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Global Public Policy Institute Newsletter

No. 5 - September 2006

 

Greetings! This is the fifth newsletter of the Global Public Policy Institute (GPPi). Our newsletter appears three times a year to keep you informed about the institute, to post our newest publications, and to share interesting recent news on global public policy-making.

 

In addition to providing an update of our activities during the past 4 months, this issue focuses on business in Africa and reform of the International Monetary Fund.

 

As always, further information can be found on our website: www.gppi.net or by downloading our new brochure.

 

Contents of this newsletter:

 

A) News from the institute

B) New and active projects

C) New publications

D) Global issues in the news

 

 

A) News from the institute (all headlines link to article)

 

 

B) New and active projects

 

 

C) New publications

 

 

D) Global issues in the news:

 

Topic 1: Business and Africa

 

1. Title: A Growing Awareness of How Business is Tackling Poverty in Africa

 

From: The International Business Leaders Forum, August 2006 http://www.iblf.org/resources/EBulletin.jsp

 

Summary: The past few months have a seen a wealth of analysis regarding what has been accomplished in Africa since last year's Africa-focused G8 meeting. This article argues that while limited progress has been made to increase aid and reduce debt and while suspension of the Doha trade talks demonstrated an unwillingness on the part of developed states to negotiate on issues such as agriculture, the role of business in alleviating poverty in Africa is becoming more profound.

 

2. Title: Africa Leads

 

From: Georg Kell, UN Global Compact, July 2006 http://www.enewsbuilder.net/globalcompact/

 

Summary: Georg Kell of the UN Global Compact writes that the "Global Compact exists to close the gap between the outcomes of globalization and the needs of humanity. Nowhere can this disparity be seen more clearly, or is the work we do more urgent, than in Africa – a region which has been almost completely bypassed by globalization." The statistics emphasize the grim situation regarding human development, especially in Sub-Saharan Africa. However, the article states that "there are encouraging developments occurring across the continent. A rise in democracy and increases in foreign investment, however modest, are beginning to change the landscape for business, creating more opportunities for both small entrepreneurs and large companies."

 

Finally, Kell argues that the promotion of good business practices and public policy to foster more and better business engagement in Africa will contribute to alleviating poverty and thus take another step towards reaching the Millennium Development Goals.

 

3. Title: An Opportunity to Unleash African Entrepreneurship

 

From: Financial Times, 24 August, 2006 (subscription required)

https://registration.ft.com/registration/barrier?referer=http://www.google.com/search?hl=en&q=%22opportunity+to+unleash+african%22+financial&location=http%3A//www.ft.com/cms/s/dbce5e0c-32cc-11db-87ac-0000779e2340.html

 

Summary: This article argues that a strong US focus on reducing poverty in Africa may be the best opportunity to turn the tide in the war on terror and close the trade deficit with China. The US has long been Africa's largest trading partner, but China is catching up fast. The article suggests that if China contributed USD 20bn in US dollar-denominated reserves per year through 2015 to fund an "entrepreneurial corps" effort to form partnerships between African and American/Chinese entrepreneurs, the financial obligations the US owes China would become entrepreneurial investments in Africa. This would satisfy America's Millennium Goal obligations and allow China to save face in the run-up to an impending trade war with the US.

 

4. Title: In the Public Interest

 

From: Oxfam

http://www.oxfam.org.uk/what_we_do/issues/debt_aid/public_interest.htm

 

Summary: In this recent report, Oxfam calls for a number of measures to be taken in follow-up to the roughly $50 billion promised to Africa in 2005. Among other things, the report stresses that "civil society organisations and private companies can play a crucial role but they must be properly regulated and integrated into strong public systems, and not seen as substitutes for them. Only governments have the capacity to deliver on the scale required."

 

The report also argues that universal public services were the basis for today’s prosperity in rich countries, and that only strong, government-led programs have the ability to fully shape African development.

 

Topic 2: International Monetary Fund Reform

 

1. Title: Reform of IMF Quotas

 

From: The Economist, 24 August, 2006 (subscription required)  

http://www.economist.com/finance/displaystory.cfm?story_id=E1_SRQPNJV

 

Summary: As the IMF is preparing for its annual meeting beginning on 11 September in Singapore, much debate has been going on regarding measures to reform IMF quotas. Last revised in January, 1999, the quotas determine how many votes a member can cast on the board, how much money it must put into the fund's coffers, and how many dollars it can take out before attracting penalty interest rates. The quotas are a distorted mirror of today's economy, the article argues, and many countries are underrepresented while the traditionally dominant countries feel their weight being shifted away.

 

2. Title: Reform of the IMF

 

From: Editorial, The Washington Post, 2 September, 2006

http://www.washingtonpost.com/wp-dyn/content/article/2006/09/01/AR2006090101430.html

 

Summary: In this editorial, it is argued that the IMF is one of the few global institutions that has the ability to manage global problems, and reform is necessary to ensure a measure of credibility. The editorial argues "the most concrete sign of progress [regarding reform] came on Thursday, when the IMF's board agreed to allow China, South Korea, Turkey and Mexico to increase their financial support for the fund in exchange for a slightly larger voice in its policies and lending...to be legitimate, multilateral institutions must reflect the global distribution of power as it is now, not as it was when these institutions were set up more than half a century ago."

 

3. Title: Making the IMF Relevant for Asia

 

From: Financial Times, 8 June, 2006 (subscription required)

http://search.ft.com/searchArticle?queryText=imf+relevant+asia&javascriptEnabled=true&id=060608000716

 

Summary: This article argues that reform of the International Monetary Fund might appear to be of secondary importance, but that a revitalised Fund is nevertheless the world's best hope to provide a sensible mechanism for tackling its rapidly growing financial imbalances. It also argues that the most indispensable reform must be the reweighing of IMF quotas to reflect the economic clout of its membership and that the Fund's professional staff must be given more day-to-day independence from the interference of member countries' executive directors.

 

4. Title: EU Set to Lose Out on US Push for IMF reform

 

From: EUObserver, 30 August 2006

http://euobserver.com/?aid=22293

 

Summary: This article emphasizes that the EU's traditionally rich states such as Germany, the Netherlands, Belgium and the Scandinavian countries, are set to lose out if US plans to give China, Turkey, South Korea and Mexico more weight in the IMF are implemented.

 

In addition, the article points out that the EU could also face internal divisions on the matter, as the bloc's own fast-growing economies, such as Ireland and Spain, could actually profit from the power reshuffle sought by Washington. Regarding whether the EU should unite under one IMF umbrella, German national bank president Axel Weber states, "We believe a common EU external representation at the IMF is premature. For this, Europe should be much more strongly politically integrated."

 

 

 

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