One of the most interesting streams of thought concerns how individual countries can make sure they gain rather than lose from increasingly international investment and production. To put it in sharper focus, is it possible to pick out a new set of “tiger” economies which will put on a spurt of growth to catch up with countries already well down the road to developed status?
Many economists believe the key to development is that levels of income in poor countries tend to converge on rich ones. If places like Singapore, Taiwan and Korea have done this during the past couple of decades, whose turn is it next?
The assumption that developing countries will steadily catch up, is derived from from the conventional theory of economic growth. Growth depends on the pace of technical change in the long run, and for a given state of technology diminishing returns to additional production mean that less developed countries will grow faster than the developed ones, converging towards the most advanced.The question – who’s next? – makes no sense, however, if convergence turns out to be the exception rather than the rule.
As the annual meeting of the IMF and World Bank gets under way in Hong Kong, the flow of reports and books about globalisation has swollen to a torrent. It produced encouraging figures but some wonder about a takeover bid. The Australian-controlled Pearl Assurance took a 5.97 per cent stake last week.. Hard-pressed cider maker Matthew Clark hardened 6p to 230p on director share-buying.Sibir Energy firmed to 14.5p as Stancroft Trust, the investment vehicle of Nicholas Berry, lifted its stake to 19.16 per cent; JKX Oil & Gas stuck at 50.5p with the Ukrainian interest lifted to just over 14 per cent.Finsbury Underwriting, a Lloyds investment trust, firmed 1p to 125.5p.
Dwyer Estates, a property group, rose 2.5p to 69p after chief executive Jeoy Esfandi said he might bid 70p a share for the 76 per cent he does not own.Lavendon, an equipment hire company floated at 140p in October, rose 9.5p to 275p following investment meetings. Confident noises on the Continent and Goldman Sachs support was behind the strength.Scottish Media added 8.5p to 657.5p on Salomon Brothers support and PizzaExpress, the eating out chain, put on 3.5p to 724p on Redmayne Bentley comments.Bass lost most of an early gain after a flat trading statement, ending just 0.5p higher at 844p.Wassall, making belligerent takeover noises, gained 3.5p to 327p but Tracker Network, the car security concern, reversed 100p to 575p as would- be bidder Trafficmaster retreated. Glassmaker Pilkington, for so long in the doldrums, had the satisfaction of a 9p gain to 156.5p. The shares, after their recent strength, fell 10p to 258.5p, dragging Centrica 3p down to 83.25p.Britannic Assurance, on its orphan funds transfer, surged 93p to 939p with United Assurance offering a 29.5p gain to 481p. The Eurocrats want the proposed link modified or they will block it.BG produced its buy-back and provided further evidence that it is better to buy on a rumour and sell on the fact. National Power fell 20.5p to 552.5p and PowerGen 22p to 755p. Worst performing blue chip was British Airways, ruffled by further doubts over the American Airlines alliance.P&O sank 16p to 668p as its proposed ferry merger with Stena Line, the Swedish group, appeared to encounter not unexpected concerns from the European Union.
A further story surfaced about the sale of its Australian and New Zealand investment assets for a reputed pounds 200m.The generators remained subdued on the latest strictures from the industry regulator and the cautious noises made to analysts. ABN Amro, the Dutch bank that controls the Hoare Govett securities house, appeared in the frame as a possible bidder and talk Commerzbank was involved in a deal to buy NatWest’s securities arm refused to fade. There is evidence some of the activity is due to jockeying ahead of tomorrow’s futures expiry. And stronger-than-expected retail sales, plus another unemployment fall, reawakened interest rate fears.Still, for once, there was a rush of interest in second-line shares with the FTSE 250 index jumping 44 to 4,686.8, although the FTSE SmallCaps index was restrained to a 7.3 gain at 2.285.4.National Westminster Bank’s headlong gallop was reined back with the shares restricted to a 2.5p advance to 877.5p But the rumours continued to flow. British Steel’s performance stemmed largely from currency influences but Railtrack was entangled in an array of rumours, ranging from the inevitable share buy-back to mouth-watering estimates about its property potential.
