Commercialism & Christmas in Non-Christian Societies

♠ Posted by Emmanuel in ,, at 12/24/2013 02:04:00 PM
Thailand features Christmas elephants, f'rinstance
Your Asian correspondent--obviously Catholic with a name like "Emmanuel"--has always found it curious that some of the most extravagant Christmas pageantry can be found in predominantly non-Christian societies. With the exception of the Philippines and (tiny) Timor-Leste, that's practically everyone else in Asia--Hong Kong, Japan, Singapore...you name it. Spending your Christmas holidays in these metropoles and indeed pretty much elsewhere nowadays, you wouldn't even be able to tell that you weren't in a Christian country given the amount of Christmas decorations lining the streets. What's more, their habits of ornamentation and gift-giving usually are more lavish precisely because they are comparatively wealthier countries.

Remarkably, the increasingly cosmopolitan nature of any number of Middle East societies has resulted in a similar phenomenon. Witness even more gigantic Christmas trees in the lobbies of hotels and shopping malls of places alike Abu Dhabi or Dubai. The UAE, of course, is ruled by an Islamic monarchy. But, alike in the Far East, the Middle East has succumbed to similar temptations. As you would suspect, the influx of foreign commercial interests buttresses the natural inclination of expatriates to celebrate the holidays and memories of days gone by. From the Christian Science Monitor:
One curious trend in the global economy is how many countries with few Christians now enjoy aspects of Christmas – the giving of gifts, an exchange of cards, even singing “Last Christmas” by Exile [???--their words, not mine]. What other religion has had its holiday traditions transcend so many borders?

Christmas has become the world’s most widely celebrated religious holiday, even if it is more commercially exploited than religiously observed in non-Christian countries – and even if the Santa Claus fantasies overshadow the day’s real meaning: the coming of Christ to humanity.

To be sure, the spread of Christmas is driven in large part by retailers – and governments – trying to find new reasons to drum up consumer spending. (Halloween and Valentine’s Day are becoming popular, too.) In many Muslim countries, it is this materialistic aspect that is often decried by Islamic preachers. And sometimes, the Christian part gets lost in translation: Foreigners in Japan tell the tale of a Tokyo department store that once decorated a window with a Santa Claus on a cross.
The obvious growth market in a globalized era is the purportedly godless society of the People's Republic of China:
The most explosive growth in celebrating a secular Christmas has been in China. Since the 1990s, the Communist Party has loosened its control over this “Western holiday.” Urban youth have embraced it, seeing Christmas as an opportunity to give gifts, celebrate with friends, and tie up a romance with a wedding. Stores often record their biggest sales around Christmas. Many Chinese can be seen wearing reindeer antlers or Santa hats. Some give specially wrapped apples as gifts (the Chinese word for apple sounds like “Silent Night.”)

As long as Chinese see only the commercial aspects, the government may not worry about the religious meaning. Still, in 2006 a group of university students started an online petition to boycott Christmas, claiming it is a Western plot to erode Chinese culture.
It's a lot of lavishness for a holiday meant to celebrate the coming of a person born in the stables, but I do not necessarily scoff at these practices. During a time when so-called Christian Europe still has a holiday season but has largely forgotten the "Christian" bit retains the "holiday" part, who am I to say the secular celebrants are "wrong"? The IPE of Christmas is simply that its European-based lore is more suitable for commercial exploitation than any other holiday of the major religions. If the Europeans are increasingly secular but still observe Christmas--at least its more overtly commercial aspects--then who am I to judge others who do the same? At any rate, a Merry Christmas to one and all. Somehow, I know you're doing your bit to prop up the consumer spending portion of GDP.
Burj Al Arab, Christmas 2009
Read More

Aid (Not Death) from Above: Drones for Disaster Relief

♠ Posted by Emmanuel in at 12/20/2013 09:46:00 AM
Some of these things don't come with missiles but with goodwill
The American habit of using drones on supposed "terrorist" targets that frequently results in killing civilians instead--"collateral damage"--has outraged a significant part of the civilized world. Former US President Jimmy Carter criticizes their use as a gross human rights violation. Meanwhile, the UN General Assembly only yesterday passed a resolution aimed at limiting their use as erstwhile American allies in the global war on terror alike Afghanistan and Pakistan have sought to limit myriad incursions in their airspace for the purpose of raining death from the skies.

Despite the quite frankly horrid purposes the Yanks use them for, drones are a neutral technology that can be used for good or ill. An unmanned aircraft is merely in the hands of those controlling it, no? Somewhat encouragingly, a former student of mine has written an interesting article for Devex--the website for development professionals--discussing how drones may be used for disaster relief instead. In the aftermath of Typhoon Haiyan devastating large swathes of the Philippines, this technology has been used with some success in the leveled city of Tacloban:
More than a month after Super Typhoon Haiyan hit the Philippines, operations on the ground remain in the relief and response phase instead of rehabilitation and recovery, with several areas still unreached by aid groups and comprehensive damage assessment still unfinished. To address these needs, several NGOs on the ground in Tacloban, the “ground zero” of the catastrophe, have been using unmanned aerial vehicles to further improve their operations — something they hope would be a standard in disaster risk reduction efforts in the future.

But can drones truly become standard operation procedure in humanitarian crises? Experts consulted by Devex believe so, although they do admit mass use of these devices will have to overcome serious challenges, like their relatively high price [elsewhere in the article it says the tab runs to $55,000 for each operating Huginn X-1] and legal issues over privacy and sovereignty rights...

In Tacloban, Danish firm Danoffice IT, which has been providing drones to U.N. agencies and several NGOs involved in the relief and response operations, said faster disaster assessment means faster disaster response, which, ultimately, saves lives. “The idea is that you have a drone and you deploy it quickly to have an assessment and overview immediately. It means that first, you save some time. After a disaster, time is very important because time has a link to life,” Denis Kerlero De Rosbo, Danoffice IT corporate social responsibility and marketing head, told Devex. “If you move quicker, you will save more lives and resources."
How, then, can drones be used to assist disaster relief?
1. Immediate assessment.

The first few hours after disasters are the most crucial moments for disaster response, particularly in search and rescue operations. But poor assessment of the affected areas can significantly reduce the effectiveness of these operations and even endanger aid workers.

Drones can be deployed for immediate assessment of disaster situations, providing detailed information to first-responders like local governments and humanitarian groups. Information is key to disaster response and mobilization.

2. Strategic planning.

Following the initial assessment phase, the information gathered will prove helpful in crafting an effective strategic plan in responding to disasters.

Scores of international aid groups and partner governments have continually extended their help to the country given the scale of devastation Haiyan brought — including the information gathered by the drones in the plans will make relief and response operations more effective.

3. Search and rescue operations.

A month after the onslaught of Haiyan, dead bodies are still being recovered in disaster areas, with some fearing a number of these people died days after the storm hit due to lack of aid.

The Huginn X1 drone, according to De Rosbo, is equipped with high-definition video and is capable of providing a live feed for the controller, making assessment and response real-time. The device can also produce thermal images, essential for finding people alive during the search and rescue operations.

4. Protecting aid workers.

Another very important area where drones can be very useful in disaster response is ensuring the security and safety of aid workers.

Humanitarians deployed on the ground are not immune to the kinds of hazards disaster victims face. They are humans too, and susceptible to these threats...Days after the storm, reports of looting in disaster areas were rampant due to hunger and desperation, while a number of local rebel groups wreaked havoc in the ravaged communities. Drones can help identify these threats.
More information on the Philippine operation is available from the site of application provider Danoffice IT. (Alike the drone manufacturer, it's obviously Danish.) It's very interesting stuff. Going forward, using drones for disaster relief may help give them a good name elsewhere in the developing world. 
Read More

Russia's Price for Buying Off Ukraine: $15B

♠ Posted by Emmanuel in ,, at 12/17/2013 07:13:00 PM
Put 'er there, Vlad, my country's yours for $15 billion
Let us update this strange tale of Ukraine. Having told his opponents to in effect get lost since they didn't win any elections or succeed in gaining a vote of no-confidence, President Viktor Yanukovych headed to the Kremlin to speak to his Russian counterpart Vladimir Putin. What is the price of fealty to Russia? Gulf Cooperation Council bigwigs bought off Egypt for $9.9 billion (so far)--$5B from the Saudis and $4.9B from the Emiratis to wean it off the upstart Qataris. Meanwhile, Yanukovych was able to wangle a $15B bailout from Russia to buy that much worth of Ukrainian sovereign debt over the next two years. Not bad, eh?
Ukraine sealed $15 billion of Russian financing and a one-third discount on energy imports from its neighbor as anti-government protesters in Kiev demanded to know what President Viktor Yanukovych had ceded in return. Russia will buy government debt this year and next and will cut the price it charges for natural gas to $268.5 per 1,000 cubic meters, President Vladimir Putin said today after meeting Yanukovych in Moscow. 
Ukrainian debt--certainly more than mildly distressed at this point--is slightly more relaxed as a result:
The yield on Ukrainian dollar bonds due 2023 plunged more than 1 percentage point to 8.833 percent as of 7:11 p.m. in Kiev, the lowest since June 17, data compiled by Bloomberg show. The yield on government debt due 2014 fell more than 6 percentage points to 15.193 percent. Putin said the financing is being provided in light of “the problems of the Ukrainian economy linked to the world financial crisis, and to support the budget of the Ukrainian government.” Trade restrictions on Ukrainian goods will also be lifted. 
However, the opposition may be further inflamed by the Russian bailout. Alike Saudi Arabia and the UAE lending, Russia lending is not exactly a "seal of good housekeeping" alike that granted by the IMF which opens doors to unbiased lending from more impartial sources:
“The shift towards Moscow risks inflaming the anti-government protests,” Capital’s Chief Emerging Markets Economist Neil Shearing said by e-mail. “While a deal with Russia was always likely to offer the best terms on short-term financing, closer ties with the EU were more likely to provide an anchor for the structural reforms needed to reinvigorate Ukraine’s faltering economy.”

Ukraine’s opposition had planned a rally for this evening and protesters flocked to Independence Square on hearing news of the Russian agreements. There were about 30,000 people there as of 7:30 p.m., according to The RBC-Ukraine news service. The Interior Ministry put the turnout at about 8,000.

“What did Yanukovych promise in exchange?” said 57-year-old Vera from Kiev, who declined to give her last name. “Nobody gives anything without a reason. Now we have only questions.” Opposition leaders addressing the crowds, who’ve blocked central Kiev since the government pulled out of a planned European Union association agreement, were similarly skeptical.  “I know only one place where there’s free cheese -- a mouse trap,” said Arseniy Yatsenyuk, head of jailed ex-Prime Minister Yulia Tymoshenko’s party. “We want to hear what he gave in return.” 
Your country's been sold, my friend. Collusion between Yanukovych and Putin reminds me of a gangster movie (not "gangsta," homey) with a dodgy plot and poor acting. Except in this case it's true-to-life. Most importantly, I hardly think it's solved its balance-of-payments issues by getting into bed with the country that's done quite a lot to exacerbate its situation by blocking trade and threatening to cut off gas supplies during winter. First, there's no guarantee this lifeline will be continued if Ukraine shows signs of disobedience. Second, Ukraine's habit of burning foreign exchange is hardly stopped by a lender with many strings attached showing up.

But hey, they voted for this guy, right?
Read More

Boxers-Turned-Politicians: Pacquiao vs Klitschko

♠ Posted by Emmanuel in ,,, at 12/16/2013 09:17:00 AM
Fighting Russkies, Striking a Blow for the EU
If this were an actual fight, it would be a grossly unfair one since Manny Pacquiao stands 1.69m tall and weighs 65kg whereas Vitali Klitschko--older brother of fellow heavyweight champion Wladimir of Hayden-Panettiere-is-my-girl fame--is 2.01m tall and weighs 110kg. However, this comparison is grossly unfair in other respects of political consequence. In terms of celebrity, the Filipino boxer is far better known competing in the welterweight division where the glamor, money and attention in prizefighting is now concentrated, whereas the heavyweight division lacks compelling personalities. Yet, Vitali Klitschko makes up for the lack of star power with brain power since, like his brother, he has a PhD. Manny Pacquiao famously dropped high school to start fighting since his family needed the money.

I bring up this comparison because the Klitschko brothers are among the most prominent figures in the current campaign to force Ukranian President Viktor Yanukovych to ink a free trade deal with the European Union. Problematically for the brothers and their prospects for Ukraine politics, both have lived virtually all their professional lives outside their homeland in Hamburg, Germany then La La Land, California. Unlike Congressman Manny Pacquiao, they do not simply go abroad to ply their trade and then return home. Nevertheless, the WSJ op-ed pages recently ran a rather fawning feature on Klitschko the Elder as a champion of freedom and free markets (hey, would you expect anything else given the source?)
Yet Mr. Klitschko stands out among the opposition, and not just because of his breathtaking physical size. He's the one new face in a crowd of familiar political mediocrities. He has a Ph.D. in physical sciences, hence his nickname, Dr. Ironfist. His considerable fortune earned from boxing reassures people about the sincerity of his commitment to fight corruption and resist temptation...

He has broken out in the polls, leading Mr. Yanukovych in a head-to-head match, which may come sooner than the presidential election due in early 2015. The government fears him enough that earlier this fall it fiddled with the residency requirement for the presidency, patently to stop him, since he had trained and lived in Germany for most of the previous decade. Mr. Klitschko says the retroactive legal change won't hold up in court, but in another context notes that the judges are in Mr. Yanukovych's pocket.

"In these hard days, the moral support from friends of democracy is very important," says Mr. Klitschko. While the nationalists in Maidan [Square--protest site] play up Russian meddling, he is always careful to insist that the fight isn't so much about personalities or geopolitics as about values—democracy, human rights, the rule of law. In short, Europe.
It's all very anti-Russian if that's your sort of thing and imagine the Iron Curtain still hangs across Eastern Europe. As the proprietor of the IPE Zone, however, I am more interested in how these two pugilistic politicians regard trade. As I mentioned before, Manny Pacquiao sponsored the passage of trade exemptions for Philippine textile exports to the US that would have likely violated WTO strictures [1, 2]. Meanwhile, Klitschko is championing a preferential trade agreement with the EU. It's not necessarily trade-positive--trade diversion and all that--but the sentiment is there. Who wins in this respect? I'd say Klitschko by a technical knock-out since the Philippine congressman's proposed deal never made it off the ground.

At any rate, we'll probably have more time to learn about both fighters' views on trade since Vitali Klitschko now suggests he will run for the presidency in 2015. Pacquiao meanwhile has long set his sights on the Philippines' highest office.

On education grounds, I prefer the guy with the PhD, but I'm stuck being in the country with the high school dropout.
Read More

World's Smallest Currency Union: Caribbean Challenges

♠ Posted by Emmanuel in , at 12/15/2013 03:16:00 PM
Yes, Virginia, these dollars bear Queen Elizabeth II's image
The Eastern Caribbean Currency Union (ECCU) is the world's smallest currency union among the four existing worldwide. The European Monetary Union (EMU) is known by all, whereas the other two are in Africa. What makes the ECCU doubly interesting is that it is pegged to the US dollar. In fact, it predates the EMU by half a century, although it changed the currency it is being pegged to from GBP to USD halfway through:
The OECS members share a common currency, the Eastern Caribbean dollar, which has been pegged to the U.S. dollar since 1976 at EC$2.70=US$1, and was pegged to the British pound at EC$4.80=£1 from 1950 to 1976. Prior to the recent inception of the European Central Bank, the ECCB was one of only three common central banks in the world and the only one where the member countries have pooled all their foreign reserves, the convertibility of the common currency is fully self-supported, and the parity of the exchange rate has not been changed.
Now, there's thought-provoking stuff over at the IMF site concerning the challenges faced by ECCU. Overall, it makes economic sense for micro-sized economies to band together currency-wise:
In terms of the benefits, the small size of these countries means that the currency arrangement allows them to take advantage of scale economies. It also allows them to diversify risk. This means that if one country gets hit by an external shock or natural disaster, the other countries can pool resources and deal with the shock more effectively.

Again, because of their size, these islands can provide, at the regional level, more cost-effective public services. So that is a major benefit. What also matters a great deal is when the union speaks with one voice the countries can be better represented at the global level. 
That said, it is subject to the same sorts of problems the Eurozone faces:
Interestingly enough, the ECCU is actually a microcosm of the European Economic and Monetary Union, since the ECCU has also faced rising fiscal deficits, unsustainable debt levels in a number of states, a lack of fiscal integration, and challenges in parts of the financial sector that can undermine the stability of this union. As illustrated by the European experience, overcoming these challenges is particularly difficult in monetary unions. 
What can I say? God save the queen--and the East Caribbean Dollar
Read More

World's #2: Yuan Overtakes Euro in Trade Finance

♠ Posted by Emmanuel in , at 12/12/2013 05:15:00 PM
Trade finance is a somewhat arcane area despite its obvious importance to keeping world trade afloat. To make a long story short, a loan taken out by a trading firm for an international transaction is known as a "letter of credit." [LC] In effect, the lending bank's creditworthiness substitutes for the debtor's, allowing the counterparty to be assuaged regarding credit risk.

In recent times, the Chinese yuan or renminbi has come on like gangbusters as more and more of these instruments are denominated in RMB. Reflecting China's emergence as the world's largest trading nation in merchandise, a significant minority of the world's letters of credit are now in RMB. In fact, it has now reached a milestone of overtaking the vaunted Euro in this application in the month of October of this year:
China’s yuan overtook the euro to become the second-most used currency in global trade finance after the dollar this year, according to the Society for Worldwide Interbank Financial Telecommunication [SWIFT]. The currency had an 8.66% share of letters of credit and collections in October [2013], compared with 6.64% for the euro, Swift said in a statement Tuesday. China, Hong Kong, Singapore, Germany and Australia were the top users of yuan in trade finance, according to the Belgium-based financial- messaging platform.
So the dollar remains far and away the largest prominent currency in trade finance, but keep in mind where the yuan came from as late as January 2012 when it held less than a 2% share. Moreover, the appeal of the currency is coming on strong outside of China:
“It’s true that overseas exporters are using the renminbi more as the contract currency to increase the attractiveness and competitiveness of goods or services sold to China,” said Cynthia Wong, the Hong Kong-based head of emerging-market trading for Singapore and Hong Kong at Societe Generale SA.
That said, the Chinese currency still has a long way to go in terms of becoming a vehicle currency for all sorts of payments and being widely exchanged one in forex markets:
The Chinese currency ranked No. 12 for transactions in the global payments system in October, unchanged from the previous month, according to Swift figures. Payment value for the currency rose 1.5% that month, less than the 4.6% growth for all currencies, the Swift data showed. That saw the yuan’s market share drop to 0.84% from 0.86% in September.

Daily yuan transactions surged to $120 billion in April from $34 billion in 2010, making it the ninth most-traded currency in the world, according to a September report by the Bank for International Settlements in Basel, Switzerland.
So there's still a long way to go in terms of China allowing further capital account openness and market-trading for the yuan to become a legitimate rival to the dollar and the euro. Yet, the demand is likely there--especially for those who regularly trade with mainland China. That the currency is steadily appreciating is a further bonus to those who wish to hold it. To non-mainland residents, that is not an inconsequential draw:
The yuan has appreciated 2.3% against the greenback this year, the best performance in Asia, according to data compiled by Bloomberg...“I’m not surprised as cross-border trades between China and Hong Kong have been quite dominantly denominated in yuan,” Raymond Yeung, a Hong Kong-based senior economist at Australia & New Zealand Banking Group Ltd., said by phone today. “Yuan trades usually increase when there are strong expectations for yuan appreciation.”
Read More

I Wanna Riot...In Singapore [?!]

♠ Posted by Emmanuel in at 12/10/2013 08:37:00 AM
@#$% the Police, Singapore Edition
Singapore has acquired a reputation for being squeaky-clean to the point of being antiseptic. It is particularly famous for two things in this respect: banning bubble gum in public that can litter surroundings and caning juvenile delinquents alike the Yankee brat kid Michael Fay [whappack!] In reality, though, there are tensions bubbling under the carefully stage-managed facade. There were race riots between ethnic Chinese and Malays in 1964 and 1969 whose records time has not erased. In their wake, Singapore has been at pains to level the playing field for all three major ethnic groups (including those of Indian ethnic descent) by, for instance, having a more diverse civil service, but things are never quite perfect.

Like many Asian nations, Singapore is highly inequitable and is becoming more and more so. Its Gini coefficient stands at 0.478. At the same time, the locals' very low birth rate results in few Singaporeans left to do blue-collar jobs...such as construction. Hence the elements for this year's sudden outburst as an Indian migrant construction worker was struck down by a wayward bus, resulting in that ever-so-rare event: a riot in Singapore.
A crowd of about 400 foreign workers, angered by a fatal road accident, set fire to vehicles and attacked police and emergency services workers late Sunday in Singapore's ethnic Indian district, injuring at least 18 people in a rare riot in the city-state

Police and eyewitnesses say the riot, the first major outburst of public violence here in more than four decades, started at about 9:23 p.m. local time (1323 GMT) after a bus hit and killed an unnamed 33-year-old Indian man in the Little India neighborhood, prompting large groups of South Asian workers to attack the bus with sticks and garbage bins.

Authorities quelled the violence before 11 p.m. after deploying 300 police officers to the scene, including its riot-control squad and Gurkha unit, police officials said in a news briefing early Monday, adding that officers didn't use any firearms to end the riot...

Police officials said 10 officers were hurt, none seriously, while the bus driver involved in the fatal accident—a Singaporean—was hospitalized. Five vehicles were burned—including three police vehicles, an ambulance and a motorcycle, the Civil Defense Force said. Several other vehicles—including police, civil defense, and privately owned cars—also were damaged, officials said...
The role of migrant workers has come under scrutiny:
The riot has sparked concerns of festering unrest amid the large foreign workforce, numbering about 1.3 million as of June, in this island state of 5.3 million people. In recent years, some foreign laborers—particularly low-pay unskilled workers in construction—have resorted to protests against alleged exploitation by employers, including a rare and illegal strike last year by about 170 public-bus drivers hired from China.
There is also, unfortunately, an element of racial profiling
Even so, police would "pay extra attention not just to Little India, but also to foreign-worker dormitories and known places of congregation, moving forward," Police Commissioner Ng Joo Hee said at the briefing. Police officials said they were treating the incident as a case of "rioting with dangerous weapons," an offense that carries penalties including up to 10 years' jail, as well as caning.
Good ol' caning; would this be Singapore without it? Yes, Singapore is highly inequitable, but its claim to fame has been different races living in relative harmony in recent years. I guess the seams are beginning to show once more as inequality becomes more evident based on racial differences. Then again, demographic realities probably mean that flashpoints of this sort will continue to occur in the near future, especially as income and racial divides reinforce each other.

This ain't Disneyland, folks.

UPDATE: Racial profiling in "Little India" is not new, and these events may further inflame matters.
Read More

Numbers Don't Lie: Catholicism is Growing

♠ Posted by Emmanuel in at 12/10/2013 07:57:00 AM
It remains remarkable how a non-negligible portion of the world population can be classified under a single church with a single leader and a single history: the Catholic Church. I've been performing religion-related research and came across a 2013 Pew Research poll describing the extent of this faith. To be sure, there is fragmentation among Christian denominations: born-agains, charismatics and so on have mixed in with Anglicans and even Catholics. However, as fads in Christianity come and go, one thing remains fairly stable in terms of global proportion and growing in terms of absolute numbers--St. Paul's brand:
Over the past century, the number of Catholics around the globe has more than tripled, from an estimated 291 million in 1910 to nearly 1.1 billion as of 2010, according to a comprehensive demographic study by the Pew Research Center.

But over the same period, the world’s overall population also has risen rapidly. As a result, Catholics have made up a remarkably stable share of all people on Earth. In 1910, Catholics comprised about half (48%) of all Christians and 17% of the world’s total population, according to historical estimates from the World Christian Database. A century later, the Pew Research study found, Catholics still comprise about half (50%) of Christians worldwide and 16% of the total global population.

What has changed substantially over the past century is the geographic distribution of the world’s Catholics. In 1910, Europe was home to about two-thirds of all Catholics, and nearly nine-in-ten lived either in Europe (65%) or Latin America (24%). By 2010, by contrast, only about a quarter of all Catholics (24%) were in Europe. The largest share (39%) were in Latin America and the Caribbean.
Now, as then, the Catholic Church's critics are myriad. In the longer historical sweep, though, its geographic reach ostensibly in the business of saving souls is broader as stagnant-to-declining markets  (North America, Europe) are supplanted by more dynamic ones (sub-Saharan Africa, Asia-Pacific), while holding on to saturated markets (Latin America).
Read More

Is Europe Overrepresented at World Cup? Nope

♠ Posted by Emmanuel in at 12/08/2013 09:47:00 AM
It's the weekend and it's time we had another feature dealing with international sport. Perhaps inevitably, let's talk about football. Some are lamenting that the ranks of World Cup participants for next year's event is in Brazil are filled with European teams. Why does Europe get represented by 13 teams--over 40% of the participants? Don't Europeans represent only slightly over 10% of the world population? Certainly this is an unfair remnant of a bygone, Eurocentric world?  With the group draws done and dusted, it's time to have a closer look at the matter.

The easiest way to go about our task is to look at the number of European teams in FIFA's rankings of national teams. Since there are 32 participants in the World Cup, how many of them are European? By this metric, things look rather fairer. Here are the Europeans in the world's top 32 as of November 28, 2013:

01. Spain
02. Germany
05. Portugal
07. Italy
08. Switzerland
09. Netherlands
11. Belgium
12. Greece
13. England
16. Croatia
18. Ukraine [did not qualify for World Cup 2014 - Brazil]
19. France
21. Bosnia-Herzegovina
22. Russia
25. Denmark [DNQ]
27. Sweden [DNQ]
28. Czech Republic [DNQ]
29. Slovenia [DNQ]
30. Serbia [DNQ]
32. Romania [DNQ]

Also consider two European teams that fall just outside the top 32:

33. Scotland [DNQ]
34. Armenia [DNQ]

So actually, Europe is (gasp!) underrepresented at the World Cup. If we dealt away with regional qualifiers which make it harder for Europeans to reach Brazil due to tougher competition--ie., each other--and instead select teams by virtue of their world rankings, then 20 out of 32 (62.5%) participants should be European instead of 13. Sorry, but the rankings imply that 7 teams from other regions of the world got in on football's equivalent of "affirmative action." We speak of a "group of death" featuring top-ranked national sides during the World Cup group stage that is hard to progress from into the knockout stages, but Europeans are invariably drawn into a "region of death" just to qualify for the event. Does anyone really doubt that European non-qualifiers alike the Czech Republic, Denmark or Sweden would beat the stuffing out of Costa Rica, Honduras or Iran?

Is it a throwback to a bygone era of Western political-economic dominance, then? No, Europe still rules over this sport if we go by international team rankings. Also keep geopolitics in mind: with the demise of the former Soviet Union and Yugoslavia, the number of world-class European national sides has significantly increased. Among the top 32, the former begat Russia and Ukraine while the latter begat Croatia, Bosnia-Herzegovina, Slovenia and Serbia. Why Europe still dominates is an interesting question which I suspect deals with the most lucrative and competitive of professional leagues being in Europe. If you want to sharpen your talents against world-class competition, then European professional leagues remain the place to be.
Read More

WTO Welcomes Its 160th Member, Yemen

♠ Posted by Emmanuel in ,, at 12/08/2013 08:57:00 AM
Yemen, there's no need to feel down
I said Yemen, pick yourself off the ground...

A little neglected in the hullabaloo surrounding the conclusion of the "Bali package" at WTO negotiations in the eponymous Indonesian resort location has been the organization's acceptance of its 160th member. A stop on the Silk Route of centuries past, to say Yemen has fallen under hard times due to religious extremists and assorted nutcases taking up their various dubious causes is an understatement. However, it now joins the growing ranks of least-developed country members:
Immediately after the heads of delegations’ meeting, members formally accepted Yemen as a new WTO member — its “accession” to the WTO. At a ceremony to celebrate the decision, Mr Azevêdo congratulated the Yemen government for the domestic reforms it is undertaking after 13 years to finally become a WTO member. “We celebrate accessions both because of what it means for the individual country, but also because of what it means for this organization,” he said

The Republic of Yemen will be the 35th least developed country in the WTO. “This group makes up a fifth of the whole WTO membership. It is an important constituency — and, as we have seen in recent days, it is one that is increasingly making its voice heard,” said the Director-General. Yemen’s Industry and Trade Minister Sa’aduddin Bin Taleb expressed his country’s gratitude and excitement at finally becoming a WTO member.

“Sometimes things change for countries and fortunes change. But the very essence of a country and the history and the civilisation remains. Ours has been trading for the last at least five or six hundred years, in fact, since the spice route," he told the assembled ministers from the WTO’s current membership.“We aim to take back that road again and to connect with everybody in the world. ... I hope that after a few months, we will have a new Yemen born." The Yemeni Parliament will have six months, until 2 June 2014, to ratify its accession package. It will then inform the WTO and 30 days later it will officially become a member.
What can I say? Yemen's membership comes just in time to enjoy duty-free, quota-free access by least-developed countries to richer ones as well as preferential rules of origin. Meanwhile, the domestic debate is awfully similar to what countries considering joining the WTO have--we will be inundated with imports, our domestic industries will be wiped out as a consequence, domestic firms are not yet ready, etcIts :
Sana’a University economics professor Salah Al-Maqtari said the move was a bad one for Yemen. “Yemen already has no customs restraints, and international products have invaded its markets, even before accession to the WTO,” he said. Al-Maqtari said Yemen imports 85 percent of its food commodities from abroad and does not produce many goods for export.

“Yemen is on the losing side because its consumption [of imports] is higher than its production [of goods for export],” he said. Car importer Sami Sabiha said the Yemeni government has not made any preparations to help industries or the economy deal with the difficulties they will face as a result of joining the organization. 
Read More

Venezuela's Bolivarian Revolution is Dead, Long Live F1!

♠ Posted by Emmanuel in ,, at 12/06/2013 02:11:00 PM
Sorry 21st century socialist sympathizers, but the economic and moral bankruptcy of Hugo Chavez's Bolivarian Revolution is becoming more apparent with each passing day as his successor finishes off the job. Even rose-tinted glasses cannot obscure the damage done. First, "oil diplomacy" is sagging as the US ups its domestic production of petroleum care of fracking and a slower world economy has limited Venezuela's ability to fund (costly) PR stunts:
The late President Hugo Chavez's dream of leveraging Venezuela's oil wealth to spread revolution across Latin America is crumbling under the weight of an economic crisis that is forcing his hand-picked successor to cut back on generous foreign aid.

Signs of the country's waning influence are becoming more apparent. In early November, Guatemala withdrew from the Petrocaribe oil alliance launched by Chavez, saying it didn't receive the ultra-low financing rates it had been promised by Venezuela when it first sought to join the 18-nation pact in 2008. Also in recent weeks, representatives of Brazil and Colombia have held meetings with their Venezuelan counterparts to collect overdue payment for food, manufactured goods and other imports. 
As some wiseguy said, the world's largest holder of crude reserves has Egypt-like FX reserves due to spectacular mismanagement aimed at generating publicity for Venezuela as some sort of alt-globalization hero and not at competence in managing a resource-rich economy.  Second, we now receive word that Venezuela is upping its police-state-like characteristics in attempting to ban public access to websites that list black market exchange rates for US dollars instead of taking scarcely believable "official" rates at face value which next to no dealers will sell you greenbacks at in exchange for the local currency (bolivars). These guys even outdo the Chinese in cyber-supression:
Venezuelans have been scrambling for dollars for weeks, taking refuge in the greenback as their own currency is in free fall. Rather than address the economic imbalances behind the bolivar's plunge, the government is going after the bearers of the bad news — it's blocking websites people use to track exchange rates on the black market.

Cyber-activists say the crackdown goes to absurd lengths, even targeting Bitly, the popular site for shortening Web addresses to make it easier to send them as links via Twitter and other social media. For more than two weeks, access to the service has been partially censored by several Internet service providers in Venezuela, apparently because Bitly was being used to evade blocks put on currency-tracking websites.

The New York company says such restrictions have only previously been seen in China, which has one of the worst records for Internet freedom, and even then not for such an extended period. Opponents of Venezuela's socialist government say the controls are designed to obscure reporting of the nation's mounting economic woes.
Can you say "police state"? Despite the country's ongoing descent into socioeconomic hell, what's notable is that state-sponsored F1 driver Pastor Maldonaldo has actually upgraded his ride next season from Williams (which scored exactly zero points this year) to Lotus (which finished fourth in the constructor's tables). How did this happen? Maldonaldo did not get his Lotus ride on merit; rather, the hard-up team is banking on Venezuelan state cash Maldonaldo will bring. In contrast to its former driver, world champion Kimi Raikkonen who the team still owes money, Maldonaldo will presumably bring in cold hard cash for his paid ride:
Lotus’ financial predicament was recently laid bare by their Ferrari-bound Finn Kimi Raikkonen, who revealed in Abu Dhabi that he had been paid “zero euros” by the team all year. It is thought that he is owed around £15 million. PDVSA paid just under £30 million a year for the quick but extremely erratic Maldonado to drive at Williams where he was responsible for the team’s first win in eight years, in Barcelona last year, along with numerous collisions. 
It's odd that Venezuela will plump big cash on this bourgeois sport as one of the last few PR stunts it can still afford even if many folks back home live lives of not-so-quiet desperation. Like in Thailand, this is democracy in action for you for better or (much) worse.
Read More

OECD 2012 Education Rankings: US, Leftists Get Dumberer

♠ Posted by Emmanuel in at 12/04/2013 11:34:00 AM
I am annoyed with the leftist Economic Policy Institute's spin on the results for the OECD's standardized tests known as PISA. The EPI is complaining that the results portray an unfair picture of American academic performance, and that US policymakers paint an unnecessarily dire picture of US education. Another year, another batch of crappy (should I spell that "KrapPi" to make it more intelligible to certain North American audiences?) results. Ho-hum. Among other EPI complaints we have the following:
  • There is a test score gap between socioeconomically advantaged and disadvantaged students in every country. Although the size of the gap varies somewhat from country to country, countries’ gaps are more similar to each other than they are different.
  • Countries’ average scores are affected by the relative numbers of advantaged and disadvantaged students in their schools. The United States has relatively more disadvantaged students than the usual comparison countries. If average scores were adjusted so that each country had a similar social class composition, U.S. scores would appear to be higher than conventionally reported and the gap with top-scoring countries, while still present, would be smaller. Adjusting for differences in countries’ social class composition can also change their relative rankings.
While I appreciate the retro-Marxist class warfare stylings, the EPI argument boils down to this: "social class," i.e., household income (I aspire to the petty bourgeoisie, in case you're interested) is the largest determinant of PISA test performance. If we accept this premise, then the picture they paint is even direr than that portrayed by American policymakers. Why? Because Stateside incomes are going nowhere fast--and so there's no point in trying to improve test scores when they are tied to stagnant-to-declining incomes. Next, try this observation:
  • Some countries to which the United States is frequently unfavorably compared currently have higher test scores, but their test scores have been falling over time, while scores in the United States have not been similarly falling. It is not apparent to what extent U.S. policymakers should attempt to learn from the experience of countries with high scores, or from the experience of countries with rising scores.
Actually, US scores have been falling over time--see an older post--while those of others have only on a case-to-case basis. For them you have this explanation: Given that any number of developed countries are just as stagnant-to-declining in income growth terms as the United States, you would expect similar performance in terms of academic achievement. The EPI told us this, right?

IMHO both parties get it wrong. American policymakers should target raising incomes if they really are concerned about raising test scores. There are endogeneity biases possible here, but the wealth of nations is seldom discussed in education reform for obvious reasons despite good reasons to believe they are linked. It's not politically correct, is it? Meanwhile, the leftists do not manage to brush off this issue with Alfred E. Neuman ease but actually exacerbate it by tying it to American's economic fortunes in engaging with well-worn class warfare discourse. US incomes are going down the toilet (or floating around a porcelain bathroom fixture), and so are US test scores.

Bottom line: Results from Shanghai, Singapore, Hong Kong, Taiwan, Korea and Macau are definitely not representative since they are neither OECD members nor are they sampled nationwide but only in major cities. That said, their economies are not stagnant-to-declining, so there's really no surprise they're faring better. Do we really need more evidence of the shifting balance of knowledge?

There is no conspiracy here to keep Americans poor and stupid. As you get poorer, you get stupider; well no @#$%, Sherlock. Ask this guy...

Read More

Lenin's Tomb? More Like His Louis Vuitton Trunk

♠ Posted by Emmanuel in at 12/03/2013 02:10:00 PM
Talk about a marketing ploy gone bad: you are looking at a giant Louis Vuitton monogram-patterned building that was supposed to house an exhibition dedicated to the famous brand in Red Square. Say what you will about Vladimir Lenin, but his mausoleum featuring his embalmed remains has been there since 1924. In a way, it continues the Russian's morbid fascination with the communist legend. Sure the ultra-nationalists and old-style communists will of course venerate him, but even those who believe times have moved on retain affection for the human who put Russia on the course of being a superpower--at least for a handful of decades.

While various (usually high-end) retailers now ply their wares in Red Square, the giant Louis Vuitton trunk was apparently the last straw. Eventually, even its promoters decried the desecration wrought on this Russian landmark:
Suddenly, the enormous Louis Vuitton suitcase was just there, standing opposite Lenin's tomb and about the same size. Muscovites wondered why, then got angry. Patriots were insulted because Louis Vuitton is a foreign brand. "An alien, foreign firm's chest" is "blocking the view of Savior Tower and St. Basil's cathedral," ultra-nationalist politician Vladimir Zhirinovsky complained.

Communists were mad because of its proximity to Lenin's mausoleum, whose facade is only 78 feet wide, compared to the 100 feet-long, 30 feet-wide suitcase. Communist Party legislator Sergei Obukhov called the over-sized piece of luggage an "indecent" intrusion into a "sacred place." And liberals took offense on aesthetic grounds. "The LV suitcase in Red Square is a very honest statement, I think," actor Maxim Vitorgan wrote on Facebook. "LV has become a symbol of bad taste ... So everything is logical. Here it is, the goal, the dream ... And who cares if the view of the square is ruined and the architectural ensemble is broken up."

In the end, both the Kremlin and GUM, the upmarket department store that helped the French luxury conglomerate LVMH erect the monstrosity today demanded its removal.
Even the most jaded of Muscovites know that prices for luxury goods there exorbitant, so I don't quite get the point in mounting this exhibit aside from, indeed, making Louis Vuitton "a symbol of bad taste." Not that preserving a long-dead communist pioneer is the height of taste but...it's almost bad enough to make you want to staple your private parts to the cobblestone.
Read More

Last Chance Saloon: WTO's Fate & This Week's Bali Meet

♠ Posted by Emmanuel in ,, at 12/01/2013 03:55:00 PM
I just wanted to share the ICTSD's useful primer on the upcoming WTO meetings in Bali, Indonesia where the organization's fate as a credible negotiating forum hangs in the balance. The full report is available as a PDF file; below is the introduction to this crucial event:
Trade ministers are set to meet in the Indonesian island province of Bali from 3-6 December for the WTO’s Ninth Ministerial Conference, in a meeting that has been touted - for better or worse - as a turning point for the 159-member organisation. Yet on the eve of the conference, what will actually be on the agenda in Bali remains fluid.

Geneva-based negotiators have spent the last several months feverishly negotiating a small package of concessions [see my earlier post on it meager contents] that, if achieved, would mark the first multilateral trade deal since the WTO was formed in 1995. A deal in Bali, officials and observers alike had said throughout the year, would provide a major boost to the organisation’s credibility at what many have deemed to be a critical moment in its history. 
Days before the ministerial, however, WTO Director-General Roberto Azevêdo confirmed that, despite a “tremendous effort” on behalf of the membership and some significant advances, they had not yet agreed on a deal to present to their ministers - leaving the fate of the Bali conference hanging in the balance.
Alike five years ago, India may play the spoiler by sinking the entire deal through kowtowing to its domestic agricultural lobbies:
Chief among those is India’s demand – affirmed at a cabinet meeting in New Delhi on Thursday – for a “peace clause”, intended to give another four years to negotiators to come up with new WTO rules for farm subsidies and the prices paid for staples bought as part of government programmes to supply food to the poor.

Other participants have accused India of backing down from an agreement struck earlier in November over that peace clause and thereby putting at risk a broader deal that would set about removing red tape at borders around the world and, advocates claim, add as must as $1tn to international trade. 
Cautious optimism holds going into next week; no outcome would result in outright despair, while an outcome would result in a welcome development. Still, prospects for a wider Doha deal are remote twelve years after it began.
Read More

American Idiocy: Dying for Shopping on Black Friday

♠ Posted by Emmanuel in , at 12/01/2013 09:04:00 AM
There are few things more pathetic than a consumerist automaton who lives to shop. This American disease has spread around the globe under the guise of various euphemisms--"economic efficiency," "free trade," "globalization," and so forth--but its symptoms are unmistakable. Today's Exhibit A is the phenomenon of "Black Friday," or the day after Thanksgiving when US retailers supposedly break even for the year and offer mega-deals to entice the American shopping classes.

Which would all be well and good if these mega-deals weren't as fake as the American Dream: to engineer "40% off," most retailers work backwards to come up with a suggested retail price (SRP) that the product is rarely if ever offered at:
The common assumption is that retailers stock up on goods and then mark down the ones that don't sell, taking a hit to their profits. But that isn't typically how it plays out. Instead, big retailers work backward with their suppliers to set starting prices that, after all the markdowns, will yield the profit margins they want. The red cardigan sweater with the ruffled neck on sale for more than 40% off at $39.99 was never meant to sell at its $68 starting price. It was designed with the discount built in. 
Being ever-so-gullible, the Yanquis lap up these frauds and are even willing to sacrifice life and limb joining the thronging masses. Witness reports of injuries and fatalities incurred by them last Friday in that all important life cause of, er, availing of larger "discounts":
  • In Chicago, a police officer shot a suspected shoplifter driving a car that was dragging a fellow officer at a Kohl's department store. The suspect and the dragged officer were treated in hospital for shoulder injuries. Three people were arrested, reports the Chicago Tribune
  • A shopper in Las Vegas who was carrying a big-screen TV home from a Target store on Thanksgiving was shot in the leg as he tried to wrestle the item back from a robber who had just stolen it from him at gunpoint, reports the Las Vegas Sun
  • At a southern California Walmart store, a police officer's wrist was broken as he tried to break up a fight between two men in the queue outside; there were two more fights over goods inside, reports the San Bernadino Sun
  • A 23-year-old man was doused with pepper spray and arrested after he allegedly attacked a police officer responding to an argument over a television at a Walmart in Garfield, New Jersey, reports the Star-Ledger
  • Despite Walmart's pledge to overhaul its crowd-control measures, scenes of mayhem such as this one were apparently filmed at a store in Fort Worth, Texas
  • Two arrests were made after a man was stabbed in an argument over a parking space at a Walmart in Virginia, reports local television station WVVA
Americans enjoy styling themselves as exemplars for the rest of us unenlightened colored peoples, but why the hell you would you like to be so shallow and live lives so pointless is beyond me.
Read More

Conflict Minerals: Which Game Console is Most Violent?

♠ Posted by Emmanuel in , at 11/28/2013 07:52:00 AM
With the holiday season upon us and one semi-new (Nintendo) and two completely new (Microsoft and Sony) video game consoles on the market, consumer interest is . While you may be thinking of blasting away virtual opponents playing Call of Duty 107 or whatever version they have nowadays, pause for a moment and think of the more than 5 million persons estimated to have died in the Congo in various conflicts. For, many elements you find in consumer electronics--including video game consoles--are sourced from mineral-rich mines there: tantalum, tin and tungsten.

Instead of Call of Duty 107, Congo is home to true-to-life civil war, foreign invasions, warlords, child soldiers, sexual crimes and so on piled atop a humongous body count that is still increasing. To fund these endless wars, proceeds from minerals--"conflict minerals"--have picked up their share of the (bloody) tab. While there are monitoring mechanisms in place that allow consumer electronics firms to gauge their reliance on dodgy Congolese sources, compliance is oftentimes voluntary and thus subject to wide variation.

So, which then are the most peaceful and violent video game consoles in real life? Watchdog group Raise Hope for Congo ranks MNCs by the measures they use in ensuring their products do not contain conflict minerals. Note that scoring high or low does not necessarily mean that their products have a high or low proportion of Congo-sourced conflict minerals, but rather that its share cannot be accurately determined because they do not keep tabs.

Microsoft (X-Box One) is greenlighted with a score of 30, meaning it has "taken proactive steps to trace and audit their supply chains, pushed for some aspects of legislation, exercised leadership in industry-wide efforts, started to help Congo develop a clean trade." Sony (Playstation 4) scores a 27 having joined some global initiatives but has not yet traced its supply chain for links to Congolese conflict minerals. Worst of all, Nintendo (Wii U) score a big, fat 0. Despite the ostensibly more family-friendly nature of its games as opposed to the blood-and-gore soaked titles of the other consoles, it is the bottom of the barrel:


What would Bowser do? If you look at the list, American companies generally rank highest, South Korean ones are in the middle, and the Japanese fall towards the back of the pack. I would believe that it's a function of activism insofar as most of them operate in the United States. Why South Koreans are more receptive than the Japanese to such entreaties makes me wonder, though.

Still, you'd hope Nintendo did a better job on the CSR end given that they are not exactly setting the sales charts on fire.
Read More

Business as Usual: Thailand Back in Crisis Mode

♠ Posted by Emmanuel in , at 11/27/2013 11:50:00 AM
There is an anarchic quality to Thai politics that has to be seen to be believed. At regular intervals, mass protests, military coups and other forms of upheaval toss out leaders whether they are democratically elected or otherwise. Since the turn of the century, media mogul Thaksin Shinawatra--sort of an Asian Silvio Berlusconi--has dominated the political scene, being PM from 2001 to 2006, when he was ousted in a military coup. Since 2006, he has lived largely outside the country to avoid criminal prosecution. However, his allies have held office most of the time, including his sister Yingluck Shinawatra who was elected in 2011:
Although Thaksin or his allies have won every election in the past decade, the judiciary often undercuts him, illustrating how the billionaire former telecommunications tycoon and populist hero remains one of the most polarising figures in modern Thai history.

Since the 2006 coup, court rulings have removed two prime ministers, disbanded four parties, jailed three election commissioners and banned 220 politicians. The military will be watched closely. A major force in politics since Thailand became a democracy in 1932, the military has staged 18 coups - some successful, some not - and made several discreet interventions in forming coalition governments, almost all with the tacit backing of the royalist establishment that now reviles Thaksin.
Now Yingluck Shinawatra finds herself in trouble. She recently tried to ramrod legislation that would grant Thaksin amnesty, but to no avail. Instead of bringing big brother home, she has raised the ire of the middle class Bangkok-based opposition. I've already called her Badluck Shinawatra for her terribly expensive and quite frankly unaffordable populist policies of supporting rice farmers in Thailand's north and northeast. Aside from trying to bring home their bete noire Thaksin home scot-free, Thailand's deteriorating economic situation is driving much unrest as ten of thousands have, well, Occupied Thailand's Government Offices:
Thousands of anti-government demonstrators kept up pressure on the Thai government Wednesday by surrounding more official buildings amid the highest tensions the country has seen since deadly unrest three years ago. The protesters in Bangkok continued to occupy the finance ministry building, which they stormed Monday and turned into their secondary command center.

They plan to send groups to a range of other ministries and government offices around the capital Wednesday, said Akanat Promphan, a spokesman for the protesters. Their objectives include the public health, labor, industry, social development and science ministries, as well as a government complex that houses multiple agencies, notably the Department of Special Investigation. The number of demonstrators, led by the opposition Democrat Party, has declined from the huge gathering of roughly 100,000 people that assembled in Bangkok on Sunday.
So those are the politics; now for the economy part. The Thai baht and the stock market are both plunging. Part of the pressure comes from Yingluck trying to auction bonds to pay the rice subsidies she vows will remain in place. Since October (harvest season), the government has failed to pay the farmers. These auctions have not succeeded either in selling the entire amount on offer, raising fears among Yingluck's allies. After all, if the farmers desert her due to non-payment of subsidies, the Thaksinite political base will be angry:
At least four sales of three-year debt in Thailand have failed to raise the targeted amounts in July and August. The notes yesterday were sold at a yield of 3.53 percent, 39 basis points higher than similar-maturity sovereign bonds, Chularat Suteethorn, head of the Public Debt Management Office, said. The securities were issued on behalf of Bank for Agriculture & Agricultural Cooperatives, which is helping to support farmers by purchasing rice at above-market prices. 
There is another large auction scheduled for Friday, November 29. If that too fails (and it looks like it will), you can bet more economic turmoil will hit Thailand and add fuel to the protester's ire at the government. Call this another example in how democracy does not always work. Sure these Southeast Asian equivalents of (Venezuelan) Chavistas are very good at winning elections, but their policies are largely unsustainable redistributive initiatives.

In the end, you got the government you deserve if you vote for this kind of nonsense.
Read More

Pound or Euro? Currency of an Independent Scotland

♠ Posted by Emmanuel in , at 11/24/2013 02:22:00 PM
The next few years are literally going to be make-or-break for the United Kingdom. First of all, the ruling Tories have promised a referendum on its membership in the European Union that, if it is held and voters decide against it, will mean the UK leaving the EU. It's a scary thought we can explore in another post; I myself don't see how the EU will lose much given how it has been very aloof.

Next, we also have another referendum scheduled in Scotland voting on staying in the United Kingdom. While it seems just desserts to me that the UK with its breakaway tendencies from the EU would be subject to similar domestic pressures, the political economy of such a move are...complicated. Scottish independence will mean that it will have to reapply for EU membership if it wants to be part of it. Moreover, there is the question of what currency it will use--the British pound, the Euro, or its own currency unit. Obviously, using the Euro will be contingent on first joining the EU and then the EMU. Both will not happen overnight.

How about continuing to use the pound? It is here where the Conservatives are throwing their weight around by threatening to kick the Scots out of the "sterling zone" if they declare independence, leaving them with the sole option of being a small nation with its own currency circa 2014. As Iceland has so vividly demonstrated, this is not such an attractive option in the new millennium, but I digress. From the FT:
Scotland will be forced to quit the sterling currency union if it votes for independence next year, a cabinet minister has said, in the starkest warning yet for Scottish voters to remain in the UK. Speaking to the Financial Times days before the Scottish government releases its vision for an independent Scotland, Alistair Carmichael, the Scottish secretary, warned Holyrood not to assume it will be let back into the sterling area if the country becomes independent.
Such a declaration would complicate efforts of the Scottish National Party (SNP) to portray a "no" vote as a walk in the park:
The Scotland secretary’s words are part of a concerted campaign across the union to rebut suggestions that a separate Scotland could simply continue to use sterling. Carwyn Jones, the Welsh first minister, said in a speech on Wednesday that his Labour-led government should also be given a veto on the idea, which he described as “very messy”

The message comes as the SNP-led government prepares to unveil its blueprint for the make-up of an independent Scotland, designed to answer questions such as what currency the country would use, whether it would belong to the EU and what taxation system it would have...

SNP leaders insist that sterling is an “asset” part-owned by Scotland, and that in the event of a vote for independence, the remaining UK will want to share the currency, not least to minimise exchange rate fluctuations between the two countries. Alex Salmond, SNP first minister, tried to ward off the threat of exclusion from sterling last week by saying that if that happened, Scotland would not be obliged to take on its share of the UK national debt.
My take is that it's a lot of hot air on both sides since poll numbers suggest the Scottish public understands the consequences of independence and generally believes it's not worth the hassle. 

Not gonna happen, as the Yanks would say.



Read More

Trade Deals: Ukraine Jilts EU, Returns to Russian Fold

♠ Posted by Emmanuel in , at 11/22/2013 08:07:00 AM
When we last talked about Ukraine, it had elected a pro-Russian leader in Viktor Yanukovych--the same Russia-aligned "bad guy" the so-called Orange Revolution supposedly got rid of. Hard economic times (brought on by the global financial crisis) soured the partnership of his opponents Yulia Tymoshenko and Viktor Yushchenko. in their place he offered, well, "change." Ukraine is a rather divided nation with its Eastern Russian-speaking portion favoring closer ties with Russia (and thus Yanukovych) and its Western portion which is warier of the giant neighbor's residual influence post-Soviet Union.

It was thus interesting to note that Yanukovych remained keen on concluding a Deep and Comprehensive Free Trade Agreement (DCFTA) with the EU that his ostensibly more Western-leaning predecessors had initiated negotiations on. In recent weeks, the EU had been pressing Ukraine to finally get this FTA done, but it wanted Yulia Tymoshenko released from prison. Jailed over corruption charges, many (especially Europeans) believe she is a political prisoner of the incumbent.

And so things came to a head at the Ukranian legislature. Yanukovych's allies would not let Tymoshenko go for medical treatment in Germany lest she mount a comeback in time for the elections in 2015. Unable to stomach her release, Ukraine has now gone a step further by not only ditching the FTA with the EU but signaling its intentions to revive economic links with Russia:
Ukraine abruptly abandoned a historic new alliance with its western neighbours on Thursday, halting plans for an imminent trade pact with the European Union and saying it would instead revive talks with Russia. EU officials, who had been preparing to sign the long-negotiated deal at the end of next week, said President Viktor Yanukovich cited fears of losing massive trade with Russia when he told an EU envoy this week that he could not agree terms.

Yanukovich's prime minister issued the dramatic order to suspend the process in the interests of "national security" and renew "active dialogue" with Moscow. EU officials, who had hoped the president's complaints in recent days were a last-minute bargaining tactic, saw little chance of saving the deal...
Ukraine's parliament, dominated by Yanukovich's allies, rejected a series of bills earlier on Thursday that would have satisfied the EU by letting opposition leader Yulia Tymoshenko out of prison to travel to Germany for medical treatment [for a back problem]. Shortly afterwards Prime Minister Mykola Azarov issued the order on suspending the EU process and reviving talks with Russia, other members of a Moscow-led customs union and the former Soviet Commonwealth of Independent States.
Is the power of their neighbors such that Ukraine would so feebly accede to Russian pressure? Perhaps it was just Yanukovych playing Russia off with the EU in seeing who would give it more economic concessions. In the end, however, the Russians seemingly offered a better deal--at least to Yanukovych who was always inclined towards Russia to begin with. It was a feint that EU officialdom perhaps bought too eagerly.

However, this story is not yet finished since another Ukranian leader less receptive to its eastern neighbors may yet ink the DCFTA since s/he will have little at stake with regard to releasing Tymoshenko.

Meanwhile, we can pass time figuring out how to get Tymoshenko's famous braided hairstyle...

UPDATE: Yulia Tymoshenko has now declared a hunger strike until her country signs the EU FTA.
Read More

After 12 Long Years, a WTO Deal in Bali?

♠ Posted by Emmanuel in , at 11/22/2013 04:42:00 AM
For obvious reasons--nothing much happening in Geneva--I have devoted very little attention to the conclusion of the WTO Doha Round, having given it up for lost. For all intents and purposes, the Doha Development Agenda as it is officially referred to is still on the back burner. But, there was activity stirring a week ago causing its new Brazilian Director-General Roberto Azevedo to remark "We are too close to success to accept failure but it is all or nothing now." Latin brio aside, they have taken some more "salable" items on the negotiating table to hopefully use in demonstrating that WTO negotiations are not yet dead by concluding a smaller multilateral deal during end-of-year gatherings of its members in Bali (3-6 December). 

What exactly is inside this "Bali package," then? Supposedly there are three pillars: (1) trade facilitation to reduce red tape among international customs authorities; (2) development in better operationalizing what kinds of special and differential treatment [SDT] are afforded developing countries; and (3) agriculture permitting developing countries more leeway in doing things such as helping feed their destitute members:
WTO ambassadors resumed consultations on Section II of a draft agreement on trade facilitation. This section provides the basis for special and differential treatment and for technical assistance and capacity building needed for the implementation of the agreement.

In agriculture, members are focusing on proposals about reducing export subsidies and related policies known collectively as “export competition”, reducing the chances that the methods used to share out a particular type of quota among traders become trade barriers in their own right, on how to deal with developing countries’ food stockholding for food security when the purchases could distort trade, on adding a number of environmental and development services to the list of programmes considered not to distort trade and therefore allowed without limit, and on cotton produced by least-developed countries (LDCs).

On development, members have agreed proposals by LDCs on preferential rules of origin and on operationalization of the services waiver for them. Work continues on duty-free, quota free treatment for LDCs. Members are also consulting on a monitoring mechanism for special and differential treatment for developing countries under WTO agreements. 
From my perspective, it's a bunch of giveaways from industrialized for developing countries which do not require substantial concessions from the former that the latter find reasonably attractive. They do not move the game on a whole lot. Still, the hope is that this "Bali package" is useful for demonstration purposes in showing the world that the WTO still matters. Yes, it's akin to shooting fish in a barrel, but the prospects are at least better than Doha. Ladies and gentlemen, a deal is now imminent...
Roberto Azevêdo, the recently appointed head of the WTO, is expected to present a finished draft of the agreement to the body’s highest organ, the general council, in a meeting as soon as Sunday or Monday.

Barring any unforeseen problems – and negotiators gave warning on Thursday that they could still emerge – the agreement would be signed by trade ministers from the WTO’s 159 member countries in Bali next month. “They have crossed over the threshold,” said a senior trade official in Geneva. Sealed, the deal would be a victory for Mr Azevêdo, who warned that the WTO risked irrelevancy if it did not deliver something substantive in Bali when took over in September.
For a guy who just came into office in September, it's certainly an auspicious beginning. And all it took was for a D-G from a developing country to do it?! We could have had something much earlier if so, but I think there's also an air of desperation that crept in which is making this deal more palatable all around. Believe it or not, trade negotiators probably got tired of attending these shindigs just to twiddle their thumbs year in and year out.
Read More

So, Just How Urbanized is Our World?

♠ Posted by Emmanuel in at 11/21/2013 11:46:00 AM
To be exact, it is 52.1% urbanized in terms of persons living in cities according to the latest 2011 figures from the UN Department of Economic and Social Affairs (UNDESA). Having turned the corner in 2007, the pace is accelerating for better or worse as more people choose to live in cities.

Also above is a map [click to enlarge] depicting global trends in urbanization according to each nation's percentage of city dwellers. It's interesting stuff, especially from an urban planning point of view.
Read More

The Difficulty of Improving One's "Soft Power"

♠ Posted by Emmanuel in , at 11/19/2013 04:50:00 AM
The notion of soft power, defined by Joseph Nye as the ability of a nation to get its way through attraction rather than coercion, is an archetypally wooly concept. How do you measure it? What sort of indicators would you use in comparing different nations according to it? Yet, the lack of hard indicators of soft power or a blueprint for achieving it has not stopped nations from trying to improve their global reputations.

Recently, the lifestyle publication Monocle previewed its most recent edition of its annual soft power rankings showing Germany topping the global league tables after the UK and the US did the last two years. Aside from not speaking English, you would think Germany also suffers from not having immediately British institutions alike "Bond, the Bard (Shakespeare) and the Beatles." Still, there are modern compensations alike, er, Bayern Munich and Borussia Dortmund--arguably the finest soccer teams in the world.

Actually, Britain's diminished performance in the 2013 rankings was predicted to some extent by Dorian Lynksey in the Guardian op-ed pages a few months ago. Given the current Tory government's obsession with quantifiable returns on expenditure--culturally important spending included--recent cutbacks may have taken their toll. For instance, diminished funding for the BBC World Service--still a plank of British cultural influence after all this years--will likely have wider repercussions.

That said, things could be worse than they are in Blighty. You could be China, which comfortably outspends the UK on cultural promotion but doesn't seem to be moving up the global rankings with any alacrity. As the Beatles sang, perhaps you can't buy love--or soft power, either:
Soft power is an unpredictable commodity that can't be bought in a hurry. China imposes a quota of 34 foreign movies a year but last year those imports outgrossed China's 893 homegrown productions, to the government's evident annoyance. Overseas consumers can't be blinded to a nation's flaws. When one of your most famous cultural exports, Ai Weiwei, is a tireless critic of the government, it's hard to pretend you're an artistic paradise, however much you spend. [Or cheap out on helping poorer crisis-hit neighbors for that matter.]

Britain has long enjoyed the cultural reach that China craves, but it's taking its enviable position for granted. Perhaps when you're the land of Bond, the Bard and the Beatles, not to mention the English language, you're prone to assuming it will be ever thus, but it's not just austerity that threatens Britain's soft power. Many elements of Conservative dogma are antithetical to it: resistance to immigration and Europe; suspicion of the BBC and state funding in general; and contempt for any area of the arts on which you can't immediately slap a price tag.
In America's case, I'd say Mickey Mouse cannot whitewash drone strikes or something to that effect. Meanwhile, the argument rages on in the UK whether its extensive cultural promotion ought to continue. Obviously, the British Council does not want the axe to fall on it despite not having "tangible" metrics to show their Conservative political overlords. Then again, assessing reputation is arguably more of an art than a science:
The British Council report rightly argues for a "move from short-term transactional and instrumental thinking to long-term relationship building". And if we must play the price-tag game, economists point out that growing demand for popular culture from newly prosperous nations plays to Britain's strengths.

Measuring the worth of culture using purely utilitarian arithmetic is a tricky path. Art should be valued on its own merits as well as for its financial rewards. But the government need only look at the global success of the Olympics opening ceremony or The King's Speech, one of the last movies to receive UK Film Council funding, to appreciate what the right combination of long-term state investment and individual creativity can do for Britain's reputation abroad, for relatively piffling sums. That, surely, is a language that even the most fanatical budget hawks can understand.
I'd pay up myself, but it's obviously not my decision to make. Read also through the informative British Council soft power report if you have some time to spare.
Read More