Blog: Latest Entries

NAFTA linkage

The Canadian dollar (CAD) and the Mexican peso (MXN) are tightly linked to the US economy; specifically here the DJI (Dow Jones Industrial average), as can be seen in the image. When the DJI strengthens, so do the CAD and the MXN, and vice versa. Note however that, on the long term (2 years, 5 years), the MXN never quite recovers the way the CAD does after a dip in the DJI.

The top graph shows an interval of one year (Oct 2009 - Oct 2010), the middle graph shows an interval of two years (Oct 2008 - Oct 2010), and the bottom one an interval of five years (Oct 2005 - Oct 2010).

Posted on:

2010.10.23 -0500

Tags:

economy

Omar Hernandez dies

Omar Hernández, one of the most amazing musicians I've known, was recently killed. Another depressing day... man is, indeed, the wolf of man.

Posted on:

2010.06.12 -0500

Tags:

art , homo homini lupus , music , people

A Brief History of Aid

[...] The 1980s also saw the rise of the neo-liberal thinking which argued that governments should liberalize their economies in favor of the laissez-faire paradigm, which encompassed [...] the private market. The experience of the newly industrializing economies of Asia gave these market-based ideas a popularity boost in policy circles in the United States and Europe. The Asian tigers seemed to have achieved high growth rates and unprecedented poverty reduction with free-market policies and an outward orientation. As free-market proponents, Milton Friedman and the Chicago School of Economics had great influence on the policies and thinking of the US President, Ronald Reagan, and the UK's Prime Minister, Margaret Thatcher. [...]

In Africa, as with other parts of the developing world, this economic overhaul necessitated two new aid-based programmes: first, stabilization, and then structural adjustment. Stabilization meant reducing a country's imbalances to reasonable levels [...]. Meanwhile structural adjustment was aimed at encouraging greater trade liberalization and reducing price and structural rigidities by such means as removing subsidies.

Both the World Bank and the IMF launched aggressive aid programmes to institute these two initiatives; the IMF's Structural Adjustment and Enhanced Structural Adjustment Facilities are examples of these. Poor governments received cash in the form of budgetary support, and in return agreed to embrace the free-market solutions to development. This would entail minimizing the role of the state, privatizing previously nationalized industries, liberalizing trade and dramatically reducing the civil service. [...]

By the end of the 1980s, emerging-market countries' debt was at least US$1 trillion, and the cost of servicing these obligations colossal. Indeed, the cost became so substantial that it eventually dwarfted foreign aid going into poor countries -- leading to a net reverse flow from poor countries to rich to the tune of US$15 billion every year between 1987 and 1989.

[...] The aid campaigners capitalized on the success of raising cash for emergency aid, and extended it to a platform to raise development aid; something entirely different.

In some recent times, the Irish musician Bono has made his case directly to the US President, George Bush, in a White House visit in October 2005, and Bob Geldof was a guest at the 2005 G8 meeting in Gleneagles, Scotland, and advised the UK's Commission to Africa. It would appear, despondent with their record of failure, that Western donors are increasingly looking to anyone for guidance on how best to tackle Africa's predicament.

Scarcely does one see Africa's (elected) officials or those African policy makers charged with the development portfolio offer an opinion on what should be done, or what might actually work to save the continent from its regression. This very important responsibility has, for all intents and purposes, and to the bewilderment and chagrin of many an African, been left to musicians who reside outside Africa. One disastrous consequence of this has been that honest, critical and serious dialogue and debate on the merits and demerits of aid have atrophied. As one critic of the aid model remarked, 'my voice can't compete with an electric guitar'.

Posted on:

2010.06.07 -0500

Tags:

texts

The two faces of Quintana Roo

[...] One key issue in the state is the inequality that comes with a high concentration of wealth. The resorts function on what they call an “all inclusive policy,” where food, drinks, entertainment and lodging are all included for an affordable price to foreign tourists – especially those who come from countries deeply affected by the crisis. In 2008, 67 percent of tourists who came to Quintana Roo stayed in five-star hotels, according to the National Institute of Statistics and Geography. Another 14 percent go to four-star facilities. A one-night stay at a luxury hotel in Playa del Carmen costs about $480 at this time of year, and that includes access to chain restaurants, high-end stores, and massages along the coast.

A world away from white sand beaches of Playa del Carmen is the workplace of Ruben Cahan, a Mayan who works as a vendor in a small shop that sells ponchos, sombreros and other tourist souvenirs, just a few blocks away from the tourist epicenter on the coast. Cahan says that business is difficult in this area. “They tell us that the locals’ shops are too far away,” he says, noting that the hotels give away hats and shirts to tourists anyway.

Astrid Cavazos, one of the managers at the Porto Royal hotel in Playa del Carmen, admits that local business that can’t afford to be near the coast line can’t compete with the resorts, “because the prices of everything we sell inside the hotel are so cheap.” She explains that “other hotels in Cancun and Playa del Carmen are like mini-cities that trap the tourists within the confines of the hotel.”

Walking along the coastal strip filled with shops in Playa del Carmen, Canadian tourists Alana Smith and Donny Smith announce that they have not had to use a word of Spanish since they arrived, because at the resort they are staying at the “staff makes an effort to speak English.”

“At the restaurants waiters are not allowed to speak Spanish even amongst themselves,” says Alejandro Eguia Lis Luis, a community organizer and coordinator of the Tzol K’in Center for Culture and Environment, a group that aims to promote a sense of community amongst the poor people in Cancun.

Arturo Ek Rodriguez, a bellboy of Mayan descendant who works at one of the hotels, says he had to apply to many different resorts before finding a job. “I was told I’d have to have a certain height to get the job, and that I did not have the profile to work there,” he says. “You’ve got to be fair-skinned and tall, more like an European type.” Along the coast line, the only testament to the Mayan culture of Quintana Roo can be seen with plaster decorations depicting Mayan statues and artwork.

[...]

“This is little Miami,” says Alejandro Luis, as he drives through the 17-kilometer stretch that is the hotel zone in Cancun, where the cost of a room for one night can be anywhere between $300 to $5000. Driving through the region, there is not a stone out of place or the slightest sign of any blemish on the roads or on the sidewalks. All of the lawns are trimmed to perfection and even the bus stops are lit up, which is an uncommon site in other parts of the city. Starbucks, Hard Rock Café and an assorted delight of various chain stores appear along the stretch, and the only thing out of place in the hotel zone are the municipal police, who drive around wearing bullet-proof vests. “We live too far from God and too close to the USA”, Alejandro Luis adds. [...]

Posted on:

2010.03.15 -0500

Tags:

texts