Goldman Sachs banker settles SEC 'pay-to-play' charges http://t.co/Kc57daIOxm
11 minutes ago
Emerging Market Channel: Latest Posts
-
Asia
India’s Development Prospects: Between Doomsday and Utopia?
Progressive critiques of India’s recent development prospects are often marked by schizophrenic worldviews – between what is and what ought to be.
Mira Kamdar’s recent piece in the World Policy Journal illustrates this well. By Ms. Kamdar’s account Indians are heading down an inevitable path to doomsday. Malthusian population pressures, resource scarcity, global warming, environmental degradation, industrial capitalism, and political corruption have combined with an inherently fractured society that is likely to erupt in caste, religious, and class warfare, terrorism, and self-destruction. Mix in the recent US-India civilian-Nuclear deal and the presence of unstable neighbors – Pakistan, Bangladesh – along with an aggressive China, and Ms. Kamdar offers up all the ingredients for a nuclear holocaust. The only uncertainty we are left with is: which doomsday will India break into first — internal implosion or external explosion?
-
Emerging Markets
The IMF should guarantee emerging market debt
The current financial crisis is putting substantial pressure on emerging markets. Many if not all face a serious risk of a sudden and severe slowdown in credit as a consequence of the withdrawal of international liquidity pools until recently available to these countries. The consequences of a credit crunch could be dire for both their public and corporate sector. This would ultimately stall the last engine of growth on which the world economy relies. The International Monetary Fund should quickly put together a preventive facility to restore the capacity of countries with healthy macroeconomic accounts to borrow from private capital markets.
-
Asia
IMF Regional Economic Outlook: “Corporate Vulnerability in Latin America: Have Firms Reduced their Exposure to Currency Risk?”
Foreign currency financing has been a key source of financial vulnerability for companies in Latin America. In the 1990s and early this decade, sharp currency depreciations in several countries in the region drove up the value of firms’ foreign currency debt relative to their assets and income, impairing many firms’ ability to service debt. This, in turn, exacerbated the banking difficulties that many of these countries experienced.
-
Emerging Markets
IMF Regional Economic Outlook (REO) “Rising Food Prices and Vulnerable Households: Fiscal Policy Options”
The sharp1 run-up in food prices between 2006 and mid-2008 has set off a debate about how to deal with the adverse effects on low-income households, which typically devote a larger share of their budget to food. In response, policymakers across the region have adopted a variety of measures to try to mitigate the impact of rising food prices on the poor. These steps have ranged from administrative measures (e.g., price controls, export quotas) to tax and expenditure measures (e.g., lowering indirect tax rates, expanding social safety nets). These actions entail varying degrees of fiscal and efficiency costs and effectiveness in reaching those households most exposed to food price hikes.
-
Emerging Markets
IMF Regional Economic Outlook (REO): “Keeping Inflation Under Control”
Inflation in the region1—which rose to over 8 percent in August 2008—is expected to remain high through end-2008, before beginning to decline gradually in 2009. For Latin America and the Caribbean, this surge in inflation is the first real on the region’s commitment to low inflation. To asses the challenges of keeping inflation under control, a recent study by IMF staff analyzes two related questions: (1) what are the main determinates of the inflation surge? and (2) how monetary policy has responded so far?.
-
Emerging Markets
Global crisis brought power to GCC central banks
Fed’s back to back rate cuts in October 2008 have caused a sense of uneasiness among GCC (Gulf Cooperation Council) central banks deciding whether to follow suit. For the first time in decades, we are watching some differences in monetary policymaking among GCC central banks. Thus following Fed’s 8 October 2008 rate cut by 50 basis points, all but Qatar central bank have matched Fed’s move. By contrast, Fed’s latest (29 October 2008) round of rate cut by 50 basis points has so far been implemented in Bahrain, Kuwait, and Saudi Arabia, while UAE officially left its rates untouched, and Qatar is yet to decide on a move.
-
Emerging Markets
IMF Regional Economic Outlook for Latin America and the Caribbean (LAC)
The world economy continues to be buffeted by the burgeoning downdraft of the financial crisis and volatile commodity prices. As such, the outlook points to a major downturn for the global economy, with growth falling to its slowest pace since the 2001–02 recession. However, authorities around the world have taken further, massive, and increasingly coordinated corrective actions. The central scenario in the IMF’s recently World Economic Outlook (http://www.imf.org/external/pubs/ft/weo/2008/02/index.htm) anticipates that these will be successful in stabilizing financial conditions. However, it will take time, under any rescue plan, to restore the proper functioning of credit markets. For the United States, our baseline projection is that recovery will begin in the second half of 2009, and will be more gradual than previous recoveries, because of the exceptional nature of the asset price adjustments taking place. Overall, growth in the advanced economies as a whole will also be close to zero at least until the middle of 2009.
-
Emerging Markets
Preserving ‘Brand India’ during crisis
Preserving financial sector confidence, not monetary easing, is key.
“Brand India” is being buffeted by the global financial crisis. India has been more financially integrated than was generally supposed, and hence more affected by financial contagion than expected. The stakes are high because policy hesitancy or missteps can turn mild contagion into virulent disease.
-
Asia
Rising domestic demand? Declining domestic demand?
China’s stock markets keep bouncing around, sometimes in synch with the rest of the world and sometimes out of synch. Yesterday it was out of synch as it lost 2.9%, largely because a number of corporations announced lower-than-expected earnings growth.
-
Emerging Markets
What Next for India?
The Reserve Bank of India suddenly reacted to the continuing liquidity problems in Indian credit markets, by cutting the repo rate, the cash reserve ratio, and even the statutory liquidity ratio. This was a welcome reversal from last week, when the RBI governor was still musing about inflation dangers. Month-to-month WPI inflation is now basically zero, and with the global recession already under way, the year-to-year figures, which are very backward looking, will start coming down quickly.
