Yesterday, the infographic shows that China now has more highways than the US which got me thinking about how countries spend their money.
Last year, Economist made a chart that looks at this very question.
It's fascinating that US spends the least on food, considering the percentage of obesity in America, I thought that Americans would be spending more money on food. I guess that food is relatively cheap in America and so that's the reason for the obesity?
Australia really loves recreation and spends the most in that category, more than US, Japan, or the EU.
Hopefully, the Economist will update the chart and include more countries this time around.
Found this flow chart and explanation on Zero Hedge, petrocurrency mercantilism is when a national bank and an energy producer collude to generate artificial demand for a currency at the expense of the purchasing power of other currencies.
Pretty fascinating when you think examine all the tools available for a petrostate.
Yesterday, I posted an infographic from howmuch.net that shows us the correlation between lower gas prices and increased travel over this year's Labor Day weekend.
Going along with the idea of the effect of lower gas prices, here's an infographic from the Visual Capitalist about petrostates.
Another cool infographic by Alberto Lucas López which compares US and China's military prowess.
US easily dwarfs China in terms of nuclear warheads (7315 to 250) but China has been increasing their military spending and a few key Chinese statistics are still unknown (ie. the size of their cyber command, etc). Interesting to see how the two powers are trying to balance each other.
Doing some research on drugs in Asia for a story and I'm honestly surprised that quantity has been steadily increasing in the region. This helps explain China and Indonesia's tough stance on drugs.
All eyes are on Greece as the overwhelming majority has rejected EU's proposed austerity measures and people are scrambling to figure out what happens next.
In essence, it seems that Greece wants the best of both worlds. They don't want the austerity measure but they still want to be part of the euro project and they want the EU to provide them with a line of credit.
Understandably, certain parties are saying that Athens has ruined any chance of compromise with its EU partners.
Personally, I'm confused by the actions of Greece prime minister Alexis Tsipras. On one hand, he's been advocating for additional assistance and on the other, he masterminded the rejection of the austerity measures. It seems like Alexis Tsipras is gambling that the EU will not force Greece out of the 19-nation currency area.
It's a very risky bet and so we probably should consider what happens if Greece does default on its debt.
If Greece doesn't pay the debt to the IMF and ECB this month, then the country will be defaulting on its loans. This is significant for a variety of reasons:
- Greece will be the 1st advanced economy to default in the history of the IMF.
- Greece will have the largest single overdue payment in the history of the IMF.
- Greece will be joining the list of IMF debtors that defaulted, debtors like the Taliban and Robert Mugabe, people you generally don't want to associate yourself with.
- If Greece is unable to pay back its debt after 2 years (which seems very likely if they leave the EU), then Greece will most likely lose its IMF membership.
- Greece might be force to exit the eurozone.
IMF rules does not permit any grace period for Greece so IMF will probably try to figure out a way for Greece to pay them back asap (not sure how though). Both IMF and Greece actions are limited so not sure what options are available for either party.
How will Greece exit (Grexit) the eurozone? Interestingly, no one knows because the euro project wasn't designed with an exit strategy. The Maastricht Treaty doesn't mention a way for a country to exit the eurozone because exiting was never considered. Perhaps this is what Greece prime minister Alexis Tsipras is gambling on.
If Grexit is successful, then the eurozone can technically be unbundled so that whenever a country suffers too much financially, the EU partners just might kick them out. Naturally, this isn't good for EU solidarity and so that's probably the reason why the EU has been trying to stop the Greek headache.
So, if Grexit doesn't happen or happens very slowly, then the country might go into Grimbo (Greece + limbo), where the country is in a state of political and economic limbo since no one knows what to do with them.
Right now, it already feels like Greece is in Grimbo and if Greece Prime Minister Alexis Tsipras doesn't figure out something soon, the country will probably face all three: Grexit, Grimbo, and Gone. I say gone because it would take decades for Greece to recover and Greece looks like it is on its way to becoming a gigantic ghost town. The chart on the right shows that capital and people are leaving the country in massive numbers.
Just consider these heartbreaking statistics: Greece economy shrunk 25% since 2008, a Grexit is predicted to cause a further 25% contraction of the economy, 25% of the population is unemployed, and for people under the age of twenty-five, the unemployment rate is at an unsustainable 52%.
French economist Thomas Piketty, author of the influential Capital in the Twenty-First Century, recently said that “Europe was founded on debt forgiveness and investment in the future. Not on the idea of endless penance. We need to remember this.”
The interview seems to suggest that Mr. Piketty wants the EU to consider debt forgiveness. Furthermore, Mr. Piketty stated that, "Germany is the country that has never repaid its debts. It has no standing to lecture other nations." (The whole interview is available here)
There's been a lot of talks lately about China's movement in the South China seas and how it's literally building an entirely new island in the area. If we look at the chart below, we can see that China has more ships than other claimant countries combined. This might explain why the US is increasing navy movements in the region and why other countries are uncomfortable with China's growth.
IMF, the International Monetary Fund, is an international entity comprised of 188 nations where the goal is to promote sustainable growth and provide economic assistance when needed.
Capsidea has provided an easy to understand infographic about the dangerous situation that Greece is in. Greece is the largest borrower of the IMF, twice that of all the other borrowers combined, and has extremely high unemployment rate as compared to the rest of the EU. What does all of this mean?
Greece is in a world of trouble and on the verge of bankruptcy if they don't get their act together and convince the IMF that they have a viable recovery plan in place.
Lee Kuan Yew, commonly referred to as LKY, was arguably the greatest statesmen of the 20th century. Deng Xiaoping opened up and transformed China, after visiting Singapore during the late 1970s. Various US Presidents, from FDR to JFK to Reagan, have played transformative role in the 20th century. However, they were presidents and leaders of a country with ample resources.
Singapore is a tiny island without many resources, save for its strategic location as a port. Lee Kuan Yew was able to use what little resources the city-state had and corralled the citizens to follow his vision, which ultimately transformed the country into becoming a model city-state. Fifty years later, Singapore is now one of the wealthiest city-states in the world.
While his leadership and government policies have received pointed criticism at times, it's difficult to argue with success. For this reason, Lee Kuan Yew was unrivaled in his achievements.
This morning at 3:18 am, not just Singapore, but the world has lost one of the most illustrious politicians of the 20th century.
Yesterday, I posted an infographic that shows how the US dollar performed in 2014. It was the only currency to gain against all other major peer currencies. This is partly due to the fact that oil price was down by 60%
Why is oil price so unexpectedly low?
This is because of Saudi Arabia, the sheik of OPEC and pretty much the entire oil industry.
The cheaper oil prices achieved multiple goals for Saudi Arabia and I reckoned that it is one of the most strategic and brilliant moves in recent diplomacy.
For one, the depressed oil price assist Saudi Arabia’s major ally, the United States. Low oil price is detrimental to anti-US countries that derived much of their power from oil. Russia and Venezuela, major producers of oil, are experiencing major hemorrhaging in their domestic market. The Russian ruble is down and some expect the Russian GDP to decline by 4.5% this year. Venezuela might possibly default and Iran isn’t able to finance their budget. So, Saudi Arabia’s insistence on maintaining oil output, and hence the low oil price, is doing major damage to anti-US countries.
Western media have generally viewed this positively and US consumers love the low oil price. But, while it’s nice to think that an ally is willing to forgo billions of dollars to assist the US, the realpolitik of modern diplomacy makes it unlikely that the House of Saud did it simply for ideological or moral premises.
Saudi Arabia is maintaining the low prices to bankrupt US shale oil companies. The very same companies that allowed the US to become the biggest producer of oil in 2014 and helping it to realize the path towards energy independence.
It was profitable for shale oil companies to extract oil from difficult-to-drill places and used a new drilling technique like fracking because the oil price was high. Now that the oil price has dropped by 60%, it’s difficult for these shale oil companies to conduct their business profitably. So the “oil boom” that the US experienced during the last 5 years may be coming to an end and it’s all because of its good ally.
Low oil price is not only detrimental to oil regimes, but also US energy producers. If the US manage to achieve energy independence, its foreign policy will not have to factor in energy reliance as much and many countries will have less leverage in negotiation.
The last thing to bear in mind is that the US trade deficit would have grown even larger these past few years, if not for the “oil boom”, and that if these energy companies are gone, then the US trade deficit will descend to an even steeper precipitous level than it is now.
Given that oil is the source of their power and wealth, it’s unlikely that the House of Saud didn’t consider all aspect and ramification of the decision to maintain the low oil price.
In essence, what Saudi Arabia offered the US was a double-edge sword, able to hack away at its enemies, but also injuring itself along the way.
The ideas were derived from the following readings:
Eric B. Schnurer, founder and president of Public Works LLC, a private consultancy agency, has written an article on Foreign Affairs about the coming digitalization of public services and governments. In it, he talks about the increasing commercialization of government services, like selling citizenships to anyone without any actual connection to the countries themselves. He lists Malta and Bulgaria as examples and discusses the e-residency program of Estonia, whereby anyone in the world can become an Estonian e-resident and enjoy usage of the country’s leading online government services.
The question after reading the article is that of competition. Will Estonia e-residency still be as attractive when other countries start offering their own version of an e-residency? Since the e-residents don't actually have any affinity for the country, mostly getting it for practical reasons, there's no actual loyalty or nationalism toward the country. It'll be as easy as changing banks and here lies the conundrum. Countries would want to promote the successes of their e-residency programs, but those very same successes would encourage competition. And when heavy players, in this case, countries with a large population and strategic advantages (Canada, Australia, South Korea, etc), start getting into the market, it leaves very little room for smaller countries. This is not to discount the advantages that the e-residency program is bringing to Estonia now — the largest number of startups per person in the world, a tech sector that accounts for almost 15% of its GDP, and an expected revenue of $565 million from people registering for e-residents (there is a registration fee after all) — but Estonia should have a plan of where to go from here.
Eric B. Schnurer cites Nevada as an example of a place that used a specific government service —rapid divorce certification — as an incentive to entice visitors during the Great Depression and that these "migratory divorces" reached its peak 1940s, bringing in nearly 20,000 visitors a year to the state. He states that these visitors fueled a boom that served as the foundation of Nevada’s tourist economy. This example illustrates the very same problem that Estonia will face. When Nevada's rapid rapid divorce certification was no longer unique to the state, it could no longer rely on it to fuel the economy. The state had to shift to something else entirely — gambling.
So when Estonia's e-residency is no longer unique to Estonia, what is it going to do?
Yesterday, a friend wrote that something wasn't up to "Singapore standard" and I took a second look at that term. I emailed her and told her that I wasn't sure if people know what exactly is "Singapore standard".
Thinking further about it, it is interesting that Singapore - a well-regarded, affluent city-state with a high standard of living - is unable to position itself as a country with high standards. German engineering, Swiss Made, and Japanese precision illustrate how countries are able to market themselves to the world due to their perceived exacting standards. In many regards, Singapore should also be on that list.
Singapore is one of the most affluent countries in the world, ranked second in terms of safety, third in global education, and placed top ten in terms of innovation. Granted, it's not easy for countries to change the mindset of consumers, but the mass admiration for Korean products now versus 10-20 years ago shows that it is entirely possible. Hyundai cars, LG TVs, and Samsung phones were previously perceived as inferior to Japanese made product, but Korean chaebols poured millions into R&D and marketed themselves extensively. Now, Korean products are held in the same regard as Japanese products, if not better. If we look at the chart below, South Korea now leads the world in innovation. Of the top 10 countries on the list, I think Singapore is the one that would seem foreign to most people.
Some might argue that Singapore Airlines, which consistently ranked as the best airline in the world, means that people do know that the Singapore standard equates to quality. I would argue that it just means great service, not necessarily high standard. All Nippon Airways or Asiana Airlines may not rank as high as Singapore Airlines, but the perception is that Japanese and Korean products/engineering are superior to Singaporean products/engineering. Just because you're good in service doesn't mean that you're good at producing quality products.
Given the adage - "It is easier to criticize than to do better" - my suggestion is that the government works with companies to encourage them to use the country in their marketing, much like how most Swiss watches use the phrase "Swiss Made" and how German luxury car brands Mercedes and BMW tout "German engineering". Given Singapore's successes and it's kiasu spirit, it should try to achieve a market position where "Singapore standard" actually means something to the world.
Not confusing at all...
There has been extensive coverage and research on the impact of the sales of US and Russia military technology to the rest of the world. US and Russia practically armed their allies during the Cold War.
As Chinese military technology continues to improve and other countries are acquiring their military technology, there should be more policies on how to regulate the sales of Chinese military technology as it has damaging consequences to regional conflicts and international relations.
Apparently, both ISIS and Hamas use Chinese drones during warfare. While some of the drones may not be military surveillance drone and only a civilian-grade drone, it is still troubling that rebel groups are able to get their hands on such technology and use it for military purposes.
Even more troubling is that China is unqualified to become a member of MTCR (Missile Technology Control Regime), the major arms control body for regulating the sale and transfer of unmanned technology, precisely over concerns about its accountability. Hence, China is in a position to sell their drones to the highest bidder, regardless of the impact it might have on other countries.
This issue should be addressed promptly before the world is proliferated with Chinese-made drones.
Going into 2015, it seems that China has decided that the best way to resolve a disputed territorial claim is through a website. The China’s State Oceanic Administration launched the website www.diaoyudao.org.cn this week in order to maintain claims that the Senkaku/Diaoyu Islands belongs to China.
The website features facts about the islands’ natural environment, its history, legal documents about the islands, and news update. Interestingly, the website is available in only one language - Mandarin Chinese. It seems that the China’s State Oceanic Administration intends for the website to be solely for its domestic audience. On the homepage, a bright red Chinese flag and the statement “Diaoyu Islands - China's sovereign territory” is placed on top of the page.
Expectedly, the website disavows Japan's claims over the islands. The purpose of the website seems to corral popular opinion to legitimize its claims.
Japan's Ministry of Foreign Affairs has its own version of history and claims over the Senkaku Islands on its website. The website is available in 12 languages, which makes it a lot more international than China's website.
Is this the future of diplomacy? Nations fighting over disputed territories through websites to manipulate popular opinion.
It would not be too difficult to imagine the United Kingdom, Ireland, Iceland, and Denmark launching their own websites to claim sole sovereignty over Rockall, the uninhabited, disputed granite islet in the North Atlantic Ocean.
This past Saturday, China commenced the first Nanjing Memorial Day, the first time the country officially held a national day of remembrance for the fallen during the Nanjing Massacre.
The ceremony was broadcasted on CCTV state television with the Chinese flag flying half-mast to commemorate the fallen.
President Xi Jinping said that no one can deny the Nanjing Massacre. According to the state-run Xinhua news agency, President Xi said that, "Anyone who tries to deny the massacre will not be allowed by history, the souls of the 300,000 deceased victims, 1.3 billion Chinese people and all people loving peace and justice in the world."
State media reported that close to 10,000 people attended the ceremony in Nanjing which included prominent Chinese dignitaries like Zhang Dejiang, chairman of the NPC, and Wang Yi, China's foreign minister.
The Nanjing Massacre is an extremely sensitive and unresolved topic for both countries. China repeatedly stresses that Japan has failed to properly atone for the massacre during an unjustified invasion. Japan tends to claim that the Nanjing Massacre was a legitimate act of war during a full-scale war. Chinese emphasizes that the casualty is close to 300,000 during the six-week killing spree by the Japanese military. Japan and some foreign academics contest the number of casualties. China accuses Japan of "whitewashing" its horrendous actions while Japan accuses China of using anti-Japanese sentiments as propaganda. Both sides cannot agree on the number or the ways by which to resolve it amicably.
The decision to implement a Nanjing Memorial Day can not have come at a more difficult time. While Japan and the China have official diplomatic relations for 42 years now, recent events regarding territorial claims over the Senkaku Islands in the East China Sea and Prime Minister Abe's visits to the Yasukuni Shrine are seriously straining bilateral relations.
Prime Minister Shinzo Abe's recent landslide in the elections further escalates tension between the two powers. Abe is a nationalist and a war hawk. He openly visits the Yasukuni Shrine, which honors Japan's war "heroes" during World War II, the very same people China wants to perpetually condemn, going so far as to instigate a national day.
President Xi tried to lower the tension by emphasizing that, "We [China] should not bear hatred against an entire nation just because a small minority of militarists launched aggressive wars." However, it remains to be seen how Japan will react to China's Nanjing Memorial Day.
My bet is on escalating military actions between the two sides. While Japan does not currently have a military due to the consequences of World War II, China's aggressiveness in East China Sea and rapid growth in its military capabilities will create a military arms race between the two countries, especially if both sides are nationalistic and hawkish.