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January 2006 Archives


Capital discipline for Big Oil Recommended!
McKinsey Quarterly Jan 2006
The industry must decide whether to raise production in the belief that its economics have changed fundamentally--and risk losses if they haven't.

The United States Needs German Economic Leadership Recommended! Adobe Acrobat Required
Posen, A.S. (IIE) Jan 2006
Only together can the United States and Germany keep the global economy integrated—by removing agricultural roadblocks to a WTO deal, coordinating on relations with China, and securing the flow of international investment. The new German chancellor, Angela Merkel, could save the Doha Round by reinterpreting the budget deal just made on agricultural support funds at the EU summit, something US pleas and attempts to shame France cannot achieve. Both countries have an interest in making a common front toward China. If the United States continues to face China alone, the Chinese government is unlikely to move the yuan peg meaningfully. Chancellor Merkel should take advantage of the American bad cop role to play good cop. In particular, under German urging, the eurozone can offer to shift several percent of its shares in the IMF and World Bank to China and other Asians in return for a revaluation of the yuan and a eurozone seat at the institutions. Both President Bush and Chancellor Merkel could also cooperate to defuse mounting economic nationalism that hampers cross-border investment. Merkel should secure opportunities for the export-dependent German economy and advance European integration, and the Bush administration should welcome German leadership and thus validate European partnership in international policy.

Think Again: Islamist Terrorism
C. Christine Fair and Husain Haqqani (Foreign Policy) Jan 2006
Pundits and politicians of all stripes are quick to offer advice on what fuels Islamist terrorism. It just so happens that much of what they say is wrong. Poverty doesn’t produce terrorists, a solution to the Israeli-Palestinian problem isn’t a cure-all, and young Muslim men aren’t the most likely to turn to terror. If we are going to fight a war on terror, the least we can do is understand who we are fighting.

Making Poverty History in 2006
NYT Jan 1, 2006
It was a banner year in 2005 for big speeches from global leaders about fighting third-world poverty. But if any of their promises are going to come close to being kept, 2006 must be a year of action.

Can Trade Ever Harm a Country?
Robert Murphy (Mises Daily) Jan 5, 2006
A recent article from the Guardian joins the growing outcry against free trade. Its central message is that countries adopting "neo-liberal" market reforms, recommended by academic economists, have done worse than those countries that ignored the supposed experts and spurned free trade. Every time I reread the article—with the subtitle "A look at Vietnam and Mexico exposes the myth of market liberalization"—I discover more and more fallacies. To economize on the reader’s precious time, I finally decided to quit digging for more errors and jot down the ones I’d already found.

Financial System Reform and Global Current Account Imbalances
Raghuram Rajan (IMF) Jan 8, 2006
I will focus on a familiar issue, the U.S. current account deficit, or more broadly, global current account imbalances, and will describe how financial system reform can play a part in their resolution. I will use China as an example, though my point applies more generally.

Globalization's Deficit
WP Jan 9, 2006
Fifteen years ago it was fashionable to pronounce the eclipse of the nation-state. In a globalized world, power would flow to supranational bodies: to the North American Free Trade Agreement, the World Trade Organization and the European Commission, and even to a United Nations freed from the paralyzing divisions of the Cold War. Today this trend appears exhausted. Supranational institutions are not exactly retreating, but they have run out of forward momentum.

IMF cancels debt Adobe Acrobat Required
IMF Survey Jan 9, 2006
Plus: Iraq receives new loan; Brazil and Argentina repay IMF loans; Saudi Arabia Article IV summary; Credit booms in transition economies; India's textile and clothing sector; Maghreb parliamentarians; Public awareness of economic issues.

Free-Trade Winds in the Mideast Wall Street Journal Subscription Required
WSJ Jan 11, 2006
A rare trade victory that opens the door to more.

The Path to Lower Gas Prices: Free Trade
Robert Karl Merting (Mises Daily) Jan 12, 2006
There are many reason the price of gas is higher than it otherwise would be in a pure market setting. But one reason has received virtually no attention. Gas imports are taxed more highly than oil imports, a protectionist arrangement that benefits domestic refineries (in the short run) but harms consumers every day.

New Ways Needed to Reduce Poverty
Rodrigo de Rato (IMF) Jan 13, 2006
This past September, world leaders gathered in New York at the UN Millennium Summit. They took stock of progress made toward the Millennium Development Goals (MDGs) in the last five years, and examined the realities we face if the MDGs are to be met in the next decade.

China's tyranny has the best hi-tech help
Jonathan Mirsky (IHT) Jan 15, 2006
You can find anything you want on China's Internet: sex, fashion, business, travel, entertainment, romance. Anything, that is, except democracy, Tiananmen, Taiwan, human rights, Tibet and hundreds of other subjects.

Globalizing King's Legacy
Taylor Branch (NYT) Jan 16, 2006
Despite our national commitment to advance free government around the world, we consistently marginalize or ignore the Rev. Dr. Martin Luther King Jr.'s commitment to the core values of democracy.

Is China accumulating too much foreign cash?
IHT Jan 17, 2006
With China's reserves now approaching the level of Japanese holdings, there are fears that this vast hoard of foreign exchange exposes the country to risks that could undermine future growth.

The Security Threat to Free Trade Wall Street Journal Subscription Required
Samuel Porteous (WSJ) Jan 17, 2006
Using "essential security" interests as an excuse for protectionism.

Strange happenings along the China coast Economist Subscription Required
Economist Jan 17, 2006
If you think China is going to revalue its currency, think again

Oil on the up, again Economist Subscription Required
Economist Jan 18, 2006
The oil price is rising once more, amid worries about the security of supply from Iran, the world’s fourth largest exporter, where there is talk of possible economic sanctions. Adding to the tension, oil firms in Nigeria, the eighth biggest exporter, have been attacked by militants who threaten to spread a campaign of sabotage and kidnapping. With demand from Asia as firm as ever, the oil price is heading in only one direction.

Is China accumulating too much foreign cash?
IHT Jan 19, 2006
With China's reserves now approaching the level of Japanese holdings, there are fears that this vast hoard of foreign exchange exposes the country to risks that could undermine future growth.

Doha Negotiations To Start Again Next Week In Geneva, Davos
BRIDGES Weekly Trade News Digest - Vol. 10, Number 1 Jan 20, 2006
Negotiations at the WTO are set to start up again next week, as trade diplomats return to Geneva a month after the December 2005 Hong Kong Ministerial Conference. The task before them is formidable. Ministers' main decision at the December meeting was simply to keep talking: in order to avert another Cancun-style collapse, they simply put off discussions on the most contentious issues in the Doha Round negotiations -- specific numbers and tariff structures for reducing subsidies and tariffs -- and gave themselves until the end of April to reach agreement on them.

De Rato in Brazil Adobe Acrobat Required
IMF Survey Jan 23, 2006
Plus: Article IV summaries: Pakistan, Ukraine, CEMAC; Dawson on IMF's transparency revolution; Capital flight, institutions, and instability; Eastern Caribbean; Germany's regulation; Kazakhstan's non-oil sector; Trade, aid, and growth.

It's the euro's fault, many Europeans say
IHT Jan 23, 2006
The crush of economists, politicians and central bankers who protest that the euro has not heightened inflation simply do not impress Heinz-Dieter Friedrich.

Dispirited Economist Subscription Required
Economist Jan 24, 2006
America's biggest banks decelerate.

When the state means business
IHT Jan 25, 2006
Today's Russia is not the same country it was only six years ago. Back then, the country was unsettled, tumultuous, impoverished. But it was free. Today Russia is different. Richer. And not free.

Blame Game Starts Up Again As Ministers Head To Davos
BRIDGES Weekly Trade News Digest - Vol. 10, Number 2 Jan 25, 2006
As they head towards a meeting in Davos, Switzerland on 27-28 January, ministers from prominent WTO Member governments have picked up where they left off at the December Ministerial Conference in Hong Kong, blaming each other for failing to take steps to break the deadlock in the Doha Round negotiations.

WTO Panel Created On EU-Brazil Retreaded Tyre Dispute
BRIDGES Weekly Trade News Digest - Vol. 10, Number 2 Jan 25, 2006
The WTO Dispute Settlement Body (DSB) on 20 January agreed to create a panel to consider an EU complaint against Brazil's import restrictions on retreaded tyres. The EU argues that the measures are quantitative restrictions forbidden by WTO rules, and also violate the GATT principles of most-favoured nation (MFN) and national treatment by differentiating among Brazilian, Mercosur, and other producers. Brazil counters that the problems associated with the disposal of such tyres mean that the restrictions are necessary to protect public health and the environment, and has suggested that it may invoke the general exceptions set out in Article XX of the GATT in its defence.

Economics And the Inevitable
WP Jan 27, 2006
Davos has come to symbolize the wealth-creating, job-destroying whirlwind of the global economy. There are more Chinese, Indians and Arabs every year, and less of an American presence.

Of scorpions and Starfighters/A>
Economist Jan 31, 2006
Are exotic credit derivatives achieving much more than pushing the envelope to its limits?

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