News & Commentary:

January 2003 Archives

Articles/Commentary

Weak world economy erodes corporate lending
FT Jan 1, 2003
Fundraising in the capital markets fell sharply in 2002 as issuance was hit by a weak global economy, falling stock markets, bankruptcies and political instability.

Markets anticipate difficult year for dollar
FT Jan 2, 2003
Markets will open on Thursday morning holding out the prospect of another difficult year for the dollar, which in 2002 suffered its biggest annual fall in 15 years.

Making the Most of Chile-U.S. Trade Deal Wall Street Journal Subscription Required
Sebastian Edwards (WSJ) Jan 3, 2003
Bureaucracy is also a barrier to trade.

Games Nations Play
Paul Krugman (NYT) Jan 3, 2003
The Bush administration's Korea policy has systematically violated the simple principle that deterrence requires a credible commitment to punish bad behavior and reward good behavior.

Pumping up the price
Economist Jan 3, 2003
The oil price began 2003 at a two-year high thanks to moves by OPEC, a strike in Venezuela and impending war with Iraq. Will the black stuff grow even more expensive over the next few months?

Sovereign Debt Restructuring: Messy or Messier? Recommended!
Anne Krueger (IMF) Jan 4, 2002
Ever since the Mexican, Asian and Russian crises of the mid-l990s, efforts have been underway to find means for more effective prevention and resolution of currency-financial crises. Much has been done with respect to crisis prevention: exchange rate flexibility is much greater than it was; there is increased transparency and improved oversight of the financial system; and greater attention is paid to unsustainable policy stances. Work continues to strengthen economies' immunity to crises.

A boom for China's foreign investors
IHT Jan 6, 2003
Plenty of foreign investors still lose money in China. But they are increasingly outnumbered by multinationals making profit that - if not quite justifying the exaggeration of the 1990s - at least makes China an indispensable part of their global operations.

Euro needs more than faith Financial Times Subscription Required
Martin Wolf (FT) Jan 6, 2003
Since the euro is forever, the economics must be assessed correctly. The UK government cannot responsibly recommend entry this year.

Fight Poverty, Not Patents Wall Street Journal Subscription Required
Carl Bildt (WSJE) Jan 6, 2003
Time is running out for the WTO to make good on its promise.

Sweden can thrive without the euro Financial Times Subscription Required
FT Jan 7, 2003
Swedish people remember what happened the last time they gambled with their currency, says Soren Wibe, a Social Democrat member of the Swedish Parliament.

The dollar under threat Financial Times Subscription Required
Martin Wolf (FT) Jan 8, 2003
The US is living on borrowed money and borrowed time. Its rake's progress cannot continue for ever. But how and when it will end remains disturbingly obscure.

China's Unstable Economy Wall Street Journal Subscription Required
Gordon G. Chang (AWSJ) Jan 8, 2003
Beijing gives every impression of being an engine of growth. But is it?

Build up: the road to Mexico
WTO Jan 8, 2002
Director-General Supachai Panitchpakdi, in a speech on 8 January 2003 at the Partnership Summit in Hyderabad, urged WTO members to "now give a major push to the negotiations and ensure all areas move forward together in a balanced way". He said "we need India's constructive engagement and leadership to help guide the Doha Development Agenda towards a successful conclusion that would benefit all members".

Hopes and Fears: The Global Outlook, Asia, and the IMF
Thomas C. Dawson (IMF) Jan 8, 2003
Remarks by the Director, External Relations Department.

Birth of an Industry: Biotech Takes Off in Asia
FEER Jan 9, 2003
Singapore is determined to build a life-sciences industry. Money is no object, nor are pro-life pressure groups. But can it clone success in such a high-risk area? Other countries with biotech dreams, take note. Plus: Singapore's liberal laws & Attracting world-class scientists.

Economies: The Limits To Consumption
FEER Jan 9, 2003
Asian governments think expanded domestic consumption is a recipe for sustained economic growth, they should think again. Easy credit is already fuelling personal bankruptcies and threatening the health of the financial system.

All that glisters...
Economist Jan 9, 2003
The price of gold is near a six-year high. The yellow metal seems to have regained some of its haven status thanks, in part, to weak stockmarkets and an impending war with Iraq. But its prospects are not so bright.

Argentina to end some controls
IHT Jan 9, 2003
The Argentine central bank said Wednesday that because the peso has strengthened, it would end more of the currency controls it imposed more than a year ago to spur business and revive the economy.

Euro's rise clouds the bright spot: exports
IHT Jan 10, 2002
The euro, which last week marked its first anniversary in the pockets and billfolds of Europeans, has risen smartly against the dollar in the past two months, pleasing the currency's guardians but fueling worries that it may hamper an economic recovery here.

Zoellick: Biotech food ban a WTO case
Jeffrey Sparshott (CheckBiotech) Jan 10, 2002
The Bush administration's top trade official yesterday said he wants to file a case to the World Trade Organization that would pry open the European Union's restrictive biotechnology market for U.S. companies.

How Far Can It Fall?
Economist Jan 10, 2002
After losing one-tenth of its value during 2002, the American dollar has fallen to its lowest point against the euro since 1999. Will it continue its retreat?

A Worldwide Economic Stimulus Plan
Jeffrey E. Garten (NYT) Jan 11, 2003
To make the world a safer place, Washington must develop a more robust global economic policy.

Oil
Economist Jan 13, 2003
The price of oil has eased from two-year highs following the decision by OPEC, the oil producers’ cartel, to raise its collective output quota. The move is partly to compensate for production lost during Venezuela’s six-week-old general strike. But any short-term price fall will be mitigated by the prospect of war in Iraq.

OPEC acts to raise oil output to cap prices
IHT Jan 13, 2003
The Organization of Petroleum Exporting Countries agreed Sunday to increase its official production quota in an effort to ease concern over tight global oil supplies and keep a lid on rising prices.

China's bold political reform Financial Times Subscription Required
FT Jan 13, 2003
The Chinese city of Shenzhen is set to introduce dramatic changes to its political system. The experiment marks the start of the boldest political reforms since 1949.

It takes time to build a United States Financial Times Subscription Required
Stephan Newhouse (FT) Jan 13, 2003
Considering language and cultural barriers, the progress made by the EU in a short time is remarkable.

Modest Growth Seen in World Economy
ST Jan 13, 2003
The world economy will see modest growth this year, Mr Eddie George, governor of the Bank of England and spokesman for the G10 central bankers, said here on Monday, adding that the financial markets were anticipating a short war in Iraq.

Argentina close to stopgap deal with IMF
FT Jan 14, 2003
After a year of trying, Argentina hopes to reach agreement with the International Monetary Fund on a stopgap programme that would cover its payments until August 2003.

Swiss democracies all over?
Robert A. Levine (IHT) Jan 14, 2003
It is clear that the United States must direct the postwar reconstruction and governance of areas that it invades and occupies. What that means is far less clear.

New Players on Global Warming
NYT Jan 15, 2003
Given the Bush administration's inert approach to global warming, the best hope for getting a start on the problem this year lies with the Senate. The prospect that something will actually happen there improved greatly this week with the introduction of a bipartisan bill bearing the signatures of two marquee sponsors, Joseph Lieberman of Connecticut and John McCain of Arizona.

Foreign companies flock to China
FT Jan 15, 2003
China attracted a record $52.7bn in foreign direct investment last year, surpassing the US to become the world's prime destination for investment inflows.

A fanatical environment Financial Times Subscription Required
Martin Wolf (FT) Jan 15, 2003
Danish statistician Bjorn Lomborg is not being condemned because he is wrong or because he exaggerates. He is being condemned because he is damnably inconvenient.

The IMF's Self-Rescue Wall Street Journal Subscription Required
WSJ Jan 15, 2003
A round-trip bailout through Argentina back to Washington.

EU Initiative Seeks To Break Deadlock In TRIPs & Health Negotiations
BRIDGES Weekly Trade News Digest - Vol. 7, Number 1 Jan 15, 2003
Following the breakdown of talks on paragraph 6 of the Declaration on TRIPs (Trade-related Aspects of Intellectual Property Rights) and health late last year, the EU put forward a proposal on 10 January to involve the World Health Organization (WHO) in decisions on whether a particular disease would be covered by the solution. While not rejecting the idea outright, the US preferred to await reactions from other countries before responding to the proposal. The EU's initiative found a less than enthusiastic welcome among developing countries, while health activists strongly criticised the proposal, arguing that it might be time to move the debate out of the WTO.

Services: WTO Members Closer To Agreement On Autonomous Liberalisation
BRIDGES Weekly Trade News Digest - Vol. 7, Number 1 Jan 15, 2003
An informal Special Session of the WTO Council for Trade in Services (CTS) meeting on 13 January made progress on modalities for granting 'credits' for Members' autonomous liberalisation (AL) -- an issue that had been left unresolved at the last CTS meeting in December. The 13 January meeting followed a set of informal consultations, and comprised an open- ended informal meeting to continue negotiations based on some new drafting suggestions circulated by the Chair, Ambassador Jara (Chile). Sources reported a commitment of the Special Session to finalise the AL modalities negotiations by February 2003. Overall, the Chair's suggestions were viewed as a "good basis for continuing the discussions" on how to seek credits for Members' unilateral liberalisation measures since the conclusion of the Uruguay Round. Further, Members reportedly moved forward on several issues previously raised by a group of 24 developing countries, including questions related to the treatment of developing country Members. How to resolve the treatment of newly acceded WTO Members such as China and Chinese Taipei remains an outstanding issue.

India Challenges EU GSP Scheme On Environment And Labour Standards
BRIDGES Weekly Trade News Digest - Vol. 7, Number 1 Jan 15, 2003
On 19 December 2002, India requested the establishment of a WTO panel to determine whether provisions under the EU's Generalised System of Preferences (GSP) tariff programme relating to labour rights, the protection of the environment and combating the production and trafficking of illicit drugs is compatible with WTO rules. The dispute request is the first ever to contest a trade measure used to promote respect for labour rights. The EU blocked the first request for the establishment of a panel at a subsequent meeting of the Dispute Settlement Body on the same day. However, any follow-up request from India would automatically be accepted by the DSB, and India has stated that the request will be tabled at a meeting of the Dispute Settlement Body on 27 January. The EU expressed "deep regret and surprise" over India's decision to seek a panel, maintaining that India "has chosen to ignore that the EU's GSP scheme is an autonomous regime granted on a non-reciprocal, generalised and non-discriminatory basis."

American investor protection is protectionist
Benn Steil (FT) Jan 16, 2003
The archaic nature of the power of the Sarbanes-Oxley Act is surprising.

Biotech crops continue rapid global growth
CheckBiotech Jan 16, 2003
Biotechnology continues to be a growing choice among farmers worldwide as global acreage of crops enhanced through biotech increased by 12 percent, or 15 million acres in 2002, according to a new report released today from the International Service for the Acquisition of Agri-biotech Applications (ISAAA).

Trade in biotechnology food products
James Stamps (CheckBiotech) Jan 16, 2003
The following article about agricultural biotechnology was published by the U.S. International Trade Commission (USITC) in the December 2002 International Economic Review. (Article also discusses biotech trade policy developments).

No way to run the world's biggest economy Financial Times Subscription Required
Stephen Roach (FT) Jan 17, 2003
The US needs a sizeable short-term stimulus to prevent deflation.

Why Trust Argentina? Wall Street Journal Subscription Required
Mary Anastasia O'Grady (WSJ) Jan 17, 2003
At best, the IMF would have us believe it is the world's most gullible lender.

The Way We Are
Maureen Dowd (NYT) Jan 19, 2003
Robert Redford said he wanted to do a sequel to "The Candidate" because things had gotten so much worse with the collusion of business, money, media, politics and celebrity.

Emerging markets
Economist Jan 20, 2003
Argentina, Brazil, Indonesia, Turkey and others want help from the International Monetary Fund but are less keen on its prescriptions. Did the IMF become a hostage to fortune by blinking first in its latest stand-off with Argentina?

Politics and science mix badly
Roger Pielke Jr. (IHT) Jan 20, 2003
The book "The Skeptical Environmentalist" by Bjorn Lomborg, which argued that the health of the environment is nowhere near as dire as described by some environmental groups, has been hailed as a tonic to the Chicken Little pronouncements of environmental extremists. And it has been condemned as misleading and advancing the cause of those seeking profits at the expense of the environment.

Captains of industry turn against euro entry
FT Jan 20, 2003
Britain's biggest business leaders have turned against the idea of the UK joining the euro, according to a poll by MORI which questioned 164 chairman and chief executives.

The Debate over Global Poverty Estimates Recommended!
World Bank Jan 2003
We highlight the World Bank's Global Economic Prospects 2003, which contains the latest World Bank estimates of the incidence of consumption/income poverty globally and regionally for 1990 and 1999. There has been much debate recently over these estimates, with several voices critical of the World Bank's numbers. See for example a paper by Sanjay G. Reddy and Thomas W. Pogge and a response by Martin Ravallion here and here.

The other side of China's success story Financial Times Subscription Required
Simon Cartledge (FT) Jan 20, 2003
Overseas capital will exacerbate the gap between the wealthy regions and the rest of the country.

IMF program for Argentina Adobe Acrobat Required
IMF Survey Jan 20, 2003
IMF program for Argentina; AEA coverage; SDRM design; Fischer on globalization; De Vries honored; Latin America and crisis; Challenges for African leaders; Demekas on postconflict aid.

OPEC grip on market weakens
IHT Jan 21, 2003
The surge in oil prices caused by the loss of production in Venezuela and the possibility of a U.S. attack on Iraq has created a rare spectacle: The president of OPEC publicly complaining that current levels are too high.

Argentine 'blackmail' tests the IMF's credibility Financial Times Subscription Required
FT Jan 21, 2003
The $6bn debt roll-over due to be released this week is being criticised for being too generous. Critics worry it could set a dangerous precedent.

A Bumpy Road to Reform
Richard Katz (AWSJ) Jan 21, 2003
Japan doesn't feel like a failed state.

Africa-US Trade Summit Discusses Future Of African Trade
BRIDGES Weekly Trade News Digest - Vol. 7, Number 2 Jan 22, 2003
Ministers and trade negotiators from sub-Saharan Africa and the US met in Port Louis, Mauritius, from 13-17 January to discuss developments under the US' African Growth and Opportunity Act (AGOA). During the meeting -- the second US-Sub-Saharan African Trade and Economic Cooperation Forum, or AGOA Summit -- US President Bush stated that he would extend the AGOA beyond the current deadline of 2008. The meeting was held in accordance with a mandate under the AGOA for a ministerial- level Forum and a parallel private sector session every year. A trade exhibition and an NGO forum were also held, and over 900 African businesses participated. The AGOA, signed by former US President Bill Clinton in May 2000, provides duty and quota-free access for nearly 2000 products from 38 (of 48) sub-Saharan African countries deemed to be promoting good governance and market economies.

WTO Appellate Body Rules Against US On Antidumping
BRIDGES Weekly Trade News Digest - Vol. 7, Number 2 Jan 22, 2003
On 16 January the WTO Appellate Body delivered its decision on a dispute relating to US legislation that allows American companies to claim money collected from antidumping or countervailing duty orders on foreign imports. In its decision, the Appellate Body upheld an earlier WTO panel ruling that found that the US Continued Dumping and Subsidy Offset Act of 2000 (CDSOA) -- popularly known as the Byrd Amendment -- constitutes an act against dumping and subsidisation, which is not allowed under WTO rules.

Emerging Market Debt. What is the Problem? Recommended!
Kenneth Rogoff (IMF) Jan 22, 2003
Speech by the Economic Counselor and Director, Research Department, IMF.

Charges hit world's biggest banks
FT Jan 22, 2003
Three of the world's biggest banks - Credit Suisse, Citigroup and Japan's Mizuho - reported billions of dollars in charges to cover loan losses and regulatory fallout.

Latin America's debt Financial Times Subscription Required
Martin Wolf (FT) Jan 22, 2003
A paper from the Inter-American Development Bank provides an illuminating explanation for Argentina's difficulties and, by extension, those of many other Latin American countries.

Could Linux dethrone the software king? Financial Times Subscription Required
FT Jan 22, 2003
The rising popularity of free, open-source alternatives to Microsoft Windows is redrawing the battle lines. The outcome will affect the entire software industry.

Currencies: Dollar slide slows despite unease over U.S.
IHT Jan 23, 2003
The dollar was little changed Wednesday after it consolidated after recent losses, but analysts said the currency remained vulnerable to news on Iraq and the U.S. economy.

Venezuela halts forex trade as bolívar falls
FT Jan 23, 2003
Venezuela's president Hugo Chávez ordered the central bank to suspend foreign currency trading for five days, a decision traders said looked set to be followed by the introduction of exchange controls, potentially managed by the military.

World Briefing: Americas
NYT Jan 23, 2003
Cuba: Would Karl Marx Approve?;.

Something Is Rotten in Denmark
Bjorn Lomborg (WSJ) Jan 23, 2003
In defense of "The Skeptical Environmentalist," a work that grapples hard with our pessimistic view of the environment.

Take on the Street?
Gregory Bresiger (Mises Daily) Jan 23, 2003
Review of Take on the Street: What Wall Street and Corporate America Don't Want You to Know. What You Can Do to Fight Back by Arthur Levitt, with Paula Dwyer. (Pantheon, New York, 338 pages) $24.95.

Sovereign Debt Restructuring Mechanism
Horst Köhler (IMF) Jan 23, 2003
Opening Remarks for the Sovereign Debt Restructuring Mechanism Conference, by the Managing Director, IMF.

Global Citizens? Recommended!
Jagdish Bhagwati (Foreign Affairs) Jan 23, 2003
On January 9, India announced that it would allow dual citizenship on a limited basis, marking a watershed in international immigration policy. An analysis of the dilemmas of global migration today.

Iraq darkens mood at Davos forum
IHT Jan 24, 2003
Economists attending the World Economic Forum quickly pieced together a gloomy conclusion for the world economy, citing the still-fragile U.S. economy and the potentially negative impact of a war in Iraq.

Taking on Rational Man Recommended!
Peter Monaghan (Chronicle of Higher Education) Jan 24, 2003
Dissident economists fight for a place in the discipline.

U.S. Role in the World Dominates Economic Talks as Brazilian Clamors to Be Heard
NYT Jan 24, 2003
In private banter and public pronouncements, the United States on Thursday dominated the first day of the World Economic Forum in Davos, Switzerland.

Le Free Market Wall Street Journal Subscription Required
Guy Sorman (WSJ) Jan 24, 2003
Classical liberalism is now the continent's dominant ideology.

Business gloom deepens amid fears of conflict
FT Jan 27, 2003
Economists expressed new fears about the effects on the world economy of an attack on Iraq, reinforcing the gloom brought by falls in stock markets and the dollar last week.

Humane Research Wall Street Journal Subscription Required
Bill Gates (WSJ) Jan 27, 2003
The West's best scientists should turn their attention to the developing world's diseases.

World economy
Economist Jan 27, 2003
America's Federal Reserve will review its interest-rate policy amid signs that the world's biggest economy remains weaker than politicians, businesses and voters would like. With a possible war in Iraq looming, the global economic outlook is, at best, uncertain.

Supachai Pledges Help in Arab Trade Reform Efforts
WTO Jan 28, 2003
Director-General Supachai Panitchpakdi, in a statement opening the Doha Development Agenda Advanced Training Programme for Arab Senior Government Officials on 19 January 2003 in Cairo, underlined his determination to effectively implement Secretariat measures to assist Arab countries and to mprove their participation in the work of the WTO and in the ongoing trade negotiations.

End of the cult of equities
FT Jan 28, 2003
The slide in global markets appears to be driven not by fundamentals but by a headlong retreat from equities as an asset class - the 'revulsion' stage of a bear market.

The Trust Deficit Wall Street Journal Subscription Required
Klaus Schwab and Thierry Malleret (WSJE) Jan 28, 2003
This is the glue that holds markets and peoples together.

Global Finance--Operating in a Politicized World Recommended!
Jack Boorman (IMF) Jan 28, 2003
New Rules, New Game? A Speech by the Special Advisor to the Managing Director, IMF.

Sovereign Debt Restructuring and the International Financial Architecture
Thomas C. Dawson (IMF) Jan 28, 2003
A Speech by the Director, External Relations Department, IMF.

The future need not be bleak Financial Times Subscription Required
Martin Wolf (FT) Jan 28, 2003
Political and economic risks loom large. Yet day follows night. It is conceivable that 2003 will see the start of a turnround in global political and economic fortunes.

Short Sellers Are People, Too! Wall Street Journal Subscription Required
Holman W. Jenkins Jr. (WSJ) Jan 29, 2003
There's nothing wrong with profiting off the collapse of a stock.

Agriculture Negotiations Still Stalling
BRIDGES Weekly Trade News Digest Jan 29, 2003
Little headway was made in bringing various sides together at a 22-24 January special (negotiating) session of the WTO Committee on Agriculture (CoA). The main goal of the special session was to "build bridges" to narrow the many wide gaps prevailing between Members' negotiating stances. In his concluding remarks, Chair Stuart Harbinson was said to have expressed "serious concern" about the prospects of Members reaching agreement on agriculture negotiating modalities by their scheduled deadline at the end of March. Nevertheless, he announced on 26 January at the World Economic Forum held in Davos that he was set to prepare a first draft modalities proposal prior to a forthcoming mini-Ministerial meeting set to be held from 14-16 February in Tokyo, Japan.

Informal TRIPs Council Reconvenes On Drugs Issue
BRIDGES Weekly Trade News Digest Jan 29, 2003
The Council for Trade-related Aspects of Intellectual Property Rights (TRIPs) convened for a first informal meeting of the year on 28 January, to continue discussions on how to deal with paragraph 6 of the Doha Declaration on the TRIPs Agreement and Public Health. Members discussed a proposal put forward by the EC earlier this year in an effort to break the deadlock in the negotiations. Little progress was made in the discussions, in which many delegations were unwilling to take a stance on the EC's proposal.

America must lead the world economy Financial Times Subscription Required
Jeffrey Garten (FT) Jan 30, 2003
Washington should be seeking ways to strengthen international economic institutions.

The Classical Economists on Gold
Nikolay Gertchev (Mises Daily) Jan , 2003
With the dollar down and gold up, both trends obviously related to growing fear of economic troubles ahead, the question again arises: why shouldn't the dollar itself be defined as a fixed quantity of gold? It would be if the views of the classical liberal tradition held sway. This tradition stands solidly behind a commodity money standard, like silver or gold, as the very embodiment of sound money.

>Russians turning from dollars to euros
IHT Jan 31, 2003 Counterfeiting
Economist Jan 31, 2002
The European Commission has responded to business leaders’ calls for tougher penalties for counterfeiters. But the world is awash in fake goods and the pirates are getting ever more organised and fearless.



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