News & Commentary:

February 2005 Archives


Proposal for a single currency for Africa Recommended!
Finance and Development Dec 2004/Feb 2005
Other articles delve into a range of development issues, including possible lessons from China's success in combating poverty; the nuts and bolts of how countries can move to a floating exchange rate; possible new approaches to fiscal accounting; and the benefits of debt relief. An IMF study on services outsourcing finds that the numbers do not support the hype over job losses, while an article on corruption argues that a lack of progress in eradicating it could be due to misguided strategies. Picture This looks at the possible benefits to agriculture from the Doha round of trade talks. The Country Focus is on Brazil and People in Economics profiles Linah Mohohlo, the award-winning central bank governor of Botswana.

Research summaries on deflation and the liquidity trap and growth, policies, institutions, and poverty Adobe Acrobat Required
IMF Research Bulletin Dec 2004/Feb 2005
Plus: Area study: Central European Countries; visiting scholars at the IMF; contents of latest issue of IMF Staff Papers; summary of IMF study on Chile; titles of recent IMF working papers; summaries of IMF Trade Research Conference and Fifth Jacques Polak Annual Research Conference.

Clash of the Titans
Zbigniew Brzezinski & John J. Mearsheimer (Foreign Policy) Jan/Feb 2005
Is China more interested in money than missiles? Will the United States seek to contain China as it once contained the Soviet Union? Zbigniew Brzezinski and John Mearsheimer go head-to-head on whether these two great powers are destined to fight it out.

Think Again: US Foreign Aid
Steven Radelet (Foreign Policy) Jan/Feb 2005
Following the tsunami in South Asia, foreign governments and aid groups accused the Bush administration of being stingy with its foreign aid. Clearly, the criticism hit a nerve: The United States increased its pledge tenfold and asserted that the country leads the pack in international development assistance. Is the worlds wealthiest country a scrooge or a savior?

No Country Left Behind
Colin L. Powell (Foreign Policy) Jan/Feb 2005
Reflecting on his four years as secretary of state, Colin Powell argues that the best way to lift millions out of poverty is not to increase levels of foreign aid. Instead, the United States must address the social and political roots of poverty by engaging in tough love and demanding that corrupt regimes change their ways.

The Global Economic Challenge
Jeffrey E. Garten (Foreign Affairs) Jan/Feb 2005
Improving U.S. foreign economic policy after four years of neglect will require addressing a series of problems that, if left to fester, will have grave consequences for U.S. domestic interests and U.S. foreign policy as a whole. Above all, the second Bush administration must recognize that geopolitics and geoeconomics are deeply intertwined and must be managed accordingly.

Re-Envisioning Asia
Francis Fukuyama (Foreign Affairs) Jan/Feb 2005
Washington's system of Asian alliances may have worked during the Cold War, but it ignores today's political reality. Although the six-party talks now underway on North Korea's nukes were born of necessity, their format should be made permanent, so the White House can help reshape Asian diplomacy.

The North Atlantic Drift
William Drozdiak (Foreign Affairs) Jan/Feb 2005
To repair the damaged transatlantic alliance, the second Bush administration must rediscover the values of Republican internationalism. Fortunately, the recent enlargement of NATO and the EU gives Washington a great chance to buttress the allies' economic ties, security strategy, and foreign policy.

Rebuilding Weak States
Stuart Eizenstat, John Edward Porter, and Jeremy Weinstein (Foreign Affairs) Jan/Feb 2005
The turmoil caused by weak and failing states gravely threatens U.S. security, yet Washington is doing little to respond. The United States needs a new, comprehensive development strategy combining crisis prevention, rapid response, centralized decision-making, and international cooperation.

Nothing to Fear: Washington Should Embrace the European Union Ronald D. Asmus, Antony J. Blinken & Philip H. Gordon (Brookings/Foreign Affairs) Jan/Feb 2005
In "Saving NATO From Europe," (November/December 2004), Jeffrey L. Cimbalo warns that a dagger is pointed at the heart of the Atlantic alliance, and the murder weapon is the European Union's draft constitution. Ratification of that document, Cimbalo asserts, would have "profound and troubling implications for the transatlantic alliance and for future U.S. influence in Europe." Washington, he believes, should "end its uncritical support for European integration" and work with its friends in Europe to halt the EU process and save NATO from an untimely death. In our view, Cimbalo's article is an example of much that is wrong with U.S. thinking about the EU and the transatlantic alliance today.

Charging interest on bullets: Calls mount for debt cancellation
Bretton Woods Update No. 44 Jan/Feb 2005
Plus: Evaluation of Bank global programmes: "poorly-defined" and excluding the poor; Bank on agricultural trade: export strategy impoverishing; IFC funds Amazon deforestation, undermines safeguard policies; IFC-backed mine violates Guatemalan law; Cautious dialogue as conflict over water continues; and Consultation extended for IFC safeguard review: doubts remain.

The Lost Wealth of Nations
Partha Dasgupta (Project Syndicate) Feb 2005
The phrase “sustainable development” is commonplace, but economic commentators offer no guidance on how we are to judge whether a nation’s economic development is, indeed, sustainable.

Kyoto’s Misplaced Priorities
Bjørn Lomborg (Project Syndicate) Feb 2005
When the Kyoto treaty enters into force on February 16, the global warming community will undoubtedly congratulate itself: to do good they have secured the most expensive worldwide treaty ever. They have succeeded in making global warming a central moral test of our time. They were wrong to do so.

Global boom winding down, warns United Nations
AT Feb 1, 2005
East and Central Asian countries led worldwide economic growth in 2004, with growth rates above 7%, while all regions of the developing world grew by an average of 5.5% - the strongest in two decades. But world trade may have reached a cyclical peak in 2004, and growth will moderate in the coming years, says a new UN report.

The De Soto Delusion Recommended!
John Gravois (Slate) Feb 1, 2005
Peruvian Economist Hernando de Soto's ideas for helping the poor have made him a global celebrity. Now, if only those ideas worked.

A Jolie Good Time
WSJ Feb 1, 2005
On "corporate social responsibility" and being stood up by Angelina.

Billion Dollar Babies
Economist Feb 1, 2005
A flurry of big acquisitions and better-than-expected corporate profits has heartened a dubious stockmarket recently. Don’t break out the champagne yet.

EU Presents Revised Services Requests To WTO Members
BRIDGES Weekly Trade News Digest - Vol. 9, Number 3 Feb 2, 2005
In an effort to give impetus to the ongoing WTO services negotiations, the EU has moved forward in the General Agreement on Trade in Services (GATS) request and offer process by presenting a revised compilation of requests for market-opening bilaterally to 103 WTO Members. The revised requests, presented on 25 January, contain a list of the new sectors in which the EU seeks the removal of barriers to the entry and operation of its service providers.

Key Members Agree To Step Up Pace Of WTO Negotiations
BRIDGES Weekly Trade News Digest - Vol. 9, Number 3 Feb 2, 2005
Trade ministers from influential WTO Member countries agreed at a 29 January 'mini-ministerial' to focus on five key negotiating areas in order to make "concrete progress" in the ongoing Doha Round trade liberalisation talks before the Hong Kong Ministerial Conference scheduled for December this year. However, Members appeared to differ on what exactly is necessary in order for this progress to happen.

Gates, Buffett and China Gang Up on Dollar
William Pesek Jr. (Bloomberg) Feb 2, 2005
The dollar can add the world's two richest men to its list of detractors, something that's raising eyebrows here in Asia.

G-7 Needs Cathartic Conversation About Currencies
Mark Gilbert (Bloomberg) Feb 2, 2005
Meetings of the Group of Seven finance ministers are like Christmas with a fractious family. Everyone tiptoes around trying to be tactful for fear of spoiling the turkey dinner, while current hurts and past insults threaten to bubble to the surface and spoil the party any second.

Where trade trumps politics Financial Times Subscription Required
Quentin PeelZ (FT) Feb 2, 2005
What is the EU grand strategy in China? Washington is asking that question ahead of the EU’s likely decision to lift the arms embargo it has imposed on China for the 15 years since Tiananmen Square.

Still gushing forth Economist Subscription Required
Economist Feb 3, 2005
The global economy is awash with liquidity, pumped by America.

Are Commodity Prices Headed for Switch to Euros?
Matthew Lynn (Bloomberg) Feb 3, 2005
Oil, metals and even aircraft may one day be priced in euros, not dollars. Dream on?

US bill aims to shake China off the peg
AT Feb 4, 2005
A bipartisan group of US lawmakers is to introduce a bill in the Senate stipulating that China ease controls on its currency within six months, or face a 27.5% tariff on all exports to the US. But this is expected to sway China, which has made it clear that it will relax the yuan peg at some point, but at its own time at its own pace.

Brown urges G7 to free up trade
BBC Feb 4, 2005
UK Chancellor Gordon Brown appeals for free trade as he opens talks on the world economy by the Group of Seven (G7) wealthy nations.

Climate change and politics: Hotting up
Economist Feb 4, 2005
The debate over global warming is getting rancorous

Latin America in the Global Economy--Challenges and Opportunities
Rodrigo de Rato (IMF) Feb 4, 2005
I will touch briefly on the outlook for the global economy and that for Latin America. The relatively favorable picture that emerges will form the basis for a few reflections on some key challenges and opportunities for Latin American countries.

Central Banks Warn U.S. Over Massive Deficits
ST Feb 5, 2005
Some the world's major central bankers have warned the US on Friday that the international community could be running out of patience with the massive US budget and trade deficits that have pushed the dollar lower and increased the cost of their exports in America.

Debt aid and dollar on G7 agenda
BBC Feb 5, 2005
Gordon Brown is continuing his efforts to persuade G7 finance ministers to back his debt relief plans.

The World Bank criticizes itself
AT Feb 5, 2005
Critics who knock the World Bank for being dominated by the world's richest nations were vindicated when an internal report by the lending agency itself made some scathing comments on its own work. The Bank's strategy, it said, is poorly defined and the voices of developing countries are inadequately represented.

Clinton's Trade Choice Wall Street Journal Subscription Required
Greg Rushford (WSJE) Feb 7, 2005
Trade aficionados will be looking to a little-known conference in Cambodia for insights into where U.S. Democrats are headed on trade policy.

Global: Confession Time
Stephen Roach (MSDW) Feb 7, 2005
At long last, Federal Reserve Chairman Alan Greenspan has owned up to the central role he has played in sparking unprecedented global imbalances. His confession came in the form of a speech innocuously entitled, “Current Account” that was given in London at the Advancing Enterprise 2005 Conference on the eve of the 5 February G-7 meeting. In the narrow world of econo-speak, his prepared text contains the functional equivalent of a “smoking gun.”

Currencies: Could the Dollar Bloc Become an RMB Bloc?
Karin Kimbrough, with Qi Zeng and Chris Gowlland (MSDW) Feb 7, 2005
Given the rapidly strengthening economic ties between China and both South Korea and Taiwan, it seems to us likely that the Korean and Taiwanese monetary authorities are probably more concerned about competitiveness relative to the RMB than relative to the USD. A prospective float of the RMB would likely lead to a decline in USD/KRW and USD/TWD, and we would expect that the KRW, and probably the TWD, could begin tracking the RMB rather than the USD.

Dealing with a Declining Dollar - Part I Recommended!
Jeffrey E. Garten (YaleGlobal) Feb 7, 2005
To avert a currency crisis, China must take on greater responsibility in managing the global financial system

Keep China's Currency Peg Wall Street Journal Subscription Required
Calla Wiemer (WSJE) Feb 8, 2005
China has shown wisdom and resolve in sticking to its peg in the face of pressure.

China trade costs US 1.5 million jobs
AT Feb 8, 2005
China's move up the technology ladder has been breathtaking, branching out from clothes and shoes to semiconductors and aerospace. But more than breath, it's taking away US jobs, finds a paper prepared for the US-China Economic and Security Review Commission. It says the growing trade deficits with China have cost the US 1.5 million jobs since 1989. Dollar's rise against euro may be tough to sustain

Making hay
Economist Feb 8, 2005
Most of Europe’s banks have been trading on lower multiples than their American rivals. Is it time to re-rate them?

Dealing with a Declining Dollar - Part II Recommended!
David Dapice (YaleGlobal) Feb 9, 2005
If Washington fails to rein in the budget deficit, international bond buyers might force a painful adjustment.

Dollar's rise against euro may be tough to sustain
IHT Feb 9, 2005
Aiding the dollar's new attractiveness is the backdrop of anemic growth in Europe.

WTO Market Access Talks Progressing Slowly, Members Still Optimistic
BRIDGES Weekly Trade News Digest - Vol. 9, Number 4 Feb 9, 2005
Common ground continues to elude WTO Members in talks on non-agricultural market access (NAMA). At the end of a week of informal-mode meetings from 31 January - 4 February, countries seemed little closer than before to agreement on any of the major issues being discussed. Nonetheless, Members did not dissent at session's close when NAMA Negotiating Group Chair Stefan Johannesson of Iceland announced that future negotiations would follow the pattern of the agriculture talks, with separate meetings to discuss specific issue areas such as the tariff-reduction formula or the effects of the erosion of trade preferences.

WTO Members Move Forward On S&D Negotiations
BRIDGES Weekly Trade News Digest - Vol. 9, Number 4 Feb 9, 2005
At the WTO Committee on Trade and Development Special Session (CTD-SS) meeting on 8 February, Members decided to move forward with negotiations on agreement-specific special and differential treatment (S&D) proposals, while keeping Chair Faizel Ismail's recently-proposed approach to S&D as a "reference point".

Substantive Discussions On Trade Facilitation Begin
BRIDGES Weekly Trade News Digest - Vol. 9, Number 4 Feb 9, 2005
At the Negotiating Group on Trade Facilitation (TF) held its third meeting from 7-9 February, Members had preliminary discussions on the first crop of substantive submissions on the issue. The WTO Secretariat, the World Bank, the World Customs Organisation and the United Nations Conference on Trade and Development (UNCTAD) also made presentations at the meeting.

G7 Inch Forward On Debt Relief, Aid And Trade For Africa
BRIDGES Weekly Trade News Digest - Vol. 9, Number 4 Feb 9, 2005
Finance ministers from Canada, France, Germany, Italy, Japan, the UK, and the US -- the Group of Seven (G7) -- met in London from 4-6 February to discuss plans for more aid, debt relief and fairer trade for Africa. British treasury sources reported an emerging consensus on the need for debt relief as well as extra development assistance and better access to western markets for developing countries. However, differences among the seven richest nations on support for full debt relief meant that the language in the finance ministers' closing statement was watered down from a declared willingness to provide "100 percent debt relief" to "as much as" 100 percent. Furthermore, the statement specified that it would operate on a "case by case analysis" of Highly Indebted Poor Countries (HIPC). Trade commentators have noted that the reference to HIPC countries would limit the number of eligible countries under any debt deal.

The US trade deficit does not spell doom Financial Times Subscription Required
Diana Farrell (FT) Feb 9, 2005
The activities of foreign subsidiaries create value for the US and the world, even if the trade accounts look worse.

Runaway oil prices: How to cope in the long term
AT Feb 10, 2005
Considering current growth, oil demand through 2002-2010 will be no less than 14 million barrels a day, and high oil prices will continue. This is not necessarily bad, as high prices do not hamper economic growth; if anything they spur it. What is needed is higher but less volatile oil and energy prices. - Andrew McKillop

Europe Leads the Doha Round Wall Street Journal Subscription Required
Mariann Fischer Boel (WSJ) Feb 10, 2005
'I will not do is sell agriculture down the river.'

Reverse swing in outsourcing
AT Feb 10, 2005
If you can't beat them, join them. That's the credo of the hordes of information technology professionals in the US and UK who, faced with the prospect of job cuts in their own countries because of cheap outsourcing, have found jobs in India. At last count, their number was 50,000, and mounting by the day.

Global: Of Topsy-Turvy Yields and Curves
Joachim Fels (MSDW) Feb 10, 2005
The global bond bubble keeps inflating. Despite decent economic growth and rising inflation, the yield on the 10-year US Treasury bond seems headed towards 4% and below. In Europe, the German 10-year Bund yield has even dropped under 3.50%, trading just a shade above the all-time lows reached in June 2003. At the same time, corporate credit spreads in Europe are tighter than they have ever been before, and the equity market (as measured by the MSCI Europe) made new highs for the year. All the major asset classes are rallying – what’s going on?

Why Beijing has got to revalue the renminbi
Benjamin North (FT) Feb 10, 2005
In a number of recent articles, FT contributors have argued against calling for a renminbi revaluation. Their view is both disingenuous and dangerous.

The privatization wave
AT Feb 11, 2005
Is nothing sacred? Apparently not in the world of privatization, which has over the past decade turned over to profiteers not only essential services such as mail, energy and even national security, but the very stuff of life: water. In this race to the bottom, life, liberty and the pursuit of happiness are increasingly sold off to the highest bidder.

How Stable is the Global Economy?
Anne O. Krueger (IMF) Feb 11, 2005
My topic today, global economic stability, is one with which everyone at the IMF can identify—it is our raison d'etre. It is also of particular interest at this juncture because the currently benign global outlook provides an opportunity to take measures that will improve the robustness of the international economy and increase global stability in the future.

Mapping the Global Future
David Gordon (Globalist) Feb 11, 2005
What major political changes will the world undergo in the next 15 years?

Cuba's Dollar Ban
Christina D. McIntosh and Grant M. Nülle (Mises Daily) Feb 14, 2005
"The destiny of this country was decided long ago and nothing and no one can intimidate or threaten us." Fidel Castro' remarks last year leave little doubt that he is willing to go any length to preserve the socialist ideology of Cuba's 1959 revolution.

Global: Close Your Eyes
Stephen Roach (MSDW) Feb 14, 2005
Another G-7 meeting has come and gone. And what has been accomplished? Next to nothing, in my view. The club of the world’s wealthiest nations has punted on the big issues facing the global economy — namely, unprecedented current-account imbalances, currency misalignments, mounting trade tensions, and the liquidity-prone biases of central banks. The G-7’s latest communiqué is emblematic of the increasingly vacuous rhetoric of globalization. This is a perilous course of inaction for a global economy beset with record imbalances.

Global: M&A -- A Purely Domestic Affair
Rebecca McCaughrin (MSDW) Feb 14, 2005
The M&A buzz is getting louder, but there’s little evidence that deal-making is going global. It’s important to make the distinction between domestic and cross-border activity since cross-border flows have important implications for the balance of payments and FX markets. Currently, monthly cross-border transactions are too modest to have much impact, outside of a few isolated incidences in smaller markets. But signs of a pick-up in domestic activity are unmistakable. Already last year, domestic activity was beginning to heat up, with the total value of M&A transactions rising by 28%YoY to $1.4trn. By contrast, global cross-border activity (excluding intra-Euroland deals) remained lackluster, rising by a more tepid 7% to $305bn despite ideal conditions for consolidation. After all, companies were flush with cash, the long lull built up an appetite for acquisitions, corporate profits improved markedly, liquidity conditions were very easy, while currency differentials should have helped to make US targets attractive. Yet, the perfect storm failed to materialize, with the pick-up in Q104 quickly fizzling out over the course of the year.

Currencies: IMF Gold Revaluation Wouldn?t Tarnish the USD
Karin Kimbrough & Sharon Yeshaya (MSDW) Feb 14, 2005
Gold took a tumble last week on the back of UK Finance Minister Gordon Brown’s proposal before Parliament to revalue and or sell a portion of the International Monetary Fund’s gold holdings. The communiqué issued from the G7 last weekend said that the IMF would look into the revaluation and sale proposal over the next few months, and that managing director Rodrigo Rato would report back in April, when the IMF is scheduled to meet in Washington.

China, India and Japan Duke It Out in Asia
William Pesek Jr. (Bloomberg) Feb 14, 2005
Everyone has an opinion on who will lead Asia in the years ahead, including the Group of Seven. Earlier this month, it clearly seemed to put its money on China.

World outlook for 2005: No risks, no gains
AT Feb 15, 2005
Expect moderate to weak growth this year, eroded by a lack of the changes badly required to address population shifts. The status quo in the world economy will continue because no one really wants to see it collapse. Change will be painful for everyone, so it's easier to postpone it.

Are Trade Deficits Good for the U.S. Economy?
Dan Griswold (Globalist) Feb 15, 2005
Does the U.S. economy grow faster in years with a high trade deficit?

Tariff Conversion Main Sticking Point Of Agriculture Week
BRIDGES Weekly Trade News Digest - Vol. 9, Number 5 Feb 16, 2005
WTO delegates convened for the first 'agriculture week' of the year from 7-11 February. The meeting ended in an impasse over the conversion of tariffs based on quantities into 'ad valorem' equivalents (AVEs), i.e., tariffs based on the price of the product. Wrapping up the agriculture week in a formal meeting of the Committee on Agriculture (CoA) special (negotiating) session on 11 February, Chair Tim Groser of New Zealand urged Members to find agreement on the conversion of specific duties to AVEs. He repeated his concern over the technical impasse over ad valorem conversion at a 14 February meeting of the Trade Negotiations Committee (TNC; see related story, this issue), saying that unless agreement is found over the next couple of weeks, "our whole game plan is in jeopardy." Several Members echoed Groser's plea, stressing the need to find a swift solution to the problem.

WTO Members Aim For July 'Approximations,' Hong Kong Deal
BRIDGES Weekly Trade News Digest - Vol. 9, Number 5 Feb 16, 2005
WTO Members must aim to agree by the December WTO summit in Hong Kong on the outlines of an agreement that would allow them to finalise the Doha Round of trade liberalisation talks in 2006, said senior trade diplomats and WTO officials at the 14 February meeting of the Trade Negotiations Committee (TNC). At the meeting of the TNC, which oversees the WTO's different negotiating bodies, Members generally agreed that the oft-vocalised political will to reach such an agreement must be translated into concrete progress in the Geneva-based negotiations.

WTO General Council Appoints Chairs For 2005
BRIDGES Weekly Trade News Digest - Vol. 9, Number 5 Feb 16, 2005
At its 15 February meeting, the WTO General Council formally approved the list of committee chair appointments for 2005. Ambassador Amina Chawahir Mohamed of Kenya became the chair of the General Council, making her the first woman (and second African) to head the WTO's highest-level decision-making body outside the biennial Ministerial Conferences.

The new money men
Economist Feb 17, 2005
Investors have made a trillion-dollar bet that hedge funds will bring them rich returns. But will they?

Franc-to-euro exchange is only for early birds
IHT Feb 18, 2005
Untold numbers still have stashes of old currencies that they have not been able to spend since 2002.

India joins China in stepped-up thirst for oil
IHT Feb 18, 2005
Oil executives and drillers in remote spots increasingly are speaking Mandarin or Hindi, not English.

Global: Post-Bubble Pitfalls -- Yet Another Lesson from Japan
Stephen Roach (MSDW) Feb 18, 2005
Japan’s fourth recession in a dozen years is a grim reminder of the downside of a post-bubble economy. So, too, is the nation’s lingering deflation, which has now persisted for more than seven years. So far, America’s post-bubble experience has been very different — merely one recession and nothing worse than a brief deflation scare. Yet it may be premature to conclude that the US has avoided the dreaded Japan syndrome.

Hockey Stick on Ice
WSJ Feb 18, 2005
Politicizing the science of global warming.

Asia's answer to the IMF
AT Feb 19, 2005
The new Japanese chief of the Asian Development Bank is back to his old ways, trumping up support for his dream Asian Monetary Fund that will curb the International Monetary Fund's domination in Asia. The timing is great in view of the dollar's free fall and the sick US trade and fiscal accounts, but is unlikely to go anywhere, any time soon. - Alan Boyd

Picking a World Bank President
NYT Feb 19, 2005
The process for choosing a World Bank leader lacks the transparency and good governance that the organization preaches.

Tunnel Vision on Corruption
Moisés Namm (WP) Feb 20, 2005
About a decade ago, the world witnessed a corruption eruption. As democratic winds swept the world, the dirty deals of once unaccountable dictators and bureaucrats came out into the open. During the Cold War, kleptocratic dictatorships often traded their allegiance to one of the two superpowers for that superpower's countenance of their thievery. With the superpower contest over, such corrupt bargains dried up. And, thanks to the information revolution, if there was even a hint of corruption at the highest levels, it quickly became global news.

Currencies: Asian Currencies to Outperform the JPY
Stephen Jen and Drew Brick (MSDW) Feb 21, 2005
We have been bullish on AXJ currencies, but are impressed by how well most of the AXJ currencies have performed. By keeping most of our forecast trajectories for USD/AXJ unchanged, with a more elevated profile for USD/JPY and a delayed float of the RMB, we are implicitly turning even more bullish on the AXJ currencies.

New Leaders Helping Asia Get Its Groove Back
William Pesek Jr. (Bloomberg) Feb 21, 2005
Singaporeans are still talking about it: The diplomatic love-fest between their leader and Indonesia's. It's not what Southeast Asians are used to. Petty squabbles with neighbors? Yes. Hollow pledges of economic cooperation? Absolutely. Grand visions of Asia taking on the West? Oh yeah. Genuine teamwork between leaders? Nope.

De Rato in Andean countries Adobe Acrobat Required
IMF Survey Feb 21, 2005
Plus: Latin America set for steady growth; Mid-East financial sector development; India's quest for higher growth; Russia's flat tax; Annuities and retirement; Financial soundness indicators; Transparency in budget processes.

EU trade chief warns of collapse in global trade talks
IHT Feb 22, 2005
The European Union's chief trade negotiator, Peter Mandelson, on Monday warned of a "serious potential breakdown" in global trade discussions if countries failed to submit proposals for freeing up trade in services by a May deadline.

The Next 9/11 Could Happen at Sea
John S. Burnett (NYT) Feb 22, 2005
Piracy, with its connection to terrorism, still pose a huge threat to the global economy.

Our Mission Remains Vital
Kofi A. Annan (WSJ) Feb 22, 2005
The U.N. needs to be reformed, but it still performs a crucial function.

We Must Lead the Way on Free Trade
WP Feb 22, 2005
Trade has proved to be an invaluable asset for U.S. foreign policy, fostering more self-sustaining economic growth among key regions of the developing world than any imaginable forms of traditional foreign aid. Free trade is one of the critical components of U.S. efforts to develop enduring, stabilizing influences in the Middle East, South Asia and Africa -- key regions for our work to thwart the rise of terrorism and illiberal government.

Global: Out of the Blue?
Stephen Roach (MSDW) Feb 22, 2005
To most, it seems to have come from out of the blue. Japan and Germany -- the world’s second and third largest economies -- moved into recession territory in late 2004. Even the US experienced a marked slowdown in GDP and productivity as the year came to an end. The Baltic Freight Index -- a good proxy for global trade -- has rolled over. OECD leading indicators are flashing a similar warning sign. And, of course, yield curves have flattened, driven by a stunning compression of rates at the long end of the maturity spectrum. The spin-doctors are out in force dismissing all these signs as aberrations. Could they be wrong?

Dollar falls on fears of a sell-off
IHT Feb 23, 2005
The dollar dived Tuesday against a range of currencies after the Bank of Korea revealed plans to step up purchases of assets denominated in other currencies.

Debunking the Poverty-Terrorism Myth
Salil Tripathi (WSJE) Feb 23, 2005
Suggestions that poverty somehow explains terrorism, insult the poor.

Global Imbalances and Global Poverty - Challenges for the IMF
Rodrigo de Rato (IMF) Feb 23, 2005
It is not often that the two elements of today's topic — global imbalances and global poverty — are discussed together. Yet, they are related, and should be considered together more frequently. Addressing today's global macroeconomic imbalances is vital for sustainable growth worldwide. And that growth is a key ingredient in addressing that other great imbalance of our time — global poverty.

Small Economies' Characteristics, Problems and Solutions Examined
BRIDGES Weekly Trade News Digest - Vol. 9, Number 6 Feb 23, 2005
The WTO Committee on Trade and Development Dedicated Session (CTD-DS) meeting on 21 February agreed on a process to move forward the work programme on small economies using an approach suggested by Chair Ambassador Trevor Clarke of Barbados. The 'Dedicated Session' of the CTD focuses exclusively on small economies.

Services: Members Discuss Mode 4, Domestic Regulation
BRIDGES Weekly Trade News Digest - Vol. 9, Number 6 Feb 23, 2005
The 7-25 February 'cluster' of services negotiations continued this week at the WTO. The bilateral process of requests and offers of market access remains well behind schedule, although Indonesia gave it a boost on 21 February by announcing its initial offer to liberalise certain services sectors. In spite of the slow pace of the request-offer process through which services trade liberalisation actually takes place, the intensity of the talks has picked up. During the 21-22 February meeting of the Special Session of the Council for Trade in Services (CTS) Members discussed 15 separate proposals on issues ranging from domestic regulation to postal services. They also discussed 'Mode 4' of the General Agreement of Trade in Services (GATS), which deals with the cross-border movement of service providing individuals.

Correcting Global Imbalances—Avoiding the Blame Game
Rodrigo de Rato (IMF) Feb 23, 2005
I have chosen to focus on the issue of global imbalances. In doing this, I shall also deal with a theme that FPA members like yourselves will relate to naturally, and that is the theme of international cooperation. As you will appreciate, it is such cooperation that will help us deal with the imbalances problem.

Honey, I Shrunk the Dollar
Thomas L. Friedman (NYT) Feb 24, 2005
When a country lives on borrowed time, borrowed money and borrowed energy, it is just begging the markets to discipline it in their own way at their own time.

Fuel for rivalry Financial Times Subscription Required
FT Feb 24, 2005
As Beijing and New Delhi enter foreign deals to bring them the oil and gas needed by their surging economies, regional politics is tending to the pragmatic though territorial claims show a sharper tone.

Forget trade deficits: go for growth Financial Times Subscription Required
Daniel Griswold (FT) Feb , 2005
If a rising trade deficit is responsible for "shipping jobs overseas", how do the critics of trade explain the fact that unemployment rises when the trade deficit shrinks and falls when it expands?

The global warming scam
Derek Kelly (AT) Feb 25, 2005
The climate catastrophists forget that it is not global warming but cooling and glaciation that have threatened life the most in the past: perhaps we need more, not fewer, greenhouse gases in the air.

Kyoto Controversy - Beyond the Protocol
AT Feb 25, 2005
While the entry into force last week of the Kyoto Protocol was a great victory according to many, it will be an empty one unless even greater challenges are met, and soon, writes Tom Athanasiou. The possible alternative: a planet much more inhospitable than even environmentalists predict.

Warning from the markets
IHT/NYT Feb 25, 2005
When a seemingly innocuous remark from the central bank of South Korea makes the dollar tank, as happened on Tuesday, all is not well with the United States' position in the world economy.

East Asia's Calm Before the Storm Wall Street Journal Subscription Required
Michael R. Auslin (WSJE) Feb 25, 2005
Rivalry between China and Japan is heating up.

Global: The Instruments of Rebalancing
Stephen Roach (MSDW) Feb 25, 2005
Global rebalancing does not occur spontaneously. It takes adjustments in economic policies and asset prices to spark a meaningful realignment in the mix of global growth. Shifts in currencies and real interest rates are the two major instruments of rebalancing. The ideal prescription for today’s lopsided US-centric world would be a combination of dollar weakness and a rise in US real interest rates. However, there is serious risk that the Fed will not execute the full-blown normalization of real interest rates that the US economy requires. If that’s the case, then there will be even greater pressure on currency adjustments to correct today’s imbalances — a development that could take world financial markets by great surprise.

Millions of Indians Await Benefits of Globalization
Jessica Einhorn (YaleGlobal) Feb 25, 2005
To realize the promise, politicians have to compete on the reform agenda - not against it

China Shows the Way in a Quota-Free Market Recommended!
Linda Lim (YaleGlobal) Feb 25, 2005
Instead of curbing Chinese textile exports, one should emulate its smart investment and management strategy.

Carbon rush at the World Bank
AT Feb 26, 2005
Kyoto has ignited what could become one of the world's biggest markets - carbon emissions - with a value that could be as high as US$250 billion And guess who's cashing in?

For a few dollars less
AT Feb 26, 2005
South Korea's announcement this month that it wants to "diversify" its currency reserves - meaning dump dollars - brought back into focus the growing international concern over the greenback's unrelenting slide, and possible demise.

Making Globalization Work
WP Feb 28, 2005
If globalization were a stock, it would have been shooting off the charts recently.

A Mideast Makeover? Recommended!
Jackson Diehl (WP) Feb 28, 2005
Popular protests spur changes from autocrats.

Argentina’s debt restructuring: Screeching to the precipice
Economist Feb 28, 2005
Argentina appears to have persuaded most of its bondholders to accept a deeply discounted debt-restructuring offer. But the country’s financing problems will continue unless it can coax back capital stashed abroad by its citizens.

Meeting the world’s energy needs: The natural-gas explosion
Economist Feb 28, 2005
A giant contract between Shell and the Gulf state of Qatar to supply liquefied natural gas to America and Europe is the latest in a series of deals that should lead to gas providing a far larger share of the world’s energy needs. Since the world’s gas reserves are more widely spread than is its oil, the growth in facilities for handling LNG should also mean greater energy security.

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