As a major consumer of energy, Google’s recent efforts to go green are seen as a welcome step by the environmental advocates, who see the Internet giant as an important future player in the renewable energy industry. But can Google really capitalise on its momentum and become an influential figure in energy policy?  Read more

With the advent of the Internet, major movie and record studios have been demanding extensions to copyright laws in order to preserve outdated business models. But copyright law can do little to protect them and they need to move with the times and embrace the new technologies.  Read more

Greece’s exit from the eurozone appears to be inevitable. Still, like a doomed marriage, it is better to have rules for the impending divorce so as to make separation less costly to both sides.  Read more

With François Hollande’s defeat of Nicolas Sarkozy, Merkel has virtually no support left in the eurozone. As the world looks for signs that Europe’s new power duo can overcome political difference and work together to save the euro, almost all European governments are counting on Hollande to change the balance of power. Will he succeed?   Read more

The future of the global economy remains shrouded in mystery. Whether the crises in the United States and the eurozone will improve remains to be seen. While the latest economic data from China largely points to a soft landing, until the Chinese economy rebalances, it will not emerge from its own domestic crisis. In fact, China will be the last major economy to emerge from the global crisis.    Read more

Greece may not be the basket case that the rest of Europe seems to believe it is. Against the bleak picture commonly propagated by the media, the Greek state actually possesses numerous positive factors in its economy, including: a massive amount of real estate, and huge savings that can be generated simply by shrinking its public sector.  Read more

Europe’s single-minded focus on austerity is a result of a misdiagnosis of its problems; and the fact that so many economies are vulnerable to natural disasters only makes the man-made disaster of austerity all the more tragic. Accordingly, the pain that Europe, especially its poor and young, is suffering as a result of its leaders’ willful ignorance of the lessons of the past is entirely unnecessary.  Read more

The advent of digital and social media has presented new opportunities for corporations in Asia. But in a region that possesses a diverse range in cultures, identities and languages, many companies have been struggling with a holistic approach for their digital strategy, which has ultimately led to corporate disaster.  Read more

Spain’s banking system is in a fragile state. Already, bad property loans are threatening to bring the system down like a house of cards, while international pressure means that the government has little manoeuvrability to support the system if further disruptions occur. Needless to say, the Spanish government is desperate to have the banking sector solve its own problems without a bailout from either the state or the EU. But will this be possible?  Read more

The United States fixation with the Renminbi has distracted the government from far more important economic issues in its relationship with China. Rather than vilifying China as the principal economic threat to America, this relationship should be recast as an opportunity – especially when the opportunities of market access far outweigh the currency threat.  Read more

Argentina’s decision to nationalise YPF – a subsidiary of Spanish energy company Repsol – has been met by international disapproval; though the Argentine government insists that the move had been necessary in order to meet its energy needs. Yet this may not turn out to be the case, particularly with investment in exploration greatly reduced.  Read more

The world’s biggest oil and gas companies are competing for the enormous reserves of natural gas and oil in the Arctic, but the ecological and economic consequences of a major oil spill would be catastrophic.  Read more

Scientists have discovered a vast reservoir of groundwater located within Africa, which is said to contain a hundred times the amount of water found on the continent’s surface. But while the news has already sparked excitement across the once water-scarce continent, this joy will be short-lived unless global leaders exercise moral and social responsibility.

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High-frequency trading has been in existence since 1999; thought it only caught the public’s attention after the “Flash Crash” in 2010 – when high-frequency liquidity providers were found to have withdrawn from the market, resulting in increased volatility and inflated asset price bubbles. But does speed-trading, as it is sometimes called, deserve its bad reputation or does it really create a “mirage of liquidity”?

Libertarian paternalism, or “soft paternalism”, is a political philosophy which states that government can nudge citizens into making decisions that are good for themselves, while offering complete freedom to individuals to make up their own minds. The problem is that the semblance of choice is an illusion, because individuals do not consciously think through their decision.  Read more

For years, the Indus River has brought water (and life) to both India and Pakistan. But today, the river now stands at the centre of a water conflict between the two South Asian neighbours, which threatens to escalate into violence. Is a water war between India and Pakistan imminent, and what is China’s role in the whole thing?  Read more

Rumours suggest that the US is likely to insist on maintaining the perverse selection process in which it gets to pick the World Bank’s president. But while Jim Yong Kim may be a good candidate, no single country should effectively decide who gets the job. Should America continue to insist on controlling the selection process, it is the Bank itself that would suffer.   Read more

In order to be a bank that serves the world’s needs and addresses global challenges, the World Bank needs internal reforms congruous to a changing world order. To find relevance, the World Bank needs to be a truly global institution with a special responsibility vis-à-vis the world’s poorest countries and a commitment to helping middle-income countries face their own challenges.   Read more

The global community will face two important decisions in Washington, DC this month; they must decide on how to proceed with the European debt crisis as well as on whom to pick as the next World Bank president. Yet, complacency, coupled with rigid practices, could very well mean that the best decisions will not be made, and the world will instead be forced to settle for second best.  Read more

Egypt’s political transition has had deep economic consequences. Though the country is now free of a repressive and tyrannical regime, the economy has entered into a steep decline, which threatens the main goals of the revolution. What’s more, Egyptian politicians now favour populist rhetoric; and unless the upcoming presidential elections can lead to economic stabilization and revival, Egyptians’ hard-won political gains may well be lost.  Read more

Student debt is growing at an alarming rate. At the end of 2011, total student loan debt crossed the $1 trillion mark, a level that is higher than the sum of all credit card debt in the United States. Already, this category of debt has been likened to the subprime crisis, raising worries that a potential delinquency crisis could find its way into the wider economy.   Read more

Having reduced the risk of a relapse into recession, the US economy is now able to move on its own power, albeit gingerly. Consequently, the question on most people’s minds today is whether the US economy is ready not just to walk, but also to run and sprint. But the US faces a new problem: that the sense of relief now can – and probably will – be taken too far.  Read more

Neoclassical economics has led us into a cul-de-sac. Although alternatives do exist, neoclassical thought has been so deeply entrenched into our finance ministries, economics departments, banks and other financial institutions, until a widespread belief has now materialised: that fictions like “perfect markets” and “efficient market hypothesis” are real.

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The Vatican Bank has been plagued by corruption and criminality ever since it was established in 1942. Yet this is hardly a surprise, given that no bona fide legal system is currently in place to ensure check and balances for the bank of God.  Read more

In the next 20 years, China will face serious economic challenges: Rising inequality, environmental degradation, external imbalances, as well as an aging society, all present major risks to China’s future. With the nation heading for an inevitable slowdown, can its government provide long-term solutions to its short-term problems?  Read more

China’s woes do not stem directly from the fact that its local governments are struggling to repay its bank loans. After all, it has been correctly argued that the Chinese government can afford to, and will most likely allow the debt to ‘roll over’ to the country’s main balance sheet. But the key problem here is two-fold: China’s debt is rising and it will eventually blow up. Secondly, China needs to identify and ensure that its long-run engine of growth works, given the weak links that exist in China’s socio-economic model.   Read more

Political change in Myanmar has been numbingly slow for a half-century, but a new leadership is trying to embrace rapid transition from within. However, the country is now being held back by the international sanctions that were imposed before its leaders turned away from authoritarianism and isolation.  Read more

There have been wildly different opinions about China's economic prospects in recent years. While plenty of investors remain very bullish about China, others express doubt about China’s economic future – with some even betting on a major financial catastrophe to happen anytime soon. Why are there two distinct camps on China’s economy and are there statistics to support either side?  Read more

The eurozone crisis has exposed the deep disparities in competitiveness among European economies. Southern European countries, in particular, are lagging far behind other European nations such as Germany and France. But while Europe needs to address the two macroeconomic imbalances – external and fiscal –at the heart of that crisis, such a solution does not require a euro breakup or a major austerity-induced recession.  Read more

With Europe on the brink of recession and recovery in the US finally getting some traction, the case for fiscal consolidation appears increasingly weak. But the case becomes stronger when one considers Asian countries' path from crisis in the late 1990's to astounding growth and prosperity today.  Read more

After being in denial for years, India’s Department of Atomic Energy finally admitted last month that the deaths of some employees and their dependents at the Kalpakkam nuclear site were caused by multiple myeloma, a rare form of bone marrow cancer linked to nuclear radiation. Will this news put a damper on India’s plans to broaden their nuclear power capabilities?  Read more

While recent developments seem to suggest some positive news for the global economy, there are at least four downside risks that could materialize this year – undermining global growth and eventually negatively affecting investor confidence and market valuations of risky assets.  Read more

Corporations, today, are holding the largest amounts of cash, relative to assets and net worth, ever recorded. The velocity of money (the frequency at which money is spent, or GDP relative to base money) also continues to plunge to historic lows. But why are companies deciding to hoard cash, when more capital investment is needed to stir economic growth?  Read more

It is easy to blame politicians for our current economic woes, but do the public have to bear some of the blame as well? As Axel Weber would say, policymakers simply do not have the public mandate to get ahead of problems, especially novel ones that seem small initially, but, if unresolved, imply potentially large costs. What then should the public do to overcome this?  Read more

Greece may have reached a last-minute bailout deal with its debtors, but the country has been saddled with harsh austerity measures and debt conditions, which leaves serious doubt on their ability to recover and avoid default in the longer term. , In key respects, Greece is facing today what Argentina faced in August of 2001. Unless Europe reflects on Argentina's experience, the parallels with Greece may end up including financial meltdown, a deep output collapse, and social and political turmoil.  Read more

The world needs a new paradigm for sustainable development. With economies teetering, ecosystems under siege, and inequality soaring, the world needs to act now to ensure our sustainable development. But how do we begin to tackle the massive challenge of retooling our global economy, preserving the environment, and providing greater opportunity and equity, including gender equality, to all?  Read more

In the last few years, the debate on socioeconomic inequality has received greater media attention and academic interest, especially after last year’s Occupy Movement. However, governments across the world have been slow to enact real changes to address the rising epidemic. Income disparities have the potential to upset social equilibriums, and when that happens, the economic recovery might inadvertently be stalled.  Read more

In part two of our feature on the Iraqi economy, we look at how the downfall of Saddam Hussein’s regime, and the subsequent introduction of the US, managed to shape Iraq’s oil industry and political scenario. Finally, we ask what the Iraqi government needs to do to ensure the nation’s future, particularly with the fate of its citizens at hand.   Read more

The modern “capitalist system” cannot be considered as true capitalism. Rather, this corrupted version is more akin to corporatism, which chokes off the dynamism that makes for engaging work, faster economic growth, and greater opportunity and inclusiveness. The time though could be right for capitalism to once again carry its true meaning, rather than the one attributed to it by corporatists seeking to hide behind it and socialists wanting to vilify it.  Read more

There are several explanations for the ECB’s insistence on a "voluntary" restructuring of Greece's sovereign debt, none of which speaks well for the institution. Indeed, as we have seen elsewhere, institutions that are not democratically accountable tend to be captured by special interests.  Read more

There is a new bank on UK's High Street. While Virgin Money has been around since 1995,the company only came into serious prominence when it finalised the deal to acquire troubled bank Northern Rock on the 1st of January this year. But will the deal to take over Northern Rock be a good result for the public who bailed out the bank during the financial crisis? And what impact will Virgin Money have on the UK's banking sector?  Read more

The pace of China’s Internet revolution has been breathtaking. Since 2006, the number of Internet users in China has more than tripled to 485 million, while the cost of connectivity is also expected to fall sharply as China’s Internet penetration rate continues to grow. But while it is always easy to get carried away with the numbers, the real change in China concerns the implications of connectivity, and not just its scale.  Read more

In part two of our feature on Goldman Sachs, we look at Goldman’s networks of power in Europe and consider the ways in which Goldman is using the same dangerous financial products, which caused the 2007 crisis, to bet against Europe’s floundering economies whilst governing, or advising those countries. Finally, we ask what can be done to reduce Goldman’s power.  Read more

The world faces a nasty credit problem. Far too often, companies and households with access to credit tend not to need it; while those who do, are not able to receive it. If this situation is left unattended, it might lead to a gradual, and then accelerated, renewed deleveraging of the economic system. How then can we unclog the global economy’s choked credit pipes?  Read more

China’s success story is one that would certainly go down the chapters of economic history. While the West firefights its debt crisis, many fail to realize that China too has her own fair share of debt. The overinvestment theory has gained greater attention from academics and politicians alike, and China is now looking to boost internal consumption as its engine of growth. However, unless Beijing has new tricks to cover its losses, her bad debt will put downward pressure on consumption growth.   Read more

Exactly one year ago, as the World Economic Forum convened in Davos, Egyptians took to the streets in a relatively peaceful protest to overthrow a regime that had ruled over them with an iron fist for 30 years. Today, their revolution is, unfortunately, incomplete and imperfect, but make no mistake: Egyptians will finish what they started.  Read more

Natural disasters are inevitable, but at every level we have the power to ensure that they do not become unnatural tragedies. According to a recent report released by the World Bank and the United Nations, an ounce of prevention in planning for disasters is worth a pound of cure. So prevention pays, if done right. And that means getting incentives right.  Read more

Recent favourable macroeconomic data has suggested that the US economy could be back on track. But the recent uplift in the economy only hides more fundamental problems, and the US still remains in the early stages of a deleveraging cycle.  Read more

Pakistan faces a desperate need for more energy. As such, officials are now pinning their hopes on an underground coal gasification project that they hope will be able to power the country for the next 30 years. But will the country’s lack of knowledge and expertise, coupled with inept crony management, threaten to snuff out their latest efforts?  Read more

Many of us are familiar with the basic services that banks provide. In simple, straightforward cases, banks keep our money and pay an interest on it, while providing the convenience of cash withdrawals along their network of ATMs. But are consumers benefitting from their banks, or are they really ripped off by hidden bank charges?  Read more

As the 2008 financial crisis showed, a simple banking system based on collecting retail savings to fund the credit needs of borrowers has evolved into a highly complex – and global – supply chain. To restore trust and adapt to the growing needs of new markets, financial leaders must re-engineer it.  Read more

Google has it. Microsoft, too, has it. Virgin, eBay and many other successful companies, they all have it. Corporate values, that is. While the term ‘corporate values’ has lost its buzzword status in recent years, it remains a key foundation of great businesses. Cliché or not, corporate values help businesses stay true to themselves, and more than anything else, it’s the vision of a great company.   Read more

Both China and India depend heavily on the broader economic global climate. The fear is that if China and India fall, Asia would be at risk, and it would be hard to avoid a global recession. Yet fears of hard landings for both economies are overblown, especially regarding China.  Read more

In the wake of the Fukushima disaster, countries around the world have been re-evaluating their nuclear power facilities. Just like Fukushima, Taiwan’s nuclear power reactors are fairly old, with all six of its existing reactors built near fault lines. Will there be a turnaround in Taiwan’s commitment to nuclear energy?  Read more

An economy is simply an accumulation of transactions involving goods and services, mostly carried out by business enterprises. Their behaviour is what matters, and this can be adequately perceived only on the ground, where the behaviour occurs – where an economy is built, where it breaks, and where it must be fixed.  Read more

The world’s major 3,000 corporations are responsible for a third of global environmental damage, but economists are divided in their views of how to stop them polluting. Some say government regulation, allied to promoting the business case, is the answer. But other experts say we need a new type of capitalism, which allows our economies to stop growing, or even to shrink.  Read more

The decade for emerging markets has come. It is not an understatement that there has been a major shift in global powers following the financial storm that started almost 5 years ago. Despite the storm, emerging markets have already captured 40 percent of world GDP. Looking ahead, a lesser-known revolution – theorised: disruptive innovation – will see to the exponential growth of emerging markets in the next decade.   Read more

Is the United States leaving Iraq for good, or are they leaving them in the lurch? As Iraqis celebrate the departure of the last American convoy, Iraq’s security and economy remains extremely vulnerable. President Obama has said that Iraq will grow faster than India and China, but can, and will Iraq warm up to economic cooperation with the United States?   Read more

Russia appears to be playing a dangerous game in its relationships with the US and Central Europe. Moscow’s strategy involves using crises with the United States to create uncertainty in Central Europe and to make the Europeans uncomfortable over perceptions that the United States has forced Russia to act the way it is acting. But, if Moscow takes its aggressive moves too far, it could spark a backlash from both sides.  Read more

The recently concluded European Union Summit only proved one thing: that Europe’s leaders were still in denial about the true causes of the eurozone’s problems, and thus were unable to resolve them. The proposed fiscal stability union may indeed prevent a collapse in the short run – though that is far from certain – but treaty negotiations outside the EU framework, and the ratification procedures that will follow, are a recipe for even more uncertainty when Europe needs it least.  Read more

The UK’s financial regulatory bodies have shown a surprising "hear no evil" attitude to criminality in its banking and financial sector. At times, the financial regulators almost seemed to want to pretend that criminality and fraud didn't, or couldn't exist in the domain they are supposed to police. Unless this issue is addressed, London risks losing its mantle as a world leading financial centre.  Read more

Powerful and unpredictable synthetic drugs that mimic the effects of marijuana, cocaine, and other illegal substances, are leaving a trail of paranoia, hallucinations and death across the US.  Read more

It is increasingly evident that Europe’s political leaders, for all their commitment to the euro’s survival, do not have a good grasp of what is required to make the single currency work. Public-sector cutbacks today do not solve the problem of yesterday’s profligacy; they simply push economies into deeper recessions.  Read more

Since China opened up its doors to the world a few decades ago, we’ve witnessed what has been a remarkable Chinese growth spurt. Today, China has the second largest economy in the world, the largest bank by market capitalization, and also the largest population of 1.34 billion in the world. As its economy continues to run full steam ahead, it is unsurprising that China is grappling to contain a massive influx of foreigners, both skilled and unskilled, who want a slice of its growing economic pie.   Read more

The US’s and Europe’s woes should be ringing alarm bells across Asia. Although many believe that the region can shrug off almost anything that the rest of the world dishes out, the crises in both regions have intensified Asia’s vulnerability to external shocks. This is Asia’s second wake-up call in three years, and this time the region needs to take the warning seriously.  Read more

The costs of services need no longer be linked to the cost of goods. A sharp decline in the costs of health care, education, and other services is now possible, thanks to the ongoing revolution in information and communications technology. Consequently, the world’s economies, both rich and poor alike, have much to gain from accelerated innovation in the information age.  Read more

The European Union project is facing its biggest test. Regardless of whether the next immediate European crisis is focused on Spain or Italy, it follows that by mid-decade, Europe’s political landscape will have shifted dramatically, with new parties, personalities and values emerging. As such, the real question, therefore, is not how the financial crisis works out. It is whether the European project will survive.  Read more

Over the last 25 years, the share of poor people in developing countries has been cut by half, while impressive development successes have been witnessed in countries once thought beyond help, thanks to effective developmental aid. But, while these results are promising, much remains to be done.  Read more

Poverty rates are on the rise in the Western world, as recession, rising fuel costs and austerity cuts to social welfare benefits, take their toll on the most vulnerable people. But rather than trying to alleviate the problem, most continue to perpetuate the cycle even further.  Read more

On November 10 2011, Cuba’s Communist Party implemented free market-like reforms to the nation’s property market, by finally allowing Cubans to buy and sell property on their own. These reforms have been met by both optimism and scepticism from within the Cuban and international community, as doubts remain over their long-term future. How will these reforms affect Cuba, and how should the rest of the world react?  Read more

The latest report from the IEA is not going to please environmentalists. Accordingly, the IEA admonishes governments for not fully embracing renewable energies – including nuclear energy. But to be fair, there is a desperate need to focus on nuclear power if we are to meet growing energy demand. The only question then that remains is whether governments have the cash and political will to consider embracing nuclear.   Read more

The Trans-Pacific Partnership (TPP) is a multilateral free trade agreement that aims to further liberalise the economies of the Asia-Pacific region. While the economics of the TPP is important, the strategic component is even more so. This is the second leg of America’s new “Pacific offensive,” aimed at offering nations in the region an alternative to excessive and rapidly growing dependence on a rising China.  Read more

Germany and the ECB have less power over the eurozone's peripheral countries than they seem to believe. If they continue to insist on concentrating all the pain of economic adjustment in the periphery, the monetary union’s slow-developing train wreck will accelerate as peripheral countries default and revert to national currencies.  Read more

Reading some economists, it might seem that the answer to all current problems is to tax the richest 1 percent and redistribute to everyone else. But if governments tax their rich more, they should do it with the aim of improving access and opportunity for all, rather than as a punitive measure to rectify some imagined wrong.  Read more

The fallout from the Fukushima nuclear disaster left the entire world running scared. Germany, for instance, announced that they would be shutting down all of its 18 nuclear power plants by 2022, choosing to rely on renewable energy sources and traditional coal-fired plants in the future instead. But the cost of utilising renewable energy sources will be great. Apart from having to actually invest into the technology, Germany could also face opportunity losses that would harm its long-term economic planning.  Read more

If the Keystone XL pipeline, which would run from Alberta, Canada to the Texas coast, goes forward, it would spell disaster for efforts to combat climate change. But defenders of the pipeline are using dirty tactics to promote dirty oil. If these tactics succeed, the very future of our planet could be at stake.   Read more

Across the world, protestors are agitating for change. On one level, the protesters are asking for little: a chance to use their skills, the right to decent work at decent pay, a fairer economy and society. Their hope is evolutionary, not revolutionary. But, on another level, they are asking for a great deal: a democracy where people, not dollars, matter, and a market economy that delivers on what it is supposed to do.  Read more

The US is a nation of vidiots – idiots raised through an unhealthy diet of television and mass propaganda. Ever since America’s love affair with the television set began in the early 1960s, there has been a slow but gradual atomisation of the American society, thanks to the propagation of corporate and political propaganda.  Read more

Eurozone’s outsized banks are highly leveraged and dependent on large quantities of wholesale debt. According to Barclays Capital, the 15 largest banks increased their returns on equity by 58 percent between 1998 and 2007, with 90 percent of the gain coming from higher leverage. However, returns have since collapsed. While this collapse will not result in a Lehman Brothers-scenario, the collapse does reflect an obsolescence in the banks’ business models, which could eventually result in further misfortune.  Read more

For a few years now, the banking industry has shouldered much of the blame for the massive financial crisis that is threatening the health of the global economy, while many others have been quick to point out the glaring lack of financial regulation. But, interestingly, there is now a growing awareness of what is known as the “shadow banking system” and findings have shown that they may have been the ones who caused the crisis after all.   Read more

Systems analysts have shown that a “super entity” of interconnected transnationals dominate the world economy. Their political power is such that even politicians fear the consequences of breaking their monopoly. But unless something can be done, the whole system is a ‘house of cards’ that could collapse at any moment.  Read more

China-bashing in the US has now reached unprecedented levels. While China does account for 42 percent of America’s trade deficit, few realise that the US actually also runs deficits with 87 other countries. At the same time, most of the US problems stem from within the country. Blaming China for all of the US problems will only serve to deflect attention away from those truly responsible for perpetuating the greatest saving shortfall in history.  Read more

The Financial Stability Board (FSB) was formed in the midst of the global financial crisis in order to coordinate urgent international regulatory-reform efforts and ensure greater financial stability and global consistency of rules. Yet today, the FSB continues to be criticised as simply a product of a political statement, lacking the legal standing to enforce or implement any of its mandates. What more can be done to strengthen the role of the FSB?  Read more

Modern capitalism, as we know it, is a sick and distorted perversion of its true origins. Since the 1980s, the form of capitalism that has dominated western economies has been one where large corporations and most financial institutions are able to privatize their gains whilst socializing their losses. The recent Occupy Wall Street movement, as such, isn’t so much as a retaliation against capitalism, but rather against its modern incarnation.  Read more

At last month's UN General Assembly, Bhutan's Prime Minister denounced what he called a “monster of a consumerist market economy” that “enslaves humanity and thrives on the insatiable nature of our greed,” urging instead for an alternative form of economic governance that shies away from the indulgent emphasis on GDP. EconomyWatch spoke to Bhutan’s Chief Planning Officer, Mr. Karma Galay, and found out exactly what the nation sees as a viable and sustainable form of alternative development.  Read more

Nearly all research into GM foods is funded by Monsanto, or other bio-tech companies, meaning truly independent data is rare. Some scientists claim only GM foods can feed the world’s booming burgeoning, but others say we are only using people as “human guinea pigs”.  Read more

Any economic model that doesn’t properly address inequality will eventually face a crisis of legitimacy, as today's global protests are now demonstrating. Unless the relative economic roles of the market and the state are rebalanced, the protests of 2011 will become more severe, eventually harming long-term economic growth and welfare.  Read more

The eurozone crisis is now a global crisis. If the crisis cannot be resolved quickly, the entire world will suffer. Despite the global implications, the eurozone continues to try and rely on itself to solve its woes. This is a recipe for trouble. The eurozone should suppress any wounded pride, acknowledge that it needs help, and provide quickly what it has already promised.   Read more

China is under pressure to bailout European countries facing debt crises. It is in the interest of China to save the eurozone, but China so far seems reluctant to extend a helping hand. As governor of the Chinese central bank, Zhou XiaoChuan told the IMF, it is still too early for China to intervene – which is probably code for “If you think we are buying euros or even euro bonds on any kind of scale while you are in this mess, think again.”

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To cure the economy, we need to understand exactly what ails it. An accurate diagnosis is just as important as a proper prescription. As Stiglitz argues, the economic problem we have is more severe than most people realize and the shocker is this: Austerity will not cure it.   Read more

The economic crisis in the eurozone is, without doubt, mammoth. On a more optimistic note, central bankers and governing authorities seem to have reached a consensus on how to tackle the economic problems: by giving banks and countries money, defaults can be avoided. But this does not address the fundamental dilemma of Europe, nor does it show a concerted understanding of Europe’s underlying political complexities.   Read more

 5 October 2011. Too much has been said about the state of the Chinese economy. While it has largely powered through the thick of the global financial crisis – China’s economic strength in fact buoyed much of the world’s economy during the meltdown – many doubts have also been raised about the outlook for the world’s second largest economy. 

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3 October 2011. Economic globalization has, of course, produced some large benefits for the world, though it has also created major problems that need to be addressed. These problems demand a similar global response, which must first be built from individual governments. For years, the world’s government has got it wrong: in order for governments to operate effectively, the role of government needs to be modernized, in line with the specific challenges posed by an interconnected world economy.  Read more

29 September 2011. He who laughs last laughs best. For decades, European countries were the colonial masters of Africa, dividing the continent at their own whim and exploiting the abundant resources available for their own purposes. Yet today, there has been a paradigm shift where African nations are now leading the world in economic growth and can more hold their own against their ex-colonial masters.  Read more

27 September 2011. A crisis of confidence envelops the global economy today. Too much debt is denting confidence – in turn holding back spending, investment and job creation. In these circumstances, we need collective action for global recovery along four main policy lines: repair, reform, rebalancing, and rebuilding.  Read more

 23 September 2011. Sir John Vickers recently unveiled the Independent Banking Commission’s proposed reforms for the United Kingdom’s bloated and dysfunctional banking sector. In the 358-page article, neither the words “ethics” nor “ethical” are mentioned once. Is it any wonder that many have lambasted the report as a “total waste of time”?

21 September 2011. Human trafficking is a global industry worth $32 billion and places millions of vulnerable people from poor countries in servitude, but the number of successful prosecutions is still pitifully small.   Read more

19 September 2011. Unemployment in the US has remained above 9 percent for 22 of the last 24 months. While some are supporting additional stimulus, others are calling for UK-style austerity. With Nobel-prize winning economists on either side of the debate, the public is rightly confused. But would either of these approaches really reduce unemployment effectively?  Read more

15 September 2011. The banking sector faces a continuous trade-off between competition and stability. Too much competition increases instability and the risk of systemic failure, but too little competition will also have dire consequences for consumers and investors. What is the balancing point?  Read more

 13 September 2011. The Norwegian economy has thus far shown remarkable resilience to the global financial crisis. The Norwegian krone is seen as a reliable currency, while many investors consider Norway as a “safe haven” to park their cash. Yet, the surge in the value of krone may lead to economic problems in the future. Will Norway’s “safe haven” status negatively impact its economic health?  Read more

9 September 2011. The events of September 11 2001 forever altered the course of human history. Till today, Americans continue to bear the bulk of the cost for the tragedy – both economically and socially. However in the aftermath of 9/11, it has been disheartening to note that a large portion of the cost could have been avoided.  Read more

7 September 2011. Belgium has not had a government in over 15 months. Yet their economy somehow managed to outperform those of the UK, Germany, France, Italy, Spain, The Netherlands, Finland, and Switzerland in the last quarter of this year. Are government worthless or is this just another abnormality?  Read more

5 September 2011. The scale of the earthquake and tsunami that struck Japan in March was far greater than even the authorities’ worst nightmare scenarios foresaw. Now, nearly half a year after the crisis, Japan has a rare opportunity to undertake the comprehensive reforms that have been postponed for too long.   Read more

Companies like Google and Apple are holding on to nearly US$2 trillion on their balance sheets. Yet, financial institutions need to address the need to balance liquidity requirements and the pursuit of revenue growth. So why are companies holding on to such large amounts of cash?  Read more

30 August 2011. The US economy – and the global economy – cannot get back on its feet without the American consumer. But never before in the post-World War II era has the American consumer been so weak for so long. One number, in particular, highlights the problem.  Read more

26 August 2011. In the aftermath of the global financial crisis, many expected Western banks to abandon their foreign interests and refocus on their domestic markets. Yet today, the presence of foreign banks in local markets is much greater overall than it was a few years ago. According to a new report by Deutsche Bank Research, banks’ cross-border business – direct or via branches or subsidiaries – has now broadly stabilized. As such, the outlook for cross-border banking is positive.  Read more

24 August 2011. The Arab world is changing. The fall of the autocratic regimes – particularly in Tunisia, Egypt and Libya – has led many political analysts to label the Arab Spring as the start of a new fourth wave of democracy. However, political change need not necessarily mean democratic change. As such, talks of a fourth wave may be premature.  Read more

Some say that the best expression of excess capacity and overdevelopment in China is its real estate market. With nominal interest rates going at a pittance, stringent capital controls and volatility in China’s equity markets, there seems to be no real alternative outlets for the nation of savers (China saved 50% of its GDP in 2010) and it is therefore no huge wonder that investors have turned to real estate as investment options.   Read more

18 August 2011. Time is running out for the eurozone. Unless a euro-bond regime of one kind or another can be reached, the euro will break down. As the EU’s largest and best-rated economy, Germany has a critical role to play in Europe’s future. But the Germans are not willing to accept any level of responsibility. Till the day they do, Europe is headed towards a breakdown of the euro that will precipitate a banking crisis beyond the control of global financial authorities.  Read more

16 August 2011. There has been much concern about financial contagion between Europe and America. But the real problem stems from another form of contagion: bad ideas move easily across borders, and misguided economic notions on both sides of the Atlantic have been reinforcing each other.  Read more

12 August 2011. The electric car industry is experiencing a revival. Electric vehicles, such as the Chevy Volt, Nissan Leaf and Tesla Roadster, are returning to production after being scrapped just a few years ago. Today, the Nissan’s Leaf has sold out while General Motor’s Volt has been back-ordered for six months. What has sparked the renewed interest in the electric car, and what does the future hold for the industry?   Read more

10 August 2011. During the 1970s, Former Citibank Chief Executive Walter Wriston famously declared that countries would never go bust or bankrupt. Governments also started to borrow large sums of money in order to fuel their spending, while lenders continued to provide these governments with a seemingly endless source of funds. Eventually, government debts grew to such insurmountable proportions that countries today are now faced with the distinct possibility of a default or even bankruptcy. How can we address the structural issues that threaten to consume the global economy?  Read more

A recurrent characteristic of Europe’s debt-crisis debate is a Latin American precedent. But, while many highly indebted Latin American countries conducted debt buybacks in the late 1980’s the most relevant experience with debt buybacks is a more recent and far less studied case: Ecuador in 2008. What lessons Greece can learn from these debt buybacks and what can they expect if they go down the same route?  Read more

 4 August 2011. The Chinese admire America’s economic dynamism, but they have lost confidence in the US government and its dysfunctional economic stewardship. The debate over the debt ceiling and the budget deficit is the last straw, and China's own shift away from export-led growth implies an end to its limitless demand for US government securities.  Read more

With all the debate in the United States over raising its debt ceiling, politicians and lawmakers are once again fighting over national spending. Democrats are sore that the US$2.4 trillion in savings will not include any mandated tax increases, while the Republicans are worried about the US$350 billion cut in the defense budget. Why is the United States perpetually policing the world at the expense of the American people and global markets?  Read more

29 July 2011. Who really got us into this mess? In Wall Street, in the City, in the corridors of Whitehall and Washington DC, and in the Berlaymont Building, it's quite common for the general public to be blamed. The Nobel prize-winning economist Paul Krugman has written a New York Times column that does a great job of puncturing such nonsense. Read what he has to say about the real causes of the financial crisis.  Read more

27 July 2011. The fate of the eurozone is ominous. As the debt crisis in Greece continues to spread and infect other eurozone nations such as Italy and Portugal, the euro-zone appears to be teetering on the brink of collapse. This is its last stand, says Nouriel Roubini, chairman of Roubini Global Economics and professor of economics at New York University's Stern School of Business. According to Roubini, “the status quo is no longer sustainable. Only a comprehensive strategy can rescue the eurozone now.”

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25 July 2011. The phone-hacking scandal which has engulfed Rupert Murdoch’s News International has changed the rules of the game for politicians, police and media, and may yet impact the Government’s relations with the UK’s powerful financial sector. Ongoing investigations by London’s Metropolitan Police have revealed at least 3,700 cases of phone hacking by journalists at the 168-year-old tabloid News of the World newspaper. But that’s only half the story.  Read more

21 July 2011. Now let's get this right: Singapore is a great place to do business. It's the gateway to Asian economies and where businesses big and small base themselves to trade with the rest of South East Asia - and the world. But as much as Singapore prides itself in being the best place for business in Asia, underneath the sparkling facade of its Central Business District and well-dressed, well-spoken and good-looking frontline representatives lies fundamental practices - that just aren't right. So what is wrong with Singaporean businesses?  Read more

19 July 2011. When Deutsche Boerse wanted to merge with the London Stock Exchange in 2004 there was an outcry. When the LSE wanted to merge with TMX the Canadians got into a knot. When NASDAQ and ICE (the Intercontinental Exchange) decided, in April this year, to launch a hostile counter bid for the New York Stock Exchange (NYSE) Euronext in the teeth of an agreed Deutsche Boerse  bid. At the time of writing, the London Stock Exchange’s bid for the Toronto Exchange TMX, which most people, including the LSE and TMX, thought was a done deal, had just collapsed. Why are exchanges all round the world looking to partner up, even if the partner is a continent away?  Read more

15 July 2011. Organizations today can both create and manage risk on a global scale. Their capacities to manage risk however, vary enormously. Risk regulation is often a crisis response and focus on macroeconomic stability, fair competition and consumer protection – but how much regulation is too much and when does it eliminate more important activities?  Read more

Politicians from advanced economies today face a conundrum on whether to restrict or welcome migrants and foreign workers. While an influx of foreign workers may provide economic benefits to a country, there have been societal concerns over the possibility of an increase in social problems, a lack of social integration, and also the threat that foreign workers bring to local employment. But according to Ian Goldin and Geoffrey Cameron, migration is in everyone’s interest. The long term benefits associated with global migration and human mobility are simply too large to ignore and should not be left in the hands of politicians.  Read more

11 July 2011. To most regular observers, the appointment of Christine Lagarde as IMF’s Managing Director came as no surprise. Lagarde had been seen as the overwhelming favourite to replace Dominique Strauss-Kahn and was duly elected despite calls for a candidate from an emerging economy. However, the challenges for Lagarde are great. While Lagarde may undoubtedly have the credentials to run one of the world’s most influential financial organisations, doubts will remain over her actual ability until she proves herself worthy of the role. Former IMF Chief Economist Raghuram Rajan believes that Lagarde arrives at a pivotal, but extremely challenging, period for the IMF wherein her success, or failure, may have a deep impact for the world economy.  Read more

7 July 2011. Over the past decades the UK has shadowed the US in seeing growing inequalities of income, declining social mobility and rises in mental illness. But the UK is still demonstrably better off on most measures of social cohesion and social capital.  Read more

Wall Street hit its biggest four-day rally last week amid optimism that Greece will avoid default. The Dow Jones Industrial average was up 153 points, S&P’s 500 Index went up 13 points – even our Consumer Confidence Index registered optimistic activity in the US after a long period of pessimism. But is the US celebrating too soon?

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1 July 2011. Recently, the International Energy Agency (IEA) announced its intentions to release nearly 2 million barrels of oil per day into the market over the next month so as to boost supply and drive down prices. Naturally, the Organisation of Petroleum Exporting Countries (OPEC) didn’t take too kindly with that decision. President Mohammad Aliabadi declared, “the market is under normal conditions. Supply and demand are desirable. There is no additional need for supply in the market." Although the IEA’s decision appears to be justified, particularly with the loss of Libyan and Yemeni oil, oil prices have been barely affected and still remain fairly high.  Read more

29 June 2011. Rising food prices affect everyone. Some demographic groups – namely the poor – are affected more than others. As food prices continue to be highly volatile, Jeffrey Frankel asks; can food prices can be stabilized? And asserts that speculators could potentially act as “detectors of change” or “stabilizing forces”.  Read more

27 June 2011. Chief Financial Officers across the US are responding to greener solutions to combat the problem of the rising cost of fuel, with over half increasing their telecommuting and teleconferencing, a recent survey has found. The findings reflect a clear need for CFOs to react and adapt to the changing environment.  Read more

23 June 2011. The IMF recently updated its economic forecasts for the global economy – predicting a two-speed recovery process whereby emerging economies would experience strong economic growth whereas most advanced economies face an uphill battle to stimulate growth and avoid stagnation. As the world proceeds on a path of recovery, Olivier Blanchard, José Viñals, and Carlo Cottarelli of the IMF explains why this path is fraught with difficulties and what needs to be done in order to ensure a smoother global recovery.  Read more

21 June 2011. EconomyWatch speaks to Reza Behnam, former Managing Director of Yahoo South East Asia and founder of ADZ - an online advertising marketplace - about his vision for ADZ as well as the technology scene in Asia. Besides getting backing from the Singapore government, Reza has also secured a star investor: Eduardo Saverin, the co-founder of Facebook. We discover Asia is on the precipice of a new digital age - with entrepreneurs such as Reza and investors such as Eduardo paving the way forward.  Read more

17 June 2011.Casinos are glamourized, popularized and highly addictive. In America alone, problem gambling affects more than 15 million people. And the economics of it all? Well according to PriceWaterHouse Coopers, the global casino industry is predicted to be worth $120 billion in 2011, up from $100 billion in 2007.And the Asia Pacific region is leading the growth, growing at a rate of 15 percent per year, compared to 2 percent growth in Europe and 7 percent in the US. Follow the money in this report on world casino revenues.
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15 June 2011. Shareholder profits have risen steeply in the US at the same time as wages have spiralled downwards. So many Americans are now out of work, or only able to find part-time work, that the business-owners are calling all the shots. Weak employment protection laws and low trade union membership complete a bleak picture for the American worker.  Read more

13 June 2011. Bitcoins have been described as “the digital currency of the future” – a new global phenomenon that threatens to challenge all preconceived notions of currency and currency exchange. Worldwide interest in Bitcoins has started to grow almost exponentially in the past few of months. But can a virtual currency work and more importantly, how?  Read more

9 June 2011. The first results are in, and they will not be great news for everyone. Simply put, it is not a good time to be an American. Last week we launched our crowdsourcing economic indicators experiment, the world's first real-time Consumer Confidence Index from your friendly local global economists at EconomyWatch.com. 48 Americans have given the US a rating of 562 (out of 1,000), broadly meaning that they expect the economy to stay the same. This is down from a confident 756 Mid May. In fact, responses in the last week have been on overage below 500, meaning that most people in the US now believe things will get worse.  Read more

7 June 2011. Debt is making us poor. As a Certified Public Accountant (CPA) and former Member of Congress, I say that every citizen has the right to know the real cost of government. I want to make the point, loud and clear, that we are living on borrowed money and on borrowed time. U.S. taxpayers collectively owed $4.5 trillion at the end of 1996 and that each taxpayer owed $45,433. Incredibly, the national debt, subject to the statutory debt ceiling, has since skyrocketed to $14.3 trillion, and so today each taxpayer owes $143,000. Hon. Joseph J. DioGuardi gives us the real picture of US national debt.  Read more

3 June 2011. House prices in the US are crashing again. With 18 million households across the country on the verge of defaulting on their mortgage, how will the fall in house prices affect your mortgage? Refinancing can be a great way to save money, if you do it right. But a bad refinance can put you in a situation where the only person benefiting is the loan officer.  Read more

1 June 2011. The Rothschilds are the most famous banking family in history. In the 19^th century they lent money to Kings and Governments and funded both sides in the Napoleonic wars. They once saved the Bank of England from collapse with their own money. But how did they come to be so fabulously wealthy? In this two-part feature we first look at their rise from the ghettoes of Frankfurt, and then in part two we ask why they have been accused of everything from deliberately starting wars, to assassinating presidents and controlling the entire global financial system.  Read more

30 May 2011. It was the 26th September, 2008. Hank Paulson, then US Treasury Secretary, had got down on one knee to Nancy Pelosi, then Speaker of the House, and begged her to support his Bailout of the Too-Big-To-Fail Banks. At that moment we knew that consumer and business confidence around the world would plummet.  We already knew that, almost as one, our clients' confidence would tumble. Projects would be put on hold, downsized or cancelled. It was a matter of business survival for us to understand just how bad it would be, but the data was painfully slow in coming. I kept asking myself, what is the point of having a forward indicator when it takes so long to get the data?

Now we are taking a small step to fix that problem, by introducing the Global, Real-Time Consumer Confidence Index.

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