Category Archives: Economics

Arab Counterrevoltion, Arab Revolutions, Corruption, Economics, Human Right, Libya, Saudi Arabia

Common Arab Epitaph: Brother Leader, Very Rich but Very Cheap…………

   Rattlesnake Ridge   Follow ArabiaDeserta on Twitter   

 
      BFF

“His name of choice was the Brother Leader, though his nearly 42 years of rule were rarely brotherly, and his leadership left a country with plentiful oil in shambles……… Given Colonel Qaddafi’s noted flamboyance, the residences of the House of Qaddafi were not quite as grand as people might have supposed. They lacked the faux grandeur of Saddam Hussein’s marbled palaces. There are no columns that bear the colonel’s initials, or fists cast to resemble his hands or river-fed moats with voracious carp. But in Baghdad and Tripoli, the physical remains of the leader’s rule still projected the distance between power and powerlessness. As rebels and residents started to pick through the detritus of the Qaddafis’ lives in recent days, there was a sense of laying claim to a country commandeered by the Arab world’s longest-ruling leader…………“For somebody who’s very rich, he was very cheap,”……..”

“For somebody who’s very rich, he was very cheap”, he said: one can say that about others: the Bin Ali, Mubarak, the al-Assad, al-Khalifa and other potentates not yet faced with the moment of truth.
Of course, many Arab “brother leaders” or “their majesties” are so rich mainly for the same reason that most of their people are poor: they need more of the resources for themselves, their extended families, and their cronies. I mean, for example if everybody in, say, Saudi Arabia was above poverty level then someone like Prince al-Waleed would be unlikely to be on the Forbes list of the richest billionaires. When there are so many thousands of princes and their supporting retainers and sycophants, well, there will be less for the rest.
(FYI: Forbes Magazine every year lists the source of the prince’s wealth as “Self-Made”. You’d think he flipped burgers are the DQ or started in the royal mail room).
Cheers
mhg


[email protected]

Economics, Human Right, Middle East Women, Saudi Arabia, WTF

Ill-Timed Honorary Degree, 23 Women Awaiting Execution……..

   Rattlesnake Ridge   Follow ArabiaDeserta on Twitter   

 
      BFF

“University of Indonesia (UI) has come under a storm of protests for awarding an honorary doctorate to King Abdullah of Saudi Arabia, a leader whose commitment to human rights has been seriously questioned by labor activists. The award came just two months after the beheading of Ruyati binti Satubi, an Indonesian maid who was convicted for murdering her employer — a crime she allegedly committed in response to repeated torture. For years, international human rights organizations have criticized Saudi Arabia for its treatment of migrant workers. A 2011 Human Rights Watch report notes that domestic workers from Indonesia “frequently endure forced confinement, food deprivation and severe psychological, physical and sexual abuse”. There are an estimated 1.5 million Indonesian maids currently working in the kingdom, with 23 on death row……………”

Bad timing. An honorary degree just after one Indonesian housemaid was beheaded, and as 23 others are on death row waiting to be beheaded. Sounds quite inappropriate. Some of these institutions bestow honorary, and real, degrees easily on the potentates.

Saudi relations with exporting countries of Asia (countries that ‘export’ housemaids) have been rocky in recent years. No other country in the whole wide world puts so much effort (including diplomatic) in securing cheap foreign housemaids for its citizens homes. Government officials delegations often travel to Indonesia and the Philippines to renegotiate terms of employment of housemaids. Saudi officials often protest laws passed by ‘exporting’ countries that seek to raise wages or generally improve living conditions for their citizens who are housemaids in the kingdom. I believe the official government economic and social policy can be summarized as a Hooverian: “two Asian housemaids in every house, a car in every garage (to be driven only by men)“.
When leaders of these two countries visit Saudi Arabia, the main topic of discussion is……housemaids! (They probably also discuss ‘certain’ security issues with Indonesian officials, given that Salafi religious Madrassas have created a large and influential Salafi fundamentalist community in Indonesia).
Economics, Finance, Gulf states, Iran, Iraq, OPEC, Saudi Arabia, Venezuela

Petroleum Rivalries Turning OPEC Upside Down……….

   Rattlesnake Ridge   Follow ArabiaDeserta on Twitter   

 
      BFF

“Saudi Arabia’s government spending, flat since the last oil boom in the 1970s, is now rising at 10 percent or more annually. And it will rise faster still: The House of Saud’s survival instinct in the wake of the initial Arab revolutions led King Abdullah to announce $130 billion of largesse in February and March. The resulting increases in government employment and salaries can be cut only at the cost of more discontent. And that’s only what the kingdom is spending on its “counterrevolution” at home. Saudi Arabia will pay the lion’s share of the pledged $25 billion of Gulf Cooperation Council aid to Bahrain, Egypt, Jordan, and Oman. With Iraq, Syria, and Yemen likely flashpoints yet to come, the bill will only increase. Already, nearly a third of the Saudi budget goes toward defense, a proportion that could rise in the face of a perceived Iranian threat. Meanwhile, fast-growing domestic demand poses a serious threat to oil-export revenues. The kingdom is one of the world’s least energy-efficient economies: With prices fixed at $3 per barrel for power generation and $0.60 per gallon of gasoline, Saudi Arabia needs 10 times more energy than the global average to generate a dollar of output. Subsidized natural gas, too, is in short supply, undermining an economic diversification drive focused on petrochemicals. As much as 1.2 million barrels per day (bpd) of oil are burned for electricity to meet summer air-conditioning demand, yet Jeddah, Saudi Arabia’s second-largest city, still suffers frequent power cuts………This combination of higher spending and lower exports shortens Saudi Arabia’s time horizon. Usually considered, on shaky evidence, to be a “price moderate” within OPEC, the kingdom now requires $85 per barrel to balance its budget. That figure will rise to $320 by 2030………”

The problem for the Saudis is that long before the year 2030, both Iran and Iraq would have resumed full control of their oil fields. Iraqi and Iranian outputs have been disrupted by thirty years of war and revolution and Western sanctions, but that era of instability will end soon. Both countries threaten to overtake Saudi Arabia as OPEC’s main producer and possibly as ‘swing’ producers. Both have huge untapped resources and unconfirmed reserves (thirty years of instability takes its toll). Then there is Venezuela, which OPEC recently declared now has the largest oil reserves, surpassing Saudi Arabia. It is almost certain that within a decade from now the heavy weights in OPEC will be three ‘ornery’ republics in addition to the Kingdom without Magic.
Cheers
mhg


[email protected]

Arab Counterrevoltion, Arab Revolutions, Cairo, Economics, Egypt, Finance, Iran, North Africa

Arab Revolutions and Oligarchs: with a Little Help from their Friends…….

   Rattlesnake Ridge   Follow ArabiaDeserta on Twitter   

 
      BFF
“What would you think if I sang out of tune,

Would you stand up and walk out on me.

Lend me your ears and I’ll sing you a song,

And I’ll try not to sing out of key.

Oh I get by with a little help from my friends,

Mmm,I get high with a little help from my friends,

Mmm, I’m gonna try with a little help from my friends……..” The Beatles (also sung by Joe Cocker and Arab Oligarchs)

“It is hard to say for sure who took down the portrait of the revolution’s most famous martyr, Mohamed Bouazizi, from its perch atop a garish gold statue on the street where he set himself on fire, touching off a season of revolt across the Arab world. One man said unnamed counterrevolutionaries did it, and another man said it was damaged by rain. Mr. Bouazizi’s neighbors say it was taken down in disgust, several weeks ago, after his mother, uncle and siblings left Sidi Bouzid, an act the neighbors considered a betrayal……. But more than that, they said they were furious at being left behind, in a place with no jobs, money or hope, without the famous Bouazizis to give voice to their despair……. It is a measure of the deep frustration in Sidi Bouzid that a few people have lashed out at the town’s favorite son. That anger is misplaced, most residents say, blaming the lack of progress here on the transitional government, which has moved slowly to address one of the revolution’s central complaints — youth unemployment — especially here in the towns of central Tunisia, where the uprising began. The bitterness here stands in stark contrast to a guarded optimism elsewhere in Tunisia about the progress of the revolution, and it threatens to undermine the gains: Several times in the last few months, disputes over jobs have led to deadly episodes of violence……..In Tunisia, as in Egypt, the optimism fueled by a popular uprising has crashed into the cold reality that life has not quickly improved, and in many cases has even grown more challenging as economies stall and interim leaders struggle to build a new system……….”

The Tunisian revolution is still unfinished, anymore than the revolution in Egypt. In both countries long-term dictators were overthrown but their appointees, whether civilian or military, are trying to keep the old order in place. In Egypt the military is asserting its supreme power and it looks set to keep on playing a leading role no matter who wins the ‘election’. The military rulers are almost certainly looking to oversee a “soft democracy”, slightly more open than under Mubarak, perhaps with leaders having term limits as in Iran (but the power of the military in Egypt, like that of the clergy in Iran, will have no term limits). In Tunisia there is probably more consensus among the people about the future of the country, but real change will be hard.
 
Both countries will eventually look more to the IMF and World Bank for financial help and advice on how to manage their economies. The IMF and IBRD are the same institutions that funded and advised the old regimes: ergo, don’t hold your breath expecting anything new. Both countries will also look to the West for help and advice, look to the same insane deregulated economic/financial system that has driven us to the brink of another depression.
Then there are the Arab counterrevolutionaries, flush with cash, who did not wish for the Egyptian and Tunisian uprisings to succeed but now seek to subvert them. Now the Arab absolute monarchs and their media are talking as if they were behind the uprisings in Tunisia and Egypt the whole time. They are holding the line, these Arab counterrevolutionaries, in Libya, Yemen, Syria, and Bahrain, and they are making sure it does not start elsewhere. With a little help from their friends.
Cheers
mhg


[email protected]

Corruption, Culture, Economics, Finance, U.S. Congress

The Lehman Precedent and Goldman’s Catharsis: WTF Rates Standard & Poor ?………….

   Rattlesnake Ridge   Follow ArabiaDeserta on Twitter   

 
      BFF
“Standard & Poor’s is taking great pains to defend its “A” rating for Lehman Holdings Inc. The rating company fired off a report Wednesday asserting that the recent collapse of the investment banking firm was a case of negative market sentiment — whether or not grounded in fundamentals — creating significant difficulties that led the company to the point of failure. “In our view, Lehman had a strong franchise across its core investment banking, trading, and investment management business,” S&P stated. “It had adequate liquidity relative to reasonably severe and foreseeable temporary stresses.” The ratings service insisted that looking beyond the current downturn, the firm had good earnings-generating ability. “We believe the downfall of Lehman reflected escalating fears that led to a loss of confidence ………..”

Thus wrote Paul Krugman in Sept. 2008 about Standard and Poor (S & P) high rating of Lehman Bros just before it collapsed. Ergo, the S & P downgrading U.S. debt is probably as meaningless as its high grade of Lehman. Good point. I think I asked around that time: wtf rates S & P?
Goldman Sachs evaded the fate of Lehman because it had, it has, too many people in Washington in its deep pockets. That would have been a better lesson, a needed financial catharsis. Dommage……..
Cheers
mhg


[email protected]

Economics, Finance, U.S. Congress, U.S. Politics

White House and U.S. Congress Engineer another Market Crash………….

   Rattlesnake Ridge   Follow ArabiaDeserta on Twitter   

 
      BFF
“What began as a weak day in the stock markets ended in the worst rout in more than two years, as investors dumped stocks amid anxiety that both Europe and the United States were failing to fix deepening economic problems. With a steep decline of around 5 percent in the United States on Thursday, stocks have now fallen nearly 11 percent in two weeks. Markets have been plunging as investors sought safer havens for their money — including Treasury bonds, which some had been avoiding during the debate over extending the nation’s debt ceiling…….With investors in the United States already focusing anew on fragile economic growth and high unemployment, waves of selling of stocks began in Europe and continued throughout the day in the United States. Analysts said the market still might have further to fall, as investors reassess the dimming economic prospects……..”

As someone said, or maybe as someone ought to have said: asinine politicians espouse asinine economic policies and create disaster. Clearly there is no shortage of asinine politicians in the United States Congress, from both parties, although the Republicans seem to earn the prize (in asininity). There is nothing more asinine in economics than forcing a contractionary economic policy during a deep recession. Even if it is for the sake of the higher goal of political expediency. Is like Roosevelt’s double-dip recession in the mid 1930s?
I know, I know, the situation in Europe helped, but the main culprits are in Washington, DC.
Cheers
mhg


[email protected]

Economics, Iran, Iraq, nuclear wepoans, Sanctions, US Foreign Policy, Weapons deals

On Iraq Sanctions, Iran Sanctions, Cuba Sanctions, Smart Sanctions, Asinine Sanctions, ………….

   Rattlesnake Ridge   Follow ArabiaDeserta on Twitter   

 
      BFF
“Economic sanctions rarely hurt a disfavored regime or its powerful supporters, at least in the short run. They hurt those at the bottom of the ladder. This is a point that we Westerners, with our addiction to the imposition of sanctions to punish bad behavior, should take more seriously than we do………..  This has always been the problem with the West’s sanction addiction. Sanctions nip at those whose lives are already marginal…….. Dictators everywhere try to control the economy, to funnel resources to their friends……… In the case of Iran, the sanctions are manifestly failing, unless their point was to force the government to redistribute the wealth. The regime is proceeding with its nuclear weapons development, and may even be picking up the pace. Western experts differ on how close the regime is to completing its research. The head of Israeli military intelligence recently estimated that Iran may have the capacity to build at least one nuclear explosive device by next year. Things may change. The Iranian regime may give up its nuclear dreams, making the world that much safer, and, incidentally, handing the Obama administration a much-needed foreign-policy victory. But no matter the result in Iran, let us remember, the next time we debate the imposition of sanctions on a rogue state, exactly whom we are really punishing…………”

It is highly unlikely that the ruling Iranian mullahs (or any replacement regime) will suddenly give up their nuclear program anytime soon.
As for the forces behind economic sanctions: they are more complex than the writer notes. The famous sanctions against Saddam Hussein’s Ba’ath regime in Iraq did not harm the dictatorship or its elites: it hurt the ordinary people. But these were broad wartime sanctions, not as selective or nuanced as what Iran “supposedly” faces currently. Then there are so-called smart sanctions that are as almost dumb as other sanctions, but maybe not as dumb as asinine sanctions. One reasonable definition of asinine sanctions is that they are the kind that neoconservatives usually prefer. A good example of asinine sanctions are those no one believes in but they are kept in place out of political fear or expediency, like the sanctions against Cuba. In fact, the American sanctions against Cuba are some of the most asinine in history.
Take the sanctions against Iran: they are only partly driven by IAEA requirements, but their depth and scope also reflect the influence of domestic American political pressure groups. These groups include the Israeli lobby (AIPAC, etc), as well as defense hawks on the right (and some on the left). These sanctions are also partly driven by a regional rivalry for domination between the United States (directly and/or through its proxy allies) and Iran. In summary, the scope of the sanctions is the result of domestic American politics as much as Iranian “infractions”. Then there is the ego of some regional allies that the U.S. administration needs to massage, in this case the Israelis, the Saudis and possibly the UAE potentates (there is oil and huge contracts at stake). Then there is the need of some in both Israel and the USA to inflate the Iranian threat and its urgency in order to divert attention away from the urgent need to resolve the issue of the West Bank and East Jerusalem. Among other things………
(Personally, I believe the only “smart” sanctions are those that target weapons and individuals, not institutions. Targeting large institutions almost always tends to harm many ordinary people).

Cheers
mhg


[email protected]

Bahrain, Culture, Economics, Jordan, Saudi Arabia

Jordanians Space out with Star Trek, about that Missing Humor…….

   Rattlesnake Ridge   Follow ArabiaDeserta on Twitter   

 
      BFF
“A Star Trek-themed attraction is set to boldly go ahead in Jordan, as US$1.5 billion of funding has been secured for a major tourism and theme park development. Construction work on the 74-hectare Red Sea Astrarium project in Aqaba, which will include four hotels and 17 entertainment developments, is expected to start early next year. The project is being funded by investors from the US and the Gulf, according to a partner in the project. The Amman company Rubicon Group Holding, which makes animated films, said in May it would design and produce the entertainment elements of the resort. The total investment in the project will be $1.5bn (Dh5.5bn), said Randa Ayoubi, the chief executive of Rubicon. “They have a group of investors. The main Jordanian investor is the King Abdullah Fund,” Ms Ayoubi said, in reference to the King Abdullah II Fund for Development (KAFD). “There are many American and investors from the Gulf [as well],” she added, without giving further details……..”

I guess there will be no more travel for the king and queen of Jordan. They may move the palace into the theme park. Not even another invitation to address a joint session of the U.S. Congress would lure the king away from Spock and Kirk and Uhura.
Fine and dandy, a good way to spend Gulf aid and investment money, but that still leaves out what Jordanians, including their king need the most: humor. The country, even with a funny Star Trek theme park will still lack the sense of humor necessary to make it a true first class tourist attraction like, say, Egypt. Maybe they can hire William Shatner (Captain Kirk) away from Priceline to work at the park?

On a more serious note: I don’t believe Jordan gets the massive volume of tourism that would make a Star Trek park profitable, especially not on the Red Sea where most Jordanians probably don’t go. It is just too far from the population centers. Unless they think they can lure a big chunk of the Saudi tourism that now prefers Lebanon, Dubai, Cairo, and Bahrain. Not clear when the hookers (les girls) will be back on the beat in Bahrain, with the uprising still in full swing: the Jordanians need to import some of those to Aqaba to attract enough of the Saudi male tourism. All this after Ramadan of course.
Cheers
mhg


[email protected]

Economics, U.S. Congress, U.S. Politics

U.S. Tea Party Nation: the Democrats’ Date Rape………….

   Rattlesnake Ridge   Follow ArabiaDeserta on Twitter   

 
      BFF
“While much of Congress is upset at the prospect of downing such a bitter brew, the new political faction known as the Tea Party doesn’t abide any compromise, no matter the stakes for the country. With just two more days on the debt clock, the machinations on Capitol Hill grew ever more surreal on Sunday. Reid’s initial compromise failed to get the required 60 votes to overcome a Republican filibuster……… As the deal evolved with more than $2 trillion in cuts, equal to or more than the amount needed to extend the debt ceiling through the next election, and with no additional revenue, the clear winner was the Tea Party. The newcomers held their ground, dictating the terms of the debate and extracting a historic victory in the scale of deficit reduction. Yet many who ran under the Tea Party banner could end up voting against it because it doesn’t go far enough. These members’ refusal to back down on any new revenue, not even closing tax loopholes for special interests, took the nation’s economy to the brink. And it left some Democrats feeling like they had been extorted ………..”

“Feeling extorted” is the wrong term to use for Democrat legislatures. The Democrats undressed, lied down (presumably on their backs but not necessarily so) and opened their legs just wide enough. Can they call it rape now? Absolutely not: they were intimidated, became the “chicken” in the unusual game of chicken, but they could have kept their clothes on, could have said “NO”.
(There is no such thing as a “Tea Party”: it is a major wing of the GOP now and soon it will be all of the GOP).
Cheers
mhg


[email protected]

Arab Revolutions, Economics, Finance, France, U.S. Politics, WTF

World Revolution Redux? a Wal-Mart World, PIGS of Europe, Arab Spring, Che Guevara……….

   Rattlesnake Ridge   Follow ArabiaDeserta on Twitter   

 
      BFF
“S. Robson “Rob” Walton, Walmart chairman, has a net worth of about $19.7 billion. And he’s only number 9 on the list of 2010’s top 20 richest Americans. Walmart workers, meanwhile, make around $8.75 an hour—about $18,000 a year. They’d have to work over a million years to approach what the chairman of Walmart Stores is sitting on. Alice and Jim Walton each have about $20 billion, and Christy Walton has $24 billion. Last year Jonathan Turley noted that the CEO of Walmart, Michael Duke, makes his average employee’s yearly salary every hour………..”

This is not just an American phenomenon anymore, although the gap tends to be wider in America and the third world (including the Middle East where the gap may possibly be the widest now) than in Europe or Japan. From Russia to Ireland, and south to the Middle East, income gaps are widening among working people and their corporate and government leaders. The middle classes, usually the pillars of stability wherever they exist, are being truly squeezed, forcing a very few of them upward, pushing the vast majority of them down the ladder. That is when revolutions erupt: when the middle class, if it exists, is threatened, when very few are at the top and most are at the bottom. Think France 1789, Russia 1917, China 1949, Iran 1979. The now-aborted Arab Spring was at least partly a bread and butter issue, about depots taking away both freedom and a chance at decent living.
Just when we thought Europe was irrevocably in its post-revolutionary stage, we are getting the ‘uprisings’ in Greece and Spain, not to mention the perennial French issue-oriented little ‘uprisings’. Advice to many older Europeans, especially in the PIGS countries: don’t throw away your Che Guevara posters and caps yet.
Okay, I may be exaggerating a bit, barely, so don’t sell the farm yet…..
Cheers
mhg


[email protected]