Persian Realm

UK banker quizzed over rates scandal at Barclays

Former Barclays chief executive Bob Diamond has called the behaviour of those responsible for rate-rigging at the bank "reprehensible".

He said he only learned the true extent of the scandal this month, and felt "physically ill" when reading incriminating emails from traders.

Mr Diamond said he "loved" Barclays and had resigned to protect its reputation. "I'm sorry, disappointed and angry."

He faced three hours of questioning by MPs on the Treasury Committee.

Niall Ferguson: London's reputation at stake over Libor

The financial historian Professor Niall Ferguson says he expects to see more revelations in the coming days about how the Libor rate was fixed.

He tells Sarah Montague that the scandal surrounding the fixing of the inter-bank rate goes much wider than Barclays and means the reputation of the City of London is at stake.

'Empower Bank' to discipline City argues Niall Ferguson

Iqbal Jaan Good to see you back

I fondly recall your articles as one of the first feature writers and contributors to Iranian.com in the old pioneering days.

So nice to have you back.

Thank you for the references to Subramanian also.

What I find interesting in Ferguson's outlook is that he clearly shows the the Notiion of "Empire" remains relevant to today's international relations.

His parrallels between what he calls the Reluctant American "Empire "and the British Empire as being very pertinent.

But more importantly he warns us about the dangers of not taking concrete and bold political and economic  actions to remedy much of the ills faced by our societies as competition with the Giants of Asia ( China, India and Russia) may constitute a genuine threat in the years to come.

Where I tend to disagree with him is that I think that China may face troubles inside very much like Iran under the Shah with it's own Public opinion which may prompt it to face democratic demands just as what is taking place in the Arab world today.

Just recall the confidence the Shah had back in the 70's in regard to Iran's economic Growth:

Shah of Iran on British TV Speaks confidence about Iran’s economic Growth and his own Political stablility

So at one point if economic liberalization which guarantees China's economic results will have to give in to democratic demands. If it doesn't it can only be faced with trouble given the education and exposure of the population to other economic and political models surrounding it on the Continent.

That's something dictatorial or autocratic regimes never seem to understand nor learn from history.

But on the otherhand the Western Democracies are also threatened by political paralyisis due to too many conflicting interests. As a result neccessary political and economic reforms seem impossible to undertake and democracies are desparately in demand of  great leadership and visionary leaders.

There is clearly a vaccum on this front in the Western World at this crucial juncture in our history.

But the  Military and economic potential of that continent and alliances ( China, India, Russia) added to the galloping demography represents a genuine concern for the Western World in that we may indeed find ourselves as largely dependant on their dictate.

From that Point of View the Shah was Right to Warn the West :

Shah's Message to the "Blue Eyed People"

The West is now paying for it's own shortsighted policies and lack of long term vision.

Remember that the UN is merely composed of 5 permanant members including two China and Russia which are hardly what one could call "Buddies" of the West.

The entire value system and Moral leverage the West enjoyed throughout the Cold War is truly at Jeapordy.

This has only enhanced with September 11th 2001 but I believe more importantly the War in Libya and America's refusal to take upon the leadership truly was a test on America's credibility for world leadership.

It augurs good and bad but I also believe that if we learn the lesson, America can emerge as a major player in the decades to come and make that necessary comback both economically and morally as the beacon of Democracy and Freedom it always took pride in and which defines it as the nation it always has been.

But that will demand far more vision and capacity to command not only america but our old European continent out of the troubled waters we are currently in.

It's easier said than done ...

Warm regards,

D

Spheres of influence - The Economist

Hi Darius, according to a new book by Arvind Subramanian of the Peterson Institute for International Economics by 2030 China's economy could loom as large as America's in the 1970s.

By 2030 according to this book China will be number 1 with 18% share of the Global economic power, USA number 2 with 10.1% and India number 3 with 6.3%.

He argues that China’s economic might will overshadow America’s sooner than people think. Mr Subramanian combines each country’s share of world GDP, trade and foreign investment into an index of economic “dominance”.

By 2030 China’s share of global economic power will match America’s in the 1970s and Britain’s a century before. Three forces will dictate China’s rise, Mr Subramanian argues: demography, convergence and “gravity”. Since China has over four times America’s population, it only has to produce a quarter of America’s output per head to exceed America’s total output.

Indeed, Mr Subramanian thinks China is already the world’s biggest economy, when due account is taken of the low prices charged for many local Chinese goods and services outside its cities.

China will be equally dominant in trade, accounting for twice America’s share of imports and exports. That projection relies on the “gravity” model of trade, which assumes that commerce between countries depends on their economic weight and the distance between them.