News and Analysis: 2-15 Apr 2014 | EmergingFrontierMarkets.com

Based in: Manila, Philippines

Posted on Tue, 15 Apr 14:

Profligate spending on foreign aid, Telegraph, 15 Apr 14:
There are few more confused policies than UK govt's on foreign aid, which has seen the budget soar by a staggering 28% in the past year. This figure, revealed by the OECD, represents probably the biggest percentage increase in a single year ever enjoyed by any department in UK peacetime history. And it has happened for no obvious reason (Aid to developing nations rebounds in '13 to reach an all-time high, OECD)

India's Rajan calls for more international monetary cooperation, Brookings (blog), by D Wessel, 10 Apr 14:
The governor of India's central bank, Raghuram Rajan, called for better international coordination among the world's central banks, saying the Federal Reserve is paying insufficient attention to the ripple effects that its exit from today's ultra-easy monetary policy will have on emerging markets

Eswar Prasad: The coming currency clash in Asia, Wall Street Journal, 8 Apr 14 [courtesy Brookings]:
Before the global financial crisis, the strange phenomenon of 'uphill' capital flows -- money moving out of middle-income economies and into richer ones -- garnered considerable attention. While private capital was flowing in the opposite direction, net flows were driven by emerging markets' accumulation of forex reserves, mostly stashed in the govt bonds of rich economies, writes Inst senior fellow / Cornell U prof

Posted on Fri, 11 Apr 14:

Three hurdles to clear for faster, better growth - Lagarde, IMF Survey Mag, 10 Apr 14:
Global policy makers will have to overcome a trio of hurdles if the world economy is to successfully generate more rapid and sustainable growth, said the IMF chief at the start of the IMF-World Bank spring meetings. She referred to "the quest for higher growth, better quality growth, more inclusive growth, and sustainable growth"

Bergsten and Truman: The IMF should move ahead without the US--Letter to the ed., FT, 9 Apr 14 [courtesy Peterson Inst]:
The IMF, which has its annual spring meetings this week, is confronting a potentially existential crisis: withdrawal by the US from active participation in, and leadership of, the world's most important econ institution. The crisis results from the most recent Congressional failure to enact legislation to implement changes in the IMF's governance structure, write Inst emeritus dir; and senior fellow (IMF reform is waiting on the US)

Barry Eichengreen: Losing interest, Project Syndicate, 11 Apr 14:
Two of the world's most prominent econ institutions, the IMF and fmr US Treasury Secretary Larry Summers, recently warned that the global economy may be facing an extended period of low interest rates. Why is that a bad thing, and what can be done about it?, asks fmr IMF senior advisor / U Calif-Berkeley prof

Posted on Wed, 9 Apr 14:

Olivier Blanchard: As demand improves, time to focus more on supply, IMF (blog), 8 Apr 14:
In our latest World Economic Outlook, we point out that the recovery which was starting to take hold in Oct is becoming not only stronger, but also broader. Emerging and developing economies continue to have strong growth, lower than before the crisis, but high nevertheless. Looking ahead, the focus must increasingly turn to the supply side, writes IMF chief economist, on leave from MIT

Nigerian GDP jumps 89% as economists add in telecoms, 'Nollywood', Intl Business Times, 7 Apr 14:
In recent months, Nigerian economists and statisticians have been doing extensive research and calculations to determine the best way to assess the nation's GDP. They had to add 13 new industries, and change the weights of various sectors. Most nations go through this process every 5 years or so, but Nigeria hasn't done it since '90 (Nigeria becomes largest economy in Africa, African Devt Bank)

India's path from poverty to empowerment, McKinsey, Feb '14:
India has made encouraging progress by halving its official poverty rate, from 45% of the population in '94 to 22% in '12. This is an achievement to be celebrated--yet it also gives the nation an opportunity to set higher aspirations. To do so, policy makers need a more comprehensive benchmark to measure gaps that must be closed and inform the allocation of resources

Posted on Mon, 7 Apr 14:

East Asian economies expected to grow at a stable pace in 2014, World Bank, 7 Apr 14:
Developing nations in the East Asia Pacific region will see stable econ growth this year, bolstered by a recovery in high-income economies and the market's modest response so far to the Fed's tapering of its quantitative easing, acc to the latest twice-yearly East Asia Pacific Economic Update released today. As a result, it remains the fastest growing region in the world

Rwanda's economy - An unlikely success story, National Public Radio, Sep '12:
Stephen Kinzer, a fmr NYTimes correspondent, recounts Pres Kagame's radical experiment in his book, A Thousand Hills (2008). He says Kagame transformed Rwanda by eliminating problems that have plagued other African economies. But rights groups routinely blast Kagame for crushing critics at home and allegedly backing rebel forces abroad (UN's timeline on Rwanda)

Coffers: The right kind of discussion on high-frequency trading, Univ Chicago, by D Silverman, Mar '14:
I commend Chicago Booth for the recent panel discussion about high-frequency trading. It is hard to say what needs to be done to address the 'problem'. Only through informed dialogue can market participants, academics, and regulators agree to substantive changes that will allow the market to function as a source of liquidity and stability for investors and traders throughout the world

Posted on Fri, 4 Apr 14:

Economic growth does not always result in social progress, new index shows, Social Progress Imperative, 3 Apr 14 [PDF]:
The Social Progress Index ranks 132 nations based on their social and environmental performance. Higher GDP per capita does bring benefits, esp. on 'basic human needs'. But rising incomes do not guarantee improvement on 'ecosystem sustainability', 'health and wellness' and 'opportunity'. The top 5 nations are New Zealand, Switzerland, Iceland, Netherlands and Norway

Changing financial flows during Afghanistan's transition--the political economy fallout, US Inst Peace, by W Byrd, 11 Sep 13:
Massive amounts of money flowing in since '01 have had profound political economy impacts, not least by further entrenching factionalized politics and fragmented patronage networks. The ongoing transition will be accompanied by drastic declines in intl military expenditures and aid, writes development economist who has worked in-country for more than a decade

Richard Tol: Carbon tax -- still the best way forward for climate policy, Intereconomics, Mar/Apr '13:
Environmental regulators have only half-heartedly accepted the advice of economists. Incentive-compatible regulation, such as tradable emission permits, has now been accepted as a policy instrument. However, stock pollutants are better regulated by price, rather than by quantity, instruments. All this makes greenhouse gas emission reduction more expensive than need be, says Sussex U prof

Posted on Wed, 2 Apr 14:

Emerging markets can manage evolving mix of global investors, IMF Survey Mag, 31 Mar 14:
The mix of investors in emerging markets stocks and bonds has evolved considerably over the past 15 years, which has made capital flows and asset prices in these nations more sensitive to events outside their own borders, acc to the IMF's latest Global Financial Stability Report. After 2 decades of investing, have global investors learnt more about emerging markets and become less prone to panics?

UN author says draft climate report alarmist, pulls out of team, Reuters, 27 Mar 14:
One of the 70 authors of a draft UN report on climate change said he had pulled out of the writing team because it was 'alarmist' about the threat. "The drafts became too alarmist," said Richard Tol, Dutch econ prof at UK's Sussex U, from Japan where govts and scientists are meeting to edit and approve the report. But he acknowledged some other authors "strongly disagree with me" (Tol's blog)

Pessimism of 20th-century global policy architects stunted developing nations' economies, Harvard, 21 Mar 14:
Influential econ ideas first advanced in 1911--stressing innovation and entrepreneurship as the fundamental generators of growth and wealth--were deemed inappropriate for developing nations, stunting progress in many parts of the world throughout the 20th century, says a Harvard prof in a newly-published paper. It examines the impact of the influential economist Joseph Schumpeter

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