News & Commentary:

January 2005 Archives


Trade out of whack Recommended!
Steve Stein (Policy Review) Dec 2004/Jan 2005
Making sense of the trade deficit.

Loving America’s Deficits Recommended!
Kenneth Rogoff (Project Syndicate) Jan 2005
With the weak dollar hanging like the sword of Damocles over the global economy, almost everyone laments America’s spendthrift habits. But did it ever occur to anybody how hard Americans must work to make everyone else look good?

Building on the Euro Recommended!
Guido Tabellini (Project Syndicate) Jan 2005
The euro is now six years old. It is past time to consider how it is performing, and whether it has lived up to the expectations that accompanied its birth.

The Ends of the World as We Know Them
Jared Diamond (NYT) Jan 1, 2005
New Year's weekend traditionally is a time for us to reflect, and to make resolutions based on our reflections. In this fresh year, with the United States seemingly at the height of its power and at the start of a new presidential term, Americans are increasingly concerned and divided about where we are going. How long can America remain ascendant? Where will we stand 10 years from now, or even next year?

The Textile Offensive Wall Street Journal Subscription Required
Emily Parker (WSJ) Jan 3, 2005
Why Vietnam isn't worried about the end to textile quotas.

The Passing of an Economic Order Wall Street Journal Subscription Required
Robert J. Samuelson (WSJE) Jan 3, 2005
We are now undergoing a profound economic transformation that is barely recognized.

Global: The Lessons of 2004
Stephen Roach (MSDW) Jan 3, 2005
It has long been said that financial markets are the ultimate mousetrap — designed to embarrass the largest number of people, the greatest amount of time. That old adage was certainly in rare form in 2004. As I look back on the year, I do so with mixed emotions. From my global perch, it was largely a year of half-baked themes — macro trends that were great to debate but ones that gained only partial traction in world financial markets. It is often claimed that we learn more from our mistakes than from our triumphs. I couldn't agree more. The key, of course, is to convert that knowledge into personal and professional growth. In that spirit, I present my annual effort at personal inventory: the five lessons of 2004.

The dollar will fall - except when it rises Financial Times Subscription Required
John Kay (FT) Jan 3, 2005
Is the dollar overvalued or undervalued? Will it rise or will it fall? As you would expect any economist to tell you, it is both overvalued and undervalued, and it will go up and down.

Hail Estonia!
Mary Anastasia O'Grady (WSJ) Jan 4, 2005
But America drops out of the top 10 freest economies.

The Probability of Catastrophe . . . Wall Street Journal Subscription Required
Richard A. Posner (WSJ) Jan 4, 2005
The fact that a disaster of a particular type has never occurred is a bad reason to ignore it.

. . . And the Economics of Disaster Management Wall Street Journal Subscription Required
Gary S. Becker (WSJ) Jan 4, 2005
Some lessons from history teach of human resilience.

A Brighter Side to the New Year Wall Street Journal Subscription Required
WSJE Jan 4, 2005
On the economic front at least, the beginning of 2005 brings some cause for cheer in Asia.

Asia/Pacific: Dollar Is The Key
Andy Xie (MSDW) Jan 4, 2005
The negative sentiment towards the dollar was behind the sustained surge of liquidity into emerging markets, which kept emerging economies buoyant, mainly via surging fixed investment in China and the resulting high commodity prices for other emerging economies. The buoyant emerging economies caused the global economy to grow at the highest rate in two decades.

Some Disasters Fuel Growth; Asian Tsunami Won't
Andy Mukherjee (Bloomberg) Jan 4, 2005
With Asian nations from Indonesia and Thailand to India and Sri Lanka still counting the casualties from the killer tsunami, a prominent economist has predicted that the world's biggest disaster in almost three decades would actually be good for economic growth.

The engines of Europe limp into ’05
IHT Jan 5, 2005
Germany is confronting rising unemployment, while France is grappling with anemic growth.

The New Mercantilists Wall Street Journal Subscription Required
WSJE Jan 5, 2005
Would you rather be the world's No. 1 importer or exporter?

Hedge Funds in Asia -- Mania or Mere Trend?
William Pesek Jr. (Bloomberg) Jan 5, 2005
Hedge funds are suddenly the rage in Asia. It's an ironic turn of events in a region that just seven years ago blamed speculative trading for its worst financial crisis in decades.

Can this year's anti-poverty promises be kept? Financial Times Subscription Required
FT Jan 5, 2005
This year's campaign for greater aid, debt relief and trade access for nations stuck in long-term poverty, which already faced obstacles, may now find itself competing for money and attention with the more immediate disaster of the Asian tsunami.

Hail the new textile maharaja
Siddharth Srivastava (AT) Jan 5, 2005
Outsourcing in information technology could soon be passe for India. With the textile and garment quota removed, India is set to emerge as the most favored destination for textile outsourcing as heavyweights like Wal-Mart and Carrefour queue up to buy their supplies from Indian manufacturers.

Wolfensohn confirms he will step down from World Bank
Times Jan 5, 2005
The race to take over one of the most powerful jobs in international development began yesterday after confirmation that James Wolfensohn will step down as president of the World Bank.

The Naked Hegemon Part 1: Why the emperor has no clothes
Andre Gunder Frank (AT) Jan 5, 2005
With its unique privilege of being able to print the world's reserve currency at will and at a cost of nothing but the paper and ink it is printed on, the US would seem to be in a can't-lose position economically. But even the mighty dollar is not invulnerable to the massive debt caused by over-consumption, under-production and the Pentagon's global adventures.

The Naked Hegemon Part 2: The center of the doughnut
Andre Gunder Frank (AT) Jan 6, 2005
There is no doubt that a collapse of the US dollar would have far-reaching effects, even as some are abandoning Uncle Sam's formerly safe haven for euros, yen and even yuan. But while the US-dominated economy gets hollowed out like a doughnut, Uncle Sam marches forward with his global vision.

Tariff Tsunami Wall Street Journal Subscription Required
WSJ Jan 6, 2005
Here's a better way to help Sri Lanka.

An Imperial Denial
Deepak Lal (YaleGlobal) Jan 6, 2005
Despite prevalent public discourse, "empire" is not a four-letter word - and it is time for the United States to begin to walk the imperial walk. In fact, throughout history, the world has been most stable under the control of empires. The United States, like empires of yore, demonstrates its dominance through unparalleled military and economic strength. Unfortunately, the US denial of its true identity may ultimately result in its undoing. In failed nation-building efforts in Iraq, for instance, the effects of US inconsistency are quite clear: "By denying its imperial role, it has not paired military power with a complementary administrative structure required to run an empire." Further, Washington's attempt to impose its own ideology onto others may prove another crucial error. If the US refuses to clean up its act and responsibly shoulder its imperial burden, warns Lal, then someone else will: In due time, China and India may indeed emerge as viable challengers.

A Foreign Aid Disaster in the Making
Thomas J. DiLorenzo (Mises Daily) Jan 6, 2005
In the wake of the tsunami disaster in Indonesia, governments throughout the world are doing what governments always do: throwing money at the problem. In this case, the money is referred to as "foreign aid."

World trade: Trading places
Economist Jan 7, 2005
This is a big year for world trade. But first, the World Trade Organisation must find a new boss, and America must pick a new trade chief.

To Float or Not to Float? Exchange Rate Regimes and Shocks Recommended!
Michele Cavallo (FRBSF Economic Letter) Jan 7, 2005
Many economists argue that a flexible exchange rate regime is preferable to a fixed exchange rate regime because it helps to insulate the domestic economy from adverse external shocks. For example, when export demand declines, a depreciation makes domestic goods more competitive abroad, stimulates an offsetting expansion in demand, and dampens the contraction in domestic economic activity. In reality, however, exchange rate depreciations in many emerging market economies over the past decade typically have been associated with financial distress and output contractions. Consequently, recent research has reconsidered the stabilization properties of a flexible exchange rate regime when exchange rate movements affect financial conditions, and these, in turn, influence economic activity.

Global: Game Over?
Stephen Roach (MSDW) Jan 7, 2005
The unraveling of the Asset Economy could well be at hand. America’s Federal Reserve has finally woken up to the perils of the risk culture that its reckless accommodation has spawned. The Fed has sounded simultaneous alarms on two fronts -- inflation and excesses in asset markets. Such explicit warnings from the US monetary authority are rare and should be taken seriously. This has important implications for the interest rate outlook, as well as for the asset-dependent US economy.

Global: Oil Price Decline Welcome, but Don?t Expect Much More
Eric Chaney and Richard Berner (MSDW) Jan 7, 2005
Back in early October, we boosted our oil price assumptions significantly, assuming a $50 peak in October for Brent quotes ($3-4 higher for West Texas Intermediate), followed by a decline to $45 towards the end of 2004 (See “Will Oil Prices Peak at $50?” Richard Berner and Eric Chaney, October 4, 2005). For once, the actual market outcome has not been as expensive as we had feared. Brent quotes effectively peaked out at $50 in October ($49.70 to be precise), but the subsequent decline was actually a bit sharper than we expected: Brent crude prices closed the year at $40, 12.5% lower than in our baseline.

Global: More Tales of Three Central Banks
Joachim Fels (MSDW) Jan 7, 2005
Contrasting and comparing various central banks’ approaches and policy stances can yield insights over and above those gained from focusing on each of them in isolation. I find it particularly instructive to compare the holy trinity consisting of the Fed, the ECB and the Bank of England. The first manages the world’s reserve currency, the second is the new kid on the block, and the latter is the ‘Old Lady’, who has a history going back to (yes) 1694 but also has perhaps the most modern policy and communication strategy of the three. Some of you may remember my piece A Tale of Three Central Banks of 21 July 2003, in which I pointed out a puzzling inverse relationship between the three banks’ transparency and predictability. The most predictable of the three in terms of interest rate changes (the Fed) was the least transparent, while the most transparent bank (the 'Old Lady') was the least predictable.

Frequent flier miles overtake US$ in value
ST Jan 8, 2005
Just when you thought it could not get any worse for the much-maligned US dollar, a British magazine has declared that it has been overtaken as the world's most popular currency by...frequent flier miles.

G7 supports tsunami debt freeze
BBC Jan 8, 2005
The G7 nations, led by the UK, agree to freeze debt repayments from countries hit by the Asian tsunami.

It's Time to Spray DDT
Nicholas D. Kristof (NYT) Jan 8, 2005
If the U.S. wants to help people in tsunami-hit countries like Sri Lanka and Indonesia - not to mention other poor countries in Africa - there's one step that would cost us nothing and would save hundreds of thousands of lives.

China and the Global Economic Recovery
Anne O. Krueger (IMF) Jan 10, 2005
The theme of today's seminar is China's role in the global economy. I want first to sketch key aspects of China's changed role in the world economy. I then want to look ahead, and suggest some of the issues that I think will confront China and its global economic partners in the next few years: whether China can achieve the much-debated soft landing; the extent to which the Chinese authorities should modify current exchange rate policy; China's role in world trade, especially in the wake of the expiration of the Multi-Fiber Agreement; and the need for structural economic reforms.

Global: The Sure-Thing Syndrome
Stephen Roach (MSDW) Jan 10, 2005
In the end, denial is usually the only thing left. In my view, that’s pretty much the case today in world financial markets. Imbalances on the real side of the global economy have moved to once unfathomable extremes. And now the Federal Reserve belatedly enters the fray threatening to take away the proverbial punch bowl from a rip-roaring party. Financial markets hardly seem concerned over this impending collision. Spreads on most risky assets have fallen to razor-thin margins. Steeped in denial, investors have once again become true believers in the sure-thing syndrome.

World Bank Job Wall Street Journal Subscription Required
WSJ Jan 11, 2005
After Wolfensohn an opportunity for much overdue reform.

China becomes world's No 3 trading nation
AT Jan 12, 2005
With its foreign trade value estimated to have hit a record high of US$1.1 trillion in 2004, China has emerged as the world's third-largest trading nation after the United States and Germany. In December alone, exports rose 33%, a trend that is likely to continue unabated in 2005.

Merging the World Bank and IMF Recommended!
Fritz Fischer (Globalist) Jan 12, 2005
Is a merger the right move to meet future development challenges?

Tsunami-hit nations get debt relief
ST Jan 13, 2005
Wealthy creditor nations offered on Wednesday to let nine tsunami-hit countries halt repayments on billions of dollars of debt, but only three said they planned to accept the Paris Club's proposal.

American deficit hits record despite dollar
IHT/NYT Jan 13, 2005
The United States trade deficit soared to a new high of $60.3 billion in November, the U.S. Commerce Department reported Wednesday. The figure breaks all previous monthly records and confounds predictions that the deficit would diminish now that the dollar has weakened and the price of oil has dropped.

Leave the Yuan Alone Wall Street Journal Subscription Required
WSJE Jan 13, 2005
Casting doubt on Don Evans's advice.

Chile: Socialism, Dictatorship, and Liberalism Recommended!
Ryan McMaken (Mises Daily) Jan 13, 2005
With Augusto Pinochet awaiting trial for ordering the killing, torture, and imprisonment of political dissidents during the 1970's, Chilean politics is back in the news. This is still a sore spot for most every Chilean, and even here in America, any sympathetic mention of either Pinochet or his Marxist predecessor Salvador Allende can provoke some harsh words.

Zoellick plies a new trade
AT Jan 14, 2005
By picking former US Trade Representative Robert Zoellick as Condoleezza Rice's deputy, President George W Bush has sought to consolidate his foreign policy team. The vanguard of corporate America, Zoellick's my-way-or-the-highway approach to global economy issues gels well with the administration's unilateralism in foreign and military policy.

Europeans relax after signs of life from dollar
IHT Jan 14, 2005
The European Central Bank on Thursday left its benchmark interest rate unchanged at 2 percent.

After 3 years, euro still confounds some
IHT Jan 14, 2005
Europe's smaller countries have been far more nimble in adapting to the single currency than people living in France, Germany and Italy.

Hold the Applause; Argentina Isn't Well Yet Wall Street Journal Subscription Required
Mary Anastasia O'Grady (WSJ) Jan 14, 2005
Nonpayment on $80 billion of debt would make anyone feel rich.

Deficit Attention Disorder Wall Street Journal Subscription Required
Michael Petris (WSJE) Jan 14, 2005
The current "unstainable" global balance of payments is perhaps necessary.

The dollar and the deficit: Thrift is a foreign concept
Economist Jan 14, 2005
The falling dollar has failed to narrow America’s trade deficit, which set another record in November. The world’s largest economy is looking increasingly like the mirror image of its third largest, Germany

Blame China? Strong yuan would offer U.S. little help
IHT Jan 15, 2005
A revaluation of the yuan is unlikely to be a silver bullet for dealing with the U.S. deficit.

Seized funds should be spent on social schemes Financial Times Subscription Required
Calestous Juma (FT) Jan 16, 2005
Exploring new avenues for funding long-term development is just as important as freezing repayment of foreign debt.

Dealing with 'No' votes Financial Times Subscription Required
Wolfgang Munchau (FT) Jan 16, 2005
It is not good perpetually to confront electorates with the stark choice between a deeply integrated Europe and leaving it altogether.

Bush's 2nd term: What the world wants from America
IHT Jan 17, 2005
Countries around the world, whether allies or not, want to be heard by the U.S. - about terrorism, development, trade, the environment and the weak dollar.

Global: At an Inflection Point
Rebecca McCaughrin (MSDW) Jan 17, 2005
Trade to remain on radar screens. This week, we had a raft of trade data out of the US, China, UK, Japan, Australia, Canada, Germany, France, Russia, among others, several of which surprised the market. Looking ahead, we think trade will remain a key focus, not only because of the current tug-of-war between structural and cyclical stories, but also because the global trade cycle is at an inflection point and this will only contribute to further variability in the coming months. Here’s a quick summary of recent developments and where we stand in the current cycle.

A Practical Plan to End Poverty Recommended!
WP Jan 17, 2005
Americans know a good deal when they see it. Today a group of leading scientists and practitioners from several fields -- agriculture, medicine, economics, education, engineering -- is making a proposal to the world. If rich and poor countries will follow through on the promises they have made over the past five years to fight extreme poverty and disease -- and rely on the best science and technology in doing so -- the world can save millions of lives and extricate hundreds of millions of its poorest people from the trap of extreme poverty. The cost is a mere 50 cents out of every $100 of rich-world income in the coming decade.

Aid Is Good; Trade Is Better Wall Street Journal Subscription Required
Supachai Panitchpakdi (WSJ) Jan 17, 2005
There's a better way to help the tsunami victims.

Dangers of US trade deficit
ST Jan 17, 2005
The United States' rising trade deficit baffles the experts: The lower the US dollar falls, the higher the trade deficit gets.

Trade Deficit Blame-Game
Irwin Stelzer (Daily Standard) Jan 17, 2005
The data last week showing that America's trade deficit hit still another record in November startled those who have been expecting the shrunken dollar to shrink the deficit, and soon. The $60.3 billion recorded in November, a jump of 7.7 percent from the October level, appalled those economists who have been forecasting a drop in the deficit. And it upset those in Europe who are hoping that the dollar will strengthen, making export goods from the eurozone more competitive.

The Truth About Trade Wall Street Journal Subscription Required
Jagdish Bhagwati (WSJ) Jan 18, 2005
Sauce for rich geese should be sauce for poor ganders.

Who's Afraid of a Deficit? Wall Street Journal Subscription Required
WSJE Jan 18, 2005
Euroland is avoiding the real problems at home.

Millennium bargain
FT Jan 18, 2005
Next item on the agenda: halve world poverty, bring hope to millions. Price: $50bn (£27bn) or so in extra aid per year. Alternative: continued preventable suffering and deprivation, above all in sub-Saharan Africa, and failure to meet the 2015 Millennium Development Goals (MDGs). This is the gist of the Millennium Project report published yesterday.

Global: The Real Interest Rate Conundrum
Stephen Roach (MSDW) Jan 18, 2005
Real, or inflation-adjusted, interest rates remain near rock-bottom levels. That’s true in most major segments of the world. It’s also true for short- and long-term maturities, alike. This condition is not sustainable. The days of abnormally low real interest rates could be coming to an end. As the world economy returns to trend, a normalization of real interest rates is both appropriate and likely. This poses major risk to financial markets, as well to asset-dependent real economies that have become hooked on low real interest rates.

Global: Liquidity Springs Eternal
Joachim Fels (MSDW) Jan 18, 2005
With the Federal Reserve apparently in the midst of a campaign to normalize interest rates, worries proliferate that higher rates will start to bite and lead to a sell-off in financial assets across the risk spectrum. I too believe that an unhappy outcome is ultimately inevitable. However, there are good reasons to think that the party can rave on for a good while longer. Two reasons are at the top of my list: liquidity and liquidity. First, the party’s host, the Fed, might have second thoughts later this year and decide that it better keep giving the guests food, booze and music to avoid riots. Second, even if the Fed decided to pull the plug and turn off the tap, the guests might simply move next door and find another host to keep the rave going for a while. Prime candidates as new hosts are the ECB and the Bank of Japan. After all, the Fed does not have a monopoly in the provision of global liquidity.

Some Pact!
Grant M. Nülle (Mises Daily) Jan 19, 2005
As a precondition to joining the European currency, member states had to abide by quantitative fiscal criteria, explained below, sharply limiting their room to maneuver. Since the adoption of the fiscal pact and the launch of the euro, many countries chose to flaunt it, to the chagrin of others that steadfastly adhered to it. This article explains how over the past 14 months a seemingly indomitable EU budgetary instrument has been rendered redundant.

Only a Game?
Anne Applebaum (WP) Jan 19, 2005
It is 9 a.m. Eastern Standard Time. You are the president of the United States, or the chancellor of Germany, or the British prime minister. You switch on the news and learn that three members of a Turkish family, recently arrived in Munich, have been diagnosed with smallpox. Across Europe, there are rumors of further outbreaks. You know that smallpox has been eradicated in nature and that its appearance can only signal a terrorist attack. You know that a few cases will quickly multiply, killing one out of three victims. What do you do?

Juggling egos at ultimate A-list party
IHT/NYT Jan 20, 2005
Klaus Schwab's office here has a dramatic view of Lake Geneva and the snow-dusted peaks beyond. It's a fitting backdrop, because for Schwab, the ups and downs of his work these days are more vertiginous than a mountain range.

Supachai's Consultative Board: Non-Discrimination In Trouble
BRIDGES Weekly Trade News Digest - Vol. 9, Number 1 Jan 19, 2005
The World Trade Organisation is threatened by the proliferation of discriminatory trading arrangements that could render it irrelevant, as well as by widespread public misperception about the WTO's role, benefits, and limitations. These were among the main conclusions of WTO Director-General Supachai Panitchpakdi's 'Consultative Board' (CB), in a report made public on 17 January. The 86-page report entitled 'The Future of the WTO: Addressing institutional challenges in the new millennium' also made a series of recommendations for how the functioning of the WTO might be improved, but stopped short of suggesting radical changes to the way the institution operates.

Indian TRIPS-Compliance Legislation Under Fire
BRIDGES Weekly Trade News Digest - Vol. 9, Number 1 Jan 19, 2005
A decree issued by the Indian government to bring the country into compliance with its obligations under the WTO Agreement on Trade-Related Intellectual Property Rights (TRIPS) has raised concerns that it will put access to life-saving drugs for diseases like AIDS out of the reach of poor people both in India and elsewhere in the world. Critics of the new law claim that it goes beyond the demands of the TRIPS Agreement and fails to take full advantage of existing WTO provisions for the protection of public health.

Millennium Project Calls For Balancing Trading System
BRIDGES Weekly Trade News Digest - Vol. 9, Number 1 Jan 19, 2005
The UN Millennium Project -- an independent advisory project commissioned by UN Secretary-General Kofi Annan to propose the best strategies for meeting the Millennium Development Goals (MDGs) -- in its final report reproached the global trading system for being "unbalanced against the interests of developing countries". Efforts to correct this should focus on improving both market access and supply-side competitiveness for low-income countries, the authors concluded, repeatedly emphasising the need for assisting poor countries in adjusting to the impacts of trade liberalisation.

Trade Response To Tsunami Disaster: Initiatives In The Pipeline
BRIDGES Weekly Trade News Digest - Vol. 9, Number 1 Jan 19, 2005
Pledges of aid and debt relief for countries affected by the Indian Ocean tsunami of 26 December 2004 have been followed by calls for special trade measures to help them rebuild their economies. The measures proposed focus mainly on expanded market access for the countries' exports and a suspension of anti-dumping duties.

Poverty Breeds Insecurity
Millennium Project (YaleGlobal) Jan 19, 2005
A UN panel on Millennium Development Goal offers detailed recommendation for way to a better future

China's Choice Wall Street Journal Subscription Required
WSJE Jan 21, 2005
China can trade with the U.S. or it can help Iran's nuclear proliferation efforts.

Global: Spending Capital Wisely
Stephen Roach (MSDW) Jan 21, 2005
In his post-election press conference of early November, President Bush famously said, “I’ve earned capital in this election and I’m going to spend it…” In his second inaugural address, the President gave every indication of sticking with this promise. This could be a very challenging commitment insofar as economic policy is concerned. While Mr. Bush is hardly lacking in political capital, financial capital is another matter altogether for a saving-short US economy. That poses two critical and related questions: Who will foot the bill for these bold initiatives? Will they solve America’s biggest economic problems?

The Failings of the Economic Freedom Index
Stefan M.I. Karlsson (Mises Daily) Jan 21, 2005
For free market economists, the issue of economic freedom is very important. No country in the world is consistently ruled according to libertarian ideals and no country is completely socialist, but there are clearly great differences among countries in their degree of capitalism and socialism or statism in general.

In Europe, the consumer is hardly king
IHT Jan 24, 2005
In Europe's major economies, retail commerce is still a highly regulated sector with deep roots in nationalist, protectionist policies.

Nations Ranked as Protectors of the Environment
NYT Jan 24, 2005
Countries from Europe and South America dominated the top spots in the 2005 index of environmental sustainability.

Global: MacroVision 2005 -- The Elastic World
Stephen Roach (MSDW) Jan 24, 2005
Our annual MacroVision event -- a day of internal deliberations followed by a day of thematic client debate -- painted a very different picture of the world than the one I embrace. There was a strong belief that macro tensions, however serious, can now be defused gently. That was thought to be generally true of markets, economies, and even geopolitical pressures. A year ago, while the MacroVision consensus was nervous about the ominous buildup of global imbalances, the group generally favored a "muddle-through" scenario. With another year of angst having gone largely for naught, there was new conviction in the case for a benign rebalancing. An elastic world can cope with almost anything, the crowd smirked.

Global: Of Bubbles, Complacency, and Liquidity
Joachim Fels (MSDW) Jan 25, 2005
"Bond Bubble?" This was one of the three themes we chose for the workshop discussions with a distinguished group of clients at this year’s MacroVision conference, which took place in New York last Friday (for an overview of the whole conference, see Stephen Roach, MacroVision 2005: The Elastic World, January 24, 2005, on this Forum. Also, my colleagues Dick Berner and Andy Xie have written must-read overviews of the other two themes discussed -- After America and Demographic Dilemma -- on these pages). The two workshops on the bubble theme were heavily oversubscribed, and the discussion was animated from the start.

The Gates Vaccinations
WP Jan 25, 2005
It can be frustratingly hard to turn money from the rich world into progress against global poverty. An aid program can finance the purchase of school textbooks or the construction of a well. But the books are lifeless without competent teachers, or if parents depend on child labor and don't want to send their kids to school. Equally, the well won't help much if it's not maintained, or if the politics of the village leave the poorest without access to it. But there's one type of aid that escapes many of these obstacles. Vaccination programs can protect millions of people from debilitating diseases. And once the vaccines are delivered, the gains are locked in: No matter how tough the environment around the vaccinated people, their health will still be protected.

The Democratic Ideal Recommended!
Joshua Muravchik (WSJ) Jan 25, 2005
The president's "realist" critics need to get real.

IMF assesses post-tsunami needs Adobe Acrobat Required
IMF Survey Jan 24, 2005
Plus: Ireland's challenges after tiger years; four new books contrast European and U.S. socioeconomic paradigms; Trade and regional integration in Africa; Oil revenues help boost Saudi Arabia's real GDP growth; Mexico's recovery broadens; Vietnam builds on strong growth; Land inequality and economic development; and Gulf Cooperation Council countries explore ways to boost growth. Events coming up; IMF financial assistance at a glance.

Emerging markets: the end of the affair?
Economist Jan 25, 2005
Emerging-market debt has been a sweetheart deal over the past three years. It is almost time to move on.

Taking networking to the next level: The world
IHT Jan 26, 2005
Globalization has eroded the power of national governments in fits and starts over the past few decades, sparking the piecemeal creation of a host of multilateral institutions and networks.

A Path to Cheaper AIDS Drugs for Poor Nations
Donald G. McNeil Jr (NYT) Jan 26, 2005
The F.D.A. has opened the way for U.S. taxpayer dollars to be used to buy cheaper AIDS medicines for use in poor countries.

The Real World: Bush's War on Poverty
Claudia Rossett (WSJ) Jan 26, 2005
Bush's war on tyranny is also a war on poverty.

Members meet DG candidates
WTO Jan 26, 2005
The four nominated candidates for the position of WTO Director-General introduced themselves to members at a formal General Council meeting on 26 January 2005.

Global health: Foundation
Economist Jan 26, 2005
The world’s richest charity confronts the health of the world’s poorest people

DG Candidates Meet With General Council
BRIDGES Weekly Trade News Digest - Vol. 9, Number 2 Jan 26, 2005
The race to replace Supachai Panitchpakdi as Director-General (DG) of the WTO officially got underway on 26 January, as the four candidates went before a formal meeting of the WTO General Council to promote their respective cases for the job.

DG Candidates Follow Up GC Hearing With Civil Society Meeting
BRIDGES Weekly Trade News Digest - Vol. 9, Number 2 Jan 26, 2005
In a meeting that marked a new step in the relationship between civil society and the WTO, candidates for the position of WTO Director-General (DG) attended a public hearing in Geneva on 26 January to respond to questions sent in from around the world regarding their vision for international trade. Three of the four candidates for the position -- former European Trade Commissioner Pascal Lamy of France, Mauritian Foreign Affairs and Trade Minister Jaya Krishna Cuttaree and Brazilian WTO Ambassador Luiz Felipe de Seixas Correa -- attended the meeting organised by the Institute for Agriculture and Trade Policy (IATP), Oxfam International and 3D --> Trade - Human Rights - Equitable Economy. The fourth DG candidate, former Uruguayan WTO Ambassador Carlos Perez del Castillo, was unable to attend.

Members, Civil Society React To Proposals For WTO Reform
BRIDGES Weekly Trade News Digest - Vol. 9, Number 2 Jan 26, 2005
Many WTO Member governments would not object to some informal discussions on the recommendations of the report on WTO reform released last week by WTO Director-General Supachai Panitchpakdi's 'Consultative Board,' so long as they do not come at the expense of work for the Doha Round negotiations. At an informal heads-of-delegation meeting on 25 January, Members gave the report a generally positive reception, in spite of disagreements over its trenchant criticism of trade preferences and preferential trade agreements. Civil society organisations, on the other hand, were more critical of some of the eight-member panel's recommendations.

In Davos, spotlight turns to Africa
IHT Jan 28, 2005
The world will be pressed to provide the money and the will to reverse a continent's slide.

A Reign On the Wane?
WP Jan 28, 2005
There's a trace of what might be called the "Eliza Doolittle Factor" at this year's gathering here of global movers and shakers. Instead of the usual griping about tutelage from arrogant Americans -- who play the Henry Higgins role in the globalization drama -- there's a new note of independence and even defiance, as in Eliza's famous refrain: "I can do bloody well without you."

WTO boss pushes for trade deal
BBC Jan 28, 2005
A new global trade deal can be struck by the end of 2006, WTO director general Supachai Panitchpakdi says.

The Market Shall Set You Free
Robert Wright (NYT) Jan 28, 2005
Last week President Bush again laid out a faith-based view of the world and again took heat for it. Human history, the president said in his inaugural address, "has a visible direction, set by liberty and the author of liberty." Accordingly, America will pursue "the ultimate goal of ending tyranny in our world" - and Mr. Bush has "complete confidence" of success. Critics on the left and right warned against grounding foreign policy in such naïve optimism (a world without tyrants?) and such unbounded faith.

At Forum, Leaders Confront Annual Enigma of China
Mark Landler (NYT) Jan 30, 2005
At the annual meeting of the World Economic Forum, there are many questions, but few answers on the subject of China's prospects.

OPEC Suggests No Output Change Till Cut in April
Jad Mouawad (NYT) Jan 30, 2005
Oil ministers suggested they might cut output in April to fend off a seasonal slowdown in demand when winter ends in the Northern Hemisphere.

A Jolie Good Time at Davos
Bret Stephens (WSJ) Jan 31, 2005
Who knew hanging out with this many left-leaning intellectuals could be so much fun?

How to rebuild the stability pact Financial Times Subscription Required
Charles Wyplosz (FT) Jan 31, 2005
The demise of the previous pact, the consequence of poor economic design, should not be allowed to pit small against large countries.

Global: An Unprepared World
Stephen Roach (MSDW) Jan 31, 2005
Globalization is a wonderful subject to debate. Basically, that’s all I’ve been doing for most of the past two weeks — first at our own MacroVision exercise and more recently at the World Economic Forum in Davos. In many respects, these were two of the most intellectually enriching weeks I have spent in a long time. Yet as I now decompress and ponder the experience, I am left with a nagging sense of concern. As I see it, investors are largely unprepared for some big changes coming in the global landscape in 2005.

Currencies: A Temporary Base in EUR/JPY and USD/JPY
Stephen L. Jen (MSDW) Jan 31, 2005
We continue to believe that, first, heading into the risk events centred around the G7 in early February, the USD index should be well-supported and EUR/JPY should trade on the heavy side. However, as the market digests through the risk events in February, most of which are USD-supportive, in my view, USD/JPY and EUR/JPY could form a temporary base. New triggers are needed for the EUR/JPY rotation to continue, or for USD/JPY to trade lower. The most important triggers are (1) a partial float of the RMB and (2) a rally in the Nikkei.

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