Author Archives: Edward Hugh

About Edward Hugh

Edward 'the bonobo is a Catalan economist of British extraction. After being born, brought-up and educated in the United Kingdom, Edward subsequently settled in Barcelona where he has now lived for over 15 years. As a consequence Edward considers himself to be "Catalan by adoption". He has also to some extent been "adopted by Catalonia", since throughout the current economic crisis he has been a constant voice on TV, radio and in the press arguing in favor of the need for some kind of internal devaluation if Spain wants to stay inside the Euro. By inclination he is a macro economist, but his obsession with trying to understand the economic impact of demographic changes has often taken him far from home, off and away from the more tranquil and placid pastures of the dismal science, into the bracken and thicket of demography, anthropology, biology, sociology and systems theory. All of which has lead him to ask himself whether Thomas Wolfe was not in fact right when he asserted that the fact of the matter is "you can never go home again".

Danish Pastry Cooking?

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As the Quartet of would-be Mideast peacemakers meets in huddled session, and as Angela Merkel does some plain talking, another closely related issue is going the rounds today (and this, and this):

“In a demonstration on the West Bank, members of Fatah’s al-Aqsa Martyrs Brigades threatened Danes in the area and told them to leave immediately, the Danish news agency Ritzau reported on Sunday. The demonstrators burned the Danish flag and called on the Palestinian authorities to cut diplomatic ties with Denmark, Ritzau said.”

“Libya has said it is closing its embassy in Denmark in protest against a series of caricatures depicting the Prophet Muhammad in a Danish newspaper.”

“A roadside bomb targeted a joint Danish-Iraqi military patrol near the southern city of Basra on Monday — the first attack on Danish troops since protests against a Danish newspaper for publishing widely criticized caricatures of Islam’s prophet.”

Danish Blogger Claus Vistessen has the story as it is seen from inside Denmark:

Four months ago the Danish newspaper Jyllandsposten posted 12 drawings of the muslim prophet depicting him as they saw him but with a clear provocative bordering to tactless zeal … the most notable drawing was one showing Muhammed, with a turban containing a large bomb.

The cartoons resulted in immediate protests and demonstrations from Muslims in Denmark, but to sum it all up; two very important things happened as a result of the drawings.
Continue reading here.

They Started With The Bus Drivers….

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I don’t intend to make this a long post. I think we’ve already explored most of the issues, (and here, and here), but I do feel we need to be vigilant about what is happening on a day to day basis in Iran. This story seems to confirm the general picture I’d been forming:

Clashes erupted between Iran’s State Security Forces and bus drivers and union activists in the Iranian capital Tehran on Saturday after authorities arrested activists in an attempt to prevent a demonstration that had been planned for the day, local residents told Iran Focus.

Agents of the Ministry of Intelligence and Security (MOIS), Iran’s notorious secret police, raided the homes of bus drivers in Tehran in the early hours of the morning, arresting hundreds of bus union activists and in some cases their relatives as well, one resident reported.

Those arrested have been taken to unknown locations.

This is an extremely repressive administration, which seems to be bent on systematically tightening its grip and eliminating all serious opposition. If you want a run-down on the various opinions about what to do about the situation, you could do worse than start here.

Troglodytes Making Waves

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A couple of weeks ago I posted here about how a senior officer in the Spanish army – Lt. Gen. Jose Mena Aguado – had been placed under house arrest for insinuating that the Spanish military might have a responsibility to intervene in defence of the Spanish Constitution if the new Catalan Statute of Autonomy went forward in its present form. Well yesterday news of this seems to have reached the New York Times. Describing the officers in question as troglodytes, the NYT has especially harsh words for the opposition Partido Popular, whose leaders, it should be remembered, described Aguado’s statement as ‘logical’ in the context of what was being proposed:

The response of the center-left government of Prime Minister José Luis Rodríguez Zapatero has been appropriately firm, including the dismissal and arrest of one of the culprits, a senior army general. Regrettably, the center-right Popular Party, the main opposition group, seems more interested in making excuses for the officers than in defending the democratic order in which it has a vital stake.

“Spanish society, Spanish politicians and, for the most part, Spanish military officers have come a long way from that (the Franco) era, moderating their views and deepening their commitment to democratic give-and-take. But the Popular Party has had a hard time getting over its electoral defeat nearly two years ago, days after the terrorist bombings of commuter trains in Madrid. It has never really accepted the democratic legitimacy of that vote. It is time for the Popular Party to move ahead. Spanish democracy needs and deserves vigorous bipartisan support.”

The NYT does arrive rather late on the scene. The Economist had this piece on the 12th January, and the FT this one on the 10th January. Meanwhile, the New York Times story is itself making waves here. The Basque news agency EITB24 covers it here. And all of which on the day in which the Partido Popular has begun collecting signatures for a referendum (in defence of the constitution and) against the the new Statute, a referendum which would itself be, well, guess what, unconstitutional, and on which Josep Piqué, leader of the PP in Catalonia, had to be given a three hour talking-to to convince him not to resign from the party, since, again guess what, he thinks the latest version of the text isn’t at all bad!

Ukraine: The Tension Continues

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A state-of-friction seems to have gotten a grip on relations between Russia and Ukraine, and it doesn’t look like it is going to go away anytime soon:

“Ukrainian state authorities seized the Yalta lighthouse on January 13 from Russia’s Black Sea Fleet, and a Ukrainian student organization is picketing the Russian radar station in Henychesk around the clock since January 15 with tacit approval from Kyiv authorities. The Ukrainian government wants Russia to agree to hand over by February all the 35 coastal installations (outside Sevastopol’s bays) that Russia’s Black Sea Fleet is using since 1997 without a legal basis.”

Meantime as more details of the recent gas deal have emerged, President Yushchenko (with elections looming) stubbornly sticks by the agreement, while his prime minister – Yuriy Yekhanurov – doesn’t seem to agree:

In contrast to the president, Yekhanurov now acknowledges that Kyiv has been blackmailed into signing, and that the agreement is not binding after all. While defending the government’s decision to sign it on January 4 regardless of the flaws, Yekhanurov has begun unveiling some of the agreement’s murky aspects. In a televised interview he recounted some moments of the negotiations in Moscow: “The whole of the pipeline from the Turkmen-Uzbek to the Russian-Ukrainian border is filled by Gazprom’s contractor RosUkrEnergo. We were offered a choice: either this, or [sarcastically] ship gas by train. Thus, we had no choice.

Spain’s Immigration

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As Spanish commenter Pepe would probably say, ‘hot labour’ is moving into Spain at a nifty clip: 2% of the total population per annum. In 2004 the number increased by 700,000. Last year, although we don’t have the numbers yet there was probably the same number or more. Here is a story from El Pais which was linked-to in the IHT based on this press release (in Spanish). Note that these numbers are for 1 January 2005, we still have to add 2006.

The number of immigrants in Spain rose last year to the equivalent of 8.5 percent of the total population as of January 1, 2005, according to figures released on Tuesday by the National Statistics Institute (INE). Of the total 44.1 million people registered as residents, 3.7 million were non-Spanish. The total population rose 2.1 percent from the year-earlier figure, while the number of immigrants rose 23 percent from the figures released on January 1, 2004.

The regions that registered the largest rise in population were Catalonia, Andalusia, Madrid and Valencia, largely due to immigration. Only in the North African enclave of Melilla did the population decrease, the INE said.

The largest immigrant group hails from Ecuador with 475,698 residents, followed by Morocco with 420,556, Colombia with 248,894, Romania with 207,960 and Britain with 174,810.

For towns with more than 10,000 inhabitants, Rojales in Alicante boasts the largest percentage of foreign-born residents. Of the total population of 13,807, 65.3 percent are immigrants, the INE said. Rojales, about 35 kilometers from Alicante, is a popular spot for British citizens to buy vacation and retirement homes.

In November, the Center for Sociological Research (CIS) released a survey showing that three out of every five Spaniards responded that there are too many immigrants in Spain. Immigration also was shown to be the second-most important problem for Spaniards (40 percent) after unemployment (54.1 percent) and ahead of terrorism (25.3 percent).

Nevertheless, the same survey showed that nearly 61 percent of Spaniards feel immigrants should have the right to vote in local elections, while 53.4 percent would extend that right to national elections.

Not Amused

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The Financial Times reports this morning that:

“Jacques Chirac, France’s president, has threatened to use nuclear weapons against any state that supported terrorism against his country or considered using weapons of mass destruction.“.

According to the FT Chirac’s actually words were:

“The leaders of states who use terrorist means against us, as well as those who would consider using, in one way or another, weapons of mass destruction, must understand that they would lay themselves open to a firm and adapted response on our part,” he said. “This response could be a conventional one. It could also be of a different kind.”

Now these words were not just any words, and the speech was not just any speech, since as the New York Times indicates, the Élysée Palace explanation is that M. Chirac’s speech reflected changes that had been adopted as part of a routine review of nuclear doctrine, a review which is carried out every five years. So not only is this a policy statement, it was also

the first time that a French president had publicly spelled out the possibility of nuclear retaliation for state-backed terrorism. In the past, France has said nuclear weapons could be used if its “vital interests” were at risk, while deliberately refraining from identifying those interests.

“In French doctrine, nuclear weapons are meant to deter attacks against ‘vital interests,’ to create uncertainty among potential attackers about what these interests could be,” said François Heisbourg, special adviser at the Foundation for Strategic Research in Paris. “But here, things get defined. That’s a change.”

Not only could this change of policy not have come at a more sensitive time in view of what is currently taking place in Iran, it could not, in my opinion have been more barbaric, since (and surely M Chirac must know this) the victims of nuclear attacks are not states, but people, normally innocent ones, and if he doesn’t know this he should try asking the relatives of the former inhabitants of Hiroshima and Nagasaki.

Hopefully such threats will never be acted on (which doesn’t do anything to rescue the ethical standing of those who issue them), but the more immediate potential economic consequences that upping-the-anti with Iran in this crude fashion could have are outlined both here and here.

The Booming Czech Republic

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The Czech Republic is booming apparently. Both per-capita GDP and fertility are definitely on an upswing, although surprisingly perhaps, for once I am not going to try and suggest that these are connected:

The Czech republic has joined Slovenia among new member states with higher levels of wealth per capita than old member Portugal, according to European Commission statistics.

This raises interesting questions which I just touch on in this AFEM post here. (Incidentally, you can find a one-page set of economic statistics for the Czech Republic from the OECD here).

What is perhaps most interesting about the Prague Post article is the way they explicitly link the increase in preganancy to a recent reform in maternity provision (due to come into effect in April), and to the fact that the ‘postponement phenomenon‘ often leads to a spike in births as women who have postponed reach the new ‘childbearing age’.

“The Labor and Social Affairs Ministry recently launched its own reforms aimed at encouraging couples to have children. The reforms provide generous benefit packages and require companies to hold the jobs of employees on leave for up to four years, and, as of April, women will begin receiving a state subsidy of 17,500 Kč ($725) for each newborn child — more than double the current amount.”
Continue reading →

The Czech Growth Engine?

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Interesting news from the Czech Republic in this week:

The Czech republic has joined Slovenia among new member states with higher levels of wealth per capita than old member Portugal, according to European Commission statistics.

The central European country enjoyed gross income per capita of 73 percent of the EU 25 average last year compared to 71 percent in Portugal, according to the latest estimate by the commission’s statistical wing, Eurostat….

The results have left Slovenia and the Czech republic chasing Greece, on 83 percent, as the next old member state to overtake, with Slovenia set to draw level with Greece by 2007 and the Czech republic to narrow the gap further in the next two years, the study predicts.

This now raises some interesting questions. How will Slovenia’s future growth compare with that of the Czech Republic (remember Slovenia is about to join the eurozone on 1 January 2007 while the Czech Republic is in no particular hurry to join)? What is the relation between Portugal’s low-growth and eurozonemembership? Will the Czech Republic now overtake Greece?

We can also, I think, see more clearly some appropriate comparisons for testing the ‘euro has been a spectacular success’ hypothesis: we can look at the UK vs France, Finland vs Sweden and Denmark, and we can look at the Czech Republic vs Portugal.

Not Before Time

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Brighton College, a modest private school in the South of England, has announced that Mandarin Chinese is to become part of school’s core curriculum from September. Now all it needs is for the state sector to follow suit:

In a clear sign of China’s growing economic and political clout, a British school has become the first in the country to make Mandarin Chinese a compulsory subject for all pupils…..

“One of my key tasks is to make sure that the pupils at Brighton College are equipped for the realities of the 21st century, and one of those realities is that China has the fastest growing economy in the world,” Richard Cairns, headmaster of Brighton College, said.

“This year China replaced Britain as the world’s fourth largest economy. We in Britain need to face up to this challenge, see it for the trading opportunity that it is, and ensure that our nation’s children are well-placed to thrive in this new global reality.

“A better understanding of the language and culture of China will be hugely to the advantage of the children of Brighton College.”

Merkel In Moscow

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Fresh from asking G. W. Bush to put an end to Guantanamo, Anglea Merkel is now in Moscow. High on the list will be both Iran, and democracy in Russia. Quite timely really that someone who grew up in East Germany and can read the riot act to him in her most charming Russian should be catapulted into the front line like this.

Certain things seem to stand out:

Merkel………..agreed with U.S. President George W. Bush on Friday that it was time to refer Iran to the UN Security Council over its refusal to abandon uranium enrichment technology that could enable it to get atomic weapons.

Germany is the world’s top exporter of goods to Iran and would have much to lose if Tehran faced sanctions. It exported 4 billion euros of goods to Iran last year.

The chancellor, who grew up in Germany’s formerly communist East and speaks fluent Russian, is under pressure from the opposition to confront Putin on reports that the development of democracy and human rights in Russia is slowing down.

“It seems that Putin will agree not to vote no, but will abstain. A yes vote would be better,”

As Alex noted, Merkel has already “been impressively successful in building authority in foreign affairs”. Could this be anything to do with the fact that authority-building on internal matters is likely to be much more uphill work, or could it be that we are going to see a German Foreign Affairs Chancellor, restricting herself internally to arbitrating between the otherwise warring factions of her government? That could be one way to make it work I suppose.