US$147/B One Year On: Political Winners and Strategic Losers
In 2009, the oil price fell sharply after a five-year honeymoon. You’d have expected it to take a number of political casualties with it. In a new analysis by the Center for Security Studies (CSS), Matthew Hulbert explains why it’s not been the case. Looking forward, he thinks that consumers will pretty likely face another price crunch as investment lags and demand rises. But he concludes with a warning to Russia, Venezuela and co:
“Some producers will no doubt see this as a ‘strategic victory’: but unless they have learned the lessons of 2008/9 to diversify their economic bases beyond narrow resource wealth, once the next bubble bursts, they will no doubt need to batten down the political hatches once more.”
Matthew is the CSS’s energy expert; he used to work in the City of London, advising on energy markets and political risk.
Rolling the dice to roll in the dough / photo: Maximaximax, wikipedia
Casinos count as one of the most recession-proof industries. They are also a convenient source of tax revenue for governments. That’s why many legislators tend to relax their moral reservations towards the “vice of gambling” and allow the re-opening of casinos to generate new government income.
Grappling with a gaping hole in its state budget, the Massachussetts legislature is seriously considering legalizing casino gambling in the state. The casino industry in the United States is even expected to keep struggling architects afloat, who are among the hardest hit by the recession. In fact, only the construction of churches seems to keep up with that of casinos.
Against all odds, the Russian government, which has been dealt a hard hand by the global economic downturn, is doing the exact opposite: As of today, casinos in Russia are outlawed. It is the result of a law that seeks to “go all-in” with eradicating a vice that allegedly is widespread among the Russian people. The law is also designed to rein in an industry seen as a breeding ground for corruption and organized crime. From the new law, Russia expects a payoff in virtue rather than cash. Meanwhile, the Russian casino industry expects at least 350,000 job losses as a result of the shutdowns – in addition to the loss in revenue for the cash-strapped Russian state.
Alas, for hundreds of thousands of Russian casino industry employees, the game is over. Yet the ban’s effectiveness might be less certain than your survival in Russian roulette. The gambling industry is expected to go underground and thus more difficult to regulate and control. So will the ban ultimately help eradicate the vice of gambling? I wouldn’t bet on it.
World distribution of dengue viruses and their mosquito vector, Aedes aegypti, in 2008
A recent Miami Herald article sparked my interest for the small insect. Its name is Aedes Aegypti, one of the 3500 mosquito species identified so far, known for spreading dengue fever, but also the Chikungunya and yellow fever viruses.
The Miami Herald article describes how Mexico is currently struggling to counter a resurgence of dengue fever. It is not the only Latin American country dealing with the buzzing issue. Brazil and Argentina have apparently reported record numbers of cases this year.
At first, hearing about yet another disease striking Mexico alarmed me. It was only after reading more on the issue – as in the case of the H1N1 virus – that I was settled. Dengue fever has a relatively low death rate. Only 2.5 percent of hospitalized patients do not survive the disease. However, the tropical febrile disease is particularly costly, with patients requiring constant and long-term monitoring. Therefore, in the case of Mexico this we know for sure: The spreading disease will strike tourism and the economy as a whole yet another blow.
With the fever increasing rapidly in tropical and subtropical areas, we ask: What can be done against the dangerous disease and its carrier – the mosquito? Researchers all over the world are testing dengue fever vaccines and at the same time considerable efforts are being invested in mosquito eradication.
Of the existing population policies and programs the ones of Singapore appear to be the most developed ones. After the 2005 dengue outbreak the country launched enhanced measures, including the introduction of fines for those who allow mosquitoes to breed in their homes and also for those found with standing water at construction sites (standing water being the larval hatching grounds of the Aedes Aegypti).
Regardless of whether Obama or McCain won last year’s US presidential elections, today’s event would have taken place either way. Today, Iraq is celebrating “National Sovereignty Day.” The date for today’s US combat troop withdrawal from all Iraqi cities, towns and villages was agreed upon by the Bush administration and the Iraqi government headed by Prime Minister Nuri al-Maliki, who was overly eager to see US combat troops leave (and take credit for it).
Indian women in Akbarpura / photo: lecercle, flickr
Well, it turns out microfinance institutions and microenterprises may very well be.
In an interesting reversal of fortunes, small, flexible and locally connected microfinance institutions seem to be fairing better than their larger commercial counterparts in the current economic climate. Due in large part to flexible business models, locally connected operations (microcreditors tend to know their customers much better), low exposure to the hazy world of high-flying finance, and an attractive product, microfinance institutions are flourishing all over the world.
By lending small amounts to poor people with no traditionally defined credit-worthiness, microfinance institutions are keeping the lower tiers of the world economy afloat, even thriving in parts.
