Wednesday, May 31, 2006
President Evo Morales’s nationalization plan is causing unrest in Bolivia’s populace—particularly within the country’s landed elite. The President has declared an “agrarian revolution” that will redistribute 48 million acres (one-fifth of the country’s total area) of idle farmlands to the country’s landless poor—a declaration that has illustrated the gap between the poor majority and the wealthy. Earlier this month Morales said, “we don’t approve of...large landowners that don’t allow the land to be farmed.”
This plan has sparked a rash response from wealthy agri-business groups in the country, including the National Farming Confederation (NFC); the NFC published a statement rejecting the President’s policy, and saying it would form “self-defense” groups, but did not elaborate on what that means. However, in other parts of Latin America, such terms usually describe groups of armed citizens. (see Bolivia farmers - CNN)
The government responded that they’re willing to have dialogue with the groups, but not if such violence-promoting terms are cast into the fray: “This is an incorrect measure that only seeks confrontation,” Alejandro Almaraz, Bolivia’s vice minister of land, said.
Unfortunately, wealthy farmers seem unwilling to talk with the government; NFC members refused to attend a meeting last week to discuss the problem, claiming that the government allowed illegal invasions of their land near Santa Cruz, an area where much of the land to be redistributed is located.
Agri-land reform isn’t the only component of Morales’s nationalization scheme: earlier this month, Morales sent troops to seize gas fields and threatened oil companies with ejection from the country if they did not agree to new contracts. Economists fear that the nationalization of resources such as oil will be detrimental to the market; most nations, particularly those impoverished ones like Bolivia, do not have the technical expertise or resources to maximize the output of their oil or natural gas reserves, a job that, to some, is best left to professional, corporate entities. (see Nationalistic politics return - FT.com)
Bolivia has engaged in such land redistribution for the past decade. Unfortunately, because of government corruption and an inefficient justice system, the country’s poor have not reaped much benefit.
A recent survey by the Catholic Church found that a small group of wealthy elites owned 90% of the country’s territory, while 3 million indigenous peasant farmers share the rest.
After Iranian demand for bilateral talks with the US, the latter has agreed to (although not alone with Iran) enter into the negotiations of European countries with Iran—but on the condition that Iran suspends development of its nuclear program.
After being pressured by members of Congress and its European allies to open a dialogue with Iran, the Bush administration, through an announcement made by Condoleeza Rice, agreed to conditional negotiations with Iran—the latter having recently come under the international community’s scrutiny given its insistence on enriching uranium. Rice noted, however, that the threat of military action remained on the table.
Although Iran had expressed a desire to enter talks with the US, tensions might be high as Iranian officials have recently expressed concern over alleged US support of separatist groups within the ethnic minority population of the country; ethnic unrest has been causing troubles in some of Iran’s poorest areas, where such groups commit violence against officials and buildings. (see Ahmadi-Nejad accuses US of urging ethnic unrest - FT.com)
Further, both US President Bush and UK’s Tony Blair have recently received briefings from Iranian opposition activists such as Amir Taheri—a resident of London who reported that Iran passed a new law requiring non-Muslims to wear special identification badges. Such news is likely to raise additional concerns among Iranian leaders as talks with the US loom on the horizon. (see Bush and Blair meet Iranian opposition - FT.com)
Iranian leader Ahmadi-Nejad has continually insisted that Iran is not seeking nuclear weapons development, just nuclear energy and that all countries should be free to pursue such technologies.
Questions to think about:
-Does Ahmadi-Nejad have a point in stating that all countries should be free to pursue nuclear energy development? Is nuclear energy development a right or a privilege?
-If the latter is true, what must a country do to be worthy of such a privilege?
Tuesday, May 30, 2006
ADB Press Release
A 6.3-magnitude earthquake struck the Indonesian island of Java on Saturday. The quake left an estimated 100,000 homeless and a death toll rising over 5700.
As other quakes hit the nations of Papua New Guinea and Tonga, hospitals in Indonesia were left struggling to support the many survivors in need of treatment. Some area hospitals were crumbled by the quake. Those surviving are in need of basic supplies.
Countries and groups from around the world have agreed to send millions in aid. The Asian Development Bank has offered $10 million in immediate grant assistance, as well as $50 million in soft loans. The United Nations, Spain, and the US have also dispatched various forms of aid.
Another cause for concern is nearby Mount Merapi, a volcano that has been under watch for weeks. Scientists are carefully studying the effects of the quake on the volcano. They have noted the volcano has emitted an average of 150 hot clouds a day since the quake, which is 3 times its prior average.
Some 30,000 jobs per year will be lost if Ecuador’s trade agreement with the U.S. expires at year’s end.
Ecuador’s President, Alfredo Palacio, asked the U.S. to extend the trade agreement for an extra year, but the country’s chief trade negotiator was doubtful about such prospects given the country’s recent decision to revoke a contract with California-based oil company, Occidental, and seize approximately US$ 1 billion; the decision to oust Occidental came after the government discovered the U.S. company improperly transferred its stake in an oil field to a Canadian company. (see Ecuador regrets Occidental move - FT.com)
Some government officials have responded that the country can find other markets for its exports, and thus suggesting its loss of an agreement with the U.S. will be of little consequence. But with some of its sectors exporting up to 70% of their production to the U.S., such confidence seems misplaced.
Neighboring countries like Peru and Colombia have already seen an influx in investment as both countries have secured trade deals with the U.S.—Colombian President Uribe, recently winning his second term, is a staunch conservative and supporter of the Bush administration.
An end to the “low-tariff” regime on the country’s exports could severely damage sectors such as agriculture and textiles. Unfortunately, the U.S. ambassador to Ecuador suggested that the regime could end early: “These preferences cannot be granted to any country that has…confiscated or has taken under its control the property of an American corporation,” she said.
A new trade deal is unlikely to happen until new leaders are installed in both the U.S. Congress and Ecuador’s presidential position: a contest for Ecuador’s presidency is in October, with US mid-term election in November. Unfortunately, January may come too late.
Discussions at the World Bank's currently ongoing Annual Bank Conference on Development Economics (ABCDE) in Tokyo will mainly center on issues relating to energy—particularly meeting the increasing energy needs of fast-growing populations and the impacts on the environment. People in some developing countries—526 million in Sub-Saharan Africa, and 800 million in South Asia—lack any access to electricity.
Lack of energy fuels the cycle of poverty in many countries, often requiring the employment of environmentally detrimental sources of energy, such as coal-burning power plants. While the two goals of fighting poverty and preserving the environment thus seem diametrically opposed, as Paul Wolfowitz says, “[i]t’s very hard to fight poverty if you…destroy the environment”. Thus, groups like the World Bank struggle to strike a balance regarding these two goals.
This problem faced by the World Bank and developing countries is perhaps most readily apparent in China, where the capital of Beijing became the most air-polluted city in the world last Fall, and where some 411,000 annual deaths are believed to be caused by harmful levels of air pollutants, such as nitrogen dioxide. Further, a majority of China’s water in rivers and lakes has become unsafe to drink (for a discussion on the ‘cancerous’ condition of the Yangtze, see Yangtze River is 'cancerous' - Reuters). Thus, while China’s economy is booming, the costs of industrialization are taking their toll on its citizens' quality of life. (see also Beijing is air-pollution capital - The Guardian)
The World Bank has helped fund and support research focusing on the reduction of carbon dioxide emissions from coal-fired plants in countries like China and India—countries among the largest producers of such emissions. One promising technology is carbon capture—whereby harmful emissions would be captured and permanently stored in geological formations; this technology is expected to be implemented on a broad scale once successful implementation in the U.S. occurs. Further, given the soaring costs of employing fossil fuels for energy, some renewable, and environmentally sound, technologies such as wind power are becoming economically viable.
The World Bank is one of the biggest promoters of such renewable energy and energy efficiency projects, providing some US$ 9 billion to such projects since 1990. (see Ramping up renewable energy - World Bank News)
Questions to think about:
-Is it fair to restrict developing countries from using environmentally harmful sources of energy in order to build their economies, since the industrial nations have already reaped the benefit of such energies?
-Can we still hope to 'save the environment', or only prevent further injury at this point?
Saturday, May 27, 2006
Update: Uribe wins re-election - FT.com
Troops patrol all parts of Bogota, serving as a reminder of Colombia’s war with the guerrillas. But the country’s wealthy citizens enjoy a rich night life, an indication of the growing sense of security and safety in the more affluent areas of Bogota as a result of President Alvaro Uribe’s security policies. Its this kind of effect that has poised the incumbent President to coast through the elections to another win.
A club owner in an affluent district of Bogota praised Uribe for his security policies and governance, and hopes for the President’s re-election on Sunday.
With strong support from the United States, Uribe’s forces have driven guerillas from urban areas in their crack-down on the illegal cocaine trade. Unfortunately, large parts of the Colombian countryside remain in the control of rebel groups, like the FARC, the most powerful of such groups.
Additionally, the poorer districts of Bogota do not enjoy a similar sense of security. One resident commented that she will not go out of her house past 8 o’clock, because of the rampant violence as the gangs swarm and take over the streets. Another resident of Bogota’s impoverished Southside demonstrated her lack of confidence in the government by commenting she would not vote for Uribe because “[n]othing gets better because of the corruption. Politicians don’t want to share...with the poor people”
However, not all of the country’s poor are dissatisfied with Uribe; Edelmira Reyes, a resident of the impoverished Bogota suburb of Bolivar City, said, “[h]e’s the only tough president I can remember who’s actually stood up to the FARC and not given into them...” (see Uribe versus Latin America's 'Pink Tide' - The Independent)
Every year, several thousand civilians are killed in the Colombian government’s battle against Marxist guerrilla groups and the illegal drug trade. The U.S. currently gives more military aid to Colombia than any other country (recently giving approximately US$ 1.3 billion under Plan Colombia) in support of its war against the guerrillas and its efforts to eradicate coca plants, from which cocaine is produced; illegal distribution of cocaine, especially its importation into wealthy countries like the U.S., is the primary source of revenue for guerrilla groups like the FARC.
Serious problems for Colombia’s citizens have resulted from the ongoing war: The World Bank cites “forced displacement” (when guerrilla groups take control of the rural countryside after being pushed out of other areas by the government, displacing the citizens who own the land) as the most severe of those problems, with some 2,800,000 people displaced from their homes since the mid-1980’s. Most of these displaced persons move to the slums of cities like Bogota, where they face severe impoverishment because of the loss of land, savings and other material assets resulting from the displacement. (see Protection of Colombia's Patrimonial Assets - The World Bank)
Questions to think about:
-Are people suffering in Colombia mainly because of an ideological war waged in the U.S. and other industrial countries against drugs such as cocaine?
-Would legalization of cocaine fix current problems in Colombia (the war and displacement)? If so, would it nevertheless lead to new, perhaps more severe, problems in Colombia and abroad?
Friday, May 26, 2006
Boris Tadic, president of Serbia, recognized the will of the voters, although he “supported the preservation of a joint state.” The EU has also vowed to recognize the results of the referendum. International monitors characterized the vote as “genuine and transparent.”
Montenegro’s last period of independence lasted from 1878-1918. In 1918, it became incorporated in part of a conglomerate that later became to be known as Yugoslavia. Serbia-Montenegro was the last remaining union between former Yugoslav states.
Montenegro’s president, Milo Djukanovic, is hopeful that the two countries will enjoy a partner relationship in the future. He also desires that “Serbia [will] be the first to recognize independent Montenegro.”
Thursday, May 25, 2006
Earlier this week, the government asked for international military support to help quash the rebellion. Australia has pledged 1300 troops to aid East Timor’s 800-member army. Other countries have also committed personnel to the effort, including Portugal, the former colonizer of the country, New Zealand, and Malaysia. The initial deployment of Australian troops was eagerly welcomed at the airport by hundreds of East Timorese.
The violence has led to the evacuation of the Australian and U.S. Embassy staff. The United Nations Security Council has opened discussions on the situation, although Australian Prime Minister John Howard believes that “once all of our forces are there, there will be a significant return of stability and normality.”
The leader of the rebellion has told the BBC that the international troops’ arrival is the only thing preventing a civil war. These soldiers believe that they were the subjects of discrimination because they came from a different part of the small nation than the military commanders.
The proverbial carrot is being dangled in front of U.S. oil companies, and Castro is holding the stick.
An existing debate in Washington over the U.S. trade embargo with Cuba is almost certain to intensify from the recent agreement by Norway and India to join Spanish oil group Repsolin in exploring for oil, and potentially profiting during a time of high oil prices, in the Cuban waters of the Gulf of Mexico.
Drilling in the waters is expected to begin in about 18 months. While large quantities of oil would have to be present in order for costly drilling in deep-waters to be economically viable, a U.S. Geological survey has estimated that the North Cuba basin could contain anywhere from 4.6 billion to potentially 9+ billion barrels of oil.
The thought of energy-hungry China reaping the benefit of such quantities of oil in mere “spitting distance” from the U.S. mainland has already sparked an intense debate over an exception to the trade embargo that would allow U.S. companies to also explore and drill for oil in the Cuban waters—but to do so would require negotiations with the Castro government. Anti-Castro Cuban exiles in Florida, with a powerful lobby, remain diametrically opposed to such a thought, and thus a conflict is likely to ensue. (see Cuba OKs Oil Venture in Gulf - Yahoo!)
Cuban government officials invited U.S. exploration during a February meeting in Mexico: “…we are open for business as soon as the laws of their country permit,” said Juan Fleites, an executive of Cuba’s state oil company, CUPET.
In a time when soaring oil prices are detrimental to American consumers, should the American government compromise its long-standing objection to the Castro regime and do what’s good for business, and potentially the “right” thing to do?
(Source Article: Dominican Republic Elections - CNN)
Results from the country’s elections last week are most favorable to Dominican President Leonel Fernandez, as his political party gained control of both houses of the country’s Congress. Unfortunately, violence resulted in the death of 10 persons in the election’s aftermath.
The vote count was slow, and the elections were accused of being fraudulent. International groups said they saw no proof of vote-rigging, however.
Before the election, Fernandez’s Dominican Liberation Party (PLD) held just one seat in the Senate and 43 seats in the House. After the elections, they held 22 of 32 Senate seats and between 90-95 of 178 House seats—a dramatic change in the power structure of the country’s government.
Fernandez has been successful in bringing the country out of a recession resulting from the fraud-induced collapse in 2003 of a major bank, Baninter. But until now he has struggled to persuade the legislature to adopt resolutions to satisfy budget obligations imposed under an IMF loan program and as part of CAFTA, the U.S. and Central America free trade agreement; the IMF recently granted waivers relating to the country’s failure to fulfill structural performance criteria of the agreement. (see IMF Review of Stand-By Arrangement for Dominican Republic)
The IMF has encouraged “[t]imely implementation of structural reforms” aimed at improving good governance and transparency issues in the banking sector, and tough criminal proceedings on those involved in the 2003 banking crisis in order to send a message that consequences result from such misconduct.
Cleans cars, fuel needed in Asia - ADB website
VP Geert van der Linden recently cautioned that, without changes in Asia’s approach to transport, irreparable harm to the environment could result.
Asia’s current approach focuses on the development of roads and costly public transportation systems, while it’s suggested they should focus on more environmentally sustainable approaches such as walking and cycling or low-cost bus systems.
The VP gave his talk at a workshop organized in cooperation with the Clean Air Initiative for Asian Cities (CAI-Asia) with support from the UK. The workshop brings together development partners from the public sector, NGOs and corporations to discuss ways in which the region can reduce greenhouse gas emissions. The region accounts for more than one quarter of the world’s greenhouse gas emissions. The VP said millions of lives will be put at risk if changes aren’t made, with “profound consequences for everyone, but especially the poor.”
Asia's vehicle fleet could mushroom by up to 10 times in size over the next few years, Nessim Ahmad, Director of ADB's Environment and Social Safeguards Division said.
Can the region continue its economic growth while implementing more environmentally sound modes of transportation?
Tuesday, May 23, 2006
On Tuesday, the House of Representatives approved a measure (by a large majority) to cut off financial aid to NGOs working in Palestine, with the exception of some health programs. A U.S. Representative commented that the U.S. needs to make it abundantly clear that terrorist regimes will not be allowed to benefit—directly or indirectly—from U.S. funds.
Opposition to the measure voiced their concerns that such an enactment may cripple peace-keeping and other development in the region.
The House vote coincides with a White House visit from Israel’s new Prime Minister, Ehud Olmert. President Bush also announced today that the U.S. would defend Israel from any potential attack, responding to hostile comments by Iranian leadership (see Bush Pledges Support to Israel - CNN)
The U.S. is not alone in cutting off aid to Palestine—Britain and the EU also do not want to support the Hamas regime. As a result, the Gaza director of the U.N Relief and Works Agency said that “the clock is ticking towards a crisis” (see Gaza on Brink of Implosion - The Guardian (UK)).
Are such measures counter-productive to creating stability in the region?
Is there any alternative for Israel when dealing with regimes that do not acknowledge its right to exist?
(Source Article: Mexico's President Visits U.S. - CNN)
Today in Utah, his first stop on a three-state visit, Mexican President Vicente Fox urged that the U.S. and Mexico work to strengthen their economic, educational and cultural relationship, insisting that continued regional prosperity will result from such efforts.
Fox’s encouragement is not surprising, considering Mexico is Utah’s third largest trading partner—and one of the nation’s top trading partners overall. In 2005, the U.S. exported commodities to Mexico in the value of approximately US$ 120 billion dollars. Additionally, the U.S. imported over 170 billion dollars worth of commodities from Mexico, resulting in a substantial trade deficit (Source: TradeStats Express).
Fox is expected to focus on discussion of immigration as well given the growing concern amongst U.S. citizens. Utah’s Hispanic population—primarily Mexican—has tripled since 1990, and the reason why is a source of dispute.
Anti-immigrant groups within Utah say the state attracts illegal immigrants because of the nonchalance of the state’s citizens who don’t report such immigrants to the authorities. Critics of Fox say he’s trying to influence U.S. policy on illegal immigration by not visiting Washington on this trip and instead opting to meet with governors of Western states.
Fox’s visit to the states coincides with the U.S. Senate’s expected vote on immigration legislation that could result in a new guest-worker program and opportunity of citizenship for the millions of illegal immigrants already in the U.S. (see Immigration Legislation - CNN). His encouragement of the strengthening of the two countries’ relationship echoes his response to previous congressional plans to build a 700 mile fence along the border: “[barriers] do not offer an effective answer for a relationship of friends and partners,” he said. The late poet Robert Frost might agree.
Despite the obvious importance and sheer immensity of U.S.-Mexico relations, immigration remains a hot-blooded issue—especially in conservative red states such as Utah.
Is Fox right in suggesting, at least impliedly, that relations with Mexico can prosper and benefit from legislation granting citizenship status to many would-be illegal immigrants?
Is he further implying that current relations might deteriorate in the absence of such legislation?
While critics might say Fox is making this trip for political reasons (though for his party alone, since he cannot run for President again), those immigrants whose status is at stake have more on the line.
New York Times
In April, the government of India announced a plan to increase the number of seats reserved for members of the lower cast groups. The plan calls for an increase in the percentage of jobs and seats reserved for select groups in medical, engineering, and other professional schools. The plan would increase the current reservation of 22.5% to 49.5% of the total spots. The current level incorporates “scheduled” castes and tribes, including those formerly known as untouchables. The plan would expand those benefited to include those who are one-step higher in the caste system or the “other backwards castes.”
Opposition, in the form of protests and hunger strikes, are coming primarily from medical students, who desire admissions based solely on merit. Hospitals affected by the strikes have refused new admissions, save emergencies, and cancelled all surgeries. The government is hoping to prevent a situation similar to the 1990 incident where numerous students committed suicide, which led to the fall of the government, after the number of reserved seats in university admissions and jobs were doubled by the government.
Some believe that the politicians are unwilling to address the plan because nearly two-thirds of India’s population are members of lower castes. Political backlash for decreasing the quotas could be severe. Prime Minister Manmohan Singh’s silence on the proposal is evidence of this. He opted instead to appoint a committee to evaluate the plan and its possible effects.
A further argument is that the better way to empower the lower social groups is to focus on basic primary education, which could benefit many more people than the current plan and lead to a long-term solution. Others argue that the only way for members of the lower group to succeed in the unequal society is by a specific quota system.
UNICEF, the U.N Children’s fund, reports that half of Niger’s children suffer from growth retardation resulting from food shortages and the world’s lowest rate of baby breastfeeding; a UNICEF representative says that 50% of children under 5 years suffer growth retardation, and only 1.2% receive exclusive breastfeeding. UNICEF data suggests that breastfeeding, considered the most nutritious source of food for growing babies, could save millions of lives if it served as the exclusive source of nutrition for babies until around 6 months of age.
Niger is a region in Africa accustomed to food shortages: last year a plague of locusts and poor harvests left some 3.6 million people largely without food.
Social and cultural attitudes in Niger, including the belief that the first born child shouldn’t be breastfed, result in Nigerian babies receiving a mixture of water and other liquids—leading to chronic infections because of unsanitary water in many areas. This lack of breastfeeding, plus other food shortages, combine to create high child mortality rates.
A recent study shows that 15.3% of all Nigerian children suffer from malnutrition. The Nigerian government, in response, has drawn up a 10-year plan intending to improve healthcare and child nutrition.
Monday, May 22, 2006
Through the Multi-Country Demobilization & Reintegration Program (MDRP), a collaborative effort amongst several nations and international organizations to disarm and reintegrate combatants in war-torn central Africa, the World Bank provides financial and technical assistance primarily to the MDRP’s efforts in easing ex-combatants' transition to civilian life.
The MDRP is currently working to reintroduce some 400,000 former combatants in the African Great Lakes countries: a region of Africa that has suffered decades-long wars, but in light of recent stability allows for programs such as the MDRP to attempt to rebuild societies therein. Of the 400,000 former combatants, some 18,000 are children as young as 6 years old. Rebel groups, including the Lord’s Resistance Army (LRA), are notorious for snatching up children at night and forcing them into service as soldiers, spies, cooks and even sex slaves. Despite The MDRP’s efforts, an estimated 30,000 children are still engaged in active combat in the Democratic Republic of Congo alone, and thousands more elsewhere in the region—all while groups like the LRA continue their efforts to kidnap and recruit these child soldiers.
While the MDRP has strong financial support for its efforts (over US$500 million, approximately 200 million of which is funded by the Bank), it is not an easy process to reintegrate children who were deprived of a normal childhood: while most children go to school and play with friends, these kids killed people. As a result, they suffer from severe psychological problems, nightmares, and are prone to violence towards others. Because of this, the MDRP oftentimes only succeeds in reuniting these children with their families, with whom the children aren't always familiar after spending years apart, and not in completely transitioning them into their communities: around 60% of children, once returned to their homes, are engaged in an activity, such as school, with the purpose of providing them with the skills they need to successfully reintegrate. Nevertheless, the MDRP and its partners aim to increase the success rate to 85%, though they remain unconvinced that a 100% success rate is on the horizon.
The MDRP is in the process of helping the local communities form their own child protection groups for the purpose of monitoring and providing reintegration support to the children upon return to their communities. In the Democratic Republic of Congo, for instance, a national program already in place that assists adult ex-combatants will soon combine its efforts with the MDRP to provide similar assistance to children.
The World Bank and the MDRP both realize that disarmament and reintegration is necessary for prosperous development in the region. With continued peace, future generations of children will not be subjected to such horrid conditions and life experiences.
Friday, May 19, 2006
Recently, organized crime in Brazilian Sao Paulo, the country's financial and industrial center, has simultaneously illustrated its own strength and the weakness of the Brazilian criminal justice system by successfully killing 30 plus police officers in the world's third largest metropolitan area. Despite incarceration of many Brazilian gang bosses, easy access to smuggled cell phones and other means of communication allow the organizations to continue functioning effectively--well enough to pull off organized attacks on police officers.
On Friday, relatives took to the streets to collect the corpses of suspected gang members who have been massacred all week in what appears to be a retaliatory attack by police. While Brazilian officials deny the attacks were carried out to avenge the death of police colleagues, several international organizations and citizens of Brazil desire investigations to be made. A human rights advisor in the Sao Paulo state government commented that, given the tainted history of the police in the region, he would be unsurprised if it were found that innocents were brutally killed along with the gangsters.
A Brazilian Senate committee looks to put together a package of reforms for stricter regulations in Brazil's notorious prisons, in an effort to curtail the operations often run by those gang bosses who are imprisoned.
Sao Paulo state Gov. Lembo commented that the recent violence is reflective of Brazil's social inequalities.
Recently, Maryland enacted legislation requiring companies with more than 10,000 employees to spend at least 8% of their payroll on employee healthcare—this legislation is targeted at Wal-Mart, since the retailer, in its position as the apotheosis of American Capitalism, is the only employer who fits the bill (and accordingly is being asked to foot the bill).
Legislation like this is largely in response to activist groups, like Wal-Mart Watch and the Service Employees International Union, putting the pressure on Wal-Mart via leaked internal documents and grass-root campaigns illustrating the impact Wal-Mart has on the U.S. With its 1.7 million worldwide employees, Wal-Mart is the largest private employer in the history of the world. Critics of the mega-corp have attributed large losses of U.S. manufacturing jobs to Wal-Mart’s business practice of “Always low prices. Always," which requires a constant flow of cheaply manufactured goods (unionized factory workers in America would drive up Wal-Mart’s prices, preventing them from rolling back the prices.)
The mega-corp’s effect, or overall relationship, on healthcare in the nation is also staggering: its healthcare policy covers less than half of its employees, leaving the government to care for tens of thousands of its employees and their children through programs such as Medicaid. Given the immensity of this relationship, the president of the SEIU hopes to back Wal-Mart into a corner via proposals of “fair share” legislation like that recently passed in Maryland—effectively forcing Wal-Mart to publicly favor the adoption of a national healthcare policy.
This plan is bold, considering corporations such as Wal-Mart are reflexively opposed to government regulation—but the plan is not implausible. If Wal-Mart is forced via legislation to foot the bill for increasing healthcare expenses, its own self-interest in profits will encourage it to favor government regulation of the healthcare system. And with its 65,000 suppliers of goods, many of whom are largely if not entirely dependent on Wal-Mart for their continued prosperity, the mega-corp’s influence could be just enough to bring real healthcare reform to the States—and potentially abroad. (For a detailed discussion on Wal-Mart’s potential to effectuate systemic social, political and economic change, see Global System Change - Wal-Mart's Sustainability Strategy).
Thus, while groups like the SEIU campaign for and support legislation like that of Maryland’s, clearly it is a short-term remedy to a major crisis; just as clear is the fact that Wal-Mart, no matter how many pennies per item sold it makes, cannot by itself—much less any other company—shoulder the burden of healthcare costs.
How many states must adopt such “fair share” legislation before Wal-Mart reacts in the way the SEIU hopes?
Can the Federal Government effectively implement a broad, national healthcare system? And, if so, what would this healthcare system look like (i.e., a mixture of privately funded coverage plus government subsidization or pure government)?
Wal-Mart’s role is perhaps key to this major development.
Tuesday, May 09, 2006
Tackling the Informal Economy
Research on economic development from the McKinsey Global Institute has demonstrated that there is a direct correlation between the extent of an informal sector in an economy and its level of development.
The author dispels the notion that the businesses acting in the gray economy are mostly small. According to McKinsey's research, the businesses operating in the informal sector
ranged from supermarket chains to software distributors to consumer-electronics assemblers. In countries such as
The author points out an interesting paradox - most of the social spending undertaken in developing countries is financed by high taxes levied on legitimate businesses. However, the money never reaches those who need it because most of the people requiring assistance operate in the informal economy and therefore are not eligible to receive the benefit of social security or insurance.
The author offers a three-point plan for "curbing informality" - making corporate taxes and business regulations easy to understand, creating harsher penalties for breaking the law, and applying penalties uniformly to those who violate the laws.
Karzai aims to lure investors into "greedy market"
May 9, 2006
As economic development in
While potential investors still have to contend with considerable red-tape, the Afghan government has shown a willingness to accommodate foreign investors. Recently, the government approved the sale of several state-owned industries and is currently passing laws that would make entry of foreign investors into
While Indian businesses have shown a willingness to hire the so-called backward castes, unrest is likely on the horizon.
Wednesday, May 03, 2006
The Independent (UK)
May 3, 2006
Progress for Children Report
This week, UNICEF published a progress report relating to the Millennium Development Goal of eradicating childhood hunger. Unfortunately, the report reveals a staggering number of children (146 million) suffer from malnutrition and related health conditions. Below are some of the many findings available in the UNICEF update:
- There is little difference between male and female children and the incidence of being underweight. (p. 8)
- Nearly half of the children in South Asia are underweight. However, these numbers may be inaccurate because only one in four children born in the region is weighed at birth. (pp. 12-13)
- Malaysia shows the fastest rate of improvement in children's health; the country reduced child poverty from 25% in 1990 to 11% in 2003. How did they do it? One practical step was to increase the intake of iodized salt. Iodized salt promotes thyroid function and helps regulate metabolism. (p. 20)
- In contrast, European children are at high risk for cardiovascular disease, hypertension, non-insulin-dependent diabetes, certain kinds of cancer, gall bladder disease, menstrual abnormalities, and arthritis due to obesity. In southern Europe, one in three children is overweight. (p. 26)
The report recommends increasing education for families about nutrition, improving access the clean water and sanitation, creating national action plans with appropriate budgets, and ensuring the delivery of important food items.
Tuesday, May 02, 2006
States sue Bush over fuel efficiencyNEW YORK (Reuters)
Bush Gasoline-Price Probe May Not Find Manipulation (Update1)
U.S. Energy Secretary Sam Bodman said today that high gasoline prices which have skyrocketed to a near record are a "crisis" for Americans.
In related news, nine states (California, Connecticut, Maine, Massachusetts, New Mexico, Oregon, Rhode Island, and Vermont) have sued the administration of President George W. Bush for lenient automotive fuel economy standards that they say worsen an energy crunch and contribute to air pollution and climate change.
Elliot Spitzer, New York Attorney General, said in a press release, "At a time when consumers are struggling to pay surging gas prices and the challenge of global climate change has become even more clear, it is unconscionable that the Bush Administration is not requiring greater mileage efficiency for light trucks."
The price increases have also prompted Republican Senators Arlen Specter of Pennsylvania and Mike DeWine of Ohio to propose enforcing U.S. antitrust laws against Saudi Arabia and other members of the Organization of Petroleum Exporting Countries. The Senate Judiciary Committee approved their plan on a voice vote today and sent the measure to the full Senate.
Our favorite antitrust expert, Professor Herb Hovenkamp, recently commented that applying U.S. antitrust laws to OPEC would go against a longstanding legal doctrine that U.S. courts don't have authority to rule on the legality of foreign government actions. It also might prove difficult to enforce.
The proposal also raises a foreign-policy issue because oil is ``a natural resource for these countries'' and ``the way they set price is by controlling output,'' Hovenkamp said.
Here are some pictures of the noon-time rally.
For full images, click here.
Monday, May 01, 2006
Puerto Rican Government Shuts Down, BBC News, 5/1/06
Puerto Rico Questions U.S. Ties By Jonathan Beale, BBC News, 3/28/06
The U.S. territory of Puerto Rico, in the midst of a financial crisis, has temporarily shut down all state-operated schools and non-essential government offices. Approximately 95,000 government workers have been left without work and 40,000 students without classes. The government is the country’s biggest employer. Puerto Rico operates as a self-governing commonwealth, but President Bush is its head of state.
Governor Aníbal Acevedo Víla has blamed the crisis on “legislative inaction”. The Puerto Rican government is currently operating at an estimated $740 million dollar deficit, and has been unable to agree its budget. The government is currently using its 2004 budget because there has been no agreement with the Puerto Rican legislature since that year.
Last week, thousands of Puerto Ricans protested in the streets, demanding a solution. Governor Acevedo hopes to introduce a 7 percent sales tax to help pay off the island’s debt and allow the government to operate. The U.S. territory currently has no sales tax, but most legislators are opposed to any tax higher than 5.5 percent. Puerto Ricans do not pay U.S. income tax, but the island receives federal funds.
The financial crisis occurs on the brink of a recent White House report questioning the political status of Puerto Rico. The commonwealth is divided with some islanders demanding independence, others advocating that Puerto Rico become the U.S.’s 51st state, and others encouraging that the island retain its current status. In 1998, only 2.5 percent of the island population favored independence. However, there has been growing resentment that their country continues to deny them full voting rights.
April 29, 2006
Despite wide security concerns, President Bush approved a $1.2 billion deal that will give Dubai International Capital, a Dubai-owned firm, control of nine manufacturing plants in the U.S. that supply machine parts to the Pentagon for military vehicles and aircrafts; Dubai International is taking over for Doncasters Group Ltd., a United Kingdom company. President Bush defended his decision last Friday stating, "I signed off on it this morning because I'm convinced -- at the recommendation of the [Committee of Foreign Investment in the U.S.] as well as our military -- that it's a sale that should go through." The CFIUS committee conducted a 45-day investigation of the transaction, which thus far has provoked nowhere near the level of concern displayed over the ports deal.
The administration conducted a "careful, thoughtful" review of the Doncasters deal, which is very different from the ports transaction. "This is a product, not a service, and the opportunity to infiltrate and sabotage is both more difficult and more detectable," said Senator Charles Schumer, a New York Democrat. CFIUS is led by the Treasury Department and includes representatives of the State and Defense departments, which are deeply involved in the process.
Mr. Bush's press secretary said the review included an assessment of "potential threats to our national security" by the U.S. intelligence community, and as a condition of approval of the deal, the company signed an "assurances agreement" with the Pentagon, agreeing to provide a continuous supply of parts.
May 1, 2006
Protests in Asia:
As people protest against the proposed immigration bill today in the United States, citizens of Asia and Europe take the day to protest unemployment, poor working conditions, and low wages. Although the protestors promise a friendly demonstration, police were on high alert in Asia with helicopters hovering overhead in Indonesia and riot police guarding the presidential palace in the Philippines. In the Philippines, government troops and police armed with batons and shields turned away hundreds of activists who marched to the Philippine presidential palace to demand a wage hike and President Gloria Macapagal Arroyo's ouster.
In Sri Lanka, “where violence between Tamil Tiger rebels and the military has sparked fears of a return to civil war, the government decided to cancel all May Day rallies in the capital.” Fifty thousand people in Jakarta chanted, “Don’t change the law,” in response to Indonesia’s plans to revise current labor laws by cutting severance packages and introducing more flexible contracts that would decrease worker security. In Cambodia, thousands of police brought the capital to a standstill during a government hold on an unauthorized May Day demonstrations. The government denied permission for the rally, allowing only one official May Day demonstration at Chenla Theater. Police armed with riot shields and batons physically prevented protesters from marching.
Protests in Europe:
“Meanwhile, in Moscow, official events set up by the ruling pro-United Russia party overshadowed traditional protest marches by the opposition Communists as 25,000 people gathered opposite the mayor's office in the central Tverskaya Street to hear speeches from trade union leaders and the mayor and listen to a concert.” In total, 1.5 million people participated in May Day rallies in Russia.
Labor unions in Germany protested the impact of globalization and the sacrifice of jobs of a quick profit. The labor unions also urged the government to introduce a minimum wage. Unfortunately for Germans, unemployment stands at 11.5 percent, “undermining government finances and the country's generous welfare state.” In Vienna, about 120,000 members of the opposition Social Democratic Party participated in a traditional march, which focused on Austria’s 8 percent unemployment rate.
Finally, in Bosnia the unemployed marched down the main street in Sarajevo, demanding new elections and the resignation of the government, which they claim is not doing enough to lower the unemployment rate, which has been above 40 percent for years.
In the first quarter of 2006 the US economy grew at its fastest rate in two and a half years, according to the Commerce Department. Growth was boosted by government spending to deal with damage from last year's Gulf Coast hurricanes. Earlier this week, the Federal Reserve chairman said he expected growth to slow to a more sustainable level.
"With crude oil prices soaring and China investing in new export capacity at a breakneck pace, the trade deficit will continue to pull down U.S. growth," said Peter Morici, a University of Maryland economist. "Without a devaluation of the dollar against the Chinese yuan, U.S. growth will slow significantly in the second half of this year."
What does this mean for consumers? Brian Fabbri, chief economist at BNP Paribas in New York said "..consumers feel happy but they are beginning to become a little less happy about gasoline price increases. This is not a big move in confidence but it does say that confidence is probably levelling off and would probably continue to do so while gasoline prices go up."
May 1, 2006
Bolivia nationalized its natural gas industry on Monday, ordering all foreign energy companies to send their supplies to Yacimientos Petroliferos Fiscales Bolivianos, a state company responsible for sales and industrialization. President Evo Morales spoke from a facility owned by Brazil’s Petroleo Brasileiro SA (Petrobras) and Spanish-Argentine’s Repsol YPF, and stated: "The time has come, the awaited day, a historic day in which Bolivia retakes absolute control of our natural resources."
Mr. Morales further warned that companies which did not follow the decree would have to leave Bolivia within six months. The companies mostly affected by this nationalization of oil are Petrobras, Repsol, British Gas, Britain’s BP PLC, and France’s Total SA. In addition to natural gas companies, Bolivia also plans to retake control of hydrocarbons companies that were privatized in the 1990s by taking over shares that belong to foreign companies as well as semipublic Bolivian entities.
This decision is closely in line with Mr. Morale’s campaign platform “to wring greater profits from the gas producers doing business in Bolivia, which has South America’s second-largest reserves after Venezuela.” Last year, in efforts to speed the nationalization process, “Bolivia's congress passed a law that raised taxes and royalties on gas production and recognized the state as the sole owner of hydrocarbon resources.”
April 30 2006
As Tanya posted earlier today, many Hispanic workers and people opposed to Congress’s efforts to crack down on illegal immigration, will protest today by walking out of work and demonstrating against the bill which would make illegal immigrants felons. Today, which is dubbed “El Boicot” or “A Day Without an Immigrant,” is aimed to show Americans what a day would be like in the United States without the work and consumption of immigrants.
Several industries like small retailers, meat packing plants, and restaurants heavily depend on immigrant labor and have prepared for possible shutdowns. For instance, “in Los Angeles, a fruit and vegetable market in the city center, employing 1,800 and serving 4,500 restaurants and 3,000 shops, will be closed today.” John Gay, Senior Vice President for the National Restaurant Association, states that the Association is on the same side as the immigrants from a policy standpoint; an ironic fact given that restaurants are likely to suffer the brint of closures due to the boycott.
There is however, some dispute, even among Immigrant groups, regarding whether or not the boycott should happen. Los Angeles’ Cardinal Roger Mahony, who was an avid supporter of the March 26th demonstration, which consisted of over 500,000 people jamming the streets of central LA, urged people to work and go to school normally during the day, and attend a major rally afterwards. A few union leaders have predicted that more than 2 million people will rally in Los Angeles and walkouts are expected at several educational institutions.
As a result of potential massive workouts, employers are faced with the task of disciplining those employees who chose to walk out. Since most employment is of the at-will variety, employers will have a huge leeway in deciding whether or not to terminate these workers. Employees are urged to ask for the day off, but “improper use of a sick leave [can be] construed as grounds for disciplinary action.” Angelo Amador, Director of Immigration Policy for the U.S. Chamber of Commerce warns that disciplinary action should be consistent: “You have to be careful if somebody takes off to go to a baseball game and you don’t fire them for that, then you cannot fire them because of this.”
Today is meant to be an eye-opening experience showing the impact that immigrants have on the economy of our country. So what will you do? Will you be one of the estimated millions of people to walk out today? Stay tuned for what I imagine will be increasing discussion on the matter.
1) What do you think? Do you think that immigrants should protest today and walk out of their jobs, or do you agree with Cardinal Mahony?
2) What is that likely impact that this walkout will have on American commerce? Will anything change?
3) What, if any, impact will the “Day Without an Immigrant” have on Congress? Do the men and women in Washington care?
April 28, 2006
This week, European carmakers announced their quarterly results which indicate that the auto sector has risen more than 18 percent this year. There is hope in the industry that restructuring would reduce the large cost base faced by most European manufacturers. Renault reported higher than expected sales and investors were delighted with a 5.8 percent rise in first quarter sales. Renault’s CEO, Carlos Ghosn, plans to turn Renault into Europe’s most profitable volume car maker in a short four-year time span. Investment firms were very impressed with these results, which Merrill Lynch called “eye popping,” and marked the week’s biggest increase, up 7.4 percent.
On a poorer note, DaimlerChrysler’s shares fell 6.4 percent over the weekend, indicating a loss in profits at both its Chrysler and Mercedes divisions. Additionally, Europe’s largest manufacturer, Volkswagen fell 4.4 percent after failing to meet expectations due to restructuring costs and low quarterly earnings. As Stephen Pope of Cantor Fitzgerald said, “Volkswagen particularly, has to rid itself of its huge cost burden.” On the other hand, brands like Peugeot and Infineon had an increase in quarterly sales.
However, “oil stocks added [the] most downward pressure on the market as crude prices retreated from recent record highs.” Following China’s increase in interest rates last Thursday, interest rates rose “prompting fears that attempts to cool the economy could slow demand for oil.”
"The Great May 1 Boycott, a day without immigrants," is a follow-up to the demonstrations attended by hundreds of thousands of immigrants and their supporters across the nation on April 10. Those rallies protested a get-tough bill passed by the Republican-led House of Representatives that would reclassify illegal immigrants as felons, punish those who help them and build a fence along much of the U.S.-Mexican border.
A bipartisan bill stalled in the U.S. Senate would bolster border security, but also provide illegal immigrants a path toward citizenship and a guest-worker program long favored by Bush.
Today's nationwide boycott may result in millions of immigrants will stay away from work, school and stores and rally in support of an overhaul of America's immigration laws. It will be interesting to see what effect, if any, this has on Iowa City.