Chairs: Katleen Vermeir and Ronny Heiremans

Berkey Kabalay and Yunus Yücel – The Violent Character of Indebtedness: The Case of Turkey

The financialization process in Turkey during the 2000s heavily relies on the practice of borrowing over saving/investing. Therefore, the effects of the accompanying financial mechanisms and discourses can be located in increasing indebtedness on the individuals (in terms of credit cards and consumer loans). This financialization in borrowing is utilized for consent-manufacturing by the AKP (ruling party) as an example of economic success and welfare creation. On the contrary, in this presentation, we are unearthing how indebtedness is a form of violence and discipline over the indebted subjectivities and how the subjects reflect the violent mechanisms in everyday life. Debt is not a mere economic exchange relation. It is a violent practice of disciplining, pacifying, and controlling over the people. Its pseudo-welfare (consumption by debt) and naturalizing discourses obscure these political and violent characteristics for many parts of the society. However, in the moment of crisis, this violence is revealed through economic hardship, precarity, harassment, despair, and debt-related suicides. After the crisis of 2018 in Turkey, this violence erupted in everyday life in Turkey. Through collecting data from two national newspapers, we underlined the rising debt-related suicides in Turkey in the post-2018 context. Through this data, we are discussing the violent characteristics of the constitution of the indebted subject, its unevenness in the experience of different socio-political groups, and the reason of increasing intensity of violence which inclines suicides.

Jiwoon Yulee – The Financialization of Social Reproduction: Focusing on the Contradiction between Chaebol Capital and Labor Precarity in South Korea

This paper argues that the root cause of intensifying precarity both in formal and informal labor must be found not in automatization and platform technology but in the tendency what I call “financialization of social reproduction.” Building on the main inquiries of feminist social reproduction theories, I examine the ways recurring financial crises reorganize labor time and social capacity to reproduce livable life in South Korea. The financial crises in 1997 and 2008 accelerated dismantling of the developmental state’s apparatuses to regulate capital and social wealth and intensifying inequality and feminization in the labor market. The growing dependency on contingent labor (including subcontracting, outsourcing, platform labor, and pseudo-self-employment) for the expanded reproduction of surplus value increases the burden in the privatized reproductive realm. This popular belief hides the tendency of surplus value extraction within the sphere of social reproduction. In this paper, I contend that financial capital increasingly relies on the basic processes and functions of human life broadly defined as social reproduction. I refer to this tendency as “financialization of social reproduction” under global capitalism today. This paper thus aims to offer a close analysis of the tendency by 1) rethinking the sphere of social reproduction and 2) situating the so-called “crises of care” in the process of precaritization of labor and life. Specifically, I look at the ways South Korean big conglomerates (chaebol companies) have shifted their profit targets to the reproductive arena and how this strategy of growth focusing on short-term financial gains in the realm of life proliferates precarity and premature death of contingent workers.

Caroline JF Metz – Profiting from Crisis yet again: the Financialisation of Distressed Debts in Europe

What do private equity giants like Blackstone and UK academics have in common? Both are investing, either directly as part of a highly profitable business strategy, or indirectly as a way to secure pensions via the USS pension scheme, in distressed debts. Distressed debts, also known as ‘non-performing loans’ (NPLs), are loans that are not being repaid, or irregularly so. From a political economy perspective, they are the expression of a socioeconomic crisis making households and companies increasingly unable to keep up with their debt payments. NPL volumes have soared in Europe between 2008 and 2015, and, as high NPL ratios hamper banks’ profits, EU policymakers have considered them a key risk for financial stability. Yet, if the rise of NPLs represents a ‘crisis’ for the banking sector, NPLs have also constituted a formidable market opportunity for a particular set of financial actors. This paper explores the ongoing financialisation of distressed debts in Europe. I analyse the financial and regulatory mechanisms, strategies and forms of state support through which distressed debts have become sources of profits for private equity groups (mostly based in the United States) and debt collection firms. In shedding light on the underexplored political economy of the European distressed debt industry, I stress that the very crisis of financialisation – i.e. the limits to everyday financialisation, characterised by waves of household defaults – can still be made into a fresh terrain for financialisation and financial accumulation, thereby raising broader concerns over the politics of debt and debt defaults.

Charles Mak – Sovereign Debt Market: A Post-COVID-19 Perspective

In the past few decades, sovereign bonds form a significant part of many institutional investment portfolios, and it is also increasingly popular with individual investors. The consequences of the financial crisis 2007-09 and the subsequent sovereign debt crisis have highlighted the critical linkages between different national economies, and between sovereign debt management, financial stability, and systemic risk. The advent of the global financial crisis 2007-09 and the subsequent sovereign debt crises have highlighted how vital an effective scheme of sovereign debt restructuring (SDR) can be for international financial stability. The paper will critically analyse whether the recent COVID-19 crisis has set the stage for a debt crisis and even a broader financial collapse due to the increase of financial fragility. The first part will provide an overview of the current sovereign bond (debt) market. Moving on to the overview of the current sovereign bond market, the paper will focus in particular on whether the existing approaches for SDR are adequate to protest investors. Building on this analysis, the paper will analyse the impact of COVID-19 to the current sovereign debt market. Also, the paper will analyse on the way how the global health emergency of COVID-19 impact the drafting of future international investment agreements (IIAs). Lastly, the paper explore the potential reform to the current approaches for SDR, as well as the potential reform of the current IIAs.