World Watch

World Watch IX – Foreign aid – Voice of disenchantment

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TEN years ago, it would have been hard to find anyone to question the wisdom and morality of the rich world giving billions of dollars in help to the poor world. A generation reared on Live Aid held these truths to be self-evident. Now, the intellectual trend is all the other way. A stream of economists, politicians and even disillusioned do-gooders have penned powerful critiques of every aspect of aid and the aid industry; men like Paul Collier, William Easterly and Robert Calderisi. Even the high priests of aid, pop stars such as Bono and Bob Geldolf, now preach a much more nuanced and complex gospel than they did in the 1980s.

Yet the intellectual arguments about aid are still conducted largely within a small circle of Western white men. So it is good to welcome a new voice to the debate, and a black African woman too, Dambisa Moyo, a Zambian economist at Goldman Sachs. It is remarkable that so few voices have been raised in Africa, supposedly the main beneficiary of the world’s largesse, about how the aid money should be spent, or even whether it should be received at all.

Unfortunately, Ms Moyo’s contribution ends there, for “Dead Aid” does not move the debate along much. Yes, she has joined the chorus of disapproval—and that in itself might surprise a few diehards who think that Africans should just be grateful for the aid and shut up. But her arguments are scarcely original and her plodding prose makes her the least stylish of the critics.

Moreover, she overstates her case, almost to the point of caricature. There is almost nobody left, even in the aid lobby, who seriously thinks that bilateral (government-to-government) aid is the sole answer to world poverty, as she suggests. “Trade not aid” is only one of several newish mantras among aidniks that seem to have passed her by.

Nonetheless, Ms Moyo is right to argue that the rich world—and Africa—should now focus on other ways of helping poor countries. Ms Moyo shows how some countries, such as Ghana, have successfully tapped the bond markets for funds. She also has good discussions on the virtues of microfinance, venture capital and liberalising trade. By concentrating on these three, African governments might well raise more money on their own; some might even lessen their dependency on aid.

Private investors will always require good governance to ensure that their dollars are not misused. This “trumps all”, argues Ms Moyo. She won’t find many Africans who disagree with that. But getting governments like Nigeria’s or Kenya’s actually to walk the talk has proved a much tougher proposition.

in The Economist

World Watch VIII – Troubled waters

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All of us have in our veins the exact same percentage of salt in our blood that exists in the ocean…And when we go back to the sea…we are going back from whence we came. John Kennedy

HUMAN beings no longer thrive under the water from which their ancestors emerged, but their relationship with the sea remains close. Over half the world’s people live within 100 kilometres (62 miles) of the coast; a tenth are within 10km. On land at least, the sea delights the senses and excites the imagination. The sight and smell of the sea inspire courage and adventure, fear and romance. Though the waves may be rippling or mountainous, the waters angry or calm, the ocean itself is eternal. Its moods pass. Its tides keep to a rhythm. It is unchanging.

Or so it has long seemed. Appearances deceive, though. Large parts of the sea may indeed remain unchanged, but in others, especially in the surface and coastal waters where 90% of marine life is to be found, the impact of man’s activities is increasingly plain. This should hardly be a surprise. Man has changed the landscape and the atmosphere. It would be odd if the seas, which he has for centuries used for food, for transport, for dumping rubbish and, more recently, for recreation, had not also been affected.

The evidence abounds. The fish that once seemed an inexhaustible source of food are now almost everywhere in decline: 90% of large predatory fish (the big ones such as tuna, swordfish and sharks) have gone, according to some scientists. In estuaries and coastal waters, 85% of the large whales have disappeared, and nearly 60% of the small ones. Many of the smaller fish are also in decline. Indeed, most familiar sea creatures, from albatrosses to walruses, from seals to oysters, have suffered huge losses.

All this has happened fairly recently. Cod have been caught off Nova Scotia for centuries, but their systematic slaughter began only after 1852; in terms of their biomass (the aggregate mass of the species), they are now 96% depleted. The killing of turtles in the Caribbean (99% down) started in the 1700s. The hunting of sharks in the Gulf of Mexico (45-99%, depending on the variety) got going only in the 1950s.

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The habitats of many of these creatures have also been affected by man’s activities. Cod live in the bottom layer of the ocean. Trawlermen in pursuit of these and other groundfish like pollock and haddock drag steel weights and rollers as well as nets behind their boats, devastating huge areas of the sea floor as they go. In the Gulf of Mexico, trawlers ply back and forth year in year out, hauling vast nets that scarify the seabed and allow no time for plant and animal life to recover. Off New England, off west Africa, in the Sea of Okhotsk north of Japan, off Sri Lanka, wherever fish can still be found, it is much the same story.

Coral reefs, whose profusion of life and diversity of ecosystems make them the rainforests of the sea, have suffered most of all. Once home to prolific concentrations of big fish, they have attracted human hunters prepared to use any means, even dynamite, to kill their prey. Perhaps only 5% of coral reefs can now be considered pristine, a quarter have been lost and all are vulnerable to global warming.

A hotter atmosphere has several effects on the sea. First, it means higher average temperatures for surface waters. One consequence for coral reefs is that the symbiosis between the corals and algae that constitute a living reef is breaking down. As temperatures rise, the algae leave or are expelled, the corals take on a bleached, white appearance and may then die.

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Hotter water, slimier slime

Warming also has consequences for ice: it melts. Melting sea ice affects ecosystems and currents. It does not affect sea levels, because floating ice is already displacing water of a weight equal to its own. But melting glaciers and ice sheets on land are bringing quantities of fresh water into the sea, whose level has been rising at an average of nearly 2 millimetres a year for over 40 years, and the pace is getting faster. Recent studies suggest that the sea level may well rise by a total of 80 centimetres this century, though the figure could plausibly be as much as 2 metres.

The burning over the past 100 years or so of fossil fuels that took half a billion years to form has suddenly, in geological terms, put an enormous amount of carbon dioxide into the atmosphere. About a third of this CO2 is taken up by the sea, where it forms carbonic acid. The plants and animals that have evolved over time to thrive in slightly alkaline surface waters—their pH is around 8.3—are now having to adapt to a 30% increase in the acidity of their surroundings. Some will no doubt flourish, but if the trend continues, as it will for at least some decades, clams, mussels, conches and all creatures that grow shells made of calcium carbonate will struggle. So will corals, especially those whose skeletons are composed of aragonite, a particularly unstable form of calcium carbonate.

Man’s interference does not stop with CO2. Knowingly and deliberately, he throws plenty of rubbish into the sea, everything from sewage to rubber tyres and from plastic packaging to toxic waste. Inadvertently, he also lets flame retardants, bunker oil and heavy metals seep into the mighty ocean, and often invasive species too. Much of the harm done by such pollutants is invisible to the eye: it shows up only in the analysis of dead polar bears or in tuna served in New York sushi bars.

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Increasingly, though, swimmers, sailors and even those who monitor the sea with the help of satellites are encountering highly visible algal blooms known as red tides. These have always occurred naturally, but they have increased in frequency, number and size in recent years, notably since man-made nitrogen fertilisers came into widespread use in the 1950s. When rainwater contaminated with these fertilisers and other nutrients reaches the sea, as it does where the Mississippi runs into the Gulf of Mexico, an explosion of toxic algae and bacteria takes place, killing fish, absorbing almost all the oxygen and leaving a microbially dominated ecosystem, often based on a carpet of slime.

Each of these phenomena would be bad enough on its own, but all appear to be linked, usually synergistically. Slaughter one species in the food web and you set off a chain of alterations above or below. Thus the near extinction of sea otters in the northern Pacific led to a proliferation of sea urchins, which then laid waste an entire kelp forest that had hitherto sustained its own ecosystem. If acidification kills tiny sea snails known as pteropods, as it is likely to, the Pacific salmon that feed upon these planktonic creatures may also die. Then other fish may move in, preventing the salmon from coming back, just as other species did when cod were all but fished out in Georges Bank, off New England.

Whereas misfortunes that came singly might not prove fatal, those that come in combination often prove overwhelming. The few coral reefs that remain pristine seem able to cope with the warming and acidification that none can escape, but most of the reefs that have also suffered overfishing or pollution have succumbed to bleaching or even death. Biodiversity comes with interdependence, and the shocks administered by mankind in recent decades have been so numerous and so severe that the natural balance of marine life is everywhere disturbed.

Are these changes reversible? Most scientists believe that fisheries, for instance, could be restored to health with the right policies, properly enforced. But many of the changes are speeding up, not slowing down. Some, such as the acidification of the seas, will continue for years to come simply because of events already in train or past. And some, such as the melting of the Arctic ice cap, may be close to the point at which an abrupt, and perhaps irreversible, series of happenings is set in motion.

It is clear, in any event, that man must change his ways. Humans could afford to treat the sea as an infinite resource when they were relatively few in number, capable of only rather inefficient exploitation of the vasty deep and without as yet a taste for fossil fuels. A world of 6.7 billion souls, set to become 9 billion by 2050, can no longer do so. The possibility of widespread catastrophe is simply too great.

in The Economist

World Watch VII – Myanmar, On the brink

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There are reckoned to be 400,000 monks in Myanmar (formerly known as Burma), about the same as the number of soldiers under the ruling junta’s command. The soldiers have the guns. The monks have the public’s support and, judging from the past fortnight’s protests, the courage and determination to defy the regime. But Myanmar’s tragic recent history suggests that when an immovable junta meets unstoppable protests, much blood is spilled.

In the last pro-democracy protests on this scale, in 1988, it took several rounds of massacres before the demonstrations finally subsided, leaving the regime as strong as ever. By Thursday September 27th, with a crackdown under way, and the first deaths from clashes with security forces, it seemed hard to imagine that things would be very different this time.

The latest round of protests began last month, after the government suddenly imposed drastic fuel-price rises. At first, the demonstrations were fairly small. It looked as if the protests might fizzle until soldiers fired over the heads of monks demonstrating in the central town of Pakkoku. The clergy demanded an apology, setting a deadline of September 17th. The next day, their demand having been ignored, they took to the streets.

At first, the regime’s forces stayed out of sight. On September 22nd, a group of monks and laymen was allowed to pray outside the normally heavily guarded home of Aung San Suu Kyi, the leader of the opposition National League for Democracy (NLD) and icon of Myanmar’s struggle for democracy. Miss Suu Kyi’s public appearance—her first since she was detained four years ago—proved a boon to the demonstrators. On Monday the protest in Yangon, Myanmar’s main city, was said to be 100,000-strong.

That night the regime broke its silence. On state television and radio, it warned of unspecified action “according to the law” if protests continued. The next day the protesters defied the threat, staging a demonstration at least as big as Monday’s. Soon after that march ended, troops and riot police moved into positions around Yangon. On Wednesday the authorities announced a two-month night-time curfew and troops surrounded monasteries in the city. But swarms of protesters again poured on to the streets, defying tear-gas, warning shots and baton charges. The first deaths, including of monks, were reported. On Thursday, troops burst into monasteries around the country to make arrests but, again, this did not stop monks and laymen from hitting the streets, where riot police shot at them.

The regime may be trying to calibrate its response to the protests, using limited force at first to quell opponents. That said, it still has elite disciplined units which would be unlikely to flinch if ordered to open fire on unarmed monks and nuns. If there are any cracks in the junta’s unity, nobody outside knows about them.

Myanmar’s junta has survived in part through diplomatic triangulation. Like North Korea, it has borne isolation and rhetorical hostility from the West by cosying up to the neighbours, notably China. And it has tried to avoid total subservience to any one of these by playing them off against each other.

As in the past, the world’s initial response to the junta’s violence was marked by bickering and point-scoring. On September 27th, the United Nations Security Council met in response to pressure from the West for co-ordinated sanctions. But Russia and China argued that the unrest was an internal matter that should not be on the council’s agenda at all. America announced new sanctions against the regime, in keeping with a policy some Western countries have pursued for nearly two decades. They are cheered on by a vocal and well-organised exile movement, and, when she was able to make her views known, by Miss Suu Kyi herself. Her heroic stature has helped make Myanmar a fashionable cause.

Shareholder-activists and ordinary consumers in the West have also done their bit to encourage a boycott. But isolation has never really been on the cards. Any gap is eagerly filled by Myanmar’s neighbours—not just China, but also India and Thailand and other members of the Association of South-East Asian Nations (ASEAN). American leaders have insisted the junta honour the 1990 election result, won by Miss Suu Kyi’s NLD, and step aside. To this end, they have already imposed wide-ranging sanctions. The European Union has been more equivocal, and its sanctions correspondingly milder. Japan, Burma’s biggest aid donor until 1988, has been softer still.

If any countries can sway the junta they are the regional ones: ASEAN, especially Thailand; India; and above all China. China has given the junta diplomatic support, helping for years to keep its behaviour off the agenda of the United Nations Security Council. But Myanmar is far from a client state. This week Chinese spokesmen called for restraint in responding to the protests. Their pleas seem to be falling on deaf ears.

Even if pressure both from within and beyond Myanmar’s borders causes the regime to crumble, the country’s troubles would still be daunting. Many of the ethnic minorities continue to distrust the majority “Burmans”, even including the democrats. And the NLD has been gutted by years of oppression. Miss Suu Kyi, inspiring figure though she is, is an untested leader who has perforce been woefully out of touch with events.

As in 1988 and 1990 the Burmese people have shown they want to choose their own leaders. In the past they did not fully reckon on the ruthlessness of the people they were up against. One day, as with all tyrannies, Myanmar’s will fall. But much blood may flow before that day dawns.

in The Economist

World Watch VI – Trunk Routes

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The world’s forests are disappearing and Africa’s are vanishing faster than those of any other continent. A report by the UN Food and Agriculture Organisation published in March reckoned that between 2000 and 2005 the continent with about 16% of the world’s forests accounted for 55% of the total losses. But reliable numbers are hard to come by. That is why a set of data pieced together by Nadine Laporte and her colleagues, of Woods Hole Research Centre, in Falmouth, Massachusetts, is so applauded by conservationists and local governments alike.

Dr Laporte and her colleagues have put together information from more than 300 satellite images. The conclusions they draw were published in Science on Friday June 8th. These data track the progression of logging roads in a region covering 4m square kilometres of central Africa between 1976 and 2003. No one has attempted anything so ambitious before in Africa. And those who have applied similar techniques to Latin America’s forests have tended to use complicated algorithms to measure vegetation changes. These run in sophisticated computers. Dr Laporte wanted something simple, robust and cheap that anyone could use.

On mapping the results an awkward patchwork of polygons emerges. The logging roads branch within the forest, in places just 1km apart. They are most dense in the Cameroon and Equatorial Guinea, where selective loggers have moved through most of the countries’ forest at least once, creaming off the most valuable species. It is Congo-Brazzaville, though, that has suffered the most rapid road construction of late. The rate of road-building has roughly quadrupled over 30 years.

Most forestry experts, however, are watching the Democratic Republic of Congo. Although still troubled by sporadic outburst of violence after a long civil war the country is now as peaceful as it has been for some time. The civil war was widely portrayed as having been financed by rampant timber harvest. In fact annual timber production fell to about a sixth of its level in 1960. Two-thirds of the forest that still remains in the region is in Congo. Now that the protective cover of war has lifted it is here that loggers are likely to seek new bounty and other foes of the forest will move in. Dr Laporte’s methods can help to track their progress

In central Africa selective logging—the removal of a few choice specimens—rather than complete deforestation is the usual method of earning cash from the trees. But Dr Laporte fears that Congo has a high enough population density to drive deforestation in the name of bagging more land for agriculture. As logging roads grant better access to the forest she expects people to move in, and eventually to do so in droves.

At least the opportunity to exploit Congo’s forests is handed out fairly, on paper anyway. In 2002, the World Bank pushed through reforms that threw out speculative concessions. These were generally gifted to a privileged and corrupt few that had enough influence or cash to get them. These days companies are supposed to implement management plans and half of tax revenues are supposed to find their way to local communities. In reality, few can be bothered with the former, nor do companies pay the proper rent on the land. And almost all of what is paid remains in the central government’s coffers.

Still, the policies in place today are a great improvement on the World Bank’s ideas of old. During structural adjustments of the early 1990s, it halved the value of the CFA franc, the currency used in much of the region. That halved the costs for foreign logging companies operating in central Africa, promoting wanton degradation by operators who promptly left at the first sign of regulation. Dr Laporte has yet to look for this pattern in the new data, but she has found it in less comprehensive pools of numbers. The study usefully illuminates the effects of both illegal and legal logging over time. Depressing reports of how quickly the world’s forests are disappearing are commonplace. Ones that may give a clue to better policy are rarer, and welcome.

 in The Economist

World Watch V – Cult of Combat

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As Uganda’s peace talks stutter along, children forced to fight for a messianic militia are trying to rebuild their broken lives.

By Andrew Ehrenkranz
Newsweek

Some of the children have yet to reach puberty. But they are fluent in rattling off the acronyms of war (RPG, LMG, SAM, SMG) and explaining just how these weapons work. Ranging in age from 7 to 18, they acquired their grim expertise as a result of being kidnapped and forced to serve as soldiers and sex slaves for the Lord’s Resistance Army (LRA) in northern Uganda. Still, says a social worker who identifies himself only as Tom, these are the lucky ones.

The children are among the few who have managed to escape captivity and seek a new start at rehabilitation clinics like this one, the Rachele Center, in the northern town of Lira. The war they were forced to fight in is complex, political, tribal and extraordinarily brutal even by African standards, led by a mystical rebel who inflicts grotesque carnage in the name of Jesus Christ and for the cause of the Ten Commandments. Over the last 20 years, the LRA has played a role in one of the continent’s longest and least-known conflicts. The fighting has killed tens of thousands of people and displaced as many as 1.7 million, about the same as in the more talked-about hostilities between a fundamentalist Muslim government and tribal rebels in the Sudanese region of Darfur. But the particular horror in Uganda’s war lies in the fact that children are both victims and perpetrators of atrocity.

Among them is Nancy, who was 9 when she and her sister were kidnapped by the LRA from their home in the Gulu district of northern Uganda in December 2002. She was beaten, tied and given a heavy load to carry on her head. In her 20 months in captivity, she was rubbed with shea-butter oil. Her captors told her two things about this supposedly magical concoction: it would stop bullets and it would prevent her from finding her way home if she tried to escape. Nancy was taught to shoot and dismantle a machine gun and forced to fight against the Ugandan Army (UDPF). Every order was a do-or-die ultimatum. She was made to loot, abduct other children and burn down houses in displacement camps. In an ambush by the Ugandan Army, Nancy was rescued, but her sister was left behind in the south Sudanese bush.

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It’s impossible to purge such a past, but to start the process of healing, scarred children need to open up and tell their stories. “If it makes them or us vomit, it’s all got to come out somehow,” said the Rachele Center’s Belgian founder, Els De Temmerman. Her book, “The Aboke Girls,” whose profits have helped fund the center, chronicles the abduction of 137 girls from a Ugandan boarding school and the daring rescue efforts of the school’s principal, Sister Rachele—the center’s namesake. For some of these kids, expressing their experiences through drawings comes more easily than talking. It’s a way to begin a dialogue with outsiders and also within their own minds. Their images scratch through the savage surface of this complex crisis.

The conflict they have fled is rooted in a colonial-era divide, when the British chose the bulk of their civil servants from Uganda’s south and most of its soldiers from the tribes of Uganda’s north. The Acholi and Langi, the dominant tribes in the north, comprised the country’s military elite. When current Ugandan President Yoweri Museveni came to power in 1986, the Acholi in the north feared retribution and a loss of influence without their traditional power base in the military. The Lord’s Resistance Army, led by an illiterate former altar boy and self-professed fundamentalist Christian “prophet” named Joseph Kony, soon became one of the many armed militias and rebels fighting in Uganda. Lieutenants from the regimes of the dictatorial Idi Amin and his successor, Milton Obote, provided the military experience and firepower to make Kony’s ragtag rebels a capable and cruel insurgent force.

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In waging its guerrilla war, the LRA found children useful as pliant slaves in camp and remorseless fighters in the field. More than 30,000 have been abducted since the late 1980s. In the Ugandan countryside, fear of LRA raids after sunset forced thousands of besieged children to make “night commutes” from rural villages and internal displacement camps to bigger towns in hopes of finding safe shelter. In recent months, however, the prospects for an end to what residents of Ugandan’s calm capital Kampala see as the war in the north have improved. The LRA once counted on the backing of the Sudanese government, which was fighting a war in southern Sudan, near the Ugandan border, against rebels of Sudan People’s Liberation Army. In the cynical calculus of unconventional warfare, Kampala would back Sudanese rebels while Khartoum supported Ugandan ones. But the long-running war in southern Sudan ended with a peace settlement in 2005, even as the war waged by other groups in the west of the country—Darfur—heated up.

At the same time, the Sudanese government, under increasing pressure on other fronts, started to find its alliance with the LRA in Uganda a liability. The group’s bizarre and horrifying zeal massacring the very people it claimed it was fighting to protect became known to the outside world. Sympathy for its cause among the northern tribes of Uganda dwindled, eventually leading to peace talks between the LRA and the Kampala government in the southern Sudanese city of Juba last year. Inevitably, the road to a lasting ceasefire has not been easy. The ongoing Juba discussions stalled and remained at an impasse until last month, when an agreement was reached to extend a truce forged last August and return to the negotiating table. However, sticking points remain, among them the LRA’s insistence that the International Criminal Court drop outstanding charges against Kony and his commanders.

While the negotiations stop and start, the children at the Rachele Center are enjoying their chance to act like kids again. Social workers try to remove some of the most tangible reminders by encouraging the children to turn their backs symbolically on the past by throwing their clothes into a bonfire. Their painfully innocent drawings were also on the way to the trash until case workers casually showed them to a visitor during an office clean out. Though critical to therapy, most are discarded after the child starts to function again. Yet some, like one 15-year-old who had his fingers chopped off for refusing an order to kill while captive, have begun to dream of more idyllic pictures. Heralded as Rachele’s most talented artist, the lanky boy stands proudly amongst a few of his colorful canvases outside of his dormitory, his smile revealing not a shred of self-pity. He’s safe, free and able to go to school—and he knows that this indeed makes him one of the lucky ones.

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© 2007 Newsweek

World Watch IV – Rich man, poor man – Globalisation and the rise of inequality

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Gluers and sawyers from the furniture factories in Galax near the mountains of Virginia lost their jobs last year when American retailers decided they could find a better supplier in China. At the other end of the furniture industry Robert Nardelli lost his job this month when Home Depot decided it could find a better chief executive in his deputy. But any likeness ends there. Mr Nardelli’s exit was as extravagantly rewarded as his occupation of the corner office had been. Next to his $210m severance pay, the redundant woodworkers’ packages were mean to the point of provocation.

That’s the way it goes all over the rich world. Since 2001 the pay of the typical worker in the United States has been stuck, with real wages growing less than half as fast as productivity. By contrast, the executive types gathering for the World Economic Forum in Davos in Switzerland have enjoyed a Beckhamesque bonanza. If you look back 20 years, the total pay of the typical top American manager has increased from roughly 40 times the average—the level for four decades—to 110 times the average now.

These are the glory days of global capitalism. The mix of technology and economic integration transforming the world has created unparalleled prosperity. In the past five years the world has seen faster growth than at any time since the early 1970s. In China each person now produces four times as much as in the early 1990s. Having joined the global labour force, hundreds of millions of people in developing countries have won the chance to escape squalor and poverty. Hundreds of millions more stand to join them.

That promises to improve the lot of humanity as a whole incalculably. But in the rich world labour’s share of GDP has fallen to historic lows, while profits are soaring. A clamour is abroad that Mr Nardelli and his friends among the top hundredth—or even the top thousandth—of the population are seizing the lion’s share of globalisation’s gains. Meanwhile everyone else—not just blue-collar factory workers but also the wider office-working middle class—shuffles along, grimly waiting for the next round of cost-cuts. They are not happy.

Fear and clothing
Signs of a backlash abound. Stephen Roach, the chief economist at Morgan Stanley, has counted 27 pieces of anti-China legislation in Congress since early 2005. The German Marshall Fund found last year that, although most people still say they favour trade, more than half of Americans want to protect companies from foreign competition even if that slows growth. In a hint of labour’s possible resurgence, the House of Representatives has just voted to raise the federal minimum wage for the first time in a decade. Even Japan is alarmed about inequality, stagnant wages and jobs going to China. Europe has tied itself in knots trying to “manage” trade in Chinese textiles. The Doha round of trade talks is dying.

What is to be done about this poisonous mix? If globalisation depends upon voters who, as workers, no longer think they gain from it, how long before democracies start to put up barriers to trade? If all the riches go to the summit of society and that summit seems beyond everybody else’s reach, are the wealth-creators under threat?

Should you blame China or your computer?
The panic comes in part from a rush to lump all the blame on globalisation. Technology—an even less resistible force—is also destroying white- and blue-collar tasks in a puff of automation and may play a bigger role in explaining rising wage inequality and the sluggish growth of middling wages. The distinctions between technology and globalisation count, if only because people tend to welcome computers but condemn foreigners (whether as competitors or immigrants). That makes technology easier to defend.

For economists, the debate about whether technology or globalisation is responsible for capital’s rewards outpacing those of labour is crucial, complicated and unresolved. One school, which blames globalisation, argues that the rocketing profits and sluggish middling wages of the past few years are the long-lasting results of trade, as all those new developing-country workers enter the labour market. This school says that technology helps workers by increasing their productivity and eventually their wages. The opposing school retorts that technology does not increase wages immediately, and some sorts of information technology seem to boost the returns to capital instead (think of how much more a dollar’s worth of computing power can do these days). And it questions whether Western incomes will remain flat: recent wage rises in America and pay claims in Europe and Japan may start to reverse the balance back away from capital.

In practice, it is hard to parcel out the blame between technology and globalisation, because the two are so intertwined. Ask IBM, which is hastily shipping bits of its services arm to India; or the call-centre worker who sees off the threat of his job going abroad by settling for only a tiny pay rise. And from a policymaker’s point of view, it matters little what is causing the pain: the remedies are broadly the same.

The first rule is to avoid harming the very miracle that generates so much wealth. Take for instance the arguments about high executive pay. Some say this is simply a matter of governance—and forcing company boards to work better. If only it were that simple. High pay is, by and large, the price needed to attract and motivate gifted managers, as our special report argues in this issue. The abuses of companies such as Home Depot obscure how most high pay has been caused not by powerful bosses fixing their own wages, but by the changing job of the chief executive, the growth of large companies and the competitive market for talent. Executive-pay restrictions would not put that horse back in its box, but they would harm companies.

Read the rest of this entry »

World Watch III – Globalization And Poverty

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In certain states of India there is an epidemic of farmers’ suicides. Today farmers in every village are facing debt and despair.

Many farmers who traditionally grew pulses and millets and paddy have been lured by seed companies to buy hybrid cotton seeds and other GM crops, which were supposed to make their lives easier and wealthier. Instead they faced bankruptcy and ruin.

Their native seeds have been displaced with new hybrids which cannot be saved and need to be purchased every year at a high cost. Hybrids are also very vulnerable to pest attacks. All pesticides have to be bought from the company that sold them the seeds; there have been reports of blatant profiteering from these companies.

It is experiences such as these which tell me that we are so wrong to be smug about the new global economy. It is time to stop and think about the impact of globalization on the lives of ordinary people. This is vital if we want to achieve sustainability.

We are repeatedly told that without genetic engineering and globalization of agriculture the world will starve, it is constantly promoted as the only alternative available for feeding the hungry.

Everywhere, food production is becoming a negative economy, with farmers spending more buying costly inputs for industrial production than the price they receive for their produce. The consequence is rising debts and epidemics of suicides in both rich and poor countries. Cows in the European Union receive on average $2 per day in subsidies. Over 1 billion people live in the world on less than $1 dollar a day.

Farmers in the Third World are encouraged by the IMF and the World Bank to produce cash crops for export. There are usually commodities that can be easily bought and sold on the World Markets. With fluctuating world prices, Fair trade is what can drag farmers and communities out of poverty. In some African countries it is cheaper to buy American sugar and coffee than it is to buy locally produced goods. This is because of over production and subsidies in the West which means that they then dump these goods on Africa destroying local markets.

When patents are granted to companies for seeds and plants, as in the case of basmati, saving and sharing seed is defined as theft of intellectual property. Corporations which have broad patents on crops such as cotton, soya bean and mustard are suing farmers for seed-saving and hiring detective agencies to find out if farmers have saved seed or shared it with neighbours.

As Gandhi reminded us, “The Earth has enough for everyone’s needs, but not for some people’s greed.”

This article has been adapted with the kind permission from Food Patents—Stealing Indigenous Knowledge

By: David Oglaza (founder of the Green and Ethical business http://www.guidemegreen.com)