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Return of the Master

Michael Strauss's picture

What makes your city great? Are you living there because of great skyscrapers? Connectivity? A love of turmoil? Edwin Heathcote at FT gives us a scan of liveable city indices here, explaining why "liveable cities lists [are] intellectually on par with People magazine’s ‘sexiest people’ lists."

Watch Livestreaming of DM2009 Finalists

Tom Grubisich's picture

Bike path in New York City

In 1993, when I was 10 years old, my family took a trip to Beijing, where the large boulevards provided us with an image that seemed reversed: bicycles everywhere, punctuated by the occasional car. The young and old rode nearly identical two-wheeled machines to get where they needed to, and the internal combustion engines were sidelined, weaving their way through an army of peddlers. At that time, writes Kristof in 1988, 76% of road space in China’s capital was taken up by bicycles – and one in every two people owned a bicycle (that’s 5.6 million bikes for 10 million people).

Fast forward 20 years: Beijing’s traffic patterns are impressive for a very different reason. Cars now clog the streets, slowing down rush hour traffic to 9 miles per hour, and bicycles have all but disappeared. Chinese consumers have overwhelmingly embraced the car - from 1990 to 2000, their number increased from 1.1 to 6 million (a 445% leap). The hunger for cars is growing; China is now home to over 78 million cars, of which 6.5 million are in Beijing alone.

Does South Asia Run the Risk of Rising Inflation?

Eliana Cardoso's picture

I am old enough to remember the days when Latin America was the land of inflation. Hyperinflation in Bolivia, Brazil and Argentina made the news in the 1980s and early 1990s. At that time, Asia was seen as immune to the Latin disease. Since then, much water has gone under the bridge. Inflation came under control in the majority of Latin American countries. Today the median inflation rate in South Asia is more than twice the size of the median inflation rate in Latin America and the Caribbean. (See chart below)

Should South Asia’s policymakers look at this information and wonder whether they are doing something wrong?

In general, the recipe for hyperinflation is the monetization of budget deficits in countries afflicted by political instability or conflict. Even if the threat of mega inflation is far removed from the South Asia scenarios, the combination of big budget deficits and loose monetary policy seems to be present in some countries of the region.

Incentives and Values in Conflict-Prone Countries

Eliana Cardoso's picture

One of the most extraordinary examples of the use of economic principles comes from the beginning of the 19th century, when England used to send a huge number of prisoners to Australia. The government originally paid the ship captain a pre-determined amount for each prisoner that boarded the ship, but half of them would die during the journey. In 1862, Edwin Chadwik, knowing that people respond to incentives, told the U.K. government to pay captains according to the number of prisoners that actually disembarked in Australia. With this adjustment, the survival rate increased from 50% to 98.5%.

This example illustrates how incentives can do wonders in some circumstances. Yet, human actions are not always guided by the same calculations made by a profit maximizing ship captain. Behavioral economists have emphasized that we respond to a deep ingrained sense of fairness. Culture and values are crucial in understanding human behavior and promoting healthy and stable societies.

Madagascar - Economic Update: Going Down...

Noro Andriamihaja's picture

If recent trends persisted during September, three new developments seem to indicate a deterioration in public finance and economic activities: (i)  the Government borrowed on the domestic financial market (about half of its monthly expenditures) for the first time since the beginning of the crisis; (ii) the exchange rate depreciated compared to the Euro and the USD over the past two weeks (down by 6 and 4% respectively); and (iii) international trade continued to decline (exports in volume, down by 62% in August compared to the same period a year ago).

Adaptation and Mitigation – The Difference

Tom Grubisich's picture



On March 19, millions of people across the globe will turn their lights off for one hour. For many, Earth Hour is a time to recognize and acknowledge the array of challenges our world faces on energy, climate, and poverty.

Well over a billion people still live without electricity. Almost 3 billion still use air-polluting and carbon-emitting solid fuels (such as wood, coal and dung) for cooking and heating.
 
Some of us have seen these numbers so many times, they no longer seem as alarming as they should. Their impact has worn thin... So to recognize this reality for millions of our fellow human beings and to raise awareness of energy poverty, here are a few things you can do for Earth Hour on Saturday, March 19:

How Should We Best Accelerate Growth and Job Creation in South Asia?

Ejaz Ghani's picture

MIGA recently sponsored its seventh symposium on political risk issues, in tandem with Georgetown University’s School of Foreign Service. We happily note that the symposium has established itself as the world's leading forum for cutting-edge assessments of the international political risk management industry, and this year it did not disappoint. A summary of the event is here. 

I’ll concentrate on one trend that was noted clearly from the political risk insurance (PRI) providers, like MIGA, that were in attendance. All agreed that, since the international financial crisis, new business has mostly taken the form of obligor default products. For the PRI industry, an obligor is a country; this product is used when there is some sort of an agreement by which a government has financial payment obligations or guarantees with an investor.  The product is suitable for certain types of transactions, for example public-private partnerships or power purchase agreements.

  

South Asia Advances on Visual Tool Comparing Development over Time

Joe Qian's picture

Proposals aiming to boost innovative climate change solutions often include some form of publicly-supported global venture capital (VC) fund.  The rationale for such a fund is that government funding is generally available for R&D and private financing is available for the commercialization of mature technologies; but funding is unavailable for entrepreneurial activities—such as proof-of-concept, piloting, firm-building, and marketing—that happen between these two stages. Given this situation, a global climate change VC fund could have a decidedly stimulating effect. Of course, it would also be important for governments not to put all their eggs in this basket, since the VC instrument could quickly reach its limits.

The financing gap is particularly severe for climate change mitigation and adaptation technologies for a number of reasons. Not only is the market for these technologies still at a very early stage of development but it is also driven by regulation. Both of these factors represent significant risks for investors. In addition, low carbon technologies tend to be more capital-intensive and require much more start-up financing than other typical VC investment sectors like information technology. The funding gap is particularly deep in the developing world, which presents a riskier business environment and a more fragmented market for investors.

Several VC-style climate-change funds have recently been launched. The Carbon Trust, established by the British government, already invests in clean-technology firms based in the UK.  In partnership with the Qatar Investment Authority, the Carbon Trust plans to set up a £250 million fund called the Qatar-UK Clean Technology Investment Fund, to be supported by both governments. The fund will primarily invest in the UK, but also to some extent in continental Europe and the Gulf Region. This will be the first major publicly-supported climate change VC fund of its size involving more than one country.

Since When Does an Improvement in the Trade Balance Signal Economic Recovery?

Sandeep Mahajan's picture

Something is  not quite right with this picture.

There has been somewhat of a celebration lately in the South African press and markets, sparked by news that the external trade balance was moving into positive territory following several months of trade deficit.

The fact that three consecutive months of trade surplus (May-July 2009) were recorded for the first time in 6 years has made it even more special. Market analysts have exulted that “South Africa's economy was likely to recover as the balance of trade improved," [which] "underscores our bullish outlook for the current account deficit." The positive mood further whetted the appetite of foreign investors, who have poured more than $7 billion into the Johannesburg Stock Exchange in 2009 thus far, bolstering the Rand to a one-year high against the US Dollar by end-August. 


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