News and Analysis: 18-22 Jan 10 | EmergingFrontierMarkets.com

Based in: Manila, Philippines

Posted on Fri, 22 Jan 10:

As world economy slowly recovers, developing world faces scarce financing: The latest annual Global Economic Prospects: Crisis, finance, and growth warns that globally, GDP growth is improving, but it will be a long road to full recovery. The strength of the recovery will depend on private-sector demand and the pace of withdrawal of fiscal and monetary stimulus. It estimates that about 64 mln more people may be living in extreme poverty by the end of '10 due to the crisis. Developing nations need to anticipate scarcer and more expensive capital, World Bank, 21 Jan 10

N Ferguson and L Kotlikoff: How to take moral hazard out of banking--Some in the US favor a new Glass-Steagall Act to separate commercial from investment banks. The former would behave themselves and be protected, while the latter could do as they pleased but w/o govt help. Others favor narrow banking, which fully backs deposits but leaves the rest of the system on its own. But times have changed. Jimmy Stewart - aka George Bailey, the trustworthy banker in It's a Wonderful Life - is dead. His local bank, Bailey Savings and Loan, is owned by a conglomerate. As Bear Stearns and Lehman Brothers showed, investment banks are too big to fail, say Harvard biz historian and Boston U economist, FT (courtesy latter's Weblog), 2 Dec 09 (Obama takes big step toward limited purpose banking, 21 Jan | Jimmy Stewart is Dead, Mar '10)

Notice from the Publisher: This Web site is marking its 8th anniversary this week. We extend our heartfelt thanks to all of you who have made it a regular stop as you surf the Web. And to provide some perspective of how the site evolved to what it is now, here's our Mar '08 essay "From 9/11 to Bali to 11-M to 7/7 to...", EmergingFrontierMarkets. com, 20 Jan 10

Posted on Thu, 21 Jan 10:

Four Asia-Pacific nations lead world in economic freedom: Hong Kong maintains its postition as the world's freest economy, followed by Singapore, Australia and New Zealand, acc to the latest Index of Economic Freedom. The annual index ranks 179 nations on the basis of 10 measures of econ openness, regulatory efficiency, rule of law, and competitiveness, Heritage Foundation/ Wall St Journal, 20 Jan 10 [pdf] (Country rankings)

A growing US-China rift: Q&A w/ Nicholas Lardy, Peterson Inst senior fellow--Q: On the global economy, China has recovered more robustly than any other nation in the world. Its growth, as you had projected, is going to be very strong this yr. So, you're hearing concerns again about the return of the global imbalances issue, of China building up big surpluses. Is there any sign of that, and what do you make of the concerns being expressed in the US and Europe?, Peterson Inst, 6 Jan 10 [pdf]

Coffers: Michael Spence--Investment strategy after the crisis: Investment strategies should not be based on the assumption that all times are 'normal' times, and that periodic instability is abnormal. The challenges of assessing systemic risk and the timing of instability are just that - challenges, not reasons to ignore the phenomenon, says Nobel Laureate '01 and Commission on Growth and Devt chair, Proj Syndicate (courtesy Malaysian Star), 23 Dec 09

Posted on Wed, 20 Jan 10:

Daniel Kaufmann: Haiti - Rescue, recovery, and effective development aid: It is clear what the immediate emergency rescue and relief needs are, such as water, food and medical treatment, and then some shelter and emergency power. What is much less clear is what needs to happen after the 1st emergency stage, and what the response from the intl community ought to be in the short-to-medium term. Some are providing recommendations brimming w/ certitude. But it just may turn out to be more efficient to start from a position of humility and doubt, acknowledging a measure of collective ignorance as to what will work in the medium term, says Brookings Inst senior fellow and Worldwide Governance Indicators fmr dir, Governance Post, 18 Jan 10 (Paris Club creditors call upon Haiti's other bilateral creditors to cancel Haiti's debt, 19 Jan)

Boardroom/ C-suite: The man behind the netbook craze--A few years ago rivals mocked the chairman of Asustek for his purse-size laptop computers, derided as low-power playthings. Today virtually every PC manufacturer on the planet offers its own version of the netbook, Fortune, 20 Nov 09

Posted on Tue, 19 Jan 10:

By the book--Taiwan's device du jour: The success of Amazon's "most-gifted" electronic book reader, Kindle, and its gathering no. of rivals has not been lost on Taiwan. In fact, the e-reader, a $1B market in '09 expected to better than double this yr, has fast become a cottage industry for the island economy, which aims to produce 80% of the component value of the devices by '13. No outfit got a better jump on this sector than Prime View Intl, whose full absorption in Dec of the US's E Ink Corp. solidified its status as the world's largest e-paper screen provider w/ a 90% share, Forbes, 15 Jan 10; (Ed.'s note: Pls click again on the link above after reaching the front page to get to the article); and

Willy Shih: US can't manufacture the Kindle and that's a problem-- Even though Amazon's Kindle e-reader's key innovation - its electronic ink - was invented and is being made, at least for now, in the US, Asian firms are capturing a large portion of the value added by manufacturing the e-reader itself. Even more worrisome, US is almost certain to lose control of the e-paper display tech and the future innovations that spring from it. Its most expensive single component, the display, is manufactured by Taiwan's Prime View Intl, notes mgmt prof, Harvard Univ, 13 Oct 09 (w/ Pisano--Restoring American competitiveness, Harv Bus. Rev [summary], July-Aug '09 | US must manufacture to innovate - and provide jobs, Nov '09)

Knowledge on fire--Girls' schools in Afghanistan face highest risk of violence: 'Stop teaching and running the girls' school, otherwise you will be slaughtered.' That was the message sent to the Headmaster of a girls' school in Logar, just south of Kabul, when masked gunmen assaulted him just outside of his house. Acc to a new joint report titled Knowledge on Fire: Attacks on Education in Afghanistan, attacks on schools are increasing at an alarming rate. Girls are at particular risk of attacks aimed at keeping them out of school, Afghan Min Educ/ CARE Intl/ World Bank, 6 Jan 10

Posted on Mon, 18 Jan 10:

David Brooks: The underlying tragedy--Haiti, like most of the world’s poorest nations, suffers from a complex web of progress-resistant cultural influences. There is the influence of the voodoo religion, which spreads the message that life is capricious and planning futile. There are high levels of social mistrust. It's time to promote locally-led paternalism. Here in America, we first tried to tackle poverty by throwing money at it, just as we did abroad. Then we tried microcommunity efforts, just as we did abroad. But the programs that really work involve intrusive paternalism, says NYT columnist, NYTimes (free registr reqd), 14 Jan 10 (Blattman's blog--David Brooks saves the world in 1000 words, 16 Jan)

Asia poised for growth but policy shifts, collective action needed, says study: Asian economies are poised for accelerated growth as the global econ crisis recedes, but recovery remains fragile and carefully calibrated policy adjustments along w/ increased integration efforts will be needed to sustain growth and cushion the region vs future shocks, says a new study, Asian Devt Bank, 14 Jan 10 (China recovery to quicken, policy changes needed to avoid overheating | India set for solid recovery, but action needed on inflation, deficit | SEAsia recovering from crisis, but fiscal, structural changes needed)

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