News and Analysis: 7-18 May 12 | EmergingFrontierMarkets.com

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Posted on Fri, 18 May 12:

Germany, US head to G8 summit with starkly different economic policies, Washington Post, 18 May 12:
Chancellor Merkel, her advisers and even much of the German opposition see Europe's problems in starkly different terms than the Obama admin does. Merkel's impulse - to fight debt at all costs to boost investor confidence - has been at the core of Europe's crisis response, because industrial powerhouse Germany has been calling the shots. But she has come under heavy criticism from Americans who say her efforts are misplaced

Mouse & wo/man: Asian start-ups gain as Facebook's co-founder looks East, AP, 17 May 12 [courtesy Econ Times/India]:
Far from the Wall Street limelight, Facebook's co-founder Eduardo Saverin is keeping a low profile in Singapore, investing his wealth in tech start-ups while enjoying a life of luxury. The Brazilian, who was one of Facebook's founders in '04, has given up his dual US citizenship and plans to settle in Singapore, where he drives a Bentley. In a rare interview with a US paper, he insisted: "This had nothing to do with taxes. I was born in Brazil. I was a US citizen for about 10 years. I thought of myself as a global citizen"

Global trade logistics performance slows down amid recession, World Bank, 15 May 12:
Singapore is the top performer among the 155 economies included in the logistics rankings, acc to the bank's latest study on trade logistics, which is based on a comprehensive world survey of int'l freight forwarders and express carriers, done every other year. Also in the top 5 are Hong Kong, Finland, Germany, and Netherlands. Broadly, infrastructure stands out as the chief driver of progress in top performers, followed by improvements in logistics services, and customs and border management

Posted on Wed, 16 May 12:

Greece could exit Euro zone, IMF chief says, France 24, 15 May 12:
IMF chief Christine Lagarde said on Tue that even an 'orderly' Greek exit from the euro zone would pose great risks but remains an option if the nation's "budgetary commitments are not honored". She said that "it is something that would be extremely expensive and would pose great risks, but it is part of the options that we must technically consider" (Rhodes: Clock is ticking to apply emerging-market debt lessons to euro crisis, FT, 2 May | Subramanian: Greece's exit may become the euro's envy, 14 May) [courtesy Inst Int'l Fin & Peterson Inst]

Jeffrey Sachs: How Malawi fed its own people, New York Times, 19 Apr 12 [PDF, courtesy Columbia U]:
Malawi is an impoverished, landlocked, tropical nation in southern Africa, one of the poorest in the world. Until his final 2 years, Malawi's pres had actually engineered an agriculture-led-boom there, one that pointed a way for Africa to overcome its chronic hunger, food insecurity, and periodic extreme famines. To accomplish this, he had to stand bravely vs the arrogance of an ill-informed foreign aid community back in '05, says author of The Price of Civilization (2011)/ Columbia Earth Inst dir

An urbanizing world, Credit Suisse Bulletin, by A Redman and F Wan, 3 Apr 12:
In 25 years, half the world's people will live in emerging market cities. Urbanization provides one of the key drivers of growth for the global economy. In a new report, we identify the challenges and explore the opportunities for govts and investors as emerging market populations migrate towards cities. Looking at population projections in the world's 15 largest urban agglomerations in 2025, we note that just 2 - Tokyo and NY - are in developed nations

Posted on Mon, 14 May 12:

Barry Eichengreen: Is Europe on a cross of gold?, Project Syndicate, 14 May 12 [courtesy Social Europe Jl]:
There is growing evidence that the medicine on which European nations have agreed - austerity - is killing the patient. There is now talk of adjusting the dosage, but talk has not yet given way to action. Will things turn out differently this time? There is no question that the greater scope for cooperation that exists today bodes well for the euro. But it is the precise policies on which European govts cooperate that will tell the tale, says author of Exorbitant Privilege: The rise and fall of the dollar. . . (2011)/ UC-Berkeley prof

Global Trends - 2nd Qtr, Eurasia Group-PwC, May '12 [PDF]:
The extraordinary breadth and depth of the current worldwide econ turmoil and its gradual stabilization create new uncertainties in int'l and local political environments. Now, more than ever, it is crucial to understand emerging global trends: 1) Seeking growth in a volatile world; 2) The politics of banking sector reform in Europe and the US; 3) Free markets vs state capitalism in oil and gas; 4) Emerging market infrastructure push creates investment opportunities; and 5) New opportunities in Asia's shifting manufacturing landscape

Paul Volcker: Foreign critics should not worry about the 'Volcker rule', FT, 14 Feb 12 [courtesy Harvard]:
I confess total surprise about the complaints by some foreign officials about the restrictions on proprietary trading by US banks embedded in the Dodd-Frank Act - now dubbed the 'Volcker Rule'. It made me think all the way back when the Glass-Steagall Act was in full force. The practical effect was to ban all securities trading by US banks - not just 'proprietary' trading, but also 'market making' and 'underwriting', says fmr Fed chair/ fmr head of Pres.'s Econ Recovery Advisory Board ('Macro…, what?!' The new buzz on financial stability, Weblog at IMF)

Posted on Fri, 11 May 12:

Greek parties in last-ditch coalition talks, AP, 11 May 12 [courtesy CBC/Canada]:
The head of a small left-wing party and potential kingmaker in Greece's coalition negotiations says he will not join forces with the conservatives and socialists to form a gov't. Fmr finance minister and socialist party head Venizelos had met with election winner Samaras, Greece's conservative party leader, in a last-ditch effort to form a coalition gov't in the crisis-struck nation. If no deal can be found, Greece will have to hold new elections next month

A conversation with Peter Thiel, American Interest, Mar-Apr '12:
Francis Fukuyama talks with the renowned entrepreneur and co-founder of Paypal. Q: I'd like to begin by asking you about a point you made about there being certain liberal and conservative blind spots about America. What did you mean by that?; Clearly, Silicon Valley was in many ways the product of a gov't industrial policy, DARPA. So much of the early tech, the creation of the internet itself, the early semiconductor industry, were really spinoffs from investments in military tech that were pushed strongly by the gov't

Financial model - Brazil, OECD Observer, Dec-Feb '12:
Anyone wishing to gauge Brazil's status as one of the world's most lucrative emerging markets should look at the growth of its financial sector. When asked how Brazil kept its head above water during the 2008/09 econ crisis, even rising above the waves last year, registering its highest growth rate in a decade, the pres of JP Morgan's asset management unit in Brazil points to its fiscal discipline

Posted on Wed, 9 May 12:

A message from Argentina for Euro-zone nations, Dallas Fed Econ Letter, by Carlos Zarazaga, May '12:
Greece recently implemented a restructuring of its sovereign obligations, perhaps because its citizens decided that the benefits of that painful decision outweighed the costs. Quick prosperity likely wasn't among the anticipated benefits. Still, many observers (incl some Greek citizens) might come to expect such a result after reviewing the often-cited experience of Argentina, a nation whose output growth rates soared for many years after its '01 debt default, one of the largest in the history of emerging markets

William Overholt: The price of German leadership, International Economy, Jan-Mar '12 [PDF]:
When the global financial crisis began, the world could be saved from depression only by massive fiscal stimulus. Because of their size and global engagement, 3 nations bore responsibility for saving the global economy: the US, China, and Germany. The US and China acted decisively and averted depression. German failure to stimulate in the common interest is of course explained by the residual trauma of Weimar inflation. But for an aspiring global leader, ancient trauma cannot excuse contemporary irresponsibility, says Harvard senior res fellow

John Hemmings: Law not war in the South China Sea, Diplomat/Japan, Nov '11:
Throughout history, state-on-state disputes have traditionally had 2 potential solutions: military or diplomatic. The Melian Dialogue in Thucydides' The Peloponnesian War states the infamous dictum that "the strong do what they can, and the weak suffer what they must." While it remains true that global int'l relations are still fed by disparities in state size and power, the current global order seeks to assuage those disparities with different types of econ, political, and dispute settlement mechanisms, says UK's Royal United Services Inst coordinator/ research analyst

Posted on Mon, 7 May 12:

World markets react to French, Greek elections, CTV News/ Canada, 7 May 12:
World stock markets were mixed after opening lower on Mon. as key elections in France and Greece sparked more worries about Europe's ability to handle the burgeoning debt crisis. The Athens exchange tumbled after Greece's 2 main political parties failed to win a combined majority as voters backed anti-austerity parties. Markets also were roiled after French socialist candidate Francois Hollande defeated Pres Sarkozy in a narrow vote. Hollande campaigned on the need for more growth-generating econ policies and less reliance on austerity

Paul Krugman: How to end this depression, NY Review of Books, 4 May 12:
The truth is that recovery would be almost ridiculously easy to achieve: all we need is to reverse the austerity policies of the past couple of years and temporarily boost spending. With a boost in spending, we could be back to more or less full employment faster than anyone imagines. But some will wonder, isn't a recovery program along the lines I've described just out of the question as a political matter? And isn't advocating such a program a waste of time?, says Nobel Laureate '08/ Princeton U prof (Cochrane: Austerity, stimulus, or growth now?, Weblog at U Chicago)

Bank publishes survey of emerging markets' consumers, AME Info/UAE, 18 Jan '12:
Credit Suisse Research Institute published its 2nd annual Emerging Consumer Survey (and Databook) - a detailed study profiling consumer sentiment within the BRICs (Brazil, Russia, India and China), Turkey, Saudi Arabia, Egypt and Indonesia. The survey suggests that confidence among emerging consumers is still reasonably strong. Of just over 14,000 adults included in the survey, 35% thought their personal finances would improve over the next 6 months and 9% expected some deterioration

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