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Volume 8, Issue 18: May 1, 2006

  1. Wal-Mart: Banking on Competition?
  2. Military Intervention and Nuclear Proliferation
  3. Vietnam: Asia's Fastest Economic Tiger
  4. ETA Announces Permanent Ceasefire

1) Wal-Mart: Banking on Competition?

Wal-Mart's plan to sponsor credit and debit cards, and to process electronic check transactions, has met stiff opposition, prompting the Federal Deposit Insurance Corp. to hold -- for the first time in its 73-year history -- hearings on an application for an industrial bank charter. Opponents of Wal-Mart's expansion into financial services have put forth several dubious arguments, according to Benjamin Powell, who dissects their arguments in his latest op-ed.

The charge that FDIC approval of Wal-Mart's banking license, one argument runs, would create a monopoly. But this is highly unlikely, "given the more than 7,500 commercial banks, 1,300 savings and loans, and 8,500 credit unions operating in the U.S. today," writes Powell. Others charge that Wal-Mart may pose a systemic risk to the financial payments system and for the federal deposit insurance fund. But Powell points out that merging banking and retail would not be any riskier than other affiliations present in the financial services industry. Nor would Wal-Mart have any incentive to engage in "predatory pricing" of its financial services, since that would attract competitors.

Ultimately, the motive of the opponents, Powell suggests, is fear of competition. "My bank and other banks in Shannon County" he quotes one community banker as having said, "could go the way of many of our retail businesses and join the dinosaurs."

See "More Anti-Wal-Mart Hysteria," by Benjamin Powell (4/26/06)
"Más histeria anti-Wal-Mart"

Center on Entrepreneurial Innovation (Benjamin Powell, director)


2) Military Intervention and Nuclear Proliferation

The Bush administration's stern warnings against Iran may hasten nuclear proliferation, just as the U.S. war in Iraq may have hastened Iran's nuclear weapons aspirations, according to Ivan Eland, director of the Independent Institute's Center on Peace & Liberty. "The invasion of Iraq and subsequent U.S. military threats against Iran have actually intensified the Iranian desire to get nuclear weapons to keep the superpower out," writes Eland in his latest op-ed.

Eland takes to task both hawkish conservatives who believe U.S. military interventionism abroad is necessary to promote American security, and liberals who who support U.S. military interventions for "humanitarian" purposes. Both groups, he argues, "should realize the long-term effects of U.S. military interventions on the proliferation of nuclear weapons around the world."

To dissuade Iran from acquiring nuclear weapons, Eland further argues, the United States should strike a deal similar to those it offered North Korea and Libya: "In exchange for ending its nuclear program, Iran would be offered a pledge of non-aggression by the United States and Israel and full economic and diplomatic integration with the world."

"The United States May Have to Live with a Nuclear Iran," by Ivan Eland (5/1/06)
"Los Estados Unidos pueden tener que convivir con un Irán nuclear"

THE WAY OUT OF IRAQ: Decentralizing the Iraqi Government, by Ivan Eland

THE EMPIRE HAS NO CLOTHES: U.S. Foreign Policy Exposed, by Ivan Eland

Center on Peace & Liberty (Ivan Eland, director)


3) Vietnam: Asia's Fastest Economic Tiger

Although registering a business in Vietnam can take 50 days or longer, that country has had the most consistent economic growth rate in South East Asia this century (4.7%) and impressive growth in 2005 (8%). Vietnam is now the fastest growing "tiger" of the region, according to Agence France-Presse.

Pragmatists in Vietnam's government have been promoting policies of economic "renovation" (doi moi) since the death of Ho Chi Minh's successor, Le Duan, twenty years ago. But the country's progress was hastened by the 2000 Enterprise Law, which significantly simplified the processes of doing business, as William Ratliff, adjunct fellow of the Independent Institute's Center on Global Prosperity, notes in a recent op-ed.

Yet, according to Ratliff, the country still suffers from "corruption, a bloated, intrusive, non-productive bureaucracy, ideological inclinations toward paternalism, and obstructionism by local officials." Vietnam's new leaders hope the pace of the new economic "tiger" will quicken. Whether they will introduce doi moi to the political system remains to be seen.

See "Getting Down to Business in Vietnam," by William Ratliff (4/26/06)
"Considerando hacer negocios en Vietnam:

Center on Global Prosperity (Alvaro Vargas Llosa, director)


4) ETA Announces Permanent Ceasefire

Last month ETA, the militant Basque separatist organization, declared a "permanent ceasefire." Observers expressed cautious optimism regarding ETA's latest announcement, but their optimism comes at a price -- entering talks with a terrorist organization responsible for killing about 800 Spaniards.

The dilemma has agonized many, including Alvaro Vargas Llosa, director of the Independent Institute's Center on Global Prosperity, who views the ceasefire as an opportunity worth taking.

"Even though I share the repugnance many of the victims of ETA and their political supporters are expressing at the thought of a negotiation, I think that country has entered a process that will result in the end of terrorism," writes Vargas Llosa in a recent op-ed. "The worst that can happen is the process may fail and things will go back to the way they were," he concludes.

See "ETA -- The Beginning of the End?" by Alvaro Vargas Llosa (4/?/06)
"ETA: ¿El principio del fin?"

Spanish-language Blog:
El Independent: El Blog del Centro Para la Prosperidad Global de The Independent Institute


LIBERTY FOR LATIN AMERICA: How to Undo Five-Hundred Years of State Oppression, by Alvaro Vargas Llosa

Center on Global Prosperity (Alvaro Vargas Llosa, director)


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