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Does the US Interest Rate Rise Mean Trouble for Emerging Markets? Depends on Your Timeframe

The rate is still very low at 0.75% in the US, and, in addition, there is no perception or expectation that rates are about to rise in other advanced economies such as Japan or the EU. Taken together then, interest rates in advanced economies look set to stay extremely low. So, for now at least, emerging markets may not need to worry too much about capital inflows drying up. But in the medium to long term a problem may loom for emerging markets.

Dismantling US Leadership One Budget at a Time, Part 2

My earlier post on congressional funding for multilateral institutions betrayed little optimism about the Senate’s willingness to restore devastating funding cuts imposed by the House of Representatives. I had no idea.

The newly released Senate funding levels are just barely an improvement over the House’s draconian cuts, slashing the president’s multilateral budget in half. When cuts of 50 percent mark an improvement, you know you’re in trouble.

Debt Deal Reunites Myanmar and the Donors

In the last few days, a delicate dance of reconciliation between Myanmar and its estranged foreign creditors reached its final measures. At the Club de Paris---the collective negotiating forum for creditor governments such as Japan and the United States---a press release just announced a debt deal with the poor and long-isolated Asian nation. The creditors committed to what is by Paris Club standards an exceptionally generous deal: cancelling half the debt in arrears---Myanmar defaulted in 1998---and instituting a 15-year repayment schedule for the remainder, including a 7-year grace period. Because the interest rates on most of these the loans are low, typically about 1%, this stretching out of repayment further reduces the debt's economic cost ("net present value" or NPV). Overall, the NPV will fall 60%. Meanwhile the World Bank and Asian Development Bank made their first loans to Myanmar in more than 20 years, in the process erasing their own arrears issues with the country.

In Celebration of This Year’s Nobel Peace Prize

I was delighted to learn this morning that the Nobel Committee awarded this year’s peace prize to not one but three highly effective female leaders: Liberian President Ellen Johnson Sirleaf, activist Leymah Gbowee of Liberia and rights activist Tawakkul Karman of Yemen.

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