Western Funds in Lybia - Article Example

Introduction The article “Western Funds Are Said to Have Managed Libyan Money Poorly” by David Rohde aims at identifying the results of managing funds into Libyan oil industry and its effect for a host of investors from the United States and Europe. In this respect it was published recently in “The New York Times.” David Rohde is a respectful journalist of The New York Times proficient in observing different issues in the Middle East countries who was once even captured by the Taliban in November 2008 and could flea after seven months of imprisonment (Rohde, 2011). Thus, his strict eye on the events in Libya and in its financial sector cannot be underestimated. Approach consideration Looking at the whole article, it is obvious that the author follows in purely analytical key of discussion. He observes the main features regarding investment procedures for the last three years of Libyan participation with the US and European countries (the UK, France, the Netherlands, etc.). Moreover, his personal arguments rely on the statistical data from different sources. It makes a reader approach to the whole problem in an inductive way. Nonetheless, the author discovers some paradoxical issues with how huge amounts of money in fees failed to be earned or reimbursed at the suggestion of the American investors. On the other hand, if the author’s approach was instinctive, it would be based solely on his assumptions and experience in the field of international financial and business relations. That is, Rohde (2011) strives to make his voice more independent throughout the whole article. It gives grounds for more objectivity in his considerations and further conclusions. As a result, the article becomes neutral in author’s ideas on the case at large. What is more, the author takes advantage of the most authoritative sources in investment and auditing practices, like KPMG, The Wall Street Journal, Goldman Sachs, JPMorgan Chase, HSBC, and the like. It makes the whole talk on the Libyan issue more or less weighed in different facts and arguments coming from a host of sources despite of banking secrecy laws. Thus, the analytical approach used by Rohde (2011) presupposes that the author is trying to evoke to a sound-minded opinion of a reader regarding the whole thing. Besides, a lot of data with concrete amounts of money spent and earned serve to make his arguments feasible in terms of statistical accuracy de facto, but probable in terms of the hidden goals of banks and firms involved de jure. Reasoning used The article is rich in the kinds of reasoning the author uses to develop the overall argument. In this respect the three subject-specific competences by Rohde (2011) are inductive, causal, and analogical types of reasoning. Before talking on all of them, one should bear it in mind that there are several points why the author refuses to go along with the deductive approach to the topic. One of them is, as was aforementioned, banking secrecy laws and extrapolation of different funds throughout the oil sectors in the Middle East. First and foremost, the author follows an inductive way of reasoning. The question is that the economical and political conflicts within Libya could not but be reflected on the financial situation referred to the export of oil. This process is still going on promising particular losses for the main stakeholders in the Libyan issue. Thus, the author claims that the American and European assets were managed poorly in Qaddafi regime (Rohde, 2011). In turn it is a prerequisite for further probabilities of breakdowns and poor performance of the investments by the European and American financial establishments. Not to make haste in generalizations on the topic, the author delves more into the numbers of assets in fees, in cash and in terms of the share banking structures have got. Statistics may not be reliable, but Rohde (2011) that according to Libyan Investment Authority, huge investments ($1.7 billion) “generated returns far below the industry benchmark” (p. 1). It is remarkable place highlighting doubts on the part of the author. Hence, an inductive way of reasoning is, perhaps, the most apparent in the article. Second, the author is driven by the causal reasoning in terms of the time perspective and relying on causative-consecutive approach insofar. Thereupon, the main logic is that Qaddafi military regime was highly criticized by the United States, but the financial relationships in the oil sector have started in 2004 after Qaddafi “renounced terrorism and halted his attempt to develop nuclear weapons” (Rohde, 2011, p. 1). Thus, the cause of the current poor investment was when the Bush administration lifted sanctions from Libya, and the consequence is that after the civil war conflict in Libya provoked by the Qaddafi regime, as strange as it may seem (Rohde, 2011). Thus, losses in revenues are discussed by the author in close relationships to his causal way of reasoning on the topic. Third, the author draws on the analogy in his reasoning on the Libyan situation. In this respect the causes of the recession in 2008 are taken to warn banks and oil companies engaged in the investment to the Libyan oil sector, as the main argument of financial meltdown. This analogy seems to be the most persuasive in the course of current economical recovery among the world countries. On the other hand, banking secrecy is another case to doubt. Needless to say, the author gives a figurative analogy with Enron and its scheming. Thus, it is critically assumed that the reports by different banks and by Libyan Investment Authority need to be justified by the Big Four auditing companies for more details. Analysis of an assumption in the text In the course of the discussion Rohde highlights in his article, the following statement is to be analyzed in detail, namely: “The document also corroborated a document leaked by Global Witness in May showing that Goldman Sachs managed about $45 million and JPMorgan Chase about $173 million for the Libyan regime in 2010” (Rohde, 2011, p. 1). In fact, it can be challenged if taking the huge loss of more than $1 billion by Goldman Sachs in 2008. With regards to logic in this very question, the amount of $45 million or $50 million in fees or bribes (as it is assumed by the author) is unessential for such a huge financial establishment. On the other hand, the report cannot be taken objectively as it is supposed to be based just on the information leakage available for Global Witness (Rohde, 2011). At least two presuppositions spring up as a result of such an assumption. The first is that Goldman Sachs did not pursue its personal interests only, but worked in coherence with the Libyan Investment Authority on the basis of high values charged by the bank. The second is that the Goldman Sachs managed quite more than $45 million. In this respect the logic of losing $1 billion is straight-forward to the 2011 banking operations before the conflict in Libya. By the way, too many reports on this issue remain top secret for the overall curiosity. Thus, it is hard to talk on the objectivity present in such an assumption. It should have more credibility through appealing to more sources likely to discredit the activity of Goldman Sachs in Libya notwithstanding high charges for low revenues it proposed as a result. Strength and weakness Overall, the author seems to be well informed in the activities by the American and European banks in Libya. It makes his discussion full of factual feasibility and purpose-driven arguments. In other words, the main strength of the article is in its essential richness in facts and statistical data leaving no room for generalizations of any kind. It makes the core ideas exemplified throughout the article comprehensive and quite convincing for a reader. Moreover, a plain flow of the main facts makes the whole discussion ascend in its significance. Starting from current situation showing poor performance of the American and European banks in Libya, the research touches upon historical as well as analytical approach among the main stakeholders especially with an advent of the Libyan Investment Authority. Facts are stubborn thing, and this rule has been effectively used by the author. By contrast, the weakness of the article is in the absence of some concluding arguments. It seems as if the author left it elusive for an observer. The article lacks some restatements and more claims on how the author sees the situation from inside out. Definitely, it would make all arguments in the body of the article more or less justified by the author at the onset. Such an approach would earn David Rohde more credibility in all assumptions and data outlined throughout the text. Moreover, the author tries to lay more emphasis on the statistics and data in the article instead of proving them right or wrong. It would make the whole talk on the issue even more controversial in arguments. So, the observation of the problem would continue paying more attention on the part of the American and European business elite and governmental structures as well. Reference Rohde, D. (2011, June 30). Western Funds Are Said to Have Managed Libyan Money Poorly. The New York Times , p. B1. Read More