Comment, analysis and other offerings from Tuesday’s FT,
Gideon Rachman: Hotheads, fainthearts and Gaddafi
The argument over whether to fight in Libya had many aspects to it – ideology, national interest, diplomacy, military calculation. But the most important divide in the western world was temperamental. The Libyan debate pitted the hotheads against the ditherers, the FT columnist says. The ditherers’ classic questions – “how will this end?”; and “what is the precedent we are setting?” remain the right questions to ask about Libya. What happens if Col Gaddafi holds on, or if the conflict is stalemated and the country semi-permanently divided?
George Soros: How Germany can avoid a two-speed Europe
Germany blames the European crisis on the countries that have lost competitiveness and run up their debts, and so puts all the burden of adjustment on debtor countries, writes Soros, chairman of Soros Fund Management and founder of the Open Society Foundations. This is a biased view, which ignores the fact that this is not only a sovereign debt crisis but also a currency and banking crisis – and Germany bears a major share of responsibility for those crises.
Robert Pozen: Japan can rebuild on new economic foundations
Before Japan decides to rebuild the whole area affected by the recent tsunami, perhaps it will look at alternative approaches, such as relocating families to cities and retraining agricultural workers for other jobs, writes Pozen, a senior lecturer at Harvard Business School and a senior fellow at the Brookings Institution. This could be part of a new focus of Japanese public spending on programmes with more potential for stimulating economic growth than building bridges in rural areas.
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Analysis: India — writing on the wall
India and Russia are accustomed to being bracketed together as two of the world’s most promising high growth markets. But is there more to it than just being adjacent initials in the fabled Brics acronym? Foreign investors are not alone in worrying this might be the case. Significant members of the Indian elite fear it may be following Russia in developing a kind of crony capitalism dominated by powerful insiders, the FT’s James Lamont and James Fontanella-Khan report.
Michael Skapinker: Real bosses know when to take a beating
Years ago, I reported on a creditors’ meeting of a UK travel group that had collapsed, the FT columnist writes. The company chairman told everyone he had let them down. Two of the creditors tore up the agenda papers and hurled them in his face. One grabbed a water jug and threw its contents over him. The chairman flinched, but sat, drenched and attentive, until everyone had vented their fury. If you want evidence of the importance of accepting public responsibility, learn the lesson of the UK parliamentary committee which Irene Rosenfeld, Kraft Foods chief executive, refused to attend.
Lex on dominoes in the desert
Traders fear higher oil will create emerging market inflation; but their response has been to switch to developed market stocks, not to quit equities altogether, Lex says. This is alarming. History is littered with significant macroeconomic shocks from wars involving Middle Eastern oil producers. If traders followed business school practice and modelled outcomes using a “realistic worst-case” scenario, they would see that the risks from the Middle East and North Africa are badly underpriced.
Andrew Hill: Just-in-time is not past its sell-by date
The severe impact of the earthquake and tsunami in Japan on global companies is making observers question the risks implicit in just-in-time supply chain management, says the FT columnist. This veiled indictment of modern supply chain management implies that companies were irresponsible to expose themselves to the aftermath of a once-in-a-generation earthquake. But I predict few businesses will have their profits eviscerated, most will suffer no lasting impact, and all will continue to favour the leanest possible supply chain in future.
FT Tilt: Ageing population will slow east Asia’s growth
East Asia’s growth in recent years benefited substantially from its young population, with the “demographic dividend” accounting for as much as one-third of economic growth over the last several decades in some countries, according to the World Bank. But a decline in fertility rates and an ageing population in some of the large economies are offsetting these benefits, FT Tilt’s Rina Chandran reports.
Libya and Yemen live blog: March 22nd
As events unfold in Libya and across the wider region, the FT is running live coverage on Gideon Rachman’s blog. On March 22: developments in the Arab contribution to the no-fly zone, China’s criticism of the conflict, and a stabilised oil market.