Economy – Chanters Lodge Livingstone

Mbendi Information Services

I get a regular newsletter from Mbendi Information Services. I ‘liked this’ one:

“I really must stop reading the financial papers just before I go to bed. Because just lately two recurring nightmares have been disturbing my sleep.

In the first, I’m just an ordinary British bloke, feet up, lukewarm ale at hand, all ready to watch the politicos debating on telly when there’s a ring of the doorbell. There stands a smartly suited gent who announces “Six grand, please guv, to pay off your household’s share of the budget deficit!” I’m aghast. My lovely house is mortgaged to the hilt and I’ve just arranged an overdraft to pay for a trip with the lads to a mystery tournament in a very dangerous country (though not nearly as dangerous as Germany according to the UK government). As I write out the cheque, he pipes up again “Never worry, guv, I’ll be back for another twenty five grand in the next couple of years!”.

I wake in a sweat and have no sooner dropped off again than the second nightmare starts.

This time I’m a French housewife frying up aubergines with garlic for the family watching sport on the TV in the room next door (this is a French tradition aimed at bringing luck to the national team playing a sport where you shouldn’t touch the ball with your hands). Suddenly there is a knock at the window. Outside stands a woman smartly dressed in a raincoat and black beret. “Voulez-vous d’abord la bonne ou la mauvaise nouvelle ?” she demands (translation: “I vill say this only once – do you want to hear the good news or the bad news first?”). “La mauvaise” I mutter and she leans forward and confidentially reveals that my pension is to be halved so the government pension deficit will not balloon to Euro 40 billion by 2015. I gasp. “Et la bonne?” I croak. “The pension contributions of your children are to be tripled and their retirement age deferred to 85 so we don’t need to cut your pension ever again!”

I think my dreams must be deficient because I don’t dream the great American dream in which I find on my doorsteps not only the taxman and the pension madam, but also the local doctor, a Chinese banker and a dishevelled man with a gun, all with their hands outstretched. The US Congressional Budget Office projects that the cumulative US budget deficit alone could increase to US$ 9,700 billion by 2020 taking the federal debt to US$ 20,000 billion, 90% of GDP and more than US$ 100,000 per household. The discredited credit ratings agencies, headquartered as they are in the USA, seem unperturbed by this state of affairs which would lead to lesser nations receiving a major ratings downgrade under similar circumstances.

Now that I’m wide awake, I really must start saving in case a real demand arrives in my mailbox that I’m unable to meet. I must also put pressure on the various levels of government around me so they cut costs to the bone and don’t have to make demands at all. The only trouble is the officials and politicians might not take kindly to losing sleep worrying about their salaries being cut or maybe even losing their jobs – salary, pension, perks, prestige and all – just so us taxpayers can sleep easy knowing our governments have a zero deficit or, better still, surpluses all round. Oh, yes, and we’d like to have government continue to provide all the services they already do plus a whole lot more. Vastly improved government productivity is the only answer I can dream up to solve this conundrum!”

The picture? Cesc Fabregas – soon to be a Barcelona player

19
MAY

Arsenal, Economy, rsa

Ron Paul

Take careful note of this for the future – and remember I was very early to tell you to watch out for Barack Obama. From National Post via Ed my son.

“A year ago, American conservatives were dreading the onset of a new era of liberalism. Barack Obama was inaugurated as President and the media declared conservatism dead for at least the next eight years. Today, conservatives are re-energized and some even predict a Republican takeover of the House of Representatives, and perhaps even the Senate, in November’s mid-term elections.

Excitement and hope were palpable at this year’s Conservative Political Action Conference (CPAC), the annual confab of American right-wing activists which took place last weekend. But renewed optimism wasn’t the biggest story coming out of conference, it was the surprise victory of Representative Ron Paul in the annual CPAC straw poll of presidential contenders. Paul, the perennial outsider, garnered 31% of the votes, defeating names like former Massachusetts governor Mitt Romney (22%), Sarah Palin (7%) and Newt Gingrich (4%).

Leaving aside the unscientific nature of the poll (only 24% of the record 10,000 attendees voted, and nearly half the delegates were under the age of 25), this result cannot be ignored and could be a portent for where the conservative movement is heading. Ron Paul is the unlikeliest of political stars. A doctor by training, he is a reserved, soft-spoken septuagenarian with ill-fitting suits and no particular charisma. Yet he has become a folk hero to legions of young, tattooed libertarians who advocate legalizing drugs, as well as to increasing numbers of conventional conservatives.

The reason? Paul is capturing the conservative zeitgeist. Known as “Dr. No” in Congress because he votes against everything, including awarding citizens the Presidential Medal of Freedom because he believes it to be an unauthorized use of public funds. Paul has become the vehicle through which devout libertarians believe they can become part of the mainstream.

Conservative activists may despise President Obama and his radical agenda, but they are almost as peeved with Republicans, who have shown over their time in power an inability to cut spending and reduce the size of government. Paul has become the standard-bearer of discontent with the Bush era’s “big-government conservatism.” One of his long-time hobby horses is shutting down the Federal Reserve and returning to the gold standard. To move that idea forward, Paul has introduced legislation that would require the Federal Reserve to be audited; the bill enjoys substantial support from Republicans and Democrats, with a staggering 313 co-sponsors. Passing such a law would have been considered total lunacy two years ago. Today, largely due to the Fed’s culpability in fuelling the 2008 financial crisis, the bill could become law.

Paul also wants to disentangle the U.S. from foreign involvement, including removing all troops from foreign soil and pulling out of the UN and NATO. The divide in the conservative movement over foreign policy is as pronounced as it’s ever been, with some openly questioning not only the 2003 Iraq war but the American presence overseas in general. Paul is attracting these people’s interest.

It is very unlikely Ron Paul will win the 2012 Republican presidential nomination, if he even runs, which is not a given. But Paul and his followers will still have an enduring impact on Republican politics in the coming years. Paul’s Campaign for Liberty, a grassroots organization dedicated to promoting and lobbying for limited government, is gaining influence among younger activists and providing a strong base of support to congressional candidates who support Paul’s brand of libertarian politics. If Paul himself doesn’t run, another candidate in sync with his views could step up to the plate and do very well.

It has become clear over the past year that despite the naysaying, America is still a centre-right country. It has a President trying to impose on it a left-wing agenda. The people are recoiling. One need only look at the recent election results in Massachusetts, New Jersey and Virginia to understand this. Democrats are on the run, and American conservatives can hardly wait until November.”

26
FEB

Economy, politics, usa

African Economy

Continuing yesterday’s post from Reuters

“That is not to say it will be a smooth ride. Eric Chirwa, a 40-year-old Zambian miner, can tell you what a tough year it’s been in Luanshya: its century-old copper mine was mothballed in the depths of the global slump, leaving 1,700 miners out of work and at the mercy of the banks with whom they had racked up huge debts in the boom years. He’s been tracking world copper prices on a daily basis, and has seen them rebound: “In the past, we never used to know the copper price,” he said. “Now I’m checking the price every day in the internet cafe.”

Internet access is one aspect of the technology driving changes in Africa that go far beyond letting a miner anticipate fluctuations in copper prices. In central Africa, Rwanda has invested heavily in broadband and is promoting itself as a business services hub. Far more visible, of course, is the cell phone. One person in three has one: in 2007 Africa had 270 million of them, according to industry association GSMA, up from 50 million in 2003. The uptake shows little sign of slowing as five years of annual growth above 5 percent swell the middle classes.

Mobile money transfer systems such as M-PESA from Kenya’s Safaricom (SCOM.NR) have allowed people with no bank accounts — still the vast majority — to ping money to each other for a fraction of the cost of transfers or a bus ride to deliver cash. The system has evolved to incorporate an array of payments from taxi fares to food, drinks and movie tickets, making it possible to spend a whole day in Nairobi without carrying cash. Cities, towns and villages are cluttered with billboards advertising the latest cell phone service or gimmick.

The macroeconomic effect is huge.

A World Bank study released in November suggested half the 5 percent growth Africa enjoyed from 2003-08 was due to improvements in infrastructure, mainly telecommunications. “Cell phones have already transformed many economies in Africa,” said Arthur Goldstuck, head of Johannesburg-based technology research firm World Wide Worx. “But the cell phone will become far more important than it is now.”

Researchers of M-PESA’s impact on Kenya say it is boosting rural incomes by as much as 30 percent, allowing small farmers to diversify out of subsistence agriculture. As browser-enabled “smart” cell phones go mainstream in the next 5-10 years, Africans will gain access to the internet-based services and information that have driven huge productivity gains in the rich world.”

Comment
In Zambia pity then that internet services are still so unreliable and expensive, and that the cellphone network also grinds to a halt so frequently. We’re told that more Africans have access to a cellphone than to running water. How’s that for ‘development’?

The Picture
A Kenyan enjoying Victoria Falls on the Zambian side!

28
JAN

Africa, Economy, infrastructure, internet, Zambia

Hope Yet?

I found this interesting from Reuters

“With the stoicism demanded of all who hope to make money in Africa, Beauty Chama sits in her empty hair salon in a leafy town in northern Zambia’s Copper Belt and looks forward to better times. “We are waiting patiently until the miners start making their money,” she said, fingering the heavy gold chain around her neck that testifies to past fat years. “Then we shall start making our money. It’s only a matter of time.”

Africa for the investor is like that: a story of boom and bust, where famine and disease are punctuated by coups and civil wars. For many, its tales of war and diamonds, tribal rivalries, plundered treasuries and secret Swiss bank accounts make it too risky. Somalia is fast approaching its third decade without a functional central government, and the prolonged ill-health of Nigerian President Umaru Yar’Adua has created a troubling power vacuum in Africa’s most alluring frontier market.

But after the implosion of such supposedly sophisticated or promising institutions as Lehman Brothers or Dubai World, the confidence of the Zambian hairdresser is finding echoes as far away as London, New York and Beijing. The International Monetary Fund believes growth in sub-Saharan Africa will be 1 percentage point above the global average, and puts eight African countries in its top 20 fastest-expanding economies in 2010. Oil-rich Angola and Congo Republic will lead the charge with growth rates of more than 9 and 12 percent respectively, both beating China, according to the IMF’s most recent projections.

“Africa,” said Tara O’Connor of Africa Risk Consulting, “is the continent of the long game. It’s not perfect, but the overarching trend is one toward entrenching political stability, which then allows businesses to operate much more consistently.” For some African countries, particularly those helped by Chinese investment and its thirst for energy and minerals, another boom may be approaching.

Investors with cheap cash needing to spice up returns in more obscure parts of the globe are asking whether Africa can shift from final investment frontier into the emerging market mainstream. Reflecting this interest, Africa gets top billing at the annual meeting of the rich and powerful in Davos this week. “Not investing in Africa is like missing out on Japan and Germany in the 1950s, Southeast Asia in the 1980s and emerging markets in the 1990s,” said Francis Beddington, head of research at emerging market investment house Insparo Capital.

He believes that in the long term, Africa has the potential to be home to a sizeable chunk of the factories and warehouses of tomorrow’s world. The Africa of old — aid-dependent, and with large tracts of the economy controlled by corrupt and capricious governments — has not disappeared. But for all the previous false dawns, there is a growing belief that the continent — home to 53 countries, a rapidly urbanizing young population of a billion people and as much as a third of the world’s natural resources — is changing.”

Hope yet?

27
JAN

Africa, Economy, Zambia

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