Posts of August 2012

Non-Alignment Reborn? Morsi, UN's Ban, etc in Iran

♠ Posted by Emmanuel in Development,Middle East at 8/31/2012 03:20:00 PM

The Non-Aligned Movement (NAM) came into existence at a time when developing countries could, yes, align themselves with either the United States and its allies or the Soviet Union and its allies. Even the United States--which dissuaded many countries from attending the 1955 Bandung Conference in Indonesia launching the NAM--has since acknowledged it as a "milestone" for developing countries. Ever-so-suspicious of others' motives, American leaders of the time thought it was some sort of communist shindig, headlined as it was by the attendance of probably the most skilled Asian diplomat of his generation, Chou En-Lai. The...

Developing an 'Autocracy Index' (World Policy Inst)

♠ Posted by Emmanuel in Socialism at 8/31/2012 06:02:00 AM

You are doubtlessly familiar with the "world's worst dictators" feature from Parade. Apparently, this concept of comparing authoritarian rule remains popular as our colleagues over at the World Policy Institute have come up with their own compilation. In their composite measure, they take a look at years in power, percentage of GDP dedicated to military spending, prison population per 100000 people, press freedom and a subjective "expert score" to rank these rather nefarious characters. While I see the logic in using national-level indicators for the most part, they have their limits. This consideration is especially true...

Hillary, More White Man's Burdenish Than Kissinger

♠ Posted by Emmanuel at 8/29/2012 02:39:00 PM

Say what you will about Henry Kissinger and the practice of realpolitik, but it is interesting to note the degeneration in US foreign policy attitudes over four decades. From Kissinger-era live and let live, Missus Clinton has largely returned to the "America knows best" attitude familiar to American exceptionalists. What is of course interesting is that the present secretary of state is even more assured in her smug self-superiority at a time when the US is in clear and obvious political-economic decline. At any rate, here's what Kissinger told South Korean leaders during the Park Chung-Hee era when certain American lawmakers were raising a big stink about human rights in that country. From the account of Kim Chung-Yum [Kissinger] also added that a country had to adopt a political system that served its environment, as the history, culture, and politics of every country was different...Secretary Kissinger remarked in a press conference that: "We cannot change all the governments...

Pragmatist Islamists? Those IMF-Loving* Egyptians

♠ Posted by Emmanuel in IMF,Middle East at 8/28/2012 03:36:00 PM

In case you haven't been following the news, IMF Managing Director Christine Lagarde recently visited Egypt, where she was promptly serenaded by a plea from their Muslim Brotherhood-linked President Mohamed "Islam is the Solution" Morsi to increase the prospective bailout amount to $4.8 billion from $3.2 billion. Undoubtedly, Egypt is in dire economic straits with borrowing costs north of 16% for long-term bond issuances and a massive budget shortfall--which even enhanced IMF beggary will fail to plug by most accounts. That said, there may be an ever-so-slightly improved prospect for a loan coming through (or some hope)....

25 Years Later, World Bank Returns to Myanmar

♠ Posted by Emmanuel in Southeast Asia,World Bank at 8/26/2012 03:36:00 PM

For developing countries, the process of normalizing relations with the rest of the world involves again availing of certain things: Coca-Cola. Pepsi. Aside from re-engaging in trade in (rather unhealthy and fattening) consumer goods, however, you also have development technocrats flogging their services in your country. I am of course talking about World Bank folks coming to your country plying development advice and rather more sought-after loans. From the Inter-Press Service: At the beginning of August, the World Bank, along with the Asian Development Bank, reopened offices in Yangon , following more than a year of widely watched though still disputed political and social reforms in the country. This marks the first formal engagement between the World Bank and Myanmar, also known as Burma,...

Cold War Still Rages...In US Trade Policy on Russia

♠ Posted by Emmanuel in Russia,Trade at 8/24/2012 02:57:00 PM

Remember the time before China joined the WTO when it was annually subjected to congressional dog-and-pony shows concerning whether a country that did not respect human rights deserved most-favoured nation (MFN) trade status with the US? Just as Americans from various walks of life still have a hankering for the good ol' days when Reagan was in office, so do there remain representatives who cannot let go of the Iron Curtain glory days. While Russia already acceded to the WTO late last year, the United States still requires its lawmakers to sign off annually on Russia not disallowing emigration of its Jewish citizens--the...

Myanmar, a Real Frontier Market for Visa Payments

♠ Posted by Emmanuel in Development,Southeast Asia at 8/21/2012 04:01:00 PM

I suppose it's not quite on par with operating a payments system in North Korea, but this is as close as it gets in Southeast Asia as the American multinational corporation Visa is set to enter Myanmar. With many Western firms looking enter to re-enter the till recently off-limits nation due to American and European economic sanctions, Burma is regarded as something of a frontier market. But, keep in mind that it's not as if the Burmese are unfamiliar with Western companies. Rather, the opportunity lies in the capitalizing on the previous familiarity they've had with MNCs until many were forced to leave to comply with sanctions....

The Fading Dream of Yuan-Yen Direct Exchange

♠ Posted by Emmanuel in China,Currencies,Japan at 8/20/2012 03:12:00 PM

One of the things people unfamiliar with currency markets do not fully appreciate--and these include poo-bahs alike Fred Bergsten of the Peterson Institute of International Economics--is that all currency pairs involve the US dollar and something else. To change Japanese yen into Chinese yuan for instance, you would typically refer to the USD/JPY exchange rate first to obtain dollars, then change the dollars to yuan via the USD/RMB exchange rate. Recently, the Chinese and Japanese governments established mechanisms to bypass the need to exchange their currencies into dollars first. In other words, you could exchange yen for yuan and vice-versa straight without changing first into dollars. It sounds great in theory: why mess with dollars when you are doing trade within Asia, anyway? The transaction costs of not having to obtain dollars in the process should reduce the costs of foreign exchange. However, things have not quite worked out that way it seems. Because the market in...

Speculation, Food Prices & Firm Reputation Risk

♠ Posted by Emmanuel in Agriculture at 8/20/2012 01:00:00 AM

In any number of commodity classes, there is the accusation that speculators and other sorts of profiteers are driving up prices to a degree unwarranted by economic fundamentals. You often hear this with regard to oil, but it's also an accusation heard with regard to foodstuffs as their prices have exploded upwards. (Developing countries are supposed to be especially vulnerable to these shocks since food expenditures take up more of a poor households's expenditures.) And, of course, the normative issues behind speculating in food are much greater than those in oil since you cannot live without the former. I recently came upon an interesting Reuters article reminding how diversion of corn crops for ethanol is causing the price of this crop to increase Stateside. This concern is especially salient this year when yields of crops alike corn have been hurt by drought conditions. Almost as an aside, the article also mentions controversies over commodity speculation in foodstuffs....

Would Korea Have Developed Following World Bank?

♠ Posted by Emmanuel in Bretton Woods Twins,Development,Economic History,South Korea at 8/17/2012 11:45:00 AM

Although more than a few colleagues tend to view the World Bank in quite a negative light no matter what they do, I have come to a more ambivalent position. (Newer readers should note potential conflicts of interest since they gave me not-insubstantial prize a few years back when I was still a PhD student.) Yes, their policies tend to follow what's in vogue among American elites. Yes, their policies too have in the past been less than considerate of the particular circumstances of developing nations in attempting to transplant foreign models of development. But ultimately, I do not think that more sinister motives attributed to them hold. Rather, "America knows best" has often been combined with off-target advice for mixed results in more than a few circumstances. Which brings me to today's post. While proctoring exams, I've had more time to read Kim Chung-yum's firsthand account in From Despair to Hope: Economic Policymaking in Korea: 1945-1979. Although it's common knowledge...

Assange's Last Stand: 'Internet Freedom' Revisited

♠ Posted by Emmanuel in Anti-Globalization at 8/16/2012 03:08:00 PM

Now this is more like it: diplomatic intrigue, a kooky character, lurid accusations...and American baddies to boot (the last does "Diddley" Bo Xilai one better). The New York Times has a--how should I put this...piquant account of WikiLeaks founder Julian Assange holed up in the Ecuadorean embassy in London. Living in a rabbit hole of a diplomatic premise just off Harrods (I could bring you there even while stone drunk), it was perhaps inevitable that Ecuador grant him asylum, so no surprises there. However, there are a number of interesting twists, most obviously that the embassy is heavily watched by British security...

Honour Among Thieves, Somali Pirate Edition

♠ Posted by Emmanuel in Africa,Underground Economy at 8/14/2012 03:05:00 PM

Coming from one of the countries worse affected by maritime piracy, I tend not to romanticize incidences of ship hijacking in the Gulf of Aden. That said, it strikes me as remarkable how much more "professional" and "businesslike" Somali pirates have become. Just as banks of yesteryear used to have lavish premises replete with gilt and marble to symbolize the idea that they meant business and were here to stay, so too do modern-day pirates (no contemporary references to the state of the financial services industry intended) understand the value of symbolism. Accordingly, Reuters has a fascinating article describing how Somali pirates now have a grasp of business essentials such as marketing (i.e., presentation of ransom demands as a worthwhile "purchase"), accounting (ransom valuation of captured crew and vessels), and so forth: [Pirate captain] Jamal provided the ship owners a breakdown of the value of their tanker, the oil it contained and also the worth of the...

Wacky Ways of Middle East Youth Unemployment

♠ Posted by Emmanuel in IMF,Labor,Middle East at 8/13/2012 06:52:00 AM

Over a year ago I penned a much-visited post depicting the world's worst levels of youth unemployment in the Middle East / North Africa (MENA) region that continue to contribute to pressures for regime change in any number of MENA countries. Today, I have an update on certain peculiarities of the MENA situation that make it unique from the rest of the world. While there are any number of regions with a problem with youth unemployment--North America and Western Europe are certainly not exempted--remedies for the MENA region must take its contextual specificities into account. The IMF's Masood Ahmed recently enumerated a...

Worse Than Facebook's: Manchester United IPO

♠ Posted by Emmanuel in Casino Capitalism,Sports at 8/11/2012 02:50:00 PM

I guess all's bad that starts badly. In recent years as an erstwhile follower of the English Premier League, I have pondered the dastardly dealings of the rapacious Ameriscum owners of Manchester United [1, 2, 3]. When you hear the words "American" and "finance" mentioned together nowadays, your gut response is that something malodorous is afoot. And so it has been with the means the Glazer family came to acquire England's most storied football club--by leveraged buyout--and their subsequent "management" of it--by saddling it with hundreds of millions of dollars in debt. Having failed in tricking Hong Kong and Singapore...

Gold, Copper and Neocolonialism in Peru

♠ Posted by Emmanuel in Latin America,Mining at 8/10/2012 09:57:00 AM

As in any number of other countries, mining remains a most controversial industry in Latin America. If you want an industry which has every possible controversy going with it--pollution issues, labour issues, domestic revenue issues and foreign exploitation issues among others--look no further. It is not encouraging that the issues remain the same after all these years: Being unable to create local mining concerns of requisite sophistication, it remains the case that foreign mining concerns still possess the much-needed expertise to bring extractive industries' output to the world market. This situation is playing out in...

M Yunus on Why Japan (!) Needs Microfinance

♠ Posted by Emmanuel in Japan at 8/09/2012 08:16:00 AM

Alike the north of Great Britain or the American rust belt, there are any number of stagnant towns in northern Japan whose difficulties have been magnified by the tsunami's wake. And, just as the UK and the US are mired in a prolonged funk despite having had zero interest rate policies (ZIRP) for some time now, Japan has been there for decades on end it seems. What to do? Returning to criticisms that many of these economic rescue programmes mounted by many governments are not geared towards helping small- and medium-sized enterprises, The pioneering Nobel Prize winner Muhammad Yunus believes that a way to kick-start Japan's economy is to offer microfinance instead of cheap loans to large, export-oriented firms who have in the past been the beneficiaries of Japanese industrial policy. Of course, Japan has a lot of other pressing and interrelated problems of debt, depopulation, deflation and a strong currency, but here's something that's potentially overlooked that may play a...

Stateless People: Independent Olympic Athletes

♠ Posted by Emmanuel in Sports at 8/07/2012 08:26:00 AM

My heart naturally goes out to the stateless people of the world. In our part of the globe there are those frequent headline-grabbers the Rohingya in western Burma. Unfortunately, they are far from alone in their persecution by nation-states who think they do not belong and have not been shy about using their monopoly of violence in "othering" these people in academic-speak. For an extreme case, consider the Kurds. In theory, the Olympics are a celebration of camaraderie among nations through the medium of sport. These events, however, are not primarily a spectacle of nationhood but of sporting achievement. That is, athletes...

Serbia Tells EU to Shove Central Bank Independence

♠ Posted by Emmanuel in Credit Crisis,Europe,IMF at 8/05/2012 06:01:00 PM

It was not so long ago that I offered to help improve Serbia's chances of EU accession by going on a Soldier of Fortune-inspired "Ratko Hunt 2010." Just when you thought that Serbia's path to EU membership has been smoothed out by the capture (or death) of the "Big Three" war criminals Slobodan Milosevic, Radovan Karadzic and finally Ratko Mladic, the Serbs go ahead and throw a curveball. Or, for a more appropriate sporting analogy, hit a moonball into the heart of Europe. Alike any number of former Soviet satellites, Serbia finds itself in economic trouble nowadays. Apparently, the current left-leaning leadership has been...

It's the Economy, Stupid, Egypt & IMF Edition

♠ Posted by Emmanuel in Credit Crisis,IMF,Middle East at 8/05/2012 10:44:00 AM

Mirror, mirror on the wall Who's the most conditionality-laden of them all? (That's not my cartoon, by the way) Americans enjoy fairy tales where everyone lives happily ever after: Cinderella. Snow White and the Seven Dwarves. Unfortunately, many of these Americans in positions of power seem to mistake Disneyfied endings with foreign policy: Liberating Afghanistan from the Taliban. Greeting American liberators with flowers in Iraq. (Yeah, right...and I have some beachfront property in Nebraska I want to sell you.) And so we have yet another of these fanciful stories about Middle East revolution with the various...

EU Political Economy, France v GB Olympic Ed'n

♠ Posted by Emmanuel in Sports at 8/01/2012 12:16:00 PM

In case you missed it, the Socialist French Prime Minister Francois Hollande yukked it up with his British counterpart David Cameron at the London Games. In particular, he took a swipe at Cameron's assertion that Britain stands ready to welcome tax exiles if the French government charges tax rates over 50%: President Francois Hollande has had a dig at David Cameron by jokingly thanking Britain for "rolling out the red carpet" for French athletes to win Olympic medals. Mr Hollande was getting his own back on Mr Cameron for comments in which the Prime Minister said he would roll out the red carpet for French businesses fleeing the 75% top rate of tax proposed by the Socialist president. Hollande is clearly pleased with himself. As I write, France already has 11 medals including 4 gold medals to the host nation's 4. GB has yet to win a single gold medal. Overall, France lies fourth in the medals table, and Great Britain a lowly 21st... Mr Hollande joined Mr Cameron at the Olympic...