News and Analysis: 18-29 June 12 | EmergingFrontierMarkets.com

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Posted on Fri, 29 June 12:

Spain and Italy win trade-off in EU growth pact talks, Deutsche Welle, 29 June 12:
Italy and Spain have lifted their objections to a deal on measures to promote growth reached at an EU summit. They had withheld their approval to back up demands for action to reduce their borrowing costs. Spain saw its yields for 10-year bonds hit 6.9% on Thu, just below the 7% mark, which is widely seen as unsustainable. Italy's PM Monti and Spain's PM Rajoy had earlier refused to sign off on the 120-bln-euro ($149 bln) growth package being debated by the leaders on Thu

P Krugman and R Layard: A Manifesto for economic sense, FT, 28 June 12 [courtesy Lond Sch Econ]:
More than 4 years after the financial crisis began, the world's major advanced economies remain deeply depressed, in a scene all too reminiscent of the 1930s. And the reason is simple: we are relying on the same ideas that governed policy in the 1930s. So the time is ripe for a Manifesto in which mainstream economists offer the public a more evidence-based analysis of our problems, say Nobel Laureate '08/Princeton prof, and Well-being prog dir at LSE Ctr Econ Performance

Asia-Pacific surpasses all regions with largest number of 'high net worth individuals', Capgemini/Royal Bank Canada, 19 June 12:
Asia-Pacific topped N America to become the single largest home to high net worth individuals (HNWI) in '11, for the 1st time, while N American HNWI still accounted for the largest regional share of investable wealth, acc to the 'World Wealth Report 2012'. The overall financial wealth of HNWI declined in '11 across all regions, except the Mideast. The 1.7% decline is the 1st since the '08 world econ crisis, a year in which HNWI global wealth declined by 19.5%. (Analyzing the wealth of the world's adult pop., Credit Suisse, Oct '11)

Posted on Wed, 27 June 12:

IMF urges Euro zone to make more determined, collective response to crisis, IMF Survey Mag, 21 June 12:
The crisis in the euro zone has reached a critical stage, the staff of the IMF said in its latest assessment, and urged the 17 member nations to remain strongly committed to a robust and complete monetary union. It should encompass a credible path to a banking union as an immediate priority, and greater fiscal integration, with better governance and more risk sharing ('We certainly don't want to divide Europe'--Q&A with Germany's finance minister, Der Spiegel, 25 June)

'The Price of Inequality' - Interview with Joseph Stiglitz, Rolling Stone, by J Bernstein, 25 June 12:
Stiglitz, Nobel Laureate '01, is uniquely qualified to explain how the economy really works, or more precisely, how and why it's working far better for the top 1% than the bottom 99%. That's the topic of his new book The Price of Inequality. The book is a model of clarity, but that's just one of its virtues. Another is how he frames the problem; he doesn't start from a place of "vast inequality is a fact of life in our free-market system, and that's as it should be." He starts from a much more interesting, and frankly, humane place

Poverty project opens to scrutiny, Nature, 12 June 12:
The Millennium Villages Project, a joint venture between Columbia U and the non-profit org Millennium Promise, both in NY, aims to chart a course out of poverty for the most deprived people in Africa. But after being forced to partially retract the findings of a paper that included the claim that its interventions had slashed child mortality, it is revamping its oversight to make its science more robust and determine whether its approach works (Pronyk: Errors in a paper on the Millennium Villages project; and Editors' reply, Lancet, 18 May [PDF])

Posted on Mon, 25 June 12:

It's time to break the vicious cycles - report, Bank for Int'l Settlements. 24 June 12:
Those hoping for quick fixes to the strains in the global economy will continue to be disappointed, says the BIS, a consortium of the world's central banks, in its annual report. The report points out that the financial sector, govts, and households and firms need to repair their balance sheets: "the financial sector needs to recognize losses and recapitalize; govts must put fiscal trajectories on a sustainable path; and households and firms need to deleverage. As things stand, each sector's burdens are worsening the position of the other two, creating a variety of vicious cycles"

Mohammed Samhouri: Egypt's looming fiscal crisis, Weblog at Carnegie Endowment, 5 June 12:
One of the toughest challenges the new Egyptian pres will face is to secure the hefty US$22.5 bln needed to finance the deficit of the recently released state budget for FY 2012/13. Given the sorry state of the post-Mubarak economy and the deep financial woes of the past 16 months - compounded by the political unrest and uncertainty likely to persist even after the inauguration - this will be a daunting task, says Reg'l Ctr Strategic Studies (Cairo) senior economist (Kinninmont: Egypt's pres'l elections -- The economy, UK Royal Inst Int'l Affairs, 18 May)

P Gramm and G Hubbard: What a Romney recovery might look like, Wall St Jl, 6 June 12 [courtesy Hubbard's site]:
Given last week's grim jobs report, it's now clearer than ever that the Nov election will be a referendum on the economy. Has the pres.'s program worked? Does Mitt Romney have a better program to promote job creation and prosperity? Fortunately, Americans have evidence that will allow them not only to judge Pres Obama's econ performance, but also to compare that with Mr. Romney's proposed alternative, say fmr US senator and econ adviser to Romney/Columbia B-School dean

Posted on Fri, 22 June 12:

Europe needs comprehensive action to revive growth, IMF Survey Mag, 18 June 12:
Europe needs to revive econ growth to help break the vicious cycle that keeps many nations stuck in crisis mode - the feedback loop between weak gov't finances, weak banks, and weak growth that continually undermine each other. Both long-term and short-term solutions are needed. Because structural reforms deliver their potential gradually, product and services market reforms, as well as labor market and pension changes, should be implemented without delay. Policy makers need to take a two-pronged approach to boosting growth

Economists find evidence for famous hypothesis of 'comparative advantage', MIT News, 20 June 12:
David Ricardo's concept of 'comparative advantage' is one of the most famous and venerable ideas in economics. Dating to 1817, Ricardo's proposal is that nations will specialize in making the goods they can produce most efficiently - their areas of comparative advantage - and trade for goods they make less well, rather than making all kinds of products for themselves. So does Ricardo's idea resemble reality? (Politics may be local, but biz is global: The ins and outs of int'l trade, Harvard Gazette, Mar '09)

Is humanity pushing Earth past a tipping point?, Weblog at Wired, 6 June 12:
Could human activity push Earth's biological systems to a planet-wide tipping point, causing changes as radical as the Ice Age's end - but with less pleasant results, and with billions of people along for a bumpy ride? It's by no means a settled scientific proposition, but many researchers say it's worth considering - and not just as an apocalyptic warning or far-fetched speculation, but as a legitimate question raised by emerging science (World Bank: Infographic-Inclusive green growth | Kyte: Inclusive green growth is smart growth, as S Korea is proving | FAQ)

Posted on Wed, 20 June 12:

Paul Krugman on Europe 'doing the unthinkable', NPR, 19 June 12 [Scroll to transcript]:
The alternatives to a breakup of the euro have to be Europe-wide solutions. And so the solution, if there is one, involves accepting a higher rate of inflation for Europe as a whole and that particularly means higher inflation in Germany. Talk to the Germans about this and of course they go crazy, but you have to say to them: What is your answer? What you're doing right now is just a path to the collapse of the euro with enormous damage and radicalization (Kirkegaard: A reply to Krugman)

World's resources being depleted, says 'Inclusive Wealth Report 2012', United Nations Univ, 20 June 12:
The world's fixation on econ growth ignores a rapid and largely irreversible trend of natural resources depletion that will seriously harm future generations, acc to a new report that unveils a new indicator aimed at encouraging sustainability, released on 17 June at the the Rio+20 Summit. The report presents a new econ index - the Inclusive Wealth Index (IWI) - that looks beyond traditional short-term econ/dev't yardsticks, such as Gross Domestic Product (GDP) and the Human Dev't Index (HDI) (Media kit [PDF])

Rio+20 Earth Summit - Q&A, Telegraph, 16 June 12:
Everything you need to know about the United Nations Conference on Sustainable Development but were too afraid to ask. Q: What is Rio+20?; Why now?: Who will be there?; What will they discuss?; What are Sustainable Development Goals?; What is GDP+?; Any rows brewing?; Why should you care? What about climate change?; Will there be riots?; Could it end in a Copenhagen-style walk out? Any celebrities coming?; Will US Pres Obama turn up at the last minute and save the planet?

Posted on Mon, 18 June 12:

G20 to meet on upbeat note after Greek vote, AFP, 18 June 12 [courtesy ChNewsAsia/S'pore)::
The leaders of the world's major powers will seek to buy the global economy some breathing space at the G20 summit with new support for an IMF financial firewall and for Greece. European leaders were relieved to be able to attend the summit after clearing the hurdle of Sun.'s pivotal Greek election, which gave parties that support Athens' EU and IMF-led bailout terms a parliamentary majority. The G20 summit, hosted by Mexico's Pres Calderon, was to begin on Mon and last 2 days

R Dobbs/Assoc: The world at work - Jobs, pay, and skills for 3.5 billion people, McKinsey, June '12:
Over the past 3 decades, as developing economies industrialized and began to compete in world markets, a global labor market started taking shape. As more than one billion people entered the labor force, a massive movement from 'farm to factory' sharply accelerated growth of productivity and per capita GDP in China and other traditionally rural nations. To raise productivity, industrial economies invested in labor-saving technologies and tapped global sources of low-cost labor

Rushing to finish a global free-trade deal, Businessweek, 31 May 12:
On paper, big, ambitious free-trade deals are the best kind. The more nations that agree to open their markets, the greater the benefits to consumers. But there's a catch: If big trade deals try to include too many nations or too many issues, the negotiations can collapse. The US and 8 other nations now negotiating a new free-trade agreement hope to avoid a similar fate. The Trans-Pacific Partnership is the most ambitious free-trade deal ever - and thus is at high risk of getting Doha'ed (US Trans-Pacific trade deal is a waste, says free trader, WSJ) [courtesy Ctr Glob Dev't]

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