53m will remain trapped in poverty
About 53m people in developing countries will remain trapped poor because of the world economic slowdown, the World Bank has claimed.
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Alternative views of the economic crisis to evaluate
While politicians, business leaders and policymakers searched for solutions at this year’s World Economic Forum in Davos, different debates were taking place at the “alternative” World Social Forum in Belem, Brazil.
There, a mix of some 100,000 campaigners, thinkers, and working people came to starkly different conclusions about the causes of the downturn, and how best to address it. This BBC article takes the views of 4 of the participants:
David Evan Harris, Director, Global Lives Project
“The current economic model which privileges unbridled competition is not sustainable”
Walden Bello, Focus on Global South
“This crisis has roots in global overproduction”
Myriam Vander Stichele, Researcher on multinationals
“Calls for re-regulation require a dismantling of the architecture of international trade treaties”
Marcos Arruda, Economist
“At this point the capitalist emperor has no clothes”
Their views make interesting reading; while they all broadly agree that the existing model of the global economy has to change in the light of the economic crisis, they offer very different perspectives of the root causes and the solutions – worth reading and evaluating to assess which you think would work best, and why.
Manufactured Landscapes
Edward Burtynsky and Jennifer Baichwal’s film Manufactured Landscapes is now available in DVD format in the UK and it contains some tremendously powerful images and takes which underline the depth of impact on our landscape that rapid economic development, globalisation and mass production can have.
read more...»Panorama: addicted to aid
Globalisation and the skills bias of world trade
The latest edition of the Economic Journal contains new research by Paolo Epifani and Gino Gancia that focuses on the skills preium for highly skilled workers in an age of globalisation. Whilst increasing economic integration between countries has undoubtedly contributed to a process of income convergence across nations, one of the paradoxes it that it can also lead to greater pay and earnings inequalities within countries - this research helps to explain why.
“Since the mid-1970s, the wage gap between high-skilled and low-skilled workers has widened. At the same time, world trade has increased dramatically: between 1980 and the late 1990s, the share of countries ‘open to trade’ rose from 35% to 95%, and the volume of trade of the average country rose from 59% of national income to 74%....Globalisation increases the size of the market firms can access. Some industries can take advantage of a larger market more easily than others as they benefit from ‘economies of scale’.The study argues that those industries that take advantage of a larger market are more likely to employ skilled workers, and so the wages of skilled workers will rise faster than unskilled workers in a period of globalisation.”
The rest of the media briefing on this new research is available here
Jim O’Neill on Globalisation
Jim O’Neill the Chief Economist of Goldman Sachs writes on the benefits of globalisation for the UK economy in today’s Sunday Telegraph
“For the nation that provided the English language to the world, that provides the link between east and west in terms of time zones, globalisation - the major structural trend of our generation - is going to become an ever greater bonus….At the heart of all of this is the expansion of the so-called BRIC economies. The emergence of Brazil, Russia, India and particularly China, closely followed by another group of emerging economies with large populations that we have dubbed the “Next 11”, will drive our future.”
Jim spoke at the Keynes Society in February and there is a report here
Fairtrade drives forward - Harriet Lamb
Harriet Lamb, Director of the Fairtrade Foundation, was on sparkling form at the Economics Teacher National Conference last Friday. Her presentation outined the business case for fairtrade and Harriet was pretty convincing the face of some tough and insightful questioning from the audience. You can download the handouts from her presentation here…
read more...»Firm Foundations for Fair Trade
Demand for fair trade products is rising nearly twenty times faster than the growth of the UK economy amid signs that consumers are increasingly willing to pay a premium price for ethical products.
read more...»Renault-Nissan announce entry into low-cost car market in India
The battle is intensifying to develop, manufacture and sell low priced family cars to meet the burgeoning demand from consumers in emerging markets. Renault and Nissan announced today that they are entering into a joint venture with the India firm Bajaj Motors to jointly build a $2,500 car to compete with Tata Motors’ Nano mode. A new 400,000 capacity plant is being built in Chakan, Maharashtra and the aim is to bring the car to the market in 2011.
read more...»Jeffrey Sachs on Carbon Trading
Jeffrey Sachs features on “You ask the Questions” in today’s Independent. There are loads of interesting questions and answers - Sachs remains positive about China’s growth potential although he expects it to decelerate to around seven per cent in the years ahead. Here he is on a question about carbon trading .... good evaluation here for students preparing for a question on carbon trading versus carbon taxes versus other policy measures:
“There is a good case for putting a price on carbon emissions but it is more straightforward to do it as a tax rather than a system of tradable permits. It would be easier to tax carbon at source – coal, oil, and gas companies. Tradable permits or carbon taxes will not help develop low-emission technologies. We need to combine carbon pricing with initiatives to promote sustainable energy and farming technologies.”
Catch the remainder of his article here
World Bank Development Indicators 2008
The latest World Bank Development Report is now available here. As usual there is a veritable cornucopia of interesting and revealing evidence on the changing shape of the global economy. A lot of the data is available for free as are pdf versions of selected chapters from the main report.
Brazil’s widening wealth gap
Gillian Lacey-Solymar, Business correspondent for BBC Newsnight has a piece on tonight’s show about the rising inequality in Brazil as her economy continues to experience breakneck growth. Expect an excellent video clip to be available from the BBC web site immediately after the Newsnight programme has aired. Excellent for highlighting the links between growth and income and wealth distributio, especially with a tax system that appears to have regressive effects on the lowest income earners.
Potatoes - The Crop of the Future?
In a world of agflation with grain prices continuing to climb higher as developed nations prolong a love affair with bio-fuels, perhaps the humble spud provides a credible and viable solution to the crisis that rising food prices is having for hundreds of millions of the world’s poorest people.
read more...»The Supply of Opium in Afghanistan
For most farmers, the decisions about which crops to plant and harvest boils down to straightforward cost benefit analysis. So when when the world price of ground coffee beans paid to farmers declines in Ethiopia somefarmers destory their coffee plants (some of which may have taken five years to grow) and instead produce chat. Likewise, when the return on producing cannabis or opium increases, farmers in Afghanistan increase the area under cultivation and supply responds.
The supply of opium from Afghanistan continues to grow and it is basically down to the economic incentives facing the farmers. There have been some success stories in cutting off the supply but the battle is a long way from bring won. This report from the excellent Alastair Leithead (a former student of mine at the RGS Newcastle) looks at the efforts to reduce opium supply in some regions of Afghanistan - so far there have been only mixed results. Whilst in some regions cultivation is being cut through eradication programmes, in others desert is being reclaimed by the farmers and a new supply of opium is opening up.
Vietnam’s rise to prominence
Vietnam is emerging as a significant economic competitor to China and this article in the Sunday Times gives a flavour of their rapid development. The economy has become more open and is now attracting huge inflows of foreign direct investment which in turn is reducing unemployment and generating a surge in manufacturing capacity that is providing a platform for sustained export growth. British firms are increasingly looking to Vietnam as a location for direct investment and also as a market for a range of business and financial services.
‘Vietnam gained admission to the World Trade Organisation last year, which triggered a huge surge in foreign investment commitments of more than £6 billion. The value of UK investments in Vietnam is more than £1.25 billion, according to British Embassy statistics. While British exports rose 17% in 2006 to more than £95m, the trade deficit is more than eight to one in Vietnam’s favour. However, Britain reaps invisible earnings from banking and financial services’
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Wolf on a Waking Giant
Martin Wolf is always eminently readable on globalisation. His recent book ‘Why Globalisation Works’ is widely regarded as one of the most complete and authoritative jusifications for the current wave of globalisation. Martin is on good form in a special report in the Financial Times this week on India and Globalisation.
He writes
‘India is not China. Its development path has been very different and, so far at least, its global impact far smaller. But it is now more open to the world economy than at any time in its post-independence history and more economically dynamic than ever before. India’s decision in the early 1990s to embrace the world economy, as part of a wider embrace of the market economy, has led to an accelerating opening up of its economy. While its impact on the world is still relatively modest, it will continue to grow.The impact on India itself is less modest and growing fast. Both sides – India and the world – will need to get used to the experience: they will grow much closer together in the years ahead.’
At the heart of the article is a neat comparison and contrast between the economies of China and India in terms of
Exports of merchandise products
Exports and imports as a share of national income - a guide to trade openness
The scale of current account surpluses and foreign exchange reserves
Inflows and outflows of foreign direct investment
Control of exchange rates
Read the rest of his article here
