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April 14, 2011

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Metropolisation!!
ALAN BERUBE and PHILIPP RODE examine economic and employment data in 150 of the world’s largest metropolitan economies located in 53 countries, for their analysis “Global MetroMonitor: The Path to Economic Recovery“. This Brookings Institution analysis shows that these metropolitan areas function as locations for high-value economic activity in their respective regions, accounting for up to 46 per cent of world GDP, with only 12 per cent of the global population.

They state that the past two decades have seen a shift, with the emerging market metros closing their gap with their higher-income counterparts due to increased mobility of capital, market reforms and off-shoring—with this shift accelerated by the global financial crisis of 2007-09. They forecast a rise in demand from emerging middle-classes for consumer goods and services, improved public services such as infrastructure, environmental quality, and educational opportunities—and that this could in turn provide an additional context for closer interdependency across these metropolitan economies.

Nuclear energy in a box!!
Heritage Foundation nuclear policy experts JACK SPENCER and NICHOLAS LORIS tout the potential of small, modular nuclear reactors (SMR) in the generation of abundant emissions-free power. They argue in their opinion piece, “Small Nuclear Reactors, Big Energy Pay-Offs“, that this naescent technology could significantly transform the nuclear industry due to numerous advantages such as lower up-front capital costs, mobility, and scalability. They state that the United States’ current regulatory environment was dominated by inefficient licensing and rule-making, and failed nuclear waste management policy, leading to barriers to new nuclear technologies. They end by calling for an approach that provides a stable regulatory environment, promotes competition, and relies on private investment and sustainable economics.

Analysing China Inc’s M&A trends and future scenarios
DEREK SCISSORS of the Heritage Foundation analyses China Inc.’s global investments since 2005 across countries, sectors and investors, quantifying it at US$224 billion in successful investments, and US$140 billion unsuccessful investments. In his analysis, “China Global Investment Tracker: 2011“, Australia, the United States, Brazil, Canada and Iran were the most popular destinations, while energy, metals and finance accounted for over 80 per cent of all investments. CNPC, Sinopec, CIC, Chalco and CNOOC were the top firms investing US$120 billion or over 50 per cent of

Chinese cross-border mergers and acquisitions.
CHARLES WOLF of the Hoover Institution states that China’s appetite for acquisitions of foreign companies could quadruple from current levels of 6.6 per cent share of global cross-border M & A by 2020 on the back of its growing trade surplus, diversification away from the United States’ debt and its appetite for natural resources, emerging technologies, and financial know-how. In his Wall Street Journal op-ed, “China’s Next Buying Spree: Foreign Companies“, he states that this would make China a more active and influential player in the global mergers and acquisitions markets, thereby enhancing its integration into the world economy, and could also lead to an improvement in China’s domestic corporate governance practices. He states that there could also be a cause for rise in tensions both within host countries and China on differential barriers to cross-border investments.

Online networks as a trigger for regime change
MARKO PRPIC and SEAN NOONAN examine the benefits and vulnerabilities of using social media tools to organise protests and revolutions, using examples of protests organised over the recent past that achieved varying degrees of success and failure.

In a Stratfor analysis, “Social Media as a Tool for Protest“, they state that while social media undoubtedly offered advantages in disseminating messages quickly and broadly, a revolution required much more, including organisation, funding, mass appeal (beyond the internet-savvy youth), and the ability to inspire and motivate individuals to get away from the comfort of their homes and face-off against the government on the streets.

They caution that over-reliance on social-media tools was no substitute for effective real-world leadership and ingenuity to tackle counter-protest tactics. These virtual tools could also be detrimental to the evolution of leadership beyond cyberspace, and could potentially cause isolation from alternate political movements with whom they may have shared goals.

Centralised vs Distributed Water Management
NIRVIKAR SINGH of University of California at Santa Cruz states that rapid economic growth, low per capita availability of water and underdeveloped physical and institutional infrastructure could lead to a potential 50 per cent water supply shortfall in India by 2030, making it one of the most severely affected countries as reported in the McKinsey-Water Resources Group study on the economic aspects of water supply.

In an East Asia forum commentary, “India’s water management challenge“, he advocates an approach that focuses on improving water usage efficiency in agriculture, which accounts for 80 per cent of India’s water utilization. He also suggests a shift away from large-scale infrastructure projects, municipal dams and river interlinking towards local water management practices to promote greater efficiency of water use, while state governments could focus on promoting innovation in agricultural practices and productivity.

Singh states that although the National Water Mission offered a comprehensive approach including conservation, efficiency and government co-ordination, there were vital shortcomings related to lack of an economics-based prioritisation, adequate co-ordination vertically down to the local level and horizontally across government departments, and calls for an inclusion of local water-management bodies to fill the gaps.

Raising the game in Lagos
PARVATHI VASUDEVAN of the Centre for International, Strategic and Development Studies in India traces the evolution of Indo-Nigerian ties over the past 50 years from a foundation of historical & political links to one based on economic links. While India’s major oil players evinced a keen interest in Nigeria—Africa’s most populous nation, which contributes 20 per cent of India’s oil imports—their moves had not yielded the expected benefits. In a report for the Chatham House, “The Changing Nature of Nigeria–India Relations“, she calls for a re-haul of New Delhi’s Africa policy with Nigeria as a template, with the following key focus areas:

•   Enhanced commercial transparency
•   Strengthened Indian diplomatic presence and raised frequency of government contacts
•   Expansion of India’s Trade and Economic relations committee’s mandate beyond hydrocarbons into all sectors
•   Enhanced footprint of Indian media in Africa
•   Expansion of the educational scholarships program to support Nigerian students

She concludes that New Delhi had to raise its game across multiple footprints to compete both effectively and transparently in Africa’s economy.

EU’s Strategic Partnerships
ANNE SCHMIDT of the Stiftung Wissenschaft und Politik (German Institute for International and Security Affairs) reviews the debate on “strategic partnerships” within the EU in the wake of the guiding principles drawn up for the strategic partnership format. In a working paper for SWP, “Strategic Partnerships – a contested policy concept“, she reviews recent publications within the European Union, and recommends that the EU itself had to develop into a strategic actor to achieve the stated goal of effective multilateralism, as well as reconciling its broad normative concerns with narrower interests.

Asian geopolitics – in charts
WALTER LOHMAN, JOHN FLEMING and NICHOLAS HAMIESEVICZ of the Asian Studies Center of the Heritage Foundation state that the global financial crisis had impacted perceptions of American power and its relationships in Asia, while these perceptions were not grounded in facts. In their report, “Key Asian Indicators: A Book of Charts“, they provide a visual representation of factoids across the spectrum of economics, politics and defence to support their argument of American predominance across all areas in Asia, and that an absence of American power could lead to a decline of peace and prosperity in Asia


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