Economics and similar, for the sleep-deprived
A subtle change has been made to the comments links, so they no longer pop up. Does this in any way help with the problem about comments not appearing on permalinked posts, readers?
Update: seemingly not
Update: Oh yeah!
Wednesday, July 30, 2008
You can put my face on the Z$50 if you like
So it looks like Zimbabwe is planning a ten-bagel currency reform (and apparently that they have managed to find an alternative supplier of banknote paper and printing software to do so). Brings me back to something I was planning on writing about very early on in this project - the fact that, whoever ends up being in charge of Zimbabwe, they are going to have to deal with the hyperinflation, and my plan for doing so.
Basically the trouble is that all the recipes for curing a hyperinflation require you to have a strong and functional state. You can do it Israeli-style - with strict and firmly enforced price controls, or you can do it Argentinean style - by introducing a currency board. But in either case, you need to make it stick. And that doesn't look very possible at the moment - although the Zimbabweans certainly need and deserve such a government, it would be nice to get rid of the hyperinflation in the near term, in the hope that this would facilitate a transition to more stable government without an economic collapse or civil war.
The only other way to control a hyperinflation is actual dollarisation a la Ecuador, but this doesn't seem practical to me. Zimbabwe has about a third of the GDP of Ecuador, but it doesn't have any material reserves of dollars at all, or any other hard currency. What it needs is something similar to dollarisation, but on the basis of a locally available fiat money standard.
And thus I suggest that Zimbabwe might as well have a go with free banking. One of the curios of the Zimbabwean economy is that it still has a significant presence from UK commercial banks (Barclays Zimbabwe, a subsidiary of Barclays plc is the largest, with Standard Chartered not far behind). Not very well informed UK journalists often discover this fact and then write ill-informed articles about "propping up Mugabe" (the reality is that neither company has made a cent in profit in Zimbabwe for about five years, but both of them have correctly assessed that they would hardly be doing the Zimbabweans a favour by destroying their domestic banking system. They don't "make loans to the Mugabe regime", they hold excess deposits (which are substantial as there aren't many viable commercial lending propositions in Zimbabwe) in short term government bonds.
Both BBZ and SC have substantially better credit ratings than the Zimbabwean state and justifiably so, and they have more of an interest in maintaining sound money in the long term than the Zimbabwean state too. They certainly don't have any interest in printing a note with twelve zeroes on it. Why not let them print banknotes and treat them as legal tender? There's my plan for monetary reform; doesn't work for most hyperinflationary countries as the local banking system is usually about as weak as the state but Zimbabwe is a special case.
Finally got tired of the "Zimbabwegians" joke!
Labels: monetary nutterism
this item posted by the management 7/30/2008 11:19:00 AM
Monday, July 28, 2008
Embarrassment of the week
Just a note in passing - neither me nor Marko Attila Hoare would have even fucking heard of a place called Darfur if it were not for people like Julie Flint and Alex de Waal. Although, as the post below says, I don't agree with her on the Bashir ICC indictment, to make the claim that Julie Flint "has aligned herself with the appeasers" is really the sort of thing that ought to have consequences for one's own credibility.
Labels: ludicrously untrue claims
this item posted by the management 7/28/2008 02:19:00 AM
Thursday, July 24, 2008
Gosh what happened there?
Well, readers, what happened is that I went off and got married. Yes, thanks very much, quite lovely. Then went off to the seaside in Brittany - basically my advice is to take the ferry to Calais, point the front of the car roughly in the direction of Wilmington, North Carolina and keep driving until the cafes no longer advertise "Wi-Fi Gratuit". Anyway, while I was away, President Mwanawasa got seriously ill with a stroke, and the Zimbabwe situation (of which, more soon) began to start moving again.
I wrote this for the Guardian website but it went in quite late because I screwed up the new submissions system and I don't think they're going to publish it because it's a bit old news now ...
The Biggest Plea Bargain in History?
Most of what needs to be said about the indictment of Omar al-Bashir has already been said. I appreciate the point of view of Jonathan Steele, Julie Flint and Alex de Waal, all of whom know much more about Darfur than I do. I very much agree with them that the top priority has to be peace in Darfur and that outside interventions by the self-appointed guardians of the international conscience are really dangerous. But I can't go so far as to condemn prosecutor Ocampo's decision to bring a public indictment on charges of genocide.
For one thing, I do think it has to be accepted that if you're going to have an International Criminal Court, this is the sort of thing it's going to do or there's no point to the thing at all - fiat justitia rua caelum. And I'm not ready to give up on the possibility of international criminal justice yet (note that the provisional Darfur Peace Agreement itself was only achieved through liberal use of threats of ICC prosecutions by Bob Zoellick). For another, the benefit of giving the Darfurians the simple pleasure of anticipating Bashir in prison shouldn't be underestimated. But finally and most importantly, I have a speculative but not entirely ridiculous theory that the indictment is a shrewder piece of politics than it's being given credit for.
The point is this; it seems to be agreed by nearly everyone that to charge Bashir with genocide (rather than an equally serious crimes against humanity charge) is a really speculative and showboating piece of prosecutorial over-reach. De Waal and Flint, in this article, agree with the UN report on the subject and the points they raise aren't really addressed in Ocampo's indictment. If the genocide charge came to trial, it most likely would not stick (and of course, a failure there would be a pretty fatal blow to the ICC's credibility).
But the fact that there's such a high risk of an embarrassing blow-up if the genocide charge ever came to trial, raises the possibility that it isn't intended to come to trial. The fact that the charge has been laid publicly (thus tipping off Bashir that he shouldn't visit any ICC signatory countries) rather than as a sealed indictment also suggests that the ICC isn't actually as serious as it might be about bringing this one into a court.
This has the flavour of a plea-bargain to me. Drawing up a maximal charge sheet and blustering about it is a traditional prosecutor's strategy, with the aim of getting the accused to cop to a lesser charge and go down quietly. And a strategy of this kind strikes me as potentially not a bad way of dealing with Bashir. He's a paranoid bully who reacts badly to threats, but he's also a violent liar who needs to be forced to the negotiating table. Increasing the pressure on him is certainly not without risks, but it allows for a sort of carrot-and-stick approach. Of course, this would mean that the Hague indictment would end up being used as a bargaining chip, which is hardly fiat justitia or a dignified way to proceed, but that's diplomacy.
One thing I would like to see though (and my real criticism of the way that the diplomatic effort is being handled) is some symmetrical pressure being applied to the rebel groups. The UN report did not find widespread evidence of crimes against humanity being carried out by rebel groups, but a number of commanders are certainly guilty of crimes against peace, and the UN team suggested that half-a-dozen rebel commanders could be worth indicting (it's in paragraph 531 of the Inquiry Report)
That would seem to me to be a good next step, given that we are where we are. Not because of any degree of moral equivalence - that simply doesn't exist, Bashir's crimes against humanity dwarf anything done by the other side in sheer scale. But it really does seem to me to be a bad idea to give the commanders of the rebel forces (many of whom don't actually live in Darfur, and therefore don't directly suffer the consequences of prolonging the war) the idea that the UN and international community are basically "on their side", and that if they keep on fighting the ICC will swoop in, pluck out Bashir and give them a separatist state.
That's not going to happen and it's very unhelpful to make implicit promises of support to the rebel factions that aren't going to be kept - it's an obvious recipe for war without end. The next round of peace talks is going to begin soon, and it might go a little better if every single seat at that table had a sword of Damocles dangling over it.
this item posted by the management 7/24/2008 11:34:00 PM