News and Analysis: 20 June-1 July 11 | EmergingFrontierMarkets.com

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Posted on Fri, 1 July 11:

Newsroom: Lee Sarokin--What if he's innocent?, Huffington Post, 23 May 11:
One cannot read the published accounts of the charges vs Strauss-Kahn without concluding that he is probably guilty. But what if he isn't? The coverage, the photos, the op-eds have ruined his reputation, forced him to resign his high IMF position and apparently ended his bid for the presidency of France. The crime charged engenders such emotion and anger that this is probably the wrong case to make the point, but shouldn't we re-examine the practice of publicizing criminal charges and the so-called 'perp walk'?, asks retired US Court of Appeals judge

Mouse and wo/man: Rosabeth Kanter--The Internet changes everything - except four things, Weblog at Harv Bus Rev, 26 May 11:
At the recent e-G8 Forum in Paris, the Internet was venerated as a revolutionary force changing everything. French Pres Sarkozy, who commissioned the forum to provide recommendations to the G8 heads of state, was extravagant in his praise, calling it a new world and the 8th continent. The fact of change is unmistakable. Internet tools and social network affect every aspect of traditional industries. But with all the talk of revolution, disruption, and really big change, I was struck by the things that are not changing - or at least, not yet, says Harvard business prof

Could advanced nations have learned from Asian financial crisis of 1997/98?, by Galina Hale, San Francisco Fed Econ Letter, 28 Feb 11:
An informed reader may notice parallels between the lessons drawn from the Asian crisis and the current discussion of policies aimed at preventing a repetition of the global financial crisis of 2007/09. Does that mean that the lessons of the Asian crisis were ignored? Was it believed that those lessons didn't apply to advanced nations? Did the many important differences between the emerging markets of East Asia prior to '97 and those of the US/Western Europe before '07 lead policy makers to conclude that an Asian-flu-type crisis was unlikely in the West?

Posted on Wed, 29 June 11:

Lagarde chosen to lead IMF; first woman in top job, AP, 28 June 11 [courtesy Ctr Int'l Govern Innov/ Can.]:
French Finance Minister Lagarde was chosen Tue to lead the IMF and will immediately confront a European debt crisis that threatens the global economy. Lagarde will be the 1st female head of the global lending org and the 11th European. Next week, she will begin a 5-year term. Her selection became all but assured once the Obama admin endorsed her earlier Tue. Hours later, the IMF's 24-member board voted to appoint her (Lagarde's appointment irks developing nations, AFP | Prasad: The old order has triumphed yet again, FT) [courtesy Bulawayo24/ Zimbabwe | Brookings]

Jeffrey Frankel: Can food prices be stabilized?, Project Syndicate, 28 June 11 [courtesy China Daily]:
Under French Pres Sarkozy's leadership, the G20 has made addressing food-price volatility a top priority this year, with their agric ministers meeting recently in Paris to come up with solutions. The G20's efforts will culminate in the Cannes Summit in Nov. But, when it comes to specific policies, caution will be very much in order, for there is a long history of measures aimed at reducing commodity-price volatility that have ended up doing more harm than good. Shooting the messenger is no way to respond to the message, says Harvard prof

Investment regulation and promotion: Can they co-exist in one body?, Invest. Climate in Practice (World Bank), Mar '11 [PDF, 2.5MB]:
Nearly every nation has an agency responsible for promoting Foreign Direct Investment. A '09 Bank report found that nearly three-quarters of nations are missing out on much of the $1 trillion annual market of FDI by simply failing at the timely provision of high-quality biz info to potential investors. And nearly 40% of the surveyed agencies said that, in addition to FDI promotion, their 3 main functions included some form of FDI regulation

Posted on Mon, 27 June 11:

BIS warns of new debts in emerging markets, AFP, 26 June 11 [courtesy Daily Nation/ Kenya]:
Emerging economies are at risk of building up debt levels and property bubbles similar to those in advanced economies that triggered the recent financial crisis, the Bank for Int'l Settlements warned Sun. "Emerging market policymakers should recognize that the lessons from the financial crisis do not apply only to advanced economies," it added. It said that Brazil, China and India all recorded credit growth of more than 20% annually between '06 and '10

Debt managers need to be more nimble and innovate, IMF Survey Mag, 24 June 11:
Emerging markets can make use of the current favorable market conditions, reflected in sizable capital inflows, to continue improving their debt structures. Some of those inflows can be tapped for investment in longer-term gov't bonds. In nations gaining access to int’l financial markets for the 1st time, the challenges are different. Their capacity to evaluate financing options is limited, but very important to avoid costly mistakes in accessing debt markets. They need to focus on shovel-ready projects to avoid misusing finances or having them lie idle

Amartya Sen: It isn't just the euro. Europe's democracy itself is at stake, Guardian, 22 June 11:
There are profound issues to be faced about how Europe's democratic governance could be undermined by the hugely heightened role of financial institutions and rating agencies, which now lord it freely over parts of Europe's political terrain. The diagnosis of econ problems by rating agencies is not the voice of verity that they pretend. It is worth remembering that the record of rating agencies in certifying financial and business institutions preceding the '08 econ crisis was so abysmal that the US Congress seriously debated whether they should be prosecuted, says Nobel Laureate '98/ Harvard prof

Posted on Fri, 24 June 11:

Daniel Gros: The EU's rules to default by, Project Syndicate, 22 June 11 [courtesy Malta Independent]:
Greece's ballooning public debt is again throwing Europe's financial markets into turmoil. But why should a debt default by the gov't of a small, peripheral economy - one which accounts for less than 3% of eurozone GDP - be so significant? The answer is simple: The financial system's entire regulatory framework was built on the assumption that gov't debt is risk-free. Any sovereign default in Europe would shatter this cornerstone of financial regulation, and thus would have profound consequences, says Ctr for European Policy Studies dir (Eichengreen: Time may be right to dust off Brady Plan for Greek restructuring, May '11 | Allen/ Evans: A Trichet Plan for the euro zone, VoxEU, Apr '11) [courtesy Taipei Times]

Singapore to become top wealth center, Irish Times, 21 June 11:
The city state is set to take over as the world's top wealth management center by '13, a new report has claimed. PwC's latest report on the wealth management sector asked respondents which financial centers they viewed as private banking hubs. In response to increased regulatory pressures, the respondents see Switzerland, London and, to a lesser extent, New York, all being challenged by the rise of Singapore and Hong Kong in the next 2 years. The report surveyed 275 institutions from 67 nations between Dec '10 and April '11, with 62% from Europe, 24% from the Americas and 14% from Asia-Pacific

William Easterly: A comment on Eberstadt's "Global poverty paradox", Commentary Mag, 25 Jan 11 (scroll):
Eberstadt, Amer Enterp Inst's chair in political economy, gives an insightful summary of the successes and failures of econ dev't in the post–WW2 period. It's not easy to fairly represent such a complex and heated debate, and he by and large does so. However, I have to disagree respectfully on a few conspicuous areas. Is development as easy as he says? Is state-building likely to work? And what does the culture perspective teach us?, asks NYU Dev't Res Inst co-dir/ prof (A reply to Easterly [scroll from the above article] | Original article)

Posted on Wed, 22 June 11:

Greece builds on vote victory in race to cut and privatize, AFP, 22 June 11 [courtesy Jakarta Globe]:
Greek ministers raced on Wed. to meet a 2-week deadline for budget cuts in return for EU-IMF cash to pay current bills and contain the eurozone crisis, hours after winning a confidence vote. The governing Socialists face a knife-edge race in overcoming dissent in their own ranks over the debt-cutting onslaught. This is despite an ultimatum from eurozone ministers insisting on crash action before they will release the next slice of aid and move ahead on a new bailout (Quick guide to the Greek crisis, Reuters)

Inspiration for a liberal economist - Q&A with Paul Krugman, Nobel Laureate '08, Five Books, 19 June 11:
Q: I wanted to start by saying how pleased I am you call yourself a liberal, because there are a lot of people - politicians - who are reluctant to be associated with the word. I do get a sense from your columns in the NY Times that you are on a mission… Wouldn't some people accuse you of having an extremely strong belief system? Isn't there a sense among liberals that, "We're in the right so we don't have to pay too much attention to conservative or Republican arguments"?

William Easterly: How not to win hearts and minds, Wall Street Journal, 16 Aug 10 [courtesy NYU]:
In June '10, this newspaper broke the story of how Afghan officials were literally stuffing suitcases with aid money and flying out of the country. As the war there drags on, we have to ask the following question: Is US aid winning hearts and minds? A UN survey taken in Jan '10 found that 52% of Afghans believe aid organizations "are corrupt and are here just to get rich". I don't know much about waging a counterinsurgency campaign, but it seems to me that we are getting very little for our money, says NYU Dev't Res Inst dir/ prof [PDF]

Posted on Mon, 20 June 11:

Olivier De Schutter: Food crises - Five priorities for the G20, Guardian, 16 June 11 [courtesy srfood.org]:
On 22-23 June, the G20 agriculture ministers will meet in Paris to make progress on key issues such as reducing commodity price volatility, limiting financial speculation and establishing a global action plan vs food crises. Five priorities may give this G20 summit a vital role in improving long-term global food security. Will they be endorsed and implemented?, asks UN Special Rapporteur on the right to food/ Catholic Univ (Louvain) and College of Europe (Natolin) law prof

Homi Kharas: Can the Asian middle class come of age?, East Asia Forum/ Australia, 12 June 11
Most South and East Asian economies have passed the World Bank's threshold of a per capita GDP of $1,000 to become classified as middle-income nations. A global middle class is best defined by the spending of households, not the income available to the economy. When households can afford small luxury items, when they can purchase consumer durables like cellphones, cars, motorcycles, refrigerators, maybe own their house, enjoy vacations and leisure and afford to educate their children and to provide them with good health care, then they can be classified as members of a global middle class. One rough definition of when this happens is when households spend at least $10/person/day, says Brookings Inst senior fellow

New opportunities emerge in Africa as China graduates from lower-skill manufacturing, World Bank, 9 May 11:
In a special lecture given in Maputo, Mozambique, the Bank's chief economist compared China's current GDP per capita to that of Japan in the early '60s or that of Korea in the early '80s. Because of its dynamic growth over the past 3 decades, China will have to move up the industrial ladder, like Japan and Korea - a 'graduation' that will free up large manufacturing employment opportunities for lower-income nations, and mark China's conversion from the 'flying goose' it once was in the footsteps of other Asian nations into a leading dragon in its own right (Lin: Demystifying success - The new structural economics approach, Dev't Outreach) [PDF]

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