Guido Westerwelle, ask Stefan Yngves, Basel Committee, to explain “risk-adjusted regulatory bank returns” to you.

Sir, Guido Westerwelle makes a passionate plea for deepening the reforms in Europe, since “In some countries youth unemployment has risen to intolerable levels”, “Europe needs austerity and reforms – not spending” March 15. 

Mr Westerwelle, the foreign minister of Germany, is unfortunately not aware that there is another sort of “unilaterally austerity imposed from the outside”, an “austerity curse”, which has been destroying the economies in Europe and impeding job creation for quite some time. 

I refer to the capital requirements for banks imposed by the Basel Committee, I do not know with which authority, and that makes lending to those perceived as “absolutely safe” borrowers, immensely more profitable for the banks¸ than lending to the “risky” borrowers, like all the small businesses and entrepreneurs. And that has effectively castrated the banks and made it impossible for these to allocate economic resources efficiently. 

May I suggest Mr. Westerwelle, that he picks up the phone and calls Stefan Ingves, the Chairman of the Basel Committee to ask him: “Stefan what are these “risk-adjusted (regulatory) returns” that you mention in your March 12 speech?

Here I explain more of this 

PS. Sir, just to let you know, I am not copying Martin Wolf with this, since he has told me not to send him anything more about these “capital requirements”… he already knows it all... so he thinks.

The resource cursed citizens merit more sympathy and respect

Sir, you have published some quite thoughtful articles on the resource curse lately but, though I tried hard, I could not find one single valid argument why the “Resource wealth need no longer be a curse” in the article by Mats Berdal and Nader Mousavizadeh published on March 25.

The resource curse have millions of people suffering horrors so it is somewhat upsetting to see it being taken as lightly as some acne that could disappear if only instead on private investors it is governments like China or other similar hopefully western states” are to invest in natural resources with long-term commitments dubbed “macro-finance”... resource curse exploiters are just what they usually end up being.

The resource curse is a cancer, for so many... and you just do not go around speaking lightly and self-servingly about easy cures to cancer. Please the resourced cursed citizens merit more sympathy and respect.

Just another oil cursed citizen

What an opportunity we seem to have missed!

Sir, Daniel Smith writes that “Politicians cannot control Nigeria’s corruption crusade”, April 12, and of course he is right, since absolutely no one could do that, at least not while oil prices are high. He writes about Nigeria saying “its politics remains a stark scramble for power in which elites compete for domination of the state apparatus to reap the benefits of control over enormous oil revenues” and as happens, the population then elects a government to whom hand over the oil revenues that in reality belongs to themselves, only to thereafter have to spend the next couple of years licking boots in order to get some of that same oil money back, while the elected government officials, arrogantly, not in need of other tax income, couldn’t care less about them. It is only when you get to understand this that you really get a feeling for what a wonderful opportunity the world seems to have lost in Iraq. Can you imagine what having helped to channel the oil revenues directly to the Iraqi citizens in a transparent way could have done? That could really have been called democracy building, and setting a great example for the citizens of Nigeria, Venezuela and all the other oil cursed nations to follow.