Referee Selection Politics: Germany v Argentina

"The Malvinas [Falklands] are Argentine": players fight for a (lost) cause predating them.

This is a quick post on an interesting and potentially important facet concerning the politics of a Germany versus Argentina World Cup final in South America. Referees are supposed to be impartial; the best are those which usually attract the least attention and let the game flow for as long as there are no egregious violations. (In which case they need to be firm yet fair to maintain order.) Yes, there are North-South aspects to this contest as there have been in the two previous finals matchups between these two countries in 1986 (when Argentina won) and 1990 (when Germany won). Italian Nicola Rizzoli's selection to referee the final raised some eyebrows since many expected the referee chosen to be neither Western European or South American:

With a European and South American team playing, many had expected FIFA to appoint an Asian referee for Sunday's game. But Rizzoli got the call to work his third Argentina match at this year's World Cup.

Why not, for instance, have an Asian referee?

Ravshan Irmatov, from Uzbekistan, had been viewed as one of the favourites for the final as he is from neither Europe nor South America, but he does not have a team of assistants who work all the time with him.

Countering suggestions of favoritism towards Europeans, the Belgian team coach has even complained that Rizzoli made far more decisions in favor of Argentina during their match:

Rizzoli was the target of criticism from Belgium's Marc Wilmots after the 1-0 quarter-final defeat by Argentina last Saturday.

Wilmots claimed: "I don't want to be a cry baby, but I noticed the referee never gives fouls against Argentina. "Every time something happens with Messi the referee gives him a free-kick. I notice he [Messi] made three fouls and no yellow card, we made one foul and one yellow card."

Somebody who was definitely not in the running for refereeing this World Cup final was English referee Howard Webb who had the honor of watching over the 2010 final between Spain and the Netherlands. The 1982 Falklands War remains a bitter dispute between Argentina and the UK, and having a British referee would have rubbed more salt into a wound that stretches onto the football pitch. "Hand of God" goal and all that:

England's Howard Webb was never in contention to referee the final - he was in charge of the 2010 showpiece and FIFA has never before appointed an official to referee two World Cup finals. It was also felt that it would be too sensitive to have Webb referee a match in which Argentina are involved - the team are still going through a FIFA disciplinary process for displaying a banner claiming the Falkland Islands should belong to their country.

Furthermore, Argentina's FIFA senior vice-president Julio Grondona has never hidden his disdain for England. In 2011 he called the English "liars" at the FIFA Congress and in an interview with the German press agency DPA referred to the English as "pirates".

So yes, football politics extend even to referee selection since the Argentinians are finicky about such things.

Improving Governance, Secularizing Vatican Finances

Nowadays, the Pope appoints merchants to run the show instead of Christ running them out.

"Take these things out of here; do not make my father's house into a marketplace!" - John 2:16. The trend worldwide as far as state-owned banks are concerned has been privatization and, if not, improved governance (read: transparency). Apparently, modernity has now caught up with the months ago as its supposedly sanctified finances were revealed as a hotbed of corruption, money-laundering and other decidedly unholy acts:

On June 28 [2013], Italian police arrested a silver-haired priest, Monsignor Nunzio Scarano, in Rome. The cleric, nicknamed Monsignor Cinquecento after the €500 bills he habitually carried around with him, was charged with fraud and corruption, together with a former secret service agent and a ­financial broker. All three were suspected of attempting to smuggle €20m by private plane across the border from Switzerland.

Prosecutors alleged that the priest, a former banker, was using the Institute for Religious Works – the formal name for the Vatican’s bank – to move money for businessmen based in the Naples region, widely regarded in Italy as a haven of organised crime. Worse still, Scarano (who, together with the other men, has denied any wrongdoing) had until only a month earlier been head of the accounting department at the Administration of the Patrimony of the Apostolic See, the treasury of the Vatican.

Part of the reason why Pope Francis' predecessor Benedict XVI had a tumultuous reign was due to money matters. How does the Vatican clean up shop? The same options faced by state-owned banks were on the menu: Privatization made limited sense since these small-sized entities could hardly operate on an independent basis in the city-state. The Vatican bank (IOR) had assets worth EUR 5 billion--not a lot in the wider (European) scheme of things. However, further secularization has been the path taken from those available. With clerics routinely abusing their status in financial matters, it was time to resort to professional management:

It follows an initial clean-up of the Institute for Religious Works (IOR), the official name of the Vatican bank, last year that saw the closure of 3,000 customer accounts under pressure from international anti-money laundering regulators concerned about its use as a tax haven. The latest shake up has a wider scope, encompassing the Vatican’s long secretive central bank, its media operations and all its assets – from real estate to stocks and bonds.

It also brings a cadre of lay advisers and finance professionals into the Vatican’s closed hierarchy, including prominent figures such as Lord Patten, the former BBC Trust chairman, and Clemens Boersig, former head of finance at Deutsche Bank and chairman of the German bank’s foundation. On the board of the scandal-ridden Vatican bank, lay advisers will now outnumber clergy...

Management of the IOR’s €4bn in assets and the billions of euros of real estate held by APSA will be handed to external, specialist asset managers focused on “ethical investment”.

The irony should not be lost on the rest of us. Many blamed the global financial crisis on a lack of religiosity among bankers and their ilk. However, it turns out that the world's largest religious organization was hardly free from the ills plaguing money managers elsewhere. So, to clean up shop, Pope Francis is making the Vatican bank's board more secular to look more like regular banks without a religious charter.

At this rate it will be nothing more remarkable than a fairly small regional bank whose funds are largely managed by ethical fund investors. From both ethical and financial standpoints, this may be a good thing given the Vatican bank's rather checkered recehistory.

When EU Membership's a Bust: Bulgarian Bank Run

A doo-run-run in Bulgaria.

The comparison that is usually made with regard to how bad Ukraine has had it due to choosing closer ties to Russia instead of the EU is Poland. However, this comparison is open to the criticism of cherry-picking examples: did all former Soviet satellites that joined the EU do as well as Poland? The answer, of course, is no. There are any number of other Eastern European countries that joined the EU and have had mixed fortunes.

Perhaps the bottom-performing one has been Bulgaria. In a number of ways it resembles Ukraine: high levels of graft and corruption and precious few signs of development. These were underscored by Bulgaria encountering that old-fashioned sign of financial crisis in the last week--the bank run--as the government was forced into a bailout:

Seven years after entering, Bulgaria has had three governments, remains the poorest of the bloc’s 28 nations and is repeatedly told by the EU to cut graft and corruption. In January, the EU said corruption “poses a significant challenge for the Bulgarian authorities.”

The general weaknesses of the system were highlighted last week when two banks suffered runs. One was brought on by an “organized attack” of “criminal actions,” according to the central bank. The other was sparked by what media reports described as a feud between the majority shareholder and a large depositor, who is also a member of parliament. The two men exchanged death threats, according to Bulgaria’s chief prosecutor, Sotir Tsatsarov.

Bulgaria’s worst financial crisis in 17 years forced the ruling Socialists to extend a 3.3 billion-lev ($2.3 billion) credit line to First Investment Bank AD and Corporate Commercial Bank AD, the country’s third- and fourth-largest lenders by assets. 

The parallels to Ukraine are obvious: just as the EU is now placing Ukraine on a seeming "fast-track" to membership, so did it do so with Bulgaria. This despite warning signs that governance in Bulgaria was not yet up to snuff with EU standards and would not be for quite some time:

The EU pushed Bulgaria’s candidacy even as it warned about the country’s organized-crime levels, bribery in public office and the failure to achieve convictions of those charged. Former Defense Minister Nikolai Tsonev, a member of then-Prime Minister’s Sergei Stanishev’s cabinet in 2008-2009, was arrested in 2010 and charged with bribery, abuse of office in procurement orders. Two years later he was acquitted on all charges.

Bulgaria ranked 77th of 175 countries, second-to-last in the EU after Greece, in 2013, according to Transparency International. Countries ranked higher and thus perceived as less corrupt: Ghana, Rwanda and Romania. In 2007 Bulgaria was 64th of 179, the second-worst in the bloc after Romania. “The EU is not only about economic support, it is a lot more: supremacy of the law, democratic values, security, prosperity -- all the reasons the EU was created for,” Bulgarian Deputy Prime Minister Zinaida Zlatanova said in a written response to questions. Zlatanova also is justice minister. 

This hasn't stopped Bulgarian officials from characterizing the bank runs as unrepresentative of Bulgaria's macroeconomic fundamentals, resorting to the time-tested excuse of unnamed shadowy forces working to undermine the country:

Bulgarians’ lack of faith in institutions sparked runs on two banks and triggered the worst financial crisis in 17 years, the nation’s president said. “Let me make this very clear: there is no banking crisis in my country, but there is a crisis of confidence,” Rosen Plevneliev said today in an interview with Bloomberg Television.

With low trust in institutions, rumors, attempts at destabilization and speculative attacks can “create a panic,” the president said in his office in the capital, Sofia. The government has extended a 3.3 billion-lev ($2.3 billion) credit line to First Investment Bank AD and Corporate Commercial Bank AD, the country’s third- and fourth-largest lenders by assets, after deposits were withdrawn. The crisis prompted Plevneliev to call early elections, a year after Prime Minister Plamen Oresharski came to power following anti-austerity protests.

The central bank blames an “organized attack” of “criminal actions” for the run on First Investment Bank. Corporate Commercial Bank lost deposits because of a dispute between a majority shareholder and a large depositor, Capital newspaper reported June 18, citing unidentified people. The yield on Bulgaria’s Eurobond due 2017 fell one basis point today to 1.636 percent, the lowest level since the central bank’s decision to bail out Corporate Commercial Bank, data compiled by Bloomberg show.

So there you are: EU membership is not a development panacea. Institutional reform is required as a precursor to making the best of EU membership instead of viewing membership as a guaranteed ticket to success. As the warning goes, "results may vary" for former Eastern bloc nations joining the EU. 

Antitrust Biggies: Rockefeller 1911, Carlos Slim 2014

You don't get Carlos Slim-like wealth with @#$% for brains.

Monopoly is a great board game; the sales charts speak for themselves. In real life, monopoly (small m) is more generally frowned upon by governments. "Monopolies distort competition and in so doing reduce consumer welfare" is the familiar refrain. The landmark case in the history of antitrust proceedings remains the breakup of Standard Oil way back in 1911 when Nelson Rockefeller dominated the (American) energy industry like no one else has since. Even today, the world's largest energy firm, Exxon-Mobil, is a recombination of two Standard Oil offshoots (those of New Jersey and New York).

Outside the United States, the world's poster boy for unimaginable wealth in the post-Rockefeller era is Mexican multibillionaire Carlos Slim. Worth a cool $71.5 billion last I checked, he didn't amass such wealth by being insensitive to changing political currents. When he caught wind of the Mexican government's upcoming legislation to break up his telecoms monopoly--the largest in Mexico--he did the authorities one better. Instead of waiting for the order to be handed down as it was for Standard Oil in 1911 or for AT&T in 1982, he is busy breaking it down into smaller-sized chunks in anticipation. Don't want to lose more market share or control than necessary, see...

Billionaire Carlos Slim is bowing to imminent antitrust legislation by planning a breakup of America Movil SAB (AMXL)’s phone operations in Mexico rather than risk profit-crushing restrictions if his company did nothing to curb its dominance.

America Movil, the Americas’ largest operator with 272 million wireless subscribers, decided to divest some assets to an independent company, reducing its market share in Mexican landlines and mobile phones to below 50 percent to appease regulators, America Movil said yesterday in a filing. Slim’s carrier will also separate its wireless towers from the rest of the business and will renounce its rights to acquire control of satellite-TV provider Dish Mexico. Slim and his family hold 57 percent of America Movil.

Slim, the world’s second-richest man and the son of a Lebanese immigrant to Mexico, had been weighing options for America Movil as Congress considered a bill that would impose the harshest penalties the company has ever encountered, as long as its subscribers represent more than half of the Mexican market. The carrier currently has 70 percent of Mexico’s mobile-phone subscribers and about 80 percent of landlines. America Movil has lost about $17 billion in market value since President Enrique Pena Nieto took office in 2012 on promises to spark more competition to boost the Mexican economy.

I think it's a smart ploy. Even a Slim-med down business is better than none. Despite what they America Movil says, it's also a good opportunity to ditch less attractive operations since the pie is still big enough for more to participate:

“The message is clear: They’re reacting to the regulatory pressure,” said Julio Zetina, an analyst at Vector Casa de Bolsa SA in Mexico City. “I’m surprised they have made a decision like this, and so quickly...”

In a radio interview today, America Movil Vice President Arturo Elias said the company won’t just sell rural, money-losing phone lines. America Movil is still analyzing which assets to sell and prefers a single buyer to create a strong competitor, he said. He also said that the assets for sale will “require much investment...”

America Movil may fetch about $8.6 billion by selling assets and will need to divest about 21 million wireless users and 4 million landlines to reduce its market share below 50 percent, Martin Lara, an analyst with Corp. Actinver SAB, estimated in a note today. Grupo Televisa SAB (TLEVICPO) may be a potential buyer for some of the assets, Lara wrote. 

Less wily people fight these kinds of legal challenges tooth and nail. I strongly suspect that Slim does not see much of a business case in fighting to the bitter end. Given them what they want--less than 50% market share--by getting rid of less profitable operations. It's rationalization of the kind America Movil would have probably done in the near future anyway; here it serves to appease polcymakers too.

Tech Frontliners: Bangladesh's Traveling Infoladies

Screening instructional videos is one of their tasks.

Your feelgood story of the day comes courtesy of Bangladesh's social entrepreneurs known as the "infoladies." Like vast swathes of the developing world, many parts of Bangladesh do not have Internet connections or other things many in the developed world take for granted. However, this does not mean that ICT are not helpful for purposes such as viewing world prices of crops on world markets when deciding what to plant, talking to relatives working abroad as migrant workers, accessing medical information and so forth. What are the needs technologically met by the infoladies? Businessweek has a neat photo essay on this matter:

Only 5 million of Bangladesh’s 152 million citizens have regular Internet access. Three-quarters live in rural villages. The Infoladies, a group of about 50 women in their early 20s, travel through the countryside equipped with a laptop computer, a tablet, a smartphone, a digital camera, and a glucometer ministering to the technologically impoverished.

The traveling infoladies have become more plentiful from their start as participants in a social entrepreneurship program. Nowadays they move around via bicycle in rural Bangladesh after ICT training to help those who do not have regular telecoms access:

They receive specialised training and necessary equipment, and then travel to remote areas by bicycle to personally connect villagers to information and resources the underprivileged need. As many as 24 such info ladies are now working in different villages of Gaibandha, Noakhali and Satkhira districts.

The info lady solution evolved from the original 'Mobile Lady' concept developed by D.Net (Development Research Network) Bangladesh, a non-profit research organisation that champions the use of ICT for the economic development of Bangladesh. Mobile ladies were providing services through cellphones.

The original "mobile lady" concept has since been expanded to a gamut of ICT-related services. The traveling person becomes a "telecenter" in one:

From the key learning from the mobile lady idea, D.Net found some limitations of mobile phone-based services. The technological innovations, like laptop device, helped D.Net find that if a bundle of services are integrated with the mobile lady, she will become a “telecentre” herself. Any one can become an info person, but women are encouraged as they enjoy more privilege than men for entering a house.

Manusher Jonno Foundation, a nongovernmental organisation, has funded the D.Net's Info Lady project. The foundation is an initiative to promote human rights and good governance in Bangladesh. The village information workers, 'mobile ladies', were renamed 'info ladies'. An info lady possesses a laptop or classmate computer, internet modem, headphone, webcam, digital camera, photo printer and a mobile phone for giving the entire livelihood information services at a cheaper rate, and fast.
Help line service, commercial phone service, photography service, livelihood information and knowledge service, international and local voice call service, video and animation service, and internet-based information service are among the services provided by an info lady.

As a practical sort, I wonder why science fiction-inspired schemes by Facebook and Google to use balloons or drones to beam Internet connections gain so much press attention when (a) they do not yet exist and (b) lack realism. Instead of fantasizing about all sorts of gee-whiz ways to connect the world, the traveling infoladies are a much better example to study since (a) they have successfully plied their trade for a number of years now and (b) they would not have been successful if they did not offer services others find useful at a reasonable cost. The transport solution is nothing fancier than a bicycle, but it's proven effective so far.

Attention Facebook and Google: instead of keeping your heads in the cloud (servers?), keep yourselves firmly planted on the ground where the real information dissemination will happen. Bangladesh's infoladies certainly do.

Does Gazprom Fund European Anti-Fracking Activists?

Paid for by Gazprom?

As far as conspiracy theories involving Russia go, this one takes the cake. Unlike the United States which has experienced a renaissance in energy production through the use of hydraulic fracturing or "fracking" in common parlance, Europe has not warmed to the technology. Many of the objections come from environmentalists who express concern over water usage, water pollution, earthquakes and so on. A few weeks ago, however, NATO Secretary-General Anders Fogh Rasmussen said that Russia was working to sabotage European energy independence from its oil and gas by undermining support for fracking. The alleged preferred means? Covert Russian funding for environmental groups:

Anders Fogh Rasmussen, secretary-general of the North Atlantic Treaty Organisation (Nato), and former premier of Denmark, told the Chatham House thinktank in London on Thursday that Vladimir Putin’s government was behind attempts to discredit fracking, according to reports.

Rasmussen said: “I have met allies who can report that Russia, as part of their sophisticated information and disinformation operations, engaged actively with so-called non-governmental organisations - environmental organisations working against shale gas - to maintain European dependence on imported Russian gas.” He declined to give details of those operations, saying: “That is my interpretation.”

For obvious reasons, NATO is at pains to point out that Rasmussen is expressing an opinion and not the position of the organization. That said, he explicitly identifies unusual Russian "concern" about the hazards of shale gas:

I would put it to you, though, that the real question, or the real power and the real leverage Russia has is its position as a key gas supplier to Europe. And indeed I would have to respectfully put it to you that a far better use of resources by Europe, and particularly the European Union, would be to invest heavily in shale gas production.

And indeed I would suggest to you that it would be far easier to sell that notion, especially, let's face it, the shale revolution is a technology and a triumph of innovation. To spend money on that would be… produce a far higher return than defence expenditure. Just a final footnote. Mr. Putin on one occasion actually lectured Germany about the environmental hazards of shale. So he’s well aware of the strategic value of the shale revolution.

What is especially odd is how Putin becomes an environmentalist all of a sudden when Europe has the technology within its grasp to wean itself off Russian energy. In the context of climate change, for instance, it couldn't care less about the environment. Let's just say it is self-interested in raising environmental concerns for this particular issue that can hurt its core economic interests. For them, it's every which way but lose. Meanwhile, the "Russian collaborator" taunt is being leveled against all sorts of European environmental protesters:

[Romanian protester] Munteanu says she has been accused of taking bribes from Russian companies to participate in the demonstrations. She says that she suspects the local authorities, interested in dividends from the shale gas drilling, were spreading such rumours. "They are welcome to come to my home and check that I haven't been taking money," she says.

Munteanu and her neighbours are not the only anti-fracking protesters accused of taking money from Russia to campaign against shale gas. Anti-fracking protests across Europe have come under fire in local and international media. Most recently, the secretary-general of NATO, Anders Fogh Rasmussen was quoted as saying that Russia has engaged with environmental organisations working against shale gas in its efforts to keep Europe dependent on its gas exports. 

Meanwhile, Russians are being fingered behind strident anti-fracking rhetoric:

At the same time, Russia and its gas giant Gazprom have also established a strong lobby to protect their interests in Europe, including employing former German Chancellor Gerhard Schroeder. Russia has pushed for major projects to expand delivery of natural gas to Europe, including Nord Stream and South Stream pipelines. The construction of the latter was recently shelved in Bulgaria after pressure from the EU.

According to Krassen Stanchev, a Bulgarian economist and head of the Institute for Market Economics, the influence of Russia and Gazprom in Bulgaria surfaced during parliamentary debates over a bill to ban shale gas exploration, which was passed in 2012. "The whole procedure and arguments are obvious evidence of corruption in the Parliament, [under the form of] serving the interests of Gazprom by all parliamentary factions," he said. 

Interesting stuff. The timing of the emergence of environmental movements--i.e., when Russia started to see the commercial threat--may be suspect:

But one thing has for years puzzled energy experts: Well-organized and well-funded environmental opposition to fracking in Europe sprang up suddenly in countries such as Bulgaria and Ukraine, which had shown little prior concern for the environment but which are heavily dependent on Russia for energy supplies. Similar movements have also targeted Europe's plans to build pipelines that would offer an alternative to reliance on Moscow.

"It's very concrete; it relates to both opposition to shale and also trying to block any alternative pipelines with environmental challenges," said Brenda Shaffer, an energy expert at Georgetown University. "There is a lot of evidence here; countries like Bulgaria, Romania, Ukraine being at the vanguard of the environmental movement is enough for it to be conspicuous," she said.

My opinion is that regardless of mooted Russian meddling, [real] environmental opposition is strong enough in core EU states to dissuade fracking from becoming a significant source of energy for Europe in the near future.

Some ACA Readings

1. Kate Ho and Ariel Pakes
2. Chuck Blahous
3. James Capretta