Meet China's Real Challenger, Mexico (No Kidding)

♠ Posted by Emmanuel in ,, at 9/27/2012 12:02:00 PM
Military man-turned-president Porfirio Diaz is usually attributed with saying, "Poor Mexico--so near the United States, so far from heaven." It is true that more than a fair share of Mexico's law and order woes stem from being a gateway to the world's largest consumer market for drugs in the United States--ask Hillary Clinton. Yet, while lurid tales of drug-related violence at the US-Mexico border unfortunately feed stereotypes about the country, Mexico has actually been quite progressive in the economic realm and is even approaching North American standard-bearer Canada in many respects. Debt crises no more; it's time is...
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Cooked Books & Worse: Argentina's IMF 'Red Card'

♠ Posted by Emmanuel in ,, at 9/25/2012 12:41:00 PM
Say what you will about the IMF, but they're pretty thick-skinned folks by now with all the criticism they engender year after year. Materially, however, the power they have over countries emanates from them being able to withhold emergency lending to countries that do not stick to the (structural adjustment) programme. Witness the likes of Serbia and Hungary endangering their IMF (life) lines due to abrogating central bank independence, the sine qua non of modern central banking for the neoliberal set. Today, it's Argentina's turn to be in the IMF doghouse [arf-arf]. And how! Remember that Argentina was not so long ago...
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Pol Eco of Trade Stats: Value-Added, Anyone?

♠ Posted by Emmanuel in ,, at 9/23/2012 06:19:00 PM
Can it be that a large part of economic conflict in the world is down to artifactual statistical considerations? That in fact could be the conclusion you would draw if the latest effort to change the way the world records trade comes true in due time. Everyone is by now aware of the fact that the United States is the world's largest net importer, and this fact has been lamented far and wide by Americans decrying their diminishing exporting prowess in recent decades. On the other hand, export-focused Asian nations alike China and before it the Asian tigers and Japan have routinely been accused of using unfair trade practices...
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Agrodiplomacy: PRC-Ukraine $3B Loans-for-Corn

♠ Posted by Emmanuel in ,, at 9/20/2012 05:02:00 PM
It's no big secret that Ukraine has been on the ropes financially for the past few years. Alike every sort of commodity exporter nowadays, however, it's found itself in luck as the the world's banker du jour and its voracious appetite have come to the rescue. That is, troubled countries can of course go to the conditionality-laden IMF as Ukraine has. But, if they're lucky, they have commodities to offer that other creditor of note which couldn't care less about economic management, governance and other Western hang-ups. Actually, there's more to this story than "Ukraine will guarantee its annual output of maize exports to...
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Vladimir Putin Tells USAID to Beat It (Just Beat It)

♠ Posted by Emmanuel in , at 9/19/2012 12:00:00 PM
Let me preface this blog post by saying I don't want to see no blood, so there's no point in USAID acting like a macho man. It doesn't matter who's wrong or who's right--just beat it. I believe that I have been fair in criticizing the US development agency USAID on two main grounds. First and foremost, they remain one of the most egregious offenders in the "tied aid" sweepstakes. That is, they only allow aid monies to be spent on American products and services in several categories until now. This practice is most offensive when it comes to food aid. Instead of helping build up the capacity of aid recipient countries to...
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Japan, PRC & Dumbly Shooting Down Flying Geese

♠ Posted by Emmanuel in ,,,, at 9/18/2012 02:54:00 PM
The migration of the so-called "Flying Geese Model" has been responsible not only for integrating more regional economies into the world economy's fold but also raising living standards in East Asia as the centre of economic gravity is rapidly heading towards our part of the world. The essentials of this story are well-known: high production costs due to a strong yen and dearer labour have encouraged Japanese firms from the first wave of industrialization in our region to set up shop elsewhere as long as comparative or competitive advantages are found. In turn, the likes of Taiwan and South Korea have followed in Japan's wake...
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The World's Best Central Bankers Don't Do QE3

♠ Posted by Emmanuel in , at 9/16/2012 04:07:00 PM
The definition of insanity is doing the same thing over and over again and expecting different results - Albert Einstein Here in the rest of the world, Fed Chairman Ben Bernanke is regarded somewhere between a joke and a menace. It thus comes no surprise that the world's most infamous central banker is nowhere to be found among this year's rankings of the world's top practitioners in this art. As observant American T-shirt makers have noted, "let them eat cash" is not quite an economically progressive move either at home or abroad. On its present trajectory, the US escaping the "new normal" of 1-2% annual growth is a distant...
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What Euro at $1.31 Says About Western Economies

♠ Posted by Emmanuel in , at 9/16/2012 02:05:00 PM
Not to my particular surprise--I too believe that the world should worry about the dollar and not the euro--the common currency went back up to $1.31 after the Federal Reserve announced QE3. Oh, the irony. Here we were supposing that old Europe had been left for dead, yet even this currency used by various troubled peripheral nations alike Greece, Ireland, Italy, Portugal and Spain has managed to bounce back despite everything. To cut a long story short concerning the battle of the moribund Western economies, consider: If subprime growth [U-S-A!] combined with unlimited deficit spending is preferable to fiscal retrenchment resulting in (a hopefully short-lived and transitional) recession [E-U!], then why is the currency of the latter preferred to the former? As per point (1), does the market prefer policies that involve tackling fiscal problems head-on despite the immediate costs over delaying any meaningful effort to address deficits? Considering that the bond yields of the...
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An Economic Case for Catalan Independence?

♠ Posted by Emmanuel at 9/14/2012 04:54:00 AM
Nothing stokes popular discontent like economic malaise, and Spain's current plight of enduring, among other things, borrowing costs characteristic of a third world country instead of a first world one is now the Catalan cause. Never fond of Spanish central government to begin with, the rallying cry for independence is in not being weighed down by that economically regressing nation: For the first time, polls this year revealed that a majority of Catalans now want an independent state – a demand that will reach full voice on Tuesday in mass rallies marking the Diada, Catalonia’s national day, under the banner of “Catalonia:...
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Roll Over Reagan: On Naming US EEZ After Ronnie

♠ Posted by Emmanuel in , at 9/13/2012 09:37:00 AM
Readers familiar with maritime disputes will of course know that the United States has not signed on to the UN Convention on the Law of the Sea (UNCLOS) even now. While UNCLOS was introduced by the United Nations during the term of President Reagan, he was one of the leading voices against signing on since it would limit American sovereignty. Reflecting that quintessentially conservative American tone, he derided UNCLOS as "socialism run amok" and a "third world giveaway." Unfortunately, this sort of self-interested reasoning is also behind the US not signing on to several other meaningful UN conventions alike those on gender equality and the use of land mines. What's the point in having UN headquarters in a country which doesn't particularly like the institution? To be sure, there are political-economic costs to this sort of American isolation. Witness Hillary Clinton's wishes that Asian nations contesting the dominion over the South China Sea resolve their conflicts by applying...
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Jobless USA: Industry Training vs College Education

♠ Posted by Emmanuel in , at 9/11/2012 05:26:00 AM
Ho hum, another month, another jobs disaster Stateside as less than 100,000 jobs were created --a pace which only prolongs what is already the most protracted recovery from job losses suffered from a recession. While the unemployment rate "dipped," this artifactual occurrence is largely down to many leaving the labour force for one reason or another. Although many Americans--including largely self-serving academics--repeat the mantra that college is the solution to US job woes, I remain unconvinced. Not only are college graduate wages falling, but college expenses are rising at a rate far outstripping inflation. If college was the magic bullet to the employment situation Stateside, then the situation should not be so dire to begin with given that enrollment is at or near all-time highs. It does not compute. In addition to college's worsening cost-benefit proposition, another thing the "college fundamentalists" (education's equivalent of religious and market fundamentalists)...
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Patrice Lumumba Friendship University Revisited

♠ Posted by Emmanuel in , at 9/09/2012 10:09:00 AM
Younger readers probably don't know what the USSR's Patrice Lumumba Friendship University was, so a short introduction is required. Having spent a while in Western academic circles, I can assure you that although many instructors have leftist sympathies--they know their Antonio Gramsci and Karl Kautsky by heart--they simply don't live the communist lifestyle, preferring the petit bourgeoisie sort of existence. British and American academia have more than their fair share of champagne socialists and the gauche caviar. Call it an inherent contradiction of leftish Western academia. However, during the cold war (LSE IDEAS used...
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CSR: From 'Blood Diamonds' to 'Conflict Minerals'

♠ Posted by Emmanuel in , at 9/07/2012 11:22:00 AM
In 2006, there was a movie entitled "Blood Diamonds" starring Leonardo DiCaprio (before he became blubberized and American-sized) that brought popular attention to the titular cause. For those of you covering corporate social responsibility (CSR), the issues should be familiar: Repressive governments and militiamen have been accused of using proceeds from the mining of these diamonds to fund their bloody conflicts in Africa. Nowadays, the cause celebre is the Democratic Republic of Congo.  As it turns out, diamonds are but one product of extractive industries which have been identified in funding African conflicts....
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Peddling Geo-Influence: PRC/Cambodia, US/Egypt

♠ Posted by Emmanuel in ,,, at 9/06/2012 08:33:00 AM
Geopolitics may have gone somewhat out of fashion after the fall of the Berlin Wall, but they've never become truly unfashionable. With the US nosediving in terms of global competitiveness and so many other things, various parts of the world are literally up for grabs to those displaying enough initiative. In other words, the "end of history" looks further away than ever with China replacing the Soviet Union with its odd hybrid of market socialism. As a sign of the times, contrast the United States which is more in prevent defence mode and China which is taking a more aggressive line. Recently I wrote about how China used its relatively close ties with Cambodia to frustrate the latter's fellow ASEAN countries who wished to bring up the matter of the South China Sea during the most recent ASEAN Regional Forum (ARF) security meetings. As the host in 2012, recall that Cambodia essentially told the Philippines and Vietnam to shove it. Back to the future? Back to the seventies, I...
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Thailand Still Dreams About an 'OPEC of Rice'

♠ Posted by Emmanuel in , at 9/02/2012 08:24:00 AM
I guess there are few truly novel ideas in international political economy. Since the formation of OPEC, developing nations have envied its perceived success in buoying oil prices. As such, there have been any number of cartels for other commodities which have been mooted or even made. Bauxite, anyone? However, it should immediately be apparent that the prospects of a successful cartel depend on a number of things such as (a) the centrality of a commodity to modern life, (b) the price elasticity of demand for the commodity, (c) the global market share of the countries within a cartel and (d) the willingness of cartel members...
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