G-20

Weekly Wire: the Global Forum

These are some of the views and reports relevant to our readers that caught our attention this week.

The Next Web
Facebook passes 1.06 billion monthly active users, 680 million mobile users, and 618 million daily users

“While sharing its financial results for the fourth quarter, Facebook on Wednesday announced a number of new milestones. The social network has now passed 1.06 billion monthly active users. Of those, daily active users passed 618 million on average during December 2012 and the number monthly active mobile users hit 680 million.

Here’s the breakdown from the release:

Monthly active users (MAUs) were 1.06 billion as of December 31, 2012, an increase of 25% year-over-year.
Daily active users (DAUs) were 618 million on average for December 2012, an increase of 28% year-over-year.
Mobile MAUs were 680 million as of December 31, 2012, an increase of 57% year-over-year.
Mobile DAUs exceeded web DAUs for the first time in the fourth quarter of 2012.” READ MORE

Weekly Wire: the Global Forum

These are some of the views and reports relevant to our readers that caught our attention this week.

All Africa
Rwanda: Civil Society Organizations Which Promote Good Governance Rewarded

"The Rwanda Governance Board (GBV) on Monday has rewarded local civil society organizations which promote good governance.

The first phase, which concerned projects dating from July 2011 until today saw 14 projects rewarded, the top three being respectively Transparency International Rwanda (TI-Rw), COPORWA (Rwanda Potters cooperative) and Isango Star Radio.

The three best performers were selected based on indicators of promoting good governance, the ability of the project to attract partners and the direct impact of projects on citizens' lives, while others were evaluated over one indicator of good governance." READ MORE

Foreign Policy
Postcards from Hell, 2012

"What does living in a failed state look like? A tour through the world’s 60 most fragile countries.

The "failed state" label may conjure up undifferentiated images of poverty and squalor, but a range of troubles plague the 60 countries atop this year’s Failed States Index -- an annual collaboration between Foreign Policy and the Fund For Peace that assesses 177 countries. (Scores are assigned out of a possible 120 points, with higher numbers indicating poorer performance.) Yes, inadequate health care, paltry infrastructure, and basic hunger are the most fundamental culprits, but sometimes it is a ruthless dictator, ethnic tension, or political corruption that is most to blame. In photos and words, here is a glimpse of what life is like in each of the world's most failed states -- and just how it came to be that way." READ MORE

The challenge at hand is to reduce the wrong incentives

The last few days at COP16 have, in a low-key way, accomplished more than I have seen at the COP meeting for some time (and I have been attending them for over a decade now).

For example, there have been a series of business-led discussions and proposals on how to develop energy-efficiency master plans at all levels—company, municipality and country. An exciting aspect has been the presence of so many innovative industry partners and governments that have not only developed, but started practicing important renewable energy and energy-efficiency solutions. UN Secretary General Ban Ki-Moon in an electric vehicle. photo by IISD

I had the pleasure of moderating a stimulating event that the World Economic Forum hosted Monday that really got into the nuts and bolts of energy efficiency. This event included small NGO representatives, the venture capital community, Fortune 500 technology companies, utility CEOs from developing nations, and Energy and Environment Ministers from four nations. There have been fruitful discussions on specific mechanisms—from feed-in tariffs, community aggregation of clean energy purchase plans, to very large-scale government procurement of clean energy services.

Prospects Weekly: Record high auto sales, G-20 face sharp fiscal adjustment, emerging market bond spreads down but yields up

The rebound in global output during the second half of 2009 was buoyed by “cash-for-clunker” incentive programs that propelled global car sales to a record high. As these programs have begun to expire, the pace of industrial production growth is expected to moderate in the coming months. High levels of public debt will require large—although not unprecedented—fiscal adjustments in many high-income countries over the next 20-years. Emerging market bond yields have climbed since late-2009, due to higher yields on benchmark U.S. Treasuries, although their spreads have remained broadly stable during the period. As U.S. bond yields increase further with the reversal of the Federal Reserve’s monetary stimulus measures, emerging market bond yields are likely to rise as well.
Auto sale incentive programs supported record high global auto sales and a rebound in industrial production. Some countries that witnessed a marked revival in manufacturing activity in the second half of 2009 had car sale incentive programs. As these programs have recently expired in the U.S., Korea, Australia, and in most Euro Zone countries—or are about to in Brazil, India, and the U.K.—momentum growth in industrial production is expected to slow in the months ahead. This, alongside adverse weather conditions, appears to have been a contributing factor in the recent loss of momentum in industrial output in Germany. By effectively front-loading demand, these programs pushed global car sales to an all-time high of 54.3mn units in January 2010 (seasonally adjusted annualized rate, JP Morgan).
Many G-20 countries face significant fiscal adjustment. High government debt and aging populations will force many high-income countries (HICs) to undergo sharp fiscal consolidation over the next 20-years. The IMF estimates that—to regain a sustainable 60% debt-to-GDP ratio—the HIC G-20 will need to adjust primary fiscal balances (excluding interest payments) from a deficit of 3.5% of GDP in 2010 to a surplus of 4.5% by 2020 and then maintain a 4.5% surplus through 2030 (i.e., cut spending or raise revenues by an average of about 6% over a 20-year period). While challenging, such large adjustments are not unprecedented. For most developing countries (LMICs) no such adjustment will be required, as their debt ratios are much lower—40% in 2010 for the LMIC G-20 vs. 107% for the HIC G-20.
Emerging market bond spreads have declined from recent peaks in October 2008, although they remain about 80 basis points above the level posted during the 18-month period ending in June 2007. While bond spreads have been broadly stable since October 2009, benchmark U.S. Treasury yields have increased 50 basis points since end-November, pushing up the cost of capital for developing countries. Looking ahead, as non-traditional monetary stimulus measures (which have kept down medium-term interest rates in the U.S.) are withdrawn, developing country bond yields are expected to rise further—although perhaps not on a one-to-one basis with the rise in the cost of U.S. bonds.

Download the Prospects Weekly as PDF here.

Talking about the new ‘G’

Potrait of men and children, Mali. Photo credit: World Bank

The other day Bob Zoellick, the Bank’s President, talked about a new “G.” The G-186, also known as the World Bank.

It’s good to see the G-20 assuming a more permanent structure and to note that their influence in the global financial architecture isn’t a blip in history to deal with the current economic crisis.

But at the same time, it’s very important to note that the G-20 doesn’t include the poorest countries. The G-186 brings the poorest voices to the table. And to really be part of the global recovery, which all countries must do for this to succeed, those countries hardest hit will need additional resources. Otherwise, we can forget full recovery.

Another essential ingredient of the recovery is to make sure we do not forget the human aspects of the crisis. We can’t look at recovery in purely numerical terms as the world did during East Asia’s financial meltdown in the late ‘90s. This has a punishing effect on employment, on lives. The world can’t fall into this trap again.

Watch Your Wallets, Protectionism is Back!

Protectionism is Back Protectionism is on the rise all over the world, thanks or should we say “no thanks” to the global economic crisis. Last November, G-20 leaders pledged to fight protectionism. Yet, according to the World Trade Organization (WTO), 18 out of these 20 economies have since taken measures to restrict trade. With the global economy struggling to recover, political pressures demanding protection from import competition to sustain domestic employment are intensifying. It is likely to prove right the old adage that the only thing we learn from history is that we never learn from history. One lesson from the experience of the 1930s that is currently most relevant is that raising trade barriers deepens and prolongs recession.

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