Global economy

BRICS bank will be a recipe either for moral hazard or redundance

BRICS leaders (from left): India Prime minister Manmohan Singh, President of the People's Republic of China Xi Jinping, South Africa's President Jacob Zuma, Brazil's President Dilma Rousseff and Russian Federation President Vladimir Putin. Leaders from the BRICS group of emerging powers failed to launch a much-anticipated new development bank to rival Western-dominated institutions like the World Bank. Photo: AFP

Among the overweening initiatives announced this week by the ill-assorted leaders of Brazil, Russia, India, China and South Africa was a pledge to set up a new BRICS Development Bank to finance economic growth in the emerging world.

Thursday, 28 March, 2013, 6:31am

BRICS nations seek to establish rival to World Bank

South Africa's foreign minister, Maite Nkoana-Mashabane, addresses delegates in Durban. Photo: EPA

The grouping of Brazil, Russia, India, China and hosts South Africa is racing to flesh out proposals for an infrastructure-focused lender that would challenge seven decades of dominance by the World Bank.

27 Mar 2013 - 5:44am

Can the BRICS break through the global gridlock?

The G20 summit in St Petersburg in September promises to be the most spectacular top-level gathering of its kind. Photo: EPA

Radical reforms of institutions tend to come in the wake of wars, as was the case after the second world war with the creation of the United Nations and the Bretton Woods financial architecture - the International Monetary Fund, the World Bank and the General Agreement on Tariffs and Trade, the predecessor of today's World Trade Organisation.

27 Mar 2013 - 3:09am 1 comment

Book review: The Great Rebalancing, by Michael Pettis

Book review: The Great Rebalancing, by Michael Pettis

China will be forced to make a drastic change to its development model that will result in average GDP growth of three per cent or less over 10 years.

10 Mar 2013 - 4:17pm

CIC president cautious but warming to US

Gao Xiqing, vice chairman, president and chief investment officer of China Investment Corp. Photo: Bloomberg

China's US$500 billion sovereign wealth fund is more optimistic about the United States economy than those of Europe and Japan, although it is generally cautious about the outlook for major economies.

7 Mar 2013 - 6:17am

World's economies need US budget compromise

US President Barack Obama and the congress should lay antipathy aside in negotiations for renewing government funding and lifting the country's debt ceiling. Photo: AP

Barring a breakthrough like "grand bargains" of the past, Washington will implement US$85 billion in spending cuts by September and US$1.2 trillion in cuts over the next 10 years. Economists say this could trim US growth by more than 0.5 per cent this year, which is not good news for the rest of the world. Ironically, there is a bittersweet note to it, with good news on US manufacturing and consumer spending, which are key to global recovery.

4 Mar 2013 - 3:27am

Danger signs for the global economy

Japanese Prime Minister Shinzo Abe. Photo: Xinhua

While people fret about a potential shooting war between three of the world's largest economies in the East China Sea, the real danger may be a currency war in which all three countries will be key players.

25 Feb 2013 - 2:52am

Group of Seven leaders will not use currencies to wage 'economic warfare'

Japan's finance minister, Taro Aso (centre), chats with South Korean Central Bank Governor Kim Choong-soo at the G20 meeting. Photo: AP

G20 finance ministers yesterday moved to calm fears of looming "economic warfare" on the currency markets, pledging they would not target specific forex rates or devalue currencies to make them more competitive.

17 Feb 2013 - 6:07am

All eyes on 20-ring circus

The luxury Ritz-Carlton hotel in central Moscow awaits the arrival of G20 policymakers this weekend. Photo: Reuters

The G20 multi-ring circus reaches Russia this week for six months of no doubt bizarre performances, culminating in September in the grandest summit on earth in St Petersburg. Given that Russia excels in circus and that President Vladimir Putin is something of a showman-in-chief, it promises to be an exciting time.

14 Feb 2013 - 4:53am

Best days of the free market are over

Best days of the free market are over

The free market has been a wonder of our age. Its ideas have been like some remarkable scientific breakthrough that transformed the world. The free market propelled America and the West to global economic dominance, and allowed hundreds of millions of people in China and elsewhere to prosper. It won the 20th century.

12 Feb 2013 - 2:45am 8 comments

Beware of mixed economic signals

The Dow Jones index rose above 14,000 for the first time since 2007.

Investors should heed conflicting economic signals. If they had predicted last week where the next negative sign was coming from, many would have said Europe, which is unlikely to emerge from its debt woes without another mini-crisis or two. But it turned out to be the US, where the economy contracted 0.1 per cent in the December quarter, against market expectations of more than 1 per cent growth. Conflicting signals emerged by the end of the week, with revised figures showing the US economy added many more jobs than thought in the December quarter, sending the Dow Jones index above 14,000 for the first time since 2007.

4 Feb 2013 - 3:02am

Misguided belief in austerity diverts attention from need for jobs

Public health care and transport workers in Greece stepped up their action against the government's austerity policies in a 24-hour strike. Photo: EPA

Three years ago, a terrible thing happened to economic policy. Although the worst of the financial crisis was over, economies on both sides of the Atlantic remained deeply depressed, with very high unemployment. Yet the Western world's policy elite somehow decided en masse that unemployment was no longer a crucial concern, and that reducing budget deficits should be the overriding priority.

3 Feb 2013 - 6:42am

Association bullish on loan market

Association bullish on loan market

Coming off a gloomy couple of years, the Asia-Pacific Loan Market Association has a positive outlook on the global loan market, because of the impact emerging markets are expected to have on it.

1 Feb 2013 - 5:22am

Re-emergence of the trading city network

Photo: EPA

Recently, a group of officials gathered to plot a new trade strategy. It was a typical trade-policy discussion: the participants diagnosed competitive export sectors, identified key trading partners, described how public and private investment could resolve barriers to global integration, and forged a new bilateral relationship.

31 Jan 2013 - 2:27am

Global economy searches for a happy ending

Japanese Prime Minister Shinzo Abe is pushing for aggressive action to weaken the yen. Photo: AFP

Tthe current global economy feels like the beginning of the third and final act of a story, which begins in search of resolution. Policy uncertainty will be the chief issue facing the US; in Europe, Greece's ability to meet its obligations and the euro zone's attempts to regain growth will be important factors this year. For Asia, 2013 holds in store two particularly pivotal plot devices.

28 Jan 2013 - 3:04am