Empty Vessels And All That Jazz

Fuzair

Thanks for your reply. You said ``hardly anyone in economics really subscribes to dependency theory now; ``

Question: Why would western capitalist school of thought subscribe to dependency theory when it only makes sense to the third world?

Zeemax

Thank you.

Zeemax #137 On ``Capitalist nations and Worker nations``, you ignore a more fundamental reality, and one that gives rise to globalization itself. This is the reality of automation, which in turn is the result of the IT revolution. The fact is that the share of human labor in the production function has diminished drastically, while what is being termed the knowledge component has increased sharply. This talk of capitalist vs. worker nations is based on realities that were true a hundred years ago, not the ones we live in today and certainly not the reality that is round the corner. But then, we Pakistanis seem to be interested only in what we see in the backview mirror, not in what lies in the road ahead. And that is why we keep getting hit by reality over and over again (the latest being the attempts of misguided generals in Pakistan to introduce a 14th century ``Islami Hakumat`` in Afghanistan, and ended up being pulled by our ears into the 20th century. But we will of course slip back into our dream world of Islamic glories if only the world would let go of our ear...ouch!

PS I am sorry if I sounded mad at you on BCCI - there is always a thin line between being clear and being polite, and I chose to err in favor of the former on chowk.

How many people want to keep this board alive ? Raise your hands. It`s second last from the archives of Chowk.

Zeemax

Reply #: 136 FARANGI_KUSH

Well ... will wonders never cease. Welcome Back Farangi_Kush. You`ve been sorely missed.

``Tavvoquo thhee jinheeN sey,khastgee kee daad paaney kee

Voh humm sey bhee ziaada KUSH-ta e tegh e sitam nikley.``

I suppose this is a compliment. But hats-off to you Sir !

Any input on the `Islamic Society` arguments I have put forth ?

Reply #: 135 tahmed321

``You are being so-o-o-o Paki elite when you talk about global conspiracies...``

Well at least you aren`t mad at me anymore over BCCI. Yes I have seen all those unfinished structures in Thailand and Indonesia. Sad isn`t it ? What a waste. The reasons you enumerated are also correct, but my article ``IMF-Friend or Foe`` refers to the reasons as to how the tigers were turned to pussycats.

Reply #: 132 sadna

``I`ll do better and ask you who is this Leila :)?``

It`s a mythical love story of Leila and Mujnoo. Ring a bell ? Leila was the woman though you didn`t know that even after hearing the WHOLE story. Just kidding.

Spirituality in Islam is an essential ingredient of Good Governance. The whole system revolves around it as one can cheat anyone but God is always watching. That Faith is supposed to prevent corruption, injustice, cheating and so forth. Certainly spirituality can neither be taught nor accounted for .. so it`s a dilemma. But that doesn`t mean the concept is not valid.

``And for example, his spirituality cannot ensure that he is the best person to negotiate the terms of a large business deal``

Believe me, negotiating business deals is the easy part. Getting the spirituality is the tough part. Once you have the spiritual strength and Faith, you can work miracles.

Reply #: 131 Urstruly

``I think the Globalization is in fact Macro level Capitalism where there will be Capitalist nations and Worker nations..``

I agree. I suspect globalisation will achieve exactly that.

Rgds

Zeemax

(It seems CHOWK ate up my first post) so ENCORE!

ZEEMAX!

A happy welcome to you.

``Tavvoquo thhee jinheeN sey,khastgee kee daad paaney kee

Voh humm sey bhee ziaada KUSH-ta e tegh e sitam nikley.``

As you can see I am here---ready,willing,and able.

My alter-ego at your service as well.

Zeemax #128 On Thailand (a country I have visited a few times): You write ``...their women are compliant because of their gentle Buddhist Faith.`` I dont think so. They talk gently, but carry a big stick (metaphorically speaking) and some carry a sharp knife (as the hubby of the lady learnt after she applied it to separate him from a certain part of his body that had been philandering). Traditionally, women ran the economy in that country and the men gossiped around. ``Their men don`t want to fight either because their Faith is non-violent. `` Sorry, I hate to keep disagreeing with you but you leave me no choice: You know the favorite sport of Thais? Thai boxing, where they kick as well as punch. Very Un-non-violent, I can assure you. Also remember: Thailand was the only country in that part of the world that managed never to come under western colonial rule. So let us not look down upon them from our Martial Race pedestal as we like to do in Pakistan.

The financial collapse in Thailand and other parts of south asia had a more straightforward reason than dark global conspiracies to keep the darkies down: there was a vast flow of global funds to Thailand and other countries where the institutional capacity to manage those funds was not present: that is, these countries had poorly developed equity and bond markets with consequent reliance on commercial banks for financial intermediation. Commercial banks in turn were not properly regulated and used the money to build up a pile of nonperforming assets. Half finished high-rises, vacant high-rises in Jakarta, Indonesia are testimony to this.

You are being so-o-o-o Paki elite when you talk about global conspiracies...

Re: urstruly #131

You want to read Immanuel Wallerstein`s World Systems theory. This is exactly what he said back in the early 1970s and has been saying for a very long time now. He is of the (lefto-pinko) dependency school (BTW, hardly anyone in economics really subscribes to dependency theory now; only dependencitas to be found are in PoliSci/IR/Soc) and argues exactly this: `Core` nations `exploit` `periphery` nations and the periphery nations have a group of comprador bourgeoisie (i.e, parasites) that exist to do the core`s bidding and keep the periphery workers in permanent subjugation.

There are so many things wrong with this theory (and all of dependency, no matter which school you look at) that I have neither the time nor the inclination to start on it.

Sameer JB # 24

December 13 (2000)is also the anniversary of the event when Indian parliament acquited 22 murderers including Vajpayee,Advani, and other members of ruling party from the charges of murder and mayhem that followed the destruction of Babri Mosque and the destruction itself. Thousands of families suffered loss of lives of loved ones when the hindu thugs rampaged muslim enclaves throughout India. The attack on Indian parliament by such desperate people who have no where to go for justice, on such day, also makes sense.

Zeemax #128
``so you ask me whether Leila was a Man or a Woman after all the discourse.``

I`ll do better and ask you who is this Leila :)?

Re the big bad US, I think you are underestimating the human and economic potential of developing countries. Once these countries get themselves sound political and financial systems, they will be all set. This depends a lot on their own choices.

Re Thailand, I`m not sure what you mean but the CIA factbook says the 1997 Constitution is still in force. The King (again I donot know anthing about this) is not publicly accountable.

Re the conflict between the material and the spiritual, you are very right. For eg, its not clear that the Dalai Lama will be wonderful at everything he does, even though he is very spiritual and considered no less than a divine incarnation. His spiritual insights and overall vision cannot ENSURE that all Tibetans will be as spiritual as he is, though he is widely respected. And for example, his spirituality cannot ensure that he is the best person to negotiate the terms of a large business deal with a multinational on behalf of a hypothetical free Tibet, say, nor ensure that his ministers run an honest efficient government.

Zeemax & Sac

I am actually disappointed with your responses. I was expecting more depth than that of Time, Fortune, or Newsweek etc. But anyway let me reiterate my question in a different way. As a simple rule of economics the capital automatically follows the path, which leads it to security and growth. In the bigger scheme of things like Globalization, one of the biggest hindrance to this flow is the sovereignty of the nations and their laws that prohibit such movement. Argentina comes as a test case for third world where such sovereignty is under attack by `external` forces. Now a time has come that whether they (Argentinians) like it or not or regardless of how much they try they will have to let the capital flow to the safety i.e. the West. So the way I envision the world that is becoming is that there will be two group of nations in the world-

(1) the nations with the pool of capital and
(2) the producer/worker/labor (under quota) nations.

I think the Globalization is in fact Macro level Capitalism where there will be Capitalist nations and Worker nations. And Capitalist nations will make sure that the Workers do not grow past worker level. In order to achieve this they (capitalist nations) are trying to weaken the sovereignty of nations by corrupting their institutions and elite, debt, war and if need be naked aggression so that the capital start finding its way to safety. One way to look at the murder of BCCI could be that. In this situation the Islamic banking i.e. `banking among Islamic countries` make sense, which they wont let happen.

re SameerJB, urstruly, Zeemax and others:

Every economy is uinque and given the right circumstances most of then can grow. However, in the long run barring a few exceptions the law of diminishing returns sets in and economies destablize or business cycles take over. One can analyze Argentina or Chile to death for causes of economic ruin. Instructive that exercise might be but to look for permanent solutions it will serve no useful purpose. Every source of competitive advantage sooner or later runs out when other people get onto the game. It is a win-win exercise in very few instances. The only true source of competitive advantage IMHO is related to high levels of grey matter in a society. The American economy is the most resistant to long downward economic cycles because it attracts the best and the brightest from all over the globe. Human brains and ingenuity cannot be cloned(for now). The biggest challenge that faces the third world is the departure of its best people for other promising pastures. The economists and bankers are too busy churning the numbers(Argentinian debt load is 55% of GNP...bad very bad) to assess the societal impact of their decisions. The developing world needs to somehow stop this massive brain drain and to be honest I have no idea whatsoever how. The incumbents have had too much of a lead in this area.

later

-sac

Zeemax #121 On Argentina: In the 18th and 19th centuries it was economically at par with the US. Today (this is before the current crisis) it`s GDP is about 3 percent (!) of the USA (i.e. $300 billion vs. $10 trillion for the USA).

Reason: Incentives. The large landholdings in Argentina (and South America generally) vs. small homestead farms in the US made the difference between innovation and vacillation, between hard work and a life of luxury.

Reply #: 123 sadna

``Pakistan is 97% Muslim so I do not see how you can get more `Islamic` than that``

You didn`t get the point. So do go over my previous posts about this stuff and `think` and get the point. I`ve said enough on the subject. To reiterate, An Islamic Society does not exist anywhere regardless of whether the population is 97% or 100% Muslim. This is a typical example of blocked minds so you ask me whether Leila was a Man or a Woman after all the discourse. C`mon.

``but surely ascribing Thailand`s financial crisis and flesh trade wholly to a Western conspiracy is very simplistic.``

Wrong. It is all a design to keep all of us including India in the dark. In case of Thailand, their women are compliant because of their gentle Buddhist Faith. Their men don`t want to fight either because their Faith is non-violent. If you had been near people in great power, you would have known they are flesh and blood just like you and me, and they need to go to the Loo too. Whole Nations are only pieces on the global chess board for them just as you decide what to cook for dinner and what to throw in the kitchen garbage. It`s as simple as that. It`s only a matter of degree, but essentially the same thing. When you decide on Okra for dinner, they decide to cook Thailand, or Pakistan, or India. Depends on with what mood they woke up, and whether their wife fought with them over breakfast.

``Between 1932 and 1997, Thailand had 15 constitutions and 17 military coups``

But the King was always there. Their King is the Head. The Prime Ministers come and go. It`s the King who controls Thailand. The others are only little fish who stage games; the King obliges them when he feels like it and kicks them out whenever he feels like it. However they still don`t have a Constitution because no one agrees on anything over there. It`s because of the Buddhist Faith. Thais are split between their Faith and the material comforts. Buddhism abhors material comforts. Look at Tibet. Tibet only fights for it`s Faith, nothing else. Thais look towards that, the seat of Buddhism; but they want BMW`s as well. That`s the conflict in Thailand. They`re actually very religious people just like Tibet.



Sadna, you need to catch up on a lot of things.

Fond Regards

Zeemax

Zeemax #121 Since you express interest in my views on the subject, here is my ha`penny worth (to use an ancient brit phrase): I did reject your examples by saying they were exceptions that prove the rule. Here is an attempted explanation: Of course there is no shortage of white collar crime in the west. But does this mean that only ``non-white white collar criminals`` are caught and punished? The answer obviously no, as anyone who reads the headlines, and as Fuzair pointed out for example in case of Enron. If we Pakistanis are to compete in the international market, one of the first things we need to unburden ourselves with is the foolish notion that the way to become successful is to play games with the law or to do anything less than provide first-rate customer service. Jails in the US, and indeed all over the world and even (thank God) in Pakistan now are full of people who thought that ``everybody does it`` and that the way to become rich is to steal (to put it bluntly).

Reply #: 24 SameerJB

Sameer forget the Cloak and Dagger stuff. The game is much bigger than double agents. Everyone at our level knows who the double agents are but we use them. It`s only petty stuff in the larger game. In this game we`re talking about whole nations. And National Leaders. We`re talking Global my friend.

Rgds

While we are on this subject.

ZEEMAX:Did you read the books,``Towers of Gold,Feet of Clay``,(banks) and ``Merchants of Death``, (Insurance)?...ANYONE?--opinions please.

and also the book by Anthony Sampsons,``Money ---``

(can`t recall).

__________________________________________________

Enron and Al Qaeda`s Shared Link

Lucy Komisar, Pacific News Service

January 21, 2002

How did top executives of Enron do it? How did they cause the world`s biggest bankruptcy while making off with millions of dollars?

They used the same financial tools as Osama bin Laden.

To attack the Osama bin Laden financial network, the Bush administration knew right where to look -- in ``offshore`` secrecy havens, including the Bahamas, Switzerland, Luxembourg, Dubai and Panama.

Investigators know that the world`s bank and corporate secrecy system was set up to move money for people with something to hide. Sometimes they are terrorists. Sometimes they are financial swindlers. They are welcomed in ``offshore`` centers that promise to keep ownership of companies and bank accounts secret, even from law enforcement.

To uncover the al Qaeda money trail, U.S. investigators had to use muscle. When a Nassau bank refused to open records, the U.S. had it cut off from the world`s wire transfer systems. The bank changed its mind in two hours.

Now, with Enron, U.S. investigators and the lawyers suing the firm`s executives are turning ``offshore`` again. Before they finish, their revelations should make lawmakers and the public question the continued existence of the world`s financial services system for criminals.

We know a lot about how Osama bin Laden used the system. Here is how Enron used it.

Andrew Fastow, the company`s chief financial officer until October 2001, was known as a master of international offshore banking laws. The key to the Enron swindle was the company`s 3,000 corporate subsidiaries and partnerships. A fourth of them were registered in Grand Cayman or Turks and Caicos, two notorious offshore centers.

Why put company ownership records in secrecy jurisdictions? So that regulatory authorities, investment analysts and stockholders won`t know about self-dealing or other improper activities. If authorities don`t know who the owners are, they can`t know if Enron managers or associates secretly own a partnership. They can`t check the books to see if the offshore company is dealing with another insider-owned company that is siphoning off its wealth. That`s how Russian oligarchs looted their country.

The offshore system was central to Enron`s collapse. Frank Karam, an attorney at Milberg Weiss Bershad Hynes and Lerach who is working on a suit against top Enron executives, explained that Enron used offshore partnerships ``to borrow at least $10 billion from banks. Enron guaranteed these loans with its own stock. They traded with themselves and reported the money as income -- as revenue and profit.``

Two offshore partnerships were set up in 1999 simply to move debt off Enron`s balance sheet and hide losses, Karam said. And Enron moved its ``profits`` to offshore subsidiaries to avoid paying U.S. taxes in four of the last five years.

Enron officials also used the offshore system to hide their own exorbitant pay. ``We hear of middle-level executives making $10 or $20 million,`` Karam said. ``If shareholders knew this...``

Records of Arthur Anderson`s contribution to this offshore system were very likely in the files the accounting firm shredded. ``Aggressive accounting`` is a common euphemism for using offshore companies to juggle the books and evade taxes. Accounting firms get consulting fees to set up such systems and then ``audit`` them.

The Clinton administration was working with European allies to rein in the offshore system, but was blocked in the Senate by Republican Phil Gramm, whose wife, Wendy, is an Enron director, and by Republican House leader Dick Armey.

At first, the Bush administration also fought reforms. Treasury Secretary Paul O`Neill weakened an Organization for Economic Cooperation and Development (OECD) strategy against tax havens. But Sept. 11 compelled the Washington to change its tune somewhat. Legislation adopted in October, for example, bans American banks from opening accounts for ``shell`` banks with no physical presence and thus no clear purpose but money-laundering. It requires banks, securities and insurance firms to verify the identities of customers.

But U.S. banks lobbied successfully against requiring additional ``due diligence`` rules for American banks dealing with offshore banks.

It`s time for another step forward. Congress should ban U.S. institutions from dealing with banks that don`t list owners` real names on accounts or cooperate with international law enforcement. The OECD is developing proposals for dealing with shell companies. Washington should support an agreement to end recognition for companies registered in secrecy jurisdictions where they don`t do business.

Imagine if Enron subsidiaries had been forced to reveal who their owners were and to keep their books where they operated and where they could be examined. Imagine if U.S. law-enforcers could demand to see bank accounts of Enron ``partnerships`` and top officials, rather than tracking them through the murky swamp of offshore secrecy.

U.S. lawmakers and officials should work to plug up the offshore financial black hole.

Lucy Komisar is a New York journalist who investigates international crime and corruption.

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