Economics, Politics and Public Policy in East Asia and the Pacific
Author: Jeffrey Frankel, Harvard University
All of a sudden, the Chinese renminbi is being touted as the next big international currency.
It has begun to internationalise along a number of dimensions in the last year or two: an RMB-denominated bond market has grown rapidly in Hong Kong, as well as a market in RMB-denominated bank deposits. Read more…
Author: Jeffrey Frankel, Harvard University
It is time for the Managing Director of the International Monetary Fund to come from an emerging market country.
But that has been said often before. Whining about the injustice of the 65-year duopoly under which the IMF MD comes from Europe and the World Bank President comes from the US won’t change anything. Read more…
Author: Jeffrey Frankel, Harvard
Korea has an opportunity to exercise historic leadership when it chairs the G20 meeting in Seoul. This will be the first time that a non-G7 country has hosted the G20 since the larger, more inclusive, group supplanted the smaller rich-country group in April 2009 as the premier steering committee for the world economy. With large emerging market and developing countries playing such expanded roles in the world economy, the G7 had lost legitimacy. It was high time to make the membership more representative. But there is also a danger that the G20 will now prove too unwieldy, in which case effective decision-making might then revert to the smaller group.
When countries like China and India used to demand a larger voice in world governance based on their large populations, they did not get very far. Read more…
Author: Jeffrey Frankel, Harvard
I recently listed some policies and institutions with which various small countries around the world have had success — innovations that might be worthy of emulation by others. Of course there are plenty of other examples of policies and institutions that have been tried and that are to be avoided. The area of agricultural policy is rife with them. Many start with a confused invoking of the need for ‘food security.’
The recent run-up in wheat prices is a good example. Robert Paarlberg wrote an excellent column in the Financial Times recently, titled ‘How grain markets sow the spikes they fear.’ Read more…
Author: Jeffrey Frankel, Harvard
In the wake of the April oil well blowout off the coast of Louisiana, policy makers are rethinking the issue of offshore drilling. Clearly the last decade’s neglect of safety rules by federal regulators needs to come to an end. But what larger implications should we draw for domestic oil drilling?
The tension has long been between those who give primacy to the environment, on the one hand, and those who give primacy to business on the other. Read more…
Author: Jeffrey Frankel, Harvard
Most observers judged as a failure the December meeting in Copenhagen of the Conference of Parties of the UN Framework Convention on Climate Change (UNFCCC). But then the usual way of judging such meetings is to look for a communiqué that voices sweeping aspirations, such as the G7 ‘decision’ at L’Aquila last summer to limit global warming to 2 degrees centigrade. In reality, without any evidence of countries agreeing what is each one’s share of the burden, such proclamations are worthless. Better tiny steps on the ground than giant flights of rhetoric.
Is there any sign of progress, even tiny steps? Read more…
Author: Jeffrey Frankel, Harvard
The climate change conference in Copenhagen is supposed to negotiate the successor agreement to the Kyoto Protocol. But negotiations have been blocked by a seemingly insurmountable obstacle. The United States is at loggerheads with the developing world, especially China – now the world’s largest emitter of greenhouse gases (GHG) –and India. Fortunately, there might be a way to break through this roadblock.
On the one hand, the leaders of India and China are clear: They won’t cut emissions until after the United States and other developed countries have cut theirs first. Read more…
Author: Jeffrey Frankel, Harvard
National leaders are meeting at the United Nations in New York to discuss climate change negotiations. Talks are continuing at the G-20 meeting in Pittsburgh. But hopes look very bleak for progress sufficient to produce at Copenhagen in December a successor treaty to the Kyoto Protocol. The biggest roadblock is the familiar game of ‘After you, Alphonse.’ The United States will not accept quantitative emission targets unless China, India and other developing countries do the same, at the same time. But the developing countries will not cut their emissions below the Business as Usual path (BAU) unless the rich countries go first.
Author: Jeffrey Frankel, Harvard Kennedy School
Friday marks 200 days in office for President Obama. “How has he done?” asks Fortune.
The first thing to say is that Barack Obama took over the presidency at an extremely difficult time. A variety of analogies suggest themselves: He is Harry Houdini who has been thrown in the river, in a straitjacket, with chains wrapped around him. Or he has taken over as the captain of a ship with a rotting hull, while the ship is under attack in a hurricane. To capture the state of the economy, perhaps the best metaphor is that Obama took over as pilot of an airplane in the middle of a steep dive. For a president precedent, he is Lincoln, who takes office as the South secedes. Or he is Roosevelt, who takes office at the depth of the Great Depression.
In any case, in light of the difficult circumstances, I think Obama has done amazingly well.