A Second Hand Conjecture

For two weeks, as John McCain’s national polls first rose above Obama and then solidified there, Democrats protested that the popular vote was irrelevant. Look to the state polls said they, in a sensible but amusingly opportunistic argument for the electoral college (for those of us who recall the venom of 2000). Alas, this was a comfort built upon something of an illusion, given that few state polls were available after the Republican convention. That’s begun to change of course, and for the first time Rasmussen has given McCain a slim electoral college advantage.

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(photo: William Bedzrah)

One of the traditional problems of economic development in sub-Saharan Africa is that internal African investment dollars tend to be spent outside the continent. Thus it’s interesting to see Nigerian investment in Ghana has now reached $580 million. Something that has sparked quick calls for a Nigeria-Ghana Chamber of Commerce and further liberalization of trade laws.

[George Kumi, Ghana’s High Commissioner to Nigeria] noted that what Nigeria and Ghana need is increase in trade investment and not foreign aids, said the business cooperation between the two countries would go along way in alleviating poverty.

“We need to move away from the old way of over protecting our internal trade. There should be free flow of goods from Ghana to Nigeria and vice versa.”
(BusinessDay)

Good stuff, to be sure.

One of the factors that makes these two countries compatible investors in each other is monetary policy and the (new) tendency of their currencies to retain value. Nigeria’s inflation rate which was as high as 16% in 2005, fell to 6.5% this year (comparable to Chile). Ghana has been experiencing an equally dramatic fall in inflation, from an astronomical 26.7% in 2004, to 11% in 2008 (better than Russia).

With falling inflation of this kind, the temptation to send your profits to Switzerland as soon as you make them is substantially reduced.

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(photo: Charles Roffey – Charles & Fred)

Someone once said that in Damascus you truly can get a little bit pregnant. It’s a good aphorism, because if you asked the foreign minister of almost any state in the Middle East or the Mediterranean what his government’s policy relationship was with Syria, he would automatically furrow his brow and call it “complicated.” You always seem to be about half-way somewhere with Syria. Lately that appears to be true even for Tzipi Livni. If so for Israel, doubly so for Lebanon.

Surveying it, Jihad Yazigi describes the situation that exists between the two countries as customarily “complicated”, but the dimension of complication he’s seeing is something relatively new. Where before thirty years of Syrian military occupation (and often not very covert political subversion) might be the most obvious locus, Yazigi is today talking about labor and direct investment in Syria by Lebanese:

Syria would probably not be liberalizing its economy and going through a revival of its services sector without the thousands of Lebanese managers that are running Syrian firms. Lebanese managerial know-how is being exported throughout the Arab world and Syria will continue to need it if it wants to further the opening up of its economy.
(The Syria Report)

That’s a very new economic relationship, as historically it is Syrian labor that has traveled to liberal and cosmopolitan Beirut. It is Syrian enterprise that has worked to create a paternalistic relationship between the two countries with one-way investment, generally government directed.

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