News and Analysis: 26-30 Apr 10 | EmergingFrontierMarkets.com

Based in: Manila, Philippines

Posted on Fri, 30 Apr 10:

Shanghai - The next Wall St? China must loosen financial curbs: Shanghai will be the next global fincl capital, China's leaders insist and analysts agree. But despite rapid growth in recent yrs, the Lujiazui fincl district won't be taking its place alongside Wall St anytime soon. Yet its stock exchange passed Tokyo's last yr as Asia's biggest in terms of trading value (but not market capitalization). It was reborn in Nov '90 and has 879 listed firms w/ a total market cap of $2.7 tril. China's 2 other stock exchanges are in Shenzhen and Hong Kong in southern China, Investor's Biz Daily, 29 Apr 10 (Shanghai Expo 2010 | Shanghai competitiveness ranks No.3, w/ rising expectations, Shanghai Daily [courtesy Xinhua], 27 Apr)

ILO says 21 mil. jobs in G20 saved by crisis response policies, but labor market slack remains high: Econ crisis policies adopted by G20 govts saved or created an estimated 21 mil. jobs in '09 and '10, says a study prepared for the G20 labor ministers meeting in Wash. The study concludes that exit strategies from the stimulus measures should not be activated prematurely, while acknowledging the need for fiscal consolidation. Growth remains fragile and private sector demand weak in many nations, Intl Labor Org, 19 Apr 10

Richard Freeman: Time to reinvent the job factory--Who will suffer the longest and the most from the implosion in 2008-2009 of Wall Street and the ensuing world recession?, asks a leading labor economist and co-director of the Labor and Worklife program at Harvard Law School, Times of India, 31 Dec 09

Posted on Thu, 29 Apr 10:

UN sees signs of global foreign direct investment rebound: Foreign direct investment flows remained relatively stable during the 4th qtr of '09, though at a low level. And prospects for the 1st qtr of '10 are better as indicated by improvements of the global biz environment and a growing optimism of transnational corporations' execs about their own co.'s prospects and a pick-up in the value of cross-border mergers and acquisitions, UNCTAD, 26 Apr 10 [pdf]

C-Suite/ Boardroom: CK Prahalad--The responsible manager: For the past 33 yrs, I have ended all my MBA and exec educ courses by sharing w/ participants my perspective on how they can become responsible managers. I acknowledge that they will be successful in terms of income, social status, and influence, but caution that managers must remember that they are the custodians of society’s most powerful institutions. They must therefore hold themselves to a higher standard, says author of Fortune at the Bottom of the Pyramid ('04), Harvard Business Rev, Jan-Feb '10 (Guru of poverty and profit dies at 69, Times of India, 18 Apr)

Edmund Phelps: Economic justice and the spirit of innovation--The market is an instrument - an imperfect and failure-prone one - whose purpose is to deliver social benefits. It is not an object of worship, nor should it be. The market does not need economists to invent it, much less apologize for it. But the market needs economists to help correct its frequent failings. An important task of economics is to allow innovators to take risks and succeed or fail on their own merits w/o causing calamitous effects for society. Witness the current situation in the US: Economists must rehabilitate the financial sector so that it can again do what it used to do, addressing the fincl needs of the biz sector, says Nobel Laureate ('06), First Things (courtesy Columbia U), Oct '09 [pdf]

Posted on Wed, 28 Apr 10:

Greek debt crisis carries all before it: Greece's exploding debt crisis eclipsed all else on financial markets Wed, knocking global stocks down hard and pushing the euro for a time to a one-yr low vs the dollar. Rating agency Standard & Poor's downgraded Greek govt debt by 3 notches to junk status Tue, blaming the nation's deteriorating econ and fiscal prospects for the move and sparking the sell-off. It also cut its ratings on Portugal by 2 notches. The crisis, which has been brewing for mths, is now entering what Deutsche Bank has called a 'death spiral'. The heads of the European Central Bank and IMF will brief German political leaders on the latest plans to help Greece, Reuters (courtesy Vancouver Sun), 28 Apr 10

C-Suite/ Boardroom: The 50 most innovative companies--For the 1st time since this magazine began this annual ranking in '05, the majority of corporations in the Top 25 are based outside the US. The reason: the new global leaders coming out of Asia. 15 of the Top 50 are Asian - up from just 5 in '06. The age of Asian innovation has begun. Also, the Top 50 list is dominated by cos. from Europe and, in another 1st, South America, BusinessWeek, 15 Apr 10 (Special report)

W Easterly and L Freschi: We must know how many are suffering, so let's make up numbers--As major world leaders gather for a summit, the UN and World Bank have bombarded them w/ messages and statistics about the effect of the crisis on the global poor: 1) We need to know how many are suffering where, so that help can be targeted to those in most need; 2) Here are our precise numbers of how many additional poor have been created by the crisis; 3) Since we based the numbers in (2) on thin evidence or no evidence whatsoever, you should also give us more money to expand our abuse of statistics, note Devt Res Inst dir and assoc dir, NYU Aid Watch, Sep '09 (World Bank research dir Martin Ravallion replies | Easterly and Freschi respond | Another reply by Ravallion and a rejoinder by Easterly)

Posted on Tue, 27 Apr 10:

Verandah: Indonesia hosts world's biggest geothermal energy forum--The congress in Bali is an attempt to look at how to better develop geothermal power as an environmentally friendly fuel for the future. Geothermal power is energy extracted from the heat stored in the Earth, and environmentalists say it could be the key to using cleaner forms of fuel. Representatives from 80 nations are attending the talks. The host nation, an archipelago of more than 17,000 islands, sits on the Pacific 'Ring of Fire'- one of the most active regions in the world for volcanic activity, BBC News, 25 Apr 10 (Indonesia aims to tap volcanic geothermal power, Ag.France-Presse, 27 Apr | Philippines' leading geothermal firm features in Global Invest.Research Challenge [IRC] | Chartered Financial Analysts Inst release on Global IRC, 17 Apr) [courtesy China Post/ Taiwan]

Bank-Fund say major push needed to regain crisis-thwarted progress on MDGs: The global econ crisis has slowed the pace of poverty reduction in developing naions, says the latest Global Monitoring Report 2010, which estimates the impact of the crisis on the Millennium Devt Goals (MDGs) and whether the world appears on track to meet these targets. It also points out that the crisis will have a permanent impact on several MDGs, incl those related to hunger and infant mortality. As a result of the crisis, 53 million more people will remain in extreme poverty by 2015 than otherwise would have, World Bank-IMF, 23 Apr 10

Posted on Mon, 26 Apr 10:

Hans-Werner Sinn: Reining in Europe's debtor nations--With intl investors no longer willing to finance Greek current-account deficit, and even shying away from refinancing existing Greek debt, only 3 possibilities remain. The 1st is that the EU provides the necessary funds on a permanent basis for deficit nations, incl Portugal, Spain, Ireland and Italy. The 2nd option is for Greece to go through a depression, reducing its wages and prices. Finally, Greece could leave the euro and devalue its currency. All 3 options are painful for different reasons, says Ifo Inst pres/ Univ Munich economist, Proj Syndicate (courtesy Korea Herald), 26 Apr 10

Emerging economies granted greater voice at World Bank: At the bank's spring meeting over the weekend, US and Japan agreed to decrease their own share of voting rights so that emerging economies could have more say. The 3.3% shift means that developing nations now have just over 47% of the total votes, and industrial powers have just below 53%. China's vote share will increase from 2.77% to 4.42%, making it the Bank's 3rd most influential member after US and Japan, pushing Germany into 4th place. Also, the bank's 186 members agreed to the 1st increase in its capital in over 20 yrs, approving a $5.1 bil. increase, Deutsche Welle, 25 Apr 10

Taking stock and looking ahead: Q&A w/ fmr IMF chief economist and Harvard prof Kenneth Rogoff--Q: In your new book, you suggest that well-informed people should have taken note of certain events that were predicting a coming recession. What were those events, and why do you think they were ignored? Hasn’t the world become more prone to financial crisis over the past 3 decades? What about sovereign debt crises? And are you anticipating a wave of new regulation?, PwC View Mag, Mar-May '10

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