News and Analysis: 1-15 July 2013 | EmergingFrontierMarkets.com

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Posted on Mon, 15 July 13:

Barry Eichengreen: A tale of two tapers, Proj Syndicate, 15 July 13 [via Social Europe Jl]:
The US Fed and the People's Bank of China (PBOC) are not typically seen as 2 peas in a pod. But they have had similar experiences in recent weeks--and neither has been a pleasant one. The Fed's bout of indigestion started with the Fed Chair's 19 June press conference, where he warned that the Fed's purchases of long-term securities might start to taper off. By coincidence, 19 June was the same day that the PBOC decided not to provide additional liquidity to its strained credit markets, writes UC-Berkeley prof

Shang-Jin Wei: Will China slow down? Not so fast, Columbia Univ, 28 Feb 13:
In the popular imagination, China's economy is often viewed as a lopsided 3-horse chariot: exports and investment are steroid-fed giants, while consumption is a dwarf. But there are a few things wrong with this image. While China does need to adjust to the fact that exports can't outpace imports forever, there is nothing wrong in and of itself with high export growth. Its investment to GDP ratio may need to be moderated somewhat. But the primary problem is not the level of investment, writes Columbia U Chazen Int'l Bus. Inst dir

Bessma Momani: The economics of Tahrir, Economist, 9 July 13 [courtesy Ctr Int'l Gov'nance Innov):
Will the military coup, and the govt it installs, steer Egypt away from the abyss? Egypt's econ woes are deep, structural, and resistant to quick solutions. If the new govt is to rectify Egypt's econ woes, it will need the IMF's loans and the return of foreign capital. To qualify for the IMF's help, it will have to reform its subsidy system. Curbing the subsidies, however, risks another revolution, writes Ctr senior fellow (Collier: Democracy in dangerous places: Egypt--what went wrong?, Social Europe Jl)

Posted on Fri, 12 July 13:

Malala, schoolgirl shot by Taliban, to speak at UN, Toronto Star, 12 July 13:
This Fri, Malala Yousafzai will celebrate her 16th birthday. For most girls, it is an age to obsess over their looks, school or boys, but she will mark her special day with a speech to world leaders at the UN in her new role as global campaigner for education. The much-anticipated address will be the 1st time the Pakistani teenager will speak in public since the Taliban shot her in the head last Oct. She was one of the few people in Pakistan who had openly criticized the militants for banning girls' education

Top Romney economic adviser calls for third party, Washington Post, 26 June 13 [courtesy Hubbard's site]:
Buried deep inside Balance, his illuminating new book on the history of the decline of great powers, Columbia Bus.School dean Glenn Hubbard says we need a 3rd political party to get the debate the nation needs. I wish I could say he is a tortured soul driven by Romney's disappointing campaign to seek a better way. That would be a dramatic story, but it's not true. He is convinced that the 2-party 'duopoly' is failing the nation ('Both parties are playing game rationally, but nation is not winning'--Hubbard)

China 'suffers worst flight delays', BBC News, 12 July 13:
China's major airports have the worst flight delays in the world, says a report from FlightStats, an travel industry monitor. According to figures from around the world in June, Beijing and Shanghai airports came bottom for on-time flights. Eight of the 10 worst-performing Asian airlines in terms of delays were Chinese carriers, the report added. It looked at "on-time performance of scheduled passenger flights" by top airlines, as well as "top performing airports based on their reported departure performance"

Posted on Wed, 10 July 13:

Olivier Blanchard: Global outlook - Still three speeds, but slower, IMF (blog), 9 July 13:
The world economy remains in 3-speed mode. Emerging markets are still growing rapidly. The US recovery is steady. And much of Europe continues to struggle. Turning to risks, old risks are still present, the main ones related to Europe. We see also 3 main new risks. The 1st is risks to growth in China. The 2nd is Japan's Abenomics, or the '3 arrows' of fiscal stimulus, aggressive monetary easing, and structural reforms. The 3rd is risks associated with the exit from quantitative easing in the US, writes IMF chief economist, on leave from MIT

World population projected to reach 9.6 billion by 2050, UN News, 13 June 13:
The current world population of 7.2 bil. is projected to increase by 1 bil. over the next 12 years and reach 9.6 bil. by 2050, acc. to a new UN report, which points out that growth will be mainly in developing nations, with more than half in Africa. It notes that India is expected to become the world's largest nation, passing China around 2028, when both nations will have populations of 1.45 bil. (11 July is World Population Day | World pop. could be nearly 11 bil. by 2100, Univ Wash.)

Peter Henry: The global trust deficit, Project Syndicate, 1 July 13:
In their preoccupation with fiscal deficits, developed-nation policy makers continue to neglect a different, yet equally critical, shortfall: the trust deficit between advanced and emerging economies when it comes to global governance. Although developing nations now account for more than half of global GDP growth, advanced nations have yet to admit them to leadership roles that reflect their growing influence in the world economy, writes NYU Bus. School dean / author of Turnaround: Third World lessons for First World growth

Posted on Mon, 8 July 13:

Editorial: US must suspend aid after Egypt's coup, Washington Post, 4 July 13:
There is no ambiguity about what happened in Egypt on Wed: a military coup against a democratically elected gov't and the wrong response to the country's problems. Having not spoken up against the excesses of Mr Morsi's gov't, the Obama admin has, with equal fecklessness, failed to forthrightly oppose the military intervention. But there should be no question that under a law passed by Congress, US aid to Egypt--incl the $1.3 bil. annual grant to the military--must be suspended

Editorial: After the coup in Cairo -- US shouldn't cut off aid to a new Egyptian gov't, Wall St Journal, 4 July 13:
The latest military coup in Egypt stops a slide into one abyss but is hardly a guarantee that it will avoid a future one. A better future will depend on the wisdom of the kind of generals who have not proven to be very wise in the past. The generals led by the armed forces chief deposed Pres Morsi, the man from the Muslim Brotherhood who was elected only a year ago. His election was the best feature of his rule, which had descended into incompetence and creeping authoritarianism

Global foreign direct investment (FDI) declined by 18% in '12, annual report says, Unctad, 26 June 13:
Global FDI inflows fell by 18% to US$1.35 tril. in '12. Recovery to more vigorous investment levels will take longer than expected, mostly because of global econ fragility and policy uncertainty, acc to an annual survey of investment trends, World Investment Report 2013. Developing nations received majority of investment for the 1st time ever, and flows in '13 are forecast to remain close to '12 level (Report proposes smart gov't strategies to make value chains work for dev't)

Posted on Fri, 5 July 13:

Egypt political upheaval to lead to more painful economic crisis, AP, 4 July 13 [via Arab Times/Kuwait]:
Egypt's descent into even deeper political turmoil will almost certainly put a multi-billion dollar int'l bailout on hold and lead to an even more painful econ crisis. After protracted negotiations that have stretched for more than a year, Egypt had been inching closer to securing a critical $4.8 bil. IMF loan. The military's overthrow of Morsi will likely put the implementation of austerity measures needed to secure that loan into a dangerous limbo. It also put the $1.5 bil. in annual US assistance in question

Can Silicon Valley be copied?, MIT Technology Review, by Vivek Wadhwa, 3 July 13:
For 50 years, experts have tried to figure out what makes Silicon Valley tick. Billions have been spent trying to replicate it, with little to show for it. The only serious challenge I see is, ironically, from the same gov't that once catalyzed its dev't. Silicon Valley is starved for talent. This could bleed the life out of its firms. Then indeed we will have real competitors emerging in places like New Delhi and Shanghai, writes author of The Immigrant Exodus: Why US is losing global race to capture entrepreneurial talent (2012)

New world wealth report released, Capgemini/RBC, 21 June 13 [PDF]:
More than half the global population of high net-worth individuals, or HNWIs, continued to be concentrated in 3 nations -- US, Japan, and Germany. For the past 3 years, individuals in these nations have accounted for roughly 53% of all HNWIs, down from 54.7% in '06. However, the market share of the top three countries is expected to erode over time as emerging markets increase in prominence (Infographic of world wealth [PDF] | Julius Baer Wealth Report)

Posted on Wed, 3 July 13:

Markets tumble on Portuguese fears and tension in Egypt, Guardian (blog), 3 July 13:
Leading shares are falling sharply on a toxic cocktail of bad news. For a start, the euro zone crisis is once more in the spotlight, following the resignation of 2 ministers in Portugal leading to fears of a collapse of the nation's gov't. Any new elections would cast doubts over the nation's ability to maintain its austerity program, key to its bailout agreement. Meanwhile the growing tension in Egypt as the army's deadline for a resolution to the current crisis approaches has sent oil prices above $100 a barrel

Amartya Sen: Why India trails China, NY Times, 20 June 13 [via Times of India]:
The hope that India might overtake China in econ growth now seems a distant one. But that comparison is not what should worry Indians most. India's underperformance can be traced to a failure to learn from the examples of so-called Asian econ dev't, pioneered by Japan, in which rapid expansion of human capability is both a goal in itself and an integral element in achieving rapid growth, writes Nobel Laureate '98 / author, with J Dreze, of An Uncertain Glory: India and its contradictions (Sen's talk at World Bank--Why is China ahead of India?)

To be clear -- Muddy language can be costly, Richmond Fed's Econ Focus, by B J Nash, Mar-May '13 [PDF]:
The movement toward plainer communication has waxed and waned since the '70s era of consumer protection laws. Today, it's waxing in both the public and private sectors. Taking traditional bureaucratic stuff and issuing it in plain language is hard work, and the gov't doesn't have a lot of people skilled at it. Try finding a shortcut for 'default', for instance, a word with several meanings. But how can people make decent decisions if writers bury critical content in jargon and tangled sentences?

Posted on Mon, 1 July 13:

Egypt's economic woes deepen as Mursi marks one year in office, Al Arabiya/UAE, 30 June 13:
One year after Pres Mursi came to office, foreign investors are still waiting for reassurances it is safe to return to Egypt as many grow increasingly concerned. Its currency has lost more than 16% of its value vs the US dollar as the central bank loosened its grip on the pound and foreign capital flowed out of the nation. Its sovereign credit rating has been downgraded twice by Moody's during Mursi's 1st year in office, standing firmly in junk territory (Egypt protests heap pressure on economy, currency, Reuters) [via Gulf News]

D Fine and S Lund: Jobs -- the next piece of Africa's growth jigsaw, Vox EU, 4 Dec 12:
Africa's recent econ performance has been impressive. With average annual growth of 5.1% over the past decade, the continent is the 2nd fastest-growing region in the world. Couple this with a growing private sector, and many African nations have much more solidly grounded and diverse economies than outside observers might assume. But one big question mark hangs over this promising outlook, write McKinsey's SAfrica dir, and Global Inst partner

The next Silicon Valley -- what's the secret to becoming the next technology hot spot?, MIT Tech Rev, 1 July 13:
In innovation quest, regions seek critical mass. A wider group of cities and regions now aspire to become tech hubs. One reason is that the Internet has spread both the ideology of startup culture (you, too, can be Mark Zuckerberg) and the means of participating through apps and Web software. Now every place from Chile to Iceland to Australia seems to have created a startup program in an effort to jump-start its own tech scene without expensive laboratories or even a top university

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