News and Analysis: 3-7 May 10 | EmergingFrontierMarkets.com

Based in: Manila, Philippines

Posted on Fri, 7 May 10:

Barry Eichengreen: Eurozone breakup would trigger the mother of all financial crises--Originally posted in Nov '07, this column is more relevant than ever, arguing that adopting the euro is effectively irreversible. Leaving would require lengthy preparations, which, given the anticipated devaluation, would trigger the mother of all fincl crises. National households and firms would shift deposits to other eurozone banks producing a system-wide bank run. Investors, trying to escape, would create a bond market crisis. Here is what the train wreck would look like, says UC-Berkeley economist, VoxEU, 4 May 10

Mothers' Index--Best and worst places to be a mother: Mothers in Norway and Australia are living in the best places in the world, acc to latest annual index which ranks the best and worst places to be a mother. Afghanistan ranked at the bottom of the list of 160 nations, which included 43 mature nations and 117 in the developing world. The index is based on an analysis of indicators of women's and children's health and well-being, and clearly shows that providing mothers w/ access to educ, econ opportunities and maternal/ child health care gives mothers and their children the best chance to survive and thrive, Save the Children, 4 May 10

Nook and cranny: W Brock, R Marshall and M Tucker--10 steps to world-class schools: 'Get outstanding students to go into teaching and treat them like professionals, not blue-collar workers in dead-end jobs... Hold faculty accountable for student achievement. Take over every school that, after 3 yrs, is unable to get at least 90% of all major groups of students on track ready to enter college w/o the need to take any remedial courses... Offer high-quality early-childhood educ to, at a minimum, all 4-yr-olds and all low-income 3-yr-olds. Students from low-income families entering kindergarten have less than half the vocabulary of the other students, note Reagan and Carter's labor secys, and Natl Ctr Educ Econ pres, Wash. Post (free registr reqd), 30 May 09

Posted on Thu, 6 May 10:

Joseph Stiglitz: Can the euro be saved?--Nobel Laureate Robert Mundell laid out the conditions under which a single currency could work. Europe didn't meet those conditions at the time; it still doesn’t. The removal of legal barriers to the movement of workers created a single labor market, but linguistic and cultural differences make US-style labor mobility unachievable. Also, Europe has no way of helping those countries facing severe econ problems. Some hoped that the Greek tragedy would convince policy makers that the euro cannot succeed w/o greater cooperation (incl fiscal assistance), says Nobel Laureate ('01) economist/ Columbia U prof, Proj Syndicate (courtesy Burma Digest), 5 May 10

Yes Africa can--Success stories from a dynamic continent: Although Africa's medium- and long-term development challenges remain large and complex, the progress underway is remarkable and undeniable, acc to a new study which aims to change the dialogue on the continent. It highlights, among others, increasing mango exports in Mali, the specialty coffee market in Rwanda, and a mobile-accessible electronic payment system in Kenya, World Bank, 29 Apr 10 (Banking on mobile money, MIT News, 23 Feb)

Charles Wolf: The cost of reuniting Korea--Prospects for reuniting South and North Korea may be better than at any time since the demise in '94 of NKorea's Kim Il Sung. Several indicators suggest a possible move in this direction. One indicator is the confiscatory revaluation of its currency in '09. Although the new won's value was pegged at 100-times the old won, the amounts of won that could be exchanged as well as the time period (48 hrs) for the exchange were sharply restricted. It's doubtless that some of the ruling elite in the military/ govt apparatus were severely affected by these measures. Their loyalty to Kim Jong-Il's rule may be diminishing as a result, says Rand chair in intl econ/ senior advisor, Forbes, 15 Mar 10

Posted on Wed, 5 May 10:

Stiglitz voices Greece concerns: Nobel laureate ('01) economist Joseph Stiglitz on Tue voiced concern about the terms of the Greek bailout w/ Athens facing severe fiscal austerity measures in a bid to slice its debt. 'It is good that Europe finally got its act together and was able to come up with a package' to save Greece, he said in an interview w/ BBC radio. But the one-time econ adviser to fmr US pres Clinton voiced concern about the 'degree of fiscal austerity' being placed on Greece, Ag. France-Presse (courtesy Straits Times/ Singapore), 5 May 10 (The people's professor, Finance & Devt, Dec-Feb '10 [pdf])

Marker: Angus Maddison--The West and the Rest in the intl economic order: The intl econ order has changed in the last 40 yrs and will no doubt go on changing, explains leading economist and historian, who died on 24 Apr 10, in this article written for this publication in '02, OECD Observer, Apr '10 (OECD chief mourns death of economist Maddison | In memoriam, by his student Bart van Ark [pdf] | Amer Enterp Inst--Growth and Interaction in the World Economy ['05]) [courtesy Univ Groningen/ Netherlands]

Posted on Tue, 4 May 10:

Verandah: Steven Cohen--The Gulf of Mexico oil spill will change the politics of energy and environment: The politics of energy were transformed on 20 Apr when a BP oil rig exploded and started spewing crude oil into the Gulf at the rate of over 200,000 gallons a day. Over the next several mths the Gulf's fishing and tourism industry will be decimated. The pictures and stories we will see should end the cry of 'drill baby drill' for the foreseeable future. These stories are custom-made for the media and the strength of their emotional impact should not be underestimated. For better or worse, catastrophe is a prime motivator of change and action, says Columbia U Earth Inst exec dir, Huffington Post, 30 Apr 10

Which poverty-fighting policies work? J-PAL has the answer: A global league of economists called J-PAL is deploying its experimental methods and one all-powerful asset - data - to explain human behavior, change how we help the poor, and try to save the world, Fast Company, 1 Dec 09 (J-PAL's Esther Duflo wins Clark medal as 'best economist under age 40', MIT News, 23 Apr 10 | Amer Econ Assn announces 2010 John Bates Clark Medal winner)

Posted on Mon, 3 May 10:

Europe and IMF agree $145 bil.financing plan w/ Greece: Negotiators over the weekend wrapped up details of the package, involving budget cuts, a freeze in wages and pensions for 3 yrs, and tax increases to address Greece's fiscal and debt problems, along w/ deep reforms designed to strengthen its competitiveness and revive stalled econ growth. With its deteriorating fiscal position came downgrades of govt bonds by rating agencies, putting pressure on fincl agencies. Investors started backing out of Greek bonds, driving up their yields. Policy makers also feared a potential spread of the crisis to other eurozone nations, IMF Survey Mag, 2 May 10 (European Central Bank--EU nations using the euro)

Amartya Sen: The economist manifesto--The 18th-century philosopher Adam Smith wasn't the free-market fundamentalist he is thought to have been. It’s time we realized the relevance of his ideas to today's financial crisis, says Nobel Laureate ('98) and Harvard prof of econ and philosophy, New Statesman, 23 Apr 10 (Niall Ferguson on Amartya Sen among the Time 100, 29 Apr)

No 'significant intensification of trade or investment restriction' but G20 must 'remain vigilant': The latest 2nd joint report on G20 trade and investment measures said that high unemployment rates and uncertainties on global growth point to the need for G20 govts 'to remain vigilant in opposing protectionism'. The 3 agencies urged the G20 leaders to undertake 'a clear and stronger commitment to open markets and make concrete their many calls to bring the Doha Round to a rapid conclusion'. At a time when govts are constrained in offering further fiscal or monetary stimulus, open trade can give the global economy a much-needed lift and provide valuable opportunities for job creation, OECD-UNCTAD-WTO, 8 Mar 10 (OECD info)

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