Marketing the Unmarketable: Israel's Soft Power

♠ Posted by Emmanuel in ,,, at 7/31/2014 01:30:00 AM
Not your grandfather's idea of "nation branding." Regardless of the party in power, one thing you can count on is that the United States will be more pro-Israel than nearly everyone else, John Kerry's alleged ham-fistedness notwithstanding. While the rest of the world is rather appalled by Israel's military attacking (a) nominally their own people in (b) a hemmed-in area, American politicians of all stripes try to outcompete each other in showing support for the embattled nation. In the rest of the world, however,  I do not need to tell you that its reputation is rather lower. Especially when these gruesome conflicts...
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Is Russia on Argentina's Credit Highway to Hell?

♠ Posted by Emmanuel in , at 7/30/2014 01:30:00 AM
One financial goner meets another? This commentary by Mohamed El-Erian struck me as wildly speculative at first: Russia is the next Argentina...yeah right! Are we talking about the same Russia that supposedly has a cool $475 billion in foreign exchange reserves? It isn't pipsqueak Argentina with less than $29 billion in reserves that looks like it may default tomorrow (more on this later after my earlier commentary). El-Erian isn't convinced that Russia's troubles are to be as lightly taken as the markets suggest: That said, Argentina is not entirely unique. Russia is on a similar path, though the details and the timetable...
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In Memoriam: Japan's Export Champion Days

♠ Posted by Emmanuel in ,, at 7/29/2014 01:30:00 AM
 In times past, there was an entire economic school of thought essentially based on "being like Japan." We called it export-led industrialization. Through a combination of government subsidies for championed industries, high import tariffs in these industries, export incentives and foreign exchange reserve accumulation to keep one's currency artificially weak, the hope in emulating these practices was, of course, to be like Japan someday. Exports=good, imports=bad. Books like Chalmers Johnson's MITI and the Japanese Miracle extolled the virtues of industrial policy. Through the looking glass we have arrived at "Japan...
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'Libertarian Hacking' is Not an Oxymoron

♠ Posted by Emmanuel in , at 7/28/2014 01:30:00 AM
Every hacker has his price--and the Koch brothers are paying for talent. Owing to the dominance of Northern California--Silicon Valley, to be exact--in the American technology sphere, it is unsurprising that we think of tech culture as predominantly liberal in orientation. It's Nancy Pelosi Land. However, if you examine the premises of what these technologies supposedly do--promote economic and political freedoms--it gets you thinking: Shouldn't conservative causes in general and libertarian ones in particular welcome advances in the global use of ICT worldwide? A recent Yahoo! News original feature--they apparently have...
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Diversification, or Macau Can't Live on Gambling Alone

♠ Posted by Emmanuel in , at 7/27/2014 01:30:00 AM
Can Manny help Macau diversify from gambling? Let's get ready to ruuuuumble: To be sure, if you compare Macau to Las Vegas in terms of gaming revenues, it's a first-round TKO for the Chinese gaming town. Since the turn of the millennium, Macau has left the former home of gambling in the dust as revenues have increased at a rapid clip. However, all good things must come to an end. Given Macau's reliance on punters (Brit-speak for gamblers) from the mainland, the growth slowdown there was bound to have knock-on effects for the Asian betting mecca. For the first time since the PRC bean counters have kept monthly tallies of...
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Russia Fun: Ruling on $100B Yukos Expropriation Claim

♠ Posted by Emmanuel in ,, at 7/25/2014 01:30:00 AM
Those were the days--and some hope to bring them back. Five years later, we are about to hear the decision on Russia's liabilities from expropriating Yukos. Readers will remember Mikhail Khodorkovsky, formerly a favored oligarch who then irked Vladimir Putin by entering politics. Shortly thereafter Khodorkovsky was thrown in jail, the firm he controlled was dismembered, and its assets were subsumed by the state-owned giant oil concern Rosneft. In post-USSR Russia, the unspoken arrangement among the beneficiaries of the fire-sale of state-owned commodities firms was that they could enjoy their, er, unusually acquired fortunes...
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Sisi's No Sissy: Ending Egypt's Unsustainable Subsidies

♠ Posted by Emmanuel in ,, at 7/24/2014 01:30:00 AM
His sartorial choices may have been Oppa Moammar Style, but Sisi has made a good start. For the record, let us recall how Egyptian President Abdul Fattah El-Sisi came into power. First, he overthrew the popularly-elected Muslim Brotherhood President Mohamad Morsi over the declining security situation in the country. Next, he successfully ran for the post of the person he mounted a coup d'etat against--there is no other appropriate term--and threw Morsi and his Muslim Brotherhood flunkies in jail to boot. Zero tolerance for intolerance, right? After the disorder of the post-Mubarak period, the part of the electorate that...
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When McDonalds China Can't Serve Burgers...

♠ Posted by Emmanuel in ,, at 7/23/2014 01:30:00 AM
...it's like Amazon without books to sell. A colleague in China posted the picture above to his social media account in the wake of Chinese food supplier Shanghai Husi being found to have relabeled the expiration date of its meat products. Upping the visibility and impact of its food safety violations, it sold these products to several major Western food chains. We usually believe that tampering with food products is common among PRC firms and not Western ones who would think more carefully about tarnishing their reputations for a bit more profit, but this instance depicts the opposite: Shanghai Husi is a subsidiary of the...
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Adios Sochi Grand Prix 2014, Russia World Cup 2018?

♠ Posted by Emmanuel in ,,, at 7/22/2014 01:30:00 AM
Geography is against Russia retaining these events without scrutiny. This is not exactly a pleasant post to write given the circumstances, but it's something that will be the subject of discussion anyway in the coming months and perhaps years. First, as I wrote a few weeks ago, the first Russian Grand Prix is scheduled on the Formula One calendar for October 12. Even as its business elites are preparing for the worst as the full weight of Western sanctions passed (and yet to pass_ disrupt their abilities to conduct business abroad, Russian race organizers are adamant that show must go on: Organizers insist Russia's first ...
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Bhagwati: PRC's Corruption 'Developmental', India's Isn't

♠ Posted by Emmanuel in , at 7/21/2014 01:30:00 AM
Corruption is one of the most studied phenomena given its ubiquity in developing countries. If corruption did not occur on a significant scale in these countries, then they would probably be classified as developed. That said, there are many debates about corruption. At one extreme, there is a "zero tolerance" approach that suggests all forms of using public office for private gain are unwelcome and should be discouraged. On the other hand, others would say that there are different forms of corruption--some of which are potentially beneficial such as "speed money" which hastens the processing of documentation in slow-moving...
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MNCs and Setting Cambodia's Minimum Wage

♠ Posted by Emmanuel in , at 7/20/2014 01:30:00 AM
Textile workers of Cambodia unite to mixed consequences. Economics textbooks will tell you that the cost of labor is determined when the downward-sloping demand curve for labor meets the upward-sloping supply curve of workers. Their intersection is called the "market-clearing" wage. Governments may introduce "distortions" however in the form of minimum wages when the market-clearing wage is deemed insufficient to meet the needs of the workers or are otherwise below what is normatively acceptable. In Cambodia, however, the cost of labor may be determined more by external forces. Namely, pressure from multinational corporations...
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A Bad Idea: Flying Passenger Jets Over Ukraine

♠ Posted by Emmanuel in ,, at 7/18/2014 12:45:00 PM
I am greatly saddened by the loss of Malaysia Airlines MH17 over the airspace of Ukraine. I have been following the disaster since it was reported several hours ago and remain none the wiser about where responsibility lies, and I am afraid that the circumstances may never be fully known. A colleague working on global health also pointed out that several European experts on AIDS en route to a major conference in Australia also lost their lives. It is thus an additional tragedy that a number of the world's top AIDS researchers have met such a fate. In the fog of war--and there is no doubt that's what's going on in Ukraine--details...
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Diversifying Zambia's Copper-Based Economy

♠ Posted by Emmanuel in , at 7/18/2014 09:42:00 AM
Welcome to Zambia's Copperbelt. Commodity-based economies are often Johnny-One-Note economies: their fortunes rise and fall based on those of a single commodity (or at best, a handful of them). In Africa, Zambia has had boom and bust cycles based on copper. During the Cold War, its preeminence was such that it once ranked as the world's third-largest producer after the US and the USSR during the late 60s. As copper prices have waxed and waned, Zambia's economic well-being has largely followed a similar path. So many decades later on, Zambia is emblematic of the challenges these commodity-based economies face of moving...
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New World Order? BRICS "New Development Bank"

♠ Posted by Emmanuel in ,, at 7/17/2014 01:30:00 AM
We've heard all that before, unfortunately, BRICS. Grand plans to supplant the (American-designed) postwar global financial architecture lie thick on the ground. As I noted in 2007, poor countries have championed the G-77, Non-Aligned Movement (NAM), New International Economic Order (NIEO), and UN Conference on Trade and Development (UNCTAD) as alternatives giving poor countries a larger voice in global economic governance. Interestingly enough, the BRICs grouping which was formed out of Goldman Sachs' Jim O'Neill acronyms has had regular meetings discussing reform of the world's financial architecture. (South Africa has...
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JP Morgan: How FIrms Can Profit From Using RMB

♠ Posted by Emmanuel in , at 7/15/2014 01:30:00 AM
It's true that Chinese currency unit the renminbi (RMB) AKA the yuan has been devaluing these past few months in tandem with slowing PRC growth. Aside from the most optimistic of speculators, did anyone really think that the currency would steadily rise forever? Yet, the global adoption of the currency continues apace as China experiments with greater liberalization of its current account. Among the early beneficiaries of this process are multinationals who've already benefited much from China opening up to the world that can now take advantage of PRC currency reforms: As China's internationalization of the RMB and its...
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Tracing Tax Avoidance, Chicken Chain Style

♠ Posted by Emmanuel in at 7/14/2014 10:45:00 AM
Coming to a theater near you: Chicken Wings of Global Deception. I used to love spy thrillers set in exotic destinations featuring mysterious characters with their cloak-and-dagger machinations. As vast sums of money moved back and forth, the glamorous implication was that some were definitely better positioned to take advantage of how the world works than others. The world was indeed their oyster as they bent rules to their advantage. Nowadays, however, shuffling large amounts of cash to and fro in order to avoid paying taxes is fairly common practice among multinationals. So much so that what used to be exotic is, well,...
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World Cup of Default: Argentina at T-Minus 19

♠ Posted by Emmanuel in , at 7/13/2014 01:30:00 AM
Despite its tremendous natural wealth, Argentina has long been the poster child of underdevelopment. Aside from the sporting conquests of its racing car drivers (think Juan Manuel Fangio) and footballers (Diego Maradona or Lionel Messi), it's better known in economic circles for lurching into crises with some regularity. Off the playing field, the economic fortunes of the World Cup finalists Germany and Argentina could not be more different. The winners of the World Cup will win a cool $35 million in prize money, so now may be a good time to root for Argentina (assuming that its football association gives the money to the...
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