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.

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.

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.

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.

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.

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.

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.

West Makes Afghanistan Safe...for Growing Opium

♠ Posted by Emmanuel in at 11/17/2013 11:33:00 AM
Say what you will about the original premise that the 2002 invasion of Afghanistan was to force Osama bin Laden out of hiding from his Taliban protectors, but the aftermath of all that has not been very positive. Afghanistan remains a very poor nation, and the persistence of the Taliban threat speaks volumes about the West's inability to provide a superior vision of the country's future. That is the political aspect of it.

Meanwhile, the economic aspect is not promising, either: despite untold millions spent on eradicating opium over more than a decade, 2013 will be a bumper crop:
Opium poppy cultivation in Afghanistan rose 36 per cent in 2013, a record high, according to the 2013 Afghanistan Opium Survey released today in Kabul by the Ministry of Counter Narcotics and UNODC. Meanwhile, opium production amounted to 5,500 tons, up by almost a half since 2012.

Calling the news "sobering", Yury Fedotov, Executive Director of UNODC, stressed that this situation poses a threat to health, stability and development in Afghanistan and beyond:  "What is needed is an integrated, comprehensive response to the drug problem. Counter-narcotics efforts must be an integral part of the security, development and institution-building agenda".

The area under cultivation rose to 209,000 ha from the previous year's total of 154,000 ha, higher than the peak of 193,000 hectares reached in 2007. Also, two provinces, Balkh and Faryab, lost their poppy-free status, leaving 15 provinces poppy-free this year compared with 17 last year.
While respect is due to the UN Office for Drugs and Crime (UNODC) for taking on drugs and crime in such a difficult situation, I honestly believe that the West has largely given up on Afghan security, let alone the country's development. After sinking billions into the place with little to show for, Western publics have signaled their armed forces to head for the exit. UNODC's diagnosis is sound, but how exactly do you reconcile so many rival warlords? Moreover, what livelihoods are possible other than this one at the current time?
The link between insecurity and opium cultivation observed in the country since 2007 was still evident in 2013; almost 90 per cent of opium poppy cultivation in 2013 remained confined to nine provinces in the southern and western regions, which include the most insurgency-ridden provinces in the country. Hilmand, Afghanistan's principal poppy-producer since 2004 and responsible for nearly half of all cultivation, expanded the area under cultivation by 34 per cent, followed by Kandahar, which saw a 16 per cent rise.

Across the country, governor-led eradication decreased by 24 per cent to some 7,300 hectares. Badakhshan, the only poppy-growing province in the north-east, witnessed a 25 per cent increase in cultivation despite the eradication of almost 2,800 ha. During the 2013 eradication campaigns, the number of casualties rose significantly, with 143 people killed this year compared with 102 fatalities in 2012.
It's a sad situation (full report here), but the time is at hand when Afghans themselves will need to deal with the insecurity, fragmentation, and lack of the development on their own. Perhaps only when they realize that no one will be left to blame for their situation can progress really be made. Then again, the Taliban would welcome retaking the reins of power.

Philippines, PRC & Geopolitics of Disaster Relief

♠ Posted by Emmanuel in ,, at 11/13/2013 01:49:00 PM
[I wish to express my appreciation to those who have gotten in touch to check whether I have been affected by the recent storm in the Philippines. Typhoon Haiyan did not really pass through the capital, Manila, where I am currently based. Nevertheless, any help you can extend to my compatriots is most welcome.] Typhoon Haiyan is one of the most powerful storms ever to hit land. While storms of its magnitude are frequent in the open ocean, it is relatively rate that one reaching over 300 kph hits populated areas. The devastation is enormous, and the UN estimates that $301 million is needed to rehabilitate affected regions over a preliminary six-month period:
The United Nations today appealed for nearly a third of a billion dollars to provide humanitarian assistance to typhoon hit regions of the Philippines where aid workers are labouring around the clock to get in urgently needed survival supplies, such as food, clean water, shelter and basic medicines. UN Emergency Relief Coordinator Valerie Amos launched the $301 million flash appeal from Manila, the capital, where she is surveying the damage by Typhoon Haiyan which ripped through nine regions in south-east Asia over the weekend. 
However, many are noticing the comparatively small amount China is pledging to give to its neighbor ($200,000 total):
China's government has promised $100,000 in aid to Manila, along with another $100,000 through the Chinese Red Cross - far less than pledged by other economic heavyweights. Japan has offered $10 million in aid and is sending in an emergency relief team, for instance, while Australia has donated $9.6 million...

"The Chinese leadership has missed an opportunity to show its magnanimity," said Joseph Cheng, a political science professor at the City University of Hong Kong who focuses on China's ties with Southeast Asia. "While still offering aid to the typhoon victims, it certainly reflects the unsatisfactory state of relations (with Manila)."

China's ties with the Philippines are already fragile as a decades-old territorial squabble over the South China Sea enters a more contentious chapter, with claimant nations spreading deeper into disputed waters in search of energy supplies, while building up their navies.
While the merely state-affiliated publication Global Times usually holds the more jingoistic views compared to the truly official Xinhua news agency or China Daily, this time it expresses concern about how the rest of the region will view the PRC's comparative stinginess. A feint, perhaps? It is still notable that such an opinion was made. Especially notable is the recognition of contributions Filipino-Chinese have made when the PRC has been affected by similar calamities:
China shouldn't be absent in the international relief efforts. Instead, it should offer help within the compass of its power, given China's international position and its location of facing the Philippines across the sea. It's a must to aid typhoon victims in the Philippines despite Haiyan having also battered China's coastal regions and bilateral tensions over the South China Sea disputes.

China, as a responsible power, should participate in relief operations to assist a disaster-stricken neighboring country, no matter whether it's friendly or not. China's international image is of vital importance to its interests. If it snubs Manila this time, China will suffer great losses...  
Aid to the typhoon victims is a kind of humanitarian aid, which is totally different from foreign aid in the past made out of geopolitical concerns. Overseas Chinese in the Philippines played an active part to mobilize relief efforts when the mainland was in disaster. It's legitimate that we provide assistance when they suffer.  
Still, China's pledge is indicative of certain things. Its leadership is not quite pleased with the Philippines, having disinvited the latter's president in recent months and now this. These expressions are also conditioned on playing to public opinion: having portrayed the Philippines as "the enemy" over the South China Sea spat to the Chinese public, it is hard to back down on the tough rhetoric against the Philippines by offering millions in disaster relief.

Asian politics are notable for the long memories of those concerned. If so, the Philippines may better remember those who helped it during its time of need. For instance, that Putin guy might not be so mean towards other developing nations...

UPDATE: China has since upped its commitment to $1.64 million, although many are questioning why it has not dispatched its state-of-the-art hospital ship Peace Ark designed for emergencies such as this to the Philippines. 

The Day Venezuela is Fully Nationalized Approaches

♠ Posted by Emmanuel in , at 11/12/2013 10:44:00 AM
The economic implosion of Venezuela is interesting insofar as the voters have repeatedly chosen Hugo Chavez and his anointed successor Nicolas Maduro despite them consigning the country to economic oblivion. Populist policies may have won votes as redistribution continues, but we are fast approaching a point when there is nothing left to nationalize or place under state watch. What then?
Venezuelan President Nicolas Maduro says he plans to extend price controls to all consumer goods, if he is given powers to govern by decree. In a televised address, Mr Maduro said that he wanted to set legal limits on businesses' profit margins. His announcement followed the seizure on Saturday of shops accused of selling electronic goods at inflated prices.

The National Assembly is expected to vote this week on his request to govern temporarily by decree. The president demanded there be "zero tolerance with speculators" in his speech broadcast on Sunday. "This is beyond usury, this is theft," he added...[t]he president announced that he would next turn his attention to stores selling toys, cars, food items, textiles and shoes. 
When all production comes under government control--as things will be at this rate--there will be no one left to blame other than the government. It will be at that point when the full extent of the government's mismanagement--galloping inflation, pathetic reserves despite being one of Latin America's leading energy exporters, and the evisceration of a functional economy--becomes apparent even to Chavez/Maduro voters:
Opposition leader Henrique Capriles said the move proved that the president "is a failed puppet of the Cuban government". "Every time he opens his mouth, he scares away the investments that create employment, and he worsens the crisis," said Mr Capriles, who narrowly lost to Mr Maduro in April's presidential election.

Official figures suggest inflation is running at more than 50%. Price hikes have become an important issue in next month's local elections.
For now, Maduro's perverse strategy involves creating artificial shortages by persecuting all forms of private industry as "speculators." Faced with a steadily deteriorating business environment, the rational thing to do would be to cut production (or flee the country if you're a foreign investor). The resulting government-induced shortage is then blamed on your "hoarding" ways, and the government then claims to "act" by slapping price controls on everything to hopefully win elections.

It will likely take Venezuela taking a turn for even worse before the Bolivarian socialists are ejected. Oftentimes, it takes things to deteriorate before they get better to get the attention of those who have been deluded for quite some time.

The Political Economy of Int'l Beauty Pageants

♠ Posted by Emmanuel in at 11/11/2013 02:23:00 PM
OK, some qualifiers about the post title here: First, I am not quite attracted to beauty pageant contestants since I generally find them too skinny. Second, I didn't actually watch the Miss Universe 2013 finals in Russia since I didn't bother to figure out what time it was showing. Third, I am probably biased since our country's bet didn't win despite making it to the last five contestants for yet another year without actually winning. (Then again, if you are looking for unbiased commentary from blogs, you are probably looking in the wrong place.) So, with those caveats in mind, here is what the most recent event has taught me about the international political economy of beauty pageants. Excerpts here from the Manila Bulletin:

(1) It often helps if you *can't* speak English, the language of the event:
Fans expressed disappointment when it was announced that [Philippine contestant Ariella] Arida finished third runner-up. They said she was the only candidate who did not use an interpreter in the field of Latina co-semifinalists [from Brazil, Ecuador, Spain, and Venezuela. In 2011, Filipino fans expressed the same sentiments when [Shamcey] Supsup won third runner-up in the beauty contest in which she was the only one in the Top 5 who did not use an interpreter.
The idea is that you are more "exotic" when you cannot speak English. (I'd like to confess that I've been using Google Translate for six years to write this blog, but few of you will believe me.) Some will say that's a nonsense argument since Miss USA won last year, but consider the rarity of straight English answers in the Q&A portions and that the event's promoter is some Yank with a weird hairdo who stands to benefit massively from a ratings jump in the States.

(2) It doesn't help to be smart. This is a beauty contest, not a brains contest.  Ask the Philippine contestant--a chemistry major--who finished fourth:
Born on Nov. 29, 1988, to public school teachers Alresito and Estella, Arida graduated from the University of the Philippines Los Banos [UPLB] in Laguna...
Arida began studying veterinary medicine at UPLB in 2005 but shifted to chemistry on her second year. Her undergraduate thesis entitled “Virtual Binding of Synthetic Nucleoside Analogues and Phyto-brassino steroids to NS5 Dengue Virus mRNA 2’-o-Methyltransferase Domain Using Dock Software” was presented in the 2010 Philippine Chemistry Congress held at Subic Bay in Zambales.
Looks matter, and passable answers will suffice during the Q&A portions--especially if delivered in a language other than English.

(3) So the Latin bloc is not doing so well economically, but hey, they do fantastically well in beauty pageants! 4 out of the top five ain't bad, and the award haul of Latin countries like Venezuela is astounding. I suppose beauty pageants act as the opiate for the masses in an increasingly secularized world--especially in Venezuela, a country run by nutters that has made a successful cottage industry of preparing young women for these events. (And don't speak English for crying out loud.)

Consider that the Philippines was a Spanish colony for over three hundred years and the domination would become even more pronounced. Ah well, roll on 2014; we're bound to win this damn thing sometime soon...

The Washington Consensus Lives On In Pakistan

♠ Posted by Emmanuel in , at 11/10/2013 08:38:00 AM
There is a photo essay on American shopping malls that I found quite amusing on Yahoo! featuring pictures taken by an obviously obsessive chap who took lots of them during that era of high consumerism, the Eighties, entitled "Big Hair, Smoking, and Record Stores." While the IMF now styles itself as not your grandpa's IMF in being a kinder, gentler lender of last resort, I had a distinct 45 RPM retro flashback while reading its latest press release concerning its recent staff mission to Pakistan (where they are not quite fond of Yanquis).

Much as the IMF would like to say otherwise, it seems we have not yet gotten away from the greatest hits of one-size-fits-all quite yet. Liberalization, privatization, deregulation...structural adjustment there anything new?

Structural adjustment:
The mission was also pleased with the strong fiscal performance in the first quarter of 2013/14 and the steady implementation of the government’s structural reform agenda...
Fiscal consolidation remains a key component of the government’s economic reform program. The mission was encouraged by the government’s efforts to enhance tax revenues, which slightly exceeded the program target level.
The government is moving forward with the privatization or restructuring of 31 public sector enterprises to improve public sector resource allocation and limit poor performance.
The authorities are also working towards significant structural reforms in the areas of trade and the business climate to encourage higher investment.
Everything old is new again, and I am afraid that we have not quite gotten into the New Wave, let alone the Alternative era at the IMF since the song remains the same. Is that doom metal? Would you like to, ah, break dance?

American Exceptionalism: Why So Few Diesel Cars?

♠ Posted by Emmanuel in ,, at 11/08/2013 06:56:00 AM
It routinely surprises insular Yanks who dare venture abroad that the rest of us are quite fond of diesel cars. In this day and age of dear fuel, improved mileage has it attractions. Americans would beg to differ: They shake! They stink! That's what trucks run on! are among the things you hear them say. Such stereotypes hold only for older generations (up to, say, Eighties vintage) of passenger vehicles. By the Nineties, consumers elsewhere embraced advances in diesel technology that have made them the fuel of choice not only on fuel saving grounds but also performance given the wider torque spread of cars running diesel. Nowadays, of course, the poshest of brands--Audi, BMW, Mercedes-Benz, etc--feature model ranges replete with diesel models. They certainly don't shake, stink, or run like trucks anymore...from Auntie:
A 1.6-litre turbodiesel delivers the torque surge of a much larger gasoline engine, yet with the fuel efficiency of a much smaller one. In the UK, diesel sales account for more than half of all cars sold, and even with a stat like that, Britain lags the rest of Europe, which has long preferred diesel to gas.

So why would more Americans not drive diesels? From the European perspective, it would suit the driving style of the States perfectly, with lots of relaxed muscle available at low rpms to cruise vast interstate networks that are the envy of the world. Better mileage means fewer fill-ups, and the on-paper improvements in fuel economy would, overnight, take the US fleet one massive step toward President Obama’s targeted 54.5 mpg national average by 2025. Simply stated, diesel should “work” in the US.
EPA rules on mileage will probably "force" US consumers to adopt diesels alike Europeans have. OTOH, you can argue that the US market is more primitive in this respect, resembling a pre-enlightened Europe:
In the UK of the 1980s, diesel drivers were outcasts. They were required to fill up around the back of the station, over by the truckers, to be looked upon by gasoline burners with a mixture of pity and smugness. And that presumed diesel drivers could even find somewhere to fill up, as not every filling station bothered to stock their fuel.

This sheer lack of availability led to great variability in pricing. As the only filling-station proprietor in 25 miles to stock diesel, Mr. Smith could subsequently charge more or less whatever he wanted. A survey of diesel prices in the US illustrates a similarly maddening snapshot of how scarcity can produce wide price fluctuations, with pump prices varying by up to 50 cents a gallon. But with more diesel purchasers, the laws of the marketplace would kick in, bringing prices into greater alignment.
Given the need for low-sulphur refining, diesel would not necessarily become cheaper than premium in the US. It is pricier on the other side of the Pond, too, but although Europeans gripe about it, they still know the savings add up. Diesel generally returns 30% better mileage than gas, and in the dominion of $8 gallons, this is no small advantage.
So the Yanks are a bunch of eco-primitives; tell me something new about these folks who still debate about whether climate change exists when the rest of the world has moved on to doing something about it. 

Are the Port of Hong Kong's Glory Days Over?

♠ Posted by Emmanuel in , at 11/04/2013 11:36:00 PM
How the mighty are falling. Here's another one from the Far East shipping files: Hong Kong ranks regularly among the world's top three busiest container ports in terms of twenty-foot equivalent units (TEUs) handled. Yet, its previously unassailable status is coming under attack due to a number of factors. First, rising labor costs in the Pearl River Delta mean it is being less used to handle shipments of manufactured goods from that part of China. Second, "industrial action" hit Hong Kong for the first time in many years earlier in 2013...
Like Shenzhen, Hong Kong’s throughput has been pinched by the decline of South China manufacturing, as high labour costs impel factory owners to shift operations to China’s interior or elsewhere in Asia. Hong Kong narrowly missed losing its third place position against Shenzhen, which marginally increased volumes in 2012 by 1.6%.

The biggest operator in the port, Hutchison International Terminals, was hit by the first major industrial action in Hong Kong in 20 years that began on March 28, 2013. The strike involved 450 port workers, including crane operators and stevedores, and lasted for 40 days. The strike caused a 20% drop in throughput at the Hong Kong operations of HPH Trust — a Singapore-listed Hutchison spin-off that comprises many of Hutchison’s Hong Kong assets.
As a result, many major port operators are divesting themselves of Hong Kong.  Indeed, the years it served as the world's gateway to China are numbered since, well, the former crown colony was reabsorbed by the mainland in 1997 and became a special administrative region (SAR). The handover happened a long time ago, and there is certainly no lack of mainland ports companies can now use--no need to use HK as an intermediary with the Reds in charge here as well:
Dropping volumes in Hong Kong was a factor in divestments by major port operators. In March 2013, HPH Trust bought Asia Container Terminals Holdings for $503m from joint owners Dubai-based DP World and Singapore-based PSA. Simultaneously, DP World sold 75% of its interest in Hong Kong’s Kwai Chung Terminal berth 3 and in ATL Logistics Centre Hong Kong for $463m to Goodman Hong Kong Logistics Fund.

While Hong Kong still retains an edge for operational efficiency, it also faces continuous erosion of demand, as more operators make direct calls to mainland ports. The competitiveness of Shenzhen ports has been boosted by easing of customs requirements for ocean to ocean transhipment.
Hong Kong retains its place as the world's freest economy, but certain parts of its portfolio no longer dominate its unique selling proposition as others have caught up. I hate to say it, but the port business may truly be a "sunset industry" for HK as some have presaged.

The Mother of Market Manipulation In Forex Trading?

♠ Posted by Emmanuel in , at 11/03/2013 10:32:00 AM
With their often haughty attitudes and tendency to focus on short-term profits in the (unfortunately) correct belief that they are too big too fail, banks are easy targets for regulators and critics of capitalism-slash-globalism alike. However, I believe that there are still grey areas and that banker-bashing is not a morality play. It was perhaps inevitable after going after price-fixing in reference-rate (LIBOR) setting that regulators' attention would turn from money markets to the mother of all markets--foreign exchange. This time, the dragnet is not just led by US or UK regulators. Befitting the forex market's global reach, regulators the world over are closing in:
At least six authorities globally – the European Commission, Switzerland’s markets regulator Finma and the country’s competition authority Weko, the UK’s Financial Services Authority, the Department of Justice in the US and the Hong Kong Monetary Authority – are looking into allegations that bankers colluded to move the currencies market.

Banks including UBS, Deutsche Bank, Citigroup, Barclays, HSBC, Royal Bank of Scotland, JPMorgan and Credit Suisse have launched internal probes or received requests for information from regulators, according to people familiar with the situation. “This is an industry-wide issue,” a top executive at a large European bank says. “It is very complex but what is clear is that there are more than just a few big market players involved.”
Anti-globalization activists and Occupy Wall Street flunkies enjoy using gross figures (to paraphrase Carl Sagan, trilyuns and trilyuns) to cast the foreign exchange market as an enormous manifestation of financial depravity with no clear social purpose. Believe it or not, I myself question the benefits of sending money back and forth without a corresponding need for foreign exchange for "real" purposes such as settling trade in goods and services. My point though is that if you recognize that money is not really changing hands long-term but merely goes back and forth, volume in the foreign exchange market is much less impressive. Especially when you realize it's mostly just large banks buying and selling currencies among one another in 5-10 million dollar trades. Absent unusual circumstances, banks' positions generally square at the end of the trading day.

In any event, the much more informal nature of interaction among FX traders is what is causing regulators to look into "collusion":
The probes hit a business area that with $5.3tn in daily volume [sigh, there they go again] is the largest financial market in the world. “I always thought that if there’s a market that’s least manipulated it’s the FX market,” says one investor. Among bankers, the foreign exchange market is often viewed as the less sophisticated relative of the rates market, whose traders are seen to have a reckless culture on the forex trading floor.

In what is a largely unregulated and off-exchange market, traders have devised their own rules of what constitutes fair play. Traders say it is perfectly normal to chat to traders at other banks, sharing views on pieces of economic data due out, or simply gossiping. One senior trader told the Financial Times that it was normal for traders to share details of their positions with each other – so long as they did not name their clients.

So, for example, traders trying to work out whether the euro would rise or fall at the daily 4pm fix – a WM/Reuters benchmark that is crucial for many large client orders – might tell traders at other banks they needed to buy, or sell, euros. From there it could be a short step for the regulator to deduce collusion. One investor says he was very surprised to hear that traders would even share their positions with each other.
This one should be interesting: If found guilty, the stakes would naturally be much higher given the international character of this market and--pardon--its ostensibly larger volumes. That said, I am not certain whether having an informal trading culture is necessarily a smoking gun for culpability. Having been stung before, banks like RBS and Barclays are not exactly waiting around and are now jettisoning forex traders in the belief doing so may help them avoid penalties. We'll see...

American Stasi: Work for the NSA, Spy on the World

♠ Posted by Emmanuel in , at 11/02/2013 02:32:00 PM
I've been watching the Academy Award-winning drama The Lives of Others based on the operations of the East German-era secret police, the Stasi. Vast improvements in technology have enabled gathering ever-more information on the activities of you and me, and the United States has come under massive fire from virtually every continent in the world for its surveillance activities. Even Malaysia--Malaysia! is now complaining. Under the excuse of thwarting the proliferation of terror, it appears the US is rather indiscriminate in snooping on friend and foe, netizens and "terrorists" alike. Commercial data mining usually has a purpose in detecting consumption patterns of people; NSA snooping does not seem to have any underlying logic save for annoying everyone else with Yanqui intrusiveness. To be honest, I find these busybodies appalling: don't they have anything better to do than, as the movie title suggests, monitor the lives of others? Sure the United States' National Security Agency pays its operatives well, but the broader question remains--is this a morally acceptable occupation? If you are a Yanqui with no scruples, however, and are a dab hand with computers and software, I have the ideal job for you--"cyber professional" at the NSA:
The National Security Agency has a complex mission: to gather foreign intelligence and to defend U.S. government information systems.  Communications have evolved from the past.  Today, the IT infrastructure is digital from start to finish.  America's national security information depends on technology as never before.

That's why NSA employs a wide variety of cyber professionals: to help protect and defend U.S. government IT systems, and to help exploit the intelligence of adversaries [my emphasis--and that category would obviously include anyone and everyone since US identification friend or foe (IFF) is evidently non-existent in this respect].

As our use of technologies grows exponentially, so do our country's vulnerabilities.  Our national security depends on the stability and reliability of our communications infrastructure.  The cyber threat to IT and national security systems has never been greater.

In fact, with the increased number of cyber events around the world, it’s more important now than ever to stay a step ahead of our cyber adversaries [my emphasis again--by spying on them before they spy on you, obviously]. At NSA, knowing cyberspace matters. As a cyber professional, you will become a part of a tradition of excellence, poised to lead the nation in the protection of our country’s national interests in cyberspace for years to come.
Even the normally placid and US-loving German chancellor from former East Germany has taken exception to the Americans' nefarious activities. Catch Angela (Merkel) gossiping about Schweini and other matters of great security to American national security in the global war on terror (GWOT).

That an NSA job is considered a cushy one in today's America says all you need to know about it in this day and age. These people--especially those jerks at the NSA--should spend more time minding their own business, not least because it's going nowhere fast economically, politically or morally.

Come to Texas: Can Tyler Cowen Say "FM Radio"?

♠ Posted by Emmanuel in at 11/01/2013 09:52:00 AM
Koch Industries of Tea Party fame-funded arch-libertarian Tyler Cowen has an interesting piece in TIME about how Texas is America's future. Having stayed there for a time, I am of somewhat more mixed opinions about its virtues and vices than he is. Read for yourselves and see what you think.

Before you do so, I have two things to point out: First, he seems to have thrown his lot with the Internet-makes-our-lives-so-much-better crowd in arguing that, actually, our standards of living have improved immeasurably because of it:
For Americans heading to these places, the likelihood is that they'll be facing slow-growing, stagnant or even falling wages. Yet it won't be the dystopia that it may sound like at first. Automation and globalization don't just make a lot of goods and services much cheaper--they sometimes make them free. There is already plenty of free online education, graded by computer bots, and free music on YouTube. Hulu and related online viewing services are allowing Americans to free up some money by cutting the cable cord. Facebook soaks up a lot of our free time, and it doesn't cost a dime. The near future likely will bring free or very cheap online medical diagnosis.
If I were a leftist, I'd say that this Koch Industries-funded arch-libertarian is trying to excuse growing income inequality Stateside by arguing that the Internet has improved the quality of our lives anyway, so economic disparities and wage stagnation don't really matter. You can raise any number of objections to this idea, from the Internet making us rather misanthropic to its essentially inegalitarian premises. That said, "free music on YouTube" is a most curious elision: Has Cowen never heard of FM radio--"free music"? For over half a century and most especially so in poor countries, the transistor radio has been the dominant source of free music. What's more, YouTube is not really quite as costless as FM radio since you have to pay for that Internet connection. 

Next, Cowen's Koch Industries funders may not be so happy with the idea that people are moving to Texas to take advantage of "European" lifestyles: less work, more quality of life:
This suggests that wages and GDP statistics may no longer be the most accurate gauges of real living standards. A new class of Americans will become far more numerous. They will despair at finding good middle-class jobs and decide to live off salaries that are roughly comparable to today's lower-middle-class incomes. Some will give up trying so hard--but it won't matter as much as it used to, because they won't have to be big successes to live relatively well.

"The world of work is changing, and what we are learning is it's no longer about the 9-to-5, it's about the work itself," says Gary Swart, CEO of oDesk, a global job marketplace that sells tools to allow businesses to hire and manage remote workers. "Millennials, they are about how to make an impact ... They want freedom in their lives, and they care more about that than they do the financial rewards."
I hope this sort of "European" argument is taken in stride by the Tea Party crowd, guardians of whatever remains of the Protestant Work Ethic and other cornerstones of their conception of being "American" lest the people Europeans [eek!].  If Senator Joseph McCarthy were still around, Cowen would probably have been called by the House Un-American Activities Committee by now.

As the Beach Boys sing, I guess that's why God made the radio.