Venezuela: failed state, betrayed revolution

Venezuela is in crisis, sliding further towards collapse.

Opposition protests sparked by attempts by the Supreme Court, stacked with loyalists to President Nicolás Maduro, to usurp the legislative powers of Congress have already seen dozens killed.

Perhaps inconveniently for the government, the President’s United Socialist Party of Venezuela (PSUV) had lost their Congressional majority in the 2015 elections for the first time since Hugo Chávez was swept into power by a democratic landslide in 1999. Shortly after Chávez’ first became President, he set about re-writing Venezuela’s constitution, giving more powers to the Presidency and laying the foundations for his Bolivarian revolution – Socialism for the 21st Century, as he called it.

This piece of history is important, given that President Maduro last week pledged to reconvene another constituent assembly to re-write the constitution once again. This is seen by many as a thinly-veiled attempt to delay the regional elections scheduled later this year, and the Presidential election scheduled for 2018.

*** This article was first published on thejournal.ie on 12 May, 2017 ***

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Mexico: political risk update

“May you live in interesting times” is a Chinese curse that seems apt to describe Mexico at its current political juncture. Times are certainly interesting. With the election of Donald Trump in the U.S., much focus in recent months has been outward-looking. Indeed, political risk in the diplomatic sphere is perhaps higher than at any time in living memory.

Domestically, the current administration is on the cusp of its final year in office, and the lame-duck status that goes with it. The pre-campaign to elect a new President in 2018 is well under way, with a very real possibility that Mexico will elect its first ever leftist President. At the same time, recent high-profile incarcerations of former high-level government officials and narco-traffickers has shone a spotlight on corruption and organised crime like never before.

With imminent – and important – state-level domestic elections in June 2017, seen by many as a prelude to the Presidential elections taking place in July 2018, the scope for political and policy change in Mexico over the period to late-2018 is significant. In light of the single term limit on the Mexican Presidency, the incumbent, Enrique Peña Nieto, will give way to his successor on December 1st, 2018. Opinion polls suggest a three-way fight between Peña Nieto’s PRI, the opposition PAN – which held the Presidency from 2000 to 2012 – and Andrés Manuel López Obrador (AMLO), at the head of Morena, the movement he left the PRD – traditionally Mexico’s 3rd party, and for whom AMLO twice contested the Presidency – to form.

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Do Trump’s Tax Cuts Threaten Ireland?

Yesterday, U.S. President Donald Trump made his ‘big announcement’ on tax cuts. Some Irish eyes aren’t smiling at the prospect of the headline-grabbing reduction in the corporation tax rate from 35% to 15% actually coming to pass. Essentially, though, this latest announcement amounts to little more than reheated campaign promises, washed down with Trump’s now-familiar saccharine bombast.

This was not a well-thought out exercise in policy innovation, but rather a cheap PR stunt designed to boost his flagging ratings and attract plaudits ahead of the media-constructed – but substantially meaningless – landmark of his Presidency’s first 100 days, which falls this Saturday.

*** This article was first published on thejournal.ie on 27 April, 2017 ***

OECD Corporation Tax Rates since 2000

Source: Tax Policy Reforms in the OECD 2016

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Globalisation for Slow Learners

The IMF recently published its updated outlook for the global economy. The good news is that recovery from the crisis seems to be finally picking up some momentum after a decade of sub-par growth. The bad news, as they see it, is that this momentum could be stopped in its tracks if the sword of Damocles that is the threat of protectionism – whether emanating from Trump’s White House, May’s Westminister or elsewhere – falls. This could throw the process of globalisation into reverse, they worry, and slow growth in the size of the economic pie.

Alongside their biannual economic forecasts, the IMF also publishes its latest thinking on various themes. In light of increased focus on the issue of inequality since the global financial crisis, to which the recent rise in political populism has been attributed, the IMF provides a timely chapter on “Understanding the downward trend in labour income shares”. It explores the reasons why the share of wages in GDP has declined markedly – in advanced, emerging and developing economies alike – in recent decades. Between the mid-1970s and its 2006 low, the labour share has declined from around 55% of GDP to around 50% in advanced economies, before recovering only slightly since the financial crisis, while income inequality has increased significantly over the same period.

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The Leprechauns are at it again

New numbers from the boffins in the CSO again make a mockery of how we measure economic activity. Sure, on the face of it, last year’s 5.2% GDP growth sounds more reasonable than the make-believe 26.3% recorded in 2015. Remember that prompted Nobel prize-winner Paul Krugman to call out Ireland’s ‘Leprechaun economics’?

Over the years, many economists in Ireland have argued that GNP – which strips out the repatriated earnings of multinationals – is a better measure of our economic progress. According to this measure, growth halved from 18.7% in 2015 to a still-stellar 9% in 2016.

But, even the most sunny-sided economists would struggle to claim with a straight face that this is a good indicator of Ireland’s true rate of economic growth.

*** This article was first published on thejournal.ie on 10 March, 2017 ***

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Basic Income: an idea whose time has finally come?

As far back as 1516, Thomas More first suggested a guaranteed income as a way to reduce theft. In 1797, enlightenment thinker Thomas Paine proposed a set of radical reforms in his seminal pamphlet on Agrarian Justice.Among these proposals was the idea of a universal basic income that would be paid to everyone, unconditionally. In the intervening 220 years, polemicists and policymakers have toyed with the idea, without it ever really catching on.

What has changed?

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Unemployment is down again but we shouldn’t be complacent

THE IRISH ECONOMY continued to create jobs at a rate of more than 1,000 per week in the three months immediately following June’s shock Brexit vote, defying some of the most pessimistic predictions about the short-term impact.

According to Tuesday’s figures from the Central Statistics Office, 57,500 jobs were created this year to the end of September, signalling robust annual job growth of 2.9%.

The pace of job growth moderated slightly to a seasonally adjusted 13,500 during the most recent three month period, down from 18,900 and 16,100 in each of the first two quarters of the year, respectively. This brought the total number employed to 2,040,500, the highest since the end of 2008, although still 6% below the all-time high of 2,169,600, reached in Q3 2007.

*** This article was first published on thejournal.ie on 23 November, 2016 *** Continue reading