Maybe it's the bright lights and majestic skyscrapers. Or maybe it's theaters and shopping and cafes. Usually, though, it's just the pragmatic search for employment. Whatever the reason, big cities have lured people throughout the ages, and in many cases it really is a siren call...urban life can be tough going.
Important developments today:
1. Two year U.S treasury notes reach record lows
2. U.S. housing starts jump in August
Two year U.S treasury notes reach record lows. In early trading today, U.S. treasury prices rose on speculation that the Federal Open Market Committee (FOMC), which meets later today, will increase purchases of U.S. debt if economic growth slows. The yield on the two-year note fell by 1 basis point to 0.46% after touching an all-time low of 0.4479%. The ten-year note has dropped for three consecutive days and is trading at 2.67%.
The ten-year notes have been rising since August 10 when the FOMC announced at its meeting that it would keep its bond holdings level by using proceeds of principal repayments to purchase U.S. debt to support the recovery. The Fed has bought $28.1bn of treasuries since August 17 using these principal repayments, hence keeping holdings in its System Open Market account at about $2 trillion.
U.S. housing starts jump in August. U.S Housing starts rose by 10.5% (m/m) to an annualized rate of 598,000 in August. Housing starts had risen to 679,000 in April, its highest level since the beginning of the crisis [see Chart at http://gem or http://www.worldbank.org/gem]. However after the expiration of the government tax breaks for new and existing home buyers in April, housing starts tumbled to a low of 539,000 in June and barely increasing in July. The August increase is welcome news to the housing market and may well suggest that the bottom might have been reached in this post-government tax incentive phase. This is also consistent with figures released yesterday showing that the U.S housing market index, a measure of builder confidence, has stabilized at 13 after tumbling from its peak of 22 in May 2010. However, with a sluggish jobs market, tight consumer credit conditions and mounting foreclosures that swell the supply of houses, recovery in housing starts will continue to remain a challenge.
Source: World Bank DEC Prospects Group and Thomson Reuters.
Among emerging markets:
In Latin America and Caribbean, Brazil, Latin America’s largest economy, current account deficit widened from 2.24% of GDP in the year through July to 2.32% in the year through August. The widening of the deficit is occurring at a time where the real is appreciating strongly on account of strong inflows of foreign investment. In August, Brazil attracted $2.328 billion worth of foreign direct investment.
Elsewhere in Latin America and the Carribean… Retail sales in Mexico fell slightly in July by 0.01%. The Mexican economy, which is tied to that of the U.S via strong trade and financial links, is recovering from one of the deepest contractions experienced. The moderation of growth in the U.S. as well as in Europe in H2 2010 will remain a check on Mexican economy’s recovery prospects.
In Sub-Saharan Africa, Nigeria, the second biggest economy in sub-Saharan Africa, the central bank raised the bench mark interest rate to 6.25% from 6%. Inflation increased to 13.7% in August (y/y) from 13% the previous month. The central bank projects the Nigerian economy to expand by 7.78% in 2010.
O Brasil vive um momento excepcional, fruto de décadas de trabalho duro. Alcançou um desenvolvimento social e econômico impressionante, tirou da pobreza dezenas de milhões de pessoas e construiu uma economia que está crescendo fortemente e atravessou sem percalços a grande crise financeira global. Pode-se dizer que o país uniu desenvolvimento econômico com estabilidade e avanços sociais, no que já foi chamado de “Consenso de Brasília” – em contraposição ao de Washington, de conturbada memória.
Important developments today:
1. Brazil to sell $500 million of international bonds
2. U.S. retail sales back on the rise
3. German investor confidence continues its decline
Brazil to sell $500 million of international bonds. Brazil’s government plans to raise about $500 million with the reopening of its global bonds that mature in 2041, according to a person close to the transaction. The last sovereign debt issue by Brazil was in July, when it raised $825 million with the reopening of its 2021 global bond. In a statement, Brazil’s Treasury said the country is retapping bonds without specifying the amount. The bonds will be offered to investors in North America and Europe on Tuesday, and some of securities will then be offered to Asian investors, according to the Treasury statement.
Recently, large Brazilian companies, including mining company Vale SA, the Brazilian Development Bank, and telecommunications company Telemar Norte Leste SA, have come to the international bond market. In the past week they raised a combined total of $6 billion. Brazilian corporates are taking advantage of near-record low borrowing costs amid growing investor appetite to secure long-term financing. More Brazilian companies are expected to tap the market soon.
U.S. retail sales back on the rise. For the second month running, U.S. consumers increased spending on groceries, clothing, sporting goods, health and personal care items, gasoline, and other general merchandise. Figures released today by the U.S. Department of Commerce show August retail sales jumped by 0.45% (m/m, saar), the highest increase in 5 months. Compared to a year ago the August figures were up 3.6% [see chart]. Against the backdrop of fall in retail sales in May and June, which raised concerns of the possibility of a double-dip among certain commentators, given the size of consumer spending in the U.S GDP (70%), the recent retail sales data bodes well for continued growth, even if at a more moderate level. Nonetheless, consumer spending will continue to be constrained by elevated levels of unemployment (9.6%) and the need to deleverage household indebtedness from their current high levels (household debt to income was 119% in Q1 2010).
Source: World Bank DEC Prospects Group and Thomson Reuters.
German investor confidence continues its decline, 5 months running. The ZEW index of investor expectations, which seeks to predict developments six months ahead, fell to a 5 month low of negative 4.3, according to a release today by the ZEW Center for European Economic Research in Germany. This fall should be seen against the backdrop of the very strong performance of the German economy in both Q1 and Q2 2010, on the back of the global rebound. Further, the slowdown in global growth and implementation of fiscal austerity in selected eurozone countries continues to weigh on investor sentiments going forward.
Among emerging markets:
In South Asia, India’s wholesale price index increased to 8.5% in August in y/y terms. In July the figure was 9.5%.
In Latin America and the Caribbean, Brazil retail sales increased 0.4% m/m and 10.9% y/y as released by the country’s national statistics office.
In Central Europe and the CIS, the Slovak Republic revised its forecast for the country’s GDP to 4% and 3.3% growth in 2010 and 2011 respectively, from a previous 3.2% and 3.8%, on account better expectations for the external environment.
More than 3 billion people in the world today don’t have access to savings accounts. Many of these 3 billion fall below the less-than-$2-per-day benchmark of the world’s poorest people. Why are banks not doing a better job to help them manage their financial lives?
The problem is largely one of cost. Providing financial services to the poor is prohibitively expensive for banks. Each time a client stands in front a of a teller’s window it costs most banks from $1 to $3. If poor clients make transactions of $1 or $2, or even less, banks won’t be able to support the costs.
It’s also too costly for the poor. Most poor people, especially those in rural areas, live far away from bank branches. Let me give one example of a woman in Kenya. The nearest branch may be 10 kilometers away, but it takes her almost an hour to get there by foot and bus because she doesn’t have her own wheels. With waiting times at the branch, that’s a round-trip of two hours – a quarter or so of her working day gone. While the bus fare is only 50 cents, that’s maybe one fifth of what she makes on an average day. So each banking transaction costs her the equivalent of almost half a day’s wages.
Transport projects typically do not include the reduction of crime and violence as an objective, but it could be a collateral benefit from investments in certain equipment and services also meant to improve the operational efficiency of a transport system. One example of this is the case of CPTM, the State suburban rail system for the São Paulo Metropolitan Region which carries almost 2 million passengers per day. CPTM was created in 1992 from Federal and State of S&
For nearly a decade, Brazil and the United States have been embroiled in a dispute over cotton subsidies. On April 6 this year, the US Trade Representative and the US Secretary of Agriculture announced that the countries had agreed on a path toward negotiated settlement. Two weeks later a Memorandum of Understanding (MOU) was signed. Although its details have yet to be spelled out, the MOU highlights both strengths and limitations of the current dispute settlement system. On the one hand, an agreement was reached through WTO rules and a “trade war” was avoided. Moreover, the agreement shows that less powerful members of the global trading system (in this case, Brazil) can successfully argue their case in the WTO. But two key limitations were also exposed: Unless the “injured” party has enough trade leverage with the “guilty” party, authorization of countermeasures—the typical WTO remedy—is of no use. And many countries may not be able to make their case to the WTO, either because of weak capacity or because the relevant sector is too small to justify raising the issue.
The MOU proposed the establishment of a fund for technical assistance and capacity building of Brazil’s cotton sector. Some of the fund’s resources will be used for activities related to international cooperation in the cotton sectors of sub-Saharan Africa and other regions. Although not explicitly stated, the use of resources for third countries was in response to another on-going cotton dispute that was brought to the WTO in 2003 by four African cotton producing countries over the same subsidies. Therefore, the MOU in addition to addressing the US-Brazil cotton dispute, it deals with a number of development issues.
What would have been a more appropriate course of action? For the United States (and other cotton-subsidizing countries), not having subsidies at all or, a second best, phasing them out as the US General Accountability Office recommended 15 years ago. For the four African cotton producing countries (and, perhaps, other cotton producing developing countries) joining forces with Brazil in its dispute settlement case may have been most beneficial.
Going forward, until WTO rules are reconfigured to address the dispute settlement system’s shortcomings, the smallest and poorest developing countries should align their interest and form coalitions with more powerful developing nations. Of course, such opportunities may not be available, underscoring the need for a reform of the dispute settlement system that includes monetary compensation as a remedy.
I explored this topic in greater detail for the Carniegie Endowment for International Peace and you can read the full piece here.
Mega-events such as the Olympics and the World Cup can be catalysts not only for huge investments in infrastructure, but also policy changes that may induce positive behavioral changes. Transport operations and mobility are particularly important for mega-events as they involve much planning and long-lasting infrastructure. The question, however, is how to keep the long-term development vision and legacy in mind while meeting the shorter-term mobility needs of a mega-event (typica
I just returned from São Paulo, perhaps the third biggest metropolitan area in the world with a population of 18 million and an endless vista of apartment towers and commercial buildings in almost any direction from the center. The traffic problems are large and reported in the daily newspapers as the peak number of kilometers of the main road network in congested conditions (equivalent to LOS F). This indicator tends to range between 100 and 200 km for any given day. The resources that
"It is true that economic and social objectives have long been seen as distinct and often competing. But this is a false dichotomy; it represents an increasingly obsolete perspective in a world of open, knowledge-based competition. Companies do not function in isolation from the society around them."
Michael Porter and Mark Kramer, "The Competitive Advantage of Corporate Philanthropy"
Harvard Business Review, 2002
Please, hold the door, the Carrotmob is coming. If you are among the un-indoctrinated, please allow me to introduce you to the Carrotmob. “Carrotmob is a type of consumer activism in which businesses compete at how socially responsible they can be, and then a network of consumers spends money to support whichever business makes the strongest offer.” According to Brian Byrnes, regular contributor to CNN.com and author of “Argentine 'Carrotmob' stick up for green business” they are a “global movement that is built on the 'carrot-or-the-stick' concept. Carrotmob rewards -- rather than punishes -- small businesses for employing sustainable practices. Essentially, a Carrotmob is the opposite of a boycott.” Although the Carrotmob operates in the commercial sphere, they are working to increase, so called, public goods with other stakeholders in their community. Activities like those undertaken by the Carrotmob are an example of creative coalition building and help to begin to address one of the challenges of fostering a collective identity, maintaining both internal and external political efficacy.
Mobile Affordability Gap in Peru
With the increase in geographic coverage and the adoption of prepaid phones, penetration in Latin America has increased dramatically. Wireless Intelligence estimates that mobile penetration in the Americas is approximately 88% as of March, 2010.
A free and independent media plays an important role in monitoring public servants and holding them accountable for their actions. In this way they promote transparency and accountability within a country. The role of media in good governance is widely acknowledged. The Worldwide Govern
The month of February played host to the OECD – Inter-American Development Bank– World Bank’s international knowledge sharing on '1-to-1 computing' in Austria. This was the first event of its kind looking specifically at the idea that, if technology is to fundamentally help transform educational practices, this can only be done where each student has her/his own personal computing device.
1-to-1 computing is not only happening in OECD countries: every student in Uruguay has her/his own laptop. Peru and Rwanda have made massive commitments to purchase laptops for students, and pilots are underway in many additional developing countries.These interventions are based on the belief that by enabling every pupil to connect to the Internet, and to each other, to access valuable resources irrespective of place and time, countries can help to bridge the digital divide while at the same time transforming education and increasing learning through the use of Information Communication Technologies (ICTs).
Given the context of this event, I thought I would provide a timely survey of the existing research on their use in education. I also advise you to check out Michael Trucano’s one year old blog, Edutech which provides incisive analysis on a wide array of ICTs in Education topics.
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| Two macaws in the Amazon. Photo © istockphoto.com |
Although the United Nations climate change conference in Copenhagen badly failed to achieve legally binding agreements, including on the specific mechanism of REDD (Reduction of Emissions from Deforestation and Forest Degradation), there was nevertheless a general sense that this mechanism is something worth pursuing. Meetings and discussions continued to take place after the conference was over, and a fund of US$ 10 billion is being set up to promote initial steps for tropical developing countries to prepare for REDD.
What lessons can be learned from the Brazilian Amazon, where deforestation rates have been steadily declining for 5 years?
Compared to estimates of land-cover change emissions from elsewhere in the tropics, estimates in the Brazilian Amazon tend to be relatively more certain because they are calculated from annual, satellite-based monitoring of land cover change for over two decades for the Brazilian portion of the Amazon. That is the work of the PRODES Project carried out by the National Institute of Space Research (INPE) of Brazil.
Deforestation in the Amazon changes a lot from year to year. The proximate causes are not totally known. They have to do with economic drivers such as prices of commodities (beef, soy, etc.), the opening of roads, but they are also influenced by the effectiveness of law enforcement to curb illegal deforestation.
The latter may have played a key role in reducing deforestation in the last 5 years. During that period, annual deforestation rates in the Brazilian Amazon plummeted from over 27 thousand km2 (August 2003-July 2004) to around 7 thousand km2 (August 2008-July 2009), an amazing 74% reduction over 5 years!
