News and Analysis: 1-5 Mar 10 | EmergingFrontierMarkets.com

Based in: Manila, Philippines

Posted on Fri, 5 Mar 10:

Greek bond issue raises $6.8 billion: Greece raised badly needed cash w/ a bond issue Thu, passing a key test of its ability to avoid a disastrous debt default and dig out of a financial crisis that has shaken the EU. The bond was 3 times oversubscribed - meaning demand exceeded available bonds - w/in an hour of its opening. The sale reflects on its ability to raise money to pay off expiring bonds and avoid the risk of default. News of the issue comes a day after it detailed a whole new round of austerity measures. Labor unions fiercely oppose the measures and have announced protests for Fri, when parliament is set to approve draft legislation on the plan, AP (courtesy Toronto Star), 5 Mar 10

Crash course: Institute launches online game on 'crash course in changing the world'--The Bank's Institute has launched an online multiplayer game designed to empower young people all over the world, esp in Africa, to start solving urgent social problems like hunger, poverty, disease, etc. Over 4,000 participants from more than 120 nations pre-registered to join. They will be challenged to complete a series of 10 missions and 10 quests - one per wk over the course of the 10-wk game. Set in the yr 2020, the game's story follows the efforts of a mysterious network of Africa's best problem-solvers. Each wk, as players unravel the mystery of the network, they will form their own innovation networks, World Bank Inst, 3 Mar 10

Post-crisis rethink at Asia conference: Top policy makers and academics from around Asia and G20 have been meeting in Seoul to debate some of the most pressing issues to emerge from the recent global downturn. The one-day confab is entitled 'How to reconstruct the world economy'. Among the proposals is a suggestion by the IMF chief economist that central banks might consider setting their target inflation rate at 4%, rather than the long-held ideal of 2%. Another paper suggests it is too early to withdraw from crisis-response policies, but proposes 5 basic principles to guide an exit from stimulus plans. A third paper addresses future sources of growth and asks how the world's economies can avoid the global imbalances that precipitated the current crisis. Another discusses how the monetary system could be structured to dissuade economies from building up reserves to insure vs capital account crisis, IMF Survey Mag, 25 Feb 10

Posted on Thu, 4 Mar 10:

Bret Stephens: How Milton Friedman saved Chile--Chile has some of the world's strictest building codes. That makes sense for a nation that straddles 2 massive tectonic plates. But having codes is one thing, enforcing them is another. The quality and consistency of enforcement is typically correlated to the wealth of nations. The poorer the nation, the likelier people are to scrimp on rebar, or use poor quality concrete, or lie about compliance, Wall Street Journal, 1 Mar 10

Naomi Klein: Milton Friedman did not save Chile--To say the late economist deserves credit for the country's building codes shows a lack of knowledge of pre-coup Chile, says The Shock Doctrine ('07) author, Guardian/ UK, 3 Mar 10

Post-crisis growth in developing countries--Special report on the implications of the '08 financial crisis: In May '08, we released our flagship The Growth Report. At that time, the West's financial system was in some distress, but we did not anticipate the terrifying mayhem that followed in Sept. In light of the events of the past yr, we wanted to revisit the recommendations of the original report. Here, we ask whether it got anything significantly wrong, or left anything significant out. We then explain how developing nations can make themselves more resilient in the face of such blows, Commission on Growth and Development, Jan '10 (Intro, 4pp. | Concluding thoughts, 2pp.[pdf] | Full report)

Posted on Wed, 3 Mar 10:

Quake threatens important Chile fish, wine sectors: The tsunami that hit this coastal city of Talcahuano (off Concepcion) sent 50-ton fishing boats crashing onto land and demolished its port - wiping out the $40 mil. in biz that courses through the local economy from the annual anchovy and sardine catch. Less than 160 km away, the economy took another beating as the quake downed bridges and opened up vast crevices on the nation's only north-south highway, paralyzing the export lifeline for the nation's renowned farm-raised salmon industry. And the telecommunications system was still so badly out of whack 4 days after the quake that local and foreign investors who own vineyards that carpet the hardest-hit areas couldn't reach winery employees by phone or Internet to discuss the upcoming harvest, AP (courtesy NPR), 3 Mar 10

Marker: Jacques Polak, iconic economist at IMF, dies at 95--Dr Polak, a native of the Netherlands, was a member of his nation's delegation to the Bretton Woods Conference in '44 at New Hampshire where the idea of both the IMF and the World Bank was hatched. He was thought to be one of the last surviving participants in the confab. He was also instrumental in the development of the SDR (Special Drawing Rights) - the intl reserve asset that was utilized as recently as last yr to bolster intl liquidity during the global financial crisis, IMF Survey Mag, 1 Mar 10 (A legacy of model elegance, Finance & Devt, June '08)

Josh Lerner: Jamaica vs Singapore--Both are relatively tiny states, w/ under 5 mil. residents apiece. Upon Singapore's independence in '65 - 3 yrs after Jamaica's own establishment as a nation - the 2 nations were about equal in income level. Both had a centrally located port, a tradition of British colonial rule, and govts w/ a strong capitalist orientation. Jamaica, in addition, had plentiful natural resources and a robust tourist industry. But 4 decades later, their standing was dramatically different: Singapore had climbed to a per capita GDP of $31,400, while Jamaica’s figure was only $4,800. What accounts for the difference?, asks Harvard Business School prof, American Mag, 19 Nov 09

Posted on Tue, 2 Mar 10:

Aid pledges pour into quake-hit Chile: Aid pledges have poured into Chile from around the world after the govt made its request for help as the rising death toll reached 723. Some 2 mil., or one eighth of the entire pop., are estimated to have been affected by Sat's massive temblor, which along w/ an Ecuador quake in 1906 is the 7th most powerful on record. Chilean For Min Fernandez said after conferring w/ Pres Bachelet that dozens of satellite phones for quake-hit areas were on their way. He said that foreign nations were also sending mobile bridges and field hospitals, Ag. France-Presse (courtesy ChNewsAsia/ S'pore), 2 Mar 10

Martin Feldstein: How safe are your dollars?--The fear about the dollar's future is driven by several different but related concerns. Will the value of the dollar continue its long-term downward trend relative to other currencies? Will the enormous rise of US govt debt that is projected for the coming decade and beyond lead to inflation or even to default? Will the explosive growth of commercial banks' excess reserves cause rapid inflation as the economy recovers?, notes Harvard prof/ fmr Council Econ Advisors chair, Proj Syndicate (courtesy Malaysian Star), 27 Feb 10

Posted on Mon, 1 Mar 10:

Chile quake death toll over 700 as rescue ramps up: Police fired tear gas and imposed an overnight curfew to control looters who sacked virtually every market in this hard-hit city of Concepcion as Chile's quake toll surpassed 700. Pres Michelle Bachelet, who leaves office 11 Mar, promised imminent deliveries of food, water and shelter for thousands living on the streets, a day after a magnitude-8.8 quake - one of the biggest in centuries - killed at least 708 people and destroyed or badly damaged 500,000 homes, AP (courtesy China Post/ Taiwan), 1 Mar 10

Financial crisis commission opens 2nd round of hearings on meltdown: While the Senate Banking Cmte may be close to proposing a fincl regulatory reform bill, elsewhere in Wash. the investigation continues into what caused the meltdown in the 1st place. The 9/11 commission for the fincl crisis launches their 2nd set of public hearings, a mth after hauling top Wall St execs to the Capitol for questioning. These hearings include a no. of experts on the fincl crisis presenting working papers on the causes that led to the meltdown, Daily Caller, 26 Feb 10 (Fincl Crisis Inquiry Comm--Forum to explore causes of fincl crisis)

Coffee/ tea room: Revamping Old Asia--Many Asian nations are discovering that reviving historic areas in their cities not only preserves their cultural heritage but also boosts their economy, Development Asia, Jan-Mar '10 [pdf] (Dutch Jakarta left behind | A Pearl [of the Orient] in need of polish)

EmergingFrontierMarkets.com

emerging and frontier markets:

the unofficial field guide