CAMBRIDGE FORECAST GROUP INTRODUCTION

July 22, 2013 on 2:36 pm | In Books, CFG, Globalization, History, Third World, USA, World-System | Comments Off

 CAMBRIDGE FORECAST GROUP

CFG History

CFG was founded in the late 1970’s.

The two co-founders were Lawrence (“Lance”) Feiner of New York City and Richard Melson of Cambridge, Massachusetts.

The basic standpoint of CFG from 1979-2013 is that the world system – the dollars, guns, doctrines and deceptions that govern our world – is groping its way towards a new world economy whose engine will be Third World development and not American/Western consumption.

A Tokyo office was established in 1982.

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See some sample Japanese CFG books shown below:

 

The 1973-2013 structural crisis is basically a kind of world-economy “traffic jam” where the three players, the West, OPEC,
and the non-oil Third World (India, China, Brazil and so on) need to “re-link”
and travel down the highway of Third World development. The
stagflation of the 1970′s was an “historical hint” that the old traffic pattern,
driven by American/Western consumption, was dysfunctional and blocked. This blockage
“caused” the oil shocks.

Politics from 1973-2013 has been an American/G8 set of moves designed to
buy time, and wait for a technical “deus ex machina” to bypass the traffic tie
up.

This is partly why the 1990′s were so feverish: they promised a technological “leapfrog” via computers, nanotechnology,
desktop fusion, genomics, robotics,  and so on. CFG interprets this as a kind of
Western wishful thinking or escapism.

 

These dimensions and this “traffic pattern in the
global political economy” are explained in many CFG books, such as the one shown
below:

Cambridge Forecast Reports:Newsletters & Forecasts

In June 1979, in our first CFG newsletter, Cambridge Forecast Reports, we forecast the industrialization of the Third World – the phenomenon now visible in China, India, Brazil, etc. – as the future driver of the world economy. See below, “Long Term Forecast” for verbatim predictions made in June, 1979.

 

http://WWW.CAMBRIDGEFORECAST.ORG

 

© 1997-2008 Cambridge Forecast Group

 

Last Updated January 2013

 

 

CAMBRIDGE FORECAST GROUP: JULY 2013 UPDATE ON PERSPECTIVE

July 3, 2013 on 1:27 pm | In Books, CFG, Development, Economics, Financial, Globalization, History, Third World, World-System | Comments Off

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CFG Update:

The Limits of Global Reaganomics and the Need for Global Pro-Third World Economic Institutions.

In our 1984 book “World Economy/Big Prediction” we predicted that barring some really revolutionary new technology of physical production (a la “cold fusion”), the future long-term engine of growth for the world economy would have to be modernization of the less developed countries. In making this prediction we used our observations on technology and the Solow economic growth model. The problem is that, despite the impressive growth in some Third World countries, the global institutions to facilitate this growth have not developed.

(For Cambridge Forecast Group book “World Economy/Big Prediction” from 1984 as mentioned above)

See:

http://cambridgeforecast.wordpress.com/2008/02/07/cambridge-forecast-group-book-world-economy/

Basically, the current problems with the world economy, trade tensions, bubbles, cash crises, debt crises, etc. are caused by two global failures, (1) the failure to create a pro-Third World global fiscality that can stimulate Third World economies directly, (2) the failure of global urban and rural land reform in the developing world and the subsequent failure to expand the South’s internal market enough forcing them to rely on exports to the West.

To flesh out this point, let’s look at an updated history of the last 40 years. (the cfg book was written in 1992/1993) In the 1970’s, after the ’73 oil price rise by OPEC the patterns of world growth were as follows: OPEC‘s enormous petrodollar surpluses were deposited in the money-center banks and the loaned out short-term to Third World countries on the theory that sovereign governments wouldn‘t default. This together with the commodity price boom kept Third World markets opened. The developed countries had recovered from the recession of the early 70’s and America’s budget deficit was small compared with what it was later to become. The problem was dollar inflation which had cooled down considerably rose dramatically after the second oil price rise.

US policy now faced a dilemma. If it slammed on the monetary breaks it would make Third World debt unpayable and endanger the money-center banks. If it let the dollar inflation soar into double digit levels it would endanger the world economy. At the IMF meeting in Belgrade in the autumn of 1979, a solution was proposed. OPEC would use its petrodollar surpluses to convert short term Third World debt into long-term (lower payment) debt. This would sop up excess petrodollars and keep inflation down and also would keep Third World markets for Western products open. The hangup was the Saudi insistence that the PLO be given observer status at the IMF and that the US recognize the PLO. This was too politically controversial, so then Sec’y of the Treasury Paul Volcker flew back from Belgrade and slammed on the monetary breaks causing the Third World debt crisis to worsen.

Discussion of Western/OPEC cooperation continued until finally the Israeli invasion of Lebanon put the kibosh on it. The Reagan administration adopted a policy of drastic tax cuts, vastly increased military spending , running a huge budget deficit and trade deficit. In other words, the US became the borrower, consumer and importer of last resort (in the words of David Hale of Kemper Financial Securities) hopefully giving the Third World countries, which undergoing austerity, someplace to export to. By the mid-eighties this policy ran into the roadblock of rising protectionist sentiment in the US.

It was at this point that the “Reagan revolution” came up with the concept that was to dominate global development strategy. In order to explain this concept, it is important to observe that the “Reagan revolution” was not so much a revolution as it was a continuation and intensification of long-standing U.S. policy towards global economic growth. Since 1945, the US had historically run budget and trade deficits in order to act as “an engine of growth” for the rest of the world economy. The Reagan debt-led model of growth simply put this strategy into “full throttle” by an “order of magnitude” increase in the U.S. budget and trade deficits, and, in order to ward off inflation, financed the deficits by debt creation rather than by monetary creation.

The Reagan debt-led model of global growth, however unpalatable it might have seemed from a bookkeeping point of view, was in fact a bold and decisive strategy. For several years, it put the U.S. squarely back in charge of the world economy. and allowed the U.S. to break the international OPEC/West/LDC “gridlock” on global economic strategy. The world’s most important commodity was now, not oil, but the U.S. dollar. Commodity prices plunged. Large parts of the global economy were turned into a “global distress sale” and U.S. growth was financed from the “proceeds”. A significant portion of the Third World’s consumer markets were shut down and replaced by the U.S. consumer market. The world’s financial power and “market” power which had been dispersed between the U.S., Europe, Japan and OPEC was now pulled firmly back into the hands of the U.S. In short, Reagan’s response in 1982 to ten years of Western, OPEC and Third World bickering was: “You’ll do it my way. Even if I’m not quite sure what my way is yet.”

In other words, the U.S. was now able to set the agenda for discussions of global development strategy for the next decade.

The strategy towards North/South development that ultimately emerged from this U.S. dominance was the so-called neoliberal strategy. It’s most important feature was the initiation, in 1986, of a new round of global trade negotiations, the Uruguay Round, of the General Agreement on Trade and Tariffs (GATT). To give some background, the origins of the General Agreement on Tariffs and Trade (and of its stillborn predecessor, the International Trade Organization (ITO)) go back to American-British wartime discussions concerning the shape of the post-war world economy. Despite vigorous efforts by developing countries (in the Havana negotiations of 1947) the draft ITO Charter only “paid lip service to development concerns”. The GATT, a separate temporary agreement negotiated by 23 countries (which became permanent when ITO was never ratified), was even less receptive to the needs of the developing countries. Tariffs on trade in manufactures between developed countries were reduced substantially under the auspices of GATT, but products in which the developing world had a comparative advantage (such as textiles or agricultural products) received much less favorable treatment. In addition, when the developing countries diversified into industrial exports, they faced a proliferation of new discriminatory non-tariff trade restrictions directed specifically at them (such as the Multifibre Agreement which discriminated against Third World textile exports).

The basic thrust of the Uruguay Round was as follows: It had been estimated that the above restrictions on LDC exports to the West cost the Third World 500 billion dollars each year. The West would agree to abolish those restrictions, thus providing 500 billion dollars worth of economic benefit to the Third World. In return, the Third World would agree to:

- open up their service economies to imports;

- give wide autonomy to outside investment;

- agree to strengthen their patent protection of Western technologies, (thus, according to some critics, “locking in” Western advantage in these technologies).

According to the neoliberal strategy, such an agreement, and even the promise of such an agreement, would bring about a massive North/South capital transfer. This capital would be lured by the promise of access to Western markets, by cheap labor, and by a favorable climate for Western investment brought about by deregulation in the LDC’s. This flood of capital investment would, in turn, “jump start” the Third World economies, lead to a rising standard of living and open up markets for Western exports. The Third World would follow the path of the dynamic Asian LDC’s and would simultaneously break the cycle of slow growth, trade imbalances and fiscal deficits in the West. In the meantime, the West’s increased access to LDC service sector and high-tech markets, brought about by the GATT agreement, would reduce protectionist sentiment in the West.

“Cheap labor is drawing investment and production away from the industrial countries. Plentiful goods and materials are crowding the world markets, and annual exports from developing to industrialized nations have risen by $100 billion since 1989. A new economic order is being born. Eventually, the entire world should share the bounty of this new order. As nations develop, their need for imported goods rises, and worldwide demand grows. Multinationals expect the developing countries to become vast new markets by the end of the decade (for Western high tech, capital equipment and services, a la GATT) as productivity and incomes climb worldwide. History is on the side of the optimists.” (Editorial from Business Week, 8/2/93.)

To look at another aspect of this, the economist Robert Lucas maintains that the reason why underdeveloped countries are underdeveloped is that they have a small amount of “human capital” (individual and social labor productivity). And the economist Helpman says that a developing country can increase its human capital by exporting to the markets of the developed countries. Going up against first world competition increases the developing countries “learning by doing” (increases human capital) However, Lucas counters by saying that the Third World as a whole cannot do this, because “there is a zero sum aspect, with inevitable mercantilist overtones, to productivity growth fueled by ‘learning by doing’’. What this means is that the vast majority of the human race cannot grow economically indefinitely simply by exporting to a small minority of the human race. In other words, (following Samir Amin) the internal market of the developing countries has to be expanded directly by urban and rural land reform and by a pro-Third World global fiscality that funds sustainable development projects in the Third World.

(Although Lucas underestimated the growth potential of the Third World and the willingness of the developed countries to absorb imports from the developing countries).

To continue with our history, the nativist backlash to the proposed GATT agreement was the Perot candidacy. When Perot turned out to be a nutcase, it was Clinton that benefited from this sentiment.

And it was Clinton that passed the GATT legislation and the smaller but similar NAFTA (North American Free Trade Agreement). The problems began immediately. After the NAFTA agreement Mexico, under pressure from the Clinton administration, kept the Peso artificially high so that the US could have a trade surplus with Mexico in order to generate support for the GATT agreement. After the GATT agreement passed in 1994, Mexican debt built up attempting to keep its currency up but became unpayable and Mexico had to be bailed out by a special US fund, the Exchange Stabilization Fund.

After the passage of GATT, Clinton, to avoid wage nativism (fear of trade with low wage countries), talked up the Asian economies, saying that they were the “wave of the future”. In addition, the Southeast Asian countries pegged their currencies to the dollar which was weakening against the yen. Money surged into the Southeast Asian countries. As one investor put it “investing in Asia became a religion”

Meanwhile the Japanese yen was rising dangerously against the dollar endangering Japan’s exports to the US. In 1995, Japan took action to lift the dollar up (by buying US bonds) As the dollar rose, the Southeast Asian countries became less and less competitive and their economies collapsed in a wave of currency devaluations and their debt became unpayable. The IMF raised hundreds of billions of dollars to bail them out. Money flowed out of the Southeast Asian economies into the US, causing the internet bubble, and causing (a temporary) surge of US growth which (together with a tax rise) wiped out the deficit.

Under the Bush junior and Obama administrations, the US ran huge budget and trade deficits and printed an enormous amount of dollars. This kept US interest rates low and money flowed into the stock markets of the developing countries which had a higher rate of return. As a result, in the early 21st century, the developing countries were growing rapidly even as the developed countries stagnated. (And 500 million people were lifted out of poverty in the developing world).

However, in the spring of 2013, Fed Chief Bernanke said that the US was reconsidering its monetary policy and would stop its bond buying program (for fear of another real estate bubble like the one under Bush junior). The surge of money into Third World markets stopped on a dime. In fact, in June of 2013, the amount of money going into Third World markets dropped by over 90% from the month earlier. It remains to be seen whether the concerns about the health of the developing countries’ economies will cause the Fed to back off.

Lawrence Feiner and Richard Melson July 2013 Cambridge Forecast Group

CFG Comment on this Update, July 12, 2013:

“It looks like the Fed has backed off of its proposed monetary tightening, as we predicted (sort of) in the Blog update. In other words it has to overstimulate the American economy (and real estate market) in order to safeguard Third World solvency. By overstimulating U.S. asset prices–stocks and houses–the American consumer starts to spend as his 401k looks better and America absorbs more imports worldwide….going back to the American consumer as locomotive, absent a new locomotive. Also lower interest rates sends money to emerging markets.

See: G20 MEETING MOSCOW JULY 19 2013

More Background:

CAMBRIDGE FORECAST GROUP INTRO

http://cambridgeforecast.wordpress.com/2011/11/29/the-reagan-revolution-and-the-developing-countries-new-cambridge-forecast-group-book/

the reagan revolution and the developing countries (1980-1990) a seminal decade for predicting the world economic future

Book Review:

The Reagan Revolution and the Developing Countries (1980-1990):

A Seminal Decade for Predicting the World Economic Future

by Lawrence Feiner and Richard Melson:

“Both former principals of the Cambridge Forecast Group, the authors have written a sharp challenge to prevailing economic thought, arguing that despite the chaos that seems to have enveloped the world economy since the end of the Cold War, the direction and development of world economic history is, in fact, quite predictable. Professors of economics and professional economists will find this book both appealing and important.” Read review.

http://publishingperspectives.com/2012/07/julys-top-self-publishing-reviews-from-blueink/

by lawrence feiner, richard melson

CAMBRIDGE FORECAST GROUP

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ISLAMIC FINANCE AND THE GLOBAL FUTURE: BIS JUNE 1-8

June 8, 2012 on 2:59 pm | In Economics, Financial, Globalization, History, Islam, Third World, World-System | Comments Off

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Central bankers’ speeches from 6 to 8 June now available‏

Press, Service (press@bis.org)

Fri 6/08/12

Central bankers’ speeches for 8 June 2012
now available on the BIS website

Fahad Bin Abdullah Al-Mubarak:

Combatting money laundering and terrorism financing

Miguel Fernández Ordóñez: Developments in Spain

Masaaki Shirakawa: Japan’s economy and monetary policy

Ben S Bernanke: Economic outlook and policy

Glenn Stevens: The glass half full

Central bankers’ speeches for 7 June 2012
now available on the BIS website

Mario Draghi: ECB press conference – introductory statement

Ravi Menon: The next phase in Islamic finance

Janet L Yellen: Perspectives on monetary policy

Ardian Fullani: Recent economic and monetary developments in Albania

Daniel K Tarullo: Dodd-Frank Act implementation

Central bankers’ speeches for 6 June 2012
now available on the BIS website

K C Chakrabarty: Human Resource management in banks – need for a new perspective

K C Chakrabarty: Exploring the challenge of financial education across emerging economies

Jörg Asmussen: Lessons from Latvia and the Baltics

Richard W Fisher: The limits of the powers of central banks

All speeches from 1997 onwards are available from the BIS website at:

http://www.bis.org/list/cbspeeches/index.htm.

Communications

Bank for International Settlements

E-mail: press@bis.org

Website: www.bis.org

Phone: +41 61 280 8188

Bank for International Settlements (BIS)

Central bankers’ speeches from 6 to 8 June now available‏

Press, Service (press@bis.org)

Fri 6/08/12

Central bankers’ speeches from 6 to 8 June now available‏

Press, Service (press@bis.org)

Fri 6/01/12

Central bankers’ speeches for 1 June 2012
now available on the BIS website

Lawrence Williams: An evolving financial services landscape in the Caribbean

Ignazio Visco: Overview of economic and financial developments in Italy

All speeches from 1997 onwards are available from the BIS website at http://www.bis.org/list/cbspeeches/index.htm.

Communications

Bank for International Settlements

E-mail: press@bis.org

Website: www.bis.org

Phone: +41 61 280 8188

Bank for International Settlements (BIS)

Central bankers’ speeches from 6 to 8 June now available‏

Press, Service (press@bis.org)

Fri 6/08/12
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L. JHA LECTURES: INDIA

May 17, 2012 on 11:02 pm | In Asia, Development, Economics, Financial, Globalization, History, Research, Third World, USA, World-System | Comments Off

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Lecture No.

Delivered by

Subject

Date

1.

Mr. Robin
Leigh-Pemberton
Economic Liberalism, Central Banking and the Developing World October 16, 1990

2.

Mr. Jacob A. Frenkel The Strategy of Economic Adjustment November 30, 1992

3.

Mr. Andrew Crockett Capital Market Innovations: Challenges and Opportunities February 20, 1995

4.

Mr. William J. McDonough Strengthening the Financial Marketplace December 5, 1996

5.

Mr. Rubens Ricupero Globalisation, Hot Money and the Seach for Profitable Investment: Is the East Asian Crisis a Global Crisis? July 17, 1998

6.

Dr. Donald T. Brash Inflation Targeting: Is New Zealand’s Experience Relevant to Developing Countries? June 17, 1999

7.

Prof. Willem H. Buiter Targets, Instruments and Institutional Arrangements for an Effective Monetary Authority October 16, 2000

8.

Prof. Martin Feldstein, Budget Deficits and National Debt January 12, 2004.

9.

Prof. Lawrence H. Summers Reflections on Global Account Imbalances and Emerging Markets Reserve Accumulation March 24, 2006

10.

Mr.Jean-Claude Trichet The growing importance of emerging economies in the globalised world and its implications for the international financial architecture November 26, 2007

11.

Prof. John Brian Taylor Lessons from the Financial Crisis for Monetary Policy in Emerging Markets February 24, 2010

12.

Prof. Maurice Obstfeld Gross Financial Flows, Global Imbalances, and Crises December 13, 2011


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CFG NEW YOUTUBE POST: PALESTINIAN UPRISING IN CFG PERSPECTIVE

May 12, 2012 on 11:48 pm | In Arabs, CFG, Globalization, History, Islam, Israel, Third World, World-System, Zionism | Comments Off

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The second Palestinian uprising and the

Israeli invasion of Lebanon: a cfg perspective‏

Cambridge Forecast Group (CFG)

Go to:

http://www.youtube.com/watch?v=UMqMr-ilZ2M

Lawrence Feiner 05-12-12

Published on May 12, 2012 by zoiladejesus27

Cambridge Forecast Group (CFG)

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CFG ON YOUTUBE

April 24, 2012 on 3:03 am | In CFG, Development, Economics, Financial, Globalization, History, Islam, Israel, Judaica, Research, Third World, World-System, Zionism | Comments Off

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Please go to Youtube and type in “lawrence feiner” to view four presentations by Lawrence Feiner of Cambridge Forecast Group on the global future and Muslims and Jews in the world-system:

- world future part 1 12-27-11

- world future part 2 03-06-12

- Einstein and the Stern gang 04-24-12

- the fall of Communism and race relations no date

YouTube – Broadcast Yourself.

www.youtube.com/
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CAMBRIDGE FORECAST GROUP: HOW TO ORIENT YOURSELF VIA THE CFG BOOK “THE REAGAN REVOLUTION AND THE DEVELOPING COUNTRIES”

March 29, 2012 on 3:16 pm | In Books, CFG, Development, Economics, Financial, Globalization, History, Research, Science & Technology, Third World, USA, World-System | Comments Off

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Readers want to know:

1.         what’s really happening?

2.         where am I in all this?

 Read:

The Reagan Revolution and the Developing Countries

Cambridge Forecast Group Book

This is a book about the Reagan revolution and the developing countries.  It shows why the years (1980-1990) were critical in determining the global economic future. The first chapter is how to think about the future. The second chapter is about growth economic and human capital. The third chapter is about development economic the forth chapter is about the world economy from Charlemagne to the present. The fifth chapter is about the Reagan revolution.

Our book is unique because no other book in our opinion has accurately described just how important the developing world was in Reagan administration policy in our 1979 Japanese book ”world economy/big prediction” the book upon which this book was based, we predicted that in the early 21th century the developing countries would be growing rapidly even as the developed countries stagnated.

About the Authors:

Lawrence Feiner is currently retired. he has a B.S. in math from The Massachusetts Institute of Technology and a Phd in math from M.I.T.. He has previously co-authored numerous Japanese books that were favorably reviewed. He was a principal of the Cambridge Forecast Group specializing in economic forecasting.

Richard Melson is currently retired after working for an investment advisory firm. He got a masters degree in Asian regional economics from Harvard. He has previously co-authored numerous Japanese books that were favorably reviewed. He was a principal of the Cambridge Forecast Group specializing in economic forecasting.

Again:

This is a book about the Reagan revolution and the developing countries. It shows why the years (1980-1990) were critical in determining the global economic future. The first chapter is how to think about the future. The second chapter is about growth economic and human capital. The third chapter is about development economic the fourth chapter is about the world economy from Charlemagne to the present. The fifth chapter is about the Reagan revolution.

Our book is unique because no other book in our opinion has accurately described just how important the developing world was in Reagan administration policy in our 1979 Japanese book ”world economy/big prediction” the book upon which this book was based, we predicted that in the early 21th century the developing countries would be growing rapidly even as the developed countries stagnated.

Click on:

“THE REAGAN REVOLUTION AND THE DEVELOPING COUNTRIES”: NEW CAMBRIDGE FORECAST GROUP BOOK

November 29, 2011 at 7:24 pm | Posted in BooksDevelopmentEconomicsFinancialGlobalizationHistoryResearchThird WorldUSAWorld-system 

http://cambridgeforecast.wordpress.com/2011/11/

CAMBRIDGE FORECAST GROUP: “WORLD ECONOMY BIG PREDICTION” BOOK

February 7, 2008 at 4:24 am | Posted in BooksFinancialGlobalizationHistoryResearchScience & Technology,Third World

http://cambridgeforecast.wordpress.com/2008/02/07/cambridge-forecast-group-book-world-economy/

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BANK FOR INTERNATIONAL SETTLEMENTS MARCH 12-16 2012: ISLAMIC FINANCE

March 16, 2012 on 2:52 pm | In Development, Economics, Financial, Globalization, History, Islam, Research, Third World, USA | Comments Off

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Central bankers’ speeches for the week 12-16 March now available‏

Press, Service (press@bis.org)

Fri 3/16/12

Central bankers’ speeches for 16 March 2012
now available on the BIS website

Muhammad bin Ibrahim: Pilot platform for cross-border investment and settlement of debt securities

Peter Pang: Pilot platform for cross-border investment and settlement of debt securities

Per Jansson: Some aspects of the economic situation

José Manuel González-Páramo: What has Europe learnt from the crisis?

Yaseen Anwar: Mobile banking in Pakistan

Stefan Ingves: Financial stability is important for us all

Ravi Menon: Forces driving the global economic outlook

Central bankers’ speeches for 15 March 2012
now available on the BIS website

Ben S Bernanke: Community banking

Patrick Honohan: Household indebtedness – context, consequence & correction

Prasarn Trairatvorakul: Thailand – assessment of recent economic performance and challenges for the period ahead

Anand Sinha: Striking a balance – credit penetration and NPA management – role of information sharing

Mario Draghi: Competitiveness of the euro area and within the euro area

Ardian Fullani: Recent economic and monetary developments in Albania

Andrew G Haldane: Towards a common financial language

Ardian Fullani: Albania’s Financial Sector Development Program

Central bankers’ speeches for 14 March 2012
now available on the BIS website

Zeti Akhtar Aziz: Islamic finance – new frontiers in financing the economy

Central bankers’ speeches for 13 March 2012
now available on the BIS website

Mario Draghi: ECB press conference – introductory statement

Tiff Macklem: Promoting growth, mitigating cycles and inequality – the role of price and financial stability

Rundheersing Bheenick: Working in the interest of Mauritius – Central Banker of the Year 2012, Africa

Central bankers’ speeches for 12 March 2012
now available on the BIS website

Benoît Coeuré: The reform of financial regulation – priorities from a European Central Bank perspective

Richard W Fisher: “Not to be used externally, but also harmful if swallowed” – projecting the future of the economy and lessons learned from Texas and Mexico

All speeches from 1997 onwards are available from the BIS website at:

http://www.bis.org/list/cbspeeches/index.htm.

Communications

Bank for International Settlements

E-mail: press@bis.org

Website: www.bis.org

Phone: +41 61 280 8188

Bank for International Settlements (BIS)

Central bankers’ speeches for the week 12-16 March now available‏

http://www.bis.org/list/cbspeeches/index.htm

Press, Service (press@bis.org)

Fri 3/16/12
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CARBON REDUCTION: INDONESIA

September 29, 2011 on 2:29 pm | In Development, Earth, Ecology, Economics, Financial, Globalization, History, Research, Third World | Comments Off

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INDONESIA’S FINANCES, WATER SUPPLIES AND APES SET

TO BENEFIT FROM UN GREEN PLAN

UNNews UNNews@un.org

New York, Sep 28 2011

INDONESIA’S FINANCES, WATER SUPPLIES AND APES SET TO BENEFIT FROM UN GREEN PLAN

Wed, 28 Sep 2011

Conserving key forests in Indonesia could generate billions of dollars in revenue, up to three times more than felling them for palm oil plantations, under a United Nations carbon reduction plan that would also secure water supplies and protect critically endangered orangutan apes, according to a “http://www.orangutanreport.un-grasp.org/ report issued today.

Under the UN Framework Convention on Climate Change (UNFCCC), governments are negotiating a mechanism to provide payments for reduced emissions from deforestation and forest degradation and other activities (REDD+), creating incentives for developing countries to cut global warming gasses from forested lands by putting a financial value for the carbon stored in forests.

Overall forest degradation through agricultural expansion, conversion to pastureland, infrastructure development, destructive logging and fires currently account for nearly 18 per cent of worldwide greenhouse gas emissions, more than the entire global transport sector and second only to the energy sector.

Many coastal peat-rich forests in Sumatra, where dense populations of the last 6,600 Sumatran orangutans survive, may be worth up to $22,000 a hectare at current carbon prices, compared with less than $7,400 a hectare when cleared for palm oil plantations, according to the report by the UN Environment Programme (UNEP) under its Great Apes Survival Partnership (GRASP), which Indonesia requested.

“Prioritizing investments in sustainable forestry including REDD+ projects can, as this report demonstrates, deliver multiple Green Economy benefits and not just in respect to climate, orangutan conservation and employment in natural resource management,” UNEP Executive Director Achim Steiner “http://www.unep.org/newscentre/Default.aspx?DocumentID=2653&ArticleID=8877&l=en said.

He noted that here had been a reported 50 per cent decline in water discharges in as many as 80 per cent of rivers due to deforestation in the Aceh and North Sumatra regions, with serious implications for agriculture and food security including rice production and human health.

The report recommends designating new forested areas for REDD+, taking into account the multiple benefits for carbon storage, orangutan habitat conservation and the protection of ecosystem services, while expanding palm oil plantations on land with low current use value and avoiding agricultural and timber concessions where conservation value is high.

The forested peatlands of Sumatra are among the most efficient carbon stores of any terrestrial ecosystem. In the last two decades, 380,000 hectares of Sumatran forests were lost to illegal logging each year, with an annual loss in carbon value estimated at more than $1 billion.

Nearly half of Sumatra’s forests disappeared between 1985 and 2007 and in the last decade, close to 80 per cent of the deforestation in the peatlands was driven by the expansion of oil palm plantations, while over 20 per cent was due to other uses, such as candlenut or coffee production.

Fewer than 6,600 Sumatran orangutans exist in the wild today, down from an estimated 85,000 in 1900, a 92 per cent drop. If this rate were to continue, the Sumatran orangutan could become the first of the great apes living today to go extinct in the wild, with local populations in parts of Sumatra disappearing as early as 2015.

Sep 28 2011

UN News Centre at http://www.un.org/news

Facebook (http://www.facebook.com/UN.News.Centre)

and

Twitter (http://twitter.com/UN_News_Centre)

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