News and Analysis: 15-26 Aug 11 | EmergingFrontierMarkets.com

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Posted on Fri, 26 Aug 11:

John Taylor: As Fed meets, two lessons from 30 years at Jackson Hole, Weblog at Bloomberg, 26 Aug 11:
The world's financial leaders are again on their way to Jackson Hole for what will be the 30th annual symposium in the Grand Teton Mountains. I attended the 1st symposium in Aug '82, and I plan to be there this week. Anticipations are running high that Fed Chairman Bernanke will say something in the opening address. I expect that the Tetons will still be there, but virtually everything else will be different. And there are lessons in those differences, says fmr Treas Undersecy for Int'l Affairs/ Stanford prof (Bernanke at Jackson Hole | Jackson Hole program | About)

Dani Rodrik: Don't expect China et al. to save the world, Harvard, 23 Aug 11:
In a world economy rapidly running out of bright spots, many are putting their hopes on the emerging and developing economies. Many experienced very rapid growth over the past decade, and most have recovered quickly from the 2008/09 crisis. Optimism abounds. Unfortunately, this is based on predictions which are largely extrapolations from the recent past, and they overlook serious structural constraints, says Harvard int'l political econ prof (Policy matters - The global economy)

Watu Wamae: Africa needs its own indicators of scientific innovation, SciDev, 6 July 11 [courtesy Rand]:
Evidence-based indicators in Science, Tech and Innovation help govts across the world to formulate policies and identify opportunities for dev't. But if STI indicators are to contribute effectively to a sustainable path towards social/ technological transformation, they need to be sensitive to the African context. There is no point simply reinventing the wheel, but Africa must develop measures of STI activity in the region, because existing methods may not capture them, says innovation/ tech policy analyst of Rand Europe

Posted on Wed, 24 Aug 11:

Bernanke's Jackson Hole speech could rattle markets, Reuters, 24 Aug 11 [courtesy Economic Times/ India]:
Whether the Federal Reserve likes it or not, its unprecedented monetary polices over the last few years have conditioned the financial markets to expect a helping hand when the going gets tough. That's why all eyes will be on the central bank's chairman when he speaks Fri at the Fed's annual symposium in Jackson Hole, Wyoming. Last year, the Fed began pumping $600 bln into the financial system through direct purchases of Treasury debt, a 2nd round of stimulus that markets dubbed 'QE2'. We take a look at what the Fed could do

Nobel laureates agree: US, Europe sliding into 'lost decade', Die Welt, 22 Aug 11 [transl. from German by Worldcrunch/ France]:
If politicians don't get a handle on it soon, the debt crisis will be a game-changer for the West. The US and European economies will face years of stagnation and decline compared to emerging nations in Asia and Latin America. In fact, the euro zone might break apart. These are some of the views from 17 Nobel Prize winners who are gathered this week for the Nobel Laureate Meetings at Lindau, an island in Germany's Lake Constance

Korea tops new survey of digital literacy, OECD, June '11:
Korea tops a new survey that tests how 15-year olds use computers and the Internet to learn. The next best performers were New Zealand, Australia, Japan, Hong Kong and Iceland. Students from 16 nations took part. The survey (by the Program for Int'l Student Assessment) tasked students with evaluating info on the Internet, assessing its credibility and navigating Web pages to test their digital reading performance. PISA evaluates the quality, equity and efficiency of school systems in some 70 nations and aims to help them see how their systems match up (S Korea tops Internet ranking, Boston Consult. Grp, July '11)

Posted on Mon, 22 Aug 11:

Oil prices should fall with Gadhafi overthrow, Los Angeles Times, 22 Aug 11:
Oil prices around the world should start falling if Libyan rebels succeed in toppling Gadhafi's regime, though the full effect will not be felt for months. When fighting broke out, oil was trading at around $84 a barrel. It quickly spiked above $93 and kept rising to a high above $110 at the end of April. Oil has fallen recently along with stocks because of concerns about the global economy (European oil companies watch Libya closely, eye possible return, Platts)

Five finance ministers: How the world can get its groove back, Globe and Mail, 15 Aug 11 [courtesy CTV/ Can.]:
The world faces a crisis of confidence. We all knew that the recovery from the financial crisis would be prolonged. However, the more serious malaise today is the lack of confidence in efforts by govts to address the structural problems that underpin weak growth, high unemployment and unsustainable fiscal balance sheets. Signed by: J Flaherty-Canada, P Gordhan-S Africa, G Osborne-UK, T Shanmugaratnam-Singapore and W Swan-Australia (New 'global governance group' initiative for small states welcomed, S'pore Inst Int'l Affairs)

Richard Levich: Why foreign exchange transactions did not freeze up during the global financial crisis, Vox EU, July '09:
In the fall of '08, the financial crisis that began in the US intensified and took on global dimensions. Financial markets froze as a growing list of financial institutions failed (eg. Bear Stearns, Fannie Mae, Freddie Mac, Lehman, etc). A rising crescendo of weak econ fundamentals spread fear about the quality and perhaps viability of many well-known financial players. Against this backdrop, the foreign exchange market stayed vibrant, and activity levels rose relative to prior years, says NYU finance prof

Posted on Fri, 19 Aug 11:

World stocks plunge on growing recession fears, AP, 19 Aug 11 [courtesy Atlanta Journal-Constitution]:
Global stocks slid again Fri as fears of a possible US recession combined with ongoing worries over Europe's debt crisis, which is stoking acute fears over the continent's banking sector. Banks have borne the brunt of the selling ever since German Chancellor Merkel and French Pres Sarkozy indicated their nations were developing a plan to tax financial transactions. Worries over their financial health and their accompanying exposure to gov't debt have further weighed on their share prices

Jeffrey Sachs: A new economic strategy for America, Politico, 4 Aug 11:
Pres Obama's fiscal policies have been esp. naive. He inherited a $1 trillion deficit and immediately announced a 'stimulus' bill to raise the deficit by another $400 bln or so per year. His idea was to throw money at the recession, in the name of raising 'aggregate demand'. The pres surrounded himself with the Wall St types who had deregulated the financial sector and thereby created the bubble economy under Pres Clinton, like Rubin, Summers, Sperling and others. The Republican opposition is, of course, far nastier and its economics are even worse. They hold that there is one and only one answer to every problem: lower taxes on the rich, says Columbia U Earth Inst dir/ econ prof

C-suite/Boardroom: Welcome to the next level - Q&A with Michael Porter, Schweizer Monat/ Switz., July '11:
Porter is one of the most influential management theorists of our times. He has explored how companies develop new ways of competing. His observations have coined contemporary praxis. Now he advocates a reinvention of capitalism. A reversal? Q: In Jan, you published a much discussed essay about a new understanding of capitalism. You show why and how companies can help to improve the econ and social conditions of society. Do you, the inventor of the value chain, think that capitalism has failed?

Posted on Wed, 17 Aug 11:

Paris meeting produced 'big words, little deeds', Der Spiegel, 17 Aug 11:
German Chancellor Merkel and French Pres Sarkozy ruled out euro bonds for the foreseeable future at their summit in Paris on Tue, and the closer fiscal coordination they proposed for the euro zone has failed to convince markets. They also rejected demands to increase the volume of the €440 bln ($634 bln) euro rescue fund. World stocks and the euro fell on Wed. due to concern that the plans for a 'true' euro-zone econ gov't, for a German-style balanced-budget clause enshrined in the national constitutions of all 17 euro member states and for a financial transaction tax would not be enough to stop the euro debt crisis from escalating

Christine Lagarde: Don't let fiscal brakes stall global recovery, Financial Times, 16 Aug 11 [courtesy IMF]:
Shaping a Goldilocks fiscal consolidation is all about timing. What is needed is a dual focus on medium-term consolidation and short-term support for growth and jobs. That may sound contradictory, but the two are mutually reinforcing. Will the markets buy such an approach? We should remember that markets can be of two minds: while they dislike high public debt - and may applaud sharp fiscal consolidation - as we saw last week they dislike low or negative growth even more, says IMF chief (Hüther: Debt brakes are the best way out of the crisis, Der Spiegel, 11 Aug)

Oslo, Zurich and Geneva are the world's most expensive cities, UBS, 16 Aug 11:
Oslo, Zurich and Geneva are the most expensive cities in the world, acc to the most recent issue of the 'Prices and Earnings' study of purchasing power around the world. Just down the ranks are Copenhagen, Stockholm and Tokyo. In contrast, prices for the selected basket containing 122 goods and services were esp. low in Mumbai, Manila and Delhi. This study is published every 3 years, with an update in the intervening years

Posted on Mon, 15 Aug 11:

World Bank's Zoellick sees 'new danger zone' in global economy, Bloomberg, 14 Aug 11 [courtesy SFGate]:
Int'l policy makers need to take steps to restore global sentiment shaken by the downgrade of the US sovereign debt rating and Europe's fiscal crisis, WB Pres Zoellick said. "I think we are entering a new danger zone," he told reporters last night after addressing the Asia Society in Sydney. "I think that confidence in econ leadership has been slipping and it will be important that the primary econ actors take steps both short and long term to restore that"

Nancy Birdsall: With all due respect, Mr. Pres - On 'nation-building' by another name, Weblog at Ctr Global Dev't, 3 Aug 11:
Pres Obama has made clear that he has no enthusiasm for 'nation building' projects in Afghanistan that go on for years or are unsustainable. They may be well intentioned, he has told aides, but they are too expensive. The pres has in mind nation-building a la Iraq: military intervention and then build and hold (and hope). Nation-building that way has gotten a bad reputation. But there is nation-building as a preventive measure, notes Ctr pres (Zoellick: Afghanistan's biggest need - A flourishing economy, Wash. Post, 24 July) [courtesy World Bank]

US, a generous donor, is committed to making aid more effective, OECD, 28 July 11:
The US has significantly enhanced its dev't strategies, policies, and programs. It should continue to reduce overlaps and improve coordination, acc to the OECD Dev't Assistance Committee’s peer review of US aid. The OECD DAC is composed of the world's major donors. The peer review suggests that improving co-ordination is vital to promote coherency, avoid overlaps and ensure that strategic, country-specific goals are given priority (Development aid to slow, June '11 | Denmark's aid funding and policies set good examples, May '11)

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