Monday, February 23, 2009

Economic stimulus package for Maldives?

There are talks of an economic stimulus package for Maldives. The discussions are being held at the Majlis level. It is no wonder that the parliamentarians and the businessmen are jumping at the opportunity to line their pockets. The key question that need to be asked is whether we need a stimulus package, and what exactly are we trying to stimulate.

One can look at what is happening in the US to see why they wanted a stimulus package and what is being done. When you really look into it, the bigger part of the stimulus package is going to prop up the big failed banks. Its not stimulus. Its Social Welfare for the Rich!

The thing that worries me is that the Majlis is mostly comprised of businessmen. If there ever is a stimulus package, I fear that the main benefactors will be the resort owners and other big businesses. Again social welfare for the rich.

Yes resorts will be hit hard, and many other sectors such as construction will see the hit. But artificially stimulating is just the wrong medicine. If the resorts or the construction companies (or any other business for that matter) are making a loss, then be it! Isnt that what risk taking in business is all about? Just like any business, investors invest hoping that their will be a profit. Why should the public money be spent propping up a failing business? What is the ethical justficiation for it? When the economy is good, they take all the profits, but when it is loss, the public has to bear it? Thats not capitalism. Privatise the profit and socialise the risk, thats what it is called.

I am not saying there are no problems with the Maldives economy, we have our own problem too. But the stimulus package is not going to solve the problems we face, and whatever the package they come up with they will come again asking for more just like the US.

Saturday, February 14, 2009

Previously patented post

Lately there have been many calls for legislations regarding "intellectual property" (IP). IP laws grant exclusive monopoly to one's creative work usually for a given period of time. The term "intellectual property" is a confusing term in that it could mean copyright, patent or trademarks. Therefore when discussing IP it is important to specify which one (copyright, patent or trademark) that we are talking about, as each of these have a specific meaning.

As Maldives will eventually have such laws, it is important for the general public to understand what these actually mean. Some people do mistakenly believe that whole ideas and concepts can be patented. What can and should be patentable is a particular implementation of an idea. There are various other conditions that have to be met for a claim to be patented. If an idea or concept can be patented, that would mean someone could patent the idea of say blogs. That would mean whoever got that patent will have an exclusive monopoly over the whole concept of blogging. How would that promote innovation? How would that allow competition? Luckily, ideas and concepts are not patentable, and we do have lots of competition for blog software and hosts.

Even if only a specific implementation of an idea is patentable, the crucial question is who will be examining the patent application for its merit. How qualified will that person or institution be? Will they be able to identify obvious and non-obvious claims? What about the existence of prior art? How long shall the patent be valid for? 5 years? 20 years? What types of patents will be allowed?

These have to be addressed to have a healthy patent system that promotes and rewards the real inventors rather than the patent trolls. We should not let our patent office become like some others where stupid and obvious patents were granted.

And there still remains the problem with rewarding the independent inventor. What happens if I make the same invention independently? Will the first applicant (and hence the patent holder) be able to stop me from developing my invention, which I made with my own effort and my very own ideas? Is he not interfering with my freedom of expression?

Maybe I should patent the idea of establishing a good patent system?

Monday, February 9, 2009

Anni's Playbook

The current president has pledged to float the Rufiyaa (and keep it at 10rf per dollar) and to secure a 800m reserve. I think this is doable and here is how i think he plans to do it.

His strategy is directly from 'freemarket' playbook and known by various names.

What is happening now is the Maldivian version of economic shock therapy. This is what the developed and developing countries want from the third world countries. The multinationals and the financial institutions will then welcome us with arms wide open.

Anni has already implemented items 4 and 8 of structural adjustments. Item 9 is in the works. Just wait and see the rest being implemented. The changes will be quick and big (literally 'alifun yaa ah').

Yes Anni will float the Rufiya and maybe it is possible to bring to 10rf per dollar. With Maldives "Open for Business" then the Rufiyaa will certainly gain. He announced to the public with great fanfare the commitment from our neighbours for 300m. What he did not say at that time were their conditionalities. The 15 MoU's might have the answer though.

I think Anni knows what he is doing, not that I agree though. His tactics are smiliar to that of Thatcherism. Maybe he will add his own flavour and then we can call it Annism.

PS: Thatcher is from the British Conservative Party and backs the current president and his MDP. Coincidence?

Tuesday, February 3, 2009

Economic shock therapy

The recent trade agreements signed by the Maldives and CII of India clearly demonstrate the economic policy of MDP. 15 MoU's were signed between Maldivian government and various private companies of India. Not much detail have been released to the public, but if history is any indication, this will result in many Indian companies making investments that will bring economic progress.

However, one is left thinking, what are the long term consequences of privatising the infrastructure of this country. What will happen to the local companies and also the local labour force. Anni is very much right leaning and his policy of frantic trade liberalisation is arguably the Maldivian version of Economic Shock Therapy, that was carried out in Chile, Poland, former USSR etc albeit without the immediate human cost.

One question still remains is how successful will this experiment be. Will it be `successful' as in Poland or will result in the rise of the oligarchs.