quarta-feira, 26 de janeiro de 2011

Egyptian Revolution

Egypt is in mainly in North Africa (Sinai peninsula is in Southwest Asia). It is a major power in Africa, the Mediterranean and the Islamic World. It covers an area of 1,010,000 square kilometers (30th world country by land area) and 79,711,000 citizens (15th world country by population). The majority of its population lives in Cairo, Alexandria and near the banks of the Nile River, where arable land is. Egypt is famous by its ancient civilization and some of the world’s most famous monuments. Egypt possesses one of the most developed and diversified economies in the Middle East, with sectors such as tourism, agriculture, industry and service at almost equal production levels. The Egyptian economy is rapidly developing, due in part to legislation aimed at luring investments, coupled with both internal and political stability, along with recent trade and market liberalization. About 60% of the population (90% of the unemployed) is under 30 years old. And about 40% live on less than 2$ a day. A third is illiterate.

Hosni Mubarak
On 6 October 1981, President Sadat was assassinated by Islamic extremists. Hosni Mubarak, Vice President since 1975 and air force commander during the October 1973 war, was elected President later that month.
President Mubarak has been re-elected by majority votes in a referendum for successive terms on four occasions: in 1987, 1993 and 1999. The referendum in itself and its results are of questionable validity. No one could run against the President due to a restriction in the Egyptian constitution in which the People's Assembly played the main role in electing the President of the Republic.
After increased domestic and international pressure for democratic reform in Egypt, Mubarak asked the parliament on 26 February 2005 to amend the constitution to allow multi-candidate presidential elections by September 2005. Previously, Mubarak secured his position by having himself nominated by parliament, then confirmed without opposition in a referendum.
The September 2005 ballot was therefore a multiple candidate election rather than a referendum, but the electoral institutions, and security apparatus remain under the control of the President. The official state media, including the three government newspapers and state television express views identical to the official line taken by Mubarak. In recent years however, there has been a steady growth in independent newspapers which occasionally criticize the President and his family. Satellite channels beaming from Egypt such as the Orbit Satellite Television and Radio Network, also exhibit relative openness as exhibited in their flagship program Al Qahira Al Yawm. In the last few years however, the cabinet headed by Prime Minister Ahmed Nazif has been somewhat successful in turning things around. In several elections, including the 2005 one, reports have shown that Mubarak's party used government vehicles to take public employees to vote for him. Votes were bought for Mubarak in poor suburbs and rural areas. It was also reported that thousands of illegal votes were allowed for Mubarak from citizens who were not registered to vote. On 8 September 2005, Dr. Ayman Nour, a dissident and candidate for the Al-Ghad party, contested the election results, and demanded a repeat of the election. In a move seen as political persecution, Nour was convicted of forgery and sentenced to five years at hard labor on 24 December 2005.
A dramatic drop in support for Mubarak and his domestic economic reform program increased with surfacing news about his son Alaa being extremely corrupt and favored in government tenders and privatization. As Alaa started getting out of the picture by 2000, Mubarak’s second son Gamal started rising in the National Democratic Party and succeeded in getting a newer generation of neo-liberals into the party and eventually the government. Gamal Mubarak branched out with a few colleagues to set up Medinvest Associates Ltd., which manages a private equity fund, and to do some corporate finance consultancy work. A corporate finance consultancy firm headed by the President's own son also raises questions of corruption, influence peddling and political power-brokerage, the same type of accusations leveled against his brother Alaa. Due to Gamal's increasing visibility and influence, rumors about him being groomed for the presidency have become common, especially after his March 2009 trip to the United States. Nevertheless, this was publicly denied by the president several times. Moreover, although some of the public generally like Gamal Mubarak as a person, many believe that his succession would mean a hereditary pseudo-monarchy.
President Mubarak has immense control over Egypt. He is even considered by many to be an autocrat, though a moderate one. Mubarak has maintained Egypt's commitment to the Camp David peace process, while at the same time re-establishing Egypt's position as an Arab leader. Egypt was readmitted to the Arab League in 1989. Egypt also has played a moderating role in such international forums as the UN and the Nonaligned Movement.

Revolution under way
Recently, after the revolution in Tunisia against the politics of Ben Ali, that had as consequence the running of Ben Ali and his family to Saudi Arabia, Egyptian activists took the street to end Mubarak’s 30-year rule. Three protesters and a policeman were all ready killed in these days of manifestations against Mubarak.
At 2011-01-26, police fired teargas and water canon to disperse protesters in Cairo. Police were deployed in large numbers around the capital.

CIA Fact Book. Background Note: Egypt
Wikipedia, Egypt
Somali.com, Recent History of Egypt
Wikipedia, History of Modern Egypt
Wikipedia, Mohammad Hosni Mubarak
Reuters, Police and anti-government protesters clash in Egypt
Picture from here

sábado, 15 de janeiro de 2011

Behind Wall Street

Behind the companies' work there is the country strategy. Some countries don’t have a clear strategy, letting the door open to more powerful ones to enter and to define strategies according to their own interests. These last ones rule and let their companies grow. Big countries’ and companies’ power and strategies mix. The goal is not the exploited country’s people welfare but the big companies’ profit.

3 small movies follow.

1 - John Perkins enterview 1 - 8.45 min
2 - Jonh Perkins enterview 2 - 7.09 min
3 - Zeitgeist 2 (Addendum) - 9.05 min

The Spanish Bank Debt and the Future of Europe.

Spanish banks are facing some debt maturities of about 80,000 million euros. Most of these maturities belonging to entities that have more facilities to be financed by its size:
Santander - 27.400 M
BBVA - 11.900 M
Banco Sabadell - 2.877 M
Banco Popular - 2.826 M
Bakinter - 1.500 M
Spain is one of the countries with the world's private debt, measured as a percentage of GDP. The addition of credit to businesses and families exceeded the 2.84 trillion in October, according to the Bank of Spain. The ratio of loans over deposits reached in September last year, latest data available, 154%. Above 100%, deposits are no longer sufficient to fund loans. It is no coincidence that the four hardest hit countries in the eurozone, Ireland, Greece, Portugal and Spain are those with a higher ratio of the entire region.
About Publc Emissions, in good times, Spain became the second largest emitter of Europe, surpassed only by Germany. Now, the difficulty of putting this type of debt are enormous: with an unemployment rate of 20% and anemic economic growth, there are many doubts about the viability of loans, with a volume of around 1.1 billion.
But you have to meet the obligations and obtain liquidity. When the interbank market does not help, it’s necessary to appeal to the ECB, which must provide collateral as security for funding. In July 2010, the appeal of the Spanish financial system became 29.1% of what gave the ECB. At the end of the year, the pressure was reduced and Spain sought 66,986,000, half in July. But the ECB has already said he does not want banks to become "dependent" on their auctions, which at the moment are unlimited and fixed rate of 1%.
The state’s emissions are considered the safest. If the Treasury has to pay more than before, the private sector will face even higher costs. Goldman Sachs estimates that the total requirements of public funding in Spain for 2011 are of no less than 210,100 million. This figure could rise if the crisis leads to an increase in defaults and a further deterioration in the price of the assets backing the loans.
Professor Marti Pachama, EAE Business School said that "The size of Spain turns it practically impossible to rescue. We are talking of about 475,000 million euros. A bailout of this size would likely provoke a new banking crisis and, by extension, the euro”.

See the article at Cinco Días (in Spanish).

Image from here.

quinta-feira, 13 de janeiro de 2011

Oh, Lord, my God, is there no help for the widow's son?

The risk that parlous government finances will trigger sovereign debt defaults remains one of the biggest threats facing the world in 2011, according to the World Economic Forum.
The several measures to the financial crisis have drained national treasuries and household incomes. However, no structural changes have been done and the underlying risks still remain.

See the article at Reuters