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Uphill Struggles For The Bank Of England

"Job well done" may be your assessment ("Inside the Bank of England," European Edition Cover Story, July 12), but it seems that the British economy is increasingly based on illegal immigrants providing "slave labor" in various industries such as agriculture, construction, and manufacturing to keep costs low. Many sectors that until recently have been providers of large-scale, high-salary employment are moving their operations to places where the workforce is better qualified and cheaper. In manufacturing, Dyson to the Far East and Rover to Eastern Europe are just two examples. Back-office operations, insurance, and banking are increasingly looking at places like India. In Britain, high-salary jobs in all sectors are diminishing as more jobs are moved abroad, and illegal immigrants are taking an increasing share of the employment market. These factors, combined with a housing bubble and huge private debt in the form of credit cards, do not bode well for the long-term prospects of the British economy.

Stephen Winfield

Bern, Switzerland

The Bank of England is doing a commendable job in managing monetary policy. However, even the Bank of England seems unlikely to be able to contain the current housing bubble. The remedies proposed to smooth out this unruly market are based on analysis that assumes the residential housing market to be homogeneous, which it is not. Government statistics include under the "Owner-Occupier" category 1.9 million leaseholders. These are occupiers, but not the ultimate owners.

Britain is probably the only market where a person purchasing a lease with a mortgage will see his equity in the property diminish through passage of time as the mortgage is repaid. The unwillingness of governments to do away with the leasehold system will ensure ever-higher property prices. This distorts the price structure of the entire residential market, followed by inevitable busts.

Antonio Albert


It is not a handicap but a great advantage that Pakistan Premier Shaukat Aziz is not a politician "Can this finance whiz learn politics?" Asian Business, July 12). His politician predecessors, Benazir Bhutto and Nawaz Sharif, were elected twice but only ruined the economy, promoted corruption, and messed up everything else. No wonder, according to a recent ACNielsen survey, 62% of people believe that politicians serve primarily their own interests. I hope and pray that President Pervez Musharraf imposes authoritarian rule for 10 to 15 years and, with the help of technocrats like Shaukat Aziz, put the country on an even keel.

We can live without democracy and politics for quite some time but not a single day with poverty and ignorance. Politics never made a poor country rich.

Muhammad Abd al-Hameed

Lahore, Pakistan

Evo Morales' critique of the U.S. Drug Enforcement Agency (DEA) highlights the failure of U.S. authorities to understand the role that coca leaves traditionally have played in Bolivian society ("Our people want to decide their own destiny," BusinessWeek Online Extra Q&A for "Gas-rich, dirt-poor, fed up," Latin America, July 5). Washington continues naively to believe that this indigenous Andean crop is used solely for drug production. In fact, it is found in a variety of everyday products and is associated with the historic traditions of Bolivia's Aymara culture of the altiplano (high plateaus). By linking access to development aid with the complete eradication of the coca crop, the White House has soured its relationship with all of Latin America and in this instance with Bolivia.

"Coca isn't cocaine" is a widely used expression throughout Bolivia. Until the DEA recognizes this difference, its efforts to eliminate coca production within Bolivia will continue to be highly detrimental to a sound bilateral foreign policy with La Paz.

Mark Scott

St. Andrews, Scotland

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