Blogs on Emerging Markets Economics

Here are links to some good blogs related to emerging market economics and business.

  • BeyondBrics is Financial Times’ emerging markets blog.
  • One of the leading economic soothsayers, Nouriel Roubini, has a blog that should not be missed.
  • The International Financial Corporation (IFC), a division of the World Bank Group has an emerging markets blog called Innovations in Emerging Markets.
  • One of the Wall Street Journal blogs is ROI where “personal finance meets current affairs.” This blog has both US and internationally oriented posts.
  • WSJ also offers New Europe about Central and Eastern European economics.
  • Mark Mobius, the major player for Franklin Templeton in emerging markets and a key investor in Romania, has a blog.
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Personal Feelings About Egypt and Hopes for Democracy

Egypt is a place that I think of fondly. My international career really started in Egypt in 1991 and I have returned a dozen times or so. Many foreigners see Cairo as a dirty, loud, chaotic place. I see it as a Middle Eastern New York City — big, crowded, fast-paced, river running through the middle, open all night, good food, music on street corners, etc. — bright lights, big city if you will.

What struck me most about the Egyptian people was their love of family, talking and a surprising lack of fundamentalism and xenophobia. Sitting around a table filled with Egyptian culinary delights such molokheya, kushari and mahshi while talking about politics and world issues is a true delight.

Many Egyptians with whom I spoke held cosmopolitan points of view. They remarked that any differences with Israel were political and not religious or ethnic. I remember speaking with the Army’s Chief of Staff, number three or four in the Egyptian military, after a protest by members of the Muslim Brotherhood. He was not a fan of the Brotherhood’s viewpoint. The General remarked that when he was a boy, he lived in a Jewish neighborhood in Cairo. His apartment building had seven units with three Jewish, two Muslim and two Coptic Christian families living in them, and everyone got along famously. That was his Cairo.

Thus, my hope is the outcome of the demonstrations for Egypt is a pluralist democracy. However, there is little history of pluralistic democracy in this part of the world. The fear of the West is that the fundamentalist religious groups being better organized, funded and intensely committed would be able to exploit any power vacuum and the putative Mohammed ElBaradei would be another Dr. Shapour Bakhtiar of Iran.

Pessimists believe that a ‘wrong’ turn of events in Egypt and Tunisia could quickly radicalize the Middle East. Those who believe there is potential for democracy in Egypt see the current situation as an opportunity to achieve a democratic foothold that could spread throughout the region far better than the Iraqi ‘democracy’ did.

A key to a peaceful outcome is if prolonged unrest will cause further economic despair. Economic despair rather than religion or political ideology tends to be the root cause of upheaval. (Please see Afghanistan blog posts.) When the protests started, their focus was failed economic policies and corruption.

A huge segment of Egypt’s population is under thirty years of age, many of whom are out of work. Young, unemployed males who are discontent with the society and their economic status are targets for radicals. If protracted unrest causes further economic disruption and more young men are out on the street, it’s bad news for folks wanting cooler heads to prevail.

For the most part, the US and the West are spectators to what is happening in Egypt with little capability to influence events. What should the US and its allies do? Here’s some suggestions.

1.) Keep America at a distance from any individual. The US must be seen as backing the Egyptian people and not a particular leader. America is viewed as a backer of President Mubarak and he is the dictator being repudiated. While there is still respect for the US in many sectors of Egyptian society, anything viewed as imperialism or helping Israel will not help the pro-democracy forces. America should play a behind-the-scenes role and support the right people and processes but not be seen as an advocate of a particular person; i.e. Mubarak, The Shah, Saddam Hussein, Ahmed Chalabi, etc.

2.) Keep cool on the Muslim Brotherhood. Related to “keeping distance from any individual”, the US and its allies needs to be careful on its rhetoric and activity regarding the Muslim Brotherhood. While pro-democracy supporters in the West fear a radical takeover in Egypt, criticizing the Muslim Brotherhood, whom also have been a target of Mubarak’s political oppression, will engender distrust. The US needs to be seen as supporting the Egyptian people not waging its war on fundamentalist Islam.

3.) Food assistance if necessary. The US and other Western countries already provide a tremendous amount of foreign aid to Egypt. Increasing foreign aid likely will have little immediate impact on the peaceful transition to democracy. However, food shortages have been reported. Riots and unrest due to food shortages can bring lawlessness quickly and a rationale for more aggressive action by the authorities. Thus, food assistance should be available if necessary.

4.) Prepare the contingency plan. Previous Middle East rulers, Saddam and even America’s friend, King Hussein, have demonstrated a willingness to suppress their countrymen violently. If ‘it goes bad’ in Egypt, a plan must be ready to decapitate military action against the people. The Armed Forces thus far have been hesitant to use force and generally supportive of the people. So, a contingency plan for military action hopefully will never be implemented. However, Mubarak certainly has allies in the Armed Forces and is a former Air Force officer himself. Thus, the West should prepare itself to prevent widespread bloodshed and kindling for a larger Middle East war.

After years of observing the Middle East, I have to admit I am pessimistic about things turning out well. But I do remember arriving in Cairo right after the first Gulf War, I entered a taxi and asked the cabbie to take me to the Semiramis hotel. He replied, “UK or US?” I said, “US.” The cabbie smiled and said, “George Bush #1.” I understand the history, situation and players are different now but I can still hope. A hopeful pessimist if you will.

Local Fire – Family Needs Computer

In our community, a neighbor had a house fire. Fortunately, everyone survived but most of their possessions were lost. The family needs a computer for their daughter, a high school student. If you have an extra computer that you are not using, please contact me.

Rise of Think Tanks in Emerging Markets

Schumpeter’s blog in The Economist discusses the rise of think tanks in emerging markets. Not good news for us emerging market consultants. (-;

The Real Economic Cost of Snow – Billable Hours for Consultants!

We have been inundated with snow in the New York area over the past few weeks. The news presenters are constantly reminding viewers about budget overruns for snow removal, lost work time, increased traffic time, etc.

I spent nearly two hours cleaning cars and shoveling snow this morning. Now, that’s time lost!

Info on Doing Business in Kazakhstan from the Kazakhstan Chamber of Commerce in the US

I attended a webinar hosted by the Kazakhstan Chamber of Commerce in the US and a Kazakh law firm.

The presentations are available from KazCham.

1. Doing Business in Kazakhstan

2. Current Economic Situation in Kazakhstan

3.

Developed Economies Facing Mountains of Debt But Emerging Economies Not

The World Economic Forum at Davos has begun. (I guess my invitation was lost in the mail. … Maybe I should check my spam filter.) An interesting article from DealBook discusses how the developed economies especially Europe are saddled with debt and the emerging powers like China and India are not.

To read the article,