Nepal Maoists’ civilian militia wages war against the independent media

They did it again! In fact, they did, have been doing, and will do it repeatedly till they shed off militant mentality!!

The Maoists’ war against the media is reaching its apogee. The Maoists, who are currently running the government, affiliated trade union stormed the building of Himal Media, which publishes the popular Nepali Times and Himal Khabarpatrika, and beat up the journalists and vandalized their office. The media house has been particularly critical of the Maoists’ excesses, especially its trade union and militant youth organization named as YCL. These two extralegal organizations lack discipline, have been terrorizing industries and business executives at a time when the whole industrial base in grounded due to domestic inefficiencies and global recession, and are pretty much above the law.

Several journalists were injured when the police baton charged a peaceful rally against the excesses of the Maoists’ affiliates. The UN, human rights organizations, civil society, and other media houses have condemned the supererogatory acts of the Maoists.

It is ironical that the Prime Minister Prachanda, the chief of Maoists party, who parrots media freedom and rule of law, has declined to admit that his party’s militant miscreants were responsible for the heinous act against the media. This is surprising because almost all the reports that came out yesterday clearly mentioned two names closely associated with the ruling Maoists-affiliated unions and personnel. The government’s spokesperson and communication minister says he is oblivious to the marauding act of its cadres (all the major newspapers published news condemning the act…does the communication minister follow newspapers?). What a HYPOCRISY?

Get it straight: The Finance Minister is parroting high revenue and growth for the country. However, he fails to realize that foreign investors are scared to invest in Nepal due to YCL’s and the Maoists Unions’, who have demanded higher minimum wage and better working conditions that is beyond affordability given razor thin profit margin of the industries. Many garment firms have already disappeared and the few remaining are on the verge of closing down due to labor problems and lack of price competitiveness. Imposing a higher minimum wage means increase in cost of production, which will further erode price competitiveness and could potentially lead to wiping off of the whole garment and textile industry.

Furthermore, if exports and imports decline, then the expected revenue collection would be a day-dream. One can imagine how much loss the country will have to endure do to the crisis. The ADB has estimated that one day of industry closure (due to bandhs and industry closures) costs at least $100,000 to the state coffers. Add the 10-plus hours of load-shedding every day and its impact on the manufacturing sector, you will discover that the total loss would be much more than the one hundred thousand dollars. My preliminary estimation points this figure to over $300,000 every day.

I can go on and on about the effect of the YCL’s stupidity and belligerent trade unions on the national economy but due to interest of time, I will save further discussion for later posts.

The bottom-line: the imbecility and lack of discipline of the YCL, and moronic attitudes of the trade unions, especially their unjust demands given the fragility of our industries are costing the nation dearly. The revolution in the name of worker’s welfare is nothing more than a politically motivated, opponent-smearing, and populist campaign implicitly sanctioned by the Maoists party itself. No where in the world has a nation progressed by waging a war against the independent media and the private sector. This is a perfect recipe for economic and political downfall. Even the elite planning commission of the nation is politicized. The Maoists government is making probably the biggest policy blunder in the history of the country by politicizing appointment in the NPC, which is supposed to be filled with experts conversant with the economic condition of the country. No words to describe their double standard behavior!

STOP taking advantage of the working class for your own benefits. STOP the excesses. STOP the madness. DISBAND the private militia. CRIMINALIZE the politically indoctrinated trade unions whose demands go well beyond the accepted norms. CEASE mobilization of belligerent youths to promote Maoists interests. STOP messing up with the independent media and the private sector.

Growth accelerations and decelerations in Western Africa

Here is a new working paper from the IMF:

The growth literature has had problems explaining the "sub-Saharan African growth dummy" in cross-country regressions. Instead of taking the usual approach of focusing on long-run growth and assuming that sub-Saharan countries have homogenous parameters in growth regressions, we concentrate our analysis on episodes of growth turnarounds (identifying growth accelerations, decelerations, and collapses) and use only West African countries in our sample. The driving force of growth turnarounds are estimated by analyzing external shocks, political and institutional changes, economic reforms, and indicators particularly relevant to the region. Using probits for a group of 22 Western African economies for the period 1960-2006, we find that growth accelerations are most clearly associated with external shocks, economic liberalization, political stability, and closeness to the coast; decelerations occurred during short-lived regimes and when corruption indices weakened; and collapses are linked to external shocks, falling domestic credit, and proximity to the coast. We then identify policy implications.

Nice discussion about the (Barro model)  cross-country panel growth regressions, growth accelerations, growth decelerations, and growth collapses in the context of a region where all these three episodes of growth are visibly seen over the past several decades.

Conditional Cash Transfer in the Philippines

 

More about the CCTs here.

Jeff Sachs on population growth and Malthus

 

Sachs argues that the Malthusian prediction (the rate of population increase would outstrip the rate of increase in output) has not been true so far because of tremendous increases in output per capita (due to technology breakthroughs).

However, he warns:

… it could be argued we have not really found a way to solve the Malthusian problem. We have thus far only managed to feed the globe’s growing population through mining of raw materials and sources of energy. We all know this cannot continue forever – some sources will run out and others will damage the earth beyond repair.

And, more more need of Keynesian policies in Africa:

Keynesian spending plans could be used to provide a massive investment of infrastructure to Africa that would set the continent on its way to development.

Greg Clark is a bit more assertive about the Malthusian prediction in his book.

Three decades of development economics and WDRs

New publication from the World Bank: Development Economics: Through the decades. This book examines how World Development Report (WDR) in the past three decades has influenced development economics. Cannot find the online downloadable version.

Here is an interesting figure/summary of country’s transition to a high-growth path.

Here is Joe Stiglitz about the WDR:

Throughout the history, the WDR has played an active role in shaping thought and policy, both within the World Bank and in the wider development community.It was sometimes overly ambitious, hoping to be able to summarize in a few clear messages the received wisdom on a key aspect of development. The world is too often too complicated for that to be done. When the WDR did so, it risked reemphasizing the obvious or what was well accepted, or conducting the discussion as such a high level of abstraction as to be of limited use. Occasionally, it became the publication vehicle for official doctrines- a summary of beliefs of the moment.Even here, it served a hopeful role, at least for students of evolution of economic thought, for they could see how thinking about development evolved over the years.

But to me, at least, its greatest contributions occurred when it helped to frame controversial issues, when it pushed the boundaries of thinking, when it opened up new frontiers- thinking about issues that had previously received too little attention- when it sparked a global debate. In those cases, the WDR’s effect was not only immediate, but also likely to be long lasting.

Links of Interest (12/19/2008)

The impact of global financial crisis on Sub-Saharan Africa

The rebirth of industrial policy

Keynesianism and Employment-linked tax incentives

Three decades of growth and economic perils on China’s path

VAT and enforcement with an informal sector

Greenspan thinks banks need more capital

Nepal’s finance minister warns to nationalize property if income tax is not paid by mid-Feb

Effect of energy crisis in Nepal (already affecting mobile operation and the embattled garment industry) More here, here, and here

UNWELCOME REPOSE: Workers at Heritage Fashion garment factory in Balkumari halt work after load-shedding, Thursday. Nepal Electricity Authority has increased power cut from forty-five hours to sixty-three hours a week. Power outage has hit industries and business installations severely, leading some to abrupt closure. (Source: The Kathmandu Post, 12/19/2008)

New papers about the global financial crisis

Stages of the 2007/2008 Global Financial Crisis: Is There a Wandering Asset-Price Bubble? by Lucjan T. Orlowski

This study identifies five distinctive stages of the current global financial crisis: the meltdown of the subprime mortgage market; spillovers into broader credit market; the liquidity crisis epitomized by the fallout of Northern Rock, Bear Stearns and Lehman Brothers with counterparty risk effects on other financial institutions; the commodity price bubble, and the ultimate demise of investment banking in the U.S. The study argues that the severity of the crisis is influenced strongly by changeable allocations of global savings coupled with excessive credit creation, which lead to over-pricing of varied types of assets. The study calls such process a “wandering asset-price bubble”. Unstable allocations elevate market, credit and liquidity risks. Monetary policy responses aimed at stabilizing financial markets are proposed.

Monetary Ease – A Factor behind Financial Crises? Some Evidence from OECD Countries by Rudiger Ahrend

This paper addresses the question of whether and how easy monetary policy may lead to excesses in financial and real asset markets and ultimately result in financial dislocation. It presents evidence suggesting that periods when short-term interest rates have been persistently and significantly below what Taylor rules would prescribe are correlated with increases in asset prices, especially as regards housing, though no systematic effects are identified on equity markets. Significant asset price increases, however, can also occur when interest rates are in line with Taylor rules, associated with periods of financial deregulation and/or innovation. The paper argues that accommodating monetary policy over the period 2002-2005, in combination with rapid financial market innovation, would seem in retrospect to have been among the factors behind the run-up in asset prices and financial imbalances -- the (partial) unwinding of which helped trigger the 2007/08 financial market turmoil.