News & Commentary:

November 2002 Archives


Trade liberalization
Finance and Development Sep/Nov 2002
Point of View by former WTO director-general Peter Sutherland on the benefits of globalization. Article co-authored by IMF Deputy Managing Director Anne Krueger on why trade openness can help curb poverty. Also, articles on the Doha development agenda, the importance of increased market access for developing countries, industrial country tariffs, the implications of China's membership in WTO, and the impact of globalization on income inequality in China. Other subjects covered in the issue are capital surges in transition countries, the embattled energy sector in the Commonwealth of Independent States, the future of pension reform in Latin America, the international community's fight against money laundering and the financing of terrorism, and the challenges of the e-banking revolution. In his regular column, Kenneth Rogoff, IMF Economic Counsellor and Director of the IMF's Research Department, enters the debate on whether IMF loans create moral hazard.

The IMF’s Dilemma in Argentina: Time for a New Approach to Lending? Recommended!
Carol Graham & Paul Robert Masson (Brookings) Nov 2002
In recent years, the international financial system has faced tremendous challenges. An increasing number of observers are questioning the way the international financial institutions manage these crises. An alternative approach that is endorsed in principle by many - including Hörst Kohler, the new managing director of the International Monetary Fund (IMF)- is a move toward more selective lending with fewer conditions, with the decision to lend based on a more general and ultimately political assessment of the recipient government’s capacity to deliver on its promises. Argentina provides a potential test bed for this approach. The authors argue that neither this method - nor the more traditional solution of more rigorous conditions with clear benchmarks for progress - can succeed in Argentina, as the country must first resolve a governance crisis that is at the root of its economic problems.

Disappointing trade figures underscore the need to accelerate trade talks
WTO Focus 57 Nov 2002
Global economic activity strengthened in the first half of 2002 and world trade started to recover from the first quarter onwards, according to the latest WTO figures. But the overall picture is disappointing and WTO Director-General Supachai Panitchpakdi says the need to meet negotiating deadlines is even more pressing. According to the WTO International Trade Statistics Report, global economic activity strengthened in the first half of 2002 and world trade started to recover from the first quarter onwards. Despite this turnaround at the beginning of the year, the dollar value of world merchandise exports remained at 4 percent below the preceding year’s level. In the first six months of 2002 imports of the EU and the United States decreased by 6 percent while those of Japan and Latin America decreased at double digit rates. China and the Russian Federation, however, sharply increased their imports by 10 and 7 percent respectively.

Does Research Still Fly? Wall Street Journal Subscription Required
Hugo Dixon (WSJ) Nov 1, 2002
How to regulate investment analysis.

A tale of 2 ailing economies
IHT Nov 1, 2002
Comparing the world's second-and third-largest economies has become something of a fashion among analysts and pundits. The comparison is disturbing.

The three digital divides Financial Times Subscription Required!
Eli Noam (FT) Nov 1, 2002
Closing the gap between the internet "haves" and "have-nots" could damage developing economies by exposing them to the competitive advantage enjoyed by western e-commerce.

The three digital divides Recommended! Financial Times Subscription Required!
Eli Noam (FT) Nov 4, 2002
Closing the gap between the internet "haves" and "have-nots" could damage developing economies by exposing them to the competitive advantage enjoyed by western e-commerce.

Back to Microsoft's Future Wall Street Journal Subscription Required
WSJ Nov 4, 2002
Bill Gates and the tech economy can break out the (cheap) bubbly.

Free Trade, Free People Recommended!
Robert B. Zoellick (WSJ) Nov 4, 2002
We offer a simple plan to save Southern Africa.

Germany to Contribute 1 Million Euros to Doha Trust Fund
WTO Nov 4, 2002
The German government on 4 November 2002 pledged a donation of 1 million euros (about CHF 1.45 million) over two years - 2003 and 2004 - to the WTO Doha Development Agenda Global Trust Fund. This pledge comes on top of approximately CHF 2 million already pledged by Germany for the period 2002-2005.

Turkish victor plans drive for EU membership
FT Nov 5, 2002
Recep Tayyip Erdogan, leader of the winning party in Turkey's elections, said he would soon tour European capitals to accelerate Ankara's efforts to qualify for EU membership.

EU Submits Ambitious Program for Tariff Reductions
EU DGT Nov 6, 2002
Delivering on the commitment undertaken in the launch of the new WTO round in Doha, the EU tabled today an ambitious proposal for tariff reductions in industrial goods. The EU proposes that WTO Members agree to significantly reduce all tariff duties by compressing them into a flatter range, within which tariff peaks and high tariffs are eliminated ('compression mechanism').
This bold initiative advances meaningful liberalisation across all non-agricultural products, which represent over 70% of developing country exports.

It also includes development-friendly proposals:
- to eliminate all export restrictions on raw materials, and
- to make deeper cuts for textiles and footwear. These tariffs will hence be brought as close to zero as possible.

Why the Euro Isn't an Elixir Wall Street Journal Subscription Required
Jean-Francois Mercier (WSJE) Nov 7, 2002
The founders of the euro clearly had higher expectations.

Internet turf war playing out
Michael Geist (Globe and Mail) Nov 7, 2002
Last week in Shanghai, Internet Corp. for Assigned Names and Numbers (ICANN), the agency responsible for administering the Internet, conducted the most important meeting in its brief history. Following months of debate on institutional reform, the ICANN board approved the elimination of board positions reserved for the general public, shelved plans for Internet user participation through on-line elections and removed most of the mechanisms that hold ICANN accountable.

Fed stuns markets with 50-point rate cut
FT Nov 7, 2002
The Federal Reserve cut its target for short-term interest rates by half a percentage point to a new 40-year low of 1.25 per cent, in a bid to support the US economy.

Thrashing out an EU prospectus directive
Economist Nov 7, 2002
A single European market for financial services edged close - maybe. Finance ministers agreed on a directive to allow securities to be issued across Europe with a single prospectus giving information on the issue with the approval of regulators in just one member state. But for many small issues, the regulator must be the home country, protecting less efficient jurisdictions.

A free trade club without benefits Recommended!
Andrew Rose (FT) Nov 7, 2002
Much of the furore over the WTO is unfathomable.

A Primer on Trade
Mark Brandly (Mises Daily) Nov 7, 2002
Hardly a day goes by when I don't read something crazy on the subject of international trade, from pundits who blame it for America's economic and social woes, to those who think trade can only thrive in the context of treaties and war. In truth, international trade is nothing more than an extension of the idea of exchange itself: that all people are better off cooperating through contract than fighting with force and coercion.

FTAA Ministerial Sets Negotiating Schedule Despite Differences On Agriculture
BRIDGES Weekly Trade News Digest - Vol. 6, Number 38 Nov 7, 2002
During a meeting of the trade ministers of the 34 member states of the Free Trade Area of the Americas (FTAA) in Quito, Ecuador on 1 November, the US, Canada, and Latin American countries established a timeline in which to negotiate the Western Hemispheric free trade zone by 2005. Despite disputes -- over agricultural subsidies, for instance -- that some countries claim could halt the entire process, the US urged Latin American governments to continue developing the deal despite the political and economic problems gripping the region. "I recognise that this is a time of economic, and indeed political, uncertainty in this region and indeed the world. And I know the courage of many of you taking on this task...But this is the time," stated US Trade Representative (USTR) Robert Zoellick.

WTO: Development, Environment Concerns Emerge In Market Access Talks
BRIDGES Weekly Trade News Digest - Vol. 6, Number 38 Nov 7, 2002
At a 4-5 November meeting of the WTO Negotiating Group on Market Access, Members considered proposals on non-agricultural market access, in which both development and environment issues emerged as occasional themes.

Slowing the Spread of AIDS in India
Bill Gates (NYT) Nov 9, 2002
India can either be the home of the world's largest and most devastating AIDS epidemic or it can become the best example of how this virus can be defeated.

Famine in Africa
Economist Nov 11, 2002
Ethiopia faces a famine worse than the catastrophe of 1984, according to the country’s prime minister. Bad weather is partly to blame. But, as elsewhere in Africa, so too is bad government

Japanese officials uneasy at yen strength
FT Nov 12, 2002
Japan's financial authorities sought to weaken the yen with a bout of verbal intervention after the currency rose to a two-month high against the dollar.

Liberty = Prosperity
Mary Anastasia O'Grady (WSJ) Nov 12, 2002
On economic freedom, good news for Europe, bad news for Latin America.

Restoring Confidence to the Global Economy
Horst Köhler (IMF) Nov 12, 2002
An Article by the IMF Managing Director.

How the Bubble Economy burst
IHT Nov 13, 2002
Mention the Bubble Economy and it conjures up images of shredded documents and half-built Houston mansions, depleted pension accounts and executives being led off in handcuffs.

A Europe of Regions? Wall Street Journal Subscription Required
WSJE Nov 13, 2002
The pressure to decentralize political and economic power is overwhelming.

A free press is crucial in overcoming global poverty Recommended!
Joseph Stiglitz and Roumeen Islam (IHT) Nov 14, 2002
Nearly more than 400 years ago, the English philosopher and writer Francis Bacon wrote that knowledge is power. Today, we see that maxim play out in many ways in the political and economic spheres in both rich and poor countries.

World trade
Economist Nov 14, 2002
Trade ministers from around the world are gathering in Sydney as part of an effort to inject new momentum into the Doha round of multilateral trade negotiations. It is a daunting task.

Emerging markets
Economist Nov 14, 2002
A team from the International Monetary Fund is now in Brazil, for the first review of the country's loan agreement - the largest in the Fund's history. As yet, though, there is no sign of a deal with Brazil's beleaguered neighbour, Argentina

Sovereign Debt Restructuring Mechanism: One Year Later Recommended!
Anne O. Krueger (IMF) Nov 14, 2002
A speech by the First Deputy Managing Director on the IMF's Sovereign Debt Restructuring Mechanism.

Argentina defaults on loan repayment
FT Nov 14, 2002
The Argentine government defaulted on a loan repayment to the World Bank, a sign of its intense frustration over negotiations with the IMF, the bank's sister institution.

Argentina's Latest Default Wall Street Journal Subscription Required
WSJ Nov 18, 2002
Missing a debt payment isn't reason for another loan.

Argentina's Economic Mess
Economist Nov 18, 2002
Argentina's decision to default on its loan payments to the World Bank will worsen the country’s economic predicament. And it will not make it easier for the government to reach a deal with the International Monetary Fund.

World trade
Economist Nov 18, 2002
Officials are meeting at the World Trade Organisation in Geneva this week, to try to make progress on the agricultural trade negotiations which are a key part of the Doha round. After recent progress on intellectual property, agriculture more than ever remains the main stumbling block

No More Optional Treatment of Options? Wall Street Journal Subscription Required
Barry Ehrlich (WSJE) Nov 18, 2002
Should the International Accounting Standards Board stick to its guns?

Economists' No. 1 nightmare: a downward spiral Recommended!
IHT Nov 19, 2002
The "d" word is back. "Deflation," that is. Now, price increases are falling ever closer to zero, with inflation rates already negative in Japan and threatening to head that direction elsewhere, too.

What AIDS Means in a Famine
Alex de Waal (NYT) Nov 19, 2002
As a result of H.I.V., African societies' capacity to resist famine is fast eroding.

Corruption and Foreign Aid
Mark Thornton (Mises Daily) Nov 19, 2002
For a few billion dollars you might expect to be able to bribe some small third world country into cleaning up its act, to defend the property rights of its citizens, to provide a stable currency, and to establish a non-interventionist economic and foreign policy.

Nato's uncertain future Financial Times Subscription Required
FT Nov 20, 2002
Growing unilateralism in Washington, fuelled by Europe's unwillingness to spend heavily on defence, leaves Nato's future in doubt.

Pressure for a Convertible Yuan Wall Street Journal Subscription Required
WSJE Nov 20, 2002
Now is a good time for Chinese financial reform.

US Hypocrisy on Trade
Tibor R. Machan (Mises Daily) Nov 20, 2002
Do you remember when America was called the leader of the Free World? It seems like so long ago. Now the USA is the leader of the protectionist world, the very opposite of free, at least where international commerce is concerned.

Globalization, Poverty, and the IMF
Thomas C. Dawson (IMF) Nov 20, 2002
A Commentary by the Director, External Relations Department.

Supachai Underlines Benefits of Removing Barriers to Trade
WTO Nov 20, 2002
Director-General Supachai Panitchpakdi, in his first annual report to members on developments in the international trading environment released on 15 November 2002, underlined the economic benefits of successful market-access negotiations in both goods and services, especially to developing countries. Serious obstacles to trade, he said, remain in agriculture, textiles and other manufactures. The report will be the basis of the WTO Trade Policy Review Body's annual review on 11 December 2002 of developments in the international trading environment and multilateral trading system.

Inching Towards Compromise On Medicines After Sydney Mini-Ministerial
BRIDGES Weekly Trade News Digest - Vol. 6, Number 40 Nov 20, 2002
On 19 November, the Chairman of the WTO Council for Trade-related Aspects of Intellectual Property Rights (TRIPs) released draft legal language for a decision by the General Council on the implementation of paragraph 6 of the Doha Declaration on the TRIPs Agreement and Public Health. The release of the draft followed discussions on this issue at the 'mini-Ministerial' in Sydney on 14-15 November and at an informal session of the TRIPs Council on 18 November. While most countries stated at the meetings that they could accept the Chair's preferred legal solution (i.e. a long-term waiver until an amendment to TRIPs comes into force), disagreements remained on some of the elements of the solution, including the coverage, eligible countries and safeguards against diversion.

Doubts Emerge At WTO Ag Committee Over Whether Doha Timeline Can Be Met
BRIDGES Weekly Trade News Digest - Vol. 6, Number 40 Nov 20, 2002
In discussions at the 18-20 and 22 November special (negotiating) session of the WTO Committee on Agriculture (CoA), several countries voiced their concern over whether Members would be able to come up with finalised negotiating modalities by end-March 2003, as provided for in the Doha Ministerial Declaration. In particular, new submissions tabled by Japan and Norway led observers to forecast new "diverging tendencies" in the already highly polarised farm trade talks. Frustration was also felt over the fact that the EC had still not tabled a concrete proposal including clear numbers and targets for further reductions in tariffs and subsidies. Members are convening for the last special session of the CoA before Chair Stuart Harbinson is to present, by 18 November, an overview paper outlining the major positions on the specific issues under negotiation.

Getting the right balance in Latin America Financial Times Subscription Required
Michael Pettis (FT) Nov 25, 2002
The crisis facing Argentina and Brazil was caused as much by balance-sheet mismanagement as by economic mismanagement.

The world economy
Economist Nov 25, 2002
The Organisation for Economic Co-operation and Development sees a slow and irregular global recovery in its latest economic outlook. The risks remain on the downside. Policymakers are finding life difficult in part because they relaxed too much in the 1990s.

UNCTAD: Global Internet population reaches new high
Nua Nov 25, 2002
The number of Internet users worldwide is expected to reach 655 million by the end of 2002, according to the United Nations.

Washington seeks the end of all import taxes
IHT Nov 27, 2002
The Bush administration, hoping to jump-start global trade negotiations, proposed a plan Tuesday to eliminate all taxes on imported industrial and consumer goods by 2015.

EU puts Doha trade round at risk
FT Nov 27, 2002
The EU’s inertia over farm trade puts Doha at risk Brussels may jeopardise a vital deadline if it delays its proposals.

The world's lonely imperial power Financial Times Subscription Required
Martin Wolf (FT) Nov 27, 2002
The US considers itself to be anti-imperialist. Yet it is now replacing the UK as the imperial power in the Middle East.

Economist Nov 27, 2002
America has proposed the elimination of global tariffs on industrial and consumer goods by 2015 in an attempt to revive the stalled Doha round of world trade talks. Is the plan too bold to work?

Rethinking foreign aid
Washington Post Nov 28, 2002
The Bush Administration is starting to flesh out its promise to expand America's paltry foreign assistance.

Can America kickstart the Doha round?
Economist Nov 28, 2002
America strengthened its free-trade credentials, by calling for all tariffs on manufactured goods to be abolished by 2015 and deep liberalisation of trade in service industries. The bold measure is likely to meet opposition from high-tariff developing countries.

AIDS in Africa
Economist Nov 28, 2002
A UN report revealed that 42m people are infected with HIV, the virus that causes AIDS. This year, 3.1m died of the disease, and 5m were newly infected. The cumulative toll of deaths and infections now exceeds the number who died in the second world war.

TRIPs Council: Still No Solution On Medicines In Sight
BRIDGES Weekly Trade News Digest - Vol. 6, Number 41 Nov 28, 2002
Informal discussions continued among heads of delegations on 26 November on the implementation of paragraph 6 of the Doha Declaration on the TRIPs [Trade-related Aspects of Intellectual Property Rights] Agreement and Public Health, based on a 24 November draft put forward by the TRIPs Council Chairman. Deep divisions remained over which countries should be eligible to use the system, which diseases should be covered and what the timeframe and content should be for negotiating a permanent solution once the waiver is in place.

S&D Review Coming Down To The Wire -- Meeting Almost Daily
BRIDGES Weekly Trade News Digest - Vol. 6, Number 41 Nov 28, 2002
As Members quickly approach a 31 December deadline on the review of special and differential treatment (S&D) provisions, special sessions of the Committee on Trade and Development (CTD) have met almost daily in hopes of finding agreement. Various formal and informal sessions have taken place on 20, 21, 25, 26, 27, and 28 November - ranging on agreement-specific and cross-cutting issues, the monitoring mechanism, and 'the way forward'. A first draft of the report that Members hope to present to the 10-12 December General Council meeting is expected to be available before the end of the day on Friday, 29 November. This would give Members the weekend to consider the draft report before reconvening on 2 & 3 December to determine whether sufficient convergence on positions could be achieved. Initial reactions on what is allegedly going to be found in the report indicates that much ground remains to be covered in a short period of time, and that both political will and flexibility will have to come from all Members if a deadlock is to be averted.

Asia's Capital Markets Drive Recovery Wall Street Journal Subscription Required
Ralph Parks (AWSJ) Nov 29, 2002
Now we know, misallocation of resources crashed the economies.

Anti-globalisation movement
Economist Nov 29, 2002
This week, anti-globalists have been urging shoppers to stay at home on "Buy Nothing Day". But the slower pace of economic growth is turning the activists' attention away from brands and rampant consumerism to issues like war with Iraq. Does the movement need a new identity?

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