July - December 2011

Gates to Push Development Agenda at G20, Won't All be Music to Harper's Ears
31 October 2011 – Winning Free Press – Mike Blanchfield Bill Gates is expected to present his ideas for a tax on financial transactions in order to reduce poverty and foster development at the upcoming G20 meeting in Cannes, France.  As President Sarkozy put food security as a primary agenda item for the meeting, international development is expected to be an important topic. Stephen Harper is opposing Gates’ tax proposal by saying that it harms Canadian banks.  Tiffany Baggetta, spokeswoman for World Vision Canada, said the G20 includes emerging economies such as India, Brazil and South Africa that are also dealing with poverty and that Canada can show global leadership by forcing other G20 leaders to address the food security crisis. (Read More)

World Leaders Need to Find the Cash to Back Climate-Change Promises
31 October 2011 – The Vancouver Sun - Jeremy Hobbs and Kumi Naidoo
At the upcoming G20 meeting, leaders should consider their actions in light of the upcoming UN climate change conference in Durban, South Africa. Access to seeds, better irrigation systems and assistance in diversifying crops are all important aspects in helping the African farmers to adapt to increasingly unpredictable seasons. At the Nov. 3-4 G20 summit three important options for generating significant new sums of finance stand out. First, Europe is on the verge of implementing a tax on all financial transactions that could generate almost 60 billion Euros per year. Second, there is growing support for applying a fair carbon charge to international transport. And finally, the Advisory Group on Climate Change Financing estimated a potential $3-8 billion savings from reform of fossil fuel subsidies in G20 countries. (Read More)

EU Leaders Urge More G20 Action
30 October 2011 – The Street – Raf Casert
Two European Union leaders have called for G20 leaders to build on EU plans to stabilize the Eurozone and enhance the global economy. A three-pronged deal by the EU was reached last Thursday which: reworks the EU bailout fund, calls on banks to take fifty percent losses on Greek bonds and orders banks to raise 106 billion Euros in new capital by June. President Barack Obama also noted that the European plan to tackle the European debt crisis plays a huge role in impacting the U.S. economy positively but he did not say anything about whether the plan has a chance of tackling the global recession in general. (Read More)

China Warns it Cannot 'Cure' Eurozone's Debt Crisis
31 October 2011 – The Telegraph – Richard Tyler
China has warned Europe that it will not be able to alleviate the Eurozone debt crisis, as the European Commission President and European Council President urged the G20 leaders to propose measures effective enough to tackle the problem. China, the world’s largest foreign exchange reserves holder, said that it wanted more clarification before it invests in sovereign wealth funds and that Europe has to deal with its own problems. European leaders remain under immense pressure to provide details on last week’s proposals to cut Greek debts by 50% and raise 106 billion Euros to recapitalize Eurozone banks. (Read More)

EU Leaders Agree on Position for G20 Summit
24 October, 2011 – Shanghai Daily
For the upcoming G20 summit, EU leaders on Sunday agreed on the idea of calling on all G20 members to reform the international monetary system, strengthen financial regulation and challenge the excessive instability of commodity prices. EU leaders also pressed the G20 countries to promote global recovery, advance international trade liberalization and combat climate change. This year’s global summit is expected to emphasize combating commodity price volatility, supporting employment, strengthening social dimension of globalization and fighting corruption, and also reforming the international monetary system and strengthening financial regulation in general. (Read More)

The Netherlands’ Pensions Top the League Table – Again
23 October 2011 – The Financial Times - Ellen Kelleher
According to this year’s global pensions index, many of the world’s pensions systems are weakened by government debt and other problems, “there are still countries where pensioners live well in their golden years,” for example the Netherlands. We see the Netherland’s pension system as successful as it gives elderly citizens a flat-rate public pension and also requires them to contribute to company pensions in their youth along with their employers. The Netherlands, Australia, Switzerland and Canada award generous payouts to mothers who stay home to raise children and others who never worked.  With assets worth $10,600bn, the US still accounts for the biggest share of the pensions market within OECD countries. (Read More)

Tunisia Counts Votes after First Arab Spring Election
24 October 2011 – Reuters – Tarek Amara and Andrew Hammond
Tunisia’s first post-revolution election, which was monitored and observed by EU officials, appears to have been won by a moderate Islamist party. Some fear that this result in a traditionally secularist state will be duplicated by other post-revolution Arab states. The vote will result in a new 217-member assembly that will serve for one year, but will write a new constitution, choose the new interim government, and set dates for more elections. The voter turnout was over 90%. There was no significant party representing the previous regime. (Read More)

EU Leaders Nervous Over IMF Involvement in Bailout Fund
23 October 2011 – EurActiv
European leaders will not pursue the option of using the European Central Bank to buy bonds that were guaranteed by the EFSF. The two remaining options are to either allow or not allow the IMF to help the EFSF insure against bond losses affecting weaker states. Insuring against bond losses costs less than direct bond purchases. This allows the EFSF to leverage its funds beyond the original 440 billion euro capacity. Many are skeptical of the idea of bringing in countries like Russia and China to the eurozone bailout, and whether the external countries can agree to help Europe in a timely manner. (Read More)

Pratibha: Democracies Must Ensure Human Rights
19 October 2011 – The Hindu
Indian President Pratibha Patil, at an event where many notable people attended, said that India is facing many challenges. India is a thriving democracy, but the goal of governments and citizens must be achieving tolerance, human rights and good governance.  She emphasized that legislators need to uphold democratic traditions while fulfilling the needs and desires of their community. She also emphasized strengthening administrative processes and conducting electoral reforms. (Read More)

As Growth Lags, IMF Shifts Gears
18 October 2011 – The Washington Post – Howard Schneider
The International Monetary Fund, known for urging governments to cut their budgets, is now asking countries to look for ways to boost growth because of concerns that a global round of austerity may trigger a new recession. The IMF warned the world’s leading economists that, “the immediate risk is that the global economy tips into a downward spiral.” The advice to boost growth through expansive government budget comes as European leaders are preparing their newest strategy to address the sovereign debt crisis. The IMF began changing its message three years ago when the financial crisis prompted the agency to urge government to increase spending to maintain economic activity. (Read More)

Departing ECB Economist Juergen Stark Call for Euro Finance Ministry, Rejects Shared Bonds
17 October 2011 – The Washington Post
The European Central Bank’s (ECB) departing chief economist, Juergen Stark, told an EU parliament committee on Monday that countries in the eurozone have to “give up national sovereignty” over deficits and debt. He said that the EU should make some amendments to its basic treaty in order to strengthen its control over nations’ budgets. Stark also supported calls by the ECB’s head, Jean Claude Trichet, for an eventual European finance ministry. (Read More)

Merkel to Address Parliament Ahead of Euro Summit
17 October 2011 – MSN News
Germany’s Chancellor Angela Merkel will brief the German parliament on her government’s position ahead of the EU’s summit over the weekend. According to her spokesman Steffan Seibert, Chancellor Merkel is more likely to address parliament on Friday. Seibert tried to reduce expectations of the summit in Brussels, saying that anything discussed during the meeting will not automatically resolve all outstanding problems related to the eurozone crisis. Decisions made during the Sunday meeting will be part of “important measures to be taken over the long term, and this long term is likely to last into next year,” Seibert said. (Read More)

G20 Steps to Boost Economy Welcomed Cautiously
16 October 2011 – IPS News – A.D. McKenzie
The G20 stated, at the end of a two-day meeting of their finance ministers and central bank governors, that they are determined to reform the financial sector to improve the economy and to “promote social inclusion.” ONE, the anti-poverty organization, noted that the agreement on principle that French Finance Minister François Baroin announced on regulating commodity markets is very important. Guillaume Grosso, director of the French branch of ONE, attributed the famine in the Horn of Africa to inaction on the part of the international community. At the end of the meeting, France and South Africa emphasized on the need for the G20 to focus on addressing climate change problems and also helping out developing nations affected by this problem. In general it is recommended to apply  a financial transaction tax (FTT), which is supported by the big financial institutions and the EU commission, which is believed to “make the financial sector more accountable” and also “fund a range of initiatives from climate mitigation.” (Read More)

China Pressed to Face up to Moral Obligations
17 October 2011 – The Australian – David Uren
Treasury Chief Martin Parkinson noted that China has to become more responsible in terms of participating in world affairs because it is going to outgrow the economy of United States. The fact that China had not participated in “pressing resolution of the impasse at the Doha world trade talks, or contribute to the G20 policy debates,” has made Australian officials very angry. It is believed that China could be doing more to support efforts in Europe to challenge the sovereign debt crisis instead of sitting idle. Dr. Parkinson finally said that China should not only approach international challenges but also focus on their domestic reform. (Read More)

G-20 Said to Weigh Boosting IMF Lending Power to Aid Europe
14 October 2011 – Bloomberg Businessweek – Sandrine Rastello
IMF and G20 officials said that nations from China to Brazil are considering increasing the International Monetary Fund’s lending resources to help stem the EU’s debt crisis. Officials, speaking anonymously, said that talks are preliminary stages as potential contributors wait to see what measures the EU takes to end the debt crisis at an October 23 summit. Officials from the BRICS said in a statement that they are willing to contribute to global financial stability through the IMF. Brazilian Finance Minister Guido Mantega told reporters yesterday is “the second most important thing that we have to discuss” at a G20 meeting in Paris this week. (Read More)

Economists urge G20 to Curb Commodity Speculation
11 October 2011 – Market Watch - Caroline Henshaw
Finance Ministers of the G20 are forced again to improve regulation of commodities markets after 450 economists from leading research institutions called for measured to curb speculative investment in food markets. The letter to the G20 ministers will add weight to similar calls by French President Nicholas Sarkozy, who has made fighting instability in food markets a top priority of his leadership of the G20 this year. The United Nation's food body this week warned that food prices are set to stay high and volatile as production struggles to keep pace with rising demand from emerging countries and to diversion of grain to make biofuels. (Read More)

G20 Likely to Beef Up Regulatory Task Force
10 October 2011 – Reuters – Huw Jones
The G20 plans to give the Financial Stability Board a stronger “institutional” reinforcement. The FSB has become an important force for achieving global agreement on new bank capital rules, Basel III, which the G20 leaders considers its central regulatory response to the financial crisis. There is distrust between the EU and the US over implementing Basel III, as too many new rules will force them to decrease lending. Furthermore, focusing on the implementation of financial regulations is difficult for policy makers. The FSB and Basel III have just approved a bank capital surcharge on the world's top 28 banks from 2016 and principles for dealing with cross-border bank crises in ways that protect taxpayers. (Read More)

OECD’s Economic Indicators Show Worrying Trends
04 October 2011 – 123jump.com – Arthi Gupta
A series of indicators released by the OECD about Eurozone statistics in August showed some unfortunate trends, adding to the uncertainty of Europe’s economic instability. The consumer and producer price indices increased by higher rates than in July. The Spanish jobless rate rose 1.25%, to end at 21.2% overall, the highest in the Eurozone. Retail sales also dropped in Romania and Greece, each by about 3%. (Read More)

Avoid Risky Assets Until November G20 Meet: Citi Strategist
4 October 2011 – Reuters - Saeed Azhar
In a meeting in Luxembourg, Eurozone finance ministers said they were reviewing the size of the private sector's involvement in a second bailout package for Greece. European officials are struggling to have a complete crisis-fighting plan before the November G20 meeting in France. One of the investment themes has been to diversify into the Japanese yen and the Swiss franc. John Woods, chief Asian strategist at Citi Private Bank, said that although Hedge Funds are a good investment in the current environment, they are turning into risky conditions. He also said that emerging markets owe European banks around $2 trillion and Asia would be hurt by a new banking crisis. (Read More)

UPDATE 2-G20 Not Setting Greek Emergency Measures –Canada
4 October 2011 – Reuters - David Ljunggren
Canadian Finance Minister Jim Flaherty said that the G20 group of nations is discussing Greece’s ability to deal with its debt crisis but is not preparing for any kind of emergency measures in case it Greece fails to do so. Flaherty disagreed with earlier comments by South Korean officials about the G20 discussing whether to supply liquidity to the global financial system. Flaherty finally said that the government would stick to its plans to balance the budget by 2014-15, and was not currently considering a second incentive to boost the economy. (Read More)

Business Calls for G20 Debt Crisis Action
3 September 2011 – Financial Times – Hugh Carnegy
The International Chamber of Commerce has said that the G20 group must act together to deal with the economic crisis when they meet in November. The advisory group, which is comprised of big corporations, industries and economists, complained of the protectionist measures of the past 18 months. The ICC suggests the G20 should apply a different approach of opening to the global trade, given that the Doha Round of negotiations has stalled. The ICC also warned the G20 against regulatory reforms and proposals favored by France because it has been argued that they will lead to artificially inflated prices of core raw materials. (Read More)

Summit Aims to Renew Push for Democracy East of EU
30 September 2011 – Associated Press - Vanessa Gera
Democracy in most former Soviet states is declining and damaging their integration with the West, while the EU (which has promised membership for some) is trying to solve its own problems. The EU summit in Warsaw, Poland which closed on Friday was meant to make the integration of these states and the EU closer and stronger. Poland is eager to see these eastern border regions transition to democracy in order to stop the flow of illegal drugs and to increase trade with neighboring countries. It is believed that EU membership can be a great incentive for these countries to transition to democracy. (Read More)

OECD Says Europe Won’t Fall into Recession
03 October 2011 – Dow Jones Newswires – Enda Tedesco
The head of the OECD Angel Gurria says that he doesn’t expect that Europe will fall into a technical recession, despite the weakening pace of its recovery. He said that Europe must “move forward in the banks’ recapitalization and prevent contagion from Greece,” to help problems in the short term. For medium- and long-term growth, he said that Europe must move forward with its structural reforms, promoting education, innovation, competitiveness, and more. (Read More)

Calls Rise for Global Focus on Creating Jobs
26 September 2011 – the Associated Press – Sarah Di Lorenzo
The OECD and the ILO are saying that government support for the unemployed is really important. Italy’s labor minister said that governments have to have economic growth together with employment growth as growth without jobs is dangerous. The ILO and the OECD present data that indicate 200 million people are jobless currently, and because of the 2008 crisis 20 million jobs were lost in G20 countries. The actual economic figures and peoples’ protests regarding the economy are leading governments to increase their focus on job creation. The OECD and the ILO argue that austerity measures may be necessary and countries should reduce their budgets and give incentives to companies to encourage them to hire more people. (Read More)

Rift Lowers Hope of G20 Breakthrough 18 February 2011 – Financial Times G20 members have reached an impasse on defining indicators that would be used to identify and address global economic imbalances. While there is broad agreement on using public debt and deficits - as well as private savings - as indicators, a disagreement over the current account measure has emerged. China is opposed to including the full current account as an indicator, and instead supports substituting this with trade figures. China is also opposed to the inclusion of real exchange rates, foreign exchange reserves, and specific targets.

(ReadOil Price Spike Threatens Global RecoveryIMF Warns of Two-Speed RecoveryJapan 'underestimated' tsunami riskSecurity Council mulls resolution condemning Syria

Bill Gates Backs Tobin tax, G20 Unconvinced
23  September 2011 – Reuters - Lesley Wroughton and Daniel Flynn
While Europe and the US are struggling to reduce their budget deficit and the sovereign debt crisis is escalating in the euro zone, developing countries are in need of support in order to climb out of poverty. While Canada, Britain, the United States, Australia and China oppose it, France, Germany, Austria, Belgium, Norway and Spain support the idea Bill Gates proposed which argues that by taxing financial transactions, we can raise “substantial resources” for developing countries. The Gates foundation also supported World Bank and IMF proposals to tax shipping and aviation fuels. The G20 is considering giving financial support for infrastructure projects and emergency food reserves in the world’s poorest regions. (Read More)

EU to observe Tunisian elections following January’s revolution
22 September 2011 – Wire Update – BNO News
The EU has announced that it will observe the Constituent Assembly elections in Tunisia next month. The elected Constituent Assembly will be in charge of writing the country’s new constitution. The election observation team will consist of 130 members, some of whom have already arrived in Tunisia. They will observe various facets of the election across the country, from campaigning to vote-counting to post-election events. The EU sees this as an important step for Tunisia, following a revolution that has provided the North-African country with a path toward democracy. (Read More)

Obama Rebuffed as Palestinians Pursue UN Threat
21 September 2011 – The New York Times – Helen Cooper and Steven Lee Myers
The United State’s late effort to prevent a Palestinian bid for membership in the United Nations faltered on Wednesday. The United States faces the prospect of having to share its role as the architect of Middle East peacemaking as other members of the Security Council seek to move forward on the issue of Palestinian statehood. Two and a half years of stagnation on the Middle East peace issue has left many frustrated and ready to try an alternative to the American-centric approach. The outcome of the Palestinian bid for UN membership remains uncertain. Meanwhile, the administration hopes that considering the Palestinian bid at the Security Council will provide a fresh opportunity for new talks. (Read More)

France Repudiates US Approach on Palestinian Statehood
21 September 2011 – New York Times – Helene Cooper and Steven Lee Myers
President Obama called for Palestine to drop its bid for statehood in the UN yesterday, and reaffirmed that the United States will use its veto power if necessary to block the action. However, French President Sarkozy, who spoke immediately after Obama, called instead for a General Assembly resolution that would grant Palestine “observer state” status. The French government has called for a collective approach in regards to the peace process, saying that the United States can no longer “do it alone.” (Read More)

 

 

Ailing Eurozone seeks G20 aid
15 September 2011 – Morning Star – Ben Chacko
Following a G7 meeting in which global leaders could not come up with answers to the world’s debt issues, many are hoping that some members of the G20, including poorer nations, will help out by buying the debt of other nations. The Brics countries – Brazil, Russia, India, China, and South Africa – appear to be the main countries the IMF hopes to receive help from. Eurozone leaders still maintain that the currency is not in great danger, but some insist that stabilizing the currency will not be easy or done quickly. Meanwhile, the Greek Prime Minister has stuck to the rigid austerity plan imposed by the EU and IMF in July, though many fear that he may stray from the plan in response to public outcry in Greece.
(Read More)

US “Not Encouraged” by India, South Africa, Brazil at UN
13 September 2011 – Bloomberg/Businessweek – Nicole Gauette
Ambassador Susan Rice said that the US has not been encouraged by the performance of India, South Africa, and Brazil as temporary members of the UN Security Council. All three countries recently blocked efforts by permanent members of the Security Council to pressure the Assad regime of Syria out of suppressing popular demonstrations in Damascus. Ambassador Rice said this move makes the US question their commitment to protecting human rights. This comes shortly after the NATO-led intervention in Libya, which troubled the three countries. The US may block the bid by these countries to join the Security Council as permanent members in the coming years.
(Read More)

G7 meeting ends with no agreement on growth
12 September 2011 – The Independent - Ben Chu
The meeting of the Group of 7’s finance ministers and central bankers closed during the weekend with an acknowledgement from the participants that the global economy is slowing, but without a commitment to take new action to stimulate growth. The lack of an agreement stems from different views on fiscal policy in the US and Europe. While the White House wants Congress to approve a $450 billion stimulus package, the German government believes that deficit reduction should be the priority of all advanced nations. The meeting’s outcome will likely not reassure investors about the G7’s commitment to economic growth. 
(Read More)

Why China Wants a G-3 World
7 September 2011 – International Herald Tribune – Parag Khanna and Mark Leonard
Despite the existence of the G-20 and talk of a G-2 and a G-Zero world, the fact is that we live in a G-3 world - “one that combines U.S. military power and consumption, Chinese capital and labor, and European rules and technology.” As the most significant actors, the U.S., Europe, and China are the “producers” of global governance while the rest remain “consumers.” Europe is discounted by most because of its disunity, but the EU represents the largest trading block, exporter of capital, and source of funding and leadership for multilateral organizations. This sits well with China, which is seeking an alternative to the dollar.
(Read More)

Zoellick Says World in “Dangerous” Period as Europe Turmoil Adds to Risks
6 September 2011 – Bloomberg 
World Bank President Robert Zoellick stated that risks to the global economy are intensifying as European leaders seek a way out of their crisis. The U.S. is not likely to return to recession but the Eurozone is facing a “particularly sensitive time,” he said. The Eurozone debt crisis is engulfing Italy and Finland is seeking collateral for loans to Greece.  Highlighting the interdependent nature of the transatlantic economy, Zoellick said: “I believe the U.S. will have slow growth, I don’t believe it will move to a double dip, but these things are very hard to predict because if you have events trigger uncertainty in Europe, that will flow back to the U.S.”
(Read More)

G7 to seek ways to prop up global growth: source
5 September 2011 – Reuters 
G7 finance ministers and central bank governors will meet in Marseilles, France on Friday to discuss options for propping up the global economy. The risk of recession has been brought about by temporary factors such as high oil prices, which were exacerbated by the sovereign debt crisis and uncertainty created by the U.S. debt ceiling debate. "There will be an indication that monetary policy will remain accommodative, and that fiscal consolidation will go on, but in some countries at a slower pace in the short term," a G7 official said. The G7 is also likely to discuss the Eurozone crisis and the need for developing countries to pick up the slack in global demand as developed countries’ economies slow.
(Read More)

End the charade in talks on global trade
24 August 2011 – Financial Times – Jean-Pierre Lehmann
The institutional framework for international trade is arguably breaking down. But this is not isolated; it reflects part of a wider gap between global governance and the economic and security challenges we face. Progress on international trade negotiations may be attained by taking four steps. First, the WTO’s Doha Round must be declared dead. Second, the WTO’s December ministerial meeting should be cancelled. Third, the WTO ministerial should be replaced with a group of eminent people tasked with finding a way forward. Fourth, the WTO needs a change of leadership. Fifth, the next head of the G20 should not be from any G20 countries or regions. 
(Read More)

Come together: is the world turning centripetal?
19 August 2011 – Foreign Policy Magazine – David Bosco
The global economic crisis, which has dragged on since 2008, has to this point strengthened international institutions. The most obvious beneficiaries are the International Monetary Fund (IMF) and European institutions, including the European Central Bank and the new European Financial Stability Facility. It's not intuitive that severe turbulence would empower rather than weaken international organizations. Crises have, in the past, shattered institutions. But now, the reality of interdependence may finally have insinuated itself into the instincts of policymakers. Multilateral instruments are getting more power and responsibility not necessarily because they've earned it, but because there seems to be no other option. The same is true in the security realm.
(Read More)

Syria unrest: World leaders call for Assad to step down
18 August 2011 – BBC 
The leaders of the US, UK, France, Germany and the EU have all called for Syria's President Assad to step down over his suppression of protesters. UN investigators say the use of violence in Syria "may amount to crimes against humanity." In a report to the UN Human Rights Council, the investigators said the UN Security Council should refer the issue to the International Criminal Court. Human rights groups believe about 2,000 people have been killed and thousands arrested since March as Syria's security forces - including tanks, helicopters, gunships and snipers - try to quell dissent that has broken out in much of the country. President Assad has promised political reforms but blames the unrest on "terrorist groups."
(Read More)

Getting Ready for the Democratization of Destruction
Sept/Oct 2011 – Foreign Policy Magazine – Andrew Krepinevich 
The rapid pace of technological progression, as well as its ongoing diffusion, offer clues as to some of the likely next big things in warfare.  Consider, to start, the U.S. military's loss of its near monopoly in precision-guided munitions warfare, which it has enjoyed since the Gulf War two decades ago. Today China is fielding precision-guided ballistic and cruise missiles, as well as other "smart" munitions, in ever greater numbers. Even non-state groups are getting into the game. The spread of nuclear weapons to the developing world, cyberattacks, and advances in biotechnology are also alarming. Such advances will rapidly increase the potential destructive power of small groups, a phenomenon that might be characterized as the "democratization of destruction." As challenges to the global order increase in scale and shift in form, the means for addressing them are actually declining.
(Read More)


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