News & Commentary:

April 2003 Archives


Water meetings everywhere and not a drop to drink
Bretton Woods Update Mar/Apr 2003
Bank "soul searching" on privatisation; Comment: Argentinian groups challenge IMF pressure on utility prices; Ghana faces IMF arm-twisting; Arrest of IMF employee points to cover-up; Frustration at limited governance discussions; Study challenges Bank's role in mining; Bank in the middle of Cambodia, PNG forestry battles; Inside the institutions: The World Bank and gender; PRSP dangers exposed again.

A Case of 'Enronitis'? Opaque Self-Dealing and the Global Financial Effect
Shang-Jin Wei and Heather Milkiewicz (Brookings) Apr 2003
corporate failures deprived millions of company employees and shareholders of their lifetime savings and retirement benefits. Stock prices of other U.S. companies also took a beating, partly in response to the revelation of these scandals, and foreign markets have suffered enormous losses. The practice of opaque self-dealing by a few insiders—as evidenced by insider trading and a lack of transparency in corporate and government operation—has contributed to the meltdown of the financial markets around the world. A crucial, invigorated reform effort is under way worldwide to stem the problem, which, if left unchecked, could lead to global financial ruin

Financial Conglomerates: The Future of Finance?
Richard Herring and Robert Litan (Brookings) Apr 2003
In 1999, after nearly twenty years of debate, the U.S. Congress finally passed legislation permitting bank affiliations with all sorts of other financial enterprises, and vice versa. In this step, the United States joined many other countries—especially in Europe and, more recently, Japan—in allowing the operation of financial conglomerates.

Normalizing Asian Trade Relations Recommended!
Richard Bush and Catharin Dalpino (Brookings) Apr 2003
At the beginning of the Bush Administration there was a point of view that the main fault-line in the geopolitics of East Asia was between the United States and China. China was a rising power that would likely challenge status-quo America for hegemony in the region. Taiwan, it was thought, would probably be the point at which conflict would occur since it was where the conflicts of interest were greatest. Strengthening alliances was important for its own sake but also because where Japan, and to a lesser extent, South Korea lined up on any dispute with China would matter. The EP-3 incident and early Administration actions to enhance security support for Taiwan only confirmed this initial belief.

Farm tariffs failure sparks Doha fears
FT Apr 1, 2003
WTO members expressed concern at the failure of farm trade negotiators to meet the deadline for setting guidelines for cuts in agricultural tariffs and subsidies.

Free farm trade means an unfair advantage Financial Times Subscription Required
Franz Fischler and Pascal Lamy (FT) Apr 1, 2003
There cannot be a Doha deal unless developing countries are able to conclude that they have been treated fairly.

Top financiers urge defence of world economy
FT Apr 2, 2003
The world's top economic policymakers should promise now to take swift and concerted action - such as cutting interest rates - if the global economy weakens further.

Moving beyond a trade setback Recommended!
Supachai Panitchpakdi (IHT) Apr 2, 2003
When the Doha round of trade talks began in November 2001, World Trade Organization members aimed to establish by March 31, 2003, a framework for negotiations to reduce trade barriers and subsidies in agriculture. The failure to meet this deadline is disappointing. But it need not be disastrous, provided governments move beyond this setback and apply the political will necessary to reach compromise.

Who lost Turkey? The International Monetary Fund
Claudia Rosett (WSJ) Apr 2, 2003
How did we lose the loyalty of Turkey, and with it that much-wanted northern front for the war in Iraq?

Agriculture Modalities: Deadline Missed, Eyes Now On Cancun
BRIDGES Weekly Trade News Digest - Vol. 7, Number 12 Apr 2, 2003
During a 31 March wrap-up meeting of the WTO Committee on Agriculture (CoA), Chair Stuart Harbinson formally declared that Members' efforts to agree on agricultural modalities by the end-March deadline had failed. The meeting concluded the last special (negotiating) session of the CoA within the official modalities phase of the Doha round negotiations. Nevertheless, Harbinson said he would continue consultations on technical issues such as tariff formulas and Strategic Products (SPs) for developing countries after the mid-April Easter break, and that further CoA special sessions had been scheduled for June and July. He urged Members to "continue working together towards completing the job given to us by Ministers in Doha as soon as possible". While Harbinson and WTO Director-General Supachai Panitchpakdi overtly expressed their disappointment over Members' disability to agree on the modalities -- or formulas for negotiations -- for an agricultural framework accord, officials from key Members, such as the US and the EU. These Members justified their stance by referring to other deadlines, such as those on special and differential treatment for developing countries and on access to inexpensive, generic essential medicines, which have been missed as wellin the course of the negotiations since November 2001.

Iraq conflict 'likely to hit global growth'
FT Apr 3, 2003
The war with Iraq will probably have about the same moderate effect on the global economy as the September 11 terrorist attacks, the World Bank has forecast.

Doha in danger
Economist Apr 3, 2003
Trade negotiators missed a deadline for agreeing to cuts in agricultural tariffs and subsidies, threatening progress in the Doha round of trade talks.

The Need to Improve the Resolution of Financial Crises: An Emerging Consensus?
Anne Krueger (IMF) Apr 3, 2003
The past year has witnessed a vigorous and constructive debate regarding the need to improve arrangements for the resolving financial crises, and in particular the tools for restructuring sovereign debt.

Gun, Germs and Stall?
Paul Krugman (NYT) Apr 4, 2003
The war has monopolized everyone's attention, but what seems to be even more fatal to an ailing economy is a crippling virus.

Competition policy
Economist Apr 4, 2003
After centuries of ripping off consumers, cartels are suffering a crackdown from the world’s competition authorities

EU-ASEAN: laying the foundations for a strengthened trade and economic partnership - Launch of TREATI
EU DGT Apr 4, 2003
Today ASEAN Trade and Economic Ministers and EU Trade Commissioner Pascal Lamy, meeting in Luang Prabang (Laos), have agreed to launch an initiative to strengthen trade and investment relations between both regions: the Trans-Regional EU-ASEAN Trade Initiative (TREATI). Under TREATI, both regions seek closer co-operation on a wide range of trade, investment and regulatory issues.

Betraying the World's Poor
NYT Apr 5, 2003
Europe and the United States must recover lost momentum in "the development round." It could go a long way toward fighting global terror.

Turkey meets terms for $700m IMF loan
FT Apr 7, 2003
Turkey has finally fulfilled the conditions for obtaining its latest loan tranche from the International Monetary Fund (IMF), a development that is likely to cheer the financial markets.

IDC Lowers Global IT Spending Forecast, Citing War And Economic Woes
Computerworld Apr 7, 2003
Uncertainties about the war in Iraq and a fragile global economy led research firm IDC to lower its spending forecast for 2003 -- but there may be some good news, too.

Real gains ground against dollar
FT Apr 8, 2003
Brazil's real gained ground for the eighth successive day to reach R3.15 against the dollar amid signs that money managers were channelling funds into Brazilian bonds.

The poor need a stake in developing countries Financial Times Subscription Required
John Williamson (FT) Apr 8, 2003
One respect in which policy needs to be adjusted is in the pursuit of lower inequality of income, alongside faster growth.

WSJ Apr 8, 2003
Waging trade war is the wrong way to punish European perfidy.

Nowhere to Turn
Frank Shostak (Mises Daily) Apr 8, 2003
Economic policymakers around the world are running out of tools to boost the flagging global economy, said the World Bank in a report last week. The bank said the U.S. Federal Reserve, the world's most influential central bank, has little room left to cut interest rates. In fact, the bank concluded that policies this year and next are more likely to be less stimulative or "restrictive" than expansive.

The death of liberal economics Financial Times Subscription Required
Philip Coggan (FT) Apr 9, 2003
The conflict in Iraq may be drawing to a close. But new fissures have appeared in the international order and there may be plenty ready to exploit them.

Searching for good news
Economist Apr 9, 2003
In its latest projections, the International Monetary Fund has again revised downwards its earlier forecasts. And most of the risks remain on the downside.

TNC Ponders Way Forward
BRIDGES Weekly Trade News Digest - Vol. 7, Number 13 Apr 10, 2003
The WTO Trade Negotiations Committee (TNC) met in Geneva from 2-4 April, bringing together high-level officials from capitals. Many officials expressed disappointment with regard to the mounting number of missed negotiating deadlines in the Doha Round, including the most recent failure in the area of agriculture negotiation.

The moral decline of a superpower
Günter Grass (IHT) Apr 11, 2003
war long sought and planned is now under way. All deliberations and warnings of the United Nations notwithstanding, an overpowering military apparatus has attacked preemptively in violation of international law. No objections were heeded. The Security Council was disdained and scorned as irrelevant. As the bombs fall and the battle for Baghdad continues, the law of might prevails.

Keep us out of dispute, says IMF chief
FT Apr 11, 2003
Horst Köhler, managing director of the IMF, finds himself torn between an urge to help Iraq and his desire to keep politics out of his institution.

The developing world
Economist Apr 11, 2003
The war in Iraq has strengthened the case for making more strenuous efforts to include emerging-market economies and the poorest countries as full participants in the world economy. The issue will be much on the minds of the finance ministers gathered in Washington for the spring meetings of the IMF and World Bank

The Other War: Global Poverty and the Millennium Challenge Account
Lael Brainard, Carol Graham, Nigel Purvis, Gayle Smith and Steven Radelet (Brookings) Apr 14, 2003
The proposed Millennium Challenge Account (MCA) would amount to a doubling of U.S. bilateral development aid—the largest increase in decades. It presents a rare opportunity to create a new blueprint for distributing and delivering aid effectively. For these reasons the MCA offers a critical chance to deliberately shape the face that the United States presents to people in poor nations around the world.

The UN is not up to the job
S. Neil MacFarlane (IHT) Apr 14, 2003
The debate over the United Nations' role in postwar Iraq has focused on the political question of who should lead. It is surreal to assume that two great powers which have just won a war at considerable expense in blood and treasure would simply step aside in favor of an organization that refused to support their war in the first place.

No, the UN is right for the job
Joseph S. Nye (IHT) Apr 14, 2003
With victory in sight, some American neo-conservatives see the Iraq war as a "two-fer" that will get rid of both Saddam Hussein and the United Nations. For example, Richard Perle, a member of the Bush administration's Defense Policy Board, wrote recently in the Guardian, "Thank God for the death of the UN." And the Pentagon and State Department are struggling over the UN's post-war role.

Optimism on strength of world economy
FT Apr 14, 2003
The overthrow of Saddam Hussein and the fall in oil prices should remove a large risk to the health of the world economy, according to weekend meetings in Washington.

Walking a Tightrope
Economist Apr 14, 2003
Delicate negotiations in Washington over the weekend ended with an agreement on reconstructing Iraq. But the terms of the deal remain vague; and there is concern that the focus on Iraq will distract attention from the plight of other poor countries

Not only bad for your health
Economist Apr 14, 2003
Economists are now predicting that SARS, a deadly pneumonia that originated in China, may have a more damaging effect on East Asia's economies than the war in Iraq.

Trade barriers perpetuate poverty
Members of the Cairns Group (IHT) Apr 15, 2003
The failure of World Trade Organization members to agree on guidelines for agricultural reform is a serious setback for the Doha round of multilateral trade negotiations.

After Iraq: A Europe gripped by self-doubt Financial Times Subscription Required
FT Apr 16, 2003
Enlargement to include 10 eastern countries threatens to accentuate divisions between 'old' and 'new' - and not just in defence and foreign policy.

DSU Reform: Members Fear Another Deadline Will Be Missed
BRIDGES Weekly Trade News Digest - Vol. 7, Number 14 Apr 16, 2003
The special session of the WTO Dispute Settlement Body (DSB) met to continue its review of the Dispute Settlement Understanding (DSU) from 10 to 11 April. As the 23 May deadline for completing the DSU reform drew closer, Members were still at odds with regard to fundamental issues in the proposals, and there were serious concerns over another possible failure to meet a deadline. A failure in these negotiations, which have an express mandate to deliver an early harvest, would be a blow to the Doha round of negotiations, following a number of other missed deadlines, including in the areas of agriculture, special and differential (S&D) treatment for developing countries, and trade- related aspects of intellectual property rights (TRIPs) and access to essential medicines.

Bush's new global order will generate resistance
William Pfaff (IHT) Apr 17, 2003
The controversy resumes in the present and future tenses, over Washington's planned - or, as it seems, largely unplanned - pacification and reconstruction of Iraq as an economic and political society, and over what may follow in the Eastern Mediterranean.

An avalanche of obfuscation
Philip Stephens (FT) Apr 21, 2003
Gordon Brown's five tests are a transparent attempt to hide the obvious: that deciding whether or not to join the euro is an exercise in crystal-ball gazing.

Economies Sickened by a Virus, and Fear
Keith Bradsher (NYT) Apr 21, 2003
SARS is starting to cause measurable economic harm worldwide, particularly in parts of the Asia-Pacific region.

IMF-World Bank spring meetings Adobe Acrobat Required
IMF Survey Apr 21, 2003
G-7 & G-24 communiques; African finance ministers press conference; and World Economic Outlook.

A New World Order
Economist Apr 21, 2003
The shape of international relations after the war in Iraq is still unclear. Will there be a complete break with the past?

How big is the danger?
Economist Apr 21, 2003
With global economic recovery still some way off, some economists have started to worry that Europe and America could find themselves with the same problem of price deflation which has bedevilled Japan for years. Are they right to be concerned?

A sense of protectionist fervour' Recommended! Financial Times Subscription Required
FT Apr 22, 2003
Country risk is re-emerging as an important driver of markets and, barring a new bull run for shares, the next few years are likely to be a stockpicker's paradise.

The World Health Organization walks into a food fight
Philip Bowring (IHT) Apr 23, 2003
While the World Health Organization plays a front-line role in the war on severe acute respiratory syndrome, it is coming under sustained attack in Washington from American industry, a sign that the UN health agency may end up fighting vested interests throughout the developed world long after SARS has become a minor scourge.

A fractured planet needs pragmatism
Michael J. Glennon (IHT) Apr 23, 2003
Some day, following the collapse of the international security system this winter, policymakers will return to the drawing board. When they do, one lesson is that rules must flow from the way states actually behave, not from the way they ought to behave.

A shared responsibility for trade Financial Times Subscription Required
Martin Wolf (FT) Apr 23, 2003
The Doha round is in some difficulty. Whether the difficulties prove terminal depends on the behaviour of the world's two trading superpowers: the US and the European Union.

A case for inflation transparency Financial Times Subscription Required
Kenneth Rogoff (FT) Apr 23, 2003
A call on the G3 central banks to speak openly and concretely about their long-term objectives.

Why the Mullahs Love a Revolution
Dilip Hiro (NYT) Apr 23, 2003
If the Bush administration truly hopes to see a "liberated" Iraq, stepping down as power broker might be the only option.

Trade recovered in 2002, but uncertainty continues
WTO Apr 23, 2003
Driven by strong demand in the United States and the big Asian economies, merchandise trade grew by 2.5% in 2002, up from a 1% decline in 2001, according to the latest WTO figures. But trade growth was uneven and masked the sluggish trade performance in many regions.

Foreign Aid, Foreign Disaster
Jude Blanchette (Mises Daily) Apr 23, 2003
Few countries around the world wanted to be entangled in the War on Iraq, but now everyone seems eager to participate in reconstruction. The United States, as primary military aggressor, has estimated the cost of this effort totaling $100 billion over the next several years.

Overseas aid
Economist Apr 23, 2003
As part of the extensive preparations for the Evian Summit, aid ministers from the G8 countries are meeting this week in Paris. Can they find a way to make aid for poor countries more effective?

The world economy
Economist Apr 25, 2003
American economic growth speeded up only slightly in the first quarter of 2003. And there is still no sign of a strong global economic rebound, according to the latest assessment from the Organisation for Economic Co-operation and Development.

GSK halves price of top Aids drug Financial Times Subscription Required
FT Apr 28, 2003
GlaxoSmithKline, the Anglo-American drugs group, has bowed to pressure and is set to announce that it is halving the price of its biggest Aids drug in poor countries.

The wobbly dollar
Economist Apr 28, 2003
The world’s major currencies are in a state of flux, with the dollar wilting against the euro amid political uncertainty and economic gloom. But is this just the start of a bigger shake-up?

When the rich talk aid, the poor don't always get it
Nancy Birdsall and Moisés Naím (IHT) Apr 29, 2003
Political leaders in the world's richest nations frequently proclaim their fervent desire to end poverty worldwide and boast of their spending on foreign aid to poor nations. Their aid efforts - which add up to about $58 billion a year - are praiseworthy. But grandstanding over foreign aid obscures the critical influence that rich countries' other policies have on the development of poor nations.

The economic perils of overreacting
Philip Bowring (IHT) Apr 29, 2003
By hitting the one region of the world with a high level of economic and trade growth, severe acute respiratory syndrome has underlined the extreme vulnerability of the global economy to unexpected shocks.

World Bank and IMF Spring Meetings
World Bank Apr 29, 2003
The joint World Bank and IMF Development Committee and the IMF’s International and Finance Committee held meetings in Washington on April 12-13. The schedule of events, the agenda, issue briefs, final communiqué, and papers.

WTO services: EU proposes to improve trading opportunities giving developing countries a better deal
EU DGT Apr 29, 2003
Today the EU tabled in the WTO a detailed list of sectors where it is offering companies and individuals in third countries further opportunities to offer services in the already very open EU market. Services already accounts for two thirds of EU employment and economic activity, and the further opening of trade in a number of areas, ranging from telecommunications, to banking, insurance, environmental services or distribution will contribute to growth and employment in the EU. At the same time, the EU offer should encourage other WTO Members to table ambitious offers. A particular focus of the offer aims to give developing countries a better deal especially in sectors of interest for them via the temporary entry of foreign nationals into the EU to provide services. “Services are an essential part of both developed and developing country economies and therefore vital to making the Doha Development Agenda really worthy of the name. This EU offer is a substantial one," EU Trade Commissioner Pascal Lamy said, "it contains real improvements for foreign services providers in terms of access to the EU market and takes particular account of developing countries’ interests.”

US-S'pore FTA 'not all about economics'
ST Apr 29, 2003
When Singapore's Trade and Industry Minister George Yeo addressed the United States Chamber of Commerce yesterday on the upcoming US-Singapore Free Trade Agreement (FTA), he told them the deal was not all about money and business.

Brazil returns successfully to bond markets
FT Apr 30, 2003
Brazil has returned to the international capital markets, confirming its financial rehabilitation under president Luiz Inácio Lula da Silva.

Three Faces of Globalization Recommended! Wall Street Journal Subscription Required
Franklin Levin (AWSJ) Apr 30, 2003
Terrorism, pandemics, and commerce are the three faces of globalization. All thrive on open borders, convenient travel, and international communication.

Development Central Issue To Market Access Talks
BRIDGES Weekly Trade News Digest - Vol. 7, Number 15 Apr 30, 2003
Convergence over how to structure negotiations on market access for industrial goods continued to elude countries as they met for a 14-16 April meeting of the WTO's Negotiating Group on Non-agricultural Market Access last week. With a 31 May deadline looming for the group to agree on a framework for negotiations on market access for non-agricultural products, many are now sceptical that Members have enough time or political will to reach agreement on how to proceed.

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