Which country has the best reputation?

Canada. Of course. This is what reveals a new report by the Reputation Institute, a consultancy. They asked over 42,000 people from G8 countries whether they think a "Country" has a good reputation, whether they have a good feeling about "Country" , whether they admire, respect or trust "Country" etc... The ranking is found below. The report argues that a 10% increase in Country Reputation leads to 11% increase in Tourism Receipts, and 2% increase in Foreign Direct Investment. Now whether reputation boosts FDI or the other way around is the question. They also estimate a self-image gap and found that Belgium, Italy and Greece rated their own country way lower than how others perceived their nation. That's telling...

Book Review: "23 things they don't teach you about capitalism", by Ha-Joon Chang.

Argentina recently imposed import-license requirements for mobile-phones. Its motive is to replace imports with local production, and hence create jobs. The trade policy, coupled with tax incentives, led Research in Motion, the makers of BlackBerrys, to begin assembling phones in Tierra del Fuego. Similarly, Brazil is trying to replace imports by local manufacturing using tax breaks. As a result, Foxconn is setting up a Brazilian plant to assemble iPads.

Both these examples, taken from this week’s Economist, would make Ha-Joon Chang smile. Not only is he a great believer in the role of manufacturing in prosperity (see here how he crushed Bhagwati in an onlinedebate), he also believes such industrial policy is exactly the right tool to promote development. His latest book, “23 things they don’t tell you about capitalism”, makes the point once again, repeating his favorite stories from previous books (see my previous review here).

The author is quite talented at convincing people that capitalism is often a bad idea. His approach consists in making extremes out of free-market ideas, and giving a few examples to prove they’re not true. Arguing by examples does not usually convince economists, who prefer regressions. But the latter should pay attention rather than dismiss it so easily.

He is most interesting when arguing that education does not matter much for growth. A university education does not make you more productive. What matters more is the capacity of organization of leaders, whether in business or government. He’s also fun when he gives example of how economists don’t do good policy. The rest is mostly summarized as “free-market policies don’t always work, but quite to the contrary”.

All in all, this is another great book by Ha-Joon Chang, but nothing new. As for Brazil and Argentina, let’s see what happens to their industries in the years to come.

The Chinese in Zambia

BBC NEWS:

"Lusaka has recently become the first African city to offer Chinese currency banking services. The city's Bank of China branch now handles counter deposits and withdrawals in yuan.
In the last 10 years... Sino-Zambian trade has really taken off, growing from just $100 million in 2000 to $2.8 billion last year... Beyond mining and manufacturing, there is also growing Chinese presence within Zambia's retail sector, from imported textiles and electronics, to chickens farmed locally and sold in city markets. The country is also home to two of China's six African Special Economic Zones."

Zambia is having elections today...