Archive for the ‘Globalization & International Trade’ Category


Wal-Mart de Mexico was an aggressive and creative corrupter, offering large payoffs to get what the law otherwise prohibited, an examination by The New York Times found.


Wal-Mart longed to build in Elda Pineda’s alfalfa field. It was an ideal location, just off this town’s bustling main entrance and barely a mile from its ancient pyramids, which draw tourists from around the world. With its usual precision, Wal-Mart calculated it would attract 250 customers an hour if only it could put a store in Mrs. Pineda’s field.

One major obstacle stood in Wal-Mart’s way.

After years of study, the town’s elected leaders had just approved a new zoning map. The leaders wanted to limit growth near the pyramids, and they considered the town’s main entrance too congested already. As a result, the 2003 zoning map prohibited commercial development on Mrs. Pineda’s field, seemingly dooming Wal-Mart’s hopes.

But 30 miles away in Mexico City, at the headquarters of Wal-Mart de Mexico, executives were not about to be thwarted by an unfavorable zoning decision. Instead, records and interviews show, they decided to undo the damage with one well-placed $52,000 bribe.

The plan was simple. The zoning map would not become law until it was published in a government newspaper. So Wal-Mart de Mexico arranged to bribe an official to change the map before it was sent to the newspaper, records and interviews show. Sure enough, when the map was published, the zoning for Mrs. Pineda’s field was redrawn to allow Wal-Mart’s store.

Problem solved.

Wal-Mart de Mexico broke ground months later, provoking fierce opposition. Protesters decried the very idea of a Wal-Mart so close to a cultural treasure. They contended the town’s traditional public markets would be decimated, its traffic mess made worse. Months of hunger strikes and sit-ins consumed Mexico’s news media. Yet for all the scrutiny, the story of the altered map remained a secret. The store opened for Christmas 2004, affirming Wal-Mart’s emerging dominance in Mexico. Read more…

As published in on December 17, 2012 (a version of this article appeared in print on December 18, 2012, on page A1 of the New York edition with the headline: The Bribery Aisle: How Wal-Mart Used Payoffs To Get Its Way in Mexico).


President faces uninvented threats from around the world

By Edward Luce

Asked about the fiscal cliff’s impact on foreign perceptions of the US, David Rothkopf, a former Clinton official, quipped: “If Lindsay Lohan were arrested again tomorrow, how much would it change your opinion of her?” The cliff is a domestic crisis of choice rather than of necessity so it is still possible to make light of it. The same cannot be said of Barack Obama’s overseas inbox.

At a moment of acute Washington navel gazing, Mr Obama faces an ominous range of uninvented threats from around the world. Whether 2013 turns out to be the year of Iran, Syria, Egypt, North Korea or Afghanistan, or a mix of the above, they march to their own time. One or two, notably Iran, could be time bombs. Alas, the fracas over Susan Rice’s withdrawal from consideration as secretary of state last week suggests Mr Obama will be distracted for some time by Washington’s clock – the one that is stuck at 11.59pm.

Mr Obama is this week likely to announce John Kerry as his choice to replace Hillary Clinton. But even the smoothest nomination will not go through the Senate until January. Foreign diplomats chafing at the Do Not Disturb sign hanging outside the White House for much of this year find it is still there six weeks after the election. Even at the price of jettisoning his most trusted foreign policy adviser, Mr Obama is trying to conserve all his leverage for the cliff and beyond. Most importantly, it is swallowing his time.

On Iran, in particular, there is little to waste. Among Washington’s foreign policy luminaries, it is hard to find one who claims to know the Obama administration’s strategy. Some speculate that the White House may have already established a back channel dialogue with Tehran led by someone like Thomas Pickering, the veteran state department envoy. If so, it would be reassuring. But this is a hope rather than an estimate. Others worry that Mr Obama lacks a real strategy to communicate. Read more…

As published in on December 16, 2012.


For Better Planning, Watch Global Demographic Trends

By Joseph Chamie

Figure 1. Uneven growth: Near 95 percent of the world’s annual demographic growth takes place in less developed regions; yet more than half the world’s GDP is center in the more developed economies. Source: United Nations and World Bank

While governments and institutions try to grapple with economic uncertainty and volatility an important factor of relative certainty is often overlooked: demography. One may not know how the markets will behave, but demographic trends can provide instructive and relative certainty for the near term to deal with debt, taxes, unemployment and entitlements, to name a few. Dismissal of major demographic trends, seven of which described below, will in all likelihood result in ill-conceived policies, unsustainable programs and squandered resources.

First, at an estimated 7 billion, the world’s population is growing at 1.1 percent annually, or 78 million people, half the peak level of 2.1 percent in the late 1960s. Although the world’s demographic growth rate is continuing to slow due to declining birthrates, the 8 billion world population mark will likely be reached by 2025. This growth will increase the world’s working age population, 15 to 64 years, by 610 million and those aged 65 years and older by 290 million, increases of 13 and 52 percent, respectively.

Second, nearly all of the world’s annual demographic growth – close to 95 percent – is occurring in less developed regions. Top seven contributing nations are India, 22 percent; China, 9 percent; Nigeria, 5 percent; Pakistan, 4 percent; Indonesia, 3 percent; Brazil, 2 percent; and Ethiopia, 2 percent (see Figure 1). Due to its much higher growth, the juggernaut population of India – currently larger than all the developed regions combined – is expected to overtake China in a decade, when the Indian population is projected to reach 1.4 billion. Among more developed regions, the nation contributing most to world population growth is the United States at 3 percent, and the growth of the next six nations, including Spain, Italy, Australia, the United Kingdom, France and Canada, ranges from 0.7 to 0.5 percent.

Though nearly all of the world’s demographic growth is occurring in less developed regions, 54 percent of the world’s GDP is carried out by the 10 largest national economies of the more developed countries (Figure 1). Collectively, these more developed countries – led by the United States, Japan and Germany – represent 14 percent of world population, expected to decline to 11 percent by midcentury. Read more…

Joseph Chamie, former director of the United Nations Population Division, recently stepped down as research director at the Center for Migration Studies.

As published by Yale Global on December 12, 2012.


Barack Obama’s foreign-policy goal in his second term: to avoid costly entanglements

By cynical tradition “abroad” is where American presidents go to seek a legacy, after their domestic agendas have stalled. This is especially true of second-term presidents. As they lose momentum at home, the temptation is to head overseas in search of crises that only American clout can resolve.

At the outset of his second term, Barack Obama seems to be planning the opposite approach. Mr Obama and his team believe that his outstanding task is to secure a domestic legacy. Their fear is that foreign entanglements may threaten that goal. It may help that he secured something of a global legacy on the day he was elected four years ago amid worldwide adulation, peaking with a Nobel peace prize awarded after less than a year in office, essentially for not being George W. Bush.

On the 2012 campaign trail, Mr Obama earned some of his warmest applause when he vowed to bring troops back from Afghanistan, ending more than a decade of war-fighting that has cost thousands of American lives and more than a trillion dollars. Time for nation-building “right here at home”, he constantly declared, to cheers. In a newspaper essay on November 23rd Mr Obama’s former White House chief of staff, Rahm Emanuel, rammed the point home. Democrats need to make America globally competitive, wrote Mr Emanuel, now mayor of Chicago. Whether it means fixing failing schools, potholed roads, snail-like internet networks or a broken immigration system, the second-term mission must be to “come home and rebuild America”.

Yet the world keeps calling. From Gaza to Syria, Jordan, Egypt, Iran, the disputed waters around China or even the euro zone, foreign crises threaten to sidetrack Mr Obama. Read more…

As published in on December 1, 2012 (from the Print Edition).


By Paola Subacchi

Throughout the just concluded 18th Congress of the Chinese Communist Party ubiquitous television screens in trains and metro stations broadcast a live feed of the Chinese assembly. Beijing’s busy people, however, seemed not to pay close attention: for them, it was business as usual.

The Chinese public’s indifference to their country’s ceremonial transition of power is hardly surprising. All critical decisions were taken well ahead of the Congress, behind closed doors, with very little input from outsiders. This apparently seamless transition, however, is widely expected to usher in a complex and potentially difficult decade for China – and for the rest of the world.

China is at a turning point. With more than 100 million people still below the official poverty line and per capita income currently just over $6,000 in nominal terms, robust economic growth must be maintained. Outgoing President Hu Jintao indicated that China’s total GDP and per capita income should double by 2020, which will require 7.5% average annual growth. Is this feasible?

Recent improvements in data for industrial production, fixed investment, and retail sales suggest that the Chinese economy, which had slowed in recent quarters, may already be on the mend. But the authorities remain cautious, given that China’s economic outlook depends heavily on external conditions, which is the source of most current uncertainty. However, as things stand, most independent economists expect 7-7.5% annual GDP in 2013-2017, while the International Monetary Fund forecasts a more optimistic 8.2-8.5% rate during this period. Read more…

Paola Subacchi is Research Director of International Economics, Chatham House, London.

As published by Project Syndicate on November 16, 2012.

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