We Won't Bury You; Americans Have Buried Themselves

Below is a comment I wrote on the Street Prophets' diary, Christ, Nessie, and teaching children to love lies.

We need to figure a way to educate our children to function in a crowded and challenging world.

I really wanted to write a facetious answer at first, but I'll play this one straight. A friend recently wrote on Facebook:

Outsourcing is outsourcing, Mitt Rmoney, not 'Offshoring'. 'Offshoring' implies the paychecks are made out to Americans. They aren't. In fact outsourcing is taking a paycheck that once went to an American, and giving away to someone else in another country.

To which I originally responded:

To which we all in Asia say "Thank you!" ;)

Naturally, he was a little miffed at that answer, so I responded:

I'm not a fan of outsourcing in general and I do sympathize with American workers, but... Outsourcing is not simply due to lower wages in other countries. In fact if I were to list all the factors that I thought contributed to the reasons why American companies outsourced jobs overseas, I'd rank lower wages compared to American wages down near the bottom of my list, especially with respect to Asian countries.

One of the factors that has helped spur on the growth of outsourcing is the fact that educational systems outside of the US are frequently superior to that of the American system. These jobs don't just go to people in other countries simply because of lower wages, they go because these other people are qualified to perform that work. They have the education, the skills, the experience to get the job done. In fact, because of the large numbers of qualified applicants, competition for jobs can be quite intense and not very easy to succeed in getting if you don't have the requisite qualifications, no matter what they are. (Here's a LinkedIn discussion in which I had to tell a younger guy how he was going to need to upgrade his language skills because, otherwise, he was going to lose out on job opportunities in which a second language is vital for getting jobs in Singapore.)

The world is crowded and challenging, and other countries are benefiting from stupid American attitudes with respect to the educational system because /we/ don't make those same mistakes. We don't have an attitude of "let's break the public school system because it offends our sensibilities." No one homeschools here. And what we do do is send our kids to enrichment classes during the evenings and weekends so that our kids can compete better, whether it's with other Asian children or American children. (I, a white American man, have a three-year-old daughter who's learning her third language - Chinese - and my wife suggested this morning that we get her into a second weekly class in that language so that she can improve faster. On a program about India that aired the same day I wrote the above comments to my friend on Facebook, there was a segment where the host interviewed some street girl, about 13 years old, in Calcutta - who spoke perfect English. He asked her what her favorite subject was, and she said physics. Why? Because it's her easiest subject. She wants to be a physicist. How many American kids would say that?)

The fault for outsourcing and a declining economic situation in America is not the rest of the world's. It is America's fault, for its backwards attitudes and lack of competitive drive in its people. I almost feel like Nikita Khrushchev now, except it's not "We will bury you!" but that Americans have buried themselves.

Good luck with that.

In the Courtyard of the Beloved

View on ExposureRoom

IN THE COURTYARD OF THE BELOVED is a visual and aural portrait of Nizamuddin Auliya Dargah, a Sufi shrine in New Delhi, India. Made from over 18,000 still images and ambient sounds recorded on-site, rapid-fire bursts of kaleidoscopic imagery assemble into fractured collages where a moment expands outwards and then converges back into itself, fleshing out a three-dimensional rendering of place.

Each day, hundreds of pilgrims travel by airplane, train, car, rickshaw and foot to reach this shrine, which honors a 12th century Sufi mystic who believed in drawing close to God through renunciation of the world and service to humanity. Beginning with imagery from these journeys, the film then enters the physical space of the shrine; a unique nexus of marketplace, social space and spiritual haven, where devotees come to offer their prayers and find a moment of reflection away from the din of Delhi traffic. As the sun sets behind the dome, musicians begin the qawwali, a style of Sufi devotional music that ranges from contemplative religious elegy to raucous crescendo.

Sania Mirza Engaged

I hadn't written about the Indian tennis star, Sania Mirza, for over four years now, so when my stats counter started showing a big increase in the number of hits for my old posts about her, I knew something was up. ;) Sure enough, Sania has announced her engagement to Pakistani cricket player Shoaib Malik. I'm sure this will disappoint many of Sania's bachelor fans, but that's life. Find another girl, guys! ;)

Congratulations to the lucky couple, and may they have a long and successful marriage!

Even as the media portrayed the upcoming marriage between Sania Mirza and Shoaib Malik as a new chapter in Indo-Pak ties, Sania Mirza clarified that she is not here to make any political statement.

Sania termed her to decision to marry Shoaib Malik as a personal one and based on mutual consent. "My marriage has nothing to do with Indo-Pak politics. I am happy as it would be the dream of every girl to get a suitable groom one day", said Sania.

When asked about the enmity between India and Pakistan, Sania said, "This is a happy moment, you should not talk such things while taking sweets. Be happy that we are getting married. We both are happy. Our families are happy. I don't think we can ask for more".

Sania Mirza also made it clear that she will keep playing tennis, once she recovers from her injury. She also said that she and Shoaib will support each other in their respective game.

"Yes, we will settle in Dubai after marriage. But I will keep playing for India and he will Inshallah play for Pakistan", said Sania Mirza.

When asked whom he will support during an India-Pakistan cricket match, Sania said, "I will continue to support India, but I will also support my husband". She revealed that she met Shoaib Mailk six to seven years ago.

Sania Mirza's wedding reception is likely to be held in Hyderabad on April 15. A grand reception will be held in Lahore later.

HT: Breaking News Online

International Politics Links (29 June 2009)

Once again, sorry for the lack of Links posts last week. I was busy with other matters. This post covers June 22nd through today, June 29th. Not surprisingly, most of the links deal with the Iranian election aftermath; stories on Israel are also increasing, mostly due to renewed settlement in the West Bank. And the newest, hottest story is of the coup in Honduras.)

Americas:
Coup In Honduras

20 People Killed in Peru in Demonstrations


Europe:
Merkel Stands Besides Demonstrators - "in Iran" (In Germany, not so much.)

Russia Ready for Deep Nuclear Arms Cuts: Medvedev


Middle East:
Odierno: Iraqis Ready for Handover

Violence Erupts in Baghdad as Deadline for U.S. Troops to Withdraw From Major Cities Nears

Iraq After The U.S. Retreat

FBI Files: Saddam Hussein Faked Having WMDs (Old news, but worth linking to.)

Karim Sadjadpour Reminds Chris Wallace That U.S. Meddling in Middle East Politics is Not Productive

David Gregory Badgers Benjamin Netanyahu Over Whether Israel Will Take Unilateral Action Against Iran

Resisting Calls, Israel Insists on Building in the West Bank

Israel Deploys Troops Along Lebanese Border (Near Shebaa Farms, specifically.)

Barak Authorizes Construction of 300 New Homes in West Bank (American reaction? Nothing.)

Pakistan Navy Slated for Major Revamp


Iran:
Has There Been a Military Coup in Iran by the Revolutionary Guard in Iran?

Reza Aslan on Iran (His interview on The Daily Show.)

Neda: A Civil Rights Struggle

Obama: Neda Video 'Heartbreaking'

The Meaning of Neda

In Iran, Authorities Admit Voting Discrepancies

Rachel Maddow: Iranian Protesters Targetting the Basiji

Evidence Of Western Intelligence Meddling in Iran

Sunday's Protest March Broken Up; Rafsanjani Defers to Khamenei (Sunday referring to June 28th.)

5,000 March Silently in Iran

Washington and the Iran Protests: Would they be Allowed in the US?

Guardianship Council Rules out Annulment of Election Results; Reformists Planning Strikes, Mourning

Chatham House Study Definitively Shows Massive Ballot Fraud in Iran's Reported Results

More Details on Saturday's Demonstrations (This would have been Saturday, June 20th.)

An Interesting Detail

Iran Election Wrap Up

Has the U.S. Played a Role in Fomenting Unrest During Iran’s Election?

Iran: 'There is Very Little Logic at Work' (This was a very interesting personal essay. Must read.)

Obama Questions Legitimacy of Iranian Elections, Says It is ‘Up to the Iranian People to Decide’ Their Leadership.

Lugar: The U.S. Should Still Be Willing To ‘Sit Down’ With Iran For Nuclear Talks


Asia:
China Crosses the Rubicon

China-India Relations: An Unresolved Border and 60,000 Troops Deployed

Thousands of Anti-Govt Protesters Mass in Bangkok (Former Prime Minister Thaksin Shinawatra wants to come home.)


Miscellaneous:
Senegal: Islam, Democracy, Sexy

Indefinite Detention, Anyone? White House is Drafting New Executive Order

Obama Considering an Executive Order Allowing Indefinite Detention.

Business/Economics Links (16 June 2009)

Advertising is Good for You:
How restaurants get you to spend more


Angry Bear:
Context for Trade Deficit

Trade Deficits Resume Upward Climb


Crooks & Liars:
President Promises 600K New Jobs This Summer

Report: The Employed Are Hurting, Too. Meanwhile, Heritage Foundation Blames Unemployment Checks for Unemployment.


Dilbert:
"Dogbert the Pirate." ("That's a different business model." Hah!)

"Job Interview"

"Pretend you don't know that."

"Dogbert the CEO"


Econbrowser:
The Dollar as a Reserve Currency: Apres le Deluge

Do you see what I see? ("I'm still looking for, and still not seeing, the economic recovery that everybody is talking about.")

How Important Is China to World Growth?


Economist's View:
Chinese Manufacturers Accused of Predatory Pricing in India

"Cultural Authenticity and the Market" (This was slightly off the beaten track for Thoma, but if you have any interest in archeology, you might find this post of interest.)

Rogoff: Rebalancing the US-China Economic Relationship

Fed Watch: Rate Hike? ("Seriously, a rate hike in this environment? Or anytime before the end of 2009? At the moment, I just can't see it happening. That said, long rate are higher, and inflation expectations in some corners of the market are rising. What is going on?")

2009 Reith Lectures: Markets and Morals ("After my piece ran, The Times was flooded with scathing letters - mostly from economists (LAUGHTER), some from my own university. I utterly failed to understand the virtue of markets, they said, or the efficiencies of trade, or even the most elementary principles of economic rationality. Amidst the torrent of criticism, I did receive a sympathetic email from my old college Economics Professor. He understood the point I was trying to make, he wrote, but could he ask a small favor: would I mind not publicly revealing the identity of the person who had taught me Economics? (LAUGHTER)")


Robert Reich:
The Great Debt Scare: Why Has It Returned?


The Bonddad Blog:
Volcker on Recovery

Flow Of Funds Charts, Part I ("Consider the following charts from the Flow of Funds. Then ask yourself, will the consumer be able to lead us out of recession?")

Consumer Confidence Up

Is the Debt Binge Over?

More Signs of Bottoming

It's Looking Like a Jobless Recovery ("Right now there is no reason to hire -- and there won't be for awhile." This is not a surprise.)

Mikhail Gorbachev: "We Had Our Perestroika. It's High Time for Yours."

There's a good essay by Mikhail Gorbachev, the former leader of the USSR, in The Washington Post. He argues, correctly, IMO, that America's political and economic systems are broken and in need of reform, although he offers no solutions.

I would offer several suggestions in all seriousness: look to Islam for guidance on economic and financial reform, and look to science fiction (and particularly Kim Stanley Robinson's Mars trilogy) for guidance on political and cultural reform. People might think I'm offering pie-in-the-sky suggestions, but many people have thought long and hard on all of these issues. For example, Robinson's work highlights some of the negatives and positives of both the current and future political and cultural systems. When Gorbachev writes, "But I am convinced that a new model will emerge...", everything that follows in Gorbachev's sentence has already been discussed in the Mars Trilogy.

I would not offer these suggestions as solutions ready made to be implemented directly, but I do believe that both can be used as the starting points for discussion on how to solve some of the world's problems.

Here are some of the highlights from the essay:

In the West, the breakup of the Soviet Union was viewed as a total victory that proved that the West did not need to change. Western leaders were convinced that they were at the helm of the right system and of a well-functioning, almost perfect economic model. Scholars opined that history had ended. The "Washington Consensus," the dogma of free markets, deregulation and balanced budgets at any cost, was force-fed to the rest of the world.

But then came the economic crisis of 2008 and 2009, and it became clear that the new Western model was an illusion that benefited chiefly the very rich. Statistics show that the poor and the middle class saw little or no benefit from the economic growth of the past decades.

The current global crisis demonstrates that the leaders of major powers, particularly the United States, had missed the signals that called for a perestroika. The result is a crisis that is not just financial and economic. It is political, too.

The model that emerged during the final decades of the 20th century has turned out to be unsustainable. It was based on a drive for super-profits and hyper-consumption for a few, on unrestrained exploitation of resources and on social and environmental irresponsibility.

But if all the proposed solutions and action now come down to a mere rebranding of the old system, we are bound to see another, perhaps even greater upheaval down the road. The current model does not need adjusting; it needs replacing. I have no ready-made prescriptions. But I am convinced that a new model will emerge, one that will emphasize public needs and public goods, such as a cleaner environment, well-functioning infrastructure and public transportation, sound education and health systems and affordable housing.

Elements of such a model already exist in some countries. Having rejected the tutorials of the International Monetary Fund, countries such as Malaysia and Brazil have achieved impressive rates of economic growth. China and India have pulled hundreds of millions of people out of poverty. By mobilizing state resources, France has built a system of high-speed railways, while Canada provides free health care. Among the new democracies, Slovenia and Slovakia have been able to mitigate the social consequences of market reforms.

The time has come for "creative construction," for striking the right balance between the government and the market, for integrating social and environmental factors and demilitarizing the economy.

Why Beef Prices are Heading Higher

Bonddad recently wrote about a Bloomberg article on rising beef prices. My quibble isn't with his technical analysis, but with one of his comments. He thought that demand was increasing for beef because...

...as the world's standard of loving [sic] increases (think India and China making more and more money) people will want better things like steak.

Now, generally speaking, what he said is true; as people's incomes rise, we do want goods that are better than what we had before. In economics, we call these "normal goods." A normal good is any good for which demand increases when income increases. A car is an example of a normal good. All things being equal, what would you rather do if your income increases, continue taking the bus or train to work or buy a new car? Of course, you'd buy the new car. (Conversely, an "inferior good" is a good that decreases in demand as income rises; an example for the US being ramen noodles.) Anyhoo, Bonddad is suggesting that because incomes are rising in countries like India and China, they want to eat better foods such as American steak. However, the truth is that beef exports to other countries isn't the reason.

In 2006, the US exported a total of 1.145 billion pounds of beef out of a total supply of 29.912 billion pounds, which comes to 3.83%. So a little under 4% of all US beef available in the country was exported. In 2007, the percentage was 4.74%, in 2008 total beef exports is projected to be 5.44%, and for 2009, 6.21%. [All of these numbers and the following data come from the US Department of Agriculture's monthly report, World Agricultural Supply and Demand Estimates, for April and May 2008.] So, beef exports are increasing, but very slowly. Rising beef exports out of the total available for sale in the US will cause domestic beef prices to rise, but not by that much. Let's look at the more likely culprit.

American cattle are normally either grass-fed or corn-fed. Per Wikipedia, "In the United States, cattle in concentrated animal feeding operations (CAFOs) are typically fed corn, soy and other types of feed that can include "by-product feedstuff." As a high-starch, high-energy food, corn decreases the time to fatten cattle and increases yield from dairy cattle." Per a 2003 Colorado State University study, "80% of consumers in the Denver-Colorado area preferred the taste of United States corn-fed beef to Australian grass-fed beef." And so a very significant portion of America's annual corn crop goes to feed cattle, and the price of corn has been rising dramatically, like other agricultural products, such as rice. Just how much corn is being used to feed cattle?

In 2005/6, the US had a total supply of 13.237 billion bushels of corn. Of that amount 6.155 billion bushels (46.50%) were used as "feed and residual," 2.981 billion bushels (22.52%) were used as "food, seed and industrial," and 2.134 billion bushels (16.12%) were exported. The remainder (1.967 billion bushels, 14.86%) was "closing stock" and used in the following year, 2006/7. Now, looking at these individual categories, we see that "feed and residual" was 44.73% in 2006/7 and is estimated to be 42.73% in 2007/8 and 39.19% in 2008/9. Clearly, "feed and residual" isn't a problem. Likewise, exports aren't a significant cause of corn inflation either: 16.98% of all US corn was exported in 2006/7, and 17.37% and 15.53% is expected to be exported in 2007/8 and 2008/9, respectively. Which leads to "food, seed and industrial."

The first two of these should be self-explanatory. It's the industrial that we're concerned with. The industrial use of corn comes primarily in the form of ethanol. You know, the alcohol addititive to your gasoline so that you wouldn't pay as much money (you hoped) to run your car? Turns out that ethanol is bringing up the price of corn. The USDA breaks out the amount of corn that's used in the production of ethanol, which is very helpful for our analysis. In 2005/6, corn used for ethanol made up 1.603 billion bushels out of the 2.981 billion bushels mentioned above (the remainder was presumably used for food and seed). Which means that that 1.603 billion bushels made up 12.11% of the total American corn supply. In 2006/7, that percentage increased to 16.92%, and is expected to increase to 20.84% and 29.58% in 2007/8 and 2008/9, respectively. That's where the corn's going! So, let's connect the dots.

Because Americans prefer corn-fed cattle over grass-fed, cattle producers feed them lots of corn and other grains that, in turn, help them to fatten up quicker before they're slaughtered. Still, it takes feedlot cattle 14-18 months before they are killed, which means they eat a lot of corn. (I don't know exactly how much an average cow eats in its lifetime. No doubt the farmers do.) Because the price of corn has been going up ($2.00 per bushel in 2005/6 to $3.04 per bushel in 2006/7), it costs the cattle producer that much more to feed a cow until it gets to its terminal weight. Which means that cattle producers are actually losing money now for every cow they sell. According to the Bloomberg article, the feedlots were losing $139.56 a head in April, up from a record loss of $169.80 a head in March, and down from a profit of $46.79 a head in April 2007. No doubt there are some other factors that probably have affected the price increases for corn (oil and fertilizers come to mind), but the primary cause of the price increases in beef appears to be due to the increases in the price of corn. Which, no doubt, must be a relief to the Indians and Chinese, who don't tend to eat beef anyway; the former tend to eat mutton and chicken, the latter pork.

Cross-posted at J2TM and at Daily Kos, where there are a lot of very good comments. Check them out.

Walden Bello: Manufacturing a Food Crisis

In reading this important article by Walden Bello in The Nation, one wonders who the people at the World Bank, the International Monetary Fund (IMF) and the World Trade Organization (WTO) really are: dogmatic eggheads who blindly follow the "free trade" mantra without regard to the human consequences, or useful fools working on behalf of rich northern nations and corporations? Perhaps both. Bello shows that, since the early 80s, the World Bank, IMF, WTO and free trade agreements like NAFTA have caused several nations (Mexico and the Philippines are given as examples) to go from being net exporters of food to net importers, largely as a result of World Bank and IMF policies that helped keep several governments solvent but at the expense of ruining local farmers. The countries were forced to accept highly subsidized food imports from the U.S. and the European Union or, in the case of Malawi, to sell off their food reserves in return for loans. In the meantime, more and more farmers are committing suicide (especially in India) as their livelihoods are ruined, and about 1,500 Malawians died from starvation when a famine struck that country in 2001-02, when little food was available because the country had been forced (earlier) to sell their food reserves. (One wonders whether the IMF and the other NGOs realize how much blood is on their hands.) The case of Malawi is particularly rich with irony considering that the World Bank forced the Malawian government to scrap a subsidy program for its farmers (which had been very successful, bringing in a bumper crop of corn), because "the subsidy distorted trade." And, yet, "[s]ince the late 1990s subsidies have accounted for 40 percent of the value of agricultural production in the European Union and 25 percent in the United States." What hypocrisy.

There is nothing wrong with international trade; we all benefit by it. But "free" trade often isn't free and can carry an extremely heavy cost. Trade, like anything else, needs to be regulated if it is to work most effectively. Obviously the human costs, in terms of suffering and needless deaths, are factors that need to be considered, but aren't. The suggestion of "food sovereignty," mentioned at the bottom of the article, makes sense. We need to realize that most of these farmers in Mexico, the Philippines, and around the world are among the poorest of the poor who, like everyone else, need to be able to support themselves and their families. Poor national governments need to weigh more carefully the demands of debt servicing by organizations like the IMF and World Bank against the needs of their citizens who are most at risk.

Some excerpts:

However, an intriguing question escaped many observers: how on earth did Mexicans, who live in the land where corn was domesticated, become dependent on US imports in the first place?

The Mexican food crisis cannot be fully understood without taking into account the fact that in the years preceding the tortilla crisis, the homeland of corn had been converted to a corn-importing economy by “free market” policies promoted by the International Monetary Fund (IMF), the World Bank and Washington. The process began with the early 1980s debt crisis. One of the two largest developing-country debtors, Mexico was forced to beg for money from the Bank and IMF to service its debt to international commercial banks. The quid pro quo for a multibillion-dollar bailout was what a member of the World Bank executive board described as “unprecedented thoroughgoing interventionism” designed to eliminate high tariffs, state regulations and government support institutions, which neoliberal doctrine identified as barriers to economic efficiency.

Interest payments rose from 19 percent of total government expenditures in 1982 to 57 percent in 1988, while capital expenditures dropped from an already low 19.3 percent to 4.4 percent. The contraction of government spending translated into the dismantling of state credit, government-subsidized agricultural inputs, price supports, state marketing boards and extension services. Unilateral liberalization of agricultural trade pushed by the IMF and World Bank also contributed to the destabilization of peasant producers.

This blow to peasant agriculture was followed by an even larger one in 1994, when the North American Free Trade Agreement went into effect. Although NAFTA had a fifteen-year phaseout of tariff protection for agricultural products, including corn, highly subsidized US corn quickly flooded in, reducing prices by half and plunging the corn sector into chronic crisis. Largely as a result of this agreement, Mexico’s status as a net food importer has now been firmly established.

With the shutting down of the state marketing agency for corn, distribution of US corn imports and Mexican grain has come to be monopolized by a few transnational traders, like US-owned Cargill and partly US-owned Maseca, operating on both sides of the border. This has given them tremendous power to speculate on trade trends, so that movements in biofuel demand can be manipulated and magnified many times over. At the same time, monopoly control of domestic trade has ensured that a rise in international corn prices does not translate into significantly higher prices paid to small producers.

...

The Philippines provides a grim example of how neoliberal economic restructuring transforms a country from a net food exporter to a net food importer. The Philippines is the world’s largest importer of rice. Manila’s desperate effort to secure supplies at any price has become front-page news, and pictures of soldiers providing security for rice distribution in poor communities have become emblematic of the global crisis.

The broad contours of the Philippines story are similar to those of Mexico. Dictator Ferdinand Marcos was guilty of many crimes and misdeeds, including failure to follow through on land reform, but one thing he cannot be accused of is starving the agricultural sector. To head off peasant discontent, the regime provided farmers with subsidized fertilizer and seeds, launched credit plans and built rural infrastructure. When Marcos fled the country in 1986, there were 900,000 metric tons of rice in government warehouses.

Paradoxically, the next few years under the new democratic dispensation saw the gutting of government investment capacity. As in Mexico the World Bank and IMF, working on behalf of international creditors, pressured the Corazon Aquino administration to make repayment of the $26 billion foreign debt a priority. Aquino acquiesced, though she was warned by the country’s top economists that the “search for a recovery program that is consistent with a debt repayment schedule determined by our creditors is a futile one.” Between 1986 and 1993 8 percent to 10 percent of GDP left the Philippines yearly in debt-service payments — roughly the same proportion as in Mexico. Interest payments as a percentage of expenditures rose from 7 percent in 1980 to 28 percent in 1994; capital expenditures plunged from 26 percent to 16 percent. In short, debt servicing became the national budgetary priority.

Spending on agriculture fell by more than half. The World Bank and its local acolytes were not worried, however, since one purpose of the belt-tightening was to get the private sector to energize the countryside. But agricultural capacity quickly eroded. Irrigation stagnated, and by the end of the 1990s only 17 percent of the Philippines’ road network was paved, compared with 82 percent in Thailand and 75 percent in Malaysia. Crop yields were generally anemic, with the average rice yield way below those in China, Vietnam and Thailand, where governments actively promoted rural production. The post-Marcos agrarian reform program shriveled, deprived of funding for support services, which had been the key to successful reforms in Taiwan and South Korea. As in Mexico Filipino peasants were confronted with full-scale retreat of the state as provider of comprehensive support — a role they had come to depend on.

And the cutback in agricultural programs was followed by trade liberalization, with the Philippines’ 1995 entry into the World Trade Organization having the same effect as Mexico’s joining NAFTA. WTO membership required the Philippines to eliminate quotas on all agricultural imports except rice and allow a certain amount of each commodity to enter at low tariff rates. While the country was allowed to maintain a quota on rice imports, it nevertheless had to admit the equivalent of 1 to 4 percent of domestic consumption over the next ten years. In fact, because of gravely weakened production resulting from lack of state support, the government imported much more than that to make up for shortfalls. The massive imports depressed the price of rice, discouraging farmers and keeping growth in production at a rate far below that of the country’s two top suppliers, Thailand and Vietnam.

The consequences of the Philippines’ joining the WTO barreled through the rest of its agriculture like a super-typhoon. Swamped by cheap corn imports — much of it subsidized US grain — farmers reduced land devoted to corn from 3.1 million hectares in 1993 to 2.5 million in 2000. Massive importation of chicken parts nearly killed that industry, while surges in imports destabilized the poultry, hog and vegetable industries.

During the 1994 campaign to ratify WTO membership, government economists, coached by their World Bank handlers, promised that losses in corn and other traditional crops would be more than compensated for by the new export industry of “high-value-added” crops like cut flowers, asparagus and broccoli. Little of this materialized. Nor did many of the 500,000 agricultural jobs that were supposed to be created yearly by the magic of the market; instead, agricultural employment dropped from 11.2 million in 1994 to 10.8 million in 2001.

The one-two punch of IMF-imposed adjustment and WTO-imposed trade liberalization swiftly transformed a largely self-sufficient agricultural economy into an import-dependent one as it steadily marginalized farmers.

...

A study of fourteen countries by the UN’s Food and Agricultural Organization found that the levels of food imports in 1995-98 exceeded those in 1990-94. This was not surprising, since one of the main goals of the WTO’s Agreement on Agriculture was to open up markets in developing countries so they could absorb surplus production in the North. As then-US Agriculture Secretary John Block put it in 1986, “The idea that developing countries should feed themselves is an anachronism from a bygone era. They could better ensure their food security by relying on US agricultural products, which are available in most cases at lower cost.”

What Block did not say was that the lower cost of US products stemmed from subsidies, which became more massive with each passing year despite the fact that the WTO was supposed to phase them out. From $367 billion in 1995, the total amount of agricultural subsidies provided by developed-country governments rose to $388 billion in 2004. Since the late 1990s subsidies have accounted for 40 percent of the value of agricultural production in the European Union and 25 percent in the United States.

...

This is not simply the erosion of national food self-sufficiency or food security but what Africanist Deborah Bryceson of Oxford calls “de-peasantization” — the phasing out of a mode of production to make the countryside a more congenial site for intensive capital accumulation. This transformation is a traumatic one for hundreds of millions of people, since peasant production is not simply an economic activity. It is an ancient way of life, a culture, which is one reason displaced or marginalized peasants in India have taken to committing suicide. In the state of Andhra Pradesh, farmer suicides rose from 233 in 1998 to 2,600 in 2002; in Maharashtra, suicides more than tripled, from 1,083 in 1995 to 3,926 in 2005. One estimate is that some 150,000 Indian farmers have taken their lives. Collapse of prices from trade liberalization and loss of control over seeds to biotech firms is part of a comprehensive problem, says global justice activist Vandana Shiva: “Under globalization, the farmer is losing her/his social, cultural, economic identity as a producer. A farmer is now a ‘consumer’ of costly seeds and costly chemicals sold by powerful global corporations through powerful landlords and money lenders locally.”

...

At the time of decolonization, in the 1960s, Africa was actually a net food exporter. Today the continent imports 25 percent of its food; almost every country is a net importer. Hunger and famine have become recurrent phenomena, with the past three years alone seeing food emergencies break out in the Horn of Africa, the Sahel, and Southern and Central Africa.

Agriculture in Africa is in deep crisis, and the causes range from wars to bad governance, lack of agricultural technology and the spread of HIV/AIDS. However, as in Mexico and the Philippines, an important part of the explanation is the phasing out of government controls and support mechanisms under the IMF and World Bank structural adjustment programs imposed as the price for assistance in servicing external debt.

...

The support that African governments were allowed to muster was channeled by the World Bank toward export agriculture to generate foreign exchange, which states needed to service debt. But, as in Ethiopia during the 1980s famine, this led to the dedication of good land to export crops, with food crops forced into less suitable soil, thus exacerbating food insecurity. Moreover, the World Bank’s encouragement of several economies to focus on the same export crops often led to overproduction, triggering price collapses in international markets. For instance, the very success of Ghana’s expansion of cocoa production triggered a 48 percent drop in the international price between 1986 and 1989. In 2002-03 a collapse in coffee prices contributed to another food emergency in Ethiopia.

As in Mexico and the Philippines, structural adjustment in Africa was not simply about underinvestment but state divestment. But there was one major difference. In Africa the World Bank and IMF micromanaged, making decisions on how fast subsidies should be phased out, how many civil servants had to be fired and even, as in the case of Malawi, how much of the country’s grain reserve should be sold and to whom.

Compounding the negative impact of adjustment were unfair EU and US trade practices. Liberalization allowed subsidized EU beef to drive many West African and South African cattle raisers to ruin. With their subsidies legitimized by the WTO, US growers offloaded cotton on world markets at 20 percent to 55 percent of production cost, thereby bankrupting West and Central African farmers.

...

In 1999 the government of Malawi initiated a program to give each smallholder family a starter pack of free fertilizers and seeds. The result was a national surplus of corn. What came after is a story that should be enshrined as a classic case study of one of the greatest blunders of neoliberal economics. The World Bank and other aid donors forced the scaling down and eventual scrapping of the program, arguing that the subsidy distorted trade. Without the free packs, output plummeted. In the meantime, the IMF insisted that the government sell off a large portion of its grain reserves to enable the food reserve agency to settle its commercial debts. The government complied. When the food crisis turned into a famine in 2001-02, there were hardly any reserves left. About 1,500 people perished. The IMF was unrepentant; in fact, it suspended its disbursements on an adjustment program on the grounds that “the parastatal sector will continue to pose risks to the successful implementation of the 2002/03 budget. Government interventions in the food and other agricultural markets… [are] crowding out more productive spending.”

By the time an even worse food crisis developed in 2005, the government had had enough of World Bank/IMF stupidity. A new president reintroduced the fertilizer subsidy, enabling 2 million households to buy it at a third of the retail price and seeds at a discount. The result: bumper harvests for two years, a million-ton maize surplus and the country transformed into a supplier of corn to Southern Africa.

Malawi’s defiance of the World Bank would probably have been an act of heroic but futile resistance a decade ago. The environment is different today, since structural adjustment has been discredited throughout Africa. Even some donor governments and NGOs that used to subscribe to it have distanced themselves from the Bank. Perhaps the motivation is to prevent their influence in the continent from being further eroded by association with a failed approach and unpopular institutions when Chinese aid is emerging as an alternative to World Bank, IMF and Western government aid programs.

...

It is not only defiance from governments like Malawi and dissent from their erstwhile allies that are undermining the IMF and the World Bank. Peasant organizations around the world have become increasingly militant in their resistance to the globalization of industrial agriculture. Indeed, it is because of pressure from farmers’ groups that the governments of the South have refused to grant wider access to their agricultural markets and demanded a massive slashing of US and EU agricultural subsidies, which brought the WTO’s Doha Round of negotiations to a standstill.

Farmers’ groups have networked internationally; one of the most dynamic to emerge is Via Campesina (Peasant’s Path). Via not only seeks to get “WTO out of agriculture” and opposes the paradigm of a globalized capitalist industrial agriculture; it also proposes an alternative — food sovereignty. Food sovereignty means, first of all, the right of a country to determine its production and consumption of food and the exemption of agriculture from global trade regimes like that of the WTO. It also means consolidation of a smallholder-centered agriculture via protection of the domestic market from low-priced imports; remunerative prices for farmers and fisherfolk; abolition of all direct and indirect export subsidies; and the phasing out of domestic subsidies that promote unsustainable agriculture. Via’s platform also calls for an end to the Trade Related Intellectual Property Rights regime, or TRIPs, which allows corporations to patent plant seeds; opposes agro-technology based on genetic engineering; and demands land reform. In contrast to an integrated global monoculture, Via offers the vision of an international agricultural economy composed of diverse national agricultural economies trading with one another but focused primarily on domestic production.

Walden Bello is senior analyst at and former executive director of Focus on the Global South, a research and advocacy institute based at Chulalongkorn University in Bangkok. He is the author or co-author of many books on politics and economic issues in the Philippines and Asia, including, most recently, Deglobalization (Zed), and recipient of the 2003 Right Livelihood Award, also known as the “Alternative Nobel Prize.” In March he was named Outstanding Public Scholar for 2008 by the International Studies Association.

HT: Economist's View

Incredible, Uniquely, Sparkling, Bloody Asia

Over the past few weeks, Milady and I have been discussing some of the regional tourism campaigns. The problem, IMO, is that several of these campaigns have rather simple and, thus, boring slogans. The three primary offenders are Incredible India, Korea Sparkling (which is normally said as if there’s a comma between "Korea" and "Sparkling"), and the local slogan, Uniquely Singapore. It’s not that the advertising campaigns are done badly; in fact, all three campaigns are quite professional with decent television commercials. It’s just that the slogans are not terribly interesting.

Two slogans that I find a little better are Malaysia, Truly Asia and Australia’s So Where the Bloody Hell Are You?, which, apparently, had generated some controversy in the UK and Canada; in the UK because of the word "bloody," and in Canada due to the "unbranded alcohol consumption" at the beginning of one of the commercials (and also for the use of the word "hell"). Singapore avoided the problem by having the slogan advertised here as "So where are you?"

There are a couple of countries that don’t advertise regionally, which is a little surprising, namely Indonesia, the Philippines, and Hong Kong. The most recent entrant in the tourism sweepstakes is Vietnam, the Hidden Charm, which, unfortunately, seems to have followed the lead of India, Korea and Singapore with a simplistic slogan.

"All we are saying..."

The Economist Intelligence Unit, a division of the corporation that publishes The Economist, has come out with its first annual "Global Peace Index," an index that ranks 121 countries based upon their "peacefulness." One of the irritants I have about certain American Christians and Islamophobes (who are often one and the same) is their claim that the US is sooo peaceful and Muslims are sooo violent. Well, the Global Peace Index exposes the lie behind that claim. Of the 121 countries in this year's index, the US placed 96th, ahead of Iran, but behind Yemen. The most peaceful Muslim country is Oman (22) [see below for a list of the remaining Muslim-majority countries]. Countries of interest: Norway (1), New Zealand (2), Japan (5), Canada (8), Hong Kong (23), Australia (25), Singapore (29), South Korea (32), United Kingdom (49), China (60), India (109), Russia (118), and Israel (119).

The following comes from the press release that describes the objective of the Index and how the Index was created:

"The objective of the Global Peace Index was to go beyond a crude measure of wars by systematically exploring the texture of peace," explained Global Peace Index President, Mr. Clyde McConaghy, speaking in Washington. "The Index provides a quantitative measure of peacefulness that is comparable over time, and we hope it will inspire and influence world leaders and governments to further action."

The rankings show that even among the G8 countries there are significant differences in peacefulness: While Japan was the most peaceful of the G8 countries, at a rank of five in the Index, Russia neared the bottom at number 118. The Global Peace Index also reveals that countries which had a turbulent time for parts of the twentieth century, such as Ireland and Germany, have emerged as peace leaders in the 21st century.

The Economist Intelligence Unit measured countries' peacefulness based on wide range of indicators - 24 in all - including ease of access to "weapons of minor destruction" (guns, small explosives), military expenditure, local corruption, and the level of respect for human rights.

After compiling the Index, the researchers examined it for patterns in order to identify the "drivers" that make for peaceful societies. They found that peaceful countries often shared high levels of democracy and transparency of government, education and material well-being. While the U.S. possesses many of these characteristics, its ranking was brought down by its engagement in warfare and external conflict, as well as high levels of incarceration and homicide. The U.S.'s rank also suffered due to the large share of military expenditure from its GDP, attributed to its status as one of the world's military-diplomatic powers.

The main findings of the Global Peace Index are:

Peace is correlated to indicators such as income, schooling and the level of regional integration

Peaceful countries often shared high levels of transparency of government and low corruption

Small, stable countries which are part of regional blocs are most likely to get a higher ranking

Muslim-majority countries: Oman (22), Qatar (30), Malaysia (37), the UAE (38), Tunisia (39), Kuwait (46), Morocco (48), Libya (58), Kazakhstan (61), Bahrain (62), Jordan (63), Egypt (73), Syria (77), Indonesia (78), Bangladesh (86), Saudi Arabia (90), Turkey (92), Yemen (95), Iran (97), Azerbaijan (101), Algeria (107), Uzbekistan (110), Lebanon (114), Pakistan (115), and Iraq (121).

Juan Cole on Global Warming, Oil and American Politics/Militarism

Juan Cole, who's at his best when he writes analysis, has done a very good piece on the intersection of global warming, oil, and American politics and militarism. The second sentence of the second paragraph is incorrect, IMO, but otherwise an excellent discussion on these various, interrelated topics.

Only by a Manhattan Project-scale government effort to develop green energy can we hope to avert the worst consequences of global warming, which is likely to raise sea levels at least a foot, and possibly 7 feet over the next century or century and a half. (That would put a lot of cities on both coasts under water). The arctic and antarctic ice shelfs are already falling into the ocean at rates that have astonished climate scientists. The arctic alone lost perennial ice cover the size of Texas in 2004-2005! Warm water takes up more space than cold water and the loss of white ice cover is bad because it radiates a lot of sunlight back out to space. So it is a double whammy.

But the other problem with petroleum and gas as sources of energy is that they are getting scarcer. No big new fields have been found for some time. And in one recent year China generated 40% of new demand for petroleum. If a billion Chinese and a billion Indians adopt the American lifestyle and all want 1.5 automobiles and superhighways to crawl along on, the existing stocks of oil will become objects of fierce competition. This process has already begun, and there is a sea change from the mid-1990s, when oil was still cheap and competition for it limited.

Iraq is an Oil War in the mind of politicians like Dick Cheney. It was necessary to deny it to China and other rivals thirty to fifty years in the future. It was necessary to open its vast petroleum fields up for exploration and cast aside anti-American Baath socialism.

Likewise, the religious rigidity of the Pushtun peoples of Helmand province is not the real reason for the US insistence on occupying Afghanistan. It is the vast Turkmenistan and Uzbekistan gas fields that Cheney has his eye on. It was the US hope to use a pipeline from Turkmenistan to supply Pakistan and India, and so forestall a deal by those two countries with Iran. The inability of the Bush administration to calm things down in Afghanistan sufficiently for anyone to dream of putting in such a pipeline and having it avoid routine sabotage has made it likely that Iran will break out of the Bush boycott toward the East.

Hunger for future rights to petroleum and positioning the US to remain a superpower in a world of hydrocarbon scarcity is also driving the campaign to get up a war against Iran. Why can Pakistan have a nuclear weapon, and that is all right, but Iran cannot? Pakistan has very little petroleum. Iran has a lot, and maybe 750 trillion cubic feet of gas in the southwest. If it gets a bomb, regime change becomes impossible, and if Iran wants to tie its supplies up in proprietary contracts with China and India, locking out the United States, it will be able to do so.

Continued heavy dependence on gas and oil therefore not only turns the world into a hothouse, with rising seas, ever more destructive hurricanes, and possibly disastrous shifts in the ocean currents, but it also drives the United States to more and more wars.

And, note that the wars are not even successful in allowing a practical oil grab of the sort Cheney and Lee Raymond dreamed of.

Indeed, you could now, in retrospect, turn their whole argument around on them. US militarism cannot secure petroleum and gas supplies from places such as Iraq, because the pipelines are so easily sabotaged and local nationalisms and religious activism make it impossible for people to accept that kind of US hegemony.

Since the Pentagon cannot practically speaking hope to safeguard US petroleum supplies from the Gulf, national security requires a massive and rapid research and development program of green energy. A lot of green technology, especially solar, would come down in price rapidly if enough government money were thrown at it. We need to press Congress on this, and maybe Californians can craft some of their famous referendum items. That would be one way to promote a new generation of electric cars.

Green energy -- wind, thermal, solar, maybe ultimately fusion, etc. -- is what would allow the US to retain its autonomy and independence into the next century, and what would allow it to avoid losing more cities the way Bush and Cheney lost New Orleans. Oil and War will, in contrast, ruin us all.

Dr. Juan Cole on "Muslim Protests Against Anti-Muhammad Caricatures"

The following is one of Dr. Juan Cole's posts regarding the offensive cartoons attacking the Prophet Muhammad (pbuh). This is a very good post, and I believe it deserves wider coverage.


"Of course people are upset when their sacred figures are attacked! But the hurt is magnified many times when the party doing the injuring is first-world, and the injured have a long history of being ruled, oppressed and marginalized. Moreover, most Muslims live in societies with strong traditions of state censorship, so they often assume that if something appears in the press, the government allowed it to do so and is therefore culpable.

"Westerners cannot feel the pain of Muslims in this instance. First, Westerners mostly live in secular societies where religious sentiments have themselves been marginalized. Second, the Muslims honor Moses and Jesus, so there is no symmetry between Christian attacks on Muhammad and Muslim critiques of the West. No Muslim cartoonist would ever lampoon the Jewish and Christian holy figures in sacred history, since Muslims believe in them, too, even if they see them all as human prophets. Third, Westerners have the security of being the first world, with their culture coded as "universal," and widely respected and imitated. Cultures like that of the Muslims in the global South receive far less respect. Finally, societies in the global South are less policed and have less security than in Western Europe or North America, allowing greater space to violent vigilateism, which would just be stopped if it were tried in the industrialized democracies. (Even wearing a t-shirt with the wrong message can get you arrested over here.)

"What Muslims are saying is that depicting Muhammad with a bomb in his turban is insupportable. It is often assumed that in the West we believe in free speech, so there is nothing that is insupportable.

"But that simply is not true. Muslims mind caricatures of Muhammad because they view him as the exemplar of all that is good in human beings. Most Western taboos are instead negative ones, not disallowal of attacks on symbols of goodness but the questioning of symbols of evil.

"Thus, it is insupportable to say that the Nazi ideology was right and to praise Hitler. In Germany if one took that sort of thing too far one would be breaking the law. Even in France, Bernard Lewis was fined for playing down the Armenian holocaust. It is insupportable to say that slavery was right, and if you proclaimed that in the wrong urban neighborhoods, you could count on a violent response.

"So once you admit that there are things that can be said that are insupportable, then the Muslim feelings about the caricatures become one reaction in an entire set of such reactions.

"But you don't have to look far for other issues that would exercise Westerners just as much as attacks on Muhammad do Muslims. In secular societies, a keen concern with race often underlies ideas of social hierarchy. Thus, any act that might bring into question the superiority of so-called white people in their own territory can provoke demonstrations and even violence such as lynchings. Consider the recent Australian race riots, which were in part about keeping the world ordered with whites on top.

"Had the Danish newspaper published antisemitic cartoons that showed, e.g., Moses as an exploitative money lender and brought into question the Holocaust, there would also have been a firestorm of protest. For the secular world, the injuries and unspoken hierarchies of race are what cannot be attacked.

"Muslims are not, as you will be told, the only community that is touchy about attacks on its holy figures or even just ordinary heros. Thousands of Muslims were killed in the early 1990s by enraged Hindus in India over the Ayodhya Mosque, which Hindus insisted was built on the site of a shrine to a Hindu holy figure. No one accuses Hindus in general of being unusually narrowminded and aggressive as a result. Or, the Likudniks in Israel protested the withdrawal from Gaza, and there were dark mutterings about what happened to Rabin recurring in the case of Sharon. The "sacred" principle at stake there is just not one most people in the outsider world would agree with the Likudniks about.

"Human beings are all alike. Where they are distinctive, it comes out of a special set of historical circumstances. The Muslims are protesting this incident vigorously, and consider the caricatures insupportable. We would protest other things, and consider them insupportable."


Dr. Cole also wrote the following comment on his blog:

"I just reiterate in response to some of the critical comments that came in that there are lots of things that if someone said them in public in the United States would cause public outcry, maybe demonstrations and even violence. The mob violence, or threat of it, would be regrettable and wrong, just as it is always wrong everywhere. But it would happen under certain circumstances here, too.

"You should remember that Bill Maher lost his job for comments after September 11, and Ari Fleischer, the White House spokesman, came out and said we all had to be very careful what we said, and that it was 'never' the time for such comments.

"The American tradition of freedom of speech rooted in the First Amendment really only protects you from the Federal government. You can't even publicly criticize some corporations without risking a lawsuit.

"I agree that it is better that most people in the North Atlantic world no longer are easily mobilized on grounds of religious feeling. But to pretend that Westerners have abolished all their taboos and irrationalities is just hubris. And, some of the protests among Muslims over the caricatures are about wounded nationalism, and not about religion at all."