Ecuador's Eco-Econ Gimmick: Pay Us NOT to Drill

♠ Posted by Emmanuel in , at 6/30/2013 06:25:00 PM
Ah, Ecuador, home of central bankers with fake degrees and would-be destination of Edward "And the Truth Shall Set You Free" Snowden. Regardless of its harrumphing and chest-thumping, there's no getting away from the fact that Ecuador is a really, really hard-up nation. Just a few days ago, some faction of the Ecuadorian government claimed that it would unilaterally walk away from trade preferences given to it by the United States. More recently, though, Rafael Correa has implied that no such thing will happen and that Edward Snowden is not being granted asylum in Ecuador. Can't afford to upset the flower growers who provide one of Ecuador's few sources of foreign exchange, right?

So what is it, really? Let's just say these guys lurch from flights of fancy to the cold light of reality in the blink of an eye. Speaking of which, our friends over at the Bulletin of Atomic Scientists have an interesting feature wherein Ecuador's government--supposedly mindful of the environmental consequences of oil drilling but dependent on oil revenues at the same time--has a unique gambit to solve the environment / state revenue quandary. Get this: it is asking others to pay it NOT to drill, baby, drill in its ecotourism sanctuary known as Yasuni National Park:
This poses a quandary for Ecuador, a poor country that relies heavily on oil exports for income but is also an eco-tourism destination. As oil development continues to push deeper into the Ecuadorian rainforest, the government has put forth a unique proposal to protect a still-pristine tract covering about 700 square miles: It has invited other nations—most pointedly, those that grew rich on fossil fuels and are now worried about global climate change—to pay to leave the oil underground. At a time when the United States and other relatively wealthy nations are doing far too little to combat climate change, Ecuador’s proposal represents an innovative way to reduce emissions, and to protect habitat for monkeys, other wildlife, and indigenous humans in the process...

One-fifth of Ecuador’s known oil reserves are located beneath the three easternmost blocks of Yasuní National Park—the Ishpingo, Tambococha, and Tiputini sections, collectively known as ITT. They lie beyond the Tiputini Biodiversity Station in a remote area populated by only a few small groups of native people, some of whom live in voluntary isolation from the rest of the world. In a proposal called the Yasuní ITT Initiative, Ecuadorian president Rafael Correa has offered to forego oil drilling in these blocks in exchange for $3.6 billion from the international community. In so doing, the country would leave some 850 million barrels of oil untouched, and about 400 million tons of carbon dioxide un-emitted.
And how many takers have there been for this blackm...indecent prop...flimf...rack...I mean, financial arrangment? Few and far between. You see, it estimates the value of its 846 million barrels of recoverable oil in Yasuni National Park at $7.2 billion. If it collects half this amount in contributions for it not to drill by 2024, it won't do so. Otherwise, you know the, ah, drill::
The initiative was announced in 2010 and is hugely popular within Ecuador, but only a few European and South American nations have agreed to support it, promising about $50 million to the fund so far. Major outreach efforts just began this year, though, and Ecuador has a 13-year timeline for reaching its $3.6 billion goal.
The financial details on this fund to keep Ecuador from drilling are hosted by UNDP. You can even make a donation there if you wish. Me? I am generally sceptical of all things that have the words "official" and "Ecuador" in some combination.

Maybe that Snowden guy will "expose" the contrivances behind this plot if and when it becomes evident to him that he's been well and truly spurned by Ecuador.

Snowden Files: Ecuador Cuts US Trade Benefits + More

♠ Posted by Emmanuel in , at 6/28/2013 02:16:00 PM
It's probably not the wisest thing to do, but at least Ecuador may be accepting the consequences of putting its foot in its mouth. Famously harbouring WikiLeaks' Julian Assange in its London embassy, it appears ready to up the stakes in testing America's (quite frankly idiotic) "Internet Freedom" concept by also harbouring former NSA contractor Edward Snowden. He famously leaked documents showing massive data gathering on Internet users on behalf of the US government and is under a global interdict from US authorities.

While this erstwhile hero to the nerdcore set has been sitting around in a Moscow airport waiting for a flight to Ecuador, a US senator threatened to remove American trade preferences granted to Andean nations:
The head of the U.S. Senate Foreign Relations Committee said on Wednesday he would seek to end preferential treatment for Ecuadorean goods if the South American nation offers political asylum to fugitive former spy agency contractor Edward Snowden.

Senator Robert Menendez [D-New Jersey], chairman of the foreign relations panel, warned in a statement that accepting Snowden "would severely jeopardize" preferential trade access the United States provides to Ecuador under two programs that are up for renewal in Congress. Our government will not reward countries for bad behavior," Menendez said.
The trade preferences, by the way, are a continuation of a 1991 pact (the Andean Trade Preference Act) wherein the US granted Bolivia, Colombia, Ecuador and Peru improved access to the American market in exchange for better cooperation fighting drug production. In Iran-Contra lingo, it was a "trade for drugs" deal. As it turns out, it needs to be renewed every two years by lawmakers, thus occasioning Menendez's threat of non-renewal the next time around. Given its meagre trade, Ecuador benefited from this trade benefit with the US significantly as demonstrated by lobbying quite hard to continue it despite a steady stream of anti-American rhetoric. Really, Correa, like his purported opponents, is quite the hypocrite.

But I suppose things may have changed and Latin brio has overcome common sense: Ecuador's government has recently said, "go ahead, make my day":
Ecuador's leftist government thumbed its nose at Washington on Thursday by renouncing U.S. trade benefits and offering to pay for human rights training in America in response to pressure over asylum for former intelligence contractor Edward Snowden. The angry response threatens a showdown between the two nations over Snowden, and may burnish President Rafael Correa's credentials to be the continent's principal challenger of U.S. power after the death of Venezuelan socialist leader Hugo Chavez.

"Ecuador will not accept pressures or threats from anyone, and it does not traffic in its values or allow them to be subjugated to mercantile interests," government spokesman Fernando Alvarado said at a news conference.
I especially like the part about how Ecuador will gladly pay for the human rights training of Americans who keep yakking about them while acting in...let's just say inconsistent ways:
In a cheeky jab at the U.S. spying program that Snowden unveiled through leaks to the media, the South American nation offered $23 million per year to finance human rights training.
The funding would be destined to help "avoid violations of privacy, torture and other actions that are denigrating to humanity," Alvarado said. He said the amount was the equivalent of what Ecuador gained each year from the trade benefits.
The Latin Left is alive and well. If it weren't, then nobody would be making PR stunts of this nature to contest the seat vacated by the late Hugo Chavez. That said, let's just say that Ecuador has some way to go before topping Chavez's stunt of subsidizing heating oil purchases of poor Americans via the CITGO subsidiary of state-owned firm PVDSA.

Meanwhile, like his immediate predecessor, Obama should just shut the hell up and think before making more retarded statements about "Internet freedom" and so on if his government is always so hellbent on prosecuting these evildoers. Making folk heroes out of ninnies is a quintessentially American government pastime. This guy isn't even on Ecuadorean soil, fer cryin' out loud.

UPDATE: Note that the US has already cut Andean Trade Preference Act benefits with Bolivia, another repeat transgressor of the Will of America. However, Bolivia's case was over its nonchalance in combating drug production there whereas Ecuador's concerns...unusual and unrelated things.

Is the IMF Beating Colleges at Online Learning?

♠ Posted by Emmanuel in , at 6/24/2013 03:43:00 PM
There is a big debate raging in academia about the relevance of university education as we know it today: First, it is becoming increasingly expensive as salaries remain stagnant or even decline as in the US and other Western nations. Second, do what universities offer have relevant course content, or are they becoming increasingly isolated in ivory towers without much practical application? Third, doesn't a higher education degree become obsolete far more quickly nowadays with the rate of advancement in all fields of human endeavour?

More and more educators believe that today's university paradigm is outmoded--and I am one of those who are asking this same question. That is, what value-added does having a college degree really offer? One of the solutions proposed, of course, is delivering course content online via what they call Massive Online Open Courses (MOOC) that can potentially deal with the issues raised above. First, delivering courses digitally allows universities to deliver courses--save for face-to-face interaction, of course--more cheaply and to a geographically broader audience. Second, material can be more readily tailored online to reflect the latest real-world trends and developments in various subject areas instead of sticking to the inbred world of folks who've been stuck in academia for years and years--like me! Third, updating of content is easier when you're not stuck with using sporadically updated textbooks and other dated course materials.

A potentially surprising vote of confidence in this idea is coming from, of all sources, the IMF. It faces the challenge of providing knowledge to many stakeholders in far-flung nations who wish to train officials better in matters of public financial management. Delivering technical assistance (i.e., advice) after all is one its main lines of business--see the table above taken from this 2011 IMF survey. What's more, it is in fact not hard up given steady incoming funding at this time because of various financial crises in different parts of the globe, but it is nonetheless moving with the times in trying to shift more courses online. Say what you will about the IMF--its critics are legion and include me--but it definitely has a 'brand' when it comes to public financial management. Unlike many middling universities, the IMF also does not lack takers for its educational services regardless of your opinion of its content:
The International Monetary Fund will make its training sessions on financial policy and debt sustainability available online this year to government officials worldwide, allowing it to reach a bigger audience at lower cost, it said on Wednesday. IMF financial workshops are meant to help governments address economic dilemmas and are currently held in eight training centers worldwide, meaning officials must travel and remain onsite for weeks, said Sharmini Coorey, director of the IMF's Institute for Capacity Development. That model is expensive for the IMF and its donor countries - and the classes fill quickly, Coorey said. In 2012, the IMF trained 7,800 officials in 270 workshops held in places like Singapore, Brazil, Kuwait and the African island of Mauritius.

"We have a lot of demand for our training and we don't have the scale to meet that demand," Coorey said. The online courses will be hosted by edX, a nonprofit consortium founded by Harvard University and the Massachusetts Institute of Technology. So far, the platform has primarily been used to host massive open online courses, or MOOCs, from elite universities.
The learning arm of the IMF, by the way, is known as the IMF Institute for Capacity Development. Get this: the IMF is even looking to expand its 'student base' insofar as others may wish to learn more about public financial management including civil society actors, consultancies, and so forth. Its marketing is sharp, too, with course offerings being made in different languages in the near future:
The classes will be in English, but may carry subtitles in other languages. They will open first to government officials within the next few months. Coorey plans to open them to the broader public in 2014. "We hope it will enhance public awareness and elevate the debate about economic issues," she said. The financial arrangements have not been made public, but edX President Anant Agarwal said the IMF courses would bring in revenue for the consortium. If it's a success, Agarwal said he would seek similar deals with other institutions, as well as corporations and nonprofits.
Who'd think that the IMF of all institutions would be an innovator in delivering online education modules? You may not agree with IMF policies and prescriptions (I usually don't). You may not even believe that it performs its functions well as the world's lender of last resort (ditto). However, when it comes to keeping in tune with the times in delivering timely and cost-effective solutions in education, it is making noticeable strides. It's hard  to imagine, but yes, the IMF seems to understand the logic driving MOOCs more than any number of universities still wedded to increasingly outmoded learning models.

I can't believe I'm saying this, but perhaps it's time that we let the IMF show us the way in higher education.

In the meantime, repeat after me, class: Savings...good! Debt...bad!

UPDATE: Details for the distance learning modules, AKA MOOCs, are already listed online.

2013=1997? Volatile Asian Markets + SE Asia Haze

♠ Posted by Emmanuel in , at 6/21/2013 02:54:00 PM

There is something about Asia that seemingly brings on the confluence of cataclysmic financial and environmental events . In 1997, the Asian financial crisis devastated wide swathes of the region in a credit crunch of epic proportions. To further the doomsday mood, the Indonesia-Malaysia-Singapore area was blanketed with suffocating smog emanating from Indonesia's recurrent forest fires. So, not only did market plunges in the values of stocks and bonds take your breath away, but so did inhaling the thick smog.

More recently, some family friends working in Singapore were scheduled to leave for Manila but ran into delays when one of their young'uns had to see a doctor due to the heavy haze blanketing the Indonesia-Malaysia-Singapore area once more. You would have hoped that Southeast Asian nations had dealt with transboundary haze in a satisfactory manner sixteen years later, but no: Forest fires still occur that devastate large areas of the Indonesian rainforest, supposedly started by slash-and-burn tactics of subsistence farmers. For, the easiest way to clear forest cover remains to set in on fire; pity if that fire goes of control.

As it so happens, the Indonesia-Malaysia-Singapore "tri-smog area" is also experiencing financial turmoil as markets here in Asia are being rocked hard. As you probably know, there is much whiplash in bond, currency and equity markets here due to uncertainty over whether the US Federal Reserve will stop buying Treasuries by the tens of billions each month via quantitative easing. There is also uncertainty over the extent of Japan's own version of quantitative easing--for how long and how much? We're sure they would like to continue, but at what cost to Japan's purse? With interest rate expectations being adjusted upwards, it becomes more difficult to borrow money to speculate in stocks. In turn, the dollar is strengthening somewhat as some international investors reconsider their portfolio investments in Asia and head home.

[Cough...cough] Meanwhile, the blame game over smog is leading to a heated war of words between Singaporean and Malaysian officials [ahem...hem]. Amid the suffocating smog, Singapore's environment minister says Indonesia has "no right" to harm the health of his countrymen as the city-state's air quality has become the worst it's ever been, 1997 notwithstanding [choke...gasp!]:
"No country or corporation has the right to pollute the air at the expense of Singaporeans' health and well-being," Singapore's Environment and Water Resources Minister Vivian Balakrishnan said on his Facebook page.

Balakrishnan said Singapore had sent officials to an emergency haze meeting in the Indonesian capital, Jakarta. At 1:00 pm local time on Thursday, the city-state's pollution standards index (PSI) soared to a new high of 371, indicating air quality had deteriorated to "hazardous" levels, and exceeding the previous record set on Wednesday night.

A PSI reading above 300 indicates "hazardous" air, while a reading between 201 and 300 means "very unhealthy". The top PSI readings in Singapore over the past two days have exceeded the peak of 226 reached in 1997 when smog from Indonesian fires disrupted shipping and air travel across Southeast Asia.
OTOH, Indonesian officials think the (pampered?) Singaporeans to be a bunch of whingers--and worse.
Earlier on Thursday, Agung Laksono, the minister who is coordinating Indonesia's response to the haze crisis, accused Singapore of "behaving like a child" by complaining about severe haze from raging forest fires on Sumatra island that has cloaked the city-state. "Singapore should not be behaving like a child and making all this noise," he told reporters in Jakarta. Laksono was responding to Singapore's demands earlier on Thursday for "definitive" action by Indonesia to quell forest fires raging in Sumatra...
Agung Laksono said "It's not what Indonesians want, it's nature."
This being the IPE Zone, what's particularly interesting are Indonesian accusations that Singaporean firms in search of palm oil plantations may be responsible for these fires. What's more, even Singaporean authorities cannot discount this possibility altogether. Indonesian officials have thus tried to deflect blame by suggesting companies based in Singapore may be partly to blame for the fires. To which the Singaporean authorities say, (surprise!) prove it:
"It can easily last for several weeks and quite possibly longer until the dry season ends in Sumatra,"  [Singaporean PM] Lee Hsien Loong said on Thursday, warning of action if Singapore-linked companies were behind the burning. "On the scale of it, it's unlikely to be just small stakeholders slashing and burning."

Singapore has said it wants Indonesia to provide maps of land concessions so it can act against firms that allow slash-and-burn land clearing. The illegal burning of forest on Indonesia's Sumatra island, to the west of Singapore and Malaysia, to clear land for palm oil plantations is a chronic problem, particularly during the June to September dry season...
Indonesian officials have tried to deflect blame by suggesting companies based in Singapore may be partly to blame for the fires. Singapore has said it wants Indonesia to provide maps of land concessions so it can act against firms that allow slash-and-burn land clearing. The illegal burning of forest on Indonesia's Sumatra island, to the west of Singapore and Malaysia, to clear land for palm oil plantations is a chronic problem, particularly during the June to September dry season.
Let's just say this matter is not, ah, clearing up soon. So, on top of financial disturbances we have logistic ones as shipping, transportation and travel are adversely affected on a region-wide basis. Having rather bad memories of 1997, I honestly hope they can sort this issue once and for all to prevent future recurrences. Moreover, the simultaneous occurrence of financial and environmental volatility honestly disturbs me a lot given how much buck passing is happening:
"The slash-and-burn technique being used is the cheapest land-clearing method and it is not only used by local farmers, but also employees of palm oil investors including Singaporean and Malaysian companies,'' Hadi Daryanto, a senior official at Indonesia's Forestry Ministry, told Indonesian media. "We hope the governments of Malaysia and Singapore will tell their investors to adopt proper measures so we can solve this problem together.''
A few years back, LSE IDEAS hosted an event in Southeast Asia asking whether the region was up to the challenge of dealing with environmental issues. My erstwhile boss Munir Majid concluded, in so many words, no. It was thus with no small amount of disappointment that I find his words to be correct no matter how bad the truth hurts as Southeast Asia is once again being blanketed in unbreathable smog. Have the root causes of these fires been identified? No. Have sanctions been put into place to place to deter those responsible? No, for again we still aren't quite sure who the violators really are. Have Southeast Asian authorities been working together to deal with transboundary haze? No, they are bickering instead and trading barbs. Alas, read on to hear more of this sad story: Despite ASEAN coming up with an agreement to deal with transboundary haze pollution in 2002, let's say it hasn't quite worked as intended. 

FATCA, Tax Havens & the New American Imperialism

♠ Posted by Emmanuel in ,, at 6/19/2013 12:58:00 PM
Once upon a time there was an offshore, where we'd hide a multimillion dollar account or two...

The wheels of financial history are spinning once more. Whereas offshore financial centres were all the rage just a few years ago, the world's most powerful countries are now causing them much discomfort as they seek to recover "lost" tax revenues. Interestingly enough, it was not always like this. Consider:
  1. Many G-8 nations were complicit in the creation of these offshore banking centres in the first place since they did not raise much of a fuss about their banks setting up shop in paradis fiscaux all those years ago;
  2. However, those things were allowed to happen during happier times when rich countries did not run habitual budget deficits;
  3. With there being no fiscal cushion to speak of in any number of wealthy countries, their mood towards tax cheats has unsurprisingly soured;
  4. Especially after the global financial crisis wiped out their tax bases, the political mood in developed nations has soured, the now-common refrain being one of "tax justice": why should us proletariats pay out a higher percentage in taxes than these wealthy folks who can shift their tax burdens elsewhere alike, say, Mitt "Bain Capital" Romney?
Even more unsurprisingly, the charge to collect more revenue is led by that most bankrupt of nations, the United States. In 2010 the Foreign Account Tax Compliance Act (FATCA)[maybe it should be "FATCAT"] was passed which allows the US Treasury to go after any offshore centre financial services provider it suspects of harbouring American tax cheats. On one hand, the "tax justice" folks whose sites I link to on the blogroll were understandably elated. On the other hand, bankers and offshore domiciles cried foul, saying the global application of American law constituted the new American imperialism.

But, this issue appears to be approaching a non-debate. With the ever-so-subservient UK appearing to bow to American wishes on this issue, it appears the famous Caribbean offshores' days of milk and honey are numbered:
Given that UBS and other Swiss banks had their vaunted bank secrecy gutted by the IRS, anything seems possible. And FATCA has a global reach with what some are calling a new American Imperialism. All in all, the world is smaller and more transparent than ever before. And it may get smaller still.

In the current milieu, the UK may be feeling some parental misgivings. After all, it spawned some of the most notorious tax havens. Many of its self-governing regions turned out to be enablers. Perhaps Britain now feels a sense of obligation to make the largely island nations join the tax haven attack.

That’s one conclusion to draw from the UK Prime Minister David Cameron asking 10 territories and self-governing regions to join hands. Just execute the Multilateral Convention on Mutual Assistance in Tax Matters, Mr. Cameron urged. It’s a creature of the OECD, the Organization for Economic Cooperation and Development. The treaty has been signed by more than 50 countries.

One of its key features—you guessed it—is information sharing. That means these countries will all share information on individuals who hold bank accounts in their jurisdictions. The 10 include Bermuda, British Virgin Island, Cayman Islands, Gibraltar, Anguilla, Montserrat, Turks and Caicos, Jersey, Guernsey and the Isle of Man. Mr. Cameron’s announcement of the 10 crown dependencies and territories tied nicely with the G-8 Summit days later.
I remain conflicted over this issue: Small island nations have few development strategies available to them, and financial services have sustained many for years and years. At the same time, it's kind of dismaying for tax cheats to get away with fiscal tomfoolery on such a vast scale. All I can say is that it's going to become much more difficult to escape American fiscal dragnets in the near future.

Crackpot Conspiracies: Bilderberg Group Circa 2013

♠ Posted by Emmanuel in at 6/17/2013 03:15:00 PM
I think it's Hollywood's fault: In any number of action/spy/suspense/thriller movies, there is a good chance that they will depict some kind of shadowy secret organization that really runs the world--usually to fulfil nefarious ends. (You can't sell movies if they were a bunch of do-gooders, can you?) One version of this storyline is that little-known but powerful masterminds get together to plot the global future to suit their purposes. Another version is that well-known public figures in politics and business are ultimately networked to an organization that decides the fate of the world that put them in places of power.

During the years of Bush the Younger, the evil organization du jour was of course the Carlyle Group. With the ebbing of American military adventurism, however, it has receded from the public eye (for now). Bereft of that military-industrial complex, conspiracy theorists have been left with more traditional bogeymen to ponder when their minds naturally wander into evil machinations being hatched.

Given that we now have a Democratic presidency, it's about time the conspiracy theorists revived the Carter-era Trilateral Commission [TLC] whose American component of a North America-Europe-Asia triad was composed mostly of Democratic instead of GOP operatives. Given Obama's seeming penchant for mounting drone attacks, engineering computer viruses, and invading Internet privacy, it's about time someone asked on whose behalf be did all of those things. I was rather amused by the Straight Dope's take on the subject matter:
The TLC's first executive director was Zbigniew Brzezinski, and such well-known figures as Walter Mondale, Caspar Weinberger, and Paul Volcker have been members. Also on the rolls at one time, mainly because the commission needed some representation from the South, was the then-governor of Georgia, Jimmy Carter. The prospect of spending hours cooped up with the likes of Walter Mondale would probably send most of us screaming for the exits. But Carter was an impressionable sort who found both the commission's meetings and its members deeply fascinating. He got chummy with many of the latter and appointed more than a dozen to posts in his administration, including Cyrus Vance, Michael Blumenthal, and of course the redoubtable Brzezinski.
This short guided tour of shadowy organizations thus brings us to the eponymous Bilderberg Group. Just as the Carlyle Group is named after the hotel its members prefer to meet at, this one is named after the venue of their first gathering. In terms of membership, however, Bilderberg resembles an older Trilateral Commission. Whereas the TLC is an North American-European-Asian gathering, a more apt name for Bilderberg would be the "Bilateral Commission" since its was intended to be an American-European gathering. But hey, it bears mentioning that the Bilderberg Group was formed in 1954--the world's powers were rather more Western then.

No matter, though. Recently, the Bilderberg Group meeting in London became an occasion for the crackpot conspracists to have a jamboree. Yes, they were partying like it was 1954 as they pondered what sort of dark machinations were being plotted in sequestered grounds...
More than 100 of the world's most powerful people are at the former manor house near London for a secretive annual gathering that has attained legendary status in the eyes of anti-capitalist protesters and conspiracy theorists. The guest list for the Bilderberg meeting includes Google executive chairman Eric Schmidt, Amazon CEO Jeff Bezos, International Monetary Fund chief Christine Lagarde and former U.S. Secretary of State Henry Kissinger. British Prime Minister David Cameron is due to drop by Friday.
The Bilderberg Group was set up in 1954 to support military and economic co-operation between Europe and North America during the Cold War. Named for the site of its first meeting — the Bilderberg Hotel in Oosterbeek, Holland — the forum for prominent politicians, thinkers and business leaders has been held annually at a series of secluded venues in Europe and North America.
I honestly doubt whether the Bilderberg Group is anything but a slightly less transparent World Economic Forum-style gathering where self-important VIPs are willing to spend top dollar to feel ever-so-important hobnobbing with other poo-bahs. While protesters at WEF events are of course ubiquitous, I believe that conspiracy theorists are less prone to ascribing dark, romantic connotations to what is ostensibly an "economic" meeting that videotapes most of its events. Let's just say that the reality of a bunch of guys talking about non-tariff barriers and other dry topics doesn't quite capture the fancy of the conspiracy set used to a steady diet of faceless characters known to viewers only by the plumes of smoke emanating from their tobacco pipes. Lemme put it this way: Do you think a runt like Paul Krugman could be cast in a Tom Clancy film adaptation? I didn't think so.

And so the "mystique" continues. Actually, the delusion is mutually reinforcing: On one hand, the erstwhile secret society members delude themselves into thinking they actually have a hand in shaping the global agenda while gathering with fellow Masters of the Universe. On the other hand, the conspiracy nutters actually buy into the idea that that's what really happens at these gatherings.

In the end, that's probably all the truth out there to be found.

Did US Ask Philippines to Kill

♠ Posted by Emmanuel in , at 6/14/2013 03:38:00 PM
News site Torrent Freak, "[t]he place where breaking news, BitTorrent and copyright collide" believes so, at least. Coming from the Philippines, I've always wondered whether to be proud or ashamed that the world's top torrent sites have had .ph top-level domains [TLDs] at one time or another. I recall the now-defunct private tracker site Demonoid being "located" in the Philippines. Sometime later, the world's second largest torrent site, Kick Ass Torrents also "moved" to the Philippines [].

As someone with--ahem--professional interest in the operation of torrent sites as working examples of the underground economy, the recent disappearance of intrigued me. Despite the Philippine passage of the Data Privacy Act in the middle of last year, it was curious to me how continued to operate with impunity after adopting its Philippine domain in April of 2011. But lo and behold, Philippine music industry figures supposedly argued that they were being hurt by's nefarious activities and the government was compelled to shut down the URL only yesterday...
Yesterday the torrent site ran into trouble with its domain, and there were signs suggesting the domain was no longer in control of the original owners. Over the past few hours more details have emerged, and the Government of the Philippines has now confirmed that the domain name has been seized on copyright grounds.

The seizure is the result of a complaint filed by the Philippine Association of the Recording Industry and several individual music labels. The complaint stated that KickassTorrents was causing “irreparable damages” to the music industry, and a local court agreed to suspend the site’s domain. “The complaint alleges that the registrant of is violating intellectual property rights by making copyrighted music available for download to its users,” the dotPH registry informed TorrentFreak. 
To be clear, the Philippine industry complaint was filed in December 2011, but Philippine authorities were only able to act after a court order was issued to do so...
Early this week the Philippine Intellectual Property Office issued a temporary restraining Order directing the dotPH registry to suspend the domain for 72 hours. The order, signed by the IPO Bureau of Legal Affairs, will become final if the domain owners don’t appeal. According to dotPH, the company that maintains the database of PH domain names, the music industry first complained about KickassTorrents in 2011.

However, the company said at the time that it would only take action following a court order. “dotPH was initially contacted by the complainants’ lawyers in December of 2011 with a demand to take down the domain, and dotPH agreed to cooperate if provided with an order from a court or appropriate authority,” TorrentFreak was informed. “dotPH received the restraining order earlier this week and subsequently suspended in compliance with IPO’s directive,” the registry adds. 
As with most of these things where "Internet," "intellectual property" and "enforcement" are mentioned, there is natural suspicion that the United States is involved in pressuring the Philippines via inclusion in the US Trade Representative's watch list. To be clear, the Philippines has long been on this list, but more for the piracy of fake DVDs as opposed to "hosting" a rogue site ( There were earlier hopes that the Philippines would be struck off the 2013 edition after cracking down on physical distribution of pirated media, but officials were disappointed when it was not. See here:
The government expressed surprise and disappointment over the decision of the United States Trade Representative (USTR) to retain the Philippines on its watch list of countries that violate intellectual-property rights (IPR) due to concerns over Internet piracy.

[Intellectual Property Office of the Philippines (IPOPHIL) Director General] Blancaflor noted the “changing requirements” of the USTR for removal from the watch list of IPR violators. “The USTR has no intention of removing the Philippines from the watch list. Every year the requirements change and vary. How can we be removed if the requirements keep changing?” he asked. “Two years ago it was massive counterfeits. We addressed that with record-breaking volume of seizures. We were not removed then. Last year the US complained that we did not pass the Internet treaty law. We passed it on March 22,” Blancaflor said.
Anyway, back to TorrentFreak on US pressure for Philippine action against
While the case is presented as a local action aimed at preventing piracy of original Filipino music, it wouldn’t be much of a surprise if U.S. forces have also been applying pressure. In its latest Special 301 Report the U.S. Government listed the Philippines on its copyright “watch list,” demanding further action against so-called rogue sites.

“The United States looks to the Philippines to take important steps to address piracy over the Internet, in particular with respect to notorious online markets,” the Office of the United States Trade Representative wrote in its report.
I suspect the Philippine authorities are still keen on having the country removed from the watch list given the efforts it has undertaken in passing the aforementioned law and continually raiding vendors of pirated DVDs. With legal backing through a court ruling to seize, its fate was pretty much sealed given the changing nature of American IP requests..

In the broader scheme of things, however, does it really matter? KAT is now operating with another TLD, business as usual. So, the US may have successfully bullied Philippine authorities, but the piracy goes on unabated as most users will eventually find the new site. And if that's taken down eventually, well, the game just moves on and on across even more TLDs. Montenegro, perhaps?

Will France's "Culture" Concerns Delay US-EU FTA?

♠ Posted by Emmanuel in ,, at 6/14/2013 10:21:00 AM
I have already dubbed the proposed " Transatlantic Trade and Investment Partnership" AKA the US-EU FTA a non-event on the grounds that (a) the counterparties are slow-growing economies (b) which already have few barriers on each other's products [around 2% tariff rates on average]. Also, (c) they face several obstacles to further liberalization on products with tariff peaks that will at best result in a watered-down agreement --especially in agriculture. While this FTA bores me already, I have nonetheless found France's intransigence somewhat intriguing given the run-ins they've had with the United States over various issues. Remember those "freedom fries"? I surely do.

A few weeks ago I discussed how the French were likely to raise a stink about "cultural imperialism" insofar as their "superior" culture was to be overwhelmed by Hollywood's brand of lowbrow tinselled trash. Call it the cultural special safeguard mechanism. While agreeing that much US video entertainment is garbage, it is not my place or that of anyone else's to question the questionable taste of French consumers. That is, if they prefer Hollywood fare to France's own productions, well, tough. Obstinate French officials are pressing this point, though. They will surely ask for exceptions in agriculture--just you wait since they will come just as night follows day--but possibly delaying the start of FTA negotiations over exceptions to entertainment is exceptional:
France is "extremely determined" to keep movies and digital media out of free trade talks between the EU and the United States, a government minister said on Wednesday, a stance that could block the start of negotiations. Two days before EU countries are supposed to give the go-ahead for negotiations, the EU is struggling to find a compromise that satisfies France's "cultural" concerns without exempting the audiovisual sector from the wide-reaching talks.

"France defends and will defend the cultural exception to the end - that's a red line," French Culture Minister Aurelie Filippetti told Reuters TV, referring to current EU rules that allow governments to preserve "cultural diversity" by setting subsidies and quotas that might otherwise be considered contrary to free trade. Asked if Paris would go as far as blocking the opening of talks on what would be the world's largest free-trade agreement, she replied: "France is extremely determined."

The first round of talks has been tentatively scheduled for July, but both sides must first agree the scope of the negotiations, something EU trade ministers should finalize at talks on Friday.
Later today the eurocrats will discuss the coverage of FTA negotiations. Expect more drama from the French. Mas oui!

UPDATE 1: The French will not block the start of the negotiations after winning an exemption on media products after hours and hours of negotiations (albeit with some qualifiers):
Paris had refused to join the 26 other EU governments unless television, movies and developing online media were left out.
The final mandate given to EU trade chief Karel De Gucht, who will lead negotiations, does not include the audiovisual sector. However, it does give the Commission the right to ask member states for a broader mandate at a later stage. "I can live with this," De Gucht told a news conference.
French Trade Minister Nicole Bricq said it was "written clearly in black and white" that culture was excluded.
UPDATE 2: A number of top European directors are elated about "victory" in a culture trade war.  

Come to Where the Energy Is: Myanmar Country

♠ Posted by Emmanuel in , at 6/12/2013 12:40:00 PM
With apologies to the Philip Morris Co.'s iconic figure, let's draw some analogies here: Both Marlboro and Myanmar are not exactly the most politically correct of figures, one representing the hazards of cigarette smoking and the other decades of political oppression. That said, both are irresistible draws in certain, undeniable respects. Marlboro is instantly recognizable worldwide for its cowboy, go-it-alone romantic imagery of the "American West." Myanmar, meanwhile, epitomizes the exoticism of the "Far East" to many Westerners. Despite their less-than-perfect reputations, they remain top-drawer economic attractions. Marlboro remains a Top 20 global brand, while Mynamar's considerable natural resources will always have its takers. [Photo c/o Process Design Engineering blog.]

So it is with the recent normalization of Myanmar's relations with the rest of the world (best illustrated by it hosting a World Economic Forum event) that it's sought energy sector investment from MNCs whose countries previously barred them from doing business with the military junta. It's like a land grab out there as its "frozen in time" oil and gas fields are going to be up for auction soon. And, unlike the oil and gas fields of Southeast Asian neighbours the Philippines and Vietnam, China is not disputing ownership over them. (Call it an accident of geography since China has this habit of claiming everything within, alas, striking distance.) Indeed, prior to the recent wave of liberalization, China was next to the only foreign investor of note in Myanmar after India. But anyway, back to the story...
[Australia's] Roc, [France's] Total SA (FP), [Italy's] Eni SpA (ENI) and [India's] Oil & Natural Gas Corp. are among 59 companies that qualified earlier this year to bid for onshore fields in Myanmar, according to the nation’s energy ministry. Myanmar is also offering 30 offshore blocks. Myanmar’s potential gas resources are estimated at as much as 45 trillion cubic feet, Roc said in February, citing a U.S. Geological Survey report. Myanmar has 7.8 trillion cubic feet of proven gas reserves, according to BP Plc data.“That’s quite a significant prize, and clearly the industry feels that as well given the appetite,” Eliet said. 
Due to having fewer geopolitical tussles with China alone, Myanmar's prospects for energy recovery may be said to be better than those of the Philippines and Vietnam irrespective of their reserves. It's certainly indicative of the lure of the "resource curse" that a country such as Myanmar stands to fill its coffers so much just by practicing rudimentary improvements in governance, but I guess that shows you how fierce competition is worldwide for fossil fuels even at this time when energy costs have receded somewhat.

World Economic Forum in Myanmar: Isolated No More

♠ Posted by Emmanuel in at 6/09/2013 02:02:00 PM
In the retail space, there are certain token signs of global integration: McDonalds, KFC and Starbucks. In the realm of economic summitry, there too are certain "franchises" one can have: Think of hosting IMF/World Bank meetings...or, in this case, a World Economic Forum event. What brought Myanmar to mind is the country hosting that most neoliberal of talk shops, the World Economic Forum, from 5-7 June. If you had told me as late as 2010 that this nation would soon be hosting Klaus Schwab's schmooze-a-thon of global movers and shakers, I'd have probably chuckled heartily in dismissing it. Klaus Schwab and Thein Sein sharing the same stage; what an idea!

Well, dismiss it no more since it's actually happened. More remarkable yet, the WEF East Asia event was held in Nay Pyi Daw--the capital created by the generals from virtually scratch starting in 2002. To escape scrutiny of their less-than-proletarian lifestyles, it was thought that Southeast Asian equivalents of McMansions were better shielded out in the boondocks. Again, who would have thought that the hermit-generals would open up to the world once more, or that a marquee WEF event would be held in Nay Pyi Daw of all places.

At any rate, the presence of Tony Fernandes (head of AirAsia--the region's largest budget carrier) and Indra Nooyi (global head of PepsiCo) and other movers and shakers in the worlds of business and politics guaranteed attention. Indeed, that few remarked on how exceptional it was that such an event was held there indicates how far Myanmar has gone towards mainstreaming itself into global affairs. Given how marginalized Myanmar has been in ASEAN in the past few years largely through its own actions, the rapid transformation of the country augurs well for the group moving forward:
John Riady, director of [multinational conglomerate] Lippo Group, said: "I think the opening up of Myanmar over the last 12-18 months is nothing short of amazing. And we should all seize this opportunity as a moment to come together and try to work out our differences and achieve a breakthrough for the integration of the region." Now that Myanmar is facing fewer sanctions and easing controls on its governing style, it'll be able to contribute as a more active member within ASEAN.
The message has been served, then: Myanmar may not remain the "weakest link" in Southeast Asia for long. Besides, with more cooperation and less fear in store for ASEAN, who's complaining?

Why World Bank Doesn't Get 'Doing Business'

♠ Posted by Emmanuel in at 6/09/2013 12:11:00 PM
The World Bank's Doing Business report has garnered much attention in purportedly comparing the ease of doing business in different countries. That is, how is easy is it to start up or close a business? Oftentimes, it's not only how easy it is to set up a business that determines entrepreneurship but also closing one down if it proves unviable. Seen from this perspective, the likes of Hong Kong and Singapore which are recognized as incubators of entrepreneurship may not really have a concentration of business geniuses but instead make possible trial-and-error until a satisfactory proposition is found.

That said, the Doing Business report I've always found curious in certain respects. Importantly, they are based on the inputs of those familiar with fairly large businesses alike those conducting international commerce and may thus not reflect conditions faced by SMEs. As it so happens, Seth Kaplan over at Policy Innovations expands on this line of argument that perhaps the title of the report ought to be "Doing Business for Multinationals" or "Doing Business for Conglomerates" as opposed to referring to the minimally capitalized who actually do most of the business in developing countries in numerical terms. He points out how incomplete the indicators are for such entities...
The easier it is to start a company, the likelier it is people will do so. The easier it is to register property, the more likely it will be registered, potentially providing a spur to investment in housing, spending on household goods, and capital formation. The easier it is to get a construction permit, the likelier it is companies will invest in new projects that involve construction. But there are many more serious obstacles to doing business in less developed countries that are not addressed in these reports—namely those related to transaction costs. As such, the narrow focus and wide influence of Doing Business distorts priorities and leads reformers to ignore key problems.

A better approach would be to actually consider the typical challenges a small-to-medium sized enterprise (containing, say, 5 to 50 employees) faces in a less developed country. This is what DB is supposed to be doing, but its focus on the formal procedures of government ignores how most companies operate: If they are large, firms use "workarounds;" if they are small, firms operate in the informal economy.
Especially problematic is the report's reliance on the opinions of folks accustomed to handling businesses with economies of scale that are not necessarily typical of the sort of fledgling firms originally envisioned. Startups and mom-and-pop, anyone?
The dependence of Doing Business on "local experts, including lawyers, business consultants, accountants, freight forwarders, government officials and other professionals routinely administering or advising on legal and regulatory requirements" means that results reflect the needs and perspectives of these respondents, not that of a SME owner, especially in less developed countries where these "local experts" rarely work for SMEs. Limiting data collection to the single, largest city—which may contain only a small proportion of a country's businesses—further reduces the usefulness of the data.

Operating in the informal economy, generally avoiding contact with goverment bodies that are not trusted, confronting myriad infrastructure problems, regularly struggling to get paid for services rendered, SMEs in less developed countries have many more important things to worry about than "resolving insolvency" and "protecting investors," which combine to make up one-fifth of the DB aggregate score. Such issues are more important to foreign investors than local retail stores, trading companies, manufacturers, and trucking firms.
Good stuff; and I think the overall criticism that this report is geared towards larger-scale enterprises is essentially correct.

IMF Agrees w/Cheney: Deficits Don't Matter for US

♠ Posted by Emmanuel in , at 6/05/2013 12:52:00 PM
Here we go again: for everyone else--especially the likes of Egypt, Pakistan and so forth, deficits do matter. But for the United States which (they say) has little funding its current account deficit, it's not really a problem. In essence it's the IMF approving of American deficits as per Dick Cheney's famous dictum that "deficits don't matter." To be exact, there's always the qualified economistic wording about how short-term fiscal consolidation is not required but rather stimulative policies to get the economy unstuck or suchlike. Instead, the real fiscal challenge for the United States is in the medium- to long-term when it must deal with its health care and pensions unfunded liabilities as baby boomers retire en masse:

Here is the IMF head honcho on the subject matter:
The U.S. economy would be faring much better were it not for the "self-inflicted" wound of tighter fiscal policy, the head of the International Monetary Fund said on Tuesday. "The U.S. is not doing as well as it could be, because of self-inflicted fiscal wounds. This year alone, fiscal adjustment will constitute an enormous 2.5 percent of GDP," IMF Managing Director Christine Lagarde said at the Brookings Institution.

She said the challenge was not the near-term fiscal outlook for the longer-term one, given the pressures of healthcare and Social Security spending. "The next couple of years are going to be quite positive looking. But if nothing is done about the medium and long-term horizon ... then the picture is a lot bleaker," Lagarde said. "This is the major challenge facing the U.S. economy today, and it must be met."
I am beginning to wonder when the medium- and long-term will arrive since they never seem to come when the IMF speaks about the US. It's in essence a free pass. Actually, the Yanks have a term for delaying the inevitable time and again in plain English: "kicking the can down the road."

Money Printing Plus: Japan's Other Growth Strategies

♠ Posted by Emmanuel in ,, at 6/04/2013 04:08:00 PM
Everyone knows of Japanese PM Shinzo Abe's money-printing strategies for combating Japan's seemingly unconquerable deflation. However, it is but one tactic in a multi-pronged strategy to get the world's third largest economy growing again in a noticeable fashion. Tomorrow Abe unveils a raft of other initiatives for doing so. Reuters has a list of expected steps in the so-called "Third Arrow of Abenomics" compiled from various news sources (don't ask me why it's called that).

Of particular interest to me are those concerning free trade agreements and migration. First, let's begin with FTAs. Belatedly keen on not losing its competitive advantage alongside those FTA-crazy South Koreans, it too is supposedly going to embark on an FTA frenzy:
Hit a target of 70 percent of exports covered by free trade deals by 2018, compared with around 19 percent, by pushing the U.S.-led Trans-Pacific Economic Partnership (TPP) and other trade deals with the European Union, China and South Korea, and aim to create an Asia-Pacific free trade area. 
Insofar as Japan has virtually zero multilateral FTAs at present (only partially implemented Japan-ASEAN FTA aside) but a whole host of bilatereal FTAs, let's say it has a lot of work to do if it truly intends to compete with Korea in this respect. With Japan's strong agricultural lobby complicating matters, expect tense negotiations when these products are discussed. That said, it's interesting how Japan is not playing geopolitics if this were truly the case in being willing to join any sort of FTA negotiation whether it be led by the US (TPP), China or whomever.

Another point of interest is opening up Japan to migration. Its population is shrinking, yet it remains easier for a camel to enter the eye of a needle than to be an economic migrant to Japan. Or is that assertion about to be shattered?
Shorten the duration of stay in Japan required for approval of permanent residency to three years from five years to encourage high-skilled foreigners to keep working in the country.
Let's just say that Japan's come up with all sorts of plans to generate growth since 1990 that have since been shelved or have borne little fruit. 

Endangered Species: SMEs in Italy, Spain

♠ Posted by Emmanuel in , at 6/03/2013 02:56:00 PM
Make no mistake: there are giant companies in Italy and Spain. However, many of the specialist products these countries are known for are from small- and medium-sized enterprises (SMEs) which also provide the bulk of employment. Unfortunately for them, the credit crisis has made their existences rather difficult. Especially since they are not very large, they find it hard to raise capital via stock or bond issuances. In other words, their modest size makes them reliant on bank loans for finance.

It's too bad that the European crisis has made many banks doubly wary of lending to these SMEs at a time when their needs for credit are the greatest. Hence the sob stories in these troubled times in troubled Latin economies. Let us begin with Italy, whose leaders haven't been especially keen on lending them a helping hand:
With an estimated 5 million enterprises accounting for 80 percent of Italy's gross domestic product, SMEs have long been the main driver of Italy's export-led economy.The crisis for the SME sector is prompting widespread calls for the government to help small businesses and save the 'Made in Italy' brand from collapse...

Italy's SMEs are also notoriously inefficient. There are approximately 65 SMEs per 1000 inhabitants in Italy, substantially above the European Union average of 40 per 1000 inhabitants, according to data from the European Commission (EC). But while Italy has some 1.7 million more SMEs than Germany, they provide 3 million fewer jobs (12.2 million persons employed as opposed to 15.2 million in Germany) and produce only 56 percent of the total value-added of their German counterparts.

Such inefficiency, the EC noted in its 'Small Business" report on Italy in 2012, is part of the reason why, despite the attraction of the "Made in Italy" brand, Italy's SMEs "trailed their EU peers in recovering from the crisis."
Ah yes, Germany again. This excerpt is interesting in noting that not all SMEs are created equal. For all its monster firms, Germany also has a world-renowned Mittelstand doing what the Italians do by and large--make specialist low-volume products. However, on average, German SMEs provide more jobs and have more remunerative value-added content due to their knowledge-intensive, precision manufacturing orientation. As the Paymasters of Europe, it's Germany's inevitable lot though to find solutions for their miserable European neighbours' largely self-inflicted woes: Yes, the Chinese have wiped out their firms making me-too products alike affordable clothing by making, well, even more affordable clothing.

The cure, as in the case of that other sob story, Spain, may be for the Germans to provide the credit so clearly lacking in the private financial sectors of these troubled economies. Is it "European finance"? Well, no--it's "financial aid":
Germany will provide about 1 billion euros to Spanish small and medium enterprises (SMEs) in a bilateral aid programme, Germany's finance ministry said in a draft outline of the plan obtained by Reuters on Monday. Germany's development bank KfW will provide 800 million euros in global loans and take stakes in funds to boost the expansion and employment potential of Spanish SMEs, the ministry said in a draft to the Bundestag's budget committee.
In other words, it's "We'll sort out the developing world as soon as we're done sorted out these EuroBrokes." Lest you think Germany not favouring SMEs or lending to them is a source of their global advantage, take note that lending to the Mittelstand is not only quite profitable but their business is also very much sought after by major financial services providers.

I get tired of saying this, but Germany's example is so much better than that of the rest. It's a pity then that the rest have a hard time emulating Germany's example--which may not be directly transferable in any case. In the meantime, does anyone really doubt why Missus Merkel literally and figuratively wears the pants in Europe?

Why Eastern Europe Spanks US in Software Development

♠ Posted by Emmanuel in ,, at 6/01/2013 02:31:00 PM
Last Thursday our home computer running Windows XP was infected by a fairly old autorun.inf virus. For, we accidentally brought home an infected USB thumb drive from the workplace, which has computers running unpatched versions of XP. Unfortunately for us, we were also running copies of Microsoft Security Essentials for our antivirus, which I belatedly found out to be a pincushion for viruses that detects next to no threats. It took me hours to find a solution to cleaning up our infected home computers, and one of the programmes I found most useful was Bitdefender's USB Immunizer. Seeing how well it worked, I became curious about their antivirus software and discovered that it was very highly rated. (I guess that shows you how much I knew about antivirus programmes...)

So Bitdefender Free is now our antivirus programme of choice for an XP and a Vista machine we still find useful despite their age. Though I did not know it at the time, it turns out that Bitdefender is a Romanian firm. By coincidence, I too am playing a video game from a Hungarian developer right now, The Incredible Adventures of Van Helsing. While rather derivative, it boasts offbeat humour of its own along with class-leading graphics. As with most things, it is no accident that Eastern Europe is becoming a hotbed of software development since these are not isolated examples. Avast! antivirus from the Czech Republic has literally topped's charts for years and years. Video game enthusiasts should also be familiar with Polish CD Projekt's Witcher 2 from a year and a half ago that won a lot of "Game of the Year" plaudits from critics.

To be sure, Eastern Europe' emergence as a hotbed of software development has been a long time coming. The educational systems there are strong in science, engineering, technology and math (STEM )subjects--partly as a reflection of the Warsaw Pact era (go ask Google's Sergey Brin). As early as 2007, Eastern Europe was already being touted as the next India. As far as Western Europe is concerned, instead of outsourcing to India, some have found it more convenient to "nearshore" to Eastern Europe where both physical and cultural distance are not as great. Indeed,  2013 may be the year Eastern Europe gains the attention it deserves with such outstanding software titles becoming evident to the global community of computer users.
In the past, I've written about the challenges Asians have--China and India especially--in creating homemade brands with global recognition. With all due respect to our Indian colleagues, they haven't developed antivirus software or games of their own recognized in global markets unlike the Eastern Europeans. By contrast, the latter have the chops in incorporating their culture into their products and they know how to market these worldwide. Just as the Chinese are very good at manufacturing goods to others' specifications, the Indians are obviously talented when it comes to programming software tailored to specified needs. However, when it comes to incorporating folk tales into cutting-edge video games alike Witcher 2--or devising tongue-in-cheek Diablo knock-offs like The Incredible Adventures of Van Helsing--let's just say us Asians aren't quite there yet in terms of branding and marketing. Nor are we in the running for most downloaded (Avast!) or outright best-performing antivirus software programmes in the world (Bitdefender).

The post title also said something about Eastern Europeans spanking the Yanks in software development. I have already alluded to the incredibly poor performance of Microsoft Software Essentials, but as it turns out, it is the absolute worst at virus detection, bar none. (Yeah, go America!) As for video games, the US er, "boasts" of having the world's largest game publisher, Electronic Arts. For two years in a row, though, it's been named not just America's worst video game company but its absolute worst company, period. Microsoft and Electronic Arts are miniatures of modern-day America: having been innovative firms in the past, they've since grown fat, dumb and happy. Meanwhile, there are dozens of lithe, hungry, and infinitely more deserving software labs in Eastern Europe literally waiting to spank these moribund American giants.

They say competition improves the breed, and I'm certainly glad that our choices are not limited to US crapware. Hopefully, these Eastern European upstarts can show the Americans how fat, dumb and happy they've become before it's too late.

Just imagine how much better Windows 8 would have been if the task of developing it were left to the Eastern Europeans...we can only hope for a better world of computing.

UPDATE: Other antivirus test results are of similar opinion in that Bitdefender is tops, while Microsoft Security Essentials is deemed (gasp!) non-competitive.

Too Strategic to Fail? The IMF & Pakistan (Again)

♠ Posted by Emmanuel in at 6/01/2013 08:00:00 AM
With its forex reserves down to a trifling $6.4 billion, Pakistan is definitely in trouble. You know the drill: the United States will not let Pakistan descend into chaos--make that civil disorder even worse than its regular state of perma-anarchy--because it's a nuclear-armed state with a constant Taliban menace. Surely Pakistani elites have noticed this paradox: the key to securing their continued stay in power is to keep things disorderly enough to maintain foreign interest.

This backdrop is probably why we (surprise!) have yet another news article touting imminent Pakistani collapse on hand. I am fascinated how this nation with next-to-no reserves has seemingly staved the inevitable for so long in the form of another IMF package. But before we get to that, let's recount the Egypt-like repeat borrowing habits of this nation:
Since 1988, Pakistan has signed onto eight IMF programs that demanded structural changes in the economy. But it has never managed to resolve its chronic problems...If Pakistan does have to turn to the IMF, it will bring its own set of challenges.

For one, the country has a patchy track record in upholding promised reforms that secured past IMF loans, including an $11 billion program granted amid the last foreign reserves crisis in 2008. The former government abandoned that program in 2011 because it refused to carry out the strict financial reforms required by the IMF. But it still owes the lending agency nearly $5 billion from that old loan.
However, it is generally known that IMF lending is not really conditioned on meeting conditionalities or implementing structural reforms. How important the borrower is to the United States geopolitically matters, and supposedly Pakistan is as strategically important as they come in South Asia. The question to me, then, is not whether Pakistan changes its ways (not likely), but how much the Yanks raise a stink about non-compliance with conditionalities that will, at most, merely result in an Egypt-like delay in disbursing emergency funding:
The new government [of once-and-future PM Nawaz Sharif] will have to convince the IMF with quick actions that this time around will be different. The IMF will want to see far-reaching reforms fast-tracked to reduce the chance of another reversal part way through a multi-year program. And the lending agency is expected to demand vast improvements in a woeful tax system that collects very little money. Taxes currently bring in only about 10 percent of gross domestic product, one of the lowest effective rates in the world. 

The IMF is also likely to press for major changes in the energy sector such as raising prices and phasing out costly subsidies that disproportionately benefit the wealthy, who use far more energy than the poor. The government spends about $1 billion in foreign currency each month to import oil to run its power plants — a costly way to generate electricity and another drain on foreign reserves. Building new hydroelectric plans or converting to less expensive natural gas production would be very expensive and take years. The IMF is also expected to demand some kind of plan to curb losses from state-owned enterprises that amount to billions of dollars a year.
Fat chance, I say. What I predict is the same old, same old: The IMF will b*tch for a while--the duration varies--about Pakistan's intransigence about structural reform when the country inevitably approaches it on its last legs. Ultimately, though, they will lend Pakistan. While making half-hearted gestures to implementing conditionalities, meanwhile, the country will back down amid the usual protests and riots. Thus, unpaid debts to the IMF will pile up as Pakistan tries to make its way out of its untenable situation alone once more. For a while it will resume its messed-up state until foreign exchange dries up again, necessitating another IMF visit.

Repeat over and over again. That is modern-day Pakistan.