News and Analysis: 17-31 July 2013 | EmergingFrontierMarkets.com

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Posted on Wed, 31 July 13:

Craig Richardson: Zimbabwe - why is one of the world's least-free economies growing so fast?, Cato Inst, 18 Mar 13:
From '09 to '11, Zimbabwe's GDP growth averaged 7.3%, making it one of the fastest-growing countries. Yet World Bank governance indicators place its govt among the worst, and the Fraser Inst ranks it as one of the least economically-free nations. Its performance coincides with its Jan '09 adoption of the US dollar and SAfrican rand as its official currencies, which swiftly squelched rampant hyperinflation. Yet that doesn't explain why it has been growing faster than Hong Kong, writes Winston-Salem Univ assoc prof (Tupy: Peril and progress in Zimbabwe, WSJ)

China - the new No.1 source of tourists in the world, UN World Tourism Org, 4 Apr 13:
Over the past decade China has been, and still is, by far the fastest-growing tourism source market in the world due to rapid urbanization, rising disposable incomes and relaxation of restrictions on foreign travel. With this sustained growth, it has become the largest spender in intl tourism globally in '12. It leaped to 1st place, surpassing both top spender Germany and 2nd largest spender US (World's top tourism spenders | Top 50 destinations intl tourism receipts) [PDF]

Harvard Nobel Prize winner talks economics with Chinese kids, Boston Globe, 12 July 13:
As he walked into Radcliffe Yard in Cambridge, Nobel Prize winning prof Eric Maskin was greeted by a group of Chinese middle school students who crowded around to take photographs, and later asked for autographs. But when the students asked him at a lecture at Harvard how winning the Nobel Prize in economics in '07 changed his life, Maskin, through a translator, didn't describe a life of celebrity (Profile of Harvard Nobel Laureate, Harvard Mag [scroll])

Posted on Mon, 29 July 13:

Adam Posen: After Bernanke, make unconventional policy the norm, FT, 15 July 13 [courtesy Peterson Inst]:
Discussion of Bernanke's possible successor has focused on who could best manage the Fed's eventual exit from its multiyear monetary expansion. While Pres Obama should take that into account, what he should really be looking for in the next chair is someone who can institutionalize a new policy approach and get congressional agreement for doing so, writes Inst pres / fmr Bank of England monetary policy cmte member (Taylor: Once again, the Fed shies away from the exit door, WSJ) [courtesy Hoover Inst]

Drug maker sells key vaccine cheaply to poor nations, AP, 29 July 13:
Drug maker Pfizer will provide 260 mil. doses of its vaccine against pneumonia and meningitis for pennies on the dollar to poor nations. The deal will provide the vaccine for a few dollars per shot. The US price is nearly $130. This is the 3rd such agreement under an innovative program in which drug makers, govts, health groups and charities collaborate to bring poor nations a long-term supply of affordable life-saving vaccines (Price reduced for vaccine against pneumonia, meningitis, GAVI Alliance)

Luanda, Angola is world's most expensive city for expats, Mercer, 23 July 13:
Despite being one of Africa's major oil producers, Angola is a relatively poor nation yet expensive for expats since imported goods can be costly. Also, finding secure living accommodations can be challenging and quite costly. The other cities appearing in the top 10 costliest cities are Moscow, Tokyo, N'Djamena/Chad, Singapore, Hong Kong, Geneva, Zurich, Bern and Sydney. The survey covers 214 cities across 5 continents and measures the comparative cost of over 200 items in each place

Posted on Fri, 26 July 13:

IMF withdraws plan for Argentine debt brief, Dow Jones Business News, 24 July 13 [via Nasdaq]:
The IMF's plan to give Argentina a boost in its legal battle with bondholders has collided with US politics. The IMF late Tue backed away from a plan to support Argentina's Supreme Court appeal after the US said the timing wasn't right. The IMF is concerned a lower-court could tilt the balance too far in favor of minority bondholders that have invested in nations struggling to pay back debts (US mulls options in court battle over Arg.'s debt, AFP | Argentina asks US Supreme Court to hear debt case, LA Times) [via Lanka Biz]

Big investors may still be too parochial - research, Stanford Univ, 9 July 13:
In a borderless and market-driven world, capital and knowledge are already flying between rich and poor nations at the speed of light. In practice, the world is more complicated. Cross-border capital flows actually collapsed during the financial crisis. But there may be more to the story than temporary econ disruptions. In reality, politics and localism still play big roles, even with institutional investors bent on maximizing returns. And that's true in the US as well as in Asia or the Middle East, as 2 separate studies indicate

How anti-poverty programs go viral, MIT News, 25 July 13:
Anti-poverty researchers and policy makers often wrestle with a basic problem: How can they get people to participate in beneficial programs? Now a new empirical study co-authored by two MIT development economists -- Abhijit Banerjee and Esther Duflo -- shows how much more popular such programs can be when socially well-connected citizens are the 1st to know about them. The researchers specifically wanted to study how knowledge about a program spreads by word of mouth

Posted on Wed, 24 July 13:

6 lessons on how to forecast China's economy, Amer Enterp Inst (blog), 22 July 13:
I started writing lists of what might happen in China 7 or 8 years ago. At first, they were just for me--a way of organizing my own thinking in early Jan for the 12 months ahead. New Year forecasting is a widely practiced business art in most areas of the world, but in China it carries particular risks and rewards. Here are a few reflections to help leaders trying to plan ahead in this fast-changing land, writes Gordon Orr, McKinsey's China guru

Can we end poverty? -- MIT's Esther Duflo, Yale Univ, Jan '13:
Duflo, a development economist at MIT and director of the Abdul Latif Jameel Poverty Action Lab, explains how our understanding of the economic lives of the poor has grown more complex in recent years. While Duflo doesn't see any 'silver bullet' that will end poverty, she points to progress, in part from the use of randomized control trials to solve specific problems

Trouble ahead for emerging market antitrust regimes, Intl Financial Law Rev, 12 Apr 12:
Emerging market antitrust regimes are set to struggle, a US economist has warned. With competition laws in place in over 115 jurisdictions, the global management of antitrust risk has become increasingly important. But the NYU economist said that the rapid expansion of antitrust regimes worldwide has exposed a vacuum of useable econ data in many markets (Trust-buster, professor makes his mark on antitrust law, Univ Florida)

Posted on Mon, 22 July 13:

Japan electoral win brings pressure for reform, AP, 22 July 13:
After winning control of both houses of parliament, PM Shinzo Abe's govt has the potential to be one of Japan's most influential and effective admins in years. Abe devoted the first 7 months of his admin to convincing a public weary of revolving-door PMs that he has the wherewithal to lead a revival in the world's No. 3 economy and deserves a strong legislative mandate. He now faces the challenge of adding substance to a nascent recovery

Economists and glorious uncertainties--Amartya refers to Bhagwati 'attacks', Telegraph India, 20 July 13:
Caps are off the mighty pens of 2 distinguished economists. Fellow economists always felt a glacial undercurrent between Jagdish Bhagwati and Amartya Sen, 2 famous economists from India. In response to a letter by Bhagwati in the Economist this week, Sen wrote: "I have resisted responding to Mr Bhagwati's persistent, and unilateral, attacks in the past, but this outrageous distortion needs correction" (I don't like brawls - Amartya | Academic brawl: Bhagwati pitches for Gujarat's Modi while Amartya backs Bihar's Nitish, Times of India)

Technological progress is key to improving world living standards, Dallas Fed Econ Letter, by E Martinez-Garcia, June '13:
A nation able to increase the output of final goods and services faster than its population grows can improve its citizens' standard of living. However, the speed with which such change occurs can vary greatly. Technological progress is the key to a nation's long-term increase in its material well-being, the work of Nobel Laureate Robert Solow and economist Trevor Swan showed in the 1950s. The contribution of factors of production, such as capital or labor, is only temporary, writes Fed senior res economist

Posted on Fri, 19 July 13:

Edward Glaeser: Big-project binge fueled Motor City's meltdown, Bloomberg, 20 Mar 13 [courtesy Manhattan Inst]:
When I hear free-spending national leaders call for more infrastructure investment, I think of Detroit's absurd monorail gliding above empty streets. That's unfair, I know. Yet the city's epic tragedy provides broader perspective on the potential consequences of mixing econ distress with bad policy making. Here are 5 somewhat contradictory lessons from its sad history, writes author of Triumph of the City (2011) / Harvard Taubman Ctr for State/Local Govt dir (Can Detroit find the road forward?, NY Times)

Kenneth Rogoff: Golden slumbers, Project Syndicate, 8 July 13:
In principle, holding gold is a form of insurance against war, financial Armageddon, and wholesale currency debasement. And, from the onset of the global financial crisis, the price of gold has often been portrayed as a barometer of global econ insecurity. So, does the collapse in gold prices--from a peak of $1,900 per ounce in Aug '11 to under $1,250 at the beginning of July '13--represent a vote of confidence in the global economy?, asks Deutsche Bank prize in financial economics '11 awardee / Harvard prof

10 'breakout nations' to watch, Columbia Univ, by S Kahn, 17 May 13:
When most of us think of 'breakout nations', the BRIC juggernauts come to mind. But Ruchir Sharma, head of emerging markets for Morgan Stanley Investment, has a more nuanced view. And it's a good thing, too, because every one of those miracle economies is in trouble. Although he doesn't predict any superpowered economy will rival the BRICs in the next 3 to 5 years, he does identify a number of nations that will 1) grow faster than market expectations, and 2) beat their peer groups

Posted on Wed, 17 July 13:

Raghu Rajan: Grounded central bankers, Univ Chicago (blog), 30 June 13:
The intensity of the market reaction was surprising, at least given the received wisdom about how the Fed's quantitative-easing (QE) policy works. QE has truly been a step in the dark. Given all the uncertainty around it--why it works, how to make it most effective, and how to exit--this raises the question of why central bankers, for whom 'innovative' is usually an epithet, have departed from their usual conservatism, writes econ advisor to India's PM / U Chicago prof

World celebrates ailing Mandela's 95th birthday, AFP, 16 July 13 [via Bus.Recorder/Pakistan]:
Global celebrations and charity events will mark Nelson Mandela's 95th birthday Thu, but the critically ill anti-apartheid hero himself may still be confined to his Pretoria hospital bed on life-support. But his hospitalization for a recurring lung infection and bitter infighting among his relatives have tempered the festive spirit. The UN in '10 declared the Nobel peace laureate's birthday Mandela Day--to encourage people around the world to do just over an hour of good deeds

Is evidence evident?, OECD Observer, by Anne Glover, Nov '12:
Science and technology play a central role in our society. They are part of everybody's life, they help to tackle the grand challenges of humankind and they create innovation and jobs and improve quality of life. They are part of our culture, and in essence define us as a species that 'wants to know'--hence why we are called Homo sapiens. But do we really give science its proper value when it comes to taking political decisions?, asks chief science adviser to European Comm pres

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