Bubbles

The global effect of the bursting of the bubble economies in the developed world was sudden and devastating. For example, Jamaica’s dollar-earning bauxite industry has shed hundreds of jobs already because of the downturn in US car production.

In Bangladesh, the housing bubble is tied to the reliance of the country to the remittances sent by overseas workers. Now that migrant workers are returning home because of mass layoffs in Europe and US, the property boom in Bangladesh has come to an end:

The diaspora Bangladeshis have sent remittance of almost 6.5 billion US dollars in 2007. There is no doubt that remittances are good for a country's economy. But it is the sad truth that most of these remittances are used in investing in unproductive assets like lands and apartments. Because liquidity chases assets, those diaspora workers will certainly want to invest in a secured asset.

A huge sum of money is going after a tiny piece of land among limited land resources. So we have created our own bubble (like dotcom bubble). Everybody knows how the prices of lands and apartments shot up. The remittances are responsible for it.

Cambodia is also experiencing a property bubble. South Koreans are Cambodia’s biggest investors. Since South Korean businesses have been badly hit by the financial crisis, many of them have already pulled off their real estate investments in Cambodia.

Meanwhile, the Caribbean financial crisis originated in part from the sharp drop in methanol and real estate prices. In Antigua, the face of bank fraud is U.S. billionaire Allen Stanford who has been charged with investment fraud. Stanford has considerable investments in the Caribbean.

For many months, the Brazilian government has claimed that the local impact of the economic crisis is only minimal. But recent reports have shown that Brazil is now the second most affected country by the crisis. Blogger Luiz explains why Brazil’s economy is vulnerable:

Sim, o Brasil tem um mercado interno, mas não vive só dele. Vive, também, da exportação de seus produtos. A crise atingiu não apenas os Estados Unidos, mas também a União Européia. Dois grandes mercados brasileiros. Reduziu o crescimento na China, outro mercado importante.

Romania’s lending bubble is familiar because it is almost the same credit bubble which burst in other rich nations.

Political Cartoon by Sacrava from Cambodia

Bailouts

Many companies which asked for a bailout from governments were financial institutions. The response of some governments was to nationalize these money-losing firms. Bank nationalization schemes have been enforced in some countries like Iceland and Kazakhstan. Trinidad and Tobago banks were rescued not just by their government but also by governments from neighboring countries.

Is nationalization a wise economic decision? Should bankrupt companies receive government assistance? The opinion of bloggers is divided:

Barbados Free Press criticizes the lack of transparency concerning the decision to bailout the banks in the region:

How much will Barbadian taxpayers eventually be on the hook for? Good luck finding out the truth because the amount of taxpayer money and concessions being given by Trinidad, Barbados and other countries is being kept secret from the taxpayers.

Barbados Underground, reacting to the renewed government involvement in the financial sector, notes that this unorthodox thinking should generate a healthy debate:

If in fact, “national financial institutions,” enhance the capacity of a national government to respond to crises in the financial services sector, the question may well be, not whether a country can afford a “national financial institution,” but whether it can afford not to have one. Such a perspective goes against my many years of training, but economic orthodoxy has been found so sorely lacking in this crisis that I am open to new ideas. New answers often require new questions and a willingness to engage in fresh open minded debate.

Streetwise Professor from Russia disagrees that failing banks should be revived by the government:

These are companies that should have been euthanized. No, let me correct that. They should have been terminated with extreme prejudice. Instead they are being revived, and pushed into doing the kinds of things that created the financial crisis in the first place.

This politicization of these large financial institutions makes their continued reliance on the government inevitable. Soft budget constraints are addictive. More bad loans will pile up, making these firms even less able to survive in the marketplace without government assistance.

Even poet dergachew from Kazakhstan is afraid that the nationalization of business enterprises will be counterproductive:

I am not a politician, but nothing positive will eventually happen in result of nationalization of big business that takes place in our country now. Sure, the government remains the only capable market player because it accumulates income from extraction of minerals, but a priori it is well-known fact that business people run a business better, than the government.

In Jamaica, blogger Jamaica Salt suggests a bailout for the country’s rum industry because of declining tourism activities:

It is indeed a sorry state of affairs. Usually in times of downturn, alcohol sales increase as people look to drown their sorrows! But I imagine that the dent in tourism to Jamaica is largely to blame for the decreasing sales figures of rum.

Political Cartoon by Sacrava. A Big Fat Cat, AIG

Stimulus plans

To assure the public that something is being planned or done to revive the economy, governments around the world are drafting various economic stimulus packages.

Hungary will implement a tax reform. Taiwan has signed a controversial trade agreement with China and several Southeast Asian nations. Hiring street sweepers is part of the Philippine stimulus plan. Mongolia has unveiled a 1.5 trillion tugrik stimulus plan (USD 980 million) – but critics claim the program is only intended to cover the budget deficit. Malaysia has recently launched its second stimulus program. Named as mini budget, this stimulus plan has generated a lot of discussion and also criticism in the country.

Sean's Russia Blog notes that Russia is relying on “gunpowder economics” for its version of a stimulus plan:

Feeling the pains of economic crisis? Can’t find a suitable place for expanding market share? Don’t fret. There is one sure fire way to keep those exports up. Sell more weapons.

China’s central government has announced a four trillion yuan stimulus package (USD 570 billion dollars). Below is the coverage of the stimulus plan:

The four trillion yuan is going to be spent on 10 categories, among them welfare investment such as housing for low-income, health-care system and education, also infrastructure-building such as new railways, roads and airports. Specially, aid to post-earthquake reconstruction in Si-chuan is mentioned in the agenda. Equally notable is the subsidy for farmers and an explicit announcement to increase the price of state food purchase from farmers.

But some bloggers are worried that corruption and poor infrastructure projects will cause the failure of the stimulus plan.

In Cambodia, it is the opposition which is suggesting a stimulus package. Predictably, the government rejected it. The stimulus hopes to realize the following:

- Setting up mechanisms to support and stabilize agricultural prices in order to protect farmers' revenue and living conditions
- Investing in human resources by increasing spending on education, training and health
- Building infrastructure that Cambodia lacks most (roads, railways, water-control and irrigation systems, housing for the poor)
- Works to protect the environment and to restore the ecological system that has been disrupted nationwide, including replanting trees and dredging lakes and rivers
- tax cuts and reduction in fees for the use of public services including road tolls and the electricity price
- Special social allowances for the poorest segment of the population
- Loans with reduced interest rates for small domestic entrepreneurs and the needy.

Adolfo from Brazil, enumerates his stimulus proposal:

O Brasil tambem tem anunciado seu pacote, eu vou fazer a minha parte e sugerir um pacote tambem: que tal o governo brasileiro diminuir o imposto de renda? Operacionalmente o procedimento eh bem simples, basta devolver R$ 1.000 para cada contribuinte. Que tal esse pacote? Ele pelo menos tem o merito de devolver o dinheiro para quem ja pagou muito mais, e em nada distorce os incentives futuros em relacao ao risco.

There are bloggers who reject the wisdom of “stimulucrats”. John Quiggin from Australia shares this negative view on implementing a stimulus:

If you believe that the economy is like a swimming pool, and that no matter how big a splash some shock (such as the collapse of the financial system) might make, the water in it will rapidly find its own level, then you will agree that there is no need for, or possible benefit from, the stimulus package.

Adolfo from Brazil believes the government intervention in the economy is more dangerous:

Para a economia brasileira mais perigoso que a crise internacional são as recentes medidas anunciadas pelo governo. Os recentes anúncios de aumento do gasto público podem perfeitamente fazer estragos na economia. Ou seja, se o governo brasileiro ficasse calado e nada fizesse estaríamos a salvo. O problema é que o governo insiste em querer intervir na economia.

He explains why a bigger public spending will hurt the taxpayers:

Da próxima vez que você ouvir alguém pedindo por um aumento do gasto público lembre-se que isso implica em menos dinheiro no seu bolso, isso implica em menos dinheiro para as empresas investirem, implica que cada vez mais você dependerá dos favores do governo, e cada vez menos de seu próprio esforço e habilidade.

The quote from Bangladesh was an English translation provided by GV Editor Rezwan. The Portuguese translation was provided by GV Editor Paula.

Of the 270 project proposals, the following five are most representative of the innovation, purpose and goodwill that Rising Voices aims to support.

Abidjan Blog Camps

Théophile Kouamouo has long been one of Francophone Africa's leading bloggers. Based in Abidjan, Ivory Coast, Kouamouo is one of the founders of the Ivoire Blog network and started the wildly successful meme “Why I Blog About Africa.” (Elia Varela Serra summarized many of the resulting responses in a two-part series on Global Voices.) Kouamouo is now trying to bring many more of his countrymen and women to the blogosphere by organizing a series of “blog camps” around Abidjan in which current Ivorian bloggers can discuss the issues affecting them and show new bloggers how to join their ranks. Kouamouo first proposed the idea on his blog back in August last year, which attracted a number of enthusiastic commenters supporting the idea. Blog Camps have a long history of attracting new citizens to the participatory net. A number of blog camps have taken place in India, including in Chennai in 2006 and, more recently, in Mumbai. Blogcamp CEE last October brought many new participants to the Russian-speaking blogosphere. For the most part, however, West Africa (and particularly Francophone West Africa) has been left out of the booming global blogosphere. That is starting to change. Panos West Africa, in partnership with Highway Africa and Global Voices, recently announced the winners of the Waxal - Blogging Africa Awards. Next year we can expect to find many more Ivorians on that list as Théophile Kouamouo sets out to organize a series of events that will bring dozens if not hundreds of Ivorians to the blogosphere. Abidjan Blog Camps will also promote more pan-African online interaction by teaming up with existing blog camp movements in Madagascar, Kenya, Uganda, Mauritius, and South Africa.

Ceasefire Liberia

Just west of Ivory Coast lies Liberia and its roughly 3.5 million inhabitants. Settled by free slaves from the United States in the early 19th century, Liberia fell into a 14-year dark period of civil war and lawlessness that concluded in late 2003 with the presence of ECOWAS and the United Nations. Today Liberia is slowly recovering despite inadequate infrastructure, unemployment at around 80%, and former combatants (many of them minors) who must be re-integrated into society. Many unemployed Liberians have put their hopes in friends and relatives living abroad in the United States. However, there is often a lack of communication and understanding between Liberians at home and those living in the diaspora. By partnering with African Refuge - a drop-in center for West African youth - and the Century Dance Complex in Park Hill, Staten Island (the largest Liberian community outside of Africa), and Amnesty International in Monrovia, freelance journalist Ruthie Ackerman aims to help foster a transatlantic Liberian blogging community.

Those Liberians who lived through the war — whether soldiers or not — experienced some type of trauma or displacement. By creating a community and sharing experiences with others, it has helped give these youth a purpose and vision that there is something larger than themselves. This will benefit the community (on both sides of the ocean) on many levels: Liberians, many of whom have difficulty adjusting to life in America, can reconnect with their families and dispel myths about what life is like in the U.S. There are also left-over tensions from the war, which may be able to be diffused through the dialogue created between the communities.

Real Experience of the Digital Era - China

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Shenyang, literally meaning “the city to the north of Shen River” and capital of the Liaoning province, is touting itself as China's “next tourist destination.” But whether you are visiting the ancient pagodas of Old City or the official “High-tech Industrial Development Zone” the tourist brochures won't mention the city's male and female sex workers who mostly come from poor rural communities in search of talked-up urban opportunities. In partnership with the Ai Zhi Yuan Zhu Center for Health and Education documentary filmmaker Wei Zhang will train male and female sex workers who use the AZYZ center how to maintain a blog and upload short video documentaries to share their experiences, opinions, and troubles in order to promote more understanding of the region's sex worker population.

Nomad Green - Mongolia

Environment officials from throughout Northeast Asia met in Ulaanbaatar this week for the first time to discuss climate change and how to enhance energy efficiency in the region. Mongolia's capital city was a fitting location for the meeting as the country's environmental deterioration has accelerated recently due to rapid urbanization, industrial growth, and increased coal consumption. Ulaanbaatar is frequently shrouded in a haze of thick pollution:

Desertification from climate change is threatening the livelihoods of nomadic Mongolian tribesmen and the country's saiga antelope was just named the most endangered antelope species in Asia. It is amid so much negative news that Portnoy Zheng, in collaboration with the Mongolian and Tibetan Foundation and the Mongolian Green Party, will train Mongolian citizens how to spread awareness - both at home and abroad - about their country's environmental crisis. Nomad Green aims to 1.) train citizen journalists how to use blogs, digital video, podcasts, and map mashups to report on environmental news, 2.) create a network and community of environmentalists sharing and spreading information about related threats, solutions, and opportunities, and 3.) translate content into Chinese and English to promote more regional and international cooperation in facing Mongolia's environmental challenges.

Empowerment of Women Activists in Media Techniques - Yemen

With international coverage of the Middle East focused on the Israel-Palestine conflict, the war in Iraq, Iran's nuclear program, and the financial markets of the Persian Gulf States, little attention is given to one of the region's poorest countries, Yemen. The few spikes in media coverage of Yemen over the past few years are all related to fears of al-Qaida presence.

In collaboration with the Hand in Hand Initiative, Ghaida'a al-Absi will organize a new media training course for female politicians, activists, and human right workers in order to bring a new perspective to the Arabic-language blogosphere and to build an online network of Yemeni gender activists. It is fitting that today, on the 98th anniversary of International Women's Day, we announce al-Absi's initiative to bring more women's voices to the internet. The deteriorating status of women's rights in Yemen is frequently documented and discussed, but rarely do women themselves take part in those discussions. By reaching out to NGO's and political parties throughout Yemen al-Absi aims to change that.

Please join me in congratulating and welcoming the newest five grantee projects to our community.