Shadow Economy & Corruption : Invisible Hands

My PhD defence, 14 July 2009

2009-07-18T13:08:00.000-07:00

April 2006 - 14 July 2009: I defended my PhD dissertation "Political economy of natural resources and governance in Iran: an empirical investigation" at the Faculty of Business & Economics of TU Dresden.

The photos and films (thanks to Mehran) can be downloaded at the following link:
http://ifile.it/4rsblo1 (1: click Request Download Ticket and then click on download)

Iran Presidential Election

2009-06-24T02:07:00.000-07:00

Information can be seen here.

End of Ahmadinejad populism is coming!

2009-06-06T02:31:00.000-07:00

my working paper on "Macroeconomics of populism in Iran" can be read here.

Abstract:

This paper uses the Dornbusch and Edwards (1990) analytical framework to investigate the
macroeconomic populism in Iran under the Ahmadinejad government. My thesis endeavours
to place the government of Ahmadinejad in a populist context and forecasts its fall mainly due
to macroeconomic instabilities. The purpose of this study is to illustrate how closely
Ahmadinejad’s government follows the model of Dornbusch and Edwards (1990).
=========================================================

12 June 2009 will show the validity of the predictions of D&E model for the case of Iran!

In press: Illegal trade in the Iranian economy: Evidence from a structural model

2009-02-22T09:16:00.001-08:00

" Illegal trade in the Iranian economy: evidence from a structural equation model" is in press in European Journal of Political Economy.

The working paper version of this work can be find in the following links:

SSRN

ERF

Corruption in Russia

2008-12-15T09:16:00.000-08:00

You can read an interesting artcile from The Economist on corruption in Russia Here.

" The effects of oil price shocks on the Iranian economy"

2008-09-17T04:06:00.001-07:00

My new joint-paper on " The effects of oil price shocks on the Iranian economy" published in Energy Economics. See it here

Alef website filtered!

2008-08-12T07:27:00.000-07:00

The Alef online news agency which disclosed and followed the scandel of Ali Kordan filtered by the government of Iran today.

What we learn from this outcome? Role of media on corruption depends on prior criteria such as quality of other institutions in a country. Rule of law is one of them.

University of Oxford Announcement

2008-08-12T05:39:00.000-07:00

University of Oxford issued a statement about the claimed PhD of Iran Interior Minister, Ali Kordan. Ali Kordan a new appointed Minster claimed that he has a PhD in Law from Oxford University. This claim undermined by an online news agency (Alef.ir) which manage by Tavakoli a parliament member in Iran. In response to these critiques, Ali Larijani, the president of Iranian parliament has asked the education commission to investigate the validity of Kordan's PhD.

Here you can see the response of Oxford Uni.

Corruption in Education

2008-08-11T01:20:00.000-07:00

Special opportunity for those who have some criminal background and skills. You can get your degree in a moment! This website offers such serviuces :

http://www.fast-degrees-online.com/

PhD certificate of New Iran Interior Minister

2008-08-11T00:31:00.000-07:00

Recently Iranian Parliament voted for suggested candidate for Interior Minister by President Ahmadinejad. Alef News Agency has initiated a hot debate about the validity of Mr. Ali Kordan PhD certificate from the University of Oxford. You can also see here this unusual certificate. I quote the idea of one of my English friend about this PhD certificate.

"...OK, regarding your query on that certificate - I see that somebody has already pointed out the unusual (i.e. incorrect) spacing between some of the words and the (in their opinion) incorrect use of commas throughout the document. I agree with the correction of "intitle" (it should be "entitle") and that its positioning is odd. In my opinion, there should be a comma after "Bryant" in that first paragraph, though it seems to me that the first paragraph does not read correctly anyway. If it was written: "According to the suggestion and the attestation of Professor Bryant, a faculty of the college of law of Oxford University..." it would not make sense anyway, as it implies that Professor Bryant IS a faculty of the college, while in fact he is a MEMBER of the faculty. In short, it all seems a bit of a mess.

Having said that, I have never seen a PhD certificate from the University of Oxford and I can imagine that it is possible that there are some unusual conventions (!) and it is not impossible that there might be archaic spellings and other random irregularities!! So I would not be able to claim that this is a fake, but it certainly looks suspicious.

I can't understand why they didn't just edit a scanned certificate of copy of a certificate in Photoshop - this would have been a whole lot more convincing!"

Vulture & Child : The sad story of poverty

2008-08-07T09:09:00.001-07:00

Many of you have seen this sad real photo, apart from a general clear message which this photo tell us about the terrible inequality and poverty in our planet, the special stroy of taking this photo may be also interesting to know.

The haunting photo of a vulture stalking an emaciated Sudanese girl who'd collapsed on her way to a feeding station won photographer Kevin Carter a Pulitzer Prize in 1994. Carter also become notorious for sticking to the journalistic principle of being an observor and not getting involved -- he left after taking his photo and neither he, nor the New York Times, which first published the photo on 26 March 1993, knew what happened to her. (Looking at the photo, it's hard to imagine a pleasant ending.) A few months later after collecting his Pulitzer, Carter committed suicide, the violence he'd encountered in his life as a journalist, especially in South Africa, becoming too much to live with.

Source: Here and Here.

End of Poverty

2008-06-27T08:20:00.000-07:00

"Extreme poverty can be ended, not in the time of our grandchildren, but our time."

Here you can listen to presentation of Jeffrey D. Sachs, director of The Earth Institute at Columbia University on "END OF POVERTY".

The Discloser Arrested!

2008-06-11T06:45:00.000-07:00

The discloser of the pervious post corruption story arrested due to his action against national security of Iran and also some financial charges!

Crruption like a cancer eats into the cultural, political and economic fabric of society, and destroys the functioning of vital organs (Amundsen, 1999).

Corruption in Iran

2008-06-10T12:52:00.000-07:00

Iran: Judicial Investigator Publically Accuses Ayatollahs of Corruption: click here

Unprecedented Revelations against Senior Iranian Clerics: Click here.

How I became an econometrican?

2008-05-26T07:58:00.000-07:00

A short text on how G.S.Maddala became an econometrician.

"How I became an econometrican?"

Drink more water!

2008-05-24T02:46:00.000-07:00

Water can reduce your sciatica pain! I used to suffer from this pain and therefore I would like to share the following recommendations for the healthy living which is essential for academic and profetional career, too!

Is your back pain caused by dehydration?

Water affects every organ and cell within your body. You may not have known this, but water even plays an enormous role in your back and spine. The lack of proper hydration even affects your back and could be a cause of back pain. Here's how... Between every two vertebrae lies a disk, which functions as a shock absorber for all that we put our backs through everyday. This disk has two parts: an outer, flexible but very tough ring, which is filled with a gelatinous substance, called the nucleus pulposis. This inner substance is primarily water. All day long, as gravity works on our upright spine, water is slowly squeezed out of the disks.

Then at night, when we are lying down, the disks slowly rehydrate. This daily dehydration and nightly rehydration of the disks is the reason why most of us are generally about Â¼ to Â½ inch shorter when we go to bed than when we wake up in the morning! Regular movement during the day is also important to keep disks hydrated - as the spine moves forward and back, the disks will absorb what water is available.

Our disks will successfully rehydrate themselves during the night, and also during the day when possible, as long as there are adequate water levels within the body. When there is not enough water available to fully hydrate the gelatinous center, the whole disk becomes compromised. The disk is designed, when fully hydrated, so that the outer ring bears 25% of the weight load while the inner nucleus pulposis supports 75%.

When the inner portion is dehydrated, it cannot support its share of the load, so more and more of your weight is borne by the outer ring, which simply was not designed for that purpose. This can cause pain, swelling, and even ruptures or herniations of the outer shell of the disk. What this means is that one of the simplest and most effective ways to reduce back pain is to increase your daily intake of clean, healthy water, and to be sure to flex your back and neck front to back at times throughout the day.

Simply stretching your spine forward and back periodically throughout the day will help to rehydrate your disks, provided that you have given your body enough water to work with!

PS: this website has also some useful tips : http://www.healthy-water-best-filters.com/back-pain-guide.html

And here is a weblog which specially talks about sciatica pain:

http://lifewithmypetback.blogspot.com/

HOW RICH ARE YOU?

2008-05-05T07:40:00.000-07:00

Every year we gaze enviously at the lists of the richest people in world.
Wondering what it would be like to have that sort of cash. But where
would you sit on one of those lists? Here's your chance to find out.

Click here to find your global richness place!

Combating the Oil Curse with Direct Distribution of Oil Revenues

2008-01-27T06:18:00.000-08:00

Thomas I. Palley in 2004 proposed a direct distribution of oil funds to Iraqis. He discussed the advantages and disadvantages of this plan and at the end of his analysis, he concludes that for Iraq after Saddam , direct allocation of oil rent is much more better or practical than Alaska experience. In Alaska, the oil revenues invested in financial assets and securities and every year eligible citizens get a dividends of these investments. That is principal amount remain in the fund and guarantee the future trend of funds from investment. That would satisfy the equality of inter-generations.

However, the author of this paper, do not believe that Iraqis environment and institutions are at the proper level and quality of doing similar policy like Alaska.

Currently among Iranian academics and some politicians, this discussion has emerged. what will be the costs and benefits of direct allocation of oil rents to Iranians? Why Alaska efficient system of managing oil rents can not be carry out in Iran? In Iran, alternative policies for managing oil wealth which have experienced by the government are "establishing stabilization oil account" in 2000 and more recently in new government of Ahmadinejad issuing "Justice Shares" among specific groups of society. However, both of them , proved real shortfalls. Stabilization Account which initially aimed to protect the government main revenues from external shocks in oil markets ( about 80% of Iranian foreign exchange revenues come from oil exports and 20 percent of GDP is Oil GDP) was more or less successful , at least for some initial years after establishment. This can be the reason behind one of our results in this study showing insignificant response of government expenditures to asymmetric oil price shocks. However, lack of transparency and accountability of state on withdraw from OSF has made this key tool inefficient. Justice Shares plan also proved very challenging for managing and lack of developed capital market and culture and knowledge of trading in stock exchange market has not benefited target groups of this plan.

However, the topic of direct distribution of oil revenues has remained to a large extent unexplored. As far as I am aware, there is not a clear theoretical or empirical study or even a real experiment of this plan in a country.

You can read the paper of Thomas I. Palley here.

Poll of the Iranian Public

2008-01-23T07:38:00.000-08:00

Special Polling on the Iranian Public: See the Results HERE!

Negotiating with the Islamic Republic of Iran

2008-01-23T07:36:00.000-08:00

Special Report on "Negotiating with the Islamic Republic of Iran" : Read Here!

Nice photos of Iran

2008-01-15T03:06:00.001-08:00

Click Here!

Iraqis need oil dividends

2008-01-03T11:08:00.000-08:00

"Beware of giving governments drawing rights on the value of public assets," Hammond quoted Smith as saying. "Public resources should belong directly to the public through mechanisms such as Alaska's permanent fund ... It is a model governments all over the world would be well-advised to copy."

See initiative of father of Alaska Oil Fund HERE.

TOP 10 Economic Predictions for 2008

2008-01-02T04:34:00.000-08:00

Here you can read the 10 predictions for 2008 carried out by GlobalInsight consultancy .

Benazir Bhutto: Victim of her game in Afghanistan?

2007-12-29T04:56:00.000-08:00

It was during Bhutto's rule that the Taliban gained prominence in Afghanistan. She viewed the Taliban as a group that could stabilize Afghanistan and enable trade access to the Central Asian republics, according to author Stephen Coll.^[1] He claims that her government provided military and financial support for the Taliban, even sending a small unit of the Pakistani army into Afghanistan.

More recently, she took an anti-Taliban stance, and condemned terrorist acts allegedly committed by the Taliban and their supporters...
However, it was a bit late! infants of terror under her system care became a monster out of control. Read the updated text of her life in wikipedia: click here.
=========
1: S. Coll, "Ghost Wars: The Secret History of the CIA, Afghanistan, and bin Laden, from the Soviet Invasion to September 10, 2001", Penguin Press HC, U.S. 2004.

Introduction to Anti-Money laundering

2007-12-10T10:09:00.000-08:00

Download complete course from here.

effects of oil price shocks on the Iranian macroeconomy

2007-12-06T05:43:00.000-08:00

Our recent working paper on " the effects of oil price shocks on the Iranian macroeconomy" can be downloaded from here.

your comments are highly welcome.

Ranking of Economics Journals

2007-12-03T06:28:00.000-08:00

Ranking of economics journals in 2007 and 2006 can be found here.

Financial data sources

2007-11-22T09:36:00.000-08:00

Two of the more popular ones are DataStream by Thompson Financial (http://www.datastream.com/) and Wharton Research Data Services (http://wrds.wharton.upenn.edu/). With regards
to free data, a more limited choice of financial data is available through popular Internet
ports such as Yahoo! (http://finance.yahoo.com). The Federal Reserve Bank
of St Louis also maintains a free database with a wide variety of data, including
some financial time series (http://research.stlouisfed.org/fred2/). The Financial
Data Finder (http://www.cob.ohio-state.edu/fin/osudata.htm), provided by the
Fisher College of Business at the Ohio State University is also a useful source. Many
academics also make the data sets they have used available on their websites. For
instance, Robert Shiller at Yale University has a website which provides links to many
different interesting financial data sets (http://aida.econ.yale.edu/%7Eshiller/
index.html).
An extremely popular website among economists is “Resources for Economists
on the Internet” (http://rfe.wustl.edu/EconFAQ.html). This site contains all sorts
of interesting material on a wide range of economic topics, including links to many
sorts of financial data. On this site you can also find links to Journal Data Archives.
Many journals encourage their authors to make their data publicly available and,
hence, in some cases you can get financial data from published academic papers
through Journal Data Archives.

(tips from: Gary Koop,University of Strathclyde)

Corruption Perception Index 2007 (10:clean,1:highly corrupt)

2007-11-13T02:14:00.000-08:00

“Talibanised”, nuclear-armed Pakistan

2007-11-08T23:28:00.000-08:00

Recent events in Pakistan are very important and may shape the future political situation of Mid.East. It might be also comparable with the last years of Shah governance in Iran. The danger of capturing the political power by extremists in Pakistan is real. In this situation, analysing the strategy of US government for managing this issue can be also interesting.

Here is an article in the Economist about Pakistan events: Click here.

Top_Secret_Pictures_from_Iran

2007-11-06T09:05:00.001-08:00

Top_Secret_Pictures_from_Iran

Business-trip index

2007-10-30T01:49:00.000-07:00

Two cities in Canada prove the most attractive destinations for business travellers. Tehran is among the worst destinations! 119 among 127 destinations.The best cities to visit on business are those that combine good infrastructure with low prices. According to the Economist Intelligence Unit's World Business Trip Index, Canada and Australia present the best locations thanks to their highly developed transport networks. A weak dollar has also made American cities more tempting. Cost has been a factor in reducing the appeal of European destinations, with only Vienna featuring in the top ten. But low prices are not enough to raise the pulling power of less developed cities. Tehran, the cheapest city to visit, remains one of the least attractive.

Democracy index

2007-10-30T01:39:00.000-07:00

Almost half of the world's countries can be considered democracies, but only 28 qualify as “full democracies”. North Korea is at the bottom of lits ( ranking 167 and Iran has categorized under Authoritarian regimes and ranking of 139, Afghanistan has ranking of 135! )

The underground economy

2007-10-30T01:30:00.000-07:00

Oct 29th 2007
From Economist.com

MANY people have enjoyed the fruits of someone else's undeclared labour, whether buying a cheap DVD from a street-seller or paying the gardener in cash. In a poll of the EU's 27 member countries, Denmark and the Netherlands are the (self-confessed) biggest users of the underground economy. In both countries 27% of respondents said they had acquired goods or services in the past year which they thought involved undeclared work. Less than 10% of people in Germany and Britain admitted acquiring something on the sly, below the EU average of 11%. Cypriots are the most law-abiding.

knowledge

2007-10-29T04:07:00.000-07:00

Uncertain
knowledge
+
Knowledge of the
amount of
uncertainty in it
=
Usable
knowledge

Knowledge

2007-10-29T04:04:00.000-07:00

Knowledge is what we know
Also, what we know we do not know.
We discover what we do not know
Essentially by what we know.
Thus knowledge expands.
With more knowledge we come to know
More of what we do not know.
Thus knowledge expands endlessly.
* * *
All knowledge is, in final analysis, history.
All sciences are, in the abstract, mathematics.
All judgements are, in their rationale, statistics.

Capital Punishment: A Global Mix Picture

2007-10-28T02:22:00.000-07:00

Apr 30th 2007
From Economist.com

CHINA executes more people than all other countries combined: unofficially, as many as 8,000, according to Amnesty International, a human-rights group. While the annual estimated number of executions fluctuates (1,591 in 2006—some 40% higher than in 2003), Amnesty notes that there is a global shift away from the death penalty. The total number of countries carrying out executions has fallen from 40 to 25 in a decade, and 129 countries are abolitionist in practice. America is one of only five democracies still to use the death penalty.

Who is free at worship?

2007-10-28T02:11:00.000-07:00

Jul 11th 2007
From Economist.com

ANY measure of freedom may be open to criticism, and combining three separate measures—religious, political and civil—may seem more arbitrary yet. But the efforts of the Hudson Institute's Centre for Religious Freedom, using rankings from other sources, provide some intriguing comparisons. It is no shock that the likes of North Korea and Iran are intolerant of all sorts of freedoms, while America is just as easy-going over religion as it is concerning political freedoms. But look at India, Indonesia and some European countries: tolerance of civil and political rights is not matched by quite the same freedom to worship.

Pricing Curse!

2007-10-28T02:09:00.001-07:00

Jun 28th 2007
From Economist.com

THE street price of cocaine varies hugely across the world. No surprise that it is cheapest in Colombia, the world's biggest producer of coca: at $2, a gram costs less than a Big Mac. Geography is an obvious price factor. The farther away a country from the main producers in South and Central America, and the more isolated it is, the higher the cost to traffick there. In far-flung New Zealand, a gram costs a wallet-busting $714.30. But there are some pricing anomalies. Although the street price in Japan is several times higher than in Israel, Germany and Britain, the wholesale price in the countries is similar, around $46.40. In Canada the wholesale price is 50% more than in America, but Canadians pay 40% less on the street. It could be that policing is more zealous in some countries, or that there is less competition among suppliers.

Military Spending

2007-10-28T01:54:00.000-07:00

May 8th 2007
From Economist.com

SAUDI ARABIA'S military expenditure amounted to 8.8% of GDP in 2005, according to the International Institute for Strategic Studies, a think-tank. America spent 4% of GDP, though its total was $495.3 billion, compared with the Desert Kingdom's $25.4 billion. Saudi Arabia has expensive tastes, buying military hardware, such as jet fighters, from its British and American allies. China spends less, at 1.4% of GDP, but it has the second-biggest total expenditure after America, if exchange rates are calculated to reflect purchasing-power parity.

Death Penalty in USA

2007-10-28T01:52:00.001-07:00

Sep 3rd 2007
From Economist.com

AMERICANS' support for the death penalty is waning, one state at a time. States have had jurisdiction over the issue since 1976 and so differences abound. Texas has executed most people; California has most death-row inmates but has executed only a small number. Since 2000, 12 states have suspended the death penalty, including New Jersey, which is moving towards formal abolition. Three have reversed the suspension this year. Last year two-thirds of states executed no one. Public opinion is also changing: a slim plurality of people said they would prefer to see prisoners locked up for life rather than executed, according to a recent poll.

GLOBAL OPIUM PRODUCTION

2007-10-28T01:49:00.000-07:00

Aug 29th 2007
From Economist.com

AFGHANISTAN'S opium crop is set to hit a new high this year, according to the UN Office on Drugs and Crime. In its annual Afghanistan Opium Survey, published on Monday August 27th, it estimates that production will soar to 8,200 tonnes in 2007, a third more than in 2006. The whole country's share of global production has edged up to 93%. Prevention is a Sisyphean task; while the area from which opium poppies were eradicated increased by a quarter to 19,000 hectares, there are still 193,000 hectares under cultivation.

Risky Business

2007-10-28T01:46:00.000-07:00

Aug 20th 2007
From Economist.com

SEX may be risky wherever you are. But those indulging in the riskiest behaviour often live in some of the world’s richest nations, according to Foreign Policy magazine, using data from the latest Durex Global Sex Survey—the world’s largest survey of sexual behaviour, with over 317,000 participants in 41 countries. They have sex at a younger age and sleep with more people, both indicators for contracting sexually transmitted infections. Each year, there are more than 340m new cases of such infections globally, excluding HIV.

World Freedom Atlas: A Nice-Looking Tool to Visualize Good Governance Indexes

2007-10-26T01:25:00.000-07:00

The time-series dataset (1990-2006) put together by the Quality of Government Institute of the Göteborg University (Sweden) is now available as an interactive mapping application in the World Freedom Atlas.

The World Freedom Atlas was programmed and designed by PhD candidate Zachary Johnson (zach.f.johnson@gmail.com) at the University of Wisconsin.

Globalization with Arab Characteristics

2007-10-23T03:53:00.000-07:00

by Marcus Noland, Peterson Institute
and Howard Pack, Wharton School

Article in YaleGlobal Online
October 17, 2007
==========================

The Arab world desperately needs jobs for its young adults, but foreign employers are afraid to commit in nations with authoritarian regimes, where regulation and the legal landscape remain shrouded in uncertainty. A lack of jobs, combined with no system for transfer-of-power and lack of trust in younger generations, could lead to a self-reinforcing downward spiral, both politically and economically.

Job creation is not only a political and demographic imperative for the Arab world, but also a security concern for the globe.

The Middle East has the world’s lowest rate of labor force participation among working-age adults. That rate has converged on the global norm, spurred by females entering the workforce. Despite strong growth, the region treads water in terms of employment. Job creation keeps pace with rising labor force participation, but hasn’t dented the region’s high unemployment rates, especially among the young.

With a few exceptions, employment grew in industries where productivity is increasing—that is, it does not appear to reflect an expansion of activity in rising dynamic sectors such as information technology–related services. In some Arab states—and not merely the oil exporters of the Persian Gulf—foreigners and not locals account for most new hires. This phenomenon is more acute in the private sector, since nationals disproportionately enter public-sector employment.

One method of rapidly creating a sustainable increase in employment is through an expansion of labor-intensive manufacturing or services exports. But manufacturing exports are modest, facing stiff competition from China and India. Foreign investment flows surged in recent years, but are largely the product of intraregional petrodollar recycling. It’s doubtful that these financial flows, unlike investment in factories undertaken by industrial firms, will convey new technology that would accelerate productivity growth.

The Arab countries score relatively poorly on a nexus of indicators relating to cross-border economic integration and the transfer, dissemination, and application of technological knowledge and innovation. Relatively weak intellectual property rights protection and state domination of many industries have retarded technology transfer and absorption. Local technical capacity, on which a dynamic industrial sector could be built, is uncertain. It is possible that with institutional or policy reform latent capabilities would manifest themselves, but under current conditions, evidence of industrial competence is muted.

This bleak situation may partly reflect the relative absence of outside catalysts. As a group, the Arab countries have weak linkages to the outside world, with the exceptions of extractive industries and tourism, where geology or special attractions like the Pyramids confer irreproducible advantages. In short, any links between the latent productive possibilities of the Arab people with goods and services demanded in the global market appear weak or nonexistent. The relative isolation from international technology inflows, whether in the form of foreign direct investment or technology licenses or the use of foreign consultants, has stunted productivity growth. Isolation inhibits the ability of firms, most locally owned, in Algeria, Egypt, and Morocco to enter international markets in new product areas, despite membership in the World Trade Organization and preferential market access through special trade agreements.

Building such links presents a formidable challenge. Addressing the institutional weaknesses requires a prolonged and uncertain slog including building a higher quality technically oriented education system and improving the intellectual property rights regime.

Under such circumstances the issues of setting priorities and linkage are nontrivial. Today’s success stories in East Asia, for example, did not get everything right from the start, maintaining economically questionable practices in some sectors for extended periods of time. In terms of corruption, all have not achieved Nordic levels of probity today, much less at the start of their periods of rapid growth. It may be that strong performance in some areas compensate for weakness in others.

The region’s reputation as a risky business environment certainly inhibits reform, in part due to deep uncertainty about the future of many political regimes. While the region’s contemporary economic performance may not be distinctive, its enduring political authoritarianism is. Some of the region’s governments rely on relatively narrow ethnic, religious, or tribal constituencies, contributing to fundamental uncertainty about political transition and the nature of successor regimes.

The region’s lack of political dynamism in the face of underlying social change, together with the increasingly religious orientation of the political opposition, paradoxically raises the possibility of abrupt transitions or regime changes. Intermittent terrorist incidents elevate the risk premium. Such deep political uncertainty discourages behavior that involves irreversibility—from physical investment to investing in education.

That said, one is struck by the degree of intraregional variation in the indicators such as the amount of time or number of approvals it takes to open a new business, as reported in our book The Arab Economies in a Changing World. This intragroup variation is important for two reasons: First, it suggests that whatever determines outcomes on these measures is not necessarily culturally or religiously determined. The influence of Islam or the anthropology of Arab culture may have many effects on local institutions and practices, but cannot explain why it takes nearly three times as long to enforce a contract in Egypt as it does in Jordan. Second, for some countries, there could be considerable gains associated with achieving “best-practice” as defined by colleagues in their region. They need not become Norway.

These issues are anything but value-free. Professional economists often focus on efficiency, but other values matter as well. In a poll recently conducted by Zogby International in Egypt, Jordan, Lebanon, Morocco, Saudi Arabia, and the United Arab Emirates, majorities in four of the six countries supported governing business by Sharia law, with pluralities in all six agreeing that Sharia required further interpretation to enable businesses in the Muslim world to integrate into the global economy.

The views elicited in the Zogby poll could be interpreted as forming a basis for adapting the demands of globalization to local values, and one can imagine an alternative set of institutions and practices that would deliver the benefits yielding reform with Arab characteristics, to paraphrase the Chinese experience. Islamic finance might be an example. But the Washington Consensus it is not.

Another poll conducted by the Pew Research Center found that while popular attitudes in the Middle East do not appear to be “antimarket,” as some have alleged, they are not particularly supportive of the process of globalization on existing terms. The issue is how to square efficiency with the values and aspirations of local communities.

The Middle East has long been a politically contested region of global significance. The demographic pressures the region faces to productively employ its young people raise the stakes even higher. It’s not difficult to envision the region caught in a downward spiral where impoverishment, discontent, militancy, and repression feed upon one another, deterring reform and impeding growth.

Yet this is not the only possible future path. Over the past year, Egypt, for example, made prodigious advances in the World Bank’s ease-of-doing-business rankings. Dubai aims to become the Singapore of the Middle East. Abu Dhabi has contracted with the Singapore government to improve its educational system. If the governments can address their daunting employment challenge, the region’s demographics could turn from a potential burden to a valuable asset. The Arab world could reap a demographic dividend as the new generation enters its most productive working years—a phenomenon that contributed to the outstanding performance of East Asia over the past four decades or so. Growing prosperity, confidence, and optimism about the future could underpin movement toward greater political openness and social tolerance.

Op-ed

2007-10-23T03:50:00.000-07:00

The Inward East

by Marcus Noland, Peterson Institute
and Howard Pack, Wharton School

Op-ed in Newsweek International
October 29, 2007
=====================================
Talk of a Middle East economic renaissance is running strong, even wild. With oil running at $80 a barrel, and petro-states investing the windfall more wisely than in the past (that is, not in offshore bank accounts), pundits have begun to speak of a “transformational moment” in the region. Stock markets have been booming—Saudi Arabia’s is up 200 percent over the last five years, while Egypt’s has risen a whopping 1,700 percent—and investors from Europe and the United States have begun to take notice.

Now let’s look at the reality. The oil boom is real, but two-thirds of all Arabs live in countries without major oil exports. And outside of oil and tourism, the Arab world is in a state of long-term deglobalization, more isolated today than it was 20, 30, or 40 years ago. The region’s shares of world trade and investment have fallen by half in the past 25 years, and though it has risen more recently, that’s almost entirely due to oil. Its slice of global manufacturing exports, never high, has dropped to less than 1 percent. Technology royalty payments—which show how quickly a society adopts new inventions—have stagnated while growing rapidly elsewhere.

So talk of an Arab spring may be premature. The Middle East already has the world’s lowest employment rate, a staggering 47 percent of the adult population. To keep pace with an exploding population of young job-seekers, the region will have to create 55 million jobs in the next 13 years—or 70 million if it hopes to bring unemployment down to the global norm, according to the World Bank. Only by engaging in global trade can Arab governments hope to hit those targets and ensure their own stability.

The problem is that recent economic progress hasn’t translated into jobs. While Egypt jumped up 39 places in the World Bank ranking of the best nations in which to do business last year, it fell two places (from 106th to 108th) in the “employing workers” category, while Saudi Arabia and Syria fell even further. In Jordan, Kuwait, and the United Arab Emirates (UAE), foreigners, not locals, have secured most of the new jobs, and unemployment among nationals has actually increased over the past five years. Employment growth has also stagnated in populous countries such as Morocco and Algeria, encouraging emigration (much of it illegal) to Europe.

Manufacturing, which probably has the best potential to create jobs, is lagging. In the early 1960s, Egypt—the Arab world’s most populous country—exported manufactured goods at roughly the same per capita level as South Korea and Taiwan. Now they export more in three days than Egypt does all year. The Philippines exports 10 times as many manufactured goods as does Egypt, and last year its increase alone was more than Egypt’s total figure. Then there’s Thailand, which by itself exports more manufactured goods than the entire Arab world, despite having only about a fourth of the population. And while Saudi Arabia, the UAE, and other oil exporters have modestly increased exports by getting into petroleum refining, petrochemicals, and aluminum smelting of late, these are capital-intensive industries that do little to create jobs.

The weakness in manufacturing owes to a host of factors: poor technical skills due to decrepit university systems (no Arab school ranks among the world’s best), weak protection for intellectual property rights, and continued state dominance of industry. Together, these factors retard the creation or adoption of new technologies that could boost productivity. The Philippines alone now spends more on foreign technology than does the entire Arab world.

Worse, some of the progress is a mirage. Foreign direct investment (FDI) in Arab nations has surged nearly $30 billion in the past five years, but most of it is from Gulf states spending their oil windfalls. Thus the money hasn’t brought in new ideas or technology. Though Egypt saw FDI rise twelvefold between 2001 and 2006, to $6.1 billion, that is still over $3 billion less than Sweden, which has just one-ninth Egypt’s population.

These problems are often blamed on Arab culture—or on Islam. But neither Islam nor culture alone can explain the big differences between Arab nations. It takes three times as long to start a business in Saudi Arabia as it does in Morocco, or nearly three times as long to enforce a contract in Egypt as it does in Jordan. Some Arab countries have made progress, so why can’t others?

In fact, certain Arab governments are making impressive attempts to join the world economy. Dubai now aims to turn itself into the Singapore of the Middle East, a secure and efficient transportation hub and base for international corporations. Even Syria and Libya have climbed on the reform bus, hoping to boost growth and employment.

Of course, reforming intentions may not be enough in the Middle East. The conflicts in the Palestinian territories and Iraq and the risks of terrorism and assassinations will continue to discourage outsiders from investing in the region. (Our research shows that merely reducing the business costs associated with terrorism could boost foreign investment by 20 to 30 percent.) Repression stifles growth in places like Syria, where per capita income has grown only half a percent annually over the past four years. Yet the Arab dictatorships are brittle, and when they fall, the Islamists who might replace them could turn out to be effective reformers along the lines of the governing AK Party in Turkey.

There’s reason to think reform would be popular. A recent Zogby International poll in Egypt, Jordan, Lebanon, Morocco, Saudi Arabia, and the UAE showed strong support for governing business by Sharia, but a version of Sharia that would allow Muslim businesses to integrate into the global economy. Even Syria's Muslim Brotherhood supports what its leader has called “the gradual and calm transformation of the public-sector economy to a free-market economy.”

If the region can figure out how to reconnect to the outside world, the Arab demographic explosion could turn into an asset. A number of East Asian countries have shown how large populations of young workers can fuel an economic boom if channeled in the right directions. The problem is that the time for reform is now, and no major Arab state is moving fast enough.

Some Photos from Economics of Corruption Workshop in Passau 2007

2007-10-19T04:16:00.000-07:00

Nobel Economics Prize 2007 – Research is relevant to practice

2007-10-19T03:31:00.000-07:00

The 2007 Sveriges Riksbank Prize in Economic Sciences has been awarded to Leonid Hurwicz, Erik Maskin and Roger Myerson “for having laid the foundations of mechanism design”. Mechanism design theory was initiated by Professor Hurwicz in the 1960s and developed separately by Professor Maskin and Professor Myerson in the 1970s and 1980s.

Mechanism design is a subfield of microeconomics and game theory, which analyses how to implement good system-wide solutions to problems that involve multiple self-interested agents, each with private information about their preferences. Whilst game theory provides methods to predict the outcome of a given game, mechanism design thus concerns the reverse question: given some desirable outcome, can we design a game which produces it? The “designer” of such a game could for example be the government or an institution.

Mechanism design theory is highly abstract and theoretical. Nevertheless, the basic intuition behind the mechanism design theory is quite simple: the theory tries to provide us with the tools to find an optimal mechanism to allocate scarce resources efficiently. When agents have private information, the final outcome of a transaction between economic agents may not be efficient for the economy as a whole. An example of this is the provision of a public good, such as street lighting. If market agents have private information about how much they value this public good, they have an incentive to pretend to be relatively uninterested in order to reduce their own share of the provision cost (the so-called free-rider problem). In this case there may be no provision of the public good at all because the required revenues cannot be raised.

Mechanism design tries to overcome these breakdowns of the market mechanism. The art of mechanism design theory is therefore to make the revelation of private information incentive compatible, which means that market agents are strictly better off if they reveal their true preferences. In case of street lighting such a mechanism could look as follows: each person should be asked to report his own willingness to pay for the project and the project will be undertaken if and only if the aggregate willingness to pay exceeds the cost of the project. If the project is undertaken those individuals that are pivotal, i.e. can influence the overall decision, pay the difference between everyone else’s reported willingness to pay and their contributions to the project. It can be shown that truth-telling is optimal for agents in this framework.

A simple example can illustrate the so-called Groves-Clark mechanism. Suppose there are three individuals, A, B and C deciding whether they want to finance street lighting. The total cost of the project is EUR 3000 and the individuals are willing to pay EUR 500, EUR 500 and EUR 2500 respectively. It is hence efficient to introduce the project. The social planner (e.g. the government) might ask everyone to contribute EUR 1000 to the project. If the individuals report their true willingness to pay, only C is pivotal, that is, with C in the process the project goes ahead, with C out of the process the project does not go ahead. C hence pays a tax of EUR 1000. Individuals A or B have no incentive to understate their willingness to pay (in order to prevent the introduction of street lighting in this case, A would have to report a willingness to pay of EUR -500. Individual A would then be pivotal and pay a tax of EUR 1000). Individual C also has the incentive to report his true willingness to pay as over- or understating the true willingness to pay leaves the tax that he needs to pay unchanged.

Mechanism design hence examines how one can extract the private information of market agents, which often prevents the efficient functioning of markets and institutions. The influence of mechanism design theory can be seen in the structure of auctions, such as the UK government’s sale of four 3G mobile phone licenses in 2000. The auction employed an Anglo-Dutch design in which the price rose until all but five bidders had quit and the last five bidders then made ‘‘best and final’’ sealed bids with the winner paying the price of the fourth-highest winning bid. It can be shown that such an auction promotes efficiency, in terms of inducing bidders to reveal their true valuations.

e-Bay is another example, where basic mechanism design theory has been used to design a second-price sealed-bid auction, in which the highest bidder wins but pays the price of the second highest bidder. The second-price sealed bid auction is efficient in that the winner is the bidder with the highest valuation and it induces buyers to reveal their true valuations. The theory of mechanism design has also been used by e-Bay to implement a quality rating system, which allows honest sellers and buyers to build up a good reputation and which tries to prevent the breakdown of transactions due to uncertainty about the quality of the good that is being sold.

But the applications of mechanism design theory go beyond the design of auctions. Another important practical area is the economic regulation of industry. The uncertainties the regulator faces about the firm’s inherent costs and managerial effort gives the regulated firm a strategic advantage. The firm would like to convince the regulator that it is a “higher cost” firm than it actually is, in the belief that the regulator will then set higher prices for the services it provides. This increases the regulated firm’s profits allowing the firm to capture parts of the consumer surplus. The mechanism design theory provides a solid theoretical framework in which one can analyse different regulatory mechanisms to deal with these problems. One example of such a regulatory mechanism is setting a price cap. This induces managers to increase efficiency and to reduce costs so as to make higher profits.

In fact, any situation in which decisions have to be taken under imperfect information about the private information of economic agents can be thought of as a mechanism design problem. How to raise taxes, regulate a monopolist, allocate emission permits, split common costs or even allocate organs– for all of these questions, the theories developed by Hurwicz, Myerson and Maskin can provide useful guidance. Whilst mechanism design theory is an essential element of graduate economics courses in the US and UK, it has been somewhat neglected by German universities. It is to be hoped that as a result of this year’s Nobel Prize, universities in Germany will put more emphasis on mechanism design in their microeconomics courses.

Source: Deutsche Bank ,Talking point October 19, 2007

Iran: Another Perspective A Photo Tour

2007-10-04T02:34:00.000-07:00

Thanks to Bizzbloger

Iran: Another Perspective A Photo Tour can be seen from here!

5 proven ways to reduce your back pain

2007-10-02T00:55:00.000-07:00

I have found this short but effective advices for reducing the back pain which is common among people. For reading this article click here.

Return from Italy

2007-10-01T02:08:00.000-07:00

I am now returned to Dresden after a 3 days in Italy. That was an international confrence on political economy and experimental economics in Siena. The experimental economics is a new topic, focusing on testing behaviour of people as an economic agents in Labs on the base of theoritical models. The major attention devoted to applications of game theories. I had also presented a paper on corruption panel about estimation of smuggling as a latent variable for the case of Iran.

Interesting point for me also was meeting Dr.Nili from Sharif University who I found him open-mind and informative economist. Next week, I will go to Passau for a workshop on economics of corruption organized by Passau University. I will give some updates about it later.

Bribery

2007-09-20T03:46:00.000-07:00

Bribery has a supply side as well as a demand side. Indian and Chinese companies are the most prolific bribe-payers when doing business abroad, according to Transparency International, an anti-corruption group. Many companies observe a double standard, it notes, paying bribes more freely abroad than at home. The index draws on the views of over 11,000 businessmen, asked to rate foreign firms operating in their country.

Source: Economist, Oct 12th 2006

Global political risk, September 2007

2007-09-20T03:34:00.000-07:00

Emerging markets yearn to be boring, at least politically. The Global Political Risk Index, which is produced by Eurasia Group, a global political risk advisory and consulting firm, rates Hungary just in front of South Korea as the most stable country in a 24-strong field. The index uses a range of qualitative and quantitative indicators to measure both the capacity of countries to withstand shocks and their susceptibility to internal crises. Pakistan comes bottom of the list, because of mounting political and security tensions, and Eurasia Group is not expecting things to improve. Nigeria and Iran also jostle at the foot of the table. But stability should not be confused with pluralism: China outranks South Africa, India and some other democracies.

Source: Economist, Sep 13th 2007

From Economist.com. Top of the class

2007-09-20T03:30:00.000-07:00

Some tips!

2007-09-17T08:34:00.000-07:00

✔Everyone is an expert at something: Whatever your expertise,
whether it’s fly fishing, yoga, parenting, knitting, sales, or customer
service, you have something to teach others who know less than
you do.
✔ The Internet is a powerful venue for reaching customers: Learn
to maximize your reach in order to run an efficient and profitable
business.

✔ Marketing is an investment in your business: Rare is the business
that succeeds without marketing. Try a variety of strategies and repeat
the ones that work best.

✔ Don’t be afraid to ask questions: Nobody has all the answers and
most people are willing to help. Just ask!

✔ Invest in other people’s information products: Not only will you
have the chance to learn something new, but you can evaluate the
content and begin to understand the formula for success. It’s also
good karma to support people whose work you admire.

✔ Persevere: This is my favorite word in the English language. There
will be days when you feel as if you are spinning your wheels for
nothing. But eventually, with enough effort, something magical
happens. It all starts to come together.

✔ Never stop learning: I don’t care what industry you are in. Things
change. Rules change. People change. Stay on top of your area
of expertise. Learn about new technology. Remember how much
fun it can be to learn something new and how rewarding it is to
succeed.

Source: Chandler, Stephanie(2007), From entrepreneur to infopreneur, John Wiley & Sons.

Before and after marriage!

2007-09-17T07:25:00.000-07:00

Well, this post is for fun! Of course, it has something with transparency in a personal life from very beginning! Thanks to my friend M.Taheri for sharing that with me.

=================

Before the marriage:
He: Yes. At last. It was so hard to wait.
She: Do you want me to leave?
He: NO! Don't even think about it.
She: Do you love me?
He: Of course!
She: Have you ever cheated on me?
He: NO! Why you even asking?
She: Will you kiss me?
He: Yes!
She: Will you hit me?
He: No way! I'm not such kind of person!
She: Can I trust you?

Now after the marriage you can read it from bottom to the top!!!!

MBA : some comments for Iranian students

2007-09-17T00:15:00.000-07:00

I found an article in BBC wesbite which may be usefull for thoes people who want to pursue their studies in MBA field. Here you can read the article: click.

New Social Security Plan for Germans

2007-09-13T06:27:00.000-07:00

This is new proposal suggested by Dieter Althaus for covering the living costs of Germans.

Details of his proposal in German can be found here.

Das Solidarische Bürgergeld

Alkohol Smuggling in Iran

2007-09-12T05:42:00.000-07:00

Consumption of alcohol according to Islamic rules is forbidden in Iran. Iran began restricting alcohol consumption and production soon after the 1979 Revolution, with harsh penalties meted out for violations of the law. However, there is widespread violation of the law. Officially recognized non-Muslim minorities are allowed to produce alcoholic beverages for their own private consumption and for religious rites such as the Eucharist.
However, the effective demand for this product is increasing among Iranians and black market of this commodity is very profitable. Smugglers import alcoholic drinks mainly from Turkey and Kurdistan of Iraqs.
======================
The following text is the executive summary of a report on this issue by Euromonitor International :

Alcoholic drinks strictly forbidden

Alcoholic drinks are strictly forbidden and even tourists from non-Islamic origin are not allowed to bring alcohol into the country. Carrying and drinking alcoholic beverage is also strictly forbidden. Western and non-Islamic tourists have no exemption.

Non-alcoholic beer available

Consumer can buy many types of soft non-alcoholic drinks in Iran with both local and international brands served everywhere. Even though Iranians widely drink tap water, soft drinks and non-alcoholic beer are also very popular. Malt drinks are widely available in different flavours and often are advertised by local producers as very healthy drinks. On its own website, leading non-alcoholic beer, soft, and malt drinks manufacturer Behnoush Iran Co recommends malt drinks as being good for pregnant women and also advises the consumption of at least two litres of malt beverage in one hour to get rid of kidney and urinary tract stones.

Wine available despite restrictions

Wine has been a major part of Iranian culture since ancient times, and this tradition has continued despite current governmental restrictions. The major wine-producing centres of Iran are Qazvin, Orumia, Shiraz, and to a lesser extent, Isfahan. Red wine is the most common variety and also the most popular, with white wine also enjoying a strong position in the north of the country. Wine-producers are often, but not always, either of Armenian or Zoroastrian background, as non-Muslim minority groups are entitled the right to produce wine (and other alcoholic beverages) for their own use. Although it is illegal for them to sell wine to other Iranians and to foreign visitors, this rule is not generally followed and their wine is easily obtainable anywhere in the country where it is produced or distributed. The Armenian producers of Orumia and Isfahan are, in particular, renowned for their sweet and sparkling red wines.

Black market has a strong presence

Iran has a bustling black market for alcohol illegally imported from neighbouring countries including Turkey, Russia, Pakistan, and especially Iraq’s Kurdistan.

Despite the prohibition of alcoholic drinks, under the counter sales have risen sharply in the course of the last few months of 2005, and sales volume has reached an all-time high on the black market. The increasing younger generation (nearly three-quarters of the Iranian population is under the age of 30), an increasing unemployment rate, runaway inflation, and a greater interest in Western lifestyles, have all played prime roles in the growth of black market alcoholic drinks in Iran.

Big hotels supply alcoholic drinks for foreign guests in confidence through the black market. Consumption of alcoholic beverages is common among people especially during parties and weddings.
========================================================

Here you can watch a documentary film on smuggling of alcohol in Iran:
http://uk.youtube.com/watch?v=AkL91MFMJPg

Demographic change: Russia Solution, Sex Day!

2007-09-12T05:26:00.000-07:00

The governor of Ulyanovsk region in Russia is offering prizes to couples who have babies in exactly nine months - on Russia's national day on 12 June.

read it here

Deleting Zeros from Iranian Currency

2007-09-12T02:39:00.000-07:00

There is recently some debates on Redenomination of Iranian currency. Usually this policy carry out to adjust the system because of hyperinflation and sending some signals to citizens,economic agents and international community about the new era in domestic economy. That is, forgeting the inflationary time in the past and regaining the lsot credibilty of state...There are many examples (about 60 countries) that have done this reform. Because of importance of this topic, I suggest that you read the following paper:

Dropping Zeros, Gaining Credibility?
Currency Redenomination in Developing Nations
Layna Mosley
Dept. of Political Science
University of North Carolina
Chapel Hill, NC
mosley@unc.edu
www.unc.edu/~lmosley/

Abstract: This paper investigates the conditions under which developing and transition nations engage in currency redenomination. Given that many governments of developing countries experience high levels of inflation and deterioration in their currencys value against other currencies, why do some elect to redenominate, while others do not? And why do some governments wait many years after a bout of hyperinflation, or after their currency is priced at 1000 or 5000 units to the dollar, to redenominate, while others do so relatively quickly? I suggest that the explanations rest in a combination of economic and political factors, including inflation, governments concerns about credibility, and the effect of currencies on national identity. I employ survival analysis to test these expectations, using a set of data for developing and transition nations, covering the 1960-2003 period. I find, not surprisingly, that inflation is an important predictor of redenomination. Redenomination also is related to political variables, including governments time horizons, the governing partys ideology, the fractionalization of the government and legislature, and the degree of social heterogeneity.

Click here for reading this paper.

To those who lost their life in 11Sep.2001

2007-09-11T02:25:00.000-07:00

The Art of Writing Proposals

2007-09-11T01:00:00.000-07:00

The Art of Writing Proposals: Some Candid Suggestions for Applicants to Social Science Research Council Competitions
Published on: Jan 07, 2004

By Adam Przeworski and Frank Salomon

Writing proposals for research funding is a peculiar facet of North American academic culture, and as with all things cultural, its attributes rise only partly into public consciousness. A proposal's overt function is to persuade a committee of scholars that the project shines with the three kinds of merit all disciplines value, namely, conceptual innovation, methodological rigor, and rich, substantive content. But to make these points stick, a proposal writer needs a feel for the unspoken customs, norms, and needs that govern the selection process itself. These are not really as arcane or ritualistic as one might suspect. For the most part, these customs arise from the committee's efforts to deal in good faith with its own problems: incomprehension among disciplines, work overload, and the problem of equitably judging proposals that reflect unlike social and academic circumstances.

Writing for committee competition is an art quite different from research work itself. After long deliberation, a committee usually has to choose among proposals that all possess the three virtues mentioned above. Other things being equal, the proposal that is awarded funding is the one that gets its merits across more forcefully because it addresses these unspoken needs and norms as well as the overt rules. The purpose of these pages is to give competitors for Council fellowships and funding a more even start by making explicit some of those normally unspoken customs and needs.

Capture the Reviewer's Attention?

While the form and the organization of a proposal are matters of taste, you should choose your form bearing in mind that every proposal reader constantly scans for clear answers to three questions:

*
What are we going to learn as the result of the proposed project that we do not know now?
*
Why is it worth knowing?
*
How will we know that the conclusions are valid?

Working through a tall stack of proposals on voluntarily-donated time, a committee member rarely has time to comb proposals for hidden answers. So, say what you have to say immediately, crisply, and forcefully. The opening paragraph, or the first page at most, is your chance to grab the reviewer's attention. Use it. This is the moment to overstate, rather than understate, your point or question. You can add the conditions and caveats later.

Questions that are clearly posed are an excellent way to begin a proposal: Are strong party systems conducive to democratic stability? Was the decline of population growth in Brazil the result of government policies? These should not be rhetorical questions; they have effect precisely because the answer is far from obvious. Stating your central point, hypothesis, or interpretation is also a good way to begin: Workers do not organize unions; unions organize workers. The success, and failure, of Corazon Aquino's revolution stems from its middle-class origins. Population growth coupled with loss of arable land poses a threat to North African food security in the next decade.

Obviously some projects are too complex and some conceptualizations too subtle for such telegraphic messages to capture. Sometimes only step-by-step argumentation can define the central problem. But even if you adopt this strategy, do not fail to leave the reviewer with something to remember: some message that will remain after reading many other proposals and discussing them for hours and hours. She's the one who claims that Argentina never had a liberal democratic tradition is how you want to be referred to during the committee's discussion, not Oh yes, she's the one from Chicago.

Aim for Clarity

Remember that most proposals are reviewed by multidisciplinary committees. A reviewer studying a proposal from another field expects the proposer to meet her halfway. After all, the reader probably accepted the committee appointment because of the excitement of surveying other people's ideas. Her only reward is the chance that proposals will provide a lucidly-guided tour of various disciplines' research frontiers. Don't cheat the reviewer of this by inflicting a tiresome trek through the duller idiosyncrasies of your discipline. Many disciplines have parochial traditions of writing in pretentious jargon. You should avoid jargon as much as you can, and when technical language is really needed, restrict yourself to those new words and technical terms that truly lack equivalents in common language. Also, keep the spotlight on ideas. An archeologist should argue the concepts latent in the ceramic typology more than the typology itself, a historian the tendency latent in the mass of events, and so forth. When additional technical material is needed, or when the argument refers to complex ancillary material, putting it into appendices decongests the main text.

Establish the Context

Your proposal should tell the committee not only what will be learned as a result of your project, but what will be learned that somebody else does not already know. It is essential that the proposal summarize the current state of knowledge and provide an up-to-date, comprehensive bibliography. Both should be precise and succinct. They need not constitute a review of the literature but a sharply focused view of the specific body or bodies of knowledge to which you will add. Committees often treat bibliographies as a sign of seriousness on the part of the applicant, and some members will put considerable effort into evaluating them. A good bibliography testifies that the author did enough preparatory work to make sure the project will complement and not duplicate other people's efforts. Many proposals fail because the references are incomplete or outdated. Missing even a single reference can be very costly if it shows failure to connect with research directly relevant to one's own. Proposal writers with limited library resources are urged to correspond with colleagues and libraries elsewhere in the early stages of research planning. Resource guides such as Dissertation Abstracts International and Social Science Periodical Index are highly recommended. For many disciplines, annual reviews (e.g., Annual Review of Anthropology) offer state-of-the-art discussions and rich bibliographies. Some disciplines have bibliographically-oriented journals, for example Review of Economic Literature and Contemporary Sociology. There are also valuable area studies-oriented guides: Handbook of Latin American Studies, International African Bibliography, etc. Familiarizing yourself with them can save days of research. Powerful bibliographic searches can be run on CD-ROM databases such as the Social Science Citations Index, Social Sciences Index, and Modern Language Association International Index. Also, on-line databases such as CARL and ERIC, available by library or network access, greatly increase your bibliographic reach.

What's the Payoff?

Disciplinary norms and personal tastes in justifying research activities differ greatly. Some scholars are swayed by the statement that it has not been studied (e.g., an historian may argue that no book has been written about a particular event, and therefore one is needed), while other scholars sometimes reflect that there may be a good reason why not. Nevertheless, the fact that less is known about one's own chosen case, period, or country than about similar ones may work in the proposer's favor. Between two identical projects, save that one concerns Egypt and the other the Sudan, reviewers are likely to prefer the latter. Citing the importance of the events that provide the subject matter is another and perhaps less dubious appeal. Turning points, crucial breakthroughs, central personages, fundamental institutions, and similar appeals to the significance of the object of research are sometimes effective if argued rather than merely asserted. Appealing to current importance may also work: e.g., democratic consolidation in South America, the aging population in industrialized countries, the relative decline of the hegemony of the United States. It's crucial to convince readers that such topics are not merely timely, but that their current urgency provides a window into some more abiding problem. Among many social scientists, explicit theoretical interest counts heavily as a point of merit. Theoretical exposition need not go back to the axiomatic bases of the discipline, proposal readers will have a reasonable interdisciplinary breadth, but it should situate the local problem in terms of its relevance to live, sometimes controversial, theoretical currents. Help your reader understand where the problem intersects the main theoretical debates in your field and show how this inquiry puts established ideas to the test or offers new ones. Good proposals demonstrate awareness of alternative viewpoints and argue the author's position in such a way as to address the field broadly, rather than developing a single sectarian tendency indifferent to alternatives.

Use a Fresh Approach

Surprises, puzzles, and apparent contradictions can powerfully persuade the reviewer whose disciplinary superego enforces a commitment to systematic model building or formal theorizing: Given its long-standing democratic traditions, Chile was expected to return to democracy before other countries in the Southern Cone, and yet . . . Is it because these traditions were already extinct by 1973 or because the assumption on which this prediction was based is false? Everyone expected that One Big Union--the slogan of the movement--would strike and win wage increases for workers. Yet statistical evidence shows just the contrary: strong unions do not strike but instead restrain workers' wage demands.

It is often worthwhile to help readers understand how the research task grows from the intellectual history or current intellectual life of the country or region that generated it. Council committees strive to build linkages among an immense diversity of national and international intellectual traditions, and members come from various countries and schools of thought. Many committee members are interested in the interplay of diverse traditions. In fact, the chance to see intellectual history in the making is another reason people accept committee membership. It is a motive to which proposals can legitimately appeal.

It pays to remember that topics of current salience, both theoretical and in the so-called real world, are likely to be a crowded field. The competitors will be more numerous and the competition less interesting than in truly unfamiliar terrain. Unless you have something original to say about them, you may be well advised to avoid topics typically styled of central interest to the discipline. Usually these are topics about which everyone is writing, and the reason is that somebody else has already made the decisive and exciting contribution. By the time you write your proposal, obtain funding, do the research, and write it up, you might wish you were working on something else. So if your instinct leads you to a problem far from the course that the pack is running, follow it, not the pack: nothing is more valuable than a really fresh beginning.

Describe Your Methodology

Methodological canons are largely discipline-specific and vary widely even within some disciplines. But two things can safely be said about methodological appeal. First, the proposal must specify the research operations you will undertake and the way you will interpret the results of these operations in terms of your central problem. Do not just tell what you mean to achieve, tell how you will spend your time while doing it. Second, a methodology is not just a list of research tasks but an argument as to why these tasks add up to the best attack on the problem. An agenda by itself will normally not suffice because the mere listing of tasks to perform does not prove that they add up to the best feasible approach.

Some popularly-used phrases fall short of identifying recognizable research operations. For example, I will look at the relation between x and y is not informative. We know what is meant when an ornithologist proposes to look at a bird, but looking at a relation between variables is something one only does indirectly, by operations like digging through dusty archive boxes, interviewing, observing and taking standardized notes, collecting and testing statistical patterns, etc. How will you tease the relationship of underlying forces from the mass of experience? The process of gathering data and moving from data to interpretation tends to follow disciplinary customs, more standard in some fields than in others; help readers from other fields recognize what parts of your methodology are standard, which are innovative. Be as specific as you possibly can be about the activities you plan to undertake to collect information, about the techniques you will use to analyze it, and about the tests of validity to which you commit yourself. Most proposals fail because they leave reviewers wondering what the applicant will actually do. Tell them! Specify the archives, the sources, the respondents, and the proposed techniques of analysis.

A research design proposing comparison between cases often has special appeal. In a certain sense all research is comparative because it must use, implicitly or explicitly, some point of reference. Making the comparison explicit raises its value as scientific inquiry. In evaluating a comparative proposal, readers ask whether the cases are chosen in such a way that their similarities and differences illuminate the central question. And is the proposer in a position to execute both legs of the comparison? When both answers are positive, the proposal may fare particularly well.

The proposal should prove that the researcher either possesses, or cooperates with people who possess, mastery of all the technical matters the project entails. For example, if a predominantly literary project includes an inquiry into the influence of the Tupian language on rural Brazilian Portuguese, the proposal will be checked for the author's background in linguistics and/or Indian languages, or the author's arrangements to collaborate with appropriate experts.

Specify Your Objectives

A well-composed proposal, like a sonata, usually ends by alluding to the original theme. How will research procedures and their products finally connect with the central question? How will you know if your idea was wrong or right? In some disciplines this imperative traditionally means holding to the strict canon of the falsifiable hypothesis. While respecting this canon, committee members are also open to less formal approaches. What matters is to convince readers that something is genuinely at stake in the inquiry, that it is not tendentiously moving toward a preconceived end, and that this leaven of the unknown will yield interesting, orderly propositions.

Proposals should normally describe the final product of the project: an article, book, chapter, dissertation, etc. If you have specific plans, it often helps to spell them out, because specifying the kind of journal in which you hope to publish, or the kind of people you hope to address, will help readers understand what might otherwise look like merely odd features of the proposal. While planning and drafting your proposal, you should keep in mind the program guidelines and application procedures outlined in the brochure specific to the Council program to which you are applying. If you have specific questions about the program, you may wish to consult with a staff member. Your final proposal should include all requested enclosures and appendices.

Final Note

To write a good proposal takes a long time. Start early. Begin thinking about your topic well in advance and make it a habit to collect references while you work on other tasks. Write a first draft at least three months in advance, revise it, show it to colleagues. Let it gather a little dust, collect colleagues' comments, revise it again. If you have a chance, share it with a seminar or similar group; the debate should help you anticipate what reviewers will eventually think. Revise the text again for substance. Go over the language, style, and form. Resharpen your opening paragraph or first page so that it drives home exactly what you mean as effectively as possible.

Iran socio-economy by The Economist

2007-08-30T03:51:00.000-07:00

Annual Oil Market Chronology

2007-08-21T05:39:00.000-07:00

Useful for users who want to do some research about oil prices and affecting events on oil markets: http://www.eia.doe.gov/emeu/cabs/AOMC/Overview.html

What to Do about Teheran's Money-Laundering

2007-08-21T05:30:00.000-07:00

As the US presses for a stronger UN Security Council resolution on Iran, the Treasury Department continues its international outreach to highlight Iran's illicit financial activity. While the Treasury-led campaign has achieved considerable success, this initiative would be far more effective if the US was not the only voice decrying the risk that Iran's deceptive practices pose to the global financial system.

Read This article here: http://www.washingtoninstitute.org/templateC06.php?CID=1078

World Drug Report - Global Illicit Drug Trends

2007-08-21T05:21:00.000-07:00

You can access the World Drug Reports from here: http://www.unodc.org/unodc/en/world_drug_report_index.html

Time Series data for Corruption Perceptions Index (CPI)

2007-08-21T05:16:00.000-07:00

You can find time series data of CPI index compiled by Transparency International here:
http://www.icgg.org/corruption.cpi_2006.html

Keep in mind, according to compilers of this index, it is recommended to use this index in cross-country analysis not time series or panel analysis.

The Economics of Corruption 2007

2007-08-21T05:13:00.000-07:00

From Oct. 7-13 2007 the annual program "The Economics of Corruption - A University Training on Good Governance and Reform", headed by Prof. Dr. Johann Graf Lambsdorff, will take place at the University of Passau, Germany. The program is directed towards anti-corruption policymakers and practitioners, as well as towards graduate and post-graduate students and faculty in the social sciences. For further information please click http://www.icgg.org/

Glossary of Job Market Terms

2007-08-17T03:04:00.000-07:00

Academia: Academia was a public garden near Athens where Plato lectured his pupils. The school became known as the Academy and the teachers and pupils as Academics. Today colleges and universities are referred to collectively as academia or the academy, and professors are known as academics.
Adjunct Professor: A person whose primary employment is outside the university but is hired to teach specific courses for a limited period of time. One of several non-tenure-track academic appointments; for others, see instructor, lecturer, and visiting professor.

Allied Social Science Associations (ASSA): The American Economic Association (AEA) holds annual meetings jointly with other social science associations, e.g. the American Finance Association (AFA), the Industrial Relations Research Association (IRRA), and the Association for Social Economics (ASE). These meetings are collectively called the Meeting of the Allied Social Science Associations. The vast majority of your initial academic job interviews will likely take place at the ASSA meetings, held in early January.

American Economic Association (AEA): The professional organization of economists. The annual meeting is held in early January as part of the Meeting of the ASSA. The AEA website is http://www.vanderbilt.edu/AEA/index.htm Student membership in the AEA is available at bargain rates and includes membership to three journals: the American Economic Review, the Journal of Economic Perspectives, and the Journal of Economic Literature.

Association for Public Policy Analysis and Management (APPAM): The professional organization of academics working in the area of public policy. They hold their annual meeting at the end of October or beginning of November. The APPAM website http://qsilver.queensu.ca/~appamwww/ contains job listings. You may post your CV on the APPAM website. Interviews at the APPAM meetings tend to be less formal than those at the ASSA meetings.

Assistant Professor: The lowest of three tenure-track or tenured faculty positions. Your first tenure-track job will almost certainly be at the assistant professor level. Progress of assistant professors toward tenure is generally assessed in a third-year review; failure to make acceptable progress can result in non-renewal of the employment contract. In the vast majority of cases, after the third-year review the assistant professor is told to publish more and work harder and is granted a second three-year contract. Assistant professors in most departments have a six-year review at which they are considered for promotion to associate professor. The salaries of assistant professors are driven by three things: 1) the salary at which one was hired, which is determined largely by the market-clearing salary for that year and the presence of alternative offers; 2) annual raises, which are usually a few percent per year; and 3) raises in response to outside offers of employment. Assistant professors may not be allowed to vote on certain issues during faculty meetings, such as a tenure review; university policy varies.

Associate Professor: the middle rank of the three tenure-track or tenured faculty positions. Generally one is promoted to associate professor after spending several years as an assistant professor and passing muster in a review. There are associate professors with tenure and associate professors without tenure; university policy varies. The length of time one must serve as an associate professor before being considered for professor may be left vague.

Campus Visit: see Flyout.
Carnegie Classification: A typology of American colleges and universities developed by the Carnegie Commission on Higher Education. Institutions are divided into categories such as Extensive Doctoral/Research Universities, Intensive Doctoral/Research Universities, Masters Colleges and Universities, Baccalaureate Colleges, Associates Colleges, Specialized Institutions, and Tribal Colleges and Universities. Universities may tout their status as an Extensive Doctoral Research University as evidence of the university’s commitment to graduate education.

Chair: 1) Abbreviation for chairperson, as in “She is the chair of the economics department,” or “She is the chair of the search committee.” 2) Abbreviation for endowed chair, as in “She has a chair in the economics department.”

Committee Work: Departmental administrative service. Different types of committees on which you may be asked to serve include: search (for new faculty), admissions, curriculum, and benefits. Departments should try to minimize the amount of committee work given to assistant professors so that they have a better chance of publishing the research necessary to pass the tenure review.

Cover letter: a letter sent as part of your application for a job. The letter should politely request an interview, list the reasons that you believe that you are a good match for that particular job, list enclosures (such as research papers and your curriculum vitae) and provide your contact information.

Curriculum Vitae: In Latin, it means “course of life” but in the context of the job market refers to a resume tailored for academic jobs. It should list your contact information and details about your education, employment, publications, research experience, and teaching experience. The term curriculum vitae is often abbreviated either CV or c.v. There is a widespread but mistaken notion that vita is singular and vitae is plural; in fact, vitae is correct for both the singular and plural.
Dead Wood: slang for faculty who do not contribute to the productivity of the department but who cannot be easily removed because they have tenure. Often a relative term used to refer to colleagues who have been in the department ten years longer than the speaker.

Dean: a university administrator with power over department chairs but lesser in rank than the provost. Deans often have control over the number of lines assigned to each department and can veto the tenure recommendations of departments.

Dual Job Search: a search that is conducted jointly by two people, e.g. a husband and wife. Dual job searches can be especially difficult and stressful, which is why they are called the two-body problem.

Emeritus: an honorary title awarded to retired faculty. Typically emeriti are given an office, library privileges, and the right to participate in commencement but do not remain voting members of the faculty.

Endowed Chair: A faculty line that has been endowed with outside funds that provide for salary and often research support. Given these extra perks, endowed chairs are generally awarded to particularly distinguished faculty and are used to recruit prestigious senior faculty from other universities. Endowed chairs are often named for the source of their endowment; for this reason you may see senior faculty referred to as, e.g., the Jane Doe Distinguished Professor in Economics.

Flyout: an invitation to visit the campus, meet faculty, and give a job talk. Generally occur after the initial interviews at the ASSA meetings and only the top few candidates are initially invited. Also called a campus visit.

Hard Money: A salary offer is hard money if it is guaranteed even if the faculty member never receives any outside grants. This is in contrast to soft money. Most offers in economics departments are hard money.

Instructor: Instructor is one of several non-tenure-track academic appointments; for others, see adjunct professor, lecturer, and visiting professor. Often instructor refers to someone who teaches a class but does not have a Ph.D.; for example, a graduate student.

Job Openings for Economists (JOE): The primary list of academic job openings in economics and related fields. A publication of the AEA and the economics department at the University of Texas at Austin, JOE is published every month except January and July. Each issue is released around the fifth day of the month. The website is located at: http://www.eco.utexas.edu/joe/

Job Talk: A formal 60- or 90-minute presentation of your research for the purpose of allowing prospective employers to gauge several things: the quality of your research, your communication skills, and your ability to think on your feet. The atmosphere of a job talk varies greatly depending on the department’s culture; faculty may sit attentively to hear an entire presentation before asking polite questions or may interrupt immediately with aggressive challenges.

Joint Appointment: the state of having appointments in multiple academic units of a college or university. If you are offered a joint appointment, ascertain which department is the primary appointment (i.e. in which department is the line) -- that department would have the most influence over your reviews. For an appointment joint between units with different objective functions, the appointee may find it difficult to satisfy all the stakeholders.

Junior Faculty: faculty without tenure; i.e. assistant professors and untenured associate professors.

Land-Grant Institution: a college or university designated by its state legislature or the U. S. Congress to receive funds under one of three pieces of legislation designed to increase the efficiency of agricultural production and educate farmers and rural populations. Those three such pieces of legislation are:
1) The Morrill Act of 1862, which gave 17.5 million acres of federal land to the states. Most of this land was sold by the states and the income was used to support the land-grant colleges and universities.
2) The Morrill Act of 1890, which required states that maintained separate colleges for blacks and whites to equitably divide the funds received under the 1862 Act; this caused the creation of 16 black land-grant colleges in the southern U. S.
3) The National Agricultural Research, Extension, and Teaching Act of 1994, which conferred land-grant status on 29 Native American colleges.
The mission of land grant institutions was expanded by two pieces of legislation: the Hatch Act of 1887, which supports agricultural experiment stations, and the Smith-Lever Act of 1914, which supports extension efforts in agriculture and home economics. There are currently 105 land-grant institutions. For some people, the term “land-grant institution” has less than positive connotations; the reason is that many states used the land-grant legislation to start new agricultural universities that were not as strong in classical education as older universities. Today the land-grant institutions are diverse, including institutions with highly ranked economics departments, such as University of California-Berkeley, Cornell, University of Maryland-College Park, Massachusetts Institute of Technology, University of Minnesota-Twin Cities, and University of Wisconsin-Madison.

Lecturer: Lecturers generally teach significantly more, but are paid significantly less, than assistant professors. Lecturers tend to have little job security; they are not tenure-track, their contracts are generally for a single year, renewable at the discretion of the department, and they rarely are promoted to assistant professor. Whereas instructor refers to someone teaching a class who does not hold a Ph.D., the term lecturer is usually reserved for a teacher with a Ph.D. Lecturer is one of several non-tenure-track academic appointments; for others, see adjunct professor, instructor, and visiting professor.

Postdoc: abbreviation for postdoctoral fellowship or a person on such a fellowship. Postdoctoral fellowships support one to three years of full-time research after one has completed one’s dissertation. In the life sciences almost all Ph.D.s complete postdocs before starting as assistant professors. Fewer Ph.D.s in economics than in the life sciences do postdocs but the practice has become more common over time. A postdoc is a useful way of getting your research agenda underway before teaching. Salary for postdocs is usually significantly less than that for assistant professors. Some postdocs are formal programs sponsored year after year by organizations (e.g. the National Institute on Aging, the National Institute on Child Health and Human Development) whereas others are ad hoc -- for example, a professor might hire a postdoc to help with a specific project. Some postdocs fund you to do your own research whereas others make you a full-time worker on a project of the employer’s design.

Professor: the highest-ranking of the three tenure-track or tenured faculty positions; to distinguish them from assistant and associate professors, they are sometimes called full professors.

Visiting Professor: a non-tenure-track academic position, usually for a single year, often by academics who have tenure or are tenure-track at another university. Many faculty serve as visiting professors while on sabbatical.

Some photo from Erfurt in Germany

2007-08-14T07:01:00.000-07:00

Know Germany better-part 2

2007-08-14T06:53:00.000-07:00

Ordnung: Rules and Regulations
''''''''''''''''''''''''''''''''''''''''''''''''''''''
The sense of Ordnung is not limited only to the Germans’
material domain, it also strongly influences their social world.
Germany is a society structured by a large number of explicit
rules and regulations. One of the first encounters foreign
residents have with the regulatory nature of German society
is the Einwohnermeldeamt (resident’s registration office). All
residents of Germany are required to register with their local
Einwohnermeldeamt and to notify that office whenever they
move or change their place of residence. German bureaucracy
can be irritating or confusing, if not downright intimidating,
especially when one is waiting in long lines, filling
out innumerable forms, or dealing with unfriendly civil servants.
The good news is that while it is time-consuming in
the beginning, at least it generally works fairly well. Don’t
forget that Germany is one of the more densely populated
countries in the world, and its bureaucracy helps keep everything
running smoothly.

Travel to German villages or small towns and you will be
struck by how picturesque they appear. All of the houses are of
a similar style and they present a pretty sight: roofs are covered
with similar tiles and the colors harmonize. This is generally
no coincidence but rather the result of a housing code that
goes into great detail about how a house may be designed,
painted, and equipped. While such detailed regulations often
seem too confining to most Americans, the Germans see it as
a way of ensuring a society that is concerned not only with
individual rights but also with the common good. As we will
see later, this notion of the common good and the social
contract is an important part of the German mindset.

The rules that regulate Germany extend far beyond the
many official laws and requirements. Unwritten codes of
manners and customs also structure German social life. Some
of these are detailed and quite explicit. Others are less so and
are simply things that “one doesn’t do.” For example, there is
even a protocol for hostess gifts. Because Germans are very protective of their homes and private lives, being invited
into someone’s home for dinner is an honor. But once invited,
there are many rules about how to behave.1 For instance,
it is customary to bring the hostess a bouquet of
flowers. Germans love flowers and florist shops are abundant.
But not just any flowers will do. Red roses symbolize romance,
so be careful to whom you give them. And white
chrysanthemums and carnations are generally reserved for
funerals. Also, it is proper to give bouquets consisting of an
odd number of flowers. No one seems to really know why this
custom is important. Some Germans say it’s an old superstition;
others justify the custom by claiming an odd number
makes for a more aesthetic arrangement.

Be that as it may, Germans feel comfortable with these
kinds of rules, which give them a feeling of security as well as
a strong sense of what is right and wrong. This sense of right
and wrong is often expressed openly and emotionally by
Germans, especially when they think someone has done something
wrong. This can seem overly judgmental or rude at
times, but Germans prefer structure to an ambiguous situation
where no one seems to know the correct way to proceed.

At times it appears Germans have a rule for everything—
and they do, almost! This is an aspect of what Germans call
Gründlichkeit, or thoroughness. Germans are great believers
in doing things thoroughly, and this has led to their reputation
as perfectionists. If they are going to do something, they
spare little expense or time in doing it well. And if they can’t
do it thoroughly, they are inclined not to do it at all. As a
German carpenter once told me, “If I don’t have the time to
do it right in the first place, when will I get the time to fix
it later?” It is this logic which underlies the reputation Germany
has for producing such high-quality automobiles and
other products. Gründlichkeit is also an important component
in the decision-making processes in traditional German
organizations.and is often a source of misunderstanding
in German and American joint ventures.

For Americans with their strong sense of individualism
and belief in personal freedom, the German devotion to order
can seem obsessive and highly constricting, even invasive,
but there is little getting around the varied laws and regulations,
because they are generally strictly enforced. At times
they irritate the Germans, too. I remember the indignation of
a German friend who had gotten a ticket for not locking her
car when she parked it. When she complained to the police,
she was told the rule was in place to discourage auto theft.
German rules can all be rationally justified, and German
officials will quickly do just that.

Know Germany better! Major German Cultural Themes

2007-08-14T06:39:00.000-07:00

This material has been extracted from the book entitled: Germany UNRAVELING AN ENIGMA (by GREG NEES)
*********************************************************************
Major German Cultural Themes

In order to communicate successfully with people from other
cultures, it is important to understand how they interpret a
given situation and what their intentions are. To do this we
must have some sense of their values, norms, and beliefs,
which interact in a complex way to influence all behavior
and communication. For the purpose of brevity I will call
these complex interactions “cultural themes,” because they
run through a culture as a theme does through a book or a
piece of music. Only when you understand the central cultural
themes of any given culture can you accurately interpret
and understand its inhabitants’ behavior, communication,
and way of life. If you don’t understand their cultural themes,
you will necessarily project your own values, norms, and
beliefs onto them, and this projection is one of the principal
causes of intercultural misunderstanding. If, however, you
begin to learn the cultural themes, what before had seemed
illogical or wrong behavior will take on a different meaning.
This chapter offers insights into seven central German
cultural themes in an attempt to explain Germans’ behavior
and their way of life. By understanding how Germans understand
the world, you will increase your chances of communicating
more successfully with them.

Ordnung Muß Sein

Ordnung muß sein (there must be order) is a well-known and
commonly heard saying in Germany; indeed one of the first
things that strike visitors to Germany is its cleanliness and
orderliness. Ordnung is a theme that permeates German society.
Go into a German house and it will be very clean, with
everything in its proper place. Walk into a mechanic’s garage
or carpenter’s workshop and the tools and equipment will be
well maintained and stored neatly. In German offices you
will notice large numbers of well-kept files and special notebooks
that are referred to as Ordner. The old saying “a place
for everything and everything in its place” might well have
originated in Germany. It is certainly a premise on which
Germans like to operate.

The desire for Ordnung is also related to Germans’ strict
adherence to schedules and deadlines. Punctuality is a virtue,
and lateness is seen as sloppiness or a sign of disrespect. Being
late upsets the general Ordnung. Perhaps the country’s railways
offer the best illustration of German punctuality. The
trains of the German railway system are famous for their
punctuality. It is a standard joke that you can set your watch
by a train’s arrival and departure times. Germany has one of
the world’s best public transportation systems, and a major
part of its success stems from the German sense of Ordnung.
This system, which links almost every village, town, and city
in Germany, is a striking example of the German ability to
effectively organize and coordinate complex processes. Like
the transportation system, the rest of the country’s infrastructure
is also well organized for the same reason.

One visible result of this well-regulated society is the condition
of German autos.Germans take their cars very seriously indeed. It
is rare to see a car in Germany that is not well kept and in
excellent mechanical condition. Germans take good care of
all their property, but their cars are especially important
because, more so than in the United States, they are a status symbol as well as a means of transportation. The fact that
they are in such good mechanical condition is in large part
due to the Technischer Überwachungsverein, or TÜV. This
agency inspects all vehicles licensed in the country and is
well known for the rigor with which its inspectors go about
their job. A horn that doesn’t work, broken turn signals, or
rust in a crucial spot are all reasons for a car to fail this strict
inspection. Inspections at a TÜV center are a microcosm of
German orderliness. These inspection stations are spic-andspan,
brightly lit, and operated by inspectors whose uniforms
would be clean enough to be seen in a doctor’s office. While
administrators take care of the paperwork in a brisk, matterof-
fact way, the cars move through a series of checkpoints,
where they are thoroughly inspected. I can well remember
the feeling of apprehension in my stomach as I watched an
inspector walking underneath my elevated car with a bright
light and very large screwdriver. He was intent on finding
any spot where rust might have weakened the car, and he did
this by thrusting the screwdriver with resounding force into
each and every section of the chassis and underbody. Luckily
for me, all rusted areas had been fixed by welding heavy
sheets of metal over them, or my car would have been one of
the many that the TÜV pulled out of circulation.

Germans claim such rigor is necessary because of the large
number of autos, especially on the Autobahn, where there is
often no speed limit and where they put their vehicles through
their paces. This can be unnerving to Americans not used to
aggressive drivers who often come racing up from behind at
over 120 miles per hour while blinking their headlights to
warn you out of their way. And as might be expected, German
drivers know each and every traffic rule and regulation
by heart—the result of strict licensing exams and extensive
and mandatory driver education programs typically costing
more than $1,000—and they expect you to do the same.
Forewarned is forearmed: defensive driving is still a foreign
concept in Germany.

*************************++ NEXT POST . Ordnung: Rules and Regulations++++++++

Schön, oder?!

2007-08-14T06:36:00.000-07:00

Iran Feels the Pressure

2007-07-06T08:37:00.000-07:00

July 6, 2007 Energy Compass

Iran Feels the Pressure

Iran’s recent decision to impose rationing on gasoline sales suggests

international pressure over the nuclear issue is starting to

bite, but also that the country is battening down its hatches in

preparation for either a military strike or a tightening of the economic

noose. What happens next?

Tehran’s refusal to suspend uranium enrichment has brought

sanctions or financial pressure on three fronts, with varying

degrees of impact. The first plank involves restrictions imposed

by the UN, which include an international travel ban on officials

involved in the nuclear program, a ban on certain technology

sales, and a call for the assets of the Revolutionary Guard to be

frozen. The second is domestic US legislation — the Iran

Sanctions Act, which gives the

president the right to penalize

non-US companies investing in

Iran’s energy sector. The third

— and by far the most damaging

— involves American pressure

on banks, companies and

export credit agencies to sever

ties with Iran . European financial

sources say the tactics are

working, forcing banks and

agencies to slash their exposure

to Iran — including Japanese

banks, which have been big

lenders to Iran .

In the months ahead, the US

is likely to tighten the financial

squeeze on Iran and make it

even harder for Iranian banks to

deal in dollars, effectively turning

Iran into a euro-driven

economy. “It’s entered a new stage,” a Tehran-based European

banker says, adding that Iran is now turning to banks in Dubai to

open up letters of credit. Now that international credit has dried

up, Iran will have to rely on funds invested in its Oil Stabilization

Fund, which currently holds more than $15 billion from windfall

revenues, but these will not be sufficient to fund large projects

such as new phases of the South Pars gas field and construction of

new refineries.

The limited sanctions imposed by the UN Security Council

have been more symbolic than effective and will not be easily

tightened. Veto-wielding China and Russia are blocking moves to

introduce new measures such as denying landing rights for Iranian

ships and aircraft and freezing the assets of Iranian banks. “More

importance should be attached to the diplomatic track,” China ’s

UN Ambassador Wang Guangya said this week, adding that the

US should enter direct negotiations with Iran on the nuclear issue.

One option would be to freeze more Iranian overseas assets and

widen the list of individuals on the travel ban to members of the

leadership. But this would risk increasing the regime’s sense of

paranoia and bolstering the position of the hardliners around

President Mahmoud Ahmadinejad.

In Washington , the pro-Israeli lobby in Congress has been

pushing for much tougher sanctions. At the end of June, two

members of a bipartisan House committee tabled a bill that, from

the end of the year, would threaten any company that supplies

gasoline to Iran with loss of access to the US market. This bill

looks unlikely to muster enough votes to become law, as

Congress is heavily divided and the US administration won’t

want to risk alienating Europeans. The bill focuses on Iran ’s

Achilles’ heel: its dependence on imported gasoline, which at

current rates of around 180,000 barrels per day makes up around

40% of Iran ’s overall consumption and last year cost the treasury

over $5 billion.

The prospect of UN sanctions on gasoline shipments seems

slim, too. Even without the threat of a Russian or Chinese veto,

any such move would face the

logistical challenge of intercepting

vessels in the Mideast Gulf .

Threatening trading companies

such as Swiss-based Vitol,

which supplies Iran with over

two-thirds of its gasoline

imports, could see moreobscure

outfits undertake the

business instead.

Iranian Oil Minister Kazem

Vaziri-Hamaneh admitted this

week that international pressure

has created problems financing

some projects and that the government

would use “internal

resources and the Oil

Stabilization Fund” to make up

the shortfalls. In contrast,

Ahmadinejad said that, by

rationing gasoline, Iran was

insulating itself from further sanctions, and had made itself “invincible.”

The rationing late last month set a monthly limit on the

amount of gasoline — priced at just 11¢ per liter — each motorist

can buy, a sensitive move in a country where cheap and plentiful

gasoline is taken for granted (EC Jun.29,p10). 􀂄

Paul Sampson, London

Compass Points

• SIGNIFICANCE: Unilateral US actions are proving most effective

in pressuring Tehran , but these involve behind-the-scenes

leverage on financial institutions, rather than formal sanctions.

Projects are being affected, but the broader economic impact

is limited by bumper oil export earnings — and sanctions on

these are highly unlikely. By rationing gasoline, Tehran aims

to limit the financial burden of subsidies — and so its vulnerability

to external pressure.

• NEXT: Looming over the sanctions is the much larger issue

of US-Iran relations, which remain encumbered by mutual

suspicion and mistrust. Despite initial talks on Iraq ,

Washington refuses to talk face-to-face with Iran on the

nuclear issue until it gives up enrichment — making a

breakthrough unlikely.

Zum Lachen!

2007-07-04T04:22:00.000-07:00

Romance versus reality

2007-06-18T00:46:00.000-07:00

Romance versus reality
Jun 14th 2007
From The Economist print edition

Iran's populist president is finding it hard to stay popular Get article background
MAHMOUD AHMADINEJAD won presidential office promising to give Iran's oil money back to the people.
But he is finding the demands of populism hard to reconcile with economic reality. His government has recently been wobbling over implementing two of its biggest economic decisions: to bring in petrol rationing and to cut interest rates.

It has dithered over rationing for more than a year, with one promised date after another passing, and no clear announcement of how or when it will happen. Rationing was finally introduced last week for government cars, but the authorities are no closer to deciding when to cap consumption by private motorists. Few Iranians will be surprised if implementing the policy is delayed for several more months.

Last year Iran spent $13 billion-plus on subsidising petrol. Though it has the world's second-largest oil reserves, the country is so short of refining capacity that it spends a lot of cash on importing fuel. Local economists complain that the subsidy tips the trade balance the wrong way, wantonly increases state spending, encourages people to waste fuel or smuggle it abroad and is regressive because the poor do not own cars.

Motorists have now been given smart cards, which they have to use when buying petrol. Once rationing is introduced these will be used to measure a monthly allowance of subsidised fuel and to charge more for excess consumption. The government has blamed the delays on technical problems with these cards.

In fact, neither Mr Ahmadinejad nor his parliament wants to take responsibility for unpopular decisions, and has not yet decided how much fuel to let people have or what rates higher consumption should incur. Some politicians even tried to dismiss the idea of public rationing altogether, saying that last month's tiny increase in the price of a litre of petrol (by $0.02) and that smart cards monitoring national
consumption will solve the problem without rationing. They seem unlikely to get their way, but there may be more rows before the policy is implemented.

The government has also made a hash of monetary policy. Mr Ahmadinejad has called for a cut in interest rates to 12%. Lending rates are capped at 14% for state banks and 17% for private banks. The money and credit council, which is meant to set rates, said in April that they should not be cut this year because of high inflation and the risk of hurting private banks. Long-term cuts are meant to help create jobs by encouraging investment in business. But with high inflation and the threat of more UN sanctions hanging over Iran's economy, most borrowers are likely to pump cash into the booming property market instead. Even if Mr Ahmadinejad decides not to insist on
the cut, his intervention has further worried businessmen who think his indifference to the plight of private banks shows he is hostile to private enterprise as a whole. This week, in an unusually bold move, 50 economists castigated the president for what they deemed to be his dismal economic policies.

Stiglitz: time to snuff the IMF?

2007-06-15T08:42:00.000-07:00

One of the things you are most famous for is information asymmetry - that all parties to a transaction aren't equally well-informed. A classic example is a company that floats stock to outside investors. Investors are less well-informed than management about the company's prospects; there has to be trust that the property isn't a lemon. Now we know that accounts were systematically cooked. What's the impact of this?

The impact is very negative because one of the reasons why we worry about accurate information is that prices are determined on the basis of that information, and investment decisions in turn depend on prices. So, if people thought profits were larger than they really were, prices in the stock market were higher than they ought to have been, and investment, say in telecommunications, was higher than it should have been. That contributed to the investment overhang that we're facing.

You frequently mention Wall Street's influence on policy via the Treasury. How does this influence work?

Every agency within the government has a natural constituency. It's quite natural that the Treasury, which would see as part of its constituency the concerns of financial markets, the concerns of Wall Street. The real problem is when what is a natural constituency, a voice, becomes dominant. The Treasury became an advocate for those interests, even when America's broader interests were put into jeopardy.

One of the things that some groups within Wall Street were very interested in was capital market liberalization - opening up markets abroad to American speculators. For them this was just another aspect of trade opening. But for developing countries, opening yourself up to speculative capital flows can be very destabilizing. When the Treasury pushed capital market liberalization as in Korea, 199394, it was just a short while later when the consequences were felt not only by Korea but by the whole world. By 1998 we were facing a global financial crisis, one in which American and European financial interests were at risk.

What struck you when you first got to the World Bank?

One of the most traumatic experiences I had there was just a month after I started. I went to Ethiopia, one of the poorest countries in the world. It had a balanced budget, no inflation, and had had rapid growth for five years, had cut back on defense expenditures from 6% to 2%, even though it had come to power through military means. This is a really unusual government - no charges of corruption. And yet the IMF had suspended its program. I asked, "Why?" The answer was that the budget wasn't balanced. But it was. They said, "But you shouldn't include foreign aid." I said, "Why else are governments giving money if it's not for them to build schools and hospitals?" They said, "You can't rely on it." The government had a very good answer. They said, "As long as we get the money, we'll build the schools, and when we don't get the money, we'll stop building the schools." And when we came back to Washington we discovered that tax revenues were more unstable than foreign aid.

Rudi Dornbusch, the MIT economist who died recently, said a couple of things I'd like you to comment on. During the heat of the Asian crisis, he said that the good side of the drama was that South Korea was a wholly owned subsidiary of the U.S. Treasury. He also said about that time that the IMF is a toy of the U.S. to pursue its economic policy offshore. Is this a fair picture?

It is a remarkably accurate picture. It's a multinational institution in which everybody has a voice, but the U.S. is the only country that has a veto power. The UN has complaints about five countries determined by historical accident having the veto power. In the IMF it's only one country. In the case of Korea, the U.S. dictation of policy was amazing. The under-secretary of the Treasury was in a hotel in Seoul as the agreement was being reached. Every night, the IMF would go up to his room and see if it met with his approval. As a result of that, the IMF team did not have time to consult the World Bank team, which had enormous experience with Korea. They said, "We were too busy to talk to the World Bank."

Let's talk about the mentality of the IMF. What do they think they're doing? Do they just apply principles they learned in school? Is it really the one-size-fits-all approach that it seems? Is their thinking that mechanical and crude?

Almost. The way the IMF is organized is designed for people to be interchangeable parts. They don't want it to be the case that if you send economist X to a country, they give different advice than economist Y. Whoever you are, there is an IMF formula. And the only way to have an IMF formula basically is to have a close to a one-size-fits-all, with decisions, recommendations, policies, very tightly controlled, from Washington, as opposed to people who really know the country in the field.

People in the IMF believe they're doing the right thing. They believe they are enhancing global stability, that they are bringing needed advice to countries, that they are an important check against what they would call populist policies, that they are bringing economic virtue to those that really don't understand economic virtue. The problem is that the world has become quite complicated, and textbook economics typically doesn't work. The economics that's taught in the U.S. and the UK focuses on economies in which markets work very well. But in most developing countries, markets don't work well. Information is imperfect, competition is imperfect, markets are incomplete. Unfortunately that kind of world is not the kind of world that they studied. It is the kind of world that [fellow Nobelist] George Akerlof and I spent thirty years studying: markets in which information is imperfect.

Some very important results have come out of that research. One is to recognize the limitations of markets. As I sometimes put it, the reason the invisible hand is invisible is partly because it's simply not there. Free markets do not necessarily lead to efficient resource allocations, and they certainly don't lead to kinds of distribution of income that promote social and political stability. The world that the IMF economists are working in is not the kind of world they studied in graduate school. As an example, the typical macroeconomic model that was taught in graduate school ignored the possibility of bankruptcy - in their world, firms don't go bankrupt. But in East Asia, bankruptcy was at the center of the problem.

When you don't think about bankruptcy, you get some very bad results. The IMF forced these countries to raise interest rates to really exorbitant levels. Firms that have a lot of debt can't meet those debt obligations if you raise interest rates to very high levels. They go into distress. They can't borrow, can't raise operating funds, they have to reduce their production, they have to lay off workers - and there's a vicious downward spiral.

How could they not think of bankruptcy? Don't they read the papers?

They're macroeconomists, and it's not in the model. To give you one example, they said that when you raise the interest rates it makes it more attractive for capital to come into a country, and that supports the exchange rate.

But if everybody's going bankrupt, capital's not going to go anywhere near the country.

Exactly, it's going to flee. When that happens, the exchange rate will not be supported. That's what happened over and over again in East Asia. It was perfectly predictable, and they paid absolutely no attention to these predictions.

Let's talk about history. Protection was an important part of the U.S. industrial strategy in the 19th century. East Asia practiced strategic protectionism too. Also, the U.S. stole other countries' patents in the 19th and early 20th centuries. Strategies which proved successful in the past, protectionism and intellectual property theft, are off limits now. What worked for the U.S. is forbidden for Brazil and India.

What you hear in a lot of the rest of the world is that the U.S., having done so well, is pulling up the ladder to make sure no one else can climb up. If we had a fair intellectual property regime, one that balanced the concerns of users as well as producers, the developing countries could live with that. Some of us in the Clinton administration believed that the kind of intellectual property regime that was being pushed by the U.S. Trade Representative, reflecting the perspectives of the pharmaceutical companies and the entertainment industry, was not balanced. We thought it would actually not be good for research and innovation. As academics, for instance, we're users of knowledge, and we know how excessive intellectual property protection can slow the pace of innovation.

Much of Latin America is in economic crisis. Argentina is in deep, and Brazil is teetering. What do you think is happening?

Part of it is that it used to be said that when the U.S. sneezed, Mexico caught a cold. Today, with greater globalization, when the U.S. sneezes, much of the rest of the world, and Latin America in particular, gets the flu or something worse. But there's another thing going on, some of the consequences of full capital market liberalization. We saw it in East Asia, and now we're seeing it in Latin America. When investors decide "this is not the place to have your money," they pull out, and there's a crash. In the '97 crisis, the IMF, the U.S. Treasury said, "Don't worry about it. As long as you have good policies, you won't have a problem." We knew that wasn't true. In fact, the problems in Argentina actually began in '97.

Now they try to blame Argentina for its problems, but they were getting A+ grades from the IMF all along.

They were getting A+ grades all along, and all of a sudden, the market said, "We don't like any emerging markets," and forced Argentina to pay high interest rates. Argentina did not have heavy debt. It's debt/GDP ratio at the end was around 55%, and at that time was even lower. It was far lower than the U.S.'s deficit was in 1992. Even at the point of the crisis, Argentina's deficit was only 3% of GDP. The U.S. deficit/GDP ratio was 4.9%. And all the deficit in Argentina was due to the privatization of social security. If the U.S. had privatized social security in 1992, our deficit would have been 8% of GDP. Argentina should not have been blamed. Markets are fickle, and when they decide they want to pull their money out, no country can survive.

The argument is that Asia has more or less recovered, that they would have been worse off without the IMF intervention. Has Asia recovered?

What I agree with is that Korea in fact quickly recovered, and so did Malaysia. Malaysia's downturn was the shortest and the shallowest. Malaysia had no IMF program.

And capital controls.

And they had capital controls. As a result of that, they were left with less debt than any of the other countries. Korea recovered quite quickly, largely because they did not follow the dictates of the IMF. The IMF said, "Get rid of your chip industry." It was the recovery of the chip industry that led to Korea's recovery. If the problems in Korea had been anywhere near the nature of the structural problems that the IMF had said, do you believe that in six or seven months, the country could have recovered like that? Clearly not.

On the other hand, Thailand, the country that was the best student of the IMF, is just getting back to its income before the crisis. And Indonesia is still not back. The fact is that the IMF policies, its excessively contractionary policies, and its cutting off of food subsidies just at the critical point, led to the political and social turmoil that had such a devastating effect. So the political and social turmoil are to a large extent of the IMF's making, and it can't simply say, "Oh, those are problems that weren't due to us." It helped create that situation.

Your former boss at the World Bank, James Wolfensohn, praised Cuba a little while ago for its success in social indicators. Do you share his evaluation, and what do you think is behind that?

I think Cuba has done a great deal for education and health, and what it has shown is that it is possible, even in a very poor country, to have a pro-poor growth strategy that improves health and education. And the failure to do that is simply because there has not been enough emphasis on these very important social dimensions of economic policy.

But the fact that Cuba has nothing to do with the IMF, and is not under the influence of international capital markets - is that one of the reasons they're able to do these things?

Well, I think that there are other countries that have taken other policies that have shown other ways of becoming independent. For instance, China has also emphasized education a great deal, and has not had an IMF program, and has had the fastest record of economic growth, and

And isolated from world capital markets.

Well, that's a very interesting example, because they have not opened themselves to the short-term capital flows, the speculative capital flows that have brought with it instability. But they have invited foreign direct investment in, the kind of investment that leads to job creation and long-term economic growth. So that is an example of taking advantage of globalization, but on their own terms. And it's the countries that have followed willy-nilly the advice of the IMF that have wound up suffering.

click to download audio vesion of this closing Q&A

Ok, what is to be done? The IMF is more widely recognized as a disaster. What kind of rejiggering of the institutional architecture would serve the poor better?

One of the aspects of globalization is that the countries of the world are today more integrated; they're more independent. With more interdependence, there is greater need for collective action, and a greater need as a result for international institutions to regulate, in one way or another, trade, finance, to provide humanitarian assistance. The problem is that some of the institutions we have are not democratic, they're not transparent. They reflect special interests within the advanced industrial countries. They do not represent the concerns of the poor and the developing countries. I used to say that since we are going to need these institutions, it is better to reform them than to start from scratch. I'm beginning to have second thoughts. I'm beginning to ask: has the credibility of the IMF been so eroded that maybe it's better to start from scratch? Is the institution so resistant to learning to change, to becoming a more democratic institution, that maybe it is time to think about creating some new institutions that really reflect today's reality, today's greater sense of democracy. When the IMF was founded more than 50 years ago, most of the developing countries were still colonies; we had a fixed exchange-rate system. The world has changed enormously, and perhaps, now, some 50 years afterwards, it's really time to re-ask the question: should we reform, or should we build from the start?

Oil-rich Iran may have to ration petrol

2007-06-15T07:39:00.000-07:00

All hands to the pump
Mar 22nd 2007
From The Economist

... After two years of dithering, the government is at last ready to introduce rationing and a price hike to reduce a subsidy that costs the country billions of dollars a year.

Petrol rationing in a country with the world's second-largest reserves of crude oil might sound slightly strange. But Iran's big problem is a shortage of refineries; it can only satisfy about 60% of its soaring demand with locally produced petrol. It imports the rest at market prices of about 45 cents a litre—five times what motorists pay at the pumps.

Several contracts have recently been signed as part of a $15 billion upgrade of refining capacity, but the new petrol will not be available for several years. In the meantime the shortage represents a vulnerability at an unfortunate moment: Western countries are looking for ways to press Iran over its nuclear programme and there has been some talk of a future embargo on imported petrol.

The subsidy is anyway costing the country dear at a time when the economy has become the focal point of domestic opposition to President Mahmoud Ahmadinejad. A populist spending spree has fuelled inflation and unbalanced the budget. Cheap petrol also encourages enormous waste as well as smuggling to neighbouring countries where it is more expensive. Officials have suggested that raising the price could help reduce consumption by around 20%.

The fear, though, is of a further increase in inflation if prices are brought, as economists say they should be, up to the cost of domestic production, something like 20 cents a litre. There is also a political problem. Iranians often see cheap petrol as proof that the government is redistributing oil wealth back to the people—one of Mr Ahmadinejad's big election promises. Raising the price makes economic sense but is the last thing a populist government wants to do.

As a result the government and the Majlis, Iran's parliament, have spent two years bickering over how to cut the subsidy without upsetting voters. Targeted subsidies and cash gifts to poor motorists have both been considered. But the focus is now on smart cards, which would ration subsidised petrol to a few litres a week, with excess consumption being paid for at the cost of imports.

The subsidised price will also be raised by a couple of cents, but some economists say the rise is too small to make a difference. The Majlis has meanwhile thrown the problem of implementing these plans back to the government with a deadline to introduce the rationing by late May and a promise to import no more than $2.5 billion of petrol over the next year.

The question, as always, is whether this government has the stomach to implement so unpopular a policy. In the past buoyant oil revenues have allowed the government to buy (and subsidise) its way out of political trouble. But with the Majlis spoiling for an economic fight with Mr Ahmadinejad, it looks as though this time he may have to make Iran's over-enthusiastic motorists pay up.

Rice Talks With Journal's Editorial Board

2007-06-13T00:48:00.000-07:00

Rice Talks With Journal's Editorial Board
June 11, 2007 2:04 p.m.

Editor's note: The following is a transcript of Secretary of State Condoleezza Rice's interview on Friday afternoon, June 8, with the editorial board of The Wall Street Journal. It has been edited slightly for garbles in the tape, sentence fragments and a few mis-transcribed words.

QUESTION: So this is on the record and -- please, do you want to start?

SECRETARY RICE: I do.

QUESTION: All right. I wonder if you'd talk a little bit about Iran and particularly what the strategy of the Administration is regarding both the nuclear program and the internal dynamics inside Iran . Because at least from our vantage point, it does seem that you're sending mixed signals, seeking a negotiation -- seeking negotiation efforts on the one hand and sending ships to send a signal and then Vice President Cheney out on the other hand, negotiating over Iraq and a day later, they take hostages and you have to issue a tough statement.

What is the strategy?

SECRETARY RICE: Well, the -- first is to recognize that Iran is a concern for us, strategic concern on multiple levels and on -- for multiple parts of our policy. But let me speak first to the question of, is this coherent or are you talking about mixed signals. I used to teach these courses and we called it coercive diplomacy or diplomacy backed up with a set of disincentives for bad behavior.

[Condoleezza Rice]And I'm often struck that there's a sense that you can't both have interaction -- let me not call it negotiation, because we're not negotiating about Iraq . We are having a set of discussions about Iraq and about the inconsistency in Iran 's policies with what they say their stated goals are on Iraq . And we're having those in part because the Iraqis themselves would like to see the development of the framework in which their neighbors are more helpful to them than harmful. And you have to understand it in that context, just understand the Neighbors Conference in that context too.

At the same time, we have, on the nuclear side, two paths that Iran can follow. They can choose to negotiate, suspend their program, and there are a number of benefits to doing that. And on the other hand, we can continue down the path of Chapter 7 resolutions in the Security Council. I'll say a bit more about that. And all of this has to be seen in a context of saying to the Iranians something that perhaps several months ago, I think they had tended to forget, which is, we will defend our interest and those of our allies in the Gulf.

And so I see it as quite coherent and whenever you -- unless you are determined that there is no other way out but conflict with a power, I think you want to always have a route out, a route that would be a non-conflict way to resolve your differences, but at the same time, putting that on the table only in the context of some demonstration of strength or willingness to use more than persuasion to -- whether it's sanctions or a demonstration of U.S. will through what we're doing in the Persian Gulf; so quite coherent from my point of view. I have been party to all of those decisions and have never seen them in conflict. And let me say right now, for the record, the notion that somehow, therefore, there are those in the Administration who believe in putting carriers in the Gulf and those in the Administration who believe in sitting down with the Iranians across the table -- we actually believe in doing both.

As long as those discussions are limited to very specific subjects -- and I want to draw another distinction here. There is a lot of talk about grand bargains out there and I don't see either of these discussions as trying to lead to a grand bargain, because that assumes, I think, a level of potential common interest with Iran that I don't see, given the nature of the Iranian regime, given the nature of Iranian policies, and the way that Iran is carrying out its interests. But might you find some areas of cooperation despite the overall rather zero-sum nature of our relationship? I think so.

QUESTION: When the President was here about four months ago, he said that he didn't see the opportunity right now to talk with Iran because he said we don't -- there's nothing that they want that we can give them -- what they want, we can't give them. What has changed in the last four, five months that Iran would sit down, we're going to have discussions?

SECRETARY RICE: Well, again, on a very limited basis. You know, we were always willing to sit down with them on the nuclear issue if certain conditions were met. That's been on the table for more than a year now and those conditions haven't yet been met, so we haven't sat down with them, and that's the one that has the more -- the broader framework -- potential for a broader framework.

But on the Iraqi side, I do think the fact that we have gone after some of their disruptive operatives, the fact that we did send a signal both to them and to our allies in the Gulf that we'll defend our interest in kind of classic ways with the carrier strike groups, I think the fact that we reinforced our forces in Iraq when a lot of people thought we wouldn't do it, and the fact that we are kind of borrowing from the other side, got the Chapter 7 resolution when the Iranians clearly thought the Russians were going to prevent that did put us in a stronger position for Ryan to sit down and have these rather more limited discussions, because then you're saying to Iran there's a cost for policies that are leading to destabilization of Iraq and endangering our soldiers. And that was the message that we probably -- that I think we had to establish first, that there was a cost to that before you were going to get anywhere even -- and I'm not sure we will, but if you were going to get anywhere by talking about Iraq, you had to send that message first.

QUESTION: Where does the nuclear discussion now go? Where do you see that going?

SECRETARY RICE: Javier Solana, I think, would tell you that the talks were civil but not fruitful, the way that I would characterize them.

QUESTION: Civil but not fruitful?

SECRETARY RICE: Yeah.

QUESTION: So nobody threw anything?

SECRETARY RICE: Nobody threw anything. (Laughter.) No, I think they have a -- he and Larijani have a pretty professional relationship. I suspect we're headed back to the Security Council. I don't see anything that suggests we're not. I think the choice that is out there is, are we going to continue down the road of strengthening the categories of sanctions that we've already adopted or are we going to start to open new categories. And that's a choice.

It's not a choice that, frankly, I'm prepared to make or talk to until we've had some consultations, because there are two things that have really helped us in the Security Council resolutions. One is the Chapter 7. Secondly, they've been unanimous. And you may -- there may come a time when the character of what's in the resolution is more important than the unanimity, but I think it's something that we just have to keep assessing. Because what we're getting right now is pretty significant collateral effects from the Chapter 7 resolution that private entities making investment and -- or making decisions considering investment and reputational risk based on the fact that Iran is in a Chapter 7 status.

And I think there's more that we can do with that outside of the Council. By its very nature, the Council is going to move more slowly and it is going to be -- the resolutions are probably going to be less robust than the United States would have if we were doing them alone, by the very nature of the Security Council. So while pursuing that path, we are always -- also continuing to pursue the collateral effects of having a Chapter 7 resolution as well as the collateral effects of what we do in sanctioning Iranian entities, which then makes it difficult for financial institutions to deal with the --

QUESTION: Can you tell us about the status of the Helms-Burton legislation and --

SECRETARY RICE: Cuba , the Cuban legislation?

QUESTION: No, the Iran-Libya Sanctions Act of 1996 --

SECRETARY RICE: Oh, ILSA -- the ILSA Act?

QUESTION: Iran version of Helms-Burton.

SECRETARY RICE: Yeah, the Iran version. You mean tertiary sanctions?

QUESTION: Yeah.

SECRETARY RICE: Look, it's there as a tool. We haven't had to really do much with it because to this point, people are making what I would consider wise and well-considered decisions about dealing with a country under Chapter 7. Now when we sanction one of their banks, banks stay away from those accounts in droves. You just don't have people trying to -- well, SEPA got actually sanctioned under Chapter 7, but even a bank like Saderat that we sanctioned unilaterally, you're really confronting people with a choice between their Iranian business and their American business and you know where they're going to go.

QUESTION: Are we confronting enough people with that choice?

SECRETARY RICE: I think there is more that we can do and one of the things that I think we're going to want to consider with some of our allies, particularly as I think we need to accelerate some of the pressure if this negotiated trend doesn't go anywhere, we should be looking to what the EU could do more and others. And you know, the EU did a set of sanctions outside of the Chapter 7. I think we ought to look at what more could be done there.

QUESTION: A couple years ago, unfortunately, the NIE was leaked that gave Iran a sort of 10-year window before it -- you know, developed nuclear arms. Now they have -- they're approaching 3,000 centrifuges and the window is suddenly looking a lot nearer. Does that change your calculation in the way you're conducting diplomacy? Because you know, right now, we're on a track where every three months, every six months, some new set of sanctions is imposed. But the window is much smaller before we're at the stage where the Iranians are given a position to develop these weapons. How does that change your thinking?

SECRETARY RICE: Well, let me come back to the window. But in terms of the rhythm of the Security Council, it's why I think we don't want to be dependent simply on what goes on inside the Security Council. You want to use the umbrella of what's going on in the Security Council to persuade people to make different kinds of choices about what they're doing with Iran . It's why you're seeing -- you know, nothing in the Security Council resolution says that German export credits to Iran had to drop 40 percent, but they did. Nothing said that four or five major banks had to pull out of Iran , but they did.

And so we can probably and I'm sure that there are measures to strengthen and accelerate those kinds of efforts because I think the Security Council, I've come to learn, has a kind of -- you can only push it so fast and so far. It just doesn't work very quickly, except when the North Koreans test a nuclear weapon, then it worked very quickly, but even that took a week. So it isn't something that we're going to be able to accelerate I think that much in the Council and work toward unanimity. But there's an awful lot that you can do outside the Council.

Now, as to the window, that's why I found ElBaradei's comments frankly disturbing because in fact you don't want to confront people with the choice between using military force or let them have a nuclear weapon. And I actually don't happen to think that's where we are. And I thought that the notion that you have to give up on suspension because they might have run one successful experiment and maybe they did -- and maybe they don't, I don't know -- just doesn't really give a full picture of how -- what it takes to move from the ability to enrich and reprocess all the way out to the ability to create nuclear material and crate nuclear material that is enriched enough to actually build a bomb.

And so the suspension option still makes sense because it's an engineering problem to run these centrifuges, run them long enough, run them fast enough, introduce material in a systematic way. And so you can still deny them the ability to know how to do that, even if they've done one little piece of it one time. And so -- or even if they've increased the number of centrifuges. So the suspension option still makes sense. And you know that we've talked to the IAEA about not trying to determine the course of the diplomacy, but to remain an organization that reports on what's actually going on in Iran . So I don't really know how to assess how far along they are. My general view of this is do it -- assume that you have to work with a sense of urgency and -- because you're going to get all kinds of assessments about how far along they are.

QUESTION: What is your assessment currently of conditions inside Iran ? I ask because, as you said earlier, we're doing things that impose costs and it can either be a severe cost or a cost they would say, no big deal -- we can get by absorbing this and they seem to have been willing to do that up to now.

SECRETARY RICE: I think it's a very opaque place and it's a political system I don't understand very well. There seem to be, you know, all these different centers of power that compete and argue actually pretty openly in their own media, criticism of each other. And yet, you have a supreme leader who I assume is the final decision-making authority, but nobody actually sees him, so that's -- it's a very complicated system to understand.

And I'll just say one thing, one of the downsides of not having been in Iran in -- for 27 years as a government is that we don't really have people who know Iran inside our own system. You know, it matters if you served in Moscow . It matters if you served in, you know, Venezuela . And the last generation of Foreign Service officers who served in Iran are now retired. So that's a problem for us and we've tried to improve our capability to understand the system a little bit by putting a kind of group in Dubai and a little bit the successor to the Riga station that looked at Moscow before we had diplomatic relations. We don't have Farsi speakers any longer in the service. I mean, we really are not well positioned. We're --

QUESTION: (Inaudible) end up for long on secondary sources.

SECRETARY RICE: Yeah. And on people who are there and it's a problem. Now, one thing that we do have is we have a lot of people who go back and forth, Iran is not North Korea ; people do go back and forth. But I just say that because when I say to you it's a very opaque system, it's hard to understand. We're also operating from something of a disadvantage in that we don't really have very good veracity or a feel for the place.

The one thing that I do think is happening is that the increasing international isolation and the disastrous policies of Ahmadinejad in the economy are having an effect. I was reading some of the stories about the refining capacity, which is essentially non-existent, and you know, they decided at the time that they could have had a refinery. They decided not to do it. And now people don't really want to build refineries there because of investment risk. And as a result, they're having to now ration gasoline and that I think will start to have an effect, but I can't tell you exactly when.

QUESTION: The arrests of the American -- Iranian Americans, do you have -- I mean, you've stated your opposition to that. But what do you think they were trying to accomplish with that, occurring so soon after you've had the discussions? And what are we prepared to do about it?

SECRETARY RICE: Well, I think it started before. And it's entirely possible that it's unrelated to the course of what we're doing there. I don't want to speculate because I think these people are -- I don't want to make conditions worse for them. They clearly weren't doing anything. They are innocent people. Some of them were just there visiting family. Is it about tensions in Iran itself, I don't know. Is it supposed to be a message to us, I don't know. But whatever it is, it needs to stop and they're not doing themselves any good by dealing with these people in this way. It's getting -- it's gotten international condemnation and just, you know, makes it somewhat easier frankly to make the case that this is not a normal regime with which you can just do normal business.

You have to go back a couple of years to the way Iran was actually viewed in the international system, not by us where for 27 years it's been viewed as a regime on the outlaw side of international politics. But this was a country for which Japan was the largest trading partner; Italy was the second-largest trading partner, diplomatic relations across the board. When Khatami was in power, people believing that there was some possibility of Iran bargain there. Iranians traveling back and forth, being received in capitals. I mean, it was operating much as a normal regime. It's now under a couple Chapter 7 resolutions. The travel advisories against some of their people. It has because of the way that it behaved also with the British, has soured relations with the British. I think that you would find that they have poisonous relations with any number of states now and you have Ahmadinejad running around the world, talking about having punched the button for the destruction of Israel . They're not -- this is not a respected -- to the degree it ever was and I think one could argue that except for us, it was sort of being treated as a quasi-normal state. That has eroded for them in international politics where Russia was a strong partner, Bushehr was well under way to now that they have a fuel dispute about Bushehr. And a lot has turned against Iran in recent years. And when they do things like they do with taking these Americans or when they took the British sailors, it really reinforces that this is a state that is an outlaw state. And the more that becomes the view of Iran , I think the easier it's going to be to impress upon people that this is not a good place to do business and not a good place to have relationships.

QUESTION: Do you -- I mean, you hear a lot of talk in foreign policy circles that if Iran does acquire a nuclear weapon, well, we'll contain it just the way we contained other possible nuclear powers. Do you accept that analysis and do you still take the view that it's absolutely unacceptable for Iran to have a nuclear weapon under any condition?

SECRETARY RICE: I absolutely think that it would be a mistake to start trying to accommodate the notion of an Iranian nuclear weapon. Not only is it bad to think about a nuclear -- forget weapon, latent technology for nuclear weapons in the hand of what is clearly an irresponsible state sponsor of terror that has a really irresponsible President who says things that if he believes them -- if he doesn't believe them, then he's cynical. And -- but stirring up trouble in the region. And if he does believe them, he's really scared.

QUESTION: Do you think he believes them?

SECRETARY RICE: I have no idea. I've never met the man, haven't talked to him. I just take him at face value, you know, take him at his word. And that is not a state that you can even conceive of having that kind of technology. What is more, the effect on the region of Iran with a nuclear weapon. I can assure you that it will set off in the region everybody else trying to secure themselves by acquiring the same. And so it doesn't mean that you don't do things that, for instance, plan against their ballistic missile threat. You know, the Russians have made this argument to us, well, there isn't an Iranian long-range nuclear threat -- missile threat yet. And others say, well, if you put in missile defenses, that must mean you think you're going to face an Iranian nuclear weapon. And my view is you plan for any emerging capability, but it doesn't mean that you accept that you can allow it to happen.

QUESTION: Speaking of Russia , could you talk about Putin's comments earlier this week? I'm wondering if your read is that is this really about missile defense or is this more about Russian domestic politics?

SECRETARY RICE: Interesting question. I don't think it's about missile defense, per se. I think it's a part of a pattern of a rather loud assertion of the fact that Russia will defend its interests and define its interests as it wishes to define them and in contradistinction from the '90s when Russia didn't do that. I think that's the kind of overall, overarching element in this. But -- and it has several elements: the (inaudible) the caucuses, the -- Central Asia and so on and so on. And that may or may not have something to do with the coming succession in domestic politics as well. But I think that's what you're really seeing is we didn't assert our -- we, Russia , did not assert our interests in the '90s and now we're going to assert those interests and we're going to assert them in a very robust way. Now, to the degree that it is about missile defense which, by the way, they have always hated. So to be fair to them, it's not as if they just woke up yesterday and said missile defense was a problem. I think we have to do a couple of things. The first is to make very clear that our missile defenses are not against Russians -- the Russian nuclear deterrent. Anybody should be able to see that, but perhaps we need to continue to demonstrate that in showing them what we're doing.

But secondly, that we would like to have a cooperative arrangement with Russia on missile defense because we think they face the same threats as we do. And so, even though I haven't myself done the geography and the geometry on Azerbaijan , why not take a look at what makes sense? But there has to be a very clear view, too, that we're going to continue to work this with Poland and the Czech Republic . That's not going to stop while we discuss this with the Russians. We're going to continue to work it in NATO. This is a high priority for American security and for the security of our allies and, therefore, discussing cooperation and working on it doesn't mean that you are going to get off course on what you're trying to do.

QUESTION: Is this how members of the G-8 behave? I mean, do they still belong in this group of democracies?

SECRETARY RICE: But they're there, okay. And I have never -- I've really never understood what would be gained by deciding that you're not going to invite them to the next meeting. Because ultimately, I think we're better off with them in contact with institutions that represent the values that we'd like them to adopt than isolating them from the institutions that represent the values that we'd like them to adopt. Because perhaps associating them with those institutions will not lead to the adoption of those values in Russia , but I can pretty well assure you that isolating them from them surely will not lead to the adoption of those values.

So it seems to me, you know, continue to work with them in the G-8. They bring some important assets to the G-8. For instance, to the degree that the G-8 has become a place that you need to talk about global problems, it is hard to imagine a discussion of Iran or Northeast Asia or the Middle East without the involvement of Russia , not to mention Kosovo or Security Counsel issues. I know that by any economic count, they don't make the G-8 cut. But by any count of the world's industrialized state that have to deal with major security and political issues then having them there is useful.

QUESTION: So should we have a G-9 with China now?

SECRETARY RICE: I think the G-8's probably big enough, but at some point China's economic power is going to have to be accommodated by the G-7. I don't know how they will do that and it probably is a decision that'll be taken after us. But what's happening really with the G-8 is it's beginning to morph, so that you have the G-8 and they meet. But then the G-5 show up, which -- you know, Brazil , China , the kind of big emerging states come, and then you have the kind of big emerging developing states that also come. So it's finding ways to accommodate the rise of these other powers. I think it's been a long time since China wasn't in or around the G-8.

QUESTION: Did the murder of Litvinenko shock you and did it change your perceptions about Putin's Russia ?

SECRETARY RICE: No. Look, I think that the reaction to the British request for cooperation is not one that has surprised me. It surprised me a little bit that they put --

QUESTION: Lugovoi.

SECRETARY RICE: Yeah, Lugovoi on television to blame the British. That was -- that surprised me a little bit. But Russia , it would seem to me, would have a lot riding on demonstrating that they are as cooperative as possible with this investigation. And I hope they do it because there's quite a cloud there right now, quite a cloud.

QUESTION: Can you talk a little bit about your trip to Panama ?

SECRETARY RICE: Yeah, it was great and I was really glad that I went to the OAS because I think the OAS has come a long way already. And I actually think that Jose Miguel has done a pretty good job on a lot of things, on Haiti and a number of issues he's done a very good job. I thought it was especially important in light of RCTV to go to Panama to the OAS and to give voice to what I think a lot of people around that table were -- wanted to say, but for a variety of reasons it's harder for them to say. I thought it was important, if the Inter-American Democratic Charter is going to mean anything, then a situation like RCTV then Article 18 of that charter which calls for the Secretary General to look into disruptions of democracy in member states, if you're not going to evoke it then, I don't know when you'd evoke it. And even if the Venezuelans said no, I think it was important to evoke it.

And I was not -- I thought I was actually very restrained in my initial comments about Venezuela in my remarks. But then when the Venezuelan representative decided to make this an opportunity to question whether or not our policies on Guantanamo and immigration and human rights were like those of Nazi Germany, I thought it was important to respond again to that. And I reminded him that, while none of what he was saying was true, was this an issue of American policy, but that he could hear and Americans could hear on CNN, ABC, CBS, any news channel, criticisms, debate, even unfounded criticism of Administration policy any given night. And that that was the assurance that Americans had and that Americans knew that their government couldn't shut down those stations for saying those things. And that that was the issue because the Venezuelan Government had shut down a TV station for saying those things.

I think it has had a deleterious effect on the Chavez government, both inside Venezuela and across the world, because you can't ignore this one. You know, I was in Spain and this got people's attention. It got people's attention in the European parliament. And I just thought it was extremely important to go and do that. But the OAS was about energy and it was also nice to go talk about our biofuels agreement with Brazil and so forth, but this was a time to --

QUESTION: Can I just follow up on that?

SECRETARY RICE: Yeah.

QUESTION: Isn't the OAS supposed to, you know, all the voices around the table, not just yours, supposed to say something about this, the way that there were complaints against Alejandro Toledo when he had for a third term for or you know, if we had another 1988 plebiscite deciding whether Pinochet should stay in power. You know, we had the same rules that we used for the 2004 referendum in Venezuela . But those countries would have said something, but now they don't and it's entirely the U.S. 's responsibility. I don't see how you can say the OAS is working.

SECRETARY RICE: Well, it wasn't entirely our responsibility and Insulza said something at the time that it happened, not at the conference -- not at the General Assembly, but he talked about his concerns several days before we got there and there were others who spoke. And -- but look, Chavez is someone who tries to intimidate smaller states. And I think some of them have been quite brave in speaking out about him. He's cost several of his allies elections and, unfortunately, he's ruining a very fine country in Venezuela . But he can't intimidate the United States in any fashion. And so I don't mind giving voice to what was being said. And the Venezuelan representative -- you know, everybody recognized what he was doing and I don't think it served him very well with this case.

QUESTION: Is the U.S. doing enough you think for refugees or people who come out of Iraq ?

SECRETARY RICE: I think we're doing better but we've got to do more. We have increased our own ceiling. As you might imagine, there are issues of security and so forth and we have to be cognizant about those. Mike Chertnoff and I are working together to see if we can process people more quickly. One of the problems has been processing people. It's been very slow. We're trying to -- and I've asked people to be more aggressive about people who may be in danger because of their work with us.

We also are trying to improve coordination and help for the states that have been taking these people and, frankly, here Jordan and Syria have been pretty -- their situations have been really -- well, they're facing a real outflow of these people and it's putting a lot of strain on their systems. And so getting the UN to actually help and treat these people as a refugee population is extremely important. Probably the population that's most worrisome right now is the Palestinian population that -- as a population -- 45,000 or so Palestinians that are sort of caught in no-man's land and trying to deal with them. So I have actually been spending a good deal of time on this; probably gotten a lot of help out Congress. But the people that I'm most worried about in the near term are the people who've worked for and with us who might be subject to recrimination and reprisal. And we're trying to step up our efforts on their behalf.

QUESTION: I've heard that there are several hundred State Department employees in Baghdad who, according to my sources, mostly stay inside the Green Zone. Is that true and is it a sensible use of our resources to have that many people doing apparently that little?

SECRETARY RICE: Well, the Embassy is inside the Green Zone. And I don't know if -- have you been to Baghdad ?

QUESTION: No.

SECRETARY RICE: The Green Zone's really big and there are a lot of -- there is a lot inside the Green Zone, including a lot of Iraqi ministries, the Iraqi leadership and so forth. So when you say stay inside the Green Zone, you have to realize that people move around inside the Green Zone to do a lot of things.

We also have people who, when their work requires, that go into the Red Zone. And we have people who are well beyond both the Green and the Red Zone serving in places like Anbar and Diyala and pretty tough places. They are civilians and they have to be protected and we are increasingly in real tough places like Anbar we're embedded with the military, with the combat brigade teams so that we can draw protection from the military rather than from having a whole separate security architecture. But you just have to realize that it's pretty dangerous. And if you are an unarmed civilian, I have an obligation to try to provide protection for those people.

So they do move around. They do move around. They move around inside the Green Zone. Some people, if their work requires it, like the Finance Minister, for instance, who's not in the Green Zone, move around outside the Green Zone. And some people actually are deployed in other parts of the country.

QUESTION: Can you talk a little bit about North Korea ? It's been two and half months since the deadline passed. What happens next?

SECRETARY RICE: Actually, the deadline was April 13th.

QUESTION: Okay, so -- all right, two months.

QUESTION: Two months.

SECRETARY RICE: Almost.

QUESTION: Six weeks.

QUESTION: Almost two months.

SECRETARY RICE: All right. Look, I think that the North Koreans, and every few days they send us word that they intend to fulfill their obligations as soon as the BDA situation is resolved. I think they will. You know, I'm certainly out there with everybody calling on them to shut down the reactor and to invite the IAEA in. But I will tell you that the resolution of BDA has been more complicated on a technical -- on technical grounds than any of us would have thought in terms of dealing with accounts and banks and the like. It's not been easy to get it resolved.

When we -- we expect, though, that as it's being resolved in the resolution, the North Koreans need to follow through. Now, when I first made this announcement, I said to people, you know, using a football metaphor, that this was the first quarter, not the fourth. And this is probably going to be hard at every stage. But the agreement that we have, the February 13th agreement, which is an agreement not between the United States and North Korea but an agreement between all parties and which backloads the benefits to the North Koreans, I think, is a good agreement.

The North Koreans have not received anything now while they're waiting, except some humanitarian assistance from South Korea , which I'm perfectly happy. I don't want to see the North Korean people starve because there's a political issue. But the oil -- the fuel oil supplies, the large humanitarian assistance that's worthy of -- worth about $300 million, and not a penny of that has gone to the North Koreans while we're in this period. And so that to me shows that this agreement is structured in the right way, which means that when they deliver, the six -- the five parties deliver.

The difference, frankly, in the agreed framework is that over ten years, we delivered fuel oil every year to the North Koreans, whether they performed or not because it was frontloaded. The structure was frontloaded and there was a light-water reactor being built -- which never fully got built but it was to be built. There's not such a thing in place -- as a energy supply by non-nuclear means to the North Koreans. And there are a set of steps that they take -- we take, but the benefits for them are at the end of this initial actions, not at the beginning of it. And I think this latest -- the fact that we've run into some delays here shows that we structured it in the right way.

And, by the way, nobody's broken it. The South Koreans have been rock solid in not making those deliveries while this gets resolved.

QUESTION: Is there a time limit on your patience?

SECRETARY RICE: It's important to remember that even while all this is going on, 1718 is in place. We're continuing to work with people on, you know, a detection architecture for goods. We're -- people would continue to be sanctioned if they're trading in goods that are prohibited. So the sanctions regime is in place anyway. And the only question would be what more would you want to do if the –

QUESTION: Are the Chinese -- are the Chinese enforcing that?

SECRETARY RICE: The Chinese are enforcing. Now --

QUESTION: Have they stopped any shipments?

SECRETARY RICE: No. There was a question about -- kind of on the high seas: Did you want to interdict shipments and the like? And nobody would have the capability to do that as a regular matter in any case. We think the more promising area really is to look at detection architecture at the -- at ports and the like. I think they've done a pretty good job. I don't -- I wouldn't say that their enforcement has been perfect. This is an intelligence-driven business and sometimes we've been able to give people good information and sometimes we haven't. But I think on balance people are enforcing 1718 because they knew when they signed on to it that they were going to have to enforce it. But my point is, 1718 is in place. It's not as if you've rolled that back in expectation about the initial actions.

QUESTION: But it sounds like they have some new (inaudible) -- the North Koreans have some new – (inaudible).

SECRETARY RICE: Because the BDA thing has been complicated to resolve, I think people have been prepared to be more patient.

QUESTION: The complication of the BDA isn't the $25 million but their access to world financial --

SECRETARY RICE: The complication is --

QUESTION: -- system.

SECRETARY RICE: -- actually getting the $25 million transferred to a place that they could use it. That's the complication.

QUESTION: I see.

SECRETARY RICE: Yeah.

QUESTION: So nobody wants to deliver it to them, no bank, because they don't want to be -- under the sanctions?

SECRETARY RICE: Let me just put it this way. Once one of these -- once you are -- your accounts are called out this way in the international financial system, the international financial system is not readily available. And even --

It's actually a bit of a lesson to the Iranians, you know, once you're in this loop, it's not easy. But we agreed to try to resolve the BDA issue as a part of the initial actions, and now we're trying to get there. I think we may be getting close, although I've said that several times before, but there ought to be a solution. And then we -- what we've not wanted to do is to have the initial actions break down because of us. It really has to be on the North Koreans to carry through because keeping, again, the six-party -- the five parties together is also a very important goal.

QUESTION: Yongbyon obviously is a part of this and they'll probably allow you to come in -- us to come in and inspect it, but are they going to have to produce the plutonium they have? Are they going to have to produce the crude weapons or the different -- whatever apparatus they've created and allow us to see those, and the sites where they are working on that?

SECRETARY RICE: There are several stages. I think the next stage would probably be disablement of their nuclear facilities; in other words, that they put in reverse because the first stage is simply to stop. Then I think you want to disable those. There will have to be an accounting for anything that has been reprocessed or stored. There will have to be an accounting for anything that has been put in state for weaponization.

Yeah, all of that has to be done -- that's what's meant by denuclearization -- and it has to be done verifiably. But there are several stages to this. The first, I think we understand pretty well what's going to happen to the first two stages and we -- the point is that in the second stage, that disablement stage, you start working on the program for the actual dismantlement -- declaration and dismantlement of the whole nuclear program. And that was in the -- that was already in the September 2005 agreement.

QUESTION: What if they come to you saying, sorry, no plutonium ?

SECRETARY RICE: I don't think that would be credible.

QUESTION: How is the situation in Darfur progressing?

SECRETARY RICE: Not good. It's not good for a couple of reasons. One is that there are hundreds of thousands of people that nobody can get to with humanitarian assistance. There continue to be attacks on the camps. There continue to be difficulties with the African Union forces to be robust enough and mobile enough to actually move around the country and make an effort to stop violence. The rebels are both disorganized among themselves and, you know, contributing to the problem. But the biggest problem is the government is not prepared to live up to the obligations that it undertook in Addis Ababa .

Now, Kofi Annan signed that agreement with him. It looked like everything was on board. It fell apart. Now, Ban Ki-Moon says that he thinks his diplomacy is starting to have an effect. But, you know, we'll see. We're moving right along in trying to structure a Security Council resolution. We've already put some unilateral sanctions on, but --

QUESTION: Would you say it's working within that framework?

SECRETARY RICE: Oh, I would not rule out other steps that we might take. I mean, we've already taken unilateral sanction steps.

QUESTION: How about a no-fly zone?

SECRETARY RICE: Look, we're trying to determine how one might work. I think it's important to look at it. And it's just -- you know, it's not self-evident how you would do it, but I think we ought to be examining how it would work.

QUESTION: I just had a quick comment.

SECRETARY RICE: Uh-huh.

QUESTION: How do you feel about what happened with Wolfowitz at the World Bank, because we wrote quite a bit about that, but --

SECRETARY RICE: I think Paul did a good job at the World Bank, I really do. And I think he had the right focus and he was trying to modernize the Bank and modernize -- and by modernize, I mean, you know, in terms of what the Bank was actually caring about and doing. I mean, there's a reason that a lot of his support came from Africa because it was a program that, I think, would have really helped the Africans.

I don't think there's any doubt that he broke a lot of china in trying to do it because whenever you're trying to deal with a kind of, you know, bureaucracy that hasn't changed very much, that's going to happen and I think it's unfortunate that it came to what it did. I don't think it really did cover the bank very well in --

QUESTION: Did it reveal an institutional problem now, or was it (inaudible) --

SECRETARY RICE: No, no, no. When I said -- look, I break china all the time, all right, so that's not -- to me, that's a compliment when you say that you go into a bureaucracy and you have to break the china. I -- that's a compliment. I do think that there were forces of resistance there that were very hard to deal with and that were going to come to the fore. Paul said he, you know, he made a lot of mistakes that he wishes he hadn't made. But I think it's extremely unfortunate, and I don't think it was good for the Bank, the way that it came out. But I think it's done now and I think Paul was basically the final outcome of this was that people had to say what needed to be said, which was that Paul had tried to act in good faith, even if he'd made some mistakes. And Bob Zoellick will go there, and the bank needs reform.

QUESTION: Do you think you could've played the diplomacy a bit better if you had come out earlier with a stronger statement, if Secretary Paulson hadn't said let's let this process play itself out, that there might've been a different result because to us, it seemed like the process was a kangaroo court by angry bureaucrats who had grudges against Wolfowitz and were going to try to get their man, whatever the cost.

SECRETARY RICE: I didn't think that trying to do this from the foreign policy side in a high-profile confrontational way was going to actually help the situation. I really didn't. I really thought that the making the case to people privately and in a more -- in a way that allowed me to talk about what I thought Paul had brought to the bank and to acknowledge that there were -- that Paul said he had problems and he was prepared to fix it, but that was better. You have to remember that this is, in fact, the purview of finance ministries and not foreign ministries and in most countries that doesn't get bridged very easily.

QUESTION: In today's Wall Street Journal there's an article by Fouad Ajami making the analogy that -- basically saying that the President's reluctance to pardon Scooter Libby is akin to leaving a wounded soldier on the battlefield. What do you think of that analogy?

SECRETARY RICE: Look, I'm not going to get involved in trying to give the President advice on how he ought to think about this. You know, he has to think about what he wants to do.

QUESTION: What's your own opinion?

SECRETARY RICE: You know that --

QUESTION: You think he should go to jail?

SECRETARY RICE: Look, let me tell you what I think about Scooter Libby. I think he's served the country really well. I think he did it to the best of his ability. I think that he is going through an extremely difficult time with his family and for him. And you know, I'm just desperately sorry that it's happening to him and I -- you know, the legal system has spoken, but I tell you, this is a really good guy who is a good public servant and ought to be treated in accordance with that.

QUESTION: If I could ask you about Iraq . There seems to be a disconnect building between the requirements on the ground of the surge and the time that Odierno and Petraeus need to accomplish their mission and they say they need, and the urgency of the democratic political process here at home where even a few Republicans are saying September is some kind of deadline. Are we headed towards a kind of bipartisan consensus, pull back from the surge in September, in your view, no matter how things are going in Iraq just because of the political dynamics here at home?

SECRETARY RICE: I'm concerned about it because I think that the -- there is a future out there that is a different mission for American forces than they are currently involved in. There is no doubt in my mind that there is a future out there where it's principally training Iraqi forces, where it is, you know, securing the territorial integrity of the country, where it is fighting with allies like we now have in Anbar -- al-Qaeda. There is a future.

But the reason the President ordered the surge and the reason it's got to have -- it's got to succeed and have time to succeed is that what was being torn apart after the February '06 events, especially for the three or four months after the February '06 events, was the kind of social fabric of the country. Because what had been a kind of latent political sectarianism, at the urging of al-Qaeda, and at the rather diabolical but I have to say quite effective attack on the Samarra mosque, became violent sectarianism as the extremes used that excuse to stoke sectarianism.

And what the surge is trying to do is to give the Iraqi Government time to recover from that and to put in place a reconciliation, a kind of de jure reconciliation that says to all Iraqis this is going to be an Iraq that is for you. And I sincerely hope that people understand that we have to provide that space for Iraqis to do that so that we are then in a position of doing what, frankly, I thought we were going to be doing at the end of '05. I really thought that we were at the end of '05 moving to a place where they -- their forces were taking over more and more security territory, they'd had the elections, they were forming a government, the institutions were coming into place. Yes, there was violence and there were insurgents and, you know, there was the occasional car bomb, but it was not -- it wasn't tearing at the fabric of a united Iraq in the way that the post February '06 did. And we've got to get them back to that place, and then I think the kind of model that some people talk about makes some sense.

Can we sustain it? I -- you know, we just have to get out there and battle to sustain it.

QUESTION: You mean politically?

SECRETARY RICE: Politically. Yes, politically. Because I know that people are anxious about -- oh, and by the way, I think the Iraqis have to be a little bit quicker at getting some of their reconciliation done, too. This isn't all us. But I'm not one who says, well, if they fail, they fail, because I just don't see that as a logical argument for the United States of America when it has very strong interests there.

And under any other circumstances we would not think it at all odd that a government that's been in power only a little more than a year and that is trying to do something that is unheard of in the Middle East, which is to resolve differences through democratic processes not by violence or repression, that is a country that's drawn on the fault lines of Sunni and Shia, that is having to resolve existential issues like how is the oil revenue going to be divided, how are you going to deal with Baathism, how are you going to deal with Sunnis who didn't vote that need to be brought in -- these are really hard issues. You know, our mature democracy can't deal with existential issues very well these days, and yet everybody says the Iraqis aren't doing their job to do this. Well, I'm among those who are pressing them and pressing them and pressing them, but I also understand how hard it is.

Now, I think that we -- there is sometimes a perception, or maybe we haven't explained it very well, that we have to stay in this posture until they "reconcile." I think that's a mistaken way to think about this. We have to give them space to get de jure reconciliation in place. That means laws. The normative reconciliation is going to take a while. I've been using an example, and if you'll pardon a kind of imperfect analogy. I lived in Birmingham when race mixing was prohibited by law two days before the Public Accommodations Act passed in 1964 and when race mixing was legal two days after the Public Accommodations Act.

Now, do you really think that people's attitudes had changed between two days before and two days after? Of course not. But the laws had changed and people started to accommodate to them. And people knew that they couldn't keep black people out of their hotels and their restaurants, and they knew that, you know, when my parents and I walked into the restaurant that they sort of had to live with it. And nobody particularly liked it, but now 40 years later you go back to Birmingham and nobody much thinks about it anymore either. And maybe there are even still some irreconcilables who don't like it very much, but it was the law and it started to condition how people related to one another and it started to condition what was acceptable behavior and what wasn't acceptable behavior.

And so when I talk about reconciliation with the Iraqis, I mean the first part of that: get the laws in place where Iraqis can see the outlines of how they're going to have to relate to one another in these new political structures. And if we can give them the room to do that, I think you will bring enough people into the tent that the extremes will get more and more isolated.

The one -- and I would say that I think where the surge is succeeding is in the most egregious elements of the violent sectarianism that we saw over last summer and last fall.

QUESTION: On the Shia side?

SECRETARY RICE: On -- yeah, where you were starting -- when you had death -- well, some Sunni death squads, too. But death squads going into communities, lining up the men, shooting the men, sending the women into exile. That's where all those bodies were turning up. Where people suspected that it was the security forces that were behind a lot of it and where Iraqis lost faith that their government would and could actually protect them.

I think we're getting through what we're doing with the Iraqi forces that people now are beginning to return to those communities so they begin to believe that people will protect them. We've got to get to the can protect them. The one real, to me, problem here, one real outlier, is what al-Qaeda and their ilk are doing with these suicide bombs. Because we're making progress, I think, on that level of sectarianism I was just talking about, but every time you have a bomb go off at a Shia mosque or in a Shia neighborhood or in a Sunni neighborhood, it rekindles that sectarian hatred. And so it's an uphill climb. It's an uphill battle.

But you know, I just -- I know that there are all these reports now -- well, but you know that this might happen or that might happen. I can remember sitting in our meetings before the invasion and saying, and particularly Don Rumsfeld -- you know, people worrying about revenge, that after all those years of the suppression of Shia and Kurds, particularly Shia, there might be revenge taken out. And then we were really rather surprised not to see it. And even in the first few months after the Samarra mosque, we were sort of surprised that people didn't.

Well, it has emerged. But it's emerged by extremists and bad guys doing it. It's not as if -- and sometimes when people say civil war it drives me a little bit crazy because, you know, it's not like Iraqi Shia and Sunnis are running down the streets killing each other because they're Sunnis and Shias. These are organized gangs and death squads, and that's a civil order problem. And we're helping them deal with a civil order problem.

I think part of the problem for the American people is that's kind of uncomfortable. And as Dave Petraeus has said, it's very dangerous -- helping them deal with a civil order problem. But if we can give them the space by helping them deal with the civil order problem to get this de jure reconciliation in place, then I think you can see the transition to the kind of posture that a lot of people talk about as acceptable for American policy. But we can't just get over where we are and go there now.

QUESTION: Has the President talked to the Prime Minister of Turkey or have you talked to your counterpart about --

SECRETARY RICE: I talked to my counterpart not -- several days ago. And General Ralston is doing his work. I think the Turks understand that it would not be a good thing to have a significant problem on that border. That problem has been a problem a long time, well before liberation. Incursions go along -- have gone along from time to time, but this one's more acute. I think it's in a kind of acute phase right now.

But I would also note that, you know, when they -- when the AP story came out that they had invaded, they were right immediately on saying, no, no, no, that's not what's happening. So I think there's some room to work. But it's part of a larger mosaic, which is that we've got to embed the internal Iraqi reconciliation process in a regional understanding about what Iraq's neighbors are and are not going to do inside the country. Because if they see themselves -- the neighbors see their interests as served by a stable and strong Iraq , and democratic, because remember a stable and strong undemocratic Iraq was a regional threat.

If they see that a stable and democratic and strong Iraq could be a regional stabilizing force, they will not be inclined to meddle in Iraq 's internal affairs. And that's why the neighbors conference, that's why even the conversations with Iran , are important from the point of view of the Iraqis. It's to try to set some rules of the road about what their neighbors can and cannot do through an international mechanism that helps the Iraqis keep control of their own affairs.

QUESTION: Thank you.

SECRETARY RICE: Thank you.

Delete Reply Forward Spam Move...
Previous | Next | Back to Messages Save Message Text | Full Heade

Raisdana idea on economics ...

2007-06-01T08:49:00.000-07:00

ارزیابی شما از نحوه آموزش به‌ویژه آموزش اقتصاد در دانشگاه‌ها چگونه است؟

به‌نظر من نه‌تنها کافی نیستند بلکه گمراه کننده‌اند. روح غالب بر آموزش دانشگاهی ما، آموزش نئوکلاسیکی است و گاه کینزی که ارزشی جز برای مطالعه تاریخ تحول اندیشه اقتصادي بورژوازي ندارد. بعضی از مدل‌ها برای تمرین خوب‌اند اما برای ساختن اندیشه خلاق چیزی ندارند. سال‌هاست آن را تدریس می‌کردند و بعد از انقلاب کمي از آنها دور شد اما دوباره همان‌ها تدریس می‌کنند. اندکی اقتصاد کینزی تدریس می‌کنند و اقتصاد کلان و سیاست‌های مالی و پولی باز هم در اقتصاد ایران کاربردی نمی‌تواند داشته باشد. و این به‌خاطر شرایط نهادی و ساختارهای اقتصادی موجود است. در دانشگاه تکنیک هم یاد می‌دهند که خیلی‌ها فرا نمی‌گیرند مثل- اقتصاد سنجی و آمار.

دانشجویان ممکن است ناراحت بشوند اما این واقعیت است متاسفانه بخش اعظم دانشجویان از حیث ملی ضعیف‌اند. دانشجویی که کارشناسی ارشد می‌گیرد، اقتصادسنجی خوانده اقتصاد ایران هم خوانده و تکنیک زیادی هم خوانده است. فرمول خیال پرورانه، ذهنی و توخالی اقتصاد نئوکلاسیکی- مثل عرضه و تقاضا- را هم از بر کرده است. اما یک جدول بانک مرکزی را نمی‌تواند بخواند. نمی‌تواند تولید ناخالص داخلی و ارزش افزوده‌های ملی را به اجزا تقسیم بکند و بخواند. نمی‌تواند منحنی نوسانات قیمت‌های فصلی و غیرفصلی را تشخیص بدهد. پزشکی را تربیت بکنيد که نه‌تنها آمپول زدن بلد نباشد، حتی از آمپول بترسد. عده‌ای را دانشگاه‌ها مشغول کرده‌اند اما بهتر نبود به‌جای آن به رشد اقتصادی و به توسعه بادوام می‌رسیدیم تکنسین‌های خوب‌تر تربیت می‌کردیم و نظام اجتماعی را اداره می‌کردیم.

یک جوشکار خوب هیچ نباید از اقتصاددانی که اینجا و آنجا به منبر می‌رود و پول می‌گیرد، چندان کمتر بگیرد. خوب معلوم است مشکلات هویت اجتماعی، احترام اجتماعی، درآمد مطمئن، روابط خانوادگي و ازدواج پیش می‌آید، پس دانشجویان به مدرک‌گرایی روی می‌آورند. ولی اگر بدانند هرکس در هر موقعیتی دارای احترام است، سندیکای کارگری احترام دارد و حقوق و دستمزدشان �/

Source:
http://www.raisdana.ir/modules.php?name=News&file=article&sid=22

Bus in one of Tehran Streets: ...!

2007-05-31T03:56:00.000-07:00

Walking in the air!: He is an outlier in the civilized Iranian Society

2007-05-31T03:50:00.000-07:00

Iran Considers Transrapid Route Designed By German Firm

2007-05-31T02:24:00.000-07:00

The German version of the magnetic levitation train -- Transrapid -- may be built in the pilgrim city of Mashhad in north-eastern Iran, a German newspaper reported.

Germany's daily Süddeutsche Zeitung (SZ) reported that a Munich-based engineering firm has received a request about the viability of such a Transrapid route in Iran.

According to the paper, the Transrapid train would help transport millions of pilgrims along the 800-kilometer (around 500-mile) stretch from Tehran to Iran's holiest city, Mashhad.

A Transrapid train ride between the two cities could reduce the trip to two to three hours -- a stark contrast to the two days a bus normally needs.

Harald Späth, managing director of the firm Regierungsbaumeister Schlegel GmbH, told SZ that his company had received an official contract to investigate whether or not the high-speed magnetic levitation train could be built.

He said that then Bavarian Economic Minister Otto Wiesheu's visit to Iran in 2004 had helped to lay the groundwork for the negotiations.

Wiesheu, who left the Bavarian government in 2005, took up a post as board director of Germany's rail company Deutsche Bahn.

Uncertain future

Späth, who said he had met with Iran's ambassador in Berlin, Mohammad Akhondzadeh, last week in Berlin to discuss the project, said that the Iranian had allocated $1.5 billion (1.1 billion euros) as "start-up financing" for the project. He also told SZ that Iran was hoping for additional, private investors.

Iranian President Ahmadinejad has strained tiesBildunterschrift: Großansicht des Bildes mit der Bildunterschrift: Iranian President Ahmadinejad has strained tiesApparently, economic sanctions against Iran would not stand in the way of the project. According to SZ, German companies exported more than four billion euros in products and services to Iran last year.

Wiesheu said that the project is "in the very early stages" in Iran.

"Iran is without a doubt a complicated country," he told SZ. "But, I hope circumstances and international relations improve," he added, referring to the country's controversial nuclear program.

Source: http://www.dw-world.de

Without comment: Parliament Representative in Iran!

2007-05-31T01:48:00.000-07:00

The Economics of Corruption 2007 - call for paper

2007-05-31T01:03:00.000-07:00

http://www.icgg.org/corruption.lecture_2007.html

Without comment! in Iraq

2007-05-30T09:57:00.000-07:00

Sadjadpour: Revolutionary Guards Have Financial Interest in Keeping Iran Isolated

2007-05-30T08:17:00.000-07:00

Interviewee: Karim Sadjadpour, associate, Carnegie Endowment for International Peace
Interviewer: Bernard Gwertzman, Consulting Editor

++++++++++++++++++++++++++++++++++++++++++++
Karim Sadjadpour, an Iranian-American who worked for several years in Iran with the International Crisis Group, says he increasingly believes elements within Iran’s Revolutionary Guards have an economic motivation in keeping Iran relatively isolated in the world, and in encouraging the latest domestic crackdowns. “Whenever there is the prospect of a U.S.-Iran dialogue or improved Iranian relations with the West, hardliners do their very best to torpedo such efforts,” he says.

• There have been several developments in Iran that have aroused considerable concern in the United States, particularly in academic circles. One is the arrest of a prominent American-Iranian scholar, Haleh Esfandiari, who has been a leader in encouraging Iranian-American academic exchanges, and who was in Iran to visit her mother. She’s been accused, as have the others, of plotting to bring about a “velvet revolution” in Iran, and of working for Israel and the United States. Her arrest has led to the condemnation of Iran from all sorts of people. What’s causing this latest crackdown on people who are interested in better relations in Iran ?
• Well, I don’t know if we can say there’s one precise reason behind the crackdown. I think it certainly was in the realm of possibility that the government in Tehran is trying to send a very stern signal to the Bush administration to cease any democracy promotion effort in Iran . At the same time, the government in Tehran is trying to send a very clear signal to Iranian-Americans and all those who work on issues of civil society or internal politics in Iran that they should tread very carefully. But I’m also increasingly coming to the conclusion that there’s a small but very powerful clique within Iran , among the political elite, who actually have entrenched political and financial interests in retaining Iran ’s isolation. And whenever there is the prospect of a U.S.-Iran dialogue or improved Iranian relations with the West, they do their very best to torpedo such efforts.

• You say they have a “financial interest” as well. Could you elaborate?

• You have hardline elements within the Revolutionary Guard, who right now have enormous financial assets, and they maintain a kind of a private mafia. And the last thing they want is Iran to open up to the rest of the world, to join the WTO. I think their logic is that right now Iran is a closed society, and the less open the merrier.
• “Whenever there is the prospect of a U.S.-Iran dialogue or improved Iranian relations with the West, hardliners do their very best to torpedo such efforts.”

Explain a little bit about the Revolutionary Guards. Is this a very large organization?
• The Revolutionary Guards comprise about 150,000 in number. They’re not a monolithic group. There’s a common perception right now that the Revolutionary Guards are very closely aligned with President Mahmoud Ahmadinejad. But I would say it’s the opposite. President Ahmadinejad has to pander to the Revolutionary Guards to project his own power, because he doesn’t have a very strong popular base. And it’s difficult to describe them as a group of 150,000 hardliners because in 2001 three-quarters of them voted for the liberal Mohammed Khatami’s re-election as president. In some ways, the Revolutionary Guards are more reflective of the Iranian society than we think. They also want change and reform to take place. But again, when I talked about this powerful clique with entrenched political and financial interest, I don’t think that they’re large in number. I think they represent a minority, a small minority of Iran ’s political elite. But they do an outstanding job of consistently playing the spoiler.
•
And are they involved in the ministry of intelligence which has been responsible for the arrests?
• I would say about those who want to retain Iran ’s isolationist status—it is not just for financial interests, but it also fits their political worldview. They’re very xenophobic, and many of them still adhere to the old adage from Ayatollah Khomeini, the leader of the Iranian revolution in 1978-79, that the relationship between the United States and Iran is like that between a wolf and a sheep. They’re extremely mistrustful of U.S. intentions and they don’t believe that having a more open Iran is in their own political interests.
• “It’s difficult to describe the[Revolutionary Guards] as a group of 150,000 hardliners because in 2001 three-quarters of them voted for the liberal Mohammed Khatami’s re-election as president. In some ways, the Revolutionary Guards are more reflective of the Iranian society than we think.”
•
Do some of these Revolutionary Guards own businesses? Are they in the oil business?
• Yes, they’re getting billion dollar contracts right now, and they essentially operate as contractors. They don’t have the technical know-how whether it’s in the oil industry, or in major infrastructure projects, but they get non-competitive bids, and then they outsource the project. They also have a lot of jetties, or “free-trade ports” where the average Iranian businessman who wants to import or export items is subject to heavy tariffs. The Revolutionary Guards, in turn, operate their own free-trade port, so they’re not subject to tariffs.
• I didn’t realize that. And how do the Revolutionary Guards relate to the Iranian army. Revolutionary Guards suggests sort of a militant group. You’re indicating they’re not just a military outfit.
• At the onset of the Revolution, there was a lot of concern that the Shah’s army couldn’t be counted on to be loyal to the newly established Islamic republic. So the Khomeinists started the Revolutionary Guards to be the protectors of the revolution. That was the original idea for their existence. But over time they’ve grown in number and they’ve grown in stature, and now there’s a lot of concern that as their economic interests have grown over the years, so have their political ambitions.
•
' Let’s move on to another subject. There’s been a crackdown in Iran , not only on those interested in the United States and the West, but on women’s rights groups. Can you elaborate?
• I think Iranian women are among the most progressive women in the Middle East . They’re very capable. We have Shrin Ebadi, the Nobel Prize winner. We have great artists, painters, and doctors and professionals. I would say that despite, not because of the Islamic Republic, Iranian women have still managed to assert themselves in a very important way in Iranian society. And I think their defiance is fairly subtle and fairly apolitical, meaning they’re not so much marching in the streets protesting, but it’s just daily acts of defiance. They are increasingly entering the workforce and going to university. Sixty percent of the universities are women, many not adhering to the strict dress code that was imposed upon them in the early days of the revolution. I would say that those who are political and out marching in the streets for women’s rights are not large in number as a percentage of the population, but they’re not negligible either. And the fact that the regime is choosing to crack down on them, shows that it is concerned about this women’s rights movement.
• Talk about the university students. Now if I read the political reporting correctly, there was a major effort by young intellectuals or reformers to boycott the last presidential election in 2005. Do they now regret this? There seems to be a lot of opposition to President Ahmadinejad among the university students these days.
• At the time, their rationale for not wanting to participate in the elections was this: “We went out to the polls en masse in 1997 to overwhelmingly elect Mohammed Khatami, but he wasn’t able to effect change the way we wanted him to. So over the course of the next five years, we elected a very reform-minded parliament, and when that wasn’t able to deliver change, we even went and reelected Khatami in 2001. We renewed his mandate and we turned out in Scandinavian turnout levels, 70-80 percent of the population voting, and we gave Khatami mandates of maybe 80 percent.”
• But after some eight years of not being able to effect changes via the ballot box, I think it’s very natural that many people decided that voting in Iran is an exercise in futility. As one secular intellectual once put it to me, “It’s like going to the gym every day for six years and not losing one pound. Pretty soon you’re going to stop exercising.” I think the rationale for not participating in the election was at the time sound, but I think now, in retrospect, those people who used to say, “Why should we vote, it doesn’t make any difference,” now realize that actually voting does make a difference, because you can go from kind of an unpleasant situation to a very negative situation. And you can go from someone like Khatami to someone like Ahmadinejad.

• Now is there an election coming up for the Majlis, the parliament, in February 2008. Could there be a groundswell of opposition to the president in this election?
• “President Ahmadinejad’s mandate when he was elected was extremely clear… I never encountered one person who said ‘I voted for Ahmadinejad because he’s going to take a hard-line nuclear posture or he’s going to take a hard-line against Israel .’ His mandate was extremely clear, and that was to improve people’s economic lot.”
• President Ahmadinejad’s mandate when he was elected was extremely clear. I covered those elections very closely, and I never encountered one person who said “I voted for Ahmadinejad because he’s going to take a hard-line nuclear posture or he’s going to take a hard-line against Israel .” His mandate was extremely clear, and that was to improve people’s economic lot. Now the way he’s been comporting himself both domestically and internationally has led to capital flight and to diminished foreign investment. And he’s created a very unfriendly economic atmosphere, and he hasn’t delivered on his lofty economic promises. So I think it would be logical that in the parliamentary elections, those who are aligned with President Ahmadinejad probably won’t do that well, because they haven’t delivered on any of their promises.

• What is the economy like in Iran now?
• Well, I think the economy in a country like Iran which is so rich in natural resources and so rich in human capital is really underperforming. You had a baby boom when the revolution occurred in 1979. Ayatollah Khomeini encouraged people to go out and have many children in order to produce this robust Islamic society. Now these children of the revolution are entering the labor market, but they’re not finding jobs. So you not only have unemployment, but you have a lot of underemployment. Young men and women who are educated are not finding jobs, and having to work at jobs for which they’re overqualified. They are driving taxis; architects are selling pizza. And there is heavy inflation. And any time you have a populist president like Ahmadinejad whose solution to problems is simply to inject cash into the economy, it’s natural that it leads to rising inflation.
• U.S. policy toward Iran seems to have two aspects. One is this rather modest program, the equivalent of the Cold War cultural program funding broadcasts and money to help out in exchanges. And the other is this cover activity that keeps going on. A lot of the commentators have sort of blamed the U.S. for the arrests in Iran. What do you say about that?
• Well, I don’t think we can blame the United States for the cruelty of the Islamic Republic. The Islamic Republic has been behaving in cruel fashion since 1979. For example, the punishment of stoning women to death for adultery existed before the neocons came to power in Washington . But that being said, I think the perception in Tehran , especially the perception of Ayatollah Khamenei, the supreme leader, is that the U.S. problems with Iran are not about Iran ’s external behavior, but about the very character of the Iranian government. Khamenei believes deep down that Iran ’s patch of real estate bordering the Caspian Sea and the Persian Gulf, a strategic location with natural resources, is so important that he believes that the United States really wants to go back to a relationship with Iran which they had in the time of the Shah. This was essentially a patron-client relationship. So when the U.S. appropriated $75 million for civil society and democracy promotion in Iran , this simply reinforced the world view of those in Tehran who believe that the United States is out to change the character of the Iranian government.
• And of course, the major foreign policy confrontation continues to be the nuclear enrichment program that Iranians continuing in the face of two series of sanctions in the Security Council, and probably another set will be coming up shortly if the Chinese and Russians agree. Is there any discomfort in the leadership over this sort of international isolation they’re getting themselves into?
• There are plenty of people like Ali Larijani, the nuclear negotiator, who doesn’t appreciate Ahmadinejad’s approach. I think they appreciate the need for Iran to retain good ties, for example, with the Europeans and not solely rely on Chinese and Russian support. But I think right now the leadership in Iran is banking on the fact that China and Russia won’t sign up to any substantial sanctions. And without China and Russia on board, European resolve is going to waver. The regime believes that if Iran continues to be persistent, this entire coalition is going to unravel. So I think they’re banking on the fact that if they hold strong, eventually, they’re going to be able to win out. At the same time, many Iranians feel, especially those like Ayatollah Khamenei, that they’re still in a difficult position because they think that if they compromise as a result of the pressure, it’s not going to get them out of trouble, but it’s going to invite even more pressure, it’s going to validate this hard-line approach against them. Someone like Ayatollah Khamenei doesn’t want confrontation—and certainly doesn’t want to have military confrontation—but he’s also averse to accommodation.
• I would think he’s making a mistake. I would think any sign of a compromise by Iran would be very welcome in the West.
• Well, again, we go back to his worldview. He really believes that it’s not about Iran’s external behavior, that it’s about the character of the Iranian government, which the United States has a problem with, and I think he believes that if he compromises as a result of the pressure, it’s not going to strengthen the argument of those in the State Department who argue for a conciliatory approach to Iran. It’s going to strengthen the argument of people like [Vice President] Dick Cheney who say, “See, the pressure’s working, let’s turn up the heat even more.”
• I would think the next presidential election in the United States would be very important for Iran. I don’t see any sign of any of the Democratic candidates wanting to have a softer view on Iran , do you?
• I think if you’re a U.S. politician, you don’t win any points by saying, let’s engage Iran , especially when you have a president in Iran who has called for wiping Israel off the map and questioned that the Holocaust happened. I think in the context of domestic U.S. politics it doesn’t win you any points by saying, let’s engage with Ahmadinejad.

Smuggling and Unemployment

2007-05-30T01:09:00.000-07:00

What we learn from economic theory about the relationship between smuggling and unemployment?

Unfortunately, as far as I have searched, we will not find something clear in theoretical economics about this important aspect. In Empirical studies which mainly focus on the link between shadow economy and unemployment the similar ambiguity can be observed. Generally speaking, there are 2 possible potential links between smuggling and unemployment:

First, through business cycle effects. Increasing unemployment may be an indicator of recession and therefore we should expect a reduction in power of purchase of people. So their effective demand fir both legal and illegal imports will be reduced.

Secondly, increasing unemployment may create motivation for seeking job within shadow economy and smuggling can be an alternative for unemployment in official economy. So, increasing official unemployment rate may increase motivation for illegal business and reducing the risk of engaging in these activities.

Any comment and idea on this topic is highly welcome!

Mohammad

Some technical expressions in financial career

2007-05-29T08:20:00.000-07:00

Analyst
The lowest position of all, and what graduates become when they join. In investment banking speak, "analyst" is simply another way of saying ‘trainee.’

What analysts do varies from division to division. In corporate finance, analysts are hardworking number crunchers who put together “pitchbooks” (company and sector research that helps banks win bids), and analyse a company’s financials. In sales, analysts telephone relatively unimportant clients on non-crucial matters. On the trading floor, analysts can’t trade until they’ve passed their regulatory exams and, even then, are heavily constrained until they’ve proven they’re not going to press the wrong button and lose a small fortune.

At most banks you’ll be an analyst for three years. The bank then decides whether or not to renew your contract, and you, in theory at least, can also decide whether to stay on.

Associate
“Associates” are basically analysts who have made the grade, or business school students who joined after studying a Masters in Business Administration (MBA). Associates typically have a team of analysts in their charge, to whom they allocate work.
So what does it take to make the move from analyst to associate? "We would expect an analyst being considered for promotion to go beyond the use of analytical skills, “ explains Calum Forrest, head of recruitment at Goldman Sachs. The bank expects a lot from candidates for associate positions:

* real leadership potential: as an associate you may be expected to manage a small team (although an associate would also receive management support from a VP);
* increasingly sophisticated judgment, specifically the ability to develop a sometimes contrary point of view, and to articulate it persuasively;
* an understanding of client motivation and the commercial backdrop to their work.
* Expect to be an associate for another three years, before moving up to the next rung – VP.

VP/Director
At this level, life starts to become exciting. The title of Vice President (VP) sounds grand, but don’t be deceived: VPs are plentiful at any large investment bank.

As a VP in corporate finance, you’ll manage the day-to-day affairs of the associates and analysts beneath you, and you’re more likely to have frequent contact with clients. If you work in sales, trading or research, you should have your own book of customers, more relaxed trading risk parameters, or your own list of companies to research.

You’ll typically be a VP for three years, but you could be here for much longer, as VP can become a bit of a sticking point. “For the first five years, it is very much year-on-year progression if you perform well,” says John Harker, head HR at Citigroup, “Once you make it to VP, however, further progression is not guaranteed. It depends upon a much greater number of variables than at analyst and associate level. These include working effectively with your peers and supporting the bank’s values.”

VPs who fail to progress at one bank tend to move to another one, where they can join at the next rank up – director or executive directors.

Once you reach Executive Director or Director level the top rungs of the ladder are within your grasp. Executive directors or directors (the titles are used interchangeably) are the right-hand men or women of the real potentates of the investment banking world – the managing directors. In corporate finance, executive directors help managing directors cope with the daily whims of client companies. In sales and trading they have bigger and more important clients to call, or even larger trades to place.

MD+
You’ve made it! Managing directors (MDs) are the upper echelons of the banking hierarchy.
They typically make the most money, have the biggest offices, and command the most respect. MDs are the people who deal directly with clients and originate (bring in) business.
As with any pyramid structure, very few people who started out as analysts will make it this far. At one large US bank, only 6-8% of directors are promoted to managing director each year. At Goldman Sachs, there are little more than 1,000 managing directors for 20,000 employees.
To make MD, Richard Davies, executive director of HR at Morgan Stanley says: “It’s about individual performance, revenue generated, and client service. If you progress smoothly, you can become an MD by the time you’re in your early 30s.”

Exception to the rule
Although this hierarchical structure exists across most divisions in banks, it’s less noticeable in the sales and trading division. Sales people and traders work on their own to make money, so if you’re an exceptionally talented VP on the trading desk, there is every chance you could earn more than an MD…

source: http://students.efinancialcareers.co.uk

US MBA schools best for banking?

2007-05-29T08:10:00.000-07:00

Should you go for Columbia or Cranfield, LBS or NYU Stern?

You may be based in London and doing business in Europe, but when it comes to doing an MBA you’re probably still better off across the Atlantic.

Although Europe’s MBA schools have progressed in leaps and bounds in the past decade, American banks in Europe (and even European banks in Europe) still favour schools in the US.

Merrill Lynch, for example, targets London Business School, INSEAD in France and IESE in Spain for European associate hires. In the US it targets Wharton, Columbia, Harvard, Chicago, and NYU Stern.

The head of associate recruitment at one major European bank says around 60% of its European MBA intake is sourced from US schools: “Big US schools are just streaks ahead in terms of their faculty and curriculum,” she says. “If you want to go into banking, you need to follow the banking route – Wharton is the top business school for finance and it has been for years.”

This may be changing. Research from London-based recruiter EM Finance suggested that students from European MBA schools were 57% more likely than their US contemporaries to be hired last year – however, the stats included recruitment at consulting firms, which tend to favour the likes of Cranfield Business School in the UK , which are all but ignored by banks.

The associate recruiter says some European schools are making their mark. “LBS have ramped up their ability to attract professors, which enhances their overall programme. We’re seeing more American students actually coming there to study as a result.”

source: http://news.efinancialcareers.co.uk

Smuggling

2007-05-02T00:45:00.000-07:00

Okay, after some weeks delay in writing here, now, i want to initiate a topic about smuggling in Iran or any other country. Both import and export sides of smuggling. in the next time, i will talk about basic concepts and specialized issues in this topic.

Mamad

Happy new persian year

2007-03-20T06:57:00.000-07:00

Norooz is one of Iran’s ancient holidays and has its root in Iran’s pre-Islamic days. It has been and is celebrated in many countries like Afghanistan, Turkey, India, Pakistan, Uzbekistan, Turkmenistan, Tajikistan, and more.

Some of the Norooz customs go back to more than 3000 years ago, and are still practiced today.

So a very happy and prosperous 1386 to you all, and as they say in Farsi may you have 100 more like it!

Cheers,
Mohammad

Name of Film: 300-- Goal of Film: Playing with history

2007-03-07T01:21:00.000-08:00

.....“300” is a ferocious retelling of the ancient Battle of Thermopylae in which King Leonidas (Gerard Butler) and 300 Spartans fought to the death against Xerxes and his massive Persian army. Facing insurmountable odds, their valor and sacrifice inspire all of Greece to unite against their Persian enemy, drawing a line in the sand for democracy.....

The above text is from this website....

This film try to play with history and introducing Persians as barbarism and western as
defenders of democracy! More on this story here!

Object to this film by signing this petition: click here!

And Here is another film on ''Engineering an Empire - The Persians (Part 1)''.

Victims of Black Trade of Drugs

2007-02-26T07:01:00.000-08:00

Dr.Raesdana, Iranian economist, have written a report on Drug Market in Iran. The report can be found here.

and here you can see some photos of victims of organized business of drugs in Iran.

Iran: Atomic program has no brake

2007-02-26T00:57:00.000-08:00

God Save Iran from This Man!! Click here!

Interesting Real Film on daily life in Iran

2007-02-22T00:36:00.000-08:00

Rageh Omaar embarks on a unique journey inside what he describes as one of the most misunderstood countries in the ... Alle » world, looking at the country through the eyes of people rarely heard - ordinary Iranians.

It took a year of wrangling to get permission to film inside Iran but the result is an amazing portrayal of an energetic and vibrant country that is completely different to the usual images seen in the media. A country of contrasts

Rageh soon discovers that Tehran is a complex place and uncovers a city of extremes of wealth and poverty, where some people survive on less than a dollar a day and others shop till they drop in glitzy shopping malls.

Rageh meets with local people to hear their personal stories and feelings about the current state of affairs in Iran. There are stories of taxi drivers, wrestlers, business women, people working with drug addicts and the country's leading pop star and his manager - the 'Simon Cowell' of Iran.

Rageh Inside Iran transcends images of angry demonstrations and burning flags to reveal a country that isn't without its problems but which is also fascinating, dynamic and hospitable.

For Watching this film online click here!

Jazayeri on the Run

2007-02-21T09:51:00.000-08:00

Shahram Jazayeri one of corrupted businessmen who has been sentenced to about 30 years in jail, yesterday escaped from some policemen in street!! How? nobody know! click here for a short text on him!

and News on his Big! Escape here!

Iran Subsidies on Energy

2007-02-20T03:17:00.000-08:00

You can read the study of Mr.Atta Tarki on the Iranian Energy Subsidy here!

Total faces investigation over $2bn Iran contract

2007-02-20T03:12:00.000-08:00

A Paris judge has launched an investigation into allegations that Total, the French oil and gas group, paid bribes to win a $2bn gascontract in Iran almost a decade ago.

The move is a further blow for Christophe de Margerie, Total's head of exploration and production, who was involved in negotiating the Iranian South Pars contract and is due to take over as chief executive in February.

Mr de Margerie, head of Total's Middle East activities from 1995 to 1999, is facing separate charges over allegations that he was involved in corruption during the scandal-plagued UN oil-for-food programme in Iraq .

The latest investigation stems from the discovery of SFr100m ($82m) in two Swiss bank accounts, allegedly paid by Total to an Iranian intermediary to help the French company's consortium win the South Pars contract. The money has been frozen.

A French judicial official told the Financial Times that Switzerland had dropped its money laundering inquiry into the affair and passed evidence to the Paris prosecutor. Total declined to comment.

One of the judges charged with the new investigation, Philippe Courroye, is also running the investigation into Mr de Margerie over the oil-for-food corruption case. The move is a further setback for the image of France 's biggest company, which has a market capitalisation of more than 130bn ($171bn) and 95,000 staff. Yet investors seemed relatively sanguine about the news, and Total shares fell 50 cents to 54.50.

Mr de Margerie is due to succeed Thierry Desmarest as chief executive when the latter steps up to be chairman after the group's annual results in February.

Known as "Big Moustache" for his grey handlebar moustache, the 55-year-old expert on the Gulf region's oil sector has denied all charges of corruption in the oil-for-food scandal.

Total won the South Pars contract in 1997 as part of an international consortium, including Russia 's Gazprom , Malaysia 's Petronas and Iran 's state-owned NIOC.

The French group has been in Iran since the 1950s, though recently it resisted pressure from the US to isolate the Islamic state over its controversial nuclear enrichment programme.

Total gave its 40 per cent stake in the South Pars project back to NIOC in2004 under the terms of the deal. But it still has rights to a share of production from the gas field, equivalent to 18,000 barrels this year, below 1 per cent of its global production.

The French fraud squad raided Total's headquarters in March on behalf of Swiss authorities in relation to the bribery case. But Total and the French government prevented the findings of the search from being used for "national interest" reasons.

Martin Arnold in Paris source: FT Tuesday, Dec 19, 2006