Showing posts from category economics.
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Afghanistan’s Mineral Wealth: Gold Mine, Curse, or Illusion?
›June 15, 2010 // By Schuyler NullAccording to The New York Times, U.S. officials have discovered a veritable bonanza of heavy metals and rare earth minerals in Afghanistan that have the potential “to fundamentally alter the Afghan economy and perhaps the Afghan war itself”:
The previously unknown deposits — including huge veins of iron, copper, cobalt, gold and critical industrial metals like lithium — are so big and include so many minerals that are essential to modern industry that Afghanistan could eventually be transformed into one of the most important mining centers in the world, the United States officials believe.
Reaction to the announcement has been mixed, with both Foreign Policy and Wired bloggers expressing skepticism about the timing of the announcement – in the midst of a difficult period of the war – and pointing out that the “discovery” is old news.
Others have expressed hope that the find, worth an estimated $1 trillion, might provide an injection of much-needed capital into one of the world’s worst economies. Environmental security expert Saleem Ali of the University of Vermont told Public Radio International’s The World that “there’s an opportunity now for the country to develop outside of a predominantly drug-dependent economy and if properly managed the minerals could provide a catalyst for all kinds of other activities as well.”
Afghanistan’s rare earth minerals in particular might prove to be extremely valuable as global demand continues to grow for these critical components of renewable energy technology and advanced electronics. The New York Times reports that an internal Pentagon memo says Afghanistan has the potential to become the “Saudi Arabia of lithium”:Just this month, American geologists working with the Pentagon team have been conducting ground surveys on dry salt lakes in western Afghanistan where they believe there are large deposits of lithium. Pentagon officials said that their initial analysis at one location in Ghazni Province showed the potential for lithium deposits as large of those of Bolivia, which now has the world’s largest known lithium reserves.
The existence of mineral reserves in Afghanistan is not new news, nor is foreign interest in them (see our coverage of Chinese copper investments at Aynak earlier this year). But the size of these resources warrants attention and raises new questions about the possibility of the unstable country falling victim to the natural resource curse – remaining mired in poverty while generating billions of dollars for an elite few.
Mineral wealth has a long history of fueling conflict in unstable countries, such as Sierra Leone, Nigeria, and the Democratic Republic of Congo. The DRC’s mining laws – which, like Afghanistan’s, were designed by the World Bank – have not prevented violent struggle to control the country’s valuable resources, as described by John Katunga in ECSP Report 12.
How can Afghanistan’s newly discovered mineral resources be developed without funding insurgents or fueling new conflicts? USAID’s Minerals and Conflict Toolkit offers a start with a set of recommendations and discrete steps that development agencies should take to avoid exacerbating the links between mining, valuable resources, and violent conflict.
Stay tuned for more analysis on Afghanistan’s development, resource curse dynamics, and what this all means for the continuing conflict.
Sources: Foreign Policy, National Public Radio, The New York Times, Public Radio International, Wired.
Photo Credit: “Remote Sensing Survey 2006” courtesy of the U.S. Geological Survey. -
Natural Resource Frontiers at Sea
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As burgeoning populations and growing economies strain natural resource stocks around the world, countries have begun looking to more remote and difficult-to-access resources, including deep-sea oil, gas, and minerals. The UN Convention on the Law of the Sea (UNCLOS) guarantees exclusive access to these resources within 200 nautical miles of a nation’s sovereign territory – called an exclusive economic zone (EEZ). TD Architects’ “Exclusive Economic Zone” illustrates this invisible global chessboard and highlights some examples of disputed areas, such as the South China Sea, the Mediterranean, the Falkland/Malvina Islands, and the Arctic.
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‘The Plundered Planet’: A Discussion With Paul Collier
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Who owns the planet’s natural wealth found underwater, below ground, and in the air? How do we reconcile our use of these assets with that of future generations? Such questions are the subject of Oxford Professor Paul Collier’s latest book, The Plundered Planet: Why We Must–and How We Can–Manage Nature for Global Prosperity, which he discussed at a recent Wilson Center event.
The author of The Bottom Billion and Breaking the Conflict Trap, Collier called Plundered Planet “the most important book I’ve written.” Resources are a “one-shot game,” he said; if we waste them, they’re gone. The next 10-20 years are “vital” to preserving natural assets as new technologies for removing them proliferate. We’re sucking fish up like “hoovers,” he said, and a combination of technology and economic growth are rapidly pushing mineral extraction into the few remaining frontiers.
Because time is short, Collier hopes his work will bring economists and environmentalists together. He said the two groups are largely at each other “cat and dog,” yet their objectives–environmental preservation and economic development–are not fundamentally opposed. In fact, to overcome polarization and produce key policy decisions, development and conservation must become partners.
Becoming Custodians, Not Curators
Collier said resource plunder can take one of two forms: “Where the few expropriate what belongs to the many”; and “where nature is expropriated by the present generation and burned up rather than benefiting future generations.” Both forms of plunder not only impede development, but are also unjust, he said.
Unlike other assets–such as books or records, which are typically owned by their authors or artists–natural assets have no human creators. A system whereby “natural assets are owned by the people who are lucky enough to live on top of them” creates “staggering inequality,” said Collier. Instead, resources must be shared equally among all citizens of a nation, including those not yet born.
Yet sharing nature’s wealth with generations to come does not mean leaving all fish in the sea, all trees on land, or all minerals underground. “We are not curators of natural artifacts,” Collier said. “We’re custodians of natural value.”
For the one billion people living in poverty, the development of natural resources can provide a path toward development, growth, and better lives, Collier argued, when properly and justly managed.
Filling the Gaps in Governance
Why have we largely plundered, rather than invested in, our resources thus far? What can be done to change the current principles of resource management? Collier’s short answer: governance.
For the poor countries in the “bottom billion,” Collier said the “broken decision chain” must be mended. The chain has six steps:- Discovering natural assets;
- Avoiding appropriation by a few at the expense of the many;
- Ensuring local inhabitants receive generous compensation for unavoidable environmental damage;
- Consuming in a way that benefits both the present and the future;
- Investing in the absorptive capacity of government; and
- Investing in domestic development.
Igniting a Movement
“There is no substitute…for building a critical mass of informed opinion,” Collier said. While technology enables plunder, it also creates a way for people to share knowledge at tremendous speeds and with wide audiences. The challenge, he said, “is to ignite the information transformation process.” A shift from plunder to sustainable management of transnational and developing country resources is a historic opportunity to benefit the world’s poor. “If these resources are harnessed for sustained development,” he said, “they can drag themselves decisively from poverty to prosperity.” The window of opportunity, however, is closing. -
VIDEO: Paul Collier On Romantics and Ostriches
›June 4, 2010 // By Dan Asin“I’m trying to build common ground between environmentalists and economists. Those two groups are being cat and dog for a long time,” author and Oxford professor Paul Collier, speaking about his new book The Plundered Planet, tells ECSP.
Collier says the interests of the two groups have thus far been dominated by their “fundamentalist” wings: On one side the environmental “romantics,” who value nature over people, and on the other the economic “ostriches,” who deny that nature’s a priori existence endows it with unique characteristics.
Work toward resolving two of the world’s most pressing challenges, environmental degradation and poverty, demands collaboration and mutual recognition by both sides. “If you take that romantic view of nature,” says Collier, “we will never feed a world of 9 billion people–we will never lift the poorest people out of poverty.” At the same time, nature does not belong exclusively to those living today, and its value must be preserved for future generations. “Those rights of the future have to be respected,” he says.
“The romantics and the ostriches, between them at the moment, are winning,” says Collier. “[I]t’s very important they start to lose.” -
Visualizing Human and Natural Resources
›In the policy world, statistics, percentages, and budgets on the order of millions and billions are routinely thrown around. But what do six and a half billion people, 957 tonnes per second, or three trillion dollars really look like?
A visualization of London’s natural resources – grass, trees, and water only – by Adam Nieman.
Visual artist Adam Nieman recently received attention from The New York Time’s Dot Earth Blog for his illuminating scale models of hard-to-envision quantities such as the volume of oil being leaked from the Deepwater Horizon wells, global carbon emissions as measured in “UN Building units per second,” and the relatively small amount of air and water on Earth.
Demographers and sustainability experts often warn about the increasingly smaller allotment of natural resources per capita, but few have illustrated that reality at such a human scale as Nieman does.On a global level, Nieman’s work shows the tremendous population density of the world’s “urban island.” Over half of the global population now lives in cities, which is represented by the grey dot, just 616 km across in “Land-Cover Islands.”
Others seeking to improve quantitative visualizations include David McCandless of the site Information Is Beautiful. Among other things, McCandless has tackled the daunting task of accurately comparing spending in an age of trillion dollar budgets, with his “Billion Dollar Gram.”
Another group, the Dutch firm TD Architects, highlights the disparity between global demographics and the distribution of wealth with “Walled World.”
Nieman’s blog examines the confusion that often occurs at the interface between the political and scientific worlds. This confusion is amply demonstrated by debates over contentious issues such as budget priorities, population growth, and climate change.
Politicians often ask that complex problems be distilled into simple bullet points for speeches and policy documents. However, when it comes to problems of such complexity and scale, pictures like these may be worth a thousand bullet points.
Sources: New York Times, Reuters.
Photo Credit: “Green London (wide)” and “land cover islands” courtesy of flickr user JohnJobby. -
Securing Food in Insecure Areas
›May 25, 2010 // By Dan Asin“Of the 1 billion people who are in food-stressed situations today, a significant proportion live in conflict-ridden countries,” said Raymond Gilpin of the U.S. Institute of Peace at last Thursday’s launch of USAID’s Feed the Future initiative. “Most of them live in fear for their lives, in uncertain environments, and without clear hope for a better tomorrow.”
According to data from the World Food Programme and the UCDP/PRIO Armed Conflict Database, of the countries with moderately to very high hunger rates in 2009, nearly a quarter experienced violent conflict in the previous year, and nearly half in the preceding two decades.
Gilpin said those working toward food security need to develop “conflict-sensitive” approaches, because “a lot of fundamentals that underlie this problem have a lot to do with conflict.” He noted several points, from production to purchasing power, at which conflict enters to disrupt the farm to mouth food cycle:- Production: Be it forced or voluntary, internal or external, conflict often results in displacement. Farmers are not exempt, and when they’re not on their land they cannot produce.
- Delivery: “Food security isn’t always an issue of food availability; it’s an issue of accessibility,” he said. “When violent conflict affects a community or a region…it destroys infrastructure and weakens institutions.”
- Market access: In conflict zones, it is solitary or competing armed contingents, rather than the market’s invisible hand, that control access to supplies. “Groups who usually have the monopoly of force, control livelihoods and food and services,” he said.
- Purchasing power: Conflict disrupts economic activity, degrading both incomes and real wealth. Those remaining in the conflict area suffer from fewer opportunities to conduct business, while those choosing to migrate relinquish their assets. In instances where food is available to purchase, conflict reduces the number of individuals who can afford it.
Photo Credit: World Food Programme distribution site in Afghanistan, courtesy Flickr user USAID Afghanistan. -
USAID’s Shah Focuses on Women, Innovation, Integration
›May 20, 2010 // By Wilson Center StaffWomen in developing countries are “core to success and failure” of USAID’s plan to fight hunger and poverty, and “we will be focusing on women in everything we do,” said USAID Administrator Rajiv Shah at today’s launch of the “Feed the Future” guide.
But to solve the “tough problem” of how to best serve women farmers, USAID needs to “take risks and be more entrepreneurial,” said Shah, as it implements the Global Hunger and Food Security Initiative.
“A lot of this is going to fail and that’s OK,” Shah said, calling for a “culture of experimentation” at the agency. He welcomed input from the private sector, which was represented at the launch by Des Moines-based Pioneer Hi-Bred.
In one “huge change in our assistance model,” Feed the Future will be “country-led and country-owned,” said Shah, who asked NGOs and USAID implementing partners to “align that expertise behind country priorities” and redirect money away from Washington towards “building real local capacity.” USAID will “work in partnership, not patronage,” with its 20 target countries, he said.
To insure that the administration’s agricultural development efforts are aligned to the same goals, Shah said USAID will collect baseline data from the start on three metrics: women’s incomes, child malnutrition, and agricultural production.
“Whether it is finance, land tenure, public extension, or training efforts, it does not matter whether it is an ‘agricultural development’ category of program,” said Shah. All programs will “provide targeted services to women farmers.”
While Shah briefly mentioned integrating these efforts with the administration’s Global Health Initiative, he only gave one example. Nutrition programs would be tied to health “platforms that already exist at scale” in country, such as HIV, malaria, vaccination, and breastfeeding promotion programs, he said.
Targeting Food Security: The Wilson Center’s Africa Program Takes Aim
If “food supplies in Africa cannot be assured, then Africa’s future remains dismal, no matter how efforts of conflict resolution pan out or how sustained international humanitarian assistance becomes,” says Steve McDonald, director of the Wilson Center’s Africa Program, in the current issue of the Wilson Center’s newsletter, Centerpoint. “It sounds sophomoric, but food is essential to population health and happiness—its very survival—but also to productivity and creativity.”
The May 2010 edition of Centerpoint highlights regional integration, a key focus of U.S. policy, as a mechanism for assuring greater continuity and availability of food supplies. Drawing on proceedings from the Africa Program’s “Promoting Regional Integration and Food Security in Africa” event held in March, Centerpoint accentuates key conclusions on building infrastructure and facilitating trade.
Photo Credit: “USAID Administrator Shah visits a hospital in Haiti” courtesy Flickr user USAID_Images. -
The Food Security Debate: From Malthus to Seinfeld
›Charles Kenny’s latest article, “Bomb Scare: The World Has a Lot of Problems; an Exploding Population Isn’t One of Them” reminds me of a late-night episode of Seinfeld: a re-run played for those who missed the original broadcast. Kenny does a nice job of filling Julian Simon’s shoes. What’s next? Will Jeffrey Sachs do a Paul Ehrlich impersonation? Oh, Lord, help me; I hope not.
I’ve already seen the finale. Not the one where Jerry, George, and Kramer go to jail — the denouement of the original “Simon and Ehrlich” show. After the public figured out that each successive argument (they never met to debate) over Malthus’s worldview was simply a rehash of the first — a statement of ideology, rather than policy — they flipped the channel.
Foreign Policy could avoid recycling this weary and irrelevant 200-year-old debate by instead exploring food security from the state-centric perspective with which policymakers are accustomed. While economists might hope for a seamless global grain production and food distribution system, it exists only on their graphs.
Cropland, water, farms, and markets are still part and parcel of the political economy of the nations in which they reside. Therefore they are subject to each state’s strategic interests, political considerations, local and regional economic forces, and historical and institutional inefficiencies.
From this realistic perspective, it is much less important that world population will soon surpass 7 billion people, and more relevant that nearly two dozen countries have dropped below established benchmarks of agricultural resource scarcity (less than 0.07 hectares of cropland per person, and/or less than 1000 cubic meters of renewable fresh water per person).
Today, 21 countries—with some 600 million people—have lost, for the foreseeable future (and perhaps forever), the potential to sustainably nourish most of their citizens using their own agricultural resources and reasonably affordable technological and energy inputs. Instead, these states must rely on trade with–and food aid from–a dwindling handful of surplus grain producers.
By 2025, another 15 countries will have joined their ranks as a result of population growth alone (according to the UN medium variant projection). By then, about 1.4 billion people will live in those 36 states—with or without climate change.
For the foreseeable future, poor countries will be dependent on an international grain market that has recently experienced unprecedented swings in volume and speculation-driven price volatility; or the incentive-numbing effects of food aid. As demand rises, the poorest states spend down foreign currency reserves to import staples, instead of using it to import technology and expertise to support their own economic development.
Meanwhile, wealthier countries finding themselves short of water and land either heavily subsidize local agriculture (e.g., Japan, Israel, and much of Europe) or invest in cropland elsewhere (e.g., China, India, and Saudi Arabia). And some grain exporters—like Thailand—decided it might be safer to hold onto some of their own grain to shield themselves from a future downturn in their own harvest. All of this is quite a bit more complex than either Malthus could have imagined or Kenny cares to relate.
It hardly matters why food prices spiked and remained relatively high—whether it is failed harvests, growing demand for grain-fed meat, biofuels, profit-taking by speculators, or climate change. Like it or not, each has become an input into those wiggly lines called grain price trends, and neither individual states nor the international system appears able or willing to do much about any of them.
From the state-centric perspective, hunger is sustained by:1. The state’s inability or lack of desire to maintain a secure environment for production and commerce within its borders;
In some countries, aspects of population age structure or population density could possibly affect all three. In others, population may have little effect at all.
2. Its incapacity to provide an economic and trade policy environment that keeps farming profitable, food markets adequately stocked and prices reasonably affordable (whether produce comes from domestic or foreign sources); and
3. Its unwillingness or inability to supplement the diets of its poor.
What bugs me most about Kenny’s re-run is its disconnect with current state-centric food policy concerns, research, and debates (even as the U.S. administration and Congress are focusing on food security, with a specific emphasis on improving the lives of women.—Ed.).
Another critique of Malthus’s 200-year-old thesis hardly informs serious policy discussions. Isn’t Foreign Policy supposed to be about today’s foreign policy?
Richard Cincotta is a consultant with the Environmental Change and Security Program and the demographer-in-residence at the H.L. Stimson Center in Washington, DC.
Photo Credit “The Bombay Armada” courtesy of Flickr user lecercle.
