Author Archives: Omar

Omar

About Omar

I graduated from the University of Cambridge in economics. My special interests were social choice theory and monetary theory. I am a postgraduate of the School of Oriental and African Studies with a doctorate in monetary economics 1984. I left academic studies to work in the financial sector for a number of years (CEO Moseley Securities), and then to manage companies in the industrial sector in the Middle-East (CEO Egyptian Cotton Company). My work in the Middle-East led to a change of path to politics in that area since 2000. Since 2012 I have written articles on politics for current affairs journals, under my own name and under pseudonyms. My area of special academic interest is the idea of instrumental rationality, its use in the development of economic and social theories, especially neoliberal constructions, and the impact of these theories on our political life, on which subject I am writing a book. Parts of the book are appearing in various academic journals, beginning with Max Weber Studies vol. 16 (2).

Assad and the crimes at Khan Sheikhun

The report by the French Intelligence services, if correct, would not only confirm Assad as the perpetrator of the Khan Sheikhun chemical attack, but would confirm the catastrophic errors of naysayers on Assad’s role in the Ghouta chemical massacre such as Seymour Hersh and Robert Parry who doubled down on Khan Sheikhun, and vindicate the view of Muhammad Idrees Ahmad that the editors of the London Review of Books were negligent in their duty in publishing Hersh’s article, and Hersh spectacularly obtuse in his acceptance of evidence from a single intelligence source among the Western intelligence services.

The new evidence is furthermore a huge embarrassment for Putin, who has admitted to Erdoğan that he would like a solution to the Damascus problem and that he ‘..is not Assad’s lawyer’. But Russia refuses to accept the evidence in the reports on the basis the samples tested by French authorities could have been obtained anywhere.

The report begins:

‘On 4 April 2017, air strikes against civilians in the city of Khan Sheikhoun killed more than 80 people. According to our experts, the symptoms observed immediately afterwards (pupil contraction, suffocation, bluing of lips, white foam on faces, convulsions), the high number of deaths, and the fact that certain responders and medical staff suffered secondary contamination are consistent with the use of a highly lethal neurotoxic agent. This has now been confirmed scientifically….’ read on here, and see the annex here

 

A World Turned Inside Out: the Emerging Markets Taking Over

Stephen Roach writes

Slowly but surely, a bruised and battered global economy now appears to be shaking off its deep post-crisis malaise. If the International Monetary Fund’s latest forecasts are borne out – an iffy proposition, to be sure – the nearly 3.6% average annual growth in world GDP expected over the 2017-2018 period would represent a modest uptick from the 3.2% pace of the past two years. Fully a decade after the Great Financial Crisis, global growth is finally returning to its 3.5% post-1980 trend.

But this round trip hardly signals that the world is back to normal. On the contrary, the overhyped idea of a “new normal” for the world economy overlooks an extraordinary transformation in the global growth dynamic over the past nine years.

At the margin, the recent improvement has been concentrated in the advanced economies, where GDP growth is now expected to average 2% over 2017-2018 – a meaningful pick-up from the unprecedentedly anemic 1.1% average growth of the preceding nine years. Relative strength in the United States (2.4%) is expected to be offset by weakness in both Europe (1.7%) and of course Japan (0.9%). However, annual growth in the advanced economies is expected to remain considerably below the longer-term trend of 2.9% recorded during the 1980-2007 period.

By contrast, the developing world keeps chugging along at a much faster pace. Although the average growth rate expected for these economies over 2017-2018, at 4.6%, is about half a percentage point lower than during the preceding nine years, they would still be expanding at more than twice the pace of the developed world. Unsurprisingly (at least to those of us who never bought into the Chinese hard-landing scenario), strength in the developing world is expected to be concentrated in China (6.4%) and India (7.5%), with growth lagging in Latin America (1.5%) and Russia (1.4%).

This persistent divergence between developed and developing economies has now reached a critical point. From 1980 to 2007, the advanced economies accounted for an average of 59% of world GDP (measured in terms of purchasing power parity), whereas the combined share of developing and emerging economies was 41%. That was then. According to the IMF’s latest forecast, those shares will completely reverse by 2018: 41% for the advanced economies and 59% for the developing world.

The pendulum of world economic growth has swung dramatically from the so-called advanced countries to the emerging and developing economies. New? Absolutely. Normal? Not even close. It is a stunning development, one that raises at least three fundamental questions about our understanding of macroeconomics:

First, isn’t it time to rethink the role of monetary policy?

The anemic recovery in the developed world has occurred against the backdrop of the most dramatic monetary easing in history – eight years of policy interest rates near the zero bound and enormous liquidity injections from vastly expanded central-bank balance sheets.

Yet these unconventional policies have had only a limited impact on real economic activity, middle-class jobs, and wages. Instead, the excess liquidity spilled over into financial markets, sustaining upward pressure on asset prices and producing outsize returns for wealthy investors. Like it or not, monetary policy has become an instrument of mounting inequality.

Second, has the developing world finally broken free of its long-standing dependence on the developed world?

I have long argued that claims of such a “decoupling” were spurious, given the persistence of export-led growth in poorer countries, which tethers their economies to external demand in richer countries. But the facts now speak otherwise. Growth in global trade slowed to a 3% average pace over the 2008-2016 post-crisis period – half the 6% norm from 1980 to 2016. Yet, over the same period, GDP growth in the developing economies barely skipped a beat. This attests to a developing world that is now far less dependent on the global trade cycle and more reliant on internal demand.

Finally, has China played a disproportionate role in reshaping the world economy?

Chinese rebalancing suggests that this may well be the case. Historically, China’s hugely successful export-led growth strategy, together with the rapid growth of China-centric global supply chains, was the major reason why I never bought the decoupling story. Yet the export share of Chinese GDP tumbled from 35% in 2007 to 20% in 2015, while its share of global output surged from 11% to 17% during this period. China, the world’s largest exporter, may well be in the vanguard of global decoupling.

This hints at an even more powerful trend: the rapid transformation of China’s industrial structure. China’s tertiary sector (services) has gone from 43% of GDP in 2007 to 52% in 2016, whereas the share of the secondary sector (manufacturing and construction) has fallen from 47% to 40% over the same period. While the private consumption share of aggregate demand increased more slowly, largely owing to high precautionary saving (which reflects gaps in the social safety net), there are grounds for optimism on this front as well.

Indeed, the explosive growth of Chinese e-commerce points to a shortcut toward a newly vibrant consumer culture that was unavailable to today’s advanced economies at a similar stage of development. In the annals of structural change, where shifts tend to be glacial, China’s evolution is a sprint.

All of this speaks to a radically different world than that which prevailed prior to the Great Financial Crisis – a world that raises profound questions about the efficacy of monetary policy, development strategies, and the role of China. While some healing of an $80 trillion global economy is now evident, progress needs to be seen through a different lens than used in past cycles. A world turned inside out, with new dynamism in the developing world far eclipsing lingering malaise in the advanced economies, is new – but hardly normal.

The Clash – الإشتباك

The year is 2013, the army has just unseated Mohamed Morsi’s Muslim Brotherhood, and pro-army and pro-MB factions clash on the streets. A reporter and photographer are arrested and thrown into the back of a police van, which is the sole camera setting; soon, other demonstrators from both sides are chucked in – along with, in one particularly chaotic scene, a lenient cop. They are crowded in there for hours in the boiling heat with no water and a plastic bottle to pee in. Through the grille-meshed window they get glimpses of the turmoil on the city streets.

At first, it looks like a no-budget movie with about a dozen people shot in a single location, but the director, Mohamed Diab, stages some spectacular riot scenes outside, which are all the more staggering for intruding on this enclosed space so unexpectedly.

The movie stunningly replicates that sense of inside and outside that must be felt by witnesses to any historic moment: the private debate, the enclosed conflict, and the theatre of confrontation unfolding beyond. What a dynamic piece of cinema.

A divided France

A Macron win may please Germany and the EUrocracy, but such an event would not avoid the fact that 75% of French voters rejected him in the first round, and that he has no party behind him in parliament. He will most probably win, but this will be an empty event. His presidency will actually be a disaster as France is likely to become ungovernable.

Should Italy finally take the plunge and leave the EURO to save itself, the effect on France, its biggest creditor and trade partner could be devastating. This is what France will face in the 2022 elections.

Ballot counting in the Turkish constitutional referendum

Nagehan Alçı writes

Since the criticisms raised by the Republican People’s Party (CHP) and the Peoples’ Democratic Party (HDP) over some ballots, the Supreme Election Board (YSK) has not yet given a good account of itself.

The CHP sought to stymie the proposed constitutional changes from the start and appealed to the Constitutional Court to cancel the legislative package as it was being approved by Parliament. So, taking advantage of the YSK’s half-baked statement on the night of the referendum, the CHP declared that it repudiated the referendum results, which was a black mark not only for the CHP, but also for Turkey’s election track record.

In fact, the YSK had decided to render unsealed ballots valid in all elections in the recent past. From a rigid legalistic point of view, the council can be criticized for not enforcing the law. Nevertheless, the practice was not one special to the April 16 referendum. The CHP and the HDP appealed to the YSK to accept unsealed ballots in various provinces after the June 7, 2015 parliamentary elections. Their applications were accepted.

In the April 16 referendum, there were 166,000 supervisors from the Justice and Development Party (AKP), 157,000 from the CHP, 133,000 from the Nationalist Movement Party (MHP), 64,000 from the HDP and 56,000 members from the Felicity Party (SP), who served as polling clerks on a total of 156,000 ballot boxes across Turkey on April 16.

Parties distribute polling clerks based on the power of provincial organizations and their strongholds. These figures indicate that individuals from various parties served and security officers ensured security for each ballot box across Turkey.

How could it be possible to manipulate ballot boxes and generate votes out of thin air in those circumstances? Could this be achieved by closing the eyes of thousands of representatives from various parties? Moreover, the “Vote and Beyond” group, which is known for its opposition to the AKP, declared that they found a mere 0.01 percent difference between the announced referendum results depending on the reports of their own supervisors.

Contrary to what has been claimed, the discussion on the ballots will not affect the results any way, given that the number of “yes” votes was 1.4 million more than no votes. The “Vote and Beyond” group sees a difference of 100,000 votes.

 

 

The German incitement to hatred, the Turkish Referendum and Neoliberal neocolonialism

This centre spread in the BILD newspaper led the German, Austrian and Dutch media onslaught telling Turkish voters to vote NO in their referendum on constitutional change (in both German and Turkish). A YES vote would see a separation of legislative and executive powers in Turkish governance, both currently in the gift of the Prime Minister’s Office, and Recep Tayyip Erdoğan would thus consolidate his presidency. BILD, owned by the media giant Axel Springer, is the largest circulation newspaper anywhere outside East Asia.

The question has to be asked why this newspaper told Turkish voters that the founder of their new Republic, Mustafa Kemal “Atatürk” (pictured) would have voted NO in this referendum. Read full article here.

Copts aim their anger entirely at Minister of Interior

Coptic demonstrators cry out the name of Magdi Abd el-Ghaffar in anger outside the bombed churches.

Mina Thabet, a Coptic Egyptian and director for the minority and vulnerable groups programme at the Egyptian Commission for Rights and Freedoms (ECRF), says …’We blame the security services. In the Tanta incident, the terrorist [as seen on camera] went through the front door of the church and moved all the way to the front without the security guards even stopping him’

Astonishingly there had been an earlier warning. A senior police official told Reuters that a bomb was discovered and disabled just outside the Tanta church about a week ago. “That should have been an alarm or a warning that this place is targeted,” said Amira Maher, who was waiting for her injured brother at a nearby hospital.

Both Thabet and Maher were part of groups of worshippers digging graves for the victims of the bombings in the basements of the devastated St George Church in Tanta and at Saint Mark’s Cathedral in Alexandria.