News and Analysis: 2-16 Aug 2013 | EmergingFrontierMarkets.com

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Posted on Fri, 16 Aug 13:

Oil prices rise on Egypt worries, AFP, 16 Aug 13 [via Hurriyet Daily News/Turkey]:
Oil prices rose in Asia on Fri, supported by concerns about turmoil in Egypt after a crackdown on protesters killed nearly 600 people nationwide, analysts said. Investors are closely watching whether the latest unrest in Egypt will escalate and affect stability in the oil-rich and politically volatile Mideast region. Traders are worried that the unrest could hit crude shipments through the Suez Canal and Sumed Pipeline, which provide a link between Europe and oil producers in the Gulf

Dani Rodrik: The problem is authoritarianism, not Islam, Project Syndicate, 12 Aug 13:
Is Islam fundamentally incompatible with democracy? Time and again events compel us to ask this question. And yet it is a question that obscures more than it illuminates. Turkey, Egypt, and Tunisia are very different nations, but one thing that they share are Islamist govts (at least until recently in Egypt's case). Yet the failure of Islamists in Egypt and Turkey tells us less about Islam's compatibility with democracy than we might think, writes Inst for Advanced Study prof (Goodbye Harvard, hello Inst for Adv Study)

Yes, money really can buy happiness, Washington Post (blog), 29 Apr 13:
"Does money buy happiness?" is the kind of open-ended question that inspires great movies, but it also has spawned quite a research program. The Univ South. Calif's Easterlin kicked off the discussion in '74 when he proposed his now-famous 'Easterlin paradox'. He compiled happiness surveys, both within and between nations, and found that both types of data suggest that reported happiness does not actually increase as people or nations get richer (Happiness is love--and $75,000, Gallup Biz Jl | Income's influence on happiness, Princeton U)

Posted on Wed, 14 Aug 13:

Targeting product design for the developing world, MIT News, 11 Aug 13:
Designing products for the developing world can be a hit-or-miss endeavor: While there may be a dire need for products addressing problems, such as access to clean water, sanitation and electricity, designing a product that consumers will actually buy is a complicated process. More often than not, such products--even those that are distributed at no charge--go unused due to poor quality, unreliability or differences in cultural expectations

Clifford Winston: A remedy for air travel woes, NY Times, 21 Nov 12 [courtesy Brookings Inst]:
One possible solution is to take a half-step toward opening up the US market and allow foreign carriers to serve any midsize US airport that has lost airline service. Soon, Aunt Sally might enjoy the service on Singapore Airlines en route to Cincinnati. It's a short flight from Sarasota, Fla.--but the hot face towels are a dream, writes Inst senior fellow (MIT's Swelbar: When measuring airline service, it's not just price that matters | UC Berkeley's Borenstein: Why US airlines need to adapt to a slow-growth future) [AL.com / Bloomberg]

Outlook - New phase of politics will lead to emerging markets divergence, Hedge Fund Jl, by Garman/Kliment/Dill, 24 June 13:
Some emerging markets (EM) will respond with constructive econ policies which will surprise investors positively, while others are likely to be mired in growing governance difficulties which will inevitably translate to poor policy. Much will depend in particular on the interplay between the level of political capital incumbents have--which allows policy makers to make decisions without having to worry about near-term political survival--and the extent of the econ slowdown in their nations, write Eurasia Group's EM strategy head, dir and researcher

Posted on Mon, 12 Aug 13:

Arianna Huffington: Do official measures of happiness take all relevant factors into account?, Chicago Tribune, 8 Aug 13:
"UK population's happiness is on the up," trumpeted a headline in the Guardian. The UK is not alone in recognizing the worth of measuring what's really worthwhile in our lives. Pres Obama has commissioned a panel that includes Nobel Laureate Daniel Kahneman and Council of Econ Advisers fmr chair Alan Krueger to come up with a way to measure 'subjective well-being', writes HuffPost ed-in-chief (Experts to continue work of Stiglitz-Sen-Fitoussi commission on measuring progress, OECD)

Development in Asia demands huge sacrifices, OECD (blog), 6 Aug 13:
Q&A with Christian Goebel, Univ Vienna Chinese Studies prof, about a new study he co-authored for the Bertelsmann Found. "Assessing Pathways to Sustainable Growth - Need for reform and governance capacities in Asia". Q: You group the nations in your study into 4 categories: long-standing democracies (India, Japan), young democracies (S Korea, Indonesia), one-party autocracies (China, Vietnam), and 'electoral autocracies' (Malaysia, Singapore). Did regime type affect the performance of the nations?

Coffers: Is your stock strategy working?, Reuters, 11 June 13:
For Eugene Fama, the Univ Chicago prof and father of modern finance, the key to investing is relatively simple. While he has spent decades debunking market timing and active management, he was taken aback when I asked him how investors can resist the temptation to invest in hot-performing managers who appear to have momentum. "Why are you asking me? I don't look at my portfolio. Mutual funds always get more money when their performance is hot. I've been screaming about this for 50 years"

Posted on Fri, 9 Aug 13:

Emerging-market engineers power global innovation, Harvard Bus.Rev (blog), by Govindarajan & Bagla, 8 Aug 13:
Recently, Thomson Reuters published its latest list of the Top 100 Global Innovators. A quick scan of the list indicates that all 100 orgs are located in developed nations. From it, some may infer that innovation is largely the realm of engineers working in developed nations, assuming that innovators from nations such as India and China don't matter after all. While we believe that the list's methodology is meticulous, we warn against this faulty assumption, write Dartmouth U prof, and mgmt consult.firm dir

US inequality rising -- all thanks to govt policies, National Memo, by David Cay Johnston, 31 May 13:
A revealing new examination of the top 1% in a variety of nations brings into focus how the US govt's tax, union bargaining, inheritance and other rules widen the growing divide between those at the top and everyone else. Its authors include UC Berkeley's Saez, who has won renown for his work examining more than a century of global data on top incomes, with Oxford's Alvaredo and Atkinson, and Paris Sch Econ's Piketty, writes Pulitzer Prize / George Polk Award recepient (Study examines staggering US wealth inequality, Wealth Strategies Jl)

The big trend - The world is getting wealthier, Stanford U, 29 Mar 13:
In your rush to understand today's stock market numbers or tomorrow's tax/debt debates, you might be blinding yourself to 2 important long-term trends: the tripling of US income over 3 generations, and the way poor nations are finally also raising their standards of living, says macroeconomist Charles Jones. Some worry needlessly that China's gain will be America's loss. He cited work by economist Paul Romer that concludes new ideas--the key ingredient fueling higher standards of living--will continue to be the engine of growth for the world

Posted on Wed, 7 Aug 13:

India's central bank gets a world-class economist as governor, Times of India, 7 Aug 13:
The Indian govt on Tue (6 Aug) named chief econ advisor Raghuram Rajan as the new Reserve Bank of India governor for a term of 3 years. Rajan, who earlier served as chief economist of the IMF, takes over at a time when the central bank is under pressure to push econ growth while arresting the slide of the rupee. The 2 goals can be contradictory since stabilizing the rupee may require raising interest rates, which could impact growth (Rajan: Why India slowed, U Chicago, May '13)

Rising tide raises all boats--Or does it?, Asian Dev't Bank (blog), by Indu Bushan, 29 July 13:
The dev't world was recently shaken by an open clash between two distinguished economists--Amartya Sen and Jagdish Bhagwati. The debate centered on the role of growth in poverty reduction. Let us start with something on which there is no disagreement. Does growth lead to poverty reduction? The answer is an unqualified yes. Then where is the confusion?, asks bank's strategy/policy dept dep. dir gen (Asia-Pac's "missing middle" lacks vital social protection)

Greg Mankiw: Politics aside, a common bond for two economists, NY Times, 30 June 13 [PDF, courtesy Harvard]:
One of the cool things about hanging around a place like Harvard, where I have been a prof for almost 30 years, is that you get to meet some talented people long before the world recognizes their talents. I was reminded of this recently, when Pres Obama appointed Jason Furman as Council of Econ Advisers chair, a position that I held under G W Bush. In Washington these days, comity between Republicans and Democrats is rare. Yet my relationship with Jason has never been hampered by our differing political affiliations

Posted on Mon, 5 Aug 13:

Well-being of the poor has deteriorated over past 15 years, says Catholic aid agency, Guardian (blog), 31 July 13:
The well-being of many poor people has deteriorated over the past 15 years as a result of factors beyond their control such as environmental degradation, rapid changes in crop prices and econ crises, says a report from the Catholic Agency for Overseas Dev't (Cafod). "One factor present in nearly every story is that of gender inequality, which intersects with other issues to create new forms of social exclusion," said the report, which is based on the views of 1,420 people in 56 communities in Bolivia, Philippines, Uganda and Zimbabwe

Boardroom/ C-suite: Developing winning products for emerging markets, McKinsey, by Gudlavalleti & Assoc , May '13:
A large automaker designed, developed, and--with appropriate fanfare--launched a commercial truck in India's burgeoning and highly competitive market. The vehicle was engineered to let owners in a range of emerging markets run the trucks longer and faster. But the truck was a disappointment. The firm hadn't adequately accounted for India's poor roads. Think this was a ham-fisted multinational dabbling in a market it didn't understand? Think again, write McK India Office consultant and principals

David Warsh: The economist who outdid Camus, Economic Principals, 4 Aug 13:
Reading Adelman's Worldly Philosopher: The odyssey of Albert O. Hirschman is to enter to a particular sort of world we have lost, in order to ponder a question about the world we live in today. If you have seen Casablanca (1942), you will have glimpsed that world. Hirschman's book Exit, Voice and Loyalty (1971) had more in common with Montaigne's Essais (1580) than with game theory. Yet it illuminated the border between econ (exit) and politics (voice), writes 2-time winner of financial journalism's Loeb Award

Posted on Fri, 2 Aug 13:

Obama explains what he wants in next Federal Reserve chairman, Los Angeles Times, 29 July 13:
Pres Obama said his pick for the next head of the Fed would need to focus on both parts of the central bank's dual mandate--keeping inflation in check and promoting maximum employment--while helping improve the lives of average Americans. He said this weekend that he had not made a final decision on a nomination. An announcement would come in 'the next several months', he said (Who would be the next leader of US Fed?, NYT | The case for Larry Summers, WP [blog]) [via Times of India]

IMF urges concerted policy action to reduce risks to global growth, IMF Survey Mag, 1 Aug 13:
The IMF's latest Spillover Report 2013 finds that 5 years after the global financial crisis, the tensions and risks rooted in the 'Systemic 5' economies--China, euro zone, Japan, UK, and US--have lessened, but these economies are not contributing to global activity as much as they might. The IMF is also releasing its Pilot External Sector Report 2013, which examines the evolution of the external sector position--exchange rates, current/capital accounts, and intl reserves--of the world's 28 largest economies plus the euro zone

Global Innovation Index 2013 released, World Intellectual Property Org, 1 July 13:
The US rejoined the 5 most-innovative nations and the UK moved up to the 3rd spot while Switzerland retained its place atop the rankings in the latest edition of the index, published by Cornell Univ, INSEAD, and the World Intellectual Property Org. The other nations in the top 10 are Sweden, Netherlands, Finland, Hong Kong, Singapore, Denmark and Ireland

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