News and Analysis: 21 Nov-2 Dec 11 | EmergingFrontierMarkets.com

Based in: Manila, Philippines

Posted on Fri, 2 Dec 11:

European Central Bank hints at help pending Euro-zone integration, Der Spiegel, 1 Dec 11:
The boost from Wed.'s coordinated action taken by major central banks around the world was immediate, but short lived. Whereas global stock indexes shot up after the announcement that the ECB, the US Fed, the Bank of England and others would make it easier for banks to access US dollars, the euphoria quickly faded on Thu. Indeed, even ECB chief Draghi felt compelled to warn vs misplaced optimism. But he also seemed to hint at a possible way out of the downward spiral ("Central banks' coordinated move has solved nothing")

Corruption Perceptions Index - Protests that marked '11 show anger at corruption in politics and public sector, Transparency Int'l, 1 Dec 11:
Corruption continues to plague too many nations around the world, acc to the latest index released on Thu. It shows some govts failing to protect citizens from corruption, be it abuse of public resources, bribery or secretive decision-making. The index scores 183 nations/ territories, using data from 17 surveys that look at factors such as enforcement of anti-corruption laws, access to information and conflicts of interest. New Zealand ranks 1st, followed by Finland and Denmark. Somalia and NKorea (included in the index for the 1st time) are last

Kenneth Arrow: Economics and inequality, Boston Review, 30 Nov 11:
Why have income and wealth inequality in the US reached unprecedented levels? Does this outcome reflect the operation of a fair and open contest? Every economy of complexity produces an unequal distribution of the good things in life. But the period immediately following WW2 showed a considerably increased equality of income compared with either the Great Depression or the previous period of relative prosperity. Since the mid-'80s, this tendency has been reversed. Clearly, the bulk of the gains from increased productivity went to a small group of upper-income recipients, says Nobel Laureate '72

Posted on Wed, 30 Nov 11:

HR firm releases quality of living city rankings, Mercer, 29 Nov 11:
European cities dominate worldwide rankings on quality of living, with Vienna as no.1, followed by Zurich, Auckland/ NZ, and Munich. Cities in Australia, New Zealand and Canada also rank highly, while Singapore is the 1st Asian city in the top 25, at no.25. Luxembourg tops the 'personal safety' rankings, followed by Bern and Helsinki. Baghdad has the lowest quality of living among the 221 cities ranked and is also last in the personal safety rankings

Jean Pisani-Ferry: Germany's hour, Handelsblatt/ Germany, 28 Nov 11 [courtesy Bruegel]:
A series of events over the last few weeks have created a new situation in Europe. And now, market participants and, increasingly, real businesses are pricing in a break-up scenario. It is still hard to think the unthinkable, let alone to work out its details, but any rational player has to consider the possibility. If disaster expectations build up and a growing no. of players start positioning themselves to protect themselves from it, the consequences could become overwhelming, says think tank's dir/ Univ Paris-Dauphin prof

Unfinished business? The WTO’s Doha Development Agenda, World Bank, 8 Nov 11:
The Doha round of global trade talks is in limbo. After 10 years of hard work by skilled negotiators, seeking to identify the interests of different participants and to reconcile them into an overall agreement, no conclusion is in sight. A Doha-weary world faces a difficult 'trilemma': to implement all or part of the draft agreements as they stand today; to modify them substantially; or to dump Doha and start afresh. At this critical juncture, a new report addresses the key questions they face and provides an empirical basis for informed choices

Posted on Mon, 28 Nov 11:

William Easterly: A firewall should be built between USAID and the defense dept, Weblog at Guardian, 21 Nov 11:
As the US gov't budget wars continue, everyone agrees that among the most vulnerable programs is foreign aid. What we now forget is that foreign aid enjoyed strong bipartisan support until quite recently. In Mar '02, Pres Bush announced large funding increases for aid, which have indeed been realized across 2 admins since. Even fmr opponents such as Jesse Helms became aid boosters. What happened to destroy that support?, asks NYU prof    (Birdsall: Why Easterly and USAID are both wrong on aid to Pakistan) [courtesy Ctr Global Dev't]

N Birdsall and R Perakis: Our wish list for the Busan forum on aid effectiveness, Ctr Global Dev't, 21 Nov 11:
From 29 Nov-1 Dec, about 2,700 delegates from around the world will gather in Busan, SKorea to talk about aid effectiveness: whether there has been progress on aid reform since previous forums in Paris and Accra, and what "dev't cooperation" (the term for "aid" coming back into vogue) should look like going forward. Will anything at all be accomplished at the Busan high level forum to make the aid system better than it is?, ask Ctr pres and prog coordinator    (AidSpeak dictionary, Easterly's site, Sep '11)

B Eichengreen, E Prasad and R Rajan: Central banks need a bigger, bolder mandate, FT, 24 Oct 11 [courtesy Brookings]:
In the wake of the global financial crisis, there is an emerging consensus that the framework underpinning central banking, known as inflation targeting, is too narrow. The crisis is a stark reminder that a monetary policy framework focused on price stability will also affect financial stability through its impact on asset prices, commodity prices, credit, leverage, capital flows, and exchange rates.   So, it is time to update central banks' mandates and operations, say UC-Berkeley, Cornell U, and U Chicago profs    (Rethinking central banking)

Posted on Fri, 25 Nov 11:

Fast-growing economies can turn new found growth into social progress, OECD, 21 Nov 11 [PDF]:
Social cohesion - the glue that holds society together - is at risk worldwide. A growing demand for social cohesion comes from a rapidly expanding middle class. Their rising expectations, desire and ability to participate in civic activities and aspirations for better standards of living are a driving force for change. How can govts promote social cohesion? A new report, Perspectives on Global Development 2012: Social cohesion in a shifting world, shows that the time is now ripe for the fast-growing nations to take advantage of their new prosperity to advance an ambitious social cohesion agenda

Our wealthier world, Reason Magazine, Nov '11:
Every American has access to $734,000 in wealth, acc to a recent World Bank report, The Changing Wealth of Nations: Measuring sustainable development in the new millennium. But most of it - 85% - is 'intangible'. We all intuitively know what tangible wealth is: it’s oil wells, automobile factories, houses, roads, sewage treatment plants, farms, forests, and so forth. But what is intangible wealth?

Robin Wells: We are Greg Mankiw… or not?, Weblog at Inst New Econ Thinking, 20 Nov 11:
I am sure that many of us who have taught introductory econ felt a pang of sympathy for Greg when we heard about the walk-out. If you have ever faced a large lecture hall of restive intro econ students, or coped with a voluble student with an ax to grind, you can feel some solidarity: we are Greg Mankiw too. Or, is Mankiw - and much of the profession, for that matter - getting a needed reality check about the need to re-orient the way we teach econ?, asks co-author, with Krugman, of Economics

Posted on Wed, 23 Nov 11:

Strong growth in developing East Asia faces risks from global uncertainty, natural disasters, World Bank, 22 Nov 11:
Growth is still strong in developing East Asia, but continues to moderate mainly due to weakening external demand, underscoring the need for govts to refocus on reforms to increase domestic demand and productivity, says the latest East Asia and Pacific Econ Update released on Tue. The twice-yearly report says real GDP in developing East Asia is projected to increase by 8.2% this year (4.7% excl China), while growth will slow to 7.8% in '12

Kenneth Rogoff: The euro zone does not need IMF help, FT, 4 Nov 11 [courtesy Harvard]:
With the G20 now focusing on the IMF as their preferred conduit for any bail-out in the euro zone, it is imperative they ask what purpose that will serve. Unless the IMF is granted considerable power to enforce conditionality at the euro-zone level, it is hard to see much benefit in its involvement, aside from providing a fig leaf for large-scale European Central Bank purchases of euro sovereign junk bonds. The problem is that there are at least 5 key flaws in the euro-zone's present interim design, says Deutsche Bank financial econ prize awardee '11/ fmr IMF chief economist

G Hubbard and A Blinder: Taxes and debt - Left and Right dare to agree, CNN Money,  Sep '11 [courtesy Amer Enterp Inst]:
The smart money in Wash. had been betting that the so-called super committee will fail because the 2 parties cannot find common ground. What a shame, because the common ground is there for the taking. Bipartisan agreement can start with the recognition that the status quo won't hold: the US govt's deficit and the national debt are now on unsustainable paths. As the late economist Herb Stein once famously quipped, "If something cannot go on forever, it will stop", say fmr US pres.'s Council Econ Advisers chair/ Columbia U Bus. Sch dean and fmr Fed vice-chair/ Princeton U prof   (Tax reform is the swiftest path to growth, WSJ, Aug '11) [courtesy Hubbard's site]

Posted on Mon, 21 Nov 11:

Jeffrey Frankel: US crisis gratuitously self-inflicted, US News & World Report, 7 Nov 11 [courtesy Harvard]:
In both Europe and the US, the current public debt woes are attributable to mistakes made by political leaders going back more than a decade. In both cases, the magnitude of the debt problems has only become evident for all to see recently, by which time it was too late for the straightforward policy solutions that were viable options before. It is hard to judge whether it is Europe or the US that has screwed up worse, says Nat'l Bur Econ Res Business Cycle Dating Cmte member/ Harvard prof

Infrastructure spending to help boost Asian living standards, IMF Survey Mag, 7 Nov 11:
Greater investment in infrastructure could help improve the standard of living in Asia, but policy makers must be wary of committing themselves to costly projects, acc to a conference in Tokyo. Pointing to the findings from 4 countries (Brazil, China, Chile, and SKorea), a researcher identified investments in electricity as an effective means of encouraging GDP growth. He said although investment in roads contributed to financial deepening and gov't revenue, it did not make a notable contribution to accelerating a nation's GDP growth

Report names and shames global tax havens, Bureau of Investigative Journalism, 4 Oct 11:
The global system that allows companies to hide their tax affairs has barely been reformed despite a G20 pledge in '09. Figures released by the campaign group Tax Justice Network reveal that the tax haven infrastructure still supports malpractice and global crime. Switzerland, the Cayman Islands, Luxembourg, Hong Kong and the US rank among the top of the league in providing secrecy. The UK, Jersey and Bermuda also figure prominently in the campaign group's "dirty dozen" worst offenders    (Jersey slams financial secrecy index as 'nonsensical',  Telegraph)

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