Posts of March 2007

Antigua, Barbuda, C'mon Gamblers

♠ Posted by Emmanuel in Music,Trade at 3/31/2007 05:54:00 AM

Here is a heartening story that contradicts those who say the WTO is unfair in hearing cases of small countries. Sometime ago, the US decided that online gaming sites operating from abroad could not ply their trade Stateside for they violated laws banning interstate gaming. Antigua and Barbuda, a small Caribbean island nation with a population of 68,000 (not featured in Cocktail or the "Kokomo" video by the Beach Boys) then brought the matter to the WTO Dispute Settlement Mechanism (DSM), alleging that US actions violated General Agreement on Trade in Services (GATS) provisions. Antigua won, and the US said it would adopt...

NAM: FTAs are Good for America

♠ Posted by Emmanuel in Trade at 3/31/2007 01:25:00 AM

The National Association of Manufacturers (NAM) in the US believes free trade agreements and bilateral deals are worth pursuing (and implies multilateral ones are not working out too well). True-blue economists will blanch at the scope for trade diversion, but manufacturing interests have views of their own. NAM's Frank Vargo states "Our free trade partners account for close to half of our exports, but only six percent of our manufactured goods deficit." He adds that "while we want to help find a compromise that works for everyone, we can’t take our eye off the ball – we need to cut foreign barriers to our exports, and more...

US: Screw WTO, It's D-I-Y Time

♠ Posted by Emmanuel in China,Trade at 3/30/2007 05:41:00 PM

Here are some preliminary thoughts on the US measure to impose countervailing duties (CVDs, or more commonly referred to as tariffs) on coated paper products from China. Coated paper is of the glossy sort you find in books, magazines, annual reports, brochures, and gift wrap. The case was brought forth by NewPage Corporation, a coated paper producer headquartered in Dayton, Ohio late last year to the US International Trade Commission (ITC). Upon investigation, the ITC found the American paper industry "materially injured" by Chinese imports. The ITC then forwarded the case to the Department of Commerce (DOC), which announced today that countervailing duties would be applied to Chinese coated paper imports ranging from 10.9% to 20.35% for subsidies including tax breaks, debt forgiveness, and low-cost loans. The term "countervailing" refers to these duties purportedly offsetting the amount by which coated paper was subsidized to sell at lower prices in the US market.Some of you...

On Iran Hostage Crisis II

♠ Posted by Emmanuel in Security at 3/29/2007 08:55:00 PM

I was hoping that this story of British sailors captured by Iran would have disappeared from the headlines by now as it is, to my thinking, exceedingly ridiculous. Frankly, I do not see how Iran can gain anything from detaining the British sailors any longer. To date, the UK has been playing "good cop" to America's "bad cop" in trying to engage Iran diplomatically along with France and Germany on the nuclear issue. (Not that Iran hasn't been able to game the system.) Now, however, Iran is testing the goodwill of one of the few countries attempting to hold back more drastic American action. If Iran backing out on releasing...

Senators Mull China Trade Sanctions

♠ Posted by Emmanuel in China,Trade at 3/28/2007 11:14:00 PM

The story in the US right now is pretty much subprime all time; so much so that even China seems to have been placed on the backburner. It's a shame as yesterday and today's Senate Committee on Finance hearings on "Risks and Reform: The Role of Currency in the US-China Relationship" have yielded a bumper crop of insights. Threateningly for US-China relations, China's perceived inaction by the Senate on currency reform is under scrutiny once more. Senators Charles Schumer (D-NY) and Lindsey Graham (R-NC)--who last year sponsored a bill proposing 27.5% tariffs on Chinese imports as a "a shot across the bow" that was not intended...

Bush the MBA Public Administrator

♠ Posted by Emmanuel in Education at 3/28/2007 02:16:00 AM

I was browsing the latest issue of Public Administration Review when the very first article stopped me in my tracks, "The First MBA President: George W. Bush as Public Administrator." For some time now, the trend in public administration studies has been to speak of public management as opposed to the more traditional administration. Supposedly, general management theory now informs government affairs to a large extent. Bush could have been a good fit with this trend. However, as the author James Pfiffner points out, perhaps business administration needs a better champion in public service. While lauding Bush's "bold thinking,"...

Killing Reefs & Endangered Fishies

♠ Posted by Emmanuel in China,Environment,Southeast Asia at 3/28/2007 12:53:00 AM

As rapid economic growth continues apace in Hong Kong and other parts of China, demand there for increasingly rare coral fish continues to grow. As these fish command very high prices in those markets, many fishermen have resorted to the dangerous practice of cyanide fishing in parts of Southeast Asia:The use of cyanide to stun and capture live coral reef fish began in the 1960s in the Philippines to supply the growing market for aquarium fish in Europe and North America, a market now worth more than $200 million a year. Since the late 1970s, the poison has also been used to capture larger live reef fish (primarily grouper...

Easterly/Wolfowitz/Gates Smackdown

♠ Posted by Emmanuel in Development at 3/27/2007 01:31:00 PM

Development aid critic William Easterly is once again stealing the show in economic blogland with his latest missive in the Wall Street Journal, this time covering why more government in Africa is not the answer to regional poverty. Along the way, Easterly makes his now-customary digs at various celebrity activists as well as Jeffrey Sachs's Millennium Development Goals and "End of Poverty" book. I don't know how I managed to miss it for so long, but there is a video excerpt online of a panel at the 2007 World Economic Forum featuring Easterly, Bill Gates, Paul Wolfowitz (key architect of the US invasion of Iraq and current World Bank president), and Liberian President Ellen Johnson-Sirleaf (the first elected lady head of state in Africa). Moderating the panel is no less than Fareed Zakaria:Hat tip to Jonathan for showing me how to insert this clip. Also, if you haven't read "The White Man's Burden" yet--which I suggest you do if you are interested in development issues regardless...

Bird Flu: Indonesia vs. WHO

♠ Posted by Emmanuel in Southeast Asia,Trade at 3/26/2007 04:04:00 AM

Indonesia has decided to hold out on sending bird flu samples to the World Health Organization (WHO). Although the WHO has called on countries to voluntarily share viruses to keep up with newer strains of the bird flu, developing countries like Indonesia are wary of cooperating for they believe that they do not receive much in return. The first issue is that WHO data is not readily shared with developing countries:Several years ago the agency set up a secure database to allow scientists in its international laboratory network to compare H5N1 avian flu viruses across countries. The aim was to get affected countries to share...

The Politics of Subprime Mayhem

♠ Posted by Emmanuel in Casino Capitalism at 3/26/2007 02:33:00 AM

Let's face it: For the most part, politicians are reactive and not proactive. Exhibit A is the recent shakeout in the US subprime mortgage industry. As nearly all the mainstream media and economics blogs stateside provide nonstop coverage of the ongoing saga concerning debt, deceit, and disclosure, there is little need for me to go over the story. Suffice to say, lawmakers in the US have begun to understand the implications of this subprime debacle. There is indeed a large political opportunity here; with election season 2008 gearing up, votes are up for grabs.Take Senator Christopher Dodd (D-Connecticut), Chairman of the...

Venezuela: We're #1 in Oil Reserves!

♠ Posted by Emmanuel in Energy,Latin America at 3/25/2007 03:38:00 AM

Venezuela now claims that it has the world's largest oil reserves at 316B barrels, topping those of Saudi Arabia at 262B. Or at least that's Hugo Chavez's claim as trumpeted on the state-owned oil firm PDVSA's website. This claim relies on heavy oil deposits being deemed recoverable in its Orinoco River valley--an area immortalized in Enya's hit song "Orinoco Flow (Sail Away)." The problem has always been that the oil there is of a heavy (high specific gravity) and sour (sulphur-filled) variety that is more difficult to refine than Saudi Arabia's typically lighter grades. If you go by quality and not quantity, Saudi Arabia...

On Chavez's Proposed Gas Cartel

♠ Posted by Emmanuel in Energy,Latin America,Trade at 3/24/2007 09:49:00 PM

It had to happen sooner or later. Seeing how OPEC has, in certain circumstances, been able to affect world prices of petroleum, one of the natural gas producers would eventually follow suit with proposing a gas cartel. What is unusual is that Venezuela would take the lead as its natural gas production is comparatively small. In fact, nearly all of its production is domestically consumed--it'd be a stretch to even call it a gas exporter at the current time. What many commentators downplay while pointing this fact out, though, is that Venezuela has substantial natural gas reserves. The Economist estimates that Venezuela has...

Is Liberation Theology History?

♠ Posted by Emmanuel in Latin America,Religion at 3/23/2007 03:34:00 AM

No discussion of Latin American political economy is quite complete without mentioning liberation theology. Like dependency theory, liberation theology is concerned with Marxist themes of domination and a quest for radical change. Whereas the West is the bogeyman in the former theory, prevailing local structures are the villains in the latter. Jesuit priests in Latin America were the main exponents of liberation theology, which gained a following mostly in the seventies and eighties in the poverty-stricken and largely Catholic region. In fact, I was taught liberation theology in college as I attended a Jesuit university, though...

Political Economy of Pronouns

♠ Posted by Emmanuel in Education at 3/23/2007 01:36:00 AM

I still remember a professor of mine from way back who was keen on writing mechanics complimenting me on a presentation I made--except for referring to a manager as a "he." Her advice as an academic was to get rid of this habit. "Think what a female reviewer would make of your political incorrectness in a journal submission," she effectively said. After that incident, I thought I wised up during a subsequent presentation by referring to the archetypal manager as a "she." I was slightly crestfallen when she was not happy with this substitution, either. Her next bit of advice was to use plural forms (they are managers; you don't have to assign gender to them).Fast forward a couple of years and one of the well-regarded authors in our department has the custom of adding [sic] to quotations that use he / him / his in reference to generic individuals like citizens, workers, and public servants. In this age of political correctness, it is common to see writing that bears the marks of...

China Crisis Caused by Accounting?

♠ Posted by Emmanuel in Casino Capitalism,China at 3/21/2007 11:31:00 PM

Here's the darndest thing to gain my attention in a while. Forbes suggests that regulations to make Chinese accounting comparable to--but not exactly of the same standard as--worldwide standards (e.g., IASB) may cause stock market turmoil. Skeletons in the closet brought out into the sunlight by firms which have performed bookkeeping sleights of hand may shock. After all, the Chinese are famous for "creative accounting" in keeping three sets of books: one for the tax man, one for the external auditor, and one for internal use. Although moving towards international accounting conventions is of course a worthwhile long-term goal, expect some fireworks in the meantime. With the average P/E ratio in China being a whopping 63 according to Forbes, things are bound to get interesting:Behind the recent, gut-clenching stock market volatility in China is a disquieting reality: China's rotten accounting. If you thought the Shanghai index's 8.8% drop in late February was bad, wait until...

Affluence, Poverty, and Deforestation

♠ Posted by Emmanuel in Environment at 3/21/2007 12:10:00 AM

Here's yet more evidence that poverty is related to deforestation courtesy of the UN's Food and Agricultural Organization (FAO) in its State of the World's Forests 2007. From figure 67, you might gather that, among regions, Europe is least concerned with deforestation as it has designated the lowest percentage of forest area for conservation. You might be saying to yourself: "I knew it, those Europeans with their 'green parties' and 'leadership' on environmental issues really don't give a damn about deforestation. It's one big sham. Look at those Africans--they've set aside the most forest area for conservation. Africans--not...

Nail Sticking Out is Pounded Down

♠ Posted by Emmanuel in China,Education at 3/20/2007 08:15:00 PM

This story exasperated me. Zheng Ming, a Chinese professor at Renmin University who served as the dean of political sciences at his school lost his post for writing the obvious about the Chinese educational system on his blog. He commented: They told me that I should be punished for breaking the 'hidden rules.'Universities have become an officialdom. The over-intervention and manipulation of academia by power definitely fetters its growth.How is China's academia doing now? Does anybody overseas read papers written by Chinese scholars? Plagiarism and theft are rampant. Obedient kids are being taught to be minions.My first reaction was surprise that they teach political science at all in China, albeit in watered-down form. While Marxist / Maoist thought you would expect to be taught even in these days of market socialism (whatever that is), straight-up political science would be something best avoided lest it encourage dangerously independent political thinking. My second reaction...

High Sea Pirates Meet High Tech

♠ Posted by Emmanuel in Security at 3/19/2007 10:23:00 PM

Avast, ye scurvy dogs! While reviewing the current trends in maritime piracy (incidences are going down after a spike earlier in the decade), I came across a fascinating set of technologies that are being deployed to combat it. As pirates have increased their capabilities by using fast boats and advanced armaments, those on the defense have upped the ante in terms of technological sophistication as well. The International Maritime Bureau (IMB), which monitors piracy incidences, endorses three applications. According to its blurb:The Inventus UAV (unmanned aerial vehicle) is a state-of-the-art reconnaissance system packaged...

The Infant Industry Which Never Grew

♠ Posted by Emmanuel in Marketing,Southeast Asia,Trade at 3/19/2007 02:45:00 AM

The infant industry argument is a familiar one: Because global competition is intense, it may be necessary to block imports for some time until domestic industry can gain a competitive footing. Critics of this argument, however, point out that some of these infant industries never grow up. Here is a case in point: Proton Cars of Malaysia. It was set up in 1983 by then-Prime Minister Mahathir Mohamed as part of a plan to industrialize Malaysia by creating a car maker to promote technology, earn foreign exchange through exports, and spawn supporting industries. It has achieved none of these objectives. Not that these failures...

The Three Waves of Globalization

♠ Posted by Emmanuel in IPE 101 at 3/17/2007 07:12:00 PM

In a review of recent books by Rajan Menon and Daniel Drezner, the Economist seems to find novelty in the idea that globalization is not all it's cracked up to be. Menon champions a strong American unilateral policy in the belief that international organizations are pretty much useless in this day and age--just as the neoconservatives do (or is that did?) On the other hand, Drezner advocates that states use their powers to shape international organizations to better cope with problems with increasingly transnational dimensions like pollution and food safety. In this context, Drezner highlights the point that states--especially...

Is Global Inequality Rising or Falling?

♠ Posted by Emmanuel in China,Development,IPE 101 at 3/17/2007 12:20:00 AM

The question of global inequality is perhaps the linchpin of all IPE debates for it concerns, among other things, the benefits of economic globalization and the efficacy of development efforts. For obvious reasons, those leaning left tend to say that global inequality is increasing, whereas those leaning right say the opposite. Among work representative of the former viewpoint is Thomas Pogge and Sanjay Reddy's, while that of the latter is Xavier Sala-i-Martin's. (Oddly enough, all three are at Columbia University; Pogge in the political science department, and Reddy and Sala-i-Martin in the economics department.) For this...