Showing posts from category economics.
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Collier and Birdsall: Plunder or Peace
›January 22, 2010 // By Julien Katchinoff
In a preview of his new book The Plundered Planet: Why We Must – and How We Can – Manage Nature for Global Prosperity, Paul Collier dispelled the common perception that Africa’s indentified resource reserves are the world’s largest. In actuality, it is estimated that up to four-fifths of the value of subsoil assets in the African continent are yet to be discovered. “That is the big story,” Collier remarked. “Here are assets which could finance transformation….but historically haven’t.” Instead, these resources have been plundered.
In a recent event hosted by the U.S. Institute of Peace, Paul Collier, professor of economics and director of the Center for the Study of African Economies at Oxford University, and Nancy Birdsall, president of the Center for Global Development, discussed how resource-rich environments in developing countries have been traditionally misused. The two also proposed strategies to disrupt these processes and transform resource “curses” into deeply needed support for peace and stable development.
Conflict and instability in countries whose economies are heavily invested in natural resource have often hindered local development and security. Many of these countries—including Cambodia, Angola, Indonesia, and DRC—have suffered from one of two forms of plunder:
Types of Natural Resources Plunder:
1. Where the few steal from the many:
Natural assets are, by definition, without natural owners, and therefore lie as easily taken common goods. “This process of expropriation opens up a whole array of dysfunctional variants, many of which are violent,” Collier noted.
2. Where the present steals from the future:
Intertemporal mismanagement is a possibility, as unlike man-made assets, natural assets belong to all generations.
Operating from a worldview of weak sustainability, where profits from natural assets are reinvested for the benefit of future generations, Collier suggested that natural resource rights are more akin to “rights of stewardship” than traditional property rights. “We may well transform that value into something that is more productive, but if we pull up natural assets from the ground, we should leave to the future something that is equivalently valuable.”
Collier argued that the successful harnessing of natural resources for stable and sustainable development depends on the application of a tenuous decision chain:
Natural Resources Decision Chain:
1. Discovery Process:
Failure in this phase stems from poor property rights, and the time consistency problem—uncertainty that conditions and regulations that make expensive upfront investments profitable today will remain in place in the future.
2. Appropriate Taxation:
Currently, as a result of poor negotiations or limited information regarding the status of resources, governments are unable to craft tax regimes which effectively capture resource rent.
3. Avoiding the Delta:
Sustainable management any discovered subsoil assets must avoid a local “Nigerian Delta” catastrophe. Clearly designating the government as the sole responsible agent for resource rents may limit such failures.
4. Saving the money:
To avoid plunder of the future by the present, Collier suggested that, though politically difficult, a proportion of revenue streams must be delineated from general accounts.
5. Building the capacity to invest in the country:
Collier deemed the inability of resource-rich countries to attract diversified investment as the “killer link.” Governments must use returns from subsoil assets to fund “investment in investment”—directing public capital toward transportation and utility infrastructure, education, health, and other short-term projects. Once in place, such projects encourage future public and private investments, thereby multiplying long-term returns.
As with many complex systems, Collier warned that the chain is only as strong as its weakest link. If one link fails, “the chain won’t pull the country from poverty to prosperity.” On the other hand, if each link holds, the value is tremendous. ”[Y]ou really can pull the country from poverty to prosperity over the course of a generation. There are no fixes in economics that are faster than that.”
Ultimately, Collier and Birdsall emphasized that success depends upon the development of an informed and competent “critical mass” of people. Even the strongest decision chain will fail if it is not underwritten by a majority of the population. Birdsall reiterated the need for public participation in the process, possibly through direct income distribution or responsible interventions by non-vested third parties.
Photo: Courtesy of Oxford University Press. -
VIDEO—How the World’s Poor Live on $2 a Day
›January 22, 2010 // By Dan Asin“Most people think that if you’re living on $1 a day or $2 a day, it’s impossible to save,” Jonathan Morduch tells ECSP Director Geoff Dabelko in a discussion of his book, Portfolios of the Poor: How the World’s Poor Live on $2 a Day. The Woodrow Wilson Center hosted Morduch and his co-author, Daryl Collins, for presenations at the Center and on Capital Hill last September. “[I]n fact, because of being poor—not despite it—households were spending a lot of time building up for the future.”
“What was really critical about what this new work was showing was that poor households were strategizing, they were making decisions,” says Morduch. “They were, essentially, juggling, active in ways that had been hidden from sight with the bigger surveys.” Now revealed, this knowledge creates opportunities for policymakers to help poor households in new ways, such as reducing regulatory costs for financial institutions seeking to service poor communities.
Morduch says microfinance and microcredit schemes are doing well, but that they are not enough to serve poor communities’ entire financial needs. “The next steps involve embracing what’s already going on and making products, devising products, that are even more flexible or even more appropriate,” he says. Households have a diverse range of needs, from food and water to financing health care and education, and Morduch says these diverse needs merit diverse solutions. -
How Copenhagen Has Changed Geopolitics: The Real Take-Home Message Is Not What You Think
›A fascinating and potentially game-changing geopolitical pas-de-deux unfolded in Copenhagen. The international media and punditocracy christened the United States and China the new G2 in reference to the expected preeminent leadership roles the two hold among their respective developed and developing country contingents. What increasingly became clear, however, was that a different G2 was influencing the agenda: China and India.
India demonstrated that, while it wants an alliance with the United States and its Western allies, a subservient allegiance is not an option.
This was clear in the way India approached a key Copenhagen sticking point—verification. India had been down this road before with the U.S.-India nuclear deal, where Washington’s insistence on external verification was seen by some Indian strategists as undermining India’s sovereignty and security, and as a potential excuse to impose costly sanctions.
Indian concerns about verification created an opportunity for China which, despite the vastly different mix of emissions in both countries, was able to entice India into an alliance. India brought along its IBSA partners, South Africa and Brazil, and it was this expanded group, meeting in conclave, that President Obama gatecrashed in his search for solutions.
Two very important messages were delivered in Copenhagen. First, India told the West it could no longer be taken for granted—it had options. Second, China told India it would be open to a new relationship based on mutual interest.
Going in to Copenhagen, visions for the conference were more varied than many realized. The West primarily thought it was negotiating a trade deal (as evidenced by the drop in EU carbon trading prices after the talks failed to deliver a climate market deal). China, too, was negotiating a trade deal, but remained open to opportunities to gain larger strategic advantages. India, on the other hand, sought a stage to drive home its major geopolitical positions.
Coming out of Copenhagen, the conference’s narrative is clearer: This was geopolitics pure and simple.
India—home to the world’s most populous democracy, a thriving economy, and one of the world’s largest English-speaking populations—is a natural U.S. ally. Its recent experience with the United States on nuclear cooperation, however, has made it wary. Such paranoia gave Beijing an opportunity to entice Delhi into an alliance at Copenhagen. Despite China’s development of Pakistan as a nuclear client state, ongoing border disputes and skirmishes, and other conflicts between the two emerging powers, Beijing succeeded.
If the United States and its Western allies are to coax India (and by extension, a substantial portion of the developing world) into going along with an ambitious emissions reduction program, or indeed any other trade regime, they will need to desist from seeking to impose measures that Delhi regards as protectionist and self-serving.
For the West, moving the world’s most populous democracy to its side, and not China’s, is worth certain concessions. Not just for the sake of a climate deal, but also for larger strategic purposes. At Copenhagen, the West incorrectly lumped India with China, and this mistaken assement proved to be self-fulfilling.
Analysis of India has long suffered from “hyphenation.” First it was India-Pakistan, now India-China. At the beginning the India-China link was competitive, but Copenhagen has shown it has the potential to become cooperative. India should be assessed on its own terms. If geopolitics abhors a stand alone, however, then the time has come to rehyphenate democratic, economically strong, English-speaking India. It would be in the United States and its allies’ benefit to create a new cooperative link: India-U.S.
A longer version of this article was originally published by UPI-Asia.com.
Cleo Paskal is a fellow at Chatham House in London and author of Global Warring: How Environmental, Economic, and Political Crises Will Redraw the World Map (Palgrave). Scott Savitt, a former Beijing-based correspondent for United Press International, is the author of the forthcoming memoir Crashing the Party (Atlas). ©Copyright Cleo Paskal and Scott Savitt.
Photo: Prime Minister of India Manmohan Singh. Courtesy World Economic Forum. -
Eco-Tourism: Kenya’s Development Engine Under Threat
›Africa’s elephants and black rhinos—already at risk—are increasingly threatened as the price of black market ivory rises, global markets contract, and unemployment rates rise. To fight poaching of these tusked animals, Ian Craig, founder of the Lewa Conservancy in Kenya and the brains behind the Northern Rangelands Trust, takes a unique approach to conservation that involves both local community members and high-level government officials, as well as private and public sector investors.
In the 1970s the black rhino population was at about 20,000. Less than three decades later, it had fallen to 200. Today, the population is about 600, of which 79 live in the Lewa Conservancy. The vast regions of Kenya covered by the Northern Rangelands Trust and the Lewa Conservancy are difficult to govern, so the conservancies partner with local communities to ensure the security necessary to protect the animals from poachers. By investing in community institutions, the conservancies create long-term sustainability and self-sufficiency.
But why should local communities—often beset by poverty, disease, and hunger—care about saving elephants or rhinoceroses rather than killing them for their tusks or meat? Revenue from tourism can total hundreds of thousands of dollars, especially because of the high cost and exclusive nature of tourism facilities in the area. This money is then injected back into community programs to improve adult literacy, school nutrition, health care, micro-credit, water and irrigation systems, community livestock and agriculture, and forestry and aquaculture.
In some politically volatile areas, the conservancy serves not only as a platform for ecological security, but also as a mediator of disputes. Where livestock theft is rampant, multi-ethnic anti-poaching teams have been able to act as intermediaries. Community elders and other traditional leaders serving on the conservancies’ boards have bi-annual meetings to further intra- and inter-regional cooperation. Along with regular managerial and council meetings, the board meetings set standards for good practices, open dialogue for policymaking and cooperation, and act as a unique platform for communication between different ethnic and regional groups.
Community members understand they have a stake in protecting not only the animals, but in ensuring security and building trust within the country. With its unique combination of local-level engagement, the cooperation and support of the Kenyan Wildlife Service and the national government, and with the resources available to the conservancies as a group, the Lewa Wildlife Conservancy hopes to create a model of conservation that can be used across Africa and in other at-risk regions.
The future is shaky: ivory prices continue to rise, the migration of animals has facilitated poaching, and small arms are abundantly available. However, the new community-focused approach has helped to create positive attitudes that aren’t just about saving animals, but about developing the nation.
Justine Lindemann is program assistant with the Africa Program at the Woodrow Wilson International Center for Scholars.
Photo: Elephants in Lewa Conservancy area, courtesty Flickr user Mara 1 -
Pakistan’s Demographic Challenge Is Not Just Economic
›In a meeting with business leaders in Lahore in late October, Secretary of State Hillary Rodham Clinton pointedly warned of the potential economic impacts of Pakistan’s rapidly growing population: “There has to be…in any plan for your own economic future, a hard look at where you’re going to get the resources to meet these needs. You do have somewhere between 170 and 180 million people. Your population is projected to be about 300 million as the current birth rates, which are among the highest in the world, continue,” she said.
Pakistan is ranked 141 (out of 182 countries) in the Human Development Index. High rates of unemployment are compounded by low levels of education and human capital. Clinton noted that Pakistani women are more vulnerable to poverty; only 40 percent are literate, compared to 68 percent of men.
The Secretary’s emphasis on the need to provide adequate education, jobs, and resources to motivate economic growth and improve well-being is welcome. But demography also has important political consequences. U.S. policymakers and the Pakistani government should consider the impact of population dynamics on the country’s intensifying instability.
As Pakistan’s population grows rapidly, it is maintaining a very young age structure: in 2005, two-thirds of its population was younger than age 30. Research by Population Action International has shown that countries with very young age structures are three times as likely to experience outbreaks of civil conflict than those with a more balanced age distribution.
The members of a “youth bulge” are not inherently dangerous, but when governments are unable to foster employment opportunities or the prospects of stability, a young age structure can serve to exacerbate the risks of conflict, as recently noted by John O. Brennan, assistant to the president for Homeland Security and Counterterrorism, in a speech on “A New Approach to Safeguarding Americans.”
As Secretary Clinton and her colleagues consider the complex barriers to achieving peace and stability for Pakistan’s people, their humanitarian and development strategies should include demographic issues. When couples are able to choose the number and timing of their children, very young age structures like Pakistan’s, can change.
Family planning and reproductive health services are fundamental human rights, but remain out of reach for many in Pakistan, where one-quarter of all married women (and 31 percent of the poorest) have an unmet need for family planning.
Greater access to family planning would lower fertility rates and increase the share of working-age adults in the population. In this transition, countries can harness the “demographic dividend”—a change that could turn Pakistan’s age structure into an economic opportunity.
However, funding from the United States—the world’s largest single donor for international family planning—has declined by one-third over the past 15 years. The foreign assistance funding priorities of the Obama administration should reflect this recognition of the linkages between population, development, and stability.
By addressing the high unmet need for family planning and reproductive health services of women in countries like Pakistan, the United States could help to create a more balanced age structure in future generations—and promote stability at the same time.
Elizabeth Leahy Madsen is a research associate at Population Action International (PAI). She is the primary author of the 2007 PAI report The Shape of Things to Come: Why Age Structure Matters to a Safer, More Equitable World.. -
Covering Climate: What’s Population Got to Do With It?
›November 9, 2009 // By Dan Asin“There’s a correlation between CO2 and population. And it’s that we live in a world of more people, more money and more things, and that all distills down to the need for more energy,” said Dennis Dimick, executive editor of National Geographic, at a Wilson Center event on the media’s coverage of climate change and population, co-sponsored by the Society of Environmental Journalists and the International Reporting Project.
“Thinking about population and trends in population is a vital reality check for assessing policies you hear about on global warming,” said New York Times reporter Andrew Revkin, who joined Dimick and Nation Web Editor Emily Douglas via video conference. “When you start to think about that number—nine billion—a lot of cheery suppositions or assertions you’ve heard about how we’re going to de-carbonize the world without too much effort…[get] challenged in a hurry,” he said.
The Inconvenient Truth of Population
Despite these strong connections, the mainstream media has been reluctant to write about population growth, which Revkin called the “ultimate incremental story.”
“We, I think, are guilty to some extent, in the media, of not paying adequate attention to this part of the whole issue,” he said, partly because there is the perception that “we kind of solved that problem. But, again, just run those numbers: Nine billion people does not solve the climate problem and it has to be considered in every stage of assessing solutions to the climate problem.”
“We need to talk about it so we understand this issue at a level beyond more people means more emissions,” said Douglas. Other factors like levels of consumption, urbanization, and household structure make the population-emissions relationship complex and difficult to explain.
Revkin added that “consumption is even a tougher story to get at in print, because we’re a medium that advertises consumption, among other things.”
The Population-Energy Challenge
One-quarter of the world’s population lacks access to electricity. “We are in this sortof double-vise, trying to constrain our own [energy] demand while also trying to provide the opportunities for people who have little to none,” said Dimick.
With fossil fuels currently providing 80 percent of global energy, and with energy demand estimated to increase dramatically to meet the needs of 2.3 billion more people by 2050, the “scale of the challenge before us . . . is immense,” he said. “To think that we’re somehow simply going to go to solar and wind—I think we’re deluding ourselves.”
Nevertheless, Dimick insisted on the need “to de-carbonize at a tremendous scale.” He proposed sustainably addressing energy needs by improving energy efficiency, expanding mass transit systems, changing land use, and considering nuclear power.
Reproductive Health Is Key
Douglas, who previously edited the RH Reality Check blog, emphasized that population issues go far beyond climate change. “I’m encouraging us to look at population not only from the perspective of the environment, but also from the perspective of individual women and their human rights, their right to determine the number and spacing of their children, and not purely to depress fertility rates in service of mitigating climate change,” she said.According to Douglas, each year 60 million pregnancies—one-third of the global total—are unintended, and 200 million women worldwide have an unmet need for contraception. Family planning programs are “cheap to employ and deploy, and women and societies want them anyway,” said Douglas. A few recent studies have argued that universal access to family planning could be one of the most cost-effective ways to reduce greenhouse gas emissions.
And not just mitigation, but adaptation as well: “Women with access to reproductive health services are healthier and they’re better able to deal with the impacts of climate change,” she said. “Poorer countries are going to need adaptation strategies, and one of those strategies is to allow women to better determine the size of their families.”
However, “many political leaders–not only on the right—don’t like reproductive health programs,” said Douglas. Disagreements over abortion and birth control are part of the problem, as well as past instances of coercive contraceptive methods in some developing countries.
Douglas cited a Population Action International survey that “found that 41 countries identified population growth as a factor that makes them more vulnerable to climate change, but only two of those countries proposed programs that address reproductive health.”
Douglas decried the “significant gap between political leaders’ understanding that population growth makes it more difficult for them to respond to climate change, and political leaders being able to muster the political will that will empower women to better control their own fertility.”
Close-Up on the Most Vulnerable
“We also can’t talk about this as though all people added to the world population produce greenhouse gases in equal measure,” said Douglas. “The world’s richest half billion people, that’s 7 percent of the global population, are responsible for 50 percent of the world’s carbon dioxide emissions. Meanwhile, the poorest 50 percent are responsible for just 7 percent of emissions.”
Revkin urged reporters to use a “close-up lens” when examining population trends impact on climate—especially in “areas of the world where there are significant risks that could be amplified by human-driven climate change, like urban severe flooding and severe rains, like we saw in Manila recently.”
With rapid urbanization in the developing world, “you have to look at places where you have hugely increased numbers of people moving essentially into harm’s way—or being born in harm’s way, if you’re talking about sub-Saharan Africa,” said Revkin.
A Thought Experiment
“What if the whole world were equal in emissions?” Revkin asked. Suppose advanced industrial countries, such as the United States, reduce their annual emissions intensity from 20 tons of CO2 per person to 10 tons. At the same time, suppose rapidly developing countries, such as India, reach the same emissions intensity. In a world with nine billion people that equates to 90 billion tons—“three times today’s current annual emissions of CO2,” he said.
“Probably the single most concrete and substantive thing a young American could to do to lower a carbon footprint is not turning of the lights or driving a Prius, but having fewer children,” said Revkin. “Eventually, should you get credit—if we’re going to become carbon-centric—for having a one child family when you could’ve had two or three? Obviously it’s just a thought experiment, but it raises some interesting questions.”
Drafted by Daniel Asin and Meaghan Parker
Edited by Meaghan Parker -
Weekly Reading
›Climate change is “the biggest global health threat of the 21st century,” says the final report of a year-long commission held by The Lancet and University College London. A Lancet editorial, “Sexual and reproductive health and climate change,” says that rapid population growth “increases the scale of vulnerability to the consequences of climate change” and that meeting the unmet need for contraception “could slow high rates of population growth, thereby reducing demographic pressure on the environment.”
Following the escalation of hostilities in Gaza, the UN Environment Programme’s environmental assessment found that Gaza’s underground water supplies are “in danger of collapse as a result of years of over-use and contamination that have been exacerbated by the recent conflict.” IRIN reports that climate change has led to lower rainfall and “slowed the recharge rate of the aquifer” under Gaza, while “rapid population growth and suburban sprawl” have left “little space for rainwater catchment.”
In “Arctic Climate Feedbacks: Global Implications,” the World Wildlife Fund says that “warming in the Arctic will likely have far-reaching impacts throughout the world, resulting in a sharp increase in harmful greenhouse gases and significant shifts in global weather patterns that could disrupt the lives and livelihoods of hundreds of millions of people.”
The Obama Administration’s Interagency Ocean Policy Task Force Interim Report—now open for a 30-day review and comment period—“proposes a new National Policy that recognizes that America’s stewardship of the ocean, our coasts, and the Great Lakes is intrinsically and intimately linked to environmental sustainability, human health and well-being, national prosperity, adaptation to climate and other environmental change, social justice, foreign policy, and national and homeland security.”
The Economics of Climate Adaptation Working Group estimates that climate risks “could cost nations up to 19 percent of their GDP by 2030, with developing countries most vulnerable,” and warns that the “historic pace of population and GDP growth could put ever more people and value at risk.” However, the group also contends that “between 40 and 68 percent of the loss expected to 2030 in the case locations – under severe climate change scenarios – could be averted through adaptation measures whose economic benefits outweigh their costs.” -
Half the Sky, All the Promise: The Personal is Political in NYT Special Issue
›“The world is awakening to a powerful truth: Women and girls aren’t the problem; they’re the solution,” write Nicholas Kristof and Sheryl WuDunn in the lead article of this Sunday’s The New York Times Magazine.
In this special issue devoted to “Saving the World’s Women,” five articles document global failures and personal horrors, but also offer forward-looking solutions from the individual to the institutional. As the subtitle says—“changing the lives of women and girls in the developing world can change everything”— this vital effort can help us not only improve the lives of women, but meet larger goals including international security, global health, and economic development.
In “The Women’s Crusade,” Pulitzer Prize-winners Kristof and WuDunn, whose new book Half the Sky will be published on September 8, outline the ways in which the world’s women and girls are abused, neglected, and overlooked. They use devastating data to detail how women around the world suffer from lack of education, maternal mortality, sexual violence, trafficking, and economic and political oppression, and then bring these figures to life with women’s personal stories.
They argue that elevating women is not a “soft” issue, but rather has the power to transform economies and address security threats—a point echoed in an interview with Hillary Clinton, in which she calls women and girls “a core factor in our foreign policy.”
“I happen to believe that the transformation of women’s roles is the last great impediment to universal progress,” says Clinton, long an informed and passionate advocate for global women’s issues. She encouraged President Obama to create a new ambassadorship for global women’s issues, and filled the opening with Melanne Verveer, a respected activist and former head of the Vital Voices Global Partnership.
Clinton most strongly emphasizes the connection between women’s issues and national security, calling it “an absolute link”: “If you look at where we are fighting terrorism, there is a connection to groups that are making a stand against modernity, and that is most evident in their treatment of women.” She goes so far as to agree that spending taxpayer money on education and healthcare for girls and women in Pakistan would be more effective than military aid to the country.
“A woman who is safe enough in her own life to invest in her children and see them go to school is not going to have as many children. The resource battles over water and land will be diminished,” she says. “And it’s an issue of how we take hard power and soft power, so called, and use it to advance not just American ends but, in advancing global progress, we are making the world safer for our own children.”
Also in the magazine:
The New York Times’ website adds a slide show of Katy Grannan’s portraits of women in South Asia and Africa, and launches a contest soliciting personal stories from the field. Submit your photos and blog posts to Kristof’s blog by September 19.- Dexter Filkins investigates the acid attacks on girl students in Afghanistan in the horrifyingly vivid storytelling he displayed in his best-seller, The Forever War.
- Lisa Belkin takes note of an emerging generation of female philanthropists using their money to “deliberately and systematically to aid women in need,” spurred by the Hunt sisters’ “Women Moving Millions” campaign.
- Tina Rosenberg describes how sex-selective abortion and inadequate health care for young girls has led to a “daughter deficit” in China and India, where, somewhat paradoxically, “development can worsen, not improve, traditional discrimination.”
- Africa’s first female President, Liberia’s Ellen Johnson-Sirleaf, tells NYT that if women ran the world, it would be “better, safer and more productive.”
To me, such vital voices are the most powerful, proving that the personal is political. The quotes in the lead article from academic studies, local NGO personnel, and women themselves map the way forward:- “When women command greater power, child health and nutrition improves” – Esther Duflo of MIT, on micro-finance.
- “Girls are just as good as boys” – An unidentified man who once beat his wife for not having sons, but changed his mind when a micro-loan turned her into the family breadwinner.
- “Gender inequality hurts economic growth” – Goldman Sachs, Global Economics Paper, 2008
- “I can’t talk about my children’s education when I’m not educated myself … If I educate myself, then I can educate my children” – Terarai Trent, a Zimbabwean woman now completing a PhD in the United States.
A fascinating and potentially game-changing geopolitical pas-de-deux unfolded in Copenhagen. The international media and punditocracy christened 
Africa’s elephants and black rhinos—already at risk—are increasingly threatened as the 
of double-vise, trying to constrain our own [energy] demand while also trying to provide the opportunities for people who have little to none,” said Dimick.
According to Douglas, each year 60 million pregnancies—one-third of the global total—are unintended, and 
