News and Analysis: 17-29 Apr 2013 | EmergingFrontierMarkets.com

Based in: Manila, Philippines

Posted on Mon, 29 Apr 13:

Asia faces shifting risks, new foundations for growth, IMF Survey Mag, 29 Apr 13:
After a year of subdued econ performance, growth in Asia is set to pick up this year driven largely by robust domestic demand, says its latest Regional Economic Outlook, with the region expected to lead the global 3-speed recovery. But financial imbalances and rising asset prices, fueled by strong credit growth and easy financing conditions, are building in several economies. The report notes 2 important medium-term policy challenges: making growth more inclusive and, esp. for emerging Asia, avoiding the 'middle-income trap'

Minimum wages key to cutting working poverty, says ILO, 7 Dec 12:
The Int'l Labor Organization has called on its 185 member states to adopt minimum wage policies as a way of reducing working poverty and providing social protection for vulnerable employees. Acc. to an ILO report, minimum wages provided social protection for the most vulnerable workers in many developed nations at the beginning of the crisis while later they were only adjusted to inflation, at best. On the other hand, many developing and emerging economies have used minimum wages as a continuing way of protecting the most vulnerable

Minimum wages aren't always the best way to improve social welfare, Int'l Dev't Res Ctr/Can. Oct '11:
For most nations, raising the minimum wage has long been considered a way to protect poor workers and their families. In fact, this active labor market intervention is a common social protection policy in many Latin American nations. But how effective are minimum wages in protecting the poor? It's a timely question as the debate heats up over whether minimum wages help avoid 'the race to the bottom' or serve as a major impediment to greater labor market flexibility and competitiveness (Debate on impact of minimum wages on employment continues)

Posted on Fri, 26 Apr 13:

SKorea decides on pullout from joint industrial zone, AFP, 26 Apr 13 [courtesy AsiaOne/S'pore]:
SKorea said Fri it had decided to withdraw all remaining staff from its joint industrial complex with NKorea for their own safety, after Pyongyang shunned an offer of formal talks. The move comes after months of tension and puts into further doubt the entire future of the Kaesong complex--the last remaining symbol of inter-Korean cooperation and a crucial source of hard currency for the impoverished North. SKorean companies active in Kaesong expressed shock at their govt's announcement

Peter Henry: Economic development lessons from all corners, Newsweek, 22 Apr 13:
In decades past, First World countries have lectured the rest of the world about how to stabilize and grow their economies. Today, in a startling turnaround, the developed world buckles under high debt and slow growth, while countries such as SKorea, India, Chile, Mexico, and even tiny Barbados provide vital lessons for recovery, writes author of Turnaround: Third World lessons for First World growth (2013) / NYU business school dean

Kemal Dervis: Economic policy's narrative imperative, Proj Syndicate, 15 Apr 13:
The best advice I received when taking up policy making responsibilities in Turkey more than a decade ago was to take "a lot of time and care to develop and communicate the 'narrative' to support the policy program that you want to succeed." The more that econ policy is subject to public debate--that is, the more democracy there is--the more important such policy narratives are, writes Brookings Inst vice pres / fmr econ affairs minister of Turkey

Posted on Wed, 24 Apr 13:

Jeffrey Sachs: How not to make America great, Esquire, Apr '13 [PDF,1.25MB, courtesy Columbia U]:
That's easy: just keep doing what both parties have been doing, and keep cutting gov't investment in people and programs. Want to turn this sorry trend around? Spend. Build. Grow. A true progressive alternative. And for the many who might not remember how this nation was built, and who might doubt that the investments are worth it, remind them of the moon, the genome, the Internet, GPS, and the Mars explorer, writes Columbia U Earth Inst dir / UN Sustainable Dev't Solutions Network dir

UN process inches forward on sustainability goals, Int'l Ctr Trade/Sustain.Dev't, 11 Apr 13:
Efforts to develop a global dev't framework beyond 2015--the completion date of the Millennium Dev't Goals--have continued to advance in recent weeks, with the high-level panel of eminent persons on the post-2015 dev't agenda holding its final formal meeting in Bali in late Mar. This 27-member group was formed last July by UN Sec-Gen, and is co-chaired by the Indonesian pres, Liberian pres and UK PM (Post-2015 agenda must be founded on coherent global framework, says panel, Guardian)

Huge boost for aid effectiveness as groundbreaking transparency initiative gains momentum, UN Dev't Program, 22 Apr 13:
More than 130 organizations are now publishing their data to the Int'l Aid Transparency Initiative, an open data platform that gives a comprehensive and comparable picture of aid flows in order to improve accountability and impact. IATI's membership has grown to include 37 donors which represent 75% of global official dev't finance. Starting this July, the UNDP--an IATI founding member--will lead a consortium that will take over hosting the initiative, a role carried out since '09 by UK Dept for Int'l Dev't

Posted on Mon, 22 Apr 13:

John Racanelli: Take back the planet, and not just on Earth Day, Baltimore Sun, 22 Apr 13:
For over 40 years, Earth Day has sent a powerful message: that each of us has both the capacity and the duty to support the environment that sustains us. This is certainly a message that dedicated conservationists can get behind, but what about everyday people with busy lives? The org behind Earth Day cites the impressive statistic that it is the largest civic observance in the world, writes US Nat'l Aquarium CEO (Earth younger than previously thought, say scientists, BBC News | How old is the Earth?, US Geol. Survey)

Global wealth distribution in 2012, Knight Frank Wealth Report, 6 Mar 13:
Many major economies are still performing well below trend, with some struggling to achieve any improvement in econ output at all. Despite this gloomy backdrop, there was still room for wealth creation in '12. The number of people with US$30m or more in net assets (referred to here as HNWIs) rose by 5% last year, or nearly 8,700, acc. to data prepared exclusively for this report by Wealth-X, a wealth intelligence firm. Across Asia, the number of HNWIs is set to rise by 88% over the next decade

Andy Sumner: Where will the world's poor live?, New World/UN Assn-UK, 2 Nov 12:
The distribution of global poverty is thus: half of the world's poor live in India and China (mainly in India); a quarter of the world's poor live in other middle-income nations (such as Pakistan, Nigeria and Indonesia); and a quarter (or less) of the world's poor live in the remaining low-income nations. The proportion of the world's $1.25 and $2 poor in middle-income nations is 74% and 79%, respectively. Why does it matter if the poor live in middle-income nations?, asks co-dir of newly established King's College Lond. Int'l Dev't Inst

Posted on Fri, 19 Apr 13:

R Pollin and M Ash: Reinhart and Rogoff are wrong about austerity, FT, 17 Apr 13 [PDF, courtesy Univ Massachusetts]:
Reinhart and Rogoff 's work is best known for its result that econ growth declines dramatically when a nation's level of public debt exceeds 90% of gross domestic product. They report that GDP growth ranges between 3-4% when the ratio of public debt to GDP is below 90%. But it collapses to -0.1% when the ratio rises above a 90% threshold. In a new paper, co-authored with Herndon, we found that these results were based on data errors and unsupportable statistical techniques, write Univ Mass profs

C Reinhart and K Rogoff: Response to Herndon, Ash and Pollin, Harvard Univ, 17 Apr 13 [PDF]:
The three authors note some missing debt data points, which they describe as 'selective omissions'. This charge, which permeates through their paper, is one we object to in the strongest terms. Surely they do not mean to insinuate that we manipulated the data to exaggerate our results. Why, for that matter, would we provide to the public domain all the data that we have gathered and used in our research over the years, documenting in detail multiple sources?, ask Harvard profs

Richard Manning: OECD is ignoring its definition of overseas aid -- Letter to editor, FT, 9 Apr 13 [PDF, courtesy Ctr Glob Dev't]:
OECD reported last week that official dev't assistance fell in '12 by 4% . This understates the real fall. OECD is now quietly allowing large volumes of loans to be counted as ODA even though they do not meet any reasonable definition of being 'concessional in character', which is the basis of the OECD's definition of aid. It is encouraging OECD finance ministries to get away with murder as they seek to massage reported aid upwards at minimum cost, writes OECD Dev't Assistance Cmte fmr chair

Posted on Wed, 17 Apr 13:

Influential Reinhart-Rogoff study on austerity may be flawed, Reuters, 16 Apr 13 [via Fiscal Times]:
One of the key intellectual touchstones in the move towards gov't austerity efforts around the world may have been incorrect in its conclusions due in part to spreadsheet coding errors, researchers at Univ Massachusetts said. A study by eminent Harvard economists Reinhart and Rogoff presented 1st in '08 said a nation's gross domestic product growth begins to slow once its debt-to-GDP ratio reaches at least 90% (Researchers finally replicate Reinhart-Rogoff, Roosevelt Inst [blog] | Reinhart-Rogoff recrunch the numbers, FT [blog] [free, registr req'd])

Policy actions improve prospects for global economy, IMF Survey Mag, 16 Apr 13:
The global economy is expected to continue mending gradually, says the IMF's latest World Economic Outlook. But with old dangers remaining and new risks emerging, policy makers cannot afford to relax their efforts. "We have moved from a 2-speed recovery to a 3-speed recovery," IMF's chief economist said. "Emerging market and developing economies are still going strong, but in advanced economies, there appears to be a growing divergence between the US and the euro area"

Dani Rodrik: The tyranny of political economy, Proj Syndicate, 11 Feb 13 [via Social Europe Jl]:
There was a time when we economists steered clear of politics. We viewed our job as describing how market economies work, when they fail, and how well-designed policies can enhance efficiency. We analyzed trade-offs between competing objectives (say, equity vs efficiency), and prescribed policies to meet desired econ outcomes, including redistribution. It was up to politicians to take our advice (or not), and to bureaucrats to implement it, writes Harvard prof / inaugural Albert Hirschman Prize awardee '07, Soc Sci Res Council in NY

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