January 25, 2006

Between fakes and originals which has the more real market?

Sir Guy de Jonquieres, January 23 has never heard of anyone being killed by a fake handbag but still he might do well refraining from questioning the authenticity of the bag of someone coming out of a Gucci store so as to avoid getting seriously handbag-banged on his head. Tough clearly the originals and the fakes both need each other to survive it might very well be the original that has most to gain in this love-hate relation, as the only way a buyer could justify to himself paying their extraordinary prices is the extraordinary demand that exist for the fakes. Agreed, it is a quite confusing issue, not made easier by the fact that the fakes might represent the real markets while the originals seem to have more to do with fake markets.

Sent to FT, January 25, 2006

January 23, 2006

Who told you life in the “curse” lane was easy

Sir, yes Chad could not resist messing around with the mechanism of the transparency initiative for managing their oil income, and yes the World Bank could not just let them do so. But why should anyone believe that this first experiment needed to work in order to be useful. The fact that FT dedicates a full page about oil income being deviated from its originally intent of use, is already much more than what is normally written about all those other millions of oil income spillages that happens in the rest of the world. The important part is now to find a way forward, perhaps through some open-minded arbitration, instead of feeding the difficulties to satisfy the gluttony of all the salivating “we told you so”.

Sent to FT on January 23, 2006

January 20, 2006

A lack of alternatives is a de-facto compulsion

Sir, Benn Steil says “The developing world should abandon parochial currencies”, January 17, and replace them with international accepted ones, arguing that the “key is to refound globalization on moneys that people will hold without compulsion”. In doing so, he somehow seems to forget that having no other alternative, results in just the same as having a compulsion. At this moment any developing country that has adopted the US dollar, or even any holder of dollars, must feel somehow uncomfortable knowing they are bound to face significant losses, in real terms, just because the USA wishes to address some of its current parochial economic imbalances through exchange corrections, asking, begging or coercing China to revalue... so they can avoid to devalue. Hah!

January 16, 2006

Market reforms are in many ways yet untested vaccines

Sir, Marifeli Pérez-Stable in her “Populist delusions block Latin America´s progress”, January 16, makes a renewed call for market reforms, and although they are surely the right vaccine against the disease of populism in Latin America, we should not forget that while not yet sure of how to apply them, and in what doses, they might indeed create even more fertile conditions for the populist virus. Venezuela is a perfect example of this in that by eliminating its import substitution economy, purely as an act of faith and without replacing it with any other job generating mechanism, it almost immediately, as a direct consequence, brought us a Chavez. And that could hardly qualify as a success.

Sent to FT January 16, 2006