News and Analysis: 12-16 Apr 10 | EmergingFrontierMarkets.com

Based in: Manila, Philippines

Posted on Fri, 16 Apr 10:

Icelandic banking report reveals greed, 'extreme negligence': A special commission put in place to investigate the causes of the banking collapse that hit Iceland 1 1/2 yrs ago exposed 'extreme negligence' on the part of the fmr Conservative PM and fmr central bank governor. On 12 Apr, Iceland's Special Investigative Commission presented a 2,000-page, 9-vol. report on the causes of the banking collapse of Oct '08. Made up of independent experts, it was established by parliament in Dec '08. Tracing the history of the collapse, its report analyzes the weaknesses of the political system and reveals how Icelandic society had been lulled by an illusory dream of wealth, EurActive, 15 Apr 10

Ngaire Woods: Global governance after the financial crisis--A new multilateralism or the last gasp of the great powers?: In the wake of the global crisis, 3 G20 summits have reinvigorated global cooperation, thrusting the IMF center stage w/ approx. $1 tril. of new resources. W/ powerful emerging economies now at the table, is a new more multilateral era of governance emerging? We find that the result of various reform measures is a new order in which multilateral institutions - such as the IMF - may end up w/ only a limited role to play alongside emerging national and regional strategies, unless a more radical transformation begins, notes Oxford global econ governance prog dir, Global Policy J, Jan-Mar '10 (w/ exec sum)

A tale of two regions: Foreign-bank lending to emerging markets during the global crisis differed from continent to continent. This might explain why Latin America was not hit as hard by the crisis as other emerging markets. During the global credit crunch, foreign banks were potential vehicles for spreading the crisis from mature economies to emerging markets. In particular, the intl credit crunch raised concerns that, as in previous crises, these bank flows would come to a sudden stop. Yet this tale unfolded differently in LatAm than it did in emerging Europe, Finance & Devt, Mar-May '10 (Challenges and opportunities for financial services in Brazil, Trusted Sources [courtesy City Lond Corp], May '09)

Posted on Thu, 15 Apr 10:

Summits galore - Now, it's Russia, India, China in Brazil: Compared to the just-ended nuclear security summit in Wash., 2 upcoming gatherings in Brasilia may seem like small affairs. But that could not be further from the truth. The group comprising BRIC (Brazil, Russia, India and China) contributed almost 50% of world econ growth from 2000-'08. And before the BRIC summit on Fri, there is set to be a gathering of the IBSA group (India, Brazil and S Africa) on Thu, Deutsche Presse-Agentur (courtesy Earth Times), 14 Apr 10

J O'Neill and A Stupnytska: The long-term outlook for the BRICs and N-11 post crisis--It is now around 8 yrs since we 1st introduced the BRIC acronym, 6 yrs since we 1st estimated how the world might look in 2050, and 4 yrs since we 1st wrote about the N-11 (next 11 emerging economies). Of course, like the rest of the world, the BRICs and N-11 have faced a severe crisis in the past 2 yrs. We assesses where we now see these economies post crisis, and show that, if anything, their current health suggests that our long-term projections are more, rather than less, likely to be realized, say global econ res head and economist, Goldman Sachs, 4 Dec 09 [pdf, w/ exec sum]

Raj Chetty: Public finance in developing nations--Recently, I've begun working on public finance in developing nations, and thinking about the optimal design of various kinds of programs there. And I think the key differences are, in the US, you're usually thinking in a system where the institutional structure is already very well developed. But in Africa or in India, it's more about setting up such a system. It's not so much what's the optimal tax rate. It's what types of taxes should we even be trying to collect? How do we deal w/ serious problems of evasion?, notes Harvard economist, Intl Growth Center/ UK, Jan '09 (Status-based taxation - a proposal to increase tax revenue collection, June '09 | Global downward trend in top rates of personal tax about to reverse, KPMG, Aug '09)

Notice from the Publisher: In case some of you are wondering why we did not post yesterday, something similarly deserving of censure has happened to our Web site in Jan.; hence, our absence, EmergingFrontierMarkets.com, 15 Apr 10

Posted on Tue, 13 Apr 10:

Thailand 'exchange traded fund' plummets as crisis intensifies: The Thai fund lost 4.6% on Mon as trading volumes more than doubled the daily average. Tourism-related components tumbled, w/ Thai Airways dropping 13% and hotel operator Minor Intl sliding nearly 9% on the day. Several govts have advised their citizens to avoid Bangkok. The fund tracks the performance of the MSCI Thailand Investable Market Index, a benchmark that includes about 85 of the largest Thai stocks, ETF Database, 13 Apr 10 (What's not in the brochures, Bangkok Post, 12 Apr)

Dani Rodrik: The return of industrial policy--British PM Gordon Brown promotes it as a vehicle for creating high-skill jobs. French Pres Nicolas Sarkozy talks about using it to keep industrial jobs in France. World Bank's chief economist Justin Lin openly supports it to speed up structural change in developing nations. McKinsey is advising govts on how to do it right. Industrial policy is back, says Harvard economist, Proj Syndicate (courtesy Korea Times), 14 Apr 10

Posted on Mon, 12 Apr 10:

Larry Elliott: Rescuing economics from its own crisis--King's College at Cambridge U will host the biggest happening for the dismal science's counterculture in decades when it hosts the inaugural conference of the George Soros-funded Inst for New Economic Thinking (INET). It's a big gig, spread over 4 days and w/ plenty of headline acts. Stiglitz, Akerlof, Spence and Mirrlees are the 4 Nobel prize laureates performing, along w/ IMF managing dir Strauss-Kahn, says econ editor, Guardian, 5 Apr 10 (IMF protesters try to disrupt Cambridge address by Strauss-Kahn, Wash.Note, 10 Apr | Protesters disrupt intl conf at King's, Varsity, 12 Apr | INET 's confab)

Poland - European success story but challenges ahead: Poland stands out as the only economy in the 27-member EU to have escaped a recession in '09. Following the onset of the crisis, exports dropped and econ growth slowed, reflecting deep recessions in its main trading partners. There was also a sharp slowdown in credit growth as banks tightened their lending criteria. Yet its limited reliance on exports, flexible exchange rate, and sound econ policies helped cushion the blow of the crisis. But upcoming elections are likely to provide a challenging backdrop to policies, IMF Survey Mag, 26 Mar 10

Jagdish Bhagwati: 10 years that shook our world--As we contemplate the last decade, indeed the last 2 decades, it is impossible not to remember that India had slipped into obscurity on the world stage, as its economy registered abysmal performance at near-3.5% over nearly a qtr of a century, while the super-performers in the Far East grew at nearly double digits. Along w/ China, it was widely believed to be the 'sleeping giant' that would wake up in the post-war period. But it had continued snoring as the smaller players, such as the Lilliputian Far Eastern economies w/ very different econ models, sprinted past India whose disastrous policy framework had seriously undermined its econ performance. The 'liberal' reforms that began in earnest under PM Rao and then finance minister Singh after the '91 balance of payments crisis were the turning point, says Columbia economist/ Council Foreign Rel. senior fellow, India Today, 3 Dec 09

EmergingFrontierMarkets.com

emerging and frontier markets:

the unofficial field guide