Unpacking The Flip Side

2011-12-21T23:26:00.001-05:00

Hands off BAZ, Charamba tells Parliament

Thursday, 22 December 2011 00:00
Lloyd Gumbo Herald Reporter

PARLIAMENT has no mandate to discuss or question theBroadcasting Authority of Zimbabwe as this is tantamount to interfering withthe Executive, a senior Government official has said.
Secretary for Media, Information and Publicity Mr George Charamba yesterdaysaid the only arms of Government with the mandate to discuss BAZ's actions werethe Executive and the Judiciary.
He said Parliament's role ended with the nomination of board members.

Mr Charamba dismissed claims by the Speaker of the House ofAssembly Mr Lovemore Moyo that Parliament had played no role in the appointmentof the BAZ board.
"Unlike the Zimbabwe Media Commission, BAZ is not a constitutional board.It's a creature of lower law or statute, therefore whatever its perceivedshortcomings, it can never amount to an unconstitutional act for thatreason," he said.

"BAZ is an instrument for the Executive, its perceiveddemeanors can never be a matter for Parliament because Parliament created thelaw a long time ago and their role ended.
"Parliament is trying to swallow its child back into the womb after birth;unfortunately the child has grown too big to be swallowed. If they want to doanything on BAZ, it will create a constitutional crisis because the Executivewon't be happy with the interference."

Mr Charamba said BAZ was the only legitimate institutionthat can invite applications, adjudicate and finally award licences free fromParliament, the ministry and the Judiciary. BAZ enjoyed autonomy.
He said inviting Media, Information and Publicity Minister Webster Shamu toexplain why BAZ qualified and disqualified other applicants would be implyingthat he sits on the BAZ board when he does not.
Mr Charamba said constitutionally, BAZ is appointed by the President and notthe Minister of Media, Information and Publicity.

He said the minister was only there to make recommendationsas provided for by the law as amended in the Broadcasting Services Act of 2007.
Mr Charamba said the BAZ board had two membership types, those who representsectoral interests and those who represent skills.
He said there was supposed to be a chief's representative for the sectoralinterests nominated by the Chief's Council.

The conscience industry nominates candidates through theZimbabwe Council of Churches.
Mr Charamba said nominations also came from competing political interests,which is done through Parliament's Standing Rules and Orders Committee.

He said the SROC was supposed to forward six names to thePresident, who would in turn appoint three from the list given to himrepresenting all parties' interests.
He said Minister Shamu wrote to Mr Moyo requesting Parliament to forward namesof people to sit on the BAZ board as required by law, but the Speaker failed tomeet the 30-day deadline.
Failure to submit the names within the set period, Mr Charamba said, allowedMinister Shamu, according to Zimbabwe's laws, to nominate people of his choiceassuming that the SROC was in agreement with his nominations.

Despite the delay and the constitutional provision tonominate, Minister Shamu had wai-ted for Parliament to submit the names.
"Mr Moyo then gave the Ministry names after the date expired and thosenames were of people who failed to make it from the ZMC.

"On the skills side, there is a provision for a lawyer,not to represent legal interests, but to bring legal skills. There is also anomination for an accountant who in this case does not represent the accountinginterests but the skills. The President has also been given power to appointthree," Mr Charamba said.
He said if anyone felt injured by BAZ's actions, they would approach the courtsnot Parliament.
Mr Charamba said at one point Prime Minister Morgan Tsvangirai and his deputyArthur Mutambara questioned the composition of BAZ during the principals'meeting, creating an impression that the SROC had not taken part in thenomination process.

He said this had created an impression that Minister Shamuand Mr Charamba had unilaterally nominated people without the SROC's input.
"My Minister and I were not in that meeting and basing on what PMTsvangirai and DPM Mutambara said, the Chief Secretary wrote to my Ministersaying it had been brought to the attention of the President that the BAZ boardhad not been properly constituted and thus it had to be regularised.
"We then went to the President and the Chief Secretary with the documentsthat showed that indeed SROC had forwarded its nominations which resulted inanother meeting being called.
"In that meeting, four items were on the agenda and had to do with BAZ,ZBC, Zimbabwe Mass Media Trust and hate language," he said.

Mr Charamba said PM Tsvangirai raised concerns sayingMinister Shamu and Mr Charamba had unilaterally appointed the board.
Minister Shamu produced evidence proving the appointments were above board andthe matter was closed.

Mr Charamba said when BAZ called for applications, everyonehad expressed happiness that licences were going to be awarded only for otherpeople to turn around and discredit the process.
He said it was strange that people had to wait for so long to complain aboutthe composition of BAZ.
PM Tsvangirai's utterances about BAZ, Mr Charamba said, had resulted in otherapplicants raising concerns with the processes.

"When you do that, you cease to be a bona-fidecomplainant, you become a sulking loser. The strange thing is that thecomplainant wasn't an applicant, but our Prime Minister. He is mourning morethan the bereaved.
"In the process, the Prime Minister has instituted legal action againsthimself because he is part of Government. It is unfortunate that we have aPrime Minister who is in the habit of inviting litigation against himself.
"It is a fact that there were two licences on offer, but there were 16applicants vying for the two licences. Surely, 14 must lose."

Mr Charamba said the court application by KISS-FMchallenging BAZ's adherence to the rules had also complicated BAZ's actionplan.
"Now that BAZ has opened other applications, when others are at court, dothey apply to be considered in the latest calls for applications or wait forthe court processes?
"The other question is; should BAZ proceed to adjudicate and awardlicences when their adherence to rules is being queried?"
He said the lasting solution to the problems around broadcasting services inZimbabwe lay with the country moving from analogue to digital.
Analogue, Mr Charamba said, made it difficult for Zimbabwe to have manybroadcasting players.
He said migrating from analogue to digital technology would see one frequencyallowing more than 20 national radio services.

MrCharamba said instead of wasting money at the courts, it was important forGovernment to provide money for Zimbabwe to digitalise its broadcastingservices and defy the law of scarcity.

The House of Assembly last week adopted a motion calling for the disbandment ofBAZ and the withdrawal of licences awarded to Zimpapers and AB Communications.
However, chief whips from the three parties in the inclusive Government saidthe adoption of the motion had no legal force.

2011-12-21T01:04:00.000-05:00

We Can Make Highlanders Great Again

IF THE HighlandersFootball Club stakeholders do not sit down to seriously discuss the club’splight and come up with a viable business plan, then we are most likely goingto see the inevitable deterioration of the team to an ordinary outfit. Theworst case scenarios would be synonymous to the demise of Zimbabwe Saints orthat of Kennedy Sibanda’s Eagles FC. I know it sounds farfetched but ifHighlanders is left on its current path, then it is surely a plausibleprediction.

Just to contextualize my concerns,Highlanders Chairman, Themba Ndlela says, “We are focusing on juniordevelopment because it is a critical element that will bring solutions to anumber of the club’s problems. The academy will not only allow us to developplayers that will come into the first team but players we can also market toother clubs, both locally and internationally”.

How can a team base its businessstrategy on developing players and then selling them to competition? Thestatement uttered by Ndlela makes us understand that his current businessstrategy is that of selling the best players to other teams in order to keep Highlandersafloat. His strategy does not seek to make Highlanders a dominant force, whichwill attract and retain players, attract supporters and sponsors to theHighlanders brand.

A good beginning for any effective Highlanders Chairman would be to: 1) putin place well qualified and knowledgeable administrators and technical team, 2)Develop a viable business plan 3) Attract and retain the best players, 4) Win games, 5) Attract back thesupporters, and 6) Attract sponsors.

Obviously one would say to achieve this requires resources. Indeed, it doesbut that should be the work of competent administrators and technical team. Administratorswill be able to get resources and results if they develop and implement a 2 to5 year viable plan. Sponsors and former Highlanders players will be able tovolunteer or even forego lucrative appointments elsewhere if they areincorporated into a business plan that demonstrates viability in 2 years. Wehave many former players who have demonstrated concern about Highlanders andare willing to assist in any way possible. The body established by formerplayers is an example. We can exploit the expertise contained in that body foradministrative or technical skills. We can also take our viable plan to a bankor any potential sponsor. But we have to demonstrate how we will create valuefor both the Highlanders brand and the sponsor. Needless to say that we must also put forward a credible repayment plan of the funds advanced to bring to fruition to our business plan.

But for us to achieve this we have to dream big and refuse to be confinedto small dreams that keep Highlanders barely surviving.

Next, I’ll discuss the issue of whether Highlanders should remain acommunity-owned team or be privatized!

Nation Must Act Decisively

2011-07-13T21:55:00.001-05:00

By Peace Thabani,

WE HAVE just witnessed a national football disgrace. Influential and top officials at the Zimbabwe Football Association (ZIFA), including the past chairman and the chief executive, have been working with an Asian betting syndicate to facilitate the Zimbabwe national team to lose games for payment.
Close to 100 players, coaches and journalists are reported to be involved and are reported to have all benefitted from the scandal. Not only did the arrangement make the purported national team lose several games, but it disintegrated the soccer administration and development structures. Read More...

First Published on NewZimbabwe.com

Soul Singer Teddy Pendergrass Dead at 59

2010-02-02T22:13:00.003-05:00

Photo: Michael Ochs Archive/Getty

King of Pop Michael Jackson Dies at 50

2010-02-01T22:25:00.000-05:00

Summer Olympics 2016

2009-10-02T13:11:00.006-05:00

Brazil Can Do It Too!!!!!!

"All those people who thought we had no ability to govern this country will now learn that we can host the Olympics."

"The Brazilian people are good, generous and the country deserves it."

Brazilian President Luiz Inacio Lula da Silva

Irving Kristol, Godfather of Modern Conservatism, Dies at 89

2009-09-19T19:42:00.002-05:00

Barry Gewen

New York Times

September 18, 2009

Irving Kristol, the political commentator who, as much as anyone, defined modern conservatism and helped revitalize the Republican Party in the late 1960s and early ’70s, setting the stage for the Reagan presidency and years of conservative dominance, died Friday in Arlington, Va. He was 89 and lived in Washington.

He was commonly known as the godfather of neoconservatism, even by those who were not entirely sure what the term meant. In probably his most widely quoted comment — his equivalent of Andy Warhol’s 15 minutes of fame — Mr. Kristol defined a neoconservative as a liberal who had been “mugged by reality.”
It was a description that summarized his experience in the 1960s, along with that of friends and associates like Daniel Bell, Nathan Glazer and Daniel Patrick Moynihan. New Deal Democrats all, they were social scientists who found themselves questioning many of President Lyndon B. Johnson’s Great Society ideas. Mr. Kristol translated his concerns into a magazine. In 1965, with a $10,000 contribution from a wealthy acquaintance, he and Daniel Bell started The Public Interest. Its founding is generally considered the beginning of neoconservatism. “Something like a ‘movement’ took shape,” Mr. Kristol wrote, “with The Public Interest at (or near) the center.”
The Public Interest writers did not take issue with the ends of the Great Society so much as with the means, the “unintended consequences” of the Democrats’ good intentions. Welfare programs, they argued, were breeding a culture of dependency; affirmative action created social divisions and did damage to its supposed beneficiaries. They placed practicality ahead of ideals. “The legitimate question to ask about any program,” Mr. Kristol said, “is, ‘Will it work?’,” and the reforms of the 1960s and ’70s, he believed, were not working. Read More...

What went wrong with economics

2009-07-17T22:44:00.004-05:00

Illustration by Jon Berkerly

Jul 16th 2009 From The Economist print edition

And how the discipline should change to avoid the mistakes of the past

OF ALL the economic bubbles that have been pricked, few have burst more spectacularly than the reputation of economics itself. A few years ago, the dismal science was being acclaimed as a way of explaining ever more forms of human behaviour, from drug-dealing to sumo-wrestling. Wall Street ransacked the best universities for game theorists and options modellers. And on the public stage, economists were seen as far more trustworthy than politicians. John McCain joked that Alan Greenspan, then chairman of the Federal Reserve, was so indispensable that if he died, the president should “prop him up and put a pair of dark glasses on him.” Read More...

Uncertainty bedevils the best system

2009-04-15T09:48:00.001-05:00

By Edmund Phelps
Published: April 14 2009 19:50 Financial Times

In countries operating a largely capitalist system, there does not appear to be a wide understanding among its actors and overseers of either its advantages or its hazards. Ignorance of what it can contribute has in the past led some countries to throw out the system or clip its wings. Ignorance of the hazards has made imprudence in markets and policy neglect all the more likely. Regaining a well-functioning capitalism will require re-education and deep reform.
Capitalism is not the “free market” or laisser faire – a system of zero government “plus the constable”. Capitalist systems function less well without state protection of investors, lenders and companies against monopoly, deception and fraud. These systems may lack the requisite political support and cause social stresses without subsidies to stimulate inclusion of the less advantaged in society’s formal business economy. Last, a huge social insurance system, with resulting high taxes, low take-home pay and low wealth, may not hurt capitalism. More...

From Bubble to Depression?

2009-04-06T13:52:00.001-05:00

By STEVEN GJERSTAD and VERNON L. SMITH, Wall Street Journal

Bubbles have been frequent in economic history, and they occur in the laboratories of experimental economics under conditions which -- when first studied in the 1980s -- were considered so transparent that bubbles would not be observed.
We economists were wrong: Even when traders in an asset market know the value of the asset, bubbles form dependably. Bubbles can arise when some agents buy not on fundamental value, but on price trend or momentum. If momentum traders have more liquidity, they can sustain a bubble longer.
But what sparks bubbles? Why does one large asset bubble -- like our dot-com bubble -- do no damage to the financial system while another one leads to its collapse? Key characteristics of housing markets -- momentum trading, liquidity, price-tier movements, and high-margin purchases -- combine to provide a fairly complete, simple description of the housing bubble collapse, and how it engulfed the financial system and then the wider economy. Read More...

Why this will not be a normal cyclical recovery

2009-04-06T10:51:00.002-05:00

By Roger Altman
Published: April 5 2009 19:23 Financial Times

The rare nature of this recession precludes a cyclically normal US recovery. Instead, we are consigned to a slow, painful climb-out, as are nations such as Japan and Mexico that depend on US demand. The implications for US policy include a likely second round of stimulus, much more federal capital for the banking system and stunning budget deficits that will slow key initiatives for President Barack Obama, such as healthcare and energy reform.
What is unusual is that this is a balance-sheet driven recession, centred on the damaged financial condition of both households and banks. These weaknesses mandate sub-normal levels of consumer spending and overall lending for about three years. More...

Related Article: The London summit has not fixed the crisis

G20 Communique - Apr 2 London Meeting

2009-04-05T10:57:00.000-05:00

We have today therefore pledged to do whatever is necessary to:

restore confidence, growth, and jobs;
repair the financial system to restore lending;
strengthen financial regulation to rebuild trust;
fund and reform our international financial institutions to overcome this crisis and prevent future ones;
promote global trade and investment and reject protectionism, to underpin prosperity;
build an inclusive, green, and sustainable recovery. Read More

Annex to Communique:

DECLARATION ON STRENGTHENING THE FINANCIAL SYSTEM

DECLARATION ON DELIVERING RESOURCES THROUGH THE INTERNATIONAL FINANCIAL INSTITUTIONS

Progress Report on the Actions of the Washington Action Plan

The Future of Capitalism Discussion

2009-03-29T20:11:00.004-05:00

Watch several discussions on the future of Capitalism hosted by Financial Times Editor Lionel Barber.

http://www.ft.com/cms/3cf2381c-c064-11dd-9559-000077b07658.html?_i_referralObject=1069619695&fromSearch=n

Courtesy Financial Times

Reform the International Monetary System

2009-03-25T12:14:00.005-05:00

Zhou Xiaochuan, Governor, People's Bank of China (PBC)

The outbreak of the current crisis and its spillover in the world have confronted us with a long-existing but still unanswered question,i.e., what kind of international reserve currency do we need to secure global financial stability and facilitate world economic growth, which was one of the purposes for establishing the IMF? There were various institutional arrangements in an attempt to find a solution, including the Silver Standard, the Gold Standard, the Gold Exchange Standard and the Bretton Woods system. The above question, however, as the ongoing financial crisis demonstrates, is far from being solved, and has become even more severe due to the inherent weaknesses of the current international monetary system. More...

Courtesy: People's Bank of China

Related Article: US willing to look at China currency proposal (Financial Times)

SA retail investment a glimpse of what’s coming

2009-03-16T20:50:00.004-05:00

By Kuthula Matshazi

RECENTLY, there have been concerns about South African businesses, especially supermarket retail chains flooding the Zimbabwe market with their goods.
This has been necessitated by the situation in Zimbabwe where there had been, in some instances, real and in other cases artificial shortages of basic foodstuffs.
In times when these shortages were acute, South Africa and Botswana became our shopping centres. As a business response to market demand, and exploiting the proximity of Zimbabwe to South Africa and the cordial political relations that we share, these businesses provided Zimbabwe with basic commodities. More...

Related Article: FINANCIAL REGIME CHANGE?, Robert Wade
New Left Review 53, September-October 2008

Courtesy: New Left Review

Fed to Buy $1 Trillion in Securities to Aid Economy

2009-03-16T20:09:00.002-05:00

By EDMUND L. ANDREWS, The New York Times
Published: March 18, 2009

WASHINGTON — The Federal Reserve sharply stepped up its efforts to bolster the economy on Wednesday, announcing that it would pump an extra $1 trillion into the financial system by purchasing Treasury bonds and mortgage securities.
Having already reduced the key interest rate it controls nearly to zero, the central bank has increasingly turned to alternatives like buying securities as a way of getting more dollars into the economy, a tactic that amounts to creating vast new sums of money out of thin air. But the moves on Wednesday were its biggest yet, almost doubling all of the Fed’s measures in the last year.
The action makes the Fed a buyer of long-term government bonds rather than the short-term debt that it typically buys and sells to help control the money supply.
The idea was to encourage more economic activity by lowering interest rates, including those on home loans, and to help the financial system as it struggles under the crushing weight of bad loans and poor investments. More...

Related Articles:

The Geithner plan explained - Audio (Financial Times)

A Test of Will (The Economist)

U.S. to Toughen Finance Rules

2009-03-16T01:10:00.002-05:00

By DAMIAN PALETTA, Wall Street Journal

The Obama administration, moving with increasing speed, has inked the main contours of its plan to revamp financial-market oversight -- changes that will ripple through the economy, affecting everything from the operations of international banks to consumer protection.
The principles include giving the Federal Reserve new powers that include authority to monitor and address broad risks across the economy, say people familiar with the matter. The proposals are expected to include tougher capital requirements for big banks and authority for regulators to take over a large financial firm that is failing.

Proposed Changes
Treasury Secretary Timothy Geithner will soon outline proposed changes in financial regulation. They are expected to include:
An enhanced role for the Federal Reserve to monitor and address broad economic risks.
Changes to the way banks are overseen to prevent lenders from shopping among regulators for the easiest supervision.
More transparency and stricter rules for the way money flows between banks.
Tougher capital requirements for big banks.
Consolidation of consumer-protection enforcement. Read More...

G20 Finance Ministers’ and Central Bank Governors’ Communiqué - 14 March 2009

2009-03-14T19:21:00.008-05:00

We, the G20 Finance Ministers and Central Bank Governors, met today to prepare for the Leaders’ London Summit. We agreed further action to restore global growth and support lending, and reforms to strengthen the global financial system.

Restoring Global Growth
1. We have taken decisive, coordinated and comprehensive action to boost demand and jobs, and are prepared to take whatever action is necessary until growth is restored. We commit to fight all forms of protectionism and maintain open trade and investment.
2. Our key priority now is to restore lending by tackling, where needed, problems in the financial system head on, through continued liquidity support, bank recapitalisation and dealing with impaired assets, through a common framework (attached). We reaffirm our commitment to take all necessary actions to ensure the soundness of systemically important institutions. More...

Annex to Communique Source: G20

Related Article: Nov 15 2008 G20 Communique

A Plan B for global finance

2009-03-14T11:58:00.004-05:00

Dani Rodrik

Mar 12th 2009, The Economist

One problem with the global [financial regulation] strategy is that it presumes we can get leading countries to surrender significant sovereignty to international agencies. It is hard to imagine that America’s Congress would ever sign off on the kind of intrusive international oversight of domestic lending practices that might have prevented the subprime-mortgage meltdown, let alone avert future crises. Nor is it likely that the IMF will be allowed to turn itself into a true global lender of last resort. The far more likely outcome is that the mismatch between the reach of markets and the scope of governance will prevail, leaving global finance as unsafe as ever. That certainly was the outcome the last time we tried an international college of regulators, in the ill-fated case of the Bank of Credit and Commerce International. Read Article...

The Fed Didn't Cause the Housing Bubble

2009-03-11T18:17:00.000-05:00

By ALAN GREENSPAN for Wall Street Journal

We are in the midst of a global crisis that will unquestionably rank as the most virulent since the 1930s. It will eventually subside and pass into history. But how the interacting and reinforcing causes and effects of this severe contraction are interpreted will shape the reconfiguration of our currently disabled global financial system.
There are at least two broad and competing explanations of the origins of this crisis. The first is that the "easy money" policies of the Federal Reserve produced the U.S. housing bubble that is at the core of today's financial mess.
The second, and far more credible, explanation agrees that it was indeed lower interest rates that spawned the speculative euphoria. However, the interest rate that mattered was not the federal-funds rate, but the rate on long-term, fixed-rate mortgages. Between 2002 and 2005, home mortgage rates led U.S. home price change by 11 months. This correlation between home prices and mortgage rates was highly significant, and a far better indicator of rising home prices than the fed-funds rate. More...

Adam Smith’s market never stood alone

2009-03-11T18:14:00.002-05:00

By Amartya Sen
Published: March 10 2009 20:15 Last updated: March 10 2009 20:15

Exactly 90 years ago, in March 1919, faced with another economic crisis, Vladimir Lenin discussed the dire straits of contemporary capitalism. He was, however, unwilling to write an epitaph: “To believe that there is no way out of the present crisis for capitalism is an error.” That particular expectation of Lenin’s, unlike some he held, proved to be correct enough. Even though American and European markets got into further problems in the 1920s, followed by the Great Depression of the 1930s, in the long haul after the end of the second world war, the market economy has been exceptionally dynamic, generating unprecedented expansion of the global economy over the past 60 years. Not any more, at least not right now. The global economic crisis began suddenly in the American autumn and is gathering speed at a frightening rate, and government attempts to stop it have had very little success despite unprecedented commitments of public funds. More...

Copyright The Financial Times Limited 2009

Now is the Time for Less Selfish Capitalism

2009-03-11T17:49:00.004-05:00

By Richard Layard
Published: March 11 2009 20:02 Last updated: March 11 2009 20:02

What is progress? The Organisation for Economic Co-operation and Development has been asking this question for some time and the current crisis makes it imperative to find an answer. According to the Anglo-Saxon Enlightenment, progress means the reduction of misery and the increase of happiness. It does not mean wealth creation or innovation, which are sometimes useful instruments but never the final goal. So we should stop the worship of money and create a more humane society where the quality of human experience is the criterion. Provided we pay ourselves in line with our productivity, we can choose whatever lifestyle is best for our quality of life.

And what would that involve? The starting point is that, despite massive wealth creation, happiness has not risen since the 1950s in the US or Britain or (over a shorter period) in western Germany. No researcher questions these facts. So accelerated economic growth is not a goal for which we should make large sacrifices. In particular, we should not sacrifice the most important source of happiness, which is the quality of human relationships – at home, at work and in the community. We have sacrificed too many of these in the name of efficiency and productivity growth.
Most of all we have sacrificed our values. In the 1960s, 60 per cent of adults said they believed “most people can be trusted”. Today the figure is 30 per cent, in both Britain and the US. The fall in trustworthy behaviour is clear in the banking sector but can also be seen in family life (more break-ups), in the playground (fewer friends you can trust) and in the workplace (growing competition between colleagues).
Increasingly, we treat private interest as the only motivation on which we can rely and competition between individuals as the way to get the most out of them. This is often counterproductive and does not generally produce a happy workplace since competition for status is a zero-sum game. Instead, we need a society based on positive-sum activities. Humans are a mix of selfishness and altruism but generally feel better working to help each other rather than to do each other down.
Our society has become too individualistic, with too much rivalry and not enough common purpose. We idolise success and status and thus undermine our mutual respect. But countries vary in this regard, and the Scandinavians have managed to combine effective economies with much greater equality and mutual respect. They have the greatest levels of trust (and happiness) of any countries in the world.
To build a society based on trust we have to start in school, if not earlier. Children should learn that the noblest life is the one that produces the least misery and the most happiness in the world. This rule should apply also in business and professional life. People should do work that is useful to society and does not just make paper profits. And all professions – including journalism, advertising and business – should have a clear, professional, ethical code that its members are required to observe. It is not for nothing that doctors form the group most respected in our society – they have a code that is enforced and everyone knows it.
So we need a trend away from excessive individualism and towards greater social responsibility. Is it possible to reverse a cultural trend in this way? It has happened before, in the early 19th century. For the next 150 years there was a growth of social responsibility, followed by a decline in the next 50. So a trend can change and it is often in bad times (such as the 1930s in Scandinavia) that people decide to seek a more co-operative lifestyle.
I have written a book about how to do this and there is room here for three points only. First we should use our schools to promote a better value system – the recent Good Childhood report sponsored by the UK Children’s Society was full of ideas about how to do this. Second, adults should reappraise their priorities about what is important. Recent events are likely to encourage this and modern happiness research can help find answers. Third, economists should adopt a more realistic model of what makes humans happy and what makes markets function.
Three ideas taught in business schools have much to answer for. One is the theory of “efficient capital markets”, now clearly discredited. The second is “principal agent” theory, which says the agents will perform best under high-powered financial incentives to align their interests with those of the principal. This has led to excessive performance-related pay, which has often undermined the motive to work well for the sake of doing a good job and introduced unnecessary tension among colleagues. Finally, there is the macho philosophy of “continuous change”, promoted by self-interested consulting companies, which disregards the fundamental human need for stability – in the name of efficiency gains that are often not realised.
We do not want communism – as research shows, the communist countries were the least happy in the world and also inefficient. But we do need a more humane brand of capitalism, based not only on better regulation but on better values.
Values matter and they are affected by our theories. We do not need a society based on Darwinian competition between individuals. Beyond subsistence, the best experience any society can provide is the feeling that other people are on your side. That is the kind of capitalism we want.

Lord Layard is at the London School of Economics Centre for Economic Performance. He has written Happiness (2005) and co-authored A Good Childhood (2009).

Copyright The Financial Times Limited 2009

'Bad Bank' Funding Plan Starts to Get Fleshed Out

2009-03-03T01:03:00.001-05:00

By DEBORAH SOLOMON and JON HILSENRATH, Wall Street Journal

WASHINGTON -- The Obama administration, filling in some of the blanks in its bank bailout, is considering creating multiple investment funds to purchase the bad loans and other distressed assets that lie at the heart of the financial crisis, according to people familiar with the matter.
The Obama team announced its intention to partner with the private sector to buy $500 billion to $1 trillion of distressed assets as part of its revamping of the $700 billion bank bailout last month. It's central to the administration's efforts to unglue credit markets, alongside a Federal Reserve program aimed at spurring consumer lending in areas such as credit cards and home loans that will be officially launched Tuesday.
No decision has been made on the final structure of what the administration is calling a private-public financing partnership, but one leading idea is to establish separate funds to be run by private investment managers. The managers would have to put up a certain amount of capital. Additional financing would come from the government, which would share in any profit or loss. More...

U.S. Is Said to Offer $30 Billion More to Help A.I.G.

2009-03-02T00:59:00.002-05:00

By ANDREW ROSS SORKIN and MARY WILLIAMS WALSH
Published: March 1, 2009 New York Times

The federal government agreed Sunday night to provide an additional $30 billion in taxpayer money to the American International Group and loosen the terms of its huge loan to the insurer, which is preparing to report a $62 billion loss on Monday, the biggest quarterly loss in history, people involved in the discussions said.
The intervention would be the fourth time that the United States has had to step in to help A.I.G., the giant insurer, avert bankruptcy. The government already owns nearly 80 percent of the insurer’s holding company as a result of the earlier interventions, which included a $60 billion loan, a $40 billion purchase of preferred shares and $50 billion to soak up the company’s toxic assets.
Federal officials, who worked feverishly over the weekend to complete the restructuring, said they thought they had no choice but to prop up A.I.G., because its business and trading activities are so intricately woven through the world’s banking system. More...

Biti's RBZ criticism good politics but bad policy

2009-02-23T12:20:00.005-05:00

By Kuthula Matshazi

Posted to the web: 18/02/2009 23:24:11 NewZimbabwe.com

FINANCE Minister Tendai Biti was recently quoted in the media apportioning blame to the Reserve Bank of Zimbabwe for the country’s economic problems. He vowed that he would reduce its role to a minimum.
At a time when Biti’s MDC party has joined an inclusive government, it wants to make a mark by announcing policies that would seem to be different from those of Zanu PF. Many, including Biti who subscribe to the lasseiz faire economic doctrine, argue that Zanu PF’s “big government” and the RBZ’s quasi-fiscal operations were responsible for leading the country to an economic depression. More...

Related Article:
Only governments can get credit rolling

'Nationalize' the Banks

2009-02-23T12:19:00.003-05:00

Dr. Doom says a takeover and resale is the market-friendly solution.

The kind of government interference in the economy that we saw in the last year of Bush was unprecedented. The central bank -- supposed to be the lender of the last resort -- became the lender of first and only resort! With our recapitalizing of financial institutions, and massive government intervention in the markets, we've already crossed a significant bridge."

By TUNKU VARADARAJAN, Wall Street Journal
21 February 2009

Yet another reason why bank nationalization is a good idea, Mr. Roubini continues, is that "we started with banks that were too big to fail, but what has happened, in the process, is that these banks have become even-bigger-to-fail. J.P. Morgan took over Bear Stearns and WaMu. BofA took over Countrywide and then Merrill. Wells Fargo took over Wachovia. It doesn't work! You can't take two zombie banks, put them together, and make a strong bank. It's like having two drunks trying to keep each other standing.
"So if you took over a big bank, and you split the assets in three or four pieces, maybe you create three or four regional or national banks, and they're stronger! Nationalization -- or 'temporary receivership,' if you like, if the N-word is a political liability -- is an occasion to undo the sort of consolidation that has created an even bigger systemic problem. And the only way to do it is by essentially taking them over and breaking them up." More...

Related Articles:

Greenspan backs bank nationalisation

The Problem With 'Nationalization'

U.S. Eyes Large Stake in Citi

2009-02-23T12:14:00.001-05:00

By DAVID ENRICH and MONICA LANGLEY, Wall Street Journal

Citigroup Inc. is in talks with federal officials that could result in the U.S. government substantially expanding its ownership of the struggling bank, according to people familiar with the situation.
While the discussions could fall apart, the government could wind up holding as much as 40% of Citigroup's common stock. Bank executives hope the stake will be closer to 25%, these people said.
Any such move would give federal officials far greater influence over one of the world's largest financial institutions. Citigroup has proposed the plan to its regulators. The Obama administration hasn't indicated if it supports the plan, according to people with knowledge of the talks. More...

US, China to ‘to help lead the world recovery’

2009-02-21T15:10:00.003-05:00

"Ahead of her arrival in Beijing, Mrs Clinton said that disagreements with China over Tibet and human rights should not be allowed to dominate the agenda".

By Geoff Dyer in Beijing
Published: February 21 2009 14:00 Last updated: February 21 2009 16:13

The US and China pledged to step up a high-level dialogue between the two countries which will address the global financial crisis, climate change and security issues.
Hillary Clinton, US secretary of state, said the two governments would work together “to help lead the world recovery” and that she appreciated China’s continued purchases of US Treasury bonds.
Hillary Clinton, US secretary of state, said the two governments would work together “to help lead the world recovery” and that she appreciated China’s continued purchases of US Treasury bonds.
Speaking on her first visit to Beijing since taking over at the State department, Mrs Clinton said that human rights issues would take a back seat to the discussions about the economy, North Korea and global warming. More...

Obama’s “Buy American” a threat to international trade

2009-02-02T13:08:00.004-05:00

By Kuthula Matshazi

While the world has been preoccupied dealing with the fallout of the global financial crisis in order to rescue the global economy, another danger looms. That danger is trade protectionism, which is being practiced by many countries but is now epitomized by the huge United States US$825 billion stimulus package.
The Bill, that has won the support of the US House of Representatives, contains a provision called “Buy American” that mandates all public works projects to procure iron and steel made in the US only. A similar Bill emanating from the Senate is reported to be considering the “Buy American” provision for all manufactured goods bought with stimulus funds. More...

Related Article:
How to tame this WTO monster

The humbling of Davos Man

2009-02-01T15:56:00.001-05:00

By John Gapper
Published: January 28 2009 19:04 Last updated: January 28 2009 19:04

Having journeyed this week up a Swiss mountain valley to the World Economic Forum’s annual meeting in Davos, I find myself in select company. Several members of the global business elite discovered at the last minute that they had pressing business elsewhere.
Where is John Thain, the former chief executive of Merrill Lynch? Back in New York trying to rescue his good name after being pushed out by Bank of America and having details of his $1.2m (€907,000, £839,000) office refurbishment leaked. And where is Sam DiPiazza, chief executive of PwC? In India, where two PwC auditors have been held by police over their role in the alleged $1bn fraud at Satyam Computers. More...

Obama's glimmers of neo-conservatism

2009-01-26T18:21:00.002-05:00

From left to centre between election and inauguration

Kevin Libin, National Post Published: Saturday, January 24, 2009

The man credited as the godfather of neo-conservatism famously described its believers as former liberals "mugged by reality." William Kristol, son of that pioneering neo-con thinker, Irving Kristol, cannot shake the sneaking suspicion that sometime between when Barack Obama was elected president of the United States, and today, someone got mugged. Because, despite Mr. Obama's fierce campaign attacks against Republican policies, the ecstasy from the far-left fringe (among others) at his victory, and some conservatives' fear that they were witnessing the second coming of Jimmy Carter, today's neo-con standard-bearer feels increasingly at ease. More...

Keynes offers us the best way to think about the financial crisis

2009-01-07T17:47:00.002-05:00

By Martin Wolf

Published: December 23 2008 18:06

We are all Keynesians now. When Barack Obama takes office he will propose a gigantic fiscal stimulus package. Such packages are being offered by many other governments. Even Germany is being dragged, kicking and screaming, into this race.
The ghost of John Maynard Keynes, the father of macroeconomics, has returned to haunt us. With it has come that of his most interesting disciple, Hyman Minsky. We all now know of the “Minsky moment” – the point at which a financial mania turns into panic.
Like all prophets, Keynes offered ambiguous lessons to his followers. Few still believe in the fiscal fine-tuning that his disciples propounded in the decades after the second world war. But nobody believes in the monetary targeting proposed by his celebrated intellectual adversary, Milton Friedman, either. Now, 62 years after Keynes’ death, in another era of financial crisis and threatened economic slump, it is easier for us to understand what remains relevant in his teaching.
I see three broad lessons.
The first, which was taken forward by Minsky, is that we should not take the pretensions of financiers seriously. “A sound banker, alas, is not one who foresees danger and avoids it, but one who, when he is ruined, is ruined in a conventional way along with his fellows, so that no one can really blame him.” Not for him, then, was the notion of “efficient markets”.
The second lesson is that the economy cannot be analysed in the same way as an individual business. For an individual company, it makes sense to cut costs. If the world tries to do so, it will merely shrink demand. An individual may not spend all his income. But the world must do so.
The third and most important lesson is that one should not treat the economy as a morality tale. In the 1930s, two opposing ideological visions were on offer: the Austrian; and the socialist. The Austrians – Ludwig von Mises and Friedrich von Hayek – argued that a purging of the excesses of the 1920s was required. Socialists argued that socialism needed to replace failed capitalism, outright. These views were grounded in alternative secular religions: the former in the view that individual self-seeking behaviour guaranteed a stable economic order; the latter in the idea that the identical motivation could lead only to exploitation, instability and crisis.
Keynes’s genius – a very English one – was to insist we should approach an economic system not as a morality play but as a technical challenge. He wished to preserve as much liberty as possible, while recognising that the minimum state was unacceptable to a democratic society with an urbanised economy. He wished to preserve a market economy, without believing that laisser faire makes everything for the best in the best of all possible worlds.
This same moralistic debate is with us, once again. Contemporary “liquidationists” insist that a collapse would lead to rebirth of a purified economy. Their leftwing opponents argue that the era of markets is over. And even I wish to see the punishment of financial alchemists who claimed that ever more debt turns economic lead into gold.
Yet Keynes would have insisted that such approaches are foolish. Markets are neither infallible nor dispensable. They are indeed the underpinnings of a productive economy and individual freedom. But they can also go seriously awry and so must be managed with care. The election of Mr Obama surely reflects a desire for just such pragmatism. Neither Ron Paul, the libertarian, nor Ralph Nader, on the left, got anywhere. So the task for this new administration is to lead the US and the world towards a pragmatic resolution of the global economic crisis we all now confront.
The urgent task is to return the world economy to health.
The shorter-term challenge is to sustain aggregate demand, as Keynes would have recommended. Also important will be direct central-bank finance of borrowers. It is evident that much of the load will fall on the US, largely because the Europeans, Japanese and even the Chinese are too inert, too complacent, or too weak. Given the correction of household spending under way in the deficit countries, this period of high government spending is, alas, likely to last for years. At the same time, a big effort must be made to purge the balance sheets of households and the financial system. A debt-for-equity swap is surely going to be necessary.
The longer-term challenge is to force a rebalancing of global demand. Deficit countries cannot be expected to spend their way into bankruptcy, while surplus countries condemn as profligacy the spending from which their exporters benefit so much. In the necessary attempt to reconstruct the global economic order, on which the new administration must focus, this will be a central issue. It is one Keynes himself had in mind when he put forward his ideas for the postwar monetary system at the Bretton Woods conference in 1944.
No less pragmatic must be the attempt to construct a new system of global financial regulation and an approach to monetary policy that curbs credit booms and asset bubbles. As Minsky made clear, no permanent answer exists. But recognition of the systemic frailty of a complex financial system would be a good start.
As was the case in the 1930s, we also have a choice: it is to deal with these challenges co-operatively and pragmatically or let ideological blinkers and selfishness obstruct us. The objective is also clear: to preserve an open and at least reasonably stable world economy that offers opportunity to as much of humanity as possible. We have done a disturbingly poor job of this in recent years. We must do better. We can do so, provided we approach the task in a spirit of humility and pragmatism, shorn of ideological blinkers
As Oscar Wilde might have said, in economics, the truth is rarely pure and never simple. That is, for me, the biggest lesson of this crisis. It is also the one Keynes himself still teaches.

martin.wolf@ft.com

Copyright The Financial Times Limited 2008

Man in the News: John Maynard Keynes

2008-10-18T21:55:00.001-05:00

By Ed Crooks
Published: October 17 2008 19:43 Last updated: October 17 2008 19:43

“We have reached a critical point,” John Maynard Keynes wrote in March 1933. “We can ... see clearly the gulf to which our present path is leading.” If governments did not take action, “we must expect the progressive breakdown of the existing structure of contract and instruments of indebtedness, accompanied by the utter discredit of orthodox leadership in finance and government, with what ultimate outcome we cannot predict.”
As the world reels from a 1929-style stock market plunge and a 1931-style banking crisis, his words are a fair assessment of the dangers we face once again. Keynes, whose life’s mission was to save capitalism from itself, is more relevant than at any time since his death in 1946.
His renewed influence can be seen everywhere: in Barack Obama’s planned stimulus package, for example. When George W. Bush said his administration’s plan to take equity in banks was “not intended to take over the free market, but to preserve it”, he could have been quoting Keynes directly.
The key to Keynes was his commitment to preserving the market economy by making it work. He was dismissive of Marxism but believed the market economy could survive only if it earned the support of the public by raising living standards.
The role of the economist, he believed, was to be the guardian of “the possibility of civilisation”, and no economist has ever been more suited for that role.
Lionel Robbins, later head of the London School of Economics, described Keynes as “one of the most remarkable men that have ever lived,” surpassed in his time only by Winston Churchill. Even Friedrich Hayek, Keynes’ staunchest adversary, described him as “the one really great man I ever knew, and for whom I had unbounded admiration”.
His optimistic, positive thought reflected his comfortable and happy upbringing and career. An academic’s son, he won scholarships to Eton and Cambridge and fell in with the Bloomsbury Group, the circle of writers and artists such as Virginia Woolf and Lytton Strachey who embodied an ideal of cultured living.
He was an imposing figure, six feet, six inches tall and full of jokes, gossip and sharp observations. Alongside economics, he had an array of other interests as mathematician, administrator, academic, investor, journalist, art collector, politician, impresario and diplomat. He was even an exemplary husband, devoted to his wife, Lydia Lopokova, a ballerina. In his language he could be carelessly provocative. But, as he said: “Words ought to be a little wild, for they are the assaults of thoughts on the unthinking.”
When bad policies were making economic problems worse, he felt a moral obligation to change them. He worked with distinction at the Treasury during the first world war and at the war’s end argued presciently against the imposition of excessively harsh conditions on Germany. When his advice was ignored, he left and published his views in his first great polemic, The Economic Consequences of the Peace .
Returning to Cambridge, Keynes kept up a flow of books and articles, including The Economic Consequences of Mr Churchill, savaging Britain’s return to the gold standard in 1925. It was not until the Great Depression, however, that his ideas reached their full flowering, published as The General Theory of Employment, Interest and Money in 1936.
The heart of the book is the idea that economic downturns are not necessarily self-correcting. Classical economics held that business cycles were unavoidable and that peaks and troughs would pass. Keynes contended that in certain circumstances economies could get stuck. If individuals and businesses try to save more, they will cut the incomes of other individuals and businesses, which will in turn cut their spending. The result can be a downward spiral that will not turn up again without outside intervention.
That is where government comes in: to pump money back into the economy by some means, such as spending on public works, to persuade individuals and businesses to save less and spend more themselves.
Keynes wrote to George Bernard Shaw that he expected the General Theory to “largely revolutionise ... the way the world thinks about economic problems”, and so it proved. Economists such as Paul Samuelson and James Tobin systematised Keynes’ ideas, using them as the foundations of what became orthodox thought and economic policy for more than two decades after the second world war.
The cover of Time magazine in December 1965 quoted Milton Friedman saying: “We are all Keynesians now.” Friedman later said he had been misrepresented by selective quotation, but the point held good. Charles L. Schultze, then US budget director, felt able to tell Time: “We can’t prevent every little wiggle in the economic cycle, but we now can prevent a major slide.”
By the time Richard Nixon borrowed Friedman’s line in 1971, however, the tide was already beginning to turn. Like a share tip from a lift boy, Nixon’s endorsement was a sign that Keynes’ intellectual stock was about to fall. Keynesian economics seemed as inadequate in the 1970s stagflation as classical economics had been for the 1930s depression, and Friedman’s monetarism eclipsed it among policy-makers in the US and Britain.
After crude applications of monetarism also foundered in the 1980s, modern macroeconomic orthodoxy blended ideas from both, reflecting a belief in the ability of monetary and fiscal policy to affect employment and growth, but also concern for inflation and budget deficits.
As the financial crisis has deepened, that orthodoxy has been shaken. The problems Keynes faced in the 1930s, such as the ineffectiveness of monetary policy and banking failures triggered by falling asset prices, again seem the most pressing. Keynes’ solutions, including greater public spending funded by borrowing, are becoming popular. The criticisms that this will fuel inflation and raise budget deficits are still heard but are increasingly seen as irrelevant.
Robert Skidelsky writes at the end of his definitive three-volume biography that Keynes’ ideas “will live so long as the world has need of them”. It certainly seems to need them now. Keynes was scathing about the view that the Great Depression was a return to normality, a necessary correction after the unsustainable excesses of the 1920s. On the contrary, he argued, the economic expansion should be seen as the normal state of affairs and the downturn was an “extraordinary imbecility”.
With the right policies, he said, the good times could be brought back. He was right then; we must hope he will be right again.

Copyright The Financial Times Limited 2008

Global crisis may hit Africa aid - U.S. official

2008-10-15T08:20:00.001-05:00

BEIJING, Oct 15 (Reuters) - The ongoing financial crisis could imperil United States aid available to Africa after 2010 and could deter private investment in the continent, a senior U.S. official said on Wednesday.
'It's a question that's concerning many of us who work on Africa,' said Jendayi Frazer, U.S. Assistant Secretary of State for African Affairs, who is in Beijing for meetings with Chinese academics and officials on cooperation in Africa.
'The question is whether the next team... will reauthorise the Millenium Challenge programme for future years. More...

When fortune frowned

2008-10-12T17:42:00.002-05:00

Oct 9th 2008. From The Economist print edition

The worst financial crisis since the Depression is redrawing the boundaries between government and markets, says Zanny Minton Beddoes (interviewed here). Will they end up in the right place?

During the past month, little more than a year after the financial storm first struck in August 2007, America’s government made its most dramatic interventions in financial markets since the 1930s. At the time it was not even certain that the economy was in recession and unemployment stood at 6.1%. In two tumultuous weeks the Federal Reserve and the Treasury between them nationalised the country’s two mortgage giants, Fannie Mae and Freddie Mac; took over AIG, the world’s largest insurance company; in effect extended government deposit insurance to $3.4 trillion in money-market funds; temporarily banned short-selling in over 900 mostly financial stocks; and, most dramatic of all, pledged to take up to $700 billion of toxic mortgage-related assets on to its books. The Fed and the Treasury were determined to prevent the kind of banking catastrophe that precipitated the Depression. Shell-shocked lawmakers cavilled, but Congress and the administration eventually agreed. More...

UK banks 'forced to seek £50bn'

2008-10-12T17:12:00.002-05:00

"What a sorry end to Britain's longest ever period of unbroken economic growth" Robert Peston, BBC business editor

Up to £50bn of taxpayers' cash is to be injected into four of Britain's biggest banks through the government's rescue package, the BBC has learned.
Royal Bank of Scotland (RBS), HBOS, Lloyds TSB and Barclays are being told by Treasury officials to seek the cash to shore up their balance sheets.
An announcement is planned before the markets open on Monday, according to BBC business editor Robert Peston.
On top of the cash to be raised by HBOS, Mr Peston said RBS is likely to get in the region of £20bn and Lloyds TSB about £5bn.
Barclays was under pressure from the Treasury, Bank of England and Financial Services authority to raise up to £8bn, he added.
The investment is part of the £500bn plan to rescue Britain's banks which was announced last week. More...

Government seizes £4bn assets

2008-10-12T10:04:00.003-05:00

Uses anti-terror laws to save UK investments in a free market!!!

2:14pm Sunday 12th October 2008
© Press Association 2008

The Government has seized more than enough Icelandic assets to pay back British savers caught up in the country's banking collapse, it was revealed.
Some £4bn is understood to have been frozen using anti-terror laws last week, compared to the estimated £3bn that UK councils, charities and individuals stand to lose.
Treasury Chief Secretary Yvette Cooper insisted the assets would not be released until a deal had been struck with Iceland's authorities to return British money. More...

Now best time to abondon neoliberal economics

2008-10-10T21:42:00.003-05:00

By Kuthula Matshazi

Neoliberalism has always championed the centrality of the private sector in driving the economy because of the belief that it is best placed to create wealth and improve the welfare of people. Through this system, we were told how economies would grow and create wealth. Yes, indeed spectacular wealth creation has happened! Most people around the world caught up to this new craze of creating wealth out of anything. The age of human ingenuity was upon us! The bountiful earthly resources were standing ready to be exploited and turned into wealth.

The technology was there to assist us exploit all these resources. As a result, since the ascendance of neoliberalism, we have seen a spectacular amount of wealth creation more than at any other time in the history of mankind. Side by side with this extraordinary wealth creation we saw the role of government in the economy reduced. It was neoliberal doctrine and a sacred one too, that government should have little role to play in directing the economy as it was the private sector who could do that more effectively and efficiently. More...

ZPF/MDC Agreement in Full

2008-09-15T13:36:00.003-05:00

Click on the link below to read the FULL agreement.

http://www.newzimbabwe.com/pages/AGREEMENT_ZPF-MDC.pdf

Source: NewZimbabwe.com

DEAL SIGNED!!

2008-09-11T22:13:00.004-05:00

A New Era Begins

Quite Diplomacy Triumphs

Below are highlights of the deal:

President Robert Mugabe with two deputies from Zanu PF;

Prime Minister Morgan Tsvangirai with two deputies from MDC-M and MDC-T;

Mugabe, as head of state and government, to chair cabinet of 31 ministers;

Tsvangirai to preside over a council of ministers, supervises ministers, formulates and implements policies, sits in National Security Council (JOC) and heads government business in parliament;

More>>>

Source: NewZimbabwe.com

Leaked: The document Tsvangirai refuses to sign

2008-08-22T14:19:00.004-05:00

...More than this its power transfer than power sharing

This is the document detailing the role of a Prime Minister in an envisaged "Inclusive Government" in Zimbabwe. The leaked document was sent anonymously to New Zimbabwe.com, and verified as authentic with several sources.MDC leader Morgan Tsvangirai has so far declined to sign this document, saying his powers are insufficient.
All but three of the President's powers as set out in the Constitution of Zimbabwe are now cross-referenced either with the Prime Minister, Cabinet or both (SEE MUGABE'S POWERS BEFORE POWER SHARING). The remaining presidential powers are the power to declare a state of emergency, the power to make pardons and the power to declare war or make peace. Those three, however, still require the president to consult Cabinet. More...

Related Article: Ncube: Zanu PF power-sharing offer 'practicable'

Source: NewZimbabwe.com

Tsvangirai flip-flops over Parliament, parties fight over Speaker

2008-08-21T08:30:00.002-05:00

WHICH IS WHICH: Tsvangirai said he had no objections to parliament reconvening on Tuesday, but on Thursday, he said he was totally opposed.

By Lebo Nkatazo, NewZimbabwe.com

ZIMBABWEAN opposition leader Morgan Tsvangirai performed a spectacular U-turn on Thursday by warning that President Robert Mugabe risked scuttling power-sharing talks if he goes ahead with the opening of parliament next Tuesday. More...

SADC Free Trade Area Launched...on schedule

2008-08-19T21:44:00.003-05:00

By Thabo Mbeki
President, Republic of South Africa

17 August 2008, Sandton, South Africa

Indeed, today, we reach an extraordinary milestone in our collective and ongoing integration programme in SADC. As you know, we embarked on this path when, in 1996, we adopted the Maseru Trade Protocol, which initiated negotiations towards a SADC free trade area. After four years of complex and sometimes difficult engagement, we concluded the negotiations, and the Trade Protocol entered into force in January 2000.
Implementation commenced in September 2000, in terms of which, according to the Protocol, we agreed that we would achieve a Free Trade Area over a period of eight years. More...

Source: Department of Foreign Affairs, South Africa

SADC: Communiqué of the Extraordinary Summit of the Organ

2008-08-19T21:26:00.004-05:00

The Extraordinary Summit of the Organ of Heads of State and Government of the Southern African Development Community (SADC) was held in Sandton, Republic of South Africa from August 16 to 17, 2008, on the margins of the 28th Ordinary SADC Summit.

It commended the Facilitator, President Thabo Mbeki for his efforts and encouraged him to continue in his mediation efforts and fully support his work;
Expressed strong opinion that documents as contained in the Facilitator’s Report reflect the framework, spirit and purpose of the SADC and AU Resolutions. In view of that, they are a good basis for a global agreement; More...

Related Articles: President Mbeki's Media Conference Notes

Source: South African Foreign Affairs Department

'MDC-T Leader Lied to Us About Zim Situation'

2008-08-19T21:06:00.003-05:00

REGIONAL and continental leaders have distanced themselves from MDC-T leader Morgan Tsvangirai and accused him of lying to them about the political situation in Zimbabwe, with some of them apologising for their earlier positions on President Mugabe.
Leaders from Zambia, Botswana and Tanzania expressed "embarrassment" at having "blindly supported Tsvangirai" during the 28th Sadc Heads of State Summit in Sandton, Johannesburg, after South Africa's President Thabo Mbeki, who is facilitating talks between Zimbabwe's political parties, gave them a full briefing on what was taking place. More...

Source: AllAfrica.com

Tsvangirai lied about DA donors - Leon

2008-08-13T08:36:00.004-05:00

"Tsvangirai solicited and received funding from the DA's key donors in Joburg"...wanted cooperation with DA

"Tsvangirai struck me as engaged, courageous and level-headed. While expressing in private the need for opposition co-operation across the Limpopo, he later publicly changed his tune and started singing in the anti-DA/DP caucus - doubtless encouraged by the ANC," writes Leon.
However, what truly "galled" Leon was the fact that Tsvangirai solicited and received funding from the DA's key donors in Joburg, "whom he visited while claiming he had never done so".
More...

Source: iol.co.za

Tsvangirai stalls progress on crucial Zimbabwe talks

2008-08-13T08:25:00.007-05:00

Latest demands reverse all agreements signed by his party's appointed negotiators in South Africa

A source close to the talks told New Zimbabwe.com: "Tsvangirai disregarded everything agreed by his negotiators in South Africa. It was like no negotiations had ever taken place. He repudiated all the positions taken in South Africa. He took what others were giving (compromises), but wanted more. It was back to pre-MoU (Memorandum of Understanding)." More...

Source: NewZimbabwe.com

The Tragedy of Tsvangirai

2008-08-13T08:23:00.002-05:00

"Tsvangirai has always been a hit-and-miss politician—capable of strokes of genius but also prone to periods of wayward and ineffectual leadership". Stephen Chan.

Tsvangirai's main source of advice was the US embassy in Harare, especially after Mugabe's government arrested Biti on treason charges and imprisoned him two weeks before the runoff. The deliberate effect of the arrest was to deprive Tsvangirai of local guidance during the crucial closing stages of the campaign. This became a test of nerve: Zanu-PF wanted to break Tsvangirai's will by isolating him and threatening him physically.
The US embassy sought to fill the gap, and was complicit in Tsvangirai's decisions to withdraw from the elections and seek refuge in the Dutch embassy. The plan was to hand Mugabe a hollow victory which the west could then attack. The US analysis was that the polls had already been fixed so a Tsvangirai victory was impossible. Participation would only legitimise a brazen "steal." The idea was also to create an image of such great intimidation that even a leader of the opposition could find safety from assassination only on diplomatic soil. I want also to say unequivocally that the Americans screwed up.
When Tsvangirai withdrew, Zanu-PF could hardly believe their luck. They were beginning to realise they were on the verge of overplaying their only hand, that of violence. Then, out of the blue, Tsvangirai solved all their problems for them. Contrary to western information, Tsvangirai's consultation of his own party members, who did indeed protest they didn't want to die for nothing, was brief and sketchy. More...

Source: Prospect Magazine

Mutambara Heroes Day Message

2008-08-11T09:10:00.001-05:00

"We take exception to the irritating ignorance, political insensitivity, double standards, and patronizing arrogance that characterize Western diplomacy with respect to our country" Arthur Mutambara". - MDC President.

So all this fuss is about White farmer interests in Zimbabwe? Well, that is not our agenda. We are sick and tired of the hypocrisy, double standards, racism and downright dishonesty. The West must not hide its true motive. Where are the Western democratic demands to Egypt, Angola, Saudi Arabia, Libya, Israel, Pakistan, and Kuwait? Moreover, what does the record of the US and UK in Iraq, Afghanistan, Abu Ghraib and Guantanamo Bay teach us? What are the lessons from the ghettos of Chicago, New York and Los Angeles? Who took out Patrice Lumumba, Salvador Allende and Kwame Nkrumah? Who created and nursed Mobutu Sese Seko, Sadam Hussein, Manuel Noriega, Jonas Savimbi and Osama Bin Laden?

More significantly, since it is our Heroes’ Day, why is it that there is not a single ZIPRA, ZANLA, MK or APLA fighter trained in the US or the UK? Why? Why did the Western lovers of democracy and freedom not extend arms of war to Africans in pursuit of the same? We thought the slogan was “Give me freedom or give me death!” and the clarion call “The price of freedom is death.” Western Europe and the USA did not train and arm Zimbabwean freedom fighters. They left the task to the “evil regimes” of China, Cuba, Russia and Eastern Europe. How ironic! Is there an apology for this malignant neglect? If there was no Western motivation to support our liberation war then, why should there be any attention paid to our democratization efforts now? More...

Source: Zimbabwe Guardian

Its the MDC-T strategic blunders stupid!

2008-08-08T10:15:00.000-05:00

By Joram Nyathi

THESE are notes in response to Dr Alex Magaisa’s article in the New Zimbabwe.com site titled "Managing the bad news from Pretoria" on the current talks between Zanu PF and the two MDCs. I found the article eloquent in a number of respects but also too indulgent of the MDC’s tendency to play victim even in cases where it makes glaring errors of judgement and loses the game. More...

Source: NewZimbabwe.com

Zanu-PF and MDC Formations sign joint statement to end political violence

2008-08-08T10:10:00.002-05:00

...in a progressive move, both parties take blame for violence

"We, the Zimbabwe African National Union-Patriotic Front (Zanu PF) and the two Movement for Democratic Change (MDC) formations pursuant to Article 10 of the Memorandum of Understanding signed by our Principals, Comrade Robert Gabriel Mugabe of Zanu PF, Mr. Morgan Richard Tsvangirai of the one MDC formation and Professor Arthur Guseni Oliver Mutambara of the other MDC formation in Harare on 21st July, 2008, enabling the resumption of dialogue under the auspices of the SADC mediation and supported and endorsed by the African Union in a bid to resolve the challenges and the multiple threats to the well-being of our people hereby unequivocally condemn the promotion and use of violence as a political tool and call for the cessation and end to all politically motivated violence in the country.
The Parties, acknowledging that violence that is attributable to us...
More...

Source: NewZimbabwe.com

Memorandum of Understanding: Zanu PF and MDC Formations

2008-08-08T10:06:00.001-05:00

PREAMBLE

We the Parties to this Memorandum of Understanding;
Concerned about the recent challenges that we have faced as a country and the multiple threats to the well-being of our people;
Dedicating ourselves to putting an end to the polarisation, divisions, conflict and intolerance that have characterised our country's politics; More...

Source: NewZimbabwe.com

Let’s act on economic sanctions or face deeper catastrophe

2008-07-12T21:53:00.002-05:00

By Kuthula Matshazi

The Zimbabwean elections are now over and the winners are happy while the losers are seething. There is need for national reconciliation at this important time of our nation as this will bring about healing and help us move forward as a nation.
Unfortunately the welfare of one section of the losers, the ordinary people, is going to get worse thanks to the violent economic sanctions that are being cheered on by those losers that have relatively deep pockets and can afford to eat three or more meals a day. I would call these people endowed losers. More...

Zimbabwe cannot be excuse for xenophobic attacks

2008-05-23T10:14:00.002-05:00

By Kuthula Matshazi

IT IS strange how the Zimbabwe situation is suddenly framed as the main cause of xenophobic attacks in South Africa.
Claims that if South African President Thabo Mbeki had acted on Zimbabwe in a more forceful way he would have helped to avoid the occurrence of this senseless and gruesome violence are nonsense. More...

Food Prices - Growing market failures, not farming

2008-05-23T07:34:00.001-05:00

By Katishi Masemola

Published in ANC Today, Volume 8, No. 20 • 23 —29 May 2008

In an article by Trevor Manuel published in ANC Today Vol 8 No 18 he said "the world has generally been able to feed itself(and)eat times, surpluses in some parts of the world have had to be diverted to cover shortages in another part of the world". We agree with this observation.
We wish to argue that there is still enough food produced by the world to still feed itself. Put differently, there is no shortage of food in the world. Therefore, the problem is with the distribution of food and commodities, particularly as determined by the commodity futures system at the Chicago Board of Trade. More...

Zimbabwe Meets Financial Commitment with AfDB

2008-05-12T23:44:00.003-05:00

African Development Bank (Tunis), 12 May 2008

In a bid to actively reconnect with international donors, the Zimbabwean government last month paid part of its arrears to the African Development Bank (AfDB) Group. On April 14, 2008, the country paid US$ 500,000 to the African Development Bank and US$150,000 to the African Development Fund. Zimbabwe has, in all, paid US$ 650,000 to the Bank Group despite numerous economic challenges currently facing the country, both globally and locally. According to Mr. Abdirrahmene Beileh, AfDB acting Director in charge of Southern African countries, "Zimbabwe is still owing the Bank large amounts of money in arrears". More...

2008-05-01T22:06:00.000-05:00

Land reforms threatened by a ‘reformist government’

2008-04-29T14:41:00.001-05:00

Kuthula Matshazi

IN SEVERAL conversations with colleagues about the possible scenarios after the Presidential election results are announced in Zimbabwe, I have asked one question that has not been adequately answered or completely avoided.
The question is how would a new reformist government reconcile the preservation of the current popular and people-based land reform on the one hand and pressures from markets and political hegemons on the other to reverse the land reform and engage in a new round of pro-capital “transparent land reforms”?
Some of those I talk to respond by saying that what they need is a change of government and then they will deal with the matter later on, while others say that there is no way there can be a reversal of the land reforms. If that happens, then people would wedge a war. More...

The will of the people must be heard

2008-04-18T08:34:00.005-05:00

Even a standard silly person could understand that President Mbeki was talking about the electoral process not the socio-economic situation. There is an electoral process that is still ongoing and to declare a crisis before that process is exhausted is nonsense. If at all there is a crisis, its the law, which allows for all these processes to happen. And ironically, all those who declare "crisis" are the very same people who use legal processes as their arguments. YOU CAN'T HAVE YOUR CAKE AND EAT IT TOO. Either choose law or chaos!!!
But we know that they know what President Mbeki meant, its just that they choose to numb their common sense just for political ends.
The crooked thinking will be reflected in the crooked outcomes in our efforts to resolve the situation in Zimbabwe. We bark wrong trees and engage in wild chases.
You harvest what you sow!
Let's get more reasonable and focus on real issues.

ANC Today says...

Speaking to journalists at the United Nations on Wednesday, President Mbeki said his comments had been made in response to a specific question about whether there was a crisis in the electoral process. "The story that I said there is no crisis, I do not have the slightest clue of where it comes from. The question was about the elections - it was not about the socio-economic conditions in Zimbabwe or anything like that," he said. More...

How Hunger Could Topple Regimes

2008-04-15T00:51:00.001-05:00

The idea of the starving masses driven by their desperation to take to the streets and overthrow the ancien regime has seemed impossibly quaint since capitalism triumphed so decisively in the Cold War. Since then, the spectacle of hunger sparking revolutionary violence has been the stuff of Broadway musicals rather than the real world of politics.
And yet, the headlines of the past month suggest that skyrocketing food prices are threatening the stability of a growing number of governments around the world. Ironically, it may be the very success of capitalism in transforming regions previously restrained by various forms of socialism that has helped create the new crisis. More...

Source: TIME

Zimbabwe needs $1B a year bailout

2008-04-13T07:50:00.002-05:00

April 04, 2008 Reuters

LONDON

Zimbabwe needs more than $1 billion a year in reconstruction aid and Britain is working with the United States, European Union, World Bank and IMF on a recovery plan, a British government source said yesterday.
Once prosperous Zimbabwe has suffered economic collapse under President Robert Mugabe, who faces the biggest crisis of his 28-year rule after a strong showing by the opposition in last Saturday's election.
Former colonial ruler Britain has said it is ready to help Zimbabwe if it judges the country has returned to democracy. More...

Related Document: MDC Transitional Plan

Source: Global Analysis

Bush ethanol plan threatens to starve 3 billion plus people worldwide

2008-04-13T07:49:00.000-05:00

WORTH REPEATING

Reflections of President Fidel Castro

March 29 2007, Granma International

MORE THAN three billion people in the world are being condemned to premature death from hunger and thirst.
This is not an exaggeration; this is rather a conservative figure. I have meditated for quite a long time on that after the meeting held by (United States) President George W. Bush with US automakers (carmakers). The sinister idea of turning foodstuffs into fuel was definitely established as the economic strategy of the US foreign policy on Monday, March 26. A wire service issued by the AP, a US information agency with worldwide coverage, literally reads: WASHINGTON (AP), March 26 — President Bush touted the benefits of "flexible fuel" vehicles running on ethanol and bio-diesel in the Monday, meeting with automakers to boost support for his energy plans. Bush said a commitment by the leaders of the domestic auto industry to double their production of flex-fuel vehicles could help motorists shift away from gasoline (petrol) and reduce the nation’s reliance on imported oil. More...

IMF head gives food price warning

2008-04-13T07:48:00.002-05:00

Story from BBC NEWS

The head of the International Monetary Fund (IMF) has warned that hundreds of thousands of people will face starvation if food prices keep rising.
Dominique Strauss-Kahn said that social unrest from continuing food price inflation could cause conflict.
There have been food riots recently in a number of countries, including Haiti, the Philippines and Egypt.
Meeting in Washington, the IMF called for strong action on food prices and the international financial crisis. More...

Related Article: Riots, instability spread as food prices skyrocket

Why costs are climbing

2008-04-13T07:46:00.002-05:00

As food prices surge, starvation looms for millions. Experts call for emergency action but admit there's no quick fix

ERIC REGULY
From Saturday's Globe and Mail
April 12, 2008 at 12:13 AM EDT

ROME — Fatal food riots in Haiti. Violent food-price protests in Egypt and Ivory Coast. Rice so valuable it is transported in armoured convoys. Soldiers guarding fields and warehouses. Export bans to keep local populations from starving.
A swelling global population, soaring energy prices, the clamouring for meat from the rising Asian middle class, competition from biofuels and hot money pouring into the commodity markets are all factors that make this crisis unique and potentially calamitous. Even with concerted global action, such as rushing more land into cultivation, it will take years to fix the problem. More...

The coming hunger

2008-04-13T07:44:00.000-05:00

Riots over rising grain prices are ripping through the developing world and the United Nations warns there's worse to come. Was Malthus right? Are we getting too numerous to feed ourselves?

Apr 12, 2008 04:30 AM, The Toronto Star
Lynda Hurst Feature Writer

The warning bells are ringing, furiously. This week, food riots paralyzed Haiti, with angry marchers outside the president's palace shouting "We are hungry!" Five people were killed in the chaos.
In Egypt, a 15-year-old boy was shot and killed this week in two days of violence over food shortages. Last month, a two-week protest at government-subsidized bakeries ended with the deaths of 10 Egyptians in clashes with police.
Rice is the staple food of 4 billion people. But the prices for it, along with corn, wheat and other basics, has surged by 40 per cent to 80 per cent in the last three years and caused panicked uprisings in some of the poorest countries on Earth, from Cameroon to Bolivia. More...

Haitian PM dismissed in wake of riots over food prices

2008-04-13T07:40:00.000-05:00

JONATHAN M. KATZ
Associated Press

April 12, 2008 at 9:56 PM EDT, Globe and Mail

PORT-AU-PRINCE, Haiti — Haitian lawmakers on Saturday dismissed the country's prime minister, hoping to defuse widespread anger of rising food prices that led to days of deadly protests and looting.
The prime minister's ouster reflects frustration over soaring food prices in a nation where most people live on less than $2 a day and chronic hunger had become unbearable in recent months. More...

This Week on African Perspective

2008-03-24T14:18:00.002-05:00

This Tuesday 25 March we discuss the upcoming elections in Zimbabwe and to discuss with us the issue is the Zimbabwean Ambassador to Canada Florence Z. Chideya. Among the issues to be discussed is whether Zimbabwe has the capacity to hold the four elections at once namely the presidential, parliamentary, senatorial and councilors; why did the government of Zimbabwe not invite Western countries; and does she think that these elections would be seen as free and fair?

Listen live on 105.5 FM in Toronto or online on http://www.chry.fm/ worldwide as we discuss this issue. To contribute, call our studio number on +1 416 736 5656 or write to africanperspective@chry.fm

About African Perspective
African Perspective is a current affairs programme that reports and analyses news and events from an African viewpoint. It broadcasts on Tuesdays at 10am-11am Eastern Time/2pm-3pm Greenwich Mean Time on CHRY 105.5 FM in Toronto and http://www.chry.fm/ on the Internet worldwide. The programme provides Africans with a platform to articulate their experiences, challenges and celebrate their achievements to both the Canadian public and policy makers.

Presenter: Kuthula Matshazi

Tsvangirai's interview on his policies

2008-03-08T11:48:00.008-05:00

Kuthula Matshazi

These comments are based on Zimbabwe's main opposition Movement for Democratic Change (MDC) leader Morgan Tsvangirai's interview with an UK based radio station that is run by Zimbabweans on his policies . Several issues arise which are not clearly explained.

Before I make comments on issues that Tsvangirai addressed, I must bring to attention that the interviewer - and indeed all other journalists - have never asked Tsvangirai whether he supports economic sanctions. Sure, he is likely to deny that there are economic sanctions for fear of self incrimination, but journalists should ask him whether he supports, in principle, the use of economic sanctions as a disciplinary regime. We want to know his general stance, if he cannot commit himself to the specific economic sanctions that he called for in Zimbabwe. Either way, his answer will tell us a lot.

Now to the issues that he discussed in his interview:

Where will the government of Tsvangirai get the money to start his economic projects and safety nets considering that we have serious balance of payments, no support (for as long as we have our land) and - by his own words - does not want to engage the IMF? Who will come in? Why is he not telling us? and why is the interviewer not pressing him on that?

Tsvangirai also lies and says that IMF does not come to countries economically damaged as Zimbabwe

He promises Matabeleland all the social services, where is he going to get the money?

He also suggests that he does not know that there is corruption in Zimbabwe and yet in many of his other speeches and his party's literature, there is so much on that issue? He says he will investigate when he gets into power. Does that not give us a clue why he cannot win elections...because he does not know anything. He's working on specualtion.

How can Tsvangirai reconcile (and this is supposed to be the first question) land reforms that favour the majority without upsetting his faceless donors who have made it a point that land reform has to be reversed. Not that I say faceless and contradict myself. I use faceless because we know who is GOING to sponsor Tsvangirai - the West, IMF and WB. By the way, land reforms can also mean involving shifting land from the poor to the few rich and agribusiness, which is the trend around many countries dominated by the neoliberal logic. This is seen as thenormal thing to do. And of course we have heard some of our own people argue in support of this skewed and irrational logic. People are suffering yet these people with all the resources divert food to biofuels and unacceptable consumption we engage in the West.

Can Tsvangirai on the one hand say that he will provide healthcare for the 80 percent of people who are poor? Where will get the money to sustain the operations?

He also mentions about giving "CHOICE" to people in seeking healthcare. That is neoliberal code language for PRIVATIZATION. So Tsvangirai is going to have a two tier healthcare system which will be a precursor to PRIVATE HEALTHCARE? And when he has faied, which he will do according to his plan, to sustain the healthcare plan, he will then turn to the private providers to take over the healthcare system? Why should we introduce CHOICE? Why not building a system that caters for all so that we will make sure we do not discriminate against the poor by pushing resources to the rich?

How is Tsvangirai going to deal with external debt problem? Through debt forgiveness? Which only happens if a country accepts structural adjustment programme? Tsvangirai might try to rig interviews but we are going to see through this. Its very easy. As long as he exposes himself to the media, we will unpack his message. If he is quite, then we will not know what he stands for.

Tsvangirai has a lot to do about his policy...but he is beholden...he can't abandon the so-called "international Community" (read Western) norms to craft pro-Zimbabwe policies...heading for another spectacular defeat!!

Liberal Trade Theory has lost validity

2008-02-20T01:09:00.005-05:00

Kuthula Matshazi

Perspectives on International Trade

If we are to use liberal trade theory, which is derived from neoclassical economics, it leads us to believe that free trade results in gains for all nations, then the theory of free trade has lost its validity because evidence shows us that although it does produce gains, on the whole many countries and people have been losers. Not only has these losses been experienced in the developing countries but they have been felt in the developed countries.
Birdsall et. al (2005) have shown that poverty in developing countries has perpetuated and in some cases even further deepened within the framework of free trade. One source of the poverty has been the structural adjustment and aid programmes that are provided by the developed countries and multilateral institutions such as the World Bank and the International Monetary Fund. By liberalizing the economies of developing countries, the developing countries believed that they would unlock value in their mainly primary products based economies and be able to trade their primary commodities on the lucrative markets of developed countries, especially in agricultural products, for instance, which is generally the main economic activity of developing countries. However, that has not been the case as the developing countries have, instead, in many instances come up against protectionist practices by the developed countries as well as huge agricultural subsidies which renders them unable to compete profitably (Birdsall, et. al, 2005).
Vietnam has demonstrated that it is possible for a country that is outside of the World Trade Organisation’s free trade framework to record gains. It has achieved this feat because its absence from participating in liberalized trade has actually enabled it to pursue only those policies that it deemed relevant to its needs (Birdsall et. al 2005). Rodrik calls the act of a country pursuing its own agenda to implemnt those policies that are going to be gainful to them policy space.
Biven (2007) on the other hand views the current free trade environment bringing about inequality in the United States. He argues that contrary to general economic belief that integration leads to economic gains for all, the integration of the US economy with countries from the developing world has created negative results such as inequalities in many instances (Biven, 2007). One area is in those jobs that can be offshored. The people employed in these tradable jobs (Blinder, 2006) that can compete with similar jobs in low labour cost countries are going to face job losses, job dislocation or a reduction in wages. Blinder (2006) cites a study by Forrester Research showing that by 2015 the US will be losing about 300 000 jobs per year and that a McKinsey study shows that the country stands to lose a further 11 percent of all national jobs to offshoring (Blinder, 2006: 120). Blinder does not see this as necessarily a catastrophe as he believes that there will be some natural adjustments within the labour market and the economy generally since the transition from the first industrial revolution, to the second and finally third did not similarly bring about a catastrophe. Using Krugman’s computable general equilibrium, Biven (2007) sees the establishment and spread of professional industries at the expense of labour intensive industries and the rise of inequality, yet the model was undertaken to prove the benign impact of trade flows on US wages (Biven 2007: 6).
On the other hand, Bhagwati (2007) feels that the free trade theory is still very valid but the uproar we hear and read in the newspapers is misplaced. He sees a trend whereby opponents of free trade rally around a particular character when they claim to have come up with evidence that can refute the successes of free trade. He believes that he made a lasting case for free trade by suggesting that if market failure occurred and was corrected by a suitable policy then the case of free trade would be restored. While this is a plausible theory, Bhagwati does not tell us how we can still believe in free trade when it has failed to account for the various negative outcomes outlined by scholars such as Biven (2007), Birdsall et. al (2005) and Blinder (2006). For instance, inequalities still persist, the Agreement on Trade-Related Aspects of Intellectual Property Rights continues to deny affordable AIDS drugs to sufferers in developing countries (Birdsall et. al (2005). Bhagwati (2007) also argues that as countries become similar in endowments, they could both profit hugely from trade in similar products. Granted, in few cases that could be the case but this claim has not been proven as a general and sustaining rule. If that were the case, countries such as Mexico would have prospered in its trade with the US. I think Bhagwati should also take into consideration that it is not only free trade per se that can bring about gains. Rather, trade is influenced by some other factors such as country endowment, disposable incomes, regional location, political considerations as well as political economy.
In conclusion, free trade can be generally good for the increase in trade volumes but that does not mean that the gains are automatically shared with the poor people or even the country hence the need for other policies to enhance its effectiveness.

IMF Conditionality

2008-02-02T14:49:00.000-05:00

Courtesy of Prof. William Coleman, Director, Institute of Globalization and Human Condition, McMaster University.

Functions of WTO and rules needed for governance

2008-01-30T00:37:00.000-05:00

Kuthula Matshazi

Perspectives on International Trade

Over the past 50 years international trade has expanded at a tremendous rate (Rodrik, 2007) recording an unparalleled growth rate in the history of trade. The growth in international trade has been accompanied by the need to form institutions that will facilitate, manage and draw up rules to administer international trade. The current trade which is of gigantic volumes requires that institutions such as the World Trade Organization be established for the facilitation of free trade between countries. This helps to eliminate inefficiencies in the system such as protectionist tendencies and short circuiting rules among many others. While I subscribe to the notion of setting up international organizations such as the WTO, I argue that the WTO and its rules have not been helpful to developing countries in advancing their trade agenda.
Petersmann (2003) outlines several reasons why there should be the establishment of organizations such as the WTO. First he says that organizations such as the WTO are required to correct market failures, correcting government failures and assist in the supply of public goods. Market failures have proven to be common because free trade has not delivered what it promises. For instance, as Naim (1999) demonstrates, the ideas that underpin trade theory, encapsulated within the Washington Consensus are hotly disputed at all levels and the results of free trade have clearly demonstrated the fallacy of these ideas. Their theoretical conceptions do not match the practical outcomes.
Financial markets have been crushing often, the epitome being the 1997 Asian Financial Crisis. Other examples include the current effects of the United States subprime mortgage fiasco. Yet these erratic free trade rules serve as ideological underpinnings of organizations such as the WTO. While indeed the WTO is needed to contain market failures, its regime framework has undermined its ability to perform this task. However, this is not to suggest that the WTO has been unable to prevent market failures. The WTO has been able to enhance, for instance intra-trade between developed countries and Asia (Naim, 1999). Developing countries have largely failed to get protection from transnational adversities such as dumping of excess agricultural products from developed countries. As a result many farmers from the developing countries have failed to compete with their counterparts from the developed countries although they possess comparative advantage. Instead of correcting market failures, the WTO has facilitated the occurrence of market failures through its rules that are sometimes inconsistence within country or region situations (Rodrik, 2007).
Secondly, international organizations such as the WTO assist in the correction of government failures (Petersmann, 2003). Governments have a tendency to pursue protectionist goals that can inhibit trade. Within countries there are special interests groups that favour protectionist tendencies for particular industries. These can be industry players or national economists generally within government or other influential places. While the US is a champion of free trade, it has is almost one of the major culprits. The US government has frustrated the developing nations by firstly excluding agriculture from trade talks in the Uruguay Round and then when it came around to including it, it has pushed for significant liberalization while at the same time increasing subsidies to its farmers. Also, agricultural products from developing countries are finding it difficult to export to the US because of the pressure from the US farmers calling for protectionism and high tariffs.
The third reason why the presence of international organizations such as the WTO is important is that they assist in enhancing the supply of a variety of public goods. The signing of the WTO Agreement is predicted to increase net world welfare by about US$250 billion (Petermann, 2003). For instance the streamlining of WTO rules has managed to facilitate trade to deliver more and diverse goods to the people.
The rules needed to be implemented to facilitate international trade have to be those that can give countries policy space (Rodrik, 2007). While these rules should generally promote free international trade, they must also protect member countries. Rodrik (2007) cites the Agreement on Safeguards as a safety valve that could allow countries protect themselves from international trade. Countries have the right to re-impose tariffs or the quantity of goods placed under restriction under certain circumstances for a limited period in order to regulate imports (Rodrik, 2007). Similarly, Naim (1999) shows, international trade is prone to the vagaries of financial markets, therefore there is need for instituting rules that can control capital flows across borders.
Also these rules ought to be sensitive to national priorities (Rodrik, 2007) especially in areas such as industrial policy. When a country tries to establish an industrial sector, it should be allowed to shield it from competition from well established external companies. Sure, there needs to be a rule that ensures that such protection is not abused. Further, these rules must be sensitive to human rights. Trade should not be pursued at the expense of the dignity and equal rights of others. This is not to argue for a very rigid and protectionist set of rules rather that the rules established should be sensitive to different compelling circumstances.

The Best of Dancing

2008-01-19T10:33:00.000-05:00

Check out this cool dude dancing. He's from the university I go to, McMaster University and I understand he records himself dancing everyday. To watch video click here

What caused Doha to go off the rails and fail?

2008-01-16T20:38:00.000-05:00

Kuthula Matshazi

Perspectives on International Trade

There are several reasons that caused the Doha Round of trade talks to collapse. One might say their failure was already visible considering the reluctance of member countries to address pertinent issues in the previous Uruguay Round that were dividing countries such as agricultural subsidies and antidumping measures as instruments of protectionism. Progress would have been difficult to be achieved if these issues were not addressed. Issues such as agricultural subsidies were of critical importance to the developing countries since they held comparative advantage in agriculture and it also contributes a significant part to the economies of the developing countries.
As Drache and Froese (2007) aptly point out, the shift in the geopolitical arena caused by the rise of China, Brazil and India which has built economic muscle that has brought about a counterforce to the status core, throwing trade power dynamics into flux. That being said, the global South has found its strength and is determined to use it to get a good deal. No longer do they see a bad deal as better than none as has always been the case. Also, the developing countries had given concessions in the Uruguay Round hoping for reciprocity. The developing countries had also convinced the developing countries to open their markets to export goods which they did, but they, in return, refused to allow such a privilege to the developing countries. Coupled with this, the World Trade Organisation trade regimes have proved to be weak and unable to regulate free trade effectively. With such a scenario providing the base upon which the Doha Trade talks were to commence, it was always going to be difficult to hope for a breakthrough.
Also, it seems that developed countries and institutions such as the World Bank have not been frankly committed to making trade mutually beneficial as evidenced by their conduct. To put this point in a clear perspective, Wise and Gallagher (2006) show us some statistics that have been used by the World Bank to justify liberalised trade. According to the World Bank, global trade liberalization would benefit the developing countries to an amount of about US$500 billion as well as alleviate poverty among 100 million people. Therein lies the weakness of the Doha Trade Round. Being perceived as a round of trade talks meant to boost development, the projections of its developmental effect was self undermining. The number of projected benefits was not credible and could not be met while the promise of making the human condition better was not materialising. On the contrary, the situation produced many losers than winners.
Among the developing countries, China seemed to benefit more from liberalized trade than the rest of countries in the liberalized world as evidenced by a study carried out by the Carnegie Endowment for International Peace. Their projection of potential benefits in global trade of US$21.6 billion accrues to developing countries. However, China gets almost half of those gains amounting US$10.5 billion. The CEIP therefore argues that these supposed gains will, in fact, leave many developing countries worse off.
Critical in examining these numbers and scenarios is to notice that the trade debate has been framed to discuss the benefits only as opposed to discussing the costs, which are many and more significant. For instance, Wise and Gallagher (2006) cite liberalization as having the potential of leading to de-industrialization, tariff losses and adjustment costs.
What the above information demonstrates is that despite the structural changes that happened in the world such as the rise of new economic giants in the South and the weak WTO rules, the trade talks are being conducted in bad faith. For instance, while the developed countries have promised to reduce the agricultural subsidies, they have taken advantage of loopholes in the WTO rules to, in fact, increase them, while the promise of “aid for trade” has been faltering. Through the G8 and other fora such as the United Nations the developed countries have made commitments which they have found difficult to keep. Against such a background, it was always going to be difficult for anyone to see how the Doha Round trade talks were going to succeed. There were already underlying problems besetting the talks. These fundamental problems should first of all be tackled before we can ever dream of successful round of trade talks. As Drache and Froese (2007) rightly point out, it seems that regionalization seems to be the way trade deals are going to be structured. Of course, this route has its own huge problems which require detailed examination.

Happy Holidays!!!!

2007-12-30T11:44:00.000-05:00

I would like to wish all the visitors to this blog happy holidays!!!
We are still open for debate though, 365 day, 24/7.

"I was very neglectful of looking at the MDC" - Thornycroft

2007-12-02T23:02:00.000-05:00

The interview below by Peta Thornycroft underlines positions of people like me who had correctly identified the MDC as hopeless five years ago. But because people volunteered to be ignorant (or were actually ignorant unknowingly) or chose to be bury their heads in the sand and also chose petty reasoning (like suggesting that anyone who criticises the MDC must be a Zanu PF supporter or CIO), have been thoroughly embarassed by their clueless, flip flopping dictator Morgan Tsvangirai.

SW Radio Africa's Violet Gonda speaks to Peta Thornycroft, a Zimbabwean national and correspondent for various foreign newspapers and radio stations, including the UK’s Daily Telegraph newspaper. In this, the second and last part of the interview, she talks about Zimbabwean politics and the media:

Broadcast November 13, 2007

VIOLET: We welcome journalist Peta Thornycroft on the programme Hot Seat again. Now Peta when we ended the discussion last week we were talking about the turmoil in the MDC. What are your thoughts exactly on what is happening in the MDC right now?

THORNYCROFT: Well, I think one has to really go back to the beginning of the MDC as journalists and look at how we covered the MDC, certainly how I covered it from July 2001. I’m afraid to say I was very neglectful of looking at the MDC. My excuse is that it wasn’t such a big foreign story, it was more of a domestic story - the opposition - but I bitterly regret that I didn’t do more work in finding out about the various fault-lines in the MDC, which I have subsequently discovered were there right from the very beginning and I was totally unaware of it. I had no idea until I think it was July 2005. I had no idea.
And the domestic press, certainly The Daily News and what else was there apart from the Daily News? What ever else, what ever other domestic media there was, also didn’t investigate the MDC - almost at all. And because of the polarization any criticism that appeared in the Herald or on ZBC I think we all dismissed as propaganda, and that’s also a natural thing that would happen. I saw that happening in South Africa as well.
Nevertheless if we’d been on our toes, a bit smarter and not so anxious and longing for the end of Zanu PF we would have and should have seen that the MDC was in trouble almost from the day it was launched. And so when it split in 2005 it was not a surprise. I remember I was down in Bulawayo in early October 2005 when I realized that an actual split was coming and that was because I had interviewed the Mayor of Bulawayo and I asked him what he would do if the MDC called for a boycott of Senate elections?
And he said to me, ‘We’ll have to field independent candidates because we cannot have Zanu PF taking our space. We down here we have a different experience of Zanu PF a longer experience of Zanu PF than people in the rest of the country. We’ve earned our place, our MPs have earned the right to be MPs for a long time and we want them to stay. We don’t want Zanu PF to have any position in the whole of Matabeleland particularly Bulawayo.’
And I remember thinking to myself ‘oh oh, this is a tricky situation,’ because in Harare we knew that people were so against the senate elections, participating in the senate elections. So clearly there had been inadequate consultation within the MDC. I reported that only I think for V.O.A because quite frankly the other newspapers were not, you know it was again a very domestic story, very domestic story. Then we came across the violence in the MDC. Read More...

Courtesy of Newzimbabwe.com

MDC Intra-party Violence and Pragmatism

2007-11-19T22:21:00.000-05:00

Kuthula Matshazi

Now we hear that the self destruction of the MDC is continuing. It is interesting to know what those MDC supporters and sympathisers are attributing that violence. To the CIO? To Zanu PF? Morgan Tsvangirai has been bought by MDC to kill the party from inside? Or Matibenga is being funded by the CIO and Zanu PF to cause commotion?
The uravelling of the previously hidden dirt is now embarassing those who were so shallow minded to attribute their own shortcomings to their opponents. Of course, opponents will make use of any weaknesses that manifests themselves. If we are to accept that it is the CIO and ZPF that are causing commotion in the opposition, then it demonstrates how hopelessly weak MDC is. How can it rely on its enemy for its viability? But we all know that it is not ZPF or the CIO which weakened the MDC. It is MDC which is causing its own demise.
Some people, ironically those who trumpeted themselves as well informed and educated were resorting to petty reasoning suggesting that the MDC was being weakened by the CIO and ZPF. Now its all in the open. The worst nightmare for MDC is MDC.
It is advisable that those who were burying their heads in the sand now take them out and start being realistic. You cannot make hatred and wishful thinking a substitute for reality.

British govt, a rogue international citizen

2007-11-18T00:56:00.000-05:00

By Kuthula Matshazi

The plan by the British to invade Zimbabwe demonstrates the rogueness of that government and its contempt of the international governance institutions as well as international law. Who is Tony Blair to unilaterally decide to invade a sovereign country? If there is anything that they are worried about, why would they not go to the United Nations, and through Chapter VII seek authority to invade Zimbabwe through the community of nations of the world?
But of course we know that the British have tried that route many times and have failed to get authorisation to invade Zimbabwe under the pretext that the country is an international threat. It’s sickening!!! The real international threat is Britain which has proved beyond doubt by its murderous adventure in Iraq and its always failing missions in Zimbabwe. Besides, Britain is currently leading Western countries in applying genocidal economic sanctions on the defenceless people of Zimbabwe.
It took almost a decade for Britain to realise that “Quite Diplomacy” was the only way to solve the problems in Zimbabwe. The economic sanctions have failed to achieve the regime change sought. If at all it had effect, it entrenched the current government of Zanu PF and ironically has led to the disintegration of its one-time-wonder party they formed and sponsored, the MDC. We wait to see for how long the British and its friends will go on pouring money into a Black Hole promoting their saboteurs under the cover of civil society. If President Thabo Mbeki’s diplomacy fails then at least it’s better because he did not apply economic sanctions or did not try to undermine a sovereign state. What he is trying to do is get a solution in a progressive manner.

Mbeki admits he is still Aids dissident six years on

2007-11-07T00:55:00.000-05:00

...Science not settled, Let the debate begin again!

President Thabo Mbeki remains an "Aids dissident" who has told a biographer that he regrets bowing to pressure from his cabinet to "withdraw from the debate" over the disease ravaging South Africa. More...

Courtesy of UK Guardian

Clare Short Letter to Zimbabwe gov't denying UK responsibility towards funding land reforms

2007-11-05T12:48:00.000-05:00

Today 5 November 2007 is the 10th year since Clare Short wrote a letter to the government of Zimbabwe denying responsibility of the British government towards funding the land reform. And fittingly I reproduce the letter in full.
It is this letter which led to the stand off between Britain and Zimbabwe because the former were refusing to honour their obligations they voluntarily agreed to at the Lancaster House Conference in 1979 as part of the agreement that brought independence to Zimbabwe. [Read letter]...

This Week on African Perspective

2007-11-03T09:53:00.000-05:00

This Tuesday 6 November we discuss the recently released 2007 Immigration report by the Canadian Conservative government which revealed that the government failed to outline major complaints and systemic problems in Canada’s immigration system and that the country received 10 000 less immigrants last year. Some people have voiced concern about the inability of the immigration system to expedite family reunion. Some have also questioned why Canada has taken 10 000 less immigrants when the country faces a problem of an ageing population and shortage of skilled labour.
To discuss this issue we have the federal New Democratic Party Immigration critic Olivia Chow (confirmed) and her federal counterpart, Omar Alghabra from the Liberal Party of Canada.

Listen live on 105.5 FM in Toronto or online on http://www.chry.fm/ worldwide as we discuss this issue. To contribute, call our studio number on +1 416 736 5656 or write to africanperspective@chry.fm

About African Perspective
African Perspective is a current affairs programme that reports and analyses news and events from an African viewpoint. It broadcasts on Tuesdays at 10am-11am Eastern Time/3pm-4pm Greenwich Mean Time on CHRY 105.5 FM in Toronto and http://www.chry.fm/ on the Internet worldwide. The programme provides Africans with a platform to articulate their experiences, challenges and celebrate their achievements to both the Canadian public and policy makers.

Presenter: Kuthula Matshazi

HIV and AIDS prevalence rate declines in Zimbabwe

2007-11-01T01:44:00.000-05:00

Posted: Wed, 31 Oct 2007 18:47:53 +0200

New statistics have revealed that the HIV and Aids prevalence rate in Zimbabwe has declined from 18.1% in 2006 to 15,6% this year.Against this background, the Ministry of Health and Child Welfare has stressed the need for unity in the fight against the pandemic if the country is to continue recording a decrease in the prevalence rate. More...

Courtesy of Newsnet

8 yrs to notice Tsvangirai's fatal flaws as leader

2007-11-01T00:50:00.000-05:00

It took EIGHT years to realise that Movement for Democratic Change President (Anti-Senate faction) Morgan Tsvangirai is a dictator and a weak leader bereft viable policies and person management skills.
When people like us raised this issue we were insulted using all the vulgar words one can think of. We were also accused of being CIOs or Zanu PF zealots when the simple truth was that Tsvangirai was a hopelessly weak yet dangerous dictator. It was therefore important for us to hold him to scrutiny to portray him for what he really is. Finally, even his own people who decided to be blind to reality are noticing it.
It will not help the opposition to continue burying their heads in the sand. Doing so, has cost them: a decade of tyranny and weak leadership.

A Review of Thomas L. Friedman book, The World is Flat

2007-11-01T00:40:00.000-05:00

A Review of Thomas L. Friedman book, The World is Flat

2007-11-01T00:16:00.000-05:00

By Kuthula Matshazi

In his book, The World is Flat: A Brief History of the Twenty-First Century Thomas L. Friedman argues that the world is now flat. By that he means that those obstacles that created inequalities and prevented global networking are being eliminated and now the playing field for international competition is being levelled. The levelling of the field is now enabling people from all corners of the world to work together on an equal footing in real time. This flattening has been facilitated by the pervasive information and telecommunications technology. He lists ten issues that he identifies as forces that flattened the world. These include the fall of the Berlin Wall in 1989, the launch of Netscape into the public domain in 1995, the creation of Work Flow Software, uploading, outsourcing, offshoring, supply chaining, insourcing, informing, and the introduction of digital and mobile technologies, which he termed steroids.
Reviewing Friedman’s book, it is important to first of all understand the type of economics that informs his worldview as he confesses at the beginning of his the book when he says, “I firmly believe in the lesson of classical economists” (Friedman, 20). His firm belief in classical economics has constrained his viewpoint beyond what he prefers to see and believe. Friedman is wrong to believe that the world is flat because the many obstacles that makes the world rough, bumpy and dangerous have not been eliminated. I will tackle some of his presumptuous truisms.
Friedman believes that “connecting all the knowledge centres of the planet together into a single global network” (Friedman, 8) would benefit both individuals and companies. He says politics and terrorism are hindrances that could get into the way of flattening the world. This statement serves to undermine his whole argument because politics has, in many instances trumped economics. Alternatively, politics has, at best cohabitated with economics. Likewise, terrorism has, over the years become part of everyday reality in the world that we live in. So therefore these two elements have, as Friedman acknowledges their influence, been part of factors that have frustrated the flattening of the world. They are part and parcel of globalization and it would be difficult, if not impossible to talk about globalization without taking them into consideration, especially for Friedman’s country, the United States, given the prominent role that country has played in the globalization process. Also, given the role the globalization process has assumed, it has encroached into other nations’ facets of life such as culture and economy causing untold suffering. These two elements – politics and terrorism - have made the world rough and bumpy as opposed to flat. In fact, the very economic globalisation that Friedman reveres is, to a great extent responsible for thwarting a flat world he mistakenly observes.
However, one can understand Friedman’s position because his assessment of the world is from a privileged position. He was born in the United States, whose corporations and individuals have benefited from the current economic globalisation process. Also, Friedman sees the world from his privileged professional position as well as his association with corporate executives whom he admires greatly and quotes extensively to justify his argument. Friedman justifies his arguments using the successes of these few privileged people to prove that they have made the world flat. True, within their small world, which is detached from the wider world, these executives have achieved spectacular economic benefits. However, Friedman goes on to suggest, quoting David Landes’ Wealth and Poverty of Nations book, that those who are poor are poor because of their culture that holds them back, dysfunctional institutions and their inability to embrace free trade among other factors. However, what free trade has delivered is uncertainty. These days, as Friedman points out, having a permanent job is no longer guaranteed. He says that people should continuously learn to adapt and be competitive to remain relevant to industry. But if we all keep up with the ever changing trends, the industries would surely reach their employment intake limits. Besides, Friedman already acknowledges that production processes are being outsourced to India, China and any other places that can perform these jobs best and at low prices.
Granted, the developed countries have built efficiencies, while the developing countries have not. It is not entirely about the regressive cultures practiced by the societies in the developing countries and the dysfunctional public institutions as Friedman suggests, but the inherent misalignment of the different cultures and aspirations of societies. While the Friedmanian kind of society is that of global flattening, the priorities and aspirations of other societies should not be seen as impediments to development, which is measured using current economic globalisation standards. The resultant pauperisation of other societies by the economic globalisation which was also facilitated by colonialism and is being sustained by imperialism should not be viewed as a failure by those societies to advance themselves. Rather that they are being forced to participate in an alien economic globalisation game as unequal partners.
Surely, refusing to partake in someone’s culture and activities is not cultural regression. On the contrary it is about assertiveness and having a choice to engage in the activities that one chooses. It is therefore ironic for Friedman to suggest, on the one hand that concepts like democracy and free markets are important and indispensable while on the other he suggests that people have no choice but to join economic globalisation if they want to live a life that would, according to him, be decent. To demonstrate Friedman’s tyrannical character, which is an antithesis of democracy, he unilaterally proclaims that:
“The Cold War had been a struggle between two economic systems – capitalism and communism – and with the fall of the wall, there was only one system left and everyone had to orient himself or herself to it one way or the another…if you were not a democracy or a democratizing society, if you continued to hold fast to highly regulated or centrally planned economics, you were seen as being on the wrong side of history”. (Friedman, 52).
Friedman makes these declarations as axiomatic. Indeed in the world that he lives in that could be true, but it was not the case in many areas beyond his world. To give him the benefit of doubt, if he were writing from a certain market that has a corresponding viewpoint then his explanations would be understandable. However, even though he could be writing for a narrow audience, the problem is that he is writing about issues that involve the whole of humanity and not only those people with a similar viewpoint or who generally understand his viewpoint. It therefore becomes important that if Friedman is discussing about globalization, which will have far reaching effects, then he should also take into consideration the condition of those people. Being more economically or militarily powerful than one society does not make that power any better.
Friedman’s ten forces that flattened the world are only acceptable to the extent that they have flattened the world for those powerful corporations and privileged individuals and not for the majority poor people. I must suggest here that these flatteners should not just be flatteners for the sake of flattening the world, but they should benefit human kind. Economic globalisation is not supposed to be an end in itself, rather a means through which people should uplift their standards of living. The question then arises as to which people in particular should benefit enormously for the majority of humanity. Friedman shows this point by even suggesting the positive effect of economic globalisation. For instance, one of the ten forces of flattening is Work Flow Software. While this software indeed improves work processes within and between companies, it bears little or no significance to the majority of the poor people of the world. The most they can do is marvel at from afar or even in some cases disbelieve its virtues. Many times such software is irrelevant in developing countries when food is the priority or it is too expensive to set up and administer. So it is better for Friedman to understand which worlds have been flattened and what effect each of his flattener has produced. That would mean getting out of his limited interaction with business people or those who are rich and privileged and seeing the world through the eyes of the majority poor.
Friedman says “What’s even worse for Mexico is that China is displacing some Mexican companies in Mexico” (Friedman, 404). If Mexico can be affected in this manner by China when it has already deregulated its economy, lowered its non tariff trade barriers and tried to improve its international competitiveness, then this demonstrates how difficult it would be for a country to participate successfully in economic globalisation. Being competitive is not only about “looking brutally honestly at your strengths and your weaknesses” (Friedman, 407). The above example of Mexico attests to my position. Despite its efforts to be a successful economic globalisation player, Mexico has been affected by economic globalization in a major way. Compared to Canada, which boarders the US, Mexico has not benefited as much. Illegal immigration to US is a huge problem and now Friedman reveals that in providing low wage sector, Mexico is being less competitive.
This suggests that Mexico can only be competitive if it further depresses the conditions which had initially made it a favourable destination for production processes. The flip side is for Mexico to heavily invest in skills development and high education, a process that does not happen overnight. Besides, already East Asian countries have a comparative advantage. If, for argument's sake, Mexico were to successfully build a competitive human resource base quickly, they would still be faced with the same China and other East Asian countries that have already a comparative advantage in high skilled labour and are important US allies in that region of the world to safeguard its strategic geopolitical interests.
Even if Mexico were in a position to compete with East Asian countries, it could, as Friedman said, have to face other factors such as politics, with which to contend that could get in the way of flattening the world.
A point to clarify my argument is Friedman’s assertion that part of Mexico’s problem is its location to the world’s largest market which speaks English and yet it has not established an English language crash course or scholarships to send its students to the US while China and India have done so and have many students enrolled in US universities. It is flawed logic to suggest that if a country sends its students to the US it would automatically succeed. As Friedman suggested, domestic politics and foreign interests may vary and influence economic relations. Besides, we cannot be sure whether those US students are resident in China and India or are US citizens. If we give him the benefit of doubt and say they are Indian and Chinese citizens, we might never know where they end up working or settled.
While Friedman’s arguments contain several flaws, it however brings into perspective many of the challenges of dealing with globalization. Importantly, it teaches us to take globalization from a broad view than just from the narrow view promoted by those who engineer and benefit from it. At the same time, it challenges us to think much deeper and confront its inherent contradictions so that we could find ways of making it work for the majority of people in the world.

School Pressure: Back Soon...

2007-10-24T23:57:00.000-05:00

I am currently committed to school work and can't update the blog regularly; and I had a computer problem. Now the computer is okay and soon I'll be having time to update the blog regularly. I am studying for a Master's in Globalization Studies at McMaster University in Hamilton, Ontario in Canada.
Besides this, I am tutoring two classes at McMaster University in Government and Politics; am doing Media Relations and Marketing Communications for an electrical distribution and automation and control company, and also have a weekly current affairs radio programme. Please bear with me.

Courses I am taking this 2007 Fall semester:

1) Globalization: An Introduction
2) Global Social Policy
3) Global Political Economy

Kuthula
Sunday, 27 October 2007

This Week on African Perspective

2007-09-24T18:34:00.000-05:00

This Tuesday 25 September we host the Ambassador of Zimbabwe in Canada Florence Chideya. We discuss the decision by the ruling party Zanu PF and the opposition party, the Movement for Democratic Change to unanimously pass the Constitution of Zimbabwe Amendment Bill Number 18. The opposition party had all along opposed what they called the piecemeal amendment and yet in what it called a “confidence building measure” it has allowed the amendment to pass. The amendment allows for the harmonization of the presidential, parliamentary and local government elections that take place in 2008.
Is President Robert Mugabe going to Portugal for the European Union-African Union Summit that has been postponed since 2003 because of a stand off between the two regional blocs over the debate whether President Mugabe should be invited or not?
The parliamentary legal committee has also passed the Indigenization and Empowerment Bill which provides an opportunity for Zimbabweans to own at least a 51% of shareholding in the majority of businesses in all sectors of the economy.
What has brought about this unity? Are we seeing a genuine desire by ZIMBABWEANS to start solving their problems?

Listen live on 105.5 FM in Toronto or online on http://www.chry.fm/ worldwide as we discuss this issue. To contribute, call our studio number on +1 416 736 5656 or write to africanperspective@chry.fm

About African Perspective
African Perspective is a current affairs programme that reports and analyses news and events from an African viewpoint. It broadcasts on Tuesdays at 10am-11am Eastern Time/2pm-3pm Greenwich Mean Time on CHRY 105.5 FM in Toronto and http://www.chry.fm/ on the Internet worldwide. The programme provides Africans with a platform to articulate their experiences, challenges and celebrate their achievements to both the Canadian public and policy makers.

Presenters: Kuthula Matshazi and Shadya Yasin

This Week on African Perspective

2007-09-17T22:52:00.000-05:00

This Tuesday 18 September we talk to Denmark based Hannilie Zulu, founder of AfriDAD, a non governmental organisation dealing in development, aid and debt in Africa. She has argued that HIV and AIDS do not exist. She has argued that food and appropriate medication should be priority for people "stamped with HIV" instead of antiretrovirals, which she feels are toxic and therefore dangerous to people's health.
She has supported South African President Thabo Mbeki's former stance questioning the thinking that HIV causes AIDS. In recent years, President Mbeki has accept the mainstream logic that HIV indeed causes AIDS.
However, like President Mbeki, Zulu accepts the critical role of diet in people "stamped with AIDS". In August the Academy of Science of South Africa released a report that concluded that nutrition on its own is not sufficient to contatin aids neither could "supplements without a healthy diet.
How then does Zulu interrogate and locate the present South African position on AIDS within the context of the past and present positions both the government and the president have taken? What is her take on the position adopted by ASSA?

Listen live on 105.5 FM in Toronto or online on http://www.chry.fm/ worldwide as we discuss this issue. To contribute, call our studio number on +1 416 736 5656 or write to africanperspective@chry.fm

About African Perspective
African Perspective is a current affairs programme that reports and analyses news and events from an African viewpoint. It broadcasts on Tuesdays at 10am-11am Eastern Time/2pm-3pm Greenwich Mean Time on CHRY 105.5 FM in Toronto and http://www.chry.fm/ on the Internet worldwide. The programme provides Africans with a platform to articulate their experiences, challenges and celebrate their achievements to both the Canadian public and policy makers.

Presenters: Kuthula Matshazi and Shadya Yasin

ZCTU losing plot

2007-09-09T18:45:00.000-05:00

The Flip Side with Kuthula Matshazi

The rationale of two issues communicated by high ranking officials of the Zimbabwe Congress of Trade Unions is difficult to understand. The ZCTU chairman Lovemore Matombo has called for a 2 day strike on 19 and 20 September while his Secretary General Wellington Chibhebhe says he does not oppose price cuts that were ordered by the government but is against the “after effects”. More...

This Week on African Perspective

2007-09-08T11:13:00.000-05:00

Does the Africa brand have ambassadors?

This Tuesday 11 September we host prominent South African businessman Mutumwa Mawere as we discuss whether the Africa brand lacks or does not lack its ambassadors. Mawere wrote an article for an online publication suggesting that the Africa brand lacks ambassadors.
We ask him why he thinks so. We also discuss the African political economy, which he argues is still dominated by multinational corporations from outside of Africa. In this regard, we want to know how, as a businessman and son of Africa, Africans can go about positioning themselves to benefit sustainably from their own resources.

Listen live on 105.5 FM in Toronto or online on http://www.chry.fm/ worldwide as we discuss this issue. To contribute, call our studio number on +1 416 736 5656 or write to africanperspective@chry.fm

About African Perspective
African Perspective is a current affairs programme that reports and analyses news and events from an African viewpoint. It broadcasts on Tuesdays at 10am-11am Eastern Time/2pm-3pm Greenwich Mean Time on CHRY 105.5 FM in Toronto and http://www.chry.fm/ on the Internet worldwide. The programme provides Africans with a platform to articulate their experiences, challenges and celebrate their achievements to both the Canadian public and policy makers.

Presenters: Kuthula Matshazi and Shadya Yasin

Tory religious schools funding policy discriminates

2007-09-01T19:46:00.000-05:00

By Kuthula Matshazi
Written for Da Reach newsletter, Toronto.

Ontario Conservative Party leader John Tory's proposal to fragment the Ontario education system through funding of faith based schools is nothing more than creating discrimination. He announced this policy as part of his lead to the provincial parliamentary elections taking place on 10 October.
On the surface of this policy, Tory comes across as the nice guy who is trying to correct a wrong which was entrenched in the constitution as a means to protect the English Catholic minority some 140 years ago. Then, the State was responding to unique challenges faced by the country whereby the minority English Catholics needed protection. I shall not debate the merits and the demerits of this policy during that time. Accordingly, Canada has evolved since then and now faces new challenges.
The Catholics are now not in a perilous situation, but the integration of the Canadian society into a unit is. We are faced with a challenge of building a society that is united and tolerant in diversity. To achieve this state, calls for understanding of each other’s religion and culture. And it takes interaction of the sort acquired from schools to internalize it. This, by no means suggests that it is only the school that provides this interaction. However, the education institutions provide children who are still growing and learning many skills with the appropriate forum for interacting and internalizing some of these critical social functions such as learning and understanding some of these cultures and religions. The importance of understanding and tolerating each other’s culture and religion has never been more compelling than now taking into cognizant deadly conflicts that have been caused in recent years over these matters.
The interaction of children at school creates an effective way of building a tolerant and culturally aware population, which is usually socially progressive. On the other hand establishing religious schools reduces and in many instances eliminates the opportunity for children to come across their peers from different backgrounds on a regular basis.
Tory’s plan locks respective religions into compartments where only the likeminded are permitted and accepted in and understood because of shared norms, values and beliefs. One probable reason Tory’s plan could succeed, although it is discriminatory, is because it has the flavor to appeal to people. Generally, people are predisposed to come together into groups sharing the same ethnicity, values, beliefs and norms such as having Little this community and Little that community. Having such grouping of communities is also a barrier to integration. Now if Tory’s plan could succeed, then it would add another front – promoted by public policy – which is a barrier to integration.
The message we would be sending to the young minds is that it is good to grow up separated from other religions and retain that separation in the critical social areas of education and culture. Not only does Tory’s plan promote discrimination, but it also takes away funding from the public school system of about $400 million. The public school system is already reeling under inadequate funding. Beyond this, should the policy be implemented, we stand to deal with potentially disastrous or dangerous unforeseen problems such as teaching hate or fostering cultural superiority. Tory’s plan of inspecting schools to see whether they comply with Ontario education standards and curriculum does not guarantee that none of this could happen, unless of course we live in a perfect world!
Also, Tory’s plan can never satisfy or cover all groups causing those who do not benefit feel marginalized. This scenario demonstrates that Tory’s plan is not as inclusive as he claims but exclusionary and fragments the population.
It is hypocritical for Ontario Premier Dalton McGuinty to suggest that funding of Catholic schools should remain in place for stability sake. But the system is already not stable because of this very unfair funding system that exists whereby only Catholic schools receive government funding. It only seems stable because apparently, those who have serious concerns about the current system are not heeded.
The Green Party of Ontario seems to be the only political party that understands that the current funding formula and that suggested by Tory are fundamentally flawed. The party rejects the funding of religious schools. Let’s hope Tory will realize the fatal flaw in his policy and do what is right: call for a non religious sufficiently funded public education system.

Listen to African Perspective - Discussion on Zimbabwe, Part 1

2007-08-31T14:21:00.000-05:00

Download and Listen to the 28 August discussion on Zimbabwe on CHRY 105.5FM, African Perspective programme. Download here...

"HIV and AIDS Do Not Exist", Part 2

2007-08-31T13:27:00.000-05:00

Download and Listen to the 21 August discussion that HIV and AIDS do not exist on CHRY 105.5FM, African Perspective programme. Download here...

"HIV and AIDS Do Not Exist", Part 1

2007-08-31T13:20:00.000-05:00

Download and Listen to the 14 August discussion that HIV and AIDS do not exist on CHRY 105.5FM, African Perspective programme. Download here...

Zimbabwe Discussion Continues

2007-08-26T20:52:00.000-05:00

This Tuesday 4 September we continue to discuss the Zimbabwean situation that has been described as the worst crisis outside a war zone. We focus on the issues that have brought about the current situation by looking at the bigger picture of the issues and discuss the situation within that context. We also look at the recent SADC meeting in Lusaka, Zambia and its outcomes. Are the SADC leaders failing to control President Robert Mugabe or they understand his position and the decisions he has taken.
We have Innocent Madawo, editor of thesouthernafrican.com a Zimbabwean journalist and a former editor with Zimbabwe's national news agency Ziana.

Listen live on 105.5 FM in Toronto or online on http://www.chry.fm/ worldwide as we discuss this issue. To contribute, call our studio number on +1 416 736 5656 or write to africanperspective@chry.fm

About African Perspective
African Perspective is a current affairs programme that reports and analyses news and events from an African viewpoint. It broadcasts on Tuesdays at 10am-11am Eastern Time/2pm-3pm Greenwich Mean Time on CHRY 105.5 FM in Toronto and http://www.chry.fm/ on the Internet worldwide. The programme provides Africans with a platform to articulate their experiences, challenges and celebrate their achievements to both the Canadian public and policy makers.

Presenters: Kuthula Matshazi and Shadya Yasin

The Zimbabwe economy

2007-08-26T20:37:00.000-05:00

Excerpt from Letter From The President
ANC Today, Volume 7, No. 33 • 24—30 August 2007

By Thabo Mbeki, President, Republic of South Africa

The Summit Meeting also approved the urgent initiation of a process that would identify the measures that the SADC region should take to assist in the economic recovery of Zimbabwe. The report prepared by the SADC Secretariat in this regard says:
“The restoration of the country’s foreign exchange generating capacity through Balance of Payments support is crucial: however, the most urgent action that is needed to start this process is to establish lines of credit to enable Zimbabwe to import inputs for its productive sectors, particularly for agriculture and foreign currency generating sectors.
“SADC should do all it can to help Zimbabwe address the issue of sanctions, which is not only hurting the economy through failure to get BoP support and lines of credit, but also through reduced markets for its products. Sanctions also damage the image of Zimbabwe, causing a severe blow to her tourist sector.
“Zimbabwe on her part must continue to implement robust policies to reduce the overvaluation of the exchange rate, to reduce the budget deficit and to control the growth of domestic credit and money supply which fuel inflation, and to reduce price distortions in the economy. Equally important is the need to avoid frequent changes in policy initiatives, which have caused uncertainties and led to the view that the policy environment is unpredictable.”
In this regard, on Monday, August 20, the Business Day newspaper published a wholly fabricated story alleging that the SADC leaders were divided over this report, describing a discussion at the Summit Meeting that never took place. This is consistent with an unethical practice in sections of our media in terms of which they manufacture news and information and communicate complete fiction as the truth.
The newspaper manufactured an unbridgeable “rift” resulting in a non-existent paralysis among the leaders, arising out of the discussion that never took place. The fact of the matter is that, acting on the recommendation of the SADC Organ on Politics, Defence and Security, (the Organ), the SADC Summit Meeting accepted the report on the Zimbabwe economy, as well as the proposal of the Organ that our Finance Ministers, in consultation with the Government of Zimbabwe, should use the report to elaborate specific interventions that could be made by our region.
The hostile allegation that our countries have recklessly turned their eyes away from the problems of Zimbabwe, because of the imperatives of solidarity, has always been nothing more than a product of propaganda, which all thinking persons would recognise as such. The reality is that in a very real sense the problems of Zimbabwe are our problems, in the same way that the problems of the rest of Southern Africa are problems for Zimbabwe as well. Our entire region stands to benefit most directly from the recovery of Zimbabwe, in much the same way as Zimbabwe benefits from the progress of the region of Southern Africa, of which it is an integral and inalienable part.
The Lusaka Summit Meeting reconfirmed these fundamental positions, which include unqualified respect for the sovereignty of Zimbabwe and the right of its people to determine their destiny. At no point will SADC and its member states act as a super-power that has the right to expropriate the people of Zimbabwe of their right to self-determination, as imperial Britain did.

US backed Zimbabwe land reform

2007-08-26T20:29:00.000-05:00

By Martin Plaut
BBC Africa analyst

The key role played by the United States ahead of Zimbabwe's independence in resolving the sticky point of land redistribution has just come to light.
The land issue has always been emotive in Zimbabwe - as can be seen with the current crisis sparked off by the government seizure of mainly white-owned farms in 2000. More...

My Top 10 Songs of the Week

2007-08-26T19:50:00.000-05:00

1. Creep - TLC

2. Don't Want To Fall In Love (New Jack Swing Club Mix) - Jane Child

3. Automatic - Pointer Sisters

4. Gandaganda - Mzekezeke

5. Got To Have Your Love - Mantronix

6. Makin' Happy - Crystal Waters

7. like the Way (Kissing Game) - Hi-Five

8. YU4Me - Mashamplani

9. Love Controversy Part 1 - Loose Ends

10. Heaven In My Eyez - Jaheim

This Week on African Perspective

2007-08-16T13:42:00.000-05:00

“HIV and AIDS Do Not Exist”: Final Discussion

This Tuesday 21 August we continue our discussion with Hannilie Zulu focussing on HIV and AIDS and probing the facts and the myths on the subject. We have a person from Uganda “stamped HIV positive” coming to the programme to give her perspective on HIV and AIDS.
Zulu is a native of Zambia and is currently based in Denmark. She is the founder of AfriDAD a non governmental organisation that focuses on Debt, Aid and Development in Africa. She has studied international economies, has authored more than 400 articles on the world economy and how it affects Africa. She is the author of 11 books which include: "Negotiating Blood" a book about the world economy, 'The mother of the Matrix' the most oppressed and controversial case of the century, The Evacuation and others. Hannilie is about to launch her new book on HIV and AIDS titled: "Telling AIDS Stamped Relatives They Are Not Ill and Becoming Eternal Enemies with Them", this coming winter.

Listen live on 105.5 FM in Toronto or online on www.chry.fm worldwide as we discuss this issue. To contribute, call our studio number on +1 416 736 5656 or write to africanperspective@chry.fm

About African Perspective
African Perspective is a current affairs programme that reports and analyses news and events from an African viewpoint. It broadcasts on Tuesdays at 10am-11am Eastern Time/2pm-3pm Greenwich Mean Time on CHRY 105.5 FM in Toronto and www.chry.fm on the Internet worldwide. The programme provides Africans with a platform to articulate their experiences, challenges and celebrate their achievements to both the Canadian public and policy makers.

Presenters: Kuthula Matshazi and Shadya Yasin

Market Failing...

2007-08-16T12:30:00.000-05:00

...as taxpayers and innocent investors bear the brunt

If the market demands that governments have limited role in economies, why are they being called then to save economies and private companies that made unwise investment decisions by lending money to people with showdy credit histories?
As a taxpayer I and many others were not involved in the gamble that these private companies undertook in a bid to reap maximum profits and yet we are now being forced to pay for their imprudent lending.
This failure once again shows the volatility of the market economy and its danger to the hard earned investments of innocent people who ultimately become victims. Also, this shows the misguided myth that governments have marginal roles to play in economies.
The market cannot have its cake and eat it too. It desires to embark on unrestrained gambles and when those gambles don't pay off it turns to us for salvation. And yet when we make suggestions about its operation we are sidelined or treated as some lunatics who don't understand how modern economies work.

Interesting book to read: Keen, Steve, Debunking Economics: The Naked Emperor of the Social Sciences, London: Zed Books, 2001.

Wall Street slides as Countrywide takes toll

2007-08-16T12:22:00.000-05:00

By Hal Weitzman in New York
Published: August 16 2007 14:09 Last updated: August 16 2007 18:08

US stocks plunged on Thursday after Countrywide, the beleaguered mortgage group, said it would have to draw on $11.5bn of credit and an official report showed new homebuilding dropped to a 10-year low in July.
The market jitters over the fallout from the subprime mortgage crisis were further fuelled by a strong statement from William Poole, president of the St Louis Federal Reserve, who denied that the subprime issue pointed to a systemic crisis in the financial system and said only a “calamity” would justify a cut in interest rates.
However, a senior Federal Reserve spokesperson in Washington said Mr Poole’s views did not represent those of the central bank’s policymaking Open Market Committee as a whole. More...

Story courtesy of The Financial Times

Other relevant links

Market meltdown continues (Toronto Star, Aug 16, 2007 01:43 PM)

Heavy losses sweep world markets (BBC, 16 August 2007, 19:13 GMT 20:13 UK)

Russian central bank intervenes (FT, August 16 2007 15:12)

ECB injects €95bn to help markets (FT, August 10 2007 04:17)