News and Analysis: 2-6 Aug 10 | EmergingFrontierMarkets.com

Based in: Manila, Philippines

Posted on Fri, 6 Aug 10:

Drought-led food squeeze next worry for emerging markets: A food price crisis may be the next stumbling block for emerging markets. Russia imposed a temporary grain export ban on Thu in response to a record-breaking heatwave and the extent of the damage to crops and its economy is only beginning to become clear. Wheat prices have jumped by more than 50% since June and are likely to rise further due to expectations of tighter supplies, triggering concerns about a repeat of the '07/'08 food crisis that forced interest rates higher in many nations and led to emergency controls in others, Reuters (courtesy Smart Investor/ India), 6 Aug 10

Hall of Fame: 10 infamous islands of exile--Established to banish dissidents and criminals, these islands are known for their one-time prisoners, from Napoleon to Nelson Mandela, Smithsonian Mag, 23 July 10

Coffers: Wealth recovery nearly compensates for '08 losses as high net worth population grows 17.1%--The world's wealthy individuals regained ground despite weakness in the world economy, acc to the 14th annual World Wealth Report. The world's wealthy pop. returned to 10 mil. in '09. NAmerica has the largest no. w/ 3.1 mil. The recovery was generally stronger in developing nations. Asia-Pacific's wealthy pop. reached 3 mil., matching that of Europe for the 1st time. The rate of growth in the size and wealth of the Mideast's wealthy pop. was slower than in other regions, largely due to the impact of the Dubai crisis, Capgemini/ Merrill Lynch, 18 June 10

Posted on Thu, 5 Aug 10:

Diamonds, a warlord and a supermodel: In '91, the rebels of the Revolutionary United Front attacked Sierra Leone from Liberia, backed by then Liberia's pres Charles Taylor. The human cost of the conflict was staggering. Diamonds were not the initial driver of the conflict, but they were crucial to funding it. It is alleged that Taylor gave model Naomi Campbell a blood diamond at a dinner. If this can be proved, then it could help to provide evidence for his links to the illicit diamond trade, and show that he was in breach of sanctions which forbade him from trading in diamonds. Taylor strongly denies all these allegations, Global Witness, 4 Aug 10 (UN--Conflict diamonds | Diamonds - Does the Kimberley Process work?, BBC News, 28 June)

Coffers: 40 US families pledge majority of wealth to philanthropy--40 of the wealthiest families and individuals have committed to returning the majority of their wealth to charitable causes. The announcement of this 1st group was made by Warren Buffet 6 wks after kicking off the long-term charitable project w/ Bill and Melinda Gates. The pledge is a moral commitment to give, not a legal contract, and it does not involve pooling money or supporting a particular set of causes or orgs, The Giving Pledge, 4 Aug 10 [pdf] (Web site)

Posted on Wed, 4 Aug 10:

Editorial: Anti-poverty programs - Give the poor money: A cake-seller in the Philippines spent her little stipend on a wooden shack, giving her 5 children a roof over their heads for the 1st time. In Kyrgyzstan, a mother spent hers buying flour to feed 6 children. In Haiti, Pres Preval praises a dairy co-op that gives mothers milk and yogurt when their children go to school. These are examples of the world's favorite new anti-poverty device, the conditional cash-transfer program in poor and middle-income nations. These transfers are good; they could be even better, Economist, 29 July 10 (The limits of Brazil's much admired and emulated anti-poverty program)

M Hallward-Driemeier and L Pritchett: Send lawyers, guns, and money--Deals vs rules in Africa: "For my friends, anything; for my enemies, the law," a fmr pres in a developing nation once said. Does govt policy make any difference? This op-ed argues that, in many developing nations, firms often make decisions based not on the policy itself, but what it implies in terms of 'deals' they may have to make w/ middle men and corrupt officials. This 'policy uncertainty' is a major concern for firms and can help explain some of the puzzles of development, note World Bank economist and Harvard prof, Vox EU, 23 July 10

Coffee/ Tea Room: Asia Pacific airports sweep top places in worldwide awards--The awards for the best airports worldwide go to Incheon/ Seoul. Singapore, Hong Kong, Beijing, and Hyderabad, acc to the most recent annual airport service quality passenger survey. The organization which runs the survey has 597 members operating over 1,679 airports in 177 countries, Airports Council Intl, Feb '10

Posted on Tue, 3 Aug 10:

Chinese car maker Geely completes Volvo takeover: Geely Holdings said Mon it had formally completed a deal to buy Sweden's Volvo Cars from US auto giant Ford at a ceremony in London. Geely, which 1st agreed to take over Volvo in Mar, said it paid a total of $1.5 bil. for Volvo. Both the EU's competition watchdog and China's commerce ministry gave their approval for the takeover last mth. The Swedish brand will keep its HQ and plants in Sweden and Belgium, and its management will retain its autonomy under a board headed by Geely's chair, Ag. France-Presse (courtesy Bangkok Post), 2 Aug 10

"Give poor people a choice"--Q&A w/ economist Paul Romer: Inadequate rules stifle development in many nations. He proposes founding new cities and running them according to more up-to-date rules to allow millions of people to live, work and raise families in well-administered urban environments, D+C Devt and Cooperation, June '10; and

Aditya Chakrabortty: Paul Romer is a brilliant economist - but his idea for charter cities is bad--He has come up a grand scheme for lifting Africa and Asia out of poverty. What they need to do is give up a big chunk of their land to a rich nation. Policy experts from Washington can take over a patch of Rwanda, and invite along GM and Microsoft and Gap to come and set up factories. Poor nations give up their sovereignty in return for the promise of greater prosperity, says Guardian's econ editorial writer, 27 July 10

Posted on Mon, 2 Aug 10:

The US stays on top: Q&A w/ geopolitical scientist George Friedman, founder/ chief exec of Stratfor, a geopolitical consulting firm. His most recent book is The Next 100 Years: A forecast for the 21st century--Q: Commentators have declared the end of American dominance. You disagree. Why?, Smithsonian Mag, Aug '10; and

Niall Ferguson: America, the fragile empire--Here today, gone tomorrow - could the US fall that fast? Washington, you have been warned, writes Harvard history prof, whose recent book is The Ascent of Money: A financial history of the world, Los Angeles Times, 28 Feb 10

New financing sources for Africa's infrastructure deficit: African nations are seeking to boost their infrastructure budgets w/ new and nontraditional financing sources. Investing in infrastructure is expensive. The estimated cost of bringing sub-Saharan Africa's infrastructure up to the level of other low-income nations and maintaining it ranges from 10–30% of current GDP. However, official devt assistance, a traditional source of budget finance, while remaining an important source of financing, is unlikely to be sufficient to support maintaining higher public investment levels. Another important issue is to ensure that new public infrastructure investment, however financed, has a strong positive net return for growth, IMF Survey Mag, 21 July 10

Notice from the Publisher: In case some of you are wondering why we did not post on Fri, 30 July, kindly note that it was not our fault. It was - again - due to a disruption in our workflow, similar to (but not the same as) what we already reported to our visitors last Jan, and just as deserving of blame and censure, EmergingFrontierMarkets.com, 2 Aug 10

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