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      in US Politics

      Blueprint for Biden? How a struggling Irish town gambled on its links to JFK

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      New Ross reinvented itself as a shrine to the Kennedy clan. Can towns linked to Biden, the most Irish American president since JFK, do the same?After its factories died and its port withered, New Ross, a town perched by the River Barrow in south-east Ireland, decided in the 1990s to tap a unique asset: John F Kennedy.The US president’s great-grandfather had sailed from the quays of New Ross to America during the 1840s famine, leaving behind a modest homestead that JFK twice visited, including a few months before his assassination in 1963. Like many Americans, not least the current US president-elect, Joe Biden, Kennedy was proud of his Irish connections and keen to re-emphasise the links. Continue reading… More

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      in US Politics

      Walmart sued by US over alleged role in fuelling America's opioid crisis

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      The US Department of Justice filed a lawsuit against Walmart on Tuesday, alleging that the retail giant filled “thousands of invalid prescriptions” for powerful painkillers, helping fuel America’s opioid crisis.Walmart runs more than 5,000 pharmacies across the country. Until 2018, the chain was a wholesale distributor of controlled substances for its own pharmacies, giving it extensive reach into many communities.The civil complaint points to the role Walmart’s pharmacies may have played in the crisis by filling opioid prescriptions and by unlawfully distributing controlled substances to the pharmacies during the height of the opioid crisis.“As a nationwide dispenser and distributor of opioids, and given the sheer number of pharmacies it operates, Walmart was uniquely well positioned to prevent the illegal diversion of opioids,” the 160-page civil suit, filed in Delaware federal court, said.“Yet, for years, as the prescription drug abuse epidemic ravaged the country, Walmart abdicated those responsibilities,” the suit added.In response, Walmart said the suit was “riddled with factual inaccuracies”.The DoJ document said the company “knowingly violated well established rules requiring it to scrutinize controlled-substance prescriptions to ensure that they were valid – that is, issued by prescribers in a legitimate manner for legitimate purposes, not for purposes of abuse or other diversion,” the suit continued. While Walmart was legally required to check potential red flags, it “made little effort to ensure that it complied with them”.Instead, Walmart made it hard for pharmacists to abide by these regulations. Managers pressured pharmacists to fill high volumes of prescriptions as quickly as possible “while at the same time denying them the authority to categorically refuse to fill prescriptions issued by prescribers the pharmacists knew were continually issuing invalid prescriptions”, the complaint charged.Even though Walmart’s compliance arm had amassed extensive information showing that people were repeatedly trying to get invalid narcotic prescriptions filled, the unit kept that data from pharmacists, authorities also said.Walmart filled prescriptions from prescribers who its own pharmacists had “repeatedly reported were acting as egregious ‘pill mills’ – even when Walmart was alerted that other pharmacies were not filling prescriptions for those prescribers. In fact, some of those pill-mill prescribers specifically told their patients to fill their prescriptions at Walmart.”So intense were the pressures on pharmacists that managers told them to “[h]ustle to the customer, hustle from station to station” because completing prescriptions “is a battle of seconds”, federal authorities alleged.As early as 2013, Walmart adopted a plan that used the number of prescriptions processed by an employee’s store as a factor in determining if the pharmacy staffer “was entitled to monetary incentive awards”.The DoJ contends that Walmart has committed “hundreds of thousands of violations” of the Controlled Substances Act. If Walmart is found liable for violating this act, each unlawfully filled prescription could result in a $67,627 penalty. Each suspicious order that was not reported to authorities could result in a penalty of up to $15,691. Civil penalties could reach “billions”, the DoJ said.More than 232,000 people died in the US from opioid-involved overdoses between 1999 and 2018, according to the DoJ.In a statement, Walmart said that the DoJ’s investigation was “tainted by historical ethics violations, and this lawsuit invents a legal theory that unlawfully forces pharmacists to come between patients and their doctors, and is riddled with factual inaccuracies and cherry-picked documents taken out of context”.“Blaming pharmacists for not second-guessing the very doctors the Drug Enforcement Administration (DEA) approved to prescribe opioids is a transparent attempt to shift blame from DEA’s well-documented failures in keeping bad doctors from prescribing opioids in the first place,” the company said.Walmart recently sued the DoJ and DEA, alleging that authorities wrongly ascribed blame to the company. The retailer’s suit wants a federal judge to determine that the government doesn’t have grounds to pursue civil damages, according to the Associated Press. More

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      in World Politics

      What Should Business Expect From Bolivia’s New President?

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      On October 18, the Bolivian public went to the polls and elected Luis Arce Catacora as the country’s 67th president in a surprise result that returned the socialist party of former President Evo Morales to power. Morales had previously ruled Bolivia as the leader of the Movement Toward Socialism (MAS) between January 2006 and November 2019, when he resigned from office and fled the country under pressure from the military following a controversial general election.

      The closeness of that contest — in which the conservative candidate Carlos Mesa missed forcing a runoff against Morales by 0.58% of the official vote tally — meant that 2020 was also expected to be a tight race. In the event, this year’s election saw Arce gain over half a million more votes than Morales had the previous year, with a similar amount bled away from Mesa’s 2019 total, handing Arce an outright victory without the need for a run-off.

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      While it would be tempting to see the Arce administration as a continuation of the Morales era, on the campaign trail, the new president repeatedly stated, “I am not Evo Morales.” Since being elected, Arce has made clear that Morales would have “no role” in his government. Nevertheless, with Arce serving as minister of economy and public finance for most of Morales’ tenure, any consideration of what to expect from the new president must take into account his predecessor’s record. 

      Business Under Morales

      The Morales administration presided over a period of considerable economic growth and social development, which saw the rate of extreme poverty drop by more than half, from 48% in 2006 to 23% in 2018, while gross national income (GNI) per capita — a general indicator of prosperity among the population — more than tripled to reach $3,530 in 2019. GDP growth was also continuous and relatively consistent during this period, fluctuating between 3.4% and 6.8% until 2019, when it dipped to 2.2%. Those figures made Bolivia one of the fastest-growing countries in the region for much of Morales’ presidency.

      Embed from Getty Images

      These changes were partly the result of a policy of nationalizing the petroleum, telecommunications and mining industries, enacted by decree early in Morales’ first year in office and less than two years after 92% of Bolivian voters had supported the nationalization of hydrocarbons during a compulsory referendum. While the country’s revenues from hydrocarbons increased dramatically and provided the funds to support poverty alleviation programs, that approach did not lead to a dramatic fall in foreign direct investment (FDI) in oil and gas extraction or mining, as many expected. In fact, both industries saw significant increases in FDI, which subsequently declined again but never below the levels seen before Morales came into office. Throughout this time, it was Arce overseeing these programs and investment, as well as a process of agricultural development and rural land redistribution, which was followed by both a significant increase in cereal and fisheries production. 

      It is important to note that a major policy shift occurred toward the latter years of the administration, with Arce himself stating during Morales’ final term that “our nationalisation agenda is over. … we need FDI, and we respect genuine, new private investment. Today FDI makes up 2 percent to 3% of our GDP. We want to double that by 2020.” In 2017, the country signed deals with foreign investors for hydrocarbon exploitation worth $1.6 billion, supplemented by a further $2.5-billion deal the following year. 

      The fact that the interim presidency of Jeanine Añez, who occupied the office between Morales and Arce, largely coincided with the COVID-19 pandemic makes it incredibly difficult to properly assess its performance, given the massive economic upheaval experienced throughout the region. While the interim government ordered an audit of the previous administration early on, it was soon forced to focus on implementing a range of measures designed to address the closure of businesses and an increase in unemployment.  

      In October, the interim government reported that the economic damage caused by the pandemic totaled around $5 billion, with an economic contraction of at least 4% expected by the end of 2020. While this unprecedented situation might make an assessment of the interim government difficult, it at least provides some important context for Arce’s approach to business and investment, which will be framed by the need to address the deep economic wounds caused by the pandemic.

      Arce’s Approach to Business

      As a candidate, Arce highlighted the efficacy of the economic policies pursued during the Morales administration and his intention to continue them. While this has been met with concern among some commentators, the more FDI-friendly latter years under Morales should give some cause for hope for investment in the country. Arce has proposed a drive for industrialization to replace importing foreign products in order to stimulate the internal market and generate more opportunities for locally-based companies. He has also said that he wants to encourage new company formation in Bolivia in order to stimulate employment.

      Yet Arce has also said that some form of austerity to deal with the country’s economic woes will be needed, even as he has pledged not to reduce public expenditure. In a sign of his pro-FDI approach, he has also highlighted his desire to tap into Bolivia’s massive and unexploited lithium reserves, at a time when demand for the mineral is skyrocketing in the face of the shift toward electric vehicles. Arce has stated that exploitation of those reserves will demand the help of a “strategic partner” and could pour an additional $2 billion into state coffers over the course of his five-year term.

      With the economic uncertainty that continues to swirl due to the ongoing pandemic, it is difficult to draw concrete conclusions about what to expect from the Arce administration, given that it is impossible to know what challenges and obstacles may present themselves in the coming months or years. Nevertheless, his early moves have pointed to a clear desire to stimulate business, with measures taken to provide for deferred credit, refinancing and rescheduling of debts, as well as forbidding additional interest being added to such credit by banks. 

      What is abundantly clear is that Luis Arce understands how critical FDI is to Bolivia’s future development, and that understanding will surely only have deepened in the context of the economic turmoil that has traversed the globe. With Bolivia boasting a host of investment opportunities and unsaturated markets, and with the new president already highlighting his desire to bring foreign investment into Bolivia’s massive untapped lithium reserves, it seems reasonable to expect that his administration will pursue a significant deepening of FDI even while he maintains the high levels of social spending seen under Evo Morales.

      The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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      in US Politics

      Trickle-down economics doesn't work but build-up does – is Biden listening? | Robert Reich

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      How should the huge financial costs of the pandemic be paid for, as well as the other deferred needs of society after this annus horribilis?Politicians rarely want to raise taxes on the rich. Joe Biden promised to do so but a closely divided Congress is already balking.That’s because they’ve bought into one of the most dangerous of all economic ideas: that economic growth requires the rich to become even richer. Rubbish.Economist John Kenneth Galbraith once dubbed it the “horse and sparrow” theory: “If you feed the horse enough oats, some will pass through to the road for the sparrows.”We know it as trickle-down economics.In a new study, David Hope of the London School of Economics and Julian Limberg of King’s College London lay waste to the theory. They reviewed data over the last half-century in advanced economies and found that tax cuts for the rich widened inequality without having any significant effect on jobs or growth. Nothing trickled down.Meanwhile, the rich have become far richer. Since the start of the pandemic, just 651 American billionaires have gained $1tn of wealth. With this windfall they could send a $3,000 check to every person in America and still be as rich as they were before the pandemic. Don’t hold your breath.You don’t need a doctorate in ethical philosophy to think that now might be a good time to redistribute some of richesStock markets have been hitting record highs. More initial public stock offerings have been launched this year than in over two decades. A wave of hi-tech IPOs has delivered gushers of money to Silicon Valley investors, founders and employees.Oh, and tax rates are historically low.Yet at the same time, more than 20 million Americans are jobless, 8 million have fallen into poverty, 19 million are at risk of eviction and 26 million are going hungry. Mainstream economists are already talking about a “K-shaped” recovery – the better-off reaping most gains while the bottom half continue to slide.You don’t need a doctorate in ethical philosophy to think that now might be a good time to tax and redistribute some of the top’s riches to the hard-hit below. The UK is already considering an emergency tax on wealth.The president-elect has rejected a wealth tax, but maybe he should be even more ambitious and seek to change economic thinking altogether.The practical alternative to trickle-down economics might be called build-up economics. Not only should the rich pay for today’s devastating crisis but they should also invest in the public’s long-term wellbeing. The rich themselves would benefit from doing so, as would everyone else.At one time, America’s major political parties were on the way to embodying these two theories. Speaking to the Democratic national convention in 1896, populist William Jennings Bryan noted: “There are two ideas of government. There are those who believe that, if you will only legislate to make the well-to-do prosperous, their prosperity will leak through on those below. The Democratic idea, however, has been that if you legislate to make the masses prosperous, their prosperity will find its way up through every class which rests upon them.”Build-up economics reached its zenith in the decades after the second world war, when the richest Americans paid a marginal income tax rate of between 70% and 90%. That revenue helped fund massive investment in infrastructure, education, health and basic research – creating the largest and most productive middle class the world had ever seen.But starting in the 1980s, America retreated from public investment. The result is crumbling infrastructure, inadequate schools, wildly dysfunctional healthcare and public health systems and a shrinking core of basic research. Productivity has plummeted.Yet we know public investment pays off. Studies show an average return on infrastructure investment of $1.92 for every public dollar invested, and a return on early childhood education of between 10% and 16% – with 80% of the benefits going to the general public.The Covid vaccine reveals the importance of investments in public health, and the pandemic shows how everyone’s health affects everyone else’s. Yet 37 million Americans still have no health insurance. A study in the Lancet estimates Medicare for All would prevent 68,000 unnecessary deaths each year, while saving money.If we don’t launch something as bold as a Green New Deal, we’ll spend trillions coping with ever more damaging hurricanes, wildfires, floods and rising sea levels.The returns from these and other public investments are huge. The costs of not making them are astronomical.Trickle-down economics is a cruel hoax, while the benefits of build-up economics are real. At this juncture, between a global pandemic and the promise of a post-pandemic world, and between the administrations of Trump and Biden, we would be well-served by changing the economic paradigm from trickle down to build up. More

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      in World Politics

      Learning to Become the World’s Second-Richest Man

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      After officially eclipsing Bill Gates to reach the rank of the second-richest person on the planet, Elon Musk clearly deserved a lengthy video interview with the Wall Street Journal. It could probe into how Musk managed to become the world’s wealthiest and most admired innovator. The Journal couldn’t saddle any random hack with that formidable task, and so its editor-in-chief, Matt Murray, rose to the occasion. The interview lasted nearly half an hour and can be viewed on YouTube.

      Most people consider Musk a genius, although here at the Daily Devil’s Dictionary we have regularly referred to him as an accomplished hyperreal performer who captures (because he is captured by) the spirit of the age. Call it the Taoist principle of reversion, being and non-being. The causal relationship between cultural icons like Musk and their environment is reversible and self-perpetuating. Pushing the metaphor, Musk’s hyperreality exists in a quantum state where the reassuring idea of stable identity disappears. Musk creates today’s culture because today’s culture has created Musk. Culture innovates; innovators hitch a ride.

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      Interviews with Musk are generally painful to watch. This one is no exception. It reveals that there is nothing stable in Elon Musk’s thought processes and very little that is original. He is certainly deeply knowledgeable, with a well-focused technical vision of his companies and their products. But his attempts at “profound thought” are difficult to differentiate from the clichés promulgated by the ambient hyperreal culture, with its deep faith in anything, however superficial, that resembles technical progress and its belief that redesign and duplication on a massive scale equal innovation.

      Musk’s deepest wisdom includes things like his advice that “we don’t want to be complacent.” He brilliantly warns of the danger posed by “the gradual creep of regulations and bureaucracy.” He believes we must fear “regulatory capture by companies.” He sees a need to “have good feedback loops for the customer” and to “make the product better.” Clearly, these are the thoughts of an original thinker.

      Then Musk also offers this pearl of innovative insight, possibly borrowed from Ronald Reagan: “The best thing government can do is just get out of the way.” Murray might have seen this as an opening to plunge into the history of Musk’s lucrative relationship with the government. But he was apparently interested in deeper things.

      Just as everyone craves access to Warren Buffett’s secret formula for investing, Murray wants to know whether other people can be as brilliantly innovative as Musk. “Is it easily learnable?” he asks. Reporting on the interview, the website Inc. chose to focus on this theme: “During a candid and freewheeling interview with Wall Street Journal editor in chief Matt Murray this week, Musk argued that creating innovative products is ‘absolutely learnable.’”

      Today’s Daily Devil’s Dictionary definition:

      Learnable:

      The actions of very rich people that poor people should be encouraged to imitate.

      Contextual Note

      Murray believes that if there were more people like Elon Musk, the world would be a better place. Concerned with the future of humanity, he hopes that Musk can teach others, or at least serve as a model so that we can all eventually become the second-richest person in the world. Musk was initially taken aback by Murray’s question. He began his response by saying, “I think it is learnable” before convincing himself that the right thing to say was “I think that’s absolutely learnable.” The website Inc. helpfully repeated for its readers Musk’s three original recipes for learning. 

      Embed from Getty Images

      The first is: “Try hard.” Success is not for the lazy. The second is “Seek negative feedback” and then ask yourself this surprising question, “How can we make this better?” But even that requires its mystical corollary: you must “love your product.” The third is essentially negative: stay away from meetings, presentations and spreadsheets. Spend time on the factory floor. To prove his point, Musk mobilizes the metaphor of a general who leaves his “ivory tower” to fight with the troops on the front line. Inspiring! 

      Murray did at one point raise the more down-to-earth question of Musk’s relationship with government, an issue with financial implications WSJ’s readers tend to be interested in. But once Musk established the overriding principle that government should simply “get out of the way,” Murray saw no reason to follow it up. Luckily, other journalists have tried harder. Six years ago, New York Mag’s Intelligencer provided the details of Musk’s Amazon-style bullying and classic techniques of corruption.

      The piece summed up his dealings with the authorities in this succinct phrase: “This negotiation is straight out of the special-interest playbook.” It explained that in 2014 “SpaceX hired lobbyists and flew a key lawmaker to its offices. Musk gave about $12,000 in campaign contributions … During the meeting … Musk described his dream to take people to Mars. … He also said Texas needed to compete with other states.” 

      In other words, the government’s role is to pony up the cash Musk needs before it gets out of his way. Taxpayers pay for the right to trust Musk’s unimpeded judgment to do the right things (i.e., whatever he wants) with the cash they have offered him. Among those right things is, of course, the odd campaign contribution, just to keep things running smoothly.

      In 2015, the Los Angeles Times reported that “Elon Musk has built a multibillion-dollar fortune running companies that make electric cars, sell solar panels and launch rockets into space. And he’s built those companies with the help of billions in government subsidies.” At the time, they set the figure at $4.9 billion. One analyst explained that “He definitely goes where there is government money. That’s a great strategy, but the government will cut you off one day.” That day has yet to come. Musk is now the one who has the power to decide when to cut the government off.

      At one point, Murray did ask Musk an embarrassing question: “What mistakes have you made?” Musk humbly admits he has made so many mistakes he wouldn’t have enough time to list them all. But he conveniently dodges the question by vaunting his involvement “on the factory floor.” He claims that “the morale is good” at Tesla, which is his Trump-like way of denying that he has ever made a serious mistake.

      Historical Note

      Musk’s employees have had the occasion to offer plenty of negative feedback, none of which he seems to have taken on board. Why should he? The government has not only backed him but is SpaceX’s main customer. The company “signed $5.5 billion worth of government contracts with NASA and the United States Air Force.” Just last week it was announced that “The FCC is giving SpaceX’s satellite internet service, Starlink, $886 million” as part of its program to bring broadband to rural America.

      Employees have regularly complained of Musk’s style of micro-management and his alacrity for making promises but failing to keep them. In September 2019, a court ruled that “the Tesla CEO and other company executives [had] been illegally sabotaging employee efforts to form a union.” Bloomberg reported last year that, after a leaker revealed a serious problem of mismanagement at the Gigafactory, “Musk set out to destroy him” — like a Mafia boss. On the other hand, the success of Musk’s companies, the pay and the challenge of the firm’s ambition has kept most of his employees reasonably happy.

      Nevertheless, Tesla has a few seriously worrying skeletons in its closet. Another whistleblower made some damning charges when he reported Tesla not only for “covering up and spying on its employees back in 2018” but for organizing a “drug cartel operation inside the Gigafactory.” These affairs have still not been adjudicated in the courts. Most likely, they will never be permitted to become public scandals. It is equally unlikely that Musk sees them as “learnable” moments.

      A year ago, Musk was officially worth about $20 billion. Two weeks ago, he became the world’s second-richest person, with a fortune estimated at $128 billion. He definitely works hard to earn what amounts to about 0.4 billion for every working day (assuming he takes weekends off and a month’s vacation). That’s the reward one can expect from spending the right amount of time on the factory floor.

      *[In the age of Oscar Wilde and Mark Twain, another American wit, the journalist Ambrose Bierce, produced a series of satirical definitions of commonly used terms, throwing light on their hidden meanings in real discourse. Bierce eventually collected and published them as a book, The Devil’s Dictionary, in 1911. We have shamelessly appropriated his title in the interest of continuing his wholesome pedagogical effort to enlighten generations of readers of the news. Read more of The Daily Devil’s Dictionary on Fair Observer.]

      The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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      in UK Politics

      ‘F*** Business’: The story of how corporate Britain got screwed by Brexit

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      On 22 June 2016 – the day before the Brexit referendum – more than 1,000 business executives signed a letter backing the UK’s membership of the European Union.The group, which including the bosses of half of the companies in the FTSE 100, stated: “Britain leaving the EU would mean uncertainty for our firms, less trade with Europe and fewer jobs”.
      Business lost that battle of course. The electorate voted by 52 per cent to 48 per cent to leave.
      And the stark reality is that business has lost just about every battle since.
      After the referendum, corporate Britain fought for the UK to remain, if not in the European Union itself, then at least in the EU’s single market and the customs union. They lobbied for a liberal immigration regime.  But the customs union membership is going, single market membership will soon be history and the incoming new immigration regime will be much more restrictive.
      And now, if Boris Johnson fails to conclude a free trade deal, there is the prospect of tariffs on exports to and imports from a region with which we do almost half our trade. All from the end of this month.“It’d be hard to imagine a worse outcome than this,” admits one weary business representative.
      Even a thin free trade agreement would be well below the worst fears of many firms and lobby groups on that morning after the shock referendum result back in 2016.As ministers freely admit, the UK government has been battling for the abstract conception of “sovereignty”, not concrete business interests, in the negotiations with Brussels.Deal or no deal, business has lost the Brexit war.
      So how did it come to this?
      In June 2018 Boris Johnson, then Foreign Secretary in Theresa May’s government, was at an event for EU diplomats.  Belgium’s ambassador to the EU asked about businesses concerns about the possibility of a hard Brexit, which in those more innocent days was defined as the UK leaving the single market and customs union.
      “Fuck business,” was Johnson’s reported response.So whose fault is it that business has lost the Brexit war?
      Was it the fault of a Conservative Party driven by pro-Brexit ideology? Was it because ministers were too afraid to challenge the prejudices of party members? Or was it a failure of businesses to lobby effectively? Did corporate Britain fail to grasp the nature of the post-referendum world and the new priorities of the public?  Did politicians fuck business or did business, to some extent, screw themselves?  Opening the closetIt was this decision by Ms May which set the UK on an early course to a hard Brexit.
      “If we [business] had been bolder during that first six-month period and more collected that would have made a difference,” says Ms Sykes. More

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      in World Politics

      Oman Has Much to Offer the EU

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      Oman and the European Union share common interests in a number of political, economic, commercial and security fields. Oman’s strategic location and links to key international trade routes are of great importance to European interests in the region. In September 2018, Brussels and Muscat signed a cooperation agreement, in addition to the one signed by the European External Action Department and the Omani Ministry of Foreign Affairs, with the aim of strengthening political dialogue and cooperation in sectors of mutual interest.

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      Oman shares with the EU the challenge of maritime piracy, which is one of the most pressing security issues that both sides face in the Indian Ocean. Since 2008, Oman has been an important partner in Operation Atlanta, the EU Naval Force mission to combat piracy on the coasts of Somalia, the Horn of Africa and the Gulf of Aden.

      Oman’s policy of being open with the world and balanced between the poles on opposing sides of regional conflicts — especially those represented by the Islamic Republic of Iran, Saudi Arabia and the United States — is similar to many EU policies in the Middle East. Muscat has highlighted its role in many regional and international issues, with Omani diplomacy complementing EU efforts to preserve stability and security in the region in ways that serve European interests.

      Investor Confidence

      Oman is considered a major logistical center for the Middle East, with its three major ports of Sohar, Duqm and Salalah, as well as a number of economic, marine and land “free zones.” With the aim of establishing an integrated infrastructure system for Oman, the General Authority for Special Economic Zones and Free Zones was launched in August to supervise the Special Economic Zone in Duqm and the free zones in Mazyouna, Salalah and Sohar.

      Embed from Getty Images

      An attractive environment for foreign direct investment (FDI) was created with the coming into force of the Foreign Capital Investment Law in January this year that allows foreigners to own 100% of investment projects as well as granting tax exemptions and customs duties. Moreover, the law does not set a minimum investment capital, facilitates procedures for establishing investment projects, grants extended rights to the use of investment lands and permits the transfer of capital to investor countries.

      In addition, Oman is the fifth safest country in the world and the third in the region, according to a recent report by Numbeo, which adds to investor confidence. In the first quarter of 2020, FDI reached over 15 billion Omani rials ($40 billion). With money coming from Iran, Kuwait, China, Saudi Arabia, South Korea, numbers from the National Center for Statistics and Information indicate that American and British capital constituted the highest share of FDI. The EU, however, has seen low investment rates in the country, with only the Netherlands coming in at roughly 304.7 million rials.

      The Vice President of the European Investment Bank (EBI) Vazil Hudak, during the International Investors Forum held in Muscat in 2019, spoke of the strengths of EU investment in Oman and the “huge” opportunities it offers. EBI is the largest financial investment institution in the world, with assets of more than €600 billion ($726 billion) and annually lends out nearly €70 billion. The EU could deepen its bilateral cooperation with Oman, directing EIB investments to achieve sustainable economic development in Oman, particularly after the economic crisis caused by the COVID-19 pandemic.

      Crisis Cooperation

      In the long term, Oman has paid attention to improving its economy by diversifying sources of income and raising the contribution of non-oil sectors to the gross domestic product. Oman was the first of the Gulf Cooperation Council (GCC) countries to develop plans to reduce its dependence on oil and diversify its economy. As a result of these policies, in 2020, Oman achieved nearly 3 billion rials in profits in the non-petroleum sector that made up 28% of the total contribution to the GDP, an increase of 6% over 2019.

      Despite the COVID-19 pandemic and accompanying lockdown measures that put strains on the economy, Oman has sought to avoid withdrawing from its sovereign reserves estimated to be worth $17 billion and moved toward setting policies to cut spending and adopt a short-term fiscal balance plan for the next four years with the aim of improving the economic situation and raising the country’s credit rating.

      The EU is currently witnessing difficult times as a result of the pandemic and the severe economic effects associated with it, coinciding with the UK’s exit from the European Union at the end of the year. In light of the circumstances, commercial and economic interests between Oman and the EU should expand into joint action, moving forward on pending agreements, including the free trade agreement that the two sides used to manage collectively through dialogue between the GCC and the EU. These negotiations were hit by apathy due to a lack of agreement over customs tariffs and the continuing blockade of Qatar since 2017. But talks on bilateral free trade agreements between Oman and the EU countries have become crucial to removing trade barriers and spurring economic growth.

      Tourism and transport sectors were among the most affected by the COVID-19 pandemic globally, with analysts predicting that tourism recovery will take up to two years, and air transportation estimated to take anywhere from two to six years. In 2018, the tourism sector contributed 2.6% to the country’s economy and was one of the five key sectors that Oman’s Ninth Five-Year Plan focused on. Given the damage inflicted on the sector during the pandemic, recovery should be stimulated by easing travel procedures. On December 9, Omani authorities issued a decision to exempt citizens of 103 countries (including the EU) from entry visa requirements for 10 days with the aim of stimulating transport and tourism after the pandemic.

      On the European Union side, the decision to exempt Omanis from the Schengen zone is still under consideration despite the ongoing talks between the two sides over the last years. An easing of entry requirements for Omanis will contribute to enhancing tourism traffic between the two sides.

      The cooperation and partnership in times of crisis creates opportunities for broader ties and paths toward economic sustainability, political stability and security for countries. The European Union is an important partner for Oman and can take advantage of the sultanate’s fortunate geographical location. The advancement of Oman-EU relations is an important factor for both sides, especially in the post-COVID-19 era.

      *[Fair Observer is a media partner of Gulf State Analytics.]

      The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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      in UK Politics

      Britain to drop tariffs on US related to Airbus subsidy dispute after Brexit next year

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      The Department for International Trade has announced that the UK will unilaterally drop tariffs on US goods related to the long-standing Airbus-Boeing state aid dispute from next year when the UK leaves the European Union’s customs union.The move is being seen by some as an attempt by the UK to curry favour with the incoming Biden administration and encourage Washington to look more kindly on proposals for an US-UK post-Brexit trade deal, whose prospects have been thrown into doubt by Joe Biden’s election victory.The EU imposed retaliatory tariffs on $4bn worth of US-made products, ranging from molasses to orange juice, in November, after being authorised to do so by the World Trade Organisation (WTO).This included the UK, as the country remains, until 31 December, an effective member of the EU customs union. But the Trade Department announced on Tuesday night that when the UK exists the post-Brexit transition in less than 24 days and gains full control over UK tariff policy, it will remove these import levies.The move might prove controversial because, as part of the same dispute (and also sanctioned by the WTO) the US has hit $7.5bn of EU goods with tariffs, including a 15 per cent levy on imports of Airbus aircraft.Airbus employs some 6,000 workers at Broughton in Wales, where the wings of its line of aircrafts are assembled.  The European aviation giant company announced plans to make 1,700 redundancies in its UK operations this year because of the losses caused by a slump in air travel this year.The Trade Department said, however, it would roll over EU tariffs on US steel next year, put in place in retaliation for Donald Trump’s import tariffs on European steel, including metal manufactured in Britain.And it added that it “reserves the right” to re-impose the Airbus-related tariffs at any point unless the US moves towards a settlement that lifts retaliatory tariffs on UK exports.
      The Trade Secretary, Liz Truss, said the move on Airbus-related tariffs would show the US “we are serious about ending a dispute that benefits neither country”.
      “Ultimately, we want to de-escalate the conflict and come to a negotiated settlement so we can deepen our trading relationship with the US and draw a line under all this,” she said.
      The Trump administration had been keen on an early US-UK trade deal, but in an interview with The New York Times earlier this month Joe Biden said: “I’m not going to enter any new trade agreement with anybody until we have made major investments here at home and in our workers”.Sam Lowe of the Centre for European Reform said de-escalating trade tensions with the US was in the UK’s interests, although he felt it wasn’t likely to be a game changer over the timing of a US-UK trade deal.
      If the UK could negotiate a settlement with the US on the Boeing-Airbus dispute that would certainly be in everyone’s interestSam Lowe, Centre for European Reform“While a trade agreement with a Biden administration is unlikely to arise any time soon, if the UK could negotiate a settlement with the US on the Boeing-Airbus dispute that would certainly be in everyone’s interest, particularly the British producers who are currently facing US tariffs as a result,” he said.
      Holger Hestermeyer of King’s College London, however, suggested the UK move could be primarily motivated by legal considerations.“The UK does not have a sufficiently solid legal basis to impose tariffs related to the Boeing dispute, as the EU and not the UK has been granted authorisation to take countermeasures,” he said.“The situation is different with regard to steel as the legal basis there is entirely different and the UK can rely on the same construct as the EU.”The EU and the US have been in a 16-year battle over claims that they have each given illicit state aid to their respective leading aircraft manufacturers.
      The World Trade Organisation last year effectively ruled that both had been guilty of the practice, allowing each side to impose tariffs on the other in retaliation, with the US going first. The US’s tariffs hit Gouda cheese, French wine and Scotch single-malt whisky.The EU had hoped that it could negotiate a settlement with the US whereby it would not have to impose its own tariffs, but it went ahead with the import levies in November, after finding the Trump administration was refusing to engage. More