraction are to be blocked, short-circuited, deflected or unsettled. So when the World Bank and other well-known enablers of wealth extraction start to organise to promote greater private-sector involvement in ‘infrastructure’, for example through Public-Private Partnerships (PPPs), alarm bells should start to ring. How are roads, bridges, hospitals, ports and railways being eyed up by finance? What bevels and polishes the lens through which they are viewed? How is infrastructure being transformed into an ‘asset class’ that will yield the returns now demanded by investors? Why now? What does the reconfiguration of infrastructure tell us about the vulnerabilities of capital? The challenge is not only to understand the mechanisms through which infrastructure is being reconfigured to extract wealth: equally important is to think through how activists might best respond. What oppositional strategies genuinely unsettle elite power instead of making it stronger?
Chapter 5 Infrastructure corridors, frontier finance and the vulnerabilities of capital The instability of infrastructure-as-asset-class and the reluctance of investors to back higher-risk, new, so-called ‘greenfield’ projects are creating a major problem for the smooth expansion of globalised capital. For infrastructure-as-asset-class is more than just a rent grab by finance or an opportunity for derivative traders to make a quick buck by constructing a superstructure of complex financial trades on the back of state-backed guarantees – though it is certainly
Chapter 4 Extraction in motion: infrastructure-as-asset-class 4.1 Yield hogs For investors, ‘infrastructure’ is now an ‘asset class’,1 the boundaries of which are limited only by the ability of finance to build new contracted income streams that extract wealth, directly or indirectly, from the activities that surround the funding, construction and operation of infrastructure facilities. What started off with investments in so-called economic infrastructure (utilities, roads, ports, airports and the like) now include investments in resource/ commodity
of this book – but not, one hastens to add, of infrastructure-as-asset-class, let alone of accumulation or of injustice. Those ‘final chapters’ will never be final: they will always be works-in-progress, unfolding, multi-layered narratives whose trajectory will be driven, as in the past, by the evolving interplay of numerous everyday struggles between those who would use mundane acts of provisioning (whether of food or water or healthcare or transport or goods or finance) as a means of accumulating wealth and those who would harness them to support social
As the tragedy of the Grenfell Tower fire of 14 June 2017 has slowly revealed a shadowy background of outsourcing and deregulation, and a council turning a blind eye to health and safety concerns, many questions need answers. Stuart Hodkinson has those answers. Safe as Houses weaves together Stuart’s research over the last decade with residents’ groups in council regeneration projects across London to provide the first comprehensive account of how Grenfell happened and how it could easily have happened in multiple locations across the country. It draws on examples of unsafe housing either refurbished or built by private companies under the Private Finance Initiative (PFI) to show both the terrible human consequences of outsourcing and deregulation and how the PFI has enabled developers, banks and investors to profiteer from highly lucrative, taxpayer-funded contracts. The book also provides shocking testimonies of how councils and other public bodies have continuously sided with their private partners, doing everything in their power to ignore, deflect and even silence those who speak out. The book concludes that the only way to end the era of unsafe regeneration and housing provision is to end the disastrous regime of self-regulation. This means strengthening safety laws, creating new enforcement agencies independent of government and industry, and replacing PFI and similar models of outsourcing with a new model of public housing that treats the provision of shelter as ‘a social service’ democratically accountable to its residents.
developed to extract wealth, directly or indirectly, from the activities that surround the funding, construction and operation of infrastructure – and attempts to quantify the amount of money now being extracted. The trajectory is not only towards increased inequality: it is also profoundly undemocratic, elitist and unstable. Undemocratic because a handful of fund managers now increasingly determine what gets financed and what does not. Elitist because the facilities that would most benefit the poor do not get built. And unstable because infrastructure-as-asset-class is a
11’, ‘The Frontier Five’) ‘capture and perpetuate the intensely competitive nature of international capital mobilization in the new pecking order of emergent nation states engaged in the race to outperform within the asset class of emerging markets, reminiscent of the analogous race for survival in the wilderness’ (Lakshminarayan 2017 : 854). African nations are subjected to a particular kind of othering through this financial discourse: Africa is either ‘rising’ or ‘in crisis’, most often ‘a combination of the two
through geographical, industry, asset class and customer diversification. She listed twenty committees overseeing risk-taking activities, grouped as management oversight committees, firm-wide transaction approval committees and business level transaction approval committees. The risk management function was independent from trading, with the reporting line being from the CRO to the Executive Committee to the Head of Strategic Partnerships, Principal Investing and Risk, who reports to the Chairman and CEO. The Global Risk Management Division consisted
in various asset classes, many investors looked to the spot FX market to hedge risk exposures; for example, downside risk in US equities was apparently hedged by buying Japanese yen. A strategy of this kind may have had limited success but at least it was available, even if expensive, because the bid–ask spreads for the major currencies widened during the crisis by a factor of four to five. The other way in which investors were hit was by the rise in FX volatility and the increased risk aversion of investors. This manifested itself in the rapid unwinding of
companies in social and commodity infrastructure are taken into account, the amounts of money going into the infrastructure asset class swell still further. But by how much is pure guesswork. No aggregate figures are publicly available. Sources: Della Croce and Yermo 2013; Inderst 2013; Rothballer and Kaserer 2012; RREEF 2011 invested?’) – and more predicted to follow as infrastructure moves to the top of many investors’ shopping lists – it would seem important to explore what ‘contracted income streams’ entail in practice and how they are now central to the emergence of