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Egyptian president Morsi's address at the UN General Assembly as "the first Egyptian civilian president elected democratically and freely." On the Egypt-Israel treaty he said: "we are committed to what we have signed on." He defended the Syrian people, who he said were trapped in "the tragedy of our era." For Syria, Morsi has formed a contact group of Iran, Egypt, Turkey and Saudi Arabia to defuse tensions in the region. Egypt backs the initiative of the Arab League and the UN led by an experienced diplomat Lakhdar Brahimi, who recently visited Syria.

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The problems Brazil faces with a sea of liquidity from developed countries with low interest rates going to emerging market countries with higher interest rates. Brazil is taking steps including a recent cut in interest rates to stem the flow. But interest rates at 12% are still too high not to attract business people in the carrying trade who borrow at low rates in the U.S. and Europe and invest the money in Brazil. The foreign direct investment has also increased. The result is an artificially overvalued currency- by as much as 36% since Jan 1, 2009 according to analysts- which hurts exporters and job creation in Brazil, as it becomes cheaper to import products than manufacture at home. Workers from VW recently protested in Sao Paulo as imports of cars are up significantly and there is a fear of job reduction at VW plants in Brazil. Brazil's automakers association estimate is for car imports to make up 25% of all cars sold in Brazil in 2011. This compares with 5% of cars sold being imported in 2005. It also shows up in production statistics. Brazilian industrial production declined by 1.6% in June 2011 from May. The cost of inputs are increasing rapidly for labor, raw materials, transportation, making Brazil a costly place to do business. The cost of living is now higher in Sao Paulo than in New York city. Cynthia Benedetto, the CFO of Embraer, a large Brazilian aircraft maker, says she always thought since she was a little girl that Brazil was the place of the future. But its deceptive now that the future is here, because this euphoria of progress could be shortlived. Embraer is investing in technology to reduce labor costs and is opening factories overseas. Bombardier, one of Embraer's competitors from Canada recently announced plans to build a manufacturing plant in Mexico. Brazilian president Rousseff is aware of this, and told Latin American leaders in Lima, Peru: "we have to defend ourselves against this immense, fantastic, extraordinary sea of liquidity that finds its way to our economies in search of returns that it can't find in its own." At the same time Rousseff has election promises to fulfill that require larger spending and for which the capital inflows are convenient but could prove erratic- for social welfare projects, and for infrastructure spending in advance of the Olympics. Turkey is seeing a similiar situation with booming consumer credit sustained by capital inflows even as its manufacturing competitiveness has remained weak. ...

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With inflation running at 6.7% in Russia, the central bank has decided not to increase interest rates following the U.S. Fed's bond purchase tapering decision in Jan 2014. The ruble declined by 6% in Jan 2014 and 15% for the last year. With the economy slowing the central bank finds it difficult to raise interest rates, and with inflation the bank has less flexibility to lower rates and increase credit availability. The ruble's lower value is a result of a shrinking current account surplus, with the added effect of capital flight from markets seen as riskier by investors. Currency collapse is a sensitive issue for many Russians after the 1997 crisis and collapse of the ruble. Central bank chief Ms. Nabiullina was on television explaining the decline to ordinary Russians, saying- " It's not that the ruble is weakening but the dollar and the euro are rising in price." Economists say the ruble's weakening won't add as much to inflation as slowing demand will make it harder for retail chains to raise prices....

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The Economist points out the shortcomings in Indonesia's effort to attract foreign investment and increase growth under the Widodo administration.

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The Brazilian Real drops to 2.9836 to the U.S. dollar in March 2015. The year to date March 2015 decline for the Real is 10.9%. Increase in interest rates will depress growth even further.

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Hernando De Soto, a prominent economist, heads the Institute for Liberty and Democracy. He has an intimate knowledge of the workings of the Egyptian economy, and describes the socio-economic marginalization of large parts of Egyptian society as Economic Apartheid. Simply put Egypt has fallen behind the times, way behind the economic progress in large developing countries.The Institute was hired by the Egyptian government in 1997, with the financial support of the US Agency for International Development, to look into what reforms were needed. It presented its 1000 page report in 2004- after years of work involving 120 Egyptian and Peruvian technicians, participation of 300 local leaders and interviews with thousands of ordinary people- to the Egyptian cabinet. The then Finance Minister Hassanein supported it and the cabinet approved it. What followed was a cabinet shakeup, and blocking of any reforms by hidden interests wanting to protect the status quo. De Soto's objective was to find out how many people were marginalized in Egypt, and how much of the economy operated outside the legal system- small business that did not have the protection of property rights or access to normal business tools and credit, that makes businesses grow. He found that 9.6 million people were employed in this sector operating "extralegally" with no protections. This being the largest sector of employment in Egypt. His action plan was intended to remove the legal impediments to these people and businesses urban and rural, so that they could grow. He says the value of these businesses outside legal protections is $248 billion or 30 times larger than the total value on the Cairo stock exchange, and 55 times greater than all the foreign direct investment in Egypt since 1800 including Suez Canal and Aswan Dam. De Soto says that because of burdensome, discriminatory and bad laws it takes 500 days to open a small bakery, getting a legal title on a vacant piece of land would take 10 years of red tape. This barrier of bad laws, poorly trained bureaucrats, inertia of the status quo, prevents people from legalizing their property and business. As a result whereas one of these types of small businesses is now India's largest company called Reliance Industries, and another Infosys is the second largest software company, most Egyptian enterprises are stuck being small and relatively poor, and do not generate jobs for the demographic surge of young people. De Soto's point is that Egypt will need good leadership to pull off this task of legal reform, and democracy alone will not be enough. Empowering the large majority of the Egyptian people operating outside the legal protections will mean giving property rights for $400 billion of assets, De Soto says. And this would unlock an amount of capital hundreds of times larger than what foreign direct investment and aid has brought to the country....

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The U.S. Federal Reserve announced on Dec. 13, 2016, that it would increase its benchmark short term interest rate by 0.25 percentage point, to between 0.50% and 0.75%. The increase will also be reflected in business and household borrowing costs. The Fed also announced its intention to make 0.75% percentage point increase in 2017, possibly in 3 quarter percentage point moves. The Fed's forecast is for the fed-funds rate to reach 2.1% at the end of 2018, and 2.9% at the end of 2019. The Fed's policy is based on a sense of strong labor market with unemployment falling, and says it is based on discussion at a 2 day meeting, and "in view of realized and expected labor-market conditions and inflation." This reflects a view that there is now not that much slack in the labor market, that further improvements could trigger higher inflation. Fed forecasts for inflation are for it to increase from 1.5% in 2016 to 1.9% in 2017 and to the target of 2% in 2018. The unemployment rate of 4.6% in 2016 is forecast to go to 4.5% in 2017 and remain at that level till 2019. Economic growth is forecast at a median annual rate of 1.9% in 2016, 2.1% in 2017, only a slight improvement from last forecast in Sept. 2016. Support for chairwoman Yellen's policy decision was unanimous. See the link on views of NYT's Binyamin Applebaum and Neil Irwin on how Fed rate policy and economic growth under the Trump administration is likely to play out, and Ian Talley's report on impact on exports with a stronger dollar in WSJ. These views also are in line with the Fed's forecasts and policy decision as they reflect the concerns of the Fed about inflation, and also reflect the Fed's view that growth will be close to 2% in 2017-2019, and not the 3-4% stated by Trump and Treasury Secretary Mnuchin. Fed rate policies to keep inflation at about 2% tend to counter stimulus spending by the Trump administration and effect of tax cuts. The size of the stimulus and the tax cuts are also likely to be much smaller than stated because of Republican concerns about the deficit in the U.S. Congress, according to these views. The stronger dollar also has the paradoxical effect of making trade gains more difficult while increasing trade friction in tougher bargaining supported by Trump, making the higher growth targets harder to reach.   ...

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Stevenson and Caselli describe the mood in Buenos Aires as negotiations with hedge fund holdout bondholders fail in July 2014.

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Casey describes the crucial policy errors in Brazil with over spending and lack of transparency in the years leading to the crisis in 2014-2015. Brazil raised interest rates half a percentage point in May 2015 to 13.25%. Inflation was at 8.13% in Brazil in March 2015. Brazilian companies have large dollar denominated debt accumulated during the boom years which needs to be refinanced as its currency the real declines. With current policies economic growth is likely to continue at 0-1%. Russia made policy errors with the departure of Kudrin as finance minister for Putin's second term as president. Policies to attract foreign investment, controlling military expenditures, and continuing growth were reversed as Russia took positions on Ukraine that led to western sanctions, capital outflows, and a sharp decline in the ruble. By May 2015 the ruble and oil prices had recovered from lows, but the ruble was still 35% below the level in June 2014, and the oil prices were still only two thirds of the peak in 2014. Russia sees the decline in the ruble as a way to reduce imports and increase import substitution for many products. The economy is weakened by high inflation- inflation was 6.9% in March 2014, going up to 16.9% in March 2015. In May 2015 Russia lowered the target repo rate by 1.5 percentage points to 12%. Russia faces stagflation- high unemployment with low GDP growth, and high inflation....

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The near collapse of Iran's state owned gas company following stricter Western sanctions and withdrawal of Total and other oil companies. Iran sits on top of the second largest gas reserves in the world but is able to export gas only to Turkey and Azerbaijan. Qatar which borders one of Iran's large gas fields is developing its side of the field with technology and investment from Shell and other foreign oil companies. The CEO of the company, Hamid Reza Araghi, told the Mehr News Agency that the company had declared bankruptcy, with debt of about $4 billion. Gas revenues have dropped to about $10 million a day and the company suffers from mismanagement.

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As its economy slows and facing high debt levels, China benefits by an estimated $18 billion a month from lower oil prices in 2015. The estimate is from Starfort Holdings, investment and private equity group. The estimates as China benefits from lower prices of all commodities, including oil, are of about $250 billion annually as China replenishes its stocks of commodities. With $12 million barrels imported daily China is a major emerging market beneficiary, along with India, of the drop in oil prices. Continuing pressure on prices from the expected resilience in shale oil production in the U.S. with learning and the development of new production methods means the benefits are likely to continue. China has also not renegotiated price points in deals made earlier at higher prices with China and Venezuela, as it pursues its foreign interests. Stockpiling of grains and edible oils are being increased by 33% in 2015 by $24.7 billion.

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Brazil faces a debt crisis in 2015-2016. Between 2010 and 2015 foreign debt of local governments and Brazilian firms increased from $100 billion to $250 billion, and dollar debt in local currency from 210 billion reas to 655 billion reas, according to Bank of International Settlements data. State banking institutions BNDES and Caixa Economica Federal financed 35% of loans in 2010, by 2015 this increased to 55%. Subsidized loans at 5.5% by BNDES to firms make Brazilian banking a fiscal operation, requiring additional funding. Petrobras increased debt issuance enormously during this period, and now needs government support as its debt is now one notch above junk status. Interest payments on Brazil's debt is 6% of GDP in 2014. Public sector debt is 66% of GDP, and credit to the private sector is 55% of GDP up from 25% in 2005. It will take Brazil years to recover from a huge borrowing binge.

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India's central bank chief, Rajan, favors a lower inflation target of 4%, with fluctuations of 2% up or down. Lower inflation is critical for India to achieve higher growth rates. The World Bank lowered the rate of growth in the global economy but kept the rate of growth of 6.4% for India unchanged. Rajan also favors creating a more formal system for setting rates, with a committee like the Open Market Committee in the U.S. deliberating over the different factors for such a decision. Rajan was a professor at the University of Chicago, and chief economist at the IMF, before joining the central bank. Central bank policies have helped stabilize India's currency, the rupee. The lower cost of oil for India with an oil import bill of $100 billion is a big boost for economic growth. For the global economy this comes at a time when China's growth rate is slowing to below 7%.

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The IMF Global Economic Outlook report for 2012-2013 presented at the annual meeting in Oct. 2012, says there are considerable downside risks and a large degree of uncertainty in late 2012. The IMF report lowers estimates for global economic growth in 2013.