'Aqoul: Economic Policy Archives

April 25, 2009

Economic Crisis & Stability: Maghreb and MENA Frings, the end of the Emigration Boom

Two articles not immediately evidently related, but speaking to similar issues. That is the impact of the global financial crisis on the emigrant populations from the MENA and MENA Fringe to either wealthy regions or Europe. The article on the Spanish situation suggests there could be a significant reflux back, but Europe differs from the Gulf example - the FT arty on the Pakis - in that the immigrant communities are older, many have permanent residency that is not employment connected (Gulfie style disguised indentured servitude).

As Jobs Die, Europe’s Migrants Head Home - NYTimes.com

That changed in the decade-long expansion that began in the late 1990s. In Spain, where the growth has been the most explosive, the foreign population rose to 5.2 million last year out of a total of 45 million people from 750,000 in 1999, according to the National Statistics Institute. Ireland’s population, now 4.1 million, was also transformed, with the percentage of foreign-born residents rising to 11 percent in 2006 from 7 percent in 2002.

“In the U.S., it took generations to build up a foreign-born population of that size,” said Demetrios Papademetriou, head of the Migration Policy Institute, a research group in Washington. “These countries have done it at an unprecedented rate, but the society and institutions haven’t even begun to have a chance to catch up.”

FT.com - Hard homecoming for Pakistan’s expatriates

The downturn in the Middle East is forcing large numbers of Pakistani expatriate workers to return home, exchanging lives of comfort for unemployment in a country experiencing political turmoil, growing insecurity and a deteriorating economy.

Those coming back from the oil-rich region range from senior and mid-career staff in banks, consumer goods companies and multinationals, to blue-collar workers such as drivers, labourers and domestic servants.

The financial crisis is reversing a trend of large-scale migration from Asia to the Middle East, especially from countries such as India, the Philippines, China and Thailand.

Continue reading "Economic Crisis & Stability: Maghreb and MENA Frings, the end of the Emigration Boom"

Posted by The Lounsbury at 06:35 PM | Comments (3) | TrackBack

Al Qaeda fil Maghreb & Generally: Oil facilties as a strategy.

A brief note on potential for Al Qaeda to target oil facilities: Al Qaeda & Oil Facilities in the Midst of the Global Economic Crisis
One item that caught the eye:

. Moreover, observers have noticed the increasing targeting of facilities and workers in the oil and gas sector in Algeria by the so-called “al-Qaeda in the Islamic Maghreb”.

I am not sure this is in fact all that much the case.

Otherwise, the conclusion:

Conclusion

As mentioned above, Bin Laden’ said in 2004 that oil prices should reach $150 per barrel. Legitimizing the targeting oil pipelines, refineries or workers rather than the wells themselves suggests that raising oil prices is a strategy Salafi-jihadists are adopting. In the shadow of bin Laden’s threat of "opening new fronts for the attrition of the economy of the West", it seems that such understanding is not limited to the Middle East only. The African continent is becoming an increasingly important for the diversification of oil production and transportation, as well as is the Caspian Sea region which is critical for diversification of oil resources to the West. However the risk of targeting oil interests, is not confined to certain geographical locations, as it’s associated with a strategy of opening “new fronts”.

According to this understanding, it seems that the targeting of oil facilities by al-Qaeda or affiliated Salafi-jihadists is designed to affect the flow of oil leading to higher fuel prices in the midst of a global economic cris

Posted by The Lounsbury at 04:06 PM | Comments (4) | TrackBack

April 20, 2009

Algeria: Mr. Comb Over & The Mee Too Container Terminal - Basic Reforms, Rents & Opportunities.

I should be less unkind, but frankly the awful hell that is required of one on every bloody business trip to Algiers (and having just returned from one), makes me disinclined.

Nevertheless, Algeria's copycat (okay not entirely copy cat) development of its port, following what appears to be a successful Moroccan operation at Tangamed has positive potential. FT's arty on DPW "vow[ing] to remodel Algiers port might even be a ray of hope in the otherwise bleak Algerian business landscape.

Might, of course being a powerfully operative word, as I have developed a highly jaundiced view over the years of promises of reform in Algeria. Some key details. [Ahem fixed the title]

Continue reading "Algeria: Mr. Comb Over & The Mee Too Container Terminal - Basic Reforms, Rents & Opportunities."

Posted by The Lounsbury at 05:43 PM | Comments (0) | TrackBack

April 14, 2009

MENA Futures, investing in good infrastructure (Morocco)

From the FT, two articles touching on probably the single most important item for turning around the Maghreb. Investment in good, solid infrastructure run by private firms. FT.com / Global Economy - Spanish port faces threat from Tangier

Mr Kjeldsen is using the threat to challenge the complacency in Algeciras that stems from more than 20 years with a monopoly of handling containers in the Gibraltar Strait. APM Terminals, its trade unions and the public sector port authority that owns the port land must work together to improve efficiency, he says. “Otherwise it’s going to be very difficult to be competitive with Morocco.”

APM Terminals declines to discuss how much it pays workers on either side of the strait, but average wages in Morocco are about $4,000 (€3,018, £2,688) a year. Those in Spain are about $14,500.

And the companion arty: FT.com Tangier hopes rest on customs ‘freezone’

It is a long way in every sense from the green hillside location of Tangier’s container terminals to the patch of desert that has become Dubai’s huge Jebel Ali port. But the developers of the Tangier-Med port complex have taken much of their inspiration from the Gulf facility.

Their hopes of emulating the success of Jebel Ali, which last year was the world’s sixth-busiest container port, rest on an area behind the terminals set aside for manufacturing and distribution developments.

Getting things right is boring (and not as much fun as declaring that foreign investors are parasites robbing the nation as the new Pasha for Life, Sidi Comb Over likes to do....), but it is the way to go.

Posted by The Lounsbury at 07:11 PM | Comments (0) | TrackBack

April 13, 2009

The Wonderful Magic of War Zone Microfinance - Iraq

Following my short note in Lounsbury 'next door' a longer comment on the' FT arty "Small US loans are catalyst for Iraqi business"

First, on the item that most irritated on reading

“I have increased my earnings and improved my family’s quality of life,” says Hamza Abid Ali, a grape-grower from Balad who has quintupled his income since taking out a $2,400 (€2,200, £2,000) loan from the Al-Baydaa Centre, a US-backed microcredit scheme. “I was earning only 500,000 dinars [$432, €322, £292] from each donam [unit of land] on my vineyard,” says Mr Ali, a 33-year-old father of three.“But with my loan, I bought a water pump and some netting to go over the top of the grapes, and now I am making 4m dinars per donam.”

Emphasis added: Having read my share of Donor AgitProp, this sort of repetitiously canned donor-lang. gets under my skin. It is positively formulaic.

In particular as the one-off examples say fuck-all about eventual longer financing stability or economic impact (although of course the examples are intended for audiences that would not understand the same).

In any event, micro-credit is so bloody fashionable that it is hard to sort out real results from fashionable spin. I do confess, however, there is some impact, although I personally tend to find it to be more along the lines of "poverty maintenance" rather than the sort of investment and financing that can create long-term and real sustained wealth growth. Not that poverty maintenance does not have its place, in particular in corrupt systems where the longer run growth investment prospects are .... constrained shall we say? There poverty maintenance may be simply the best choice available.

Regardless, the background

Continue reading "The Wonderful Magic of War Zone Microfinance - Iraq"

Posted by The Lounsbury at 06:20 PM | Comments (2) | TrackBack

April 12, 2009

Dubai Roosting

FT.com / Middle East - Former minister faces charges in Dubai

Mohammed bin Kharbash is to be sent to trial after an investigation into events at Deyaar, the real estate unit of Dubai Islamic Bank. .... Mr bin Kharbash, the former chairman of Deyaar, had allegedly helped Zach Shahin, the developer’s former chief executive, to seize company money. Mr Shahin, a US national detained by Dubai’s authorities last year, will also face charges of alleged bribe-taking. Trials have already started against other executives at Dubai Islamic Bank, in which the government holds a 30 per cent stake, as well as developers such as Sama Dubai, part of the Dubai Holding conglomerate.

Sama Dubai btw has some non trivial issues.

Posted by The Lounsbury at 03:40 PM | Comments (3) | TrackBack

April 07, 2009

Just giving the Algerian people another shot at expressing their gratitude to Mr Comb Over

A fine arty in Middle East Report Online Introducing Algeria’s President-for-Life by Ahmed Aghrout and Yahia H. Zoubir - focused on the upcoming... "elections."
I personally like Bouteflika's declaration "I propose nothing new, but I promise a strong and peaceful Algeria (Jeune Afrique 5-11 avril) for its charming bluntness and honesty.... well except maybe the strong and peaceful part. But certainly nothing new!

The economy remains dependent on hydrocarbon revenues -- exports outside this sector represent a paltry 2 percent of the total. The official rate of unemployment is close to 15 percent, which explains why candidate Bouteflika has promised the creation of 3 million jobs within five years if he is reelected. He claims to have brought unemployment down from more than 30 percent in 1999 to 12 percent in 2008, but no one outside the regime considers this figure credible, and true unemployment is certainly much more widespread than the state says. Domestic and foreign investment faces tall hurdles, while the banking sector remains quasi-archaic. Most of the infrastructure projects of which Bouteflika boasts have been plagued by delays as well as waste.

Tall hurdles indeed, for FDI. You'd have to be bloody retarded to invest in Algeria now given Comb Over thinks Presidential decrees forbidding foreigners from owning more than 49% of firms and blocking previously agreed on dividend repatriation. And those charming speeches about foreigners robbing Algeria... Mmmm, indeed its the foreigners robbing.

Posted by The Lounsbury at 02:22 PM | Comments (0) | TrackBack

April 06, 2009

The charming vapidness of Gulf journalism.

Gulf Expats to stay put

Many expatriate workers across the Middle East see no reason to leave their country of residence during this present economic crisis, said a survey conducted by Bayt.com, a leading job site in the region

Bayt of course is pimping its services (and given its cost structure, whistling in the wind).

I really love Gulf journalism - in English or Arabic, it manages to be pure PR driven vapidness.

Which makes me think of FT's note Dubai turns to PR to revive its image

Dubai has appointed London public relations group Finsbury to handle its financial communications strategy as the city state seeks to head off negative media coverage of its troubled economy.

Ah yes. Head off negative media coverage. Insolvency is merely an item to be spun.

Well, supposing, Dubai's restructuring of its debt bloated corporations goes well, it might just somewhat work. However, one can observe that much of the Dubai linked work (much, but not all) in North Africa has ground to a halt with hidden insolvencies ... technical delays seem to be the favoured excuse.

As an aside, this is mildly amusing as an indicator of its own black-box nature biting it in the ass:

Set up in 2006, the holding company grew in importance as officials realised that the various wings of Dubai Inc – including Dubai World, Dubai Holding and the government – had been raising debt unilaterally, leaving them in the dark about the true extent of the emirate’s liabilities.

Posted by The Lounsbury at 06:08 PM | Comments (0) | TrackBack

April 05, 2009

Islamic Finance & Global Crises

The FT has a good comment on Islamic Finance:Islamic finance must resolve inner tensions. Notably the facile fashion of it being a solution to the current financial crisis.

A small idea is developing into a big hope in the Middle East. It is that the answer to the global financial crisis lies in Islamic finance.
Proponents of the $800bn industry argue that the prohibition on dealing in interest has saved Islamic institutions, preventing them from investing in all the dubious structures that have brought down high-flying international institutions.

One cheerleader for Islamic finance is Humayon Dar, chief executive officer of BMB Islamic, a subsidiary of The BMB Group, the global alternative asset management company. He says he was starting to worry about his job at the end of last year because of the changing economic climate.

Continue reading "Islamic Finance & Global Crises"

Posted by The Lounsbury at 04:42 PM | Comments (0) | TrackBack

March 29, 2009

Is Tunis the New Dubai on the Mediterranean?

Is Tunis the New Dubai on the Mediterranean? - Middle East Times

However, not so far away, the Tunisian economy is telling a different story. Both the end of 2008 and the beginning of 2009 have bought good news for Tunisia's business climate; all the sectors that have previously been synonymous with investment in Dubai are now being referenced to this small North African country: tourism, manufacturing, services, etc.

The answer is no. Horrible, lazy and dumb journo "Is X the next Y"....

Now, leaving aside the idiotic comparison with Dubai - profoundly idiotic on many levels - there is a bit of a story in the beneifical competition on the World Bank ranking for ease of Doing Business. This has proven a great tool, insofar as the ranking motivates the egos of the Ben Alis.

What I find most queer about the article as it sees as 'good' the worst comparative points - that is real estate hype - with Dubai. When one sees that kind of hype, one knows its utter tripe.

Posted by The Lounsbury at 03:24 PM | Comments (0) | TrackBack

March 23, 2009

Dubai, Bye Bye?: Guardian Lumps Gulf City's Fate with Detroit

Simon Jenkins at The Guardian declares prognosis negative on the ultimate fate of Dubai, which he has slated to be the Detroit of the Middle East, only worse, and largely on an architectural basis. My gut and a brief impression there in real time tend to disagree. But folks with real data and experience are out there. (UPDATE: One of our Aqoul circle opines differently from Jenkins here (disclaimer, author didn't write the overenthusiastic tite). And now, for the Dubai-curious. a bit of Jenkins below the break.

Continue reading "Dubai, Bye Bye?: Guardian Lumps Gulf City's Fate with Detroit"

Posted by Matthew Hogan at 08:56 AM | Comments (5) | TrackBack

February 18, 2009

And in the realm of unsurprising, in a downturn, Emiratis can't be fired...

This I find simply amusing, in a vague sort of way:UAE to safeguard jobs of nationals

The United Arab Emirates labour ministry on Wednesday said it would regulate the dismissal of nationals working in the private sector, raising another level of protection around the local workforce as the ravages of the financial crisis cut deep into the Gulf state. ... Property and financial companies, especially in Dubai, have been shedding staff since the credit crunch triggered a real estate crash in the emirates. The gloom has spread to other previously vibrant sectors, such as tourism, .... private companies will only be able to dismiss UAE nationals for serious misconduct, including absenteeism, theft or drunkenness. The economic downturn will not be reason enough to make Emirati staff redundant. .... One human resources officer, who declined to be identified because of the sensitivity of the issue, said the move could affect the flexibility of employers and hurt Dubai’s competitiveness.

Ah well, the great subsidized Real Estate Scheme pretending to be shopping tourism wasn't really competitive regardless. Dubai is fucked into a cocked hat.

Nevertheless, they haven't gotten to the Algerian level of plain idiocy yet. More on that tomorrow.

Posted by The Lounsbury at 07:30 PM | Comments (3) | TrackBack

February 12, 2009

Dubai: Hype does not in fact immunise

Having taken a rather sceptical view of Dubai for a while, and been disgusted with, e.g. the FT allowing itself to print arties re Dubai & Gulf insulated from the global storms, I have taken some sour pleasure in this: Laid-Off Foreigners Flee as Dubai Spirals Down as well as the earlier Times arty on the same phenomena. Worth a ponder as to impact, I rather suspect that the Dubai black box shall have to be substantially unwound.

Posted by The Lounsbury at 03:47 PM | Comments (9) | TrackBack

November 23, 2008

Paternalism & Global Crisis, MENA Boom and ... Bust & the Nanny States

FT's Roula Khalaf, has a fine article on Gulf region paternalism, using the Kuwaiti example, on the stresses of the Petrol States as oil pricing collapses with global demand, and their nanny state traditions catch up. In discussion directly, Kuwaitis asking for the Government to prop up the stock markets.

Continue reading "Paternalism & Global Crisis, MENA Boom and ... Bust & the Nanny States"

Posted by The Lounsbury at 10:31 AM | Comments (0) | TrackBack

October 29, 2008

Seeders of Lebanon? Local Banking System Stability Noted

This NY Times article (may need to register) reports that Lebanon has remarkably stable and well-capitalized banks. In the midst of global turmoil in finance, they have eschewed speculative investments in favor of storing high levels of deposits. This stability has begun to attract hedge funds from outside. But to the untutored observer here, the article leaves open a simpler question -- how do the Lebanese banks make money (i.e. where do they lend for profit)? It appears that the banks are looking to branch out to several neighboring places (e.g.Bank Audi in other Arab lands), but there is little in the article to indicate they do much more than serve as safe places for deposit and as transfer agents for expatriate and diaspora inbound remittances (not that there's anything wrong with that, it's safe and presumably safely profitable via use fees, if any etc.). Otherwise the banks service some of the national debt of $45 billion. Are they simply giant vaults or seeders of a better future? Or might it be both?

Posted by Matthew Hogan at 09:10 PM | Comments (8) | TrackBack

September 30, 2008

Marshall Plan vs Iraq War: Costs

Another trivia about costs: Several sources indicate the war in Iraq has cost about $550 billion so far. Comparatively, the Marshall Plan which helped repel communism in Western Europe by bringing prosperity and stability there, cost $13 billion, which in today’s money is equivalent to anywhere between $100 and $750 billion. Applicability of such a plan in MENA today vs. post war Europe?

Posted by Shaheen at 01:30 PM | Comments (7) | TrackBack

September 26, 2008

Cost of the Arab Economic Boycott on Israel

I used to think the Arab Economic Boycott was useless, as in ineffective and mostly unimplementable (laws that can’t be implemented shouldn’t exist, period). Now, I came across this research article, “The Effect of the Arab Boycott on Israel: The Automobile Market”:

Recent progress towards a comprehensive peace in the Middle East has led to a relaxation of the enforcement of the Arab economic boycott of Israel. This in turn has led to the entry of all the major Japanese and Korean automobile manufacturers into the Israeli market. In this paper, we examine the effect of the Arab economic boycott on this market. Using recent advances in estimating discrete-choice models of product differentiation, we estimate that had the boycott continued, the welfare loss per purchaser would have been approximately $1940 in 1995. This benefit can be interpreted as a peace dividend. Since approximately 113,000 new automobiles were sold in 1995, the welfare gain to consumers was more than $219 million that year.

Which makes me view it in a different light. If that was just for the automobile market, then it was definitely not stupid. Doesn’t change my opinion, which is well known in Aqoul, that Arabs should just turn their back on Israel until they can actually do something about it, meaning even in the light of this information, it shouldn’t be their top priority – but it does change the judgment on the quality of the boycott.

Posted by Shaheen at 03:12 AM | Comments (13) | TrackBack

September 21, 2008

As Rome burns, economic thoughts from MENA

Well, as we watch the United States nationalise its financial system in fits and starts, rather like the quasi emerging market it has become (I should note that I was amused to read comment somewhere regarding Central Banking and best practice, now that the US central bank has become the handmaiden of its finanance ministry. So much for all that independence talk they've spent the last decade pimping), a moment to look at MENA.

I suppose the Americans can say little about Iran's Gov booting a too uppity Gov of the Cen. Bank, not that one should expect particularly rational comment on Iran from the US at present, regardless.

I must say that the GCC going ahead with the monetary union preps surprised me slightly, insofar as its strikes me their interests are rather divergent at present in terms of policy.... but draft plans and actual execution are not something the Gulf is glued to by habit.

On perhaps the merely amusing side, Rush to the Gulf set to lower salaries speaks to the oversupply of bankers and doubts being expressed that the Gulf is really the boomtown(s) as presented. Dubai rather.... In the same manner, there is a nice set of items to talk about this week, if I get a chance, notably:

the first signs the Dubai et all Gulf Property Speculation Game is going to splot;
Capital flight can hit even the most well intentioned little financial black holes...even Dubai Land
But the oil gusher does allow for very high standards of National Poverty

Continue reading "As Rome burns, economic thoughts from MENA"

Posted by The Lounsbury at 06:58 PM | Comments (4) | TrackBack

September 04, 2008

Gulf: The Wonderful Lightness of Opacity - Corporate Gov

A bit of analysis of zero surprise to anyone who has done business in the area, but worthy of attention the FT's note - "The transparency shortfall" on lack of transparency in the Gulf.

While on one hand more transparency would be good, on the other hand, the real incentives in a liquidity drenched environment is pretty low. Without real incentives, mere pablum about raising more money from foreigners (why bother) isn't going to drive change. Of course in the medium term it's needed, but human nature is short-termist.

Otherwise, a further item of reflexion and debate:

Kuwaiti and Saudi companies, surprisingly, produced the lowest average scores. These longstanding trading cultures boast the region’s largest pools of liquidity, some of its most sophisticated investors and strong regulations.

One of the metrics used by the research is whether a company publishes annual reports in English. About a third of GCC companies do not, but that rises to 60 per cent in Kuwait and 68 per cent in Saudi Arabia – a large factor in their poor performance.

Companies that publish crucial corporate information in Arabic put a swathe of investors at a disadvantage, the researchers argue.

Leaving aside the idea it is "surprising" that Saudiyah and Kuwait are least transparent (certainly doesn't surprise me, what 'trading cultures' has to do with transparency rather escapes me (never mind the dodginess of the characterisation)., the probable debate point here is regarding use of English (by listed companies) in reporting.

Continue reading "Gulf: The Wonderful Lightness of Opacity - Corporate Gov"

Posted by The Lounsbury at 07:24 PM | Comments (0) | TrackBack

September 01, 2008

Let us praise Libyan craftiness and all the lessons learned from Italy

I confess no small degree of admiration for the Desert Hookah Smoker, my early childhood guide, Si Mouamar Gaddafi. this little bit is an act of piracy worthy of .... Rome I think

It's delicious, extorting equity:

In a tent outside Benghazi on Saturday, Silvio Berlusconi, Italy's centre-right prime minister, returned a headless statue of Venus carted away by Italians decades ago and signed a friendship pact with Muammer Gaddafi, the Libyan leader.

The agreement, in which Italy pledges to pay $5bn (€3.4bn, £2.75bn) over 25 years in reparations through various projects - including a highway across Libya from Egypt to Tunisia - follows a decade of difficult negotiations under a succession of Italian governments.

Of course any pledge over 25 years by an Italian government should be discounted to present value using a discount rate appropriate to Italian finances, perhaps Medieval ones. Still, a win win - B Boy and the Guide get to bask in the PR of Large Numbers, and the Guide gets to pocket a decent amount of current exchange.

Almost as intriguing is is The Guide's "Extol[ing] virtues of capitalist reforms" as the FT arty puts it.
Well not quite:

Continue reading "Let us praise Libyan craftiness and all the lessons learned from Italy"

Posted by The Lounsbury at 07:19 PM | Comments (7) | TrackBack

August 24, 2008

MENA Development and Investment: How 'bout just makin' stuff?

Moving back MENA-ward, I add a rant inspired by long-time discussions here and elsewhere regarding investment in Middle East and North African (MENA) countries. My amateur self keeps reading about Gulf or other money chasing things like real estate or hub port facilities, or digging out more of that Texas tea. Now, I hope I don't use too technical economic terms here, but here goes the rant: shouldn't the bulk of this fund dough, including money from superrich nations, be going towards activities where, you know, MENA regular folks will, like, MAKE NEW STUFF and then SELL THAT NEWLY-MADE STUFF TO OTHER PEOPLE for, um, HARD MONEY. That may sound a bit hi-falutin grad-school airy-fairy idealistic, development economics-y, but it needs to be said.

Continue reading "MENA Development and Investment: How 'bout just makin' stuff?"

Posted by Matthew Hogan at 11:43 PM | Comments (24) | TrackBack

August 19, 2008

Waning Maximalism: Siren Syria

It is always difficult to evaluate the reality of Gulf investments - they are the vapour ware of the investment world, often announced, much less often delivered. However, this Gulf Times arty on Gulfie investment in Syria is nevertheless interesting taken in hand with the recent trips by US bankers, hat in hand, to the Gulf.

While not explicitly connected, there has been major damage to American reputation - and Western banks reputations I would add - in this last year and one can not but think Lebanese Presidents visiting Syria is a bit of realism that but four years ago would have been off the table.

Posted by The Lounsbury at 08:17 PM | Comments (0) | TrackBack

August 07, 2008

Nouakchott in the Dark: Mauretania Coup

Semi-Aqoulite alle on his blog provides background and details on Mauretania going coup coup. In comments by alle elsewhere on this site, he notes that "there goes the Arab world's most interesting experiment in democracy-by-coup."

Posted by Matthew Hogan at 09:22 PM | Comments (0) | TrackBack

July 27, 2008

Water, Food & Petrol

Last week, as part of an ongoing series on the emerging issue of food price spikes and food security, the New York Times published an interesting article on Egyptian Ag industry and farming (although pretending to be an article about all MENA....

An interesting if typically journalistically shallow discussion. In general it highlighted why it is terribly difficult to be optimistic about Egypt's future, given an entirely screwed up economy (although yes liberalizing, although inflation and poor management threaten the gains - also this article at greater depth on the economy), and a screwed up Ag system...

The article frames its Egyptian based observations as all MENA, but while certain issues are shared, many are very Egyptian. Certainly Ag is attracting capital flows, although some may be more real estate plays - e.g. the cited Gulfie interest.

Continue reading "Water, Food & Petrol"

Posted by The Lounsbury at 07:17 AM | Comments (0) | TrackBack

July 13, 2008

Ya Rayah...Ch7al nedmou lebad l-ghafline qblek: Southern Med & Socio Economics

With proper reference to Taha's Ya Rayah* which seems more than appropriate given the subject matter, and prompted by The Economist’s recent profile on investment in the Mediterranean as well as a series of articles on the Maghreb and southern Med region (let me call this MedSud from now on, as MEDA sounds idiotic), including a previously noted Lounsbury article from NY Times piece on Algerian Youth, an interesting FT series on labour markets, education and youth in MENA (and in particular on entrepreneurship, or rather not being a lazy bureaucrat), in addition to the rather cretinous article from Abu Dhabi on Maghreb investment that Hogan already cited.

Update: also in similar vein see Comments on Khaleej Times whinging on Islamic Finance

Update II - 15 Jul: quick clarification on my remarks and in particular my MedSud usage. While the underlying article and research by ANIMA covers a wider range - the MEDA zone as they define it including Israel and Turkey, my remarks do not. I personally consider both too different to look at analytically in grouping with the Maghreb or the Arab Machreq. Obviously discussable, but the remarks below should be understood as excluding entirely Turkey and Israel.

Continue reading "Ya Rayah...Ch7al nedmou lebad l-ghafline qblek: Southern Med & Socio Economics"

Posted by The Lounsbury at 10:35 AM | Comments (13) | TrackBack

July 08, 2008

Maghreb-ward, Ho! Gulf investment heads into the sunset

Rudely poaching on turf far better handled by other contributors, I call attention to this article in The National of Abu Dhabi(?) which relates risk/reward considerations of Gulf investment in North Africa, particularly in real estate. Do the observations jibe with reality? Too little fear, too little greed, or too much. Or just right. A good intro for the beginner or just a superficial story? Excerpts below the fold.

Continue reading "Maghreb-ward, Ho! Gulf investment heads into the sunset"

Posted by Matthew Hogan at 09:14 PM | Comments (5) | TrackBack

June 27, 2008

Bubble, Bubble, Oil and Trouble

This Washington Post story nurtures the question: are the recent bubble-like oil price spikes driven by speculative runs on oil or are they driven by a fundamental growth in demand? The supply side, aka Saudi Arabia, claims the first choice and the demand side, aka America and industrialized states, claims the second. My semi-educated wild hunch is that the supply siders' 'explanation (high speculation) is closer to the truth. (UPDATE: Commenter Klaus notes a more recent Krugman column on the same subject arguing that economic fundamentals are primarily driving the price increase.)

Continue reading "Bubble, Bubble, Oil and Trouble"

Posted by Matthew Hogan at 08:23 PM | Comments (7) | TrackBack

June 22, 2008

Islamic Finance Bubble

A quick note, prompted by a very decent set of audio-visual summaries at FT on Islamic Finance, and a note within the presentation that the Islamic Finance industry has not been effected to date by the global credit crunch (although noting exposure to Gulf Real Estate).

It strikes me that as impressive as the growth has been in the past seven years, it corresponds rather precisely with the big Gulf boom driven by hydrocarbon prices. There is much loose talk of huge new Muslim markets, counting up the global number of Muslims - African, Asian, etc. - as potential market numbers (see the articles here). This, like your average "MENA" but really Gulf Fund, playing with regional numbers to inflate potential is utter bollocks. Much boosterism comes from the Gulf, and more from City bankers with a thin understanding of the variations in the Islamic world and the extent to which poorer markets with more liberal approaches to Islam are going to be genuinely willing to pay a premium for services (or be exposed to more risk - although that is more likely to be disguised). Perhaps worth a further discussion, but it strikes me that Islamic finance growth right now is intimiately and almost uniquely driven by asset inflation in the Gulf, that makes everything look attractive.

Posted by The Lounsbury at 10:18 AM | Comments (3) | TrackBack

June 19, 2008

KSA Gives Up Dream of Making the Desert Green

Here’s a very interesting article on the waste that the Saudi adventure of growing its own wheat has been. A few quotes:

“Within 12 years, between 1980 and 1992, wheat production grew 29-fold--from 142,000 tons in 1980 to 4.1 million tons in 1992 --making the Saudi desert the world's sixth-largest wheat exporting country.” “Between 1981 and 1993, Saudi Arabia spent a total of $225 billion out of US$420 billion in total oil revenues on defense and security. (…) Maintaining the ruling family is estimated to have cost $4 billion per annum during the 1980s, and more in later years as the family grew”
“For the sixteen years between 1984 and 2000, it may be estimated that the assessable cost of Saudi agricultural development could be put at about $85 billion, representing 18 percent of the country's $485 billion in revenues from oil exports during the period. This huge investment produced wheat at an average cost of more than US$500 per ton. During the same period, the international market price for wheat averaged about $120 per ton. When the waste resulting from abandoning the newly reclaimed and irrigated lands plus four unquantified government subsidies are added, the cost might more than double.”

Continue reading "KSA Gives Up Dream of Making the Desert Green"

Posted by Shaheen at 12:55 PM | Comments (3) | TrackBack

June 08, 2008

Rebuilding Lake Tritonis

Through Pantom, Jane Jacobs on cities:

... City development is a natural process, and oftentimes the problem is not to get it going but to remove obstacles to it.
In many ways we would simply waste less time and money on what doesn't work:
• Cities and countries wouldn't bother trying to attract transplanted factories (the focus of most current international development). At best this would be seen as a stopgap measure, one step short of charity.

This quote sums up the spirit of an important part of Jacob's article. It made me think of all those efforts to develop the Sahara and the Arabian Desert. One particular instance that came to mind is an idea put on the table by the Tunisian government in the 1980s to create an interior sea using the chotts. The idea was never implemented for petty political reasons, so petty politics might have positive side benefits it seems. It was actually born in the head of a French military scientist in 1864’s Algeria.

Continue reading "Rebuilding Lake Tritonis"

Posted by Shaheen at 09:46 AM | Comments (10) | TrackBack

May 07, 2008

Bread & Riots

If you follow MENA news (and indeed news generally) rising food prices, coupled with rising petrol prices, have provoked for the first time in years serious concerns about food availability to the poorer segments of the population. And demos and riots. And when mass demos occur in the Middle East and North Africa, fear of regime stability gets in the air. Serious challenges for a region where the emerging free(er) markets are yet fragile. Nevertheless, the FT's arty today, Mideast reels as hunger outgrows oil earnings is bothersome.

Perhaps the lead is what is the most irritating:

For years, food policy in the Middle East and North Africa was very simple: hydrocarbon exports paid for carbohydrate imports.

A quote that then segues into issues of the non-oil exporters. My irritation is always raised when all MENA is written about as if it were the Gulf. This is not merely sloppy, it leads people, even Sr. persons, to dangerously misconstrue developments.

Continue reading "Bread & Riots"

Posted by The Lounsbury at 04:46 PM | Comments (1) | TrackBack

March 22, 2008

American Tantrums - Don't Talk to the Iranians

The Americans increasingly shrill tantrums about doing business with Iranstrike me as entirely self-defeating. Rather like the Cuban sanctions, they are likely merely to give the regime a foreign enemy and scapegoat an excuse on which to hang the consequences of its own economic incompetence. Never mind they are likely to be as successful as those stunningly successful Cuban sanctions (whose main purpose seems to be preventing Americans from vacationing on the cheap, but no matter, all the better for the aficionados of non-tradable products Cuban).

Childish idiocy and tantrums, wishful thinking and gradiosity seem to be what one is in for until this current band of incompetents in the US is out of power. Nine long months, if the cretins don't drive themselves into a currency collapse.

Meanwhile, I would think the US Treasury has better things to do with its time than haranguing the world about the risks of doing business with Iranian financial firms. It might do well to worry about the risks of doing business with American financial firms.

Continue reading "American Tantrums - Don't Talk to the Iranians"

Posted by The Lounsbury at 12:47 PM | Comments (0) | TrackBack

February 03, 2008

Dollars, Gulf Politics & MENA Economies, tip, tiptoeing...

Without extended commentary, I draw attention to The Financial Times report that Qatar is considering breaking the dollar peg, following Kuwait and certainly if it does so putting a nail in the coffin of the original vision of the unified Gulf currency zone.

The report, which if realized, would make Qatar the 2nd after Kuwait to break the strict dollar peg, highlights a feedback between the current American Administration's profligate fiscal policy -itself tied to a frankly delusional foreign policy that has by evident incompetence as well as imperial overreaching damaged credibility generally [never mind the exact politics]- and regional politics and policy. Make no mistake, the dollar peg has long been as much a politic as an economic statement.

Of course taking such a step in an environment like the present is economically rational - above all if one believes that one is entering a period of long term dollar weakness or instability, although a more flexible exchange regime is generically usually a better thing regardless of the specific dollar issues.

Continue reading "Dollars, Gulf Politics & MENA Economies, tip, tiptoeing..."

Posted by The Lounsbury at 08:51 AM | Comments (3) | TrackBack

December 11, 2007

Releasing Built-Up Labor Tension

The floodgates have opened. It is the beginning of the end for serious labor repression in the UAE, and the rest of the Gulf is likely to follow. Dubai's employers have been forced to negotiate with (illegally) organized labor and come out second-best.

Organized labor has never had it good in the Gulf. The armies of foreign construction workers - there are 700,000 in the UAE alone - live in overcrowded and unhygienic quarters, work in unsafe conditions, have no political rights, and are banned from collective bargaining. They can't even switch jobs when their employers fail to pay them, as happens all too often. Over the past couple of years, a depreciation in the value of local currencies pegged to the dollar has meant they have been able to send less money home than ever before, rendering many unable to support families they were forced to leave behind, even as high inflation has eaten into their purchasing power in the Gulf. Meanwhile, demand for workers has surged with a building boom brought about by high oil prices.

Continue reading "Releasing Built-Up Labor Tension"

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November 10, 2007

MENA Reform: Dead Hand of the State & Great Cairo

Returning to issues financial and economic, and in homage to our classic Cairo building post from 2005, I draw attention to a fine, if short, article in The Financial Times on the nefast influence of the dead hand of the Egyptian state, and the politics of pious posturing on the living standards and housing quality in Cairo, the Great Dump.

A few key items to highlight, as they are general lessons for the region, and indeed for emerging markets, largely around the failure of socialist and unrealistic, indeed wooley headed "progressive Left" interventionism.

Continue reading "MENA Reform: Dead Hand of the State & Great Cairo"

Posted by The Lounsbury at 01:22 PM | Comments (3) | TrackBack

September 04, 2007

Incentives and Accountability in Gulf Labor Markets

If the penalty for shooting someone was a $12 fine, and a warning that repeat offenders might lose access to firearms, what would happen? The murder rate would shoot up. We rely on incentives and disincentives to promote or dissuade against all sorts of things, from charitable giving to compliance with the law.

Continue reading "Incentives and Accountability in Gulf Labor Markets"

Posted by dubaiwalla at 12:15 AM | Comments (9) | TrackBack

September 02, 2007

Remittances & MENA, a brief reflexion on money flows

My favourite newspaper, as a running dog of an anglo saxon ultra liberale as the francophones like to style me (well except the running dog part, it not being in the idioma) The Financial Times has a fine series on Remittances, or in more ordinary language, money sent home by 3rd Worlders working outside of home country.

Funny these terms. Leaving this aside, remittances is quite a hot topic in the financial world, both in policy and in the money making parts, because the volumes are huge and our grubby little minds always think there must be ways to do interesting things with cash flows. More prosaically, the development people are all atwitter that:

In many developing countries today, more money comes from remittances than from foreign aid, foreign investment or even traditional exports. In Central America, remittances have long eclipsed traditional agricultural mainstays such as coffee and bananas. Migrants send more money to Morocco than tourists spend there. In some small countries – Lebanon, Serbia, Haiti, Tonga, Albania and Jamaica are all examples – remittances generate more revenues than all merchandise exports put together. The latest World Bank figures list 14 countries where migrants’ earnings account for 15 per cent or more of economic output, ranging from Moldova with 38 per cent to Jamaica with 16.4 per cent.

So there must be ways to make this money work better than merely supporting consumption, they say!

On the other side, and this is particularly true for marginally financially literate American government officials, there is this huge obsession with hawala (their mot phare, having just learned it, and thinking it applicable everywhere in - what do they call it, the silly little American provincials, BMENA or GMENA (Broader / Greater MENA), (1) and transfers (informal or otherwise) as terror financing. Apparently insensible to the data indicating nothing much in the way of money laundering as such has been involved in al Qaeda acts despite much fevered talk.

Continue reading "Remittances & MENA, a brief reflexion on money flows"

Posted by The Lounsbury at 07:25 AM | Comments (7) | TrackBack

July 25, 2007

Islamist Election & Moving MENA Forward: Stability and Investment

Some time back a good friend of mine in the Maghrebine banking community asked me my thoughts on what would happen if The Parti la Justice et le Développement (Justice & Development Party), the moderate Islamist party in Morocco won the upcoming elections - as they would clearly do in any free election, from an investment flow point of view. Or more succinctly - would people like me take money out of the market, re-balance to Tunisia, etc.

My answer was "depends" - although Moroccan politics is not something I follow terribly closely, PJD actually in the economic sphere has always struck me as being fairly economically liberal (given the francophone and Arab world benchmarks that is) - and I opined that us Anglo Saxon investors would actually like to see a government with better roots and thus probably better ability to move economic liberalisation forward. I was worried, though, that this answer might be too me. I submit, then, the results of the Turkish elections and London's reactioin as partial indication my gut read is on target.

Continue reading "Islamist Election & Moving MENA Forward: Stability and Investment"

Posted by The Lounsbury at 08:17 PM | Comments (17) | TrackBack

July 22, 2007

Dubai's New Erection Penetrates Foe China Entry's Position

Why are you looking at me like that? Stop it. The internal structure of the new under-construction Burj Dubai tower has just passed the height of the rival entry in the world's tallest building competition, Taiwan-Republic of China's Taipei 101 tower. The Burj is now 1,667 feet (sorry, I don't do metric). The question: is there any value or significance to such structures? It looks horrible at this stage; is the final version decent? And no. The caption wrote itself. Grow up. (Update: Taipei 101 - I think it's ugly too.)

Posted by Matthew Hogan at 02:45 PM | Comments (9) | TrackBack

May 23, 2007

The never ending list of new bans in Islamic finance

Before I mention this amusing theoretical case of a usurious zero interest rate, a few comments about today’s FT Alphaville’s entry on Islamic finance:

Islamic finance - based on a strict interpretation of the Koran that bans the use of interest in transactions

Usury. The Quran bans usury. What the Quran explicitly bans isn’t the topic of the Islamic finance debate. It’s whether any amount of interest constitutes usury.

Concepts such as derivatives and hedge funds, for example, are considered particularly controversial, given the Koran’s ban on gharar (speculation).

Ben Smith, the author of this entry really needs to get his info outside Tora Bora, because there’s no such ban whatsoever in the Quran. The discussion about gharar comes from some hardly known jurisprudence, and it's not even a prohibition. Even the obscure ramblings of those yawn provoking troglodytes have a more nuanced (well, confused) view on it than the one presented above.

Continue reading "The never ending list of new bans in Islamic finance"

Posted by Shaheen at 12:31 PM | Comments (6) | TrackBack

May 05, 2007

The Forex Wall

I’ve hit it again. The Lounsbury and I have had a brief exchange about this some time ago, and I just discussed it with a Moroccan acquaintance. The guy’s an accountant. Morocco or Tunisia, to quote only those examples among many other Arab countries, impose trade restrictions when it comes to foreign currencies.

The argument I’m given in support for those restrictions is invariably the same: everyone will rush to buy foreign currencies, and the country will have a shortage of it. That such an argument comes from an accountant is puzzling. It totally ignores the fact that markets would automatically balance that demand. If some little buddy is ready to sell his house for a couple of euros, then he must be a moron of epic proportions. And if one’s worried about the resulting exchange rate, then there definitely are ways to control them through market mechanisms.

Continue reading "The Forex Wall"

Posted by Shaheen at 01:11 AM | Comments (6) | TrackBack

April 26, 2007

Finance 101 for Muslims

It is sad to say this, but finance is to today’s Muslims what medicine or astronomy was to medieval Europeans. I’m so sick of coming across people condemning themselves to poverty because they decided to follow the widespread confusion promoted by ulemas who are criminally ignorant about finance and even about traditional Islamic jurisprudence itself. So here, I decided to write this intro to finance in the hope that it will enlighten at least some of the Muslims who are hesitant when it comes to dealing with interests.

I’ll try to make it as simple as possible and will avoid circus monkeys jargon, sometimes even overly simplifying for clarity’s sake. It’s for lay people, so finance geeks look away, or your eyes are going to hurt. This is very long, so here are the sections:

I The law of gravity: supply and demand
II Money’s just an asset
III The time value of money
IV Risk
V Putting it together: interest rates
VI You do want that loan: why borrowing is necessary
VII The fallacies behind Islamic finance
VIII Islamic jurisprudence and the case of the last Caliphate
IX Pass it on

Continue reading "Finance 101 for Muslims"

Posted by Shaheen at 03:12 AM | Comments (29) | TrackBack

April 05, 2007

Well, Golly: Egyptian Finance Comes to Town

Youssef Boutros Ghali, Egypt's Minister of Finance, will be giving his take -- perhaps a bad choice of words -- on the economy of Nile-dom right here in Potomac River City, aka Washington D.C., on Thursday, April 12 (reserve at the CATO Institute by 11 April). Full details are below the break, and here, the most important of which is "Cato Forums and luncheons are free of charge." D.C area Aqoulites are required to go, if they are below 32 and in any kind of University. Meanwhile, informed comments from all on the subject, including from our own regional finance hyperinformed but Masrophobic resident Id, are welcome.

Continue reading "Well, Golly: Egyptian Finance Comes to Town"

Posted by Matthew Hogan at 08:16 PM | Comments (6) | TrackBack

March 06, 2007

Iraq Oil Law Discussion

Somewhat tardily, but at reader request, a note on the new Iraqi oil law bill in cabinet, as reported in the FT.

My quick reaction: meaningless bollocks. My longer reaction, bloody idiotic meaningless bollocks just like the fucking schools painted and other such nonsense that only idiotic innocents with no fucking sense of fucking reality will get excited about. There are no economics to discuss. There is no way to model having your pipelines constantly cut and if you're in Kurd Land, the Kurds losing control of their production, a political threat of no small probability.

Reader reactions welcome.

[NB: corrected some idiotic early AM grammatical blunders, linking idiocies and the like-CL 7 march]

Continue reading "Iraq Oil Law Discussion"

Posted by The Lounsbury at 03:19 AM | Comments (9) | TrackBack

February 17, 2007

Arab unity, saved by the dinar

In the latest of Qaddafi's changes of mood, it has been decided to impose a visa to Maghrebi citizens visiting Libya among others. This is not the first violation of the agreements that guarantee freedom of movement in the Maghreb. But while violating agreements in MENA is a common sport that might have little impact in practice - most of them haven't been worth the paper they're written on since their inception - this one in particular could have seriously hurt the interests of both Tunisia and Libya itself.

Continue reading "Arab unity, saved by the dinar"

Posted by Shaheen at 07:09 PM | Comments (5) | TrackBack

February 03, 2007

Khaleejization: Background Information

The Arab Gulf countries have long relied on foreign labor to keep their economies running. Nationals largely work in cushy government jobs that pay above-market wages and require relatively few hours. This was part of the bargain the royal families struck with their populations- no representation, no taxation. By contrast, private sectors in the Gulf are dominated by expatriates. With the partial exception of certain kinds of managers, the latter are compensated poorly and work long hours.

Continue reading "Khaleejization: Background Information"

Posted by Top Secret Anonymous Guy at 08:52 PM | Comments (1) | TrackBack

Abu Dhabi Strikes Back

For generations, the rulers of the Arabian peninsula have been rivals. In the past, they vied for the loyalties of the nomadic tribes of the region. Today, their competition centers around their economies. Flush with oil revenues, they have striven to outdo one another in building businesses and cities.

Continue reading "Abu Dhabi Strikes Back"

Posted by dubaiwalla at 12:58 PM | Comments (4) | TrackBack

January 12, 2007

Pan-Arab Trade: Never Missing an Occasion to Miss...

Rather than go on with the stunningly depressing issues of American blundering about in the MENA region and environs, I am off a mood to poke a stick in the eye of Pan-Arab cooperation, or perhaps better, Pan-Arab whinging on about cooperation without any real intention to cooperate.

The underlying article here is in French, from the Moroccan business journal, La Vie Eco, a decent enough publication, and discusses the problems that several much ballyhooed (or feared, depending on the perspective) free trade agreements between the Arab Med and generally Arab states have gone nowhere. Amusingly I recalled the head of Al Ahram al Iqtissadi telling me several years ago that all these agreements would go right into the freezer. Sadly that appears to be the case.

The why of the rather predictable fate of these efforts is perhaps a more interesting question than the actual failure, as the failure of cooperation - even on the relatively limited sub-regional scale - often surprises, but worse than surprises, is a positive drag on the region.

Continue reading "Pan-Arab Trade: Never Missing an Occasion to Miss..."

Posted by The Lounsbury at 07:48 PM | Comments (2) | TrackBack

December 01, 2006

Tipping the Wrong Way: MENA & US Policy

The slow motion disaster that is Iraq has come to bore me, now that I have written off personal interests there (although as an aside, now one doesn't cease to get offers to take part in US reconstruction - sorry boys, too late. In '03 I would have done it. Now you're 3 years down the road to utter catastrophe, not a bloody chance).

However, as part of the larger wreckage of US policy, that remains sadly a major but largely negative driver in the region (not due to overall intentions, but realism of how and on what schedule said intentions can be implemented - which is to say due to the utterly magical fairy-dust approach they insist on taking) one has to be interested in Iraq and US MENA policy which surrounds it and is in part driven by the fiasco.

Continue reading "Tipping the Wrong Way: MENA & US Policy"

Posted by The Lounsbury at 10:06 AM | Comments (3) | TrackBack

November 12, 2006

Dirty Little Secrets: Labour Exploitation in the UAE

To get away from US centered whanking on, and away from the depressing subjects of Iraq or Palestine, a quick reference to a very timely article in FT on labour exploitation in the UAE .

An open secret of course, if one can say a secret at all.

Continue reading "Dirty Little Secrets: Labour Exploitation in the UAE"

Posted by The Lounsbury at 12:38 PM | Comments (9) | TrackBack

October 22, 2006

Memo from Dubai

It seems worthwhile to draw attention to an interesting article in NYT on Dubai and culture clashes, one which I think despite some superficialities is actually quite interesting. Stemming from a recent local Expat paper's admonishment to respect local culture a bit, it appears to have set off some reaction. I frankly agree with the admonition.

I also found the illustrating image amusing as the inappropriate couple behind the Emirati clique is so very clearly Leb.

Continue reading "Memo from Dubai"

Posted by The Lounsbury at 11:14 AM | Comments (9) | TrackBack

October 06, 2006

Dubai, the Attraction

A quick note to draw attention to a recent arty by Roula Khalaf of FT on Dubai and the why behind its success to date: Dubai cultivates oasis of calm where Arab business life can flourish.

The main thrust of the article is to highlight some of the why behind Dubai's success to date, beyond just stupid amounts of capital. Although that is a clear major condition, it is not a sufficient one as the other petro-giants of the region never managed to achieve Dubai's success (even if we mitigate our appreciation of the success by noting a definately unsustainable aspect doped by too much liquidity chasing too few quality assets).

Despite my own critical attitude towards Dubai - much is clearly illusion and can not survive, there are also clear lessons with respect to the ability of the Arab/MENA region entreprenurial classes actually being able to flourish when a moderately liberal (quite liberal for the off-shore aspects) business environment is established. I do note that some of - indeed in some ways much of Dubai's liberalism is rather Potemkin liberalism insofar as it is all of a very temporary, Enlightened Despot Suffrage quality. That being said, if one takes Dubai with a grain of salt, it does illustrate via its off-shore business services sector the degree to which Arabo-Muslim entrepreneurship is seeking a place to flourish away from the dead hand of the state, and the degree to which even in the temporary, Prince-dependent liberalism of Dubai seems vastly attractive in a world where the West is growing stupidly more hostile to Arabo-Islamic money.

Continue reading "Dubai, the Attraction"

Posted by The Lounsbury at 01:10 PM | Comments (0) | TrackBack

September 27, 2006

Solidarity, Reg: Maghreb, Outsourcing and Reaction

One of the issues that the United States has gotten right in MENA is its sometime concentration (when the gross fabulists that are political leadership of the Bush Administration are not dreaming up imaginary and magical transformations of a New Middle East, in time to render themselves ridculous and fools, e.g. Lebanon) on economic liberalisation as means to grow the region and provide new opportunity. It would do better to focus more on seeing real liberalisation see the day, and let its completely magical thinking about democratisation fall by the wayside.

The political support for such liberalisation contrasts favourably with the absurd double talk Europe engages in with respect to economic policy, above all France (which of course is no worse and in many ways better informed than the self-decieving fabulism the Americans are engaging in on the political 'democratisation' front). The Financial Times has an important article, although one not likely to be noticed by many, on the clash between Axa unions in France and the company over its plans to outsource to the Maghreb.

Continue reading "Solidarity, Reg: Maghreb, Outsourcing and Reaction"

Posted by The Lounsbury at 05:47 PM | Comments (4) | TrackBack

September 25, 2006

Leb Land & Recon, Back to Networks

Returning to a hint I made a month ago, I find on the newswires confirmation of the scheming re buying some street cred in Lebanon after the disastrous backing of 'transformation via Israeli shells' did such a lovely job of fucking American reputation into a cocked hat.

The USD 250 million of course is better than zero, but I am having a hard time seeing effectiveness given zero on the ground networks.

Hezbullah won, and even the backstopping effort isn't very good.

[Updated with links to actual entries supra, just to prove The Lounsbury is ahead of the curve]

Posted by The Lounsbury at 04:17 PM | Comments (6) | TrackBack

September 15, 2006

Futile Bollocks and Banking

Although I remain rather too busy to contribute as I would like and should, the Generator is too embarassing to have as the lead item, so a comment on an important piece of idiocy by the Americans: their attempt to shut the Iranians out of the financial markets unilaterally: US threatens further action against Iranian banks.

I frankly find such interventions borderline retarded, as well as self-defeating, leaving aside the willy nilly confusion of Hezbullah with al Qaeda in such rhetoric. Incoherence.

Continue reading "Futile Bollocks and Banking"

Posted by The Lounsbury at 04:45 AM | Comments (2) | TrackBack

August 22, 2006

Rigidities & Employment: Small Details, Large Effects

In my small note last week, on MENA Trade, Business Culture & Americans our colleague Shaheen rightly raised the issue of negative effects of apparently small issues as well as the negative impact of what I might call "sand in the wheels" - such as heavy visa regulations that can kill time sensitive deals - an increasingly common issue in a world of accelerating decision cycles.

Aside from the conversation in comments on the challenges of visas for the entrepreneur looking to build exports (as I note, supposedly a key policy concern for the US), my own suggestion with respect to visa services was rightly critiqued for the remaining bureaucratic braking effect.

Continue reading "Rigidities & Employment: Small Details, Large Effects"

Posted by The Lounsbury at 03:44 PM | Comments (2) | TrackBack

July 28, 2006

Be Saudi: Hire a Saudi

That is the message on a billboard that towers above Saudi cities and attempts to call upon the patriotism of Saudis when the many Saudisation schemes have failed. "Saudisation" is the process of mandatory government-sponsored affirmative action that aims to end the monopoly of expatriates, mainly in the fields of banking and government bureaucracies. The scheme initially was launched in order to get Saudis into middle management white-collar jobs but has recently descended into the realms of (shock, horror) retail businesses and supermarkets. As the Israel-Lebanon issue has now descended into the wrist-slashing realm of the depressing, I thought 'Aqoul would turn its attention to the merely-banging-head-against-the wall realm of the depressing.

Continue reading "Be Saudi: Hire a Saudi"

Posted by Meph at 10:48 AM | Comments (20) | TrackBack

June 19, 2006

Hariri's Clever Scheme

Or, where the Lebanon debt crisis came from in the first place.

So I see that Executive magazine finally has their web edition up (disclaimer: they give me money, but not to blog), which means I can point to this Nick Photidiates article on the Lebanese national debt and how the banking sector is tied up in it. According to him, it all came down to decisions Rafik Hariri made when he originally took power.

Continue reading "Hariri's Clever Scheme"

Posted by tomscud at 08:23 AM | Comments (2) | TrackBack

May 29, 2006

On Iraq, Dinars & Informed Comment: Some Reflexions

Due to some misunderstanding, I thought I would make a follow-up comment on a semi-private email exchange on Iraq

The context then: I wrote Professor Cole of Informed Comment regarding a relatively tangential statement there regarding Iraqi dinars, monetary policy and some statement by Amer Taheri regarding the stability of the currency. Cole withdrew his original characterisation re Taheri, but then followed up with further comment, mentioning yours truly in both. Given the excuse, I thought I should correct some misapprehensions, as well as abusively ramble on, these being my core competencies, about currency valuation, Iraq and the like, perhaps secondarily some gratuitous abuse of various parties for my own personal entertainment.

Continue reading "On Iraq, Dinars & Informed Comment: Some Reflexions"

Posted by The Lounsbury at 12:21 PM | Comments (5) | TrackBack

May 23, 2006

Dubai Glitter - Union troubles

While not having much substantive to add, I thought that before this aged too much, that some attention should be brought to a recent FT article on on unions, entitled "Union troubles start to emerge from Dubai's glittering facades' published 19 May.

The article covers material that we here at Aqoul have touched upon, effectively the signs that the impoverished sub Con workers who make up the spine of the vast construction site that is Dubai are finally starting to crack under the pressure of low wages, rising costs, and just plain near slavery conditions.

The article bears a quick reading, as well as pondering whether UAE aspirations (to US FTA, to other goodies) will force change. I would bet that the government takes a bail out angle. After all, among the drivers of the last few weeks of unrest has been that labourers have been crushed between escalating housing and general living costs, and low wages.

An obvious Dubai type solution is to have the Emirate provide mass worker housing somewhere, allowing companies to externalise housing costs (or continue to do so to be more accurate).

Part of the usual indirect and obscure subsidy approach the Emirates have grown to love. Might even be an efficient solution.

Posted by The Lounsbury at 06:56 PM | Comments (2) | TrackBack

May 20, 2006

Islamic Finance - Scholar Shortages

Some weeks ago one of your fine 'Aqoul authors raised the issue of Islamic finance, and its present situation.

While perhaps less sexy than the faux-reports of Iranian Nazi-esque clothing restrictions on minorities, understanding a bit about economic developments in the region is more useful to readers wanting to actually have a sense of MENA developments (as opposed to merely whanking on in general ignorance about the horrors of the Arab world, etc), and The Financial Times has been running quite a number of interesting articles on the region - well actually about the Gulf, but the confusion of Gulf with all of MENA/Arab world is so general I almost cannot complain.

Continue reading "Islamic Finance - Scholar Shortages"

Posted by The Lounsbury at 10:31 PM | Comments (16) | TrackBack

May 16, 2006

Maghrebine Media II

Now that we have had our little side trip on Somali-Dutch immigration politics (fulfilling all desire on my part to touch on the same, although at Reason.com one can pursue one’s desire to comment on the irrational reactions) , I thought I might return to something rather more profound, that being media in the Maghreb and the recent Moroccan steps to liberalisation.

Continue reading "Maghrebine Media II"

Posted by The Lounsbury at 12:52 PM | Comments (0) | TrackBack

May 15, 2006

Maghrebine Media Makeovers: Morocco Issues Radio & TV Licenses - Liberalising or Potemkin Media

Following up on some prior exchanges with Issandr Bey of The Arabist, I thought I might take a moment to give a summary of the results of an item we touched on, liberalisation of the Moroccan broadcast market. Let me also try to do some value added original commentary as well, if only for the novelty value – I have terribly neglected such in my long-whinging on about tumours and the like.

The Conseil supérieur de la communication audiovisuelle (CSCA) issued the first approvals for private broadcast licenses (excepting some limited prior efforts), one television via satellite by the Médi 1 group, Médi1 Sat, and 11 radio projects.

Continue reading "Maghrebine Media Makeovers: Morocco Issues Radio & TV Licenses - Liberalising or Potemkin Media"

Posted by The Lounsbury at 02:43 AM | Comments (7) | TrackBack

May 11, 2006

Dubai: Economic Cannibalisation?

FT's William Wallace - a reporter working from Cairo who I am coming to look forward to - has an interesting article on Dubai, Building ambition raises Middle East financial stakes, that merits a read by those of us who follow the place.

The shortest version, speculation that the Dubai model of free zones and specialised development "cities" is reaching the end of its logic with its proliferation in Dubai and copying of the concept among on the part of neighbours, as in Qatar. I beleive there is something to this, the issue of diminishing returns off of the strategy.

Continue reading "Dubai: Economic Cannibalisation?"

Posted by The Lounsbury at 12:10 PM | Comments (4) | TrackBack

May 04, 2006

Morocco, Journos and Media bis, a reply

Encore comment

This is a bit tardy, but Issandr Bey of the Arabist had a comment on my somewhat ill-tempered take on the Moroccan journal, Le Journal Hebdo libel case judgment as well as more generally on the media there and some related developments.

As a distraction from working on a market proposal which I haven’t got the proper information on regardless, I thought I might expand on my comment on The Arabist reply.

Red Prince to the rescue

Continue reading "Morocco, Journos and Media bis, a reply"

Posted by The Lounsbury at 04:47 AM | Comments (2) | TrackBack

April 29, 2006

Dubai Buy II: Revenge of the UAE

According to the New York Times:

President Bush is expected on Friday to announce his approval of a deal under which a Dubai-owned company would take control of nine plants in the United States that manufacture parts for American military vehicles and aircraft, say two administration officials familiar with the terms of the deal. . . .

Continue reading "Dubai Buy II: Revenge of the UAE"

Posted by Matthew Hogan at 09:01 AM | Comments (0) | TrackBack

April 11, 2006

Morocco: Pimping Pleasure or Stalling Out? (Economist)

The present Economist contains an intriguing article covering part of my brief, and a somewhat neglected corner of the MENA world, Morocco. Morocco attracts rather little attention in the "Anglo Saxon" world, despite having racked up some interesting political and economic wins in the past year, so perhaps a quick commentary then on the article, and the state of things in this rather strategically located country.

Continue reading "Morocco: Pimping Pleasure or Stalling Out? (Economist)"

Posted by The Lounsbury at 06:13 AM | Comments (26) | TrackBack

April 06, 2006

Labour Rights in the Gulf

For decades now, the Gulf countries have built themselves up using a combination of abundant capital and cheap labour. Owing to their relatively small population bases and large oil revenues, importing workers from poor neighboring countries has been easy. Since the 1960s, each decade has seen a large rise in the numbers of expatriates in the Gulf. Proportions vary between the various countries, but the numbers are highest in the UAE, where non-citizens account for some 85% of the population and over 90% of the workforce (including 98% of the private sector).

Continue reading "Labour Rights in the Gulf"

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March 10, 2006

DPW, Some Round Up Thoughts on the Blow Back

I shall make this briefish note as the DPW fiasco continues to steam ahead. In many ways this is good for me personally as I expect increased in-region / non-US flows for MENA money. But it is bad for investment in the US, bad for US MENA policy and reveals as clearly as clear can be the deep vein of anti-Arab bigotry hiding beneath the surface in the United States. A loss for moderation, a loss for state security interests and a loss for economic efficiency and investment in key assets. Yes, bravo to ignorant know-nothing racist jingoism. This blows back not only to commerce, but also to our pious middle conversation, make no mistake about it.

Continue reading "DPW, Some Round Up Thoughts on the Blow Back"

Posted by The Lounsbury at 11:35 AM | Comments (5) | TrackBack

March 09, 2006

Score One Own Goal for US Know-Nothing Nativist Bigotry & General Islamophobia

Well, the irrational forces of bigotted know-nothing nativism and bigotted Islamophobia won out, DPW has finally said fuck it, keep poorly run ports, we'll take the profitable parts of P&O , or as the statement went,

“Because of the strong relationship between the United Arab Emirates and the US, and to preserve that relationship...DP World will transfer fully the US operation of P&O Ports North America Inc to a United States entity,” Edward Bilkey, the company’s chief operating officer, said in a statement.

Only yesterday the head, Mr Sharaf,

acknowledged ... that the US facilities were a small part of the deal and less profitable than other P&O container terminals. His remarks came as the White House appeared to soften its support for the deal and the House of Representatives pressed ahead with plans to block the transaction.

It is also of note that private equity groups, smelling blood in the water,

have approached DP World about buying the US operations, people familiar with the matter said. Industry observers said logical candidates included Blackstone and Macquarie, the Australian bank.

Well, mark one of up for the forces of blind bigotry and irrational anti-Arab xenophobia with all the dark hand waving about "connexions" and "associations" and the utter inability to distinguish between Saudiyah and the rest of the Arab world.

Continue reading "Score One Own Goal for US Know-Nothing Nativist Bigotry & General Islamophobia"

Posted by The Lounsbury at 07:08 PM | Comments (4) | TrackBack

March 05, 2006

Dubai: Some Background

For those members of our readership who hadn't come across Dubai before the P&O deal hit the headlines, here is some basic information about the city.

If you were to arrive in Dubai and look at all the glass and concrete buildings, you might easily believe yourself at first to be in a medium-to-large American city. This is not true – the city runs along rather different lines from any in the West, and similarities are often only superficial. However, there is one important way in which Dubai resembles the United States: the business of Dubai is business.

Continue reading "Dubai: Some Background"

Posted by dubaiwalla at 10:43 PM | Comments (7) | TrackBack

Bedfellows & Commerce: Israel's Zim Lines Supports DPW (Updated)

Sadly my work is distracting me from the fun of the ongoing Bigotted Know Nothing Nativist Ignoramus Mob Madness surrounding DPW's takeover of UK's P&O and the incidental acquisition of the operating leases for port operations at six major US ports (although in the UK and globally sanity has prevailed*), I wanted to augment my dear friend and colleague, Secret Dubai's post on Israeli support for Dubai and DPW with specific reference to the Israeli shipping line Zim's statement of support; I should say it comes as no surprise to anyone with experience in the region that some Israelis would step forward on this, even in a politically delicate situation - not so oddly it is the moderates on all sides trying to do business that know each other.

Continue reading "Bedfellows & Commerce: Israel's Zim Lines Supports DPW (Updated)"

Posted by The Lounsbury at 03:57 PM | Comments (9) | TrackBack

February 25, 2006

Right Punditocracy Defends UAE Port Deal

Not to sully Aqoul too much with USA domestic blustery, but it appears some of the heavy weight right punditocracy is weighing in against knee-jerk opposition to the Dubai Ports World indirect purchase of US ports operations via its purchase of a British company's interests.

Bill O'Reilly: "For now, the cold truth is that the U.S.A. will not win the war on terror without the help of nations like the United Arab Emirates. We simply cannot afford to fire that nation. If we lose these people, we'll lose the war."

Lawrence Kudlow: "This whole brouhaha surrounding the Bush administration’s green-light to a United Arab Emirates company slated to manage six major U.S. ports has nothing to do with protecting homeland security. Allow me to give it its proper name: Islamophobia."

Continue reading "Right Punditocracy Defends UAE Port Deal"

Posted by Matthew Hogan at 03:17 PM | Comments (25) | TrackBack

February 20, 2006

Invert This! Dangerous Yield Curves, Global Economy & MENA

Not to distract from the hot and overheated issues like the UAE -- excuse me, the {dramatic music} ARAB -- firm acquiring US port operations for its greasy Semite terror-mitts; or the obscure Danish cartoons wherein Muslims worldwide have found a cause for disproportionate outrage, in preference to their own local horrible conditions, or the tens of thousands of insulting movies, texts, speeches and fiction already out there.

But am I the only one noticing -- ok I am not, but it's sure quiet -- that the US Treasury yield curve is doing one of its periodic dangerous inversions? In a world of hyperliquidity and low real return (UAE equity market as MENA example?), and undervalued pressurized Chinese currency (my prediction for a bigger than expected global shock when the renminbi is properly revalued), could this mean a downturn that will affect the current climate in MENA, not to mention worldwide?

Eco-people: help me out. Should the prudent be stuffing their dirhams in the mattresses?

Posted by Matthew Hogan at 03:24 PM | Comments (11) | TrackBack

February 19, 2006

Ports, Prejudice & Cartoons: On Hypocrisy, Xenophobia and Danger

The emerging US controversy over Dubai Port World (an atrocious name I may add, even DP World is bad - hereafter at 'Aqoul, DPW) buying out historic UK port operator P&O - which incidentally includes a portfolio of US assets.

That unfortunate fact - a portfolio of US assets, which is to say management interests in six US ports on the United States Eastern Sea Board - has occasioned the exposure of a vein of ugly sentiment and public commentary, as well as typical for the "blogosphere" blind and ill-informed reaction. Another confirmation that Right and Left blog authors’ sneering with respect to the real media is badly misplaced.

This post – which will be updated and moved forward as I develop it – is intended to correct the poorly-informed xenophobic knee-jerking on Left and Right.

(I note in the interim that the fine American habit of turning everything into a lawsuit has emerged already as Maimi "Firm Sues to Block Foreign Port Takeover" per the WP, which pimps the security fallacy.)

Continue reading "Ports, Prejudice & Cartoons: On Hypocrisy, Xenophobia and Danger"

Posted by The Lounsbury at 11:00 PM | Comments (34) | TrackBack

On Morocco, Investment & Islamist Promotion

Without further comment In Morocco, a Gray Area for Growth, by Hoagland, a not bad op-ed (if superficial factually) that at least poses challenges to some of the more simple minded phobia with respect to Islamism.

Posted by The Lounsbury at 06:09 PM | Comments (0) | TrackBack

February 17, 2006

MENA Investment & FDI: Oh my, they control our ports (Updated: Dubai & US Ports)

Foreign direct investment often provokes among the less than economically literate frightened reactions about loss of control - sometimes justified but in general, not. That politicians exploit tribal fears of foreigners controlling the jewels of the nation (whichever nation) is perhaps not surprising. It is always depressing. As we pass through a small storm of Islamic versus Western tensions, it is not surprising that the forces of unreason, emotive fear sweeping MENA, etc. have had an influence.

[Update: related post chez my Lounsbury den of iniquity, with respect to blog commentary and xenophobia, a small obs and question posed.]

[Update II: My coyness aside, a discussion of the Dubai Port World - US Ports issue broke at at the above commentary linked at Lounsbury - after some obligatory beating of a sensless commentator sensless.]

Continue reading "MENA Investment & FDI: Oh my, they control our ports (Updated: Dubai & US Ports)"

Posted by The Lounsbury at 02:56 AM | Comments (2) | TrackBack

February 01, 2006

Foreign Workers and Labour Rights in the Gulf

Last year I attended a Sunni-Shia wedding for an old friend of mine (this is an entry on its own, but for another time). It was a truly international affair with guests from North America, Europe, the Mideast, Africa and Asia. One of bride’s relatives flew in from the UAE with her husband, two young children and two nannies in tow. One nanny for each child of course: a young south Indian man for the boy and a Filipino woman for the girl. Both children were absolutely insufferable and threw tantrums constantly, only to be whisked out of sight or amused in a desperate fashion by their respective nannies until they settled down. After a time I began to suspect the boy was developmentally delayed (this is not simply because he was supremely irritating, there were clearly speech issues), but it seemed as though neither parent had noticed. His nanny, barely literate and sweet-natured, was tasked mainly with keeping the child happy, clean and well-fed. He clearly did not have the authority to discipline, a fact that the boy realized and used to his advantage. The girl was somewhat quieter, but the dynamic with her nanny was largely the same. Both nannies were subjected to verbal and physical abuse by their tiny and tyrannical charges, but they bore it gamely, if at times wearily. The parents, while not overtly classist/racist, were still very condescending when interacting with "the help". Naturally, their children noticed and imitated this behaviour.

Continue reading "Foreign Workers and Labour Rights in the Gulf"

Posted by eerie at 09:35 PM | Comments (13) | TrackBack

January 25, 2006

Maghreb & Islamic Liberalism: Superficialities & Hope for a Liberalising State, Islamic Feminism, etc

Returning to commentary, although forewarning this is post chemo and may lack a certain clarity:

Via Daniel Drezner's post on That's some interesting Islam in Morocco, I found this article from Der Spiegel on Morocco - one of my favourite countries in the MENA region - discussing Mohammed VI's efforts to modernise the socio-political culture:

The Quiet Revolution: Morocco's King Aims To Build a Modern Islamic Democracy
by Helene Zuber.

Compare, by the way, to this article from almost six years ago:

New Hope, Old Frustrations - Morocco: the point of change
by the ever Left Ramonet.

An interesting, but rather flawed article I would say.

Continue reading "Maghreb & Islamic Liberalism: Superficialities & Hope for a Liberalising State, Islamic Feminism, etc"

Posted by The Lounsbury at 07:06 PM | Comments (2) | TrackBack

January 20, 2006

Media, Business & Problems

Our Dear Father of Aardvarks has an interesting posty on al Jazeerah's market position and some recent claims that al Arabiyah is beating it out that has interest from both commercial and socio-political points of view.

Continue reading "Media, Business & Problems"

Posted by The Lounsbury at 12:47 PM | Comments (0) | TrackBack

January 11, 2006

On Media, Influence and Means: Agitprop, Iraq,

Via our dear friend, Father of Aardvarks 'a comment on Gerecht on Iraqi payola', found 'Hearts and Minds' in Iraq: As History Shows, Ideas Matter More Than Who Pays to Promote Them leads me to make a comment on influence and media from a business standpoint.

Continue reading "On Media, Influence and Means: Agitprop, Iraq,"

Posted by The Lounsbury at 08:30 PM | Comments (3) | TrackBack

January 02, 2006

And in the area of economic illiteracy and policy foolishness

I read in the Moroccan business journal, L'Economiste (see here) that the drooling idiots in the government are looking at "reviewing" the concessionary contract with Lydec for the management of waste services, electricity, and other public utilities.

Continue reading "And in the area of economic illiteracy and policy foolishness"

Posted by The Lounsbury at 04:51 PM | Comments (1) | TrackBack

A Followup on the Iraq Fuel Price Fiasco

Lew Rockwell, a bit of a free-market fundamentalist, but that's not usually a bad thing, gives a 101 level explanation of why price controls and subsidies have a bad effect:

The mystery to explain is why a country that is incredibly oil rich – with the 2nd largest oil reserves in the world – would face a massive shortage of all oil products. If you knew nothing more than this detail, and you knew something about the history of economic debacles, you might guess: price controls. You would be right.

From what I can gather from public sources . . .what is unique [to Iraq in the region] is the combination of subsidies and price controls that led gasoline to be fix-priced at 5 cents per gallon until very recently. You don't have to be an economist to know what the results of this policy would be. Not only does it lead to overconsumption [but] the number of vendors willing to distribute the stuff in the open market collapses. What’s left is bought in Iraq and sold to neighboring countries at a profit.

Thus does a policy designed to make oil cheap for all result in the bizarre world in which a country full of oil underground would not have any of the stuff available above ground.

Posted by Matthew Hogan at 04:09 PM | Comments (1) | TrackBack

December 24, 2005

The bubble bursteth?

A Christmas crash for soaring sandland stocks:

Retailers dump UAE stocks
Posted: Friday, December 23, 2005

Dubai: Retail investors put the skids under UAE shares and drove the Dubai market perilously close to the 1.000 point level that analysts say could trigger an institutional sell-off.

The Dubai index, which has fallen steadily since hitting a record high on November 9, closed 4.79 per cent lower at 1,003.72 points. The Abu Dhabi index finished 3.03 per cent down at 4,984.21 points.

Brokers said retail investors were behind most of the selling.

'There is real fear among the small, day traders. This is a clear sign that sentiment has turned,' said Mohammed Yassin of Emirates Capital Corporation.

In Dubai more than 78 million shares traded hands, just above the daily average for a week that has generally seen moderate volumes. The focus next week will be whether the market can keep the index above the key support level of 1000.

'If the index falls below that level then some institutions will have to start selling. I don't expect panic but there will be a gradual sell-off, which could exacerbate the correction,' said one fund manager. [Reuters]

Posted by secretdubai at 04:28 PM | Comments (5) | TrackBack

November 23, 2005

On Trade: Wolf & The Illiterate Mumbling of the Anti Globos

Martin Wolf has an excellent commentary on the idiocies of the anti-trade anti-globo Left and its ridiculous mumbo jumbo. Were I not half way to la la land, I might comment, but I do wish to draw attention:

Martin Wolf: Trade justice fighters are misguided
By Martin Wolf
Published: November 22 2005 20:34

Posted by The Lounsbury at 05:28 PM | Comments (1) | TrackBack

Sharia Products: Market grows for Muslim investors

Laying in bed mildly delusional from anti-haemorrhagatic drugs and other items, I thought I might indulge myself in a reflexion on an interesting arty from The Financial Times on Islamic Finance and products.

The arty in question Market grows for Muslim investors covers some interesting territory even if it is a bit general.

As I can not think of a better time to indulge in commentary on sharia products than when slightly delusional from from anti-haemorrhagatic drugs, what follows are some comments on the text itself:

Continue reading "Sharia Products: Market grows for Muslim investors"

Posted by The Lounsbury at 03:09 PM | Comments (4) | TrackBack

November 08, 2005

US Gov and Private Equity: Project is public [Upated with Arty Text] [Update 11 Nov]

The item I have refered to in the past is now public:
A Ludicrously Bad Idea

The key item here is this:

"The U.S. wants to see some success before further expansion. It envisions attracting board members with the clout -- names being bandied about include Jack Welch and Robert Rubin -- to get Egyptian leader Hosni Mubarak on the phone to complain, for example, that he needs to free up pharmaceutical prices if a private drug industry is to flourish in Egypt."

Fucking stupid ass concept. Getting your fund involved in these kind of politics is a disastrous way to invest.

UPDATE: Arty text below with extended commentary.

Continue reading "US Gov and Private Equity: Project is public [Upated with Arty Text] [Update 11 Nov]"

Posted by The Lounsbury at 06:23 PM | Comments (11) | TrackBack

October 24, 2005

On regional economies and competitive advantages: McKinsey & A Comment on the Maghreb (plus a perso reference)

McKinsey has published a short note in its Quarterly based off of its recent (and still secret) report to the Moroccan government on what it should do to stop being such a medoicre performer, entitled:
Morocco's Off-Shoring Advantage

More comments later, link is to the abstract, full content requires membership.

As an aside, I may be looking to hire a translator, see the Lounsbury blog for details.

Posted by The Lounsbury at 03:52 PM | Comments (0) | TrackBack

October 17, 2005

On Subsidies and Incompetence: How Social Solidarity Rings Hollow

In checking today's edition of the Moroccan business daily "L'Economiste" (most famous in my circles for having a bit back published an article on banking that included the inadvertent (or so one would hope) text: "My love I want to lick you everywhere.") online I was quite amused by the front pager on the inconveniences of the totally batty and absurd petrol products subsidies program.

The underlying article conveys the detials, which are essentially because the grossly incompetent (from a current planning perspective) Finance Ministry has refused to acknowledge the reality of USD 50/barrel prices and has planned its subsidies program (which was de-indexed from the market a few years back in a fit of stupidity) against (as I recall) 20 odd dollars/barrel, the government is 5 billion Moroccan dirhams in the hole to the local distributors and refiners. That's roughly 470 million USD at current prices.

A non-trivial sum.

The point here is the idiocy of the subsidies to begin with, which are boosting consumption at a time of accelerating prices, while doing nothing to help the country address conservation issues. At the very least they should be bloody indexed.

This entirely leaves aside the fact that despite the prattle about social solidarity, the untargetted subsidy actually is gives more to industrial users at the expense of taxpayers than to the poor. A targetted subsidy to say a certain size of butagaz (the weiner nat gas bottles the poor use to cook and do just about anything) might be rational.

However, this is precisely the sort of irrational economic policy that if the country is forced to lift it, the drooling morons in the anti-globo left will squeel on about oil companies and Big Business, etc. etc.

Posted by The Lounsbury at 11:26 AM | Comments (4) | TrackBack

October 12, 2005

Migration, Economics & MENA-African pileups

While I may be banging away at an issue of little general interest, I was encouraged to find something of relevance to the rising issue of Euro-African migration and the Maghreb in the last issue of the Economist.

Economics focus
Be my guest

The economic case for temporary migration is compelling; the historical record less so
Oct 6th 2005
_{(Yes subscription, don't like it? Fuck off then and read some free twaddle.)}

For those puzzled, my reference is to the recent problem emerging in the Maghreb and especially Morocco with its land border with the Spanish enclaves Ceuta and Mellila, which I mentioned in my typically light weight Illegal Immigration - Borders & Madness and The Maghreb-African Immigration Problem

Continue reading "Migration, Economics & MENA-African pileups"

Posted by The Lounsbury at 04:49 PM | Comments (3) | TrackBack

October 06, 2005

Arab Radio

Our friend The Father of Aardvarks has an interesting little piece drawing attention to a new report on Arab radio from the Arab Advisors Group; a very solid media advisory group founded a few years back (I should disclose that I know one of the founders, and have done business with him).

Our fine Father of Aardvarks, or Bou Aradvraak as I like to call him, largely concetrates on the public policy angle, which is important, but I find the business angle as interesting.

Continue reading "Arab Radio"

Posted by The Lounsbury at 05:21 PM | Comments (0) | TrackBack

September 30, 2005

Illegal Immigration - Borders & Madness: Mass Attempts at the Spanish-Moroccan border

Recently The Father of Aardvarks made a comment on some recent apparent censorship in Morocco with regards to press comments about illegal immigrants in Morocco attempting to reach Europe. Or as the Father of Aardvarks put it:

Here's a story of an Arab government clamping down on the media with an unusual twist. Al-Jazeera reports that the Moroccan government confiscated the press run of a local newspaper because it ran a "racist" and "inflammatory" article about African immigrants "invading northern Morocco."

While I understand the Father of Aardvarks is a media critic by interest and trade, my first thought was to the underlying crisis (the second being it would be nice to know which paper; there are some in Morocco I am familiar with which I have no problem suspecting of racist and inflammatory yellow journalism).

This past week saw rather dramatic events underlining precisely the level of bubbling tension on all sides that might well justifiably provoke action by the government: a series of mass assualts by "thousands" of African would be immigrants to Europe on the frontier fences of the Spanish enclaves of Ceuta and Mellila.

The crisis effectively is a rather large accumulation of sub-Saharan Africans building up in the Moroccan north - in the region called the Rif - along the border areas with the Spanish enclaves. This has been fairly little mentioned in the local press, although one does see time and and again in some areas clots of what are clearly sub-Saharan migrants begging and travelling north. Something most people do not trouble themselves about as Moroccans try to emmigrate in much the same way.

However, in the last few years, Morocco has been under intense pressure from the EU to "do more" with regards to stopping the flow of illegal immigrants to Spain and onwards and has taken stepped up measures to block transits via the Mediterranean and the enclaves.

Continue reading "Illegal Immigration - Borders & Madness: Mass Attempts at the Spanish-Moroccan border"

Posted by The Lounsbury at 05:47 AM | Comments (1) | TrackBack

September 29, 2005

IPO madness

Earlier comments here have drawn attention to the surplus of liquidity in the region, and the resulting stock market bubble. So what happens when there's an IPO for a UAE company and no way to apply for shares in Abu Dhabi?

[T]he Dana Gas IPO brought chaos to UAE banks with would-be subscribers falling over themselves to pick up application forms. All flights from Saudi Arabia to the UAE have been booked solid for days and 33,000 people crossed the border in the past four days, according to local officials.

Several banks had to close their doors to control the crowds and some banks reported scuffles as the crowds struggled to get to the counters. At least one incident was reported in which a security guard was roughed up.

New laws regulating IPOs will soon be ready in the UAE. But I believe a stock market crash is inevitable regardless.

Posted by dubaiwalla at 02:01 PM | Comments (4) | TrackBack

September 12, 2005

Underdevelopment as Dilettantisme: Why MENA Does Not Attract Capital, Reason No. 5

While sadly behind on my ability to comment substantively, I thought a bit of a comment on dilettanstisme would be worth a quick intervention (and it being all I have time for, it's what one gets).

The comment is provoked by a series of convos over the past few days in regards to a certain MENA country (which for various sensitivity reasons shall remain unnamed) and its hosting of a MENA region investment conference. Let's say that our certain MENA country is not exactly a star performer in the realm of attracted FDI, per capita or in gross. Of course neither is the region.

There are multitudes of reasons for this. The one to be discussed today, dilettantisme.

Continue reading "Underdevelopment as Dilettantisme: Why MENA Does Not Attract Capital, Reason No. 5"

Posted by The Lounsbury at 09:25 AM | Comments (1) | TrackBack

September 01, 2005

Colds, Fevers and Oil: US Gulf, Global Pricing

I think it worth bringing to others attention the following: Nadezhda on rather nasty scenarios regarding the impact of the hurricane that has apparently more or less destroyed the US Gulf Coast

There is plenty of electronic ink being spilled about this, I shall not waste time on that, however some reflexion on the problematic state of global oil markets and this event is relevant to the MENA region.

Posted by The Lounsbury at 10:51 AM | Comments (0) | TrackBack

August 26, 2005

Structuring Private Equity in MENA for Development (bis)

Added Thoughts on Private Equity for Devleopment MENA

I neglected to touch on a few key points in my original note, below are further thoughts on private equity and economic development for the MENA region.

Continue reading "Structuring Private Equity in MENA for Development (bis)"

Posted by The Lounsbury at 08:16 AM | Comments (0) | TrackBack

August 25, 2005

Structuring Private Equity in MENA for Development

A few weeks ago I raised the subject of emerging markets private equity in particular in the context of US Gov efforts to utilize the vehicle to further its political / development goals in the Middle East – North Africa region. One of our online world colleagues if you will posed a question to me as to what the “The Lounsbury” approach would be, in the context of my expressed skepticism in regards to the investment vehicle / definition chosen by The Overseas Private Equity Corporation.

Ironically (well not really) at present I am working on materials closely related to just this question, although not really in regards to development – but as much of the private equity activity in region has been international development institution driven there is a clearly overlap. Now, having sent drafts of my materials off for comment I can take a moment to sketch out some preliminary thoughts on the issue that will be the basis for future comment.

First, my assumptions, based on personal experience in the region and in the “sector” if we can call it that. Again, these are my a priori assumptions and principes.

Continue reading "Structuring Private Equity in MENA for Development"

Posted by The Lounsbury at 11:34 AM | Comments (3) | TrackBack

Water, Business & Privatisation

A fine comment in The Financial Times today on water services privatisation that has no small meaning for the MENA region.

The private sector can get water flowing to the poor
By Fredrik Segerfeldt
Published: August 24 2005 20:14 | Last updated: August 24 2005 20:14

A subject of long interest to me, as some know, dating back to my time in Egypt where I was appaled at the sheer madness of Egypt's water policies.

Well, actually I spent much of my time appalled by everything in Egypt, but that is another matter.

It is an abiding shame that the idiot anti-globalisation fools opposed sensible privatisation of water services under emotive and illiterate cries of "human rights" and the like, while all too typically ignoring the fact of real costs of water services which get borne by the poor one way or another.

Posted by The Lounsbury at 06:07 AM | Comments (3) | TrackBack

August 16, 2005

Pimping Equity or Pissing it Away?: Private Equity & US Gov Efforts, some quick notes

A somewhat quick note building off of a comment by the esteemed Nadezhda in regards to my rapid note on a new US Gov private equity fund _{(also with more rough perso comments at Lounsbury )} backed by the Overseas Private Investment Corporation, a US parastatal investment insurance and financing house whose main line of business is political risk insurance on US direct investments in risky locales.

I have been intending - and still intend to - write some commentary on this specific issue of private equity (or in general equity finance) in the MENA region, but I thought some quick notes on this OPIC backed private equity fund for the MENA region are in order, and in response to some notes by Nadezhda - whose name I have learned to spell now.

Continue reading "Pimping Equity or Pissing it Away?: Private Equity & US Gov Efforts, some quick notes"

Posted by The Lounsbury at 05:45 AM | Comments (6) | TrackBack

August 11, 2005

Market Madness or Brilliance? US Gov Private Equity for MENA Announced

At the risk of descending into flackery or something approaching it, I thought a brief comment here might be fun.

OPIC BOARD APPROVES $75 MILLION FOR MIDDLE EAST & NORTH AFRICA FUND

Certainly this plays into my personal interests.

[Updated with correction below]
[Update with a question: Is there a debate to be had here regarding using such tools for acheiving a policy goal?]

Continue reading "Market Madness or Brilliance? US Gov Private Equity for MENA Announced"

Posted by The Lounsbury at 01:06 PM | Comments (6) | TrackBack

August 02, 2005

Tsar Mubarek & Reforms for the Neo Mamlouks

An article that merits close reading and attention; in fact I believe it is deeply indicative of the real challenges in Egypt, and in some ways the wider Arab world in regards to transition costs - if in general with moderately less severity.

In Egypt's Countryside, Farmers' Anger Seen As 'Silent Time Bomb'
Recent Revolt Over Rents and Evictions Draws Support of Mubarak Opponents
By Daniel Williams
Washington Post Foreign Service
Sunday, July 17, 2005; A16

I would cite this as something highly indicative of the real position of the Mubarek government as well as the liberal urban classes, what I might call the "kefaya" chattering classes in one of my less charitable moods (although one supposes one can validly ask if I have charitable moods). I mean by that, the generaly comfortable proper liberal opposition who rather uncomfortabley ressemble a similar opposition in the fading years of the tsarist empire in old Russia.

Continue reading "Tsar Mubarek & Reforms for the Neo Mamlouks"

Posted by The Lounsbury at 07:25 AM | Comments (1) | TrackBack

July 29, 2005

Furthering Political Integration in the Gulf Cooperation Council

The Gulf Cooperation Council (GCC) is a grouping of six states on the Arabian peninsula- Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE- formed in 1981. Each of the aforementioned states is an absolute monarchy that depends upon hydrocarbons as the primary source of revenue for its rentier economy. The organization’s record on cooperation thus far has been mixed. Significant decisions require the unanimous support of all six member states. The GCC acts an effective bloc only when members’ national interests coincide. However, when consensus cannot be reached, decision-making is blocked.

Continue reading "Furthering Political Integration in the Gulf Cooperation Council"

Posted by dubaiwalla at 06:45 AM | Comments (7) | TrackBack

July 27, 2005

On IMF, Populism, Yemen & Jordan: Populism as Self Defeat, or why subsidy riots are not wins

A small note in response to a note by our friend, the Father of Aardvark(s) _{(hmmmm, I believe that I should create an Arabised plural, and for the sheer fun of it, a broken one, so from now on, Abu Aardvark to me is Abu Araadvaraak (abusing grammar and presuming Ardvark is a compound word), or in Maghrebine form Bou Aradvrak).} on the 'victory' of the Yemani street in reversing the revision of subsidised petrol prices.

Continue reading "On IMF, Populism, Yemen & Jordan: Populism as Self Defeat, or why subsidy riots are not wins"

Posted by The Lounsbury at 03:09 PM | Comments (3) | TrackBack

July 26, 2005

Creating Opportunities - Liberalisation & MENA, The Micro Level

A small piece of news that I shall try to expand on, but after some little work on a Fund proposition. In the meantime, for comment and reflection.

The Moroccan business press reported an item that I would think most readers would pass over in boredom, but I find highly relevant to understanding why unemployment is so high throughout the MENA region and why liberalisation - domestic liberalisation even more so than to the global market, is so important for giving real opportunities to the populations here. And by doing so, providing alternatives to the ever more attractive nihilism of Salafist Takfiri ideology.

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Posted by The Lounsbury at 04:16 PM | Comments (2) | TrackBack

July 07, 2005

An extended comment on IMF, Jordan discussion

As this is rather long for comments, a small entry on the IMF, Jordan and Liberalism discussion based on our esteemed co-author, ridemycamel, who again hopefully will pardon my poor manners, sharp tongue and the like.

I also note that due to popular outcry, I am introducing block quoting. I dislike it, but have to maintain some pretension to customer service or our financier will dump me. (Although it was such a pain to add I can't promise consistancy here)

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Posted by The Lounsbury at 03:19 PM | Comments (0) | TrackBack

July 04, 2005

IMF, Jordan and Hegemony: A Rebuttal of Sorts (Updated)

Let me engage for the first time a co-author, in particular ridemycamel in regards to his entry on the IMF.

I’ll say first of all it is intelligent, well-written, clear and concise. Incredibly wrong-headed and trapped in leftist twaddle, but well-written. I thank the author in advance for what I am sure will be an interesting reply and while I am going to whack him up side the head a number of times, it is with all due respect.

From the top then:
Financial Aid, the IMF, and Historical Structures: The Case of the Bread Riots in Jordan

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Posted by The Lounsbury at 09:56 AM | Comments (23) | TrackBack