“The Vital Wave Consulting” blog has an interesting post from June 26 – “Is the Rest of the World Ready for a Unified BRIC?” - about last week’s summit in Moscow of the four “BRIC” countries: Brazil, Russia, India, and China. The article ponts out that trade among the four countries is too small to justify talk of a new trading bloc, but remarks that they have some common interests with respect to world trade, notably reducing reliance on the U.S. dollar. The BRIC countries are hard to overlook. Together they comprise about 43% of the world’s population and 15% of its GDP, and hold over 40% of the world’s gold and foreign exchange reserves. Their economies are growing at more than double the pace of developed economies. That they are holding a summit at all indicates that they are looking for ways to throw their combined weight around for mutual benefit. [click to continue…]
Several months ago I posted an article contending that decoupling – the notion that movements in emerging markets correlate minimally, if at all, with those in mature markets – was dead. The vertiginous rise in most emerging market indices over the previous seven or eight years stood in stark contrast to the anemic performance of the S&P 500 over the same period. As the financial meltdown and subsequent recession hit, there was a brief moment when it seemed that many of the emerging markets, especially in Asia and Latin America, might emerge unscathed. Subsequent events indicated that emerging markets, especially in Africa but also Southeast Asia, were suffering as much as the OECD countries, but with much less of a cushion against humanitarian catastrophe. In some parts of Africa, a five per cent drop in GDP can push millions of people into starvation. Decoupling, as I wrote, was dead. Even the miserable Congolese worker scrabbling in the dirt for diamonds or gold or the columbium-tantalite used in cell phones, was hit by the collapse in consumer and industrial demand in America, Europe, Japan, and China.
I may have been wrong. [click to continue…]
The last several weeks have been busy. I am not even over jet lag from my two-week trip to Indonesia and Thailand, from which I returned last Sunday, and I leave tomorrow morning for Senegal. Naturally, I would rather think about my contribution to the world’s economy than about my ever-expanding carbon footprint. At least I am not traveling around the world to attend conferences on climate change, which would be a touch too absurd even for my tastes.
I spoke to quite a few business and government people in both Indonesia and Thailand, and it seems clear to me that Asia will lead the world out of recession. Thailand has been suffering a political crisis for several years now, marked by a military coup, rioting, the takeover by demonstrators of the country’s main airport, and the abrupt dismissal of two Prime Ministers, but its economy seems to sail on, unperturbed. The nation’s factories are humming, building cars and auto parts, microprocessors, and all kinds of industrial equipment and consumer goods, and potential investors are lining up at the gates, determined not to miss the next big thing. [click to continue…]
Working abroad isn’t what it used to be.
There is an old Three Stooges movie in which the boys have been sent by their company on a business trip to Mexico and receive a telegram from the head office saying they have been fired (nowadays they might be “right-sized”) and no further funds will be coming their way. There ensues a crazy hour or so in which Moe, Larry, and Curly try to sneak out of their hotel without paying, get chased by the police, and escape from jail, all punctuated with the pokes in the eye and bops on the head for which they were famous. [click to continue…]
I arrived a week ago in Minsk, capital of the former Soviet Republic of Belarus, as part of a small team of World Bank staff and consultants visiting for a week to conduct what is called a “mini-diagnostic” of the investment climate – or business enabling environment, as it is also called – and to identify areas in which reform is both needed and possible.
Over the past decade or more, investment climate reform has become a core product for the World Bank Group, which has been offered to at least a hundred countries. It is a reflection of the “Washington Consensus,” which I have written about in a previous post, and which is a statement of the market-oriented reforms and liberalization of the economy considered essential to achieve economic growth. [click to continue…]