News and Analysis: 27 Sep-8 Oct 10 | EmergingFrontierMarkets.com

Based in: Manila, Philippines

Posted on Fri, 8 Oct 10:

Kenneth Rogoff: $10,000 gold?--It has never been easy to have a rational conversation about the value of gold. Lately, with gold prices up more than 300% over the last decade, it is harder than ever. What was true for the alchemists of yore remains true today - gold and reason are often difficult to reconcile, says Harvard prof/ fmr IMF chief economist, Proj Syndicate (courtesy Korea Times), 6 Oct 10

Capital flows to emerging economies (scroll): The econ backdrop for private capital flows to emerging markets continues to be favorable in the current econ expansion, says a new report. The mix of macro conditions reflects a mixture of 'push' and 'pull' factors. Among the 'push' factors, a key driver is the likelihood that the low interest rates in the mature economies will be more extended. The 'pull' factors include high interest rates in some key emerging markets (Brazil and India), strong growth and, in some cases, improved terms of trade, which are esp powerful in attracting inflows into commodity exporting nations, Inst Int'l Finance, 4 Oct 10

I Bremmer and N Roubini: Seven ways to save the world (click a 2nd time to get to the page-Ed.)--In the wake of the worst financial crisis since the Great Depression, regulators and gov't officials around the world have been scrambling to avoid a repeat performance. Although the prognosis isn't good, policymakers of the G7 nations can avoid being condemned to a series of ever-increasing boom-and-bust cycles if they are willing - and able - to perform the following radical procedures on their economies, say political risk consulting Eurasia Group pres and NYU prof, Institutional Investor, Sep '10

Posted on Wed, 6 Oct 10:

Fred Bergsten: We can fight fire with fire on the renminbi--China continues to manipulate its currency to the extent that it is now undervalued by at least 20%. Japan has resumed intervention on a massive scale to lower the yen. Switzerland has spent more than $100 bil. to keep its franc from rising. All these nations, and some others, already run large trade surpluses and hold huge reserves but nevertheless want to weaken their currencies to boost growth through exports. Now some deficit nations, like Brazil, feel compelled to emulate these interventions to defend their competitive positions. Virtually all economies, including the EU and US, are seeking to avoid stronger currencies, says Institute director, FT (courtesy Peterson Inst), 4 Oct 10 ; and

Robert Reich: Why it's foolish to weaken the dollar to create jobs--Washington is actively pursuing a weak dollar as a jobs policy. (The dollar just plunged to a six-month low vs the euro.) How? The Fed is keeping long-term interest rates so low global investors are heading elsewhere for high returns, which bids the dollar down. Every time another Fed official hints the Fed will start printing even more money ('quantitative easing' in Fed speak) the dollar takes another dive. Using a weakening dollar to create more jobs doesn't get us where we want to be, says UC-Berkeley prof/ fmr US secy of labor, Author's Weblog, 1 Oct 10

J Somavia, J Stoltenberg and D Strauss-Kahn: We must tackle the jobs crisis now--The financial crisis has imposed many costs on the world economy - none more painful than the impact on the tens of millions of working people who have lost their jobs. Some 210 mil. are out of work, an increase of 30 mil. since '07 - the highest level of official unemployment in history. In the developing world, informal economies have grown, leaving about 1.2 bil. still unable to earn enough to keep themselves and their families above the poverty level, say ILO director-general, Norway's prime minister, and IMF managing director, El Pais/ Spain (courtesy Norway confab), 12 Sep 10 (Oslo confab calls for action to avoid jobless 'lost generation' | After Oslo, what next?)

Posted on Mon, 4 Oct 10:

Developing countries come to the global economy's rescue: While the industrial world puts its house in order, developing countries are becoming a new engine of global growth and a pulling force for advanced economies, says a new book The Day After Tomorrow: A handbook on the future of economic policy in the developing world. According to the authors, almost half of global growth is currently coming from developing countries. As a group, it is projected that their economic size will surpass that of their developed peers in 2015, World Bank, 27 Sep 10

Lula hails Brazil's oil-fueled '30-year boom': For years 'Lula' was a dirty word at Brazil's main stock exchange, the Bovespa in Sao Paulo. Times have changed - and Lula knows it. The unprecedented largest share offer in world history - the sale of $70 bil. worth of shares in the energy group Petrobras - aims to help bankroll a massive offshore exploration project that may propel Brazil into the premier league of global oil producers. But the offering is also the clearest example of what Brazilians are calling the 'new Brazil', a booming, investment-friendly South American nation that they believe is steaming towards a future of prosperity and global clout, Guardian, 26 Sep 10 (Brazil ponders future of successful hunger relief program, Le Monde, 21 Sep)

Field Trip: India's lost Buddhist university to rise from ashes--Indian academics have long dreamt of resurrecting Nalanda Univ, one of the world's oldest seats of learning which has lain in ruins for 800 years since being razed by foreign invaders. Now that has come one step closer after the parliament passed a bill approving plans to rebuild the campus. Founded in the 3rd century, it gained an int'l reputation before being sacked and burnt down by Turkic soldiers in 1193 - when Oxford U was only just coming into existence, Ag. France-Presse (courtesy Taipei Times), 14 Sep 10 (Int'l funding sought for Nalanda U - Amartya Sen, Indo-Asian News Svce | Unesco World Heritage Ctr | Inst Peace & Conflict Studies/ India--Nalanda U's revival and soft-power diplomacy, Nov '07 [PDF])

Posted on Fri, 1 Oct 10:

Global Forum delivers global report card on tax info: The Global Forum on transparency and exchange of info for tax purposes issued phase one peer reviews covering the legal and regulatory frameworks in eight jurisdictions. More than 100 jurisdictions and observers are now part of the forum. All these jurisdictions, as well as others identified by the forum as relevant to its work, are participating in reviews of their systems, OECD, 30 Sep 10 (Updated progress report, 28 Sep [PDF] | Recent implementers: Philippines, Brunei, Brazil and Indonesia)

William Gale: The Bush tax cuts - The least effective stimulus: The Bush tax cuts were never meant to be an econ stimulus package. They were designed in '99 as part of then-Gov. Bush's pres. platform. The intent was to return to the American taxpayer the emerging budget surpluses that had arisen under unprecedented econ prosperity. It's downright bizarre to consider extending those same tax cuts now as a way to turn around a faltering recovery in an era of huge deficits, says Inst senior fellow, New York Times (courtesy Brookings Inst), 28 Sep 10 ; and

Michael Boskin: Fiscally, Obama has had a rough summer--Has the Obama administration learned anything from the string of fiscal setbacks it has suffered this summer? Let's hope the late conversion to tough deficit rhetoric gets a lot of play. Fortunately, it appears that US voters, who have a way of holding politicians accountable for their pronouncement, are far ahead of the politicians, says Stanford prof/ US Pres.'s Council of Economic Advisers fmr chair, Proj Syndicate (courtesy Japan Times), 28 Sep 10

Top 25 financial sectors to get mandatory IMF check-up: Economies with financial sectors that have the greatest impact on global financial stability are now required to undergo in-depth reviews of their financial health by the IMF every five years. The Fund chose the 25 economies based on the size of their financial sectors and their connections with financial sectors in other nations. Among the top 25 are nine emerging markets: the BRICs, Hong Kong, Singapore, SKorea, Mexico and Turkey, IMF Survey Magazine, 27 Sep 10

Posted on Wed, 29 Sep 10:

Hong Kong joins London, New York as cream of world's financial centers: The exclusive club that is the world's "Big 2" financial centers, until now the intimate preserve of London and NY, has opened its doors to a new member. According to the latest results of a six-monthly survey, Hong Kong has joined its heavyweight counterparts in the West for its competitiveness as a financial services and capital markets hub. The index, which is now sponsored by the Qatar Financial Center having previously been supported by the City of London, also showed Singapore was rapidly rising up the scale, taking 4th spot, International Adviser, 20 Sep 10 (Global Financial Centers Index report at Z/Yen)

The North-South Korean Kaesong Industrial Complex (KIC): The KIC is a six-year old industrial park located in NKorea just across the demilitarized zone from SKorea. As of May '10, over 110 medium-sized SKorean companies in the KIC are employing over 40,000 NKorean workers to manufacture products. The KIC represents a dilemma for US and SKorea. On the one hand, the project provides an ongoing revenue stream to the regime in Pyongyang. On the other hand, the KIC is the last remaining form of cooperation between SKorea and NKorea, providing a possible beachhead for market reforms, by D Nanto and M Manyin, US Congressional Research Service (courtesy Open CRS), June '10 (w/ exec sum)

Posted on Mon, 27 Sep 10:

Jeffrey Sachs: The Millennium Development Goals (MDG)--The leading international econ adviser of his generation and special adviser to UN Secy-Gen Ban Ki-Moon says if we devote just a modest fraction of our vast wealth to the effort to reduce poverty, we could not only reduce it, we could end it completely by the end of 2025. Here, the Columbia U Earth Institute director recommends where to learn more about the MDG, FiveBooks, 20 Sep 10 ; and

Jagdish Bhagwati: Millennium Devt Goals--Time for a rethink: The 10th anniversary of the MDG should be an occasion for member states to contemplate new leadership in managing the goals in order to address the instruments candidly and add key nuances. The management of the chosen MDG under the present leadership has fallen into a technocratic pursuit of increased demands for aid flows, and advocating programs regardless of governance constraints and local contexts - an approach that diverts attention from the effective pursuit of even the chosen goals. Surely we can do better, says Columbia U prof/ NY Council on Foreign Relations senior fellow, Finance & Development, Sep '10

Coffers: MSCI upgrade not always a boon for emerging markets--When Israel was admitted to the club of developed nations by index provider MSCI, many investors expected more conservative fund managers would pour money into its stock market. Since the 27 May reclassification, however, Israel has missed a stock rally in both emerging and developed markets. Investment inflows have also lagged, underscoring possible pitfalls for S Korea and Taiwan, the two other emerging economies on track for a possible upgrade next year, Reuters (coutesy Smart Investor/ India), Aug '10 (Palestinian Stock Exchange in talks in Tel Aviv, Haifa Diary, June '10)

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