Given the bedraggled state of US finances, it is still worth remembering that it is a large lender to LDCs. At the turn of the decade, forgiving the debts of highly indebted poor countries (HIPCs) was all the rage. With the environmental consciousness of development agencies increasing--loans and projects now have to have environmental impact assessments--it was only a matter of time before something like occurred on a larger scale.You see, USAID has begun giving loan forgiveness under the Tropical Forest Conservation Act of 1998. This kind of debt relief is granted upon recipient countries agreeing to better protect tropical forests from deforestation in a so-called debt-for-nature swap. The US is about to embark on the largest such deal with Indonesia. From the Wall Street Journal:The United States will sign an agreement Tuesday to forgive nearly $30 million in Indonesian debt in return for the large Southeast Asian country agreeing to protect forests on Sumatra Island, which...
***damn Green Dam PRC Nannyware Postponed
Our favorite official news agency Xinhua reports that the Chinese government is delaying the implementation of its "Green Dam Youth Escort" nannyware:China will delay the mandatory installation of the controversial "Green Dam-Youth Escort" filtering software on new computers, the Ministry of Industry and Information Technology (MIIT) said here Tuesday. The pre-installation was delayed as some computer producers said such massive installation demanded extra time, said the ministry.All computers produced or sold in China were scheduled to be installed withsuch software after July 1, according to MIIT's previous announcement. Theministry would continue to provide a free download of the software and equipschool and Internet bar computers with it after July 1, said a spokesman withMIIT. The ministry would also keep on soliciting opinions to perfect thepre-installation plan, he said. The software is designed to block violenceand pornographic contents on the Internet to protect minors....
Those Fake Improvements in US Personal Saving
♠ Posted by Emmanuel in Cheneynomics,Credit Crisis
at 6/26/2009 05:17:00 PM
I was puzzled by the blogs of the New York Times and the Atlantic trumpeting improvements in the US personal saving rate. Both have neglected to mention the rather important fact that disposable personal income--the denominator value in computing this rate--has been grossly distorted by ongoing initiatives related to the stimulus package. When these distortions are removed, we are likely to get a clearer picture of the situation. In the meantime, let me explain what's going on.Stock markets are rather underwhelmed by the latest data on US personal income and personal spending. Sure, the headline numbers look impressive, with the personal saving rate for May coming in at 6.9% as opposed to an already impressive 5.6% the month before. However, the $787 stimulus bill formally known as the American Recovery and Reinvestment Act of 2009 is providing Americans with a dubious and temporary windfall largely at government's expense. On the giveaway side, it's largely down to one-time...
US, Google, and PRC Censorship of the Internets
The Tony Award-winning musical Avenue Q, a parody of Sesame Street, has a memorable song declaring that "The Internet is for Porn". Above is the music from that song set to World of Warcraft video game imagery. What brought it to mind are China's latest initiatives purportedly targeting the spread of mind-polluting pornography in the country with the world's largest base of Internet users. At first, authorities had little computer cops trundling across your computer screen whenever you visited forbidden sites. With the 20th anniversary of Tiananmen passing without much incident, PRC leadership appears to have been emboldened in asking for others to comply with more draconian censorship measures, such as American computer software and hardware providers.Those who are skeptical-minded, like yours truly, see this initiative of targeting porn as a Trojan horse for more intrusive censorship should it become necessary. Certainly, events in Iran--especially the use of YouTube and Twitter...
China v. US: Which Came First, Metal or Chicken?
Following news that the US and EU have requested for talks to begin at the WTO over China's use of protectionist policies giving local firms advantages in availing of domestically-sourced raw material supplies comes news that China has, in response, requested that a dispute settlement panel be formed to contest US bans on Chinese chicken over avian flu. That is, while the commodities case initiated by the US and EU has just entered the 60-day window for resolving matters through bilateral talks, that period has already lapsed for the chicken case initiated by China, meaning it can now ask for court proceedings to get underway.This Wall Street Journal Asia op-ed says this tit-for-tat is not really going to cause significant changes in their trade relationship. Moreover, it is argued that both cases have merit:The U.S. and the European Union raised complaints this week at the World Trade Organization over China's export restraints on raw materials. Meanwhile, China has escalated...
Nuclear Revival, University of Birmingham Edition
The much-vaunted nuclear revival is in full swing as any number of countries have searched for alternative power sources that are both reasonably cost-efficient and non-carbon emitting. Yes, I'm talking about you, fossil fuels! Current sentiment for nuclear power is driven by a number of factors. Improvements in the design of nuclear power plants have largely removed Homer Simpson-esque fears of imminent catastrophe by bungling operators. Many years without a high-profile incident have bolstered this sentiment. Consequently, longstanding green opposition over the safety of nukes has since been outbalanced by its non-carbon-emitting...
US, EU Go to WTO on PRC Raw Materials Use
From the US Trade Representative's site comes word of a joint US-EU filing regarding China's restrictions on the availability of PRC raw materials to the would-be plaintiffs. That is, there is unequal access to PRC-produced raw materials granted to Chinese firms not given to foreign ones in alleged contravention of WTO rules:What Chinese Policies Are at Issue? China maintains a number of measures that restrain exports of raw material inputs for which it is the top, or near top, world producer. These measures skew the playing field against the United States and other countries by creating substantial competitive benefits for downstream Chinese producers that use the inputs in the production and export of numerous processed steel, aluminum and chemical products and a wide range of further processed products. The principal measures include: Export quotas that tightly restrict the volumes of material that can be exported from China Export duties that raise the export price for...
A Journey to the Heart of Fabulous in Saudi Arabia
♠ Posted by Emmanuel in Middle East,Migration
at 6/22/2009 08:39:00 AM
Not so long ago, Samuel Huntington warned about an impending Clash of Civilizations as cultural clashes became more frequent due to globalization making intercultural interactions more unavoidable. At about the same time, Priscilla Queen of the Desert was a hit movie about drag queens embarking on a search for identity in the Australian Outback. They've even made a musical out of it. Why am I telling you this? Well, both have come to real life in Saudi Arabia in a recent incident involving the Saudi authorities and Filipino workers. It is widely known that foreign workers constitute a large part of the KSA population--supposedly 5 out of 27 million from what I can gather on the Internets [no sic]. With recent windfalls from rising oil revenues, projects aimed at increasing energy production capacity as well as establishing centers for banking and commerce have popped up all over the place--once again necessitating an influx of foreign workers. To paraphrase Kevin Costner, if...
Korea to Take Japan to WTO Over Li-ion Batteries
South Korea's path to industrialization is broadly similar to Japan's: start off with easy-to-make stuff like textiles, eventually move to steel and petrochemicals, which in turn are critical for the production of automobiles and consumer electronics, etc. It is remarkable that in 2009, when many commentators like the Asian Development Bank have called the export-led growth models used by such countries as not being what they were, these two are still keen on them. Yes, exports are good--and so are mercantilist policies--as long as you apply them and not your trade partner. In the current row, the arena of contestation is...
Industrial Espionage in US Meets PRC Nannyware
♠ Posted by Emmanuel in China,Underground Economy
at 6/14/2009 10:27:00 AM
A few days ago, I mentioned in passing that China's attempt to install mandatory censorship software into the hardware of Western PC makers could be construed as a trade barrier as it has been found to foul up expected functionalities. Little did I know that a related trade dispute was already brewing. Solid Oak Software of California is now claiming that it is "99.9%" certain that parts of its CyberSitter web-filtering software have been stolen by the designers of China's so-called "Green Dam" nannyware. Naturally, the Chinese developers are vehemently denying this claim.And here comes the fun part: Solid Oak is enlisting the help of Uncle Sam in preventing the likes of Dell and Compaq from installing this allegedly pirated software. Yes! A nice trade conflict is potentially brewing that may once again force the US and China to butt heads in the merciless arena known as world trade. However, the Wall Street Journal notes below that the American concern is the underdog since...
Is China's Censorship Software a Trade Barrier?
Former US President Bill Clinton believed that China opening up to the world via trade would result in greater personal rights and freedoms for the Chinese people. According to this line of thinking, a taste of the Western consumerist conception of the "good life" would embolden the PRC's citizens to ask for more leeway in interacting with the rest of the world without filtering through the lenses of official censors.Let's just say that Clinton's thinking hasn't really come true. I have previously argued that export-led industrialization was ideal for PRC leadership since control of the "commanding heights" of the economy--finance, production, etc.--would remain firmly in state hands. Insofar as many other East Asian states before it have maintained such a grip, China has wanted to do the same and has largely succeeded. Likely emboldened by the non-event that was the twentieth anniversary of the Tiananmen massacre, China is reportedly asking PC makers--particularly foreign ones--to...
Ecuador Says "No Mas" to Trade
♠ Posted by Emmanuel
at 6/06/2009 12:41:00 PM
Unbeknownst to many, member countries facing considerable balance-of-payments difficulties can petition the WTO to temporarily raise tariffs on imports. Although infrequently invoked, they do exist. Recently, Ecuador said "no mas" to trade by requesting such concessions. Let's begin with this backgrounder from Reuters:World Trade Organisation (WTO) members agreed on Thursday to allow Ecuador to impose temporary import restrictions because of balance of payments problems. The move was hailed by rich and developing countries as proof that the rules-based trading system umpired by the WTO was working well despite the economic crisis, and that WTO members could tackle the needs of developing countries in difficulties.The members reached agreement after lengthy consultations in which Ecuador agreed to modify the restrictions and phase them out early if its economy improved, according to a draft report by the WTO's committee on balance of payments restrictions, a copy of which was...
It's a Deal: ASEAN-South Korea FTA
♠ Posted by Emmanuel in Southeast Asia,Trade
at 6/05/2009 01:35:00 PM
Here is another important data point in ASEAN's (Association of Southeast Asian Nations) goal of forming a single market by 2015 . With WTO negotiations stalled, ASEAN countries have not turned their back on trade and have actively sought free trade agreements with regional counterparts [1, 2]. ASEAN can now chalk up South Korea alongside the antipodean pair of Australia and New Zealand. In the works are deals with India, Japan, and China. Think of ASEAN's activities as a hub-and-spoke arrangement. Within ASEAN, they are striving to create a single market by 2015. In turn, this is complemented by various efforts to sign FTAs with counterparts in the wider Asia-Pacific region. From the Manila Times:The leaders of South Korea and the group of 10 Southeast Asian nations ended a two-day summit by also pledging further cooperation to boost Asia’s financial sector by supporting the development of a stronger regional bond market. In an immediate move to strengthen economic ties, Seoul...
Dog and Pony Show: Geithner (F)lies to China
...but more importantly, the Chinese are happy about it. Indeed, I am not making negative comments about what Geithner is doing in China as what he's saying is what his hosts want to hear. What did Christine McVie sing in that old Fleetwood Mac song? Tell me lies...tell me sweet little lies. Everyone is probably aware that US Treasury Secretary Tim Geithner is currently in Beijing peddling the idea that "China's US investments are safe." His prepared remarks actually contain much sense, especially the bits about the US consumers having to save more and Chinese consumers having to spend more. Longtime readers should hear familiar tropes:Our common challenge is to recognize that a more balanced and sustainable global recovery will require changes in the composition of growth in our two economies. Because of this, our policies have to be directed at very different outcomes.In the United States, saving rates will have to increase, and the purchases of U.S. consumers cannot be as...
I Beat Roubini to the Punch on Rating Agencies [!]
♠ Posted by Emmanuel in Cheneynomics
at 6/01/2009 08:31:00 AM
Nouriel Roubini has achieved near-cult status among those bearish on the fate of the US economy and its repercussions for the rest of the world. However, I am chuffed to report that some bozo may have beat him to the punch on the charade of US rating agencies. Here's what I wrote on 20 November 2008 (don't you love that doctored graphic?):As an IPE scholar, I am inclined to believe that no amount of red ink will make the major credit rating agencies--S&P, Moody's, and Fitch's--downgrade US debt. The reasons are political-economic. With the exception of Fitch's, these are all US-based firms. When push comes to shove, they will try to protect the national interest, provided not-too-subtle nudges from Sammy. For instance, American authorities have sole discretion for classifying these entities as nationally recognized statistical rating organizations (NRSROs). If American authorities catch wind of an impending downgrade, it is child's play to kick them out of the US credit rating...