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1 After Brics, new power houses (Larry Elliott in The Guardian) First it was the Brics. The Brics are Brazil, Russia, India and China – four emerging economies lumped together in 2001 by Jim O’Neill, then at Goldman Sachs, to show that western investors needed to take notice of what was happening in the post-cold war global economy. Robert Ward, of the Economist Intelligence Unit, linked Colombia, Indonesia, , Vietnam, Egypt and Turkey but the Civets never really took off. Now O’Neill is championing the Mints, a name first coined by the fund managers Fidelity, for what he thinks will be the second generation of emerging market pace-setters: Mexico, Indonesia, Nigeria and Turkey.
The Mints share some common features. They all have big and growing populations with plentiful supplies of young workers. That should help them grow fast when ageing and shrinking populations will lead inexorably to slower growth rates in many developed countries (and China) over the coming decades. And they are nicely placed geographically to take advantage of large markets nearby, with Indonesia close to China, Turkey on the edge of the European Union and Mexico on America’s doorstep.
Strong growth in Asia has pushed up demand for the fuel and raw materials needed for industrialisation and three of the Mints – Mexico, Indonesia and Nigeria – are leading commodity producers. Of the four, only Nigeria is not already a member of the G20 group of developed and developing countries. Even so, financial markets are wary about treating what is actually a disparate group of countries as a bloc. If the Brics are now a bit old hat, it is in part because their reputations are a little tarnished.
2 Progress in war on poverty (Nicholas Kristof in The New York Times) America’s war on poverty turned 50 years old this week, and plenty of people have concluded that, as President Reagan put it: “We fought a war on poverty, and poverty won.” That perception shapes the right’s suspicion of food stamps, minimum-wage raises and extensions of unemployment benefits. Yet a careful look at the evidence suggests that such a view is flat wrong. In fact, the first lesson of the war on poverty is that we can make progress against poverty, but that it’s an uphill slog.
The most accurate measures, using Census Bureau figures that take account of benefits, suggest that poverty rates have fallen by more than one-third since 1968. There’s a consensus that without the war on poverty, other forces (such as mass incarceration, a rise in single mothers and the decline in trade unions) would have lifted poverty much higher.
A Columbia University study suggests that without government benefits, the poverty rate would have soared to 31 percent in 2012. Indeed, an average of 27 million people were lifted annually out of poverty by social programs between 1968 and 2012, according to the White House Council of Economic Advisers.
Critics are right that antipoverty work is difficult and that dependency can be a problem. But the premise of so much of today’s opposition to food stamps and other benefits — that government assistance inevitably fails — is just wrong. And child poverty is as unconscionable in a rich nation today as it was half a century ago.
3 ECB rates stay at record low of 0.25% (BBC) The European Central Bank (ECB) has kept its benchmark interest rate at a record low of 0.25%. ECB said president Mario Draghi said rates would “remain at present or lower levels for an extended period of time”. There had been speculation that the bank might act to bolster fragile growth in the 18-nation euro bloc.
With eurozone inflation falling below 1%, there is also concern about deflation as consumers delay purchases in the hope of prices falling further. The eurozone economy grew only 0.1% in the third quarter, while inflation, at only 0.8%, remains below the ECB’s goal of about 2%. Mr Draghi said the eurozone “may experience a prolonged period of low inflation, to be followed by a gradual upward movement towards inflation rates below but close to 2% later on”.
4 India diplomat indicted in the US (Christopher M Matthews in The Wall Street Journal) Federal prosecutors filed an indictment on Thursday against the Indian consular worker at the center of an international diplomatic spat, accusing her of underpaying a domestic worker. In a letter to US District Judge Shira Scheindlin, Manhattan prosecutors said that a federal grand jury had voted to return an indictment against Devyani Khobragade charging her with two counts visa fraud and making false statements.
Prosecutors initially said they had learned Ms. Khobragade left the US on Thursday. But they later learned she may not have gotten on her flight, according to a person familiar with the matter. Her whereabouts weren’t immediately clear. Last month, Ms. Khobragade was arrested on charges she submitted false documents to get a work visa for a domestic helper in her Manhattan home. Prosecutors said she grossly underpaid the helper. Ms. Khobragade has denied all the charges.
The arrest and subsequent detainment of Ms. Khobragade sparked a diplomatic row between the US and India, leading Secretary of State John Kerry last month to issue a statement of regret over the situation.