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!


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.