Views from Eurasia

I spent last week in Amman Jordan where I presented a paper on the U.S. Subprime mortgage crisis to the Association of Banks in Jordan. Financial market developments in the U.S. have affected markets world wide. I will be happy to send the paper to any of you who would like it.

 

I am now finishing up a short visit to Astana, the capital of Kazakhstan, where I participated in the founding of the Eurasian Economic Club of Scientist in the run up to the tenth year anniversary of the establishment of Astana as Kazakhstan’s capital. Kazakhstan boarders Russia to the north and China to the East, but as part of the former Soviet Union has closer ties with Russia.

 

Last night was the final banquet/party. If you really want to party, party with Russians and Kazakhs. They are warm friendly people to begin with but become even more so with each shot of vodka. Following tradition they each expressed themselves to the whole group through a series of toasts delivered from the most senior person on down.

 

As we were a large group, toasts were delivered from the dance floor with a microphone. Our table went up as a group and the delegate from Beijing next to me, his adrenaline flowing, literally shouted into the microphone warm platitudes of greatness and success to everyone. I had thought of him as soft spoken until then.

 

There were many Russians attending and I marveled at the warm relationship the Kazakhs expressed toward their Russian brothers. It was an interesting contrast with the attitude I observed sixteen years earlier when I lead the IMF’s technical assistance teams to the National Bank of Kazakhstan, Kazakhstan’s central bank newly established from the branch of the Soviet central bank that had preceded it. The relationship then with Kazakhstan’s former colonial master was tense and sensitive. Now, as an independent country, the Kazakhs wanted to be close to their Russian brothers again. But it shouldn’t surprise us that volunteer relationships work better than coercive ones.

 

I am reminded as well of comments by dinner guests at my home some weeks ago about the future of China and Russia. The consensus was that China was a good country to do business with because the rules were clear and adhered to and the Russia was not for the lack of the same. Russian President Medvedev has been saying the right things, “we must repeat again and again: protection of property rights is the first and most important task of the state.” The Economist quotes the results of a survey of 60 Russian chief executives in which most want Russia by “2020 to be ‘free, educated and law-abiding;’ only 22% want it to be ‘strong.’” My dinner guests did not think Russia could change. “Ten or twenty years from now no one will pay any attention to Russia,” my dinner guests concluded. “It will be unimportant. It will be all China.”

 

On a different note, I asked a number of the young Kazakhs helping with the conference what they thought of the U.S. presidential campaigns. They all liked Obama, not because they know and approve of his policy positions, but because his Indonesian step father was a Muslim (Kazakhstan is a majority Muslim country—vodka drinking Muslim’s I call them). Though they know Obama is a Christian, they think he will understand Islam better. The Indonesian delegate at my table (another Muslim country) expressed exactly the same views.

About wcoats

I specialize in advising central banks on monetary policy and the development of the capacity to formulate and implement monetary policy.  I joined the International Monetary Fund in 1975 from which I retired in 2003 as Assistant Director of the Monetary and Financial Systems Department. While at the IMF I led or participated in missions to the central banks of over twenty countries (including Afghanistan, Bosnia, Croatia, Egypt, Iraq, Israel, Kazakhstan, Kenya, Kosovo, Kyrgystan, Moldova, Serbia, Turkey, West Bank and Gaza Strip, and Zimbabwe) and was seconded as a visiting economist to the Board of Governors of the Federal Reserve System (1979-80), and to the World Bank's World Development Report team in 1989.  After retirement from the IMF I was a member of the Board of the Cayman Islands Monetary Authority from 2003-10 and of the editorial board of the Cayman Financial Review from 2010-2017.  Prior to joining the IMF I was Assistant Prof of Economics at UVa from 1970-75.  I am currently a fellow of Johns Hopkins Krieger School of Arts and Sciences, Institute for Applied Economics, Global Health, and the Study of Business Enterprise.  In March 2019 Central Banking Journal awarded me for my “Outstanding Contribution for Capacity Building.”  My most recent book is One Currency for Bosnia: Creating the Central Bank of Bosnia and Herzegovina. I have a BA in Economics from the UC Berkeley and a PhD in Economics from the University of Chicago. My dissertation committee was chaired by Milton Friedman and included Robert J. Gordon.
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