News and Analysis: 22-26 Feb 10 | EmergingFrontierMarkets.com

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Posted on Fri, 26 Feb 10:

J Bhagwati and A Panagariya: Protectionism's other names--Lagging employment recovery and continuing high levels of unemployment have marked the macroecon scenario in the US. So it is natural that the US, which chaired the G20 Pittsburgh summit, would use its privileged position to invite the US secy of labor, a well-known union activist, to convene a meeting of labor ministers on the jobs situation prior to the next G20 summit meeting in Canada. However, US labor unions have had a long history of pushing for a 'social clause' into trade treaties at every forum, say US Council For. Relations senior fellow and Columbia U economist, Times of India, 23 Feb 10

US science board releases policy-oriented companion piece to science indicators, urges action to sustain leadership: In its companion piece to Science and Engineering Indicators 2010 published every 2 yrs, the new report 'Globalization of Sci/ Eng Research' noted that while global R&D spending has increased about 7% per yr on average, the growth in the Asia/ Pacific region has outpaced this average, w/ most of the increase coming from China, India and other developing nations. It said the US govt must be attentive to developments in sci/eng capacity worldwide and take steps to maintain its competitive strength, Natl Science Board, 19 Feb 10 (Related info)

From our archive (25 Jan 10): Science/ engineering indicators show eroding US competitive advantage in the world: The state of the US sci/ eng enterprise is strong, yet its lead is slipping, acc to the newly released Science and Engineering Indicators (SEI Digest), which is published every 2 yrs. It finds that the gap is narrowing for R&D expenditures in the US, EU, and Asia in absolute dollars. In the past decade, annual Asian R&D expenditure growth is 4 times that of the US. US is also no longer way ahead in terms of its no. of doctoral degrees in the natural sciences. And latest data show China has achieved parity w/ the US in terms of no. of researchers, Natl Science Board, 15 Jan 10

Posted on Thu, 25 Feb 10:

Steven Pifer: Curing 'Ukraine fatigue' in the West--If Viktor Yanukovich, the winner of Ukraine's pres'l race, acts quickly to address his nation's pressing problems, he could move it out of the doldrums and cure the 'Ukraine fatigue' afflicting Washington and most European capitals. As Yushchenko exits as pres, Ukraine faces a host of problems. It suffered a crushing 14% fall in gross domestic product in '09. Unwise pricing policies and widespread corruption have put the critical gas sector in virtual bankruptcy, says Inst senior fellow, NY Times (courtesy Brookings Inst), 9 Feb 10 (Indep. Intl Experts Comm--A reform program for a new Ukraine pres, 2 Feb [pdf, courtesy Peterson Inst] | IMF Blog--Reigniting growth in Emerging Europe, 10 Feb | IMF Survey Mag--IMF urges Ukraine to stick w/ recovery policies, Nov '09)

Homi Kharas: 'Build back better' in Haiti--Lessons from the Indonesian tsunami: The unfortunate truth is that the poor are the most vulnerable. They live in disaster-prone locations and poorly-constructed dwellings. In Haiti, as elsewhere, richer neighborhoods in Pétionville suffered far less than poorer areas in Port-au-Prince. Because of the strong link between disaster and poverty, the global aid community embarked on a program of 'building back better' after the '04 Indian Ocean tsunami. If a similarly ambitious program is designed for Haiti, the Indonesian tsunami recovery can provide valuable lessons, says Inst senior fellow and fmr World Bank's EAsia/ Pacific chief economist, Brookings Inst, 21 Jan 10

Posted on Wed, 24 Feb 10:

Bringing it all back home: Economists long assumed that remittances made a negligible contribution to the global economy and the development of poor nations. But when a World Bank economist named Dilip Ratha - a migrant himself, from a poor village in Orissa, India - began putting together annual global tallies of wage transfers across borders in '03, the numbers were dumbfounding. In '08, he estimates that $338 bil. in remittances poured into developing nations. All the foreign aid in the world, by comparison, added up to just about $100 bil. For many nations, remittances are quite simply the most important source of foreign funds. That's the paradox of remittances - the most vulnerable players in the global economy add up to one of its most formidable forces, by John Gravois, National (UAE), 18 Feb 10

Invasion of the European economists: One-third of the faculty of Harvard’s econ dept hails from Europe. At the U Chicago’s Business School, half of the finance dept's faculty is European. And these schools aren't alone: European economists are overrepresented at all 1st-tier US universities. These academics - most of them young rising stars escaping the mediocrity and politicization of econ depts in their nations of origin - see top US schools as the best places to study and teach, by Guy Sorman, City Journal, Dec-Feb '10

Coffers: Barton Biggs--The next hot market: Emerging markets are where the growth is, but the tenbaggers are to be made not in the discovered emerging markets where stocks are already at high prices but in the 'frontier' markets. A yr or 2 from now, Syria could be one of them, but don't start salivating because there is nothing a non-resident investor can buy now. But that will change. Once the virtuous, self-reinforcing circle of discovery - foreign direct investment, infrastructure development, sovereign debt and equity issues, and a functioning stock market - begins, the econ and financial gains can be staggering, says Traxis Partners hedge fund managing partner, Newsweek, 13 Nov 09 (Inter Press Svce--US starts normalization process w/ Syria in earnest, 18 Feb 10)

Posted on Tue, 23 Feb 10:

Latin Amer, Caribbean nations discuss creation of new bloc: Mexican Pres Calderon on Mon opened a 2-day summit of LatAm and Caribbean nations that is expected to explore the creation of a new regional bloc. Foreign ministers drafted a proposal over the weekend for the creation of a bloc of the Americas w/o US and Canada. Members of the Rio Group met in Cancun, which also saw the 2nd summit of LatAm and the Caribbean. At the current summit, however, leaders were only expected to make a formal decision about the creation of the new org. A taskforce was expected to be created to work on the details, w/ a view to actually launching it at the next summit in July '11, Deutsche Presse-Ag.(courtesy Earth Times), 22 Feb 10 (LatAm News Dispatch--Rio Group to create hemispheric org excluding N Amer)

Controls on capital part of policy mix, says IMF staff: With the global economy recovering, capital is flowing back to emerging markets - a welcome development in that it provides additional financing for productive investment, opportunities for risk diversification, and scope for consumption smoothing. But some nations facing sudden and temporary spikes in different forms of foreign capital flows are worried about the possible problems this can cause for econ management or the health of the financial system. In a new paper, IMF staff discusses the circumstances under which controls on capital inflows can usefully form part of the policy toolkit to address econ or fincl concerns surrounding sudden surges in capital, IMF Survey Mag, 19 Feb 10

Donors' mixed aid performance for '10 sparks concern: Aid to developing nations in '10 will reach record levels in dollar terms after increasing by 35% since '04. But it will still be less than the major aid donors promised 5 yrs ago at the Gleneagles and Millennium+5 summits. Though a majority of nations will meet their commitments, the underperformance of several large donors means there will be a significant shortfall, acc to a new aid review. In '05, the 15 EU nations that are members of the Devt Assistance Cmte committed to reach a minimum aid target in '10 of 0.51% of their Gross National Income. Some will surpass that goal: Sweden, Luxembourg, Denmark, Netherlands, Belgium, UK, Finland, Ireland and Spain, OECD, 17 Feb 10

Posted on Mon, 22 Feb 10:

This financial meltdown, and the next one: A panel discussion convened by the Faculty of Arts and Sciences dean of social sciences analyzed the causes of the financial crisis of '07 to '09, the resulting near-brush w/ what one of them called 'Great Depression 2.0', and their relatively bleak outlook for the developed nations and economies of the West. The panel featured economists John Campbell, Kenneth Rogoff, Jeremy Stein, and biz historian Niall Ferguson, Harvard Mag, 12 Feb 10 (Princeton U Pr--This Time is Different: Eight centuries of financial folly ['09])

Michael Spence: China's next mountain to climb--After 3 decades of sustained growth and a remarkably successful policy response to the recent global crisis, Chinese self-confidence is soaring. But the lessons that the govt may draw from the crisis may not be the best guides for the long term, says Nobel Laureate '01 and (Intl) Comm on Growth and Devt chair, Proj Syndicate (courtesy Daily News Egypt), 22 Jan 10

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