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361. The Euro Crisis: Implications for the Internal Market and Harmonisation of Corporate Taxes

Author:
H. Onno Ruding
Publication Date:
05-2012
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies
Abstract:
The so-called 'euro crisis' is of the utmost economic, financial and political importance for all member countries of the euro area and for the future of the Economic and Monetary Union (EMU). In my view, however, it is not primarily a euro crisis in the strict sense. The euro itself is of course involved, but, as a currency with a rather stable exchange rate vis-à-vis other currencies and with a major role in global financial markets, it is not at the heart of the crisis. Rather the crisis is a matter of the serious imbalances in the economies of several euro-area countries, particularly their budget deficits and sovereign debts and as well as their lack of competitiveness and balance-of-payments deficits.
Topic:
Economics, Markets, and Monetary Policy
Political Geography:
Europe

362. Perspectives on the G20: The Los Cabos Summit and Beyond

Author:
James A. Haley
Publication Date:
06-2012
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
The G20 leaders meeting in Los Cabos confront a number of challenges. Most prominent among these is the state of the global economy, which remains dangerously unbalanced, and in which the balance of risks is clearly weighted on the downside. These risks emanate from several sources.
Topic:
Economics, International Cooperation, International Organization, International Trade and Finance, Markets, and Financial Crisis
Political Geography:
China

363. Egypt's Perfect Economic Storm

Author:
David P. Goldmann
Publication Date:
06-2012
Content Type:
Journal Article
Journal:
The Journal of International Security Affairs
Institution:
Jewish Institute for National Security Affairs
Abstract:
A year after the overthrow of Hosni Mubarak, Egypt's economic crisis has become a uniquely severe event. Markets are now forecasting a devaluation of Egypt's currency by about two-thirds, as capital flight and an enormous structural trade deficit exhaust the country's foreign exchange reserves. With perhaps half of Egypt's population living on $2 per day, a major devaluation would price basic necessities out of the reach of tens of millions of people, despite the country's extensive (if inefficient) system of subsidies. The crisis seems uncontainable; Egypt's central bank appears to have exhausted its capacity to borrow from the domestic market, and is at odds with prospective foreign donors. As a result, Egypt now faces a financial collapse similar to those in over-indebted Latin American countries during the 1980s and 1990s, except with a crucial difference: the Latin Americans are all food exporters, while Egypt imports half its domestically consumed foodstuffs. The difference between Egypt and a Latin American banana republic is the bananas. This is an unprecedented state of affairs, a perfect economic storm. Egypt imports half its caloric consumption and is the world's largest importer of wheat. Economic collapse will “transform a peaceful revolution into a hunger revolution,” the second-in-command of Egypt's Muslim Brotherhood warned on February 3rd.1 After months of refusing to bargain with the International Monetary Fund (IMF), Egypt's government has begun negotiations for a $3.2 billion loan, or less than the amount of capital flight in December alone. But the involvement of the IMF has done little to reassure Egyptian investors. And on February 11, 2012, Egypt's Finance Minister said that his country would need $11 billion in external aid.2 Moreover, as of this writing, Egypt's insistence on prosecuting American democracy activists threatens to shut off American aid at a critical moment. It is possible that Egypt's leaders have abandoned hope of forestalling the crisis and are directing their energies instead toward finding a foreign entity to blame. Even under the most benign political conditions, though, it is unlikely that the West or the Gulf States would offer Egypt aid on the scale required to prevent a crisis. Unlike other countries threatened by famine, Egypt's requirements simply are too great for the rest of the world to shoulder for an extended period of time. Its governance, moreover, is so corrupt that its capacity to use foreign aid is in doubt. The most likely outcome is a humanitarian catastrophe too large for the rest of the world to ameliorate, and a political outcome too chaotic to permit large-scale humanitarian intervention, like Somalia. An implicit assumption of public policy is that all problems have solutions. Egypt appears to be an outstanding exception, a major nation in existential crisis for which no solution will be found.
Topic:
Markets
Political Geography:
America, Latin America, Egypt, and Somalia

364. CARE and Cargill: An Innovative NGO-Private Sector Partnership to Fight Global Poverty

Publication Date:
06-2012
Content Type:
Policy Brief
Institution:
Center for Strategic and International Studies
Abstract:
Formed in 2008, the Rural Development Initiative is a five-year, $10 million partnership between CARE, a prominent humanitarian organization, and Cargill, an international producer and marketer of food, agricultural, financial, and industrial products and services. CARE partners with Cargill employees in local communities and along the company's supply chains to improve crop yields, access to markets, and incomes for farmers; enhance the attendance and quality of education programs; and increase access to health care, nutritional programs, and safe drinking water in rural communities. With projects in Ghana, Côte d'Ivoire, Egypt, India, Honduras, Guatemala, and Brazil, the CARE-Cargill partnership seeks to help 100,000 people lift themselves out of poverty by 2013. Through the Rural Development Initiative, CARE and Cargill leverage their respective strengths to improve livelihoods, while at the same time improving Cargill's competitive advantage and fulfilling CARE's mandate.
Topic:
Agriculture, Economics, Humanitarian Aid, and Markets
Political Geography:
India, Brazil, Egypt, Honduras, Guatemala, and Ghana

365. Business and Human Rights: An Issue Whose Time Has Come

Author:
Jill Shankleman and Hannah Clayton
Publication Date:
07-2012
Content Type:
Policy Brief
Institution:
United States Institute of Peace
Abstract:
Business activities in fragile and conflict-affected regions could adversely impact the human rights of host populations in diverse ways, and could trigger or sustain violent conflict. The international “Protect, Respect and Remedy Framework on Business and Human Rights” could help businesses avoid infringing on the human rights of others and should address adverse human rights impacts when they occur. This framework would complement (and not replace) exiting initiatives like the U.N. Global Compact, IFC Performance Standards and OECD Guidelines. It provides a human rights lens that does not treat communities as 'vulnerable' or 'needy,' but as viable partners with rights. Implementation of the framework (and other voluntary standards) will always be fraught with difficulty. However, companies could become more amenable if they discover that compli­ance could enhance risk management and improve productivity. Coordination, communication and accountability are vital for credible and effective imple­mentation of the framework. Key steps have been identified to help corporations comply.
Topic:
Conflict Prevention, Development, Economics, Human Rights, Human Welfare, Markets, and Foreign Direct Investment
Political Geography:
United Nations

366. Regulation, Market Structure, and Role of the Credit Rating Agencies

Author:
Mark A. Calabria and Emily McClintock Ekins
Publication Date:
08-2012
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
During the financial crisis of 2008, the financial markets would have been better served if the credit rating agency industry had been more competitive. We present evidence that suggests the Securities and Exchange Commission's designation of Nationally Recognized Statistical Rating Organizations (NRSROs) inadvertently created a de facto oligopoly, which primarily propped up three firms: Moody's, S, and Fitch. We also explain the rationale behind the NRSRO designation given to credit rating agencies (CRAs) and demonstrate that it was not intended to be an oligopolistic mechanism or to reduce investor due diligence, but rather was intended to protect consumers. Although CRAs were indirectly constrained by their reputation among investors, the lack of competition allowed for greater market complacency. Government regulatory use of credit ratings inflated the market demand for NRSRO ratings, despite the decreasing informational value of credit ratings. It is unlikely that this sort of regulatory framework could result in anything except misaligned incentives among economic actors and distorted market information that provides inaccurate signals to investors and other financial actors. Given the importance of our capital infrastructure and the power of credit rating agencies in our financial markets, and despite the good intentions of the uses of the NRSRO designation, it is not worth the cost and should be abolished. Regulators should work to eliminate regulatory reliance on credit ratings for financial safety and soundness. These regulatory reforms will, in turn, reduce CRA oligopolistic power and the artificial demand for their ratings.
Topic:
Economics, Markets, Financial Crisis, and Governance
Political Geography:
United States

367. Corporate Welfare in the Federal Budget

Author:
Tad DeHaven
Publication Date:
07-2012
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
Rising federal spending and huge deficits are pushing the nation toward a financial and economic crisis. Policymakers should find and eliminate wasteful, damaging, and unneeded programs in the federal budget. One good way to save money would be to cut subsidies to businesses. Corporate welfare in the federal budget costs taxpayers almost $100 billion a year.
Topic:
Economics, Markets, Monetary Policy, and Financial Crisis
Political Geography:
United States

368. Business and Human Rights: Proposals from the Research Group on Private International Law and Human Rights

Author:
Nicolás Zambrana Tévar
Publication Date:
07-2012
Content Type:
Working Paper
Institution:
Centre on Human Rights in Conflict
Abstract:
By means of Resolution 17/4 of 16 June 2011, the UN Human Rights Council has created a Working Group with the mission of implementing the UN “Protect, Respect and Remedy” Framework and its Guiding Principles. As part of its activities, the Working Group asked for input from stakeholders and convened a meeting with them, which took place in Geneva on 20 January 2012.
Topic:
Economics, Human Rights, Human Welfare, International Trade and Finance, and Markets
Political Geography:
Geneva and United Nations

369. Turkey's Standing in Gas Pipeline Games

Author:
Olgu Okumus
Publication Date:
03-2012
Content Type:
Policy Brief
Institution:
Global Political Trends Center
Abstract:
Since September 2011, the Eurasian gas market has been facing shocking bi-monthly announcements: on September 23, British Petroleum (BP) announced the South East Europe Pipeline (SEEP); on December 26, Turkish and Azeri authorities announced their joint agreement for the Trans-­Anatolian Pipeline (TANAP); and on February 26, the Shah Deniz II Consortium announced it was undertaking exclusive negotiations with the Trans Adriatic Pipeline (TAP). The shock wave intensified when the Turkish Energy Minister hinted that a new agreement allowing Russia to build its own South Stream pipeline under the Black Sea using Turkish territorial waters was in the works. Now the ultimate question of the Eurasian energy market is: “Which of these projects will be built?” This Policy Brief seeks to answer this question by analyzing Turkey's standing in Eurasian energy diplomacy in the perspective of energy transit projects competing for building the Southern Energy Corridor of gas transit from the Caspian zone to Europe. First, I present a short review of Turkish strategy in Eurasian energy diplomacy. Secondly, I detail the driving forces behind Turkish energy policy. I then conclude with some remarks about different scenarios of Turkish energy policy in the framework of the Southern Energy Corridor.
Topic:
Security, Diplomacy, Energy Policy, Markets, and Natural Resources
Political Geography:
Europe and Turkey

370. Prospects for Global Growth in 2012

Author:
Onur Bayramoğlu
Publication Date:
03-2012
Content Type:
Policy Brief
Institution:
Global Political Trends Center
Abstract:
The current concern among many is that what we are faced today is not a usual crisis that is part of the economic cycle, but an era of great stagnation with low growth and high unemployment, not witnessed since the Great Depression of the 1930's. One wonders which country will drive global growth while major actors such as the European Union are now financial casinos, the United States is continuously losing its dynamism, Japan is struggling under demographical problems, and the emerging markets are still too small and volatile. Once again, policy makers acknowledge that the problems of growth are global and systematic; such that if one faces an issue, all of them get contaminated. However, they still seek for solutions in mercantilist national policies.
Topic:
Economics, Globalization, International Trade and Finance, Markets, and Financial Crisis
Political Geography:
United States and Europe