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Tuesday, November 15, 2011

New kids on the block- Greece and Italy!

Well, in case you have not heard, Greece has a new prime minister and his name is Lucas Papademos who is an economist by training and former Governor of the Central Bank in Greece. He takes over from former prime minister George Papandreou, who decided to step down amidst pressure from Greece's- and now Europe's- well know debt crisis.

And in Italy, long time prime minister and Italian export, Silvio Burlesconi, has also decided to step down as prime minister of Europe's fourth largest economy amidst similar debt related issues. His successor is Mario Monti, who is also an economist by training as is his counterpart in Greece and was a former Goldman Sach's executive.

Very interesting things indeed...

Monday, October 31, 2011

Where is the people's money? American banks must find it!

Article from Thomas Friedman: Here.

Well, in not so many words, this is why I for one was not too upset when they started to come after the "tax havens"... the money is there somewhere. In a vault, under some one's basement floor, or in a Swiss/Cayman/Bermudian/Jersey Shore bank account- the latter is more likely.

The quicker the powers that be find out where the people's money went, the better off the entire world will be. We can do nothing about it except for hope, and pray, that a solution is found to the mess. Sure, some of it is in China, but that was a legitimate issue- a major chunk of the ill gotten gains were stolen by some people we don't even know. Makes you spitting mad, doesn't it?

Friday, October 28, 2011

Can Europe get right?

Odds are, no. They have- policy makers that is- have confused themselves on the matter. They don't know which way to go, who to turn to and what to do.

The European crisis is a fine mess, if I can say so. If you follow publications like the Financial Times and The Economist online, you would see that they have a series of articles that is continually compiling information on this crisis's origins, the issues that are happening currently as a result and also what policy makers and bankers are doing to stave off the worst!

I can list to you reams and reams of Internet files that document all of the problems and possible solutions. But it would be a waste of time.

Thursday, October 20, 2011

Gaddafi is caught!

Apparently Muammar Gaddafi has been caught at his home town in Sirte, Libya. Sources from Sky News and The Daily Mail report that he has been shot in both legs and has been transported by ambulance to a hospital.

Don't know where Libya goes with this. I hope he is kept aliveand given exile. We will have to see!

I'm not fully impressed with how easily some people forget that Gaddafi was accepted in certain circles as the man who tried to keep things together in Libya. But I am more than thankful that this bloody era is over for Libya and the Middle East.

Saturday, October 1, 2011

Kweku Adoboli is a man after many hearts!

Sort of an old story, but we know that every black man that don't have two cents to rub against the next cheered with glee when they found out this guy DID IT. LOL... but, he caused more problems than anyone could have ever imagined and thus it's a painful experience for persons in the UBS Group.

More importantly it shows you that we have not learned the painful lesson of the 2008 financial crisis at all. It's all happening all over again. These guys are just too greedy!

See story here:
BBC

Monday, September 26, 2011

It's going to come down to the actors!

Paul Krugman of the NY Times writes that The European Policymakers are unlikely to make reforms necessary to save the European Union.

He cites that recent pronouncements- most likely made during the Sept.,2011 IMF/World Bank Annual Board of Governors meetings- are extremely bland and scary at the same time.

I am not sure how Krugam is thinking, but is obvious that two things are happening simultaneously: 1. Just like the set of bankers/actors that created the financial collapse of 2008, most of them hedged their bets and bet wide on other people's money and bet tight with their own money, often against what they bet on with other people's money; and 2., that there will be more action for political instability, more so from policy think tanks and multi-lateral agencies, companies and actors, even more than from political pressures from the ground in terms of labour unrest and social upheaval.

It's that time where I'm quite sure, certain gaggles of elites, not necessarily from the legislative branches of the leadership community in Europe, are actively considering if not planning the downfall of many of the current and aspiring politicians who have the mindset that keeps the current state of affairs constant.

Sounds like a war is going to break out. This time, cash will be their fuel, the casualties will be dispersed and seemingly inconsequential to the scheme of things, think tanks and social-meetings will be the battle room and the social media will be their primary weapon of choice!

The time to make these decisions whether folks like it or not is here. And, to be fair, it's not like Europe has not had political instability in it's history at all. This time it will be more sophisticated, and hopefully more humane than other shifts in politics in Europe.

Sunday, September 25, 2011

Speeches from the World Bank/IMF Board of Governors Meetings, 2011

Here are the speeches from the 2011 Annual Meetings of the Boards of Governors of the World Bank Group and the International Monetary Fund.

See available links to Chairman of The WB/IMF Group, Prime Minister Hubert Ingraham's speech:
Here.

President of The World Bank's speech, Robert Zoellick:
Here.

Managing Director of The International Monetary Fund Christine Lagarde's speech:
Here.

Just for your information!

Cheers!

Thursday, September 22, 2011

IMF posts its World Economic Outlook for Sept. 2011.

Have not read it yet but the title isn't very encouraging.

See here: IMF World Economic Outlook Sept. 2011

Will read it sometime today or tomorrow!

Thursday, September 8, 2011

Big Jobs Speech tonight from Pres. Obama!

Well the big job's speech is going to be tonight and delivered by President Obama. Jobs, jobs, jobs! I wonder what he has to say about it? I think the US is about 10% unemployment and up to 15% real unemployment! Staggering figures. What's even more staggering is that it's been like this for well over two and a half years or thereabouts!

The US has tried stimulus. That fell short and many have said that it has failed. They have tried quantitative easing. That fell way short as well as banks hoarded money and buffered their balance sheets. They tried nationalisation. That didn't work out either as the government held on more debt from once private companies, car companies and banks, which raised the debt level and still created no new jobs or new innovation in the economy. The toolkit is just about empty at this stage.

Mitt Romney- current Republican candidate and former Governor of Massachusetts- said he has a job plan that has over 40 action steps. Rick Perry, Governor of Texas who is also a Republican candidate for President, said that he has created more jobs than Mitt Romney in Texas than Romney did in Mass.. Whatever!

We need jobs now in American. Small states like The Bahamas depend on that tourism investment. We also use jobs indicators to sense where the foreign direct investment money is flowing from in order to plan FDI projects.

If America can't do it, and apparently the EU is in another dream world, then we need some place else to deliver!

Thursday, September 1, 2011

The Bahamian Economy: What, me worry?

No one in The Bahamas is in the mood for more bad news, especially after Hurricane Irene swept through leaving significant damage that some estimate to be well in the millions. But bad news is what we had with the recent downgrade from the ratings agency Moody's on The Bahamas Sovereign Bonds to A3 status.

I remember back in mid-May, 2007 The Bahamas put up a Sovereign Bond package for investors and immediately gobbled up. I'm not sure if the same type of exuberance for Bahamian Bonds will hold true today.

For general information, issuing Sovereign Bonds is a way in which a country can raise money from investors to fund public operations. Aside from direct public borrowing- which can also be buttressed by the application of bonds into the loan structure- it is a very effective way in which a government can obtain money to do things it needs to do.

The main problem with Bahamian bonds being downgraded A3 status- which is the start of the second tier on the Moody's ratings chart- is that investors may see Bahamian Bonds as unstable, with the possibility of the government defaulting on paying back Bond Investors that have already invested.

In 2009 Standard & Poor's - the somewhat disgraced ratings agency that has recently downgraded The United States Sovereign Bonds as well in an act that many call political in nature- also downgraded The Bahamas Sovereign Bond ratings to BBB+, the equivalent to the recent Moody's rating.

The Moody's statement on why they downgraded The Bahamas was based on three factors: "1. The significant run up in government debt levels in recent years; 2. The country's limited growth prospects; 3. The challenges the government is likely to face in raising revenues."

The way Sovereign Bonds work is that investors purchase these bonds, just like a regular investment that’s expected to make a return. What's important with this is that the yield, or in other words the interest paid on these bonds, is how investors make money on the returns from that investment.

The dynamic is that as a country's credit worthiness is put into question in a negative way- as it has been with the recent ratings downgrades- investors will look for higher yields in shorter time frames. For example, they may seek bonds that carry 5 percent yield on a 5 year to maturity dated bond over a 5 percent yield on a 10 year maturity dated bond, and even better if they can get a 7 percent yield on a 5 year maturity date and so on and so forth. As reported by The Central Bank, The Bahamas Government has issued over 2.5 billion dollars worth of Government Bonds with 35 of those issues to reach maturity by 2016, nearly 50 to reach maturity by 2021 and over 80 to reach maturity from 2021 and beyond as far as the year 2037.

The concern over the risk of default in this case is well founded in terms of the ratings downgrade. It’s highly unlikely that an investor would want to be locked into a debt security with an entity that has decreasing means on which to pay that debt.

To some it means nothing. But to others it sends off signals that point to other issues surrounding the Bahamian economy in addition to it all factors highlighting our extensive debt accumulation over the course of the last several years. For example, considering that The Bahamas depends on foreign direct investment, what message do these downgrades send to investors if they want to invest in other portions of the Bahamian economy? How would their investor appetite be affected if there is considerable weakness in the economy?

Other things come to mind as well in terms of addressing this problem in the short and long term. One issue for the short term is confronting the issue of boosting consumer spending. This means not only tackling the astronomical unemployment rate- and the under-employed with the discouraged workers as well- but also boosting real wages in and for the long term.

Another issue is tackling and controlling headline and core inflation for the short and long term respectively. One economist pointed out in January of this year that inflation should not be a main concern, but it rather highlights the signs of recovery in the economy as prices were appreciating. I'm thinking that the exuberance of that statement should be tamped down just a bit.

As we see now- even with lowering oil prices- if boosting consumer spending is to be addressed as a first major step, reducing prices is critical to spurring an appreciation in real wages and increasing employment, most particularly when inflation in The Bahamas is imported and unemployment has little or no effect on inflation domestically. Concentrating on these things are vitally needed in order to generate government revenue in order for the government to have the fiscal headroom to stave off risk of default and meet its other social and regulatory obligations at the same time.

But if investors, both foreign and domestic, would be put off from pumping new money into the Bahamian economy because of these factors aforementioned, then how do we create meaningful jobs, boost consumer spending, while also taking into consideration a softening in the tourism sector? In addition to an increasing dislocation of that tourism product from the main economy (with an increasing bulk of our arrivals choosing the half-day cruise ship stop over, rather than taking that three day trip), how do we assure real investor confidence when tourism is our main industry and is not performing the way it should?

On the other hand the financial services sector has lost jobs and also lost out on business opportunities to other jurisdictions, even though it is virtually un-taxed in comparison.

Another concern is that at the same time with there being no new forms of economic production being presented other than the threat of oil exploration, agriculture is not being given a chance to have a fair start for production for domestic consumption or for export. With that, mostly all other forms of industrial activity and extraction of the natural resources in The Bahamas are being underutilized or under-explored.

Even more concerning- and we have seen this play out in The United States and the debt ceiling debate- is that as politics is becoming more competitive and everyone wants to be credited for the best ideas and the most successful administration, attaining bi-partisan decisions is becoming less and less attainable, which is something that is factored into the determinations on bond ratings most definitely.

Concerns on the long and short term prospects for The Bahamas, even as it is discussed by Moody’s and Standard & Poor’s, should be held by all Bahamians as we begin to see our economic outlook dwindle, and also especially concerning as we see the global economic recovery stall.

One thing is for certain, doing the same things we have been doing and not being more creative and flexible on what can be done in The Bahamas is probably going to create new problems.

Tuesday, August 2, 2011

The BCA's growth in a changing environment!

The Bahamian Contractors Association (BCA) has come a long way in its development as an organization in The Bahamas. Within one short year, great work has been done with regard to growing the organization's revenue; winning a pioneering Grant Project aimed at strengthening The BCA's Training Programmes; developing its lobbying mechanisms to be more effective; and growing the BCA's revenue and membership all in one swoop. It is progress well noted and something that other non-profit organization's and for profit organizations can take sharp example from.

When I first met the then President of the BCA Stephen Wrinkle and his Executive Director, at the time during a stint I had as a Consultant with The Inter-American Development Bank for their Multi-lateral Investment Fund, both men were at their wits end with regard to the amount of opportunities for advancement for Bahamian Contractors. The BCA, having been an organization since 1952 and since Mr. Wrinkle's leadership within the past two and a half years since we had first met, not much had changed over those last 50 plus years with regard to the overall participation from Contractors; the level of administrative and economic impact the BCA had as an organization; the tools, systems and programmes that the BCA used as an organization; and the support from the broader public with addressing issues such as corrupt contractors; and assistance with regard to legislation and regulations that would work to boost the industry as a whole.

What’s even worse as an organization like the BCA, it was branded as being an elitist organization catering only to the big contractors, leaving the small and medium sized contractors out of the process. While sentiments to this effect may be little misplaced, much has been done to instil confidence in other quarters of the construction industry that felt that they have been left out.

When writing a project that would correct these deficiencies within the BCA and work with regard to making the necessary adjustments in the private sector, we focused on three key areas; the commercial relevance and viability of the BCA by increasing membership and participation, which meant that smaller contractors and medium sized contractors would have to be more involved in the process; creating a training programme for the trainer of trainer’s and Contractor’s alike so that smaller contractors did in fact have a chance to participate in large projects, once the proper training and skills assessment and market requirements were assessed; and increasing the lobbying power of the BCA by formalizing the international partnerships of the BCA and strengthening national partnerships in a concentrated manner.

After those first meetings with the BCA, the IADB and myself, and after having left a template for a project for strengthening the BCA on the table ready to be approved, I had disengaged from the IADB and then after such the BCA and I started a working partnership in a number of areas. The first of which was that one of the major stumbling blocks in the way of the BCA was the issue of developing a credible business-relay to the public and vested stakeholders that it was in fact ready to make the move into becoming a more effective association for all members.

The second major stumbling block was that the BCA’s revenue points were weak, and the prospects of raising revenue relative to what was doable on the ground was also weak as to what was envisioned by their governing board.

The third major issue was that the BCA had not the technical expertise on the ground to pave the way for them obtaining the Grant from the IADB, or for that matter obtaining and securing funding from the Baha Mar Development Team for more funding for training for contractors to be able to get better contracts from the works being done at Baha Mar and elsewhere.

What happened since mid-2010 to mid-2011 was nothing short of phenomenal. Not only did membership increase by over 450%, we also increased revenue by nearly 1200%, without taking into account the Grant Funding from the IADB, by applying basic marketing and follow through fundamentals, even in the face of a newly started, competing organization in the New Providence Contractors Association (NPCA) that has gained much traction within the industry and have also garnered public sympathy for their plight.

As simple as it sounds, contractors knew of the BCA, some even took part in BCA events in the past, but many of them were unaware that the BCA was an organization that they could have joined and let alone make more effective. Through my tracking, more than 3 of the 5 contractors contacted over the course of the 12 months I was surprised that none of them knew that they could become legitimate members of the BCA and 4 of the 5 contractors didn’t know exactly what the BCA did, even though they had heard of it or in fact participated in BCA events in the past. This indicated to me that even though they had heard about the BCA before in the past, they were unaware or have never been contacted fully on the benefits of joining the BCA.

What’s even more exciting about the recent developments with the BCA is that the IADB project will increase membership exponentially through one of its components, as well as put in place the framework for The BCA Institute- a full scaled, market sensitive training programme for anyone who is interested, not just contractors or persons in the construction industry.

Another critical achievement that has given value for members of the BCA is the creation of an interactive website, which allows BCA members to post their own work to their profile spaces, allow for consumers to rate the contractor of their choice and send reviews, as well as allows the regular news and updates on the construction industry in The Bahamas. Some contractors have already notified the BCA that they have been contacted for job offers through the website and have in fact won contracts.

Apart from the lobbying in the media, the BCA was able to capitalize on major developments in The Bahamas and it is part result to the credibility the office gave to support the lobbying efforts and being able to demonstrate that the BCA was not all about talk, but it was about doing.

While I personally had no hand in the training initiative or the planning of training initiatives with the Baha Mar Development Team as I moved on to other projects that required my direct attention and having completed 80% of my plan, the initiatives on the ground at the BCA, tripled by the inputs from the IADB Grant, are more than exportable and can be used as a template for partnering organizations to invest in.

The turn-around was a fantastic experience and one that should be an example for other organizations looking to grow, take advantage of their opportunities and develop as an entity that serves the public good!

Can the BP oil disaster prove fruitful for The Bahamas?

The oil exploration debate in The Bahamas is starting to take shape in a very open way. The Minister for The Environment, who is responsible for the country's natural resources, has stated clearly that more analysis is needed before oil exploration is to be taken seriously in The Bahamas.

During the last administration of The Progressive Liberal Party, 2002 to 2007, the Natural Gas/LNG (not exactly crude oil, but a natural resource for energy) was an issue of great contention, the main point being protecting the environment. The second issue has been a national security concern, garnering cooperation from abroad and finding a way to secure the investments from natural or manmade occurrences, which could be disastrous to the environment in addition to it destabilizing a country.

The Bahamas Petroleum Company PLC's company profile page states that it has a license to explore for oil in The Bahamas and wishes to start as early as 2012. Their profile also states that the company has, between the years 1947 and 1986, drilled for oil in onshore and shallow water areas in The Bahamas and that their license has provided them the ability to do so, even though they have not drilled for oil in the last 20 years.

British Petroleum (BP) on the other hand has been in the business of oil exploration for a number of years. A good part of BP's business model has been oil exploration and refining with oil retail second. Comparing them with the other oil company, also known as the "Big 6", they have a smaller market share than all but four out of that group.

This makes the case for BP’s “Deepwater Oil Spill” in 2010 interesting, when looking into BP’s operations model and financial performance compared to that of other oil companies.

BP's average Return on Assets (ROA) when compared to Chevron and Exxon Mobil is nestled at the midpoint between the other companies during the years 2008 to 2010.

There's nothing startling about BP's Return on Equity (ROE) ratios for the same period either, as the numbers appear too vague if we wish to make a case that BP was paying out more money to equity than it was putting back into assets over the same period of time compared to the other companies on a pound for pound basis, with it being un-assessed by duration and intangible variables that can skew ratios through virtue of the net income and expenses payable at any point and time that may affect assets.

What's interesting with this however, is when we subtract ROA over ROE for the same period it tells a different story. BP's ROA over ROE gives us a better insight into how BP was spending its money on assets compared to equity.

While BP's ROA over ROE was less than Exxon and slightly more than Chevron, BP is larger than Chevron in market capitalization and global reach. In addition with Exxon having a negative ROA over ROE and was pumping more money into equity over assets between 2008 to 2010, both Exxon and BP had negative ROA over ROE figures.

All of this matters because ROA shows you how much money a company puts back into its company’s operations at the very first glance. When you subtract ROA from ROE, you have more of an idea of not how much a company puts back into assets, but more importantly how much money a company puts back into assets pound for pound compared to other companies in the same industry, as it eliminates the size and capitalization issue as we have with the oil behemoth Exxon. ROA also matters if a company’s business model is more capital intensive than other companies in the same industry per dollar value compared to other business operations, for example oil retail vs. oil exploration; oil transportation vs. oil refining, and so on and so forth.

It must be noted that while all oil companies mentioned had recent oil spills from mid 2010 up to 2011, BP’s oil spill was much larger by tonnage, which can be attributed to their business model as well as their size, scope and capitalization, relative to the spill’s geographical location- which may have been dictated by all of the factors of their industry and what they were allowed to endeavour in the oil market.

The numbers suggest, among other things, that the larger size tonnage spill is correlated to the company’s size and capitalization and then the ratio of ROA over ROE for each company respectively. While Exxon had more individual oil spills than all of the other companies mentioned, but because of their size, scope and extreme market capitalization, they were able to contain these spills in addition to having the capacity to minimize the fall out more so than BP.

Let’s take for another example the Talmadge Oil Spill that Enbridge Energy was responsible for in 2010, which produced a tonnage spill of nearly 3,500 tonnes, we have to not only look into company financials to see if a disaster could be averted by alerting the public to the company’s performance, but also to the issue of timely mandatory reporting of financials, to assist analysts and persons who have vested interest in these matters with regard to dealing with issues before they become disasters. In fact, aside from BP, the ratio of tonnage spill to revenue for Enbridge is significant and speaks to their business model, size scope and market capitalization in addition to their ROA and ROE performance indicators.

As with Enbridge, their reporting structure is not as strict as BP or the American-International oil companies. But from what we have examined, Enbridge has a negative ROA over ROE over the period of the last several years up until their last open financial report of record, produced in 2005 as reported by Hoovers. Digging a little deeper into the Enbridge financial information on their company website, they have up very basic reports for 2009 and 2010, which states that they have spent more money on company assets and operational equipment over those last two years, but when we calculate the ratios, they have the lowest ROA and also display negative ROA’s over ROE’s over the course of all the years recorded.

Enbridge, by far, is considerably smaller company by capitalization than any of the other Big 6 Oil companies mentioned. They are not intensively involved in the retail side of the oil and natural gas business- as is BP to some extent compared to Exxon and Chevron- with Enbridge being more focused on the exploration and wholesale distribution of crude oil, oil bi-products and natural gas.

This leads me to believe that as The Bahamas moves forward with oil and natural gas exploration, four key things must be essential to protecting the environment and preventing a major disaster:

1. The security of investments from man-made or natural disasters;

2. The business model, size, scope and market capitalization of any oil company in The Bahamas must be adequately categorized in relation to its financial performance and its projections on the possible returns on assets and equity;

3. Accurate and timely reporting of any oil company’s financial and investment information; and

4. Necessary legislation and regulations that curb the overcompensation of equity.

What happened to the Gulf Coast by virtue of this disaster and also what happened to BP's reputation by the Deepwater Oil Spill of 2010 is something that can be avoided in The Bahamas if we look carefully into the factors outlined in this article and then some.

Thursday, July 21, 2011

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Sunday, July 3, 2011

DSK is now free to roam!

If you have not heard, Dominique Strauss-Khan, the former head of the IMF has been released from his house arrest over the last week.

Funny thing is that while his release has been seen as an achievement for proponents of his innocence, the woman that has accused him of rape is now coming under much scrutiny.

Apparently the woman- who is still nameless to many- is a hotel maid with a very large bank account. Too large to go unnoticed. In addition to this hotel maid being a very wealthy woman, he boyfriend is also a convicted man currently serving time for drug charges.

The twists and turns are getting twistier and turnier. People have long claimed that it was a set up and the "powers that be" wanted DSK out of the IMF. For what reason is still unknown to many. Other conspiracy theorists state that the other reason why the powers that be wanted to smear DSK was because they wanted to stunt his chances for running for the French Presidency next year.

Whatever it may be, the turn of events with the hotel maid and her now known background, leaves questions to be answered.

Where will it turn from here on in, no one knows just yet.

Wednesday, June 8, 2011

Dare To Be Great taping with me!

Hi all,

I was invited to be a guest on a Caribbean eRadio show on an eRadio stationed owned by Charles Lewis from Barbados on the show Dare To Be Great with the host Spence Finlayson. We had a great time. Also we had a co-guest Mr. Andrew Harris from Barbados who has a wealth of experience in the financial services sector.

I was a television guest on Dareto Be Great a few short months back with Spence. He is a fantastic host a master motivator.

Listen to internet radio with eRadio Broadcast Network on Blog Talk Radio

Monday, June 6, 2011

Is crime an economic concern in The Bahamas?

The focus has been on crime in The Bahamas for the last few years. It's playing such an important part in the social dialogue that reports have it that it has become the number one concern in some quarters, with the economy being a very close second. With such a high premium placed on both the economy and on crime one has to ask the question; are these issues correlated to some extent?

I got an email over the past week stating that in Toronto, where they have five million people, that the murder count was 60 and people were furious over it. In 2010 Toronto had 60 murders in total. In The Bahamas the murder count for the year, 2011 is already 58 and will more than likely be higher by this submission is received by the media outlets that have so graciously shared my correspondence with the public.

With regard to analyzing crime statistics, persons sometimes tend to internalize and personalize crime and isolate the person that committed the crime. Partly because it affects us all in some way – my cousin was shot in back of the head, in broad daylight, with witnesses, but the chief witness was killed a year later before he had a chance to testify.

Without question the issue of crime is deep as it is wide. To that extent, you shouldn’t be blustered with the notion that any one person is able to solve crime with one stroke or within a calendar year. I certainly cannot share with you path breaking information on a one year 100% crime reduction strategy, and I can assure you that no one else can either. I will tell you however that reacting to the crime news and overstating crime statistics instead of analyzing the nature of the criminal behaviour and parameters of this behaviour are not fruitful endeavours.

Going back to the statistics to some extent and to add further value to the Bahamian murder rate statistic, UN reports indicate that the average murder rate for every 100,000 persons in The Bahamas stands at 22. This is the same rate as Brazil, Haiti and Guyana, but far less than Trinidad and Tobago and Jamaica with 43 and 60 per 100,000 respectively. St. Kitts and Nevis on the other hand has a murder rate of 35 persons for every 100,000 and their population is under 75,000.

Let's take a closer look at The Bahamas vs. St. Kitts and Nevis, with the latter suffering under the weight of a severe murder spree. Persons have indicated that the size of the population matters with regard to crime, but this matter can be a wash when we examine the population size of both countries as The Bahamas is four times the population size of St. Kitts and Nevis.

We may say with some degree of rationale however that population density instead of overall population size may be the cause of the differences in crime levels in each country, when we bring into the mix Trinidad with a population density of 254, Jamaica at 252 against that of St. Kitts and Nevis at 164 and The Bahamas at 23.27, all UN reported statistics. Population density as it relates to urbanization and how that relates to the crime phenomenon has been well documented. To date over 85% of the crime in The Bahamas happens in the inner cities of the capital city of New Providence.

Analysts typically link crime between economic performance and criminal activity. Speaking to an authority on the matter in The Bahamas, he assured me that crime is not a result of economic reasons. But the question to be asked is; what economic concerns are we evaluating with criminal statistics?

If we look at GDP per capita in all four of our countries, we see that Jamaica has a lower GDP per capita than all cases and a higher murder rate. But when we look at Trinidad and Tobago we see that they have the second highest murder rate but the second highest GDP per capita and the Bahamas ranked with the highest GDP per capita and the lowest crime rate, relatively speaking.

While analyzing the murder rate alone is not enough to base any determination on with regard to overall crime, so too, can we base any determinations on the crime by virtue of the murder rate as it relates to GDP per capita either, because there is more to economic performance, and the economy for that matter, than just the GDP per capita alone.

When we speak of the economy, we speak of things not only in the performance indicators, but we also speak to the level of un-employment; urbanization; the size of the informal sector; the size and scope of corruption; the illegal vices trade (gambling, narcotics, illegal immigration trade and the trade in sex workers); the level of economic openness and transparency; business ease; and the level of state and social protection in terms of property rights and transfers relative to population size and scope as well as a host of other issues and concerns.

I take the position, absolutely, that over 70% of the total crime in The Bahamas can be traced back to prevailing economic concerns and linked to wider structural deficits in the economic regulatory mechanisms in The Bahamas. Crimes against property in total, realty theft, house breaking and grand theft auto, are crimes that have economic implications, if only from a net positive benefit for the criminal.

To a broader extent when we speak of benefits transfers to underserved citizens- knowing full well that employees of the Department of Social Services were attacked by irate customers only a few short months back- we have to look at the amount of those transfer benefits relative to the economic situation we have today in The Bahamas.

We also must examine to the state’s capacity to provide proper services and deliver adequate benefits under prevailing financial constraints in addition to issue of social protection intervention before the turning point of human attitudinal change, particularly pre-school and secondary school assessments of persons that exhibit anti-social behavioural traits, with issues such as violence against women and overall attitudes against women to be taken into serious consideration as well as with the general lack of respect for authority and property.

While we must submit that crime is not a single entity with one single fix, we must begin to think about the links with crime to the wider economy and by virtue the society. Then, we must disaggregate certain crimes, under certain instances, with certain parameters and then determine if they all can be identifiable under those instances and parameters.

The Bahamas has the ability to build the capacity in its institutions and societies to deal with this matter decisively, and I believe that we can deal with this matter absolutely.

Thursday, May 19, 2011

What to do about the IMF?

In case you have not heard, the IMF (former) Dominique Strauss-Khan was arrested and charged with the sexual assault of a hotel maid. His second in command, John Lipsky, has assumed the role of Managing Director.

Apparently, Mr. Strauss Khan forced himself on a hotel maid in his New York Hotel- lady of African descent- and caused her great distress. Reports from the lady says that he chased her around the room after he appeared from his bathroom naked and ready for action. That's rather unfortunate.

This is not the first time that Strauss-Khan, who has been labeled "The Great Seducer" by his circle of people that know him well, has been in trouble because of his sexual practices. While nothing this severe has ever been reported, he was near expulsion from the IMF because of his relationship with a former employee at the bank. The Hungarian born woman has since left the fund for another international organization and the affair was squashed. Not so easily will this sexual assault charge be dropped however.

Currently Mr. Strauss-Khan was held on bail and now has been released on 1 million dollars bail with a 5 million dollar bond. He was on suicide watch over the past two days but has been released as of today.

This leaves the IMF in a very difficult position. European heads were in France- Strauss-Khan's home country- discussion what to do about the European Debt Crisis. The fund is supposed to be leading the charge on this debt restructuring effort for weaker countries and his presence was greatly expected to lead these discussion. But instead of him being present for the high-level meeting, he was locked away in Rikers Island and the meetings, in turn, discussed what to do about the scandal and how to replace Mr. Strauss-Khan, considering the severity of the situation on both sides.

To make matters even more interesting, Mr. Strauss Khan was a leading candidate for president running under the French Social Party and was set to challenge Nicholas Sarkozy in the upcoming French elections. That most obviously has been set aside as he has to answer charges in New York for sexual assault. But it does make the situation seem as if it is an all out collapse of the front runner for the French Socialist Party.

People wonder if he was set up? And if he was set up, then by whom and for what reason? No doubt conspiracy theories will swirl. I for one do not like the way he was treated, even if it was assault. He is a very important world figure and diplomat and such immunity against certain treatment was expected.

We will monitor this story as things progress. As it stands now, Strauss-Khan has been replaced by his second in command, he is released on bail, he will not be leaving the USA any time soon, and the fund is moving forward with the discussions in Europe about dealing with the Debt Crisis.

Saturday, May 14, 2011

Obama got Osama!

So Obama got Osama. This is a sure way to get re-elected. Do you think it was timed? Perhaps just a little timed. But, I really feel as if they could not find Osama Bin-Laden- the allied NATO forces- for about two to three years after September 11 and after the invasion of Afghanistan. After all, they still have not found Mullah Omar either and he was the cheif Taliban leader.

Reports have it that CIA had the house where Bin-Laden was killed under surveilance for over 6 months. They wanted to make sure that it was in fact Bin-Laden.

To me, I think they should have captured him. Why? So they can find out what in particular was in the mind of Bin-Laden, map his physiology and his brain patterns. There must have been something distinctive about Bin-Laden that made him the way he was.

But, in any case, it is over.... for now. Even as 80 Pakistani recruits and personell were killed two days ago in retaliatory fashion, the Bin-Laden issue is over.

Congrats to President Obama!

Friday, May 13, 2011

Happy Birthday to me!

I turned 31 today. Some say it's the most unluckiest of days, but it doesn't matter-- the man makes the pay and God paves the way!

Happy Birthday to me!

Cheers!

Wednesday, April 27, 2011

Afghanistan gets messier!

Afghan officer kills 9 US Soldiers.

This is where the danger of Afghanistan gets to a real point where the US should really get out of the arena. It's to a point where an officer of the law, who has no apparent ties to al-Queada or the Taliban, have apparently gone off of his rocker and hit out at Afghan and American soldiers.

The risk of retaliation is obvious. This is where American soldiers may get bogged down into a situation where they may feel as if they should retaliate, but if they do retaliate against the Afghan military they run the risk of jeopardizing their operation to a larger extent-- you would have the insurgents and the organised military that you (the US army) trained against you.

I hope the US military does not retaliate and they do in fact keep their cool. If they don't, it can get worse and it will spill over into the life of Afghanistan.

Tuesday, April 26, 2011

The Middle East war rages on...

It just keeps spreading. Reports have it that hundreds of protesters have been killed in Syria. Syrian president Bashar al-Assad has put the hit out on anyone in the streets. The response by the allied powers- France, USA and Britain- has been luke warm.

This is a very nasty turn of events. As the premium has been placed on Libya, Syrian armed forces are getting away with genocide. There is no oil in Syria, you see? But, an unstable Syria is a threat to Israel. But, how much of a premium on Israeli security should the allies place?

In turn, speaking about Libya, the allies are not letting go of the thought that Gadaffi should, simply, just leave. Apparently, Gadaffi had a lengthy meeting with South African president, Jacob Zuma, where reports indicate that Gadaffi left the meeting with the intention of offering a peace treaty with rebels in the north in Ben-Gazi.

In the meantime, rebels in Ben Gazi have started to make strong preparations to export oil on a steady pace.

The mess in Syria compared to the mess in Libya seems unfair and uneven. But, such is the nature of geopolitics.

Transitory inflation concerns?

Janet Yellen of the Fed says that inflation will remain transitory- meaning that inflation fears should be toned down because household wages are shrinking because of oil and food price inflation.

I don't know how to think about this. On the one hand, food and oil prices are on the rise. But, wages are shrinking. This means more to traders and investment bankers than it does for the average person on the street. To them, it's good news. For average folks like us, it is terrible news.

It shows that we don't control the oil and food prices and those prices are disaggregated from our wages.

See attached article: Bloomberg on Transitory inflation

Monday, April 18, 2011

Holy Week...

Well, for my Christian friends out there, Sunday (me thinks) marked the start of the official Holy Week for Christians. This is the week we celebrate the life, death and ressurection of our Lord and Saviour Jesus Christ.

Good Friday is a national holiday in the Bahamas as well as Easter Monday. Good Friday being the day he was crucified and Easter Monday represents his rise and appearance to his followers.

Hope everyone has a safe, good holiday weekend, for those who are celebrating! In the Bahamas, people attend church- of course- but the meal is fried fish and "Hot-Cross" buns. This symbolizes the last supper Jesus had with his disciples on the night he was betrayed. (and some of us don't forget the wine, too...hehehehe)

In any event, God bless and let Jesus live!

Youri

Thursday, April 14, 2011

Dani Rodrik on Development Econ

... it's a little old, but I really love the commentary!!

Sunday, April 3, 2011

Laughing all the way to the bank can be so sweet!

Who would have thought that the richest man in Mainland China sells sodas? Not efficiently made consumer electronics and certainly not automobile parts or power tools. He sells sodas!

Billionaire Zong Qinghou of Hangzhou Wahaha Group Co., with "Wahaha" being a literal translation of Laughing Child in Chinese, has an estimated net worth of over 7.0 billion (USD) as stated by Forbes Magazine, 2010.

Mr. Zong, who started his company back in 1987 with a loan of just under $22,000 (USD), is now looking to invest in other industries as well, including high technology and now, as reported by Bloomberg, Department Store Retailing. If only I had listened to my grandfather (a man in his own right who made millions selling soft and hard drinks) before he passed away, he implored me to "...boy, go and get the sodas and the malt-tonics and start selling!!!" I might have been, at least, a millionaire by now.

However, it's more than just the money aspect of it and it is even more than just the weird fact that China's richest man sells mere sweetened, flavoured water. The fact is that in a market like China, some goods are simply universal. Also, it shows that with a little idea, as non-unique as it is, the right strategy, commitment and diversification with needs at the forefront, one can turn a non-unique idea into something spectacular.

Now, the Caribbean, if we take it island by island, does not and probably will never reach the population size of China. However, we do have a unique position as we are a tourist destination and our population can multiply every year due to tourist arrivals.

With that being said, the question has to be asked about the development of such an entrepreneur like Mr. Zong, relative to scale to the Caribbean, is how does the Caribbean- especially with the typically non-unique things that the Caribbean does as a collective- take inspiration from that and exploit our advantages.

Take for example the Tourism Industry. I can't think of one globally recognized Tour Company that is Caribbean based and solely owned by Caribbeans’. Considering that selling tours is something that happens in the Caribbean on a daily basis, there should be a company, or, group of companies, that do this for different markets at a mass scale. The markets for selling tours may be different and vary in size but, the fundamental to selling tours isn't. Also, the efficiencies in the business model within tour companies, is where Caribbean companies have perfected the art of the business, if only through the repetitive nature of our consistent business.

Can you imagine a Caribbean based Tour Company, receiving a loan or grant to venture into the Asian market? Can you imagine a Caribbean based Tour Company, actually breaking into the increasingly lucrative Asian market? With the list of millionaires and billionaires growing in countries such as India and China, the efficiency of the tour selling business compared to the growing market, would make endless profits for a successful firm, with or without full service tours to other jurisdictions outside of the Caribbean e.g., Chinese tourist going to Malaysia or Germany.

Let's go a little deeper into the Tourism market and take a look at Hotel Construction and Maintenance. In the Caribbean, we build hotels, we are a major tourist destination, and will always be in need of Hotels. However, I can think of very few cases in the Caribbean, where a major tourism related project was designed and erected by a solely owned Caribbean Contractor or Developer. More so, there are very few Caribbean construction magnates that specialise in Hotel construction, even though Hotel Construction and Maintenance is a key element of the tourism product.

Now, this is not to say that the construction industry doesn't have its own peculiarities, but, I contend that it's simply a part of doing business in a globalized world where expertise is top notch. For example, raw materials for construction are imported in many developed countries as it is the case for Caribbean countries. Manufacturing of machines and equipment for refining raw materials for construction is also an issue to consider in addition to the maintenance of such equipment. However, in a globalized world where labour and goods are to move freely, and with the open borders as we have in the Caribbean along with the very flexible regulatory regimes, these matters can be solved with a commitment to development and intentions to making progress, as doing nothing gets you nothing.

Can you imagine a government securing a bond for a construction company to build a world class hotel? And can you imagine a Caribbean where that firm not only receives the bond guarantee, but secures the right to import as much labour and materials to build world class Hotels?

Then there is the market for education in Tourism, in all facets of tourism related production and service. From construction development and manufacturing, to service oriented training in Hotel administration to housekeeping, Caribbean centres for tourism industry development would be world class and produce world class talent.

The millions of people that visit the Caribbean on a yearly basis can't be wrong. They come to our islands because we are doing something right as well as we have the right look about what we're doing. This is what makes the comparison to Mr. Zong in the Chinese domestic market for sodas such a sweet comparison, if we allow our minds to grasp the non-unique idea he had that turned his market inside- out.

However, Mr. Zong’s initial $22,000 dollar loan certainly did a great deal in kick starting his empire, especially due to his need, his market’s readiness for his effort and the trust from the regulatory regime in making his venture and subsequent expansion a success.

Thursday, March 24, 2011

Libya has been under attack!

I hate to be late with news. But, my job isn't about being on point with the time of the events, it's about the analysis of the issues! Therefore, I have a pass!

But, in case you have not heard, Libya has been under attack from UN sanctioned forces, including NATO. Leading the way are the French- where Libya was a former colony of sorts- and the USA, where there has been a huge political backlash (from the GOP of all places) about the authorisation of force on in Libya.

Whatever the case may be about the political gamesmanship, war is serious. The USA is still in the middle of the Middle East with Iraq and Afghanistan. The never ending wars. The main question is for the Libyan case: what exactly will be the end game for the USA? Will it be a continuation of the war in the Middle East- making the case even clearer on the perception that the USA is going for an all out colonisation of the Middle East- and how will the USA find themselves with less terrorists as a result: the "less terrorists" theory, being predicated on the idea that stuck in the minds of policy and security analysts, who were and still are critical of the war in Iraq, because they feel as if it breeds more terrorists as a result of invading Iraq, because it would have and is galvanizing anti-American Jihadists in the region.

The French case is a little different. France has a very vocal Islamic minority. They have taken to the streets in the past for equal rights and justice in the recent past (2005 to be exact), much like the African American civil rights struggle in America in the 60's and 70's.

France, seeing Libya as a country that it had under it's control gone awry, has taken the lead initiative in this UN sub NATO force. The politics in France is unclear on their direction and intent in Libya as well. However, reports have it that President Sarkozy is leaning towards ending the invasion and the aerial assault on Libya, short of actually ousting of Muammar Gaddafi. Which seems rather odd as it's the ousting of Gaddafi that the invasion and aerial assault on Libya was supposed to be all about?

No doubt, Libya has French and American companies in the thick of the oil and construction business. The destruction of Libya would mean the destruction of American and French interests. The war between Gaddafi and the rebels may last long than anticipated, especially if Gaddafi digs his heels in and goes in for the long fight-- which he appears to be wanting to do.

Gaddafi's son has said that he will die in Libya for the people of Libya, or something to that effect. This may drag on... a case scenario that no one wants, especially if time is money and money means oil and investment and the destabilization of Libya in the medium to long term!

Wednesday, March 16, 2011

8.9 Earthquake hits Japan

I guess you all know that an 8.9 earthquake hit Japan last week. The amount of persons killed is over the 10 thousand mark. There are thousands more injured!

This is a pretty big disaster. Tsunami warnings have been posted all across the Japanese coast, going as far as for Hawaii.

I remember in 2006 when a Tsunami hit Indonesia, wiping out thousands. The Japanese government donated over $500 million dollars in US currency, immediately. They deserve the same type of assistance from Indonesia, China, the US and from Europe.

That's the truth!

Sunday, February 27, 2011

Why the Middle Eastern Revolution matters to the Caribbean!

Everyone in the world has probably been glued to their television sets, watching the revolution in the Middle East. I guess for some it's the late 1970's all over again. For others, memory takes them back even further. For people who review the politics of history- while adding its value to contemporary themes- it is quite breathtaking.

However, what's taking place in the Middle East also gives way to sentiments of angst. Especially when one turns around to look at their own country, in the attempt to make comparisons on the catalysts that took hold and prompted countries like Egypt, Tunisia and now, Libya, to the tipping point of revolution.

The Caribbean is far from being the Middle East. Although we have accepted persons of Middle Eastern heritage, for example the Bahamas with the deposed Shah of Iran and his family after the 1979 Iranian Revolution, and also a notable Lebanese population in Cuba, their style, culture and religious customs, however, have not taken root. While there is a strong representation of Islamic culture in Trinidad and Tobago as well, they are mostly African Muslims that emigrated under different circumstances and times.

Setting that backdrop, one has to ask the question posed earlier; how does the Middle Eastern Revolution relate to the Caribbean? The answer to that may be in the way the question came about in the first place and also in the way the answers relate to the underlying revolutionary catalysts that spurred protesters in the Middle East at its first instance.

The Economist magazine provided us with a lovely interactive chart of the socio-demographics of the leadership styles and profiles of the countries that were undergoing revolution. The results were far from conclusive, but it does give us a chance to ponder on some of the variables.

For example, and quite obviously, all regimes were dictatorships. But, there are also dictatorships in North Korea, Myanmar, Belarus and Cuba. They all were also, quite obviously, Islamic. But, there are Islamic majorities in Pakistan and in Indonesia, as well as a sizable majority in Nigeria.

Another variable was that their leaders were all over the age of 65 and their populations had a median age of 35. Manmohan Singh is closer to 80 than he is 60, and Alpha Conde, the current president of Guinea since December of 2010, is 73. Guinea’s median age is just under 37 and the median age in India is 25.

There were other variables, but these stick out the most. They stick out not because they are all alike, or that there is or isn't the paradoxical comparison of other countries, but because the variables still don't answer a fundamental question.

The fundamental question to be asked is; what, exactly, were people protesting in the Middle East? Numerous reports indicate a sentiment for economic liberation and the acknowledgement that the current guard was not equitable with spreading the wealth through their economic administration.

While the protesters felt that they were left out of the wealth loop, the numbers don't necessarily bear their claims. While Libya has seen a decline in GDP from 2008 and during the height of the crisis, Egypt has not seen the type of drop in GDP during the worst of the economic crisis. In fact, Egypt was set to grow at just over 6 percent of GDP for the year 2011, up from just over 5 percent GDP growth in 2010.

While it can be said that the Egyptian revolution was a little milder than that of Libya, but it also can speak to the leadership style of Libyan leader Muammar Gadafi, which some have likened to that of Saddam Hussein. Also, with Tunisia, they had feared well during the great global economic crisis, with GDP never falling below 2 percent of growth.

We have now two conflicting issues. The first being that the protesters in the Middle East were in arms over economic concerns, while the second issue is that the numbers don't bear the claims of the protesters for that being so.

Obviously one would suggest that; well, all countries weathered the storm and growth was seen, but growth for who, exactly?

This allows me to bring in another variable proposed by the Economist. That being that all of the regimes were in place for lengthy sessions.

Dictatorships, especially lengthy dictatorships, by nature, have strong holds on a country’s resources. While economic growth may be seen during their tenures- due to the fact that their tenures breed temporary, albeit, relatively, stable periods- this does not reflect, at all, the participation in the economic growth of the vast majority of the population. This of course excludes sub-sections of the population, by design, from the process of growth and hence the mis-interpreted and mis-understood depictions of economic vitality.

What does all of this have to do with the Caribbean? It has much to do with the Caribbean, because of the fact that these nuance variables are also at play within our local communities. While there are no dictatorships in the region (minus Cuba); while there are no Islamic majorities in the region; and while there are a few leaders that are over the age of 60, the issue of economic inclusion, no matter what other variable plays a part in either accelerating or retarding revolution, appears to be at play in the Middle East, whether or not the numbers speak directly to that assertion or not- which, in this instance, the numbers may not be telling the whole story.

The Caribbean, also, is at the mercy of global trends shocks. None starker than the price of oil and inflationary pressure. Oil is now comfortably above $100 dollars on the back of the Middle Eastern revolution, which many fear may fuel inflation and jeopardize recovery efforts.

While that economic reality does not speak to the contemporaneous political economy of the situation in the Middle East, its effects are real enough for us to mention as part and manner of the bi-product of what we have been witnessing in the Middle East.

Saturday, February 19, 2011

Mubarak is gone... and now Bahrain tries to oust their leaders!

It is a full fledged revolution in place in the Middle East. It is so astounding that some have even given it a moniker- The Jasmine Revolution! I guess it was time to change the old guard for another form of leadership. What will shake out of it is yet to be determined, but we hope it isn't Islamic Fundamentalists.

As you are quite aware, Hoseni Mubarak- after a 30 year rule over Egypt- has left the building. He left the very next day after his televised address to the Egyptian public on how he would not, in fact, leave. The move was one that took everyone by surprise. We thought he would have did what he said: that is, stay on until September and then have a transitional government. Well, the people were not having any of that!

Mubarak had failed to put in place his newly selected Vice President as a way to quell the angst of the Egyptian people. Now, the military has full control of the state. A position that they are not quite accustomed to, after the 30 year rule of Mubarak.

Now, as fate would have it, after the Egyptian and Yemeni Revolution, Bahrain is now having an uprising against the ruling class. Protesters have been met more harshly than what we have seen in Egypt. Sort of like what we saw in Iran last year after their presidential elections.

For the case of Bahrain, a country with a little over 800,000 people, the case may be more manageable than that of Iran. However, the difference between Iran and Bahrain is that Bahrain has a Monarchy, while Iran has a Theocracy. While one would think that a Theocracy would not have dared to squash protesters the way they did in Iran, protesters in Bahrain, are facing the same fate and may even be harsher.

I don't know how the Middle East can stomach turning their military against their people, ala Saddam Hussein. It doesn't look good, to say the very least. But, such is the neighbourhood.

What will happen is Bahrain is yet to be determined. Far from it. But, with only 800,000 people, there can't be much bloodshed for too long. Hopefully it will all end well!

Sunday, February 6, 2011

Is the Middle East in the middle of a new Revolution?

Some times, some people, just get fed up with the same ol'e same ol'e. This appears to be the case in Egypt after 30 odd years of Hoseni Mubarak at the helm.

If you have not heard, there are large protests in Egypt with protesters asking for President Mubarak to step down and for a peaceful, democratic, transition. The thing is with leaders like Mubarak- who can almost, if not certainly, be classified as a dictator- is that they do not go down easily. In fact, they try their hardest to secure power for the next generation after they have formally left the seat of authority. Sometimes they even stay around- like Vladimir Putin in Russia (even though he is not classified as a dictator)- to pull strings as if they had never left.

If you have not also heard, is that in Egypt, Mubarak appointed a Vice President in a Mr. Omar Suleiman, who was also the Egyptian head of intelligence. Whether or not he will be a crowd favourite in Egypt in the months to come is the issue. But, he has been used by the United States in the past as the chief head of operations for US military operations in the Middle East. Mr. Suleiman is also the chief architect of the Egyptian/Israeli peace accord-- by extension, holding extremist at bay from bringing holy hell and fire upon Israel.

However, Egypt is not the only case of revolution in the Middle East currently. Yemen has just ousted it's president, Ali Abdullah Saleh, and sent him packing to Saudi Arabia. No strong word yet on what would or should happen in Yemen after his departure, but one can imagine that everyone is very concerned about this power vac um.

Yemen is a hot spot for terrorism. In fact, Yemen is on the Al-Queda watch list for America. If you can remember, the Christmas day Nigerian bomber was trained in Yemen as well as a number of other "suspicious" activities surrounding money transfers and "chatter" coming from Yemen to the outside world, has prompted security analysts to look very closely at Yemen. See the Council on Foreign Relations website for more background notes.

The situation on Yemen has calmed down now. However, the power structure is still non-functioning. This can breed more terrorist cells and harbour more persons wishing to indulge in illicit acts- and not just terrorism alone- and remain a festering boil on the backs of the Yemeni people. We need to watch this closely.

Even before Yemen and Egypt, there was Tunisia. A somewhat mild revolution compared to that of Egypt at least, but now as we look back, a bellwether to the most recent demonstrations that we have seen in Egypt. President Ben Ali was ousted, the prime minister shuffled the Cabinet and we are now at a point where the new cabinet must deliver or face the consequences of Ben Ali.

Perhaps we were all fooling ourselves? Perhaps it is a course of nature, considering how the economy was so bad for so long and that people were bound to revolt. Perhaps this was the case? Perhaps what happened in Iran last year was a forewarning to us all. Perhaps all other regime collapses of this year can weather the storm as did the Iranian regime? We will have to wait and see.

We should all be watching. It's not as if the Middle East is like any other region. Terrorism is the main watchword and Al-Queda need only one or two more dysfunctional societies for them to take root and disrupt the rest of the world again. I remarked on my Facebooj page that this looks like the 1970's all over again for the Middle East... it appears to be so!!!

Wednesday, January 26, 2011

President Obama's State of the Union Address..

Well, it was last night (Jan 25th, 2011 for historical record keeping purposes). I don't know why I tuned in, but it was typical Obama none the less. However, while the delivery was the same, the contents of the speech were different.

Why do I say it was different? Well, President Obama was talking about deficit reductions in a way that it he weaved into, or, out of, corporate concessions for business. It almost sounded as if George Bush could have given the speech. LOL...

He also praised the movements in Tunisia. If you have not heard, Tunisia just put out its president for almost life last week, and the people have also been rooting out his cabinet as well. No idea on when real elections will take place, but that is another story.

President Obama also talked about not repealing Health Care Reform. Apparently, some want to repeal it-- the numbers have been dwindling on that number for repeal, but it is still a stead group of congress persons who are in favour of repealing Health Care Reform.

Hopefully, President Obama spoke right to their hearts and they leave the repeal talk alone. Plus, it would set a bad precedent and it may also come across as racist. Don't want that, do we?

Anyways... the speech was typical in Obama's delivery, but a little different with regard to the content. See full speech here

Saturday, January 22, 2011

The fall of the American Empire?

A college buddy of mine responded to a Facebook message I placed on my wall. He was asking me why was I commenting on America all of a sudden? However, when the President of China, Hu Jintao, visited Washington DC in the month of January he and American counterpart, Barack Obama, commentators wondered what will America do about a seemingly, increasing, threat, China poses to US interests. I explained to my buddy that international news is what I comment on and not to take it too personal. But it did lead me to think: is the sun setting on the American Empire?

I must say that America has been our greatest ally- even taking into consideration the Chinese assistance with many projects in the Bahamas- and it's a relationship I truly treasure as a Caribbean individual.

The American media went into overdrive for President Hu's trip, from talking about a full scale attack on Chinese technology and military systems, to the milder, trade and commercial based sanctions and measures to curb Chinese exports and the undervalued Chinese currency. Whatever it is, it has to be said that China has the world's largest standing army and has the second largest economy in the world and growing at a rapid pace while the American economy is in a decline.

The first point that people notice is the huge military build up of arms that the US has not been able to persuade the Chinese not to build. Reports from the Pentagon estimate that the Chinese nuclear arsenal has increased some 25 percent since 2006. The People's Liberation Army of China has a standing army of over 2.5 million men and another 500,000 on reserve. The United States has just under a 1.5 million standing army with about the same amount of official reservists.

While that total seems startling, especially considering China's population, but the way warfare has changed and weaponry has developed since the Atomic Bomb dropped on Hiroshima, a country like the United States, doesn't have to engage in an "on the ground" invasion. With a military expenditure of over $680 billion dollars (with a Republican congress promising to increase this amount), with much of that spending going towards satellites, surveillance systems, long range missiles, anti-ballistic missiles (like the Patriot missile) and sea to air combat vehicles, the Unites States seems more fortified than China.

But, there is more to having military power than size or advanced technology alone. You need the universal, intellectual right, to use your moral authority to get the job done, as we have seen with the invasion of Iraq with America and the inability of China to persuade North Korea, or anyone else for that matter, to put their aggressions aside.

The second issue is that US economic power seems to have faded. The Free Market ideology has flaws and the salience of its subscriptions has been severely challenged in the international arena. The market system has been criticized by Chinese officials, of all things, as well by other emerging economies such as Brazil’s former President, Lula da Silva.

America has not kept captive the imagination of the rest of the world through the philosophical underpinnings of the capitalist free market ideology. One has only to look at the mess the global banking sector has gotten the rest of the world in and you can understand why there needs to be a better way of doing business. Massive worldwide unemployment and business closures, led to massive protests and instability.

While some proponents of the free market system feel that this is just a blip on the radar and that this system is the best way to transfer wealth to the economically under-served, they believe that by increasing the amount of wealth and money to be dispersed without government interference should increase income equality. Opponents on the other hand would argue that if this were the case, the American financial system and automobile sector would not need government bail-outs or government facilities for housing in the US (Fannie and Freddie Mac) nor other regulations that work to ensure that wealth is not concentrated into the hands of the few, would not be necessary now or ever.

Slate Magazine's Tim Noah estimates that income inequality is a major issue in America as the top fifth of Americans, who earn more than $100,000 a year, received nearly 50 percent of all income in the U.S., while the bottom 20 percent received just 3 percent. However, income inequality in China is a growing problem as well, with a Socialist system. A report from China's Ministry of Labour and Social Security estimate that 20 percent of China's population at the poverty level accounts for only 4.7 percent of the total income or consumption and 20 percent of China's population at the affluent level accounts for 50 percent of the total income or consumption and the gap is widening.

One can say that the demonstrations in China in 2008 and 2009 indicated that the Chinese people were clamouring for more reform to their system. Conversely, Tea Party protests in America, while a little milder and somewhat more civil, has brought about threats of political assassinations and actual attempted assassinations , with protestors brandishing semi-automatic weapons at the rallies doesn't quite bode well for America either. (I have to add that the French and Greeks take to the streets with more fervour and animosity than China and America combined)

China's export driven economic model, to China's credit, is changing towards an inward, domestic spending and consumption pattern of growth, isn't exactly socialist either. In fact, China is exactly where the Western world was back in the 1700's with a "beggar they neighbour" mindset and Mercantilist practices. China, now the largest exporter in the world, surpassing Germany in 2009 and now the second larger economy surpassing Japan in 2010- has the economic might to make demands on global interests worldwide, with or without fully subscribing to any ideology moving forward.

America has other internal challenges as well. Their media is on steroids with the 24 hour news cycle model that accelerates the velocity of political and negative social rhetoric at record speed while breeding social discontent. Their congress has bottlenecks as well, with it always in deadlock with threat of filibuster, made worse by a large gap with regard to the transformation of policy information to the masses about how the American economy and society works with a democratic system and congress.

China doesn't have those internal problems as they have a strong check on the information that flows through China, and as a one party democratic system, makes decisions more quickly than the American two or, multi-party, system.

Which country will self destruct, artificially inflate their economy and over extend their reach without the influence to back it up, first, or who has the resilience to overcome those obstacles to attaining ultimate global power over the next 100 years? America appears to have the lead!

Saturday, January 15, 2011

January 14th, 2011!

KEMP GLOBAL was born. Great day for the President and CEO, Youri Aramin Kemp, indeed!

Monday, January 10, 2011

Political Rhetoric to blame?

Well, it's been all over the news- the shooting of several people in Tuscon Arizona, with one of the critically wounded being Congresswoman Gabrielle Gifford.

People are jumping to the idea that political rhetoric is to blame. But, there hasn't been any evidence to suggest that. It appears that the young man responsible for the shooting, was a nutter on his own run and not tied to anyone political action committee or side.

So, to me, rhetoric from the GOP or the Democrats aren't truly to blame. Now, the shooter may have gotten a few ideas from some sides of the divide, but it appears as if he had his mind made up on his issues from jump street.

It was so incredibly shocking that the cable news networks- CNN and MSNBC- were quick to jump to political rhetoric being to blame, before even having an idea on what was behind the shooting or who the shooter was themselves.

This is how media influences, or, at least, tries, to influence the debate and how it is structured. The irony of it all: is that the media is blaming the politicians for spewing rhetoric for insighting the shooter to violent action, but they are flaming the debate themselves by choosing sides and casting blame in a negative light. They didn't get away with it as some reporters with integrity, particularly Wolf Blitzer from CNN, caught it right away and asked them to change their tune-- much to the shock of the other talking heads who were trying to shade the debate.

It's not a good thing to hear these types of assassination attempts. It's also not goo to flame the debate and jump to conclusions. We will have to see how this develops over the next few weeks.