Zimbabwe once again!

Once again I have to write about Dear Zimbabwe. Everyone knows that what is going on there is tragic, a man-made humanitarian disaster. Let us hope that someday those responsible will be held accountable and judged by their peers.

If you read the link on the title of the post, this article I found in the New York Times is a good description of what is happening to those who vote with their feet, since their ballot votes do not count and are not respected by their own government or their neighbours, and decide to try to get to South Africa and work.

South Africa itself is going into elections. I fear Zimbabweans are going to be easy scapegoats for politicians trying to get elected. And I fear that violence will ensure.

Today I also got an email from a Catholic Missionary in Zimbabwe. A portion of cornmeal is 30 trillion, the same as the monthly salary of a school teacher. Can we be surprised if people try to leave?

For some of us who have invested so many years in Africa, Mugabe and his brutal regime are such a disappointment. Now just imagine for the people living in this land blessed by nature and cursed with their leaders. Since the beginning of times one might add. Bad leadership is not something of the past few years in Zimbabwe.

Dim economic outlook!

Prieur du Plessis who I read every day and have come to respect, extensively quotes today from a report from Albert Edwards, strategist for Societé Generale. You can read the full report if you click on the title of this post. 

Prieur´s blog, Investment Postcards is accessible from my Blog roll on the sidebar next to this post as always.

And it certainly makes for interesting reading! 

Edwards’s “Global Strategy” report is sub-titled “Technicals say it is time to bail out. Cut exposure and prepare for rout. US depression looking likely. China’s 2009 implosion could get ugly.” 

What has really impressed me of his views is the mention to the possibility of China imploding and the internal situation turning into chaos. Their exports have been so drastically reduced that they could be tempted, to avoid internal violence and riots, to devalue the yuan, thus starting a 1930s style Trade War.

There are, however, still indications that Chinese officials are prepared to go along doing the " right thing". They have too much invested in our markets to want to go it alone. But China is also a political dictatorship and one has to wonder the extent they might be prepared to go to to maintain the regime in place if things start going very wrong....

Zimbabwe: SADC´s sad failure

At the time of writing these few words, there are still conflicting reports on whether a SADC Summit held in Pretoria has finally managed to broker a deal on power-sharing in Zimbabwe. I have just landed from South Africa myself, even though I was not involved in this meeting or issue at all.

South Africa´s President Motlanthe has announced that the leader of the Opposition Morgan Tsvangirai, will be sworn in as Prime Minister of Zimbabwe on February 11th.

Tsvangirai himself has, however, denied the agreement and criticized the outcome of the Summit.

In any case, why would someone who has won the elections, ( Tsvangirai beat Mugabe in the fairest of the polls held in that country last March) and who has the majority in Parliament, be still called the leader of the Opposition? 

This just shows what countries in Southern Africa really think of democracy and “ one man, one vote”.

African leaders should once and for all abandon the idea that in order to lead a country you have to have had direct involvement in the “ liberation struggle”. If the people choose another way, it seems they believe it is easier to simply ignore the results of the vote, and go on with business as usual.

The problem in Zimbabwe is that this means death to some people, be it through political violence and repression or disease. This attitude is costing human lives and suffering.  Not that SADC leaders seem to care that much. And what makes things worse is that these same leaders have several millions of their own Nationals living in Zimbabwe and therefore suffering along the Zimbabweans who still remain in their country.

Apuntes iberoamericanos: Obama y el bloqueo a Cuba

Yes I know it is in Spanish, but this is a good opinion about President Obama and Cuba by someone who knows very well what he is writing about. If you can understand the language, I recommend this post.

Apuntes iberoamericanos: Obama y el bloqueo a Cuba

Give it a try on all things form Latin America!

A happy man!

 

Yesterday I was attending the Biannual Meeting of a small Intergovernmental organization of 13 member states of which four account for 80% of the regular contributions and 100% of the voluntary contributions, for a total of 99.99% of the total funds this organization spends in its annual budget.

 

We spent most of the afternoon session discussing a small increase in the salaries of the Directors of the four Research Centers whose activities are funded 100% by the four countries I mentioned earlier, all of them European.

 

For a couple of hours we had to listen to very opinionated delegates who had to take the floor a number of times each. And the four countries who pay for the activities, myself included, listened patiently to all this senseless ranting.

 

Now, why would a country whose total annual contribution to the organization doesn’t suffice to pay for the monthly salary of ONE of the Directors whose stipendium we were discussing, warrant the use of the floor of a reputable organization with lots of other things to discuss, I really wonder.

 

But I did discover something. I was thinking lately that I was growing old. I found out yesterday that I still have the will to fight in me. I grabbed the microphone and stated clearly that I supported the small increase, the first in over 5 years, and that my country would pay for the whole thing. That should keep them quiet, I thought.

 

One of the delegates came back to me saying that this was democracy at its best and that we had to listen to everyone’s opinion. I answered that, with all due respect, his country in no way accorded it citizens back home the right he was so strongly defending at the meeting and that he should perhaps have the humility to acknowledge that being loud and omnipresent does not make you right.

 

Last night, at a miserable little hotel in the middle of nowhere in a small town in Central Europe, I went to bed a happy man, and I slept soundly. I think I had deserved it!

Shameless boasting!

 

Please allow me to boast shamelessly today. If you read yesterday´s post, before President Obama became the 44^th in our history, I sort of hinted that the Euro was a mistake, and certainly not such a good idea if we place our hopes in it.

 

Now, today I wake up to find a column by Paul Krugman, (yes that one!) saying the same thing about Spain, very close to me. (http://krugman.blogs.nytimes.com/) .

 

Please understand this is the first time ever, that I have actually thought and written about something which agrees with what an Economist like Mr. Krugman believes.

 

What he says, and I only hinted, is that economies of the  likes of Spain, Ireland, Greece and Italy need, desperately, to become more competitive. Since the Euro zone discards devaluation, the only other solution is to drastically reduce salaries. So, we will have to face that indebtness is only part of our predicament in Europe. Competitiveness is a lot more crucial in these times.

 

That is what I called yesterday in my post, having to pay for the party we have had for these past years when we all thought we were rich people, with lots of money to spend.

 

The problem is that in a Socialist environment like in most of Europe, once you have obtained something by whatever means ( at the beginning it was through revolution now it is called “ social benefits”) you can never, by principle, go back. They become “ Human Rights” with ease and are no longer open for debate. At least that is the principle that European Socialists uphold. That is why they have this obsession with spending their way out of recession, thus worsening the problem they want to solve in the medium run.

 

However they don’t really have to care that much, because the investment in infrastructure they so loudly proclaim as the solution to most of our current problems, is bound to create a few jobs for workers coming from the housing sector and low level manufacturing sectors. But those are going to be more prone to vote for the Left anyway, whereas in the services sectors, at the very least hiring’s are coming to are halt, and layoffs, though still relatively limited, may grow in the next few months. But they happen to have fewer voters amongst these citizens anyway.

 

Who knows, if in Europe we keep down this road for long enough through this crisis and recession it may well be that Socialism will disappear once again from the political map. For a couple of decades at least. This is what happened after the crisis of the 70s in the UK with the coming to power of Thatcher and in the US with Ronald Reagan. Sort of a vaccination.

 

Just to add a little bit of spice to the whole issue of flexibility of the different developed economies, in his recent analysis, Andrew Garthwaite, Global Strategist at Credit Suisse, ranks 44 countries regarding their flexibility to adjust to cost reduction. It is no surprise to see that the most flexible country and therefore the one with the highest probability to regain its competitive status is the USA. Perhaps it is no surprise either to see that the last, number 44, is Spain. It ranks as the least flexible economy regarding labor costs. Therefore, it has the least chance to be able to regain competitiveness in a limited period of time, if ever.

 

There are worse examples and the IMF is all over them in the European Union. Take Hungary and Latvia for example.

 

But also take the differences between President Obama´s constant praise of his country and his people and the capacity we Americans have to work harder and come out of the crisis stronger than ever, and the small talk, yes small talk of some leaders who refuse to go to their Parliaments and prefer talk shows and You Tube videos to ask their countrymen to “ shop more intensely in this traditional sales month!!!”

 

In any case, I digress. The main purpose of this post was to share my pride at having got it “right” this time and to go along with  Krugman, an American Liberal, from someone like me who certainly is not one of those.

 

The fact is we are, at some time, going to have to tackle the competitiveness problem head-on. And without the possibility of devaluation, and politicians not wanting to accept that salaries and standard of living is going to have to come down substantially ( the IMF suggest a 5% cut in the public sectors of a few European countries), the only other way economists can think off is via exports.

 

But is this  a sensible thing to propose in an environment where manufacturing has being decreasing for decades, and these countries owe most of their GDP to the housing sector and services? I somehow don’t think so. 

The Big Day

Today is the big day. I, like tens of millions of people around the world, will spend the evening ( in Europe) watching President Obama´s every move and every word.

In the current world context and the bad news we get on a daily basis, we have to count on our leaders, and as I have written before, expectations are high regarding Obama´s capacity to steer us out of the current mess.

Since Ronald Reagan´s Inauguration expectations have not been as high. I hope we won’t be disappointed. I don’t think the US and the rest of the world could take it.

But, back home, we now we are back to thinking that maybe our money is not so safe in the bank. States are guaranteeing deposits, but now we learn that a number of European States would actually need to leave the Euro to be able to become competitive again, before any one of them defaults.

Can States default? They certainly have done so in the past. Some more than once under the same ruler. So are Ireland, Greece, Spain, etc any safer than those other countries? If so, why?

And we see that some leaders still believe that a country can spend its way out of a recession. Since when has this worked? I have not found a single example of this. I have, however, found a few of exactly the opposite, during the crisis of the 70s. Ask the British Labour Party for instance.

What has happened to a sound monetary policy and a responsible fiscal policy? Can they be maintained in a Euro zone in which internal differences are still so high?

I still remember ( it was only ten years ago after all) how proud I was when, on January 1^st early, I took my three children to line up at the bank ( yes they were open on that day!) to exchange their savings into Euros. Is it possible that all this will end being a bad dream?

And yet, if we dedicate ourselves to party and to live like rich people, someone, someday, is going to present us with the bill. And we will have to pay for it. We, or worse still, our children, those that stood in line to exchange their money into Euros. 

Africa: an excellent blog

I have found, and I link on my blog page, this excellent blog on all news and issues African. It is maintained by Senior blogger Derek Catsam who is an assistant professor of history at the University of Texas of the Permian Basin.

I have been reading it for a while and not always agree with what he says, but I would certainly recommend a look into its content which is updated daily.

http://africa.foreignpolicyblogs.com/

A European Mac user

Yesterday Steve Jobs, Apple´s CEO, announced that he was taking a medical leave of absence for six months. This after his absence from the recent Macworld Expo, where Apple has traditionally revealed its new products for years. I do not own any Apple stock, and I have no intention to buy. For me Jobs has the right to cure himself. After all it is not the first time he has to leave the company because of his health.

I have recently switched over to Mac computers, after a lifelong struggle with Windows. The only thing I have to say is that, after six months of intense use, I still have not managed to freeze OSX once, whereas with Windows in that period I would have had to reinstall the system a few times. My last Windows laptop, belonging to my employer, awaits at home until I have the time and the courage to take it back to the IT Department for them to reinstall the operating system or, if my dream comes true, to issue me with a new one. All I use this laptop for is to manage two 1TB external disks on my home network. It still manages to screw itself up from time to time, with no help from me.

It really is unimportant if us Mac users are 8%, 12% or 20% of total computer users. When I travel to the US, I feel at home with my white macbook. With very few exceptions, Mac users are welcome and well taken care of by network administrators al over the US. Mac friendly wifi access are everywhere.

In Europe, the situation is exactly the opposite. Whenever I have a problem at a hotel, or with a network admin, when I mention I have a macbook, a smirk comes to their face. “ Ah!!! there you are. You ( yes I) are not compatible! “ 

There is nothing they can or will do for me. This phrase sounds even worse in French! Europe has very few Apple Stores. Spain doesn´t have one. China and Australia do.

I therefore feel like a minority when I carry my macbook around Europe. But not a respected minority like in the USA. In Europe we mac users are still discriminated against.

Our Leaders and the crisis

There are many differences between Europe and the US as far as perceptions go. Part of the reason I am writing this blog is to try and highlight some of these differences so that we can hopefully understand each other better.

The US now is up to 7% unemployment rate. This rate skyrockets in some European countries. In Spain, for instance, it is nearly 14% and growing at an alarming rate. That is double the US rate, but in Spain people seem less concerned about this.

They seem to believe that a social “ cushion” still exists in Europe. That family and its ability to help out in a crisis period is going to be able to cope as was the case 20 years ago. I think they are wrong. European society is now much less vertebrated than in the past. A lot less than some of us would have liked to see in our lifetime. This is the result of political choices, mistakes one could argue, of so many years of socialism.

People also tend to forget that public resources are limited and that the money people on the dole receive every month they are out of a job has to be paid by those of us who still are employed, and by our children.

Another main concern is the capacity of our leaders to steer us out of this crisis. Present European leaders are of the “ optimist” category. They are all very capable as long as we have favorable winds. They cannot acknowledge the gravity of the situation. They have to speak about the recovery, which they label as “ speedy”. 

I believe we lack “ pessimists” in government in most countries. Most European leaders are no Churchills. And a Churchill is probably what we most need now in Europe. Someone has to tell us that “ blood, sweat and tears” is what we can expect in the near future. And that the recession is going to be lengthy rather than speedy. In other words, we need to be told the truth from the people whose job it is to know the truth.

I am in no position to judge President-Elect Obama. I do not know if he is a “Roosevelt” or not. But I will be following closely, because, in Europe, we also need his leadership as much as we need our own leaders to stand up and fight for us.

Emerging powers

Today I am going to rant about the “ emerging countries”. There seems to be a big public opinion campaign in favor of the “ new powers”, namely South Africa, Brazil and India. They even want to be permanent members of the Security Council. At least the present members ( USA, UK, China, France and Russia) pay for the activities of the organization in which they rule supreme.

But these other countries want to come in via the front door. They claim that they have grown into World powers. Really? Nothing could be further from the truth.

We may have changed our perception of these countries, but they certainly have not changed. In each and every one of them, millions, that’s right, millions of their citizens, go to bed hungry, every day!

What happened to “ no taxation without representation”. Shouldn’t we change the order of the phrase: “ no representation without taxation”. If they want influence on a world scale, let them be prepared to pay for it.

The problem is that for the countries with true global interests, the issue is not really that important. The US, for instance, needs those 3 countries as allies and, since the US is not going to let go of its policy and interests, it really is no big deal whether the 3 become “ world powers” or not.

Other countries, those who really do pay for the UN, Germany, Japan, Spain, Italy, Holland, etc, seem to believe that they have lost the battle and that they will have to see those “ emerging powers” take a prominent place in the world order and they will have to pick up the tab.

But, questions must be asked and answered. After the past two years in the Security Council, when South Africa has supported actively every rogue regime in the world, refusing over and over again to condemn Mugabe in Zimbabwe, to accept criticism of Iran, or North Korea; Do we really want this country to play a leading role in defining and defending the world order?

Brazil and India also actively share this “ See no evil” foreign policy. They eagerly take Western credit for their needs of advanced technology and equipment, and they then sell there less sensitive equipment to anyone who is prepared to pay for their planes, trains, weapons, etc. which then, in turn, are used against their own people.

I think it is time that we should tell the rest of the world that power has to be paid for or at least earned on a daily basis. If the “ emerging powers” want to play a key role, they will have to earn the International Community’s respect with their stand on world issues. As long as they keep supporting tyrants, they will need to accept a secondary role in world events. 

Cartoon

I have found this funny cartoon in a blog I follow and that I recommend for its insite on the economic situation.

 Try http://www.investmentpostcards.com it really is worth it. 

Prieur du Plessis writes from Cape Town in South Africa, and manages what I am tryingto do with this blog of mine: to contribute what sometimes will be a different perspective from what people read back home in the States...

A snowy day in Madrid and the Palestinian Tragedy

Today it is snowing in Madrid.  It must have been 20 years since I last saw snow in my back yard.  it makes one wonder about climate change and global warming. Maybe one of these days I will come back to the subject. The fact is that the city is completely collapsed, all the radio  shows recommend people to stay at home. That is exactly what I have done.

 From the nice, warm, peace and quiet of my home, as I watch the snow falling from my window,  I am reflecting on the tragedy going on in the Gaza strip, in Palestine, while I wait for the Israeli ambassador to Spain, Raphael Schutz, to come up on the web for a live chat on the situation in the Middle East.

 According to press reports, the death toll is over 700 people. It is easy to assume that most people in the United States back  Israel regardless of reason; and that most people in Europe sympathize with the Palestinians, also regardless of reason. This has long been the tendency of the majority of the people on both sides of the Atlantic.

 However, listening to a number of talk shows in Spain lately,  one can think that, perhaps, some things are changing in European public opinion. 

Most of the listeners who bothered to come forward with an opinion, understand Israel’s position towards terrorism, and point out that most of the Palestinian or Arab public figures have not come out to support Hamas this time round.

Some also  mention that both Jordan and Egypt never fulfilled their promise to turn over Palestinian land to the Palestinians when they could do so, before 1967. That  year, Israel occupied the territories which they then took a long time to hand over to the Palestinian authorities. But the fact remains, that Israel and only Israel, has provided the Palestinian people with land of their own, even if they have not been very forthcoming about it or even generous.

 I was very impressed on January 1st  when listening to the New Year concert from Vienna on TV. The Argentinian conductor, Daniel Barenboim, himself Jewish, expressed the wish to see human justice come to be in 2009 in Palestine. I agree fully with that sentiment. I believe Israel could do a lot more politically, socially, and economically. I also believe that after thousands of years of conflict, it is the day to day living together, working together, and having the same economic interests, the only chance that we might see a bright future in the area.

 At the end of the day it is slightly over 6 million Israelis, and a similar number of Palestinians ( of which only 3 million actually live in Palestine) holding the whole world hostage in its quest for peace.  

   Finally the Ambassador is up on line and he has put forward an interesting thought which I will share with you. He points out that in the last 60 years, Israel has managed to grow into a modern and democratic society, with economic progress for all living there. In those same 60 years, the Palestinians have received total  aid exceeding the amount of the Marshall plan for Europe after the Second World War, but their economy and infrastructure continue to be in shambles. He puts the blame on the corruption of Palestinian officials. 

I don’t think anybody could argue  with that. Corruption has been and is a fact of daily life in Palestine. However, I think that part of the responsibility lies within Israel itself. Israel has consistently taken advantage of economic and trade benefits given to the Palestinians by the European Union among others, and has profited from Palestine’s agriculture and small industrial base.

 I will never forget many years ago in the 90s, when Europe decided to increase the quota for oranges coming from Palestine. Israel’s immediate reaction was to close the border for agricultural exports through their territory, and they then proceeded to sell the entire Palestinian contingent through their own commercial channels. There are many other stories of abuse in fisheries and other sectors. They therefore share part of the responsibility and  they should acknowledge this fact sooner rather than later.

 But the fact remains that Hamas was elected into power mainly because of corruption issues and that they have decided to use their resources against Israel, instead of working for the betterment of the Palestinian society in the Gaza strip. It is really amazing to see that there seems to be no shortage of ammunition on the Palestinian side, while they complain that the closing of the border by Israel is forcing people into starvation and the deprivation of medical care. It would be far more reasonable to see the resources, both economical and human, dedicated to the supply of weapons and ammunition to the militia in Palestine, change their efforts to supply food and medicines to the general population.

And here in Madrid, snow keeps falling....