It's Refugee Week In England...

...and this fellow has a song to sing about 'foreigners':



... oh and 'muslamic rape gangs'?

Does it get any worse that this fellow right here? So sad and wrong you just want to laugh.


ht: roving bandit

A Supreme court get out of jail free card

The highest court in the world of money just made securities fraud a whole lot easier.

Goodgod will we ever learn?

Another note on the 'looming' currency war

I wrote this post on the potential for a currency war a while back, arguing that nations ought not to get involved. Since then, few significant headlines have cropped up. With the renminibi steadily rising against the dollar, Europe steeped in greecier bigger problems, and emerging economies faring much better than a year ago, it seems as if the guns have been muffled. Nonetheless, Krugman wrote a post two weeks ago that I think is worth reposting/discussing.

A central tool for understanding monetary policy and foreign exchange rates is the 'impossible trinity' or the trilemma, as I like to call it...

As it says in the middle of the triangle, a country cannot pursue all three policy goals at the same time.

The example in the picture is pertinent, but an equally appropriate starting point is the situation in the US right now.

The US has free capital flows and retains control over its monetary policy, control it is wielding ardently at the moment for the purposes of stimulating the post-financial-crisis economy.

The problem is, with rock bottom interest rates and increasing amounts of US dollars floating around, emerging markets (such as Brazil) are faced with appreciating exchange rates against the dollar. This spells trouble for economies that export massive amounts to the US, and even more trouble for economies with high interest rates that can't easily manage massive short term capital inflows coming from the US. 

...historically speaking, big trouble. On page 14 of this section of this section of the OECD Economic Outlook you can see that one in ten of the 268 countries that have faced a similar episode have fallen into either a banking crisis or a currency crisis.

So, Brazil has three choices, 1) either accept the appreciation of the reál against the dollar (making sales to the US less likely, and capital to flow freely to Brazil), 2) pursue an equally expansionary monetary policy (relinquishing independence and causing unsolicited domestic inflation), or 3) restrict the increase in capital flows and risk scaring away coveted long term foreign investment.

Luckily for countries like Brazil, the IMF has learned, after years of pigheadedness, that capital controls are useful for stemming exactly this type of short-term-investment-fueled boom and bust cycles. In fact, the IMF has been meeting in Rio over this past week to discuss exactly which are the appropriate measures to place on capital in the effort to mitigate the destructive and destabilizing effects of this flighty capital.

As you can see, this poor set of choices that emerging markets face are a direct result of the US trying to save its economy. So, to argue that the US shouldn't put other countries in this position is to argue that the US should give up their independent monetary policy. This will simply not happen. Brazil should know this and stop asking.

Abu Dhabi's mercenaries need an incentive to stay

From the NYT on May 14th:

 ABU DHABI, United Arab Emirates — Late one night last November, a plane carrying dozens of Colombian men touched down in this glittering seaside capital. Whisked through customs by an Emirati intelligence officer, the group boarded an unmarked bus and drove roughly 20 miles to a windswept military complex in the desert sand.

The Colombians had entered the United Arab Emirates posing as construction workers. In fact, they were soldiers for a secret American-led mercenary army being built by Erik Prince, the billionaire founder of Blackwater Worldwide, with $529 million from the oil-soaked sheikdom.

Reflex Response is the new name given to the mercenaries formerly know as Blackwater, led by the aformentioned Erik Prince. R2, as the group is know in the Gulf, is in fact an Emirati company, with the government's stake at 51%. Prince has called this place his home for almost a year now, during which time he has been successfully convincing the Sheiks the benefits of a private foreign army (a la Gadafi).

Know for his groups' despicable practices, Prince has been distancing himself from his former company (currently re-branded as Xe). The former name was tainted by their operations in Iraq, where the group received several no-bid contracts amounting to 21 million USD. They have garnered harsh criticism for their behavior (to put it lightly) and have been investigated by several Governments, including the Iraqi government, for their abuses:

From the NYT again:

Contractors often shot with little discrimination — and few if any consequences — at unarmed Iraqi civilians, Iraqi security forces, American troops and even other contractors, stirring public outrage and undermining much of what the coalition forces were sent to accomplish. The mayhem cropped up around Iraq, notably in one episode reported in March 2005 in which a small battle erupted involving three separate security companies... 

...one of which was Blackwater. Most famously, the group opened fire on a crowd of people and killed at least 17 civilians including women and children, and wounded some 30 others in what came to be known as the Nisoor Square Massacre. In April of this year a US federal appeals court reopened the case against four Blackwater mercenaries.

Make no mistake. These are the worst people in the world. They go above and beyond the call of duty for a bloodthirsty gang of mercenaries. They bribe officials, smuggle arms, open fire upon civilians, and shoot at other private soldiers that are supposedly 'on their side'. There are endless stories about companies like Blackwater that mercilessly shoot down defenseless citizens.



Here in Abu Dhabi, the threat of citizens taking action against the government is slim to none. Unlike Bahrain, the people here are religiously homogenous. Unlike Egypt, no political opposition to the government exists. Unlike Libya, the people here are placated with houses, free school and health care, and all manner of interest free loans encouraging entrepreneurship and personal wealth creation. Basically, any and all reasons for uprising have either been dealt with or simply do not exist. As a friend recently put it, "If Emiratis were to protest... well, they'd probably send their Philipina maids in their place. It's too hot outside you know..." Three bloggers were arrested earlier this year for their harsh criticism of the regime, but I still can't imagine an organized demonstration of any kind. So what use is R2?

The main threat to the Sheiks, if any could be cited at all, may come from Iran. It's no secret that the strife in Bahrain this past spring was fomented by Iran. Here, however, there are very few Shia for Iran to eqip with rebellious ideology or weapons.

In any case, the government is easily courted by a security company from the US, a country with which the UAE has close ties. But it is not clear if the US State Department has had any involvement in the deal, or conversely, if Relex Response is in fact breaking US law by training foreign troops without first receiving their blessing. The UAE has had a strong history of pouring money on American military initiatives, and surely the offer of your own personal international guard makes too much sense to reject.

According to the NYT, R2 is spending $9 million per month on initiatives including training Emiratis, and paying south asian laborers to cook, clean and maintain their camp (as one does in this part of the world). Pennies for a Sheik. But operations have not been so smooth. Like any company that comes to the UAE, R2 has been plagued with what we call "runners". Handfuls of employees have been hired and either quit or were fired within months. They come, make a quick buck and realize this place is a desert. But with all the prostitutes in Dubai (rock up to the Fairmont any night of the week and you'll see what I mean) I'm sure R2 can persuade its mercenaries to stay.

They have no other reason.


For more, check out http://www.blackwaterwatch.com/

Blattman, Banerjee and Duflo Debate

On Chris Blattman's excellent blog a debate about development sprung up last week.

The question was basically this: What is the best first step for South Sudan as an emergent country?

The two sides are as follows: social spending (Duflo and Banerjee) versus security and private sector (Blattman).

Banerjee and Duflo champion social services for the poor (on the economix blog initially), including: schools, health care, health insurance and even a direct cash transfer system.

Blattman argues, given that South Sudan has little to no operational capacity for such bureaucracies, creating a welfare state would be too much of a burden. He advocates making peace with warlords, and creating invectives for them, and the rich in general, to invest in productive fixed assets such as factories or plantations. He also pushes for an operational police force. His point is that politics is primary and security is at the heart of it: maintain peace and support private sector development. Oh, and build roads.

Banerjee and Duflo respond, that pursuing redistributive policies that target the poor is essentially building the identity of the state. Hopefully, as they suggest, a virtuous cycle would start whereby the poor support the state for putting them first and therefor hold off special interest groups (eg. warlords, elites) from capturing the product of nation (oil mostly for now).

Finally, Blattman remains skeptical. With evidence from Sierra Leone he chops down the benefits of cash transfers. From his own experience in Uganda and Liberia, his opinion of the effectiveness of redistribution programs, as far as they spur development, is jaded.

Of course, we are tempted to think that this is an atrificial trade-off, and that the state of South Sudan can pursue both courses at once. While to some extent that may be true (eg. placating warlords could fit on both agendas) I think the notion that these respective policies build the identity of the state is accurate and useful.

Will the state grow akin to an enlightened version of African socialism of 1960's? Or more like the capitalist enterprise of the 90's plus security and sensibility? Perhaps it is unfair to cast upon them such shadows. In any case, let us all hope for Lant Pritchett's work to have some impact.

In the end, I must admit, I am convinced by Banerjee and Duflo. Perhaps because because of quixotry, perhaps because of this:

Good ol' Canadian tact

Canada and the UAE have been having a diplomatic row over airline landing rights. It is a really silly tit for tat.

After a five years of negotiations, Canada denied Etihad and Emirates airlines more rights to land in Canada. According to the "Proposed Framework for Commercial Cooperation" which was written in 2006, among the ideas discussed were profit sharing, route coordination and code sharing between airlines. In the end, Canada just wouldn't let the UAE airlines in. In response to this denial of access, in October 2010, the UAE denied a several Canadian diplomats (Ministers Blackburn and MacKay) permission to land in the UAE.

The UAE also imposed visa fees on Canadians traveling to the UAE that began in January. $200, $500 and $1000 bucks is what Canadians will have to pay to come to the UAE for a month, three, or six months. A little hefty if you ask me!

And perhaps most importantly, the UAE chose not to renew the land-lease under Camp Mirage, the not-so-secret Canadian air base in the UAE. Apparently, as Harp notes in the link below, the UAE was using a free extension of the lease as leverage during the negotiations. (At that point it had already granted for three months.)

Over the next few months several Canadians, including the PM Mr. Harpie, accused the UAE of being soft on terror. Perhaps the comments were misconstrued, but that is how the comments coming out of Canada were understood here. (Here's what Herp said, if you care to look.)

Bam! Out goes the base that served Canada's mission to Afghanistan. 30 days to move!

How much has that cost Canada? Hmm? Think relocation, logistics, a new lease in Cyprus (Mirage could have been free!). Think an average of 3.6 million kilograms of cargo being moved by air each year, and as many as 32,500 Canadian personnel passing through annually. Were talking hundreds of millions of dollars.

To be sure, the UAE was trying to strong arm Canada. If the UAE doesn't get what it wants, well, you're not likely to be friends. Then again, the Canadian negotiators at the table were fools.

Were we going to take it lying down? No! Canadians struck back! In the media, pundits were calling the UAE Lilliputian, a spoiled child, a two-year-old in the grocery store cookie aisle, and a bunch of pompous thugs behaving like Canadians need them (search those terms to see each respective diatribe). We sure showed them.

Here are a few quotes that show that neither side really knows the economic impact of their decisions:

House Leader John Baird:  "It would have cost Canada literally tens of thousands of jobs and was not in Canadian's best interest" (bull)

Economy Minister Sultan Bin Saeed Al Mansouri: "Each additional flight would contribute $60 million to the Canadian economy. It will provide job opportunities for the Canadians." (not likely)

Harper: "That's just not how you treat allies, and I think tells us you better pick your friends pretty carefully in the future." (riiiight)

Finally, criticizing Canadian negotiating skills, Foreign Affairs Critic MP Bobby Rae: "I have never seen such a ham-fisted and confrontational approach to a friendly and moderate country in my political experience."

Ham fisted? I am not even muslim and I am offended that he used that word in the UAE.

Ah, good ol' Canadian tact.

Shopping Can't Save the World

Over the previous 50 or so years we have seen the development of charities driven by classical capitalists. The Bill Gates' of the world, if you will. These magnates destroy take from the little guy with one hand give back to society with the other.

In a two action motion, they complete a viscous cycle. In the fist action they perpetuate the inequalities and injustices of the global capitalist system, they reinforce, and profit from the agreements and accords that keep poor people poor and ignorant. They profit big time. 

Then, in the second, they attempt to absolve themselves of the guilt that their business practice has brought upon them. They set up charities. And people forget. That they were ever bad in the first place is a secondary consideration. (I mean, they run charities, so how could they have done wrong in the past?)

Don'f forget! Microsoft is one of the most ruthless, dastardly and morally corrupt corporations in the world. They have abused so many people, from Namibian schools, to Danish programmers, it is remarkable. They are still malicious, even with a cherry on top. Of course, the same goes with many top companies in the States in particular, including Apple, Nike, Starbucks, Gap, etc...

These days, however, a new kind of business model has become the norm. One in which the two actions of destroying and deluding repairing society happen all at once. Its called brand aid and it's that same delusion we were used to, now it just happens all at once!

Should you feel better about buying a shirt you don't need from GAP because a portion goes to fighting aids? NO. Should the fact that Apple gives some tiny amount to fighting aids or feeding the poor forgive their abusive business practices NO!

These kinds of charity are merely promotional material. How could Old Navy or Microsoft get rich without poor people to abuse? Not as easily, that is for sure. It is in Starbucks best interest to keep the poor disenfranchised, but give them just a little help, so the public image of GAP changes so slightly, allowing the Nike to sell an extra million t-shirts/programs/anything.

Here's a little presentation from Lisa Ann Richey, the author of the upcoming book entitled Brand Aid: Shopping Well to Save the World. Please, please watch this Bono clip at 3:47. Ugh.

This is not to condemn projects that promote small business in impoverished nations, as Zizeck does in this great little video. There are thousands of products out there that are wonderful and worthy of your dollar. It is just to say that the odds are stacked against the poor. Big businesses enjoy it, and won't change anything. A little cash the flows straight to entrepreneurs in poor countries is a good thing. Indeed it is the least we can do, but it just won't solve anything.

It reminds me of the moral question my family sometimes asked itself when we lived in Kenya. Should we hire some more people? Should we help out more poor Kenyans, who most likely are over qualified for any position we can offer? Sure. But it won't solve anything.

That 1% goes to fight poverty in someway does not forgive overspending on silly things people don't need. That a handbag is made by a poor Ghanain woman does not make it good to buy fifty. It won't fix anything on the systemic level, therefore the moral penance it seems to afford is illusory, and by no means does it justify living beyond our means (as environmentalists). The best thing we can do for the poor is understand that the rules of capitalism are made by the WTO, the World bank and the OECD (and often local governments) and they are implicitly working against the poor by having the best interests of the rich at heart. And, even more important, we should strive to solve that. And how.

Hat tip to: Slavoj Zizek and Brand Aid

Harper is a very big problem

A couple of snippets about Harper:

• "Since 2006, Harper has cut funding for women’s advocacy by 43 per cent, shut 12 out of 16 Status of Women offices in Canada and eliminated funding of legal voices for women and minority groups, including the National Association of Women and the Law and the Courts Challenges Program. "

• "Harper decorated the government lobby in parliament with photos of just himself, instead of the traditional portraits of former Prime Ministers."

• Harper has tried (and failed) four times to create a law that would allow the government to obtain private information from internet providers without a warrant.

• "In 2007, Harper cut $1.2 Billion in spending for the establishment of quality national childcare. However, he never kept his promise to cut the $1.4 billion in tax breaks he gives to oil companies." 

• During the G20 summit in Toronto more than a thousand people were arrested. Less than a hundred were actually charged with a crime. The others.... well... they were just being pesky I guess.

• Herpy is tough on crime! He'll double the 5 billion dollars we spend on the prison system, despite the fact that crime in Canada is falling for a decade.

• Harpster reinterpreted the meaning of child soldier (he thinks they belong to their 'national military') so that Canada can no longer recognize the vast majority of child soldiers as being child soldiers.

• Harp has cut Canadian aid to Africa in half. Choosing instead to use aid as a tool for improving relations with middle income countries which now receive an 80% portion. But wait, he gets better, he actually froze all aid in 2010.

• There are close to 100 First Nations communities in Canada that have unsafe drinking water. Herpie doesn't think that clean water is a right, and did not allocate any new funding to solve the problem in the 2011 budget

• Harper is actually the love child of Dick Cheney and Karl Rove. They mixed their sperm together so they wouldn't know who the real father is and Gm'd their sperms to produce babies with no trace of the vestigial organ known as the human heart. (not intended to be a factual statement)

• Every spring Hearp prorogues parliament so he can retreat back to the prairies where he lays 2 million egg sacs beneath the soil. (not intended to be a factual statement)

Sources for (most of) these can be found at ShitHarperDid.ca

Good ol' Kenyan Politics

Ruto is a thug. He  has been embezzling, smuggling, illegally selling, lying, cheating and stealing his entire career as a Kenyan Politician. Then again, he is nothing out of the ordinary.


He was suspended as a Higher Eudcation minister on charges of corruption in October. He was acquitted just a few days ago and cleared of all charges. The half million US that disappeared out of the coffers of the Kenya Pipeline Company apparently didn't go directly into his pocket.

He is also one of the six men accused of inciting the post election violence in 2007/8. He has been trying his best to get the case deferred, even flying to the Hague this week to haggle, but has failed at every attempt

And, of course, he will be running for president.

In your country, would this man, if only accused of these crimes, run for office?

The horror of the 2007/8 election violence in Kenya

Herpy likes to keep the media at bay

Harpster has trouble with democracy and with names

It is a troubling time for Canadians. A federal election is upon us. It is the 4th election in seven years. Over the past five, Harper has lead a minority Conservative government who have been efficiently dismantling Canada's democracy, it's regard for the environment, and its reputation in the world for being a progressive and egalitarian nation. I am no expert on Canadian Politics, but I am aware that the situation is dire.

Over the past years Conservative scandals have been so numerous, it is hard to pick any in particular that stand out. Nonetheless, here are a few:

Harper has seen to it: that war resistors are offered no shelter in canada, that the choice of abortion be left off the G8 maternal health policy (even for rape victims), that parliament was prorogued not once, but twice.... and that is just the beginning of the list. He's been shutting down women's groups, limiting funding for grassroots organizations, blatantly appealing to particular special interest lobbies without regard for consequence (video) and limiting the media's ability to showcase his deception and deceit (video and video). He thinks that the Canadian people don't care that he broke the law by deliberately misleading parliament about the cost of fighter jets he proposed Canada purchase:




Allow me to go into a little more detail about the two prorogations. They were both for the explicit purpose of avoiding a motion of no confidence. The likelyhood of losing that vote came about in 2009 because Herpie tried to limit civil servants rights to strike, eliminate the dollar 95 that political parties garner for each vote they receive in an election, and tried to limit the recourse that women have for pay equity issues; things he's still trying to do.

The second prorogation was as blatantly undemocratic as the first. Even the Economist had a dig: "Mr Harper’s move looks like naked self-interest" His efforts to shut down parliament amidst the controversy of the Afghan detainees affair succeeded.

Now, all of this is broad strokes, so more research/attention is needed to do any justice to how terrible this government really is. If you have anything to add or correct, please do!

Even now there are great little scandals to pay attention to. For example:

Why does Harpy have trouble with his own party member's name?




 Because he is conniving bastard.

 What a tool.

(Apologies for the overly dense linking!)

Lant Pritchett in South Sudan

Lant Pritchett at South Sudan Workshop March 15, 2011 from GD on Vimeo.

Must See, Must Read

Meet Gene Sharpe

the author of the handbook for non-violent revolutions!

(I haven't read it yet!)

Click^!

And coming soon for those of us who are less literarily inclined... the movie...

 

...is coming out this fall.

American blinders on?

Do people still believe that the US is the champion of democracy in the world even after learning that the US has supported Mubarak with 2 billion dollars every year (including 1.3 billion in military support)?

Do people still believe the US is promoting good governance even after learning that they support the current corrupt and oppressive (to varying degrees) regimes in Saudi Arabia, Yemen, Israel, Algeria and Bahrain?

Do people still believe the US helps to promote smooth transitions to democracy after learning that they supported military coups in Tunisia, (recently reversed!) Algeria, and oversaw the transition of power from father (who was assassinated) to son in Lebanon?

(And we haven't even started to talk historically, or to mention Iraq or Iran.)

Hell, the US even started giving money to Gaddafi in 2009!

Surely the truth must be coming out now. I refuse to believe that someone could credit the US's involvement in the Middle East for the peoples' uprisings these days.

It is also quite clear (if you check this graph) that the US has and will continue to use more military funding to bolster tis to autocratic regimes, than it has to back up the clamor you always hear about liberalization and democracy:

FMF = Foreign Military Funding

And yes, I do mean the Gaddafi: the madman, the tyrant, the Berlusconi of the Middle East (if Berlusconi were a little more prone to pogrom):

Then again, there is nothing like a good ol' virgin female bodyguard troope eh boys?

Vancouver has lowest corporate tax rates in the world

A few of my old friends from UBC have been shaking up politics in Vancouver, an old haunt of mine, at their online news source, The Mainlander. It is fantastic stuff.

In their latest article, Nate Crompton writes that Vancouver politicians are continuing to ignore social problems in favor of pro-business policies. For one, Vancouver  has lowest corporate tax rate in the world which includes frequent reductions in taxes for condo development. Amidst the growing problems of homelessness and drug addiction, Vancouver is also seeking a clearly counterproductive anti-poor flat tax regime. Additionally, the once considered progressive mayor, Gregor Robertson, has reneged on his commitment to build social housing in of the newly built Olympic Village project.

Catch all the Vancouver civic scandal at

Support the uprising, support democracy!

Several news agencies, and as a result probably many people, believe that there is a huge risk of radical, militant islamist political parties rising to power once the 'classic Arab autocrat' is ousted.

I have heard this theory promulgated many times over the past few weeks; used to describe both the Tunisian and Egyptian uprisings and even implicitly used to justify the long standing American foreign support for corrupt regimes in the Middle East. Unfortunately, in most cases, it is patently false.

One of the central beliefs in Islamic political philosophy, though few there are, is that despotism beats anarchy. Basic Sharia law, unbeknownst to most western media outlets, largely steers clear of outright political assertions, dealing mostly with familial concerns. But it does come down clearly on this point. As Al-Ghazali (1058-1111), a very influential philosopher, put it, "The tyranny of a sultan for a hundred years causes less damage than one year's tyranny exercised by the subjects against one another... Revolt was justified only against a rule who clearly went against a command of God or his prophet."

This may at first glance seem to support the notion that these autocrats are saving society from what some may call "bad people". But, if we look closer at the political situations in many Arab countries we see that many fundamentalist islamic institutions are largely supportive of the long standing regimes. Islamists have been called on by many regimes for justification of political action in return for political positions and various other favours. Autocrats and dogmatists have been going skipping hand in hand, hanging onto each others backs, all the while sidelining the more moderate and democratic voices in society (be they of what ever religious bent). Those opposing the regime may indeed be religiously conservative and muslim (fine by me), but primarily they would oppose the regime because they are democratic (even more fine).

Mubarak for example, has held a tight grip on the official religious establishment. A horrid but perfect example occurred in 2007 when several journalists were convicted of publishing false information about the regime. A fatwa came from the Grand Imam, the highest religious authority, who cited the Quoran while stipulating that those convicted of libel should be sentenced to 80 lashes!

Ignorant and alarmist media outlets mention the illegal political party the Muslim Brotherhood (that attained 20% of the parliament as independents in the 2005 elections) and Americans westerners get a bit scared. The reality is that they have been the only sensible opposition to Mubarak, have worked explicitly towards democracy, and have claimed outright that they would pose "a democratic political challenge to the regime, not a theological one."

The notion that toppling dictators will plunge Arab Muslim countries into bedlam is frightening. But the idea that radical islamists will suddenly seize power if a regime is toppled simply does not hold not water.

By promoting either argument, America the West is oppressing the moderate democratic people who have been silenced for so long, and who have really never had the chance to take control of their countries.

*

By the way check out this and this for a who's who of the has-beens of Egypt.

Giant tip of the hat to the chaps at http://www.arabist.net/

Issandr El Amrani in Egypt

Check out the coverage from the bloggers at http://www.arabist.net/

Based on several accounts I've been reading, it seems less likely the riots in Egypt will turn into a full scale revolution than those in Tunisia. This is mostly because the army in Egypt has not taken, and probably won't take, a direct stance against Mubarak. Whereas in Tunis, Rachid Ammar, the commander of the military, turned against Ben Ali from the beginning. The early actions of the military in these situations has proven to be very important.

The Egyptian military and police also have plenty of experience dealing with riots.

Time to Vote!

The referendum needs at least 60% of the population of South Sudan to be considered. It's time to vote!

 


More from AFP

What's up in Sudan:

Rather than bore you with lines of text explaining the vast and mostly terrible past and present states of Sudan, here is a great lil video: