The British government’s postal company, Royal Mail Group, is currently suffering from trade union-organised strikes. Royal Mail’s sorting facilities badly need more mechanisation, as has been introduced by all of Royal Mail’s competitors. The Communication Workers’ Union disagrees. The strikes are bad news for the future of the company as they will help encourage customers to switch to other suppliers like rival UKMail and newer technologies like email.
The real question is: why on earth does the British government own a postal service anyway? It doesn’t own British Telecom any longer; why should it own Royal Mail Group? In 1994/5, the Dutch postal service, KPN, was sold by its government owners. Now, as TNT, it is a major international player, competing directly against Royal Mail.
As EU member states liberalise their postal services, companies who have become private sector players early on will have a competitive advantage. They will have already built up expertise at competing internationally and have taken advantage of private sector capital to become major players. If Royal Mail Group plc wants to be a major player in the European postal market of 2020, a public floatation now would be a huge advantage.
Some people think it’s wrong for something that’s “Royal” to be in the private sector (though it doesn’t seem to be a problem for the private global player the Royal Bank of Scotland). But really the issue is whether you want a sickly, unsuccessful Royal Mail that’s hammered even in its home market by TNT and Deutsche Post, or one that’s a British success story throughout Europe.
Zimbabwe’s dictator Robert Mugabe has decided to outlaw inflation by introducing price controls. These controls are being enforced by arresting businesspeople who sell at a market price. The result, says The Economist, is that “shops are bare of basic goods, as businesses refuse to sell more than a minimum of flour, sugar, maize and other items at a crippling loss. There has been panic buying all over the country.”
Instituting price controls is yet another wrongheaded policy from Mugabe. The right thing to do is for Mr Mugabe to turn off the government’s banknote printing presses, the direct cause of the inflation. Printing excessive quantities of banknotes has enabled massive wage increases for civil servants, ensuring support for Mugabe. As elsewhere, inflation is a tax that redistributes income from the wealth-creating private sector to the wealth-consuming public sector.
“Freedom and Whisky gang thegither,” wrote the Scottish poet Robert Burns. And this month economic freedom and whisky truly have gone hand in hand with the decision by India to hack away at punitive import tariffs on Scottish whisky. Scotch producers are delighted, believing that they could see exports to India increase by a factor of four. Needless to say, this is exactly the opposite of what development campaigners would like to see. After all, whisky is an infant industry for India, and therefore needs “targeted protection”.
Back in the real world, targeted isolationism has had a dismal record over the past fifty years. Such isolationism breeds uncompetitive companies that fail to turn into profitable industries. It is much better for industries to be created that can actually compete in the here and now: they are the ones that really will grow into global players. Whisky is likely to be one such industry for India. Perhaps I haven’t been looking but I haven’t noticed Indian whisky on the supermarket shelves yet. I’m sure we’ll be seeing a lot more of it in the future. Is that bad news for Scottish producers? Probably for cheap, blended brands like Bells and Teachers, but India’s rising middle class is a huge market for selling genuine article Single Malt Scotch to.
The World Bank puts out many interesting publications but out on the ground, its legacy is one of failure. Remarkably, 65% to 70% of World Bank projects in Africa fail. Its efforts to fight corruption were fundamentally undermined this year by the Bank’s own board in its decision to remove Paul Wolfowitz (based on spurious accusations). As such, governmental donors to the Bank need to question whether their funds would be better spent through their own national aid agencies.
The Bank’s confused focus keeps becoming ever more apparent. Now the Bank has used its budget - supposedly aimed at fighting poverty - to enter the software business, competing directly against Google. To help people read blogs, it’s produced an RSS reader called The BuzzMonitor. With Google et al providing excellent readers for free, do we really need development aid - given by imposed-upon taxpayers - being spent helping people read blogs?