Economists tend to say that markets have short memories, in an attempt to explain why, seemingly, markets do not apply large enough discounts to some asset prices even after episodes of turmoil. However, economists typically ignore the fact that they also seem to have short memories and that, often, simplification prevails over careful analysis. A clear example is the ongoing commentary bashing Asian countries for a variety of assorted reasons: adopting mercantilist policies, having learnt the wrong lessons from the 1997 crisis, risking heavy capital losses from their exchange rate reserves, managing their currencies, self-inflicting standard of living costs, etc. While this commentary is largely the result of the fashionable discussion on the global imbalance, and while this is a very convenient way of providing arguments for politicians so that they can tackle, in a partial, biased and inefficient way, the problem of rising income inequality in the Western world, the truth of the matter is that few people seems to remember the conclusions of the post-crisis analysis back in 1997-98 and the policy implications of such conclusions. Ten years later, the Asian crisis feels like a very old event and memories seem to be blurring.

Overseas acquisitions by Indian companies have suddenly gone on top gear. In the first nine months of 2006, there were 112 foreign acquisitions by Indian companies with a combined deal value of $7.2 billion. Last year it was $4.5 billion, which was itself several times more than the figure for 2004. What is triggering this surge, why now, and why it should worry the Europeans?

Let us examine the combination of the four factors which seems to interplay in this sharp turnaround:

This year's Nobel Peace Prize was awarded to a former Professor of Economics, Muhammad Yunus, the inventor of group-lending microcredit in 1976. When the then Professor of Economics at Chittagong University, in Bangladesh, bet on the poor as being bankable individuals by creating the Grameen Bank, in the nearby village of Jobra, he extended tiny loans to poor individuals without collateral out of his own pocket. His motivation was to help such villagers to finance their investment projects, and, eventually, pull them out of poverty. His idea was a successful one, as Grameen replications mushroomed worldwide in the developing world and Eastern Europe, now reaching nearly seven million individuals living under the poverty line. What is exactly Yunus' innovative idea all about, and what made it replicable beyond Bangladeshi villages?

The decision by Bolivia to nationalize its natural gas and petroleum industries is going to result in heavy losses for Brazil, but it also shows that populism and contract breaches continue to be an "easy way out" for Latin America to justify its refusal to introduce much needed reforms. Nations in the region tend to periodically succumb to the temptation of using their vast natural resources to reach political objectives.

Oil prices have almost doubled in the past two years. After having breached the 75 dollar a barrel threshold for brief periods the market seems ready to test a price of 80 dollars for WTI, while global demand continues to grow. Future prices on the NYMEX are currently above 70 dollars until December of 2012. Yesterday the far dated quotes reached a new record. Refining margins have remained high and the average retail price of gasoline in the US should be higher this summer than last year. Prices are reflecting multiple constraints and imbalances along all of the supply chain. Capacity increases will be limited for at least the next three years, both in the upstream and in the downstream. More important, the oil service sector as well as construction and engineering companies are not able to meet their costumers' requirements. The resulting cost inflation is contributing to a shift of oil industry supply curves.

Are the poor made better off by globalization, as most orthodox economists and certainly the IMF and World Bank believe? Or are the poor hurt by global competition, as many anti-globalization activists would suggest? The orthodox view (the so-called «Washington Consensus») is frequently wrong: at best, openness to trade needs to be accompanied by many other policies that will allow the poor to take advantage of what globalization has to offer. New evidence suggests that there are four important lessons world leaders need to take into account.

In December, the Chileans celebrated a new round of elections. However, beyond this event, there is yet another point worth celebrating: the profound and subtle transformation which is taking place in Chile and in Latin America stemming from the surge of economic pragmatism outside the predetermined paths of any rigid ideological model.

The example of Chile

The Chilean example is, from this point of view, exemplary (and perhaps unique), where the privatization of pension funds remained within the framework of a jewel of regulation of top quality institutional craftsmanship. Year after year, the system was modified and adjusted in order to improve. Today, the Chilean regulation body, the Superintendencia, is one of the most credible, technically prestigious and highly esteemed institutions in the country, making it a strong institutional mast.