Economist 6/17/16

  1. Since May the programme, “Sights of Shanxi”, has been airing live every Friday on a channel in the northern province of that name. In the show, local cities bid to play host to a tourism-development conference. The contestants have to tell four judges why their city is such a great place, in front of a studio audience of 100 people and a panel of experts.What makes this special is that, for the first time, local bigwigs are not just speaking in public, which is rare enough, but competing against one another and being judged by ordinary folk, which is unheard of.The government itself is partly responsible for the show’s success. The head of Shanxi television, Tao Yixiao, says that his colleagues originally wanted to limit the audience’s contribution to the scoring. It was the provincial vice-governor, Wang Yixin, who insisted that the votes of the studio audience and panellists, as well as those of viewers at home, should be given more weight.The government has good reason to be encouraging them. Shanxi’s economy is struggling; tourism is its favoured way of diversifying away from its traditional coal-mining business.
  2. The Panama Canal Authority (ACP )will be able to charge more for passage to bigger ships now that massive new locks have been built at both the Pacific and Atlantic ends of the canal and channels have been deepened and widened. The $5 billion venture will be inaugurated on June 26th when the first vessel officially sails through.Over 960m cubic metres of cargo passed through the canal in 2015.The expansion increases capacity to 1.7 billion cubic metres. The biggest container ships that could use the old canal, known as Panamaxes, can carry around 5,000 TEUs (20-foot equivalent units, or a standard shipping container). Neo-Panamaxes that will squeeze through the new locks can carry around 13,000 TEUs.
  3. The expansion will not only fill the coffers of the ACP and the Panamanian government. It will also change how freight moves around the world. Traffic could divert from the Suez Canal.Larger vessels, which currently ply that route between Asia and America’s east coast, now have the option of going through Panama. America’s east-coast ports should get busier.Ports in Baltimore, Charleston, Miami, New York and Savannah are updating facilities to accommodate the Neo-Panamaxes. The Port Authority of New York and New Jersey plans to spend $2.7 billion on enlarging its terminals and shipping lanes, and a further $1.3 billion to raise a bridge by 20 metres.
  4. Nigeria’s currency, in the face of a slump in the price of oil, which used to account for about 90% of the country’s export earnings, has failed miserably. Now it is being scrapped. The central-bank governor tried heroically to conserve the country’s dwindling reserves of foreign exchange. In effect, he banned the import of a huge range of goods rationed the supply of dollars from the central bank to importers; and threatened to clamp down on people trading dollars on the black market while Russia, Angola and Kazakhstan allowed their currencies to slide to make exports more competitive.Despite the central bank’s best efforts to defend the peg of 197 naira to the dollar, it continued its slide on the black market, where a dollar costs more than 360 naira. Since most importers have to get their dollars on the black market, rather than through the tiny allocations released by the central bank, the price of almost everything in Nigeria has soared. In May annual inflation jumped to almost 16%.The central bank finally relented and explained that it would introduce a “flexible interbank exchange-rate market” starting on June 20th. If the currency is allowed to find its natural home, it may settle somewhere between 280 and 350 naira to the dollar, traders reckon.

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