Saturday, May 13, 2006

The democratic process in Iran needs peace not war

There is a common belief that Iran's government is one that is unfair to it's people and the only way they can keep in power is because they have a fascist grip on their people.
This view is what the US is trying to push about Iran. The Iranian president Mahmoud Ahmadinejad has made the US's job even easier by stating that Israel should be "wiped off the map" [1].

The truth is that there are many people in Iran that are against their own government and want to find their way to a democratic society as soon as possible. Today, discussing with an Iranian, that message was delivered to me very clearly. He stated: "Iranians are fed up with this government", but they want a peaceful transition to democracy. Nobody - not even the Iranian opposition - wants the US to attack Iran. If the US attacks Iran the opposition in Iran will forget that they don't like the government and unite to fight the US. An attack from the US would only create a worse situation for those that want democracy in Iran".

The message is clear, even from those that oppose the current regime in Iran. Let the Iranian people find their way to democracy in their own time.

Attacking Iran is not the solution to solve the disagreement over nuclear energy.


[1] Iranian president's public call for Israel to be "wiped off the map".

Monday, May 08, 2006

Alain Minc has his story wrong about France's economic success

Alain Minc, a French writer, businessman and French establishment insider was interviewed by the BBC World on Hardtalk today (08-05-2006). During the interview he made some interesting statements about France:
We are ending a very bad period

With this he meant that the Jacques Chirac government had been very bad for France economically. This is an interesting comment when put together with the quote about France being the second country in the world receiving foreign investment.
We don't change because we are not poor enough

In this context he stated that the United Kingdom was ripe for change in the beginning of the 90's when Thatcher reached power. He quotes his memories of 1979 in London to say "I remember London in 1979, the trash on the streets the lack of electricity..."
We will change because it is a fact of life that we need to change

We argues that France is a country that cannot avoid change into a much more market oriented economy. He further argues that the change to a market economy is a "natural" change that cannot be avoided.
France is number 2 in the foreign investment - that is a sign that we are changing.
France is schizophrenic country, on one side one of the best productivities rates in the world [but there is also a side that is unproductive]. We have a very dynamic side, that's why we are receiving foreign investment.

He argues that France is a very dynamic country despite the government's actions.

Interesting comments... He basically states that all the laws and interventions that were caused by strikes and demonstrations on the street could not together avoid the fact that France is a very dynamic country and is bound to be an economic success in the future.
Quite a strong statement wouldn't you think? Despite all interventions France has survived Jacques Chirac's "leftism".
One would say that all evidence suggests otherwise. I mean, in his own admission "France is the second biggest receiver of foreign investment in the world". At least part of that should be due to state intervention wouldn't you say? This is not so strange if you believe that businesses actually search for stability, not for risk. With the world's stock exchanges representing more than 95% of the world's wealth risk is not the first thing that businesses or investors want. Despite France's strikes and state intervention it is clear for businesses that the French government will do anything to keep a bad business going. That's why the foreign investment is going to France, not because of the "dynamism" of the economy.
If you think that the largest receiver of foreign investment is China you can start to draw a parallel.
State intervention is good for business, not bad. It happens that it is also good for the workers (avoiding the sudden impact of globalization on unemployment, for example).
Alain Minc is against intervention not because of it's negative economic impacts but because his clients (he is a business advisor) don't like the current government intervention in France because it has not gone their way (he stated in the show several times that he "ignores"/"hates" Jacques Chirac).

Sunday, May 07, 2006

Alienating the Palestinian Authority is not the answer

What do the European Union (EU) and the United States (USA) want to achieve by withdrawing all financial aid to the Palestinian Authority (P.A.)?
USA and EU withdrew their financial aid after Hamas' victory in this year's legitimate elections (they were supervised by the very same EU and USA).

It is quite clear that a position like that can only make the already tense relationship between Hamas and the West even worse (Hamas is listed by both EU and USA as a terrorist organization).

Today there were news of demonstrations in Indonesia with the objective of collecting donations to the P.A. I'm sure that other muslim countries will try help the P.A. as that in turn gives their governments increased popularity at home, as many Muslims see the Israel-Palestine conflict as a West-Muslim conflict.

By cutting aid to the P.A. the EU and USA are only contributing to the widening gap between the Palestinians - who now still trust the West due to their generous help - and the West.

We have to change this. The P.A. needs to be brought back to the International Community as a full member with legitimate concerns that need to be addressed just like Israel's concerns are being addressed.

The Palestinian people, just like the Israeli people deserve a solution, but alienating the P.A. is not the answer.

In response to a reader's comments

In response to my post on Unemployment socrates comments:

  1. the global market is too integrated for one government to be able to combat unemployment on it's own,
  2. the current consumption levels are unsustainable, which will lead to a crash and social unrest
  3. the only solutions to keep the current consumption levels are a)accept many low paid workers into the first-world economies, or b)buy as many goods as possible from low income countries (Vietnam, Singapore, China, India, etc.)
  4. to control the social unrest that may be caused by point 2 governments are using the supposed "war on terror" as an excuse to have a tighter grip in society


I'd like to comment on the first statement:
the global market is too integrated for one government to be able to combat unemployment on it's own

Although it is true that the global market is very integrated - as witnessed by ripple effects caused by the Asian Tiger's crisis in the 90's - it is not totally true that a single government cannot do much against it.
Again I go back to the Asian crisis of the 90's. Joseph Stiglitz[1] argues in his book that the devaluation of the Thai Baht was worsened by the policies imposed by the IMF. Indeed those same policies caused the economic collapse in Argentina in 2002[2].
What this tells us is that the current global financial system is not ready to handle economic crisis on a local scale, the question is: if the we cannot attack this type of problems with a global approach why should we not use a local approach?
Indeed a local approach was what some of the Asian economies took with very positive results. And Poland and China are cited by Stiglitz as having taken a different approach than what the Washington consensus (IMF, World Bank, etc.) advocated and have had success in implementing important reforms in their economies without going through the same troubles as the Asian countries that followed the IMF's advice.

The global financial system is not ready to deal with one country's problems, its interests are far more on the side of conserving the wealth of those that already have it than protecting those that most require help, an example of that is what the IMF did in Argentina: trying to avoid Argentina's default on debt at the cost of famine and strife for the Argentinean peoples.

So, my point is: there is a solution to unemployment that will avoid social unrest and will not cause an economic crisis, but that solution requires more courage and action from local governments, not necessarily more IMF/World Bank intervention.

If you are interested in this "local approach" you can read more about "microcredit", just google for it. Microcredit initiatives have done a lot to reduce poverty in many countries, both rich and poor.

[1] Joseph Stiglitz, Globalization and its discontents, Penguin books, 2002
[2] for a comment on Argentina's economic collapse

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