Sunday, February 20, 2011
Saturday, February 19, 2011
It's very important that we read, and understand
How Far Will the Youth Revolution Spread?
by Justice Litle, Editorial Director, Taipan Publishing Group
Ike's Domino Theory is in full swing now. From a Tunisian handcart vendor to Tahrir Square in Egypt, and now to Iran, Libya, Yemen and Bahrain, Middle East revolution is spreading.
It seemed to begin with an out-of-the-blue event... a single domino unexpectedly falling. On Dec. 17, a broken and frustrated youth named Mohamed Bouazizi set himself on fire in the Tunisian town of Sidi Bouzid. All of Tunisia then rallied in anger.
There is natural comparison here to Gavrilo Princip, the Yugoslav nationalist who assassinated an archduke and touched off World War I. That opportunity came about because of a driver mix-up.
If Franz Ferdinand and his wife had not made a fateful wrong turn that day, would Europe have still marched to war? If Mohamed Bouazizi had not despaired of all hope for the future, would multiple "strong men" still have been toppled?
The picture cannot be confined to a one-off event. In order for revolution or war to occur, surrounding conditions have to be just so. One could compare a dangerous situation to an extremely dry forest, crackling with dead underbrush after a long period of drought. With conditions like that, a single cigarette butt or errant campfire spark can fuel an inferno.
In the Middle East, the dry tinder of resentment had been building up for a very long time. Now it is fed by the flames of angry youth. In many Middle Eastern countries youth under 30, and in some cases under 20, make up the majority of the population. Many of these are restless, angry and unemployed.
And then there is the "social" aspect to the revolution. The gatherings in Tunisia and Egypt were more professionally managed than ever before. Tools like Facebook and Twitter were used to organize gatherings and share valuable hints and tips, such as the best way to counter tear gas. (Put vinegar or onion under your scarf.)
When President Mubarak stalled before fleeing the country, many believed the main goal was buying time to move assets to safety. Western intelligence services now seem to confirm this. Estimates of the Mubarak fortune, accumulated over decades of iron-fisted rule, range from $3 billion to a whopping $40 billion.
With Mubarak out there is talk of freezing these assets, particularly in Swiss and U.K. accounts, as the rightful property of Egypt. There is also talk of trying Mubarak for corruption, with some Egyptians arguing he should be executed a la Saddam Hussein. No wonder the man looked pale in his televised speech. He was thinking about his neck... and his gold.
For the most part Westerners cheer as they take in this grand sweep of history in the making. As old hands at democracy, we in the West are proud to see a new taste for freedom sweep away old regimes.
But there are grave parallels here too -- comparisons that should deeply concern the West. After all, it is not just the Middle East that is populated by angry, disaffected youth. Nor is it just the Middle East dealing with potential food shortages and a mounting cost of living for those who can least afford it. As Businessweek reports,
... [R]ich democracies ignore youth unemployment at their peril. In the 34 industrialized nations in the Organization for Economic Cooperation and Development, at least 16.7 million young people are not employed, in school, or in training, and about 10 million of those aren't even looking, the OECD said in December 2010. In the most-developed nations, the job market has split between high-paying jobs that many workers aren't qualified for and low-paying jobs that they can't live on, says Harry J. Holzer, a public policy professor at Georgetown University and co-author of a new book, Where Are All the Good Jobs Going? Many of the jobs that once paid good wages to high school graduates have been automated or outsourced.
... Although the recession ended in the summer of 2009, youth unemployment remains near its cyclical peak. In the U.S., 18 percent of 16- to 24-year-olds were unemployed in December 2010, according to the Labor Dept., a year and a half after the recession technically ended. For blacks of the same age it was 27 percent. What keeps the numbers from being even higher is that many teens have simply given up. Some are sitting on couches. Others are in school, which can be a dead end itself. The percentage of American 16- to 19-year-olds who are employed has fallen to below 26 percent, a record low.
Meanwhile David Goldman, who writes as "Spengler" for the Asia Times, openly wonders what will happen to Egypt (and other Middle East countries) if China's wheat crop fails:
Not until June will we know the extent of the damage to China's winter wheat crop, virtually all its production. Extremely low rainfall this winter parched more than 5 million hectares of 14 million hectares planted, and the next few weeks' weather will determine if the world faces a real shortage of the staff of life.
Hoarding on the part of North African countries, starting with Algeria, has already pushed up the wheat price in the Mediterranean to a 20% premium over the price shown on the Chicago futures market. The immediate risk is that pre-emptive purchases of wheat will price the grain out of the reach of poor Egyptians, not to mention Pakistanis and Bengalis.
And if reserve-rich China, usually self-sufficient, goes into the world market to buy millions of tons of wheat, the price of wheat can rise to an arbitrarily high level.
The dictators are going, but for many of these countries the food may be going too -- priced out of the average consumer's hands. (Via Spengler, roughly 40 million Egyptians live on less than US$2 per day.) In Egypt and elsewhere, we can expect more anger ahead.
In the West, stomachs are not so empty. But at the same time, Westerners have a much lower threshold for acceptable hardships -- and young Western individuals, often with education but no solid employment prospects, can see the writing on the wall.
As it becomes more apparent that reflation-based monetary policies are hostile to those with limited discretionary income and those without jobs, the potential for youth unrest in the U.S. and Europe, not just the Middle East, will grow.
by Justice Litle, Editorial Director, Taipan Publishing Group
Ike's Domino Theory is in full swing now. From a Tunisian handcart vendor to Tahrir Square in Egypt, and now to Iran, Libya, Yemen and Bahrain, Middle East revolution is spreading.
It seemed to begin with an out-of-the-blue event... a single domino unexpectedly falling. On Dec. 17, a broken and frustrated youth named Mohamed Bouazizi set himself on fire in the Tunisian town of Sidi Bouzid. All of Tunisia then rallied in anger.
There is natural comparison here to Gavrilo Princip, the Yugoslav nationalist who assassinated an archduke and touched off World War I. That opportunity came about because of a driver mix-up.
If Franz Ferdinand and his wife had not made a fateful wrong turn that day, would Europe have still marched to war? If Mohamed Bouazizi had not despaired of all hope for the future, would multiple "strong men" still have been toppled?
The picture cannot be confined to a one-off event. In order for revolution or war to occur, surrounding conditions have to be just so. One could compare a dangerous situation to an extremely dry forest, crackling with dead underbrush after a long period of drought. With conditions like that, a single cigarette butt or errant campfire spark can fuel an inferno.
In the Middle East, the dry tinder of resentment had been building up for a very long time. Now it is fed by the flames of angry youth. In many Middle Eastern countries youth under 30, and in some cases under 20, make up the majority of the population. Many of these are restless, angry and unemployed.
And then there is the "social" aspect to the revolution. The gatherings in Tunisia and Egypt were more professionally managed than ever before. Tools like Facebook and Twitter were used to organize gatherings and share valuable hints and tips, such as the best way to counter tear gas. (Put vinegar or onion under your scarf.)
When President Mubarak stalled before fleeing the country, many believed the main goal was buying time to move assets to safety. Western intelligence services now seem to confirm this. Estimates of the Mubarak fortune, accumulated over decades of iron-fisted rule, range from $3 billion to a whopping $40 billion.
With Mubarak out there is talk of freezing these assets, particularly in Swiss and U.K. accounts, as the rightful property of Egypt. There is also talk of trying Mubarak for corruption, with some Egyptians arguing he should be executed a la Saddam Hussein. No wonder the man looked pale in his televised speech. He was thinking about his neck... and his gold.
For the most part Westerners cheer as they take in this grand sweep of history in the making. As old hands at democracy, we in the West are proud to see a new taste for freedom sweep away old regimes.
But there are grave parallels here too -- comparisons that should deeply concern the West. After all, it is not just the Middle East that is populated by angry, disaffected youth. Nor is it just the Middle East dealing with potential food shortages and a mounting cost of living for those who can least afford it. As Businessweek reports,
... [R]ich democracies ignore youth unemployment at their peril. In the 34 industrialized nations in the Organization for Economic Cooperation and Development, at least 16.7 million young people are not employed, in school, or in training, and about 10 million of those aren't even looking, the OECD said in December 2010. In the most-developed nations, the job market has split between high-paying jobs that many workers aren't qualified for and low-paying jobs that they can't live on, says Harry J. Holzer, a public policy professor at Georgetown University and co-author of a new book, Where Are All the Good Jobs Going? Many of the jobs that once paid good wages to high school graduates have been automated or outsourced.
... Although the recession ended in the summer of 2009, youth unemployment remains near its cyclical peak. In the U.S., 18 percent of 16- to 24-year-olds were unemployed in December 2010, according to the Labor Dept., a year and a half after the recession technically ended. For blacks of the same age it was 27 percent. What keeps the numbers from being even higher is that many teens have simply given up. Some are sitting on couches. Others are in school, which can be a dead end itself. The percentage of American 16- to 19-year-olds who are employed has fallen to below 26 percent, a record low.
Meanwhile David Goldman, who writes as "Spengler" for the Asia Times, openly wonders what will happen to Egypt (and other Middle East countries) if China's wheat crop fails:
Not until June will we know the extent of the damage to China's winter wheat crop, virtually all its production. Extremely low rainfall this winter parched more than 5 million hectares of 14 million hectares planted, and the next few weeks' weather will determine if the world faces a real shortage of the staff of life.
Hoarding on the part of North African countries, starting with Algeria, has already pushed up the wheat price in the Mediterranean to a 20% premium over the price shown on the Chicago futures market. The immediate risk is that pre-emptive purchases of wheat will price the grain out of the reach of poor Egyptians, not to mention Pakistanis and Bengalis.
And if reserve-rich China, usually self-sufficient, goes into the world market to buy millions of tons of wheat, the price of wheat can rise to an arbitrarily high level.
The dictators are going, but for many of these countries the food may be going too -- priced out of the average consumer's hands. (Via Spengler, roughly 40 million Egyptians live on less than US$2 per day.) In Egypt and elsewhere, we can expect more anger ahead.
In the West, stomachs are not so empty. But at the same time, Westerners have a much lower threshold for acceptable hardships -- and young Western individuals, often with education but no solid employment prospects, can see the writing on the wall.
As it becomes more apparent that reflation-based monetary policies are hostile to those with limited discretionary income and those without jobs, the potential for youth unrest in the U.S. and Europe, not just the Middle East, will grow.
Saturday, February 12, 2011
US NEWS (when we'll know??)
How Hosni Mubarak Got So Rich
..Rick Newman, On Friday February 11, 2011,
There are no Mubaraks on the Forbes list of the world's richest people, but there sure ought to be.
The mounting pressure from 18 days of historic protests finally drove Egyptian President Hosni Mubarak from office, after three decades as his nation's iron-fisted ruler. But over that time, Mubarak amassed a fortune that should finance a pretty comfortable retirement. The British Guardian newspaper cites Middle Eastern sources placing the wealth of Mubarak and his family at somewhere between $40 billion and $70 billion. That's a pretty good pension for government work. The world's richest man--Mexican business magnate Carlos Slim--is worth about $54 billion, by comparison. Bill Gates is close behind, with a net worth of about $53 billion.
Mubarak, of course, was a military man, not a businessman. But running a country with a suspended constitution for 30 years generates certain perks, and Mubarak was in a position to take a slice of virtually every significant business deal in the country, from development projects throughout the Nile basin to transit projects on the Suez Canal, which is a conduit for about 4 percent of the world's oil shipments. "There was no accountability, no need for transparency," says Prof. Amaney Jamal of Princeton University. "He was able to reach into the economic sphere and benefit from monopolies, bribery fees, red-tape fees, and nepotism. It was guaranteed profit."
Had the typical Egyptian enjoyed a morsel of that, Mubarak might still be in power. But Egypt, despite a cadre of well-educated young people, has struggled as an economic backwater. The nation's GDP per capita is just $6,200, according to the CIA--one-seventh what it is in the United States. That output ranks 136th in the world, even though Egypt ranks 16th in population. Mubarak had been working on a set of economic reforms, but they stalled during the global recession. The chronic lack of jobs and upward mobility was perhaps the biggest factor driving millions of enraged Egyptian youths into the streets, demanding change.
Estimates of Mubarak's wealth will probably be hard to verify, if not impossible (one reason dictators tend not to make it onto Forbes's annual list). His money is certainly not sitting in an Egyptian vault, waiting to be counted. And his delayed exit may have allowed Mubarak time to move money around and hide significant parts of his fortune. The Swiss government has said it is temporarily freezing any assets in Swiss banks that could be linked to Mubarak, an uncharacteristically aggressive move for the secretive banking nation. But that doesn't mean the money will ever be returned to the Egyptian people, and it may even find its way to Mubarak eventually. Other Mubarak funds are reportedly sitting in British banks, and Mubarak was no doubt wily enough to squire away some cash in unlikely places. Plus, an eventual exile deal could allow Mubarak to retain some of his wealth, no questions asked, as long as he and his family leave Egypt and make no further bids for power.
Epic skimming is a common privilege of Middle Eastern despots, and Mubarak and his two sons, Gamal and Alaa, were a bit less conspicuous than some of the Saudi princes and other Middle Eastern royals seen partying from time to time on the French Riviera or other hotspots. The family does reportedly own posh estates in London, New York, and Beverly Hills, plus a number of properties around the Egyptian resort town of Sharm El Sheikh, where Mubarak reportedly went after resigning the presidency.
Mubarak also spread the wealth far and wide in Egyptian power circles--another Middle Eastern tradition--one reason he incurred the kind of loyalty that allowed him to rule for a remarkable three decades. Top Army officials were almost certainly on his payroll, which might help explain why the Army eased him out in the end--allowing a kind of in-country exile--instead of hounding him out of Egypt or imprisoning him once it was clear the tide had turned against him for good.
That money trail, in fact, will help determine whether Egypt becomes a more prosperous, democratic country, or continues to muddle along as an economic basket case. Even though he's out of power, Mubarak may still be able to influence the Army officials running the country, through the financial connections that made them all wealthy. And if not Mubarak, the next leader may be poised to start lining his pockets the same way Mubarak did. For Egypt to have a more effective, transparent economy, all of that will have to be cleaned up. There are probably a lot of people in Cairo who have been checking their bank balances lately
..Rick Newman, On Friday February 11, 2011,
There are no Mubaraks on the Forbes list of the world's richest people, but there sure ought to be.
The mounting pressure from 18 days of historic protests finally drove Egyptian President Hosni Mubarak from office, after three decades as his nation's iron-fisted ruler. But over that time, Mubarak amassed a fortune that should finance a pretty comfortable retirement. The British Guardian newspaper cites Middle Eastern sources placing the wealth of Mubarak and his family at somewhere between $40 billion and $70 billion. That's a pretty good pension for government work. The world's richest man--Mexican business magnate Carlos Slim--is worth about $54 billion, by comparison. Bill Gates is close behind, with a net worth of about $53 billion.
Mubarak, of course, was a military man, not a businessman. But running a country with a suspended constitution for 30 years generates certain perks, and Mubarak was in a position to take a slice of virtually every significant business deal in the country, from development projects throughout the Nile basin to transit projects on the Suez Canal, which is a conduit for about 4 percent of the world's oil shipments. "There was no accountability, no need for transparency," says Prof. Amaney Jamal of Princeton University. "He was able to reach into the economic sphere and benefit from monopolies, bribery fees, red-tape fees, and nepotism. It was guaranteed profit."
Had the typical Egyptian enjoyed a morsel of that, Mubarak might still be in power. But Egypt, despite a cadre of well-educated young people, has struggled as an economic backwater. The nation's GDP per capita is just $6,200, according to the CIA--one-seventh what it is in the United States. That output ranks 136th in the world, even though Egypt ranks 16th in population. Mubarak had been working on a set of economic reforms, but they stalled during the global recession. The chronic lack of jobs and upward mobility was perhaps the biggest factor driving millions of enraged Egyptian youths into the streets, demanding change.
Estimates of Mubarak's wealth will probably be hard to verify, if not impossible (one reason dictators tend not to make it onto Forbes's annual list). His money is certainly not sitting in an Egyptian vault, waiting to be counted. And his delayed exit may have allowed Mubarak time to move money around and hide significant parts of his fortune. The Swiss government has said it is temporarily freezing any assets in Swiss banks that could be linked to Mubarak, an uncharacteristically aggressive move for the secretive banking nation. But that doesn't mean the money will ever be returned to the Egyptian people, and it may even find its way to Mubarak eventually. Other Mubarak funds are reportedly sitting in British banks, and Mubarak was no doubt wily enough to squire away some cash in unlikely places. Plus, an eventual exile deal could allow Mubarak to retain some of his wealth, no questions asked, as long as he and his family leave Egypt and make no further bids for power.
Epic skimming is a common privilege of Middle Eastern despots, and Mubarak and his two sons, Gamal and Alaa, were a bit less conspicuous than some of the Saudi princes and other Middle Eastern royals seen partying from time to time on the French Riviera or other hotspots. The family does reportedly own posh estates in London, New York, and Beverly Hills, plus a number of properties around the Egyptian resort town of Sharm El Sheikh, where Mubarak reportedly went after resigning the presidency.
Mubarak also spread the wealth far and wide in Egyptian power circles--another Middle Eastern tradition--one reason he incurred the kind of loyalty that allowed him to rule for a remarkable three decades. Top Army officials were almost certainly on his payroll, which might help explain why the Army eased him out in the end--allowing a kind of in-country exile--instead of hounding him out of Egypt or imprisoning him once it was clear the tide had turned against him for good.
That money trail, in fact, will help determine whether Egypt becomes a more prosperous, democratic country, or continues to muddle along as an economic basket case. Even though he's out of power, Mubarak may still be able to influence the Army officials running the country, through the financial connections that made them all wealthy. And if not Mubarak, the next leader may be poised to start lining his pockets the same way Mubarak did. For Egypt to have a more effective, transparent economy, all of that will have to be cleaned up. There are probably a lot of people in Cairo who have been checking their bank balances lately
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