Tinderbox

Spark?

A missile fired from a hand-held launcher damaged a mosque in the southern Bosnian town of Mostar on Tuesday just before worshippers were due to gather for a pre-dawn Ramadan meal, officials said.

The mosque is in the Jasenica area, a Croat-majority suburb of the town which is split evenly between Bosnian Muslims and Bosnian Croats. It was built last year on the ruins of an Islamic building destroyed in the fighting in 1993-1994 between the two groups.

The missile was fired from a “Zolja” hand-held grenade launcher at around 4:30 a.m. (0230 GMT), local police said. Nobody was hurt.

Spain and Senegal Enter Migration Deal

Migration from poorer areas to richer areas can either be managed or un-managed. After years of the latter, it looks like Spain and Senegal are going to try the former.

The deal would discourage illegal migration and give Spain the opportunity to recruit a significant number of workers, Mr Moratinos said.

More than half of the 26,000 migrants who have reached the Spanish Canary Islands this year come from Senegal.

[Spanish Foreign Minister] Moratinos also signed a co-operation deal that will give Senegal up to 15m euros (£10.3m) of Spanish aid annually over five years.

Municipal and provincial elections in Belgium

A very quick and summary update on the municipal and provincial elections in Belgium, which get more and more complicated what with all the “cartels”. The general idea is one of power consolidation for the ruling parties, with the Christian Democrats and Flemish nationalists the big winners in Flanders and the Socialist Party getting away nicely in the Walloon provinces.
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Italy 2007 Budget Storm

Italian Finance Minister Tommaso Padoa-Schioppa is going to be a man of his word (and not follow in the path of that other European political leader who was lying about his budget in the morning, in the afternoon, and at night). He assures us of this:

Mr Padoa-Schioppa was adamant any adjustments to the budget, which MPs must approve, would not affect its goal of cutting Italy’s budget deficit to 2.8 per cent.

This is an important re-affirmation, since this time yesterday this little detail wasn’t clear at all, as there was a small matter of 5 billion euro of cuts which were in the budget but which effectively didn’t exist. (All of this is explained in a post on the Italian Economy Watch blog, and the follow up here, as well as by Claus Vistesen on his blog).

As the Economist said:

This is not the sort of thing you expect of a former board member of the European Central Bank. But it shows how far Mr Padoa-Schioppa has had to bend to placate demands by left-wing parties within the government.

The uproar produced within the small business community – who would have seen this mony simply transferred from their coffers to those of the state – has meant that Prodi has now had to publicly vow that the budget will be changed, always of course sticking to the three principles which underlie the budget policy of the current Italian government, namely:

“It’s clear that we will make technical corrections and adjustments, but we absolutely won’t renounce the three objectives of fairness, restoring the health of the public finances and development,”

So, Tommaso Padoa-Schioppa, even though this isn’t exactly the sort of thing that you expect from an ex-director of the ECB, we will assume that this time you are serious, and that you will try to comply with the spirit of what your government has agreed with the European Commission, even if, realistically, it may be a very difficult objective to achieve in the global economic environment we may all face in 2007.

Virtual politics and real bullets

The Russian journalist Anna Politkovskaya, renowned for her reporting on the North Caucasus wars, was murdered yesterday in an evident assassination (three shots, two to the chest and one to the head) in the lift leading to her home. It was the birthday of the Russian President, and just after the birthday of the Russian-appointed prime minister of Chechnya, who she was about to accuse of torture. After a week of rising hysteria in the Russian media and state, with a wave of goon-squad assaults on Georgian businesses and the collection of sinister lists of Georgian-sounding schoolchildren – what, pray, is the purpose of this? – this ought to inter any lingering myths of Russian democracy. It is time to grasp that we are sharing a continent with a very large tyranny, in fact, that we never ceased to do so.

Exactly what will happen next is unclear, but the worst must be assumed. The reaction of Europe so far appears to be deafening silence. See the BBC report above for a tasty quote from the secretary of the Council of Europe, Terry Davis, suggesting she was killed by “self-appointed executioners”. Self-appointed? I don’t think his Midlands constituents lost very much when they voted him out back in 2004. No Baltic gas pipelines were involved, so German silence is a given, France will presumably continue to find Russian support on the UNSC useful, and Britain will probably shut up – hasn’t Tony Blair prided himself on his personal relationship with Putin? (Personal politics, the great delusion of the last hundred years.)

If you need any convincing, I recommend Andrew Wilson’s book Virtual Politics: Faking Democracy in the Post-Soviet World. This is a truly impressive march through a morass of deceit and state-sponsored bullshit, whose central thesis is simply that most of Russian politics, as it was marketed both to the Russians and also to the western politicians, businessmen and bureaucrats who funded it through the 1990s, does not exist. Parties do not have members, policies, or constitutions, and do not represent real interest groups. Even when, like the Communist Party, they actually do exist, they are frequently not actually trying to win the elections-sensationally, Wilson quotes a senior Communist as being horrified how close the party came to unwanted victory in 1996.

Instead, parties, movements and politicians are usually prepared from whole cloth for specific political projects, and created in the public mind by a barrage of TV advertising for the mass and outrageous web propagandists for the elite. It is possible to buy an entire political party, tailored to one’s specifications, from $100,000.
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An Experiment in Globalization: Results

First off, Apple did get back to me within the time frame that they promise. (I was in New York on business part of this week and last, thus the lack of blogging.) So far, so good.

But I can’t say I’m satisfied with the results. Instead of finding a way for me to acquire music from iTunes, they replied:

Currently, iTunes Music Store Gift Certificates can only be redeemed in the country where they are purchased. It is not possible to send an iTunes Music Store Gift Certificate to a recipient in another country.

Because of this, the order was canceled and a refund was issued in the amount of $[foo] to the sender’s credit card. This credit should post to the their account within 3-5 business days of [date]. We apologize for any inconvenience.

Upshot is no tunes for me, no money for Apple, or the artists, or anyone else interested in making some euro cents from legal downloads of music. (I suppose I could log onto iTunes US whenever I happen to be in the States; how’s that for convenience?) Market failure, thy name is copyright lawyers.

Andy Xie, India and China

Andy Xie is a rare beast, he’s a talented, creative economist. His recent departure from Morgan Stanley, and by implication from the Global Economic Forum, is now being widely commented on in the press (and here).

Andy was really one of the first global economists to start drawing attention to the important impact the rise of the Chinese economy was going to have (you can find a selection of some of his posts on my page here, and my early China Economy Watch blog – now defunct – was full of citations from Andy, basically he was getting it right when almost everyone else was getting it wrong).

There are two memorable arguments that Xie has advanced over the years that still bear thinking about.

1) Throw away the text books. This wasn’t meant, I don’t think, to be taken literally, what he was getting at was that we are facing new phenomena, and we need to think on our feet. Intuitive economics. Two recent posts of mine (and comments) on the Indian Economy Blog reflect this legacy (and here).

2). It’s time to start conceptualising the global economy as *one* single developing economy (with a lot of market imperfections) rather than as the sum total of a lot of discrete individual economies. I still think that this idea hasn’t attracted the attention it deserves as a methodological proposal.

Ostensibly Andy left as a result of remarks he made about Singapore (if you believe the rumour mill):
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Getting Hotter in Hungary

As we have noted on Afoe in recent weeks Hungarian society seems badly divided and faces daunting economic adjustments (and here). This weekend’s municipal elections seem to have resolved nothing, with both sides seeming effectively able to claim some sort of victory:

Preliminary results released by the election office, with some nearly all the votes counted, showed Fidesz winning the mayorships in 15 of Hungary’s 23 largest cities, as well majorities in 18 of 19 county councils.

The Socialists retained power in most of Budapest’s 23 districts and Budapest Mayor Gabor Demszky — supported by the two-party governing coalition — won his fifth consecutive term since the 1990 return to democracy.

Not surprisingly under the circumstances the temperature is rising fairly rapidly. Prime Minister Ferenc Gyurcsany yesterday asked the Hungarian parliament to hold a vote of confidence in his government (and this will now take place on Friday). On Sunday night Hungarian President Laszlo Solyom called on Gyurcsany to step down.

With the outcome of Friday’s vote seeming to lean in Gyurcsany’s favour the opposition Fidesz party are getting frustrated and restless. Opposition leader Viktor Orban is already crying ‘foul’:

Opposition leader Viktor Orban of the Fidesz party said the confidence vote was a “deceitful and worthless trick.” He called instead for a constructive vote of no-confidence in parliament, in which the coalition would be forced to name a new prime ministerial candidate.

While Lajos Kosa, a Fidesz vice president, is being downright provocative:

The budget will come and further austerity measures worth 1,000 billion forints ($4.6 billion) will come too and then in the spring all of us will be chased out (from parliament), all of us, because a general uprising may break out in the country

Indeed the party is currently threatening to boycott the vote:

We will not be there… we won’t take part in this comedy,” Fidesz parliament faction leader Tibor Navracsics told a news conference.

Which all takes us back to that early guest post by P O’Neill where he perceptively warned:

But an older concern is working its way back onto the agenda: how to handle an economic crisis in a member country……However, the risk of the latter type of crisis in a member country is now quite high.”

When campaign songs come back to haunt you

Angie, Angie, when will those clouds all disappear?
Angie, Angie, where will it lead us from here?
With no loving in our souls and no money in our coats
You can’t say were satisfied
But Angie, Angie, you can’t say we never tried
Angie, you’re beautiful, but ain’t it time we said good-bye?
Angie, I still love you, remember all those nights we cried?
All the dreams we held so close seemed to all go up in smoke

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