Latest Updates: economics RSS
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thabet
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johnpi
Good news: Gulf petro-powers to launch currency in latest threat to dollar hegemony.
“The Gulf monetary union pact has come into effect,” said Kuwait’s finance minister, Mustafa al-Shamali, speaking at a Gulf Co-operation Council (GCC) summit in Kuwait.
The move will give the hyper-rich club of oil exporters a petro-currency of their own, greatly increasing their influence in the global exchange and capital markets and potentially displacing the US dollar as the pricing currency for oil contracts. Between them they amount to regional superpower with a GDP of $1.2 trillion (£739bn), some 40pc of the world’s proven oil reserves, and financial clout equal to that of China.
Moves like this signal the death-knell of the kind of gross right-wing ideological economic irresponsibility we saw during the Bush administration. The eventual loss of dollar hegemony will be one of the most significant and far-reaching-into-the-future responses to the Bush era.
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johnpi
Dubai & Abu Dhabi markets plunge on debt woes.
Stock markets in the Gulf emirate of Dubai and its neighboring capital of Abu Dhabi fell sharply on Monday and then ground to a halt amid a lack of buyers after Dubai World’s shock proposal to suspend debt payments.
….Dubai World property unit Nakheel, builder of the iconic Palm Jumeirah man-made island, asked to suspend trading of its sukuks, or Islamic bonds, listed on the Dubai-based Nasdaq Dubai exchange.
One of the key loans affected by Dubai World’s planned debt moratorium is a Nakheel issue of $3.5 billion of Islamic bonds or sukuks, scheduled to mature on Dec. 14.
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thabet
A member of the Church of England’s ethical advisory group described protectionist attitudes towards Africa as “a fucking disgrace” at an event hosted by the Phoney Grinning Lying Warmongering Bastard Faux Faith Foundation on Wednesday night.
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thabet
Four Gulf Arab states, alongside Russia, China, Japan and France, plan to ’stop using the US currency for oil trading’.
(Also, if the report is out, and the US knows about these plans too, the meetings between these nations are no longer ’secret’. So let’s stop calling them ’secret’.)
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thabet
Via Chris Dillow is this very interesting, but unsurprising, paper:
In a complete tangent the use of the word ‘luck’ always reminds me how people perceive events differently, or use different language to identify the same process and outcome. What is ‘luck’ is to someone struggling for a job during a recession in the study above, will probably be identified as God’s Will by a Muslim, or a Christian.
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thabet
Even Swati rebels know they can exploit socioeconomic conditions for their own benefit:
“Every year the government would deceitfully claim that the mine business was suffering a loss and therefore nothing could be offered to the locals; whereas, in reality, all the profit was going in the pockets of officers and ‘bigwigs’ [...] Two months ago when we took control of this area… and we opened the doors for the local workers… and 1/3 of the proceeds go to the Taliban while 2/3 is distributed to the workers.”
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thabet
I quite enjoyed this article on class and race:
Thus the primacy of anti-discrimination not only performs the economic function of making markets more efficient, it also performs the therapeutic function of making those of us who have benefited from those markets sleep better at night. And, perhaps more important, it has, ‘for a long time’, as Wendy Bottero says in her contribution to the recent Runnymede Trust collection Who Cares about the White Working Class?, also performed the intellectual function of focusing social analysis on what she calls ‘questions of racial or sexual identity’ and on ‘cultural differences’ instead of on ‘the way in which capitalist economies create large numbers of low-wage, low-skill jobs with poor job security’.
Race and socioeconomics intersect, and sometimes liberals don’t pay enough attention to this.
Life on the bottom of the pile is hard, no matter if you’re black, or white; Muslim or not (I mention Muslims because often reports like this on the state of Muslims unnecessarily ‘Islamise’ the problem).
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thabet
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thabet
Poverty: a human rights issue or not?
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razib, murtad fitri
talking about “the oil curse” below. when i was kid sometimes my parents’ friends would joke about how god loves the arabs, they gave them so much oil. in hindsight with economic history and theory under one’s belt it seems much more likely that god is cursing the arabs. if you have a very small population and huge resource endowments you can live well for a while. but as most people are aware, saudi per capita wealth peaked in the 1970s. GDP PPP places saudi arabia between slovakia and estonia today. these were nations under the boot of the red empire 20 years ago.
saudi arabia is slouching back toward the world of malthus. population is growing, but it isn’t producing new oil reserves. of course we know about sovereign wealth funds and the fact that wealthy saudis have invested money. well, i happen to know some older trustifarians. nice people. but they illustrated something important to me: it isn’t whether you have money in the bank, as what you do with the money in the bank, that makes the long term difference.
p.s. using cape verde & sao tome as natural experiments, economists suggest that all things equal an enormous natural resource windfall increases corruption by 25-40%. the increased wealth can absorb this, but what happens when you are left with bad habits but the resource is gone?
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razib, murtad fitri
over the past few years i’ve read many books on econ and economics. at the end of it i’m rather skeptical of theory in general. dani rodrik’s One Economics, Many Recipes: Globalization, Institutions, and Economic Growth is kind of a narrative mess, but i think it’s true to the fact that reality is a mess. but one big thing is clear: education matters. high literacy is not a guarantee of economic success, ask sri lanka. but it is a necessary precondition for broad-based growth in the modern economy. japan was a mass literate society by the late tokugawa period, it was already in position to “catch-up” to the west when it made the attempt.
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razib, murtad fitri
reading False Economy: A Surprising Economic History of the World. readable, if a little orthodox in its economics and a bit sloppy on the history (almost all economic history i’ve read has a tendency to look at historical details as afterthoughts, the broader the more extreme the tendency). some stuff about economic performance and the muslim world.
1) lots of stuff about water and raw material inputs. apparently 15% of the world’s freshwater is locked up into reservoirs and such, but 85% in the middle east’s is! the author points out that industrial take off might have been difficult because of the scarcity of material inputs such as fuel (trees, coal) and energy (water power) which aided england in the early years (coal + water in the pennines).
2) malaysia is held up as an example of a high performing muslim country. the author points out that it is in fact outperforming thailand and the phillipines. i think there are several reasons for these (malaysia has a relative surplus of land and resources in relation to its population for example, british legal framework might be better, etc.). but the author ignores the fact that almost all southeast asian economies the chinese minorities are the catalytic engines of growth, and malaysia has the largest percentage of these, with thailand the second largest, and the phillipines only a relatively small minority.
good book, with the caveats above. the part on the natural resources curse is especially clear and fleshed out well.
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razib, murtad fitri
The first sukuk (Islamic bond) defaults have arrived, and no one has a clue how they’re going to shake out. Which might actually be a feature rather than a bug, going forwards.
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aziz
a VAT tax for the United States? I think if some taxes are reduced as well, it would be a good idea.
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razib, murtad fitri
erik reinert’s How Rich Countries Got Rich . . . and Why Poor Countries Stay Poor is worth a read. a scholarly jeremiad against neo-classical rooted development economics, far superior to shlock such as naomi klein’s sensationalist error-riddled The Shock Doctrine. granted, i know enough about economic history to see that reinert’s polemic is somewhat selective in presentation of fact, but there are no glaring laugh-out-loud errors, and his negative case against neo-classical theory rests on genuine empirical trends.
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razib, murtad fitri
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thabet
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thabet
The evidence for why economic inequality isn’t good for people and their societies.
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thabet
Matthias Klein and Afshin Molavi offer rebuttals to the popular opinion that Dubai is ‘finished’ (as an example consider this latest Time report).
(Via The Lounsbury who thinks they’re not quite right, and who also found himself defending Dubai from Andrew Sullivan’s silliness.)
Personally, I don’t really see much of a slow down in the UAE capital.
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thabet
Chris Dillow links to some research (pdf) which tries to explain how slavery impacted upon the economic development of some African countries.
Dillow also notes:
Any individual who thinks their wealth is the result of their own effort is just an idiot.
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razib, murtad fitri
bring back usury laws?
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thabet
Radio 4’s Analysis has a very good programme on the financial crisis, looking at the big players (the rich nations) and the impact their decisions will have on those at bottom of the global ladder.
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thabet
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razib, murtad fitri
A Hometown Bank Heeds a Call to Serve Its Islamic Clients:
The sense of religious and communal obligation has its fiduciary advantages to Mr. Ranzini. Besides carefully vetting prospective home-buyers, and besides having a well-educated, professional clientele among American Muslims, he has customers for whom default would be almost sinful. Indeed, there have been only a handful of failures among University Bank’s observant Muslim clients.
“In my heart, I’m doing this because it’s the command of my creator,” said Fariz Huzair, 51, who recently bought a home for his family in Canton, Mich. “You have a standard you’re supposed to live up to.”
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thabet
Americans set to become ‘more French’.
That can never be a good thing.
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thabet
Take a look at this article in Time magazine.
Read who the article discusses.
Then scroll to the bottom and read who provided some ‘additional reporting’.
(Via a friend.)
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thabet
Video games: are they art?
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razib, murtad fitri
i had a weird thought today: over the past 10 years the USA has had a little taste of the sort of economic incentives operating in a petro-state. i’m talking about the real estate bubble. talking to people it was rather obvious that everyone wanted to buy low and sell high, the magic outside condition of rising property values would get them rich. no human capital investment (e.g., education) or labor input (work long ass hours) needed; just get a mortgage and the magic will happen.
basically, it was the psychology of rent seeking. instead of producing wealth, we americans were expecting it as our just dessert because of the structural conditions of the world. now that the bubble has burst, what are we left with? we don’t have much human capital at all beyond what we had in 2000, and it doesn’t look like web 2.0 can step into the breach….
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thabet
“Nationalization”. Or hypocrisy.
