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July 2005 Archives


G8 cancellation of World Bank, IMF debt: "step forward"
Bretton Woods Update 46 Jun/Jul 2005
This latest edition features an article on the recent G7 finance ministers (the G8 minus Russia) agreemeent to write off $40 to $55 billion of debts owed to the World Bank, IMF and African Development Bank (AfDB) in a meeting in London. It discusses debates on the direction of the World Bank following a recent report from the Bank's evaluation department assessing its contribution to growth and poverty reduction. A dividing line is increasingly being drawn between advocates of economic growth driven by big infrastructure and those defending re-distribution through the provision of social services, and also features an article written by Ezequiel Nino, of Asociacion Civil por la Justicia y la Igualdad in Argentina, on the World Bank's International Centre for the Settlment of Investment Disputes (ICSID).

If farm subsidies ended: Consequences not clear
IHT Jul 1, 2005
Farmers say they are responsible not only for producing food but also for maintaining the storied charms of Europe's countryside.

Senate Approves Free Trade Pact
Edmund L. Andrews (NYT) Jul 1, 2005
After a bitter and prolonged battle, the Senate voted 54 to 45 to approve the Central American Free Trade Agreement.

What's Behind the Trade Deficit Numbers?
Antony P. Mueller (Mises Daily) Jul 1, 2005
Every month, so the numbers show, the U.S. is getting deeper into debt. Each trade deficit needs external financing. Thus with each monthly figure that shows a deficit in foreign trade, the U.S. foreign investment position is deteriorating.

CNOOC-Unocal deal might ease pressure on yuan
AT Jul 2, 2005
Chinese experts argue that a successful purchase of Unocal by CNOOC might reduce the pressure to revalue the yuan in the short term as it would require China to spend down some of its US dollar reserves, indirectly weakening the yuan. However, US opposition to the deal is mounting.

Africa at the Summit
NYT Jul 3, 2005
President Bush should grasp the opportunity to improve the life prospects of millions of human beings.

Tone Deaf on Africa Recommended!
William Easterly (NYT) Jul 3, 2005
Big plans to end poverty in Africa miss the critical elements of feedback and accountability.

Helping poor 'a lifetime's work'
BBC Jul 3, 2005
Ending poverty in Africa will not be achieved during one G8 summit but will take a lifetime, says Gordon Brown.

A global and musical shout for Africa aid
IHT Jul 4, 2005
Hundreds of thousands of people gathered here and in nine other spots around the world for free concerts meant to persuade world leaders to give more money to fight poverty in Africa.

Why turn a blind eye to tyranny?
IHT Jul 4, 2005
The Group of 8 leaders should take Ethiopia's example as a reminder that their efforts to fight poverty in Africa must be accompanied by an equally serious effort to address the human rights abuses responsible for so much of the continent's misery.

Protection is Like War
Gary Galles (Mises Daily) Jul 4, 2005
Much of what we know is by analogy, because, as Jacob Bronowski put it, “at the basis of human thought lies the judgment of what is like and what is unlike.” Analogies are so important in extend­ing under­stand­ing and expressing ideas that William James said, “A native talent for perceiving analogies is reckoned . . . as the leading fact in genius of every order.”

The G8 summit: The G8's African challenge
Economist Jul 4, 2005
Help for Africa will be high on the agenda of the G8 summit in Gleneagles this week. But it is not clear that debt relief, or even substantially increased aid flows, will be enough to produce success where so many previous development efforts have failed.

IMF work program Adobe Acrobat Required
IMF Survey Jul 4, 2005
Plus: Executive Board discusses debt relief; Economic reform in Switzerland; African trade arrangements; Euro adoption; World Economic Outlook: global imbalances; Parliamentarians meet in Vienna, Austria; Marriage and inequality.

Bush gives no sign of relenting for G-8
IHT Jul 5, 2005
The leaders of the G-8 are to discuss climate change and relieving Africa's impoverishment.

The needs of Asia's poor are being overlooked, UN report warns
IHT Jul 5, 2005
They are being neglected, the report says, because the dynamism and success of countries like China and India, which boast the world's highest rates of economic growth.

Cutting Through the Fog at Gleneagles Wall Street Journal Subscription Required
George Melloan (WSJ) Jul 5, 2005
Blair's G-8 summit agenda shows he has big plans for climate control and African poverty; carrying his plans out is another matter.

African leaders seek end to debt
BBC Jul 5, 2005
Delegates at the African Union summit in Libya prepare a final declaration urging debt cancellation.

It's Never Enough
N. Joseph Potts (Mises Daily) Jul 6, 2005
The Group of Eight finance ministers will meet this week in Perthshire, Scotland to address various weighty financial decisions that their governments have expropriated from the more-capable hands of their citizens. Thanks in part to the globally choreographed performances of dozens of famous, caring, and would-be-famous-and-caring rock stars, the G-8—a group, not of countries, but of governments of countries—are being cajoled to “make poverty history” by…by…it isn’t very clear, but it involves a lot of things, most of all money.

A Checklist for Development Economists
Globalist Jul 6, 2005
What steps should economists take to help repair developing world economies?

Africa and Globalization
Globalist Jul 7, 2005
Why is the G8's focus on Africa a good time for self-reflection on the continent?

Democrats and Cafta Wall Street Journal Subscription Required
WSJ Jul 7, 2005
Where's Bill Clinton when you need him?

The Coming Trade War, Part 3 : Trade in the age of overcapacity
Henry C K Liu (AT) Jul 8, 2005
Neo-liberals have created a false dichotomy between so-called command economies and market economies. With the CNOOC-Unocal controversy, ideologue fantasy is once again clashing with harsh reality as the US on the one hand relies on China to relieve its overcapacity problem while on the other it fears for its national security.

How Africans See the Initiative to Help the Continent Recommended!
Bashir Goth (Khaleej Times) Jul 8, 2005
Africans worry that aid from the G-8 will be channeled into their corrupt leaders' back accounts

G8 leaders agree $50bn aid boost
BBC Jul 9, 2005
Prime Minister Tony Blair says the G8 has agreed a $50bn (£28.8bn) aid boost as leaders sign the communique. Full story:

G-8 claims some progress on aid and global warming
IHT Jul 9, 2005
Agreements included commitments to double aid to Africa by 2010.

WP Jul 9, 2005
Expectations for what could be achieved at this week's Group of Eight summit in Scotland were too high, as they often are. A three-day meeting between the leaders of the richest Western economies and Japan, plus Russia, is never a substitute for the years of negotiation that are needed.

Why I Oppose CAFTA
Sander Levin (WP) Jul 11, 2005
As the congressional debate over the Central American Free Trade Agreement (CAFTA) moves front and center, we should not lose sight of what the argument is about -- and what it is not about.

The price of free trade
Jeffrey Robertson (AT) Jul 12, 2005
Economic sanctions have a long and sordid history of ineffectual political interference in international commerce - diverting trade, harming domestic producers and exporters, and creating economic inefficiencies. Asia's free trade agreements, with similar discriminatory trade measures, could end up having the same effect.

The New Protectionism?
Peter Mandelson (Globalist) Jul 12, 2005
Will competition cause the United States and Europe to follow protectionist policies?

Threat to US economy is Washington, not Beijing
Jephraim P Gundzik (AT) Jul 14, 2005
The increasing politicization of economic relations between Washington and Beijing poses a significant threat to the US economy. A shift toward protectionism, rather than supporting the economy, as intended, is likely to push US inflation and interest rates higher and economic growth lower.

Cafta Is the American Way Wall Street Journal Subscription Required
Henry M. Paulson, Jr. (WSJ) Jul 14, 2005
Cafta would give U.S. producers an equal footing to sell their goods.

Quit Bullying China
RObert Barro (BW) Jul 14, 2005
If the U.S. would stop its hectoring, China would probably revalue.

Oil and the yuan
Wu Lei and Liu Xue-Jun (AT) Jul 15, 2005
Despite the vast amounts of ink spilled writing about high oil prices and a possible yuan revaluation, few have attempted to relate the two. Though a stronger yuan would increase China's purchasing power, allowing it to buy more oil, paradoxically, this would exacerbate tight supply conditions in the long run and damage the very countries now advocating revaluation.

All Rock, No Action
Jean-Claude Shanda Tonme (NYT) Jul 15, 2005
Live 8, that extraordinary media event that some people of good intentions in the West just orchestrated, would have left us Africans indifferent if we hadn't realized that it was an insult both to us and to common sense.

A New Latin Consensus
Marcela Sanchez (WP) Jul 16, 2005
In 1989 economists in North and South America developed a formula to rescue Latin America from the "lost decade" of the 1980s. At the time, a huge foreign debt crisis coupled with triple-digit inflation had driven living standards back to the levels of the 1970s.

Bush Says CAFTA Will Save Jobs
WP Jul 16, 2005
President Bush traveled to the heart of North Carolina's fast-shrinking textile manufacturing belt Friday to urge Congress to pass the Central American Free Trade Agreement, a deal that he said would stem the job losses that have plagued the industry.

America's Truth Deficit
William Greider (NYT) Jul 18, 2005
During the cold war, as the Soviet economic system slowly unraveled, internal reform was impossible because highly placed officials who recognized the systemic disorders could not talk about them honestly. The United States is now in an equivalent predicament. Its weakening position in the global trading system is obvious and ominous, yet leaders in politics, business, finance and the news media are not willing to discuss candidly what is happening and why. Instead, they recycle the usual bromides about the benefits of free trade and assurances that everything will work out for the best.

G8 debt proposal Adobe Acrobat Required
IMF Survey Jul 18, 2005
Plus: Bernes on IEO challenges; Armenia takes off; Eurosclerosis; Expenditure uncertainties; Worker remittances; Beating the business cycle; Governance reform and aid coordination.

Trade Is a Two-Way Street Wall Street Journal Subscription Required
Robert A. Mosbacher (WSJ) Jul 19, 2005
Many forget that several U.S. companies have made investments in China -- often much bigger than the one proposed by Cnooc.

The battle for Unocal -Globalist-nationalist conflict
Jeff Moore (AT) Jul 20, 2005
The furor created by CNOOC's bid for Unocal has revealed a growing conflict between pro-globalization forces and economic nationalists within the US government, says Michael A Weinstein. But why does CNOOC want Unocal so much, anyway? The answer to that lies within - actually under - Thailand, Myanmar, Indonesia and Vietnam, where Unocal's projects are producing massive amounts of oil and natural gas.

In the Globalization Age, Nations Matter Wall Street Journal Subscription Required
Robert J. Samuelson (WSJ) Jul 20, 2005
The real question about globalization is whether nations can fashion a system that works for everyone.

WTO probes EU-US air trade battle
BBC Jul 21, 2005
The world's most complex trade row formally begins, as the World Trade Organization probes rival planemakers Airbus and Boeing.

China's currency: How far will it go? Economist Subscription Required
Economist Jul 21, 2005
China said it will stop pegging its currency to the dollar and tie it to a basket of currencies instead, in a highly managed float, thus revaluing the yuan. American politicians have exerted strong pressure on the Chinese to make such a move, but are likely to be disappointed by its small scale.

Revaluation: A Double-Edged Sword for China
Xu Haihui (FT/YaleGlobal) Jul 21, 2005
China's decision to revalue the renminbi will have diverse effects.

China eases peg of yuan to dollar
IHT Jul 22, 2005
The change in the value of the Chinese currency was minor, valuing the dollar at 8.110 yuan.

China Revalues the Yuan
NYT Jul 22, 2005
China's currency revaluation should be good for international trade relations if the United States can rise to the occasion.

China's Currency Bow Wall Street Journal Subscription Required
WSJ Jul 22, 2005
Will the protectionists now shut up?

An Inevitable Revaluation Wall Street Journal Subscription Required
Stephen Green (WSJ) Jul 22, 2005
The move signals the start of a long-term appreciation of the yuan.

China's Currency Move
WP Jul 22, 2005
The United States and China are at loggerheads on several fronts: China's military buildup, its piracy of intellectual property, its human rights abuses. But one potential flash point has been managed successfully so far, to the credit of the Bush administration. Treasury Secretary John W. Snow has persuaded Congress to shelve bad legislation that would slap tariffs on China to punish it for maintaining an undervalued currency. Meanwhile, Mr. Snow has urged the Chinese to reform their currency policy for their own good. Yesterday China took a first step in that direction, abandoning a decade-old policy of pegging the yuan to the dollar.

Ringgit gains after dumping the dollar
AT Jul 23, 2005
Malaysia quickly followed China's revaluation by shaking off the ringgit's dollar peg, sparking enthusiasm among investors. On the very first day of its new peg to a currency basket, the ringgit opened half a percent up against the dollar, but dealers anticipate further rises.

CAFTA Deserves To Pass
WP Jul 25, 2005
This week the administration aims to jam the Central American Free Trade Agreement through the House, having already secured Senate passage. Rep. Sherrod Brown, the Democrats' chief CAFTA blocker, has stated his party's ground for resistance, including in a Post op-ed on May 31.

Classical Theory vs. the Real World Wall Street Journal Subscription Required
Amar Bhide & Edmund Phelps (WSJ) Jul 25, 2005
Should the Bush administration continue to press China for a more substantial revaluation?

Trade and Guts Wall Street Journal Subscription Required
Supachai Panitchpakdi (WSJ) Jul 25, 2005
WTO negotiators must either narrow their differences on key trade issues or prepare for tense negotiations this fall.

Don't Get So Excited About the Yuan Wall Street Journal Subscription Required
Jonathan Anderson (WSJ) Jul 25, 2005
The gulf between perception and reality on the currency issue is often enormous.

The Stakes in CAFTA
WP Jul 26, 2005
The House is getting ready to vote on the Central American Free Trade Agreement (CAFTA), a deal that would bind the five nations of Central America plus the Dominican Republic to the U.S. economy. From a commercial standpoint, it's curious that most Democrats in the House resist the agreement.

China's Devalued Concession
Robert Samuelson (WP) Jul 26, 2005
Let's be clear. The central problem of the exploding trade imbalances between China and the United States -- and China and the rest of the world -- is not the exchange rate. It is the addiction of China, following the pattern set by Japan and other Asian countries, to export-led economic growth.

Hold the Cheers for China's Yuan Decision
George Melloan (WSJ) Jul 26, 2005 Wall Street Journal Subscription Required
When politicians mess around with currency relationships, they usually make a mess.

Is the Euro Forever?
Grant Nülle (Mises Daily) Jul 26, 2005
Leaders of European Union member states have been reeling from the double rejection of the proposed European Constitution by two of the six founding members, the Netherlands and France. Given a chance to express their opinion on “ever closer union,” for the first time in over a decade and ever, respectively, French and Dutch voters spurned the controversial text against the wishes of their countries’ political, media and commercial elite.

Flexible yuan gives China a 'rusty lever'
AT Jul 27, 2005
Chinese experts continue to suggest positive effects from last Thursday's yuan revaluation, including a restoration of the long-dormant currency policy lever to the government, and stronger incentives for Chinese manufacturers to innovate rather than compete on price alone.

IMF chief draws fire over style as leader
IHT Jul 27, 2005
Critics say Rato's term has lacked direction, leaving both his own role at the IMF and the Fund's role in the world fairly undefined.

Cafta's Benefits Wall Street Journal Subscription Required
WSJ Jul 27, 2005
The 'loss of sovereignty' and other myths.

Appreciation Has Its Limits Wall Street Journal Subscription Required
Fang Xinghai (WSJ) Jul 27, 2005
But American politicians will still ask for more.

Heavy metal
Economist Jul 27, 2005
Copper hit an all-time high this week, after China announced plans to revalue the yuan. Why?

Time Running Out For Ag Compromise; Groser Delivers Downbeat Assessment
BRIDGES Weekly Trade News Digest - Vol. 9, Number 27 Jul 27, 2005
With the end-July deadline for reaching "first approximations" on agriculture rapidly approaching, negotiators met all week and over the weekend to find common ground. Between 21 and 26 July, agriculture Chair Tim Groser held consultations with key delegates covering all three pillars of the negotiations (market access, domestic support and export competition).

No Results On S&D Despite Marathon Negotiations
BRIDGES Weekly Trade News Digest - Vol. 9, Number 27 Jul 27, 2005
WTO Committee on Trade and Development special (negotiating) session (CTD-SS) Chair Faizel Ismail (South Africa) announced on 27 July that "several issues remain unresolved" on special and differential treatment (S&D) for developing countries, rendering it "impossible... to make specific recommendations" to the General Council (GC) meeting on 29 July.

Hope Disappearing For July Deal
BRIDGES Weekly Trade News Digest - Vol. 9, Number 27 Jul 27, 2005
Days of intensive informal consultations held by the Chairs of the WTO negotiating groups on agriculture, development, and non-agricultural market access (NAMA) in an effort to reach at least some common ground among Members before an end-July target date for progress in the Doha Round negotiations appear to have largely failed (see related stories, this issue). Many delegations seem to have given up hope that anything significant will emerge from the July General Council (GC) meetings, and are turning their attention instead on December's Ministerial Conference in Hong Kong.

House Approves Free Trade Pact
Edmund L. Andrews (NYT) Jul 28, 2005
The House narrowly approved the Central American Free Trade Agreement in one of the year's hardest-fought legislative battles.

Winners of Free Trade Wall Street Journal Subscription Required
WSJ Jul 28, 2005
Asian garment-producers are responding to the Chinese challenge by honing their own competitive advantages.

The United States and Globalization
Globalist Jul 28, 2005
How is the United States dealing with being the face of globalization?

Applauding the Cafta 15
NYT Jul 29, 2005
Anyone who believes that the benefits of free trade outweigh those of protectionism should give a pat on the back to the Democrats who voted for the Central American Free Trade Agreement.

Currency Wars Wall Street Journal Subscription Required
Ronald I. McKinnon (WSJ) Jul 29, 2005
Yuan appreciation could unhinge China's economy.

It's Not the End Of the Oil Age
Daniel Yergin (WP) Jul 31, 2005
Technology and Higher Prices Drive a Supply Buildup.

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