Saturday, June 30, 2007

Dubai and congestion: Gulf Talent press release

Just in advance of a road toll system in Dubai Gulf Talent has issued a release. Some excerpts:
Dubai is officially the most congested city in the Middle East, according to the latest survey by, the region’s leading online recruitment portal.
The journey times are particularly long for those commuting to Dubai from neighbouring Sharjah, home to many expatriates working in Dubai. Although just 15 km away and connected to Dubai via two express highways, Sharjah residents working in Dubai reported spending on average 2 hours and 44 minutes for the daily return journey to and from work, much of it in slow-moving bumper-to-bumper traffic.
Cairo came second in the traffic rankings, with total daily commute time at 1 hour and 33 minutes on average.
A core underlying problem remains that, across much of the region, the development of support infrastructure is lagging behind more prestigious mega-projects such as airports, business parks, and high-rise towers – leading to continuous bottlenecks and disruptions in traffic.
Commuting of course does not stand alone from the decision on where to live. The lengthy commutes are chosen in part because of the differences in rent between Dubai and Sharjah. Given that congestion within Dubai even for those who choose to live there the option of living in Sharjah becomes all the more attractive.

It's ironic that a city like Dubai whose road and transport system could have been designed for the start (the early 1970s) to work well now has commuting times that exceed those in an old and massive city like Cairo. It says something good about the Dubai economic model, but raises questions at the same time about the quality of urban planning.

But why should I criticize? I claim to be a libertarian after all.


Friday, June 29, 2007

Barneys comes to Dubai

That's Barneys (the fancy department store), not Barney (the purple star of the kids show).

Remember Barneys? Rachel, of the TV show Friends, worked at Barneys.

The business arm of the Dubai government has purchased Barneys. So reports The New York Times:
The clothing retailer Barneys New York, a temple to fashion that introduced Americans to Armani and $300 T-shirts, was sold yesterday to the investment arm of the Dubai government for $825 million.

The flagship Barneys store at 660 Madison Avenue in Manhattan opened in 1993.

The deal for Barneys, whose founder pawned his wife’s engagement ring to start it 84 years ago, represents a trophy for Istithmar, the arm of the Dubai government. It has been on a buying spree in the United States, purchasing a raft of high-profile businesses and real estate, like stakes in the retailer Loehmann’s Holdings and the investment bank Perella Weinberg Partners.
Unlike Saks Fifth Avenue or Neiman Marcus, Barneys never became a household name or a megabusiness. Despite cameos in “Sex in the City” and Vogue, it remained exclusive — its reach largely confined to the two coasts and a crowd of the ultra-fashionable.

Even so, Barneys, founded in 1923 as an off-price men’s suit store, has become a prized asset in fashion, renowned — and at times parodied — for sparse displays, obscure designers and aloof sales clerks.

Reviewing the store in The New York Times last year, Alex Kuczynski wrote that “to its New York department store brethren, Barneys is the cool kid in the class, the one with the magically floppy head of hair, while Bloomingdale’s is the head cheerleader and Lord & Taylor, the substitute teacher.”
With the sale of Barneys — arguably the most coveted part of the Jones business — it may be harder for the board to find a future buyer, said Andrew Jassin, managing director, Jassin-O’Rourke Group, a fashion consulting firm, and a former executive at Jones Apparel.

Still, he said, the price the Dubai government paid for Barneys is “a great gift to the shareholders of Jones Apparel.”
Women's Wear Daily looks at the tourist angle:
While many industry consultants, and even some investment bankers not involved in the deal, have speculated that international expansion in tourist locales is the primary reason why Barneys would be an attractive purchase for an overseas buyer, Jackson downplayed that analysis.

"I wouldn't oversell that idea in the sense that we start with underlying businesses that are sustainable, with attractive growth models. To the extent that we can expand into international markets where tourists are, it would be [an opportunity], but the primary business still has to work. From our standpoint, to be attractive in tourist locales, the core business has to work as an existing business before it can [be opened] in a stand-alone tourist compound," the ceo said.


Wednesday, June 13, 2007

The Slave Trade: two items

Item 1: "Countries on the list are subject to sanctions for not doing enough to stop the yearly flow of some 800,000 people, 80 percent of them female and up to half of them children, across international borders for the sex trade and other forms of forced and indentured labor. Among U.S. friends getting a failing grade were Bahrain, Kuwait, Oman and Qatar"

Item 2: "Charleston, South Carolina: Eighteen years ago, Tony Akeem organised a ceremony in New York City to honour the millions of Africans who died crossing the Atlantic during the slave trade. Similar observances have since spread around the world. On Saturday, offerings of water, honey and rum were poured along the shores of South Carolina and elsewhere for Middle Passage Remembrance Day."

Tuesday, June 12, 2007

Oil Prices: the difference a week (weak?) makes

A week ago: We will drive "oil prices through the roof" if you persist in the development of bio-fuels.

Today: The story is of the recovery of oil prices from a huge selloff on Friday.

If OPEC wants to delay the development of cost-effective bio-fuels it should expand production, not contract it. Conversely, if bio-fuels become more likely to be competitive in the future, we would predict oil prices to fall today.

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Friday, June 08, 2007

There's a new blog in town

VoxEU is an economics blog

Those "who have agreed to contribute regularly, are: Philippe Aghin, Alberto Alesina, Richard Baldwin, Giuseppe Bertola, Tim Besley, Olivier Blanchard, Tito Boeri, Willem Buiter, Michael Burda, Stephen Cecchetti, Daniel Cohen, Juan Dolado, Esther Duflo, Barry Eichengreen, Francesco Giavazzi, Jeffrey Frankel, Rachel Griffith, Philip Lane, Philippe Martin, Richard Portes, Anne Sibert, Guido Tabellini, Shang-Jin Wei, and Charles Wyplosz."

Contributions welcomed: "Vox will feature items that are diverse both in terms of length and depth of analysis, but a key element will be 'columns' by researchers on policy relevant topics. These will be 500-1500 word "research-based policy analysis and commentary". The level should be above a newspaper column but very much more accessible than a journal article. The audience is trained economists (not necessarily PhD but some formal training) in the public and private sectors, academia as well as the specialized media. We encourage references to research, tables, charts and diagrams where appropriate. We encourage submissions from all professional economists."


Saturday, June 02, 2007

Nose Job Nation

The surgeons there have really worked down the learning curve. For my taste, it's a shame.

But people respond to incentives. If you're constrained to cover the rest of your body, you work on your face.


Causes of inflation: spot the flaws

Gulf News, under the headline "Dollar peg barely affects inflation, says Saudi Arabia":
Sayyari, governor of the Saudi Arabia Monetary Agency (Sama), said the kingdom paid for less than 25 per cent of its exports in currencies other than the dollar and the riyal. "One of the important factors that can have an impact on inflation is the rise in public spending," Sayyari said on state-run Saudi Channel 1.

"It's important to coordinate monetary policy and government spending to limit the impact on inflation and that is always available through continued dialogue with the finance ministry," he said.
Any appreciation of the Saudi riyal would reduce local currency revenue from dollar-denominated oil exports. While that may not be a concern in smaller countries such as Kuwait, it could sway policy in Saudi Arabia, where public debt topped 100 per cent of gross domestic product during a spell of low oil prices in the 1990s.

Saudi Arabia, the region's strongest advocate of dollar-pegged exchange rates, has a much lower inflation rate than some other Gulf states.
Sayyari said the widely varying inflation rates in countries with dollar pegs showed exchange rates were not to blame for price rises. "This proves that the causes of inflation are local," he said.