Fight! For what!?!?

Well, it seems as if we will end 2008 in war. War between the Israeli's and the Arabs in the Gaza Strip.

I don't even know where to begin with all of this mess. But, one thing is for sure, it probably won't end here.

I think we need to get rid of all of the old Israeli politicians like Ehud Barack, Netanyahu, Peres and politicians of their generation and like thinking. They need to go, because I feel they manipulate the tensions to their own need.

While Hamas is in no way honourable, but really, can they control the militants anymore than the US control immigration?

Come on.....

I find it odd, however, a few weeks after current president Olmert, called the attacks on Arab's in Gaza and the West Bank "pogrom's", that we have now full scale attacks by the Israeli forces on Hamas and the Gaza Strip.

2008 in review!!!

What a year. While we have had some doozies of years in the past, each and every year afterwards tends to be more explosive than the other, in each particular and individual way.

I would like to highlight some of the more important points of this year, around the globe, which impacted the world the way I see it.

I am going to write this from heart, as if you had to do research to jot down all of the things that has- as you said- impacted your view, then, they really were not that significant to begin with.

While I would shy away from dates and times as much as possible, these are the issues in no particular order;

1. The credit squeeze of a financial crisis, gave the world a crushing recession. What a way for the world to go out in 2008. While the pain started in June and then again August, the peanut butter hit the fan in November when everyone had to finally admit that they do realize that things were really, really, that bad.

Companies got bail out after bail out after the flow of money stopped from the private market--US and in Europe. Unheard of in a free society that so many subsidies handed out to so many established private market share companies. Companies like Lehman Bros. and Bear Stearns, went out of business and hence, were bought or swallowed up in government sponsored re-packaging buy-outs by other bigger firms.

The auto-industry, got a late Christmas present when president Bush, gave the industry the bail out money and subsidies, it was begging for--which I don't think they needed.

In any event, the era of government (sovereign) business is in. This year, marked the end of free-market capitalism and international finance.

RIP!

2. India and Pakistan, are in heated tension over the latest attack, sponsored by Pakistani terrorist in Mumbai India.

Mumbai, is the centre of capitalism in India. Pakistani Muslims hate India and hate western capitalism. So, they go a two-for.

This will shape the region, most definitely. Why I say, is because, if India, one of the major emerging markets, is hampered and bogged down in a conflagration with Pakistan, then, we would have, literally, a world war on our hands.

I don't know who's allegiance is bought and to where the other countries side, but, I side with India. While I am willing to give Pakistani authorities- under the coverage of President Zadari- the benefit of the doubt. But, if things get to things, then, India has my full support in any war or sanction.

India is not the aggressor.

3. Obama and his hot looking mama, are coming to DC. This has to be the feel good story of the year. Nothing can top this, in regards to news making.

America, has it's first African American president. While I don't think that you can fully classify president Obama as a true African American, he's close enough.

Why do I say he is not a full African American, in the black African American sense of the term? Well, he is not a born in African American, from slavery. His father, was an African student and not a Johnson, or, Smith from Georgia or Alabama. The issues black Americans carry in regards to their heritage, Obama, has not had the ecological framework built into him because of it and, endure the hardship on his psychological makeup because of it.

Second, his mother was white. He was raised in a Caucasian home, by very conservative grandparents. While his skin color is not black, or, charcoal, he is not full white, either.

Even so, for him, to be an oddity, rather than a minority, is good enough for me. I accept him with what every he identifies with. Him being their, as opposed to the other people we had in office before, is proof enough that there is hope in a color blind society.

The saving grace, is that he was socialized black, not by his choice but by the way the world saw black and white. While he may not carry all of the tensions in his heart, he understands the social implications. His wife has these same black American issues and outlooks, which she has shared with her dissertation at Princeton and with her "being proud, for once, of her country".

I know I may have missed a few other things, but this is what I remember as important.

Well...

That's 2008, for me.

Best wishes for a 2009.

Youri

New Year resolutions!!!

I would like to extend a Merry Christmas, Happy Kwanzaa and Happy Chunnukah (not sure if that's spelled correctly), first and foremost.

Now, I would like to wish a Happy and prosperous New Year to all of the readers. What will be the New Year's resolutions for 2009?

I know we all have a few things we need to put on the wish list and right now, you need to give it serious thought--not that I'm telling you folks. LOL....

New Year resolutions are sort of a private thing. I for one think that you should write them or discuss them (of sorts) with yourself, or with a spiritual leader--or someone you trust in that fashion.

I would like to say, however, is that anything is possible. Just hope and pray and wish for it, and work towards it even in the slightest fashion and you WILL reach success!!

True and I know it!!

Happy New Year!!!

Youri Kemp

Cameron is trying!!

Give David Cameron, the leader of the opposition Tory party in the UK parliament, an A for effort. And, riding out the storm, during this wave of Labour love with Gordon Brown and the British people.

Polls were up fro Brown, during his spectacular leadership during the global financial crisis. He looked stellar. But, that is short lived and it will be soon forgotten, once people get back to the reality of a slowing economy, regardless what has happened and will be done by the Chancellor. And, once the peanut butter hits the fan on the reckless pre-budget stimulus, for the long term, that Chancellor Darling and PM Brown, handed the British people!! More debt and little stimulus!

But, throughout it all, Cameron is navigating through very treacherous waters, but his seat as leader of the Tories is safe. Hague is a dead man, politically. Shadow Chancellor, George Osbourne, does not have the "trust" factor for him to be leader, even before we discuss his shenanigans with Russian oligarch's like Derispaka of Rusal.

The latest issue he has been battling, is his test of the waters, attempting to get some of his fellow Shadow MP's, to quit their 6 figure a day jobs. I giggled when I typed that, seriously.

See article in the FT, here...http://www.ft.com/cms/s/0/3ee0fde6-d056-11dd-ae00-000077b07658.html

More importantly, though, Gordon Brown is not an attractive leader. Cameron does not sound at all bad. In fact, he looks very impressive. Why shouldn't folks give Cameron and the Tories a shot? In fact, if Tony Blair were not such a supreme intellect, Cameron would fair reasonably well against a Blair Labour Party on any given week. While it would have taken allot of work to win, a win, was certainly not out of the question.

So, it isn't "if" Cameron becomes PM. It's not even a matter of "when," as much as it is "how soon."

We want more CSME...perhaps!!

I wrote an article on the EPA (European Partnership Agreement) with the ACP (African, Caribbean and Pacific) countries, shortly before the Christmas and it was in response to some questions, a colleague of mine posed in regards to the possible impact on the Caribbean countries. In fact, her letter was asking about the CSME (Caribbean Single Market and Economy) as well. Also, she wanted to know what about her country, the Bahamas?

Well, while I won't narrow the view to one particular country--it wouldn't be fair-- I can, however, discuss the merits of the CSME as a response to the second half of her queries, about my outlook on international trade issues.

We want more CSME!! (maybe)

As short as an answer as I can give her, which would explain in no fuzzy language, about my desire for a functioning CSME throughout the entire Caribbean--inclusive of Cuba, Venezuela and the Netherlands Antilles (the latter, should have joined, despite their sovereign dependency) and truly, my guarded optimism for a fully functioning market for the future---way, WAY, into the future I'm afraid.

I guess one must be thinking, Cuba, Venezuela and NA!?!?! You must be thinking of oil and the capacity to produce energy? Certainly. Energy producing countries, have a very valuable commodity (obviously). Securing energy, in any way shape or form, should be a priority of any government, or, in this case, region. Affordable and sustainable energy, should be top priority for any country. In addition to affordable energy, oil producing countries, produce oil worker's and bi-products of oil, with a pecuniary economy that aids and complements it. This means that they, on average--as with most functioning natural resources countries that are not afflicted by dictatorships and rogue governments-- spending on the economy is constant, due to the demand of product. Basically, it's as stable as the civil service.

This means, by any average stretch of the imagination, subsidizing production, during a rough market period for their commodity and because of their rational self interest to keep high production going. The loss of their base for other services or trade related activity, will not be hit with sharp declines, compared to other countries that have no natural resources or commodities of distinguishable and preferential status. While at some points, oil would come at a greater cost, due to subsidization, but, an agreement for affordable energy, does not, or, should not exclude any country from seeking cheaper energy from elsewhere--at least, I would hope not.

So, yes, let Venezuela, Cuba and NA join as of today. While there are implications for two of the Spanish speaking countries, the obvious fact is that one of them, is a huge trading partner with the US. And, the other, while it is not an oil producing country, should have never have been left out of our consideration as a Caribbean country, to whom we should be involved with in the first place.

If we all stand together and move together, as well as support the region totally, we can get out from under the thumb of political regional activists, who are hell bent on keeping things status quo. In fact, I feel democracy and freer markets, can be aided with consistent cooperation overall. Any embargo, endangers the likelihood of the seeds of democracy, to take root under the impression of free markets. There will simply be no exchange of best practices and current practice, will be accepted as the norm. While we must be cognizant of reinforcing the wrong type of behaviour, not getting in and expressing the right types of behavior at any point and time, leaves us with keeping that behaviour normal and people, adjust to the normality to which many feel as abnormal.

Without the existence of an alternative, the status quo is kept constant.

But, back to the base of this article. The total reasoning behind my position, now, however, is not for the affinity for a unified Caribbean economy--even though it is an added plus. In fact, the simplicity of that position is an expected output--not that we in the Caribbean would ever be fully coordinated as the EU and ASEAN countries "are", relatively speaking. But, it would create certain opportunities to grow our potential in the region, through shared experiences and solidifying best practice measures for the Caribbean, which may be more user friendly--so to speak!

Let's face it; we in the Caribbean, are drowning in a cesspool of stagnation and lack of sensitive, fast tracked development, which has been exacerbated by our conservatism, acting in the parameters of an outdated economic model, which does, at best, serve the few and not responsive to the many. We need opportunities for the many--as inverse as it sounds. Democracy in the region, can almost be called pseudo-democracy. Not that the CSME will export democracy by any stretch of the imagination. But, it will combat the pervasiveness of these realities and strengthen the pool of resources, based on similar experiences and Caribbean attitudes towards doing business, which we, as a people, worked on the fringes of (at minimal successes for comprehensive progress) to try to at least cope with the realities of the current global framework, which we are in--and in fact, a framework which is failing at the present time.

But, onto the nuts and bolts of this article...

Aside from my personal pledge to- through my writing and expertise- nudge more thinkers into thinking CSME like, there are, unfortunately, only minimal short term benefits for the major players and marginal losses, for the free-riders and no guaranteed short term winners, for the mid-range players. But, for the overall long term, there can be better prices and greater purchasing power, en masse, for average consumers in the region, if worked correctly, can cut out third and fourth party export partners--like the US and the EU-- and build a regional trade structure of our own, for our benefit and our sole purpose. It won't be easy, but it would be optimal.

Who are the major players in the CSME?

As it stands now, Trinidad and Jamaica. Trinidad, moreso than Jamaica. In fact, Jamaica is considered a key player, in more of a beneficiary capacity, exporting their voluminous population of varying levels of skilled labour, to various parts of the Caribbean. It almost seems to be a downsizing attempt of the Jamaican economy. Also, the stabilization and the bringing the Jamaican economy, on par per value of most other Caribbean states, with greater economic solvency, would be a desirable knock on effect for Jamaica.

Trinidad, on the other hand, has oil it would like to export, on a sustained and arbitrarily qualified basis. The CSME provides for that and provides for enhanced discussions on the facilitation of that export, on those facts. With no agreement to preferential treatment, Trinidad is left with its head in its hand, depending on the mercy of the folks who are supposed to be supporting the market functioning of an integrated Caribbean economy--the CARICOM member states. Not that Trinidad can't do without, but, it would do better with a concentrated and attentive, growing, Caribbean market. They can't lose.

As for a statistical database for the CARICOM and with particular relevance to the CSME, the trade growth on key data, are non existent. The need to show folks and businesses actionable, comparative trend flows of growth and strength in partners, is critical to making the CSME work faster. While we would have to depend on individual member states for the information on their trade partners from their relevant statistical agencies, there is enough possibilities to go on despite the lack of that centralized framework. It's about time, I feel, the region graduated from ad-hoc regional policies and work harder in shaping demand.

Another big issue, is the free-movement of labour. Xenophobia is a key concern, but, truthfully, who would want an influx of foreigners into their jurisdictions? Also, an influx of, possibly, lower skilled migrants? I don't know how lower skilled migrants do it. They have the least money, per average, yet, they are the highest number of migrants per average. Where do they get the money? It's a conundrum to be dealt with at another time. With that, we don't even have a naturalized visa for the region, let alone relaxed standards on leisure travel. That in itself is an issue to be worked on, before we are talked into accepting immigrants, like the Mariel boat lift.

Lastly, the single currency is a non-starter-- at this present time. It would be better if we concentrated on facilitating, free and cheaper trade in goods, rather than a single currency at this time. Not that it is not an option to be discussed, ever. But, it is not in sync with a proper development plan, which would be optimal and progressive, considering the factors which must come with any sort of economic union. The EU is grappling with the same issues with their rules and regulations of acceptance into the Euro-zone, where the rules are not in realistic favour with the countries, looking for accession to the union.

But, for the Caribbean single currency, now, the way I see it, it would not be superior to the pegged exchange rates to the US dollar individually. Integrating into a single currency, is a mammoth undertaking which, I am afraid, would be an undertaking that would have no formal, positive impact on quality of life. While it may make regional and international trade, more favourable and easier. The actuality that it would devalue the way of life for many, with the Caribbean being a strong international player that can affect global outcomes, is a risk not to be taken with the single currency by any country that enjoys the current, best choice option of a fixed exchange with the EU or the US dollar, respectively.

Currently, the OECS currency, is typical example of a currency, with well thought out integrative intentions, but little or no value to the currency, as it stands now. It has less comparative value than that of the Bahamian or Cayman dollar, because its participants have little or no economic 'commodifying' value to underpin the currency. There has been little or no solidification of a strengthened market, yet, to give it that kind of clout as a currency of 'tradeable' value on the foreign exchange market. While a single currency should, in theory, reduce cost in trade--the fact of the matter is, what "will" you trade, if you have a weak base to begin with?

Why should any country that enjoys a more valuable exchange rate, give that up for a lower denominated currency at the onset, where gains are projected in the future, with no relevant power to base current projections on, with still no realistic expectations to base growth on down the line?

In these stream of thoughts on that possible action and outcome, individually, we are strong. To reiterate, binding us to a single currency, is a move that has no value for individual countries with more to lose, with no sight of a gain--especially when major commodity and manufacturing countries, like the three countries mentioned as possible additions to the CSME, are left out of the picture due to non economic reasons.

While I dream one day of the Caribbean region, being a solely cohesive unit--because, really, and truly, we are all one. I don't see the full gambit of the CSME in my lifetime, although considerable gains are possible right now, which would change my thinking on the entire matter--the political will, however, is not as progressive and aggressive as this author's.

Not that we would not or will not try, but the realities of the world that is around us, limits that approach and scope of the relevant power of such a grand Caribbean coalition of the willing.

The thing with government...

The thing with government is, is that government, need not know the exact details of any private sector initiative. However, a government, only need to know how to go about making the necessary decisions to make the private sector, more efficient.

Not that I'm saying that government need to not know, intimately, the needs and the dynamics of every industry either. However, the government need only know how and what to put in place, to make the situation more responsive to the market demands. A good observation on behaviour and activity, is better served than having a know it all expert on any issue. The expert may in turn use his or her expert position, to hoodwink you at every corner, or, stifle progress for personal gain at every turn. It is the free market, after all.

This admission of this most rational theory, is on the premise that the government, through laws and regulations, know exactly what is legal in the market place as a component of the market--at the very least. Government's should know what's right and what's wrong in a jurisdiction. Also, it is also based on the premise that no one politician, will have the power or position in democracies, to have the end all say in every single private market initiative.

This assumes too that in other forms of governments, dictatorships as well as communist states, that they have tried centralized economic decision making and, have fell short in harnessing the effects of a full, participatory market place. The evidence to believe this is a fair assumption, is clear on regimes that are dictatorial or very centralized with power in an elite few, who neglect many natural resources and comparative advantages, for the sake of their own interests. A recent and more relevant example comes to mind with the Iraqi oil fields, for years, under-developed by Saddam Hussein. Also, the lack of other, possible, alternatives in the market for other countries, with similar comparative advantages but little or no incentive to produce or invest in it--the entire Caribbean, with little or no alternative, other than tourism and administrative services; financial, legal and now, research and data storage.

At that base level I feel, it is not necessary that a government or a politician, be a hot shot expert on anything. However, they do need to see and have a vision for talent and best practice, considering the circumstances that are presented to them.

For example, it did not take a hot shot financier, to know that futures trading, was sending the market into inflationary sessions. But, it does not take a hot shot financier, to know that there should be a cap on that if we are to have equitable prices in the market and to make the necessary adjustment on that type of market activity.

Based on that function and the obvious nature of that example, there are very many differing degree's of latitude that one can and should take to adjust to circumstances and situations--not just for government, but in your professional and personal life as well!

Merry Christmas!

Merry Christmas and Happy Holiday's to everyone who has visited, as small of a number as it is, this site.

Global View Today will not go off air during the season. In fact, there is no down time for Glbal View Today, per say. But, don't expect daily posts and expect, at least, for the content to be news driven--as I may be too drunk to write anything with sense.

LOL....

Best wishes,

Youri

In response...EPA and it's implications!

A letter was sent to me by a colleague of mine from a community organization I had worked with some time back, asking me about the EPA (European Partnership Agreement) and the Caribbeans' position and more particularly, the implications of the agreement in the region. I had to put on my trade and development cap this time and give her a bang for her buck--with respects to the length of the response.

I would have to say that the Caribbean community, at least the Caribbean governments, are in favour of the EPA and were in favour from the onset-- except for President Jagdeo of Guyana and the Haitian government in regards to services.

President Jagdeo was reported saying that he did not want to sign the agreement, without a revision clause, which allows parties to revise the agreement after a certain period. The Haitian government, did not feel it as the right time to sign the services agreement of the EPA and maintained their position with "goods only" access and participation. The Bahamas took a similar position, but is expected to sign the full services and investments agreement of the EPA, with Haiti, still unclear and most likely will not be signing the services and investments portion of the agreement.

Notice I said "services" and "investments". There are three parts, for all intents and purposes.

So, the first question is answered-- to some extent. However, the question still remains- and it is funny that it is being asked at this late stage- is; what are the implications of the EPA in and on Caribbean countries?

To start things off, and I want to make clear that the entire ramifications of the EPA cannot be expounded upon in this one short article, but, I will try to touch on the more salient points of the issue that were widely discussed.

I want to say- now at the onset- that I am by no means being cheeky with this following remark in saying that many of the folks who were responsible for negotiating the agreement, don't quite fully understand the implications, themselves. Not to rail on anyone for them taking that position post "negotiations", because, many of the issues are a little far off of the economic forecast radar. However, there was not as much desired intent of signing the agreement from the Caribbean side of things, which spoke loudly and boldly to a particular policy direction, for best interest overall, moving forward with the progress of the implementation of the EPA, over that of what they were told to do by a select few Caribbean "negotiators" and the EU Trade Department.

The politics of this, is important to understanding why, fundamentally, we are at this stage of the issue.

I have heard government ministers and, even senior Caribbean Regional Negotiating Machinery (CRNM) personnel involved with the negotiations of the EPA, say that they are either troubled with the lack of policy coherence on the matter, in regards to national governments and their electorate. And, secondly, many feel as if the EPA was adopted, carte-blanche, by the region, with most of the issues for critical concern left up to European advisers.

I think that it is patently obvious that the EPA was given to the ACP (African, Caribbean and Pacific) countries, with little or no input from them. It's the colonial thinking by us, primarily and, the lack of true understanding of complex issues like international trade and finance. To their defence, if anyone were to tell you that they understood all there is to know about the issues, they would be a bold face liar. I won't lie to you in this article, from what I see and what is happening.

Even that is still not the issue, primarily, however. The issue is, yet again, what does this mean for business in the Caribbean?

Well, to begin to answer that question, one would seriously have to look at one's self and come to some conclusion on the matter--it's the best bet. Sadly, the few folks who do know how to analyze the issue from an economic and political standpoint, are few and far between. There is simply no room for economists, to make decisions on the economy. And, politics, is left up to the folks and how that is affects their bottom line--that does not mean that anyone, understands the issues any better than the other.

To be on the bright side of all of this, I would have to say that there are opportunities for business, as freer trade normally provides. However, there are issues that national governments, must be careful of in light of business, on the way their local policy affairs are impacted. And, also, where exactly are these opportunities and for whom will it benefit?

This leads me to a train of thought on the matter, which has been a major talking point and concern for regional governments on this issue; and that is, the EPA, and, international agreements like the EPA, would force much needed modernization in their respective national governments. Not exactly an economically based answer in regards to the bottom line dollar's and cent's. But, it is true.

While that seems pessimistic and dire, while at the same time, refreshingly honest in that they too see the need to modernize and admit that they are in a state of ubiquitous disillusionment on the matter of their respective governments, leading the modernization and policy reforms on their own. And, while I appreciate their candor, one can only help to think that, perhaps, the EPA would be fast tracked to save regional officials from themselves.

But, there is more at stake than just a few self deprecating government officials and negative Nellie's, allowing for us to to go on and swallow, or, spit, a full scale sweeping agreement, which, as it stands now, has neither a heads nor tails of the coin from their position and from their own admission, on the lack of true business interests representation and a coherent trade policy directive. How do we lead this region to a path of prosperity through this model?

I wrote in an article on my website "Global View Today" and published in the Caribbean Net News (which prompted a letter by the concerned reader and hence, my reply); "Negotiating Trade in Developing Countries", which touched on the same issues of lack of policy coherence on trade matters, from the perspective of persons, who are leading the negotiations, having no clear and direct ties to local business or international business. This is a serious issue and I encourage you to look for the article, and give us your thoughts. Not that we are bashing anyone, but, people have a right to understand what folks got us into. It's only fair. Tells us what you did and for why? Better yet, give us different answers and say it in a way folks understand.

Now, for me, personally, I am no protectionist. I too am in favour of international cooperation. Not the EPA in particular, or exclusive of the EPA in particular. But, international cooperation, which is fair and, at the same time, meaningful.

This leads to the second and more fundamental concern about the EPA, which I feel has not been addressed, if, at all. The issue is what's in it for business and the bottom line? What's in the bag? What are the long term projections and analysis, of expected trade growth, investment growth in goods, intellectual growth in services and the long term effect of increased investments to the region, from other states in the agreement. The investment side is critical, as it was never addressed as services, were--as lightly as the services issue was. Show us how the agreement, will affect that bottom line with projections in true analyzable and actionable data. I think many would be hard pressed for that answer.

These answers should be left up to officials, who would have to share with us the information--if they can--and not from folks, looking from the outside in. One can only- through reading the material on the agreement- make up your own mind--if you have SPSS, Stata, RATS or even Exel, do your own quantitative and then, make a geographical comparison on economic and political viability, for yourself or your organization.

In regards to the quantitative, discussing taxes is an obvious, albeit, major concern. Analyzing the phasing rate's is too simplistic. But, there are a few serious issues, which takes experience to give us a fairer description on what's happening around the world as well a for us, as a region and a people, to take a paralactic approach to the issue and look at it from someone else's position using a totally different approach.

To give one example, there is an expected/projected increase in investment in government procurement coming to the Caribbean region, as opposed to the African states, who have more natural resources and can prop up their economies, without government capital spending plans. While they too need "aid for trade", they have other fish to fry and the Caribbean, as arid as our lands are in many regards and as barren is our mineral reserves, have to be careful of the corruption that can come as a result of that reality.

Also, the much vaunted sugar issue for the Caribbean as an export to the EU, has been hit with import quota's to the EU--which, in some extent, negates the potency for trade growth in that particular area, directly. It implies that, yes, you can have a reduced tariff rate access to the EU, but, you can only sell us so much. Not an ideal deal. Many analysts would tell you that no agreement is all fair, but, this makes this agreement seem as a wasted effort and well beyond less than fair--if the issue you go on for a campaign for, is hit with greater restrictions for trade and development growth, it makes the agreement, seem dangerous to the gains in development in the region.

Also, in regards to fisheries- another big commodity issue- is that there is a high demand for our fish--signing an agreement for the sake of saving the industry, from a regional perspective, just got us an agreement which cut our bottom line from the economic power it once had. That is not profit driven economics, at all. You would have thought that an export restriction, would have given an incentive to drive up the price. Apparently, some folks thought otherwise.

There are a few other issues for local importers and businesses in general, in regards to MFN status. They would most certainly have to compete with foreign companies and, considering the lack of policy instruments for safeguards in the CRNM's arsenal of intellectual capacity (or at least it has not been displayed, as yet), they will be given a free ride access to come in--basically, nothing much would change and something, which the EPA proponents suggested would be a dramatic change in modernization and moving from the "old way" of doing business. More FDI and little or no stopping it.

More importantly however, with the idea of investments, there would be a legalized influx, something in which we have to determine the long term aspects of development; labour capital; technological modernization; loss in domestic advantage, which would have implications for local politicians and; long term national and international debt, tied to foreign direct investments, we have no control over and a host of other issues, to lengthy to explain, in regards to this article. At least, tell us where do you see the benefit in this regards. I have my own ideas, but it is not up to me to make these determinations.

So, while we have to participate in this EPA exercise and, while regional governments say that they don't have to agree with anything in the agreement. The fact of the matter is, they did. Also, the other fact of the matter is that they did not have a sound hand in negotiating the marginal, or, broad term benefits that the EPA had the potential for. They left that up to the EU, as well.

Same issue is in regards to services, the issue which had everyone on baited hook, but will have as much impact on services in the region, as it always had--foreigners, with high qualifications, will have the same and even greater access to the region. That's globalization. However, what will national governments do, to educate and train their people? Also, how does this EPA address that? Especially from a major technological base of intellectual capacity, Europe? Unaddressed, as so many of the issues--unaddressed for established professionals and for prospective students in the region.

In my opinion, and it is disheartening to say this, is that this agreement would be a wasted effort, if not for the EU and their commitment to development in the developing world--as hypocritical in their positions as they have been in the past, markets are reigning supreme in the sense of stabilized markets. Not the same old "prop up a dictator" style of global leadership.

Also, in addition to that, this agreement would be totally botched, if the EU did not see long term growth potential for investments in the region, in order to sustain foreign markets for their goods--something, which was not taken into consideration with MFN treatment issues on foreign competing firms, in regards to goods trade, offsetting themselves due to the widening of the scope to a select group of countries, impacting the concentration of the revenue gains, in very many different ways.

To be fair, and to be refreshingly blunt again, is that the minute I got the first initial text of the agreement and, noticed the reaction of folks who were actively involved in the arrangement, I quit looking into it as its signage, as it was, was only a matter of time and that does not mean that its signing, was a particularly healthy endeavour. As a matter of fact, what I read had me a little concerned about the level of seriousness about the implications folks who were dealing with it, had for the region.

Forgive my debt!?!?

The more and more I read about the problems in the financial sector and the deepening of the credit crisis world wide, it is becoming more and more apparent that we would have to forgive folks of their debt--home equity and credit card debt, primarily.

We have to find a way to scroll back the huge debt inflicted upon ordinary citizens who got teaser rates for home mortgages and also, adjustable rates and high interest payments on their credit cards.

It is the only way to fully recover from this global slump. In fact, they (government regulators) have to do it--or else, consumers may decrease consumption and adjust to new living conditions, and leave stocks and bonds at a low yield rate for many, many, years to come. That damages Wall St. and they don't really want that and leave them at the hands of private equity firms, for an extended period of time.

The obvious, should be stated and that is that we can't forget the mass amount of actual consumers and main drivers of the economy--the average and middle class. They are the huge spenders in numbers, not the hot shot Wall Street power broker and not the guy's in government. But, the actual you's and me's of this economy.

Because average folks like you and I, are suffering with 1. lack of credit and 2. high debt ratios--from predatory lending practices, for the most part, we can't go to the malls and go buy that stock or bond, and, quite possibly, are selling our lot in this bear market and having that patio sale, to buy food and gasoline. Thank God oil went down and is going down, food prices should follow--if we don't have a massive disruption in oil that is not derivative and financial related.

The US CPI is down. Japan has just cut it's interest rates. Exports are down in China and Japan--two of the major global exporters-- and US and EU inflation, is down due to lack of demand and not because of high interest rates, as they have been cut. Oil is deflating.

Despite all that has been done in regards to monetary policy, it still is not enough as companies, worldwide, on top of all of the bad news reported, are losing stocks and we are in the mid-way point of a deflationary period in goods and stocks.

I can now appreciate the position of forgiving folks of their debt. Even if politicians, took it as pandering and demagoguery to the masses, if you are going to give fat cats on Wall St. a bail out, and, give the auto-makers a bail out and leave out the auto-worker's, you have to give the average man, who have the numbers, a bail out as well.

The free check in the mail by the US Treasury was a good attempt. But, more was needed. In fact, folks need to be welcomed into their lending institutions, with new faith that their bills will be met and their credit, will not be harmed in the near or distant future. We need a direct debt solution between the bank's and the average tax payer. We need to think on that. Seriously!

In fact, a bail out on Main street, is needed to complete this cycle of economic doldrums and for the world, to come out of this economic funk stronger and faster.

Youri

Eastwood's back!! Grand Torino...Must see!!

Finally Clint's back with something new and testosterone filled and not some mushy crap!

Be wary of the IMF!

This is the time for emerging markets and developing countries, to be very wary of the IMF and their predatory lending practices-- lest we be like Ecuador in the near future.

This is not a time for risking borrowing, as the IMF is sugegsted to do in an attempt to combat the financial crisis in the developing world.
http://www.caribbeannetnews.com/news-13037--17-17--.html

Nouriel Roubini of NYU Stern, suggests that this is prime time for the IMF to lend. I know it is...but, that does not mean developing countries have to go with hat in hand to Strauss-Khan.

Zero's not welcomed!

The WTO just ruled in favour of the EU and their zeroing complaint against the USofA.

The US loses another dispute settlement case. Against the EU at that.
http://www.wto.org/english/tratop_e/dispu_e/cases_e/ds294_e.htm

Zeroing is an anti-dumping trade policy, which, in simple terms, sets the dumping price average of a good which is reportedly at a "dumped" price category, back to zero after it is evaluated rather than take into effect and account the true nominal value of the good, if below the price of the good in the domestic jurisdiction.

This takes out of the question the price variation of the price is lower naturally and assumes that it is being dumped, and carries higher price value, when it is not. This is a makeup trade protection barrier for the big boy's and not really a mechanism for the smaller, non mass producing countries.

For a better explanation, see the WTO website on the recent ruling---
http://www.wto.org/english/tratop_e/dispu_e/cases_e/ds294_e.htm

The anti-dumping and umping policies can be hazy, so don't feel bad if you don't get it at first glance.

Dumping, in trade, is when a country, produces a good well below market value and sells that good to another country, in an attempt to gain market share in a jurisdiction where they may have domestic competition.

Anti-dumping, has many different forms and basically counter acts dumping practices---countervailing duties and safeguards.

Britain's stimulus plan examined PT2--"Ensuring Financial Stability"

Here is the second part of my four part series on the recent pre-budget report and stimulus plan, the Chancellor, Alistair Darling, prepared for the British House of Commons in November this year.

As you well know from the first article posted here on this subject, I laid out some critical concerns moving forward for this budget, in order for it to make any sense other than it being a free hand-out for political tricks and mileage. However, before we address this, we have to look at the second main pillar directed at the stimulus package in the report--Ensuring Financial Stability.
See budget chapter, here: http://www.hm-treasury.gov.uk/d/pbr08_chapter3_190.pdf

There are three main responses to the credit crisis, in regards to ensuring financial stability. While most of this chapter, is basically a history lesson--a subjective one at that-- it provided very little policy response and expected outputs and outcomes from their policy decisions.

The first policy response, was a Special Liquidity Scheme (SLS) for banks, looking to get rid of their risky debt obligations and in turn swap them with Government Treasury Bills.

The second response, was to address the issues of solvency with the banks. So, the BOE instituted a Recapitalisation fund, allowing banks to recapitalize from a government guaranteed fund, so that they can continue to fund their regular debt and credit obligations.

The third response, was to provide the banking system, with capital and resources in order for them to refinance their maturing loans. This was to allow banks to continue their lending practices as well as expand and, fund expansion of the private system, during this time of economic uncertainty and lack of trust between the inter-bank lending circuit.

To the first response, I don't know how the British Government got away with this. Perhaps because international finance is opaque and the officials at the treasury knew it, so, they had ample opportunity to pass this issue right above the heads of ordinary folks. In fact, the measures were taken as a swift response in April and the pre-budget report, was given in November. Goes to show you how they got it snuck into the system.

There is no way, when the British people find out, are they going to want to be saddled with the debt of banks, who traded and swapped people's mortgage related CD's, indefinitely. What they did was- the UK government- bought those debts and are buying those debts, while not fixing the regulation mechanisms of the system. This in turn, just throws money at the system, masking the systemic risk and putting the UK treasury deeper into the hole--hoping and praying everything, goes back to normal. Well, back to normal, is what got it to where it is, in the first place. Also, I can understand that the UK government, because it's financial services institution is globally connected and they had a responsibility to not let international companies and, in some cases, governments fail. They did too much to help, while putting the UK citizens at greater risk.

This gamble, once it hits the fan, will cost Brown his job.

The second and third responses, really are bottom line issues of the first response. In fact, it was probably not needed to be stated--let alone, overstaed as issues all to themselves. One would have to look at the bottom line of the loan guarantee contracts, to see if there is any delineation of the issues from the other, making it different from the first initial response of buying back bad debt. However, if it provides the psychological confidence of the market players, then it was more than worth the effort--in that regards, only.

Another major portion of the pre-budget and in conjunction with the international response mentioned, is the fact that they are going to pursue action that would mitigate fraud and the lack of oversight in the market. Pages 58-59 of the report, stated what was said at the recent G-20 meeting, but nothing more about how to go about doing some of these things, let alone what has been done specifically in relation to those issues. Most acutely, fraud, illegal trading activity and lack of transparency in the market.

The rest of the report, details nothing significant, other than what the government "plans" to allow its agencies to do to help ease the pain in this crisis. Basically, more government sponsored intervention at its fancy.

PM Gordon Brown has asked for allot, got allot and will be expected to be careful, with the lot he has been allowed. This may mean more debt for the Brits.

Other than that, this portion, while it sounded on target, delivered nothing on target.

Misick is on the way out...

The hand writing is on the wall. Michael Misick, premier of the Turk's and Caicos Islands, is on his last legs as the leader of that country.

What an awful demise for such a bright man. I think it's best he steps aside, in any event, and allow himself the opportunity to come back at a much later date. He is not in his 50's yet and about half, or maybe, a full decade out of the hot seat, would serve him well when he decides, if he wants to decide, to be the leader of TCI again.

Right now, his party, the Progressive National Party (PNP), are going to hold a special vote this week to see if whether or not they should keep Misick, or not.

Misick states that moves to move him from office is unconstitutional, but, such is life--if they folks don't want you, they don't want you and, the guys who are the back-bencher's and, for that matter, the front bencher's, don't want to go down on your ship with you. So, they are deciding to save their own political careers and get rid of you--for now.

Reported in the Caribbean Net News today, nine out of thirteen MP's have signed a petition of no confidence on premier Misick--it's pretty bad.

Best of luck to TCI and their leadership crisis.

Ecuador hurts everyone with default!

It was a shock to see Ecuador, default on it's payment, considering that they have over $6bn in the treasury, to meet its payments easily. Ecuador has over $30bn in overall global debt, which it has obligations to meet by 2012.

There apparently is a leftist president, Rafael Correa, who doesn't like to pay his bills. I don't know what's going on in Ecuador, aside from the fact that this guy just has something else to do with the people's money. Pay your bills, I say.

But, why would Ecuador be feeling the pinch and buckle in these tough times. A closer look may be in order, to see why this president, feels as if he can't and should not meet the obligations due to lack of resources. This is something I am not able to get into, aside from other desk research to see who else has the same type of position in Latin America. However, Argentina may need a second look after what has happened in Ecuador--considering that most LA countries, mirror themselves in regards to their markets and structure of governance.

There is no reason for LA to be the way it is. No reason at all. Production could be up and economies, could be well above board.

What next for India?

They don't want to go to war with Pakistan and they don't want terrorist's coming over the border.

Should they wait on the Obama campaign with the impending attack on Northern Pakistan? Or, do they "try" to work with the Pakistani government?

The odds are they let it slide. Indian's are pacifists--sorry to say. But, it is in their cultural makeup, to be peace makers. While both countries had a nuclear arms race, India would not have been the first to use it. And, certainly, would not be the one to invade on the ground in Pakistan.

The Pakistanis have a soft target in India. Sad. I think a good butt-whooping of Pakistan, before the IMF financial and economic reforms kick in, would do the country a bit of good.

Then again, the economic reforms may make the people Les tense in Pakistan--who are clearly jealous of the prosperous Indians. But, their religion may not make them enjoy their new success!!

We will have to wait and see what happens under all circumstances in any event. Its up to the new Pakistani Government and President Zadari. He appears to be smart, but, the culture of politics in Pakistan, does not work on the most craftiest or the most intelligent, it works on family favour---so, he can do what he wants!

But, as it stands now, thoughts of the attack is dying down as many thought it would!

Moment in courage!

The infamous tank man from the Tiananmen Square protests in 1989, China!

Ghana elections are on again!

http://news.bbc.co.uk/2/hi/africa/7775081.stm

It seems as if elections nowadays are like pre-school competitions; everyone is a winner, even if they don't actually win.

Fact is, democracy, is the real winner in Ghana. They have come a long way since colonial rule and independence in 1957--thanks to JJ Rawlings and his setting the country, on the right path to democracy and peaceful exchange.

Too often, and this is the main case, leadership in Africa--like Mugabe in Zimbabwe--tend not to want to let go.

Ghana is a beacon of hope for a beleaguered continent, rife with political corruptions with economic failures!

Let them have a run off. Let them continue to vote until someone wins. This is happy to see...but, someone has to win!

Youri

Time for a Caribbean wide rate cut!

I sat and thought about a possible- coordinated- rate cut for Caribbean countries. Not surprisingly, I find it, folks would rather sit on conservative principles and in turn wait on the G-8 countries-- and now-- the G-20 countries, to pick up the pieces in their own economies so that they can reap the benefits of their work at a later date; foreign direct investment and; tourism related activity.

That's fine enough if you knew for sure when the major markets and now, the emerging markets, would pick up. Also, it would be fine, if the Caribbean and other developing countries, depended on other major forms of foreign direct investment, other than those from the major G-8 countries.

However, the former question is harder to predict--although some, including this author, happens to think that we will have a rebound in the major markets in mid-2009-- and the latter, while not as wrought with theoretical considerations, is also dependent on stronger G-8 based investor classes, who may have emerging market subsidiaries, but are also cash strapped and are in the same bind Caribbean countries are in as well--basically, the blind leading the blind.

But, back to the question; is a Caribbean wide coordinated rate cut, now, feasible? I find some strong merit in such a move, which basis is not dependent on mirroring other established markets in their coordinated rate cut move to combat the current credit crisis.

Let's examine the situation!

What does the current credit crisis, have to do with the Caribbean and how is it affecting the region?

The main issue is lack of, or, the easing up of foreign direct investment projects. That's the main and obvious answer when we ask about linkages to the current lack of confidence in the market to extend credit to that of Caribbean economies.

There have been a few projects, reportedly tied to investment banks and private equity firms, who have found it difficult to execute their current investment strategy, due to their turning to a conservative position in the times of lean. Or, companies, who have been exposed to the epicentre of the credit squeeze--sub-prime deviates--who have either gone out of business (of sorts), like Lehman Bro's, or, who have simply found themselves in a cash starved position where they could no longer fund their client's investment portfolio into expansive, new, or, potentially economically and politically risky ventures, with no sight of strong returns in the near future; late returns, are endemic to Caribbean investment's.

How will a rate cut affect this? In fact, a rate cut will be otiose. But, not cutting rates, will equally do as much for his situation as well.

The question now is left to individual governments to act on their domestic and national economic instinct and interests, over that of being dependent on foreign direct investment and finding themselves with their hands tied with nothing (capital) to unbind. This may be a time to find some alternative means of economic production and stimulation, where you no longer have the option of a major source of your economic development--foreign direct investment.

Another scenario plays out, when we ask another question of region wide economists; since their is lack of the main alternative to development in lack of foreign direct investment and now, losses in tourism, what can national Caribbean governments and economies in this Elysium alike, do to make the best out of a horrible situation?

The question has been asked and addressed by several countries, worldwide and not just Caribbean countries. In fact, the first answers, were laid out and acted upon by the USA and the UK, in regards to domestic stimulus plans, which are laden with development in infrastructure and capital projects.

For them, the question is easy with an even easier answer-- they have billions of dollars in private equity, to act upon safe, government sponsored programs. Their government debt, is also dependable and at a very low risk of defaulting and thus, spurring security for long term investment all around. The issue is if whether or not Caribbean governments, can follow this strategy, lock step and come out better for it in the long term. Not that they may have difficulty executing on the dotted line and procedure, but if they have that kind of private equity and trust in their government to repay and finance such a huge (if this turns to be the case) debt, if it needs be and becomes a problem for the future. (This is assuming that government, would have to borrow to finance this initiative, which in many cases, they almost always have to)

What would a rate cut do to make this transition easier?

Not much, if no one has the risk appetite, en masse, to act on the new initiative. However, there are merits to having home field advantage if there "must" be some movement on a good deal.

Not cutting rates, on the other hand, would probably slow down private national investors, in regards to them not running- as fast as the foreign investor- towards getting in on the government investment bandwagon. And, Caribbean governments, would have possibly cut of their noses to spite their faces--providing capital investment initiatives, but limiting the amount of people who are able to participate in it and still, possibly, leaving the ready made investment plans to the folks who have the money to act on that investment; companies with foreign direct investment capital.

My position on this is if you are going to run up debt, may as well make it national debt, in a time like this. You can easily repay national debt, when the foreign direct investment or tourism related activity kicks in, with foreign reserves that will be stronger than they are now at current prices.

A third question about this issue is; despite all of the non-interest rate dependent drivers to the economy, how can a rate cut work overall and provide a better end all solution?

My underpinning reason to this is based on an evident factor of the question; " what else do you have now?" My answer in regards to this is on one side, nothing. And, on the other, next to nothing. There is always a third, fourth and fifth way, to do things. I say that with confidence, because if everything in regards to managing an economy was constant, we would not have the free-market and unpredictable cycles of production. Hence, there is always more than one way to skin a cat.

Saying all of that, I feel a strong and coordinated rate cut, would, considering these times, even though the first two scenario's may lend the feeling of Hobson's choice;

1. Increase domestic spending, with little or no risk of short term inflation. The Caribbean markets are price takers. Their economies are not only dependent on FDI but also, dependent on imports. They don't set international prices. So, their local economies, have little to fear from a rate cut spurring expenditure and increasing domestic inflation, if the main reasons for high price inflation is due to foreign companies and the price they set for them to consume at the onset. A rate cut would spur spending, put money into the pocket of large and small importing companies and provide jobs due to the higher demand--or at least, keep jobs.

2. A rate cut would not only spur current demand and raise the level of imports with leaving the a risk of future inflation as secondary and manageable. In fact, a long term plan for a reasoned rate cut now and, a slow deflation after world wide demand on goods rise, would raise inventory, while taking advantage of the low prices globally and at the same time, leave the option of raising the tax thresholds at a future date all in the same time.

The Caribbean, unless by some miracle, corners all sides of the goods market in the next two years, is, and, always will be, price takers. This time, we can be price getter's and deal getter's, considering the current drop in prices world wide and the deflation in goods making companies and commodities. This would work all towards creating true savings in this down time, while increasing tax base revenues -or at least that option for the future. This idea is on the assumption that demand, would always be sticky downwards and high prices, take months to take psychological effects on consumers. The long time it took average consumers to adjust to un-Godly prices in fuel, is enough rationale to believe that this theory would work.

3. Increases personal debt is of little concern. Especially if the rate cut and other policy instruments, are geared towards SME's and importing companies, personal debt to the consumer is something a rate cut would work to diminish--while boosting productivity and perhaps, spurring spin-off investments in the private market by creating more capital to be accessed by average consumers, due to increased purchasing power and current savings to the average dollar.

While the third reason, leads us to a whole litany of other policy initiatives that would be pro-cyclical. They would all be over shadowed by the present and current opportunity, private consumers and businesses in the Caribbean, can and would be able to take advantage of, in the midst of a wide spanning deflationary pressure on foreign stocks and goods in the major markets.

With all of this, I see Caribbean investors, snapping up deals on foreign stocks, goods, services and real-estate. Giving the idea of remittances, third consideration to foreign capital obtaining methods for building Caribbean economies-- under present circumstances, of course.

A coordinated rate cut, while it is not my only policy prescription, is not far fetched. And, it is certainly not follow fashion, because the bigger G-20 countries said and did it!!!

Youri

No visa's for medical workers in Zimbabwe

http://www.ft.com/cms/s/0/1066b6b2-c774-11dd-b611-000077b07658.html

Mugabe has denied visa's for medical workers to assist with the cholera outbreak. Dear God. I am keeping this story going, because I want to be one of the first to see the Mugabe regime toppled!!

I am really begining to dislike Mugabe very, very strongly!!!

Also, the cholera threat is spreading to neighbouring countries. Most recently, South Africa...
http://www.ft.com/cms/s/0/3aa378b8-c7db-11dd-b611-000077b07658.html

Mugabe is a danger to his country. A danger to the region. And, with his rogue military, a danger to the world!

Youri

Bush on the Middle East...

I guess it wasn't enough to invade the region, you had to rub it in in one last victory lap!

Capital Punishment letter...

Mr. Dudley Sharp has went on with another letter to the Caribbean Net News today. I have nothing more left to say to Mr. Sharpe in regards to commentary to the Net News. He can have the last word on that forum. Here is his latest article on the Net News, with a rebuttal of my second part of the Capital Punishment debate...
http://www.caribbeannetnews.com/letters/letters.php?news_id=12860&start=0&category_id=7

My second part....(also posted in the Caribbean Net News.)
http://globalviewtoday.blogspot.com/2008/12/capital-punishment-in-caribbean-pt-2.html
http://www.caribbeannetnews.com/oped/oped.php?news_id=12845&start=0&category_id=6

The article posted here, has had a large debate on the issues as you will see in the replies. All I can say to the readers is I report, in fact, we, reported and you should decide.

His main point is that I qualified the capital punishment debate as subjective, but with my subjective outlook, he qualifies it as baseless because it would ultimately mean that the entire argument, is subjective including mine and hence valueless.

Well, perhaps he is right. My total underpinning on the merit of capital punishment is that it can't be proven as a universally accepted mode of deterrent....there simply is no evidence, where it aids or disrupts criminal activity, and in particular violent crime. Mr. Sharpe in fact agrees. So, I don't know why he would want to argue, or counter argue, from that premise?

My point is, however, and was always, is that in the Caribbean, it is not a deterrent and we have serious issues in regards to creating more college graduates than we do criminals.

I can say no more than that just there...

Best,

Youri

Hand's up...

...For all of the folks out there who don't believe president elect Obama when he says that he was not involved with Gov. Blagojevich...
http://www.washingtonpost.com/wp-dyn/content/article/2008/12/11/AR2008121103936.html?wpisrc=newsletter

It's funny. Obama may not have endorsed the Gov.. He may not have sent money to the Gov.. But, he was quite aware of the corrupt nature of the Gov. before he won the presidency.

This "I see no evil and hear no evil" from Obama is rather disheartening. It's like a cheating husband, who has been caught with everything except for being in bed with his mistress and saying he is not a cheater.

In any event, if I were Obama, I would just not talk about it. Let that idiot Gov sort out his own stories.

Youri

Asia after the credit squeeze!

Here again, is another lovely article from the McKinsey Quarterly talking about Asia's furture after the financial crisis. This publication is beginning to have a profound effect on my global view, as much as the Economist and the Wall Street Journal have---in fact, more impact on my vision than does the Wall Street Journal.
http://www.mckinseyquarterly.com/Financial_Services/Banking/Asias_future_and_the_financial_crisis_2270

They run us through the issues that happened when the crisis came to town. While I won't discuss, in total detail, the merits for a better Asia--some points on the economic side of it however, bear representing.

For a good while when Lehman and Bear Stearns started to fall apart at the onset of this crisis, Asia was seen as a safe haven for stock and bond investors. They were as stable as Europe, but without all of the financial ties Europe had to American finance. Hence, investors, who were not already entrenched in the US financial system, by-passed Europe and went straight to Asia. This was a fair enough reaction and warranted. The Asian financial market was not as sought after because, I feel, it was severely untested and post 1997-98 Asian financial crisis, financial stability in the region coupled with autocratic sovereign type regimes, was not something an investor looking to invest would go to Asia for--besides, tech stocks and automobile related stocks, were a better and more lucrative venture, in any event.

However, as the McKinsey article notes, the crisis came to Asia in the form of an extreme downturn in exports to their major consumer base in the West. In fact, reports from the World Bank states that China in particular has had a sharp drop in exports in total.
http://www.forbes.com/afxnewslimited/feeds/afx/2008/12/10/afx5801711.html
http://www.ft.com/cms/s/0/4336a27c-babe-11dd-bc6c-0000779fd18c.html

Just to note, analyst's have warned China on export driven growth. They were left totally exposed to international shock. It is up to the government to do something, while not becoming more protectionist as Thailand and Vietnam have done with this year's rice crisis, turning rice exports inward, hoarding on one end and supplying particular regional partners at a higher price, through cutting export quota's and as a result, raising export prices to others.

So, while people were investing in Asian stocks as a safe haven from US and EU sub-prime related investment's, while the sub-prime credit squeeze took tremendous effect, Asian stocks started to lose value because they were moving less product because their production base--very capital intensive cars and small labour intensive gadgets and trinkets, were not a priority for US and EU markets, as much as food based commodities and now, more importantly for the future, construction based investments; ore; concrete and; plumbing fixtures etc...this is even before governments like France and the USofA, decided to go on the path to structural developments and capital investments, to bring itself out of the slump.

Forget about oil. Oil pricing and the mechanisms for which the price on the market is derived, has been out of whack due to derivatives and futures trading, inflating the prices unnecessarily. Oil has a long way to go before correcting itself to it's true market value. First the inflation and now, the crushing deflation. Oil won't be a way to go for at least another 2-3 years. At best. what makes it worse, is that new tech in alternative energy is coming.

In any event, the other issue the article touched on is the Asian financial market. While it is inevitable that they have increased in trade between themselves through ASEAN and APEC--more so with ASEAN. Financial stability has to come and greater financial participation, is inevitable. However, some things must come first and be taken into consideration. For starters, a regional network for stock exchanges must be done through ASEAN and not the WTO or any other Western bourse. This is a crucial mistake, if they sub-contract their regional bourse to that of a foreign entity. An Asian market, has to set asian prices. An even bigger mistake, if they left region wide ratings to one country or to a western firm. They would never have a stable bourse for the region, if it is not inclusive of solely ASEAN countries--Asian centric, with China and Japan and Australia as the gate-keepers.

Second, they have to work on a master fund for the region. The article mentions this. A fund, sort of like the IMF. However, it can't be an old boys club and take pattern from their individual country models that are based on very compact and centralized regulations. Most notably Singapore and the other sovereign entity, China. This would be a crucial mistake for innovation and dynamism in the region and may hurt exports further as well as solidify the base for stagnation in regards to investment.

The old boy's club of rich elites and sovereigns, may make the proliferation of the wrong type of market structure and macroeconomic principles, harder to reverse as there will be a pervasive feeling of de-stabilizing democratic and social forces as a consequence, due to greater economic power, but little freedom to make create and attain greater economic power unless you are dictated to or allowed to by the sovereign directorate. I say this, based upon the models of protest witnessed in Tienanmen Square, the quiet protests in Singapore and the issues in Thailand--there simply is too much money, floating around with no democracy. In fact, democracy in Asia is almost an oxymoron in representing linkages.

Also, another concern for greater financial cooperation, may be that it would be very aversive to foreign direct investment and create a separate buffer for extra regional investment, sort of like how the EU treats member countries national interests, as every national economic decision has to ratified pending EU approval--this is a non-tariff barrier in itself. This works out to regional protectionism, and not what it was meant to be--global integration through economic cooperation. On top of all of that, ruining exports to the west, as we have seen with regional MFN actions in rice exports to the Philippines from Vietnam and at the same time, creating a regional block of super Asian moneyed elites who are hell bent on economic power.

May be a little far fetched. Perhaps they would not get along. But, it is a scenario on the table to be discussed.

Youri

Regulation and beyond....

Here is a nice article from the McKinsey Quarterly, which lays out a case for a new way forward for companies, looking to deal with regulation post 2008 crisis.
http://www.mckinseyquarterly.com/Strategy/Strategic_Thinking/Managing_regulation_in_a_new_era_2273

It makes a few interesting points, but they would only be interesting and refreshing, if one only had an American view of the firm and corporations. Some of the multi-stakeholder type models they talk about and the socioeconomic approaches they feel would work, or, are and would be revolutionary, are already being done in Europe--Germany and Sweden, to be exact. The Coordinated Market Economy, works just fine in Germany. I know for a fact. Also, they are in the top five of the largest economies in the world--3rd to be exact with a GDP of just over $3 trillion USD-- the largest in Europe.

One note in particular about this model and it is the idea that in a designed capitalist society, like the USA, with a fundamental underpinning of self gratification first and society second, an approach like this would take years to accomplish through regulatory implementation--if it happens at all. Perhaps it may be for nothing. People may not take to the new regulations and find ways to avoid it or corrupt the system, is it is not something they feel would be a necessary issue to take into serious consideration. The CEO of Kingfisher (as you will read in this article) believes that incremental changes in regulation, would take too long and do no good. He advocates for sweeping governmental changes, to deal with such crises again and build a new national and international commercial network for better business. Perhaps the CEO of Kingfisher should be the WTO chairman. Pascal Lamy (current WTO chairman) needs a break, in any event.

I would have to say, however, that there are countless examples of paper laws on the books--laws, which are in fact laws, really good ones too and very good for the society, but are not practiced to the letter and direct interpretation of the law. Will this "new" regulation, the McKinsey quarterly talks about, be something that is worth the time and effort to implement--at the same time scare the wits out of the market actors, who always hate new regulation? What kind of CEO is that guy at Kingfisher, anyways?

Another issue I find strikingly idealistic with this article, is that it assumes that a new model like this, is in fact wanted by everyone after the 2008 crisis. As bad as the 2008 year was, crashes are innevitable--regardless of the society. It's like slash and burn and putting your field on fallow. Sometimes, you have to take a break. This article also takes, for example, not only the CEO of Kingfisher, but the Chairman of Nestle, to suggest that there would be industry wide support for such regulatory changes. However, both companies are European--so too is the other company they mention in the article; Unilever. While I find high virtue in the Euro zone model, they patterned it after the US capitalist and industrial model post war and always, wait for the USofA to make a move before they make a move. They are not leaders in the market and if left up to them, we would be back to the days of stagnant royal kingdoms where we would have to have revolution all over again, for liberty and freedoms, we alaready saw take place in France and America centuries ago in their revolutions.

While it may be a factor that their management styles, may have impacted by management practices and experiences through exposure to the "Social/Know your role peasant" Europe, where the father royalty takes care of his loyal subjects (nothing much has changed). Again I ask, is that what "America", the greatest nation on earth, wants? Even with every day people and not exclusive to the hot-shot wall street power broker. A model like this, and McKinsey says it quite candidly, will have to be a model built on trust and transparency. Companies would have to share industry knowledge and techniques with the open public through government. This would undermine the base of capitalism in America and America itself at its core essence. It takes away the element of surprise, makes the system much less serendipitous and will strip away particular and niche intelligence components for innovation out of the market. These qualities, bring countries out of an economic slump faster, just as much as overdoing it, creates a bubble and a resounding crash. Take a look at the world recovery and then tell me which countries will rebound faster and better than the others--the USofA and Britain a close second. Germany, while I like the Coodinated Market Economic model, will take a late hit and have a very slow 2009 if their export partners decide to spend closer to home--something it would take consumers in both the USofA to come around to. Germany also has a strong Euro zone and emerging markets in eastern Europe, to sell German goods to.

No one country is averse to crashes. I would prefer, while not dissing the Euro strategy at all, to keep it they way it is to some degree and for the government to find a way, instead, to make companies stop inflating prices under ridiculous premises. Instead of sharing technologies, the government should take care of the consumer first and foremost. That's the kind of regulation people, like me and you, need.

Youri

Britain's stimulus plan examined PT1; "Maintaining macroeconomic stability"

While the world has been swept up in the bombast and pomp of Britain's prime minister, Gordon Brown, and his "leadership" amidst such a time of global economic uncertainty. And, while he has oodles of good ideas for everyone. Shouldn't we, as honest and decent observers, give his bail out plan a second look?

The plan to save Britain from an excruciating recession was unveiled by the PM and the Chancellor, Alistair Darling, in late November.

Chancellor's pre-budget report: http://www.hm-treasury.gov.uk/prebud_pbr08_repindex.htm

Aside from running Britain into more debt in the 2009-2010 fiscal year and projecting, quite boldly more debt for the remaining fiscal year 2008-2009, what can we expect in regards to the stimulus package, or, increase in tax credits, or, a decrease in VAT to achieve which warrants higher debt?

I for one, am of the opinion that the UK does not need to dig itself further in debt. In fact, the amount of people now on top-up benefits (social welfare benefits) are phenomenally high. While the Labour party has exacerbated the extent to which welfare services, especially free money to single mothers and the unemployed and under-employed are handled. You have, and I admit, the Thatcherite policies of privatization for the steady increase of unemployment and persons seeking higher employment in the new Britain--post John Major-- to thank!

While I appreciate the fact that people are hurting world wide. The fact that Britons, in regards to low inflation on food items and relatively medium (but rising fast) expenses on travel, tax credits to the currently un-empowered do very little to give greater benefits to the persons who are more likely to stimulate the economy through production and purchase, from the position of post production outputs and wages.

Now, let's turn our attention to the meat of the matter. The key factor of interest, which differs from previous pre-budget reports, is the fact that these are extraordinary times. While the report also states nifty goals like; environmental commitments, which may have an effect on production and; improving public services, which may work out to cutting the public services. The heart of the matter lie in the stimulus interventions in the macro-economic policy, helping small business and fiscal stability policies for this pre-budget report.

In this first part article, I will look at the "Maintaining macroeconomic stability" chapter and the contents within. I decided to look at the entire pre-budget report in chunks, to get more in and give more particular analyses to the particular components, without appearing too general or looking as if my writing is scattered all over the place, with terms and phrases, which may not compute.

See chapter here: http://www.hm-treasury.gov.uk/d/pbr08_chapter2_228.pdf

From the start---
First off, to me, cutting VAT tax to 15% was a good thing. Cut taxes all day, every day, is my battle cry. However, Britain, as said, is running a huge public deficit--some 550 billion tax receipts to 630 billion expenditure up to now at the end of 2008. That simply is not a type of government deficit Britain can keep up. While cutting the VAT was good and, at the same time, they also raised income taxes and cut allowances for persons making over 100k pounds. While they attempted to bring more relief to the many, this may work out to bringing more inflation to the entire UK--where the poor, would surely suffer in the long run. Also, they are increasing top up benefits, at the same time as well. I would assume they would have to cut public services, at a time where the services are over-bloated, but, a time where folks can't lose their jobs and at a time where labour can't fire them, either. Brown is on the wrong path in this regard. Britain will be in more debt in 2009-2010.

Let's take for instance, in fact, how this policy was said to effect persons. You cut the VAT tax on goods, while Britain is at its highest point in importation of goods. That tax break, will go to a Euro zone and abroad (emerging export markets), while not working towards bringing the country out of debt at all. Also, the persons who make over 100k pounds--the same persons you cut tax allowances for and the ones you raised taxes to 45%-- are the ones who are going to be the innovators of the economy, who would surely boost production and spur creativity. The disincentive to create, while at the same time giving no assurance to you if you were to lose your job in this tough time, is something that was more than a gamble. Unless the companies that export from foreign markets, have a British base and have a credible market share in the UK domestic market for goods, in particular, then, this just boosts foreign markets. Unless you also cut taxes for small business services as well.

Also, another issue to take into account, is the fact that as they raise taxes on high income earners, and, they lowered VAT for all on the assumption that their retail sector would be competitive and the consumer would reap the benefits, have they also taken into account that this may not be the case and in fact more job losses would increase the likelihood of a soft Christmas season? One thing about that is positive, however, and that is that commodity prices worldwide, which affect Britain's consumption through imported goods, are going down--deflation in the prices and the stocks of the companies, to be more specific. This is a chief reason stated as the policy response and one that may work. But, to expect a robust Christmas and a rosy first half of 2009 to take Britain out of the slump is more than optimistic. I am expecting modest global growth for 2009, by only .25%. Also, they have extended the tax breaks on vat into 2010 December. So, there will be allot of spending moving forward hopefully.

I see the VAT cut helping Asian and emerging market stocks who export to Britain, but I don't see Britons getting savings--especially since the persons who you gave a tax rise too--the folks making over 100k-- are more than likely to be the shop keepers, who you are forcing to lower prices at a time where location matters more than "lowest" price. For example, why travel to Essex, paying 5 pounds for the trip, for a shirt costing 20 pounds, when you can travel to Oxford Street with a 2 pound bus ride and a cost on your day trip, and pay for the same shirt which would cost you 21 pounds? While savings is not the target of concern, one could help but raise the point as an issue moving forward.

Speaking of which, travel tax is something that has not been addressed. And, it is something that has gone up in the UK in the last 2 years. This has to be a concern and I for one, would stress it as a major concern. This hits the average consumer in the pocket, more than any other tax; in most cases, it is a tax for work in peak hours and a huge disincentive to travel to shop.

This first piece of the pre-budget, sets the tone for the rest of the report. If we are cutting taxes, we would have to look at the cutting of public services for the deficit. Also, we would have to look at the section for small business growth, in order to see if there are enough provisions in place to offset the rise in taxes for persons making over 100k pounds. Also, to see if those same business taxes, extend to services and not only the goods market. If not for both equally, the UK has simply had Chancellor Darling and Prime Minister Brown, hand them more labour tax and spend policies under the table and in the guise of fiscal stimulus--with more debt to boot and more hand-outs for the unproductive. To top it all off, help the Labour party pay for their election on the cheap with public finances.

Youri

EU backtracking on sending troops to Congo!

Not that the EU not sending troops worries me. In fact, I feel at that time they would have done more structural damage than anything.
http://www.ft.com/cms/s/0/8d057606-c565-11dd-b516-000077b07658.html

I simply just don't trust interests, other than the Germans and the British on this venture. If they, either of them, were to lead the force and have most of their troops involved, perhaps, it may be useful.

But, in any event, in a report here I stated that the rouge Gen. Nkunda, left the area in Eastern Congo he had threatened to take, all on his own. Troops aren't needed anymore.

Good. Hopefully, we can come to some domestic solution and allow peace talks to take precedent.

Capital Punishment in the Caribbean PT 2- Just pay for it!

In response to a letter posted in regards to the first part of the "Capital Punishment in the Caribbean" series (the article posted on Caribbean Net News on the 8th of Dec 2008 and the letter on the 9th, 2008), I took the liberty of hastening the second part of the material to deal with a third part of the Capital Punishment proponents' debate, which was left unaddressed.

While I admit the first article was extremely lengthy. This follow up, would promise to be as intellectually fulfilling as well as respond to the letter and present the second half of my stance against Capital Punishment, to a tee--and respond to the focal point of the author of the letter--while not being as fustian as the former

I would just like to start off on his letter, first, with what the author stated as his main point; "No one is suggesting that the death penalty is the solution to crime in the Caribbean"....in fact, yes, yes folks were and are trying to make the deterrent argument. And, hence, my rebuttal on that line of argument on the debate, especially in regards to the Caribbean and saying quite loudly, again, that it is not an argument--along with all of the relevant points mentioned. End of story!

The letter stated, quite candidly, Capital Punishment--while persons agree that is no determinant as it being a deterrent to crime-- is not about deterrence, but, about "justice". Sounds allot like president G.W. Bush after 9-11, doesn't it? To this date, the persons wanted and sought for for "justice" have not been caught. While that part of the argument is tangential, of course, I would advance to say, as well, that "justice" in that sense and in the sense of murder and Capital Punishment, is subjective.

This leads me to the crux of my position in this second part essay: since capital punishment, is rooted in the idea of justice to the criminal and for the victim who lost their life, then who's to say that everyone feels that capital punishment, should be a tool for everyone and for every victim's family who where killed?

Are the mouth pieces for capital punishment, speaking on behalf of all persons who were murdered and their families? I happen to think not. Also, are they speaking, especially in the Caribbean, from their King James version of the New Testament? "Christians" following the true teachings of "Jesus Christ"?? I don't think so either. I thought Christ taught us to love and forgive? Perhaps its not the same bible we share and not the same brand of "Christianity" we ascribe to.

Since, folks like me, and, the proponents for the death penalty, like Dudley Sharp- the author of the letter response to my first article- have differing views on what's "just" in the penal codes world wide, perhaps, the proponents would do something that would be palatable to me, as an anti-death penalty proponent and a tax paying citizen who would have to pay for the execution and that is, simply, pay for their killer's execution--if they want added value to the punishment, as capital punishment is. The pro-death folks should; assist with the legal proceedings; administer the lethal injection; throw the switch on ol'e sparky and/or; pull the lever on the gallows. Sounds fair to me. Don't let the tax payers who are not in favour if the death penalty, pay for your justice the way "you think" it should be applied. The pro-death penalty proponents, should start a little kitty in the corner of their homes for death day prep-- sort of like a "swear jar". That sounds reasonable. We, as tax payers, pay for enough "stuff" we have no value for, we should not pay for individual brands of justice for folks who don't have the guts or the ability to kill a murder for themselves and rather, choose to let the tax payers and the system, do it for them.

Here is where we are now with this debate, as Mr. Sharp has just admitted to- 1. the debate is not about what deters crime and 2. it is not about what's "just" as it is subjective-- more so, who knows what exactly the "true" victim would be feeling? After all, they are dead and at the point of the great beyond-- or where ever you believe people go after they pass away! (Condolences to all the victims who have been slaughtered and their families, and in no way am I being flippant about murder)

Just pay for it i say. Every red cent and every hair follicle on that rope and for every volt charged, pay for it. Participate in it, if you wish and if that makes you feel complete. However, don't tell me, ever, that in the Caribbean region in particular, where we seem to create more criminals than we do college graduates, all in a system handed down to use to our disadvantage, that capital punishment--especially in regards to the persons pre-disposed to commit murder and crime; young adult males-- don't deserve justice for being a product of their environment and working within a system which was not created for them primarily.

That is the underlying theme of my argument--we in the Caribbean, have an economic and social system, that works against young adult males. Black America has that issue as well and White America, has just now come to grips with the issues regarding their social and economic frameworks for exclusion which binds many a folk.

Yes. We have a president Obama. Yes. We do have a host of other prominent black men. They are, for the most part, exceptions--and extraordinary exceptions at that--to the rule. They too understand that all don't make it. They too understand, or, at least we hope so, that some will never have the opportunity to see the light of day on their face, let alone have an opportunity to reject it's radiance. This is why president elect Obama and people like him, resonate with the people--he too knows, he too felt and he too knows what to do about some of the systems of injustices, which most are non racial, but, seem to effect race and gender more than anything else.

Regardless of the excuses and exceptions to the rule some of us may have, in the words of the Rev. Jesse Jackson--and I am in no way a supporter of him-- "we have more work to do"...(this was after he had dealt with the situation of the Jena six)

Let's not, especially in the Caribbean, neglect the issues to how do we go about preventing crime and reducing the levels of criminals, fit for actual punishment and quite sadly after the fact--when all sides know, full well and very clearly, it is not a deterrent and never will be a deterrent. We don't save lives that way at all. And, don't waste people's time and money. Point blank!

To say again, we have a problem region wide and black males, in particular, have an issue with ingratiating themselves into the normal society in the western world. Why would I want for anyone, to take their eye off of not working towards rectifying the wrongs they have inflicted upon these urban young males and not have ear to what is the real solution?

And, no, don't cry me a river. And, no, I won't cry a river for myself. I'm a lucky one- at least so far. However, there are those out there, who need someone to articulate and speak for them, who understand the issues, rather than someone who will not. And, at the same time, neglect duties to make for a better life as opposed to making clear way for the destruction and discarding of human life in totality. Such a pitiful waste!

No Sir, readers. Mr. Sharp is wrong on this one. Dead wrong, indeed!

Youri

Blaming Pakistan. India had better keep calm.

The talk of the town in Asia and intelligence circles world wide is that Pakistan, is at the root of the terror attack in Mumbai that left over 150 people dead. While it may be true that Pakistani groups are, admittedly, responsible for the attacks. However, the overwhelming media reports are implicating the entire Pakistani people and not making it clear that these groups are rouge elements within Pakistan. Who, by all intents and purposes, are wanted by current President Zadari and have been outlawed by former military strong man and former president of Pakistan, Pervez Musharraf.

Indian officials have been leading the PR charge on Pakistan. Many Indians are very upset and angry at Pakistan, for allowing these militant groups, the Lashkar-e-Taiba along with Jaish-e-Mohammad, to be energized and re-energized by not dousing their energy and going after them with vigor. While they are right that they do need Pakistani official governmental help in routing these killers. India, also, has India to blame by not securing the Indian people, from an obvious threat on and within their borders.

Now, here is what we have; intelligence reports have it now that these militant groups, are being supported by elements within the Pakistani military. I have a little trouble with believing the importance of that linkage. For one, Musharraf, a former general of Pakistan and held the country by martial rule for an extended period of time, abhorred the Islamic militants. He was very instrumental to any success the US had in Northern Afghanistan and the tribal areas, as it is. The military supported Musharraf. So, how can it be now, that such deep linkages with the terror group's who orchestrated these attacks, can be attributed to such deep Pakistani military involvement? Yes, they may have been military men involved with the attacks--I would not have assumed otherwise. Yes, they may have friends in the military and as their own countrymen, have friends all over Pakistan as well as sympathizers for their cause--not sympathy for the method--but sympathy for the cause. These issues do not compute, however, to an entire Pakistani country wide plan and plot to kill India. I just do not see that. And, if there was, then, we would have had and will be having an all scale war between Pakistan and India--again!

Just over the weekend, former presidential nominee Sen John McCain, led a team of senate leaders, including the one Sen Joe Lieberman, to Pakistan to "talk" about the issues in relation to the recent attack--and I would guess, a host of other issues. Outgoing Sec of State Rice, made a trip the week before. The double duty on diplomacy is really insulting, but, such is the high life.

As we all know, there is very little the troop of senators can do aside from talk about the issues, or, be messenger boys for the president--who is still G.W. Bush at this time. Or, perhaps, after the meeting McCain had with the president elect Obama, they may have been on an errand for him. We will certainly need the transcripts from the press conference, to see if the rhetoric of president elect Obama on the issue, adds up to what was stated and discussed by the senate leadership at the meeting with president Zadari.

Side note: I think, while the attack on Mumbai was on the table for discussion, I think McCain would have more than likely talked to Zadari on the impending attack on Pakistan--more particularly the Afghan/Pakistan border, where president elect Obama feels Usama Bin-Laden is hiding. More on this as I monitor this as the days progress.

What does this mean for Asian markets? Adds fuel to the dismal flame that are torching Asian stocks. The market has not regained prominence since the sub prime crisis started to unfold and more than likely, this attack on Indian and an major Asian financial centre, does very little to help. Exports have been down, but have been going down before the attacks. India, as well as China and Japan, depend heavily on EU and American consumers buying their goods.

As for the financial markets, security is the top concern for companies looking to do business in and from India. No strong word yet on a mass exodus of companies. However, we will have to wait and see.

All in all, we have a messy, but, very manageable diplomatic and political issue in India and Asia, with Pakistan in the hot seat.