Weekend Business Report

Since there's no book review posted on Pop and Politics.com this week, I thought I might try something new for the weekend.

Here are a few articles I found interesting concerning recent international trade deals and economic news. From what I can tell, barring an unforseen nuclear calamity, the global community has far too much to risk by engaging in a knock down, drag out, nuclear war; when instead nations can topple one another using trade and development. Of course that's an argument based in rationalism, and we all know what we're dealing out there and in Washington. But we're not all dead yet so in the meantime...

Egypt, Russia to up trade exchange

"CAIRO, September 16 -- Egypt and Russia will soon sign an agreement on easing procedures for businessmen entry visas as part of efforts to boost trade exchange and joint investment.

Russia's new ambassador in Cairo said that the new plans were the outcome of exchanged visits by Russian President Vladimir Putin and his Egyptian counterpart Hosni Mubarak.

The ambassador was speaking in a meeting with Egyptian Businessmen Association under Gamal Al Nazer.

The ambassador said Egypt-Russia trade exchange volume in 2004 hit $ 400 million, double the year before.

Over the first six months of this year, trade exchange between Cairo and Moscow hit $ 410 million, a further increase, he said.

Egyptian exports to Russia up annually by 40%, he added. - arabicnews"

What's fascinating about this to me is how it seems like both China and Russia are in a scramble to garner favor with America's traditional allies. The US has provided Egypt with $1.3 billion a year in military aid since 1979, and an average of $815 million a year in economic assistance. All told, Egypt has received over $50 billion in US largesse since 1975, as of at least 2004. Certainly with that much aid Egypt is somewhat obliged to work with the US in terms of strategic goals for the Middle East. However, if they were build a strong relationship with the Bear, which results in a large economic windfall for Cairo, what would then keep them in America's big tent? It is certain that they wouldn't be an enemy of the US per se, my point is there's nothing keeping them completely loyal (and I use that term loosely) either.

LIBERIA: Anti-graft plan endorsed to cheers from world donors

MONROVIA, 15 September (IRIN) - Liberia's transitional government has endorsed a far-reaching and controversial plan to combat graft that includes placing outsiders in key administrative positions over the next three years.

This week's signing of the so-called Governance and Economic Management Assistance Programme (GEMAP), despite resistance from some Liberian leaders, was widely welcomed at a press conference held by the country's international partners late on Wednesday.

"The US welcomes the signing of the GEMAP and we intend to ensure that the revenue of Liberia is captured for the people of Liberia and to ensure the funds get expended correctly," said US Ambassador to Liberia, Donald Booth.

Under the approved GEMAP document, special positions for foreign financial experts will be created in the Central Bank and five main revenue generating agencies: the National Port Authority, the Forestry Agency, the Bureau of Maritime Affairs, Robertsfield International Airport and the Petroleum Refining Corporation.

Representatives of the World Bank and European Union also welcomed the adoption of GEMAP but were quick to make assurances that the programme would not impinge the national sovereignty of Liberia." Read More

I promised myself I wouldn't cry...But seriously folks, graft has been cited as the number one reason why many Africans still remain in extreme poverty. That may or may not be true but at least if African nations, such as Liberia, do their part in stemming off graft, Western nations, such as the US, can no longer use that as an excuse to not give what most developmental economists, like Jeffrey D. Sachs, say is the right amount of developmental aid (0.7 per cent of GNP). I'll be the first to admit that Africa, in some cases, has been it's own worst enemy since independence so if this plan to eliminate or reduce graft works, I'll also be the first to cheer loudly in the streets (or at least on my blog).

Malaysia moves to
boost capital market

"MALAYSIA moved to make its capital market more attractive by allowing local investors to buy listed securities abroad and it is also letting foreign companies sell their shares in the country.

This comes as the Government strives to draw more foreign investors and follows the loosening of foreign exchange rules by Bank Negara Malaysia in April.

JMF Fund Management Sdn Bhd managing director Mohamed Azahari Kamil lauds SC’s decision as the measures would create more liquidity in the market.

“This will put Malaysia back in the international market,” he said."

Read More

During the Asian financial crisis of 1997-1998, one of the countries at least moderately affected was Malaysia. In 1997 the Kuala Lumpur Stock Exchange plunged to 856 points, its lowest point since 1993. On October 2, the ringgit dropped again and Prime Minister Mahathir bin Mohamad immediately introduced capital controls. However, the currency collapsed again in late 1997 when Mahathir bin Mohamad announced that the government would spend 10 billion ringgit in a road, rail and pipeline project. In 1998 the country's gross domestic product plunged 6.2 percent, which brought the country in the vicinity of financial ruin. When it was over, Malaysia was one of the fastest countries to recover and this article seems to indicate that one of the Asian Tigers has come roaring back to prominence. You can expect a lot of US dollars to flow out of our economy and into theirs in the next few years.

World Bank: Serbia Making Great Progress

"BELGRADE, Serbia-Montenegro (AP) - Serbia-Montenegro has made great progress in implementing business-friendly policies, but there is still a long way to go in economic reforms, the World Bank said Friday.

"The country came to reforms late compared to neighbors in the region, and needs to catch up," said Carolyn Yungr, World Bank envoy to the country.

This week's report, entitled "Doing Business in 2006: Creating Jobs" and co-sponsored by the World Bank and the International Finance Corp., the bank's private-sector arm, found Serbia-Montenegro among the 12 most-reformed places to operate, out of 155 countries reviewed last year.

Georgia, Slovakia, Germany, Finland, Latvia, the Netherlands and Romania were also among leading reformers."

Read More

Given what's happened to this place since the break-up of Yugoslavia and the subsequent Kosovo War, it's great to see even this much good news. I'm sure there's still work to be done but this report seems to indicate that in the very near future, Serbia will be near the top of the list of countries with, "burgeoning economies." A European Tiger, if you will.

and finally...

Oil deposit discovered in Brazil


"RIO DE JANEIRO, Sept. 15 (Xinhuanet) -- Canadian firm EnCana discovered an oil deposit off-shore in Campos field, in the northern littoral of Brazil's Rio de Janeiro state, said the director of the company's Brazilian branch Julio Moreira, as cited by the press Thursday.

The company reported that the well, dubbed Chinook, has a deposit of 100 million to 200 million barrels of heavy oil, said Moreira.

In a test carried out last week, extraction from the well reached 1,800 barrels. It can reach a daily extraction capacity of 5,000 barrels, said the executive.

"We are happy because heavy-petroleum extraction is our specialty. Perhaps by the end of the year, we'll declare the commercial viability of the discovery," said Moreira.

Chinook is the third well discovered by EnCana in lot BMC-7 of Campos field. EnCana owns 50 percent of the lot and Kerr McGee, a United States oil firm, owns the other half.

EnCana has yet to decide whether to export its production or sell it in Brazil, where the market for heavy oil is limited as the majority of refining plants in the country only process light-crude.

In addition to the BMC-7 deposit, EnCana has shares in eight other lots, seven of which are operated by Brazil's state-run oil firm PETROBRAS."

According to some analysts, it looks like we have oil for about 10,000 days, or about 27 years. Assuming that consumption stays at its current constant rate. If consumption increases an average 5% a year, then we have oil for about 15 years. But the US Geological Survey estimates the amount of oil that is still to be found at about 3 trillions, three times the oil reserves known today (it is not clear if "all" that oil can actually be pumped to the surface and therefore used). Now there's a bunch of companies scattered throughout the world prospecting for oil, including the one cited above. I've sad in many posts that I believe we need to ween ourselves off of oil and seek out renewable, cleaner sources of energy but I'm not a hysteric who believes the world is running out of oil tomorrow either. Every time I hear that the global well is running dry, I see another article stating that somebody found more oil. Russia is set to outproduce Saudi Arabia in the next decade or so and they aren't close to running out of oil either.

That's your PC trip around the economies of the world, have a fine weekend : )