Category Archives: Politics

Cheaper oil- Many winners, a few bad losers

Cheaper oil- Many winners, a few bad losers

A lower price will boost the world economy and harm some unpleasant regimes—but there are risks

Crude oil prices -2014

Crude oil prices -2014

Oct 25th 2014 | The Economist magazine

THE collapse of the Soviet Union in 1991 had many causes. None was as basic as the fall in the price of oil, its main export, by two-thirds in real terms between 1980 and 1986. By the same token, the 14-year rule of Vladimir Putin, heir to what remained, has been bolstered by a threefold rise in the oil price.

Now the oil price is falling again. Since June, it has dropped from about $115 for a barrel of Brent crude to $85 or so—a reduction of roughly a quarter. If prices settle at today’s level, the bill for oil consumers will be about $1 trillion a year lower. That would be a shot in the arm for a stagnating world economy. It would also have big political consequences. For some governments it would be a rare opportunity; for others, a threat.

The scale of shale

Predicting oil prices is a mug’s game (we speak from experience). The fall of the past three months is partly the result of unexpected—and maybe short-lived—developments. Who would have guessed that chaotic, war-torn Libya would somehow be pumping 40% more oil at the end of September than it had just a month earlier? Saudi Arabia’s decision to boost output to protect its market share and hurt American shale producers and see off new developments in the Arctic was also a surprise. Perhaps the fall was exaggerated by hedge-fund investors dumping oil they had been holding in the false expectation of rising prices.

Geopolitical shocks can surprise on the upside as well as the down. Saudi Arabia may well decide to resume its self-appointed post as swing producer and cut output to push prices up once more. With war stalking Iraq, Libya still fragile and Nigeria prey to insurgency (see article), supply is vulnerable to chaotic forces.

But many of the causes of lower prices have staying power. The economic malaise weighing down on demand is not about to lift, despite the tonic of cheaper oil (see article). Conservation, spurred by high prices and green regulation, is more like a ratchet than a piece of elastic. The average new car consumes 25% less petrol per mile than ten years ago. Some observers think the rich world has reached “peak car”, and that motoring is in long-term decline. Even if they are wrong, and lower prices encourage people to drive more, energy-saving ideas will not suddenly be uninvented.

Much of the extra supply is baked in, too. Most oil investment takes years of planning and, after a certain point, cannot easily be turned off. The fracking revolution is also likely to rage on. Since the start of 2010 the United States, the main winner, has increased its output by more than 3m barrels per day to 8.5m b/d. Shale oil is relatively expensive, because it comes from many small, short-lived wells. Analysts claim that a third of wells lose money below $80 a barrel, so shale-oil production will adjust, helping put a floor under the price. But the floor will sag. Break-even points are falling. In past price squeezes, oilmen confounded the experts by finding unimagined savings. This time will be no different.

For governments in consuming countries the price fall offers some budgetary breathing-room. Fuel subsidies hog scandalous amounts of money in many developing countries—20% of public spending in Indonesia and 14% in India (including fertiliser and food). Lower prices give governments the opportunity to spend the money more productively or return it to the taxpayers. This week India led the way by announcing an end to diesel subsidies. Others should follow Narendra Modi’s lead.

The axis of diesel

For those governments that have used the windfall revenues from higher prices to run aggressive foreign policies, by contrast, things could get uncomfortable. The most vulnerable are Venezuela, Iran and Russia.

The first to crack could be Venezuela, home to the anti-American “Bolivarian revolution”, which the late Hugo Chávez tried to export around his region. Venezuela’s budget is based on oil at $120 a barrel. Even before the price fall it was struggling to pay its debts. Foreign-exchange reserves are dwindling, inflation is rampant and Venezuelans are enduring shortages of everyday goods such as flour and toilet paper.

Iran is also in a tricky position. It needs oil at about $140 a barrel to balance a profligate budget padded with the extravagant spending schemes of its former president, Mahmoud Ahmedinejad. Sanctions designed to curb its nuclear programme make it especially vulnerable. Some claim that Sunni Saudi Arabia is conspiring with America to use the oil price to put pressure on its Shia rival. Whatever the motivation, the falling price is certainly having that effect.

Compared with these two, Russia can bide its time. A falling currency means that the rouble value of oil sales has dropped less than its dollar value, cushioning tax revenues and limiting the budget deficit. The Kremlin can draw on money it has saved in reserve funds, though these are smaller than they were a few years ago and it had already budgeted to run them down. Russia can probably cope with today’s prices for 18 months to two years, but the money will eventually run out. Mr Putin’s military modernisation, which has absorbed 20% of public spending, looks like an extravagance. Sanctions are stifling the economy and making it hard to borrow. Poorer Russians will be less able to afford imported food and consumer goods. If the oil price stays where it is, it will foster discontent.

Democrats and liberals should welcome the curb the oil price imposes on countries like Iran, Venezuela and Russia. But there is also an increased risk of instability. Iran’s relatively outward-looking president, Hassan Rouhani, was elected to improve living standards. If the economy sinks, it could strengthen the hand of his hardline opponents. Similarly, a default in Venezuela could have dire consequences not just for Venezuelans but also for the Caribbean countries that have come to depend on Bolivarian aid. And Mr Putin, deprived of economic legitimacy, could well plunge deeper into the xenophobic nationalism that has fuelled his campaign in Ukraine. Cheaper oil is welcome, but it is not trouble-free.

Guyana – Capitol TV News Videos – 14 October 2014

Guyana – Capitol TV News Videos – 14 October 2014

  • Student suicide shocks WCD “Swami” school
  • No full compensation for flooded EBD communities
  • GWI offers “Free Pass for disconnected consumers
  • Granger continues call for Local Gov’t polls
  • AFC says gov’t stalling NO Confidence debate
  • Plaisance residents say Whittaker “stranger to the truth”
  • Sports
Student suicide shocks WCD “Swami” school   Posted: 14 Oct 2014 02:09 PM PDT

Dead is Alex Persaud of 18 Stewartville, West Coast Demerara. The boy bought Gramoxone at a shop nearby his home two Mondays ago and succumbed last Friday. The teenager was said to be involved with an 18-year-old Information Technology teacher at the Saraswati Vidya Niketan Secondary School at Cornelia Ida. Persaud was in his third […] Continue reading

One Muslim state’s peaceful power transfer – commentary

One Muslim state’s peaceful power transfer

By the Monitor’s Editorial Board October 14, 2014 – [source]

  • Indonesian President-elect Joko Widodo, center, speaks with Facebook CEO Mark Zuckerberg, right, during their visit to a market in Jakarta, Indonesia, Oct 13. The two discussed ways to use the online social network for national development.

With four Muslim countries now splintered in armed conflict (Libya, Syria, Iraq, and Yemen), the world can be grateful that the largest Muslim country will achieve a peaceful milestone Oct. 20. For the first time in its history, Indonesia will see a transfer of power from one popularly elected president to another: A humble former furniture maker, Joko Widodo, will take over from a former Army general, Susilo Bambang Yudhoyono.  Continue reading

Challenge to Britain’s ruling conservatives

Challenge to Britain’s ruling conservatives

P.M. David Cameron

P.M. David Cameron

If British Prime Minister David Cameron felt that with the No vote in Scotland he would have a respite from political pressures, the loss of one of his Conservative Party’s seats in a by-election last week will quickly have brought him back to reality. For the result of the poll marks the victory of a fringe offshoot of the Conservatives, the United Kingdom Independence Party (UKIP) which has opposed Britain’s continuing membership of the European Union.

To make it worse, the UKIP’s victory was the result of the resignation of a Conservative Member of Parliament from both his seat and the Party who, by joining UKIP made it clear that the centrepoint of his challenge was Britain’s EU membership.   Continue reading

Guyana: Forbes Burnham & My Grand Disillusion – By Rosaliene Bacchus

Originally posted on Three Worlds One Vision:

Late President Forbes Burnham - GuyanaLinden Forbes Sampson Burnham (1923-1985)
Prime Minister of Guyana, 1964-1980
President of the Cooperative Republic of Guyana, 1980-1985
Photo Credit: Guyana Graphic

Linden Forbes Sampson Burnham: an impressive name. In retaining his mother’s maiden name, Sampson, not a common practice in Guyana, he reveals a deep regard for her. With a father who was a schoolmaster and both parents devout Methodists, the young Forbes had a strict and upright upbringing.

The brilliant, young Forbes won the 1942 British Guiana Scholarship, the highest scholastic award at that time. Later, he excelled at the University of London, achieving a Bachelor of Laws (Honors) Degree.

When I first met Forbes Burnham, then a practicing lawyer and leader of a newly-formed political party, I was about four to five years old. I was at our next-door neighbor’s flat the day he came to pick up his order of black pudding. The charming…

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DIASPORA – editorial in Stabroek News

DIASPORA –  editorial in Stabroek News

Guyana: President Ramotar

President Ramotar

Last week GINA, the Government’s information service, reported that President Donald Ramotar had met Guyanese in Washington and Queens, New York, in the course of his visit to the United Nations, and that he had asked them to return home and invest in the country’s economy. One wonders if he was serious when he put that question to his compatriots in the diaspora, or whether he was just going through the motions.

If he was serious, then he is truly divorced from reality; we have been waiting twenty-two years for this flood of returnees to swamp us with their US dollars, their overseas skills and their drive to nurture their homeland, and no one, even President Ramotar one would think, anticipates that they will do so in the immediate future.

Continue reading

Brazil could elect first black president – so why isn’t anyone talking about it? (+video)

Brazil could elect first black president – so why isn’t anyone talking about it? (+video)

By Taylor Barnes, Correspondent October 4, 2014 – CSM

Brazilian singer Gilberto Gil sings a song he composed for presidential candidate Marina Silva of the Brazilian Socialist Party (PSB) during a meeting with artists and intellectuals at a campaign rally in Rio de Janeiro, Brazil.

The official jingle for Marina Silva’s presidential campaign discreetly refers to the candidate’s skin color: “She’s going to come with her tan skin and popular appeal…. She’s going to be so different, and for that reason, so similar to all of us.”

The brief line – among diverse references to how she appeals to all Brazilians of all creeds – is symbolic. After her years in the public eye as a politician and activist, Brazilians know well the personal story of Ms. Silva: She hails from an impoverished family of 11 children in a remote corner of the Amazon, worked as a housemaid, and was illiterate until the age of 16. She’s a devout Pentecostal Christian and an outspoken environmentalistContinue reading

Turkey, the Kurds and Iraq: The Prize and Peril of Kirkuk

Turkey, the Kurds and Iraq: The Prize and Peril of Kirkuk

Geopolitical Weekly  Tuesday, October 7, 2014 -

In June 1919, aboard an Allied warship en route to Paris, sat Damat Ferid Pasha, the Grand Vizier of a crumbling Ottoman Empire. The elderly statesman, donning an iconic red fez and boasting an impeccably groomed mustache, held in his hands a memorandum that he was to present to the Allied powers at the Quai d’Orsay. The negotiations on postwar reparations started five months earlier, but the Ottoman delegation was prepared to make the most of its tardy invitation to the talks. As he journeyed across the Mediterranean that summer toward the French shore, Damat Ferid mentally rehearsed the list of demands he would make to the Allied powers during his last-ditch effort to hold the empire together.

He began with a message, not of reproach, but of inculpability: “Gentlemen, I should not be bold enough to come before this High Assembly if I thought that the Ottoman people had incurred any responsibility in the war that has ravaged Europe and Asia with fire and sword.” His speech was followed by an even more defiant memorandum, denouncing any attempt to redistribute Ottoman land to the Kurds, Greeks and Armenians, asserting: “In Asia, the Turkish lands are bounded on the south by the provinces of Mosul and Diyarbakir, as well as a part of Aleppo as far as the Mediterranean.” When Damat Ferid’s demands were presented in Paris, the Allies were in awe of the gall displayed by the Ottoman delegation. Continue reading

Guyana: Capitol TV News Videos – 07 October 2014

  • PPP protests GECOM PRO appointment
  • Dynamic Airways to resume flights
  • GT residents uncomfortable with cleanup exercise
  • Another missing report in file for Complaints Authority
  • Protests for Local Gov’t Elections continue
  • Sports
PPP protests GECOM PRO appointment   Posted: 07 Oct 2014 02:09 PM PD
Dynamic Airways to resume flights   Posted: 07 Oct 2014 02:08 PM PDT
GT residents uncomfortable with cleanup exercise    Posted: 07 Oct 2014 02:07 PM PDT Continue reading

Capitol News – TV Video Reports – 03 October 2014

  • Gang raped Amerindian woman speaks out
  • Rice krispies hype at GUYEXPO
  • Thief beaten first by residents, then handed to police
  • APNU backing NO-Confidence motion
  • UG considers higher fees, increased pay for lectures
  • Whittaker stands by Plaisance Overseer appointment
  • Sports
Gang raped Amerindian woman speaks out   Posted: 03 Oct 2014 02:09 PM PDT
Rice krispies hype at GUYEXPO   Posted: 03 Oct 2014 02:08 PM PDT  Continue reading
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