Loomnie

H/T 3quarksdaily

In the current edition of The Economist:

In some countries it [citizenship] is, in effect, on sale. In others, such as America, it may be an accident of birth, with no conscious choice involved. Rather than making a fetish out of passports, a better approach would be to use residence (especially tax residence) as the main criterion for an individual’s rights and responsibilities. That encourages cohesion and commitment, because it stems from a conscious decision to live in a country and abide by its rules. The world is gradually moving in this direction. But many states (mostly poor and ill-run) resist the trend and some rich democracies like the Netherlands and Germany are trying to curb it (see article), offering a variety of excuses.

Here.

Robert Frisk writes in The Independent:

The banks and the rating agencies have become the dictators of the West. Like the Mubaraks and Ben Alis, the banks believed – and still believe – they are owners of their countries. The elections which give them power have – through the gutlessness and collusion of governments – become as false as the polls to which the Arabs were forced to troop decade after decade to anoint their own national property owners. Goldman Sachs and the Royal Bank of Scotland became the Mubaraks and Ben Alis of the US and the UK, each gobbling up the people’s wealth in bogus rewards and bonuses for their vicious bosses on a scale infinitely more rapacious than their greedy Arab dictator-brothers could imagine.

I didn’t need Charles Ferguson’s Inside Job on BBC2 this week – though it helped – to teach me that the ratings agencies and the US banks are interchangeable, that their personnel move seamlessly between agency, bank and US government. The ratings lads (almost always lads, of course) who AAA-rated sub-prime loans and derivatives in America are now – via their poisonous influence on the markets – clawing down the people of Europe by threatening to lower or withdraw the very same ratings from European nations which they lavished upon criminals before the financial crash in the US. I believe that understatement tends to win arguments. But, forgive me, who are these creatures whose ratings agencies now put more fear into the French than Rommel did in 1940?

Here. H/T Keith Hart on FB.

1.Immigrant networks are a rare bright spark in the world economy. Rich countries should welcome them – The Economist

2. What’s your flavour? Italian or Spanish? – BBC Business Editor

3. Black France - Africa is a country

4. The dangerous cocktail of global money and local politics – Moisés Naím

5. On Nigeria’s Petroleum Industries Bill – Mallam Nasir El-rufai

I’d been waiting for the first major newspaper columnist to write something about this. Here it is, from Evans-Pritchard of The Telegraph:

From a WSJ review of Stealth of Nations: The Global Rise of the Informal Economy:

Mr. Neuwirth introduces us to a woman named Jandira who for a decade has peddled coffee and homemade cakes to the unlicensed vendors at São Paulo’s early-morning wholesale market for pirated movies. Her street-corner business, she proudly tells him, has enabled her to buy two cars and a house and to pay her children’s fees at private school. Another of Mr. Neuwirth’s sources, Chinese handbag designer Ethan Zhang, prefers to stay illegal. For him it’s a matter of costs and benefits: “If I want to get a license, then I will need a bank account and an office in an office building.” These are not people who lack the skills to survive through legal employment; they just see no good reason to join the legal economy.

System D is full of surprises. From Linda Chen, who trades counterfeit auto parts, we learn that China has a hierarchy of fake merchandise: The manufacturers of high-quality fakes offer guarantees and take back defective products, but with low-quality fakes it’s caveat emptor. Ogun Dairo buys woodchips from a sawmill and uses them to smoke fish, for sale by street vendors; her unlicensed grill is in an illegal squatter settlement in Lagos, but she buys fish that have been imported from Europe. At the euphemistically named Guangzhou Dashatou Second Hand Trade Center, where Arthur Okafor obtains the pirated mobile phones that he later smuggles into Nigeria, the cash turnover is so high that almost every (unlicensed) kiosk has a battery-powered currency counter.

The review reminds me of a chapter in my dissertation, in which I follow a container of secondhand clothing from the Cotonou port to the used clothes market in the Beninese city, and from the market to the Seme border and then into Nigeria. I show the different regulatory regimes under which batches of the imported used clothing fall – when taxes get paid on them and when not, and how the final retailer in Lagos sometimes actually pay some form of tax on the goods he has in his small stall on Lagos Island – even when secondhand clothing is not legally supposed to be imported or sold in the country (there is a ban on the importation of secondhand clothing into Nigeria). It also reminds me of the importance of ethnography for understanding microeconomic interactions that eventually feed into macroeconomic figures of a country. (Try understanding why Benin would always have a balance of trade deficit without knowing that almost all consumer goods it imports ends up being smuggled into Nigeria.) Of course, the whole idea of the informal economy itself arose from Keith Hart’s ethnographic study of urban slums in Ghana in the 1960s.

Read the review here. H/T to Bunmi Oloruntoba on Twitter.

On naked capitalism:

My first take on the question came when The Guardian asked me to write an oped on Occupy Wall Street a few days later. At the time I was inspired mainly by what Marisa Holmes, another brilliant organizer of the original occupation, had discovered in her work as a video documentarian, doing one-on-one interviews of fellow campers during the first two nights at Zucotti Square. Over and over she heard the same story: “I did everything I was supposed to! I worked hard, studied hard, got into college. Now I’m unemployed, with no prospects, and $50 to $80,000.00 in debt.” These were kids who played by the rules, and were rewarded by a future of constant harassment, of being told they were worthless deadbeats by agents of those very financial institutions who—after having spectacularly failed to play by the rules, and crashing the world economy as a result, were saved and coddled by the government in all the ways that ordinary Americans such as themselves, equally spectacularly, were not.

“We are watching,” I wrote, “the beginnings of the defiant self-assertion of a new generation of Americans, a generation who are looking forward to finishing their education with no jobs, no future, but still saddled with enormous and unforgivable debt.” Three weeks later, after watching more and more elements of mainstream America clamber on board, I think this is still true. In a way, the demographic base of OWS is about as far as one can get from that of the Tea Party—with which it is so often, and so confusingly, compared. The popular base of the Tea Party was always middle aged suburban white Republicans, most of middling economic means, anti-intellectual, terrified of social change—above all, for fear that what they saw as their one remaining buffer of privilege (basically, their whiteness) might finally be stripped away. OWS, by contrast, is at core forwards-looking youth movement, just a group of forward-looking people who have been stopped dead in their tracks; of mixed class backgrounds but with a significant element of working class origins; their one strongest common feature being a remarkably high level of education. It’s no coincidence that the epicenter of the Wall Street Occupation, and so many others, is an impromptu library: a library being not only a model of an alternative economy, where lending is from a communal pool, at 0% interest, and the currency being leant is knowledge, and the means to understanding.

In a way, this is nothing new. Revolutionary coalitions have always tended to consist of a kind of alliance between children of the professional classes who reject their parents’ values, and talented children of the popular classes who managed to win themselves a bourgeois education, only to discover that acquiring a bourgeois education does not actually mean one gets to become a member of the bourgeoisie. You see the pattern repeated over and over, in country after country: Chou Enlai meets Mao Tse Tung, or Che Guevara meets Fidel Castro. Even US counter-insurgency experts have long known the surest harbingers of revolutionary ferment in any country is the growth of a population of unemployed and impoverished college graduates: that is, young people bursting with energy, with plenty of time on their hands, every reason to be angry, and access to the entire history of radical thought. In the US, the depredations of the student loan system simply ensures such budding revolutionaries cannot fail to identify banks as their primary enemy, or to understand the role of the Federal Government—which maintains the student loan program, and ensures that their loans will be held over their heads forever, even in the event of bankruptcy—in maintaining the banking system’s ultimate control over every aspect of their future lives.

Read it here.

From Reuters:

Nigeria’s central bank plans to diversify its $33 billion in foreign exchange reserves away from the dollar by switching a tenth of the stockpile into yuan, underlining the momentum behind China’s drive to internationalise its currency.

“We are looking at anything to start with from 5 to 10 percent of our reserves,” central bank governor Lamido Sanusi said on Monday.

The central bank had already said that it was considering reducing its reliance on the dollar, which economists say accounts for the bulk of its $32.96 billion in reserves . The bank does not publish the currency composition of its assets.

But Sanusi, speaking to CNBC news by telephone from China, said Africa’s second-largest economy was not abandoning the dollar and euro. “They are going to remain an important part of our holdings,” he said.

Continue reading for more analysis of the decision. From what I’ve seen, CBN seems to be the first central bank to do this.

See also FT TIlt for more analysis.

From Bloomberg:

Energy companies operating in Senegal will drill three offshore wells next year as the West African nation vies to join a growing group of regional crude producers, according to the state-owned oil company,Petrosen.

Senegalese officials held talks with more than 10 oil companies this year in attempts to lure investors to its energy industry, said Joseph Medou, Petrosen’s geologist, in an interview in Dakar Aug. 25.

“If we make comparisons to what is happening in Ghana and Ivory Coast, to Sierra Leone, we think we have the same kind of plays,” he said.

Read here.

On the current political situation in Senegal, see this Project Syndicate column from Sanou Mbaye.

The Economist Intelligence Unit answers here.