Egypt's World Beggary Tour 2013 Goes On

♠ Posted by Emmanuel in , at 4/28/2013 09:38:00 AM
The rise and millennia-long fall of the Egyptian Empire continues apace. From the giddy heights of empire catalogued in the Bible to its present penury, Egypt has come a long way--down, that is, with no end in sight. The latest humiliation of course is being flat broke after the "Arab Spring" broke its back financially as tourism and FDI have disappeared due to the very poor law and order situation in the country. That is, the very essential thing a country needs to move forward--political order--is elusive post-Mubarak. What is happening should be known to almost all readers by now. Losing foreign exchange and unwilling to give up on politically popular food and energy subsidies in a context where even more civil unrest would emerge if these are removed, Egypt is going around the world--begging bowl in hand--to cadge foreign exchange to tide it over. But, for how long can it last without an IMF deal which would unlock further emergency funding? This being the IPE Zone, the...
Read More

EU-US FTA & the Lameness of 'Cultural Exception'

♠ Posted by Emmanuel in ,, at 4/24/2013 04:21:00 PM
There is already a certain desperation to the idea that trade can significantly be boosted between the US and EU FTA when they already have exceptionally low tariff levels. What more substantial trade barriers can be removed? Are these dynamic and growing markets? The answers, of course, are "few" and "no." Despite there being a number of obstacles to even this smallest of possible achievements--especially agriculture--one of the more interesting ones concerns trade in "audiovisual industries." Today, I came across two interesting articles on US entertainment. The first concerns American firm director Michael Bay "apologizing" for his movie Armageddon. Alike the vast majority of US-based productions, Bay's films have next to no artistic merit despite having commercial appeal. So it's schlock, but it's schlock that finds a ready audience of gullible folks worldwide of the lowest common denominator variety [explosions! special FX! naked people! cussing!] I myself prefer watching...
Read More

Of Profits & Reconciliation: Kaesong Industrial Complex

♠ Posted by Emmanuel in at 4/21/2013 12:01:00 PM
They say the road to hell is paved with good intentions, and that certainly seems to be the case here: opened in 2004 as a manifestation of the late Roh Tae Woo's "sunshine policy" of South towards North Korea, it was hoped Kaesong Industrial Complex would herald closer economic ties between the two Koreas. Located in the North near the now-legendary 38th parallel, this (quasi-) export processing zone was modelled in part on the example of other successful EPZs in the region. Through trials and tribulations you are all well aware of including North Korea's penchant to throw tantrums every so often, Kaesong has not really...
Read More

Arab Spring F1 (Ep III): 2013 Bahrain Grand Prix

♠ Posted by Emmanuel in , at 4/19/2013 06:15:00 PM
For a third consecutive year, we have controversy over whether the Bahrain Grand Prix should proceed. In 2011, it was famously cancelled despite attempts by F1 bigwigs to insulate this event from the turmoil that engulfed the region via the Arab Spring of protests against authoritarian regimes (alike that of Bahrain)[1, 2, 3]. Despite many conscientious F1 drivers saying that F1 is simply a sport while what's going on in the country is a life-or-death matter to some, the race went ahead anyway in 2012. This year, the protesters are back in action. To be sure, the protesters are smart in understanding that the travelling...
Read More

LDC Marketing Lessons Selling to Brokebank Yanks

♠ Posted by Emmanuel in , at 4/17/2013 05:27:00 PM
Here's an interesting feature I somehow missed given my interest in the intersection between marketing and international political economy. Nowadays the "American Dream" is a punch line to a sick joke only the most delusional and gullible of USA#1 cheerleaders actually fall for. (And the joke's on you, buddy, as they would say.)  But once upon a time, there was a shining idea of "America" before the world crushed its spirit of smug self-superiority. In reality, 20% of these impecunious wastrels are now worth less than zero. Those were the days: In the commercial realm there was Raymond Vernon's "product life cycle" theory (PLC) in which the most advanced products would emanate from a highly industrialized nation (like the United States) before being sold as exports to other nations including less developed ones. Eventually, they would even be made there as the "lead" nation moved on to ever-newer innovations. Unlike ever-decreasing living standards in the US of A, however,...
Read More

The IMF is Unfair (Duh): Japan v Egypt

♠ Posted by Emmanuel in ,, at 4/15/2013 12:30:00 PM
That the IMF has special and differential treatment for developed countries over developing countries is an unoriginal criticism of the institution. For whatever reason, rich donor countries do not get long sermons about fiscal profligacy, burgeoning deficits, and the need for belt tightening. On the other hand, poor borrower countries are given long sermons about fiscal rectitude, out-of-whack deficits, and the need for austerity. In other words, the poor need to bear the brunt of socially dislocating and harmful policies, while the rich go scot-free. The recent global financial crisis has been an opportunity for the IMF to prove otherwise. As its recently disgraced and departed former leader suggested, this is supposedly no longer the big, bad IMF that prescribed "structural adjustment" as a "one size fits all" remedy to financial crises globally. Hah! To demonstrate continuing unfairness, let's begin with Japan whose national debt is beyond an unthinkable 200% of GDP. Would...
Read More

"Overfinance": Iceland, Cyprus...Now Luxembourg?

♠ Posted by Emmanuel in , at 4/10/2013 02:46:00 PM
The modern world has enabled many things to grow far larger than they ought to be through rather unnatural processes. Below is an alleged photo of a 30 pound "goldfish" supposedly caught in a lake in France. I still cannot believe my eyes so many weeks after first seeing this photograph, but if it's real and not Photoshopped, I am truly gobsmacked. In a similar way, financial crises in Europe are roiling countries whose banking sectors have grown unnaturally large relative to the "real" economy. What does it matter if your financial services industry is unusually large compared to GDP? Well, go ask Iceland from a few years...
Read More

Loser's Lament: Delta Air Sues US Ex-Im Bank

♠ Posted by Emmanuel in ,, at 4/05/2013 05:02:00 PM
The hapless and pathetic US carrier Delta Airlines seems less interested nowadays in running a viable business than in taking on quixotic wild goose chases. A few months ago it made the headlines by buying an oil refinery to help bring its costs under control. Nevermind that it's the cost of crude oil that's particularly high and not that of refining it, but hey, it made for a pretty good 5-minute publicity stunt if it did not neccessarily improve Delta's bottom line. Now we have another act of desperation with virtually no chance of paying off: Delta has filed a case against the American Export-Import Bank for allegedly providing "subsidies" to foreign carriers it is in competition with by offering export finance to Boeing when it sells jetliners abroad. Aside from the sheer chutzpah of believing that the US government would prioritize the interests of a constant drag on its purse alike the airline industry at the expense of a viable export industry alike commercial jet exports,...
Read More

Obama's Anti-China Free Trade Area of Free People [sic]

♠ Posted by Emmanuel in at 4/02/2013 06:31:00 AM
Question: What do you get when you cross the EU-US FTA with the Trans-Pacific Partnership? Answer: The Free Trade Area of Free People (FTAFP)[sic] During the Cold War, older readers will remember that the United States began funding pro-democracy propaganda via Radio Free Europe, Radio Free Asia, and so forth. Now that the Cold War is over, we are, er...supposedly returning to that same sort of mentality from the Yanks. Or, at least news sources are telling as alike the Financial Times. Maybe it was a slow day at the world's premier financial newspaper, but it too has succumbed to this temptation of portraying US FTA initiatives as those meant to "bandwagon against" China in the economic realm. I am honestly wary of this characterization since it, first of all, brings us back to the framing of trade as inherently conflictual when it's supposed to be mutually beneficial as per the theory of comparative advantage. Moreover, hasn't China pursued FTAs of its own especially in Asia...
Read More