A simple understanding of the laws of comparative advantage should be enough to draw out a strategy that would propel the Jordanian economy out of "Fake" growth into real, meaningful economic growth. As is the case with Jordan's industries, the country is at an absolute disadvantage when it comes to comparing its strengths in world markets. A member of the WTO, Jordan must abide by international trade laws, such as tariffs and import/export restrictions. However, when competing with products from more advantageous countries, such as China, India, or even Somalia (as in the case with producing Bananas), Jordan sure to be the loser if not following a plan that focuses on what it does best.
Theoretically, for example, Jordan can produce bananas. In fact it already does. But, the production of bananas requires vast amounts of water, which is an extremely scarce resource in one of the water-poorest countries in the world. At the same time, the production of olives and olive oil are not only a centuries old tradition, it is a far more viable alternative. Although Jordan won't be at an absolute advantage at producing olive oil, since Spain, Italy, Greece, Tunisia...are way ahead in the game, Jordan could devote the banana lands and resources to the production of tomatoes and other foods taking advantage of the warm winters of Jordan Valley.
By producing bananas, and other less strategic products, such as textiles, Jordan is foregoing a chance to specialize in an industry, or two, and instead is trying to do it all. World markets today do not allow for such ways of thinking. With emotions aside, Jordan is in need of a national SWOT analysis to better understand its place in the region, as well as the world. Economically speaking.
Saturday, February 07, 2009
Monday, December 29, 2008
Gaza Protests In the US--Calendar
- San Francisco
Tuesday, December 30, 5:00 pm
Israeli Consulate:456 Montgomery St. Contact: 415-821-6545, answer@answersf.org
Fort Lauderdale, FL
Tuesday, December 30, 5:00 pm
Federal Building: 299 E. Broward Blvd.
Contact: 954-707-0155, FtLauderdale@answerfl.org
Chicago
Details to be announced
Contact: 773-463-0311, answer@chicagoanswer.net
Boston
Details to be announced
Contact: 857-334-5084, boston@answercoalition.org
Seattle
Saturday, January 3, 12:00 noon - 2:00 pm
Westlake Park: 4th and Pine
Initiated by Voices of Palestine
Contact: general@voicesofpalestine.org
Washington, D.C.
Tuesday, December 30, 4:30 pm
State Department: 22nd St & C St NW
Contact: 202-544-3389 x14, dc@answercoalition.org
Los Angeles
Tuesday, December 30, 4:30 pm
Israeli Consulate: 6380 Wilshire Blvd.
Contact: 213-251-1025, answerla@answerla.org
New York City
Tuesday, December 30, 5:00 pm
Israeli Consulate: 800 2nd Ave (b/w 42nd and 43rd Sts)
Contact: 212-694-8720, nyc@answercoalition.org
http://groups.yahoo.com/group/NAAP-NorthernCalifornia/
Monday, October 20, 2008
There is a huge Sale and Arabs are not attending
Aside from one piece of news mentioning a Qatari Company mulling "taking an interest" in the Asian subsidiaries of American International Group (AIG), Arabs' money has been largely absent from the fire sale going on in Europe and the US. Many local and International investors have been acquiring stakes in financial companies, and others as in the case of General Electric, for pennies on the dollar with great long term profit potential. Although Arab money better stay in the Arab world to ignite badly needed economic development, there exist many options on the global stage since the local market is not getting the attention it deserves.
The recent increase in Oil prices, although retreated, has left governments of the gulf with huge budget surpluses. There are many projects going on that have been decided prior to the down turn in global markets. These days, with the likes of Warren buffet attesting to the sense made by investing in Equities in major markets, a great opportunity will go by without taking advantage of it.
I understand that companies, such as Dubai World, have learnt a lesson by staying away from American companies due to the dirty politics of some politicians in Washington, but their money is more than welcome at times like these.
The recent increase in Oil prices, although retreated, has left governments of the gulf with huge budget surpluses. There are many projects going on that have been decided prior to the down turn in global markets. These days, with the likes of Warren buffet attesting to the sense made by investing in Equities in major markets, a great opportunity will go by without taking advantage of it.
I understand that companies, such as Dubai World, have learnt a lesson by staying away from American companies due to the dirty politics of some politicians in Washington, but their money is more than welcome at times like these.
Saturday, October 18, 2008
A Look at Jordan's Major Free Trade Agreements
United States-Jordan free Trade Agreement
The agreement was signed in 2004 and aims at eliminating tariffs by 2014 on all Jordanian and American products traded between the two countries. So far, the agreement's effect has been positive on the Jordanian side. In 2007, Jordan exported $1.329 Billions worth of merchandise to the USA and imported $856 Millions. The Numbers are up from $673.5 Millions and $492 Millions, respectively, since 2004. Although, it is worth mentioning that a big percentage of imports from the US were on their way to Iraq. So, Jordan holds a sizable trade balance with the US.
Due to prohibitive transportation costs, further increases of exports to the US are possible only through focusing on high value added products, such as pharmaceuticals and dead Sea products, arts and crafts, and quality textiles, or the exporting of services, such as tech outsourcing.
Canada-Jordan Free Trade Agreement
Despite its enormous surface area, Canada remains a relatively small market. with a population of 33 Million, it is one of the least dense countries in the world. On the economic side, however, Canada, the ninth largest economy in the world, ahead of Russia, India, and Brazil, is not a small player, with international trade taking place in 2006 totaling ~$740 Billion. Compared that to Jordan's $16 Billion and the scale gets out of hands. What would Jordan trade with Canada? Canada has abundant natural resources, more shale rock to cover Jordan in many layers, is the world's largest producer of Potash, a major source of Phosphate, and, unlike the US, prescription drugs are heavily subsidized by the government.
Well, since Canada has already lobbied its businesses to widen trade with Jordan in the Forestry and Agriculture industry, Jordan can very well benefit from such trade. As any Canadian will tell you, winter months in Canada are snowy, bitter cold. Therefore, with a Jordanian mild winter climate, floral and other agri-businesses will find premium paying markets. Although I would not disregard pharmaceuticals, since the government is paying for them! The Agreement was signed in August, 2008.
EU-Jordan Association Agreement
This agreement is the one making the most sense. For one, the geographic proximity of the European market is more of reason to take advantage of. The higher standard of living, the homogeneity and size of the market, the large volume of existing trade between the Middle East and Europe are more reasons to exploit the association agreement. From fresh flowers to produce to pharmaceuticals, Dead Sea products and fertilizers, Jordanian products are well positioned to compete. However, what remains as an obstacle is the degrees of conformity to International standards and professionalism in business settings and contracts.
In 2001, Jordanian exports to the EU were a mere $50 Million, while imports were more than a Billion dollars. Compared to 2007, Jordan has decreased the difference percentage-wise to $300 Million vs. $3.6 Billion. the agreement was finalized in May, 2002.
p.s. According to wikipedia, Algeria, peru, libya, Syria, Kuwait, and Bahrain also have free trade agreements with Jordan, but not much information is available on the internet.
The agreement was signed in 2004 and aims at eliminating tariffs by 2014 on all Jordanian and American products traded between the two countries. So far, the agreement's effect has been positive on the Jordanian side. In 2007, Jordan exported $1.329 Billions worth of merchandise to the USA and imported $856 Millions. The Numbers are up from $673.5 Millions and $492 Millions, respectively, since 2004. Although, it is worth mentioning that a big percentage of imports from the US were on their way to Iraq. So, Jordan holds a sizable trade balance with the US.
Due to prohibitive transportation costs, further increases of exports to the US are possible only through focusing on high value added products, such as pharmaceuticals and dead Sea products, arts and crafts, and quality textiles, or the exporting of services, such as tech outsourcing.
Canada-Jordan Free Trade Agreement
Despite its enormous surface area, Canada remains a relatively small market. with a population of 33 Million, it is one of the least dense countries in the world. On the economic side, however, Canada, the ninth largest economy in the world, ahead of Russia, India, and Brazil, is not a small player, with international trade taking place in 2006 totaling ~$740 Billion. Compared that to Jordan's $16 Billion and the scale gets out of hands. What would Jordan trade with Canada? Canada has abundant natural resources, more shale rock to cover Jordan in many layers, is the world's largest producer of Potash, a major source of Phosphate, and, unlike the US, prescription drugs are heavily subsidized by the government.
Well, since Canada has already lobbied its businesses to widen trade with Jordan in the Forestry and Agriculture industry, Jordan can very well benefit from such trade. As any Canadian will tell you, winter months in Canada are snowy, bitter cold. Therefore, with a Jordanian mild winter climate, floral and other agri-businesses will find premium paying markets. Although I would not disregard pharmaceuticals, since the government is paying for them! The Agreement was signed in August, 2008.
EU-Jordan Association Agreement
This agreement is the one making the most sense. For one, the geographic proximity of the European market is more of reason to take advantage of. The higher standard of living, the homogeneity and size of the market, the large volume of existing trade between the Middle East and Europe are more reasons to exploit the association agreement. From fresh flowers to produce to pharmaceuticals, Dead Sea products and fertilizers, Jordanian products are well positioned to compete. However, what remains as an obstacle is the degrees of conformity to International standards and professionalism in business settings and contracts.
In 2001, Jordanian exports to the EU were a mere $50 Million, while imports were more than a Billion dollars. Compared to 2007, Jordan has decreased the difference percentage-wise to $300 Million vs. $3.6 Billion. the agreement was finalized in May, 2002.
p.s. According to wikipedia, Algeria, peru, libya, Syria, Kuwait, and Bahrain also have free trade agreements with Jordan, but not much information is available on the internet.
Monday, October 13, 2008
Is Islam Damaged Beyond Repair?
In a previous post, I presented my views of how "Islam is not the Answer," and how countries with a majority of Muslims lag behind on almost all economic, developmental, cultural, and civil rights measures. These days we are faced with a version of Islam that is nothing more than a suppressing tool used by governments and religious "leaders", given the way most Muslims understand Islam, to deprive citizens of their ability to think and judge on their own.
However, the biggest fallout, as I see it, is the lack of a sense of organization within the Muslim world. This is apparent in the current chaos of fatwas being declared for the most ridiculous reason, for the absent of unity in announcing major Islamic occasions, and for gruesome conflicts between Shia and Sunnis.
Although, as I put together in the post linked to above, Muslim countries are way behind on many measures, superficial differences between sects and a race for dominance between THE two countries in the Middle East are dampening our ability to unite against whatever challenges are facing us.
After decades of the same, there is no Palestine, Shias and Sunnis are still fighting, illiteracy, corruption, and unemployment are rampant, And the feeling of some "conspiracy" brewing against Muslims rendering them more insecure than ever, one wonders whether Islam is damaged beyond repair?
However, the biggest fallout, as I see it, is the lack of a sense of organization within the Muslim world. This is apparent in the current chaos of fatwas being declared for the most ridiculous reason, for the absent of unity in announcing major Islamic occasions, and for gruesome conflicts between Shia and Sunnis.
Although, as I put together in the post linked to above, Muslim countries are way behind on many measures, superficial differences between sects and a race for dominance between THE two countries in the Middle East are dampening our ability to unite against whatever challenges are facing us.
After decades of the same, there is no Palestine, Shias and Sunnis are still fighting, illiteracy, corruption, and unemployment are rampant, And the feeling of some "conspiracy" brewing against Muslims rendering them more insecure than ever, one wonders whether Islam is damaged beyond repair?
Saturday, October 11, 2008
The attack on Capitalism is Unjustified
All it took is a decline in paper wealth for all those to unleash their attack machines on the merits of Capitalism claiming that other systems, namely Communism and Socialism, are far better for the livelihood of all mankind. However, a credible example of how these two systems might be more beneficial are never given. In socialist economies, you will always see those complaining of high income tax rates (reaching 59% in Denmark and 56% in Sweden) . Also, any shortcomings in the performance and efficiency of the a socialist government will have a tremendous negative effect on citizens. In Communist economic environments, people are most likely to be buried under mountains of bureaucracy, economic inefficiency, and the absence of personal motivation and aspiration.
Therefore, to attack capitalism because of a few bad weeks in comparison to many decades of growth is absured. Just look at Ireland, South Korea, Japan, USA, Australia, and Britain, then look at the Soveit Union (no wonder it vanished), Cuba, and North Korea.
Therefore, to attack capitalism because of a few bad weeks in comparison to many decades of growth is absured. Just look at Ireland, South Korea, Japan, USA, Australia, and Britain, then look at the Soveit Union (no wonder it vanished), Cuba, and North Korea.
Friday, October 10, 2008
Why it is the best time to put your cash into stocks
After suffering its worst week ever, American stock markets are poised to be the place for bargain hunters. Many well-known, established companies have lost more than 50% of their shares' value over the past few weeks. Companies, the likes of CitiGroup, Intel, General Motors, Ford, and Alcoa are at or near their 52 week lows. Actually in the case of GM, it is 52 year low. These companies are either world leaders in their industries, or hold too much value to the American economy to let them go bankrupt. Take GM and Ford for example. Both companies have more than a half Million employees between them. Add to that the numbers employed by their parts' suppliers, dealerships' salespersons, and many other tangent industries. For these two companies to go under will most likely result in an economic situation that makes the great depression look like a time of boom in comparison.
My long Term stock picks include:
My long Term stock picks include:
| Company | Current Share Price | Ticker
|
| Ford
the US government will do everything in its power to help Ford and GM stay operational. Letting them close shop (or sold to a foreign investor) is like cancelling the 4th of July! | $1.99 | F |
| General Motors | $4.89 | GM |
| Citi Group
Despite losing to Wells Fargo in acquiring Wachovia, Citi remains one of the largest financial companies in the world | $14.11 | C |
| AIG
the US government has too much of a stake in AIG to let go under. | $2.33 | AIG |
| Intel
Without doubt, the most dominant Chip maker. | $15.19 | INTC |
| Sun Microsystems
After a reverse stock split, it is back to the low single digit. Most likely due to general market conditions. | $4.80 | JAVA |
| Alcoa
The worlds' largest Aluminium and American Stable. | $11.25 | AA |
| The Home depot
If you can't sell you house in this market, might as well improve it to add value. This is where the Home depot comes into play. Even after the market recovers, HD will still benefit from a resurrected housing market. | $19.75 | HD |
| General Electric
Probably the most diverse company (that's not a holding company) in the world. GE is worth at least $50 once markets recover. Its decline is attributed to the decline of its financial unit. | $21.50 | GE |
| Bank of America
The most stable Banking company in the US. Acquired Country Wide for pennies on the dollar. | $20.87 | BAC |
Tuesday, October 07, 2008
Falafel Gets a Day in Court
Just like the Greeks did, when they sued French dairy farms (and won) for using the word "Feta" to describe the cheese they sold, Lebanon is gearing up its own litigation forces to sue Israeli companies over marketing Hummus, Falafel, and Babaghanouj as "Israeli products."
I have noticed, even at Arab owned grocery stores in the States, that packaging of above products claims them to be "Authentic Israeli" products. Although the Jewish cuisine is mainly based on corned beef, pastrami, and sauerkraut, they have managed to mass market Middle Eastern products in the US (the brand Sabra is an example). At the same time, Arabs were caught stuck with Zyad brands packaged in the hideous metal cans without an atom of flavor.
I have noticed, even at Arab owned grocery stores in the States, that packaging of above products claims them to be "Authentic Israeli" products. Although the Jewish cuisine is mainly based on corned beef, pastrami, and sauerkraut, they have managed to mass market Middle Eastern products in the US (the brand Sabra is an example). At the same time, Arabs were caught stuck with Zyad brands packaged in the hideous metal cans without an atom of flavor.
Sunday, October 05, 2008
The Hopeless State of the Ministry of Planning and International Cooperation's Website
One would expect a ministry of an International audience to have a website fully functioning and available in as many languages as the sources of aid sought. However, the Jordanian ministry of Planning and International Cooperation is guilty on both counts. Even as it is the recipient of the "Gold Award in the Best Ministry Category/ the King Abdullah II Award for Government Performance and Transparency."
To start with, the website just seized functioning all together (Link). I am hoping they had read my mind and decided to revitalize their digital presence. Also, for a "Transparency" award recipient, the website (when was still up) had only two studies: one of them was in regard to external trade during the first half of the decade.
The aspect of a website of such ministry that I really care about is the current and constant availability of studies in relation to the economic, development, and external trade statistics, studies, and reports. These reports would help the interested have a window into the country's progress and be able to study and analyze the Business/trade/FDI environment.
One last observation: I can understand being the winner in the Best Ministry Category as this ministry tops all others in generating international grants and Aid!
To start with, the website just seized functioning all together (Link). I am hoping they had read my mind and decided to revitalize their digital presence. Also, for a "Transparency" award recipient, the website (when was still up) had only two studies: one of them was in regard to external trade during the first half of the decade.
The aspect of a website of such ministry that I really care about is the current and constant availability of studies in relation to the economic, development, and external trade statistics, studies, and reports. These reports would help the interested have a window into the country's progress and be able to study and analyze the Business/trade/FDI environment.
One last observation: I can understand being the winner in the Best Ministry Category as this ministry tops all others in generating international grants and Aid!
Thursday, October 02, 2008
The Halal and Haram of Stock Trading
Dr. Nooh Ali Salman, the Jordanian religious leader, has issued a Fatwa (edict) prohibiting the trading in global securities due to the harm and losses incurred by many Jordanians in the recent crack down on Securities' Brokers in the country. Dr. Salman likened trading in stocks with gambling. However, the Fatwa fails to acknowledge the stark differences between gambling and Investing/trading in the stock market.
Trading in Stocks is no different than the trading prophet Muhammad did for living. He basically bought low and sold high, such are the basis for every single trading transaction. However, what many Jordanians are doing is basically speculation and, out right, gambling. Trading done by most Jordanians is seldom based on fundamentals of industries', general macroeconomic conditions, and profound look into companies' operations, executives, nor competition. The mere hearsay of some development cooking is usually enough motivation to pour life-savings into the market. And therefore, it is Haram. But, to declare that all trading in securities, including those based on credible analysis and understanding of the market and its forces, is also Haram is flawed to say the least.
Trading in Stocks is no different than the trading prophet Muhammad did for living. He basically bought low and sold high, such are the basis for every single trading transaction. However, what many Jordanians are doing is basically speculation and, out right, gambling. Trading done by most Jordanians is seldom based on fundamentals of industries', general macroeconomic conditions, and profound look into companies' operations, executives, nor competition. The mere hearsay of some development cooking is usually enough motivation to pour life-savings into the market. And therefore, it is Haram. But, to declare that all trading in securities, including those based on credible analysis and understanding of the market and its forces, is also Haram is flawed to say the least.
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