Benn Steil


A graphical take on geoeconomic issues, with links to the news and expert commentary.

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Showing posts for "Development"

Is the BRICS Bank More “Democratic” Than the World Bank?

by Benn Steil and Dinah Walker

The launch of the new BRICS development bank “reflects the disparity and democratic deficiency in the global governance and is trying to restart, to rethink that,” according to Nobel economist Joseph Stiglitz.  But is the BRICS bank really more “democratic” than the World Bank, whose governance legitimacy its founders are challenging? Read more »

Hurling BRICS at the World Bank and the $

by Benn Steil and Dinah Walker

Brazil, Russia, India, China, and South Africa (the “BRICS”) made a splash last week with the official launch of their new development bank.  The backers made no secret of their intention to challenge the way things are done in the established international financial and monetary architecture. Read more »

Lew Does Not Need IMF Reform to Aid Ukraine

by Benn Steil and Dinah Walker

The new provisional government in Ukraine is seeking $15 billion in assistance from the International Monetary Fund.  This would represent 700% of the country’s quota with the Fund, added on top of the loans it has already outstanding, amounting to 214% of its quota. Read more »

Is a “Decisive Role” for Market Forces in China Compatible with a 7 Percent Growth Target?

by Benn Steil and Dinah Walker

The Chinese government is early next year expected to announce a 7% growth target for 2014, a rate China has managed to exceed every year since 1990.  Chinese growth has also exceeded the government target at least as far back as 2001 (the first year for which we have found such targets); the target has therefore in essence been a floor.  In contrast, as today’s Geo-Graphic shows, the White House has overestimated U.S. growth 70% of the time since 2001. Read more »

Labor Data Show That China Is a Bubble Waiting to Burst

by Benn Steil and Dinah Walker

China “may have” overinvested to the tune of 12-20% of gross domestic product (GDP) between 2007 and 2011 – this is the diplomatically worded conclusion of a working paper released last week by the IMF.  This week’s Geo-Graphic backs it up.

As our figure above shows, the share of the Chinese labor force working in manufacturing and construction, at 38%, is roughly twice the global average – towering well above manufacturing powerhouses like Germany (25%) and South Korea (23%).  Manufacturing’s share of the Chinese work force, at 29%, is also 6 percentage points higher than the level at which other fast growing economies have typically begun slowing.  Once that share exceeds 23%, according to analysis by Barry Eichengreen, it “becomes necessary to shift workers into services, where productivity growth is slower.” Construction’s share of the Chinese labor force, at 9%, is also 2 percentage points higher than in the United States at the peak of the housing bubble in September 2006.  Labor data therefore suggest that China is headed for an extended slowdown in GDP growth. Read more »

Even Slowing China Is Fueling Global Growth

by the Center for Geoeconomic Studies

China’s economy slowed from a growth rate of 10.3% in 2010 to 9.5% in 2011 (and a 2000s peak of 14.2% in 2007), prompting fears that China could trigger a global slowdown.  Yet at 10% of world output, 2.5 times what it was in 2001, the Chinese economy is now so large that it will continue to make a significantly rising contribution to global growth even if its own growth rate continues to fall off moderately.

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Afghanistan’s Dependence on Foreign Aid



The U.S. is increasing its military and civilian presence in Afghanistan as part of the Obama administration’s efforts to bring stability to the region and reduce the threat of terrorism at home. Economic growth is critical for building a stable society in a war-torn country. Although Afghanistan’s economy has grown by 20 percent annually since 2002, this growth has largely been driven by foreign aid. Aid has risen by 25 percent annually since 2002, increasing from 32 percent of GDP in 2002 to 42 percent in 2008. These massive aid inflows have fueled corruption, and leave the economy exposed to destabilizing shocks once aid is withdrawn. Building a functional, self-sustaining Afghan economy is therefore vital to the success of the U.S. and coalition mission in the country. Read more »

Emerging Markets and World Growth



With the United States and other developed countries no longer serving as the engine of global demand growth, a new source of growth is needed. In the past few years, emerging markets have been an important source of global demand growth. The IMF expects this trend to continue, with demand in the emerging world recovering faster than demand in the advanced economies. Read more »

Sovereign Wealth Funds and Transparency


As the graph above indicates, there is a clear correlation between ‘democracy’ and ‘sovereign fund transparency’. However, the composition of countries with sovereign funds is shifting toward large, poor, and often autocratic countries whose interests are less aligned with the U.S. The articles below discuss how policymakers can act to address the transparency and security concerns raised by the growth of sovereign wealth funds. Read more »