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Assorted Personal Notations, Essays, and Other Jottings

Posts Tagged ‘spain

[LINK] “Colonies Turned Creditors”

I came across a brief article at Ozy by Pooja Bhatia noting that prosperity in former colonies is leading to the reversal of traditional patterns of post-colonial dominance. The effect is perhaps biggest in the case of Portugal, which is the smallest and poorest of the former imperial powers and has (in Brazil and Angola) larger and richer colonies. Spain, too, is noteworthy: Spanish-speaking America is much more populous than Spain, and has in aggregate a bigger economy.

In recent years, investors from Angola, former colony of Portugal, have bought significant chunks of Portuguese companies. Spanish officials are urging their counterparts in South and Latin America to come invest — never mind the conquest. And an exodus of bright young Portuguese is seeking opportunity abroad — often in erstwhile Portuguese colonies like Brazil, Angola and even East Timor.

It’s a significant reversal from decades past, when former colonies went begging their former masters for investment, aid and trade preferences, while stomaching the brain drain of their best-educated graduates. Now the roles have reversed, at least in some quarters. Some former colonies have become emerging markets, logging fast rates of growth, while the erstwhile imperialists are scrambling to stay afloat in the global recession.

Nowhere has the reversal been as dramatic as in Portugal and Angola. The former colonizer expects its economy will shrink 1.8 percent this year, while Angola, fat on diamonds and oil and Chinese love, grew nearly 12 percent annually from 2002 to 2011.

To be sure, the phenomenon is neither widespread nor particularly thoroughgoing. The Democratic Republic of Congo remains mired in terrible conflict, while its former overlord, Belgium, enjoys relative peace and absolute wealth. And for all the Indians snapping up real estate in the United Kingdom, hundreds of millions of Indians still struggle well below the poverty line. Angola’s riches, meanwhile, are concentrated among a handful of oligarchs, including the daughter of President Jose Eduardo dos Santos, who is worth some $3 billion. (She’s got a half-billion-dollar chunk of a Portuguese media company.) Moreover, the country’s relationship with Portugal got testy just last month, with dos Santos complaining that Europeans were casting aspersions on the ethics of Angolan investors.

But nowhere are northern countries’ woes on better display than in the reversal of migration patterns. Migrants tend to vote with their feet. Since widespread decolonization in the mid-1950s, they’ve tended to stream from global south to global north, often to the imperial motherland. After India’s independence from Britain, for instance, Indians tended to immigrate to “Commonwealth” countries, for instance, while Haitians often went to Francophone ones like France, French-speaking Canada or Belgium, and Angolans headed for Portugal.

The flow appears to be reversing — at least in Portugal and perhaps in other places. Since the start of the financial crisis in 2008, young Portuguese have been streaming not only to wealthier European countries but also to former Portuguese colonies like East Timor, Brazil and Angola.

Written by Randy McDonald

June 25, 2014 at 7:34 pm

[BLOG] Some Friday links

  • blogTO posts a history of the Toronto Islands, and how a peninsula became an archipelago.
  • Crooked Timber makes the argument that cross-national intelligence undermines national democracies.
  • The Dragon’s Gaze links to a paper suggesting that there may be a hundred million worlds in our galaxy capable of supporting life.
  • Imageo shows the startling depth of the drought in California.
  • Joe. My. God. notes that the victim of a gay-bashing in New York City allegedly by members of an ultra-Orthodox Jewish street patrol is suing them.
  • Language Hat announces that twenty previously unknown Pablo Neruda poems have been found in Chile.
  • Marginal Revolution notes the increasing walkability of Los Angeles.
  • Registan notes continuing issues for women in Azerbaijan.
  • The Russian Demographics Blog is skeptical of the possibilities that the Donetsk basin in the east could be reconciled to wider Ukraine after this war is over, raising the spectre of Catalonia in post-Franco Spain.
  • Spacing Toronto shares a story of an investigation to an unscenic pair of billboards placed at the intersection of Davenport Road and Bathurst Street.
  • Torontoist notes a local protest by migrant rights’ activists against the shutdown of the temporary foreign worker program.
  • The Transit Toronto blog commemorates the end of the 28 Davisville bus route.

[DM] “The “Hot Labour” Phenomenon”

Co-blogger Edward Hugh has posted a translation of a German-language interview where he talks about “hot labour”, large surge of muigration fueling boom/bust cycles.

Strong growth. Rising real estate prices. Rapid job creation. Surging immigration. This list sums up the Switzerland of 2014 down to a tee. However, it also sounds like a description of what things were like in Spain in 2007 – shortly before the country’s economy fell off a cliff. What follows is a conversation between financial journalist Detlef Gürtler and economist and crisis expert Edward Hugh about possible parallels and differences between the two booms, and the role of a new phenomenon which Hugh describes as “Hot Labour”.

Hugh argues that this is a new phenomenon, and on the increase as a result of central bank bubble inducing activity. While immigration is a vital tool aiding economies to manage the population ageing process, it is important that economic activities be balanced. Immigration fueling boom/bust cycles is far from innocuous, and harm a country just as much as a sudden stop in capital flows if the immigration is followed by emigration.

Detlef Gürtler: Well Edward, you personally lived through one of the most important real estate booms in European history – the recent Spanish one. Is the real estate boom we are witnessing in Switzerland in any way comparable?

Edward Hugh: Before I start, I think it’s worth pointing out that it goes without saying the Swiss are quite different from the Spaniards; and the Swiss economy is completely different from the Spanish one. In this sense every boom or crisis is in its own way different from anything before. That said, such “trivia” doesn’t normally stop economists like me from trying to draw comparisons, even if in this case I have to be extremely careful, since while I know quite a lot about Spain I know much less about Switzerland. So perhaps you will help me.

Detlef Gürtler: Yes, economists do make comparisons, and you were even so bold as to draw one between the German 1990s housing boom and the one which took place in Spain after the start of the century.

Edward Hugh: Well this comparison isn’t so strange as it may seem. Many talk today about Spain becoming the new Germany – in the sense of an export powerhouse – and while this idea may have a rather dubious basis in reality the shift from domestic consumption to exports is quite striking.

In both cases the subsequent “regeneration” was preceded by a significant consumer boom, in both cases there was a strong increase in real estate prices including a construction boom, in both cases there was an increase in household indebtedness, in both cases the current account deficit deteriorated. And then in both cases there was a rude awakening. The only real difference was one of scale, and in this case scale is important. Spain had what was at the end of the day the mother of all housing bubbles.

Written by Randy McDonald

June 16, 2014 at 5:00 pm

[BLOG] Some Tuesday links

  • The Big Picture shares photos of Iran 25 years after the death of Ayatollah Khomeini.
  • Crooked Timber continues its seminar on the ethics of open borders.</li
  • D-Brief notes the discovery of two new classes of planets not found in our solar system, Earth-mass gas dwarfs and rocky super-Earths.
  • The Dragon’s Gaze links to a paper suggesting that red dwarfs’ solar wind would significantly heat exoplanets in their circumstellar habitable zones and links to another paper concluded that Kepler-10c is a giant rocky world.
  • The Dragon’s Tales notes drama in Canada regarding the possibility or not of a F-35 purchase.
  • The Financial Times‘ The World blog wonders about the future of the monarchy in a securely democratic Spain.
  • Geocurrents’ Martin Lewis concludes that poverty isn’t clearly the cause of the Boko Haram insurgency in Nigeria, notwithstanding the relative poverty of the Muslim north.
  • Lawyers, Guns and Money is rightly upset that Confederate general and defender of slavery Robert E. Lee is positioned in a new book as an American patriot.
  • The New APPS Blog considers the issues associated with democracy in the European Union after the recent elections.
  • Savage Minds’ P. Kerim Friedman considers the shooting ratio of ethnography. How much raw material do anthropologists need to collect to come up with something compelling?
  • Window on Eurasia traces the genealogy of Eurasianism in the Soviet era.

[BLOG] Some Saturday links

  • At the Broadside Blog, Caitlin Kelly promotes Greenwich Village’s Bleecker Street, in New York City, as her favourite street.
  • The Crux argues that the apparent existence of multiple planets capable of being broadly Earth-like argues ill for our future. (The question “where is everybody?” becomes much more worrisome if it appears that there should be people out there already.)
  • Cody Delistraty writes about the ways in which travel can be a negative phenomenon, unmooring people.
  • Edward Hugh, at A Fistful of Euros, is pessimistic about Spain’s economy.
  • Joe. My. God. shares video from a New York City cat cafe.
  • Language Log reports on the exceptional difficulties of Macartney’s mission to China in the late 18th century in writing Chinese.
  • Marginal Revolution notes that the legacies of the Cold War are still felt in central Europe, in the movement of deer herds which do not cross the German-Czech border.
  • Towleroad reports on the grief of a lesbian couple in Iowa after their adoptive son died in the care of his parents.
  • Window on Eurasia notes the unstable and questionable nature of the “Russian world” model and observes the sympathies of some in Tatarstan for Crimean Tatars.

[BLOG] Some Friday links

  • Centauri Dreams maps the known worlds of the 55 Cancri A system.
  • Crasstalk makes the argument that jerks predominate worrisomely among the initial demographics of Google Glass users.
  • D-Brief notes that an unusually bright supernova was magnified by an intervening galaxy.
  • The Dragon’s Gaze links to a paper examining the discovery of the first methane brown dwarf, Gliese 229B, written by one of the discoverers.
  • The Dragon’s Tales notes that Catalonia is pressing ahead on its advisory independence referendum.
  • Eastern Approaches visits eastern Ukraine.
  • Marginal Revolution speculates that immigration has diminished productivity and hence economic growth per capita in New Zealand.
  • The Power and the Money’s Noel Maurer engages with that paper dating pronounced Argentine economic decline to the mid-1970s on.
  • Torontoist recommended that Gene Jones leave Toronto Community Housing, and notes that today he was fired.
  • Window on Eurasia links to an essayist who argues that the whole concept of a “Russian world”, as applied to the Russian state, is simply amorphous.

[LINK] “Argentina: The Myth of a Century of Decline”

Eugenio Diaz-Bonilla, writing for Economonitor, makes a superficially persuasive case that Argentina’s period of pronounced economic decline relative to the United States and Europe isn’t a century old. Argentina, he suggests, declined relative to the north after the Second World War like Australia, unlike Australia starting from a relatively lower point. The big economic shock came much later.

Below I will try to show that instead of a “century decline,” what characterizes Argentina’s economic evolution as compared to other countries is that it suffered a deep economic collapse from the mid 1970s to the end of the 1980s (in what follows, data is from the Maddison Project. http://www.ggdc.net/maddison/maddison-project/data.htm).

This structural break in the evolution of the GDP per capita (GDPpc) in Argentina can indeed be attributed to internal conditions in that country. But other than that, there is not much difference in the evolution of Argentina, when compared to, for instance, Australia, or Uruguay, two countries mentioned by The Economist as either not having suffered the “hundred year decline” and/or to have followed better economic and institutional policies than Argentina. It is true that other countries such as Korea or Spain, which had far lower GDPpc than Argentina during great part of the 20th Century overtook Argentina by a large margin since the 1970s. But it is also true that if Argentina had avoided the sharp drop in the 1970s and maintained the share of the US GDPpc that prevailed before that structural break, the country would have had now an income per capita above all countries in LAC and many European countries such as Portugal, the Czech Republic, Hungary, and Poland. And if it had maintained the lineal trend growth from the 1960s to the mid 1970s it would be now at about the level of New Zealand or Spain, according to the data of the Maddison Project. In other words, if Argentina had avoided the real tragedy that started in the mid 1970s, the country would be now a developed country.

The cause? Totalitarianism and its aftermath.

The decline started with the fracture of the society after the death of Perón in 1974, but it was the subsequent military coup of March 1976, which aiming at stamping out the Peronist Party and its followers (a “final solution” for Argentina, if you will), killed and forced into exile a significant number of Argentines (which among other things hollowed the previously relatively well-built basis of scientists mainly in public universities), started to dismantle the manufacturing base that was supposed to give the Peronist Party its loyal labor base, generated the debt explosion that led to the 1980s debt crisis, and spent a large amount of fiscal resources into different military adventures (including the misguided invasion of the Malvinas, which generated further loses of lives as well). The Radical Party, with President Alfonsín, won the elections in 1983 and did a very good job at restoring the democratic institutions (including the unprecedented trials and imprisonment of the military leaders responsible for the tragedy of the 1970s. But the Administration was hobbled by the very weakened and highly indebted economy left by the previous dictatorial government, had to contend with a restive military (which attempted several coup d’etats in the 1980s and 1990s, until the putschists were finally defeated during the Menem Administration), was under the pressure of a labor force that was expecting improvements in its living conditions after a decade of wage compression under the military, and suffered the collapse of commodity prices in mid-1980s.

This is an interesting rephrasing of Argentina’s economic situation, taking it out of a Latin American context and putting it into a post-totalitarian context. Spain and Portugal, after their democratic transitions in the mid-1970s, went through a decade-long period of decline relative to northwestern Europe, as did central Europe in the decade after 1989. Recovery came only relatively slowly, and full convergence still far from complete.

Is Diaz-Bonilla correct in suggesting that Argentina is going to remain in the convergence club and retake its lost position towards the bottom of First World income rankings? Is his analysis correct at all, or enough? I wonder.

Written by Randy McDonald

April 22, 2014 at 11:05 pm

[LINK] Three links on the troubled future of the Puerto Rico economy

  • Reuters’ Luciana Lopez described Puerto Rico’s entrenched underground economy. Unregulated and–critically–not paying taxes at a time when the Puerto Rican government is terribly short of money, the question of how to deal with this is key.
  • From the western mountain town of Lares to the capital San Juan, officials are wrestling with how to bring the underground economy out of the shadows and onto the tax rolls without creating such an onerous financial burden that thousands of small and medium businesses can’t survive.

    More than a quarter of the island’s economy is informal, some studies say, from large companies evading taxes to individuals selling items for cash at roadside stands. But estimates vary widely because the activity can be so hard to track.

    While not new, the problem has become urgent of late. The government desperately needs to find new revenue to bolster a budget full of holes and turn around an economy now eight years in recession. It is scrambling to avoid a painful debt restructuring some view as almost inevitable.

    Last month’s $3.5 billion bond sale bought the island some time, but precious little else, with fundamental worries about its shrinking economy still unsolved.

    [. . .]

    The divisions between the government and its people leave policymakers in a damned-if-you-do, damned-if-you-don’t position.

    “This is the conundrum for the island,” said Emily Raimes, lead analyst on Puerto Rico for Moody’s Investors Service. “Actions that they can take to help their finances may very well be actions that hurt the economy.”

  • La Prensa, meanwhile, shared a report suggesting that the Puerto Rican government wants to launch the island as a platform for Spanish investment in the United States and broader Latin America.
  • Puerto Rico’s government is pushing a strategic plan to transform the Caribbean island into an “investment bridge” from Spain to the United States and Latin America and is offering fiscal and legal incentives to Spanish investors, Puerto Rican Secretary of Economic Development and Commerce Alberto Baco said in an interview with Efe.

    The new administration of Gov. Alejandro Padilla intends to reorient the Puerto Rican economy toward foreign services, mainly in the banking sector, securities, engineering and computer technology, Baco said.

    The aim is to internationalize the island’s economy, which is fundamentally based on the manufacturing sector, and create a platform for foreign firms wanting to export their services to North America and for local companies who wish to break into the European market.

    Baco, on a visit to Madrid to meet with Spanish businessmen, said that Puerto Rico, which is a U.S. commonwealth but maintains its fiscal independence, will invest up to $300 million in the tourist industry, “specializing in sports, culture and adventure” tourism.

    The opening in May of the new Air Europa route between Madrid and San Juan could also increase tourist traffic by some 200 percent, Baco said, adding that Iberia could return to the Puerto Rican market.

  • The Huffington Post‘s Adrian Brito notes that statehood in the United States, by removing many of Puerto Rico’s economic advantages as a self-governing commonwealth, would be an economic catastrophe for the island.
  • According to a new report published by the U.S General Accountability Office (GAO), out of the estimated $5.2 billion in new federal spending Puerto Rico would receive, only a range of $2-4 billion would come back in new revenues for the federal government. However, statehood would mean that every day Puerto Ricans would be saddled with $2.3 billion in new federal taxes that they do not pay today.

    The GAO report addressed the adverse impact of statehood on the Island’s finances, stating:

    … [a]s a result of statehood, changes to Puerto Rico government spending and revenue could ultimately affect the government’s efforts to maintain a balanced budged… statehood could [therefore] result in reduced Puerto Rico tax revenue. If Puerto Rico’s government wished to maintain pre-statehood tax burdens for individual and corporations, it would need to lower its tax rates, which could reduce tax revenues.

    Given Puerto Rico’s recent financial struggles and the government of the Commonwealth’s tough economic reform efforts, cutting almost half of the Island’s budget would be disastrous. GAO also notes that Puerto Rico’s current triple tax-exempt bonds would no longer be exempt from federal taxes, which would make it much harder for the Island to reduce its fiscal woes.

    U.S. manufacturers in Puerto Rico, in particular pharmaceutical companies, would also face a higher tax-burden under statehood and the U.S GAO report confirms that many of them would leave. This would put in risk more than 80,000 jobs, plus tens of thousands more government jobs that would be at stake if the local government loses billions in tax revenues under statehood.

    Written by Randy McDonald

    April 22, 2014 at 7:43 pm

    [BLOG] Some Thursday links

    • Andart’s Anders Sandberg links to an essay he co-wrote about human longevity. The lessons of centenarians are important, but they also indicate the problems with extended: the damage of ageing has to be slowed down or even repaired, somehow.
    • BlogTO has two photoposts about alternate subways in Toronto, one showing a 1913 proposal for a downtown route, the other examining the Lower Queen Station that could have anchored a Queen Street subway.
    • Crooked Timber and Lawyers, Guns and Money both go after Conor Friedersdorf’s article that doesn’t identify bigoted behaviour as bigoted.
    • The Dragon’s Gaze notes that the results of a search for exomoons, while not turning any up, has produced interesting data on planetary densities.
    • Eastern Approaches, looking to the examples of Arab Spring states, argues that Ukraine will have trouble getting back state assets appropriated by the Yanukovich elite.
    • Geocurrents wonders whether mealtimes in Spain are product of geography and climate.
    • Language Hat notes the disappearance of Yiddish as a major American language.
    • Marginal Revolution links to a paper asking whether too many cultural similarities can lead to interstate war and notes Ukraine’s weak post-Soviet economic growth.
    • The Planetary Society Blog features a Marc Rayman post talking about the Dawn probe’s maneuvering towards dwarf planet Ceres.
    • Steve Munro breaks down Toronto’s transit history into three different phases.
    • Torontoist goes into more detail about the school trustees who would like a crackdown on nudity at Pride.
    • Towleroad examines Liz Dahl, the second Russia Today anchor to quit on a live broadcast over Crimea.

    [BLOG] Some Friday links

    • Centauri Dreams reacts to yesterday’s announcement that Kepler had found another 715 planets. What an embarrassment of riches!
    • Crooked Timber’s Chris Bertram mourns the freer blogging culture of old, before things because set and professionalized.
    • A Fistful of Euros’ Edward Hugh argues that, with a shrinking population and stagnant incomes, Japan-style deflation is inevitable in Spain.
    • At Geocurrents, Claire Negiar summarizes the simmering separatism of the southern Senegalese region of Casamance.
    • Marginal Revolution’s Tyler Cowen starts a discussion about the impact of bringing extinct species like the passenger pigeon back to life.
    • The New APPS Blog’s Mohan Matthen argues that an independent Scotland and the rest of the United Kingdom should maintain a currency union. (I’ve made arguments against.)
    • The Power and the Money’s Noel Maurer maps the declining power of Chavista politics at the polls in Venezuela.
    • Savage Minds has a neat interview with an ethnographer who is also a designer.
    • The Speed River Journal’s Van Waffle celebrates the avocado, with photos and recipes.
    • Torontoist links to a cool video showing the exploration of some hidden nooks of the Toronto transit system.
    • Window on Eurasia notes that, at least in terms of declared ethnic identity, Ukraine is as Ukrainian as Russia is Russians.
    • Wonkman points out that mores in cities take a while to get used to, just like the mores of non-urban areas.
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