News & Commentary:

October 2007 Archives


New IMF head, same legitimacy problem
Bretton Woods Update No.57 Sep/Oct 2007
Plus: Competing to 'light up Africa'; IMF plans to convince not listen; Inside the institutions: The World Bank and financial sector reform; and more.

Democracy Without America
Michael Mandelbaum (Foreign Affairs) Sep/Oct 2007
Freedom is spreading around the world -- less because of Washington than in spite of it.

Smart Samaritans Recommended!
Michael Clemens (Foreign Affairs) Sep/Oct 2007
Is there a third way for development between doing everything and doing nothing?

FPTV: How Do You Defend a Failing State?
FP Sep/Oct 2007
It’s not easy representing one of the world’s most vulnerable nations. Not only must you confront such problems as endemic poverty, entrenched corruption, and ethnic violence, but you have to defend your government from ferocious criticism in the media. To get the other side of the story, FPTV sat down with ambassadors from seven of the worst-performing countries on the 2007 Failed States Index.

The Free-Trade Paradox Recommended!
Moisés Naím (FP) Sep/Oct 2007
Why is trade booming while trade talks are crashing?

How Capitalism Is Killing Democracy Recommended!
Robert B. Reich (FP) Sep/Oct 2007
Free markets were supposed to lead to free societies. Instead, today’s supercharged global economy is eroding the power of the people in democracies everywhere. Welcome to a world where the bottom line trumps the common good and government takes a back seat to big business.

The List: The World’s Largest Hedge Funds
Foreign Policy Sep/Oct 2007
Enormously powerful, the world's hedge funds together hold about $1.5 trillion in assets. But it's not easy to pin down what these secretive, diversified investment firms are up to. In this List, FP looks at the five biggest players and just where these new "masters of the universe" spend their billions.

The Great Leap Backward?
Elizabeth C. Economy (Foreign Affairs/YaleGlobal) Sep/Oct 2007
China has become a leading polluter in the world, with its citizens suffering from air pollution, decreasing supplies of potable water and reckless development. Consumers around the world buy inexpensive goods from China, but do not pay the true costs. The country has environmental laws, but businesses and local leaders ignore them in order to increase jobs and profits. The nation is capable of bold economic and political reform that could slow rampant environmental damage: “China needs leaders with the vision to introduce a new set of economic and political initiatives that will transform the way the country does business,” writes Elizabeth Economy for Foreign Affairs. “Without such measures, China will not return to global preeminence in the twenty-first century.”

Beyond Belief Recommended!
Clive Crook (Atlantic Monthly) Oct 2007
Some economists are beginning to doubt the benefits of free trade. What’s wrong with them?

Asia Drags Down the Free Trade Cause Far Eastern Economic Review Subscription Required
Greg Rushford (FEER) Oct 2007
FTA proliferation in Asia is damaging free trade.

High Noon at the IMF Recommended!
Kenneth Rogoff (Project Syndicate) Oct 2007
This month’s International Monetary Fund (IMF) meetings in Washington will bring together the world’s top finance ministers and central bankers at a critical juncture for the global economy.

Sarkozy and the Euro’s Perfect Storm
Melvyn Krauss (Project Syndicate) Oct 2007
The more French president Nicolas Sarkozy attacks the European Central Bank and the strong euro, the more he is criticized in the European media, by European finance ministers, European Union officials and the ECB itself. The critics are right. The fundamental reason behind France’s current economic weakness is its lack of competitiveness even in other euro-zone economies where the euro is not a factor.

Surviving the Great Capital Flood
Simon Johnson and Jonathan D. Ostry (Project Syndicate) Oct 2007
Despite recent financial market turbulence, the underlying dynamic of the world economy remains essentially unchanged. The big issue is not how to deal with a downturn, but rather how to sustain today’s global boom and the capital flows that go with it. With the world expected to continue growing rapidly, there are excellent investment opportunities that will be funded only if capital continues to move into countries that can use it productively.

Paving the Road to Growth
Bjørn Lomborg, Julio Gonzalez , Jose Luis Guasch and Tomas Serebrisky (Project Syndicate) Oct 2007
The extreme poor in Latin America’s rural communities live five kilometers or more on average from the nearest paved road – almost twice as far as non-poor rural households, resulting in difficult and very costly access to markets and needed services. Moreover, poor transport undermines Latin America’s international competitiveness. More than half of Latin American firms consider poor infrastructure to be a major obstacle to the operation and growth of their business.

Reforming the IMF Recommended!
John Morgan (EV) Oct 2007
A radical proposal to sell voting rights at the IMF and redistribute power through market mechanisms instead of by formula.

Goodbye to Going It Alone
Joseph S. Nye (Project Syndicate) Oct 2007
There have been several recent proposals to make multilateralism more effective. While none of them is perfect, they all reflect a new understanding that countries cannot address most of the serious challenges they face today – problems like climate change, pandemics, financial stability, and terrorism –by acting alone.

The Dark Matter of Financial Globalization Recommended!
Nouriel Roubini (Project Syndicate) Oct 2007
It is now clear that allowing banks and other financial institutions to collect fees for mortgage-related transactions while offloading the credit risk was a recipe for reckless lending. So reforms are needed to address the negative effects – including increased systemic risk – of financial liberalization, and to prevent financial turmoil from causing severe economic damage.

The Nobel Message
Jeffrey D. Sachs (Project Syndicate) Oct 2007
The Nobel Peace Prize awarded to the UN's Inter-Governmental Panel on Climate Change sends a powerful message about the importance of global scientific efforts in addressing the challenges of the twenty-first century. Now that effort should be extended to for other global challenges, including the global loss of biodiversity, desertification, and over-fishing of the oceans.

Helping Globalization’s Hardest Hit
Lee Hudson Teslik (CFR) (2007)
The United Auto Workers hadn’t staged a national walkout in nearly three decades, so the union’s September 2007 strike against General Motors was no small event, even if it lasted only two days. If the strike secured a “model deal,” as the Washington Post put it, it also highlighted the intense fears of U.S. workers over their uncertain role in a globalizing economy. Presidential candidates, too, seem on edge about trade, as do a growing number of U.S. businesses. As a recent Foreign Affairs article notes, while globalization has brought “huge overall benefits,” its convulsive job-market side effects also spur protectionism and fears over falling wages.

Fair Trade in Bloom
NYT Oct 2, 2007
Major corporations are rushing to meet the growing demand for food products that adhere to social and environmental standards.

Everyone Pays, in Dollars
NYT Oct 2, 2007
The public and policy makers must realize that the economic vulnerabilities of a weaker dollar are self- inflicted -- and that the responsibility for fixing them lies squarely with Washington.

Combating Corruption Wall Street Journal Subscription Required
WSJ Oct 2, 2007
On the link between corruption and poverty.

Don't Bank on the ADB Wall Street Journal Subscription Required Recommended!
William R. Easterly (WSJ) Oct 2, 2007
Its day has passed, if it ever had one.

Is the United States Headed for Double Bubble Trouble? Recommended!
Richard Baldwin (VoxEU) Oct 2, 2007
As the dollar has started to slide, the question is: how far, how fast? This column, which is based on Paul Krugman's recent Economic Policy article, suggests the answers are: pretty far and pretty fast.

Social attitudes and economic development:L An epidemiological approach
Yann Algan & Pierre Cahuc (VoxEU) Oct 2, 2007
What are the fundamental causes of differences in income per capita across countries? Although there is still little consensus on the answers to this question, it is often argued that social attitudes such as trust are one of the main determinants of economic development.

Africa's Ocean Of Need
WP Oct 3, 2007
One of the most uncomfortable and encouraging conversations I've ever had took place a few years ago at an overcrowded AIDS testing clinic in Addis Ababa, Ethiopia.

Trade and Security Trump Democracy in Burma - Part I
Bertil Lintner (YaleGlobal) Oct 3, 2007
Neighboring countries have leverage, but trade and strategic factors dictate that they remain silent about repression.

WIPO Adopts Development Agenda, But Faces Budget Row
BRIDGES Weekly Trade News Digest - Vol. 11, Number 33 Oct 3, 2007
Members of the World Intellectual Property Organisation on 28 September adopted a 'development agenda', approving a set of reform proposals aimed at placing development concerns at the heart of the institution's work.

NAMA Talks Still Focused on 'Non-Core' Issues, As Clock Continues to Tick
BRIDGES Weekly Trade News Digest - Vol. 11, Number 33 Oct 3, 2007
The Doha Round talks on liberalising trade in industrial goods continue to proceed at a snail's pace, despite a warning from the chair of the negotiating committee that time is running out for Members to reach an agreement.

Services Chair to Consult With Members on Whether to Draft a Text
BRIDGES Weekly Trade News Digest - Vol. 11, Number 33 Oct 3, 2007
The chair of the Doha Round services negotiations is set to start meeting with WTO Members to determine whether to issue a draft text setting out parameters to guide the process of liberalisation, as well as what might go into such a document.

UNDP Comes Clean Wall Street Journal Subscription Required
WSJ Oct 4, 2007
To be precise: Cambodia does it for them.

Bouncy markets
Economist Oct 4, 2007
The markets seem to think that the credit crisis is over, but they're wrong.

Trade and Security Trump Democracy in Burma - Part II
Salil Tripathi (YaleGlobal) Oct 4, 2007
Human-rights advocates protest outside all the wrong places.

Green has the blues
Economist Oct 7, 2007
What to do about the falling dollar?

Doha or Die Wall Street Journal Subscription Required
WSJ Oct 8, 2007
Will Brazil and India kill global trade talks?

The consensus for free trade among economists — has it frayed? Recommended!
Jagdish Bhagwati (WTO) Oct 8, 2007
Alan Blinder focuses on online outsourcing of services in his own writings as also in the present debate organized by Ben Friedman; but the issues raised are far more general for free trade itself, and have been advertised as such by the media. So, for both analytical and public-policy reasons, I cast my own contribution very wide, putting Blinder’s arguments into necessary perspective.

Emerging economies’ debt contingent on world real interest rates
Bernardo Guimaraes (VoxEU) Oct 8, 2007
Emerging nation debts are desirable for moving capital from richer to poorer countries, where it is relatively scarce. However, debt crises in emerging nations have negative effects on the global financial system. New research suggests that if emerging economies’ debt payments were negatively related to the world real interest rates prevailing on the maturity of their debt contracts, the risk of default and its volatility would be significantly reduced. A switch to such debt contracts would decrease the incidence of sovereign debt crises.

Bravo, Costa Rica Wall Street Journal Subscription Required
WSJ Oct 9, 2007
A victory for free trade.

Don't Cry for Free Trade Recommended!
Jagdish N. Bhagwati (FT/CFR) Oct 9, 2007
Turn to the leading U.S. newspapers these days and you will read about the "loss of nerve," even "loss of faith," in free trade by economists. Presidential candidates often cite a "lack of consensus" among economists as an excuse to deflect challenges from free trade proponents. Jagdish Bhagwati argues that, when examined in a historical perspective, it is clear free trade is alive and well among economists.

EMU and inequality: the facts Recommended!
Giuseppe Bertola (VoxEU) Oct 10, 2007
Empirical research shows that EMU improves economic performance, but is also associated with higher inequality and lower social spending. This casts doubt on the political sustainability of EMU without social-policy integration and much deeper financial market development. Thinking about EMU’s future, it would be wrong and dangerous to disregard the implications for income inequality and its remedies.

How does China compete with developed countries?
Peter K. Schott (VoxEU) Oct 10, 2007
Fear of China’s industry mirrors that of Japan’s in the 1980s when the Japanese were poised to take over the world’s manufacturing and it was the yen that was undervalued. Then as now, competition is painful for US and European firms, but firms don’t stand still. Some fail, others adapt, and the best of them not only survive, they thrive.

In Africa, Prosperity From Seeds Falls Short
NYT Oct 10, 2007
New seeds have spread to a fraction of the land where they could help millions of farmers escape poverty.

U.S. Affects a Strong Silence on Its Weak Currency
NYT Oct 10, 2007
As Washington officials react with almost contented silence to a weak dollar, European officials are grumbling because it makes American exports cheaper in world markets.

Learning How to Cope with Capital Inflows
IMF Survey Oct 10, 2007
The strong increase in net private capital inflows to emerging market economies over the past few years is proving to be a mixed blessing.

Skills Key to Adapt to Globalization
IMF Survey Oct 10, 2007
While strong economic growth has made most people better off in absolute terms, globalization is often blamed for the widening gap between rich and poor.

How to Lock In Global Growth
IMF Survey Oct 10, 2007
During 2004-2006, the world economy enjoyed its most rapid growth since the late 1960s and early 1970s.

Clash over NAMA Further Dims Hopes for Doha Deal
BRIDGES Weekly Trade News Digest - Vol. 11, Number 34 Oct 10, 2007
Prospects for a deal in the troubled Doha Round of trade talks grew dimmer still this week, after an acrimonious debate on industrial tariff cuts between a large group of developing countries and the US left some trade diplomats wondering if an agreement was even possible.

WIPO General Assembly Ends In Disarray, Amidst Divisions over Director-General
BRIDGES Weekly Trade News Digest - Vol. 11, Number 34 Oct 10, 2007
The World Intellectual Property Organization's annual General Assembly ended in disarray on 4 October, with member governments unable to agree on a new budget or future revenue streams for the institution, amidst divisions on whether Director-General Kamil Idris should resign.

After Long Delay, US Notifies 2002-2005 Ag Subsidies to WTO
BRIDGES Weekly Trade News Digest - Vol. 11, Number 34 Oct 10, 2007
The US on 4 October announced that it has notified the WTO of its domestic support payments to farmers for the years 2002 to 2005, with a senior official insisting that Washington had remained within the spending limits imposed by its obligations to the global trade body.

Learning How to Cope with Capital Inflows
IMF Survey Oct 10, 2007
The strong increase in net private capital inflows to emerging market economies over the past few years is proving to be a mixed blessing.

IMF Fuels Critics of Globalization
WSJ Oct 10, 2007
The International Monetary Fund's (IMF) findings published in its semiannual World Economic Outlook confirm the work of other economists that technology and foreign investment are worsening income inequality world wide. The report is an unusual admission of the demerits of globalization. Their research found that although the overall wealth increased through globalization, the income of lower-income workers has risen in the past two decades, but at a slower rate than for higher-skilled workers in a great majority of countries, resulting in a widening of income disparity. The lesson for policy makers would be to expand investment in education that would allow low income and less-skilled groups to capitalize on the opportunities from technology and investment. The economic theory suggests that increased trade and investment should reduce income in developing countries because as more low-skilled jobs moved from the developed including the U.S. to developing countries, demand and wages of workers increase in developing countries, thereby reducing the income disparity. Since the late 1980s, the IMF has pressured countries to open their borders to foreign investment, technology and trade as a panacea to boost economic growth, and extended loans to nations who followed its prescription. The economics textbook advice that the IMF prescribed was not borne by facts. Countries in Latin America, Asia and East Europe that began to liberalize their economies experienced a widening income disparity. Sub-Saharan Africa is an exception perhaps because many African civil wars may have destroyed the wealthy classes. Political resentment, anti IMF and anti-globalization backlash developed in many parts of the world that have followed the fund's advice, and its movement has become a political barrier to further liberalization of trade and foreign investment.

Smiling Past Corruption
WSJ Oct 11, 2007
How the World Bank winked at bribery, and worse, in Cambodia.

The Chinese Scapegoat Wall Street Journal Subscription Required
WSJ Oct 11, 2007
The Europeans jump on the "revaluation" bandwagon.

As euro strengthens, fewer Swiss venture across German border
IHT Oct 11, 2007
The slide of the Swiss franc has prompted the Swiss to cut back on what they used to spend on shopping trips to Germany.

Europe Must Look East to Deal with the Euro
C. Fred Bergsten (Peterson Institute/FT) Oct 11, 2007
The euro has recently hit a succession of record highs against the dollar. A number of European leaders, including Nicolas Sarkozy, the French president, and Jean-Claude Juncker, chairman of the group of 13 eurozone ministers, have called on the United States to take action to halt the trend. The issue will be high on the agenda of the forthcoming Group of Seven leading industrialized nations and International Monetary Fund meetings in Washington. The eurozone should look to Beijing rather than Washington, however, if it wants to avoid the costs to its economies of a much stronger currency.

Free-Trade Fight Reflects Broader Battle
WP Oct 12, 2007
Renewal of Costa Rica Pact Protracted Tensions Over Control of U.S. Foreign Policy.

In Search of Common Sense
Bo Ekman (YaleGlobal) Oct 12, 2007
The Tallberg Foundation offers global governance for an increasingly interdependent world.

: Meetings to Focus on Growth, IMF Reforms
IMF Survey Oct 12, 2007
Finance ministers and central bank governors from around the world gather in Washington October 20-22 for the IMF-World Bank Annual Meetings amid conflicting signs about prospects for the global economy and renewed pressures for IMF reform.

Gore and UN panel are awarded Nobel Peace Prize
IHT Oct 12, 2007
The Nobel citation said Friday that Gore "is probably the single individual who has done most to create greater worldwide understanding of the measures that need to be adopted" on global warming.

Trade surplus puts pressure on inflation in China
IHT Oct 12, 2007
The Chinese trade surplus rose 56 percent in September to $23.9 billion, adding pressure for higher borrowing costs and a stronger yuan.

Merrill painfully learns the risks of managing risk
IHT Oct 12, 2007
In July, Merrill Lynch reported a solid second quarter. Profit was up 31 percent over the previous year and essentially flat from the prior quarter. The chief executive, Stanley O'Neal, sent a memorandum to employees outlining risks he saw in the economy and praising performance.

Banks May Pool Billions to Avert Securities Sell-Off
NYT Oct 14, 2007
Several of the world's biggest banks are in talks to put up about $75 billion in backup financing that could be used to buy risky mortgage securities and other assets.

As Angola booms, poverty persists for mos
IHT Oct 14, 2007
Thanks to its surging oil production, Angola's economy has one of the fastest growth rates in the world. But Angolans, by many indications, remain as poor as ever.

The Cotton Club
WSJ Oct 15, 2007
A left-right coalition takes on the worst subsidy for the rich.

Thinking Big on Global Warming
Fred C. Ikle & Lowell Wood (WSJ) Oct 15, 2007
There may be a much easier way to mitigate the greenhouse effect.

A Booster for the World Bank
Sebastian Mallaby (WP) Oct 15, 2007
The presidential corner office at World Bank headquarters has undergone serial changes. Under the master networker, James Wolfensohn, it was a gallery of faces: Yard upon yard of windowsill was forested with trophy photographs. Under the ex-Pentagon man, Paul Wolfowitz, the photos gave way to an ornamental Indonesian dagger. Now comes the workaholic Robert Zoellick. Forget photographs and ornaments; the windowsill is covered with meticulously stacked files.

3 Americans to share Nobel prize in economics
IHT Oct 15, 2007
The economists work in mechanism design theory, which looks at situations in which markets do not work properly.

Inequality in India and China: Is Globalization to Blame?
Pranab Bardhan (YaleGlobal) Oct 15, 2007
Internal forces, technological change and problematic policies spur growing inequality.

Will Bob Zoellick Be a Good World Bank President--Or a Great One? Recommended!
Nancy Birdsall (CGD) Oct 15, 2007
Robert Zoellick is off to a good start at the World Bank, as Sebastian Mallaby notes today in his Washington Post column. Bank staff are delighted with his policy pragmatism and World Bank boosterism—the view that the bank can be all things to all shareholders and stakeholders, continuing to do everything it has always done—but more so and better so. In his first Annual Meeting speech he also managed to be all things to all listeners. Mallaby and others heard him emphasize helping the losers on the dark side of globalization, while the Wall Street Journal heard him promote free trade (subscription required), though as my colleague Lawrence MacDonald noted in his report on the speech, "Zoellick never once uttered the phrase 'free trade' in the speech, although he did of course describe how the bank tries to help poor countries benefit more from trade, for example, by helping countries improve ports and meet global standards."

Dollar sinks as IMF chief says greenback overvalued
Times Oct 16, 2007
The dollar sank further against sterling and the euro yesterday as the managing director of the International Monetary Fund said that the US currency was overvalued.

Market Turmoil Puts Focus on Transparency
IMF Survey Oct 16, 2007
Policymakers face a delicate balancing act in the wake of the market turbulence that rocked financial markets in July and August, according to a senior IMF official.

House of Paulson? Wall Street Journal Subscription Required
WSJ Oct 16, 2007
J.P. Morgan would make the banks write down bad assets. Wall Street Journal Subscription Required

A Market Nobel
Peter Boettke (WSJ) Oct 16, 2007
The economics winners owe a debt to an old debate about why socialism doesn't work.

Free trade agreements and trade liberalisation
Dean A. DeRosa & Gary Clyde Hufbauer (VoxEU) Oct 16, 2007
Global tariff-cutting over the past decade was dominated by preferential trade agreements. These deals stimulate trade among members, but by creating tariff discrimination, they also divert trade from non-members. Recent research suggests that the majority of the world’s preferential deals created more trade than they diverted and so constitute a constructive force in the world economy.

Russian Trade Bully Wall Street Journal Subscription Required
WSJ Oct 17, 2007
Putin's regime can't yet be trusted to play by the rules.

IMF Survey: Emerging Markets Main Engine of Growth
IMF Survey Oct 17, 2007
China is now the single most important contributor to world growth, in terms of both market and purchasing-power-parity (PPP) exchange rates.

Sovereign wealth funds
Richard Portes (VoxEU) Oct 17, 2007
Sovereign wealth funds are politically so hot that they competed with the summer's financial crisis for media attention - both politicians and the press have expressed concern about their activities. Not many corporates have complained, however, and some like Barclays and Blackstone have welcomed sovereign wealth fund investment. How are sovereign wealth funds apt to respond?

Material world
Economist Oct 17, 2007
Oil is not the only commodity on a tear.

Banker, heal thyself
Economist Oct 17, 2007
Banks seek life in the debt markets.

'Encouraging Signs' on Global Imbalances
IMF Survey Oct 17, 2007
Global imbalances remain large, although there are some encouraging signs of moderation, IMF Chief Economist Simon Johnson told a briefing.

EU trade chief calls for aggressive action against China
IHT Oct 17, 2007
Peter Mandelson said the EU should align policy closely with Washington and be ready to take cases against China to the WTO.

Agriculture: 'Degrees' Of Progress, While Broad Divisions Persist
BRIDGES Weekly Trade News Digest - Vol. 11, Number 35 Oct 17, 2007
With WTO Members still deadlocked on the depth of Doha Round farm subsidy and tariff cuts, negotiators in Geneva are focusing on a range of secondary and technical issues in order to make it possible for governments to conclude an agreement swiftly if and when they make the concessions necessary to bridge their differences.

'Interim' Goods-Only EPAs May Suffice for ACP Before End-Year Deadline, EU Says
BRIDGES Weekly Trade News Digest - Vol. 11, Number 35 Oct 17, 2007
The EU appears to have stepped back from threats to curtail preferential market access for some of the world's poorest countries if they fail to reach comprehensive trade agreements before a key negotiating deadline at the end of the year. Interim accords limited to goods trade may suffice to preserve uninterrupted market access, Brussels now seems to be suggesting.

Globalization With Arab Characteristics
Marcus Noland and Howard Pack (YaleGlobal) Oct 17, 2007
The Arab world must adapt and globalize to placate a young population.

IMF Forecasts Slower World Growth in 2008
IMF Survey Oct 18, 2007
World economic growth is expected to slow next year, with recent turbulence in financial markets triggered by the fallout from the U.S. subprime mortgage market clouding prospects, the IMF said in the October 2007 World Economic Outlook (WEO) released on October 17.

Seeing Sugar's Future in Fuel
NYT Oct 18, 2007
After seeing Midwestern farmers improve their lot by selling corn to ethanol distilleries, sugar cane and sugar beet growers want their own ethanol deal, paid for by U.S. taxpayers.

World Bank runaround
WSJ Oct 18, 2007
A case study in downplaying corruption.

Confronting Cambodia's Corruption
WSJ Oct 18, 2007
The World Bank responds on Cambodian corruption.

Heroes of the zeroes Recommended!
Economist Oct 18, 2007
Central bankers are acclaimed for their part in taming inflation. They deserve to be.

In praise of the strong euro
Economist Oct 18, 2007
Europeans should learn to love their currency.

What the IMF doesn't see
Mark Weisbrot (IHT) Oct 18, 2007
Finance ministers, bankers and businessmen are gathering in Washington this week for the annual fall meetings of the International Monetary Fund and World Bank. As is customary, the IMF is presenting its analysis of the world economy, and this year it is releasing some research that is sure to cause controversy and provide fuel for its critics.

Why Climate Change Can't Be Stopped Recommended!
Paul J. Saunders and Vaughan Turekian (YaleGlobal/Foreign Policy) Oct 18, 2007
Still, governments should not simply shrug and give up.

More EU influence at the IMF with fewer chairs
Alan Ahearne & Barry Eichengreen (VoxEU) Oct 18, 2007
Europe has no shortage of opinions on international economic affairs, but these suffer from a shortage of impact. The EU could become more influential by reforming its external representation. The IMF is the place to start. Here is a proposal.

The euro stimulates Eurozone financial asset trade
Nicolas Coeurdacier & Philippe Martin (VoxEU) Oct 19, 2007
Common sense suggests that the euro should have stimulated trade in financial assets among Eurozone nations. Empirical research confirms this, but finds a much larger effect in bonds than equities. Also, euro ‘outsiders’ seem to benefit from lower transaction costs to diversify risk when purchasing euro assets, but the gain is around half what the insiders get and with a potential diversion effect that penalises firms which want to raise capital on international markets.

World Bank Weary Wall Street Journal Subscription Required
Adam Lerrick (WSJ) Oct 19, 2007
Private lenders channel 300 times more capital to developing nations.

Africa's strong growth
Economist Oct 19, 2007
Africa's boom is not only because of pricey commodities.

IMF, World Bank Ready Joint Action Plan
IMF Survey Oct 19, 2007
The IMF and the World Bank are set to launch a joint management action plan designed to improve coordination and communication between the two global financial institutions.

Economists debate value of their own Nobel award
IHT Oct 19, 2007
The kind of work that has often been honored has stirred up dismay.

Fighting for the past
Jacques Diouf and Jean-Michel Severino (IHT) Oct 19, 2007
We have witnessed a dramatic rise in agricultural commodity prices worldwide this year. Driven by a strong demand for biofuels due to concerns over climate change, the prices of rice, wheat and maize have reached record highs.

Last Chance for Farm Reform
NYT Oct 20, 2007
President Bush, who has generally been on the right side of the farm issue, should think seriously about vetoing a deeply disappointing farm bill.

A Global Tax Credit
Justin Muzinich & Eric Wekker (NYT) Oct 20, 2007
The presidential candidates should look to reform our system of foreign aid by modeling it on the successful programs the U.S. has used to reduce domestic poverty.

G-7 Steps Up Pressure On China on Currency
WP Oct 20, 2007
Leaders of major industrialized nations yesterday called on China to let its currency appreciate rapidly, arguing that its current system of manipulating the value of its currency is causing distortions in the world economy.

World Bank welcomes new leader's stability
LAT Oct 20, 2007
Zoellick focuses on post-Wolfowitz damage control while underscoring the original mission of helping the impoverished.

Is economic development in danger of drying up?
Jon Gertner (IHT/NYT) Oct 20, 2007
Scientists sometimes refer to the effect a hotter world will have on fresh water as the other water problem, because global warming more commonly evokes the specter of rising oceans submerging great coastal cities. By comparison, the steady decrease in mountain snowpack - the loss of the deep accumulation of high-altitude winter snow that melts each spring to provide nearby regions with most of their water - seems to be a more modest worry.

What Development Round?
NYT Oct 21, 2007
If the big countries fail to deliver real benefits to the poorest nations, the so-called development round will be exposed as a mere tactical ploy.

Role reversal at IMF as the rich come under fire
IHT Oct 21, 2007
The theme of the meeting of the International Monetary Fund this year has not been fear of protesters but of the global impact of the collapse in the American housing sector, which many delegates blame on lax regulations and sleepy regulators in Europe and the United States.

In many countries, cement is crucial for growth but an enemy of green
IHT Oct 21, 2007
Some 80 percent of cement is made in and used by emerging economies. But making cement creates pollution, in the form of carbon dioxide emissions.

Growth vs value Economist Subscription Required
Economist Oct 21, 2007
What was first shall be last.

Asia Stocks Tumble in Early Trading
NYT Oct 22, 2007
Renewed concerns about the health of the American economy sent Asian stocks sharply lower in early trading today.

Regaining Our Balance Wall Street Journal Subscription Required
Joaquin Alumnia (WSJ) Oct 22, 2007
Each of the world's major economies needs to make adjustments.

Corporate Farming's Best Friend
WP Oct 22, 2007
This was the year the antiquated and expensive farm subsidy program was to be reformed.

Bank of the South, championed by Venezuela, begins to take form
IHT Oct 22, 2007
The idea from Hugo Chávez, the Venezuelan president, of creating a Bank of the South to finance regional development projects is moving forward, aided by the tacit approval of Brazil, which has South America's largest economy.

The Dollar's Got Further to Slide Recommended! Wall Street Journal Subscription Required
Richard Clarida (WSJ) Oct 23, 2007
The Fed can handle inflation. But don't expect a cheap European vacation anytime soon.

Surplus Services Wall Street Journal Subscription Required
WSJ Oct 23, 2007
U.S. companies do a roaring business in China.

The Emerging Emerging Market Wall Street Journal Subscription Required
Andrew Mitchell (WSJ) Oct 23, 2007
The credit crunch has shaken the kaleidoscope of the world economy.

Plowing Old Ground
WP Oct 23, 2007
These are good times for American farmers. Net farm income in 2007 will be more than $87 billion, a record, according to the Agriculture Department's latest projections. And in 2006, the average farm household already earned $80,000, about 20 percent more than the average non-farm family. The boom is driven not only by federal subsidies for corn-based ethanol but also by strong demand for U.S. farm products overseas. The prices of corn, cotton, soybeans, wheat and rice are on the rise, as are farmers' land values.

Letter From Russia: A boom that depends on migrant workers
IHT Oct 23, 2007
As Russia's surging economy lures more and more immigrants, who are willing to take jobs its own citizens can't or won't do, the country is confronting a problem more familiar in the West: integrating foreign workers who often face discrimination and harassment.

Bush trade agenda gets help from unlikely ally: Hugo Chávez
IHT Oct 23, 2007
President George W. Bush - facing opposition to proposed trade accords with Peru, Panama and Colombia - argues that the deals will strengthen capitalism and democracy in the region.

Amid Market Crunch, Calls for Stronger IMF
IMF Survey Oct 23, 2007
With market turbulence exposing fault lines in parts of the international financial system, the IMF wrapped up its 2007 Annual Meetings amid calls for the multilateral institution to strengthen its role as a global financial watchdog and revamp its governance.

Detroit To Japan: Strengthen The Yen
Brian Wingfield (Forbes) Oct 23, 2007
The issue isn't going anywhere, despite the noise. But its still worth watching.

Fasten the Seatbelt
Qing Wang (MSDW) Oct 23, 2007
It is time to fasten the seatbelt, as the USD/CNY rate is likely to embark on a steeper and bumpier journey in the coming weeks/months, in my view.

China targeted by anti-dumping measures
FT Oct 23, 2007
Countries’ official blocks on imports have fallen to record lows, although that trend seems to be reversing as complaints against unfair competition from China increase.

STMicro chief bemoans dollar-euro exchange rate
IHT Oct 24, 2007
STMicroelectronics, the largest European chip maker, posted quarterly earnings that exceeded expectations, but its chief executive, Carlo Bozotti, could not help complaining, anyway, that earnings would have been better but for the strong euro.

Ag Chair Preparing to Revise Text, As Lamy Says 'Hour of Truth Rapidly Approaching'
BRIDGES Weekly Trade News Digest - Vol. 11, Number 36 Oct 24, 2007
The chair of the troubled Doha Round agriculture talks has given Member governments until 2 November to iron out their differences. After that, he will put together a detailed new potential draft deal for make-or-break final negotiations, guessing where consensus might lie on issues for which negotiators fail to point the way to compromise.

European Parliament Endorses TRIPS Amendment
BRIDGES Weekly Trade News Digest - Vol. 11, Number 36 Oct 24, 2007
The European Parliament on 24 October endorsed an amendment to WTO intellectual property rules aimed at easing poor countries' access to essential medicines, after the EU's 27 member governments promised to help developing nations manufacture and import affordable drugs.

NAMA Talks Remain Divided, With Time Running Out
BRIDGES Weekly Trade News Digest - Vol. 11, Number 36 Oct 24, 2007
WTO Members are showing few signs of narrowing their differences on manufacturing tariff cuts, the chair of the contentious talks said on 22 October, warning that the Doha Round would fail if they could not reach an agreement by the end of the year.

Rising Tide
Alvaro Vargas Llosa (TNR) Oct 24, 2007
No, global capitalism is not making the poor even poorer.

Hurricane Ahead
Steve Forbes (Forbes) Oct 26, 2007
On the crisis of the weakening dollar.

Europe feels economic chill after summer's credit crisis
IHT Oct 25, 2007
For Europe, perhaps the biggest loss from the financial crisis so far has been in confidence.

China and India: Same Globalization Road, Different Destinies
Scott B. MacDonald (YaleGlobal) Oct 24, 2007
Ambitions of Asia's two giant emerging economies could lead to rivalry.

The Definition of a Sovereign Wealth Fund
Stephen Jen (MSDW) Oct 26, 2007
There is no universally agreed definition of sovereign wealth funds (SWFs). In this note, we try to better define what SWFs are.

The Economics of Climate Change
IMF Survey Oct 26, 2007
Climate change resulting from man-made increases in atmospheric greenhouse gas concentrations presents a serious challenge to human welfare.

Today's Hidden Slave Trade
Bob Herbert (NYT) Oct 27, 2007
As a society, we're repelled by the slavery of old. But the wholesale transport of women across international borders and around the U.S. to serve as prostitutes stirs very little outrage.

How America must handle the falling dollar
Lawrence Summers (FT) Oct 28, 2007
The falling dollar generates anxiety almost everywhere.

IMF brushes off drop of U.S. dollar to record lows
IHT Oct 29, 2007
The International Monetary Fund shrugged off the tumble of the U.S. dollar to record lows against other currencies, saying that global foreign-exchange markets were tracking economic fundamentals.

Don’t believe the hype: renminbi flexibility
Shang-Jin Wei (VoxEU) Oct 29, 2007
Those urging China to adopt a more flexible exchange-rate regime sell the policy advice on the ground that it will substantially speed up the adjustment of global current accounts and that it will also substantially enhance the effectiveness of China’s domestic macroeconomic policies. Both supposed benefits may be exaggerated.

EU steel makers seek tariffs on China imports
IHT Oct 29, 2007
The request for antidumping tariffs sets the scene for a debate likely to divide European governments.

IMF reform: a marathon, not a sprint
Peter B. Kenen (VoxEU) Oct 30, 2007
Here is an evaluation of progress on IMF reform by one of the world’s most eminent scholars of the global financial system.

A Services Surplus Wall Street Journal Subscription Required
WSJ Oct 30, 2007
The real meaning of the U.S.-China trade figures.

Protectionism and the Falling Dollar Wall Street Journal Subscription Required
David Ranson (WSJ) Oct 30, 2007
The markets are only responding to what our politicians say they want.

Steel Trap Wall Street Journal Subscription Required
WSJ Oct 30, 2007
Brussels is tempted by American-style protectionism.

Courting Seoul Wall Street Journal Subscription Required
WSJ Oct 30, 2007
While Congress dithers, Korea talks trade with other partners.

Sugar’s Sweetheart Deal
NYT Oct 30, 2007
Of all the government’s farm-support programs, there are few as egregious as the tangle of loans, quotas and import tariffs set up to protect the well-connected club of American sugar producers at the expense of American consumers and farmers in the developing world. This year’s farm bill will add American taxpayers to the list of casualties.

Bangalore butler is latest development in offshore outsourcing
IHT Oct 30, 2007
The second wave of outsourcing, according to some, will be the globalization of consumer services.

OPEC says pumping more won't bring oil price down
IHT Oct 30, 2007
Officials told an industry conference Tuesday that record high prices were due to financial speculation, geopolitics and a shortfall in refining capacity.

Bad Trade Wall Street Journal Subscription Required
WSJ Oct 31, 2007
A failed program, so let's expand it.

The Global Poverty Trap
Robert J. Samuelson (WP) Oct 31, 2007
It's nature vs. nurture. One of the big debates of our time involves the causes of economic growth. Why is North America richer than South America? Why is Africa poor and Europe wealthy? Is it possible to eliminate global poverty? The World Bank estimates that 2.5 billion people still live on $2 a day or less. On one side are economists who argue that societies can nurture economic growth by adopting sound policies. Not so, say other scholars such as Lawrence Harrison of Tufts University. Culture (a.k.a. "nature") predisposes some societies to rapid growth and others to poverty or meager growth.

De Rato Charted New Course for IMF
IMF Survey Oct 31, 2007
Rodrigo de Rato steps down as Managing Director on October 31 after three-and-a-half years at the helm of the IMF, during which he helped chart a new course for the 185-member international institution at a time of rapid shifts in the global economy.

Ag, NAMA Talks Continue, With Revised Draft Texts Expected Mid-November
BRIDGES Weekly Trade News Digest - Vol. 11, Number 37 Oct 31, 2007
Talks on agriculture and industrial goods trade continue at the WTO, in what may be the last week of discussions before the chairs of the two negotiating committees issue new draft compromise texts that could become the basis for a Doha Round agreement - or a bitter collapse.

IEA says oil prices will stay 'very high,' threatening global growth
IHT Oct 31, 2007
The unusually stark warning came from Fatih Birol, chief economist of the International Energy Agency, ahead of the agency's annual report.

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