News & Commentary:

October 2005 Archives


World Bank support for extractives: complicity in human rights violations Recommended!
Bretton Woods Update No.47 Sep/Oct 2005
Plus: UK cuts through World Bank spin on conditionality; Fund economists whistle different trade tune; Climate change and the World Bank: dubious green credentials; and IMF accused of exacerbating famine in Niger.

Hundred-Dollar Oil
James Hamilton (Atlantic Monthly) Oct 2005
Where do you think oil prices will be next year? Go ahead, pick a number—any number—and you can probably find an expert somewhere who agrees with you. Andy Xie, the chief Asian economist for Morgan Stanley, says oil prices are about to collapse—recent prices of about $60 a barrel are far too high to last. The oil analyst Matthew Simmons says hogwash—we'll soon be paying $100 a barrel. Other pundits have staked out much of the wide real estate between those predictions.

Sizing the emerging global labor market Recommended!
McKinsey Quarterly 2005, No. 3 Aug/Oct 2005
Rational behavior from both companies and countries can help it work more efficiently.

China's Global Hunt for Energy
David Zweig and Bi Jianhai (Foreign Affairs) Sep/Oct 2005
Chinese foreign policy is now driven by China's unprecendented need for resources. In exchange for access to oil and other raw materials to fuel its booming economy, Beijing has boosted its bilateral relations with resource-rich states, sometimes striking deals with rogue governments or treading on U.S. turf. Beijing's hunger may worry some in Washington, but it also creates new grounds for cooperation.

China's "Peaceful Rise" to Great-Power Status
Zheng Bijian (Foreign Affairs) Sep/Oct 2005
Despite widespread fears about China's growing economic clout and political stature, Beijing remains committed to a "peaceful rise": bringing its people out of poverty by embracing economic globalization and improving relations with the rest of the world. As it emerges as a great power, China knows that its continued development depends on world peace -- a peace that its development will in turn reinforce.

Development and Democracy
Bruce Bueno de Mesquita and George W. Downs (Foreign Affairs) Sep/Oct 2005
Conventional wisdom has long assumed that economic liberalization undermines repressive regimes. Recent events, however, suggest that savvy autocrats have learned how to cut the cord between growth and freedom, enjoying the benefits of the former without the risks of the latter. Washington and international lenders should take note.

Here Today, Gone Tomorrow Foreign Policy Subscription Required Recommended!
Foreign Policy Sep/Oct 2005
What are the “endangered species” in our midst? When FP first arrived on the scene in 1970, few would have predicted that, 35 years later, the Soviet Union would have closed up shop, or that the person handling your customer service requests would be sitting in Bangalore. In our 35th anniversary issue, we asked 16 leading thinkers to look ahead to which ideas, values, or institutions that we take for granted may no longer be with us in 2040.

Ranking the Rich 2005 Recommended!
Foreign Policy/CGD Sep/Oct 2005
The third annual CGD/FP Commitment to Development Index ranks the generosity of 21 rich nations on how they help or hinder the poor. The rich hand out vast sums of foreign aid, but they also put up enormous barriers to trade. They selflessly send soldiers to keep the peace, but then sell arms to Third World thugs. In the end, are the rich doing more harm than good?

The Protection Racket Foreign Policy Subscription Required
Arvind Panagariya (Foreign Policy) Sep/Oct 2005
Development activists have finally realized that free trade is not evil. When do they plan to tell the poor?

Japan is Back, For Real This Time Recommended!
Jesper Koll (FEER) Oct 2005
Japan is back as a high-growth economy. A combination of positive cyclical forces and structural changes suggests that an upgrade to the short- and medium- term outlook for the country is in order. Over the next five to 10 years, the Japanese economy’s growth potential is poised to be close to 2.5% —much higher than the 1% to 1.5% estimates commonly proffered by economists. This paves the way for the Japanese economy to become an even more powerful engine of prosperity for Asia.

How do super powers rise?
Juan Eugenio Corradi (Opinion Sur) Oct 2005
There are three golden rules for geopolitics. The first can be formulated in this way: The flag accompanies business. The second rule asserts: the weight of nations, not their intentions, is what counts. The third comes from time-honored political theory and states: the limit of one’s freedom is the freedom of others.

IMF-World Bank Annual Meetings Overview
IMF Survey Oct 3, 2005
Plus: IMF communique; IMF maps out future strategy; Ministers reach debt cancellation deal; IMF's low-income country initiatives; World Economic Outlook (press briefing); Regional Economic Outlook: Sub-Saharan Africa.

The Fund Appears to Be Sleeping at the Wheel
Morris Goldstein and Michael Mussa (FT/IIE) Oct 3, 2005
The US Treasury has warned that the International Monetary Fund appears to be asleep at the wheel on a fundamental responsibility--exchange rate surveillance. This failure to mind exchange rate policy is very unhealthy both for the Fund and the international monetary system. If the IMF does not address this issue soon, others will take up the task. This is apparent in the widespread congressional support for the Schumer-Graham bill, which would impose high US tariffs on Chinese imports to offset the estimated undervaluation of the renminbi. A potential trade war and international chaos lie down this route.

U.S. visit to China will focus on yuan
IHT Oct 4, 2005
The talks in Beijing are expected to determine whether the Bush administration brands China a currency manipulator in a crucial report expected to be released in November.

Looking less omnipotent, headed for more transparency
Economist Oct 4, 2005
Hedge funds are headed for a lot more transparency, and not before time.

Agriculture: Geneva Negotiations Turn To Concrete Numbers
BRIDGES Weekly Trade News Digest - Vol. 9, Number 33 Oct 5, 2005
During the week and a half since high-level talks among key WTO Members in Paris from 22-23 October, Geneva-based agriculture delegates, joined by capital-based officials, have been engaged in intense negotiations on different 'scenarios' for cuts in tariffs and domestic support. The EU and the US tabled ideas for these reductions during their bilateral meeting in Paris; these were now expanded upon and circulated to WTO delegations in Geneva.

WIPO Members Create New Forum To Discuss Development Agenda
BRIDGES Weekly Trade News Digest - Vol. 9, Number 33 Oct 5, 2005
Members of the World Intellectual Property Organization (WIPO) have agreed to establish a "Provisional Committee" to continue discussions on proposals to mainstream a 'development agenda' into all of WIPO's work. The WIPO General Assembly (GA) specified that this committee would hold two one-week sessions and report any recommendations to the next GA in September 2006. The new forum's ability to influence WIPO policy, however, is yet to be determined.

Rules: Anti-Dumping, Fisheries Discussed; Still No Clarity On HK Expectations
BRIDGES Weekly Trade News Digest - Vol. 9, Number 33 Oct 5, 2005
WTO Members focused on anti-dumping (AD) and fisheries subsidies during meetings of the Negotiating Group on Rules from 26-30 September.

Europeans steer away from U.S. trade fight
IHT Oct 6, 2005
European governments were examining moves late Wednesday to suspend state funding to the Airbus A350.

It's the System, Stupid Wall Street Journal Subscription Required
Hugo Restall (WSJ) Oct 6, 2005
The Bush administration squanders its credibility by hectoring on the yuan's value.

Lamy: Trade is “fundamental tool” in fight against poverty
WTO Oct 6, 2005
Director-General Pascal Lamy, in a speech to the UN Conference on Trade and Development in Geneva on 6 October 2005, said that “the bottom line will have to be that trade must act, and deliver, as an engine of GDP growth and development”. He added that “the economic interests and development needs of developing countries lie at the heart of the Doha Agenda”.

America's Bad Trade Example Wall Street Journal Subscription Required
WSJ Oct 7, 2005
Bush's vision of a strong North America depends upon the integrated market being allowed to work.

To save global trade talks, action is needed on agriculture
IHT Oct 7, 2005
After four years of what passes for negotiations, the score card for delivery remains a blank sheet.

The Oil Bubble
WSJ Oct 8, 2005
Seventy dollars a barrel? Relax, it'll come down.

Aumann and Schelling Awarded Nobel Economics Prize
Bloomberg Oct 10, 2005
Robert J. Aumann and Thomas C. Schelling won the Nobel Prize in economics for establishing game theory as the dominant approach to understanding conflict and cooperation between countries, individuals and organizations.

EU faces pressure to open its farm markets after U.S. offer
IHT Oct 11, 2005
The U.S. trade representative pledged to cut farm subsidies by 60 percent over five years.

The Road to Hong Kong Wall Street Journal Subscription Required
WSJ Oct 11, 2005
Welcome progress toward opening up trade.

Globalization Explained to the French
Philip H. Gordon (Le Figaro/Brookings) Oct 11, 2005
The Affaire Danone—the recent panic in Paris set off by rumors that one of France's top food companies was subject to a hostile takeover from PepsiCo—is but the most recent example of France's particular resistance to economic globalization. From sheep farmer José Bové's famous dismantling a McDonald's restaurant in 1999 to the rejection last summer of the supposedly "neo-liberal" EU constitution, the French continue to demonstrate that they have an even tougher time than others in accepting the growing, and inexorable, integration of the world economy.

Doha's Last Chance Wall Street Journal Subscription Required
WSJ Oct 12, 2005
A hopeful sign that Doha may yet further open up world trade.

Outsourcing has a downside for India
Rabindra P Kar (AT) Oct 13, 2005
Outsourcing has been a boon to the Indian economy, with increased employment and a better life for many. But there is a downside - the infrastructure is strained, land and housing prices have shot up and not everyone is benefiting. India needs more diversity.

Winds of Change Wall Street Journal Subscription Required
John Audley (WSJ) Oct 13, 2005
The U.S. adopts a more coherent agriculture policy.

Waking Up to Trade
WP Oct 13, 2005
After months of neglecting global trade liberalization, the Bush administration is returning to the fray. On Monday it unveiled a proposal in the international trade negotiations known as the Doha round to cut farm protectionism in exchange for reciprocal cuts in other countries.

Ag Subsidies On Negotiating Table; Haggling Underway
BRIDGES Weekly Trade News Digest - Vol. 9, Number 34 Oct 12, 2005
Back-and-forth number-based negotiations are well and truly underway in the WTO agriculture talks, with the US and the EU making offers and counter-offers for cuts to subsidies and tariffs, first at a 10 October 'mini-ministerial' meting in Zurich and then in a series of meetings in Geneva.

US, EU Divided On Agricultural Market Access
BRIDGES Weekly Trade News Digest - Vol. 9, Number 34 Oct 12, 2005
The US and the EU are sharply divided on the extent to which they want farm tariffs reduced in the Doha Round WTO negotiations, following three days of high-level meetings in Zurich and Geneva that saw the two economic heavyweights exchange new and revised proposals on agricultural market access.

Brazil Asks for Cross-Retaliation under TRIPS, GATS in Cotton Dispute with US
BRIDGES Weekly Trade News Digest - Vol. 9, Number 34 Oct 12, 2005
Alleging that the US has missed the 21 September deadline to comply with a March WTO ruling on its cotton subsidy programme, Brazil has formally requested the right to retaliate against US patents, copyrights, and services providers. On 6 October, Brazil asked the WTO Dispute Settlement Body (DSB) for permission to suspend obligations under WTO rules on services and intellectual property rights. Members will discuss Brazil's request to impose USD 1.037 billion worth of sanctions at a DSB meeting scheduled for 18 October.

A Dead Heat for Last Place
IHT Oct 14, 2005
Poor countries should refuse to sign onto a new world trade pact until the United States, Europe and Japan drastically cut their farm subsidies.

The Case Against China
Ernest Preeg (Globalist) Oct 14, 2005
Does the United States have any form of redress in its currency dispute with China?

Dispute Over Farm Subsidies Stalls Global Trade Negotiations
WP Oct 16, 2005
Securing a worldwide agreement to cut trade barriers and reduce government subsidies was never going to be easy. Rob Portman knew that when he began his job as U.S. trade representative in May.

Asia and Middle East Regional Economic Outlooks Adobe Acrobat Required
IMF Survey Oct 17, 2005
Plus: Policy Support Instrument; IIE on IMF reform; Financial stability conference; Mozambique's tax reform; Nigeria's pension reform; Chile's pension reform; Why political connections matter.

Trade Makes the World Go Round Wall Street Journal Subscription Required
Per Stig Moller & Thomas Ostros (WSJ) Oct 18, 2005
Globalization is not a zero-sum game. Everyone can be a winner, both globally and nationally.

'Protect Regime Now, Feed People Later'
Shim Jae Hoon (YaleGlobal) Oct 18, 2005
North Korea switches policy on receiving food aid to safeguard the regime.

Bush backs EU efforts to cut agricultural subsidies
IHT Oct 19, 2005
President George W. Bush met Tuesday at the White House with José Manuel Barroso, the European Commission president, and both men offered strong support for efforts to unblock world trade negotiations.

The Charm of the Farm
WP Oct 19, 2005
It's hard to feel passionate about any subject that's shrouded in thick veils of jargon. After a spurt of action last week, the "round" (translation: the global trade negotiations launched four years ago) appears to hinge on the "amber box," "blue box" and "green box" (that is, different kinds of farm subsidies), not to mention "de minimus" payments (meaning payments amounting to billions of dollars). But if the details cause the eyes to glaze over, the stakes in the talks that will resume today are simple. Reformers want to cut the subsidies and tariffs that support the rich world's farmers while ripping off taxpayers, ripping off consumers and ripping off the poor world's exporters. Meanwhile, rich farmers are using their ample political muscle to defend the indefensible.

Agriculture Week: Members Focus On Lagging Market Access Talks
BRIDGES Weekly Trade News Digest - Vol. 9, Number 35 Oct 19, 2005
WTO Director-General Pascal Lamy identified market access as the most divisive area of the agriculture negotiations in his 13 October report to the Trade Negotiations Committee (TNC). Despite a flurry of new proposals on tariff reduction, Members remain deeply divided in this area, and the current 'agriculture week,' which began on 17 October, has focused on market access.

TNC: Lamy Outlines Doha Round Roadmap For Hong Kong And Beyond
BRIDGES Weekly Trade News Digest - Vol. 9, Number 35 Oct 19, 2005
Outlining the steps necessary to bring the Doha Round to conclusion by the end of 2006, WTO Director-General Pascal Lamy cautioned Members on 13 October that even an agreement at the Hong Kong Ministerial Conference in December would leave them with a great deal of work to do.

Members Largely Favourable To New Approach On Small Economies' Problems
BRIDGES Weekly Trade News Digest - Vol. 9, Number 35 Oct 19, 2005
Most WTO Members responded positively to a two-track approach for considering the problems faced by small, vulnerable economies in the multilateral trading system, at a 17 October meeting of the Committee on Trade and Development Dedicated Session -- Small Economies (CTD-DS). A group of 21 Members, most of them sponsors of earlier proposals on the work plan for small economies in the Doha Round, put forward a two-track approach (WT/COMTD/SE/W/14) that would have small economies make proposals on how to address their particular problems directly to the relevant WTO bodies, while the CTD-DS would continue to monitor the progress of these proposals. This approach essentially corresponds to a longstanding demand of many developed countries, a point first conceded by the sponsors of the new paper in a 29 July press release.

Argentina: Land of the Incredible Shrinking Peso Wall Street Journal Subscription Required
Mary Anastasia O'Grady (WSJ) Oct 21, 2005
A lot has changed in Argentina since the 1980s hyperinflation, but much remains the same.

In France, the power of 'terroir'
IHT Oct 22, 2005
The French fondness for the "terroir," the mythical landscape of farms and the men and women who tend to them, is the main reason that French politicians are putting up such a big fight in the global trade talks.

News Analysis: Globalization drives a wedge into EU
IHT Oct 23, 2005
The French government has come to view the EU as a threat to its old ways of life.

Wanted: Fed Chief With Foreign Flair
Businessweek Oct 24, 2005
With so much U.S. debt held overseas, Greenspan's successor must be a diplomat.

Bush nominates new Fed chairman
IHT/NYT Oct 24, 2005
President George W. Bush on Monday nominated Ben Bernanke, his top economic adviser, to replace Alan Greenspan as chairman of the U.S. Federal Reserve Board, handing management of the world's most powerful central bank to a nonideologue who is widely respected by liberals and conservatives.

The Bernanke Standard
WSJ Oct 25, 2005
The Fed nominee inherits his own inflation revival.

Every which way but down
Economist Oct 25, 2005
America's currency has strengthened this year, defying huge current-account and fiscal deficits. The Fed’s new chairman will have a lot to do with whether it continues to rise

Global Imbalances - An assessment
Raghuram G. Rajan (IMF) Oct 25, 2005
The IMF in its latest World Economic Outlook has projected global growth of about 4.3 percent for 2005 and the same for 2006. Even though the overall growth is slightly above trend, there are a number of developments concern us.

China, India Superpower? Not so Fast!
Pranab Bardhan (YaleGlobal) Oct 25, 2005
Despite impressive growth, the rising Asian giants have feet of clay.

Tough flying for the global economy
AT Oct 26, 2005
The global economy is already wobbling under the weight of this year's energy shock. Now it's flying on just two engines, fueled by the American consumer on the demand side and the Chinese producer on the supply side. If the demand engine sputters, added thrust from the supply engine would be devastatingly destabilizing.

Nigeria Wins Debt Relief
CGD Oct 26, 2005
Nigeria and the Paris Club of rich-country creditors have announced a deal that will relieve Africa's most populous country of about $18 billion in debt. The deal caps months of work by Nigerian and creditor nation officials. CGD analysis contributed to the outcome.

Ag: FIPs Ministers' Meet Ends Abruptly; EU To Make New Offer On Market Access?
BRIDGES Weekly Trade News Digest - Vol. 9, Number 36 Oct 26, 2005
The Doha Round negotiations risk collapse, warned the US and the EU on 19 October, after meetings among major trading powers broke down over farm trade reform. The chair of the WTO agriculture negotiations, Ambassador Crawford Falconer of New Zealand, warned Members on 21 October that if they failed to resolve their major differences within ten days, it would be impossible for them to reach agreement at the Hong Kong Ministerial Conference in December.

Market Access Flexibilities Up For Discussion In WTO Farm Talks
BRIDGES Weekly Trade News Digest - Vol. 9, Number 36 Oct 26, 2005
Even as ministerial-level talks between five influential WTO Members fell apart in Geneva last week (see related story, this issue), trade negotiators continued to hold informal meetings. Market access remains a major point of contention, and not just from countries that would like to see steeper reductions in farm tariffs. The group of African, Caribbean and Pacific (ACP) countries made a new market access proposal that highlighted the vulnerability of many developing countries to the unrestrained opening of markets.

TRIPS Council Still Divided On Public Health Amendment
BRIDGES Weekly Trade News Digest - Vol. 9, Number 36 Oct 26, 2005
WTO Members remain divided on how to formally amend the Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPS) in order to facilitate the export of drugs produced under compulsory licence. No substantive discussions took place on the issue during the 25-26 October meeting of the TRIPS council. Members, whose positions are largely unchanged since the last meeting in June, focused on process-related issues. Chair Ambassador Choi Hyuck of Korea suspended the TRIPS Council's session on 26 October. It is set to reconvene on 28 October, when Members will discuss the relationship between the TRIPS Agreement, the Convention on Biological Diversity and traditional knowledge.

Future Shock at the Fed
James Grant (NYT) Oct 26, 2005
It will be the world's dollar holders, not Ben S. Bernanke, who will be changing the way the Fed operates.

Cow Politics
NYT Oct 27, 2005
The developed world could lift 140 million people out of poverty if it really reformed the way it managed agricultural trade.
Claudia Rosett (WSJ) Oct 27, 2005
Corruption and conflicts of interest at the U.N.

Trade Growth in 2005 to Slow from Record 2004 Pace
WTO Oct 27, 2005
Lower economic output, brought on in part by the sharp rise in oil prices, will slow world trade growth in 2005, according to WTO annual publication International Trade Statistics released on 27 October 2005. World merchandise exports are expected to grow by 6.5 per cent in 2005, markedly less than the 9 per cent growth recorded in 2004.

Why is the World Bank Still Lending? Wall Street Journal Subscription Required
Adam Lerrick (WSJ) Oct 28, 2005
The Bank's effort to retain influence with middle-income countries siphons off scarce funds from the poorest.

The Fate of 'Made in the USA'
Robert J. Samuelson (WP) Oct 28, 2005
Globalization puts a question mark for the future of American manufacturing.

Home | Economics | Business & Finance | Politics | Law | ICT | Development | News | Research