Archive for the ‘economies’ Category

The year 2025: Oil, dollar out; Russia, Islam in

November 21, 2008

Global warming could be a boon to Russia, a European country could be overrun by organized crime and the U.S. and its dollar could further decline in importance during the next two decades, says a U.S. intelligence report with predictions for the world in 2025.

The report, Global Trends 2025, is published every four years by the National Intelligence Council to give U.S. leaders insight into looming problems and opportunities.

The report says the warming earth will extend Russia and Canada‘s growing season and ease their access to northern oil fields, strengthening their economies. But Russia’s potential emergence as a world power may be clouded by lagging investment in its energy sector, persistent crime and government corruption, the report says.

By PAMELA HESS, Associated Press Writer

Analysts also warn that the same kind of organized crime plaguing Russia could eventually take over the government of an Eastern or Central European country. The report is silent on which one.

It also says countries in Africa and South Asia may find themselves unstable and ungoverned, as state regimes collapse or wither away under security problems and water and food shortages brought about by climate change and a population increase of 1.4 billion.

The potential for conflict will be greater in 2025 than it is now, as the world’s population competes for declining and shifting food, water and energy resources.

Despite a more precarious world situation, the report also says al-Qaida’s terrorist franchise could decay “sooner than people think.” It cites its growing unpopularity in the Muslim world, where it kills most of its victims.

“The prospect that al-Qaida will be among the small number of…

Read the rest:
http://news.yahoo.com/s/ap/20081121/
ap_on_go_ot/intel_trends_4

Global Financial Crisis, Intertwined Economies, Too Much Debt: Now What?

November 16, 2008

Barack Obama surely has one of the toughest leadership challenges any incoming president has ever faced. We’re in the midst of a terrible economic meltdown, the current administration has lost all credibility, the House of Representatives is full of knuckle-dragging Neanderthals, and the public is being whipsawed between free-market fundamentalists preaching the virtues of just letting the market rip and left-wingers who think we can punish Wall Street while protecting Main Street. It feels like a mess with no one in charge.
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Now is when we need a president who has the skill, the vision and the courage to cut through this cacophony, pull us together as one nation and inspire and enable us to do the one thing we can and must do right now:

Go shopping.

Obama can’t wait until Jan. 20 to weigh in on this. If we don’t stimulate the global economy fast enough and big enough, some of Obama’s inaugural balls might be held in soup kitchens.

When President Bush told us to go shopping after 9/11, he was right. We needed to stimulate the economy then. The problem was that the Bush economic team never turned off the green light and told people to “go saving.” So with easy credit seemingly endlessly available, American consumers saved virtually nothing and bid up housing prices to record levels. Retailers expanded stores and China expanded factories to accommodate all the shopping. It was quite a party. We had banks in America giving mortgages to people whose only qualification “was that they could fog up a knife,” one mortgage broker told me.

By Thomas Friedman
The New York Times

But when something seems too good to be true, it usually is. When these reckless mortgages eventually blew up, it led to a credit crisis. Banks stopped lending. That soon morphed into an equity crisis, as worried investors liquidated stock portfolios. The equity crisis made people feel poor and metastasized into a consumption crisis, which is why purchases of cars, appliances, electronics, homes and clothing have just fallen off a cliff. This, in turn, has sparked more company defaults, exacerbated the credit crisis and metastasized into an unemployment crisis, as companies rush to shed workers.

Governments are having a problem arresting this deflationary downward spiral — maybe because this financial crisis combines four chemicals we have never seen combined to this degree before, and we don’t fully grasp how damaging their interactions have been, and may still be….

Read the rest:
http://www.nytimes.com/2008/11/16/
opinion/16friedman.html?scp=1&sq=jaws&st=nyt


“You’re gonna need a bigger boat.”

World Leaders Agree to Seek Major Economic Reform

November 16, 2008

Group of 20 In Wasshington DC Pledges Cooperation to Restore Growth
World leaders holding an emergency meeting to combat the economic crisis agreed yesterday to a far-reaching action plan that, over the next 4 1/2 months, would begin to reshape international financial institutions and reform worldwide regulatory and accounting rules. 

By Glenn Kessler and Anthony Faiola
Washington Post Staff Writers
Sunday, November 16, 2008; Page A01

The leaders’ 11-page statement spoke of broad principles, leaving the details to be worked out by lower-level aides before another summit meeting in April, after Barack Obama assumes the presidency. But the gathering in Washington of the nearly two dozen nations — from every region of the world — reflected the new balance of power emerging in the aftermath of a financial crisis that has devastated even well-run economies, a wrenching process that British Prime Minister Gordon Brown has dubbed “the birth pangs of this new global order.”

World leaders pose for the group photo on Saturday, Nov. 15, ...

World leaders pose for the group photo on Saturday, Nov. 15, 2008, in Washington. President Bush invited leaders of the G-20 community to Washington for a weekend summit to discuss the world economy and the current condition of the financial markets.(AP Photo/RIA-Novosti, Vladimir Rodionov, Presidential Press Service)

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http://www.washingtonpost.com/w
p-dyn/content/article/2008/11/15
/AR2008111500902.html?hpid=topnews

China’s central bank pledges global cooperation

October 11, 2008

BEIJING (AFP) – China’s central bank has pledged to continue international cooperation to tackle the global financial crisis and maintain market stability, according to state media.

The pledge on Friday came after China this week joined the US Federal Reserve, the European Central Bank and other major central banks to cut interest rates in response to the global financial turmoil and fears of a domestic slowdown.

“The PBOC (People’s Bank of China) will continue close contacts and cooperation with counterparts and international financial organisations to jointly maintain stability of global financial markets,” PBOC spokesman Li Chao told Xinhua news agency.

A bank employee counts out 100 Yuan notes in Shanghai in early ... 
A bank employee counts out 100 Yuan notes in Shanghai in early April. China’s central bank has pledged to continue international cooperation to tackle the global financial crisis and maintain market stability, according to state media.(AFP/File/Mark Ralston)

The PBOC would monitor the crisis and take action to guard against financial risks, Li said.

The global economic slowdown had reduced demand for Chinese exports and affected China’s economy, he added.

But Li was confident that China could ride out the crisis, according to Xinhua.

“China has a huge domestic market and the liquidity is abundant,” he said.

“As long as we take strong measures to boost domestic demand, the economy has big potential for sustainable growth.”

A PBOC statement on the third-quarter meeting of its monetary policy committee said it would take flexible and prudent macro-economic control measures to boost economic growth, according to Xinhua.

Read the rest:
http://news.yahoo.com/s/afp/20081011/bs_afp/finance
bankingchinabank_081011042810

Brain drain, talent mismatch hold Taiwan back

March 16, 2008
By Lee Chyen Yee

TAIPEI (Reuters) – When Bernard Liu was looking for people to join his team of equity researchers at JPMorgan in Taiwan last year, he found a labor market rich in engineers but lacking in people qualified for the service sector.

Below: Taipei, Taiwan (臺北市)

In the end, it took him a whole year to fill the three posts.

“It’s typically a much more mixed skillset and unfortunately on some of the critical skills, candidates sometimes are lacking,” said Liu, whose company employs about 550 staff in Taiwan working in investment banking, securities and asset management. “It’s actually quite a handicap for Taiwan in the integration in the global economy.”

Managers like Liu are feeling the effects of a brain drain of talent from Taiwan to more global economies like the United States, Hong Kong and China.

Multinational companies also complain that candidates have weak English skills, a lack of talent in management and insufficient expertise in high-level research.

These deficiencies are hampering Taiwan as it tries to transform itself from a manufacturing economy into one that offers more sophisticated financial, legal and other business services.

“Some Taiwanese lawyers we know prefer to work in Hong Kong or China nowadays because the markets are hot,” said Jack Huang, partner-in-chief in Taipei of global law firm Jones Day.

For decades, Taiwan has profited from contract manufacturing, making electronic products for brands such as Dell and Texas Instruments. But, as a growing China takes on some of that manufacturing, Taiwan could be left behind.

Read the rest:
http://news.yahoo.com/s/nm/20080316/bs_nm/
taiwan_economy_jobs_dc_1

Corruption of Asian Economies Rated By Expats

March 12, 2008

From The Daily Tribune
Manila
March 12, 2008

It seems that no country in Asia can beat the Philippines under President Arroyo in the corruption game, with the country again seen by expatriates as tops in corruption.

The Philippines, Thailand, Indonesia and China are among the most corrupt Asian economies, according to results of a regional poll of expatriate businessmen released Monday, with the Philippines topping it, having obtained a 9.0 out of a possible 10 points under a grading system where 0 is the perfect score and 10 the worst.

While the Philippines retained its number one ranking in corruption, Singapore and Hong Kong retained their rankings as the cleanest economies, the Political and Economic Risk Consultancy (PERC) said in its report.

A man uses his mobile phone as he walks past a stock exchange ...
A man uses his mobile phone as he walks past a stock exchange board inside a bank in Taipei March 10, 2008. Asian stocks hit their lowest in nearly seven weeks on Monday, while the dollar was near a record low against the euro and an eight-year low against the yen after weak employment data fuelled U.S. recession fears. Shares in China, Taiwan and Singapore were down more than 2 percent.REUTERS/Nicky Loh (TAIWAN)

The annual survey covers only 13 economies in Asia and excludes other countries notorious for corruption, such as Myanmar and Bangladesh.

Some 1,400 expatriates were polled in January and February this year, PERC said.

Corruption remains a problem in the region despite huge economic progress made over the years, with governments generally lacking the political will to tackle the problem, the Hong Kong-based PERC said.

“The Philippines is a sad case when it comes to corruption,” the consultancy said in a summary report made available to Agence France Presse.

The Philippine situation is “probably no worse than in places like Indonesia and Thailand” but corruption has become politicized and is openly discussed in the media, unlike in authoritarian countries like China and Vietnam, it said.

The Philippines scored 9.0 out of a possible 10 points under a grading system used by PERC under which zero is the best score and 10 the worst.

Even in Philippine based surveys, the government of Mrs. Arroyo is seen to be very corrupt, with some seven out of 10 Filipinos distrusting Mrs. Arroyo as well as her spouse, who is perceived to be part of the conjugal partnership involved in alleged corrupt deals.

The Philippine Senate has an ongoing investigation on the alleged corrupt deals with China where huge kickbacks have reportedly been received by what has been termed “The Greedy Group” plus plus, where ZTE National Broadband Network witness Dante Madriaga, linked the presidential couple to the scam.

There are two other projects also in partnership with China, that are said to be corruption-filled, and where kickbacks have also been received by top Malacañang officials. These are the NorthRail and SouthRail projects, both of which are also scheduled for hearings at the Senate.

The latest fray on corruption, coupled with the sovereignty issue is the joint exploration agreement with China.

Expatriates who were surveyed by PERC also found China to be mired in corruption, coming in at number three.

China’s score worsened to 7.98 from 6.29 last year with corruption seen to be as widespread as ever despite Beijing’s efforts to clamp down on it.

“The economy is growing so rapidly that even low-level officials are able to amass illicit fortunes.

“The penalties for getting caught might be draconian, but graft is so widespread and the potential rewards so great that people seem to be more than willing to take the risks.”

As in the 2007 survey, Thailand remained the second most corrupt economy after the Philippines with a score of 8.0 after the military, which seized power in a coup in 2006, was seen to have failed to tackle the problem.

“The kingdom’s economy has been marking time for two years while it sorts out political problems in which allegations of corruption figure prominently,” said PERC.

Indonesia, which ranked behind Thailand with a score of 7.98, has made improvements under President Susilo Bambang Yudhoyono but the perception of the civil service as one prone to graft remains strong, said PERC.

“International ratings agencies might have improved Indonesia’s foreign and domestic currency debt ratings recently, citing the government’s efforts to tackle corruption… however, the problem is still very serious,” said PERC.

Corruption is also perceived to have worsened in Malaysia, which scored 6.37 in the survey, worse than last year’s grade of 6.25, but the country retained its number six ranking in the poll.

Malaysian Prime Minister Abdullah Ahmad Badawi’s failure to carry out his promise to fight graft was one of the key reasons his ruling coalition suffered its worst ever results during last Saturday’s elections, PERC said.

“A promise to fight corruption was the main campaign theme that won (Abdullah) a big increase in voter support in the last national elections (in 2004),” the consultancy said.

The pressure is now on Abdullah, who rejected pressure to step down despite the poll setback, to show he is serious about fighting corruption in his second term as prime minister, said PERC.

It is not only PERC that has come out with these findings of a corrupt Philippine economy.

Poor governance and corruption are two major complementing constraints on growth of the local economy, which has fallen behind its neighbors in East and Southeast Asia, the Asian Development Bank (ADB) said in its latest country report.

The ADB report also cited poor national revenues, lack of infrastructure and waning investor confidence as hurdles to growth.

In its report “Philippines: Critical Development Constraints,” the ADB said the country’s economy has fallen behind its neighbors in East and Southeast Asia over the past five decades.

It cited studies suggesting that the Philippines ‘ ranking in the control of corruption and maintaining political stability have worsened.

It also said that the pace of poverty reduction has been slow and income inequality remains stubbornly high.

The report added the Philippines has lost momentum in controlling corruption, and has allowed Vietnam and fairly soon, Indonesia, to pass it.

“In the case of political stability, the Philippines has slipped, particularly relative to the 1998 level,” the report added.

The ADB cited studies that show causal relationships between corruption, political instability and weak rule of law, on one hand, and investment, on the other hand, in the country.

“The perception of worsening corruption was found to partly explain the low investment rate in the Philippines. Poor governance was also found to translate into higher lending rates, reflective of premiums for worsening corruption, political instability, and internal conflict, acting as disincentives to private investment,” it said.

The study noted a key reason for weak revenue generation, which are leakages in revenue collection, was “rooted in persistent corruption and patronage problems.”

Governance concerns not only weaken investor confidence, they underlie most other critical constraints. For instance, corruption undermines tax collection; political instability hinders investment and growth and reduces the tax base; and both contribute to the tightness of the fiscal space.

Poor infrastructure is a result of insufficient development spending and of poor governance, the latter causing leakages and misappropriation of public funds, it added.

Similarly, poor governance hinders the pace of poverty reduction, as it reduces growth of incomes and productive employment opportunities. It is also a major factor contributing to inequalities in access to education, health, infrastructure, and other productive assets, as well as to weaknesses of many poverty reduction programs, it said.

“The Philippines must raise revenues, improve infrastructure, strengthen governance to build investor confidence, expand its industrial base and improve access to employment and development opportunities to increase growth and reduce poverty,” the ADB said.

It noted the data released by the government wherein 26.9 percent of families in 2006 were below the official poverty threshold, up from 24.4 percent in 2003.

“While growth has picked up in recent years, with the economy in 2007 posting its highest growth of 7.3 percent in the last three decades, both public and private investment remain sluggish and their share in gross domestic product has continued to decline, raising the question of whether the current economic momentum can be sustained,” the report said.

It also identified a number of critical constraints to economic growth and the fight against poverty in the next five to eight years for the Philippines .

“Targeting and removal of the most critical constraints will lead to the highest returns for the country. It will spur investment, which in turn will lead to sustained and high growth and create more productive employment opportunities,” said Ifzal Ali, Chief Economist of ADB.

“This would ensure that the fruits of development are shared by all,” he added. With Michaela P.del Callar and AFP