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Don't Blame Microfinance

WSJ: Rising labor costs have a deep impact on China. IHT: Russia needs a new agenda. Foreign Policy: Obama must change his North Korea policy.

Rising labor costs have a deep impact on China

J.C. de Swaan, a lecturer in economics at Princeton University, writes in the Wall Street Journal that rising labor costs are leading to structural changes in China’s economy.

QUOTE: While wage increases are exacerbating inflation, they are a positive development. Beijing should make sure to allow that process to unfold to facilitate the shift toward greater reliance on domestic consumption.

Russia needs a new agenda

Mikhail Gorbachev, leader of the Soviet Union from 1985 until its dissolution in 1991, writes in the International Herald Tribune that Russia needs a new agenda that seeks to achieve a competitive, democratic political system; supports innovation; and holds the government accountable.

QUOTE: More and more people have begun to see the government as a tool in the hands of the few seeking personal gain and domination — a dangerous process in which the authorities lose the respect of the people.

The world’s poor cannot afford microfinance to die

A group of economics professors from American universities write in the Financial Times that an ineffective new law in India is having negative effects on the global microfinance industry. The crisis in India is due to governance problems, not microfinance itself.

QUOTE: Institutions need to be more diligent in their lending – but politicians also need to be wary. In taking aim at the occasional overstep, they may inadvertently destroy microfinance itself.

American cannot remain silent as China acts like a bully

Columnist Richard Cohen writes in the Washington Post that the United States should proceed with caution as China becomes more and more of a bully. But it must also not accept China’s aggressive ways and human rights violations.

QUOTE: China cannot be some Middle Kingdom redux, making its own rules on everything from unilaterally claiming a hunk of the ocean to imprisoning the most unassertive of political protesters.

Indonesia gets new corruption fighters

An editorial in the Wall Street Journal argues that two recent appointments in Indonesia’s government will hopefully bring much-needed energy and leadership to combating corruption in the country. The president will also be needed to change public opinion.

QUOTE: Messrs. Basrief [Arief] and Busyro [Muqoddas] have an opportunity to help reverse what has become a persistent drag on the development of the world's fourth most populous country.

Obama must change his North Korea policy

Joel Wit, a visiting fellow at the US-Korea Institute at Johns Hopkins School of Advanced International Studies, writes in Foreign Policy that the Obama administration needs a new policy to deal with North Korea. The policy of “strategic patience” has failed to bring about peace and stability or an end to the nuclear program.

QUOTE: Unless the United States changes course, the threat to its interests and those of its allies will get much worse in the months ahead. Expect more provocations, escalation, and possibly even war.

Scandal-ridden Berlusconi faces judgment day

Contributor Alessandro Speciale writes in GlobalPost that Italian Prime Minister Silvio Berlusconi has faced scandal after scandal. In order to maintain his leadership, he now must resort to the same tricks he criticized other politicians for using. He survived a confidence vote in the senate Tuesday and now must face the lower house.

QUOTE: So far, Berlusconi has been able to survive, even though that has meant Italy’s government has stalled in the middle of a devastating financial crisis that has threatens to tear apart the eurozone.

The G20 must work towards an open global economy

Michael Spence, professor of economics at the Stern School of Business at New York University, writes in Project Syndicate that the G20 must get serious about promoting global economic stability. It must recognize the “collective interest” in an open global economy.

QUOTE: We need a pragmatic willingness to adapt incentives and outcomes to achieve distributional results that allow the major players, with their domestic political constraints, to keep the system open.

A better way to stimulate the US economy

Columnist Jonah Goldberg writes in the Los Angeles Times that rather than supporting a government stimulus program two years ago, President Obama should have simply given a one-year payroll tax holiday.

QUOTE: Such a stimulus would have been very progressive because payroll taxes are decidedly regressive, hitting the working and middle class harder than they hit the wealthy.

India and China must resolve political issues to support their economies

An editorial in the Times of India argues that the upcoming trip of Chinese Premier Wen Jiabao to India should serve as an opportunity for the two rising nations to foster the kind of political climate necessary to build stronger economic ties.

QUOTE: Above all, India-China ties could take a great leap forward if the border issue could be resolved. Let's hope that Wen's visit will provide a political impetus to such a resolution.