News and Analysis: 24-28 May 10 | EmergingFrontierMarkets.com

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Posted on Fri, 28 May 10:

US and Germany emphasize common ground on financial regulation: US Treas Secy Geithner, fresh from talks w/ the European Central Bank pres and UK finance minister, met German Fin Min Schaeuble in Berlin. Geithner praised Germany's leadership in the Greek debt crisis, but also reminded Schaeuble of Germany's responsibility, as Europe's biggest economy, to strive for a united EU front on regulation of the fincl markets - a veiled criticism of Germany's decision last wk to ban some forms of short-selling to rein in speculators, Deutsche Welle, 27 May 10 (US and EU oceans apart on fiscal policy, Der Spiegel, 27 May)

E Prasad and K Foda: Tracking indexes for the global econ recovery (TIGER)--Is the global econ recovery on track or are we in a lull before the next phase of the storm? This question dominates the news headlines and the current debate on the state of the world economy. But before we know where we are going, we need to know where the world economy now stands. In collaboration w/ the Financial Times, we have developed a set of composite indexes which aim to track the recovery based on a set of macroeconomic, financial and confidence variables for the G20 economies, say Inst senior fellow/ Cornell U economist and senior res asst, Brookings Inst, 26 May 10 (The world economy is recovering, FT/ UK [courtesy Brookings], 26 May)

Posted on Thu, 27 May 10:

Singapore closes popular beaches after oil spill: Public beaches stained by an oil slick from a tanker damaged in a collision off the city-state have been closed, officials said Thu. A chocolate-like film covered a stretch of water along the popular East Coast Park after crude from Tue's collision slipped out of a floating cordon at sea. A tanker was carrying nearly 62,000 tons of crude when it collided w/ a bulk carrier. About 2,500 tons of crude leaked from a gash on the double-hulled tanker's port side. Emergency crews are using biodegradable dispersants and absorbent material to soak up the oil, while 3.3km of booms surround the main oil slick in a busy shipping lane straddling Singapore, Malaysia and Indonesia, Ag. France-Presse (courtesy ChNewsAsia/ Spore), 27 May 10

Jonathan Adams: Get ready for China's domination of science--Since its econ reform began in '78, China has gone from being a poor developing nation to the 2nd-largest economy in the world. Its meteoric rise has been one of the most important global changes of recent yrs: its rise was the most-read news story of the decade, surpassing even 9/11 and the Iraq war. Yet when it comes to sci/ tech, most people still think of it as being stuck in the past and only visualize a nation w/ massive steelworks and vast smoking factories. That may have been true a few yrs ago, but it is no longer the case, says Thomson Reuters research evaluation dir, New Scientist/ UK (courtesy Education News/ US), Feb '10 (BRIC reports reveal global science shifts, Mar '10)

Mouse and wo/men: Shane Greenstein--A network of platforms: The Internet has been called a 'network of networks'. Although the phrase once had meaning, it is misleading today. The commercial Internet should be called a 'network of platforms'. Leading firms view the Internet through the same lens they view the rest of computing. To them, the Internet is a market in which to apply their platform strategies. And early platform leaders did 4 things: compete, expand, seed, and defend, says Northwestern economist, IEEE Micro (Inst Electr & Electro Engr), Nov-Dec '09 [pdf]

Posted on Wed, 26 May 10:

Global growth rising faster than expected but risks increasing too: Economic activity is picking up faster than expected but volatile sovereign debt markets and overheating in emerging-market economies are presenting increasing risks to the global recovery, acc to the latest Economic Outlook. Strong growth in China and other emerging markets is helping to pull other nations out of recession. But at the same time, the risk of overheating and inflation is growing in emerging markets. Instability in sovereign debt markets poses another serious risk, OECD, 26 May 10 (Outlook for several emerging markets [scroll])

Human-resources firm releases global rankings of 'quality of living': Vienna retains the top spot in the latest quality of living survey (highlights) of more than 200 cities. Next are Zurich and Geneva, while Vancouver and Auckland are in joint 4th. Living conditions are analyzed acc to 39 factors, grouped in 10 categories (like political/ social, econ, socio-cultural, public services/ transport, etc). This year’s ranking also identifies the cities w/ the best 'eco-ranking' based on water availability/ drinkability, waste removal, quality of sewage systems, air pollution and traffic congestion. Calgary is at the top of this index, followed by Honolulu, and Ottawa and Helsinki in joint 3rd, Mercer, 26 May 10

Jeffrey Sachs: Millennium Development Goals (MDGs) at 10--The 8 MDGs are in many ways the Cinderella of intl development. When 160 world leaders met at the UN in Sep 2000, they were inspired to adopt the Millennium Declaration, incl bold targets in the fight vs poverty, disease and hunger. Such declarations are usually photo ops and little more. The MDGs, however, have become the belle of the ball, says Columbia U Earth Inst dir, Scientific American, 25 May 10 (Child mortality rates falling faster than expected, Inter Press Svce, 24 May | Lancet article [w/ preview and exec sum])

Posted on Tue, 25 May 10:

World stocks sag on renewed Europe fears: World stock markets and the euro tumbled Tue on fears Europe's debt crisis will cause a prolonged slump in the region and weaken the outlook for global growth. Asian markets were also hit hard by reports that NKorean leader Kim Jong Il ordered his military to be on combat alert amid rising tensions on the peninsula, AP (courtesy Taiwan News), 25 May 10

AEO finds Africa hit by the crisis but set to rebound: This yr's African Economic Outlook (AEO), which was launched Mon, finds that the global crisis brought a period of relatively high econ growth in Africa to a sudden end: Africa’s GDP growth was slashed from an average of about 6% in '06-'08 to 2.5% in '09. Given the pace of pop. growth, this means that growth of per capita GDP came to a near standstill. Ave. growth is expected to rebound to 4.5% in '10 and 5.2% in '11, although the recession will leave its mark, AfDB/ OECD/ UNECA, 24 May 10 (Building up resilience in low-income nations, IMF Survey Mag, 17 May)

Guy Sorman: An Asian Century? Not so fast--Pundits are proclaiming the beginning of an Asian Century. Many think that the next G20 meeting, which will take place in Seoul this autumn, represents a transfer of power from West to East, a decline of Western influence, and a geopolitical tectonic shift. Such a hyperbolic vision of history seems justified, at least on the surface, by a series of recent events. But proclaiming the end of the West and the advent of the Asian Century may be premature, says a French intellectual and Economics Does Not Lie ('09) author, Manhattan Inst City Journal, Jan '10 ('Asian Century needs the next Asia,' McKinsey, Oct '09 | Asia's importance growing in global economy, IMF Survey Mag, 12 May 10) [courtesy Diligent Media Corp/ India]

Posted on Mon, 24 May 10:

William Easterly: Rodrik's pessimism on democracy - Let the debate begin--Rodrik has been dropping tantalizing hints about his forthcoming book (The Globalization Paradox). And one of his arguments is the political trilemma. I look forward to the detailed logic and evidence, but so far I have two big reasons for skepticism, says NYU economist and Devt Res Inst co-dir, NYU AidWatch, 18 May 10

From our archive (19 May 10): Dani Rodrik--Greek lessons for the world economy--Deep down, the crisis is yet another manifestation of what I call 'the political trilemma of the world economy': economic globalization, political democracy, and the nation-state are mutually irreconcilable. We can have at most 2 at one time. Democracy is compatible w/ national sovereignty only if we restrict globalization. If we push for globalization while retaining the nation-state, we must jettison democracy. And if we want democracy along w/ globalization, we must shove the nation-state aside and strive for greater intl governance, says Harvard economist/ Albert Hirschman Prize Laureate, Proj Syndicate (courtesy Biz Standard/ India), 18 May 10 (The inescapable trilemma of the world economy, June '07)

Fred Bergsten: Beijing is key to creating more US jobs--China's currency is now undervalued by about 25% on a trade-weighted basis and by about 40% vs the US dollar. Every day, China buys about $1 bil. in the currency markets, holding down the price of the yuan and thus maintaining an artificially strong competitive position. Several of its neighbors - incl Hong Kong, Malaysia, Singapore, and Taiwan - similarly intervene to remain competitive w/ China and thus substantially undervalue their currencies vs the dollar and other currencies. Such currency manipulation is a blatant form of protectionism, says Inst dir, Foreign Policy Mag (courtesy Peterson Inst), 14 Apr 10

Barry Eichengreen: Why China is right on the yuan--China is finally prepared to let the yuan resume its slow but steady upward march. We can now expect the yuan to begin appreciating again very gradually vs the US dollar as it did bet. '05 and '07. Some observers, incl those most fearful of a trade war, will be relieved. Others, who see a substantially undervalued yuan as a significant factor in US unemployment, will be disappointed by gradual adjustment. Chinese officials have been on the receiving end of a lot of gratuitous advice. They have been wise to disregard it. In managing their exchange rate, they have gotten it exactly right, says UC-Berkeley economist, Proj Syndicate (courtesy Taipei Times), 28 Apr 10

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