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CGD in the News

December 29, 2009

Arvind Subramanian: The Triumph of Economics

The Business Standards published an op-ed by CGD senior fellow Arvind Subramanian jointly at the Peterson Institute.

December 25, 2009

Decoding the Decade (The Globe and Mail)

The Globe and Mail quotes CGD vice-president quotes Todd Moss on global development in the past decade.

From the article:

"“Our old thinking about the ‘first’ and ‘third’ worlds is a completely dead concept,” says Todd Moss of Washington’s Center for Global Development. “Even in the poor countries that are not part of the BRIC emerging markets, you’re still getting urban centres that are cosmopolitan, globally integrated and forces in the world economy. The distribution of economic and decision-making power has shifted dramatically in the last 10 years.”"

Read the article

December 20, 2009

The Rising Influence of Rising Affluence (Wall Street Journal)

The Wall Street Journal quotes CGD president Nancy Birdsall on the rise of the middle class.

From the article:

"What's the bigger upside of all this economic enfranchisement? "At some point, when you have a sufficiently large middle class -- that's the key to sustained good government," says Nancy Birdsall, president of the Center for Global Development, a research organization in ashington. "It's the middle class that demands a competitive system, property rights, the rule of law, an economic setting where they can compete, where they aren't fighting the insider privileges that are associated with developing economies."

Read the article

December 14, 2009

Identifying a Fair Deal on Climate Change (VoxEu)

VoxEU published an op-ed by CGD president Nancy Birdsall and senior fellow Arvind Subramanian jointly appointed to the Peterson Institute.

From the article:

"What constitutes a fair deal between the developed and developing countries on climate change – including for example between the US on the one hand and China and India on the other? In the academic and policy literature, the answer to this question is emissions-focussed and mostly arbitrary.

The Stern Review implicitly endorses equality of greenhouse gas emissions per capita as a desirable long run objective, and derives from this objective an emissions reduction allocation of 80:20 for rich and poor countries, respectively. Other authors (Frankel, 2009; Jacoby et. al., 2008) have tended to discuss fairness in terms of allocating the future “rights” to emissions across countries based on such parameters or combinations of them as current total emissions, cumulative past emissions, emissions per capita, per capita income and so forth."

Read the Op-ed

December 13, 2009

Coverage of CGD's Contribution to Nick Kristof's "Win a Trip" Contest (New York Times & On the Ground Blog)

New York Times columnist Nick Kristof cites CGD's contribution to his "Win a Trip" contest in his Sunday column and on his blog.

From the New York Times:

"So where should we go on this fourth win-a-trip? What issues should we cover? You tell me — on Facebook, Twitter and my blog ( Information about how to enter the contest is on my blog — and I owe a shout-out to the Center for Global Development for helping screen the applications."

Read the article

From Kristof's On the Ground blog:

"The Center for Global Development will sift through the applications, written and video, and help narrow them down to a group of finalists. Then I’ll work with my assistant, Natasha Yefimov, in picking a winner. We may want more information or references from some people (confirmation, for example, that you don’t snore)."

Read the blog

December 10, 2009

Will Rice Market Go Up in Flames Again? (The Philippine Star)

By Peter Timmer And Tom Slayton / Center for Global Development

MANILA, Philippines - To understand how we got here, it is useful to recap the events of the last several weeks.

With a presidential election scheduled for May 2010 and increased import requirements because of typhoon damage that is officially forecast to have reduced this year’s rice crop as much as 1.0 mmt below last year’s output of 16.8 mmt, the Philippines has started its import campaign almost two months earlier than normal, despite comfortable government-held stocks.

Its Nov. 4 tender contained a number of restrictive features:

the minimum offer was 100,000 tons; the maximum that could be supplied from the cheapest eligible origin (Pakistan) was 50,000 tons; shipments via containers were prohibited; expensive supplier credits of 270 days were required, and participating firms had to show proof of having performed on an agricultural contract worth $33.75 million.

The week before the tender, Agriculture Secretary Yap was talking up the price: “We are not very far off from possibly another rerun of 2008.” However, the lowest prices offered in the tender came in much lower than expected. While NFA’s budget provided for awards of $540 CNF, the successful purchases came in at an average price of $475, with Vinafood 2 selling 150,000 tons and the balance sold by Daewoo with an option to ship from either Thailand or Vietnam.

These contracts had barely been signed before NFA issued a Dec. 1 tender for 600,000 tons for February-May arrival.

This tender was officially trumpeted as the largest ever, but it was not. (The May 5, 2008, tender was for 675,000 tons.)

Even though prices in the first tender came in substantially below its publicized purchase price of $543, NFA announced it was again prepared to pay this level.

The terms of this tender are even more restrictive: the minimum bid of 100,000 tons must now be made at a single price and participants must show experience in having successfully executed a rice contract worth $81 million. The maximum tonnage allowable from Pakistan was increased to 100,000 tons. Once again, no container shipments and supplier credits of 270 days are mandatory.

In a move that Manila must surely have expected would excite the market, NFA one week later issued a second tender for 600,000 tons which would be held on Dec. 8 for the same delivery period (and terms). Three days later, a senior NFA official confirmed that a third tender of 600,000 tons had been authorized, while an unnamed NFA official told the press that this tender would be held on Dec. 15 and an additional tender would be held one week later.

The official said that December’s third and fourth tenders would be for a total of 1.0 mmt. Indeed, on Nov. 23 the third tender for 600,000 tons to be held Dec. 15 was issued.

With an import window extending until September, it is both incomprehensible and reckless that the Philippines would attempt to buy 2.2 mmt within a single month.

Further, the tendering process raises several key issues. Why do they publicly disclose the price they are willing to pay in advance? Why do they announce future tenders while earlier tenders are still outstanding, a practice that arguably contributes to higher prices? Why are tender terms so restrictive, to the point where they seem designed to discourage suppliers who can provide rice at competitive prices?

And why did they pay prices so far above the market last year? Will they do so again this year?

While the Dec. 1 tender prompted offers of $598–687 CNF, statements by NFA officials suggest that it does not find the prices unreasonable and will purchase as much rice as its budget of $326 million will cover, including 300,000 tons from Vinafood 2. It is also reported that NFA will likely increase the budgets allocated for the Dec. 8 and 15 tenders, which could accommodate even higher prices.


Due to a combination of disappointing rains during the monsoon season and late floods, India’s main crop has declined significantly this year. However, because of its export ban on non-Basmati rice in 2008 and 2009, the government is holding unprecedented stocks. Still, these stocks could be strained if the government needs to release large quantities to control local prices.

On Oct. 14, India announced it was rescinding its 70 percent duty on imported rice to permit the private trade to import. On Oct. 30, three parastatals each tendered for 10,000 tons and within weeks there were rumors that the country was in negotiations with Thailand to import up to 2 mmt, with another 1 mmt possible after assessing the situation in March or July.

These rumors were subsequently confirmed by the minister of trade. Citing high prices offered on the three tenders, they were cancelled. Both the Indian ministers of agriculture and trade then indicated that no imports would be needed.


On Nov. 16, Prime Minister Dung instructed the ministries of trade and agriculture to monitor production and demand so as to ensure no rice shortage at Tet in February.

This may be a precursor to new export restrictions by Hanoi. While Vietnamese exporters were officially reported to be sitting on an unprecedented 1.6 mmt of stocks, it simply is not known if Vietnam will once again impose export restrictions – especially if Vinafood 2 seeks to maximize sales to both the Philippines and India.

What happens next?

Today’s world rice market has an unnerving similarity to 2008. All three of the elements in the price explosion then are again in play, with the twist that India might add 2–3 mmt to world market demand in 2010 instead of subtracting 3 mmt from market supply in 2008. Vietnam hopefully has learned an important lesson from 2008: withdrawing from the market when prices are high just guarantees they will have to sell later at lower prices. Still, concerns to keep domestic rice prices stable and affordable, especially over the Tet holiday, could prompt Hanoi to restrict exports.

It is hard to understand what the Philippines is doing with their aggressive tendering and officials actively talking about the potential for another rice price flare up. One explanation is that the country just wants to get its imports ordered before they have to pay even higher prices. If that is the case, quiet tenders over an extended period of time with flexible terms and longer delivery dates would be the better approach. The alternative explanation is that the government actually wants to pay higher prices because these contracts carry larger “commissions” that fill political coffers. With such an explanation, NFA’s behavior suddenly makes sense.

How can another rice-price explosion be prevented?

Panicked hoarding by farmers, traders and consumers (and governments) can easily drive up prices to levels double or more what are justified by fundamentals of supply and demand.

In the first instance, calmer heads need to prevail. India can easily get through the next year without importing rice and, in any case, does not need to buy at this time.

Vietnam has more than adequate supplies for domestic consumption. And the Philippines can smooth out its understandably large import needs over the next 10 months.

The 2008 crisis caused domestic food prices to soar in countries where the poor often spend 20 to 50 percent of their income on rice alone. Another rice crisis would be a serious blow to food security in a world where one billion people are already undernourished.

December 5, 2009

Perhaps Microfinance Isn't Such a Big Deal after All (Financial Times)

The Financial Times quotes CGD research fellow David Roodman on Microfinance.

From the article:

"David Roodman, a microfinance expert at the Center for Global Development, sums it up well: “Suppose microfinance is not having much average impact on poverty, but is giving millions of people a modicum of greater control over their lives … is that so bad?” Other serious studies are in the pipeline. If microfinance is to thrive under the microscope, perhaps its practitioners should establish more realistic expectations."

Read the article (subscription required)

December 5, 2009

Dispute over Pneumococcal Vaccine Initiative (Lancet)

The Lancet quotes CGD vice-president and senior fellow Ruth Levine on advance market commitments for vaccines.

From the article:

"An expert group headed by Ruth Levine, a senior fellow at the Center for Global Development—a think-tank based in Washington, DC, USA—had studied the options, and held consultations with vaccine producers to get a sense of their pain threshold. Days prior to what was meant to be the last meeting of the AMC donors (May, 2008) to hammer out the final details of the scheme, Levine's group presented a report to the donors in which they recommended a price of $10 per dose.

Norway, alone among the donors, argued that this was too high and feared that the terms were being set “on industry's premises”. Internal documents show that Norway insisted that the price should not be higher than $7, and managed to convince the other donors to agree.

The Global Alliance for Vaccines and Immunisation (GAVI) says that the initiative will save 7 million lives by 2030. A logical question is what was gained by pushing the price down by 30%? How many more lives are expected to be saved with this AMC compared with the higher price of $10? The difficulty of finding clear answers to these questions indicates one of the fundamental problems of the years-long AMC process: the lack of transparency in the deliberations, which has hampered informed public debate about this huge aid-financed project."

Read the article (subscription required)

December 4, 2009

Will Rice Market Go Up in Flames Again? (The Philippine Star)

The Philippine Star published part 1 of CGD non-resident fellow Peter Timmer and Tom Slayton's op-ed on rice prices.

From the article:

"MANILA, Philippines - The National Food Authority (NFA), the rice buying authority for the Philippines, has just held its first of three December tenders, with announced purchasing efforts for the month to total 1.8 million metric tons (mmt).

Because of the string of tenders proclaimed widely to the press, reports that NFA buying might be 3.0 mmt before it is finished, and reports that India may buy 2-3 mmt, today’s prices are almost $150/ton greater than those paid by Manila less than one month ago.

Assuming that NFA uses its entire budget allocated for the tender, it will pay an average price of over $624 CNF for 522,000 tons of an intended purchase of 600,000 tons.

This compares to an average purchase price of $475 paid on Nov. 3. Allowing $40/ton for freight and financing – and making no provisions for commissions — this would equate to $584 FOB. As of Oct. 9, the week prior to NFA’s first tender announcement, the price of low-grade Vietnamese rice, the quality usually purchased by NFA, was only $340.

Will the world rice market in 2010 go up in flames again, repeating last year’s crisis when world prices more than trebled in four months? An earlier analysis showed that world prices soared to over $1,000 per ton because of three intersecting events: 1) India’s ban of non-Basmati exports as it sought to minimize wheat imports; 2) Vietnam’s export restrictions as Vinafood 2, a state-owned company, attempted to maximize sales to the Philippines without having to compete for supplies; and 3) reckless buying by the Philippines. (To be continued)."

Read the article

December 2, 2009

Arrested Development (America Abroad Media)

America Abroad Media interviewed CGD president Nancy Birdsall and non-resident fellow Carol Lancaster.

Listen to the program

Nancy Birdsall quotes (1:27-2:00 & 49:35-50:00)

Carol Lancaster quotes (27:00-27:40, 31:05-31:30, 32:50-33:08, & 34:28-34:48).