Category Archives: Economics

Imagine a New Middle East Slogan: Export Beautiful Pork, Not Beautiful Guns……

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Vice President Mike Pence tweeted today that:”@Potus just announced that American pork will be exported to Argentina & American farmers and ranchers will reap the rewards.”

Mr. Pence forgot to add the obligatory “Great” this time. In fact Mr. Pence has not used the “epithet” of greatness for a couple of days now to describe his boss. I wonder why….

Mr. Trump was in the Middle East last May, being anointed by Arab leaders as the new prophet of our age. He claimed he had made deals worth more than $450 billion. He claimed.
Too bad Potus forgot to negotiate, during his May Summit, to have American pork exported to the Middle East. Imagine exclusive export of pork to all those allied Arab and Muslim countries. (Scratch sanctioned Iran: they don’t deserve all that beautiful pork, not yet).

Imagine the rewards.
Imagine, if you can, the new slogan:

Export Beautiful Pork, not Beautiful Guns.

Or:

Raise Fat Pigs, not Skinny Terrorists….

(FYI: for some reason Congress always prefers “pork” to “pigs”).

It won’t be kosher or halal, but just imagine the added rewards….

Cheers

Mohammed Haider Ghuloum

Why Not Liquidate the IMF?………..

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“IMF members delete anti-protectionism pledge, keep currency commitments. Member countries of the International Monetary Fund on Saturday pledged to work to reduce global imbalances but failed to repeat their past pledge to resist all forms of protectionism. The International Monetary and Financial Committee (IMFC), the IMF’s steering body, also repeated its past commitments on currency exchange rates. “We will refrain from competitive devaluations, and will not target our exchange rates for competitive purposes,” the IMFC said……….”

It has been years since I stopped attending the International Monetary Fund (IMF) meetings (annual, semi-annual, etc). So now is the time for me to ask: Why not liquidate the IMF?
I was never impressed with the people I met there, nor with their tailor-made policies: tailor made to satisfy richer countries, tailor-made to squeeze poorer countries. All written up by their Gucci-clad, duty-free addicted staff allegedly for the benefit of the Wretched of the Earth (including the Middle Classes of the major Industrial Countries).

Ditto the IBRD (World Bank), although the latter can be somewhat useful for the poorer countries.
Just think outside the box…….
Cheers
Mohammed Haider Ghuloum

Donald Trump’s Brief Airborne Syrian Fling: My Fatwa for Next Year………

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President Trump has managed to gather some sort of consensus, at least within the media and among politicians, around his brief air-war fling with Syria. As usual in the initial phase of a military action, both parties and the media have managed to praise his action, in some cases for fear of looking unpatriotic or “too outlier” (fear of bullying is not confined to school children).

Soon they will be asking: what next? What? No more? Especially cable media will go through severe withdrawal symptoms, being used to some thirty years of covering (ad nauseam) non-stop foreign wars. Some are already beginning to ask the question. Then the absolute rulers of the allied Muslim countries will push him to support a “democratic” Syria (where power can be shared between the Wahhabi Salafists attached to Saudi Arabia and the Muslim Brotherhood attached to Turkey’s strongman Erdogan). A claustrophobic democratic experience they would never allow their own peoples to enjoy. Apparently Trump has been listening to the potentates lately, and he seems to be impressed.

My guess? My Fatwa: sometime well before the summer of 2018, Democrats will look back and say that Trump did his Syrian fling in order to divert attention from “other” more pressing “America First” issues he could not handle. The quick disenchantment happened with LBJ, Bush (pere et fils), and perhaps others.

A one-week apparent success (meaning no American casualties) while his foes’ knives are being temporarily hidden. Foreign action trumps domestic failure, but only for a while (just ask George H W Bush who presided over the end of the Soviet Union and a swift American victory in the Persian Gulf War).
The infrastructure will still need to be dealt with, and Trump may soon have some Obama-style stonewalling by the Republican Congress on the required spending. Then there is Healthcare, then a mechanism to keep and create jobs inside the USA, then a mechanism to encourage young people to enroll in STEM education (preferably within the excellent traditional mode of a broad American undergraduate college education that we all enjoyed).

The risk is that America First may become America Later. Looks like George Dubya Bush was right: being US president is a hard job……

Cheers
Mohammed Haider Ghuloum

American Economic and Political Dilemma: Robots Replace Workers, Idiots Replace Political Leaders……..

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“U.S. workers face higher risk of being replaced by robots. Millions of workers around the world are at risk of losing their jobs to robots — but Americans should be particularly worried. Thirty-eight percent of jobs in the U.S. are at high risk of being replaced by robots and artificial intelligence over the next 15 years, according to a new report by PwC. Meanwhile, only 30% of jobs in the U.K. are similarly endangered. The same level of risk applies to only 21% of positions in Japan. The U.S. and U.K. labor markets are both dominated by services jobs, and roughly the same share of workers are employed in key sectors including finance, transportation, education, manufacturing and food services……..”

No real surprise here, and not only robots. If you have not been living on a faraway planet in another galaxy, you’d notice something happening, a trend, for several years. It is not only an issue of robots replacing workers.

Some of the most important jobs in the United States, the most important jobs, all the way to the top, have been taken over by idiots and fools, especially in Washington DC. Most of the political jobs and especially the jobs of their leaders in both the U.S. Congress and the White House have now been taken over, almost completely, by utter idiots. Or so it seems.

Thanks to its new generation of leaders and their backers and their owners, America may well be on its way to rejoin the Third World. In Congress, each side has been engaging in self-gratifying political ideological masturbation. Partner-less of course by definition. Class distinctions are already sharpening, ethnic and religious distinctions are being encouraged, and self-serving Think Tanks of Hate are rolling in dark money.

All this is probably a bit of an exaggeration: no country in the world, or in its history, has been or is as resilient as the United States of America. This shall pass. There is always hope, as long as there are free and “unfettered” elections coming. As long as the people remain educated. Politics is a series of experiments, an exercise in trial and error.

More on this later, stay tuned.

Cheers
Mohammed Haider Ghuloum

Iran’s Khamenei Does a Trump: MAGA becomes MIGA……

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“Supreme leader Ayatollah Ali Khamenei fleshed out his vision of a “Made in Iran” economy Tuesday, calling for a ban on certain imports and an end to the $15-billion smuggling trade. The annual speech on the first day of the Persian year serves as a sort of Iranian equivalent to the US State of the Union address, and Khamenei used it to provide more details about his calls for a self-sufficient “resistance economy” that has been his main theme in recent months. “The importing of products where an Iranian equivalent exists should be considered religiously and legally haram (forbidden),” he told a huge crowd in the holy city of Mashhad. He took aim at Iran’s rampant black market in smuggled goods, which he said was worth at least $15 billion annually. “Some speak of $20-25 billion,” he said. “We want greatness for our country, social well-being and security at the national level. Without a strong economy we cannot achieve all that…..”

Ayatollah Khamenei sounds almost like a Trumpista, but only in the economics of trade sense. I am exaggerating a bit: clearly Khamenei does not believe in a trickle-down economy, now set to become a gushing-up economy under Trump. He does not have a gaggle of billionaires around him defining his own “populist” comfort zone in Tehran. He mostly favors fellow mullahs.

Not as bad as many other Middle East leaders these days. Some groveling Arab leaders are the worst offenders, effectively throwing their fellow Muslims under the bus to please Trump. Before the November elections they expected a resounding Hillary Clinton victory. Their Wahhabi-Liberal mouthpieces in the press and social media obediently excoriated Trump. But that was then.

Soon after Mr. Trump issued his first unconstitutional Executive Order banning many Muslims from travel to the USA, surprisingly including legal residents, some Arab kings and princes reacted positively. Particularly Saudi and UAE rulers, who have certain demands of Mr. Trump for their own regional agendas, quickly praised his move. Even as many Americans and the US courts stood against it. Their hasty positive reaction was uncalled for, it was voluntary, did not even wait for the US court decisions, which turned out as I had expected.

Khamenei is also applying some pressure on President Rouhani in his election year, distancing himself from an economy that has not done as well. Some Iranian officials have recently expressed disappointment that the Nuclear Deal has not helped the economy as much as they had expected.

But the Iranians have become good at managing under forced self-sufficiency. The long decades of mostly-American sanctions have forced them to produce many of the tools, equipment, and weapons they have needed. An unintended positive by-product of the economic siege. Even with the reduction and lifting of sanctions, their country will continue to produce many of the goods it has been forced to make under the economic siege.
So, maybe its is the other way around: maybe Mr. Trump’s “Made in America” message is an imitation of the forced “Made in Iran” policy on the other side of the world. Ali Khamenei has not uttered the term “Make Iran Great Again” (MIGA), but his occasional exhortations and policy statements sound similar to “Make America Great Again” (MAGA). Without the goofy red Trump hat.

More on this later, stay tuned.

Cheers
M. Haider Ghuloum

New Old Saudi Vision of Total Conformism: from Riyadh to Pyongyang………

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“The Council of Ministers endorsed during its session on Monday under the chairmanship of Custodian of the Two Holy Mosques King Salman Saudi Arabia’s Vision 2030. The Cabinet session was devoted to discuss the vision, which was drafted by the Council of Economic and Development Affairs upon instructions of Custodian of the Two Holy Mosques. Following is the text of Saudi Arabia’s vision 2030……..”

The new phrase Saudi Vision 2030 has been covered extensively in Saudi, Gulf, and some Arab media. There has been some good coverage in international media as well, until a heavy dose of realistic skepticism set in. I am in no position to openly express my own judgment yet, but I will soon. There is certainly a need to look beyond the years of oil boom, a need for some new (and serious) vision.

Yet I don’t like the quick and intimidating cheering in the Gulf GCC region, the exclusion and rejection of any doubt or questioning.  No debate of  such a vital issue. The distinctly Saudi conformism that is spreading to all GCC states.

As expected, Saudi and Gulf GCC media are not critical: not one iota of criticism or healthy (or unhealthy) doubt has been expressed. A lot of enthusiasm has been expressed, in blissful ignorance. Suddenly everybody on the Arab shores of the Gulf is as conformist as any good Saudi citizen in Riyadh or Qassim, anyone who is not in the safety of foreign exile or in a local prison. It is like the old days when Saddam was issuing his Baathist drivel across the Persian Gulf media and nobody was allowed to criticize him.

No doubt there are many ‘secret’ doubters, especially in the other Gulf GCC states if not in heavily brain-washed Saudi Arabia, but they dare not express their doubt. It is almost like having Kim Jong Un of North Korea (the Cute Leader) publish an economic “vision” for his country! Nobody would even think of criticize him in old Pyongyang.

Similarly, some Persian Gulf states are moving rapidly toward a new common repressive model. Even in places where the press “used to be” relatively free. Criticism of the plan by Prince Mohammed, the the favorite son and possible successor of King Salman, would be considered “insulting a sisterly or brotherly” state. That is a new category of crime that could land you in prison anywhere in the GCC (as in Pyongyang).

If the open doubter is a true Wahhabi terrorist-supporter he could go to prison and maybe get rehabilitated from his doubts. If he is a Shi’a agitator or doubter, he will likely be charged with “terrorism” and lose his head to a sword.

But is this emperor, in this case Prince Mohammed Bin Salman and his vision, also naked (as in the famous parable or fable)? I am not certain yet. That will be covered in a new post coming soon to a theater right here. I have not read the detailed outlines of this economic vision in detail, yet. Who knows, I might become an enthusiastic supporter as well.
But the devil is in the details.

Cheers
Mohammed Haider Ghuloum

New Global Financial Phenomenon: from Poor Candidates to Rich Leaders…….

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All the recent talk of the Panama Papers and hidden wealth. It is, as I once observed, the tip of a huge global iceberg.

In the old days, three or four or five decades ago, when an Arab or Muslim leader (not a monarch) died or left power, he left behind only his personal belongings and (maybe) his pension. That was the case with Gamal Abdel Nasser in Egypt, Qassim of Iraq, Ben Bella of Algeria, and various other leaders. The same was true of American leaders: Truman and Eisenhower did not leave office as very wealthy men. In fact nor did Nixon. But that was then. Things are different now, especially in the past two decades.

Now there is one thing that most Middle Eastern leaders, especially Arab leaders, have in common with modern era American presidents  and with many European leaders of the past two decades. They all have the same thing in common with other Muslim leaders and with African leaders and with Latin American leaders and Chinese and Russian leaders.
Know what it is? They all leave office as very rich people, much richer than before they took office.

Americans call it “looking for number one“, and they don’t mean “the people“.  That is one risk they take when they seek office. It is a by-product of the globalization of many things, especially greed and corruption.
Cheers
Mohammed Haider Ghuloum

Is It Brotherly Blackmail? Lebanon in Arab Financial Crosshairs………

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The Saudi move to cancel the $4 billion promised aid to Lebanon (and indirectly to France) is apparently a ‘first step‘ in something bigger.  At least that is what Saudi proxies and allies in Beirut are gleefully threatening.

The Saudis are frustrated with their failure to weaken Hezbollah and pull Lebanon out of what they claim is an Iranian orbit. It is hard for them to believe that all the inducements they have offered Lebanon could fail, that their top proxies in Beirut, occasional billionaire Saad Hariri and his sidekick Fouad Saniora, could not bring the small country along. One Lebanese minister, a Mr. Mashnuq (the Hanged Man) who is part of the Saudi-financed March 14 (Hariri) camp has warned of more pain to come. Clearly a not subtle Saudi threat-by-proxy.
The threat of “more pain to come” could include a renewal and expansion of previous expulsion measures against the expatriate Lebanese citizens in some GCC states of the Persian Gulf.  The UAE has recently been reported to have resumed its old policy of summarily expelling Lebanese expats who are Shi’as. The secretary general of the GCC, a Bahraini close to the ruling autocrats, has ominously warned Lebanon for going against what he called erroneously “Arab consensus on Iran“. The GCC secretary was of course lying, to put it politely: in fact there is no Arab consensus on Iran or on anything else whatsoever.
An expulsion of the Lebanese expats would not be in the interest of the Gulf states. They are not normally involved in politics. Many businesses and institutions benefit from the Lebanese experience and skills in various economic sectors. It would effectively lower the efficiency of business and the quality of life in the host countries.

Some Arab media speculate that the Saudis are canceling the promised aid partly because of their own dire financial situation. A situation largely created by their own short-sighted oil policies of recent years.

Another possible factor that Saudi and Gulf media ignore is that the Lebanese authorities are holding a high-ranking young Saudi prince who had tried to smuggle large quantities of illegal drugs on his private jet through Beirut airport.

Will all this economic pressure against Lebanon work? Will the small country where pro-Wahhabi sentiment is restricted to a small fraction of the population yield to Saudi pressure?  It looks highly unlikely now, given the political realities and the demographics of Lebanon.

The Israelis are watching this game next door with great interest.
Cheers
Mohammed Haider Ghuloum

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Rouhani in Europe: Economic Irony, Mullahs as Princes………..

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As I read (and watch) the news, I notice that Iran’s Hassan Rouhani is signing tens of billions of dollars worth of contracts in Europe. It is as if he is some Saudi or Qatari or UAE prince or potentate. I realize that there is an irony here, somewhere (if I can explain it).

The Gulf GCC states are allegedly reportedly presumably perhaps maybe cutting back their purchases in Europe. Mainly non-military and non-security purchases. A result of lower revenues. The Iranians are busy signing new trade deals and purchasing tens of billions of new goods (and services). A result of increased revenues.

Oil revenues of most oil producers, including Gulf GCC, have gone down significantly. Iranian oil revenues are increasing sharply now, because of the lifting of sanctions. So will other non-oil revenues increase now given that their economy is diverse. It is too soon and too absurd to say that the mullahs are the “new” oil princes. Of course t is only like a windfall being used, but is it?
Who would have thunk it only months ago. How long would this trend last? How long could it last? Ich weiss nicht………..

Cheers
Mohammed Haider Ghuloum
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Comparing Cool Apple and a Genocidal Petroleum Oligarchy………

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Reports say that Apple Corporation (AAPL) has about $207 billions in cash (that was before the latest good results came out on Tuesday). All these beautiful useful gadgets, some necessary and some not so necessary, and some American technical ingenuity/creativity have made a lot of money for Apple during the past decade. They may use it to buy back shares, pay more dividends, expand into new products, or acquire subsidiaries.

Reports also claim that Saudi Arabia used to have over $700 billion in foreign exchange (Forex) reserves (its Sovereign Fund managed by its monetary agency SAMA).  All of it from oil revenues. These have probably been depleted by somewhere over $100 billion over the past two years, since the new regime of His Majesty King Salman Bin Abdulaziz and His Royal Highness the Crown Prince to the Crown Prince (and Minister of Defense) Mohammed Bin Salman came to power. The latter is the putative conqueror of Yemen: he has been pouring Saudi money and American (and British) bombs (cluster bombs and otherwise) all over the poor country of Yemen for seven months. With the goal of establishing a government to his liking in Sana’a.

Too much power and money can make even the most impotent of potentates blind to past history. All it takes is a tablespoon of foolish vanity, and the rich young Arab princes have plenty of that. Hence this new quagmire in Yemen, which promises to go on long after former president Hadi (Bin Zombie) evacuates his Riyadh hotel suite for wherever the hell he’ll end up. Long after Al Qaeda (the Saudi-led AQAP) expand their newly acquired territory in the South beyond Al Mukalla. Long after the Caliphate of ISIS expand their current use of the porous border to attack civilian Ismailite (quasi-Shi’a) inhabitants of Najran and Jazan.

Hence the new barely-veiled threats by Saudi officials of sending newly hired Arab and African (and Western?) mercenaries into Syria.

The IMF has noted that Saudi reserves could vanish within five years. That is possible if the funds are used at current rates and crude oil prices remain near current low levels. Especially if the need arises to buy public approval with new royal handouts. Especially if the princes continue their costly genocidal war on Yemen and expand their intrusion in Syria into an official military confrontation with their Iranian and Lebanese rivals, even if the “boots on the ground” are rented foreign mercenaries.

Hopefully their reckless policies do not doom the economies of the other Gulf states.

Cheers
Mohammed Haider Ghuloum

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