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A quarterly magazine of the IMF

March 2005
Volume 42, Number 1

What's Holding Up Doha? Finding a Voice Hans Peter Lankes More than three years after launching the latest phase of global trade talks, known as the Doha Round, little progress has been made. Tackling the apprehension of small developing countries seems to be a key to breaking the deadlock. Poorer countries will need support if they are to overcome their fears, cope with adjustment, and take full advantage of the opportunities of open trade. (145 kb, pdf file) Why Should Small Developing Countries Engage in the GlobalTrading System? Point of View examines the concerns of small developing countries about joining the global trading system. Rubens Ricupero, former Secretary-General of UNCTAD, stresses that practical initiatives are needed to exorcize the fears of developing countries about the impact of liberalization. Faizel Ismail, head of South Africa's delegation to the WTO, suggests a four-pronged strategy to ease the concerns of developing countries. And Sok Siphana, Cambodia's Secretary of State for Commerce, emphasizes that openness, not isolation, is the key, noting that Cambodia has managed to make WTO rules work in its favor. (97 kb, pdf file) Making the WTO More Supportive of Development Bernard Hoekman Proposal for a new approach to help developing countries integrate into the global trading system and make the WTO more supportive of development by having all WTO members accept a set of core commitments while allowing latitude in other areas, particularly for developing countries that have enjoyed opt-outs for certain rules. (155 kb, pdf file) Debating Doha Why Prospects for Trade Talks Are Not Bright Aaditya Mattoo and Arvind Subramanian Substantial opportunities for trade liberalization undoubtedly exist, but bargains between industrial and developing countries are becoming increasingly difficult to strike. (75 kb, pdf file) Doha Can Achieve Much More than Skeptics Expect William R. Cline The remaining areas of protection-agriculture, textiles, and apparel-are widely regarded as the most difficult politically. But with forceful leadership by both industrial and developing countries, there is good reason to believe that the Doha Round can move the world substantially further toward global free trade. (95 kb, pdf file)		Success Requires a 'Grand Vision' Patrick A. Messerlin If the global community hopes to avoid unduly slow progress in the Doha Round, it needs a "Grand Vision"-one that takes a long-term view and enables emerging market economies to take a leadership role. (94 kb, pdf file) Preference Erosion: Cause for Alarm? Katerina Alexandraki Preference erosion has become an obstacle to completing the Doha Round. A few vulnerable economies dependent on a handful of products are most at risk from a loss of trade preferences. But any help for them should be within the boundaries of a rules-based, non-discriminatory system. The ultimate aim should be the integration of all countries into the global economy. (117 kb, pdf file) Aligning Aid with Adjustment Stephen Tokarick A study on the impact of agricultural trade liberalization finds that while a number of poor countries would probably face higher import bills, the size of these increases would generally be small. But, for the small group of countries that will be hard hit by liberalizing agricultural trade, special financing schemes will be needed. (162 kb, pdf file) How Freer Trade Can Help Feed the Poor John Nash and Donald Mitchell Trade policy may not, at first glance, seem like the ideal tool for combating hunger. But eradicating costly protectionist barriers may be one of the best ways to put food on the tables of the poor. This article presents an agenda for easing hunger worldwide by reducing trade protectionism. (133 kb, pdf file) Also in This Issue Understanding the Investment Climate Warrick Smith and Mary Hallward-Driemeier Examining the investment climate and how firms thrive and create jobs gives economists a new perspective on the dynamics of development and poverty reduction. New data sources about firms provide insights into helping economies grow. (141 kb, pdf file) Time for Change at the IMF Vijay L. Kelkar, Praveen K. Chaudhry, and Marta Vanduzer-Snow The authors, who include a former Indian Executive Director of the IMF, set out an agenda for transforming the IMF and addressing new forces shaping the global economy. They propose boosting the capital base of the institution, increasing the voting power of developing countries, and making the IMF more accountable. (99 kb, pdf file)
Departments Letter from the Editor (56 kb, pdf file) Letters to the Editor Amartya Sen—a contrarian view; What pace works best for reform?; The IMF must take on corruption. (59 kb, pdf file) In Brief News from international agencies Asian tsunami spotlights disaster preparedness; the IMF improves terms on emergency aid; results of F&D's readership survey. (72 kb, pdf file) People in Economics Managing the Currency of an 'Out' Country Camilla Andersen profiles Bodil Nyboe Andersen, the central bank governor of Denmark, a country that is part of the European Union but opted not to adopt the euro, instead maintaining its own currency, the krone. (118 kb, pdf file) Picture This Energy (In)security? Examines energy demand worldwide over the next 30 years. Energy needs will be almost 60 percent higher by 2030, if governments stick with current policies. But if they adopt more energy-efficient programs, global energy demand could be 10 percent lower than otherwise. (149 kb, pdf file) Back to Basics Dollarization: Controlling Risk Is Key Socorro Heysen Dollarization-the use of a foreign currency, usually the U.S. dollar, for transactions in another country-was a hot theme at economic conferences and seminars only a few years ago. Now economists are putting more emphasis on caution as the costs and risk of dollarization have become more apparent. (52 kb, pdf file) Book Reviews The World's Banker: A Story of Failed States, Financial Crises, and the Wealth and Poverty of Nations, Sebastian Mallaby Chairman of the Fed: William McChesney Martin and the Creation of the Modern American Financial System, Robert P. Bremner The End of Oil: On the Edge of a Perilous New World, Paul Roberts (123 kb, pdf file) Country Focus Euro Area Growth should pick up somewhat in the Euro area in 2005, but productivity and labor participation must improve to tackle fiscal pressures from aging, including mounting pension liabilities. (86 kb, pdf file) Straight Talk Rules versus Discretion Raghuram Rajan Should the IMF have less of a free hand in resolving crises? The Director of the IMF's Research Department examines whether or not the IMF should follow many central banks in adopting more of a rules-based approach to problems. (65 kb, pdf file)