We live in financial times - 2

This is just an addendum to a previous post last week that was inspired by the recent launch of the FT’s amazing re-branding campaign. London, one of the capitals of globalisation, is currently full of FT adverstising posters. Here they are:

The world’s business centers in one. Or: the World as Business Center. That looks like Atlantis: mythical, ideal, probably has never existed, and not likely to ever exist. So much for those who love globalisation.

Richard Branson as El Che. Yeah, since Karl Marx and “Jo” Schumpeter we know that capitalism is the true revolutionary force in human history…

Developed vs. emerging world - snapshot

Here a small graphic that provides a good overview of the relative weight of the rich and “developing”/”emerging” world today.

Emerging market catch-up has been impressive, reaching now more than 50% of world GDP in purchasing power parity terms. Emerging market share in world trade (see a previous post) is growing too. Yet but given their demographic weight, there is much more to expect.

Energy consumption levels are high - China will indeed need to make an extra effort, although it is to be reminded that the historical culprits of global warming are the rich countries.

As regards foreign exchange, the situation appears to be very different from the pre-Asian crisis situation. With the commodity boom, emerging market growth, and increasinlgy prudent macroeconomic policies, reserve accumulation by emerging markets has been impressive.

Market capitalisation levels show that the emerging world has still a very long institutional way to go and will need to strengthen institutional capacity for capital markets for better long-term conditions.

The graphic was just compiled by Merrill Lynch, with data from emergingportfolio.com.“Developed” world here is the G10: US, Euro area, Japan, Canada, NZ, Australia, Norway, Switzerland, Sweden. “Emerging” world, well, the Rest:

Gideon a tout compris - papa, maman et la démocratie

Gideon Rachman from the FT with whom I do not always fully agree, clearly got it right this time, in his latest column.

“Les jupes de maman” ou “l’autorité paternelle” - c’est l’offre de choix de la France au second tour des élections le 6 mai prochain:

“France now has a clear choice. Does the country want a mummy or a daddy as its next president?

We live in financial times - a sense of déjà vu

(very modestly updated)

The international business newspaper Financial Times is scaling up its branding. Its new tagline is “We live in Financial Times” (more here).

In an e-mail sent to its staff, the management announced:

“an expanded “People” section, increased space for world news coverage, and some exciting additions to our unrivalled team of columnists and commentators (…) The tagline “We Live in Financial Times” underlines our relevance as the globalisation of business reaches ever broader and deeper”.

Indeed, “globalisation lives”, as the newspaper’s chief economics commentator Martin Wolf put it back in September last year (walled for non-subscribers) and as the existence of this modest blog among zillions demonstrates.

This sleepy Monday mornig in the office, all this reminded me of something.

International Economic Institutions - Wake-up Call for the United States and Europe

The Atlantic Council issued a strong wake-up call for the United States and Europe. In its report (mentioned in my previous post regarding the WTO) entitled “Transatlantic Leadership for a New Global Economy”, it urges the United States and Europe to lead the way in building a new international institutional architecture for the world economy. It argues that globalisation has fundamentally changed the current economic and political power equilibrium, rendering the international governance architecture based on Bretton Woods, created at a time where the US and Europe were the sole important heavyweights (apart from the USSR..), irrelevant today. The US and the EU need to lead the way to changing the current institutional framework. Given the current state of play in world affairs, a very welcome wake-up call. The policy conclusions are the most interesting and highly relevant. Here they are:

No future for multilateral rounds of trade negotiations

There are more and more voices expressing the view that the model of multilateral trade liberalisation rounds, such as held since the founding of the GATT back in 1947, makes no sense today. 15o states now make up the WTO, and the principle of consensus renders decision-making almost impossible.

Back in 2003, Razeen Sally from the LSE wrote a paper that remains as relevant as ever, analysing at that time the WTO’s decision-making difficulties in the run-up to Cancun:

“Clouding the negotiations at the WTO are three alarming trends: creeping standards harmonization, through which more-developed members seek to impose higher regulatory standards in such areas as intellectual property on less-developed members; excessive legalism, through which WTO panel rulings fill in the gaps of WTO agreements; and a more politicized WTO, where interest-group politics threatens to paralyze the organization”.

Now in 2007, what has changed? Not much.

“Free Trade” Agreements - The Debate at a Glance

A few weeks ago, South Korea and the United States signed a free trade agreement which sparked lots of debate. FT Economics Commentator Martin Wolf made objections to this agreement in a column published on the 3rd of April, and opened it to comments from leading economists on his online “economist’s” forum. Comments came in until a few days ago, and I warmly invite you to have a look at it - if you are a geek enough. The forum, but not Martin Wolf’s column, is open to non-FT subscribers. Have participated such eminent figures as: Robert Wade, André Sapir, Fred Bergsten, Jagdish Baghwati, a former USTR Carla Hills, David Vines, Joseph Francois.

World trade in 2006 favourable to developing countries

The WTO released yesterday its latest figures on world trade.

According to the WTO, world merchandise trade grew 8% in 2006, the second highest performance since 2000. World commercial services exports rose by 11% to $2.7 trillion in 2006 at the same annual pace since 2000. This surpasses the buoyant GDP growth - 5.4% - the world as a whole has witnessed in 2006 (see the IMF’s freshly released World Economic Outlook for latest global economic trends).

A few very interesting trends highlighted by the WTO:

The Economist might get it wrong again

“Verry shockingue”. The prominent British and internationally leading weekly The Economist has sometimes erred spectacularly. The most prominent error it itself recognizes was its support for the war in Iraq in 2003. A predictable disaster.

The Economist’s cover page this week, dedicated to France’s upcoming presidential election, is entitled: France’s chance: The case for Nicolas Sarkozy. I am afraid that it could be wrong in its assessment again.

I read the leader and agreed on everything The Economist says about France’s problems, the reforms it needs, the stakes in the French presidential election, and the candidates. True, too, the election is a choice between “worst, worse and bad”, as The Economist puts it. But who is the “only” “bad” candidate? I am not sure it is Sarkozy. I disagree with The Economist’s conclusion:

[Nicolas Sarkozy] is the only candidate brave enough to advocate the “rupture” with its past that France needs after so many gloomy years. It has been said that France advances by revolution from time to time but seldom, if ever, manages to reform. Mr Sarkozy offers at least a chance of proving this aphorism wrong.”

The reasons I disagree are related to the realities of French institutions.

Birthdays

Last month, the EU turned 50. This month, the GATT is turning 60.

Apart from the community of policy-geeks, and the elite-readers of the comment and debate sections of dull and conservative papers such as the FT and the WSJ, nobody hardly noticed. Mainstream media prefer to cover protectionist agitation of a few angry minorities and politicians’ electoralist point-scoring rather than provide what they should: Information and Background. But no: it’s all about featurisation or tabloidification and entertaining the Crowds dubbed as not intelligent enough to understand anything that matters to their lives. After all, the EU and the GATT are about people’s jobs, what they buy in their supermarkets and shopping malls and the incredible rise in the levels of comfort in life rendered possible by the Tide of the Market both EU and GATT initiated.

My oh-so modest blog lost in the ever-expanding blogosphere is also celebrating a very modest birthday: 5 months. (Wow!….)

For this occasion, I undertook an appraisal which led me to refresh the 2 About pages (About the author, and What this blog is about) in order to match the theory of the blog with its practice and to concentrate on the essentials. I also asked friends to produce a new design template for it. So a new look to be expected soon!

Chin chin!