Can the IMF Make a Productive Response to the Economic Crisis?

After G20 countries allotted the IMF $1tillion a few weeks ago, there are concerns that they will not be able to deliver the policies needed to make sure developing countries make it through the economic crisis. This is not surprising, IMF policies after the Asian Financial Crisis were seen as failures. They had a one size fits all philosophy to economic problems - there were reports that the wrong country was found imbedded in the paperwork because they had cut-and-pasted the text from rescue package to rescue package - even when economic conditions were considerably different from country to country.

Will Development Zuma Zoom Zoom in South Africa?

Will the election of Jacob Zuma be positive for South African development? This is unclear; Zuma and the ANC are extremely popular – obtaining 65% of the vote this week – despite Zuma's several political obstacles including: practicing polygamy (currently has 6 wives), a bizarre concept of AIDS treatment (said a shower would wash away the AIDS virus), charges of rape, corruption, racketeering, tax-evasion, money-laundering and fraud. Zuma is charismatic and has been able to shake the accusations. Popular support among average South Africans may come from his populist retoric but this makes the white minority – who control a major portion of South African assets – a bit nervous. Already an estimated 800,000 have left since 1994 and the election of Zuma could lead to more emigration out of South Africa, further adding to a shortage of skilled workers in the country.

I Want to be a Teacher Now... $125,000 a Year

Education is extremely important to development and most industrial countries and several emerging market countries are out performing US students in math and science. Is boosting teacher salaries and streamlining the staffing process a good way to get test scores up and America’s education system back on track? A charter school in New York is conducting an experiment, paying teachers $125,000 a year but cutting support and consulting positions to compensate for the high annual salary. In a few years, it will be interesting to see the results.

Redistribution and Taxing the Rich

This was a chart posted on the Economist.com, most were what I would expect but I was surprised to see how much China taxes.

Pirates, Pirates, Pirates...

The recent hostage situation involving Somali pirates taking over an American ship was tragic but the result of a larger problem. Analysts are commenting that we are having a piracy problem but really it is the lack of other economic opportunities in Somalia that has lead to a piracy problem. Somalia is a failed state with one of the lowest GDPs in the world. Unless the global community can spur economic develop in the area, piracy will likely continue.

Lil Kim Launches Rocket

Over the weekend Kim Jong Il or Lil Kim – as I like to call him - unsuccessfully launched a rocket, that North Korea called peaceful but the international community deemed a threat. Even though the rocket did not successfully make it into orbit – instead crashed in the ocean – it did give the crumbling nation some bargaining power when disarmament talks eventually resume but will add to public suffering in the short term, as further sanctions will likely be imposed. Although I’m not sure there is much more the international community can do, North Korea is already one of the most economically depressed countries in the world, regularly unable to produce enough to feed its population but I'm sure UN member nations will try to make them suffer meanwhile Lil Kim will continue to sip Cognac surrounded by Swedish "ladies."

G20 Come Through With a Trillion for IMF/World Bank

Today at the G20 conference in London, rich countries have agreed to give the IMF and World Bank a trillion dollars to fund developing countries as they struggle through tough economic times. Brazil and several other emerging market countries have seen a sharp decrease in tax receipts – Brazil alone saw tax revenue drop by 4.7% in December. This money will hopefully cushion the blow and allow governments to operate without making massive spending cuts that would hurt the poor and potentially cause civil unrest.