Showing posts with label economics. Show all posts
Showing posts with label economics. Show all posts

Jun 22, 2007

Globalization and small-shops owners

This interesting article shows an example of Globalization's good and bad effects:
Efficient big companies raising the bar, and on the other hand small-shop owners losing out

Chain Reaction: the story of Jordan's first chain pharmacy

In short, it talks about Pharmacy One, which is a chain-pharmacy in Jordan. In few years, this pharmacy has expanded into 17 branches, and it's taking business away from many pharmacy owners who have been in business for over 30 years.

what is the solution for these small-pharmacy owners?
are they the unavoidable collateral damage of Globalization and modernity?
or should the government enact laws to prevent Chains from providing better service or cheaper prices?
or maybe the government can offer educational programs to help those owners understand the new rules of the game? (but those go only so far)

It's a hard problem. It is even much harder if you are (or know) somebody who is losing his 30-year-old business to one of those efficient chains.

Similarly, an investor chose Hai Nazzal, which is a relatively poor neighborhood in Amman, to build a mall. That was a surprising step at the beginning. But soon it attracted almost all shoppers in the area. Many of the old clothes shops in the neighborhood closed up as a result... what do you do with these people who support usually big families? One can talk as much as he likes about free market, development, and globalization... but, to have a sizable portion of the population lose their livelihood in a short period is a real problem.

I'm not saying flip the laws, raise walls, and halt free market... one must find a solution to ease it on all these unsuspecting citizens who lost their livelihood within few months.

do you guys know/thought of any good solutions for this problem?
I think soon most of the arab world will fall into it soon.

More interesting posts about Globalization & Arab World:

Jordan’s Pharmaceutical Industry and Tomatoes

Industrial Jordan in the Age of Globalization

May 26, 2007

Islamic Finance - the science of fraud

The state of most "islamic financial solutions" offered today by many "islamic" banks are almost joke-like. Many of those are exact replicas of regular interest-based solution but with "fancier" names. Instead of interest, they change "rent", and instead of calling them "bonds", they call them "sukuk"... is this really the spirit of islamic finance? Why would islam give us a different system... if it is actually the same underneath!?

One of the bravest and most articulate defenders of true islamic finance is professor Mahmoud El-Gamal or Rice university. He published the following article in Financial Times. I think it says much. Read the whole article at
http://search.ft.com/ftArticle?queryText=special+report+islamic&y=0&aje=true&x=0&id=070523000775

One of the most popular [phony islamic finance] models is the sale/lease-back bond structure, known by the exotic name sukuk al-ijara. A bond issuer sells some real estate or other assets to a special purpose vehicle, which raises the funds by selling share certificates. The SPV leases the assets back to the issuer, thus collecting principal plus interest and passing them along to sukuk holders in the form of rent. At the end of the lease, the SPV sells or gives the property back to the issuer.