2018/10/08: Upon closer inspection, GVCs and new technologies exhibit features that limit the upside to – and may even undermine – developing countries’ economic performance. One such feature is an overall bias in favor of skills and other capabilities. This bias reduces developing countries’ comparative advantage in traditionally labor-intensive manufacturing (and other) activities, and decreases their gains from trade.
Second, GVCs make it harder for low-income countries to use their labor-cost advantage to offset their technological disadvantage, by reducing their ability to substitute unskilled labor for other production inputs. These two features reinforce and compound each other. The evidence to date, on the employment and trade fronts, is that the disadvantages may have more than offset the advantages.
The usual response to these concerns is to stress the importance of building up complementary skills and capabilities. Developing countries must upgrade their educational systems and technical training, improve their business environment, and enhance their logistics and transport networks in order to make fuller use of new technologies, goes the oft-heard refrain.
But pointing out that developing countries need to advance on all those dimensions is neither news nor helpful development advice. It is akin to saying that development requires development. Trade and technology present an opportunity when they are able to leverage existing capabilities, and thereby provide a more direct and reliable path to development. When they demand complementary and costly investments, they are no longer a shortcut around manufacturing-led development.
Compare the new technologies with the traditional model of industrialization, which has been a powerful engine of economic growth in developing countries. First, manufacturing is tradable, which means domestic output is not constrained by demand (and incomes) at home. Second, manufacturing know-how was relatively easy to transfer across countries and, in particular, from rich to poor economies. Third, manufacturing did not make large demands on skills.
These three characteristics collectively made manufacturing a fantastic escalator to higher incomes for developing countries. New technologies present a very different picture in terms of the ease of transferring know-how and the skill requirements they imply. As a result, their net impact on low-income countries looks considerably more uncertain.
2018/10/10: Climate change will be worse for people who are poor, or not white, or not men, or very young, or very old — or any combination of the above. So if you, in your daily life, are doing anything to make life easier for any of those groups, you are helping to fight the devastating impacts of climate change
San Francisco's fleet of semi-derilict e-scooters shares sidewalk space with San Francisco's army of homeless people, who live in naked squalor alongside the some of the world's greatest displays of wealth.
It's a heady cocktail, and what's emerged from it is a homeless folk-hacking practice that has homeless people removing scooters' main computer (along with its GPS tracker), stripping off the logos, and hotwiring it, turning it into an untraceable personal transportation system.
"Every homeless person has like three scooters now," Ghadieh said. "They take the brains out, the logos off and they literally hotwire it."
I've seen scooters stashed at tent cities around San Francisco. Photos of people extracting the batteries have been posted on Twitter and Reddit. Rumor has it the batteries have a resale price of about $50 on the street, but there doesn't appear to be a huge market for them on eBay or Craigslist, according to my quick survey.
Digital technologies, such as ever-higher-quality communications and remote management with virtual reality or telepresence, will make countries less reliant on simple products for exports: higher quality interactions will become easier over vast distances. They open up scope for growth strategies that involve more complicated goods and especially services: not just call centres, but integrated design, or accountancy services, and even remote health or personal care. In the report, we identify five emerging tech-based pathways for prosperity, including some with more domestically driven growth engines, that go beyond past successful strategies.
Our report on digital technologies articulates a concern that current business models and the nature of government action in most countries will not lead to a route to including these three billion. We will need new business models as well as better government action, including sensible regulation of tax and data. The market alone will not deliver inclusion.
Tech shouldn’t be scared of governance rules; it should definitely not behave as if the only alternative to a libertarian world of totally free markets, including for data, is a model identified with China in which the state controls all, including the on-off switch. India is interesting here. Despite its enormous potential, there has been a backlash on its digital identity system Aadhar.
2018/07/26: almost 4.5 million people die each year from health problems caused by inhaling indoor smoke generated by burning solid fuel. Worldwide, 38 percent of the population – 2.7 billion people – cook with wood collected unsustainably from forest and farm landscapes.
In sub-Saharan Africa, the backbreaking process of gathering firewood by hand – often by women and girls – and carrying it home provides the main source of fuel for cooking and heating.
Although liquid fuels, solar energy and hydropower could offer possible alternatives, high costs, infrastructure shortcomings and local habits make sustainable use of wood fuel, including firewood and charcoal, a more viable option in the region.
As a result, researchers at the World Agroforestry Centre (ICRAF) and the Wangari Maathai Institute (WMI) in Nairobi, Royal Institute of Technology, Lund University, Swedish University of Agricultural Sciences, International Institute for Tropical Agriculture, Center for International Forestry Research are trying to find healthier, more efficient energy conversion technologies that emit less pollution and simultaneously produce biochar (biomass charcoal) for soil amendment to improve plant growth and health.
Not only is it strenuous work to gather wood, it detracts women from other pursuits such as agriculture or operating small businesses to generate income,” said Njenga. “Women spend about one working day per week in collecting firewood from forests. This implies that women are essentially living on a 20 percent pay cut as their productive days in a week are normally five as they spend Saturdays attending to domestic chores.”
2018/09/21: it is impossible to achieve absolute decoupling of resource use from GDP on a global scale, even with rapid efficiency gains and aggressive taxes on resource extraction. This is the conclusion reached by literally every existing study that has been conducted on the matter (you can follow links to the original research here). The reason is simple: the rate of decoupling is outstripped by the normal rate of GDP growth, even in high-efficiency scenarios. To make matters worse, there are physical limits to resource efficiency, and as we approach them the rate of improvement slows down, giving yet more force to the scale effect of GDP growth.
Unlike resource use, GDP can (thankfully) be dramatically decoupled from carbon emissions. But this solves only one dimension of our ecological poly-crisis. Even if we magically switched to a completely clean and renewable energy system tomorrow, we would be no closer to reversing our overshoot of all the other critical planetary boundaries: biodiversity collapse, chemical loading, deforestation, etc.
What are we going to do with all that clean energy? The same things we’re doing with fossil fuels: raze forests, intensify agricultural extraction, produce mountains of stuff, send waste to landfill – and do all of this at an ever-increasing rate, because our economic system is programmed to require endless expansion.
I have never said that poor countries shouldn’t grow – nor has anyone in this field of study (which Noah would know had he read any of the relevant literature). I have simply said that we can’t continue with aggregate global growth. What we need, then, is a fairer distribution of global income, with much more of it going to poor countries (and poor people within rich countries).
Is it politically impossible? Well, it would certainly require a struggle. But it’s far less impossible than Noah’s preferred alternative, namely, to transcend the laws of physics.
the real cause of lower fertility isn’t higher GDP but rather better girls’ education. GDP is a confounding factor.
While poor countries may need some GDP growth, that should never – for any nation, rich or poor – be the objective as such. The objective should be to improve human well-being: better health, better education, better housing, happiness, etc.
there is no evidence that relying on a switch to services, in and of itself, reduces the material throughput of the global economy.
2018/09/10: is society incapable of tackling income inequality peacefully?
Walter Scheidel: No, but history shows that there are limits. There is a big difference between maintaining existing arrangements that successfully check inequality (Scandinavia is a good example) and significantly reducing it. The latter requires real change and that is always much harder to do: think of America or Britain, not to mention Brazil, China or India. The modern welfare state does a reasonably good job of compensating for inequality before taxes and transfers. However for more substantial levelling to occur, the established order needs to be shaken up: the greater the shock to the system, the easier it becomes to reduce privilege at the top.
Are we really living in an unfathomable period of wealth inequality, or was the relatively equal society that followed the second world war the real aberration?
Walter Scheidel: When we view history over the long run we can see that this experience was certainly a novelty. We now know that modernisation as such does not reliably reduce inequality. Many things had to come together to make this happen, such as very high income and estate taxes, strong labour unions, and intrusive regulations and controls. Since the 1980s, liberalisation and globalisation have allowed inequality to rise again. Even so, wealth concentration in Europe is nowhere near as high as it was a century ago. America, meanwhile, is getting there, which shows that it all depends on where you look.
measures that worked well in the past may have done so because they were taken in the unique context of massive violent shocks and threats: the world wars and communism. This requires us to be more creative in dealing with inequality. Above all we must think harder about feasibility. It is not enough for economists to come up with recipes to reduce inequality, we also need to figure out how to implement them in an environment that is politically polarised and economically globalised. Both factors limit our scope for intervention.
in practice there will always be losers, and even basic-income schemes can take us only so far. At the end of the day, someone owns the robots. As long as the capitalist world system is in place, it is hard to see how even huge productivity gains from greater automation would benefit society evenly instead of funnelling even more income and wealth to those who are in the best position to pocket these gains.
2018/03/08: In northern Nigeria, thanks to the ingenuity, dedication, and hard work of a local entrepreneur, Habiba Ali, a new solar energy initiative is not only providing her community with a sustainable and affordable source of energy, but is also empowering other women through access to income-generation activates.
There is huge energy poverty in our country and over 89 per cent of this poverty lies in rural areas. There is a need to bring innovation in renewable energy and sustainability to bridge the poverty gap. I believe innovation is only as good as the impact that it makes.
This sentiment echoes IRENA’s research, which shows that off-grid renewables offer a cost-effective, environmentally sustainable way to accelerate the pace of electrification. Expanding the range of appliances powered by off-grid renewables can also encourage income generating activities in rural areas.
Through Sosai, Habiba also created Women of the North for Excellence (the MASI), an initiative where women can become entrepreneurs through leadership in commission-based projects.
One project involves renting out solar dryers for drying peppers and other crops, thereby increasing their shelf life. Nigeria accounts for about 50 per cent of Africa’s pepper production and in rural northern Nigeria as much as 40 per cent of a family’s income can come from harvesting peppers.
Women play a major role in agriculture, and the introduction of solar powered technology will go a long way to improving their economic and social status.
2018/09/17: We can judge the moral fibre of a society by how it treats its least well-off members.
That sounds like a reasonably straightforward idea. But knowing who the poorest people are is not as easy as it sounds. The traditional measure of poverty in the UK has been to consider a household as being in relative poverty if its income is below 60 per cent of the median household income after housing costs.
by counting assets and assessing people’s real needs more effectively around two and a half million people who were in the old poverty measure - in particular many pensioners with assets - are no longer counted as poor. These are replaced by a different set of people - mostly people with disabilities and families with children.
While the overall figures have remained broadly the same, this paints a different picture for UK society.
Statisticians hope that their new measure can command a political consensus so we can at least agree who the poorest are.
2918/09/13: Evacuation isn’t an option for everyone.
When people don’t evacuate from mandatory evacuation zones, it isn’t
a problem of intelligence or herd mentality. It’s a problem of poverty and resources. We need to treat it as such.
just like last year, armchair meteorologists are saying that residents who
fail to leave areas affected by Hurricane Florence just don’t understand the danger. Frankly, that is an elitist mentality.
Cost is a major factor for many people trying to decide whether to ev
Many Americans don’t even have $500 in savings, making an unplanned hotel stay a significant financial burden. Even if they resorted to a high-interest payday loan to cover evacuation expenses, leaving the area might get them fired.
2018/07/16: the first ever report to quantify the growing risks and assess the opportunities of the global cooling challenge.
There are over 1.1 billion people globally who face immediate risks from lack of access to cooling. Cooling underpins the ability of millions to escape poverty, to keep our children healthy, vaccines stable, food nutritious, and our economies productive. Access to cooling is now a fundamental issue of equity, and as temperatures hit record levels, this could also mean the difference between life or death for some.
These risks are both a development and climate change issue, as they pose challenges for the health, safety, and productivity of populations across the world – especially countries in Asia and Africa where access gaps are the largest. Yet this challenge also offers business and entrepreneurs the opportunity of major new consumer markets which want super-efficient, affordable technologies to meet their cooling needs.
In a world facing continuously rising temperatures, access to cooling is not a luxury – it’s essential for everyday life. It guarantees safe cold supply chains for fresh produce, safe storage of life-saving vaccines, and safe work and housing conditions-
It can cost between $10,000 to $25,000 to install a solar panel system on a home. And then there are the barriers beyond cost, like being a renter or having a roof that’s too small or shady for panels. These factors mean solar isn’t available to about half of all Americans, according to the Department of Energy. New York is among the top dozen solar-producing states in the U.S., but in 2014, less than 4 percent of solar installations benefited New York households with incomes below $40,000.
That could change if the community solar model catches on. Not only does community solar make renewable energy accessible to more people; proponents say that it has the potential to alleviate energy insecurity. Each month, one in three Americans struggles with choosing between paying their utility bill or for other basic necessities. With the right incentives, community solar can lower utility bills and give communities control over how they produce and consume energy.
Hunger and obesity occur simultaneously within the same urban populations, a growing trend known as the 'Malnutrition Cocktail.'
From afar it almost seems as if two discrete tragedies are unfolding in Nepal, bound by nature's fury.
The fast-growing use of cell phones in Africa - where many people lack the basic human necessities - has made headlines worldwide the past few years. The surprising boom has led to widespread speculation - and hope - that cell phones could potentially transform the impoverished continent. Cell phones are making a difference, says Mbiti, but his latest research also reveals, however, that cell phones alone can't drive development.
Tumblr is a place to express yourself, discover yourself, and bond over the stuff you love. It's where your interests connect you with your people.
NAFTA's Legacy for Mexico: Economic Displacement, rnLower Wages for Most, Increased MigrationrnNAFTA Devastated Mexico's Rural Sector and Increased PovertyrnThe North American Free Trade Agreement (NAFTA) was sold to the people of all three countries with rngrand promises. Mexicans were promised NAFTA would raise their wages and bring Mexicans' rnstandards of living closer to the United States and Canada. Instead, after 24 years, real wages in Mexico rnare down from already low prern-rnNAFTA wages, two million Mexicans engaged in farming lost their rnlivelihoods and lands, tens of thousands of small businesses have gone bankrupt as American bigrn-rnbox rnretailers moved in, and poverty remains widespread. And, Mexican taxpayers have paid foreign rninvestors more than $204 million in compensation following Investorrn-rnState Dispute Settlement attacks.rnPrior to NAFTA, 21.4 percent of rnMexico's population earned less than rnthe minimum income needed for food, a rnshare that has barely budged in the 24 rnyears since NAFTA's implementation. rnToday, over half of the Mexican rnpopulation and over 60 percent of the rnrural population still fall below the rnpoverty line, contrary to the promises rnmade by NAFTA's proponents. On the rn10rn-rnyear anniversary of NAFTA, the rnWashington Postrnreported: "19 million rnmore Mexicans are living in poverty rnthan 20 years ago, according to the rnMexican government and international rnorganizations." rnBefore NAFTA, Mexico only imported rncorn and other basic food commodities if local production did not meet domestic needs. NAFTA rneliminated Mexican tariffs on corn and other commodities. NAFTA terms also required revocation of rnprograms supporting small farmers. But NAFTA did not discipline U.S. subsidies on agriculture. The rnresult was disastrous for millions of people in the Mexican countryside whose livelihoods relied on rnagriculture. Amid a NAFTArn-rnspurred influx of cheap U.S. corn, the price paid to Mexican farmers for the rncorn that they grew fell by 66 percent, forcing many to abandon farming. From 1991 to 2007, about 2 rnmillion Mexicans engaged in farming and related work lost their livelihoods. Mexico's participation in rnNAFTA was conditioned on changing its revolutionaryrn-rnera Constitution's land reforms, undoing rnprovisions that guaranteed small plots (rn"ejidosrn") to millions of Mexicans living in rural villages. As corn rnprices plummeted, indebted farmers lost their land, which newly could be acquired by foreign firms that rnconsolidated prime acres into large plantations.rnAccording to a New Republic exposé: "as cheap American foodstuffs flooded Mexico's markets and as rnU.S. agribusiness moved in, 1.1 million small farmers rn-rnand 1.4 million other Mexicans dependent upon rnthe farm sector rn-rnwere driven out of work between 1993 and 2005. Wages dropped so precipitously that rntoday the income of a farm laborer is onern-rnthird that of what it was before NAFTA." The exposé noted rnthat, as jobs and wages fell, many rural Mexicans joined the ranks of the 12 million undocumented rnimmigrants competing for lowrn-rnwage jobs in the United States. rnThough the price paid to Mexican farmers plummeted after NAFTA, the newly deregulated retail price of rntortillas rn-rnMexico's staple food rn-rnshot up 279 percent in the pact's first 10 years. This contradicts free rntrade theory, which predicts that gains from liberalization come on the import side as all consumers enjoy rnlower prices, while injury only occurs to those in sectors directly displaced by imports. But, NAFTA rnincluded service sector and investment rules that facilitated consolidation of grain trading, milling, baking rnand retail. So in short order the relatively few remaining large firms dominating these activities were able rnto raise the prices paid by Mexican consumers and reap extra profits as corn costs simultaneously rndeclined. This problem is ongoing; Recent reports show that U.S. exports of corn, wheat, soybeans and rnrice are all sold below production costs, devastating Mexico's agricultural sector.