Finance & Economics
Finance & Economics
Fair Observer's analysis of important economic and financial issues, events and trends in global markets and the world economy.
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360° Analysis / Africa / African Change / developing world / economy / Lee-Roy Chetty / Socio-Economic Development / Sub-Saharan Africa / Finance & Economics / Global Change / AfricaAfter a decade of disappointing progress on development, many people attributed Africa’s poor performance to persistent governance failures. Today, the picture is changing dramatically. Africa is the second most populous continent after Asia. Its current population of nearly 1 billion people is expected to rise to 2.2 billion over the next 40 years. Between 2000 and 2010, GDP grew at 5.6% a year, topping 7% in 2002, 2004 and 2007 respectively. The global economic crisis of 2008 continues to affect the continent, particularly resource-rich countries. Growth in sub-Saharan Africa slowed to 2.8% in 2009 as international banks cut back on letters of credit to exporters. Demand for exports...
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360° Analysis / Africa / China / diversification / Dubai / Economic growth / governance / Leadership / Solomon Appiah / Finance & Economics / AfricaAs Africa's economy continues to grow, questions arise over how to make that growth sustainable. The World Bank released the latest Africa’s Pulse Volume 7 on April 15, 2013. It reports that Africa has maintained impressive growth momentum as well as having made progress towards the Millenium Development Goals. Another highlight of the report includes a graph on the fastest growing economies which depict a number of African countries outperforming China and India in terms of economic growth. This growth is making a dent in poverty on the continent but not as deep as we would like to see. The growth phenomenon is not new. The IMF World Economic Outlook 2012 declared...
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360° Analysis / austerity / Cyprus / Cyprus bail out / ECB / JOHN SYDNEY HOPKINS / Mario Draghi / Michalis Sarris / Europe / Finance & Economics / BRICWith the great amount of debate, chatter, and serious analysis about the EU’s financial rescue of Cyprus from insolvency and potential departure from the euro zone, many wonder if the EU policy emerging from the Cypriot “bail out” will have a lasting impact on the political and economic integration of Europe. In my view, the European Union’s (EU) rescue of Cyprus will be seen as a milestone event, and will have a lasting impact on the EU’s ability to manage the process of European integration and the future integrity of the euro zone for key reasons. Loss of Credibility The EU leadership has suffered another loss of credibility. The fragility of the Cypriot...
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360° Analysis / Cyprus bailout / Euro crisis / Eurozone / Harris Samaras / IMF / Europe / Finance & EconomicsHarris Samaras asks why Cyprus received the harshest bailout deal in the Eurozone so far, and looks at what this means for Europe’s financial future. The European Union (EU), the International Monetary Fund (IMF), and the international media blame Cyprus’ banking practices for the main cause of the crisis, and have ensured that the Cyprus economy was ruined in just a weekend. Manically, German and French politicians argued that Cyprus is harboring criminal money, is an offshore tax haven, and a money laundering center. For the record, Cyprus is an EU low tax jurisdiction not an offshore financial center. It makes one wonder: have all the EU, IMF and OECD reports and assessments...
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Arab Human Development / Arab World / economy / Foreign Direct Investment / Jean AbiNader / Private Sector / Unemployment / World Bank / WTO / Finance & Economics / Focus Article / Middle East / AfricaJean AbiNader analyzes the newest World Bank report on the Middle East and North Africa (MENA). The World Bank has issued its fourth volume in the series Jobs for Shared Prosperity – Time for Action in the Middle East and North Africa. Well over 300 pages, the study provides its five main messages separately for those who need a super condensed summary. Reading through the messages, I noticed how clear it is that very few results can be achieved without strategies that integrate the resources and talents of the public and private sectors. Drawing on my experiences across the MENA region, there is much to be gained from cross-border sharing of best practices regardless...
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360° Analysis / India / Mumbai / poverty / Poverty Free World / Rahool Gadkari / Social Development / Finance & Economics / BRIC / Global Change / AsiaAs India focuses on stimulating economic growth, it must not neglect the challenges facing its 360 million below the poverty line citizens. India has been the topic of much discussion in the recent past. Attracting much attention from investors and corporations alike for its high growth numbers last decade, India rode the capital markets boom of the 2000s. With the influx of FDI that followed, India experienced unprecedented economic growth and rapid urbanization that led to the creation of a growing class of nouveau riche. But India’s growth has not been inclusive. Commentators often refer to the country’s dichotomous nature, juxtapositioning India the emerging economic giant...
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360° Analysis / Cuba / Diplomacy / European Union / IAEA / Inflation / Iran / Negotiations / Nuclear Program / Politics / Sanctions / Steve H. Hanke / trade / United States / United States of America / Finance & Economics / Middle EastIranians have become adept at circumventing economic sanctions which, even if perfectly implemented, would be unlikely to stop Iran’s nuclear aspirations. Diplomacy is the only viable solution. In light of Senator Chuck Hagel’s appointment as US Secretary of Defense, the issue of Iran — and the economic sanctions, in particular — promises to stay in play. Hagel has been lambasted by the neo-conservatives and some hard-line supporters of Israel for daring to question (in the past) that sanctions are the best way to confront Iran’s nuclear ambitions. Well, as it turns out, the sanctions have failed to force Tehran to abandon its nuclear program. Indeed, sanctions...
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Buffett Rule / Deficit Reduction / President Obama / United States / Finance & Economics / Focus ArticleDonald Marron, Director of the Tax Policy Center who served as a member of the President's Council of Economic Advisors between 2002-2009, discusses President Obama's deficit reduction proposal. President Obama’s budget identifies a group of policies as a $1.8 trillion deficit reduction proposal. I found the budget presentation of this proposal somewhat confusing; in particular, it is difficult to see how much deficit reduction the president wants to do through spending cuts versus revenue increases. After some digging into the weeds, I pulled together the following summary to answer that question: The proposal would increase revenue by $750 billion over the next decade. Much...
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Insurance companies are looking for feasible ways to provide coverage to rural populations living below the poverty line. Background Microinsurance is an insurance scheme specially created for vulnerable sections of society - the disadvantaged, those living in rural areas and those living below the poverty line (BPL). Microinsurance can encompass many types of coverage, including property, health and life insurance, and is often delivered to these vulnerable segments of society through intermediaries such as self-help groups (SHGs), cooperatives and microfinance institutions. The microinsurance industry is still developing, and only time will tell whether it will benefit both the insurer...