Posts of April 2012

Globalizing Bad Taste in Cars, BRICS+Beckham Edn

♠ Posted by Emmanuel at 4/29/2012 11:42:00 AM

[A weekend feature! It's been such a long time, but rest assured that I still speak of political economy.] Way back when, anyone with a passing familiarity with the automobile business knew what the most important auto shows were: Detroit, Frankfurt, Geneva, Paris, Tokyo. The presence of marques on parade varied by where the automakers hailed from along with how far along the vehicle prototypes on display were in terms of becoming production models. To be sure, some will always be fated to show duty. If you've been to one of these events, there isn't much variation among them: pretty girls broadly beaming from the stands...

Bad Habits Die Hard: On USAID "Relaxing" Tied Aid

♠ Posted by Emmanuel in Agriculture,Americana,Development at 4/26/2012 01:33:00 PM

Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime - Chinese proverb Give LDCs subsidized American foodstuffs and you can feed them for a while, albeit with the risk of decimating unsubsidized local food production. Help develop their food self-sufficiency by buying food locally...well, to hell with that - paraphrasing US aid policy Here's a very important development you may have missed: I certainly did because it wasn't widely publicized at the beginning of the year--even in development circles where I assume it's groundbreaking news. The US Agency for International Development (USAID) has repeatedly been cited as one of the most flagrant offenders in the tied aid sweepstakes. That is, this aid agency has been encouraged to give business to American contractors for various development and emergency relief projects. The pitfall here is obvious: instead of supporting budding enterprises in developing countries, USAID has traditionally...

6/365 Egyptian Lawmakers Vote for IMF Rescue

♠ Posted by Emmanuel in IMF,Middle East at 4/25/2012 10:09:00 AM

Those are such bad numbers you too probably wouldn't have missed much by not getting out of bed. I am simultaneously fascinated and appalled by the developments in Egypt. Among the more influential academics in policy circles--see Anne-Marie Slaughter especially--there's been this idea that we're in a new foreign policy frontier where the availability of digital tools to the average person has reshaped the conduct of diplomacy. This sort of thinking is tied in to the neo-triumphalist version of the Arab Spring in which the "Internet freedom fighters" or whomever the Americans like to style them as to suit their own particular...

Fight-a-Bully: Philippine, PRC Territorial Disputes

♠ Posted by Emmanuel in China,Southeast Asia at 4/22/2012 11:03:00 AM

[NOTE: Perhaps it's not obvious for me to begin writing about a territorial dispute by talking about lawyers, but why I'm doing so will be obvious soon enough.] While I suppose a certain number of lawyers are necessary for modern societal functioning--drawing up contracts, settling contractual disputes, finalizing Larry King's divorces and so on--too many lawyers is a dubious situation. Not only do their functions primarily concern wealth redistribution rather than wealth generation, but having too many folks train for these occupations of often dubious worth may result in unemployment of their sort. While the United States...

Why LDCs Won't Give the IMF More Money

♠ Posted by Emmanuel in IMF at 4/20/2012 09:06:00 AM

I am rather tired of reading news clippings about how LDCs are reluctant to give the IMF more money when their grievances are not given proper airing. If you're looking for a global governance dinosaur par excellence, then I will give you the IMF. Imagine that we were stuck in the Fifties, the White Man's Burden of civilizing various coloured people was still underway, and the global financial crisis that has greatly undermined the West's hegemony didn't happen. In this Mad Men-ish time warp, we'd expect a couple of things. First, the IMF head would always be a Caucasian Westerner despite all the changes that have occurred...

IMF's (Shocking?) Endorsement of Procyclicality

♠ Posted by Emmanuel in Energy,IMF at 4/18/2012 03:44:00 PM

I needn't recycle criticisms you're most familiar with concerning how the IMF exacerbates difficulties by deterring poor countries from using countercyclical policies to cope with downturns--either indirectly via policy suggestions during Article IV consultations or via conditionalities when they encounter balance of payments crises. Review the Joseph Stiglitz (countercyclical) versus Kenneth Rogoff (balanced budget) debate over Washington Consensus-style policies. Recently, I received an invitation to attend the rollout of the IMF's flagship publication, the World Economic Outlook, which is published biannually. Apparently,...

Lingo Wars: Urban Dictionary v Academie Francaise

♠ Posted by Emmanuel in Europe at 4/17/2012 12:09:00 PM

While most things Anglo-Saxon are taking a well-deserved beating nowadays--neoliberal economic policies and a penchant for soaring rates of obesity among other things--there remains considerable vitality in their common language. As the Global Transformations crew rightly pointed out sometime ago, having the most speakers of a language doesn't make it a "global language." For, if this were the case, then Mandarin would be the world's lingua franca. Instead, it's English that makes the claim, being the language expected to be spoken among business and political elites. With the coming of the Internet, those most able to propagate...

EuroPissants: Should Germany [!] Leave Eurozone?

♠ Posted by Emmanuel in Europe at 4/16/2012 10:14:00 AM

Having lived on and off the continent during the past few years, I am a follower and sometimes patron of various things European: Euratom. Euro currency. Eurofighter. Eurostar. Eurotunnel. Eurotrash. Not wanting to be left behind in all this naming fun, I've come up with the EuroPalin and EuroNasty. Today, dear friends, I must indulge your patience as we consider yet another term as indicated in the post title. You see, it is not enough to acknowledge that the PIIGS economies are the weak ones in the EMU. Rather, gaping current account and budget deficits coupled with general uncompetitiveness bedevils more than Portugal, Ireland, Italy and Spain. That's the unfortunate truth. Conventional thinking, reinforced by brainless "reality show" fare in the popular consciousness, suggests that the solution lies in eliminating the weakest link(s): We vote you off the island, Greece. You're fired, Portugal, and so on and so forth. This sort of logic dominates the thinking of those who...

Pope 1, Obama 0: LatAm United vs Cuba Embargo

♠ Posted by Emmanuel in Latin America at 4/15/2012 06:42:00 PM

I tell you the truth, whatever you bind on earth will be bound in heaven, and whatever you loose on earth will be loosed in heaven - Mateo 18:18 Here's yet another example of how the gringos are unwelcome in their own backyard: A few weeks ago, I discussed the skillful diplomacy the Vatican has conducted over the years with the brothers Castro, culminating in Pope Benedict XVI's open-air mass attended by hundreds of thousands in late March. This is the same Fidel Castro, let it not be forgotten, who jailed (or worse) countless Catholic priests. But His emissary has loosed the chains in dealing with Cuba, even denouncing...

I Knew It: 61% of Treasuries Purchased by the Fed

♠ Posted by Emmanuel in Americana,Cheneynomics at 4/12/2012 09:08:00 AM

What do you get when you cross the soppy Bushite Lee Greenwood with Obama's pastor? For one thing, you get a more accurate (financial) portrayal of the current state of that benighted land: I'm cowed to be an American Where at last I know I'm unfree And I won't forget Uncle Ben Who sold me into debt slavery You can modify the rest of the lyrics accordingly--especially with Jeremiah Wright's trademark catchphrase replacing the title of the Greenwood tune. Anyway, this lyrical reassessment was brought about by a TIME feature I read recently that revealed the lie behind the "deficit's don't matter because US borrowing rates are so low" favoured by assorted (and rather ignorant) USA #1-style cheerleaders who inhabit the blogosphere. As it turns out, the Federal Reserve flow of funds report for the entire year of 2011 reveals how "strong" demand is in the "market" for US treasuries. With 61% of Treasury purchases accounted for by Federal Reserve buying, both terms in quotation...

Developmental Authoritarianism: Burma's Turn?

♠ Posted by Emmanuel in Southeast Asia at 4/10/2012 01:18:00 PM

There's an interesting brace of articles [1, 2] from the Financial Times concerning Myanmar AKA Burma opening up to the rest of the world once again. Following Vietnam and China before that, Burma appears to be loosening up to the extent that it can profit from participation in the world economy. Ironically given the general goal of authoritarian development Myanmar's junta wants to promote, a major impetus for Burma right now is to avoid becoming too dependent on China. While the PRC remains Burma's investor of last resort with all sorts of mostly energy-related projects going on there, the junta tired of China exploiting its pariah status to obtain the best deal possible...for China, that is. Or so these articles suggest. I remain convinced that Burma normalizing its relations with everyone else will likely culiminate in ASEAN giving it the stamp of approval by (finally) allowing it to take up the ASEAN rotating chairmanship in 2014. Surely, Myanmar has already done much to...

EuroNasty II: Carbon Taxes on Maritime Transport?

♠ Posted by Emmanuel in China,Development,Environment,Europe,Trade at 4/09/2012 10:26:00 AM

[NOTE: Out of curiosity, I Googled "euronasty" and was shocked, just shocked at the search results! As I've said before, the IPE Zone is a family-oriented site.] There has already been much controversy over the European Union beginning to levy carbon taxes on air transport. In particular, their application to foreign carriers makes them complain that the EU regulation constitutes extraterritoriality insofar as (1) obviously, they aren't European carriers and (2) "taxable" miles are those incurred not just within EU airspace but for the entire journey. So far the EU has avoided contestation of the legality of these carbon...

Palace Coup? World Bank Vets Pick Okonjo-Iweala

♠ Posted by Emmanuel in Africa,Bretton Woods Twins,Development,Gender Equality at 4/06/2012 12:57:00 PM

News is becoming sparser as most of the Christian world slows for the Easter holidays. However, in the run-up to the selection of the next World Bank president which should happen in a fortnight or so, we've had ringing endorsements of Nigerian Finance Minister Ngozi Okonjo-Iweala. (See a previous post for further ruminations.) We begin with an interesting counterblast to the current climate of economist-phobia at development institutions post global financial crisis. While it may be trendy to put non-economists at these institutions, the Economist (surprise!) slams this trend in endorsing her as the best candidate for the...

A Parisian in America: Comic Stylings of IMF's Lagarde

♠ Posted by Emmanuel in IMF at 4/04/2012 11:58:00 AM

This will be short and unsweet as it demonstrates that you do not have to go very far to observe the mind-boggling ludicrousness of the world economy. My homepage ever since I hopped into cyberspace in 1994, Yahoo! News, is carrying an Agence-France Presse clipping about how IMF Managing Director Christine Lagarde is now calling on the United States to contribute more to the IMF, especially to ensure that the European debt crisis does not spill over to America. Given that the United States is the world's most superindebted nation, with a national debt over 100% of its GDP at $15.62 trillion and rising annually at a trillion-dollar-plus rate, it's reminiscent of cadging a bankrupt. And a haughty bankrupt at that who would rather not fulfil its international obligations despite hosting the institution. Call it Yankee UN disease. With US elections coming up, no politicians wants to be seen adding to American fiscal malaise: But her comments will be anathema to politicians in...

Got Fission? Debating Nukes 4 Development

♠ Posted by Emmanuel at 4/02/2012 09:56:00 AM

Our colleagues over at the Bulletin of the Atomic Scientists sent me a notice about a timely new feature of theirs concerning LDCs considering the adoption of nuclear power (the Atomic Scientists maintain the well-known Doomsday Clock). The impetus for doing so should be familiar to everyone: insecure supplies of crude oil and global warming are concerns that we in the Global South share with our peers in developed nations. That said, traditional problematiques that have bedevilled nuclear power adoption have never really gone away. Post-Fukushima, it makes many LDCs wonder if one of the world's most technologically savvy...

Money Talks? Bahrain GP Still On (Fortnight to Go)

♠ Posted by Emmanuel in Middle East,Sports at 4/01/2012 03:05:00 PM

Some have hunger games; Formula One has, well, anger races. There has been a lot in the news about how the Formula One circus will not be disrupted this year alike how last year's Bahrain Grand Prix was postponed then finally cancelled due to the events of the so-called Arab Spring. During the Valentine's "Day of Rage" in 2011, the eyes of the world were also focused on Bahrain, where the al-Khalifa ruling family was not subsequently toppled. Despite more than a few observers questioning the human rights aspects of Bahrain's crowd control efforts up to the present time--another protester died this weekend--organizers...