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Open Think Tank Articles
Memo 9: Afghanistan needs a continued international commitment to ensure its security and assist in economic and social development. The US, EU and Germany must focus on training local authorities. Cooperating with Iran and the Taliban remains a point of debate.
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Survey by Wall Street Journal: Economists are now debating the extent of the recession rather than its existence. Recent statistics seem to confirm concerns.
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Global Must Read Articles
China is spending its $586 billion stimulus plan on infrastructure development. ++ However, a steel and concrete stimulus will not provide long-term economic growth. ++ Instead, China should equally distribute ownership rights to the remaining 119,000 state-owned enterprises, valuing around $4 billion, and create a more transparent budget process through public hearings and
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By passing an economic rescue package, Congress intended to stabilize the banking system by “purchasing illiquid mortgages and mortgage-related securities.” ++ Rising unemployment, falling house prices and European economies in crisis have averted the desired outcome. ++ However, the next administration will have less trouble dealing with challenges as it will face a “more
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The Bush administration destroyed American goodwill abroad. ++ Obama is a welcome change, but there are limits to what “soft power” can achieve. ++ White House glamour will be useless if Asia stops buying US treasury bonds. ++ As the IMF slips out of American hands, so does world economic leadership and we return to a multi-polar world. ++ Soft power counts for little without economic backing,
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Actions undertaken by governments and central banks won’t be able to adress the financial crisis as other huge risks are threatening the financial system. ++ The world has benefited from over-consuming America, but the “US engine of growth” can’t be replaced by Asia, pushing the EU into a depression. ++ There is a need for macroeconomic and fiscal coordination at the EU
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It is no wonder that Barack Obama has won the presidential elections as he understood the failures of the current administration. ++ To make up for these mistakes Obama must replace Bush’s economic bailout plan by implementing a more transparent and controlled strategy. ++ His administration must take the leading role in adressing issues of climate change and “come up with
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A US recession is inevitable but stopping global downturn should be political leaders’ top priority. ++ Expansionary policies by the surplus economies of Asia and the Middle East could offset demand decline. ++ Coordinated expansion should include policy that prevents big banks from withdrawing credit overseas and swap lines between the US, EU, Japan and all main emerging markets. ++ The
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Gordon Brown and Alistair Darling “have shown us the way through this financial crisis.” ++ The British Prime Minister and his officials lead the world in assessing the financial crisis and quickly enacting an apt solution. ++ The problem: lack of capital in the banking system; Brown’s solution: equity injections, a type of temporary nationalization, with the first commitment of funds coming to
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Washington is bankrupt, fiscally and morally. ++ Socialism is in full swing, proving the free-market Republicans hypocrites. ++ Paulson wants Congress to grant the Fed $700 billion to buy private assets. ++ Such a move will only create more financial turmoil for the US and Europe in the future. ++ Moreover, the entire G8 is a financially “spent force.” ++ Yet, ironically the political landscape
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Due to high oil prices that make transport more expensive, US companies might stop outsourcing to Asia and give Mexico another chance. ++ China’s export taxes are rising, its workers are demanding higher wages and the Chinese currency is rapidly appreciating against the USD. ++ Therefore, Mexico is the better choice, but it also has to cope with challenges such as high raw material costs and
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The debate between individualism and collectivism seemed closed after the cold war, but if collectivist societies rise economically, the outnumbered individualists won’t continue to dominate. ++ Americans usually value individuals, rights, and privacy and Asians value relationships, harmony, and duty. ++ Scientists say the Western idea of individual choice is an illusion and the real key to
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India’s slide by two places in the global competitiveness ranking from 2007 to 2008 reveals the country’s infrastructural deficiencies. ++ “The government is unable to create infrastructure needed to sustain present levels of growth” especially with respect to primary education, energy, broadband networks, access to water, health, and the environment. ++ This is a threat
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As potentially non-economic agents, SWFs are threatening to affect the efficiency of the global market economy and distort the allocation of risk and resources. ++ Governance should remain adapted to the fund’s purpose and specific political and cultural setting, but increasing net returns will require transparency, and the professionalism and accountability of management, not further
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The rise of American philanthropy and foreign investment, as well as the need for raw materials are protecting Africa’s frontier economies from international economic volatility. ++ Yet a slowdown in the US and EU could lead to the decrease of the significant cash
infusion from immigrants. ++ And investors are undependable since they fear political turmoil in formerly stable Nigeria, Kenya and
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The IMF’s need for governance reform points to the EU’s lack of management of its external monetary policy. ++ Consolidating the representation of Eurozone members on the board - currently 15 members are awkwardly split among 8 chairs - would increase effectiveness, give the EU a voting power that truly reflects the euro’s strength on bond and currency markets, and strengthen the voice of
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As a reserve currency, the US dollar’s value was only sustainable while the economy was growing. ++ As many economists expect a recession, the Fed is moving aggressively to pump more liquidity into the US banking system. ++ This and increasing trade protectionism are adversely sustaining consumption, hindering capital formation and entrepreneurship, and halting the creation of wealth necessary to
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The world financial
markets’ present bout of turbulences should not hide the long-term and often brighter
trends:
Despite
occasional crises, global financial assets have expanded continuously over the
last decades. In 2006 alone, global assets increased by 17% to 167 trillion
USD.
The
growing importance of emerging countries’ financial markets and their
increasing integration in
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The US economy is facing a post-bubble recession rather than a cyclical downturn. ++ As homebuilders and consumers - a sector representing 78% of GDP, are being hit the hardest, the Fed’s monetary easing policies which favor consumption are proving ineffective. ++ The focus should be on exports and infrastructure spending instead of attempts to maintain unsustainably high rates of personal
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The struggling US economy has become a critical issue for America’s current and future leadership. Robert Reich, a professor of public policy at the University of California at Berkeley and a former US secretary of labour, argues that presidential hopefuls need to recognize that “middle-class families have exhausted the coping mechanisms” which have kept them afloat since the 1970’s.
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Debunking five traditional myths about the European economy, Steven Hill from the Washington Post, reassesses Europe’s economic position vis-à-vis the United States and the World. The “eurosclerotic” European Union is the world’s leading economic bloc, accounting for about one-third of all trade.
Traditionally considered unattractive to investors and uncompetitive, today’s Europe outperforms
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Education is a vital part of the UK economy, says Donald MacLeod in response to a report by the British Council. The report, compiled by Dr. Pamela Lenton of the University of Sheffield, reveals that the educational sector is worth more to the UK than financial services or the automotive industry. Home to world renowned universities and independent schools, the rising number of fee-paying
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