Thursday, November 12, 2015

What is the IMF’s currency basket? - By Krista Hughes Nov 11 2015

China

Economy

Global

What is the IMF’s currency basket?

By Krista Hughes

Nov 11 2015

This article is published in collaboration with Reuters.

International Monetary Fund policymakers are expected to decide this month whether to add China’s yuan to the Fund’s benchmark currency basket after a campaign by Beijing for inclusion.

Joining the Special Drawing Rights (SDR) basket would mark a symbolic coming of age for China as an economic power and an acknowledgement of its efforts to reform its economy to be more market driven.

It would have little immediate practical impact on the world economy, though currency analysts estimate that inclusion could drive global demand for the yuan to top $500 billion in coming years.

WHAT IS THE SDR?

The SDR was created in 1969 as a virtual currency and an international reserve asset. Its value, set every day, is determined by a basket of currencies comprising the U.S. dollar (41.9 percent), the euro (37.4 percent), pound sterling (11.3 percent), and yen (9.4 percent).

HOW IMPORTANT IS THE SDR?

As of Sept. 10, there were 204.1 billion SDRs in circulation, worth about $280 billion. That’s equivalent to less than 2 percent of total global reserve assets of $11.46 trillion as of the end of June. The IMF allocates SDRs to its members depending on their stake in the Fund, and members can exchange them for hard currency if they want to adjust the composition of their reserves. The SDR interest rate, based on three-month market rates for debt in the respective currencies, governs the cost of IMF loans to members.

HOW DOES A CURRENCY QUALIFY?

The currency must be issued by a country or currency union which is one of the world’s top exporters over a five-year period. It must also be “freely usable”, or widely used to make payments for international transactions, and widely traded in major currency markets. The yuan meets the first criteria but at the last review, in 2010, it was found not to be freely usable.

151111-imf sdr dollar pound euro yen pie chart

WHAT CRITERIA COUNT IN THE REVIEW?

IMF staff found in a report in July that the yuan still had a way to go in meeting the freely usable criteria, for example pointing to sparse trading outside Asian markets and a low volume of yuan-denominated international debt. But China has since announced reforms to tackle many of the shortcomings identified. Ultimately the decision will come down to the judgment of IMF members, as represented by the executive board. Countries like Britain and France have already signaled that they would support the yuan’s inclusion.

HAS THE SDR BASKET’S COMPOSITION CHANGED BEFORE?

The basket size was cut from 26 currencies to five in 1980, and in 2000 the euro replaced the Deutschmark and the French franc in the basket. (Reporting by Krista Hughes; Editing by Will Waterman)

Publication does not imply endorsement of views by the World Economic Forum.

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Author: Krista Hughes is Trade Correspondent at Reuters.

Image: Chinese 100 yuan banknotes are seen in this picture illustration. REUTERS/Jason Lee.

Posted by Krista Hughes - 12:37

All opinions expressed are those of the author. The World Economic Forum Blog is an independent and neutral platform dedicated to generating debate around the key topics that shape global, regional and industry agendas.

47 quotes on leadership worth repeating - By José Santiago Nov 11 2015

Employment, Skills and Human Capital

Leadership

47 quotes on leadership worth repeating

By José Santiago

Nov 11 2015

What does it take to be a good leader? From Aristotle to Bill Gates, here are 47 empowering quotes from some of the greatest leaders of our time.

1. He who has never learned to obey cannot be a good commander. — Aristotle

2. A leader is a dealer in hope. — Napoleon Bonaparte

3. If one is lucky, a solitary fantasy can totally transform one million realities. — Maya Angelou, writer

5. Leadership is the capacity to translate vision into reality. — Warren Bennis, scholar and author

6. Before you are a leader, success is all about growing yourself. When you become a leader, success is all about growing others. — Jack Welch, American business executive

7. A leader is one who knows the way, goes the way, and shows the way. — John Maxwell, author

9. Never doubt that a small group of thoughtful, concerned citizens can change world. Indeed it is the only thing that ever has. — Margaret Mead, cultural anthropologist

10. The nation will find it very hard to look up to the leaders who are keeping their ears to the ground. — Sir Winston Churchill

11. Anyone can hold the helm when the sea is calm. — Publilius Syrus, Latin writer

12. A great person attracts great people and knows how to hold them together. — Johann Wolfgang Von Goethe, writer

13. I start with the premise that the function of leadership is to produce more leaders, not more followers. — Ralph Nader, American political activist

14. The key to successful leadership today is influence, not authority. — Kenneth Blanchard, author and management expert

15.

16. A good general not only sees the way to victory; he also knows when victory is impossible. — Polybius, Greek historian of the Hellenistic period

17. A leader takes people where they want to go. A great leader takes people where they don’t necessarily want to go, but ought to be. — Rosalynn Carter, former first lady of the United States

18. Twenty years from now you will be more disappointed by the things that you didn’t do than by the ones you did do. So throw off the bowlines. Sail away from the safe harbour. Catch the trade winds in your sails. Explore. Dream. Discover. — Mark Twain, author

19.

20. Leadership is the art of getting someone else to do something you want done because he wants to do it. — General Dwight Eisenhower

21. The leader has to be practical and a realist yet must talk the language of the visionary and the idealist. — Eric Hoffer, philosopher

22. Leaders think and talk about the solutions. Followers think and talk about the problems. — Brian Tracy, author

23. Never tell people how to do things. Tell them what to do and they will surprise you with their ingenuity. — General George Patton, military commander

24. As we look ahead into the next century, leaders will be those who empower others. — Bill Gates

25.

26. Do what you feel in your heart to be right, for you’ll be criticized anyway. — Eleanor Roosevelt

27. Education is the mother of leadership. — Wendell Willkie, American lawyer and business executive

28. Great leaders are not defined by the absence of weakness, but rather by the presence of clear strengths. — John Zenger, German journalist

29. He who has great power should use it lightly. — Seneca

30. He who has learned how to obey will know how to command. — Solon, Athenian statesman, lawmaker and poet

31.

32. The art of leadership is saying no, not saying yes. It is very easy to say yes. — Tony Blair

33. If you would not be forgotten, as soon as you are dead and rotten, either write things worth reading, or do things worth the writing. — Benjamin Franklin

34. In matters of style, swim with the current; in matters of principle, stand like a rock. — Thomas Jefferson

35.

36. It is better to lead from behind and to put others in front, especially when you celebrate victory when nice things occur. You take the front line when there is danger. Then people will appreciate your leadership. — Nelson Mandela

37. Leadership and learning are indispensable to each other. — John F. Kennedy

38. If you cannot do great things, do small things in a great way. — Napoleon Hill, author

39.

40. No man is good enough to govern another man without that other’s consent. — Abraham Lincoln

41. To do great things is difficult; but to command great things is more difficult. — Friedrich Nietzsche

42. Logic will get you from A to B. Imagination will take you everywhere. — Albert Einstein

43.

44. I must follow the people. Am I not their leader? — Benjamin Disraeli, former British prime minister

45. Success is walking from failure to failure with no loss of enthusiasm. — Winston Churchill

46. You don’t have to hold a position in order to be a leader. — Henry Ford

47.

Have you read?
12 books every leader should read 10 steps to becoming a successful leader 4 leadership lessons from Pope Francis

Author: José Santiago, Digital Content Specialist, Public Engagement, World Economic Forum

Image: A woman walks through Brookfield Place off Bay Street, on the day of their annual general meeting for shareholders in Toronto REUTERS/Mark Blinch

Posted by José Santiago - 16:54

Japan targets boosting birth rate to increase growth

NOV 12, 20159:18 PM

[TOKYO] Japan plans to include steps to raise the birth rate, such easier access to childcare and tax incentives, in a package of reforms due this month to tackle the biggest bottleneck to economic growth.

Japan's population began declining four years ago after several years of warnings that the birth rate was too low, prompting some economists to applaud Prime Minister Shinzo Abe's decision to put the issue on the agenda. "I want to confront the demographic problem head on and place particular emphasis on policies that will contribute to raising the birth rate," Mr Abe said on Thursday after a Cabinet meeting.

However, others warn the government has fallen so far behind on the population issue that it will be difficult to raise economic growth without opening up to large-scale immigration.

Most countries would turn to immigration, but this has met with resistance from politicians and the public, who prize the country's mostly homogenous society. "There is a lack of childcare facilities and improving this is important," said Hiroshi Shiraishi, senior economist at BNP Paribas Securities. "However, this will not boost growth in the next five years. The more direct way is through immigration." Mr Abe wants to raise the birth rate to 1.8 per woman from 1.42 currently by loosening regulations on childcare providers and making it easier for women to return to work after their child is born.

Other proposals the government will consider are easing the tax burden for some part-time employees and making interest-free loans available for higher education.

The idea is to prevent the population from falling below 100 million from around 127 million currently. Advanced economies usually require a birth rate around 2.1 children per woman simply to keep the population stable.

Japan's population is projected to fall around a third to 87 million in 2060, the National Institute of Population and Social Security Research says.

Japan's working-age population peaked in the mid-1990s and has been falling ever since, data from the internal affairs ministry shows. Projections show the labour force could shrink to 44 million in 2060, which is half of its peak.

China's scrapping of its one-child policy and adoption of a two-child policy is expected to boost the country's economic growth by about 0.5 of a percentage point, a senior Chinese official said on Tuesday.

REUTERS

Jokowi to skip Apec summit in Philippines

NOV 12, 20158:32 PM

[MANILA] Indonesian President Joko Widodo will not attend an annual summit of Asia-Pacific Economic Cooperation (Apec) forum members in the Philippines because of domestic issues, a Philippine foreign ministry official said on Thursday.

Indonesia is Southeast Asia's biggest economy and has in recent months been the source of smoke from land-clearing fires that has blanketed much of the region.

An Indonesian foreign ministry spokesman in Jakarta confirmed that the Indonesian leader popularly known as Jokowi would not be attending the Nov 18-19 summit in Manila but did not elaborate on the domestic issues keeping him at home.

Vice President Jusuf Kalla would be going instead, the Indonesian spokesman said.

Jokowi cut short his first official trip to the United States last month to oversee his government's efforts to combat the fires that have caused school closures, flight cancellations and pollution levels to spike. "The haze has really crossed borders. So I think that is the one that he's trying to look into," said the Philippine official, Laura del Rosario.

Russian President Vladimir Putin has also decided not to attend the Apec summit, sending Prime Minister Dmitry Medvedev in his place, a Kremlin spokesman said.

REUTERS

Canadian Oil Sands rails against Suncor’s latest takeover tact

Jameson Berkow, Reporter, BNN
8:38 AM, E.T. | November 12, 2015
Energy and Resources

Tags: Canadian Oil Sands, Suncor Energy

Follow this

CDN OIL SANDSStock data delayed up to 20 minutes

$9.35

$0.19

1.99%

COS.TO: 9.55● SU.TO: 35.45

chart type: 6month, Comparative

See Full Stock Page »

If shareholders of Canadian Oil Sands Ltd. (COS.TO -1.99%) haven’t already received a call from their broker, they should expect one soon.
Suncor Energy Inc. (SU.TO -2.17%), which launched a $4.3-billion hostile takeover bid for the largest member of the Syncrude Canada oil sands consortium last month, is offering financial incentives to brokers who convince their clients to tender their shares. The so-called dealer solicitation fee provides $0.05 per share to brokers whose clients tender at least 300 COS shares, with a minimum fee of $75 and a maximum fee of $1,500, according to a notice posted on the Canadian Oil Sands website.
COS has implemented a shareholder rights plan (otherwise known as a “poison pill”) in an effort to buy more time for management to search for a higher bid. The company considers the offer of 0.25 of a Suncor share per COS share to be “substantially undervalued, obviously opportunistic and exploitive” -- and now COS is accusing its suitor of attempting to buy support for its takeover bid since those fees are paid to brokers and not shareholders.
“Knowing the weakness of their bid, they feel it is necessary to pay brokers and incentivize them to encourage clients to tender their shares,” COS said in its notice.
“We don’t think that’s right.”
Dealer solicitation fees are considered a relatively common way of reaching out to retail investors, though the optics of appearing to buy support from brokers often generates controversy. In 2013, Calgary-based fertilizer giant Agrium was accused of using the practice inappropriately as it sought to fend off New York City-based hedge fund Jana Partners’ attempts to split the company’s retail and wholesale divisions into separate businesses. At the time, the Financial Advisers Association of Canada vowed to take a closer look at the use of dealer solicitation fees.
Suncor’s offer to buy COS, which would increase its ownership stake in Syncrude from 12 percent to 49 percent, expires on December 4,marking 60 days since the offer was made. The COS rights plan requires bids to be open for at least 120 days. The Alberta Securities Commission has scheduled a hearing for November 26 to decide whether to accept Suncor’s challenge of the rights plan and strike it down.
On Thursday morning, Suncor also warned that a rejection of its hostile takeover of Canadian Oil Sands Ltd. would leave the bid target’s investors exposed to weak oil markets and a possible share-price collapse.
In a letter to Canadian Oil Sands’ shareholders titled “hope is not a strategy,” Suncor chief executive officer Steve Williams says a rejection of the $4.7-billion all-share offer carries a “very real risk” of sending the target company’s stock into a tailspin from around $10 to its pre-bid level of about $6 per share.

Thursday, November 12, 2015