Headline December 27, 2016/ ''' RICH COUNTRIES - POOR COUNTRIES '''



*Rich MAN - Poor Men*  :   '' I AM SORRY, SIR,'' said the money changer to me. ''We don't take or transact Pakistani currency.'' I hastily pulled out a $100 bill.

And all this and that  while, muttering something about the wretched  *Jet Leg*. The feign tricked nobody. There were over 8 passengers around the counter awaiting service.

This happened just two days ago at one beautiful international airport, with low clouds, and soft drizzle.  The transaction done, I walked away, head lowered in utter shame and disgust. 

*All students of Pakistan to think andddd  maybe for a change, note*.

*How the world views a country, is what by and large determines the monetary value of that particular country's currency*.

Still simmering from that shame, I reflected on the destiny of the poor and developing countries as lots and lots of money is escaping their governments porous capital controls.

To the barricades then, but politely. And with the Nervousness of steel! 

And then, and then,  The man who calls himself Jack is a caricature of a small-gangster.  Sporting a chunky  Louis Vuitton belt, a gold necklace and gold-rimmed sunglasses, he chomps on a Cuban cigar. 

He says he has come to a pawnshop across the street from the Ponte 16 casino in Macau, a gambling Mecca and former Portuguese colony-

That is administered separately from China, only for its fine Cohibas. But when asked for advice about how to exchange Yuan held within China for foreign currency   -a transaction officially limited by China's capital controls-

He breaks into a laugh and flashes a Chinese bank card. ''Just swipe it,'' he says. ''However much money you have in your China account, you can transfer it here.''

Macau's role as an illicit way station to move cash out of China, away from the government's prying eyes, is nothing new.

Just last year, though, things have been busier than normal. Capital outflows were already on the rise because of worries about the economy.

During last summer, after the stockmarket crashed and the government let the Yuan weaken, they soared.  Official data indicates that more than $150 billion of capital left China last August.

Faced with this exodus, the government launched a crackdown on underground banks, which ran money across borders and arrange for matching onshore and offshore transactions.

It would have been naive to imagine that the remarkable confluence of trade-boosting circumstances of the early 2000s  would last forever.

The falling dollar value of world trade is not necessarily a terrible thing. Cheaper products help consumers to buy more goods. By the same token, the slump in volumes is not a disaster for the world economy if it reflects growing domestic output  in America and China.

But many economies will suffer. Commodity exporters in the rich world, such as Australia and Canada, are relatively diversified.

Their falling currencies will boost tourism and exports of manufactured goods, among other industries.

Of greater concern are the many economies without much manufacturing. 

Rapid trade growth in the 1990s and 2000s led to a golden age of convergence between incomes in emerging economies and the rich world, as poor countries joined global supply chains.

Yet many have barely begun the process of industrialisation: average income in sub-Saharan Africa is about one quarter of that in China. Weaker trade growth and shorter, leaner supply chains means the ladder Chinese workers climbed is being pulled up behind them.

If the world is unlikely to repeat trade boom of 2000s, there are nonetheless ways to prevent trade from stagnating.

Rich countries should push ahead  with the trade deals they have begun, and ratify the ones they have already negotiated.

The deal on trade facilitation the WTO reached in 2013, which aims to reduce the cost of trade  in poor countries in particular, requires ratification by two-thirds of the organization's  161 members to come into force.

So far, just 16 have signed on. Efforts to  pass TPP have  been undermined by electoral politics.

President Barrack Obama, having won  ''trade promotion authority''  [the power to submit trade deals for an up-or-down vote in Congress] should strive to finish TPP, lest the political capital already spent on the deal go to waste.

TPP is especially worthwhile as it lowers barriers to agricultural imports and services, which will be of critical importance to developing economies that can no longer count on manufacturing to carry them to greater wealth.

Reforms within emerging economies, to liberalise agricultural and prepare workers for jobs in the service sector, will also be necessary.

But as leaders from Indonesia to Brazil are discovering, the slump after the boom is not the easiest moment to take hard decisions

With respectful dedication to the Leaders, Students, Professors and Teachers of the World. See Ya all on !WOW!   -the world students Society and Twitter-!E-WOW!   -the Ecosystem 2011:

''' Ports & Storms '''

Good Night and God Bless

SAM Daily Times - the Voice of the Voiceless


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