Tag Archives: libya

The Economist, weekly digest, 12th-18th March

EU SPLITTING INTO EUROZONE AND NON EURO
Is the EU splitting into two tiers i.e. euro zone and non euro zone members? The euro zone members are to have their own meeting following the upcoming EU summit. The euro zone members are in general less economically liberal than the non euro zone members (driven by France). In particular, there are greater calls for more economic integration between the euro-zone members (e..g a common rate for corporation tax and more fiscal harmonisation). There is likely to be spill over into general EU matters which will further disenfranchise the UK, to the point of perhaps having to drop out of the union.

COTE D’IVOIRE – DON’T DO A KENYA/ZIMBABWE COMPROMISE
As Libya has dominated headlines, the post presidential election  stalemate in the Ivory Coast continues as the losing president refuses to refurnish power. Civil war has consequently broken out leaving many Ivorians destitute. The AU should resist its tendency to allow bad losers to stay on by endorsing governments of BOGUS NATIONAL UNITY (read Kenya and Zimbabwe). Such governments are often unable to govern and sets a bad example.

INEQUALITY GROWING IN THE UK BUT SHRINKING IN GERMANY
The Watford Gap (valley) is the unofficial boundary between the north and the south. Inequality has rocketed in the UK over the last 20 years, such that a quarter of the UK now has a per capita GDP of lower than municipal Shanghai. The parts of UK in question are typically the northern rural areas. Investment in education is seen as the means to best address this, however, this is unlikely in face of the looming public spending cuts. Note that in the equivalent period, the inequality between the most affluent and poorest parts of Germany has dramatically fallen as more investment went to the reunified East.

UK PENSION REFORM – MULTIPLE ATTACKS
George Osborne’s 3 pronged attack on public sector workers: 1) 2 year pay freeze, 2) large scale redundancies; and 3) less pension benefits. Public sector workers are to now contribute more to receive a smaller pension after retiring later. This is to help address the massive (£1 trillion) unfunded UK public sector pension liability that has accrued due to commonplace defined benefit (i.e. final salary) schemes.

HEATHROW BEHIND IN BATTLE FOR EUROPE’S PREMIER HUB AIRPORT
London Mayor Boris Johnson is calling for more airport capacity in London. He proposes the government should either invest in a new airport in the Thames Estuary or increase capacity at Gatwick or Stansted. This is in response to Heathrow already operating at overcapacity (after plans to expand it were voted down by parliament due on environmental  and noise pollution grounds) despite serving fewer destinations than Paris’s Charles de Gaulle and Frankfurt (serving 185, 200 and 300 respectively). So the fight continues for the crown of pre-eminent European hub. It is also seen as BJ taking aim at George Osbrone, his likely rival for the future leadership of his party.

UK FOREIGN POLICY BLUNDERS
– The UK tried to engage with the Libyan rebel Council by sending diplomatic representation into Libya under SAS cover. The team arrived unannounced in the dark and were subsequently were rounded up by the alarmed rebels.
– The UK was slow in its attempts to evacuate Britons stranded in Libya (mostly oil workers).
– The Foreign Office developed a strategy of sending ambassadors and  other high ranking officials (read Prince Andrew) to drum up business for Business abroad. It recently emerged that Prince Andrew has links to a convicted sex offender in America.

WE NEED A VIRTUAL CENSUS
Has been conducted every 10 years since 1801 (bar 1941 due to WW2). It’s suggested that the current formal paper based  complete and submit regimen should be replaced by a VIRTUAL CENSUS that feeds into information from existing computerised databases of public records (e.g. tax records), which has already been pioneered in Scandinavia. This is likely to to be cheaper, more current (as data increasingly expires more quickly) and likely to identify fewer Jedi knights.

BURLESCONI LIVES
Despite facing ongoing charges, his position is looking more secure thanks to the backing of coalition partners, the Northern League.

US MANUFACTURING REBOUNDING
Rebounding following the post recession huge slump as orders pick up from abroad. Each additional percentage point of another country’s growth boosts its imports from America by three percentage points.

CHINA SPENDING MORE ON INTERNAL SECURITY
Annual announcement of the revised 5 year budget included the announcement of double digit growth in national security spending. The growth, however, in addressing internal security threats was greater than that of external threats. Also it was announced that school children should receive an hour of physical exercise in school every day.

SUBWAY OVERTAKES MACCY D’S
Subway officially overtakes Macdonalds in number of worldwide branches (33 thousand to 32 thousand).

PC MARKET UNDER A TRIPLE THREAT
HP and Dell, the world’s two foremost PC manufacturers are coming under attack by three major computing trends:
1) The rise of the Tablet (notably the Apple iPad) has resulted in downgraded future growth projections for the PC.
2) Cloud computing is now encouraging businesses to store information in the Cloud (with say Amazon or Rackspace) rather than servers from HP or Dell. (In turn Amazon will need servers to host the cloud data but can drive a hard bargain because of their size).
3) Vertical integration means that consumers now expect an “all-in-one solution” from their IT systems provider. This has resulted in computer companies coming into HP/Dell’s turn (e.g. Oracle buying Sun Microsystems).

CLOTHING RETAIL – KEEPING PACE WITH CHANGING FASHIONS
Zara (SP) vs. H&M (SWE). Zara are the logistics experts in managing to get new clothing styles into their stores within weeks, whilst the same takes H&M months. H&M makes 65% of its wares in lower-cost Asian countries.

HOW MUCH OIL IS SLOSHING AROUND?
The US has a reserve of 727m barrels, Japan:320b and Europe as a total has 420b. The US consumes 20m barrels a day, thus its reserves could support it for about a month. Global world output is about 85m b/d , and less than half of this is opec. World consumption is also about 85m b/d.

Advertisements

The Economist Weekly Round Up, Mar 5th – 11th

WHY OIL PRICES ARE SPIKING
1) Oil prices reached $120/barrel due to FOREIGN WORKERS FLEEING Libya amidst the civil unrest. Compare to the peak of $150/barrel in 2008. There is much concern in India and China where the monetary policy is loose and inflation is rife. Aside from the Libya ‘blip’ wider structural issues remain as oil demand is fast outpacing increases in readily availably supply. More must be done in the areas of electric vehicles and pricing carbons.

DEVELOPING WORLD’S BIG HITTERS
A new trend of ‘diversified global conglomerates’ was identified. Examples include Tata (India), Brazil’s Embaraer (aircraft) and South Africa’s MTN (mobile phones). Such groups able to unlock developing markets where governments are frequently incompetent and the markets are hopelessly underdeveloped.

TIME FOR NO FLY IN LIBYA
Britain is pushing for a no-fly-zone over Libya to quash the regime’s use of helicopter gunships and aircraft on dissecting civilians. Deployment of a no-fly-zone helped save the lives of Kurds in Iraq. America did not support this proposal as it is concerned of being embroiled in another misadventure.

REMARKABLE UN SOLIDARITY ON LIBYA SANCATIONS
Although the international community is mostly against a no-fly-zone over Libya, there is surprising consensus on international sanctions against Libya and the referral of Colonel Gadaffi to the International Criminal Court as unanimously voted for by the UN Security Council (which includes Russia and China). It is believed that this because of the inevitable fall of Gadaffi.

COURT SAYS OK TO BASH THE TROOPS
The Supreme Court defended the right of Kansas’ Westboro Baptist church to PICKET the funeral of troops killed in the Afghanistan and Iraqi wars. The church believes the fatalities are due to American society’s tolerance of homosexuality. Compare to the picketing of returning British military coffins at Wooton Basset.

OBAMA CONCEDES TO MANDATE WAIVERS
Obama will immediately give states the opportunity to seek waivers from the MANDATES in his healthcare package as soon as it comes into effect. There have been state level challenges against the constitutionality of the healthcare mandates.

2012 RUNNERS
Obama’s looking good for 2012 because: 48% approval rating is respectable, economy gradually recovering and he has a slick electoral machine. Obama’s not looking good for 2012 because: whites are deserting him in key electoral battlegrounds including Ohio, Florida, Virginia, Indiana and Wisconsin. Names touted for the republican nomination contest include Romney, Gingrich, Pawlenty, Daniels, Huntsman, Rick Santorum, Hayley Barbour, but surprisingly not Sarah Palin (who only received 3% of the votes at the recent CPAC convention).

WILL APPLE’S CLOSED MODEL WORK FOR APPS?
Apple is steaming ahead in the tablet market (which it itself pioneered) following the release of the iPad 2 (its predecessor sold over 15m units). Competing tablet manufacturers are adopting Google Android’s OS (which has now been adapted for tablets). It is unclear whether the iPad’s closed model will succeed in the same way it did with iTunes (where the music market is dominated by a few major publishers).

SECOND/THIRD GENERATION IMMIGRANTS ARE THE WORST!
Jewish riots in Brick Lane in the 19th Century, black riots in Brixton in 1981 and asian riots in Bradford in 2001. All involving 2nd generation immigrants who are less willing to live with the slights and marginalisation experienced by immigrants. Optimism lies as future generations integrate better. Exemplified by modern day Jews and Blacks.

BANKERS TIRE OF SWIZERLAND
The well off bankers who left London for Swizerland are being outgunned by the super-rich. Schools are a particular background where there is an overdemand for places at the local international schools. Although banks may be regulated less, every day life appears to be regulated more e.g. if you want a Sunday lunch, you have to drive to France (as everything is closed in the city because people are out skiing and sailing in the countryside).

BILATERAL TIES OR GLOBAL INSTITUTIONAL PLAY?
The Labour party is articulating its foreign policy position in opposition. It takes issues against the Foreign Office’s policy of circumventing the international bodies (e.g. EU/UN) in order to forge its own bilateral ties with countries. Douglas Alexander, the shadow Foreign Secretary, believes the real power lies with the internal bodies. He’s seen a right leaning figure in a heavily leftwards Labour party.

HIGH SPEED RAIL NOT NECESSARILY PROFITABLE
High Speed Rail 2 (HS2), which will provide high speed rail to Manchester and Leeds from London, is due to start being built from 2017 and operable form 2026. The cost-benefit on high speed rail investment is not clear following schemes like the Channel Tunnel which has never come close to achieving its projected passenger numbers.

OFSTED ARE A JOKE
Almost half of school pupils leave without 5 GCSE passes despite 89% of secondary schools being rated satisfactory or better by OFSTED.

DEMOCRACY BUT NO LIGHT IN IRAQ
Even though democracy has already been installed in Iraq, street protests against the government continue as it is not able to delivery basic services including a regular supply of electricity.