Saturday, April 21, 2007
A recent report from Beijing authorities revealed that China will probably replace the United States by 2008 as the biggest source of greenhouse gas emissions in the world. The International Energy Agency, based in Paris, also released information showing that China's rate of greenhouse gas emissions has been increasing at a rate much greater than all other industrialized nations. China's National Bureau of Statistics showed that China's fossil fuel consumption increased by more than 9% in 2006, compared to the U.S.'s increase of 1.2% that same year. China's total greenhouse gas emissions were about 42% of that of the U.S. in 2001. The increased rates of emissions took China's total to almost 97% of the U.S.'s total in 2006.
Analysts are concerned about what consequences China's economic growth and increased energy consumption will have on the environment and global warming issues. Evidence suggests that local Chinese officials are prioritizing economic development over environmental protection. However, the national government of China are introducing incentives to local officials based on economic success as well as enivironmental protection. President Bush had refused to sign onto the Kyoto Protocol because it bound only industrialized nations to reduce their greenhouse gas emissions, and left fast-developing countries such as China exempt.
Question: How can China balance economic growth with environmental concerns? What policies should the government implement to strike such a balance?
On Saturday, South and North Korea wrapped up economic discussions regarding food aid, cross border trains, and other joint projects. South Korea had offered to resume talks in February after the North Koreans agreed to begin closing its nuclear facilities. However, since North Korea missed the April 14th deadline to begin disarming, the talks were put into question. South Korea, at the opening session, called on North Korea to honor its agreement to disarm. This resulted in the North Korean contingent storming out of the talks.
Talks resumed Friday after Thursday’s walkout, and several major economic issues were addressed. North Korea has proposed to set up a branch of its bank in Kaesong, which is a border city and also houses a joint industrial complex. Furthermore, the two states also agreed to run test trains across the border, which would be first time trains have crossed the DMZ in over 50 years. The two sides are close on agreements to exchange raw materials for clothes, shoes, and soap, for the right to develop mineral resources in the north.
However, the most important development from the talks was the North Korean request for 400,000 tons of rice aid. South Korea had resumed much of its aid shipments in February after the talks, but withheld food shipments to put pressure on the North Koreans to disarm. At the moment of this posting, however, South Korea, while accepting in principle to accept NK’s request, is still pushing for a joint statement that forces North Korea to discuss disarmament. North Korea, however, argues that these current economic talks have nothing to do with the nuclear agreement.
Question: How long can North Korea, as a state, survive on aid from other nations—and, what would be the economic impact of the two Koreas eventually unified?
Friday, April 20, 2007
Higher Incidence of Infection and Disease in Iraq Attributable to Water Shortage, Contamination, and Medical Waste
Sources: Insecurity and Lack of Funds Prevent Cleansing of Polluted Sites; Medical Waste a Growing Health Hazard; Doctors Warn of Summer Dehydration among Children and the Elderly; Children Suffer Bad Water Diseases
Severe water shortages are leading Iraqis to use contaminated river water for all of their needs. Like its sewage and electrical infrastructure,
Soon after the U.S.-led invasion, UNICEF tanker trucks were deployed to the most devastated areas of
Without access to potable water, more families are turning to contaminated river water. Back in February, one month before UNICEF tanker trucks stopped supplying water, NGOs Coordination Committee in
In addition to dirty water, up to 400 polluted sites in
Hospitals, forced to operate on small electric generators, lack fuel for burning their waste. But with the breakdown in refuse disposal, bio-hazardous waste lays around for weeks. Children scavenge through the garbage in search of items, like used syringes, to sell on the market so that they may eat. Dozens of children have ended up in emergency rooms with symptoms of infectious diseases contracted from sewers, waste dumps, and hospital waste. Exposed petrochemicals sites and sulfur mines are other sources of pollution and health concerns, as is radiation in areas where nuclear research had been conducted in the past.
The long-term health consequences aren’t fully understood. But, according to specialists, the number of cancer cases has radically increased over the past five years. One oncologist at the
For Discussion: Should foreign and international environmental organizations organize toxic clean-ups in the middle of a war? Given the instability of the new government and the ongoing fighting, what are possible “solutions” for bringing potable water to civilians?
Sources: The Arrival of Homo Urbanus; UN Habitat Fund to Finance Slum Housing; Proper Policies Key to Upgrading Slums; Health, Environment Threatened by Future Urban Growth; Sustainable Urbanisation Key to Fighting Urban Poverty; UN-HABITAT
The 21st Session of the governing council of the United Nations Human Settlements Program (UN-Habitat) met this week in
This year marks the first time in history that more than half of the world’s population lives in urban areas, “mostly in low-income urban settlements in developing countries,” according to Zoe Chafe of Worldwatch International. Executive Director of UN-Habitat, Anna Tibaijuka coined the term homo urbanus to describe the swell of slum dwellers, whose worldwide population of one billion is projected to double in the next thirteen years. Slums are characterized by “shelter deprivations,” a term which denotes lack of water, lack of sanitation, overcrowding, non-durable housing, and a lack of security of tenure. Worldwatch International’s report, “Our Urban Future,” found that 1.6 million people in slums die annually due to lack of clean water and sanitation, while 800,000 people die from urban pollution.
The UN-Habitat Advisory Group on Forced Evictions (AGFE) reported this week that, over the past three years in particular, illegal arbitrary evictions have become a common practice in both developed and developing countries. AGFE found that the lack of comprehensive planning for urban development and environmental policies as well as inappropriate regulatory frameworks governing land use, occupancy, and ownership have contributed to the trend of massive-scale evictions in at least 60 countries.
Ninety-five percent of urban growth in the next twenty years will be absorbed by developing nations. Some developing countries are set to triple their entire urban areas within thirty years, yet they already face cash shortages that prevent them from providing adequate basic services and facilities. Weak and poorly financed local governments have been unable to secure and distribute sufficient supplies of clean water to residents and manage solid waste disposal. Tibaijuka notes that despite their poverty, slum dwellers must pay four to 100 times more for water than affluent people. In
Presentations at this week’s session in
For Discussion: One expert has argued that international aid is unable to improve cities and that slums are a manifestation of poor policies. How is human settlement shaped by economic forces? By unjust land-use policy? By war and other conflict? Are slums a manifestation of no policy?
The United States Congress is currently considering patent reform legislation. The so-called Patent Reform Act, which has been introduced in both the Senate and the House, has been welcomed both by the information technology (IT) industry as well as other nations. The changes would result in greater uniformity between United States patent laws and the patent laws of other countries. Three major changes in the current law include:
***Patents would be awarded to the party who files first, as opposed to the party that is the “first to invent.” Currently the United States is the only nation in the world to use the “first to invent” system.
***Damages available in infringement lawsuits would be limited.
***Introduction of a new process for questioning the validity of patents that have already been granted.
The biotech industry, while conceding that reforms to the law may be needed, expressed misgivings about the proposed statute. They assert that the proposed changes could hamper research and development, particularly in the pharmaceutical sector. Small inventors voiced similar concerns.
Is international finance and development driving a movement towards international uniformity in laws (as the proposed patent reform legislation would bring the U.S. into the same system used by the rest of the world)?
The 1997 Kyoto Protocol is an international treaty regarding the reduction of greenhouse gas emissions. The Protocol gives legal power to the 1994 United Nations Framework Convention on Climate Change (UNFCCC). The UNFCCC enjoys almost universal acceptance by United Nations member-states with 189 countries having ratified the Convention. The Kyoto Protocol has been ratified by 171 countries.
In North America, both Canada and Mexico have ratified both the Convention and the Protocol. The United States continues to resist ratifying the Protocol in spite of pressure from both its citizens and other industrialized nations that have committed to the decreases set forth in the treaty. However, as target dates approach for greenhouse gas reductions and member-states struggle with how to meet their commitments under the Protocol, officials of at least one ratifying nation—Canada--have expressed concerns about the potential effect of environmental commitments under the Protocol on the national economy.
Canada’s Environment Minister John Baird, relying on a study produced by economist Don Drummond, recently announced that complying with the obligations of the Kyoto Protocol would result in massive unemployment, decreased production, and increased energy prices, driving Canada into a recession.
Sponsors of legislation that has been proposed to implement the Protocol countered the study, asserting that it amounts to fear-mongering and fails to account for the positive economic effects of controlling greenhouse gases. Baird has invited the sponsors to prove these assertions by producing their own economic assessment of the legislation.
Must countries “choose” between healthy environments and a healthy economy? Is there another way? Might a healthy environment be “good” for the economy?
Wednesday, April 18, 2007
World Bank Report Reveals Reform Progress in Trade, Business Environment and Governance in MENA Region
2007 MENA Economic Developments and Prospects Report
The World Bank Middle East and North Africa (MENA) region launched a new report that looks into economic trends and prospects for the region. This is an advanced edition and the final report will be released in May 2007.
This is the third of an annual series of reports. The theme for this year's publication is labor markets and employment, a critical area for the MENA region as a result of its strong labor force growth and large share of young population.
High economic growth has been accompanied by strong job creation and declining unemployment in recent years. But for this performance to be sustainable it needs to be supported by deeper structural reforms in countries of the Middle East and North Africa region.
According to the report, the GDP growth reached 6.3% for the region in 2006 – up from an average of 3.6% a year during the 1990s. This is the fourth year in a row of robust growth performance, driven by high oil prices, economic recovery in Europe and reforms that are broadly going in the right direction. As a result, many jobs have been generated, primarily by the private sector as public employment slows down.
"Countries in the MENA region need to remove the remaining barriers that hinder the business environment for the private sector in order to maintain growth, increase private investment and generate more jobs" said Daniela Gressani, World Bank Vice President for the MENA region.
Indicators reveal that employment grew at 4.5% per annum in 2000-05, the strongest rate of job creation among developing regions. However, the report indicates that productivity remains a concern and women are still less successful than men in finding jobs. "Too many jobs are still being created in sectors with low or declining productivity" said Carlos Silva-Jáuregui, Lead Economist and principal author of the report.
Question: What can be done in the MENA region to establish the structural reforms required to balance growth with labor productivity and job creation?
Liberia’s economy is projected to grow by 11% a year on average over the next five years, according to the International Monetary Fund (IMF). Reconstruction projects and foreign investment will provide a much needed boost to Liberia’s economy, as will revival in the country’s mining, forestry, and agriculture.
The West African nation was hurt by years of civil war, and running water and electricity are still scarce. Liberia was once the world’s fifth largest iron ore exporter and home to the world’s largest rubber plantation.
The IMF said that to aid recovery Liberia must cut its debts of almost $4 billion.
Liberia’s gross domestic product (GDP) growth grew by an estimated 7.8% last year with a similar growth rate expected for 2007.
President Ellen Johnson-Sirleaf is a former World Bank economist who took over the task of rebuilding Liberia. Analysts say that once the country has managed to reduce the money it owes, it can make further inroads by qualifying for international debt relief.
Liberia was founded by black slaves who were freed from the U.S. in 1847.
Washington has supported the nation's efforts to clear the $1.5 billion it owes to the IMF and the World Bank. Earlier this year the Bush Administration waived the $391 million bilateral debt Liberia owed to the United States. In addition, the Bush administration committed $200 million in the next year to help Liberia.
Question: What else can be done to address Liberia's debt burden and the critical needs of Liberia's people?
The EU is promising a more aggressive approach to increase market access in countries such as
Greater market access is a long-standing demand of EU business. Many remain skeptical whether the EU has the political fortitude to implement its rhetoric in practice. Past efforts have run out of steam before making significant inroads into foreign markets.
Will the EU be willing to make enough accommodations in its own non-tariff barriers to garner legitimate concessions from target countries? How should target countries respond to EU requests to modify regulatory regimes that have legitimate domestic purposes but incidentally impact foreign access to the market?
Tuesday, April 17, 2007
World Bank President Vows to Say in Post, Despite Criticism
World Bank Divided on Wolfowitz's Future
World Bank Meeting—Policy board tries to stay focused despite Wolfowitz
During the past couple of weeks, those questioning U.S. President Bush’s decision to nominate Paul Wolfowitz as President of the World Bank may have seen some of their fears realized. Controversy has surrounded Wolfowitz’s involvement in securing a nearly $200,000 per year job at the World Bank for a female with whom he is romantically involved. Wolfowitz admitted that mistakes were made in promoting his partner to her current position and he later apologized, asking for “some understanding” from the global community.
However, Wolfowitz has not received much understanding. His questionable actions have caused many World Bank staff members and advocacy groups to call for his resignation. Currently, the 24-member executive board holds the fate of World Bank’s tenth President, as they review the Wolfowitz’s role in his partner’s promotion and contemplate what, if any, remedies need to be taken. Amid the controversy and talks of his resignation, Wolfowitz has vowed to remain World Bank President and has denied all resignation reports.
Many fear that this turmoil will cast a fog over the World Bank’s anti-poverty goals, especially with the results from last weekend’s IMF/World Bank Spring Meeting being publicized this week.
Questions: Do you think the World Bank executive board will sanction Wolfowitz? Should they? Or, should Wolfowitz take it upon himself to resign?
A two-day conference organized by the U.N. Refugee Agency and the U.N. High Commissioner for Refugees (UNHCR) convened today in Geneva to address the plight of the 4 million Iraqi refugees who have been displaced by the ongoing conflict in their country, set into motion by the 2003 United States invasion of Iraq. This is the first global attempt to address the Iraqi refugee crisis. More than 450 representatives from 60 countries, as well as the Red Cross and many humanitarian workers, attending the
Of the 4 million refugees, 1.9 million have been displaced to other regions of
While international media report on the war’s political and military developments, very little attention has been paid to the humanitarian dimension of the war. Up to 50,000 Iraqis flee their homes every month to escape the fighting, the lack of security, and the general breakdown of society. Internally displaced refugees continue to be victims of sectarian violence, while Iraqis who have fled to other countries lack social support networks, means of subsistence, and protection from police and other forms of abuse. Many refugees are held in camps at the borders where there is insufficient protection from fighting. In addition to the stress and depression caused by rootlessness and war, refugees face serious medical and hunger problems, unemployment, discrimination, and poverty. Refugees have been barred from taking up employment and attending school; even schools organized by refugees within camps have been forcibly closed down. Employers of refugees are subject to fines and imprisonment, and police in various countries conduct frequent sweeps of public areas, workplaces, and areas of high Iraqi refugee concentration to get rid of “illegal” workers who are dropped off at the border with
Conceding that much more money is needed, the U.N. High Commissioner for Refugees requested a modest $60 million for humanitarian operations. A briefing paper published this week by Human Rights Watch, entitled Iraq: From a Flood to a Trickle, by comparison, emphasized the denial of asylum to Iraqis over the apportionment of aid.
According to the refugee-policy director at Human Rights Watch,
Thousands of Palestinians men who worked in Iraq and remitted their salaries back to the Occupied Palestinian Territories, to their families, have tried to leave Iraq in response to the escalation in kidnappings and murders of Palestinians by the Shi’a militias in Iraq. These Palestinians have encountered the same restrictive measures facing Iraqi refugees and are now held in refugee camps in a “no man’s land” along
Quite troubling, too, is the increased use of religious affiliation as a criterion to determine whether asylum seekers may gain access to a country and the scope of their rights once asylum is granted. Shi’a Muslims, for example, have routinely been denied entry to
Many of these restrictive measures violate international customary law, like the principle of nonrefoulement, or prohibition on the forcible return of refugees to a place where they face the risk of persecution, torture, or other serious threats to their lives because of ongoing armed conflict and indiscriminate violence. Human rights groups, like Amnesty International, have called on the
Monday, April 16, 2007
Source: Oxfam International
In response to Hamas’s April 2006 parliamentary victory, international donors, including the United States, Canada, and the European Union, suspended aid to the Palestinian Authority, the nominal authority (established in 1994 under the Oslo peace agreements) of the Occupied Palestinian Territories—marking the first use of sanctions against an occupied people. The boycott followed closely behind the Israeli government’s decision to hold on to tax and custom revenues it collects on behalf of the Palestinian Authority. One year later, a briefing note published by Oxfam International reports that according to the U.N. Relief and Works Agency, the number of Palestinians living in deep poverty (defined as living on less than 50 cents per day) has doubled to over one million since the beginning of the boycott.
Although the boycott was aimed at pressuring Hamas to recognize the state of
The Palestinian Authority is the primary service provider for the
Eight months into the boycott, the rate of poverty among the 161,000 people (who in turn support one million dependents) employed by the Palestinian Authority had risen to 71%. Among the general population in
The Oxfam report is highly critical of the sanctions. It argues that “international aid should be provided impartially on the basis of need, not as a political tool to change the policies of a government or to oust it.” The report also notes that the political objectives on which economic aid has been conditioned (e.g., that Hamas recognize the state of
If the Occupied Palestinian Territories become a “failed state” due to the economic meltdown and humanitarian crisis, what will be the next step in Israeli-Palestinian relations and the so-called road to peace? Is it ever legitimate to impose economic sanctions on a civilian population in order to pressure political organizations in power? If Palestinians had not voted Hamas into power in the parliament, would the argument against sanctions be stronger? Should the democratic election be a factor in the distribution of aid?
Asia has turned the clock back to the Cold War...at least for the time being and at least for the Space Race. What formerly was merely a status symbol during the U.S. vs. U.S.S.R. race to the moon has now become a matter of national security. Countries such as North Korea, China, Japan, Taiwan, South Korea, India, etc. have raced to remain on pace.
Currently, it appears that China is ahead in Space Race Asia, as it is the only Asian state to put astronauts into orbit. Japan looks as if it is closest to China’s pace, as it now has satellites in orbit to monitor any place on Earth, spending nearly $500 million per year on spy satellites. Japan, along with India and China have the capacity to launch their own rockets, but India, South Korea, and Malaysia all currently have operational satellites in orbit. South Korea is also close to being able to launch their own satellites, as the $277 million rocket launch site is projected to be ready next year. India is hoping to launch its moon mission this year, and spends nearly $700 million on its space program. Even North Korea has claimed to have launched a ballistic satellite, although the claim has not been verified.
China, however, is the clear-cut leader in Space Race Asia. China spends $1.2 billion, and is ready to launch a third manned mission next year. It has demonstrated its space prowess as it has knocked a satellite out of orbit. Furthermore, it is preparing to launch a satellite that will make a lunar orbit. Most importantly, China’s program has made a direct challenge to U.S. space superiority by demonstrating its capacity for anti-satellite missiles. Air Force Col. Tom Ehrhard (ret.) stated that that this is a “new and dangerous phase of Chinese foreign policy...[challenging] the internationally recognized sanctity and neutrality of the ‘commons,’ those areas like international waters, airspace, cyberspace, and space itself.” China, however, claims that she is committed to the demilitarization of space, submitting U.N. resolutions that outlaw anti-satellite and space weaponry. The U.S. has blocked such resolutions, but China has invited the U.S. back to the negotiating table.
1) Should the U.S. be involved in discussions with China to demilitarize space, given that the Chinese already have anti-satellite weaponry?
2) What are the potential ramifications of Space Race Asia on poorer/developing states such as North Korea and India? In other words, who is bearing the burden of India’s $700 million (and increasing) space budget?
The last valid licenses of the approximately fifty
The expiration of the agency licenses coincides with a Russian effort to overhaul its adoption laws. The changes are driven by two On one hand, notorious cases of neglect, abuse, and death of Russian children adopted into American families is one motivating factor for the restructuring. On the other hand, the changes are part of a broader movement to restructure the international adoption market. For example, the top two countries for American adoptions,
Observers attribute the current lapse in Russian licensing to bureaucratic delay and expect
How should governments approach foreign adoption agencies? What types of guidelines or limitations should they enforce? How, if at all, should cross-border adoptions be treated differently than domestic adoptions?
Sunday, April 15, 2007
Hogar de Cristo, a Catholic social services organization originally founded in
According to Hogar de Cristo’s chief of production, less than 4% of materials are wasted. The one-room houses are basic bamboo structures with zinc roofs. Bamboo is the cheapest building material in
Although the slums of Guayaquíl are enveloped in Hogar de Cristo houses, some Ecuadorians consider the structures, with their lack of glass windows, electricity, or plumbing, to be inadequate and undignified. Father Costa concedes that he is not proud of these living conditions, but explains that facilitating home ownership is the best way to help people out of poverty. He reports a discernable pattern of development within five to seven years of a home purchase: Families begin with cosmetic changes to the home, such as painting it and planting flowers. Next, they wall-in the ceiling-high posts that hold up the house, thereby doubling their living space. Gradually, they replace the bamboo with masonry, pour a concrete floor on the ground level, and add electricity and plumbing. As owners improve their homes, they pressure the municipal government to develop infrastructure by paving roads and extending electricity, water, and sanitation services. For example, Hogar de Cristo sold hundreds of houses to the people of Guasmo, once a shanty-town right outside Guayaquíl, and almost all have subsequently been turned into solid concrete block and brick homes, the streets have been paved, and the city has installed basic services.
In reaction to the sharp depletion of
For Discussion: Are development dollars better spent in projects implemented by charitable organizations based in the community they serve? Are they better spent when projects are not managed by intermediaries?
Friday, April 13, 2007
The Convention, which was adopted at the seventy-sixth session (June, 1989) of the International Labour Organization (ILO) in
Although most members of the German Bundestag agree on the need for protection of indigenous people’s rights, entrenched corporate interests fueled their opposition to the Convention. Many indigenous and tribal people inhabit areas rich in natural resources that international private companies exploit. The Convention instructs governments to protect natural resources in lands inhabited by indigenous populations. According to Article 15, the rights of indigenous peoples include their right to “participate in the use, management, and conservation” of natural resources pertaining to their lands. Accordingly, governments that retain ownership of mineral, sub-surface, or other natural resources are supposed to consult with indigenous people before undertaking any programs for the exploitation of these resources. In addition, indigenous peoples should “receive fair compensation for any damages which they may sustain as a result of such activities.”
It is not surprising, then, that of the mere 18 countries which have ratified the Convention, most are developing nations from
Reporting on Latin America, Stavenhagen told the United Nations Human Rights Council last month in Geneva that “the gradual deterioration of the indigenous habitat and the impact of extractive activities on the environment and on indigenous peoples’ rights are matters of special concern, especially in the Amazon, the northern border areas, and the Pacific coast.”
The Convention is available at:
Why would a government ratify the Convention but fail to abide by it?
How could the gap between the recognition of indigenous people and actual practice in implementing the Convention be bridged?
Yesterday Cuban Foreign Trade Minister Raul de la Nuez announced that the island nation’s exports had increased by 35% in 2006. This marks the greatest increase for Cuban exports in twenty years, and has been attributed to the high price of nickel—a resource that is plentiful in Cuba—on the international market and the export of pharmaceuticals.
Nonetheless, de la Nuez also emphasized the difficulties of doing business in Cuba, especially with regard to the underutilization of existing production capacity and the scarceness of packing materials, the majority of which are imported into the nation. He also stressed the importance of diversifying markets and augmenting existing sectors. For instance, he called for increases in exports from the service sector, emphasized that they should be higher aggregate value services.
Is it time for the U.S. to life its longstanding embargo against Cuba?
The EU has scrutinized roaming charges imposed by cell phone operators in
Cell phone companies justify the roaming charges as a recovery of the costs of routing calls through rival networks. European officials counter that the companies make an annual profit of $11 billion from roaming charges and cite examples where companies charge sixty times more per-minute for a cross-boarder roaming call than for a domestic call. Lobbyists for the cell phone companies insist that the legislation is unnecessary because of a competition-driven decrease in roaming charges, and they warn that price caps will cause the companies to lose money in some areas.
Should roaming charges be left to market forces rather than government regulation? If regulation is desirable, are there alternatives to price caps that would be less intrusive?
Thursday, April 12, 2007
In a statement that is sure to be a source of controversy amongst already tense Turkish and Kurdish officials, the country’s top general called for Turkish troops to move across the Iraqi borders in order to combat rebels from the Kurdish Workers party, or PKK. Turkey accuses the regional government of Northern Iraq of harboring these rebels, but the latter denies such involvement.
No political decision has yet been made on the matter, and the US is apprehensive of such a move as it could potentially destabilize an already troubled region. US officials, while believing that the general’s calls are related more to internal political rhetoric (as the Turkish presidential election is fast approaching), they also believe there is a chance of Turkey moving into northern Iraq in the near future. Further, the EU has also warned against such an incursion, though Turkey is not likely to pay much heed to the EU given the trouble its experiencing in trying to obtain membership.
Meanwhile, PKK forces continue to operate in southern Turkey, and their operations are largely responsible for this controversy. However, regional governments in northern Iraq have warned Turkey that if it interferes in Iraq, the former would interfere in Turkey. Turkish officials remain concerned that the Kurds will form an independent state, despite US assurances of the opposite. Indeed, Turkish officials believe the US is responsible for the Kurds newfound capacity to become an independent state.
What can this new turn of events mean for Turkey’s already questionable relations with the EU?
Foreign Policy in Focus
April 12, 2007
In the days leading up to its semi-annual meeting in
Recently, IMF’s Managing Director Rodrigo Rato announced a new goal of the bank – convening talks amongst the major economic powers with an aim to reduce imbalances that have adversely affect the global economy such as
1. Does the IMF have a role to play as of the present time?
2. Is it advisable to ‘merge’ the IMF with the World Bank to create a more streamlined, efficient organization or are there any advantages to having 2 multilateral financial institutions?
Chinese Premier Wen Jiabao “heralded” warmer ties with Japan this week, as he visited Japan. This is the first visit to Japan by a Chinese prime minister in over seven years, continuing the recent détente between the two Asian powers. This is notable, because despite the harsh rhetoric leveled at Japan from China, China is Japan’s number one trading partner. This visit has defrosted some of the tensions between the two states, as Premier Wen’s warm personality has won some fans in Japan.
There are still several deep divides between the two states. There are still disputes over territorial waters, the status of Taiwan, and, most strikingly, the Japanese shrine honoring the war heroes (or criminals, depending on which side of the debate you are on). This is the most divisive issue between the two states, and Premier Wen held back little when he urged Japan to take responsibility for World War II war crimes. This division was made worse with former Prime Minister Koizumi’s visits to the shrines. Wen also discussed the growing economic ties between Japan and China, and despite the conflicting claims of oil and gas reserves, Wen encouraged both states to jointy develop the areas.
Japanese and Chinese companies heeded Premier Wen’s advice, as energy companies from both states agreed to potentially develop the projects together. Nippon Oil Corp and the Chinese National Petroleum Corp (CNPC) signed a long term cooperation accord, although few specifics were mentioned. However, this is expected to expand trade of crude oil, oil products, and liquefied petroleum gas (LPG).
Question: Could a Sino-Japanese axis possibly lead to something along the lines of the old ECC or the modern EU?
Colombia withdrew its bid to host the 2014 Federation Internationale de Football Association (FIFA) World Cup on April 11, leaving Brazil as the only South American nation with an outstanding bid. President Uribe had vowed to provide the financial resources necessary to fund the event, but the Colombian Football Association ultimately decided against proceeding with the bid. Many involved in the decision expressed concern over the government’s ability to develop the infrastructure necessary to stage the event successfully.
According to FIFA regulations, Colombia would have been required to update its existing stadium facilities and build additional stadiums. Currently, it only has two stadiums that accommodate over forty-thousand spectators. Updates and construction can be very expensive. For example, the South African government, whose country is set to host the World Cup in 2010, has budgeted over $770 million for stadium, public-transportation, and airport renovations.
Colombia has heard these concerns before; both financial and security considerations caused the nation to withdraw its World Cup bid in 1986. FIFA has announced that the 2014 match will be held in South America, but other South American nations are likely to face the same problems as Colombia. In fact, Chile recently proposed using two of its larger stadiums in the qualifying matches for the 2010 South African World Cup, but FIFA rejected both of those venues, believing that the quality of the fields was too poor.
(1) Beyond the financial realm, what are some of the benefits to hosting the World Cup for developing countries? What are some of the drawbacks?
(2) Should governments in developing countries invest the nations’ financial resources in hosting world-wide sporting events? What are some alternative sources of funding? Are those more desirable?
Oxfam, Save the Children UK, and other British charities warn that UK’s foreign policy is hampering their efforts to provide disaster relief and reconstruction assistance in developing countries. In particular, aid programs in
Should multinational charities refuse funding from national governments to avoid the misperception that they are an extension of the government? Would such charities have a better reception in the developing world if they moved their headquarters to a more neutral location, such as
April 12, 2007
At a Round Table for a select group of media persons ahead of the World Bank’s and IMF’s weekend Spring Meeting, World Bank President Paul Wolfowitz stated that
Wolfowitz also mentioned that the Bank’s 2007 World Development Report would focus on agriculture and strongly emphasize investment in rural development as a major way of fighting poverty. Citing to his own recent visit to
1. What can African nations learn from Asian successes
April 12, 2007
Paul Wolfowitz’s tenure as World Bank President which was contentious to begin with given his involvement with the U.S.-led
Notably, Wolfowitz’s 5 year term continues until 2010, and none of the Bank’s executive directors have publicly withdrawn support. Thus, his job does not seem to be in immediate danger. He has responded to these criticisms by creating a special committee to evaluate the pay raises given to Riza. He also reiterated his priorities regarding the developing world – dealing with environmental problems, rooting out governmental corruption and fighting poverty. However, many believe that the recent controversies could adversely affect Wolfowitz’ ability to raise funds from developed countries.
1. Should Wolfowitz remain World Bank President? What qualities must a World Bank President have?
2.How should the World Bank best respond to the criticisms leveled against its President?
Wednesday, April 11, 2007
A report issued by the Canadian think tank Centre for the Study of Living Standards asserts that Canada will lag economically and ultimately suffer a lowered or stagnant standard of living if it does not make changes to increase productivity.
The report notes that Canada’s business output grew an average of only 1.1% per year between 2000 and 2006, or only a third as much as the United States over the same period. It also points to the fact that between 1973 and 2006, Canada was the third lowest-producing member country in the Organization for Economic Cooperation and Development (OECD).
Among the recommendations set fort in the report were:
*** to increase competitiveness through deregulation;
*** to weaken current unemployment health benefits for temporary and unemployed workers; and
*** to remove “institutional rigidities” such as inter-province trade and labor movement restrictions.
The last of these recommendations is perhaps the most interesting from a comparative standpoint. The Constitutions of both Canada and the United States have commerce clauses—language that among other things encourages free trade among the political entities—provinces and states, respectively—that make up each country.
While jurisprudence in the United States has found that the bulk of the power with respect to this issue lies with the federal government, Canadian case law has found the opposite: as a result, the provinces have been empowered to exercise more control over trade amongst themselves which has in turn led to some barriers to trade—and productivity—that may be constraining economic progress in Canada.
Does Canada’s interpretation of its Constitution with respect to province versus national government powers to regulate inter-province commerce need to be revisited?
Click here for a comparative analysis of commerce clauses found in United States, Canadian, and Australian constitutions.
Mexico’s Secretary of the Economy, Eduardo Sojo, traveled to Japan this week to discuss the bilateral trade agreement between the two nations. Specifically, Sojo will be addressing reported trade deficits on the Mexican side.
While Mexican officials have lauded the fact that trade between the two countries has grown 41% in the two years since the agreement went into effect, there is concern about the current trade deficit, which amounts to $12 billion.
Trade between Mexico and Japan is almost entirely focused on two sectors: automotive and agricultural products. In Japan, Secretary Sojo will seek to attract investments in Mexico as well as increase exports from Mexico of agricultural and food products.
Japan is Mexico’s fourth largest trading partner, after the United States, European Union, and China.
What do you think is the cause of Mexico’s trade deficit with Japan?
Do you think Secretary Sojo’s reported solution will alleviate the problem?
To solve the labor shortages, Romanian businesses are importing Chinese workers en masse. Although this solution creates additional expenses for Romanian businesses, such as the cost of providing room and board, it enables Romanian factories to keep costs competitive. At the same time, the system benefits the Chinese workers, as well. The Chinese workers agree that the working conditions and pay are better in the Romanian factories than in their homeland. In fact, labor is in such demand that one textile factory pays its Chinese workers twice the legal minimum wage.
Tuesday, April 10, 2007
UNEP Press Release – Climate Proofing Africa Key Challenge for the Continent
UNEP Press Release – IPCC Outlines Strategies for Responding to the Impacts of Human-Caused Climate Change
According to a press release released by the United Nations Environment Programme (UNEP), Africa requires urgent assistance to adapt to climate change and action by industrialized countries to cut greenhouse gas emissions if the Continent and its people are to thrive in the 21st Century.
A regional report by the Intergovernmental Panel on Climate Change (IPCC) predicts that the continued increase in greenhouse gases will later this century put up to 1.8 billion more people in Africa at risk of water stress.
Achim Steiner, Executive Director of the UNEP which co-founded the IPCC, said: “The report underlines the enormous costs facing Africa as a result of unchecked climate change – costs which are wholly unacceptable for the 800 million people alive today and for the generations to come. It is the Continent with the least responsibility for the climate change and yet is perversely the Continent with the most at risk if greenhouse gases are not cut.”
According to the report, even a small temperature rise could lead to falls in water flows equal to one large dam being lost annually. African tourism, mostly based on nature, will be significantly impacted with 25-40 percent of the animal species in sub-Saharan Africa to become endangered. Arid and semi-arid lands are likely to increase by up to eight percent with important ramifications for livelihoods, poverty eradication, and meeting and maintaining the Millennium Development Goals. Sea level rise, especially along the east African coast, will increase flooding at a cost of up to 10 percent of the GDP. The report predicts that wheat may disappear from Africa by the 2080s.
The IPCC finds that early action to improve seasonal climate forecasts, food security, freshwater supplies, disaster and emergency response, famine early-warning systems and insurance coverage can minimize the damage from future climate change while generating many immediate practical benefits.
The IPCC also emphasizes that adaptation – in developed but especially vulnerable developing countries – is also needed to cope with the climate change already underway. “‘Climate proofing’ infrastructure and agriculture to health care services and communities will require investment but equally intelligent planning so that it is central to decision-making rather than on the periphery.”
Question: Is there anything else that developing countries should do to minimize the damage from future climate change to Africa?
Afghanistan: World Bank Provides Further Grant Support to Help Improve Irrigation Infrastructure
Today, the World Bank approved an additional grant to the Afghanistan Emergency Irrigation Rehabilitation Project. This additional grant will add $25 million to the initial grant of $40 million, which was approved on December 23, 2004. This money is to provide Afghan farmers with adequate water supplies through the development of traditional irrigation systems throughout the country. The long-term effect of this project is “to increase agricultural productivity and farm income, improve food security and livelihoods, and reduce vulnerability of farmers to droughts.”
The additional funding approved today will ensure that 635 water irrigation systems will be completed. These irrigation systems will help Afghanistan become better suited for a successful farming industry. Due to its rough terrain, mountains, deserts, and arid climate, Afghanistan historically has been an “unforgiving place for agriculture.” According to Nihal Fernando, Senior Rural Development Specialist and Project Team Leader, these irrigation systems will vastly improve the Afghan farming, which is essential for reducing poverty and ensuring economic growth in the country.
Since the project’s inception in 2004, new irrigations systems have been in place for nearly 54,000 ha (135,000 acres) of farmland.
Questions: Do you think the World Bank made a wise decision in approving another $25 million to this project? Besides farming, what other industries could promote economic growth and reduce poverty in Afghanistan?
The U.S. will bring two cases to the World Trade Organization (WTO) against China regarding intellectual property rights and copyright piracy. The complaints are based on China's well-known practice of allowing pirated copies of DVDs of Hollywood movies and U.S. books and music to be sold for as little as $1 per copy in shops throughout China. China's piracy and counterfeiting of U.S. and other foreign products has been causing controversy for a long time now. U.S. officials claim that China's lack of protection of intellectual property rights has resulted in billions of dollars of loss to U.S. companies. The purpose of the complaints is to get China to strengthen its enforcement of copyright and trademark laws.
The rampant practice of piracy in China is due to the government's blocking foreign companies from accessing its markets. The second complaint of the U.S. will seek to bring down China's strict trade barriers which are keeping legitimate U.S. products out of the country. China's officials responded to the news of the cases against its piracy practices with threats that the cases would likely damage bilateral ties with the U.S.
Question: Is the U.S. right to challenge China's policies in controlling its media?
Monday, April 09, 2007
Today the International Monetary Fund (IMF) reported that the global economy was on the rise in spite of slower growth posted for the world’s largest economy and importing country—the United States.
The IMF further asserted that the United States’ economic slowdown has thus far had little effect on other economies because of the fact that U.S. economic troubles have been centered on the domestic housing market crash.
The IMF also noted that as of yet there has been little spillover from the troubled housing market into other areas of the U.S. economy, but that it is foreseeable that consumer spending and investment could be adversely impacted if the residential housing market does not improve, thus potentially implicated economies in exporting countries around the globe.
In the United States, concerns are growing as market watchers begin to change their economic forecast from a “soft landing” for the troubled domestic residential housing market to a housing-led recession for the United States that will—and some assert already is—spilling into other economic sectors.
In addition to the mixed signals on Wall Street—numbers for companies like U.S. Steel indicate a healthy economy while homebuilders’ stocks paint a very different picture—is the effect on state revenues, important because these political entities are more involved in major investments for infrastructure.
Reports that the nationwide housing slump has reduced state revenues are tempered, asserting that while states have seen decreases in taxes from real estate sales and transfers, as well as decreases in the purchase of associated items. At this point, state governments assert that the problem is not serious as the rest of the economy is fairly strong. That could change if there is spillover from housing to other market sectors.
1. Is or was the housing crash avoidable?
2. Do large economies like the United States have a responsibility to the global economy?
3. How are other major economies (e.g., China, a growing economic power on the global scene that is facing a housing bubble akin to that experienced by the U.S.) dealing with burgeoning domestic economic issues that could spillover into the global economy?
Sunday, April 08, 2007
A US delegation began a four-day visit to the hermitic North Korean state. Bill Richardson, a Democratic presidential candidate from New Mexico (also current NM governor and former US ambassador to the United Nations), leads the Bush administration-endorsed visit. This visit coincides with the impending deadline in the recent nuclear disarmament agreement. This delegation was sent in the hopes of improving the US-North Korea relationship, as protocol is considered very important in North Korea. NK likes to be viewed as a major power, and the visit, which includes a former ambassador, former veterans affairs secretary, and other top advisors could go a long way in improving US-NK relations. This trip, however, is not officially part of the six-way talks, but Richardson has requested a meeting with Kim Jong-il. The visit will also oversee the transfer of the remains of US soldiers who died in the Korean War.
An agreement was reached on February 13th, in the hopes to achieve NK disarmament, but the agreement has been put to the test due to the delayed money transfer from frozen funds based in Macau (although, on Friday, the State Department announced that the obstacles holding up the money transfers have been resolved, clearing the way for the transfer). There is worry that NK will not shut down its main nuclear reactor by the April 14 deadline as a response to the non-release of frozen money. This week, furthermore, North Korean leaders have made statements, which question whether NK is truly genuine about shutting down its nuclear reactors.
Question: What additional steps, short of war, are possible to ensure NK disarms?