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1202. The Future of the Chiang Mai Initiative: An Asian Monetary Fund?
- Author:
- C. Randall Henning
- Publication Date:
- 02-2009
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics
- Abstract:
- In September 1997, at the outset of the last global financial crisis, the Japanese Ministry of Finance proposed the creation of an Asian Monetary Fund. Although this particular proposal was scuttled, the idea of a common regional fund on which East Asian governments might draw in times of financial turmoil survives. The region's disaffection from the International Monetary Fund (IMF), stemming from the 1997–98 crisis, sustains this idea and a desire on the part of individual countries to self-insure with large holdings of foreign exchange reserves. East Asian governments and central banks have created a set of bilateral swap arrangements (BSAs) dubbed the Chiang Mai Initiative (CMI) and are negotiating among themselves to build these BSAs into a more comprehensive facility. Some Asian officials hope that such a facility could underpin exchange rate cooperation and monetary integration in the region, although such proposals remain for the moment long-term visions.
- Topic:
- Economics, International Cooperation, International Trade and Finance, Regional Cooperation, and Financial Crisis
- Political Geography:
- Japan, Israel, and Asia
1203. Money for the Auto Industry: Consistent with WTO Rules?
- Author:
- Gary Clyde Hufbauer and Claire Brunel
- Publication Date:
- 02-2009
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics
- Abstract:
- As the financial crisis threatens to lead to a depression, the woes of the automobile industry are second only to the distress of the financial sector. Employment in the US auto industry dropped 9 percent between 2007 and 2008, with much more to follow in 2009. Overall, US auto sales dropped 18 percent between 2007 and 2008, and sales of SUVs plunged 44 percent on a year-over-year basis. Since some sort of financing is required for 90 percent of US car sales, the global credit freeze hit the auto industry with a second blow.
- Topic:
- Economics, International Political Economy, International Trade and Finance, Poverty, and Financial Crisis
- Political Geography:
- United States
1204. A Green Recovery? Assessing US Economic Stimulus and the Prospects for International Coordination
- Author:
- Trevor Houser, Shashank Mohan, and Robert Heilmayr
- Publication Date:
- 02-2009
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics
- Abstract:
- As the 111th Congress begins and a new president takes office, the economic crisis dominates the US policy agenda. The financial system remains in a tenuous state despite massive bank recapitalization, and the economy, more than a year into the current recession, shows no signs of recovery. Given the scale of the challenge Washington faces and the amount of money required to combat it, there will likely be little room for other legislative priorities. As a result, policymakers are hoping to direct government spending over the next two years in a way that not only generates short-term economic growth and employment but also addresses long-term policy goals sidelined by the current crisis.
- Topic:
- International Relations, Climate Change, Economics, Environment, International Political Economy, and International Trade and Finance
- Political Geography:
- United States
1205. Buy American: Bad for Jobs, Worse for Reputation
- Author:
- Gary Clyde Hufbauer and Jeffrey J. Schott
- Publication Date:
- 02-2009
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics
- Abstract:
- On January 28, 2009, the US House of Representatives passed its economic stimulus plan, the American Recovery and Reinvestment Act of 2009. Out of the bill's 700 text pages, a small half-page section attracted enormous media attention: the section requiring that all public projects funded by the stimulus plan must use only iron and steel produced in the United States (box 1). Another provision, which drew less attention, extends the so-called Berry Amendment (an old Buy American provision) to uniforms purchased by the Department of Homeland Security.
- Topic:
- Economics, Globalization, Government, Industrial Policy, International Political Economy, International Trade and Finance, and International Affairs
- Political Geography:
- United States
1206. A New Information Infrastructure for Financial Markets
- Publication Date:
- 02-2009
- Content Type:
- Working Paper
- Institution:
- Council on Foreign Relations
- Abstract:
- Information about prices and quantities of assets lies at the heart of well-functioning capital markets. In the current financial crisis, it has become clear that many important actors-both firms and regulatory agencies-have not had sufficient information. Distributed by the Center for Geoeconomic Studies, this Working Paper proposes a new regulatory regime for gathering and disseminating financial market information. The authors argue that government regulators need a new infrastructure to collect and analyze adequate information from large (systemically important) financial institutions. This new information framework would bolster the government's ability to foresee, contain, and, ideally, prevent disruptions to the overall financial services industry.
- Topic:
- Economics, Government, Industrial Policy, International Trade and Finance, and Markets
- Political Geography:
- United States
1207. China's $1.7 Trillion Bet: China's External Portfolio and Dollar Reserves
- Author:
- Brad W. Setser and Arpana Pandey
- Publication Date:
- 01-2009
- Content Type:
- Working Paper
- Institution:
- Council on Foreign Relations
- Abstract:
- China reported $1.95 trillion in foreign exchange reserves at the end of 2008. This is by far the largest stockpile of foreign exchange in the world: China holds roughly two times more reserves than Japan, and four times more than either Russia or Saudi Arabia. Moreover, China's true foreign port- folio exceeds its disclosed foreign exchange reserves. At the end of December, the State Administration of Foreign Exchange (SAFE)—part of the People's Bank of China (PBoC) managed close to $2.1 trillion: $1.95 trillion in formal reserves and between $108 and $158 billion in “other foreign assets.” China's state banks and the China Investment Corporation (CIC), China's sovereign wealth fund, together manage another $250 billion or so. This puts China's total holdings of foreign assets at over $2.3 trillion. That is over 50 percent of China's gross domestic product (GDP), or roughly $2,000 per Chinese inhabitant.
- Topic:
- International Relations, Debt, Economics, Emerging Markets, and International Trade and Finance
- Political Geography:
- Russia, United States, China, Israel, Asia, and Saudi Arabia
1208. Savings, Credit and Insurance: Household Demand for Formal Financial Services in Rural Ghana
- Author:
- Lena Giesbert, Susan Steiner, and Mirko Bendig
- Publication Date:
- 01-2009
- Content Type:
- Working Paper
- Institution:
- German Institute of Global and Area Studies
- Abstract:
- This paper argues that the study of the demand for financial services in developing countries leaves out part of the story, if it looks at only one of the three elements of the so called finance trinity, i.e. savings products, loans, or insurances, as is largely done in the literature. In contrast to previous research, it is assumed that households' choice for any of these services is strongly interconnected. Therefore, the paper simultaneously estimates the determinants of household demand for savings, loans and insurances by applying a multivariate probit model on household survey data from rural Ghana. On the one hand, the estimation results confirm the common finding that poorer households are less likely to participate in the formal financial sector than better off households. On the other hand, there is empirical evidence that the usage of savings products, loans and insurances does not only depend on the socio-economic status of households, but also on various other factors, such as households' risk assessment and the past exposure to shocks. In addition, trust in the providing institution and its products appear to play a key role.
- Topic:
- Development, Economics, International Trade and Finance, Poverty, and Third World
- Political Geography:
- Africa
1209. The Private Sector in Security Sector Reform: Essential But Not Yet Optimized
- Author:
- Robert Perito
- Publication Date:
- 01-2009
- Content Type:
- Policy Brief
- Institution:
- United States Institute of Peace
- Abstract:
- While the U.S. and world economies are slowing markedly, Security Sector Reform (SSR) is a growth industry for the private sector. U.S. government employees may set SSR policy and design projects, but implementation is extensively outsourced to private contractors. With the forthcoming surge of U.S. military forces into Afghanistan, the U.S. Army has announced contracts worth $1.1 billion for the construction of military bases and training centers for Afghan military and police. Private firms supply everything from construction materials to trainers and administrative staff. Private contractors operating in Pakistan and Afghanistan are required to provide their own security. Up to 15 percent of the cost of construction will go to private security firms, which guard convoys, facilities and personnel.
- Topic:
- Security, Economics, Government, International Trade and Finance, and Markets
- Political Geography:
- Pakistan, Afghanistan, and United States
1210. A Draft Convention on Illicit Trade in Precious Metals and Precious Gems
- Author:
- Jonas Hartelius
- Publication Date:
- 02-2009
- Content Type:
- Policy Brief
- Institution:
- EastWest Institute
- Abstract:
- Precious metals and gemstones have long been valued for their aesthetic properties and ability to retain (or increase) their value. Many precious metals today are also used in the manufacture of high technology commodities. Their high value makes precious metals and precious gems attractive to criminals. They have several functions in the criminal economy: They are attractive goods for theft and other forms of criminal acquisition, calling for special protection on the part of the owners and governments. They can be used for re-circulating stolen goods, including jewelry, antiques, and works of art, through fragmentation, smelting, and other forms of destruction or transformation. Such processes reduce or even destroy the commercial or cultural value of the material, but they also increase the difficulties for police and other authorities to trace the material and bring criminals to justice. They can be used for transporting and transferring valuables outside regular channels and thus finance war, civil conflicts, terrorism, and other forms of dangerous crime. They can be used to hide criminal assets and thus make recovery more difficult. They can be used for tax evasion through smuggling, hiding of assets, etc. The full extent or value of criminal activities with precious metals and precious gems has not been fully investigated. It can safely be assumed, however, that the criminal market in these goods is considerable.
- Topic:
- Globalization, International Law, International Trade and Finance, Treaties and Agreements, and United Nations
- Political Geography:
- United States