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18731. Resource Management and Transition in Central Asia, Azerbaijan, and Mongolia

Author:
Richard Pomfret
Publication Date:
03-2011
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
The paper presents a comparative analysis of the resource-rich transition economies of Mongolia and the southern republics of the former Soviet Union. For Uzbekistan and Turkmenistan, the ability to earn revenue from cotton exports allowed them to avoid reform. Oil in Azerbaijan and Kazakhstan was associated with large-scale corruption, but with soaring revenues in the 2000s their institutions evolved and to some extent improved. Kyrgyzstan and Mongolia illustrate the challenges facing small economies with large potential mineral resources, with the former suffering from competition for rents among the elite and the latter from lost opportunities. Overall the countries illustrate that a resource curse is not inevitable among transition economies, but a series of hurdles need to be surmounted to benefit from resource abundance. Neither the similar initial institutions nor those created in the 1990s are immutable.
Topic:
Corruption, Economics, Oil, and Natural Resources
Political Geography:
Central Asia, Kazakhstan, Uzbekistan, Soviet Union, Azerbaijan, and Turkmenistan

18732. IFSWF Report on Compliance with the Santiago Principles: Admirable but Flawed Transparency

Author:
Edwin M. Truman and Sarah Bagnall
Publication Date:
08-2011
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
On July 7, 2011 the International Forum of Sovereign Wealth Funds (IFSWF) released a report on IFSWF Members' Experience in the Application of the Santiago Principles. The report is a self-assessment of the voluntary compliance of 21 member sovereign wealth funds (SWFs) with the Generally Accepted Principles and Practices of SWFs, issued in October 2008. We commend the IFSWF for undertaking the surveys on which the report is based, for the later decision to publish the results, and for the detail included in the report. However, as with many self-assessments, the report has some flaws. The principal flaw is that the characterization of the extent of compliance with the Santiago Principles is exaggerated.
Topic:
Economics, International Trade and Finance, Markets, and Sovereign Wealth Funds
Political Geography:
Santiago

18733. Europe on the Brink

Author:
Simon Johnson and Peter Boone
Publication Date:
07-2011
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
Attempts to resolve the problems in Europe are failing, and the crisis is spreading from Greece, Ireland, and Portugal to larger nations. Europe's financial system relies on moral hazard, i.e., a “no defaults” policy, to attract the funding needed to roll over large amounts of short–term bank and sovereign debt. Now that politicians in creditor nations are calling for private sector burden sharing, investors are demanding higher interest rates to hold these debts. But higher rates may tip banks and nations toward bankruptcy. Europe's banks and financial system are highly integrated across countries. Rising expectations of default in some countries could lead to large-scale capital flight into “safe” countries. This shift will raise concerns regarding solvency and liquidity of many financial institutions. The payments system of the euro area is serving as an opaque bailout mechanism that is currently preventing the euro area from falling apart at this time. If the number of nations in trouble spreads beyond Greece, Ireland, and Portugal, this bailout system will be stressed because of the potential size of accumulated funding. The European Central Bank (ECB) could soon see a vocal debate between inflationist and hawkish (anti–inflation) members. Inflationists will call for large–scale interventions, including bond buybacks and emergency loans, while the hawks will attempt to close loopholes in the payments system that effectively permit each troubled nation to create money needed to finance capital flight and budget deficits. At this stage in the debate, we see little chance that Europe can avoid ending the “moral hazard” regime, in which case it needs to plan for widespread sovereign and bank debt restructurings.
Topic:
Debt, Economics, Regional Cooperation, and Financial Crisis
Political Geography:
Europe, Greece, and Ireland

18734. Markets vs. Malthus: Food Security and the Global Economy

Author:
Cullen S. Hendrix
Publication Date:
07-2011
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
In the past four years, rising world food prices and the global economic downturn increased the ranks of the world's food insecure1 from 848 million to 925 million by September 2010, reversing decades of slow yet steady progress in reducing hunger (WFP and FAO 2010). While the human costs have been considerable, the political consequences have been significant as well. Food prices sparked demonstrations and riots in 48 countries 2007–08. While prices receded in 2009, they reached historic highs in February 2011—and were once again implicated in political turmoil. High food and fuel prices were among the grievances motivating the demonstrations that led to the ouster of Tunisian President Zine El Abidine Ben Ali and Egyptian President Hosni Mubarak.
Topic:
Agriculture, Economics, International Trade and Finance, Poverty, and Food
Political Geography:
Ethiopia and Egypt

18735. Keeping the Promise of Global Accounting Standards

Author:
Nicolas Véron
Publication Date:
07-2011
Content Type:
Policy Brief
Institution:
The Polish Institute of International Affairs
Abstract:
Accounting is a fundamental underpinning of capital markets, and the worldwide spread of International Financial Reporting Standards (IFRS) marks one of the most advanced attempts to develop globally consistent financial rules. The financial crisis has generated heated debates on the economic role of fair value accounting and other IFRS principles. Underlying these controversies are differing views about the mission and governance of accounting standard-setters, and how standards interact with other public policy instruments. The absence of relevant precedents for the unique institutional features of the IFRS Foundation, the global standard-setting organization, makes choices more difficult.The IFRS' defining promise is crossborder comparability of financial statements, but the aim of global harmonization will not be fully achieved in the next few years. Given the varying pace and modalities of local IFRS adoption, the IFRS Foundation must focus on the quality of its standards and the integrity of its brand. Standardsetting should serve investors' information needs, leaving other public-policy goals to be met through local assessment by individual jurisdictions. The foundation's governance and funding framework should strengthen its accountability to the global investor community. Active monitoring of local endorsement and implementation practices should encourage the gradual convergence of “IFRS dialects” towards a true single global reporting language.
Topic:
Economics, Globalization, International Trade and Finance, and Markets

18736. America's Energy Security Options

Author:
Trevor Houser
Publication Date:
06-2011
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
Like clock-work, as US gasoline prices approached $4 a gallon in spring 2011, energy security moved to the forefront of the American political debate. Global oil prices have recovered from their collapse during the financial crisis more quickly than expected due to resilient developing-country demand and political instability throughout the Middle East and North Africa. As with past oil price spikes, politicians have been quick to offer silver bullet solutions to lower gas prices and make America more energy secure. But given the complexity of the US energy system and global energy markets, it is difficult for even informed observers to evaluate how far current proposals go in solving the country's energy security challenge.
Topic:
Energy Policy, Oil, Natural Resources, and Biofuels
Political Geography:
United States, America, Middle East, and North Africa

18737. What Should the United States Do about Doha?

Author:
Jeffrey J. Schott
Publication Date:
06-2011
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
The Doha Round of multilateral trade negotiations in the World Trade Organization (WTO) remains stalled despite the political impetus provided by the Seoul G-20 Summit in November 2010. The major trading nations have not revised their positions enough to propel new negotiations on agriculture, manufactures, and services. There is now little chance to complete an agreement this year and little indication that current efforts could succeed next year.
Topic:
Economics, International Cooperation, and International Trade and Finance
Political Geography:
United States

18738. The Triple Compact: Improving Accountability in State Building

Author:
Ben Rowswell
Publication Date:
08-2011
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
As a result of international state-building efforts, progress has been made in Afghanistan, however, political dysfunction and a lack of accountability remain problems. It has been suggested that failures of accountability may, in fact, be a product of the state- building effort itself. In the hybrid form of governance where authority is divided between the government and the international community, it can be difficult for the population to determine where accountability lies, leading to feelings of frustration and disempowerment.
Topic:
Foreign Policy, Development, War, Foreign Aid, and Infrastructure
Political Geography:
Afghanistan

18739. Protectors of Putin's vertical: Russian power ministries before the 2011-2012 elections

Author:
Alexander Golts
Publication Date:
09-2011
Content Type:
Policy Brief
Institution:
Finnish Institute of International Affairs
Abstract:
Contrary to the traditional behaviour during the election period, the Russian government is risking irritating the security ministries and agencies by conducting extremely painful reforms in the Armed Forces and the Ministry of the Interior. However, the authorities cannot avoid such reforms because of the total inefficiency of these two “power ministries”. In the aftermath of the Russian-Georgian conflict in August 2008, the Defence Ministry decided to carry out the most radical military reform undertaken in Russia over the past 100 years. However, it is still unclear whether the reformers will be able to resolve the main problem concerning the military construction – the repeal of conscription. In contrast to the Armed Forces, the reform of the Ministry of the Interior does not even touch the major deficiencies in the law enforcement agencies, namely their centralization, lack of public control, and the prevalence of repressive functions over protection of citizens. The ongoing reform is merely a great purge. The country's leadership believes that by firing corrupt police officers, it can solve the problem of corruption in general. The reform of the Security Council and the rejection of any reform of the Ministry of the Interior troops is a prescription for possible public unrest rather than an attempt to improve inter-agency coordination. The genuine reason for these reforms is the complete exhaustion of Prime Minister Putin's model of organizing the security forces. Yet, the next president will need their complete loyalty because of the real possibility of public unrest in the next few years.
Topic:
Corruption, Democratization, and Governance
Political Geography:
Russia

18740. Humanitarian soldiers, colonialised Others and invisible enemies: Visual strategic communication narratives of the Afghan war

Author:
Noora Kotilainen
Publication Date:
08-2011
Content Type:
Working Paper
Institution:
Finnish Institute of International Affairs
Abstract:
This paper examines the current visual strategic communications endeavour of the Afghanistan International Security Assistance Force (ISAF) operation, which is designed to influence public opinion within the participant coalition nations. The aim is to track down what kind of means, messages and narratives the Western strategic communications machinery topically uses, in order to more effectively convince and address the domestic publics of the desirability of the operation. I concentrate on analysing the communication and image building endeavour taking place in Internet and new media surroundings, and namely bite into visual images constructed for the communication. For material, I use the ISAF media Flickr photostream, which is a large and frequently updated set of online photographs presented by ISAF.
Topic:
Security, Science and Technology, Communications, and Mass Media
Political Geography:
Afghanistan