Newsletter 4-23-2021

Hi everyone. Thanks for subscribing. If you have the means, please consider becoming a paying member. If you have the inclination, please pass this newsletter around to others who might enjoy the read. Now onto this week's edition of No Craic, Mad Craic, and Great Craic.

No Craic

(1) FitchRatings--one of the big three global credit rating agencies alongside Moody's and S&P Global Ratings--is priming investors for some post-pandemic austerity in the global south.

A few weeks back, the firm put out a statement warning about the deteriorating quality of assets held on the balance sheets of multinational development banks, or MDBs. (MDBs include big, Washington-based outfits such as the International Monetary Fund and the World Bank as well as regional players like the Asian Development Bank, the African Development Bank, the Islamic Development Bank, etc.). As their analysts argued, by providing emergency liquidity to desperate governments/firms during the pandemic, MDBs have added considerable default-related risk to their portfolios, risk not yet making itself felt due to the MDBs having also temporarily suspended debt repayments from their borrowers.

Should Fitch et al choose to downgrade the credit ratings of particular MDBs--thereby increasing their borrowing costs--the institutions in question are likely to push their own borrowers, be they governments or corporations, into adopting punishing and developmentally disastrous austerity so as to make sure outstanding loans are repaid in full (which, in turn, will help restore the credit rating of the MDB). Alas, austerity in the current context is certain to set off deflationary cycle in the south from which it will be nearly impossible to recover. Whatever slim prospects the sustainable development goals (SDGs) laid out by the UN in 2015 still had of being met will be well and truly gone should all this come to pass.

(2) Wee-man Emmanuel Macron has declared his opposition to 1980s-1990s era Washington Consensus-styled development, decrying the folly of a paradigm built on "less state intervention, privatisations, structural reforms, opening up economies through trade (and the) financialisation of our economies." In its stead, the French President claims he will be working to implement an alternative regime for EU-Africa relations in particular, a regime he posits will bring welfare gains and a genuine sense of partnership between the colonizers of yore and their one-time subjects. Operationally, Macron's vision is to be achieved through expanding Public-Private Partnerships (PPPs) and building complex securities and bond markets in developing counties.

For Macron and the contemporary World Bank, which is also subscribed to the finance-for-development modality hitherto described, the notion is that the proposed measures will suffice to derisk investment to such a degree as to facilitate a historic inflow of private capital from the global north, capital that will be allocated for building the energy infrastructure, hospitals, schools, roads etc., needed to power the south's advancement.  

Nice as Blackrock-as-your-salvation sounds on paper, it augurs disaster in practice. France itself (as well as many countries in Africa) have already had disastrous experience with PPPs, after all, experiences so bad that the French Court of Auditors has explicitly stated that PPPs are a "budgetary time bomb" and a far more expensive option than direct public investment. The way Macron/the World Bank suggest southern countries ought court Wall Street invesment, meanwhile, will inevitably lead to governments being loaded up with enormous though hidden liabilities at the same time as it exposes their economies to the inherently volatile swings of finance (swings that will see all those dollars flow out-of-country when liquidity gets tight/uncertainty ticks up back in New York or London).

Stay away.

(3) In view of King Abdullah II's crackdown on phantom coupists in Jordan a few weeks back, one may be keen to learn that his efforts were, in all likelihood, aided by the Israeli cyber intelligence firm NSO. Per Axios, the Jordanian regime solicited the services of NSO--a company in the business of hacking and surveillance--in late 2020. In view of this coming together, it seems plausible that Abdullah's security aides used the tech acquired from NSO in order to spy on the King's brother, amongst others, and that the Jordanian mukhabarat are more generally moving toward the digital monitoring tactics currently being embraced in the Gulf.

NSO, it should be said, is currently being investigated by the US Department of Justice due to the company's government clients allegedly hacking the private communications (via WhatsApp) of 1400 people in 2019.

(4) Sultan Jalabi recently published a lengthy exposé on the prison/detention economy in Syria.

As Jalabi details, financial extortion has run rampant in post-2011 Syria. A vast majority of families suffering from the loss of a child/parent/sibling have been forced to pay in excess of $10,000 in order to (i) find out the location of a disappeared individual; (2) secure the release of said individual; (iii) secure the transfer of said individual to a civil prison; (iv) expedite court proceedings (or change a court ruling); or (v) gain visiting rights.

The lion's share of the detainees included in the study were arrested due to attending a demonstration and/or engaging in non-violent political activism during the early days of the Arab Spring.

(5) If not spinning with quite the same frequency as the one in the US, the revolving door connecting state and private interests in the UK is quite operational in its own right. This has become especially apparent following revelations related to former Prime Minister David Cameron's lobbying on behalf of the now defunct Greensill Capital (lobbying which resulted in his soon-to-fold client being made a designated lender within the government's Coronavirus Large Business Interruption Loan Scheme).

Per Martin William's book Parliament Ltd., as of 2015, British politicians sat on the boards of 2,400 private companies, and the external income earned by parliamentarians through such positions amounted to 25% the salaries paid them by the state.  

Mad Craic

(6) In the course of roughly 48 hours, a group of schemers/rentiers/financiers triumphantly announced their plot to ruin European soccer forever more and then saw their plots--hastily and incoherently cobbled together by a coterie of executives who have not been subject to critique or challenge in decades--collapse in ignominy.

Turns out you can't alienate fandom, long-standing media partners, and governing institutions at one and the same time and expect your attempts at (further) feudalizing a sport's economy and organization to go forward.  

Great Craic

(7) Hisham Melhem has written a nice piece tracing how the United States' partial retreat from the Middle East stands as the causa ultima for the new reactionary axis being forged by the UAE/Saudi/Israel/Egypt/Morocco/Bahrain/Sudanese military, etc.

Not sure I agree with the author's conclusions, though his point that "leaving the security of the Middle East in the hands of unaccountable autocrats and strongmen is not the answer" is difficult to dispute.

(8) Bruno Amable and Thibault Darcillon have just penned a very interesting paper on the evolution of political cleavages in the global north.

As they detail--and as your boy discussed in the wake of America's November elections--the political salience of income is partially receding in contemporary times while the salience of education-levels is growing, at least as relates to policy preferences vis-a-vis redistribution, investment in public education, globalisation and immigration. Worryingly, after documenting the extent to which highly-educated elites now dominate "Left" constituencies in many countries while financially-rich elites dominate "Right" constituencies, the authors also point to the prospect of an emergent bourgeois bloc rising to power in the coming years, a bloc that will be consolidated via an elite coalition uniting Brahmin Left (principally: college-educated people with "Refugees Are Welcome" signs on the lawn of their $1.5 million property) and Merchant Right (segments of capital reliant upon trade/financial integration).

(9) Below you'll find a map of Arab universities circa 1974, courtesy of Esmat Elhalaby. Pretty neat.

Below here, meanwhile, you'll find a recently colorized photo of three Tunisian anti-colonialists waiting their execution by the French authorities in 1952.  

(Tunisia's independence day was on March 20).

(10) Here's a video of a chimpanzee being reunited with the people who rescued him. It is truly top notch.

        Have a great weekend.