EasyJet Takes Yer Breath Away: Berlin v Tourists

Turning and returning to some secret place to hide
Watching in slow motion as you turn to me and say
Take my breath away...

OK, so L.A.-based 80s synthpop / New Wave band Berlin has little to do with their titular city aside from the name. The band's greatest hits (like its Top Gun theme) came before the Berlin Wall collapsed. Now, though, beneficiaries of the Iron Curtain's demise are complaining that tourists are literally taking their breath away. Unbeknownst to many, Berlin is Europe's third largest tourist destination for overnight stays after Paris and London. And so the complaints rain down: We are being overrun by foreigners, punks, weirdos, etc. To use a regrettable term, some Berlin residents seek living space away from the travelling hordes. Like many others, this occurrence is another story of globalization. Whereas the European travel market was once dominated by national carriers charging higher air fares, low-cost airlines like (Greek) EasyJet and (Irish) RyanAir have revolutionized the industry by standardizing planes, minimizing frills, and using secondary airports to offer bus fare-like rates. My Italian flatmate, for instance, flies out to visit different European cities three weekends each month.

Some Europeans tend to be snobbish about tourists. From constantly bugging locals for directions to crowding out local transportation, there's always some minor gripe to be heard. As an IPE fiend, I happen to be in the minority that realizes the benefits of tourism for local industry and welcomes travellers unreservedly. Migration is a right of all peoples--read the Universal Declaration on Human Rights if you're in doubt. So, let people roam where they wish to provided they put some towards respecting local rules and customs. But it appears not everyone is happy about these events happening in Europe. The denizens of Berlin's Kreuzberg district, for instance, are crying foul:

“Help, the tourists are coming” was the name of a gathering organized recently by the Green party in Kreuzburg. The turnout was good - over 120 people squeezed into a hall to talk about what they should do about the tourists who many long-time residents say are ruining the neighbourhood.

The bogeymen in their eyes have a profile: They are young and hail from England [yobs?], Sweden, or maybe Italy. In the morning they rattle sleeping residents out of their beds as they drag trolley suitcases over the cobblestones on their way to catch an early Ryanair flight. At night, they disturb the peace with loutish, alcohol-fuelled behaviour, littering the sidewalks with broken beer bottles and vomit. “We’re not a zoo,” said one young man in low-hanging jeans and a hoodie. “Tourists need to head over to Alex or Kudamm,” he added, referring to Alexanderplatz and Kurfürstendamm, two areas which have traditionally been main tourist magnets in the German capital.

But things are changing. The one-time alternative neighbourhood was once best known for its squats, drop-outs, punks and immigrants, not to mention the annual May Day demonstrations where leftists square off against police. But Kreuzberg is now firmly on the itinerary of many tourists, alongside the Brandenburg Gate and the TV Tower. With its many bars and clubs, hip reputation and cheap prices for accommodation and beer, Kreuzberg has become a prime destination for the low-cost-airline set.

It seems complains mirror those from the time of Berlin (the band). In addition, the practice of informal hotelling (think Crashpadder or Airbnb) is upsetting those in the formal sector:

“I’ve lived in Kreuzberg for 20 years,” was a refrain often heard at the meeting, although it was hard to know whether people were angrier about the neighbourhood losing some of its gritty edge or at the techno blasting away in the all-night, open-air clubs along the Spree River. Indeed, some of the complaints by the self-styled “alternative” crowd were reminiscent of the objections voiced by Swabian villagers upset at local punk shows in the 1980s...

There is also a thriving black-market hotel sector, which has the Berlin government concerned. Those are apartments that are regularly rented out by the day, week or month to young tourists or foreign students. The practice, while illegal because the owners lack the proper permits, is very popular. “Berlin has become the capital of the holiday rental,” according to Burkhard Kieker, head of the city marketing agency, who said the trend pushes rents up and makes apartments scarce.

But the situation is unlikely to change any time soon, especially as Berlin keeps breaking its own record for tourist visits each year. In 2010, according to the city’s tourist office, there were more than 21 million overnight stays and the total number of visitors topped 9 million, an increase of 9.5 percent over 2009. There are currently 112,000 hotel beds in the city; another 15,000 are planned...

“City policy has simply been overwhelmed by all the development,” admitted Gerhard Buchholz from the city’s tourist board. But city authorities aren’t likely to discourage tourists from going to Kreuzberg or any other neighbourhood, despite complaints from locals. Berlin Mayor Klaus Wowereit is a big backer of the city’s tourism sector, since industry-poor Berlin has few other sources of revenue. Tourism adds about €9 billion to city coffers every year.

According to marketing chief Kieker, the Kreuzberg protests are overwrought and residents should be proud rather than annoyed that visitors from all over Europe come to experience something of the lives Kreuzbergers get to live every day. The neighbourhood has become a central part of Berlin, he said, instead of remaining the niche place it used to be. But it appears that for many long-term residents, living in that niche was just fine.

This problem is one I am sure most other cities would love. Having too many visitors! From where I come from, that would be worth putting up some inconvenience with. I suppose stricter zoning regulations can help overall, but still--you may not know how good you've got it till its gone. In the wisdom of Berlin...

Through the hourglass I saw you
In time you slipped away
When the mirror crashed I called you
And turned to hear you say
If only for today--I am unafraid

Philippines' Economics of Excessive Vacation

Is too much vacation bad? Working in academia right now, I must unreservedly state that one of its perks is having more free time once the semester is out. However, for the clock puncher / office slave classes, things are not as straightforward. Take the example of the Philippines. Inheriting a "hectic" holiday schedule from its colonial masters of manana the Spanish, things have gotten out of hand in recent years. In a bid to supposedly increase vacation trips and decrease disruptions due to holidays, it has had a habit of moving holidays that fall midweek to Fridays and Mondays.

However, the economic benefits of doing so are not clear. Indeed, industry voices and the president himself are looking to reduce the number of paid holidays to a more manageable 16 [!] days--still world-leading by any standard, though:

With less than two weeks left before Christmas this year, the Philippine government unveiled a holiday gift to its people: Friday would be day off to mark Christmas Eve, and a second public holiday, in honor of a national martyr, would be observed on Monday, Dec. 27.

The result was a windfall four-day weekend. But instead of invoking cheer, such surprises are increasingly being met with grumbles from Philippine business leaders, its president and even some of its heavily vacationed workers. The Dec. 12 holiday shuffle was part of a distinctly Philippine way of handing out and scheduling days off—offering many official vacation days, and often rearranging them at the last minute to fall on the nearest Friday or Monday.

The country's leaders have hoped the long weekends will encourage citizens to shop and travel, boosting retail sales and the local tourism industry. Former Philippine President Gloria Macapagal Arroyo embraced the strategy, dubbed "holiday economics," and was often photographed on long weekends kitted out in a wetsuit for some surfing, or visiting her home province [of Pampanga], north of Manila.

Not working out that way. First, disposable income is not high enough to encourage jaunts elsewhere in the Philippines during long weekends. Let's just say there isn't yet a habit of going around Europe on cheap Easyjet or Ryanair weekend trips:

The tourism industry in the Philippines accounts for 8% of total gross domestic product, compared with nearly double that in nearby Thailand, so shuffling and adding holidays to benefit the travel industry would have a relatively slight knock-on effect on the broader economy. Many Filipino workers don't earn enough to go off on lavish jaunts around the country anyway. The per capita income here averages under $2,000 a year. Even those with solid professional jobs struggle to make ends meet, and don't necessarily get paid on national holidays.

Second, all these paid holidays are, according to some, making the Philippines less attractive as a business destination compared to its neighbouring countries which get by on less R&R:

Fewer holidays could help stir more foreign interest in the economy. In a recent study, the Joint Foreign Chambers of Commerce warned that the number of holidays and their erratic timing dissuades some foreign companies from coming here. Under Philippine law, businesses have to double daily wages for those who work through the main public holidays, or pay up to 50% on other selected holidays. That is a powerful deterrent as lower-cost locations such as Bangladesh and Vietnam open up to the global economy.

Already, foreign direct investment is the lowest of the major Southeast Asian countries, totaling $1.95 billion in 2009 compared with $4.88 billion in Indonesia, $7.60 billion in Vietnam and $5.96 billion in Thailand.

Maybe too much vacation isn't good. But then again, I'm not exactly in a position to gripe, right?

Can Count Dracula Save Romania's Economy?

The title is more apropos than you would think. When we last talked about Romania, it was in the clutches of an IMF standby agreement as one of the Soviet satellite countries that ran into a bad balance-of-payments situation in June of 2009. The recently Economist featured a downcast article on Romania's economic prospects going forward. In some respects, it's a matter of "political risk" being an unsettled matter in the country:

Nor are foreign investors queuing up to take advantage of Romania’s fertile soil and beautiful scenery or its flexible, cheap and multilingual workforce. Services are particularly underdeveloped. “This could be the back office of Europe,” says a foreign banker, who tries hard to stay optimistic. It could also be a regional hub for companies interested in smaller neighbouring countries. But investors like certainty, not the murky, jerky decision-making that typifies Romanian politics.

Aside from the difficulties attracting foreign investors due to political shenanigans, there's the matter of promoting tourism. For better or worse, Romania is associated with Vlad Basarab Tepes, also known as Vlad the Impaler or "Count Dracula" as immortalized in fiction. In scenic Snagov Lake lies the island of Snagov, whose monastery contains his grave. Despite his global renown (or notoriety depending on your perspective), this site should be of at least as much historical interest as Lenin's Tomb or the Mausoleum of Mao Zedong. Yet, despite the picturesque location, efforts to make it into a tourist destination have been haphazard at best:

A good example of good intentions but poor results comes from Snagov, an island monastery where the real-life Dracula, a prince called Vlad Tepes, is supposedly buried. With much fanfare, the authorities have built a bridge across the lake, a beauty spot, in the hope of attracting tourists. That is welcome: past governments perversely shunned Romania’s most famous son. The new tourism minister, Elena Udrea (a vivacious and wealthy blonde), wants him to take centre stage. She will lead foreign ambassadors on a “Dracula tour” of his castles in the summer. But for humbler visitors, finding the unsignposted way to Snagov is hard. The ill-built bridge is an eyesore. A rough-spoken monk demands a hefty fee and refers to local gypsies (Roma) as “scum”.

It's not quite a Disneyfied attraction just yet. Call it a regrettable metaphor for lack of progress -

Once I had the rarest rose
That ever deigned to bloom
Cruel winter chilled the bud
And stole my flower too soon

Gravy Train: High Speed Rail's Economic Benefits

Come in here dear boy, have a cigar. You're gonna go far if you've got the latest transportation must-have: high-speed rail. As you probably know, China is in the vanguard of high-speed rail technology almost alongside the Europeans and the Japanese after investing tonnes and tonnes of dough in this technology. Governator Arnold Schwarzenegger of California even dreams of groping--I mean, availing of--some high-speed trains from the PRC with what should be incredibly funky Chinese financing given the perpetually empty coffers of the, ahem, "Golden State" (so ironic, that).

However, the purpose of today's post is not to heap more well-deserved dirt on the festering carcass of American hegemony, but to instead contemplate high-speed rail's benefits for those still in the land of the fiscally living. Sometime ago, I discussed China's vaunted proposals to establish a high-speed network linking a New Silk Road. Years and years of rapid Chinese growth despite all the acknowledged pitfalls of doing business in that country--corruption, pollution, and so on--suggest to me that infrastructure is important.

While visiting the LSE home page, an interesting feature caught my eye coming from a colleague in the Geography department--the same folks who recently brought us the iPhone happiness app that's caught a fair amount of media attention. Its findings come from a study of the economic effects of linking the German towns of Köln and Frankfurt by high-speed rail. Here's the press blurb:

High-speed rail lines bring clear and significant economic benefits to the communities they serve, the first thorough statistical study of the subject has discovered. Economists discovered that towns connected to a new high-speed line saw their GDP rise by at least 2.7 per cent compared to neighbours not on the route. Their study also found that increased market access through high-speed rail has a direct correlation with a rise in GDP – for each one per cent increase in market access, there is a 0.25 per cent rise in GDP.

The findings, from the London School of Economics and Political Science and the University of Hamburg, may be used to support arguments for high-speed networks which are already being planned in the UK, US and across the world. Until now, no one has demonstrated that high-speed rail brings clear economic gains along its routes.

Authors Gabriel Ahlfeld and Arne Feddersen presented their findings at the conference of the German Economic Association. The paper, From Periphery to Core: economic adjustments to high-speed rail, also points to advantages in employment and GDP per capita for towns on the high-speed network.

Their research focused on the line between Cologne and Frankfurt, which opened in 2002 and runs trains at almost 185mph (300 kmh). The authors looked at the prosperity and growth of two towns with stations on the new line – Limburg and Montabaur – and compared them with more than 3,000 other municipalities in the surrounding regions.

The new line brought Limburg and Montabaur within a 40-minute journey of both Cologne and Frankfurt. Over a four-year period, the researchers found that both towns and the area immediately around them saw their economies grow by at least 2.7 per cent more than their unconnected neighbours.

This effect, say the authors, is entirely attributable to the improved access to markets for Limburg and Montabaur and not to any external factors or inherent growth. They chose the two towns for the study because both were included on the high-speed route due to lobbying by regional government and not because their economies were powerful or expanding.

Dr Ahlfeldt, from the Department of Geography and Environment at LSE, said: 'One of the problems with identifying the impact of high-speed rail has been that lines tend to get built first between areas with strong and growing economies so that it's difficult for economists to be sure which effects are attributable to the new rail line and which to existing factors. But because there was no economic rationale for building the line to Limburg and Montabaur, they provided the perfect "laboratory" conditions for us to measure the effect of high-speed trains.

'It is quite clear that the line itself brought significant and lasting benefits in access to markets, growth, employment and individual prosperity. One of our key findings is a positive market access elasticity, which means that improvements in accessibility to other towns, cities and regions, will be reflected in economic growth. We believe this research develops a new framework for predicting the economic effects of large-scale infrastructure projects and will help governments to define future spending priorities.'

Very interesting stuff, and it certainly bodes well for China and the rest of Asia that it plans to link up with the PRC via high-speed rail. There's an ungated version of the paper available online if you're further interested. And did we tell you the name of the game, boy? We call it 'Riding the Gravy Train.'

India Stumbling: The Commonwealth Games Fiasco

One of the slogans used by Indian authorities to describe the economic ascent of their country has been "India Rising." However, another longstanding knock on the country has been its lacklustre infrastructure--ports, roads, sanitation and what else have you. Compared to the likes of China, which always prioritizes these things, let's say that India lags behind. Among the BASIC countries, China put up all sorts of dazzling stadiums to impress the foreigners during the 2008 Summer Olympics, while South Africa just hosted a very successful 2010 World Cup where international visitors were treated to a real showcase of African culture and development. Football organizer FIFA certainly wasn't one to complain.

Now it's India's turn to strut its stuff as another member of the BASIC countries (Brazil gets its shot, of course, with World Cup 2014). The upcoming 2010 Commonwealth Games in New Delhi are exactly what they say on the tin, featuring the UK and its myriad former colonies which constitute the British Commonwealth. Held every four years, it gathers some of the best athletes these countries can muster. Unfortunately for India, these games have proven to be an absolute media fiasco. The newspaper headlines worldwide are all agog over unmissable signs that preparation has been lacklustre such as collapsing structures, unfinished stadiums, and a squalid athletes' village:

[W]ith infrastructure collapsing, stadiums unfinished and the athletes' village resembling the aftermath of a party advertised by a teenager on Facebook, Delhi is in danger of humiliation. And all this before the most cynical body of workers known to man arrives in town: the world's sporting press.

Delhi appears to be doomed. Yet all is not entirely lost. Sure, the few high-profile sportsmen available to the Games – Sir Chris Hoy, Phillips Idowu and above all Usain Bolt – long ago indicated that they would be absent. Sure, some of the sports are hardly likely to seize the front page (lawn bowls, anyone?). Sure, the unholy combination of incompetence, corruption and a delayed monsoon have turned much of the site into a festering swamp...

You simply can't get away with this kind of lackadaisical preparation in this day and age. Some are already saying that the negative images beaming out of Delhi will negatively affect India's ability to attract foreign investment and tourists:

Moody’s Analytics Inc., a unit of Moody’s Corp., said India’s preparations for next month’s Commonwealth Games may discourage investors and dent its appeal with holidaymakers. “Confidence in India’s infrastructure, its capacity to organize large events, and its reputation as a tourist destination have all been brought into question,” Matt Robinson, a senior economist at Moody’s Analytics in Sydney wrote in a note today.

India has struggled to get venues, bridges and other infrastructure ready in time to host teams from 71 countries and territories during the Oct. 3-14 event. Prime Minister Manmohan Singh wants to tap private financing for at least half of the $1 trillion India needs to build roads, ports, utilities and airports in the five years ending March 2017 to accelerate growth in Asia’s third-biggest economy.

“The negative publicity could deter foreign investment and give multinational businesses considering expanding in India reason to think twice,” said Robinson. The buildup to the Games, which Singh had said would highlight India’s growing economic strength, has been marred by the collapse of a footbridge next to the main stadium, an outbreak of dengue fever, monsoon floods and security concerns after the Sept. 19 shooting of two Taiwanese near a mosque.

“There is no major project anywhere in the world which is concluded to perfection,” India’s Minister of Commerce and Industry Anand Sharma told reporters today in Ottawa, where he was meeting with his Canadian counterpart. “Our guests will be welcomed and the Commonwealth games will be rejoiced and remembered.” Sharma said “unprecedented” rains and floods have caused difficulties and other countries should show “understanding.”

Complaints about conditions at the athletes’ village, which will house the teams, emerged this week. Canada, Scotland and New Zealand delayed their arrival in India to give organizers time to fix plumbing, wiring and furnishings. “The fiasco is undermining the anticipated benefits of hosting a major international sports event,” said Robinson. Commonwealth Games Federation chief Mike Fennell said today that “considerable improvements” had been made to the village.

There went India's nation branding exercise--for now. Instead of Beijing, it looks more like the great American city of Detroit. So much for the showcase bit; let's just hope the show goes on reasonably well for India's sake. I can guarantee you this, however: F1 impresario Bernie Ecclestone, a stickler for preparation, simply will not allow such things to happen during the inaugural 2011 Indian Grand Prix.

Time to Join the Fight Against Maritime Piracy

Later this morning I'll be off to the International Maritime Organization (IMO) headquarters here in London to participate in the launch of a new initiative called Seafarers' Rights International. In essence, it's a response by various stakeholder groups to the plight of seafarers travelling through the volatile Gulf of Aden where still-rampant piracy endangers not only crewmen but also world trade. While I'm not much of an activist, I'll make an exception here since my country sends somewhere between a fifth to a quarter of all seafarers worldwide. Not coincidentally, today (23 September) is also the UN-designated World Maritime Day. Here is a brief description of what we're up against from the press blurb:

Piracy and crime at sea have been problems throughout history. But, in recent years, there has been a dramatic upsurge in the threat to shipping and crews, particularly with attacks originating from the lawless coastal regions of Somalia. 2008 saw an increase in attacks on shipping in the Gulf of Aden from pirates operating out of certain coastal regions of Somalia. In that year 111 ships were attacked. By 2009, the number of ships attacked had increased to 217, with 47 vessels and 867 crew taken hostage.

Currently there are 354 people being held hostage (including Paul and Lynn Chandler). Their nationalities are Indian, Sri Lankan, Greek, Pakistani, Filipino, Sudanese, Ghanaian, Bangladeshi, Ukrainian, Yemeni, Burmese, Turkish, Vietnamese, Kenyan, Indonesian, Chinese, Korean and British. Sixteen vessels are also being held to ransom.

Twenty to twenty five thousand vessels pass through the affected area each year – that’s over 400 vessels and 6,000 seafarers at risk every week. In 2007, a piracy attack was reported approximately every 31 hours. There were 15 piracy related deaths in 2006, 11 in 2008 and nine in 2009. In 2008 the amount paid to pirates in ransoms was estimated at US$150 million. There are an estimated 600 to 1,000 pirates operating out of Somali waters.

And here are more details of the petition which you can of course sign on to online:

The petition (www.endpiracypetition.org) was launched just four months ago as the centrepiece of a campaign to persuade all governments to commit the resources necessary to end the increasing problem of Somalia-based piracy. Originally intended to achieve half a million signatures, it has far exceeded that figure and definitively proves that immediate action is needed.

At a time when 354 seafarers and 16 ships are being held hostage in Somalia, pirates are being released unprosecuted to kidnap, loot and maybe kill again, when it is impossible to use routes via the Suez Canal between Asia/the Middle East and Europe/North America without passing through a high risk area, the campaign calls on governments to:

• Dedicate significant resources and work to find real solutions to the growing piracy problem
• Take immediate steps to secure the release and safe return of kidnapped seafarers to their families
• Work within the international community to secure a stable and peaceful future for Somalia and its people

Since this is the IPE Zone, we must also consider the negative effects of piracy on world trade if ships choose to go around the Cape of Good Hope instead of passing through the Suez Canal or purchase increasingly costly insurance:

As well as the human cost in fear and trauma caused to victims, seafarers and their families, piracy creates additional economic costs which are ultimately passed on to taxpayers and consumers. Apart from military patrols, paid for by a handful of governments, ship operators have to pay to re-route ships, meet higher insurance premiums, hire security guards and install shipboard deterrent/protection equipment.

6.8 billion tons of goods are moved by sea each year, in a global trade cycle worth $7.4 trillion. European economies are those most affected in relation to trade through the Gulf of Aden. In August 2009 the Suez Canal reported a 20% drop in revenues, partly as a result of piracy.

Examples:

Re-routing a tanker from Saudi Arabia to the USA via the Cape of Good Hope means 2,700 extra miles on the voyage. Over a year this reduces the number of voyages the ship can do from six to five round trips (a 26% drop). Additional fuel costs over the year would be $3.5 million.

In 2002 maritime insurers tripled the premiums for tankers passing through Yemeni waters. The cost to insure the ship, not the cargo, for a typical supertanker that carries 2 million barrels of oil jumped from $150,000 to $450,000 for a single trip. That increase translated into an additional 15 cents a barrel on the delivered cost of the oil.

Re-routing on a liner trade would mean adding another ship to the service to maintain the schedule. On a Europe - Far East route, re-routing around the Cape of Good Hope would increase the costs by $89 million per year ($74.4 million in fuel and $14.6 million in charter expenses).

War risk binders for ships transiting the Gulf of Aden cost $20,000 per ship per voyage, excluding injury, liability and ransom coverage. Crew costs while the vessel is in the high risk area can double. The cost of hiring a security escort through the Suez Canal can be as much as $100,000. Yemen’s navy is charging commercial vessels up to $55,000 each for escorted transit through the Gulf of Aden.

Maersk Line is reportedly increasing the amount it charges for cargo in and out of East African ports by $50 to $100 per container. The company’s ‘war risk charges’ for containers transported through the Gulf of Aden are $25 for a 20 foot container and $50 for a 40 foot container.

The breakdown of what a typical ransom costs (Source: Miller Insurance Services Limited) is as follows:
Average ransom $2 to $5 million
Managing the pirates: approx $550,000
Managing the people: approx $600,000
Managing the business: approx $1 million
TOTAL = ransom + $2.15 million

Attacks on energy vessels account for a large proportion of piracy attacks (12% in 2006, 24% in 2007). Over 60% of all oil used worldwide is transported by sea.

It's not fun stuff, I hope you'll agree.

The Passport Offering Most Visa-Free Travel Is...

...the United Kingdom. The Economist provided the chart above taken from statistics gathered by Henley & Partners, a specialist in "international residence and citizenship planning." (In plain English, I take that to mean services for the internationally mobile wealthy to minimize tax obligations. To quote the late Leona Helmsley, only the little people pay taxes.) Anyway, despite your possible reservations about the firm, Henley & Partners has been conducting annual surveys on how many countries in this wide world you can visit with different passports without having to apply for a visa. Of all people, I know this process can be tiring: lining up for hours, dealing with sometimes surly consulate officials, and paying pretty large sums for the privilege of visiting other nations takes its toll--especially if you enjoy travelling like I do.

At any rate, here is the accompanying blurb. Unsurprisingly, there are "soft power" and "nation branding" considerations which help determine the number of countries you can visit without applying for a visa. (Referring to my previous post, those easy-like-Sunday-morning Danes come in second place.) Certainly, prestige and bragging rights are at stake:

The Henley Visa Restrictions Index is a global ranking of countries according to travel freedom their citizens enjoy. Henley & Partners has analyzed the visa regulations of all the countries and territories in the world. It has created an index which ranks countries according to the visa-free access its citizens enjoy to other countries. This is the first time that a global ranking shows the international travel freedom of the citizens of the various countries as well as the international relations and status of individual countries relative to others.

In today's globalized world, visa restrictions play an important role in controlling the movement of foreign nationals across borders. Almost all countries now require visas from certain non-nationals who wish to enter their territory. Visa requirements are also an expression of the relationships between individual nations, and generally reflect the relations and status of a country within the international community of nations.

What is striking to me is how low the United States comes in the overall scheme of things. I guess America has overhyped the value of a US passport since it is not exactly the top travel document at all. For every sycophantic nation that has a George W. Bush street, there is another nation which takes a dimmer view of America. Meanwhile, the passing of Europe's colonial era has two advantages: They not only retain strong ties with former colonies that have forgotten earlier times, but they also are also regarded as less malodorous than America whose busybody status is largely undiminished.

Go figure; I was rather surprised with these results, actually. So, my dears, the sun apparently never set on the British empire of visa-free travel.

"Nation Branding" in the Global Political Economy

Nation branding: The strategic self-presentation of a country with the aim of creating reputational capital through economic, political and social interest promotion at home and abroad (Gyorgy Szondi)

It is perhaps inescapable in this day and age that countries keen on promoting tourism embark on "nation branding." As a marketing major from my undergraduate years, I tend to see this world through such a perspective. For instance, the Chinese brand is certainly beating the American one in the global political economy sweepstakes as the former's more easygoing and less hypocritical approach to making friends and influencing people is certainly upending the Yankee flunkies on virtually every continent.

Today, however, I will relate the example of a "nation branding" exercise gone awry that belies the imagination. Apparently, the Danish tourist authorities thought up a campaign involving someone portraying an unwed mother parading her son on YouTube (see clip above). While tending to the little 'un, she narrates a story in which she got drunk, had fun in bed, and woke up to discover that the father to-be had fled Denmark. So, she appeals for the (foreign) father to come forward. As it turns out, the storyline was entirely concocted for tourist promotion. Worse, the confusion that it caused has been immense while offending many Danes. Instead of portraying an uplifting image, some thought it depicted Denmark as a land of dumb, easy blondes. Many thought it was a condom ad and not any sort of tourist promotion ad:

In September 2009, VisitDenmark, the tourism arm of the Danish government, launched a marketing campaign on YouTube. The video introduced to the world a beautiful 20-something blonde protagonist, Karen, and her adorable baby, August. Nothing quite extraordinary there, except that Karen had a small Mama Mia problem – she had no idea who August's father is.

Speaking candidly into a webcam and computer microphone, Karen related a story of how she had met the August's father some 1.5 years ago. He was visiting Denmark, presumably as a tourist. They went to a bar, got drunk and went back to her place. He was gone by the time she awoke in the morning.

Karen explained that she could not recall the name of the man that she had slept with or his country of origin, but that she would like to get in touch with him again. She is certain that he is August's father as she had not been with any other man ever since. She was hoping, through the powers of the internet, that her message would somehow reach this man. To add a final catalytic touch on this viral video to be, Karen recruited her audience, towards the end of her video plea, to help in her search. There was no indication anywhere within the video or on the webpage to suggest that VisitDenmark was, in any shape or form, involved. Also, the story was fabricated – entirely.

The video spread quickly; more than 200,000 views in 24 hours. Many people were engaged and responded empathetically. They also did as 'Karen' had asked and shared the link with friends. The national media quickly took the bait as well, appealing for information that could possibly shed light on this overnight internet sensation.

In just four days, the YouTube counter showed more than 770,000 views. But by that time, the Danish media had exposed the hoax. People wrote emails and letters to newspapers, claiming that 'Karen' is an actress, and, as far as they were aware, not a mother. What followed was a massive public outcry. Those who were kind enough to share the video felt duped. Some opposed the portrayal of Danish women as irresponsible and 'easy'. Many felt it was an inappropriate use of taxpayer money as the video misrepresented their country and culture.

VisitDenmark's rationalisation, that it reflected the country's liberal ideals, did little to calm the furore. Following a storm of criticism, the tourism organisation's director issued an official apology and stepped down. The video stayed online for a mere two weeks.

It might not be necessary for tourism campaigns to be understood or liked by the locals, said Rhonda S. Zaharna, an associate professor at American University's School of Communications. "But the one thing that I found was that great campaigns usually enjoy strong, positive, internal resonance. That's when you know you've hit the nail on the head and you've got that defining campaign."

Speaking at Global Strategic Thinking: Managing Public Relations in a 21st Century Global Society – a conference organised by SMU's Lee Kong Chian School of Business and the Institute of Public Relations of Singapore – Zaharna explained that nation branding campaigns walk the tightrope between managing 'image' (how others perceive the nation) and 'identity' (how the nation and its people see themselves).

And me? I'm kind of excited to visit Denmark again. I've always wanted to er, see Legoland ;-) This stuff is very interesting indeed. Certainly, tourist promotion is not an activity to be taken lightly. In fact, I have come up with my own viral campaign for the United States. Really. Given America's fearsome weight management issues, I've decided to turn them into something positive. See for yourselves:

I kill myself, but not via burgers and shakes, baby.

Harry Potter Theme Park: Why Orlando, Not London?

London Mayor Boris Johnson is known far and wide as a loose cannon who unloads on friends and foes alike with regular abandon. A few days ago, he took aim at American politicians taking turns demonizing BP and hurting British pension funds and pensioners who rely on its stock and dividends, respectively. Given that BP has agreed to set aside £20 billion to cover potential damages, he's turned his attention to that poster boy of continued British influence in pop culture, the 'Harry Potter' franchise.

Apparently Orlando, Florida--the theme park capital of the world--has stolen a march on London for it has just opened a Harry Potter attraction inside of the Universal Studios theme park. In his regular Daily Telegraph op-ed, Boris Johnson urges Londoners to petition for the creation of a UK-based venue. After all, there is nothing inherently British about Orlando, Florida (or am I missing something?) Unfortunately, some good points are mixed with factually challenged points: Brits invented the Internet? EuroDisney is profitable? You must be joking that this sort of writing is worth the £250,000 'chicken feed' they're paying him...

You know, sometimes I don't understand what's wrong with us. This is just about the most creative and imaginative country on earth – and yet sometimes we just don't seem to have the gumption to exploit our intellectual property. We split the atom, and now we have to get French or Korean scientists to help us build nuclear power stations. We perfected the finest cars on earth – and now Rolls-Royce is in the hands of the Germans. Whatever we invent, from the jet engine to the internet [!--Tim Berners-Lee didn't invent the Internet but perhaps the World Wide Web], we find that someone else carts it off and makes a killing from it elsewhere. And now, in the crowning insult, I am being told by a 12-year-old that I have to start making preparations to take everyone to Orlando, Florida.

I want you to know that I have nothing against Orlando, though you are, of course, far more likely to get shot or robbed there than in London. In general I adore America. But I deeply and bitterly resent that Orlando is about to become the official place of pilgrimage for every Harry Potter fan on earth. On the 18th of this month they are unveiling a vast 20-acre attraction – a theme park – that will be called The Wizarding World of Harry Pottere_STmk, and the word in the industry is that it is gonna be huge. There will be animatronic whomping willows and exhilarating interactive quidditch-style rides, and vast latex-covered Hagrids rolling bonhomiously down the street.

In the words of Mr Thierry Coup of Warner Bros: "We are taking the most iconic and powerful moments of the stories and putting them in an immersive environment. It is taking the theme park experience to a new level." And of course I wish Thierry and his colleagues every possible luck, and I am sure it will be wonderful. But I cannot conceal my feelings; and the more I think of those millions of beaming kids waving their wands and scampering the Styrofoam turrets of Hogwartse_STmk, and the more I think of those millions of poor put-upon parents who must now pay to fly to Orlando and pay to buy wizard hats and wizard cloaks and wizard burgers washed down with wizard meade_STmk, the more I grind my teeth in jealous irritation.

Because the fact is that Harry Potter is not American. He is British. Where is Diagon Alley, where they buy wands and stuff? It is in London, and if you want to get into the Ministry of Magic you disappear down a London telephone box. The train for Hogwarts goes from King's Cross, not Grand Central Station, and what is Harry Potter all about? It is about the ritual and intrigue and dorm-feast excitement of a British boarding school of a kind that you just don't find in America. Hogwarts is a place where children occasionally get cross with each other – not "mad" – and where the situation is usually saved by a good old British sense of HUMOUR. WITH A U. RIGHT? NOT HUMOR. GOTTIT?

I know that Thierry and everyone at Warner Bros and Universal will do a magnificent job of making it look and feel authentic and faithful to the stories. But I know somewhere that's even better than Orlando at looking like London – and that is London. I want to know why this Kingdom of Potter is not being built in the UK, and I won't be fobbed off with any nonsense about the weather. They built Eurodisney in the Valley of the Marne, where it is at least as cold and drizzly as it is in London – and it has been a triumphant success...

My point is that this Potter business has legs. It will run and run, and we must be utterly mad, as a country, to leave it to the Americans to make money from a great British invention. I appeal to the children of this country and to their Potter-fiend parents to write to Warner Bros and Universal, and perhaps, even, to the great J K herself. Bring Harry home to Britain – and if you want a site with less rainfall than Rome, with excellent public transport, and strong connections to Harry Potter, I have just the place.

Boris Johnson also neglected to mention that public transportation in London is horrendously expensive, but hey, after two whoppers about the Internet and Eurodisney, who's keeping score other than me?

Largest World Cup Patrons are...the Americans

Most people--including the Americans--believe that the US is indifferent to football or what they call "soccer." Certainly, the big money in American professional leagues is in American football, baseball, basketball, and to a lesser extent, ice hockey. There's also the impression that the American soccer leagues are where washed-up players go to finish off their careers Sunset Boulevard-style. Think of David Beckham. The current England coach, Italian Fabio Capello told Beckham that to have any chance at playing for his country, he had to come back and play in ["real"] European competition. Becks' injury ended such hopes, but still.

This interesting contribution I came across by Scott Gulbransen, Senior Director of Global Public Relations for Sony Online Entertainment, begs to differ with this impression. He says that Americans not only have paid the most for TV rights, but their contingent of fans in South Africa is the largest one. Further, he suggests that increasing popularity of the sport in America is due to a continuing influx of Latin immigrants:

There is no doubting that soccer is popular and growing in the United States, with the influx of immigrants from Mexico, Central and South America. With that increase in popularity, the World Cup is becoming a bigger deal here in the U.S.. More and more Americans are joining their neighbors from all parts of the globe to live the spectacle that is the Cup.

This year’s Cup in South Africa has a very American feel to it. Not only does the United States have its best chance to advance in the tournament in 60 years, but Americans are flocking to the country buying up tickets and wielding our substantial financial influence.

In fact, U.S. fans have bought more tickets than any other nation outside of South Africa. U.S. television networks have also paid the highest media rights fees of any nation. The US is a finalist to host the World Cup (in either 2018 or 2022) for the second time ever. The last time (1994) was the first and only time every ticket to every game was completely sold out. American affluence and hunger for the sport fueled the greatest financial success FIFA had ever seen.

With that in mind, you’d think FIFA would be excited about the fact the US is driving such interest in the sport. You'd think the "sleeping giant" of U.S. soccer would excited the governing body. Not so says one of its leaders.

And here is an interesting quote that demonstrates that football's high priests understand IPE [!] UEFA President Michel Platini argues that unlike the World Bank or the IMF, football governing bodies are much more egalitarian to Third World interests. Even the IMF blog tells you the IMF is in need of reform. Hence, the commercial clout of US broadcasters, fans, and sponsors (it needs to be mentioned) should not sway matters too much in America's direction--especially as it bids to host another World Cup according to the powers-that-be:

With that in mind, you’d think FIFA would be excited about the fact the US is driving such interest in the sport. You'd think the "sleeping giant" of U.S. soccer would excited the governing body. Not so says one of its leaders.

"You may be confusing the world of football (soccer) with the IMF or the World Bank," says Michel Platini, a top executive of FIFA, the international governing body of international soccer. "When it comes to decision-making in international football, the U.S., like Germany or China, has as much power as San Marino, Vanuatu or Belize."

Whether Platini admits it or not, the World Cup needs the US more than ever. With a global recession, Americans and their wallets – including the large television networks – throw more money at the tournament than everyone else combined. FIFA and the World Cup increasingly need American interest and money to keep the expensive show afloat. Yes, it might be the world's most popular sport, but America is its richest and most important benefactor.

The Washington Post reports that FIFA figures do indeed show Americans have bought the most tickets to the events after the host nation.

Dogfight: Of A380s and Emirates vs Lufthansa

The Wall Street Journal has a fascinating article on Dubai's flagship carrier Emirates buying 32 more Airbus A380 superjumbos from EADS, the European aerospace consortium. While the emirate of Dubai is obviously in the dumps as its real-estate megaprojects are finding few financiers and takers at the current time, its airline is doing just fine, thank you. Certainly, the advantageous location of Dubai between Europe and Asia is a considerable advantage.

Importantly, the article points out that the announcement of this $11.5B purchase was held in Berlin. Apparently, the (money-losing) German carrier Lufthansa is reluctant to allow Emirates more slots in Germany as it would increase the competition for this unprofitable carrier. It's the same old story: look at these furriners stealing our airline jobs! Landing rights have been a point of contention between Dubai and Germany for quite some time now. What Emirates wants to make clear is that, contrary to Lufthansa's brand of protectionism, manufacturing these planes will create jobs in Deutschland:

Dubai's Emirates Airline ordered 32 additional Airbus A380 superjumbo jetliners, and deliberately announced the $11.5 billion deal in Germany's capital to fight a trade battle with flag carrier Deutsche Lufthansa AG.

Emirates, which had already ordered 58 of the world's largest passenger plane, wants Berlin to grant it greater access to the huge German aviation market. Lufthansa argues that its home market of 80 million people shouldn't be thrown open to a carrier from one of the United Arab Emirates. Dubai has a population of roughly 3.5 million people. Carriers from the UAE may now serve at most four German cities.

Lufthansa has effectively lobbied Berlin not to raise the limit, so Emirates is playing a new card: jobs. Emirates is one of Airbus's biggest customers. Its new total of 90 A380s on order accounts for almost 40% of the 234 orders Airbus has signed for its two-deck plane.

The fight between Emirates and Lufthansa pits service jobs against manufacturing employment and shows how hard it can be to define markets in a global economy. Airbus, a unit of European Aeronautic Defence & Space Co., says that the A380 program in Germany supports more than 30 suppliers and creates 40,000 jobs directly and indirectly. Each Emirates A380 generates €20 million ($24 million) in work for German suppliers, an Airbus spokesman said. He declined to comment on the spat between its customers.

Lufthansa says it supports far more German employment than Emirates does. "It's up to the government to decide whether they want to create jobs here or export them," said Lufthansa Chief Executive Wolfgang Mayrhuber. Andrew Parker, Emirates senior vice president for international affairs, said the airline chose to announce its order at the Berlin Air Show "to illustrate pretty powerfully that we're a big part of Airbus's future..."

A spokesman for Germany's federal transport ministry said the government has no plans to allow Emirates to fly to more than four cities. Emirates' rivals say it unfairly benefits from government support that has allowed it to grow far larger than its home market would allow by poaching foreign traffic. Officials at the fast-growing airline deny the charge.

Emirates is owned by the government of Dubai, which also owns the emirate's airports. The ruling family has developed its aviation policies to promote Dubai as a global hub connecting far-flung markets. It allows almost any airline to land at its airport, which charges low fees. Dubai has no income tax or corporate tax. The low costs help Emirates against rivals in higher-cost markets.

Emirates, established in 1985, has expanded quickly over the past decade with giant orders from Airbus and U.S. rival Boeing Co. In addition to the A380 orders placed Tuesday, Emirates has 143 aircraft on order, with a catalog value of $48 billion, although large customers such as Emirates generally receive large discounts.

Emirates officials say they haven't faced trouble funding their operations amid Dubai's recent financial woes. The largest carrier in the Middle East, Emirates last month posted a fivefold rise in full-year net profit to 3.5 billion United Arab Emirates dirhams ($953 million) and said it expects double-digit growth to continue this year...

A similar spat is ongoing between Air Canada and Emirates as Canada deregulates its market. Air Canada's Chief Executive Colin Rovinescu even makes a risible analogy to Emirates dumping [!] on the Canadian market of Emirates' gains in seating capacity:

"The fact that they've purchased all these A380s and have all this capacity means they're basically manufacturing seats in massive quantities," Mr. Rovinescu said. "In any other industry, this would be considered dumping." Aviation isn't covered by World Trade Organization rules, so ordinary dumping criteria don't apply.

Mr. Parker at Emirates said the opposition from Air Canada and Lufthansa is a result of outdated thinking about airline markets. "It's predictable that the same-old, same-old is bandied about by legacy carriers. We just get on with it," he said.

There are any number of interesting questions here that trade wonks haven't really looked at pertaining to the airline industry. Litigation at the WTO has concerned state support for commercial aircraft manufacture (most prominently Airbus vs Boeing but also see Embraer vs Bombardier), not for airlines. Let's begin with accusations levelled against Emirates by Lufthansa and Air Canada:

• Does Dubai's funnelling of state funds into Emirates together with tax breaks and other incentives constitute "actionable subsidies"?
• Does increased seating capacity in excess of that necessary to serve the "domestic market" (howsoever defined) constitute "dumping"?

More interestingly from my point of view...

• Can the UAE take on Emirates' case against German or Canadian restrictions on landing rights?
• If the UAE prosecutes a WTO case against Lufthansa, what effect would that have on Emirates' order for 32 superjumbos?

As I said, it's interesting stuff. The trouble here is that analogous extant cases apply to trade in goods, not in services, so we're literally in uncharted aerospace here as far as international trade law is concerned.

Quant Easing: Weak £ Draws Tourists (from PRC)

While I'm not exactly a happy camper being paid in rather useless pounds, it seems tourists are flocking to London in droves given the exceptionally weak currency that makes for veritable bargains. I myself have make a note of this fact before. Nowhere is this situation more apparent than in the West End of London where there is a high concentration of retail outlets. (Yes, my school is in is area.) The West End was famously immortalized in song by the Pet Shop Boys' "West End Girls" after...I don't really know what. To no one's real surprise, retailers there cite an influx of Chinese power shoppers as those keeping them afloat. What's more, they are lobbying the government to ease visa restrictions so that our Chinese friends can buy more pieces of Britannia. A nation of shopkeepers, indeed. Given the moribund economic outlook for the UK, the West End is expecting a parade of highs leading to the 2012 Olympics. From the Evening Standard:

West End retailers are on course for record sales this year as millions of tourists flock to the capital to take advantage of the favourable exchange rate, it was revealed today. Sales in Oxford Street and Regent Street are expected to exceed £6 billion this year for the first time, with £12 billion forecast for the next two years. Retailers put the increase down to international shoppers attracted to London by the weak pound.

A survey by the New West End Company, which represents 600 retailers in Bond Street, Oxford Street and Regent Street, found nearly half predicted the 2012 Olympics would boost sales by 10 per cent. Chinese shoppers are the fastest growing international market for the West End, with a 35 per cent increase in spending predicted for 2012. A surge of Chinese visitors has already been responsible for boosting sales figures by £50 million in two years. As the pound has grown weaker, the amount spent has risen from an average £344 per Chinese tourist at the start of 2008 to £631 this year.

But retailers claim trade is being hampered by visa restrictions, with the documents being too expensive to purchase and taking too long to process. A UK visa for Chinese shoppers costs £64 and is valid for 30 days. But a visa for the Schengen group of European countries costs £60 and is valid for six months. Only 110,000 Chinese tourists visit Britain each year compared with two million going to the rest of Europe.

The New West End Company and VisitBritain have launched the Visa-ability Campaign, calling for restrictions on visas to be relaxed to capitalise on the Olympics. Nigel Dasler, vice president of tax-free shopping service Global Blu, said: "Our analysts forecast that the lifting of visa restrictions for Chinese shoppers - business executives purchasing large-scale items - could yield increased spend of £165 million over the first two years in the West End economy."

British Airways Strike: Scabs Better Than Strikers

The newswires are buzzing here in the UK about how British Airways cabin crews have been ordered back on the job by the High Court just a day before they were scheduled to go on strike again. Due to technical reasons in the way the Unite union (which 97% of cabin crew belong to) handled the strike ballot, BA has been able to secure an injunction. As if the airline isn't losing enough money from the sporadic belchings of Eyjafjallajokull. From Auntie:

British Airways has won a High Court injunction to stop the latest strikes by its cabin staff. The decision was based on a technicality and whether Unite followed rules in contacting its members with strike result details. The first of four five-day walkouts had been due to begin at midnight, but will not go ahead following Mr Justice McCombe's decision.

The union has said it will appeal against the injunction decision. BBC business editor Robert Peston said the decision created more uncertainty for passengers, and for employees. "Although the company may regard it as a victory, it doesn't appear to have solved what is a very serious industrial relations problem," our correspondent said.

However, the real question to me is whether British Airways should care to go to such great lengths to retain its regular (and quite militant) cabin crew. As these folks are paid significantly more than yours truly despite their apparent surliness, I am not exactly sympathetic to their cause. Given that there are literally thousands of unemployed here in the UK who would gladly fill in these posts, you can argue that they have greater incentive to do a good job than the strikers do.

Well, what do you know? As rolling strikes are expected to start once again depending on the outcome of the ruling, keep in mind that customer satisfaction ratings were actually higher for the replacement crew (or scabs in "industrial action" terminology than for the regulars. From the Evening Standard comes this insightful article:

Air passengers preferred the volunteer staff who replaced the regular cabin crew during the latest British Airways strike. A survey found there were small but key improvements among satisfaction levels when employees from other parts of the company took over during the seven-day industrial action at the end of March. The regular “Think Customer” questionnaire found overall satisfaction levels rose to 76 per cent, a one per cent increase on the previous survey. When passengers were asked whether they were happy “with the presence of staff” 75 per cent reported they were — a rise of two per cent.

There was also a two per cent increase when travellers were asked if problems were dealt with correctly. One passenger said: “My memory is how great the overall experience was from all members of your team bearing in mind they must have been under enormous pressure.” The survey was published in the in-house magazine BA News.

A company insider said: “We are delighted with the results. Although the increases are small they are key factors in showing how well the volunteer staff did their jobs — and they were clearly appreciated by our customers.” Union sources said: “BA would say that wouldn't they – it's a company survey which we would dispute.”

A further 20 days of strikes begin on Tuesday in the long-running cabin crew dispute. BA expects to have to cancel more than 5,000 flights and is preparing for a busy weekend with passengers trying to get away early.

Yes, you can complain that the surveys were conducted by BA, but the point is that I can think of no airline that farms out its customer feedback operations to, say, Deloitte. An economist type could have a field day with this finding--"people respond to incentives," whereas the strikers have a sense of (misplaced?) entitlement. All I can say is, why be so keen on keeping the strikers when there are apparently many out there who are at least as able to satisfy the customers?

And, of course, you can follow the latest news on the strike from the BA site.

Arizona Baseball: Taking a Bat to Racial Profiling

I'm countin' down to the day deservin'
Fittin' for a King
I'm waitin' for the time when I can get to Arizona
Cause my money's spent on the goddamn rent
Neither party is mine
Not the jackass or the elephant

Unbeknownst to many, I studied for an MBA at Thunderbird in Glendale, Arizona. It was there where I first encountered International Political Economy and eventually set into motion the chain of events that's seen yours truly become an IPE blogger. Thunderbird is renowned among American B-schools for being tops in the speciality of international business for the longest time. Due to its concentration of IPE and area studies amongst more traditional business courses, I believe that I received a really good education which I still appreciate to this day.

So, it's with no passing familiarity that I believe I'm entitled to speak about goings-on in the Valley of the Sun. There has been much hullabaloo as of late Stateside about Arizona's implementation of the inflammatory SB 1070 (text here) aimed at cracking down on illegal immigration (text here). Among its most contentious provisions is the ability to stop those suspected of being illegal immigrants and force them to produce documents showing they are legally entitled to be in the state. This provision has led to concerns that persons of colour may be subject to racial profiling. Even those who are legally in the state can be inconvenienced by simply forgetting to carry now-required documents all the time.

I am naturally of the opinion that these measures are far too draconian. While in Arizona, I must say that I didn't feel inconvenienced at all despite obviously being a non-Caucasian. This, of course, may change entirely if and when SB 1070 is implemented. Historically, Arizona has had the knack of getting itself into trouble on matters concerning race relations. For instance, the lyrics above are from a Public Enemy number above which dates to 1991. Early Public Enemy wasn't long on subtlety--comparing black liberation to a violent jailbreak, for instance. Here, Chuck D's theme is, er, taking out the governor if he didn't make MLK Day a holiday. As with so many things dealing with Arizona, the story of celebrating Martin Luther King Day involves Senator John McCain (R-AZ):

The holiday went into effect in 1986. Only 27 states and D.C. honored the holiday that first year. Activists in state after state tried to prevent it from being recognized. In Arizona, a bill to recognize a holiday honoring MLK failed in the legislature, so then-Gov. Bruce Babbitt, a Democrat, declared one through executive order.

In January 1987, the first act of Arizona's new governor, Republican Evan Mecham, was to rescind the executive order by his predecessor to create an MLK holiday. Arizona's stance became a national controversy. McCain backed the decision at the time. But eventually he changed his mind.

In 1990, Arizonans were given an opportunity to vote to observe an MLK holiday. McCain successfully appealed to former President Ronald Reagan to support the holiday. In a letter to voters, Reagan wrote that he hoped Arizonans would "join me in supporting a holiday to commemorate these ideals to which Dr. King dedicated his life."

Mecham, for his part, opposed the holiday, saying, "I guess King did a lot for the colored people, but I don't think he deserves a national holiday." The 1990 referendum failed. And as a direct result, the National Football League rescinded its original decision to have Super Bowl XXVII played in Sun Devil Stadium in Tempe, Arizona.

Partly from pressure from the NFL, Arizona eventually made MLK Day a holiday via referendum in 1992. Still, it lost a lot of convention business and the 1993 Super Bowl for the delay. Now, however, there are ructions involving that other major American sport, baseball. It will be of no surprise to readers that I am a fan of the Arizona Diamondbacks because of the Arizona connection. It was during my time there that the great pitcher Randy Johnson came to the desert and spent the salad days of his Hall of Fame career. This may seem odd to my American readers but I know what a ground rule double and a 4-6-3 double play are. Just as hosting the Super Bowl XXVII was jeopardized by Arizona removing remembrance of MLK day, SB 1070 is threatening to endanger a sport even closer to the economic interests of the state.

To make a long story short, Arizona is one of the world's epicentres for baseball. Not only is a lot of Major League Baseball's spring training (or preseason) held there, but several minor leagues that feed into clubs at the major league level operate in the state, too. And, just as Super Bowl XXVII was successfully withdrawn from Arizona over pressure from the NFL with so many African-American players, the same dynamic may be in place here as players of Latin descent are obviously plentiful in Major League Baseball. What is more, Chase Field (formerly Bank One Ballpark before Bank One was acquired by Chase) is scheduled to host the 2011 All-Star Game. That too is coming under sustained pressure.

Once again demonstrating that you don't need to venture far to find material relevant to political economy, Yahoo's Jeff Passan had a good op-ed describing the potential economic costs to Arizona if SB 1070 is implemented:

Baseball’s entanglement in Arizona’s new immigration measure, Senate Bill 1070, goes well beyond the small swath of protestors demanding Major League Baseball pull the 2011 All-Star Game out of Phoenix and boycott Arizona Diamondbacks games. More than 1,000 players, and hundreds more executives, coaches, trainers and business staff, spend about eight weeks of spring training in the Phoenix area. Latin Americans represent 25-plus percent of major league players, and the percentage in the minor leagues is even higher. The sweeping reform, which critics say invites racial profiling, is almost certain to hit baseball if the federal government doesn’t intervene...

“There’s no distinguishing characteristic between an undocumented alien and someone who’s here legally,” said Glen Wasserstein, a partner with the Immigration Law Group in Washington. “How do you possibly have reasonable suspicion? Everybody of Hispanic orientation will be scrutinized. Why would you bring your passport and visa with you?”...

The 12 teams participating in the Arizona Rookie League each have at least six players from Spanish-speaking countries on their rosters. Latin Americans comprise more than 40 percent of the 317 players currently assigned to the league. Of the 28 players on the Oakland Athletics’ AZL team, 20 are from foreign countries, including 11 of 13 pitchers, eight of whom are Dominican and three of whom are Venezuelan.

The proliferation of Latinos in the game is why SB 1070 so frightens MLB and the MLB Players Association. While neither organization would comment, both are investigating how the law will affect players old and young, rich and poor, and how the sport can reconcile infusing hundreds of millions of dollars into the economy through spring training and the All-Star Game when more than a quarter of its constituents can be legally profiled...

And then there is specific trouble for the current owners of the Diamondbacks, in particular Republican supporter Ken Kendrick (known to us fans as Ken-Ken). There is talk of boycotting games when the D-Backs are on the road:

One source said MLB is unlikely to change the All-Star Game only 14 months before it is scheduled, though officials have discussed the potential ramifications. The scrutiny is even greater on the Diamondbacks. Ken Kendrick, the team’s managing partner, is a significant donor to the Republican Party, which SB 1070 opponents say railroaded the measure into law. The Diamondbacks released a statement that said Kendrick opposes the bill. Still, 40 protestors stood outside the Diamondbacks’ game in Chicago on Thursday, and more are expected at future games.

“It’s a real issue, and we wear Arizona on our chest, so we do represent the state,” Diamondbacks general manager Josh Byrnes said. “We’re insulated to some degree, but things that affect society at large affect us. We take a lot of pride in our representation from the Dominican Republic, Venezuela, Rodrigo Lopez from Mexico, Augie Ojeda(notes) growing up in California of Mexican descent. That’s what’s great about baseball. Every team has such great diversity.”

For now, at least. If [Us Attorney-General Eric] Holder doesn’t join the others filing suit against SB 1070 and it goes into effect, Latin American players almost certainly will avoid the Diamondbacks. Whether that aversion stretches to the other 14 teams with spring training in the Phoenix area is another question altogether.

The Arizona Republic has a lot more on how other local businesses may be hurt. For a state so reliant on tourism (think of the Grand Canyon, Flagstaff, and Sedona), the prospect of harassing anyone for not being white has the potential to put off many visitors. Add in boycotts of conventions and the state has not only a major image but also an economic problem. This time, the pink underwear sheriff Joe Arpaio has gone too far. McCain is on the spot too for supporting this measure as he keeps changing his mind on immigration matters. For someone who's supported amnesty in the past, it's a somewhat sudden about-face he's made in supporting SB 1070.

Illegal immigration as well as narcotic and human trafficking are serious problems that require more thoughtful measures than SB 1070. Based on my experience, Arizonans are not racist. It's just that their independent streak sometimes results in overreactions like this one. Now, like then, however, I ultimately believe that economic pressure will overturn this highly discriminatory measure. Otherwise, there will be hell to pay.

I don't like it at all.

UPDATE 1: Check out the normally conservative Arizona Republic (with a title like that...) unloading on the state's politicians for creating this mess. Then again, it name checks politicians from both parties.

upDATE 2: The same paper notes that violence isn't up on the AZ side of the border, contrary to media- and politician-fanned perceptions.

Gordon's Armada Cometh: Rescuing Stranded Brits

I am sailing, I am sailing
Home again 'cross the sea
I am sailing, stormy waters
To be near you, to be free

As a certain band will tell you, British Sea Power was the foundational pillar of the British Empire. And, as the great, great Rod Stewart will tell you, nautical themes still have deep resonance in the British psyche even if its days as a naval power are long gone. The touching song excerpted above, Sailing, is regarded by many as an alternative national anthem of the United Kingdom.

I am 100% certain that you've heard of the now-infamous flight cancellations across much of Europe due to Icelandic volcanic explosions. That event in itself is an interesting commentary on how Mother Nature can disrupt commerce as already unprofitable carriers lose money hand over fist due to flight cancellations. There is even talk of American-style bailouts to help them recover from this situation which may continue indefinitely depending on the cooperation of certain Icelandic volcanoes. At the same time, the British nation wants to get home after doing business or holidaying on the Continent.

And so Prime Minister Gordon Brown has sent not just the HMS Albion previously en route to repatriate British troops from Afghanistan but two more vessels to help with rescue efforts. The flagship vessel HMS Ark Royal has been despatched, as has the largest warship, HMS Ocean. It may not be sending the troops off to show the foreigners who's boss in the Falklands, but it draws on the same sentiment of, well, sailing home (eventually) to evoke strong political imagery. Whoever said jingoism is dead?

Or maybe not. the Times of London reports on bellyaching, particularly from ferry companies, that this gesture was more token than effective:

It was dubbed “Gordon’s Armada” but the two Royal Navy warships ordered by the Prime Minister to evacuate holidaymakers from northern France ran into controversy last night. Thousands of stranded airline passengers began making their way to the Channel ports after Gordon Brown announced that HMS Ark Royal and HMS Ocean were being sent to rescue them. But last night the ships had still not docked as ferry companies condemned the operation as a “gesture” and insisted that there was no need for the Navy to get involved. The British Ambassador to Paris, Sir Peter Westmacott, described the plan as simply an “option” and said that those who reached Calais were sure of a ferry crossing after a short wait.

Ferry companies said that the warships would be better deployed to Spain, which is to be the hub of the effort to repatriate British tourists from around the world. HMS Albion was expected to arrive in Santander, northern Spain, this morning to collect about 300 servicemen and women who have been in Afghanistan. It might also carry some civilians.

Admiral Lord West of Spithead, the Security Minister, first suggested the Navy’s involvement after an emergency meeting at Downing Street on Sunday. Details were announced by the Prime Minister yesterday morning after a meeting of the Cobra emergency planning committee.

Mr Brown said the aircraft carrier Ark Royal and the helicopter carrier Ocean would operate from the Channel ports. “I expect Ocean to be in the Channel today. I expect the Ark Royal to be moving towards the Channel later,” he said. Experts estimated that the Ark Royal could carry about 1,000 civilian passengers on each sailing and Ocean up to 2,000. With crossings taking approximately three hours and a further hour each end for boarding and disembarking, the ships could manage three crossings a day. This would equate to 9,000 of the 150,000 passengers being rescued daily.

Ministry of Defence commanders and civilian staff yesterday struggled to organise the first big civilian evacuation since Lebanon in 2006. South Coast ports, including the cruise ship terminal at Southampton, were asked if they could handle the warships.

Tim Fish, a maritime analyst at Jane’s Information Group, questioned the wisdom of using the warships. He said: “They are very large platforms but it does sound odd to use them as ferries. They are not comfortable by any means. They are not ferries so they will take longer to load and unload in port but they have a large enough capacity to get thousands of people on board for a quick trip across the Channel.”

Cross-Channel ferry companies also said they were coping with the additional passengers and had “plenty of spaces” to get holidaymakers home. William Gibbons, director of the Passenger Shipping Association, said: “I don’t think there is any shortage of capacity. I don’t think the navy ships will be of any use at the French Channel ports. This all seems to have been done rather hastily. We were not consulted. The Channel ports are no busier than on a typical summer’s day.”

Chris Jones, spokesman for Brittany Ferries, said: “We have plenty of spaces.” P&O Ferries said it had seen more than ten times as many daily bookings as are usual for this time of year. But the company has accommodated everyone wanting to travel from Calais to Dover. A spokesman said: “It might sound attractive to get in an aircraft carrier to take 1,000 people at a time, but we can carry five times that capacity. “The lion’s share of the repatriation will be done by professional ferry companies working all along the French coast, not by a well-meaning gesture from the Royal Navy.”

In the meantime, my boss Professor Michael Cox is stranded in Paris. As he's baulked at being bilked by Eurostar charging exorbitant prices for a return trip, he's decided to stay there for now. Don't worry boss, the Queen's Navee will soon be upon yonder shores. Whether a trip on board an aircraft carrier suits you, I don't know! To be with you; to be free.