News and Analysis: 15-19 Mar 10 | EmergingFrontierMarkets.com

Based in: Manila, Philippines

Posted on Fri, 19 Mar 10:

Paul Krugman: Taking on China and its currency--Widespread complaints that China was manipulating its currency - selling renminbi and buying foreign currencies, so as to keep the renminbi weak and its exports artificially cheap - began around '03. Today, it is adding more than $30 bil. per mth to its $2.4 tril. hoard of reserves. IMF expects China to have a current account surplus this yr of more than $450 bil. - 10 times the '03 figure. This is the most distortionary exchange rate policy any major nation has ever followed. And it’s one that seriously damages the rest of the world, says Nobel Laureate '08, NY Times (free registr reqd), 14 Mar 10

Ronald McKinnon: A reply to Krugman--I am dismayed but not surprised by his China bashing. Among economists but probably few others, to label a nation as 'mercantilist' as he does is as vituperative as you can get - at least since the days of Adam Smith who gave mercantilists such a bad time in The Wealth of Nations. China has not been deliberately undervaluing the renminbi to gain a mercantile advantage. Rather, it has been searching for exchange-rate and price-level stability in a world which, for better or for worse, is largely on a dollar standard, says Stanford economist, International Economy, Dec-Feb '10 [pdf]

Breacher of the peace: Daron Acemoglu, the MIT prof honored by the Amer Econ Assn in '05 as the most influential US economist under 40, has a history of challenging arbitrary and unpredictable application of rules. He argues that even free markets need impartially adjudicated regulations. by Simon Willson, Finance & Devt, Mar-May '10 [pdf] ; and

From our archive (1 Dec 09): Daron Acemoglu--Creating a world without poverty: What makes a nation rich? One economist's big answer--Say you're a world leader and you want your nation's economy to prosper. According to this Clark Medal winner '05 (for the American economist under 40 who has made the most significant contribution to economics--Ed.) from MIT, there's a simple solution: start with free elections, Esquire, 18 Nov 09

Posted on Thu, 18 Mar 10:

NKorean official executed for currency reform failure - report: NKorean authorities have executed a senior ruling party official in charge of financial planning after holding him responsible for failure of last yr's currency reform, SKorea's Yonhap News agency reported today. He led the Financial Planning Dept when the govt implemented the currency reform on 30 Nov last yr, knocking 2 zeros off the nominal value of its bank notes, Kyodo News (courtesy Mainichi Daily/ Jap), 18 Mar 10 (Noland--NKorea's failed currency reform, BBC News [courtesy Peterson Inst], 5 Feb)

London and New York lead world in latest global financial centers report: London and NY are tied for 1st place in the latest study, the 7th of its kind, which combines survey responses from fincl services professionals around the world w/ external indices to produce ratings and rankings of the world’s leading 75 fincl centers. It also indicates that the gap bet. the top 2 and Hong Kong in 3rd has narrowed. This twice-yearly survey covers the period from July to Dec, Z/Yen Group (courtesy City of London Corp), 12 Mar 10

Kenneth Rogoff: Japan's slow-motion crisis--If you listen to American, European or even Chinese leaders, Japan is the econ future no one wants. In selling massive stimulus packages and bank bailouts, Western leaders told their people, "We must do this or we will end up like Japan, mired in recession and deflation for a decade or more," says Harvard prof/ fmr IMF chief economist, Proj Syndicate (courtesy Japan Times), 5 Mar 10

Posted on Wed, 17 Mar 10:

Copenhagen climate summit undone by 'arrogance': The 'disappointing' outcome of Dec's climate summit was largely down to 'arrogance' on the part of rich nations, acc to Nicholas Stern, chair of an environment inst at the London School of Econ. The economist said that the US and EU nations had not understood well enough the concerns of poorer nations. Meanwhile, the UN's special envoy on climate change suggested there would now be a twin-track approach, w/ some of the important discussions taking place outside the UN umbrella, BBC News, 16 Mar 10 (Related: Independent Climate Change Email Inquiry)

Developing Asia's largest slum: In a recent case study, 2 biz profs look at Dharavi in Mumbai, India, home to an est. 700,000 people living on just 551 acres and featured in the Oscar-winning film Slumdog Millionaire. They examine ongoing efforts to forge a public-private mixed development bet. the state govt and for-profit developers. The goal is to transform it into a neighborhood offering desirable, market-rate residential and commercial real estate while providing its longtime residents w/ free housing and improved services in the same area. But there is a reason this project has languished for yrs, Harvard, 15 Mar 10

Not just for the privileged: Poor families are turning in greater numbers to private schools, long a privilege of the wealthy and middle class. This movement is driven by the push for universal primary schooling. Govts are struggling to keep up w/ demand for places, and often lack finances to expand access to education. Although the trend is particularly pronounced in nations such as India, and in sub- Saharan Africa, the story is similar across the developing world, Development Asia, Aug-Sep '09

Posted on Tue, 16 Mar 10:

6 key points of the US financial regulation legislation: Senate banking cmte chair Dodd's 2nd draft of financial reform legislation tracks closer to the bill that passed the House in Dec, eliminating several of the bold reforms he proposed last fall. But Republicans remain opposed, despite Dodd's decision to incorporate their ideas on some issues, Washington Post (free registr reqd), 16 Mar 10

Crisis contained--Asian voices reflect on the region's fragile rebound: As Asia tentatively makes its way out of the global econ crisis, the region - and the world - watches and learns from its resilient, though far from invulnerable, journey. 5 leading Asian voices - Sri Lanka's central bank governor, a leading Chinese journalist, an influential SKorean economist, an econ advisor to India's PM, and Singapore's finance minister - share their views on the region's econ pain and recovery, Finance & Devt, Dec-Feb '10

Posted on Mon, 15 Mar 10:

Will Thailand’s govt ride out the storm?: Streams of 'red shirt' protesters converged on Mon on a military base housing Prime Minister Abhisit to press him to call a new election, a demand he refused to meet. While the protests by supporters of fmr PM Thaksin have had no significant impact on Thai's stock market so far, the size of the rally and simmering tensions highlight a deep political divide that could hurt growth, consumer confidence and its long-term investment image, Reuters (courtesy Natl Post/ Canada), 15 Mar 10

Liaquat Ahamed: Shaking the invisible hand--Most of the books initially published about the financial crisis were by fincl journalists documenting exactly what happened. A 2nd wave by economists that tries to bring an analytical perspective to the events is now arriving in bookstores. The econ profession has clearly been shaken by its failure to anticipate the astounding vulnerability of the fincl system and the steepness of the econ downturn that followed the banking collapse, says author of FT-Goldman Sachs '09 best biz book Lords of Finance, National Interest, 23 Feb 10

G Hufbauer, J Schott and W Wong: Figuring out the Doha Round--World Trade Org negotiators have missed every deadline set by ministers and summiteers - most recently the G20's pledge to finish the Round in '09. This record of futility has led some observers to propose dropping the whole venture and starting over with a new agenda focused on 21st century issues. We believe that would be a big mistake, say Peterson Inst senior fellows and analyst, VoxEU, 22 Feb 10

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