Goldhater: Can India Fix Its Current Account Deficit?

♠ Posted by Emmanuel in , at 1/31/2014 10:28:00 AM
First came the James Bond film Goldfinger, then came the spoof movie Goldmember. Now we have the threequel...Goldhater. It is generally well-known that India is a major if not the #1 market for the precious metal since many cultural traditions are based on it--especially as gifts. However, the substantial rise in gold prices in the past decade or so has served to increase India's current account deficit. How to control rises in the deficit, then? India has been busy slapping one tax on gold after another: India will not revise its record high import duty on gold and other restrictions on imports until the nation's current account deficit is firmly under control, Finance Minister P Chidambaram said in Davos on 23 January. India has a record high 10% import duty on gold and a rule that says 20% of all bullion imports must exit the country as exports. The subcontinent used to be the world's largest consumer of the precious metal until the government made three upward revisions...
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Bet on Asia? How Macau Stomps Puny Las Vegas

♠ Posted by Emmanuel in , at 1/29/2014 02:00:00 PM
I did not fully appreciate how well and truly Las Vegas has been eclipsed by Macau. 2006 was the year Macau overtook Las Vegas in gambling revenues. Perhaps reflecting the dour, sour mood of a has-been nation experiencing the overwhelming misery wrought by the BushBama years, Las Vegas has gone nowhere since. However, Macau is going from strength to strength. From crackdowns on free-spending PRC officials siphoning government funds to gamble in Macau to an induced slowdown in growth on the mainland, it doesn't matter. Indeed, the worry is not about Macau losing paying customers, but not having enough facilities to welcome...
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US-Owned Cruise Lines: Guaranteeing Misery at Sea

♠ Posted by Emmanuel in at 1/29/2014 01:02:00 PM
So many people to poison, so little time American air lines and cruise lines are renowned worldwide for their absolutely abysmal standards (if they have any). There is nothing as soul-destroying as taking a flight on American, Delta, United. US carriers are rightly regarded as utter garbage by global standards, and these purveyors of human misery will never win any global travel awards. Not content with immiserizing American flyers, Yanquis dabbling with the travel industry have expanded operations to cruise lines. Carnival Cruise Lines are famous for sickening passengers on their pile 'em high and sell 'em cheap misadventures...
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USAID Told to Get Lost Pt. 3 (Ecuador Edition)

♠ Posted by Emmanuel in , at 1/26/2014 05:59:00 PM
I almost forgot to post about this one (apologies). Mostly on the grounds of political interference, the United States Agency for International Development (USAID) has, in the past few years, been bounced from Russia and Bolivia. The proximate cause is when USAID provides funding to civil society organizations which may not be in the best standing with the leaders of these countries. And so the story repeats itself in Ecuador: The United States has canceled aid to Ecuador worth $32 million over the coming years after long-running disputes with the government of socialist President Rafael Correa, according to U.S. officials. Correa, a U.S.-trained economist, has often been at odds with Washington since winning power in 2007. He accuses the U.S. government of trying to undermine him and this year Ecuador renounced U.S. trade benefits dating from the early 1990s [see here]. According to a U.S. State Department spokesperson, Ecuador recently informed the U.S. Agency for...
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Can [Mexico, Turkey] Withstand EM Selloff?

♠ Posted by Emmanuel in , at 1/24/2014 07:26:00 PM
OK, here's the quick version of What's Going On in the World Economy. Despite the US jokeonomy failing to revive from comatose to, say, zombified as witnessed by the labor force participation rate falling with no end in sight, the rumor is that the Fed will further slow down its purchases of US Treasuries. In turn, expectations of higher interest rates Stateside is causing a selloff in emerging markets as investors repatriate their funds. Who, then, is macho enough to weather this Made In America @&^*storm? Argentina is putting the pedal to the metal on the highway to hell, but it was headed in that general direction anyway. Hence the emerging markets' latest battle cry to all those who care to listen: Developing countries are not all alike! We're not Argentina! Or so they say from Davos, Switzerland. Among those protesting most loudly there is Turkey, most likely because many commentators have lumped it with the "developing economies likely to falter" category. And so...
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Party Like 2001: Argentina Again Headed for Default

♠ Posted by Emmanuel in , at 1/23/2014 01:33:00 PM
There is no shortage of bad news these days...even The Captain and Tennille of "Muskrat Love" fame are calling it quits. In a sort-of related story, the Argentinian love affair with the retro-Peronist Fernandez-Kirchners appears to be coming to an end. Buoyed earlier by disavowing its foreign debt and engaging in a program of massive government spending powered by money printing, things were bound to come to an unfortunate end sooner or later. 2014 may be the year when the hurt that has been storing up since Argentina's 2001 default comes back in a big way: Thirteen years after that collapse, President Cristina Fernandez de Kirchner is running out of time to avert another crisis. The policy mix that Fernandez and her late husband and predecessor, Nestor Kirchner, used to usher in 7 percent average annual growth over the past decade -- higher government spending financed by printing money -- is unraveling.  Populism plus mismanagement equals a fine mess as the government...
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Lampooning PRC 'Non-Interference' in South Sudan

♠ Posted by Emmanuel in ,, at 1/21/2014 08:54:00 AM
Does China side with President Salva Kiir or Rick Machar? Both? Neither?  Us folks working in development studies are simply fascinated by the mysterious foreign aid activities of China. Unlike rich countries which are members of the OECD Development Assistance Committee (DAC) and disclose who receives their aid, for which projects and in what amount, China does not feel an obligation to do so. A few years ago now, China released a white paper on foreign aid that gave a fleeting glimpse of its aid practices, albeit without disclosing how much it has actually provided over the years and much more. China's practices...
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Secrets of Orlando's 'Harry Potter' Theme Park Success

♠ Posted by Emmanuel in , at 1/21/2014 08:51:00 AM
You needn't be a movie star to enjoy Butterbeer,; just head to Orlando FL Here's another example of the fallibility of what you read on the Internet--this time from, er, me. Three years ago, I thought that the development of a Harry Potter theme park in Orlando, Florida based on the world-conquering series of books and cinematographic adaptations was a bad idea. Why? Simply put, it deals with location, location, location. If the series were set in a sunny and humid climate where the protagonists wore beach shorts and flip-flops all the time, then there would be no problem. As it is, however, the series is set in a dark,...
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So Long, Asia: Africa is Now Fastest-Growing Continent

♠ Posted by Emmanuel in , at 1/19/2014 10:13:00 AM
At  midyear 2013, IMF bloggers declared Africa to be the second-fastest growing region in the world after (developing) Asia. Fast-forward a couple of months and it now has the distinction of being the world's fastest-growing region outright. Given that Africa has unfortunately lagged behind other regions in terms of growth during the past few decades, this occurrence is a welcome one, and this Asian certainly bears no grudges in seeing our African peers outperforming. Well done! However, this distinction being bestowed by the African Development Bank, the AfDB unsurprisingly asks for more of the "good governance" agenda it has championed for quite some time alike its other regional development bank counterparts as well as the World Bank. It is still very much in vogue in development circles: Africa is now the fastest growing continent in the world, the African Development Bank’s Annual Development Effectiveness Review 2013 [ADER] states. The report, just published, says...
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Why China Holds Upper Hand Over US in Asia for 2014

♠ Posted by Emmanuel in , at 1/18/2014 03:13:00 PM
Or so the Nikkei Asian Review believes. And the reasons for China reasserting its sphere of influence in the region are straightforward. On China's part, it has the bully pulpit in 2014 as the host of the Asia-Pacific Economic Cooperation (APEC). So, member economies' ministers--maybe even the Philippine president the PRC has put in its doghouse--will be trooping to the Middle Kingdom over the course of the year: Holding the rotating chair of the APEC forum this year, China will host a series of APEC meetings, including those of ministers in charge of trade, energy and finance, in various parts of the country starting in May. The series of APEC events will culminate in a summit of leaders in a Beijing suburb in early autumn, which will be chaired by Chinese President Xi Jinping. The APEC meetings will cover issues in a wide range of areas, including trade and investment rules and environmental and energy cooperation. By presiding over them, China will try to demonstrate...
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The Rise and Rise of FDI From the Global South

♠ Posted by Emmanuel in , at 1/17/2014 05:20:00 AM
Much has been made of the protectionism which firms such as those from China have encountered investing in the West. I have called specious arguments on "national security" grounds unvarnished racism, and such discrimination certainly plays a part. Moreover, I have been further vindicated by leaks that reveal massive American spying on its own citizens and those of the rest of world. Who's the real "national security" threat here when one of the largest US tech firms labels its government as an "advanced persistent threat"? You are, quite frankly, a bleeping moron to believe in US security guarantees, especially when it comes...
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PRC Industrial Policy: Killing Off 75% of Solar Makers

♠ Posted by Emmanuel in , at 1/15/2014 10:52:00 AM
Well surprise, surprise: Having reached a settlement last August with the European Union which was previously set to slap anti-dumping tariffs on its solar panels, we now get word on the extent of China's subsidies for the industry. At year-end 2013, the PRC's government rolled back the industrial benefits allotted to this industry, and there is now expected to be a bloodbath on the production floor of China's manufacturers. How bad will things get? Try a 75% "death sentence" rate as only a quarter or so of firms will remain eligible for government support. From the Nikkei Asian Review: The Chinese government is pushing for a drastic shakeout of the country's overcrowded solar cell industry, supporting only a quarter of players and practically telling the rest to get out of the business. The Ministry of Industry and Information Technology has announced a list of 134 producers of silicon materials, solar panels and other components of photovoltaic systems as meeting certain...
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Which US-Led FTA Nego is Lamer, TPP or TTIP?

♠ Posted by Emmanuel in ,,, at 1/14/2014 02:58:00 PM
You say "TPP," I say "TTIP"; let's call both things off One of the many reasons why the Doha Round of WTO trade negotiations has been put on indefinite pause is due to Americans holding out for stronger intellectual property protections. Typically hard-headed, the Yanquis have not really given up on their pet causes. Instead, they have merely resurrected them in plutilateral arrangements being touted by the US Trade Representative. (1) Let us begin with the much-ballyhooed expansion of the Trans-Pacific Partnership (TPP). Originally a grouping of trade-willing APEC member countries Brunei, Chile, New Zealand and Singapore. the US is seeking to crash into their party. With the release of more leaked documents, the secretive TPP negotiations apparently involve the US barging into someone else's FTA and attempting to shape it to its own ends. Surprise, surprise. In simple terms, it aims to revive its failed Doha wish list with suck...I mean, "Asia-Pacific countries keen on concluding...
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World Bank President and Bono [?!] on Ending Poverty

♠ Posted by Emmanuel in , at 1/12/2014 10:44:00 AM
We haven't had a video feature in ages, so here's one that should be of general interest. Current World Bank President Jim Yong Kim has not really received much popular public attention--or even in development circles for that matter. (Notice how the YouTube clip doesn't actually name him but instead his title. Kim's reserved manner certainly doesn't generate outlandish headlines that he fed his out-of-favor uncle to 120 hungry dogs alike that other Kim.) What better way, then, to raise his public profile but to pair this reserved intellectual with the extroverted entertainer Bono? The latter is known for his passionate espousal of vastly increasing aid to the developing world, although he's encountered much criticism along the way about being ill-informed about the subject matter Still, it's a potentially smashing concept, and they actually try it out in this 2012 clip in which both discuss ways to end poverty. The pairing works to a greater extent than you would expect:...
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Economy Sucks, Tunisian Islamists Give Up Power?

♠ Posted by Emmanuel in , at 1/10/2014 09:35:00 AM
Yippee Arab Spring! Tunisia, another economic basket case for the IMF This may be the ultimate application of Bill Clinton's principle of "it's the economy, stupid." It's no big secret that Tunisia is in dire economic straits. In the hands of the Islamist Ennahda party after the so-called Arab Spring, its economic plight has only worsened. At the moment, Tunisia is trying to convince IMF powers-that-be that its next tranche should be doled out soon as the natives become increasingly restless: Tunisia's government, under pressure from protests over public spending cuts, said on Wednesday it had done enough to persuade...
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Two Latin Americas? MERCOSUR vs Pacific Alliance

♠ Posted by Emmanuel in , at 1/09/2014 08:51:00 AM
Brazil is becoming Argentina, Argentina is becoming Venezuela, and Venezuela is becoming Zimbabwe - unnamed Brazilian official Think of the Wall Street Journal's op-ed pages as a confused bastion of conservative thinking and you won't go far astray. It whitewashes George W. Bush's free-spending ways and features his Fox News-inspired brand of flag-waving USA#1 boosterism, for instance. Such wooly thinking is evident in a recent piece about "The Two Latin Americas" that purportedly contrasts anti-enterprise, anti-trade and anti-American countries (Argentina, Brazil, Venezuela) with pro-enterprise, pro-trade, and pro-American countries (Mexico, Peru, Chile and Colombia). The former group is composed of MERCOSUR customs union members doing poorly, while the latter group is composed of the more recently formed group the Pacific Alliance doing better. You do not need to convince me that Argentina and Venezuela are run by left-wing ideologues/nutters with few sane ideas about how...
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US Energy: Fracking Towns 1, Coal Towns 0

♠ Posted by Emmanuel in at 1/07/2014 08:24:00 AM
And that accent you've tried so desperately to shed: pure West Virginia. What is your father, dear? Is he a coal miner? - Sir Anthony Hopkins as mad genius "Hannibal Lecter" in the Silence of the Lambs. The recent US energy boom due to the large-scale application of fracking has not been a boon to everyone. In a country as large as the US, some energy-producing communities were bound to benefit and others to suffer from the gales of Schumpeterian "creative destruction." In other words, capitalism often produces innovations alike natural gas fracking which render older technologies and industries based on them obsolete....
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Enlivening Naypyitaw, Myanmar's "Ghost Capital"

♠ Posted by Emmanuel in , at 1/05/2014 08:06:00 AM
Where Google Earth fears to tread. Welcome to Naypyitaw In the pantheon of vanity projects, there is none more hubristic than establishing a nation's capital in the middle of nowhere. The archetypal and best-known example is Brasilia, the erstwhile seat of Brazilian government. Lesser-known but no less the product of planning on a grand scale are Australia's capital of Canberra and Canada's capital of Ottawa. None of these so-called capitals are among these countries' liveliest cities; it is difficult to pre-plan a "happening" town, and they generally prove this point. Seen any rock albums entitled Live in [Brasilia, Canberra,...
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US Mess, EU's Problem: Refugee Crisis at Sea

♠ Posted by Emmanuel in ,,,, at 1/03/2014 01:16:00 PM
Did US interference make their lives any better? Take a guess... For many people in conflict zones, the coming of the year 2014 is hardly "new," let alone "happy." The depressing truth as we begin another calendar year is simply that various messes the white man has contributed to are in no way sorted out, and that foreign adventurism--especially the so-called "war on terror," is not yet finished. We are all familiar with friends who like getting into you trouble. A few drinks for them and they become belligerent. The archetypal "friend" that fits into this mold is the United States as it engages in drunken outbursts that...
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And the World's Match-Fixing Capital is...Singapore [?!]

♠ Posted by Emmanuel in , at 1/01/2014 09:58:00 AM
Shuffle up and deal and...match-fix? The recent race riots in Singapore came as a shock to the rest of the world given the tightly regulated nature of the city-state. How could such disorder happen? Well, preconceptions about the supposedly antiseptic nature of Singapore may receive a further knock: It is only recently that Singapore began tolerating gambling--especially on Sentosa Island--to help lure travelers with a penchant for gambling away from other Asian destinations such as Macao. In reality, however, Singaporeans have had a very long tradition of gambling with it practically coursing through citizens' veins. Consequently,...
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