Development

  • Greece cannot lose by rejecting this week’s final offer from international creditors – and leaving the eurozone would achieve a better outcome for its economy, argues Wolfgang Münchau
  • Foreign companies are finding ways of circumventing economic sanctions on Russia, enabling the provision of goods and services like banking to blacklisted entities
  • As the government in Athens fast runs out of money – and nervous depositors pull cash from the country’s banks – there is growing talk of the extraordinary use of capital controls in Greece
  • A documentary shows how the poorly-trained and equipped Kurdish peshmerga forces are the international coalition’s only reliable boots on the ground in northern Iraq (Vice Media)
  • A Chinese entrepreneur who took just 19 days to build a 57-storey tower says he has triggered a construction revolution. And his dreams soar far, far higher (BBC)

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It is five years since a massive earthquake tore through Haiti, leaving tens if not hundreds of thousands dead and sparking a huge aid effort from overseas governments and charities to feed, shelter and treat afflicted Haitians.

A total of $13bn, more than 10 per cent of the global annual government aid budget, was pledged over several years — about $10bn from governments, and the rest from private donors.

Looking back, what was the effect of all this assistance? Did it provide short-term relief? Did it put the Caribbean nation on the path to higher living standards, better governance and greater resilience to natural disasters? Or could the aid effort have been much more effective?

The verdict at this juncture is: don’t knowRead more

The biggest development story of the last two decades has been the vast reduction in the number of the world’s extreme poor thanks to the rapid growth of China and other developing economies. But how does the US, the world’s richest economy, fit in when you apply the $2/day poverty line the World Bank and others normally use to grade much poorer countries?

In a fascinating new paper, researchers at the Brookings Institution look at exactly that question and come up with some potentially shocking findings, albeit ones that come with plenty of caveats attached. Read more

Once Indonesia has finally got through counting the votes and has separated the two presidential candidates, it will have a new leader. That puts the nation of 250m people in good company. In Asia, in the last 18 months, countries with approaching a total of 3bn inhabitants – including China, India, Japan and South Korea – have changed their leadership. Even the Thais have a new man in charge, though he had to organise a coup to get there.

One country that has not altered its leadership is the Philippines. Benigno “Noynoy” Aquino, has been president for four years. By the standards of his perennially disappointing country of nearly 100m people, his time in office has been a roaring success. Growth has stabilized above 6 per cent, inflation is low and debt and budget deficits have been brought under firm control. The economy is even creating jobs – something it has sorely lacked for years – in the booming outsourcing sector. Call centres in the Philippines employ more people than ones in India. Ratings agencies have responded to improving macroeconomic conditions, upgrading sovereign debt to investment grade. Philippine conglomerates have started investing significant sums at home. Read more

For those expats bemoaning the cost of a burger in Geneva or rent in Tokyo, it could be worse. They could be living in Luanda.

The tight supply of international standard housing in Luanda has put the Angolan capital top of the list of the most expensive cities in the world, according to a survey by consultants Mercer of the costs of living abroad. It held the same position last year as the oil boom continues to suck in expats. Read more

At a recent show at the British Library in London showcasing pre-Columbian gold, a Colombian diplomat noted that his countrymen were “very concerned about their image and public relations.”

Until a decade ago, Colombia was mostly associated with guerrillas and drug kingpins such as Pablo Escobar. All of that has changed.

But the country still suffers from a public relations failure at the local level. As Colombia’s image abroad continues to improve, thanks in large part to the main players in the current election campaign, the view Colombians have of their own nation is growing ever more negative, partly because of those same men. Read more

By Gideon Rachman
In 1996 a friend of mine called Jim Rohwer published a book called Asia Rising. A few months later, Asia crashed. The financial crisis of 1997 made my colleague’s book look foolish. I thought of Jim Rohwer (who died prematurely in 2001) last week as a I listened to another Jim – Jim O’Neill, formerly of Goldman Sachs – defending his bullish views on emerging markets in a radio interview.

AFP

I had the privilege this week of listening to a lecture by Hans Rosling, professor of global health at Sweden’s Karolinska Institute. Many will have seen his engaging performances on Youtube or in Ted talks . He’s the one with the endearing Swedish accent – he says “yust” for “just” – and the animated charts that show nations as variously sized, coloured bubbles moving dramatically over time. He also uses a pointer with a little hand attached to the end.

His message is basically an optimistic one: that poor countries are rapidly converging on richer ones as their birth rates fall to sustainable levels and as their victory over preventable disease and premature death allows them to advance economically. Most of the world is now between what he calls “light bulb” and “washing machine” – in other words advancing up the lower rungs of the “middle classs”. Read more

hitandrun / www.hitandrunmedia.com

By Peter Chapman
With the global youth-to-adult unemployment ratio at its peak, and inequality one of the themes at Davos last week, the FT looks at the questions raised by youth unemployment, as well as solutions to it, in this Special Report.

Will the world’s lack of jobs drive the under-25s to violence and extremism? Do children, meanwhile, make easy targets for the global slave trade, and why is it that teenagers face greater bullying and violence over their sexual orientation?

Business often points the finger at government over the need to tackle the mismatch between qualifications and jobs but could it be doing more to confront the matter itself? Certainly German companies like BMW are bringing the benefit of apprenticeships to US states like South Carolina.

We have examined this and more in our Investing in Young People report.

What do you think must be done to prevent a lost generation of young people? Please share your comments with us below. Read more

FT senior columnist Gillian Tett reports on why business and governments are at loggerheads over where growth will come from, with business saying it is not ready to invest, yet confidence in governments is low.

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(Getty)

Familiar calls rang out this week to halt the decline in western countries’ performances in global education rankings. It seemed on first glance that the rise of the intensive east Asian model of schooling has only accelerated. However, the results from PISA (The Programme for International Student Assessment) come with plenty of caveats – as amply summarised by Sam Freedman of TeachFirst here.

Along with statistical shortcomings – only about 10 per cent of students answered all the questions on reading – there are also broader critiques. Accurately comparing the educational systems of countries with staggeringly different cultural norms, school systems and input hours may be an impossible task. The rankings also focus narrowly on the maths, science and reading skills of students in everyday situations. There is no evaluation of students’ ability to master technology for instance – surely a key skill for the knowledge economy. Read more

It is a common error in politics to underestimate your adversary. Ever since Hugo Chávez fell ill from cancer two years ago, many imagined that his rule and his oil-fuelled socialist revolution would also end with his death, undermined by its own prodigious inefficiency and corruption. But now that the Venezuelan president has actually died, it no longer quite looks that way.

Chávez is now bound for mythology. In the imagination of his mourning supporters, he may come to occupy a space similar to Che Guevara’s – another martyr of the revolutionary left, albeit one without as large a cheque book. Indeed, Chávez’s early death is likely to prolong “chavismo” for a few more years rather than bring it to an abrupt end. Read more

By Jasmine Whitbread, chief executive of Save the Children

There are two sessions on the future of the UN’s Millennium Development Goals beyond 2015 at Davos this year – the same number of sessions given to meditation and art walks. The word ‘growth’ features in 11 of the agenda’s headings, ‘human’ in four, but ‘poverty’ gets no airtime at all. Yet, if the World Economic Forum is ‘committed to improving the state of the world’, what happens after 2015 is a critical debate for every government that signed up to the MDGs in the first place, and for every business with supply chains or future customers in emerging and developing countries. Read more

(AP)

Friday’s events from the World Economic Forum feature an address by Mario Draghi, president of the European Central Bank, and sessions looking at the challenges faced by, and presented by, the fast-changing Arab world. Reports from FT writers in Davos and by Ben Fenton, Lina Saigol and Lindsay Whipp in London

17.03: The Davos Live Blog is closing down now but for more reading and insight on today’s events, please visit the FT’s in depth page on the World Economic Forum.

16.41: Gideon Rachman, titular proprietor of this blog, has written his surmise from the earlier session on Syria.

16.16: Asked by the Amercian moderator of his panel session about corruption and banking regulation, Nigeria’s central bank governor Sanusi displays a little frustration:

He said: “We are the only country which has taken people out of banks and put them in jail. No bankers in your countries have gone to jail.”

16.12: Martin Wolf has recorded his view on the politics and economics at play in a “low-intensity” Davos this year:

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Lord Paul Boateng, former chief secretary to the treasury and the former UK high commissioner to South Africa, answers questions about his first trip to Davos.

1. Is this your first trip to Davos?

I have to confess that it is. I’ve reached a fairly advanced age without ever having felt Davos was for me. I have been an active participant, however, both as a cabinet minister and a diplomat at the spin offs in Mumbai and Cape Town where the WEF reaches out to the rest of the world.

2. What’s the best thing about going to Davos?

If you’ve got an idea or a product to sell then this is a quite unique market place. There are lots of serious people on the lookout for the next big idea or opportunity. A voracious media circus with the promise of global coverage also helps. Read more

By Chris Cook, education correspondent

Qatar has enormous oil and gas reserves, but the little state is trying to kick the petroleum habit and become a high-tech society. It wants a sustainable economy for when the oil runs out – and a more cultured society in the meantime.

The Qatar Foundation is the institution that is leading this drive: I am in the little Gulf state this week for WISE, their annual summit on education, where I was a speaker on the finance of education. The whole thing is rather spectacular.

When they say they are going to do something, they go big – sometimes to a rather baffling degree. One of my favourite examples of this is their super-duper equine health centre, which trains horse-handlers and apparently features a sauna for the horses. Read more

FARC commander Mauricio Jaramillo, is flanked by FARC rebels Ricardo Tellez (left) and Andres Paris, during a press conference in Havana, Cuba, on Sept. 4. Photo AP

For many FT readers, the guerrilla conflict that Colombia has suffered over the past 50 years, and the possibility that it may now end, probably seems like a sordid tropical war taking place in a corner of the world of little interest, and less importance. It is otherwise. In this corner of the Americas there is, in fact, a great and complex geopolitical game at work, in the same way that there was a great game at work in central Asia in the 19th  century.

Only 12 years ago, Colombia was considered an “almost failed” state. That is why the United States – under an initiative begun under President Bill Clinton, and continued under President George W Bush and President Barack Obama – launched “Plan Colombia”: a program of military and development aid that constitutes one of the US’s biggest, and one of its most controversial, foreign policy initiatives. To date, the US has committed some $8bn under this plan, which is designed to combat insurgent guerrilla forces in Colombia and curb drug trafficking. Read more

Here’s what we’ve been chatting about today: 

The Olympics are on our doorstep, but we’re still picking up interesting articles from around the world: