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Money Managers for Mankind? China in the Age of Global Governance, Part III
March 3, 2016 5:11 pm / Leave a comment
By: Andrew Gavin Marshall
Originally posted at Occupy.com on 9 February 2016
This is the third article in a three-part series looking at China's transformed role on the world financial stage. Read the first and second articles here.
In pursuing the strategy toward China of "integrate, but hedge," the United States and its G-7 allies attempted to manage China's global financial role, giving the world's second largest economy a greater stake in the existing system while attempting to prevent alternative or antagonistic emerging market economies from gaining power.
However, due to the slow pace of reforms and their often disappointing results – case in point: the five-year delay of International Monetary Fund (IMF) reforms that would give China and other emerging economies greater influence in the Fund and World Bank – China has turned to creating its own development bank, the Asian Infrastructure Investment Bank (AIIB). And while China was developing the AIIB over the course of 2015, China was not only hedging its own bets – it was also advancing a strategy of "integration" on the monetary front. In the world of currencies, central banks and the global monetary order, China had an important year.
The main issue has been the inclusion of the Chinese currency – the yuan, or renminbi – in the elite basket of currencies managed by the IMF known as Special Drawing Rights (SDRs). Consisting of four of the world's most traded currencies (the U.S. dollar, the euro, Japanese yen and British pound), the SDR is a currency unit whose value is weighted among those four currencies and used in IMF transactions between nations and central banks. But the real importance of the SDR basket is that it is a symbolic grouping of the few select currencies (and countries) that dominate the global monetary system. They are the most traded, saved and important currencies in the world, giving the countries and institutions that control them inordinate power in the global monetary and economic system.
China has lobbied for years to be included in the SDR basket, as both a sign of its global economic status and as a recognition of its new geopolitical power. But for China to be included, it needed to meet a number of criteria related to how easily tradable the currency is, how many central banks use the currency as a reserve asset, and whether or not interest rates are determined by market forces. Eswar Prasad, an economics professor at Cornell University who was previously the China country director at the IMF, commented that "this is ultimately going to be decided on political rather than economic merits."
In laying the groundwork for inclusion, the IMF announced late last May that the renminbi was no longer considered to be "undervalued" – a long-held complaint of the IMF, United States and other G-7 nations that felt for such a large economy to maintain such a cheap currency gave it an overwhelming trade advantage, keeping its products cheaper and thus more competitive in international markets. Thus, the IMF's declaration paved the way for consideration of the Chinese currency to be included in the SDR.
When the G-7 finance ministers and central bank governors met in Berlin in late May, they discussed the potential inclusion of the renminbi in the SDR basket. German Finance Minister Wolfgang Schauble said that "it is desirable in principle" but "the technical conditions must be examined." The G-7 countries continued to push China to reform its capital markets in order to increase its potential for inclusion. This pressured China to implement further market reforms to "liberalize" its financial markets, allowing for private financial institutions to play a larger role in managing the country's economy (as opposed to being more state-directed and managed).
Earlier that same month, the People's Bank of China (PBoC), China's central bank, approved roughly 30 foreign financial institutions to invest its domestic bond market, giving banks like HSBC, BNP Paribas, Société Générale, ING and Morgan Stanley greater access to the world's third largest bond market (following the U.S. and Japan). China made moves over subsequent months to increase the access of foreign central banks and sovereign wealth funds to its bond market, as the country continued reforms that liberalized its economy. However, China still remained hesitant to adapt market forces too quickly or too fully that might have the effect of destabilizing the economy.
In August, the IMF recommended that while the renminbi should be added to the SDR basket, with a final decision to be made in November, the currency's actual addition to the basket should not take place until September of 2016. This was in order to allow the country to implement further financial reforms and give banks, central banks and asset managers enough time to adjust their currency holdings to a slightly reformed monetary order. Some G-7 countries, such as Germany, France, Britain and Italy, favored a quick inclusion of the renminbi to the SDR, but Japan and the U.S. favored a more cautious approach.
Then, partway into August, China shocked global financial markets with a rapid currency devaluation – done partly to provide a boost to its own slowing economy – raising criticism from several countries that China was engaging in a currency war to lower the value of the renminbi in order to boost exports at the expense of other nations. However, because China's currency is so closely tied to the U.S. dollar, as the dollar has risen in value over the past year or so, China's currency has risen with it. This has put further strain on China's economy and decreased its competitiveness relative to other global currencies whose value has declined relative to the rise of the dollar. That's why, when China devalued in August, it explained the move as an attempt to move more towards a market oriented value for its exchange rate.
China was accused of currency manipulation due to its sudden devaluation, though it was in fact more accurately a response to the pressures from the manipulated changes in the value of the big currencies (U.S. dollar, Japanese yen and euro), which fluctuated in response to the winding down or ramping up of their respective Quantitative Easing (QE) programs. China managed to mute some harsher criticisms of its move by quickly announcing further market-oriented reforms to its financial and interest rate markets.
At a meeting of G-20 finance ministers and central bank governors in early September, U.S. Treasury Secretary Jacob Lew pressured his Chinese counterparts to continue the process of implementing market reforms, and specifically allowing markets a larger say in determining the value of the Chinese currency.
In mid-November, the IMF officially recommended that China be included in the SDR basket, which would "turn its currency into one of the pillars of international finance," noted the New York Times. However, the final decision was to be made by the IMF's Executive Board at the end of the month, where the G-7 countries have the power to pass or block any final moves. Following the IMF staff recommendation, China's central bank announced that it would be implementing further reforms to allow markets more of a say in setting interest rates. And in late November, the IMF Executive Board voted in agreement to let the renminbi be included in the SDR basket, effective October 1, 2016.
Then, partway into December, China announced that it would begin to measure the value of its currency against a basket of 13 currencies instead of just the U.S. dollar. This would give the currency more room to fall in value relative to the U.S. dollar's rise, and would give the country more "monetary independence" from the decisions and actions of the U.S. Federal Reserve. The announcement came just as the Fed was set to raise interest rates for the first time in nearly a decade, a move that would drive the U.S. currency even higher and put even more pressure on China as its economy continues to slow. In response, the Chinese currency hit a new four-year low against the U.S. dollar, increasing the country's trade competitiveness.
The rise of China is one of the most important economic stories of the late 20th and early 21st centuries, and will continue to remain so. While the United States and the G-7 seek to "integrate, but hedge" their bets in bringing China into the structures of global economic governance, such as through inclusion into the SDR basket, China continues to pressure for greater political power commensurate with its economic weight, "hiding its brightness, biding its time." But the time is increasingly present, visible with China's founding of the Asian Infrastructure Investment Bank (AIIB), as a potential rival to the World Bank.
The integration of China into the structures and systems of global economic governance will have lasting ramifications. Not simply because it represents a shift from the dominance that the G-7 nations held over the global economy for the past four decades, but because the Chinese model of state-run totalitarian capitalism itself presents an alternative approach to constructing a market economy. As China increasingly becomes a part of the governing structure of the world economy, its model will gain increased influence. Indeed, if war and hostilities between the other great powers are to be avoided, the future of global capitalism may well rely on a combination of Western markets and institutions backed up by totalitarian institutions like the regime in Beijing.
Given that the capitalist system is experiencing a crisis in its legitimacy – with warnings from the head of the Bank of England, the IMF, and influential financial dynasties that the system is increasingly under threat due to its excesses – democracy may no longer be compatiblewith capitalism. And totalitarian state structures may be the only way to save capitalism from itself.
"Hide Your Brightness, Bide Your Time": China in the Age of Global Governance, Part II
This is the second article in a three-part series focusing on China's transformed role on the world financial stage. Read the first part here.
One of the most important developments in the global economy over the past thirty years has been the integration of China into the global economic system and its governing institutions. The United States and the G-7, which collectively dominate these institutions, have managed the process in a slow, incremental fashion, allowing China a larger voice, greater representation and more authority in return for its implementation of reforms to further advance the market economy and allow Western banks and corporations greater access to the Chinese market.
But China, and other emerging market economies, have become increasingly frustrated with the slow efforts on the part of the G-7 nations and the institutions they control. With emerging economies, and notably China, accounting for such a large share of global economic growth and wealth, those countries feel increasingly underrepresented in international economic institutions and decision-making. Their international political power does not accurately reflect their international economic influence.
Integration and greater representation within the global economic architecture is designed to give emerging economies a greater stake in the international economic and political system, providing them with ownership and authority. However, if the process is too slow or the results too weak, emerging economies could potentially create their own parallel institutions and perhaps even (in the long term) construct a parallel or opposing economic system altogether.
China is the most important emerging market economy and the one at the forefront of this process of integration. The United States has for decades pursued a strategy toward China described as "integrate, but hedge." In a nutshell, the concept is that it is imperative to bring China within the international system, but it must be done slowly and in a way that curbs China's potential capacity to disrupt the system or existing power structures. However, such a strategy can backfire, for hedging bets can easily transform into antagonism, pushing China to adopt more aggressive responses and ultimately creating the circumstance such a strategy was supposed to avoid.
This process is evident in the development of the Asian Infrastructure Investment Bank (AIIB), which came in response to the slow efforts by the U.S. to give China and other emerging economies greater representation and ownership in the International Monetary Fund (IMF) and World Bank. In 2010, the IMF agreed to implement reforms to its governance structure and that of its sister institution, the World Bank – which is dominated by the U.S. and the G-7 – allowing several emerging market countries to gain increased shares and power within the 188-member-nation institutions.
But since the reforms were agreed in 2010 and ratified by virtually every nation in the world, only the U.S. has refrained, held back by a Congress that proclaims its wariness to give up any influence within the Fund. However, America would maintain its status as the top shareholder in the IMF and World Bank, while remaining the only one with veto power, and Japan would keep its position as the second largest shareholder. But the reforms would elevate China from the Fund's sixth largest shareholder to third largest, putting it ahead of Germany, the United Kingdom and France.
Following years of delays in ratifying the IMF's quota and shareholder reforms, Chinese President Xi Jinping announced in October of 2013 plans for the formation of "a new multinational, multibillion-dollar bank to finance roads, rails and power grids across Asia." The so-called Asia Infrastructure Investment Bank would present a challenge to the role of the World Bank and the Asian Development Bank (ADB), in which Japan and the U.S. are the two largest shareholders.
The U.S. was quick to pursue a strategy of containment and opposition to the proposed bank. As China was engaging in behind-the-scenes diplomacy with several Asian, European and other large nations around the world to gain support for the AIIB, the United States was lobbying its allies to oppose the bank and refuse to join its membership. China was meanwhile attempting to secure a roster of rich nations to join the AIIB as founding members and thus provide the development bank with much-needed capital. The U.S., however, was pressuring South Korea and Australia, among others, to reject the proposal and ensure that "membership in the bank would be limited to smaller countries, depriving it of the prestige and respectability the Chinese seek."
At first, the U.S. lobbying and pressure seemed to work. When the AIIB was officially founded in late October of 2014, it had a membership of roughly 20 smaller countries along with China. The only other large nation to join was India. But in March of 2015, the UK defied pressure from the U.S. and announced that it would be joining the AIIB. U.S. officials weren't pleased; one told the Financial Times that Washington was frustrated with Britain's "trend toward constant accommodation of China." This approach, said the official, "is not the best way to engage a rising power."
Once Britain, a G-7 member, joined the AIIB, it led the way for other powerful and rich nations to do so. Within days, three other G-7 nations – Germany, France and Italy – all announced they were joining the bank. At the same time, Japan, China's major competitor for economic, political and military influence in the region, said it was sticking by its major patron, the United States, and refused to join the AIIB. "The United States now knows Japan is trustworthy," said Japanese Prime Minister Shinzo Abe.
But the American strategy of opposition to the AIIB was not without its critics. Lawrence Summers, the former U.S. Treasury Secretary, former chief economist at the World Bank, and a top economic adviser to President Obama in his first term, wrote in the Financial Times that the U.S. decision to oppose the AIIB could represent "the moment the United States lost its role as the underwriter of the global economic system." Summers wrote that "the global economic architecture needs substantial adjustment," with the U.S. and G-7 nations needing to adapt to a world in which China was virtually the same economic size as the United States, and in which emerging market economies accounted for roughly half of global wealth.
The President of the World Bank, U.S.-appointed Jim Yong Kim, pledged to find ways to cooperate with the new Chinese-led development bank, as did the Japanese head of the Asian Development Bank (ADB). Former World Bank President Robert Zoellick also wrote that U.S. opposition to the AIIB was "a strategic mistake." Even President Obama in April suggested that the AIIB could potentially be a "good thing," but stressed that it would have to adopt the standards set by U.S. and Western-controlled institutions like the World Bank.
In June of last year, former Federal Reserve Chairman Ben Bernanke chimed in, saying, "The U.S. Congress is largely at fault for all that's happening," referring to the role of the legislature in blocking the ratification of the IMF's reforms. Because of this, he explained, China and other countries have been increasingly looking to create their own regional institutions. "It would have been better to have a globally unified system," said Bernanke.
By September, following a state visit between Chinese President Xi Jinping and President Obama at the White House, the U.S. formally announced "what amounts to a truce" over their opposition to the AIIB, with the U.S. saying it would stop lobbying against the institution in return for China agreeing to increase its financial contributions to institutions like the World Bank. However, both the United States and Japan continued to refuse to join the AIIB as members. At a joint press conference, President Xi said that "China is the current international system's builder, contributor and developer and participant, and also beneficiary." China was willing, he added, "to work with all other countries to firmly defend the fruits of victory of the second world war, and the existing international system."
According to plan, the AIIB is to start with a capital base of $100 billion, and its ownership structure is designed to give countries in the Asia Pacific region roughly 75% of the voting shares, "giving smaller Asian countries a greater say than they have in other global organizations." China provides the AIIB with nearly $30 billion of its $100 billion, giving its chief backer between 25% and 30% of voting shares and the only veto, since major decisions require a 75% majority.
The second largest contributor and shareholder is India, providing $8.4 billion, followed by Russia at $6.5 billion. Next is Germany with a $4.5 billion contribution, South Korea and Australia each providing $3.7 billion, with France and Indonesia each contributing $3.4 billion. Among the other large shareholders are Brazil, the UK, Turkey, Italy, Saudi Arabia, Spain, Iran, Thailand and the Netherlands.
The result: while the U.S. and Japan sit on the sidelines hedging their bets, the AIIB starts its place in the world of global economic governance with a membership of 57 nations from around the world. As former Chinese leader Deng Xiaoping said several decades ago, "Hide your brightness; bide your time." With the founding of the AIIB, China may very well be staking a claim on its time for greater power in the global economy.
Meet the "Emerging Market" Superstars of Global Economic Governance, Part II
February 2, 2016 2:53 pm / Leave a comment
Originally posted at Occupy.com on 19 January 2016 and at the Transnational Institute on 21 January 2016
This is the second of a two-part article that was co-produced and co-published with the Transnational Institute, timed to coincide with the World Economic Forum starting this week in Davos, Switzerland. The first installment of the article appeared on 18 January.
Monetary Orthodoxy and its Political Repercussions
Central bankers are notoriously conservative and orthodox in their ideological positions. In the world of economics, this puts them in the position of being the political guardians of the global neoliberal order. In terms of policies, this translates into being strong promoters of low inflation, often requiring them to raise interest rates; supporters of liberalization (or deregulation) of markets, particularly financial and debt markets; implementing austerity measures (cutting social spending), and undertaking various structural reforms (such as the deregulation of labour markets and privatization of state assets) designed to further transform their respective societies into modern market economies.
While central bankers themselves are confined to the strict mandates of their institutions, often focused around what's called maintaining "price stability" (keeping inflation at a low and stable level, generally between 2-5% depending on the country), they are still able to greatly influence the broader set of economic policies and priorities, and through their control over monetary policy they have the capacity to inflate or shrink an economy, giving them immense leverage over other policy-makers.
One of the most important characteristics of modern central banks is their so-called "independence," referring to the degree to which the central bank and its governor are accountable to political authorities. If a central bank is "independent," this means it has the power to act independently of elected (or otherwise established) political authorities so long as it is operating within its mandate and using the various policy options and instruments available to it (such as raising or lowering interest rates). Some of the most powerful central banks in the world, such as the U.S. Federal Reserve, the European Central Bank (ECB) and the Bank of England, are examples of independent central banks led by unelected technocrats who are unaccountable to elected officials and the democratic process.
Thus, in the world of central banking, the prevailing orthodoxy revolves around the twin concepts of operational independence and a mandate focusing on price stability. The combination of these factors gives central bankers immense political power, for their economic decisions have profound social and political consequences, capable of causing recessions or depressions, creating mass unemployment, collapsing governments, bailing out banks and financial institutions (and handing the bill to the public), and transforming the very structure of society itself.
This political power is most frequently used to the benefit of the national and international private financial community (banks, insurance companies, asset managers, etc.) as opposed to the wider public community or nation. A mandate of "price stability" (low inflation), for example, is beneficial to creditors because it increases the amounts they are owed and protects the value of their savings. Higher inflation, on the other hand, can reduce the value of their savings and make it easier for debtors to pay off debts. There are of course exceptions and nuances to this general scenario. For example, hyperinflation is bad for everyone, and low to moderate inflation may be good for debtors so long as their wages are adjusted to inflation (which allows them to be paid more in dollar amounts for the same amount of work, and thus, helps to pay off debts faster).
Raghuram Rajan acknowledged the political nature of central banking during a speech at the annual congregation of global central bankers in Jackson Hole, Wyoming, in late August of 2015. While the work and focus of central bankers is largely "technical," explained Rajan, both history and "the current political environment" have an immense influence on monetary policy and its technical components. Rajan noted that central bankers think of and promote themselves as "apolitical," but the "background influence of political economy" is always present, "sometimes without recognizing it."
The problem for central bankers, he suggested, was their communication of political issues, because once central bankers do so, they become engaged in "the political dialogue," which they are supposed to avoid, "because you're a technocrat whose supposed view is apolitical." An unelected technocrat at a central bank is capable of "making decisions that infringe on the prerogative of elected officials," he said, but such "decisions may mean political trade-offs," or deals to be made with politicians. When it comes to making policy, he said, "nothing can really be clean."
This is something that Governor Rajan knows very well. In January of 2015, he made a private deal with the elected government of Prime Minister Narendra Modi in which he agreed to cut interest rates, giving a boost to economic growth in return for the government agreeing to implement a host of austerity measures and "structural reforms" designed to further develop India's "power, land, minerals and infrastructure." But by early February, Rajan indicated that "the war on inflation" was far from won in India, and refused to cut rates further.
This was viewed as "a message" by the central banker to the government to include austerity measures and other reforms if the government expected any further monetary support. The government acquiesced to the Governor's demands, and the budget submitted by the Finance Minister included a "panopoly" of austerity measures and other reforms. Private bankers and investors expressed their delight at the new budget.
A couple days after the budget was announced, another important announcement was made for Rajan, as he was granted special new powers with the central bank being given an "inflation target" (putting "price stability" into the mandate). This effectively gave Rajan and the Reserve Bank of India (RBI) greater independence from political authorities. The day after he was granted these new powers, Rajan cut interest rates in line with his previous deal with the government in return for the budget items he demanded, and possibly in a quid-pro-quo for granting him new independent powers. During 2015, there continued to be tussles between the RBI and the government about the independence of the Bank, but it seems likely that Rajan will emerge victorious.
Governor Carstens of Mexico also had his own struggles throughout the year, dealing with the repercussions of potential higher interest rates in the United States. However despite the Mexican economy slowing down, but Governor Carstens refused to cut interest rates any further, not wanting to "let inflation and the peso go adrift." The main guideline of the central bank, he said, "should be inflation expectations," adding that he would even consider raising rates if need be, possibly even before the U.S. Federal Reserve raised its own rates. "We will act," he said in an interview with the Wall Street Journal. Carstens endorsed the austerity package introduced by the Mexican Finance Minister Luid Videgaray, but warned that, "What's important here is that the Finance Ministry sticks to its promises."
In late July, Governor Carstens enjoyed a notable victory in the world of central bankers: inflation in Mexico hit its lowest level since 1970, and at 2.76%, it was below the 3% target set by the central bank. As the Wall Street Journal opined, this achievement "polishes Mexico's credentials as the most economically orthodox country in Latin America, and one where inflation-control policies are sacrosanct." Carstens referred to it as "an important milestone for Mexico."
In September, Mexican Finance Minister Luis Videgaray announced that President Pena Nieto would nominate Carstens for a second six-year term at the head of the country's central bank, which was "likely to give confidence to financial markets." And despite the inevitable negative consequences of higher U.S. interest rates on emerging market economies, both Governors even came out in support of the Federal Reserve raising rates. Carstens said such a move would be reflective of a stronger U.S. economy which would be "very good news." Rajan, on the other hand, said, "It's preferable to have a move early on and an advertised, slow move up rather than the Fed be forced to tighten more significantly down the line."
Emerging Markets – An Expanding Global Elite
Rajan and Carstens are also a reflection of one of the most important economic stories in the past several decades, which has been the rise of what we call the "emerging market" economies, countries like China, India, Brazil, Russia, South Africa, Mexico, Turkey and Indonesia, among others. In the 25 years prior to the global financial crisis, the Group of Seven (G-7) countries (United States, Germany, Japan, United Kingdom, France, Italy and Canada) accounted for roughly half of global GDP, but their share has declined relative to the growth of emerging markets. In 1990, emerging economies accounted for less than a third of global growth, but by 2013, they accounted for roughly half, in what The Economist called "the biggest economic transformation in modern history."
Emerging markets have not risen in economic size and strength in opposition to the economic system defined and governed by the G-7 nations, but rather through their integration into that economic order and acceptance of the economic orthodoxy propagated by the developed economies. With their rise, they are demanding greater international political power to match their increased international economic weight.
Despite unity on economic policy, this shift has not been a smooth process or without resistance, given the reluctance of the United States and G-7 nations to give space for emerging nations to articulate alternatives particularly on issues of foreign policy where there is more divergence of views. In managing this process, the G-7 nations have granted special status to a small group of emerging economies and to the top financial diplomats that represent them in international circles. In particular, China, India, Brazil and Mexico are the most favoured emerging economies, the most integrated into the structures of global economic governance, and whose top diplomats (in particular, central bankers) are the most respected and represented in global financial circles.
The Emerging Consensus
These two governors of the global economy, perhaps the two most respected central bankers from emerging market economies, represent the changing faces of global economic governance, but also represent the fact that for emerging markets to get real power, they must first give up any alternative economic ideology or vision. Both Carstens and Rajan attended prestigious American universities, worked in high level positions at the IMF and in their respective finance ministries before ascending to the throne of monetary managers for Latin America's second largest – and Asia's third largest – economy.
Integration into the existing power structures of global economic governance requires first and foremost, ideological capitulation: to accept the market system as the ideal form of the global economic order. They may push for reforms and alterations, but the substance remains largely the same: the market remains supreme and sovereign. Carstens and Rajan may be global economic governors of a different variety than the world is accustomed to, but they are firmly entrenched within the existing apparatus and ideology of global economic governance. Keep your eyes on these two, they're going places, and taking their respective countries – and the global economy – with them.
Highlights from Carsten and Rajan's calendar in 2015
The following is a list of some of the most important meetings and gatherings of international financial diplomats and technocrats attended by one or both of governors Carstens and Rajan over the course of 2015.
Jan. 11-12: Bi-Monthly meeting of the Bank for International Settlements (BIS), Basel, Switzerland
Jan. 21-24: World Economic Forum (WEF) Annual Meeting, Davos, Switzerland
Feb. 8-10: Institute of International Finance (IIF) G20 Conference, Istanbul, Turkey
March 9: Bi-Monthly Meeting of the BIS, Basel, Switzerland
March 26: Financial Stability Board (FSB) Plenary Meeting, Frankfurt, Germany
April 16-19: World Bank and International Monetary Fund (IMF) Spring Meeting, Washington, D.C.
May 10-11: Bi-Monthly Meeting of Bank for International Settlements (BIS), Basel, Switzerland
June 11-13: 73rd Plenary Session, Group of Thirty (G-30), Hosted by the Central Bank of Brazil
July 7: Bi-Monthly Meeting of Bank for International Settlements (BIS), Basel, Switzerland
Aug. 27-29: Federal Reserve Bank of Kansas City Economic Policy Symposium, Jackson Hole, Wyoming, United States
Sept. 4-5: G20 Finance Ministers and Central Bank Governors Meeting, Ankara, Turkey
Sept. 25: Financial Stability Board (FSB) Meeting, London, U.K.
Oct. 8-11: World Bank and International Monetary Fund (IMF) Annual Meeting, Lima, Peru
Nov. 9: Bi-Monthly Meeting of Bank for International Settlements (BIS), Basel, Switzerland
Andrew Gavin Marshall is a freelance writer and researcher based in Toronto, Canada.
Meet the "Emerging Market" Superstars of Global Economic Governance, Part I
January 25, 2016 12:55 pm / 3 Comments on Meet the "Emerging Market" Superstars of Global Economic Governance, Part I
One is Mexican, described by the Financial Times for his "Wall Street-sized reputation for financial wizardry"; the other is Indian hailed by India's Economic Times as "the Poster Boy of Banking" whose "chiselled features are as sharp as his brain." Meet Agustin Carstens and Raghuram Rajan. As the world's economic elite gathers this week to meet in Davos, they are a perfect example of what has been called the "Davos class" – what Samuel Huntingdon described as a class who "see national governments as residues from the past whose only useful function is to facilitate the elite's global operations." U.S.-educated central bankers in two emerging market economies, their stories focused on their activities in one year, 2015, reveal how global power has both shifted and yet ultimately reinforced a global economic empire. Carstens entered the inner circle of financial elites, via his role as Mexico's finance minister from 2006 to 2009, during which time he was responsible for managing the country's response to the global financial crisis. In that capacity, Carstens turned to the IMF in April of 2009 for a $47 billion credit line to help Mexico weather the financial fallout from the crisis. During this time, he was appointed Chairman of the Joint Development Committee (JDC) of the World Bank, and after being appointed Governor of the Central Bank of Mexico in 2010, he became a member of the steering committee of the Financial Stability Board (FSB), set up to help coordinate response to the financial crisis, and was also appointed to the board of directors of the Bank for International Settlements (BIS) in Basel, Switzerland, which coordinates between 60 major central banks around the world. This impressive career resumé led to him being considered in 2011 as a contender for the top spot at the International Monetary Fund (IMF).
Raghuram Rajan's rise to Governor of the Reserve Bank of India (RBI) followed a reverse trajectory to that of Carsten – not building his career first at a national level, but rather by gaining financial market legitimacy for his work at the IMF making himself a highly-sought after candidate within India's elite circles. However, like Carstens, he started off in the U.S. education system, obtaining a PhD in economics from MIT in the United States in 1991, then became a professor at the University of Chicago before, in 2003, becoming the first non-Westerner and youngest person ever to fill the post of Chief Economist at the IMF, a position he held until 2007. His predictions in 2005 that "financial innovations" of the previous years and decades could make financial markets increasingly fragile, vulnerable and prone to crisis may have been questioned at the time, but after the global financial crisis hit in 2008 and proved Rajan correct, they led to him becoming well respected.
IMF Economic Counselor and Research Department Director Raghuram Rajan briefs the press on the World Economic Outlook on April 13, 2005 at the International Monetary Fund Headquarters (IMF), Washington, D.C. The IMF World Economic Outlook presents analysis and projections of economic developments at the global level, in major country groups and in many individual countries. IMF Staff Photographer/ Stephen Jaffe
But this independence of thinking didn't dim his belief in central tenets of neoliberalism, necessary to receive the support from financial markets to stand for office. In August of 2012, Rajan was appointed as the chief economic adviser to India's finance ministry, praised by the Wall Street Journal as "a strong believer in liberalization and privatization," who felt that India should continue with many of the market reforms it began implementing in the early 1990s. And the following August, in 2013, he was appointed to head the central bank by Indian Prime Minister Manmohan Singh. Immediately upon becoming Governor of the Reserve Bank of India, Rajan told the Financial Times that he planned to turn India into "a more continental and open economy" within a globalized world. Such a task is not easy, and comes with a great many risks. "I have to be careful," he concluded.
Fostering a common vision in support of private financial capital
As central bankers in a globalized financial order, Carstens and Rajan have plenty of opportunities to meet up. They both sit on important committees of the Bank for International Settlements that meets every two months. Rajan is Vice Chairman of the BIS Board of Directors while Carstens is Chairman of BIS's Economic Consultative Committee (ECC) and Chairman of the Global Economy Meeting (GEM). The latter has been described by its former chairman and President of the European Central Bank, Jean-Claude Trichet, "as the prime group for the governance of central bank cooperation." The Spring and Annual Meetings of the World Bank and International Monetary Fund (IMF), taking place in April and September (or October), are also another regular stop in their calendars, especially for Carstens who has been appointed Chairman of the International Monetary and Financial Committee (IMFC), a secretive steering committee for the Fund. In addition, both Rajan and Carstens attend the private gatherings of the Group of 20 (G-20) nations that take place four times a year.
Beyond the world of inter-state financial cooperation, both Carstens and Rajan are frequent guests at meetings of private financiers – and thus all too easily pulled into the vision and interests of the private financial world – through gatherings of groupings such as the Institute of International Finance (IIF), the world's largest and most important association of global financial institutions. IIF brings together the top executives of nearly 500 major banks, asset management firms, insurance companies, sovereign wealth funds, credit ratings agencies, hedge funds and other investment institutions.
During the IMF's Spring Meeting in Washington in 2015, D.C., Carstens along with the Chinese Central Banker Zhou Xiaochuan, spoke at a forum on the subject of "International Capital Markets and Emerging Markets." Carstens also sits as a member of an IIF exclusive advisory working group dedicated to supporting capital flows to emerging market countries, called the "Group of Trustees of the Principles," sitting alongside other current and former central bankers, finance ministry officials and private bankers and financiers.
In 2013, shortly after his appointment as Governor of the RBI, Rajan spoke to an audience of the IIF outlining his objectives for reforming India's economy over the coming years, which included further "liberalization" of India's various financial and debt markets and to transform his own institution into a modern central bank with strict Western standards and credentials. Governor Rajan is also a member of the very exclusive Group of Thirty (G30), a private research and advocacy group of roughly 30 individuals, including current and former central bankers.
Among these meetings, the annual meeting in Davos in January, which Carstens attended in 2015, is a key forum to meet other elites outside financial circles including dozens of heads of state and hundreds of ministers and other high-ranking government officials, business and financial leaders, media and academic figures, and the chiefs of every major international organization.
Carsten and Rajan's interactions and meetings at least ten times a year alongside other top financial diplomats help to foster shared experiences, understanding and objectives, encourage cooperation at the supranational level, and further align their ideological positions relative to one another. Similarly, their extensive interactions and affiliation with private financial market participants helps to create a community of shared interests between central bankers and financiers. Ultimately, these groupings and exchanges allow the central bankers to come face to face with their main constituents, for it is the interests of financial markets that central banks protect above all else, whether through the promotion of liberalization and other "structural reforms," including austerity measures that are frequently demanded by markets.
Central banks also serve financial markets through the implementation of bailout programs designed to save banks and financial institutions when markets fail, as well as through the management of monetary policy with its primary objectives of achieving 'price stability' (low and stable inflation), which generally favours creditors at the expense of debtors. The prevailing orthodoxy of central bankers is closely aligned with the interests and objectives of private financial institutions, and Governors Carstens and Rajan are no exceptions.
Andrew Gavin Marshall is a freelance researcher and writer based in Toronto, Canada.
After "Landmark" IMF Reforms, U.S. Is Still the Group's Unrivaled Economic Power
November 12, 2015 3:27 pm / Leave a comment
Originally posted at Occupy.com on 5 November 2015
The International Monetary Fund is one of the three pillars of the global economic system, the other two being the World Bank and the World Trade Organization. And the importance of the IMF cannot be overstated, with its membership of 188 nations (a few less than the membership of the United Nations) and its responsibility to "aid" countries in economic crisis needing loans. The IMF applies strict conditions in return for its assistance, and as such, it has been one of the most influential institutions in the management, maintenance and evolution of the world economic order.
Due to its central role in global financial governance, the management and power structure within the Fund itself reflects the power of some of the IMF's individual member nations in the wider global economy. The United States, as the largest and most powerful economy in the world, was not only the primary architect of the IMF but remains its largest single shareholder – the only nation with veto power over the Fund's major decisions.
The IMF was founded in 1944 and officially launched in 1946 with a membership of just over two dozen nations. During the following years and decades its membership grew rapidly. The Fund's governance structure includes a Managing Director and deputies who are supported by an Executive Board and a Board of Governors. The Board of Governors consists of the finance ministers or central bank governors of the IMF's member nations, who meet twice a year at the Spring and Annual meetings of the Fund and World Bank, providing national political authority to the direction and decisions of the Fund.
The Executive Board, on the other hand, consists of 24 representatives, usually mid-level bureaucrats from their respective national finance ministries or central banks, who serve at the Fund overseeing its day-to-day operations in close cooperation with the Managing Director. While the Board of Governors reflects the entire membership of the IMF, power at the Fund is not the same as at the United Nations, where one nation gets one vote. Instead, the IMF has a constituency system whereby individual nations are part of larger groups that collectively elect a representative from among their ranks to serve on the Executive Board.
For example, one constituency on the IMF's Executive Board consists of 23 different African nations who collectively hold 3.34% of the IMF's voting shares. Most of that influence is controlled by just two nations in the constituency, South Africa and Nigeria. Another African constituency on the Executive Board consists of 23 nations with a collective voting power of 1.66%. This means virtually all of sub-Saharan Africa, representing some 46 nations, has approximately 5% of the voting power within the Fund.
On the other hand, there are nations that do not represent a larger constituency, yet their IMF quotas and voting shares are so great that they have a permanently appointed representative on the Executive Board. The top five shareholders today are the U.S. with 16.74%, Japan with 6.23%, Germany with 5.81%, and France and the United Kingdom with 4.29% each. China, Saudi Arabia and Russia have their own permanent seats on the Executive Board; Canada and Italy are also among the top 10 shareholders in the Fund.
In other words, the major shareholders are the Group of Seven (G-7) nations along with three major emerging market and strategically significant countries. But this was not always so.
Division of Power
In the early 1960s, the largest five shareholders with permanent seats on the Executive Board of the IMF were the U.S., United Kingdom, France, West Germany and India. By 1971, Japan had joined the list and moved above India. The so-called Group of Five (G-5) nations dispatched finance ministers and central bankers who held secret meetings several times a year to steer the global economy.
Quota and governance reforms took place over the years that followed, with countries increasing the amount of money they paid into the Fund and the amount of votes they held over IMF decisions. But the top five largely remained the same. By 1983, Saudi Arabia was added as a sixth member of the group with an appointed director. This composition was maintained into the 1990s, though the pecking order changed (by 1999 Japan had risen to second place, with Germany third and France and the U.K. tied at fourth and fifth).
Not until 2010 did the Group of Twenty (G-20) finance ministers and central bank governors agree to reforms in the quotas and voting shares of the IMF, seeking to increase the participation and ownership of major emerging market economies. The aim was to maintain the legitimacy of the IMF in an era when roughly half the world's GDP growth was coming from emerging and developing nations. Yet the representation and power of those nations in international institutions remained largely locked in the era of the 1970s. The 2010 reforms, while agreed upon, have still not been implemented due to U.S. Congress's refusal to ratify them. Virtually every other IMF member nation has ratified and agreed to the reforms, and even the U.S. administration has pushed for the reforms, but Congress remains reluctant due to fears of a perceived loss of U.S. influence over the Fund.
The reality is that the changes in governance of the IMF keep the U.S. as the largest shareholder and still the only one with veto power, though it increases the ownership of emerging market economies, in particular those represented in the membership of the G-20. According to the data of quotas and shares, here is a list of the top 35 shareholders of the IMF, both before and after the 2010 reforms:
In the pre-2010 phase, which still exists at present, the top 10 shareholders are all of the G-7 nations plus China (at 6th place), Saudi Arabia (8th) and Russia (10th). After the reforms are implemented, the U.S. stays at number one, Japan stays in 2nd place, but China moves up to 3rd place followed by Germany, the U.K., France and Italy. Then comes India, Russia and Brazil, with Canada kicked off the top 10 list at number 11. Saudi Arabia has also been kicked off the top 10, following Canada at number 12.
When the G-20 reached agreement in 2010 on the IMF reforms, it was hailed as a "landmark" deal to give developing countries more power and say in the operations of the Fund, with then-Managing Director Dominique Strauss-Kahn calling it "a very historic agreement." British Chancellor of the Exchequer George Osborne said at the time of the initial agreement, "We have pulled off major reform of the IMF so it properly represents the balance of economic power in the world."
The reality, however, is that while China, India and Brazil made significant gains due to the reforms, the overall distribution of power within the Fund remains relatively unchanged. Prior to the reforms, the G-7 nations (U.S., Germany, Japan, U.K., France, Italy and Canada) collectively held 43% of the IMF's voting shares. After the reforms, the G-7 nations will hold approximately 41% of the voting shares of the IMF. Overall, the G-20 nations (which include the G-7, plus Australia and 11 major emerging market economies) collectively account for 63% of voting shares prior to the reforms, and nearly 65% after the reforms.
Even with these relatively minor changes, the U.S. Congress has failed to pass the reforms, leading the IMF and G-20 nations to seek other "interim solutions" and ad-hoc arrangements until America ratifies the changes. But the hesitation of the U.S. has already had major repercussions, as China founded its own international economic institution, the Asian Infrastructure Investment Bank (AIIB), threatening U.S. dominance of such international organizations.
Former U.S. Treasury Secretary Lawrence Summers wrote an op-ed in which he said the U.S. failure to ratify the IMF changes cleared the way "for China to establish the Asian Infrastructure Investment Bank." Summers wrote that "with China's economic size rivalling America's and emerging markets accounting for at least half of world output, the global economic architecture needs substantial adjustment."
As history has shown, international institutions are slow to adapt to changes in the global economy, and even slower to adapt to changes in their governance structures. While the U.S. is concerned about maintaining its place at the center of global economic governance, through its inaction and inability to adapt quickly or with substance, it puts its own position at threat and creates the impetus for other nations to create alternatives.
The U.S. has stood at the center of the world's financial system for roughly 70 years, but there is no reason to assume it will remain there. In an age-old example of national hubris, America's drive to maintain its centrality – and uncontested power – in the global economy may lead to its eventual replacement.
When the IMF Meets: Here's What Happened At the Global Plutocracy's Pow Wow in Peru
October 26, 2015 7:30 am / 1 Comment on When the IMF Meets: Here's What Happened At the Global Plutocracy's Pow Wow in Peru
Originally posted at Occupy.com
On October 6, the finance ministers, central bankers and development ministers from 188 countries convened for the Annual Meeting of the World Bank and International Monetary Fund in Lima, Peru. The yearly gathering is one of the top scheduled events on the calendar of economic diplomats, bringing them together for private discussions, seminars and press conferences with journalists. And of course it's a big deal for the thousands of private bankers and financiers who are there to cut deals with the chief financial policymakers in those 188 IMF-member nations.
It was ironic that this year's meeting took place in Peru at a time when emerging market economies are experiencing increased economic problems: the result of a combined slow-down in economic growth in China, a collapse in commodity prices, and threats by the U.S. Federal Reserve to hike interest rates in the near future. Indeed, talk of China, interest rate hikes and emerging market crisis was plentiful in Peru. Central bankers, unsurprisingly, came out generally in favor of raising rates, with top monetary officials from emerging markets saying they more feared the uncertainty about when rates would rise than the rise itself, and urged the Fed to simply get on with it.
Global Pow Wow
The annual meetings bring together the Board of Governors of the IMF, made up of the central bankers or finance ministers from the Fund's 188 member nations. But the Governors are given their marching orders from the 24-member International Monetary and Financial Committee (IMFC), made up of ministers and central bank governors from the 24 major constituencies represented on the IMF's Executive Board, and whose membership largely reflects that of the Group of Twenty (G20).
The IMFC held their meeting in Lima on Oct. 9, presided over by the committee's chairman, Agustin Carstens, the Governor of the Central Bank of Mexico, and the IMF Managing Director Christine Lagarde. In attendance were the finance ministers of Japan (Taro Aso), India (Arun Jaitley), Argentina (Axel Kicillof), Brazil (Joaquim Levy), France (Michel Sapin), Italy (Pier Carlo Padoan), Germany (Wolfgang Schauble), Singapore (Tharman Shanmugaratnam), Great Britain (George Osborne) and the United States (Jack Lew), along with top-level central bankers from Saudi Arabia, Nigeria, Norway, Algeria, Colombia, Belgium and China.
Also participating in the IMFC meeting were Mark Carney, Governor of the Bank of England and Chairman of the Financial Stability Board (FSB); Jaime Caruana, General Manager of the Bank for International Settlements (BIS); Valdis Dombrovskis, Vice President of the European Commission; Angel Gurria, Secretary-General of the Organization for Economic Cooperation and Development; Mario Draghi, President of the European Central Bank (ECB), and other top representatives from OPEC, the World Bank and the World Trade Organization (WTO).
These various financial diplomats met and made prepared statements, but the real work and decision-making took place in the IMFC's off-the-record discussions. These discussions also included, as usual, a joint meeting between the IMFC and the G20, after which the G20 held a press conference discussing recent agreements made by the world's top economic diplomats collectively representing roughly 85% of global GDP.
The meetings followed the consistent hierarchy of operations among the world's most powerful economies, starting with a private gathering of the finance ministers and central bankers from the Group of Seven (G7) nations, including the U.S., Germany, Japan, UK, France, Italy and Canada. This was followed by a gathering of ministers and monetary chiefs from the G20 nations (consisting of the G7 plus China, Brazil, Russia, India, South Africa, Argentina, Australia, Turkey, Saudi Arabia, Mexico, South Korea, Indonesia and the European Union). The heads of the world's major international organizations also attended these meetings, functioning effectively as a steering committee for the global economy. The G20 then held a joint session with the IMFC, which functions as the steering committee of the IMF.
The IMFC's communiqué following its meeting warned that global economic growth was "modest and uneven" with increased "uncertainty and financial market volatility." Risks to the global economy "have increased," it noted, in particular for emerging markets.
Apart from the IMFC and G20, a number of other important meetings took place on the sidelines of the annual gathering, many of which prominently featured bankers. One of the most important gatherings of global financiers was the Annual Membership Meeting of the Institute of International Finance (IIF), a consortium of roughly 500 global financial institutions including banks, asset managers, insurance companies, sovereign wealth funds, hedge funds, central banks, credit ratings agencies and development banks.
From Oct. 9-10, the world's top bankers and financiers then held luncheons and private meetings with the world's top economic policy-makers, who were also invited to attend or speak at the conference proceedings. The IIF's opening ceremony was addressed by Peru's President Ollanta Humala Tasso, and included guest speakers like the finance minister of Indonesia and central bankers from Thailand and Malaysia, as well as the top Swedish central banker, Stefan Ingves, who serves as chairman of the Basel Committee on Banking Supervision (BCBS) which is responsible for shaping and implementing global banking regulations known as Basel III.
On the second day of the IIF's meeting, guest speakers included top officials from Brazil's finance ministry, the World Bank, and a keynote address was delivered by the governor of Canada's central bank, Stephen S. Poloz. The rest of the day included talks by finance ministers and central bankers from Colombia, Chile and Peru; a top official from the central bank of France; and an official from the Financial Stability Board (FSB), which is a group of global central banks, finance ministries and regulators responsible for managing stability of financial markets.
Another important gathering in Lima was the Group of Thirty (G30), presided over by its Chairman Jean-Claude Trichet, the former President of the European Central Bank. The G30 was established in 1978 as a nonprofit group of roughly 30 sitting and former central bankers, finance ministers, economists and private bankers, with the aim "to deepen understanding of international economic and financial issues" and "to examine the choices available to market practitioners and policymakers."
Among the G30's current members are former Federal Reserve Chair Paul Volcker; Mark Carney of the Bank of England and Financial Stability Board; Jaime Caruana of the BIS; Mario Draghi of the ECB; William C. Dudley of the Federal Reserve Bank of New York; former U.S. Treasury Secretary Timothy Geithner; former Bank of England Governor Mervyn King; economist Paul Krugman; Bank of Japan Governor Haruhiko Kuroda; Bank of France Governor and BIS Chairman Christian Noyer; Reserve Bank of India Governor Raghuram Rajan; Tharman Shanmugaratnam of Singapore; former U.S. Treasury Secretary Lawrence Summers; Chinese central banker Zhou Xiaochuan; and top bankers from UBS, JPMorgan Chase, BlackRock and Goldman Sachs.
This year, the G30 held its annual International Banking Seminar in Peru, "an invitation-only, off-the-record forum that allows for frank discussion and debate of the thorniest issues confronting the central banking community," bringing together "over fifty percent of the world's central bank governors, the Chairmen and CEOs of the financial sector, and a select few academics to debate financial and systemic issues of global import."
The meeting included a short speech by Federal Reserve Vice Chairman Stanley Fischer, who told the audience that the Fed's interest rate rise was "an expectation, not a commitment." Fischer acknowledged that "shifting expectations concerning U.S. interest rates could lead to more volatility in financial markets and the value of the dollar, intensifying spillovers to other economies, including emerging market economies." He reassured his audience, however, that the Fed will "remain committed to communicating our intentions as clearly as possible… to assist market participants, be they in the private or the public sector, in understanding our intentions as they make their investment decisions."
But the true importance of the annual IMF meetings is not what happens in formal proceedings and seminars, but the various secret meetings of finance ministers, central bankers and private financiers that take place on the sidelines of the official conference. In these closed-door events, a select group of government and monetary officials, primarily those from the G7 and G20 nations, were invited to wine and dine with bankers at decadent dinners and lavish parties, and speak to private gatherings of the world's top investors and money managers. It's here, in these various meetings, where the world's chief financial diplomats were able to meet, greet and receive praise or criticism from their true constituents: the global financial elite.
As usual, the annual pow wow of the global plutocracy came and went with little comment outside the financial press. But as always, the annual IMF meetings – and the more secretive, simultaneous gatherings of global economic diplomats and financiers on the sidelines – represented the core of global economic governance, manifest in the various ad-hoc committees that in essence rule the world.
These individuals' main interactions were not with the populations in their home nations – the people who suffer under austerity, who have to "adjust" to the restructuring of their societies into "market economies" – but rather with those from whom they have the most to gain: bankers, billionaires and financiers. And rest assured, when the officials retire from their central bank and finance ministry positions, they will be stepping out of their membership in the G7, G20 and IMFC, and into the boardrooms of JPMorgan Chase, Goldman Sachs, BlackRock, Barclays and Deutsche Bank. They will be well rewarded, with large salaries and bonuses for a job well done while in public office. And the revolving door of global economic governance will keep turning.
A Year in the World-Traveling Life of U.S. Treasury Secretary Jack Lew
October 15, 2015 2:52 pm / Leave a comment
Jacob Joseph ("Jack") Lew is one of the two most powerful financial diplomats in the world, the other being his central banking counterpart, Janet Yellen, the Chair of the Federal Reserve Board. As the U.S. Secretary of the Treasury, Lew has been the most important economic official inside the Obama administration since his confirmation in February 2013 following the president's re-election.
Prior to serving as Treasury Secretary, Lew was White House Chief of Staff to President Obama from 2012 to 2013, and Director of the Office of Management and Budget from 2010 to 2012, a position he also held in the Clinton administration from 1998 until 2011. Lew was also Deputy Secretary of State under Hillary Clinton from 2009 to 2010. But from 2006 to 2008, he worked at Citigroup, overseeing the bank's $1.8 billion in wealth management assets, and was then appointed as one of Citi's senior executives.
Lew's appointment to Citigroup was made on the recommendation of the bank's then-Chairman Robert Rubin, the former Treasury Secretary from the Clinton administration (1995-1999), with whom Lew worked closely. When Lew left the bank to join the Obama administration immediately following the 2008 financial crisis and the billions in bailouts his bank received, Lew got a bonus of almost $1 million from Citigroup on top of his more than $2 million in regular earnings from the bank.
Tracking Lew's Movements
In examining the role played by the Treasury Secretary to shape U.S. and global economy policy, it's revealing to look at his schedule over the course of a year. After reviewing Secretary Lew's schedule of phone calls and meetings in 2014, it's easier to understand what it means to be one of the world's most powerful financial diplomats. More than any other high-level official, Lew was in consistent contact with Yellen, having held over 30 phone calls or meetings with the Federal Reserve Chairperson over the course of the year, which included regular lunch or breakfast meetings.
As the two top diplomats and managers of the American economy and the U.S. dollar, it makes sense for these two individuals to meet frequently, both to assess the economic outlook and to devise a common U.S. position at international meetings – like the bi-annual meetings of the IMF steering committee known as the International Monetary and Financial Committee (IMFC), as well as the secretive meetings of finance ministers and central bankers of the Group of Seven (G7) and Group of Twenty (G20) nations.
Officially founded in 1976, the G7 sits at the center of global economic governance, meeting at the head of state level once a year, and holding multiple meetings and conference calls among the finance ministers and central bank governors of nations that comprise its membership: the U.S., Germany, Japan, France, UK, Italy and Canada. The G20, on the other hand, was founded as a meeting of finance ministers and central bank governors in 1999, and only started meeting at the head of state level in late 2008 in the midst of the global financial crisis.
Jack Lew was in frequent contact with his G7 peers, including all of the finance ministers and most of the central bankers. In addition to the gatherings of the G7 and G20, Lew spoke or met with German Finance Minister Wolfgang Schauble roughly 20 times throughout 2014. In the same period he met or spoke with the British Chancellor of the Exchequer, George Osborne, roughly 16 times; with European Central Bank (ECB) President Mario Draghi some 15 times; and with Japanese Finance Minister Taro Aso 14 times.
Secretary Lew also had extensive contact with French Finance Minister Michel Sapin and his predecessor Pierre Moscovici, who became European Commissioner for Economic and Monetary Affairs; Italian Finance Minister Pier Carlo Padoan; Canadian Finance Minister Joe Oliver; and Mark Carney, the Governor of the Bank of England and Chairman of the Financial Stability Board (FSB), an institution that brings together central bankers, finance ministers and regulators to oversee the global management of financial markets. Lew spoke or met with Carney some 12 times throughout the year.
But apart from Yellen, the high-level official with whom Lew had the most contact was Christine Lagarde, the Managing Director of the IMF and a former French Finance Minister; Lew met or spoke to Lagarde roughly 23 times in 2014, including at the meetings of the G7 and G20, which the IMF Managing Director typically attends.
The G20 has a much wider membership than the G7, though it includes all of the G7 nations in addition to Australia, the European Union, and major emerging market economies such as China, India, Brazil, Russia, Mexico, Turkey, South Africa, Saudi Arabia, Argentina, Indonesia and South Korea. The heads of major international organizations like the IMF, World Bank, Bank for International Settlements (BIS), World Trade Organization (WTO), and the Organization for Economic Cooperation and Development (OECD) also typically attend the meetings of the G7 and G20.
Following Yellen, Lagarde and Schauble, Secretary Lew was most frequently in contact with Australian Treasurer Joe Hockey, with whom he met or spoke roughly 17 times throughout the year. While Australia is not even a member of the G7, it would typically seem odd to have such extensive communication between its Treasurer and the U.S. Treasury Secretary. But Australia was hosting the G20 meetings in 2014, and thus Hockey closely coordinated with Lew on meetings that involved financial officials convening four times during the year.
Another name that stands out is Tharman Shanmugaratnam, the Singaporean Finance Minister who held nine separate calls and meetings with Lew, and 13 including those of the G20. Shanmugaratnam became Finance Minister of Singapore, a wealthy Asian city-state, in 2007, and has also held the dual role as head of the Monetary Authority of Singapore (MAS), the country's central bank. In addition, Tharman serves on the board of directors of Singapore's large sovereign wealth fund, GIC, which manages between $100 and $350 billion in assets, including significant stakes in Citigroup and UBS, Switzerland's largest bank.
The likely reason why Lew had such frequent contact with Shanmugaratnam – the chief financial diplomat of a country that is neither a member of the G7 nor the G20 – is because in March of 2011, Shanmugaratnam was appointed Chairman of the IMF's steering group, the International Monetary and Financial Committee (IMFC), made up of finance ministers and central bank governors from the nations represented on the Fund's Executive Board.
Lew attended the World Economic Forum in Davos, Switzerland, in January of 2014, where he held private bilateral meetings with Mark Carney of the Bank of England (and FSB), Saudi finance minister and central bank governor Ibrahim Al-Assaf, ECB President Mario Draghi, and Mexican Finance Minister Luis Videgaray, who was another emerging market diplomat with whom Lew had frequent contact throughout the year (eight separate phone calls and meetings, or 12 including those at the G20).
In February, Lew traveled to Australia for the first G20 meeting of finance ministers and central bank governors under the chairmanship of Australian Treasurer Joe Hockey. Lew moderated a session of a conference hosted by the Institute of International Finance (IIF) and held private meetings with German Finance Minister Schauble, Turkish Deputy Prime Minister and top financial diplomat Ali Babacan, and Japanese Finance Minister Taro Aso. And just before the official G20 meetings began, the G7 countries got together for a quiet one-hour meeting as well.
As the Spring Meetings of the IMF were starting in April, Jack Lew held private meetings with Russian Finance Minister Anton Siluanov, Videgaray of Mexico, Draghi of the ECB, Saudi Finance Minister Al-Assaf, and Brazilian Finance Minister Guido Mantega. Once again, Lew attended a private one-hour gathering of the G7 ministers before attending a wider G20 meeting of ministers and central bank governors on April 10. The following day, Lew attended the joint G20-IMFC meeting, and continued with G20 meetings for the rest of the day.
In September, Lew once again traveled to Australia for a special meeting of G20 financial diplomats, during which time Germany served as host for a private lunch meeting of the G7 finance ministers and central bank governors. He returned to Australia in November for the main head-of-state summit of the G20, where he privately met with his counterparts from Saudi Arabia, China, France, Japan, and with Mark Carney of the FSB.
As the chief financial diplomat from the most powerful nation and economy in the world, Jacob Lew is the central figure among G7 diplomats with whom he is in frequent contact, while closely coordinating with the chairs of the G20, the IMFC, and the heads of international organizations like the IMF and FSB. Through these and other groupings, Treasury Secretary Lew sits at what can only be understood as the absolute center of global financial diplomacy and governance.


We are incredibly excited to announce that Felix Flores, Jr. has joined the iMentor team as the Executive Director of our Bay Area region! Felix comes to iMentor after spending almost 20 years in educational and non-profit leadership positions for organizations like Yes We Code and Genesys Works. He also spent time as the Director of Alumni Scholarships & Student Engagement at the University of California Alumni Association. His passion for our mission stems from being a first generation college student himself and understanding the unique challenges our students face daily in their pursuit of post-secondary success. Below is an open letter that Felix wrote to all members of the iMentor Bay Area community.
I am excited to join the iMentor team and help further our impact in Oakland and San Jose. Being a first-generation college graduate myself and with nearly 20 years in education and nonprofit service, I understand that the power of mentoring is an incredible agent for social change. Mentors have the power to influence lives that will change the level of success in our students' communities and our collective future. Thank you for your sharing your talents and experiences with Bay Area youth. Our students will benefit from your guidance as they navigate high school and pursue post-secondary success.
During these unsettling times, our differences should spur dialogue rather than be a source of our divide. Acknowledgement of privilege can further conversations and lead to greater equity and inclusion. I believe the power of mentoring will play an impactful role to help generate empathy and further unite our country. Your work with iMentor will positively impact our communities for generations to come. For that, I am grateful for your commitment.


Historic. There's no other way to describe MLS's week in the Concacaf Champions League. #CCLFever peaked on Tuesday with Toronto FC and the New York Red Bulls victories over Liga MX, then broke Wednesday as Chivas casually disposed of a beat-up Sounders side. What does it all mean? Has MLS turned the corner against their southern neighbors? What now in the semis, given the free space (disappointment) is still open? ESPN's Herculez Gomez joins the guys to share his infinite Concacaf wisdom.
Also in this episode ... MLSsoccer.com national writer Paul Tenorio on Darwin Quintero and Minnesota United and the TAM effect in MLS, a weekend preview featuring the clubs you said we never talk about and a rip-roaring mailbag featuring Dr. Seuss-inspired MLS rhymes!
Are LAFC the best expansion team of all-time? Who will advance in CCL?
MLS Week 2 is in the books, and the guys dig into all the big storylines. Matt says the biggest is rampant LAFC, whose dominating performance in Utah prompted Mike Petke to take the blame for Real Salt Lake's collective failure. David goes with the young Red Bulls, who made nine changes to the team that knocked off Club Tijuana on the road and didn't miss a beat working over the Timbers. Andrew goes with Five Stripe Nation, 72,035 of which showed to watch Atlanta United get back on track.
Also in this episode ... the rest of the headlines from the weekend, MLSsoccer.com national writer Sam Stejskal rounds up the news from around the league, handicapping the CONCACAF Champions League quarterfinal second legs and a laugh-filled mailbag highlighted by ExtraTime Bingo!
Has MLS turned CCL corner after Liga MX sweep?
There's nothing that gets the ExtraTime Radio guys as riled up as the CONCACAF Champions League. So when MLS teams went three for three against Liga MX in quarterfinal first legs, you knew Thursday's episode was going to be epic. Still, the big question after Toronto FC, Seattle and the Red Bulls made history remains unanswered: Is a marker of things to come or simply a flash in the pan before the usual second-leg disappointment?
MLS is back for Week 2 as well and MLSsoccer.com national writer Paul Tenorio jumps on to talk trade rumors in New England, moving and shaking (for a No. 6) in ATL, the Chicago Fire's 2018 season and what he expects from the remainder of the transfer window. Then the guys preview all the games and dig into the mailbag! Don't forget to subscribe below to have the podcast delivered to you every single week.
What's real and what's fake from Week 1 + CCL disappointment incoming?
After months of slogging through rumors, MLS is back. With Week 1 in the books, the guys try to decide what's real and what's fool's gold. Are Columbus Crew SC really that good? Should Atlanta United panic? Can the Revs really make the playoffs when their central defense sees double red? Is Justin Meram poised for a Best XI-caliber season? Stay tuned for a #PlayYourKids conversation with Sam "Sam on TAM" Stejskal before finishing up by predicting which MLS teams have the best chance to advance in the CONCACAF Champions League.
Western Conference preview + Who will win MLS Cup?
Just two days left until MLS is back! Andrew, David, Bobby and Matt break the Western Conference down from LA to Portland and everywhere in between (especially San Jose!). Can the Galaxy get back to where their fans expect? How does FC Dallas rebound? Is this a make or break season for Sporting KC? And what does Cascadia look like in 2018? MLS Cup predictions, too!
Submit a question, topic or hot take! You could be a part of Tuesday's ExtraTime Live (4 pm ET, Facebook Live and Youtube).


Mobile devices are increasingly used to complete surveys that were traditionally completed on personal computer. In a number of our recent general population studies the proportion of people completing a survey with a mobile device is 25% to 30% and with 69% of adults having a smartphone the proportion using their smartphone to complete a survey is likely to increase. Survey completion times for mobile phones can take twice as long compered to using a computer. For one study a 20-minute survey was taking an average of 55-minutes by mobile phone.
Mobile research offers many new opportunities and changes to the way we undertake online research. Like any data collection method, we need to understand who is responsive to an approach to get the best results and avoiding costly errors. Even if you are not targeting mobile phone or other mobile device users for your research, people are increasingly completing surveys using their mobile devices; smartphones and tablets.
For most survey research, tablets are basically the same as a lap top. However, mobile phones provide a very different experience. Before discussing the issues and benefits of smartphones for your research, let's first look at who is using mobile devices to complete more traditional online surveys; ones sent by email with a survey link.
From research we have conducted that covered a general population of people aged 18 years and over we found that younger people are more likely to use their smartphone to complete a survey. This pattern is consistent across age groups with a steady decline of mobile phone use to complete a survey as people get older. Interestingly, operating in the opposite direction is older consumers being more likely to use a tablet.
While tempting to assume mobile phone use for a survey is youth driven, there is more to the story which we need to know to account for smartphone use in our research design. The chart below shows that type of employment is also a significant factor. People in part-time employment and the unemployed are also more likely to use their smartphone. Even when we control for age we still find type of employment influential in what device they use to complete a survey.
Why are People Using Mobile Phones to Complete Online Surveys?
The employment pattern helps to better understand why people choose different devices to do a survey. It is about access at the time of the invitation. People who have access to a computer when they receive a survey invitation and can use that computer without much interruption will use the computer. There is no incentive to switch devices. People working part-time or unemployed are more likely to not be sitting at a computer. The email invitation is more likely to be seen on their phone, these people are also less likely to have ready access to a computer and potentially having to wait until they get home to use a computer.
To better understand what drives mobile phone choice, I've also spoken to participants and a couple of other themes emerge. In terms of employment, people who work in retail or non-office roles are unlikely to work near a computer, making the phone the only real option. The age difference was driven in part by older people being more likely to be in full-time employment and in an office role with computer access and their declining eyesight making mobile phone less attractive. The sudden halving around 45 years nicely aligns with the decline in eye sight (Macular Degeneration) with people over the age of 40.
The main driver of mobile phone use is access at the time of invitation. The main factor limiting its use is screen size. The higher use among youth affect is likely to be due to a combination of smartphone penetration, less access to a computer at the time of a survey, and better eye sight than simply and unhelpfully a youth culture thing among the GenZ digital natives.
Small Screen. Even with the larger mobile phone screens their smaller screen size of a phone places limits on wide range of survey design features. Participants are less able to view stimulus material (images), read long survey invitations and question instructions, and complete scale and grid style questions (e.g. service and image batteries).
Divided Attention. The nature of completing surveys on the go means surveys are more likely to be done between customers (retail and personal service), on public transport and other environments means survey participants are likely to be paying less attention to the overall questionnaire flow and longer questions.
Less Survey Functionality. Combining the smaller screen size with software differences mean not all question types that are available for a computer can be rendered on a mobile phone. Such as choice and conjoint questions, and some gamification style questions.
Access Issues. The wide range of platforms and coverage can mean some users cannot access a survey using a mobile phone. This is particularly important for regional, rural and remote participants.
Reflecting the nature of mobile phone usage patterns, their physical and software design there are four key things to keep in mind when design a survey which is either targeted at mobile phone access or where it is an option.
Know Your Participant and Their Context. The time, day, holiday/non-holiday can all affect both your response rate and the device used to complete a survey. Similarly for occupation or demographic segment targeted studies you need to be mindful of what device they are likely to use. For large studies a small pilot study will show what device is being used.
Shorter Surveys. Moving from telephone and face-to-face lead to an explosion in survey length; moving to mobile will mean shorter surveys. This may mean the overall questionnaire is shorter or a split survey design is used where not every question is asked of every participant.
Test Complex Questions. Not all questions can be shown on all mobile phone platforms due software differences and the way they render a question on a smaller screen. Some questions types like best/worst, choice and conjoint, and heat-map questions may require a change in design to accommodate mobile phone use, if possible.
Prevent Phone Completion. If removing mobile phones from the survey would not bias your results and if you are using methods that do not work well for mobile then you should block mobile phone access and encourage the person to access the survey when they are on a computer.
There is a temptation to make all surveys available to all people for all devices, while this social equity approach may be needed in some contexts, when you are paying for research and using that information to make decision, quality should be your driving concern.
The above comments were about use of mobile phones for surveys designed for completing on a personal computer, mobile phones however, also offer many opportunities for studies designed with them as the targeted device, each one worthy of their own article. Some the approaches use existing apps on a phone while others either use the browser to access software or require participants to download an app.
SMS Text Survey. These are surveys sent using the text facility and require only a single response. This can be as simple as single letter or number ('Y' for 'Yes', 'U' for sales are 'Up') or a longer text response.
Example of When to Use: Industry, customer, student and employee polling and simple feedback (e.g. Was the delivery on time?).
Geo-activated Surveys. Using the geo-location features inside an application or survey tool to activate the survey when a person is in a targeted area.
Example of When to Use: Research for events, media and PR events, tourism destinations, wayfinding and location research.
Diary Completion. Using closed and open ended responses to sequentially document an experience rather than give all the information after the event as in traditional studies.
Example of When to Use: Service experience, customer journey and path-to-purchase, new staff/ student orientation experience, export knowledge mapping, and new product evaluation done in situ.
Visual Documentation. Use of the photo and video tools to show what a person can see or the context they are in.
Example of When to Use: Ethnographic studies, shopping, environment/ store design, critical incident/ problem identification, product usage and media research.
In-Context Studies. Similar to geo-activation except a person is asked to provide the information within a given context. Survey and tools may only be active during defined time periods.
The ever expansion of devices that people use to communicate and use provide an increasing wide range of tools for research use that add to existing methods. Each with their own advantages and implications for research design. For mobile phones used in conjunction with personal computer based research care is needed to ensure biases in who, when and an in what context a study is undertaken are used to either enrich the study or are understand and controlled to ensure you get accurate and reliable results.
Finally, while tempting to design all studies for smallest screen, this is not always the best option for getting the insights you need and can lead to false findings about a customer segment when the insight was about the device.


text:
Most Malaysia coronavirus cases linked to Islamic gathering
Straits Herald March 16, 2020
Malaysia said Sunday that more than half the country's 428 coronavirus cases were linked to an international Islamic gathering held last month.
The Southeast Asian nation announced a spike of 190 new infections over the weekend, mostly linked to a global Islamic event attended by almost 20,000 people.
"Of the 428 cases, 243 are participants from the religious event in Sri Petaling mosque," Noor Hisham Abdullah, director-general of the health ministry, told AFP.
Authorities said participants at the gathering from February 27 to March 1 came from Bangladesh, Brunei, the Philippines, Singapore and Thailand.
Around 14,500 of the participants were Malaysian.
Brunei reported 10 new cases on Saturday, raising the total to 50, most in people who attended the Malaysia gathering.
Singapore has also announced cases linked to the event.
On Friday, Prime Minister Muhyiddin Yassin warned Malaysia of a second wave of infections spread and urged people to avoid mass gatherings.
Ahmad Farouk, a lecturer at Monash University, told AFP that authorities should shut down mosques for at least two weeks to contain the spread of the virus. – AFP
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Surveying is a term given to the act of accurately measuring the dimensions and positions of physical elements in the real world, and the angles between them. There are many types of surveyor, but in real terms a typical surveyor measures land and buildings and their exact sizes and boundaries.
The most common contact the general public has with a surveyor is when they purchase a new house, or need planning permission for building works.
A building surveyor is a recognized profession in the UK, and is concerned with the surveying of buildings. A building surveyor will be employed to accurately gauge the size of buildings and rooms, to ensure that they are in keeping with health and safety laws, property legislation laws and building regulations.
A building surveyor can be important when gaining planning permission for new constructions, assessing the value of buildings, and to advise on a number of maintenance and design considerations of larger buildings.
A land surveyor's job is to accurately measure areas of land. Commonly, they can be employed when land changes hands, to get an accurate measurement of the amount of land for sale and whether there are any planning or land regulation considerations.
Land surveyors can be brought in to verify the scope and boundaries of neighbours' land, particularly when there is a dispute. Physical features that appear on older maps and deeds can, over time, become eroded or change and this can lead to deeds become inaccurate.
A land surveyor's skills at accurately measuring how things have changed physically are indispensable in these cases.
What equipment does a surveyor use?
Even up until the 1990s, a surveyor would be found using a tape measure, a measure, and a theodolite, which measures angles. More modern equipment is known as a "total station", which is a theodolite which includes an electronic distance measuring tool.
Does a surveyor use GPS?
Top of the line surveying equipment uses GPS to measure larger distances, which can even send data back to the surveyor's office by email. However, GPS is still only accurate to around 20-40mm, and cannot work well in densely populated areas such as forests and some construction sites. Therefore, total stations are still widely used.
Is there a professional body of surveyors?
Chartered surveyors in the UK all belong to the Royal Institute of Chartered Surveyors.
How much will a valuation cost?
Of course the price will vary on a number of factors, but a simple valuation on a home tends to cost around £100-£250. A home-owners survey, which will include more information of interest when there is a potential home purchase, will cost between £250-£1000.
A full structural survey, which goes into great detail about the structure of the building and how it may need to be maintained can cost up to £1500. Prices vary heavily depending on where you are in the country, and the size of the property.


Great list.. However you missed one important fundamental of confidence. Th1a&#82t7;s to be believe in yourself, even of everybody else doubts you… Thanks for the read, your blog has been an inspiration for me..


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Andres Iniesta, right, could not finish Barcelona's victory over Real Sociedad.
Andres Iniesta will have tests on a calf problem on Friday after being forced off during Barcelona's 1-0 Copa del Rey win over Real Sociedad.
Neymar scored the only goal of the game from the penalty spot as Barca ended a 10-year wait for a win at Anoeta, but the victory was tainted by Iniesta's injury.
The midfielder was replaced by Andre Gomes at half-time after complaining of a light pain and the Blaugrana will hope that the knock is nothing serious.
A statement from the club after the game confirmed: "Iniesta was substituted due to a problem with his left calf. [On Friday], he will have more tests back in Barcelona."
Iniesta missed six weeks with a knee injury earlier in the season, returning as a second-half substitute in December's draw with Real Madrid.
Barca underwent a slump in results without him -- drawing four out of five games at one point -- and his return to action prompted a five-game winning run.
Rafinha is currently the only Barca player missing through injury. A hamstring problem kept him out of Thursday's game in San Sebastian, but he's not expected to be sidelined for too long.
The win against Real Sociedad gives Barca a one-goal advantage going into next week's quarterfinal second leg at Camp Nou.