Posts of July 2013

'Like Saudi Leaving OPEC': Russians Ditch Potash Cartel

♠ Posted by Emmanuel in Agriculture,Russia at 7/31/2013 02:26:00 PM

Potash Corp of Saskatchewan Share Price Fertilizer may not be the sexiest of industries, but make no mistake: Given its widespread agricultural applications which span virtually the entire globe, nearly every nation with such industries need the stuff. In the past few years, a duopoly has emerged between Russian/Belarusian firms on one hand and US/Canadian firms on the other represented by BPC and Canoptex, respectively. Until recently, both were actually successful in cornering the global market and jacking up prices. However, with the Russian BPC partner Uralkali defecting from its Belarusian one, commodity markets for...

Car Talk: Detroit is Dead; Long Live S Carolina!

♠ Posted by Emmanuel in Supply Chain at 7/30/2013 10:56:00 AM

Despite giving up its distinction of being the world's largest car market to China in 2009, the United States remains comfortably in second place. What's more, the average price of a passenger vehicle sold in the US remains higher than one sold in China for the simple reason that US income per capita remains higher despite income being on an opposite, downward trend. We've talked a lot about cars recently, from the demise of Detroit to its replacement by (foreign-owned and non-unionized) plants in the American South alike in Alabama. Today, let's turn our attention to another rising Southern state. It is well known that...

Belo Monte, Brazil's "Ethical Megadam"

♠ Posted by Emmanuel in Energy,Latin America at 7/29/2013 12:44:00 PM

Here at the IPE Zone, we are true aficionados of oxymoronic terms, many of them wrought by those famously tongue-twisted Yanquis. For starters, try "financial stability," "Internet freedom," and my current favourite, "American savings." Today, though, we have some other (Latin) Americans engaging in these entertaining if oftentimes hypocritical exercises in linguistic flights of fancy. Still, it's perhaps a worthwhile attempt to reduce the rest of the world's gaping Orwellian doublespeak deficit with the United States. With the cessation of large development lenders funding them (at least until recently), we are supposedly...

Private Banking: When Will Asia Overtake Europe?

♠ Posted by Emmanuel in Southeast Asia at 7/25/2013 09:38:00 AM

As more fortunes are being built with each passing day in Asia than in Europe, it is inevitable that the former will overtake the latter as the world's top region for HNWI (high net worth individual) accounts. Remember, the Forbes Rich List already had more Asian billionaires than European ones last year. Yet for historical reasons, it appears that assets under management (AUM) in Europe exceed those in Asia still. To be sure, there is some way to go before Singapore overtakes Switzerland, or Hong Kong overtakes London in country-country / city-city comparisons. From the Financial Times: Singapore could yet overtake Switzerland...

PRC TV Drama Viewership: The Int'l Pecking Order

♠ Posted by Emmanuel in China,Entertainment at 7/22/2013 03:09:00 AM

Popular culture has a way of reflecting preferences and biases, especially when taken from an international perspective. Commercial implications aside, the WSJ's China Real Time blog has an interesting feature on TV drama viewership habits in China, with British dramas such as Downton Abbey gaining an increasingly large audience in the mainland. As in Western nations, certain demographics are more sought after than others. Their measure? The number of threads started on discussion boards per various demographics: Comparing levels of discussion on different social media sites, a recent study from entertainment research company...

In Detroit We Glimpse America's Future

♠ Posted by Emmanuel in Americana,Cheneynomics at 7/20/2013 03:50:00 PM

Just a city boy, born and raised in south Detroit He took the midnight train goin' anywhere... I have been to Detroit and it is not an experience I fondly remember. So, I do not question the motives of the protagonist in the Journey song above in leaving. Still, it was with some sadness that I heard this once-great American city declare bankruptcy only yesterday. In many respects it was the conclusion of the inevitable: years of outmigration and industrial decay had taken their toll on municipal finances. Contrast its decrepit state today with what it used to be. Despite the occasionally dodgy (non-)narrative, the documentary...

When the IMF [Hearts] Capital Controls: PRC Case

♠ Posted by Emmanuel at 7/19/2013 05:21:00 PM

My, my, how things have changed. As late as September 1997--with the Asian financial crisis already underway--the IMF was still arguing for amending its Articles of Agreement to include regulatory powers over opening up members' capital accounts: Last September [1997] in Hong Kong, the Interim Committee of the IMF’s Board of Governors agreed that it was "time to add a new chapter to the Bretton Woods agreement." Thus, it invited the IMF’s Executive Board to complete work on a proposed amendment of the Fund’s Articles of Agreement to make the liberalization of capital movements one of the purposes of the Fund and extend its jurisdiction over capital movements. Understandably, though, the aforementioned financial crisis hardened attitudes of developing countries to the suggestion of wealthier countries' representatives on the IMF's Board of Governors to further liberalization. As "sour grapes" perhaps, the IMF then declared this goal infeasible because of poor economic governance...

Badluck Shinawatra's Failed Global Thai Rice Empire

♠ Posted by Emmanuel in Agriculture,Southeast Asia at 7/17/2013 03:11:00 PM

I suppose that Thai PM Yingluck Shinawatra has received as much grief over her first name as Nigerian President Goodluck Jonathan. But oh, Yingluck, how your name has proven to be unworthy of your fate as of late! Let me explain... Since her election, Yingluck Shinawatra has continued to court populist support from more receptive constituencies of her brother, the controversial exile Thaksin--folks in rural areas as opposed to the snooty Bangkok city slickers who have long been the most vicious Shinawatra haters. Given the need to enlist their support, what better way is there than to guarantee that the government would...

Meet America's #2 Jetliner Company...Airbus S.A.S.

♠ Posted by Emmanuel in Americana,Europe,FDI,Labor at 7/16/2013 09:57:00 AM

Mas oui! There's an old joke that the best car made in America is the (Ohio-made) Honda Accord. Similarly, we may soon hear that the best jetliner made in America is the (Alabama-made) Airbus A320. Following the lead of Mercedes-Benz, the multinational European concern has decided to set up shop in the land of the Crimson Tide to meet US demand for its bread-and-butter Boeing 737 competitor. The post below talks about how the Chinese have been continually frozen out of investing in the US over increasingly dubious "national security" grounds. Yes, there remains that brouhaha over it being forced out of a contract to make...

Latest US China-Bashing: Hog Farm Protectionism

♠ Posted by Emmanuel in China,FDI,Trade at 7/13/2013 03:48:00 PM

I am a true connoisseur of all sorts of protectionism: the more obscure and inscrutable the justifications for it, the more I savour the hypocrisy. Free trade? Get outta here! In recent years, the United States has served up some of the more ridiculous examples of what is, at heart, unvarnished racism on the part of American lawmakers. (You don't see them block European foreign investment on a regular basis, do you?) When the purchase of minor American producer Unocal by Chinese SOE CNOOC, "national security" concerns were raised. There was also the matter of 3Leaf, a minor player in the server market, being subject to Committee...

Is the 2013 US Farm Bill "WTO Legal"? Nope

♠ Posted by Emmanuel in Agriculture,Americana,Trade at 7/11/2013 09:52:00 AM

Ho hum--another US Farm Bill, another round of fat agricultural subsidies for American producers that hurt farmers in the developing world. Just as Brazil successfully sued the US for its cotton subsidies a couple of years back [DS 267], the 2013 Farm Bill under consideration does not do away with actionable subsidies in the form of price supports if crop prices drop significantly. Senator Pat Roberts (R-Kansas) recognizes this, although it should be pointed out that his state is not a major producer of the most-contested crops--rice and peanuts: I also have longstanding WTO concerns. The United States lost the cotton...

Forcing Argentines to Accept Evita Peron Bank Notes

♠ Posted by Emmanuel in Latin America at 7/10/2013 11:16:00 AM

It won't be easy--you'll think it strange--when I try to explain why so many Argentinians refuse to honour Evita Peron bank notes issued a year ago. Over half a century after her early death, she remains a polarizing figure in Argentina. Peronists including the present leader of Argentina (and the person largely responsible for these bank notes), Cristina Fernandez, style Evita as a champion of the poor and women's rights besides. Others think she was simply an opportunist who was at the right place at the right time. Obviously, being associated with General Juan Peron is tough. American media labelled him a dictator; others...

The Futility of Democracy, Egypt Edition

♠ Posted by Emmanuel in Middle East at 7/09/2013 02:16:00 PM

The miserable plight of Egypt post-Mubarak points out shortfalls of mindlessly championing the virtues of "democracy." Americans, already despised in the Middle East for their "elections are great...unless you elect Hamas" hypocrisy, are particularly guilty in this latest fiasco. Worthy of especially harsh condemnation is equating electoral democracy as the be-all and end-all of it. For Western observers, the heart of the matter is that Islamic fundamentalism remains the most organized and potent political force in Egypt. While Mubarak's suppression of the Muslim Brotherhood and Salafists may not have been "democratic,"...

Tennis Diplomacy? ROC-PRC Wimbledon Doubles Champs

♠ Posted by Emmanuel in China,Sports at 7/07/2013 06:41:00 PM

As a casual tennis fan, I usually don't watch the doubles matches at Wimbledon. I guess it was by luck that I caught the women's doubles final after watching France's Marion Bartoli maul Germany's Sabine Lisicki. As with most doubles events--even the finals--the crowd at Centre Court was sparse. However, the result was remarkable from an International Relations standpoint insofar as the identities of the winning players went: Hsieh-Hsu Wei of Taiwan and Peng Shuai of China soundly defeated Australian duo Ashleigh Barty and Casey Dellacqua 7-6 6-1. Despite it being 3 AM in Taipei and Beijing, you can rest assured...

WSJ: What Egypt Needs is Its Pinochet

♠ Posted by Emmanuel in Middle East at 7/05/2013 05:39:00 PM

I do not need convincing that Hosni Mubarak was a better compromise for an Egyptian leader than any of the buffoons that followed him. Witness the total bankruptcy of ideas demonstrated by the Muslim Brotherhood "leadership." While I was amused by their total lack of political sophistication and economic understanding--remember those interest- and conditionality-free IMF loans--things have been quite miserable for the Egyptian people. What remedy, then, do the WSJ op-ed pages offer post-Mursi? Assuming that military rule is inevitable in such a tumultuous nation, they are looking for [gasp!] an Egyptian General Augusto Pinochet: Egyptians would be lucky if their new ruling generals turn out to be in the mold of Chile's Augusto Pinochet, who took power amid chaos but hired free-market reformers and midwifed a transition to democracy. If General Sisi merely tries to restore the old Mubarak order, he will eventually suffer Mr. Morsi's fate. I cannot make up something so distasteful...

Agents of Imperialism? Bolivia Expelled USAID

♠ Posted by Emmanuel in Development,Internet Governance,Latin America at 7/05/2013 08:52:00 AM

I have become captivated by the twists and turns of the Edward Snowden real-life spy caper. While the original accusation that the US was using its advantageous position in the Internet infrastructure to spy on its own citizens and its allies was expected--absolute power corrupts absolutely--its unfolding implications are far more interesting. Call it Frederick Forsyth...on crack. The IPE implications I've covered in some detail, from Ecuador unilaterally disavowing trade preferences given to it by the US to European lawmakers deliberating on whether to delay the start of EU-US FTA negotiations. The latest word is that EC President Manuel Barroso wants negotiations to occur alongside investigations of American spying. The sideshow is at least as interesting: I enjoy the (calculated) titillation as that master of self-promotion, former Russian spy Anna Chapman, has offered to marry spyboy / boytoy [!?] Edward Snowden and thus grant him rights to remain in Russia. Back in Latin...

With (Spying) Friends Like US, Who Needs US-EU FTA?

♠ Posted by Emmanuel in Europe,Internet Governance,Trade at 7/02/2013 12:02:00 PM

It seems the Yanks have gotten themselves into yet another fine mess with their Internet Unfreedom spying activities. [Hello NSA lackeys, I hope you're enjoying yourselves reading this post in between surfing porn sites.] Over the weekend, Der Spiegel added fuel to the fire over the US National Security Agency spying on Internet communications of American friends and foes alike. (Do the Yanks treat them all that differently?) Alike most everyone else, the Germans have come under massive surveillance: The documents prove that Germany played a central role in the NSA's global surveillance network -- and how the Germans have also become targets of US attacks. Each month, the US intelligence service saves data from around half a billion communications connections from Germany. However, linguistic ties being paramount, there is a set of favoured Anglophone nations who are exempt from a thorough covert investigation from the American spooks: No one is safe from this mass spying...