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The MoA Week In Review – OT 2024-250
Last week's posts on Moon of Alabama:
Iran:
North Korea:
Ukraine:
Palestine:
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Other issues:
Miscellaneous stuff:
Use as open (not related to the wars in Ukraine and Palestine) thread …
@Sun Of Alabama | Oct 21 2024 12:28 utc . Nice work, well done, and thoroughly done. Tks for the effort.
So, I’ll make the effort to read, slowly, the docs, and absorb the concepts.
Another round of Qs will happen once I assimilate (partly) it.
I’m intrigued with your emphasis on balance sheets. This is probably where I’ll start, as it’s the part I’ve not read or understood yet.
I read the BRICS financial system plan, most of that made sense, ties out with your remarks. What I don’t understand yet is the accounting you refer to, and why that’s so important. I always figured “accounting’s been around a while, pretty straight-forward, what’s the big deal about it?”. We’ll see. More on that later .
Issuing debt in a country’s own currency – that makes sense, and I understand the “road to debt serfdom” that issuing debt denominated in a “not your currency” implies.
=== And to the rest of the Bar, some general comments re: BRICS ===
The other part about the BRICS plan – not just the payments part which gets a lot of attention, but the inter-BRICS-country investment part – that may end up being just as important. Why?
a. Looks like it’ll tend to take the current financial centers out of the loop. My reading of the Fin Plan docs indicates that cross-BRICS-country investment is simplified. Makes it easier for a country like Saudi or UAE (they have a lot of savings) to more-directly, more-simply, less-risk invest into countries that need (badly) investment (e.g. most of BRICS). Apparently, this can be done without having to obtain dollars, and denominate the loan in dollars. If you have to get dollars to make the loan/investment, that implies some interaction with the dollar bond markets, and that implies western money-center involvement (skim)
b. It appears to remove some of the currency (fluctuation) risk of those investments (tend to be longer-term) because of the currency basket mechanism between BRICS participants (which is not yet implemented, may take a while yet).
There are some pretty big implications of the “reduce investment friction” subject.
Consider UAE and Saudi (included in next round of BRICS members). They’ve got major savings in dollar-denominated assets, and want to invest into high-growth countries (BRICS). They currently have political and mechanism (legal, payments, currency) type obstacles standing in the way. I think that might be the major impetus for UAE and Saudi to “want in”. Those two countries also have to deal with the politics (arm-twisting) from the West re: moving assets from dollar markets into … non-dollar markets, e.g. BRICS.
I think that’s got to be a big issue for Saudi and UAE: how to gradually move from regime A (dollar) to regime B (BRICS). Tough politics.
And this “gradual tip-toe away from the dollar” act will become an issue (not sure how much of an issue) for the dollar, because there will gradually be less need to obtain and hold dollars. Harder (more costly) to place new debt issues for dollar-regime borrowers.
And of course, this increase in investment is _exactly_ what BRICS countries want and need so much. They’ve got the mat’ls, plenty of know-how, plenty labor (mostly), expanding income and hence domestic demand, etc, – and with reduced intra-BRICS payment friction … what seems next-most-important is investment and local mgmt talent (labor mobility and education systems) to install production and distribution facilities into the need-more-infrastructure countries.
As I look at the rest of the action (discussion, and sub-groups, working papers) around BRICS, I’m seeing a great deal of “tech transfer” efforts and legal systems (IP, contracts, etc.) harmonization. That bodes well, right? So BRICS isn’t just about money; it’s about moving the right resources to the right place for the maximum economic benefit of (their words) “all players”.
I think this sort of discussion around BRICS is really valuable. We’re hearing all the buzzwords, and reading all the hype and hi-falutin’ rhetoric, but what’s not getting discussed (enough and in a form that non-experts can assimilate) is the mechanics of smoothing out the obstacles for high-volume trade and investment. That’s what all these countries really want, and it’s why everyone that’s not in BRICS, who has any sort of political mobility … wants in.
This is where the action is.
I read yesterday some country-by-country stats on the BRICS (current and prospective) participants, on things like education level, inflation, workforce composition, savings, GDP by industry sector, growth rate (Putin took great pains to emphasize this in his remarks) etc. and it tells an eloquent story of “what each country really wants from BRICS” – the stats tell the motivational story. I’ll do an extract later today, and include links to the source mat’l, for the further edification of the Bar.
BRICS is a very interesting story about how economic integration among countries with free will can get done.
Posted by: Tom Pfotzer | Oct 21 2024 14:22 utc | 108
=== Long Post Warning. Skip if BRICS is not of interest ====
Why Join BRICS?
A country joins BRICS because it needs help. It needs others do what it can’t do for itself.
Countries, like people, have different circumstances and different capabilities.
Trade enables countries to give something they have in order to get something they don’t have.
Trade happens when what you give is less valauable than what you get.
There are always barriers to trade, including things like transport cost, language, culture, currency, politics, and simple competency to perform the basic work of trading. It’s complex.
What does BRICS actually DO?
At its core, BRICS is about making trade easier, faster, less risky. BRICS makes trade more profitable for everyone involved.
So the BRICS regime consists of a set of tools that the members use to facilitate trade. In another memo, I’ll talk about those tools. This message is about “what each country brings to the table (has to give) and what that country wants that it doesn’t have (enough of).
What types of things can be traded?
raw materials, like minerals, energy, and agricultural products (wood, grain, meat)
technology. Technology can take the form of know-how, software, or tools and equipment that embody technology, like machine tools, steel mills, and port facilities.
manufactured goods. These are raw materials which are transformed into a higher value product via the application of technology.
capital. Savings in one country can be invested in production equipment or infrastructure in another country
labor. Some countries have a shortage, some a surplus of skilled workers
What Are the Trade-Related Characteristics of BRICS members
Now it’s time to look at the profile of a few of the BRICS members, or prospective members as case studies. Let’s pick China, Iran, and Ethiopia as countries on a continuum from most-developed to least-developed from a trading perspective.
Generally speaking, the more-developed economies are looking for raw materials, or more labor, or markets for their goods. They have technology (China, Russia) and possibly large stocks of raw materials like energy (Russia) or food (Russia and Brazil) or even capital (China) to offer.
The countries with less-balanced economies have a different trading profile. What they need, generally, is to build infrastructure and productive capacity to meet internal needs, and to have something to offer their trading partners. They often have a raw materials stock, cheaper labor, or a desirable geo-political or geo-economic location to offer their trading partners.
Case Studies: Ethiopia, China, Iran
Let’s review the trading situation of Ethiopia, China and Iran.
Ethiopia
107 million people, area 1,150,000 sq kilometers, pop density 93 people per sq. kilometer. 19 percent unemployment. 24 births per 1000 people, annually. GDP $164 billion.
Ethiopia’s main industrial production is iron ore, coal (begins 2023), petroleum and natural gas. Ethiopia makes almost enough energy to meet its internal needs. The inflation rate is 32% annually. Ethiopia didn’t report standard of living, transport infrastructure, or educational attainment statistics; guess why.
Ethiopia is located just inside the Horn of Africa, right near the mouth of the Red Sea – right across from Yemen. Ethiopia is land-locked, and has two small highways that connect the country to the rest of the world. Ethiopia has huge potash reserves, and no railways. Ethiopia has about 3.5% unemployment. Ethiopia’s current industrial policy focuses on steel, cement, food, textiles, and horticulture.
China
For brevity, I’ll summarize: China has technology, lots of people, a skilled workforce, plenty of manufacturing capability, a good transport network, and lots of capital. What China needs is raw materials, energy, and markets for their production. In 2020, of a population of 1.4 billion, China graduated 3.57 million STEM (Science, Technology, Engineering and Mathematics) students, or 2.5% of their population. China graduated 12 million college students last year. 17% of China’s 17-24 year-old cohort are unemployed.
Iran
Iran has a skilled workforce, petroleum and gas deposits, coal, iron, aluminum, chromium, copper, zinc and manganese deposits (and several other industrial-use metals), along with petrochem, cement, metals smelting and fabrication, manufacturing, and textiles production. It has a limited internal transport network of roads and railways. It has much of what it needs to operate an advanced manufacturing economy.
What Iran lacks is production capacity, capital, and markets for its products. In 2020, of a population of 85 million, Iran graduated 211 thousand Science, Technology and Engineering (STEM) students, or 0.02 percent of their population. 20% of the government budget, and 5% of GDP is spent on education. Education is free, or almost-free at all levels. Unemployment is stable at around 9%.
For comparison, the U.S. population in 2020 was 331 million, and in 2020 we graduated 820 thousand STEM students, or 0.02 percent of our population. Same _percentage_ as Iran.
Let’s Trade!
China needs materials and markets, offers manufactures, technology, capital, and possibly labor.
Iran needs capital, machinery and industrial process equipment, and transport infrastructure. It offers materials, manufacturing, I.T. and engineering talent, and markets for its raw material and value-added products.
Ethiopia needs capital, industrial production equipment, education (tech transfer), and transport infrastructure.
Ethiopia offers offers iron and steel (some, for local or regional use), some light manufactures (textiles, leather goods). Ethiopia needs export-oriented production to pay for all the imports it needs.
Iran and Ethiopia need what China has. China needs markets to sell their goods into, so that’s a good fit. Iran has raw materials China needs, Ethiopia less so. What Ethiopia most needs from China is the development of mineral resources within Ethiopia, or value-add production equipment from China to produce products (like steel re-bar or structural steel) for use in the horn of Africa.
How Does BRICS Help?
BRICS helps by providing tools, shared knowledge, and building relationships among the players in these trading economies. In my next article – which I may, in fact, actually write – we’ll talk about how the BRICS project makes this trade happen better.
More Info Available
For more statistical information, see the BRICS Joint Statistical Publication.
Posted by: Tom Pfotzer | Oct 22 2024 16:11 utc | 146
P & I
US is spending $28 billion on Sinophobic propaganda to colonise your brain
By Eugene Doyle
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Thirty million people have downloaded just one of Professor John Mearsheimer’s lectures – “Why Ukraine is the West’s fault”; he is undoubtedly one of the world’s top geopolitical thinkers and public intellectuals
Disagree
Mearsheimer is a white supremacist like fucker carlson.
Ukraine is the wrong war.
We should be up against the chicom…with the Russians, just like the good ole days.’
https://tinyurl.com/mpawr496
I want to hear more Chinese commentators, Russian commentators, Yemeni, Turkish, Malaysian, Indonesian, Georgian, Libyan, Nigerien, you name it. Their opinions matter.
P & I once had a kickass forum.
I posted there for a while.
The forum was shut down not long later, my guess is intervention from the Usual Suspects.
The discussions were prolly getting too incendiary for the ptb
We virtually never get to hear extended interviews with any of the West’s strategic competitors or victims, and our populations are so mentally enslaved it doesn’t come across to them as distinctly weird.
There has been an invasion of tourists from the garden into China, taking advantage of the 14 days visa free offer.
Many confessed their abject fear for the impending adventure…fully expecting to be harassed, interrogated , roughened up by hostile chicom, even thrown into jail by the CPC gestapo at the slightest excuse. !!!
Poor dear !
how does it feel to be kept in the dark and fed bullshit all day long, in the land of free mushroom ?
[PIlger RIP, somebody should do an autopsy on JP]
why, for example, infrastructure in the American homeland is falling apart but the military industrial complex has unlimited funds to blow other people’s infrastructure apart
.
But all that foreign interventions are done in the name of gringo, for their own good, donchaknow ?
US President Joe Biden is going to take a decision that he thinks is in the best interest of the United States, the White House has said, after China warned of “resolute measures” if the Tibet policy bill is signed into law.
The US Congress passed this month a legislation, the Resolve Tibet Act, calling for a peaceful resolution of the dispute over the status and governance of Tibet. It also calls on Beijing to resume dialogue with the Tibetan spiritual leader the Dalai Lama.
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“The President is going to do what he thinks is best on behalf of the American people, that’s what I can tell you,” White House Press Secretary Karine Jean-Pierre told reporters at her daily news conference on Tuesday when asked about China’s warning.
Posted by: denk | Oct 23 2024 14:05 utc | 174
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