Two Decades

November 11, 2009

Who is the strongest
Who is the best
Who holds the aces
The East
Or the West
This is the crap our children are learning
But oh, oh, oh, the tide is turning
~Roger Waters

Twenty years ago I was in Monterrey watching the evening news, they were talking about some nonsense, when a cable came from Berlin.

People were gathering around Brandenburger Tor.

The soldier were pointing their weapons at them.

The people were yelling Wir wollen raus! Wir bleiben hier! (We want out, we are staying here).

At 22:30, Berlin Time, The Wall was open.

People not longer have right to a free ride, to free food, to employment security.

But they have the right to pursue happiness.

And that is worth dying for.


The Dutch Disease

September 25, 2009

Riches get their value from the mind of the possessor; they are blessings to those who know how to use them, and curses to those who do not.
~Terence

I am going to analise two important phenomenas that affect a country development: The Dutch Disease and The Democracy Effect in Economy. I will start with the former and analyse the later in my next post.

Dutch disease is named after the effect that the discovery of natural gas had in Holland in the 1960s. It is also called the Resource Trap but it can originate not only in natural resources discovery, but in any development in that results in a large inflow of foreign currency, including a sharp surge in natural resource prices, foreign assistance, and foreign direct investment.

Imagine first a country like Japan in the 1950s, with not natural resources. Japanese people want to buy imports, but they can only do so with hard currency, so they need to produce exports to get it. Exports (tradable goods) would sell in hard currency and sell it to importers who will use it to buy imports and sell them in Japan. Exports in such cases are manufactured products and some services (and some natural resources in a limited fashion), so the country start producing in order to import goods that lacks, making the national industry important and competitive. The local non-tradable good and services (like restaurants) get some of the money since people increase their standard of living, elevating the price of these non-tradable goods and services, and attracting some labour

Imagine then a country that discovers oil or gas or diamonds. This natural resource is sold in the international markets, creating a surge in the inflow of hard currency to the country. Since the price of tradeable goods is set internationally, the laws of supply and demand make rise the exchange rate of the country in question, hence making the rest of the exports in the country less competitive. Additionally, the extra revenue make non-tradeable goods and service more expensive in the country since there is more money to be spent and demand for new items.

Example, in the 1970s, Nigeria exported peanuts and cacao, then the oil revenues started to build up, and the Nigerian currency gain value, making their peanuts and cacao too expensive. Both industries collapsed. When prices eventually went down, the growth and standard of living of Nigerians was halved.

So the ill effect comes when the resource runs out or when the price goes down. The manufacturing industry has been badly damaged and cannot compete in international markets. All the foreign investment went towards the natural resource, and nothing to the traditional manufacturing sector. The country then stops development and spiral down.

Foreign Aid has the same effect that a natural resource discovery: It brings unearned hard currency to a country, making his own currency more expensive and killing its exports.

Hence, a sudden surge in the foreign currency inflows to a country make this country uncompetitive in the global markets, killing his tradable sector, making his non-tradable sector more expensive, and slowing the growth in the long run.

Now with pictures: In a normal economy without lots of natural resources, the manufacture sector is big (blue), some people and employ in services (green), and very few are in the natural resources sector (red) and, with hope, very few are unemployed (grey)

Country without resources

Country without resources

Then oil is discovered and a boom starts. The booming sector attracts all the labour force and foreign investment, while the traditional sector lags behind and gets reduced. The non-tradeable sector grows a little since there is a new demand for its goods and products, and draws some of the capital and labour, making these goods and services more expensive and in further detriment of the traditional sector. The excesive exports of the natural resource make the currency so expensive that further damages the traditional tradeable industry.

The economy in a natural resource boom

The economy in a natural resource boom

After some years or decades, the natural resources either ran out or the international prices plumbed. The former boom sectors shrinks, laying out people, the demand for non-tradable good and services shrinks too, laying out people, and the traditional manufactures are now too small to accommmodate the excess of labour. No further investment is done, and unemployment rises.

Dutch Disease effects

Dutch Disease effects


Honduras

September 3, 2009

Believe, when you are most unhappy, that there is something for you to do in the world. So long as you can sweeten another’s pain, life is not in vain.
~Hellen Keller

I ask my readers to sign an Amnesty International petition to help Honduras back in its democracy.

Beatings and mass arrests are being used by the de facto government of Honduras as a way of punishing people for voicing their opposition to the military-backed coup d’etat in June. Scores of interviews by an Amnesty International delegation on the ground told the same story of beatings and mass arrests by the police, of media workers and human rights defenders being targeted and female protesters suffering gender based violence.

You can sign the petition to Hillary R. Clinton following this link:

http://bit.ly/Qwaw7

Thanks to all participants.


Bill Day

August 28, 2009

It is easy to dodge our responsibilities, but we cannot dodge the consequences of dodging our responsibilities
~Josiah Charles Stamp

I discovered one of the best children rights advocates in the world. He is a cartoonist called Bill Day.

This is his cartoon from today. And there are still termagants who think their body is only theirs.

293999_zoom


Al Gore vs Gorvachev: The .eco Domain

August 27, 2009

Those who try to lead the people can only do so by following the mob
~Oscar Wilde

Al Gore and Mikhail Gorbachev are in a battle for the control of the .eco domain. The Internet Corporation for Assigned Names and Numbers (Icann), the body that oversees the internet’s structure, decided to make available the “green” domain. Gore supports Dot Eco LLC, while Gorbachev is linked to the Canadian Big Room through Green Cross International, the charity that he founded.

Big Room promises to donate a quarter of the sales to environmental and social causes, it is also saying that they will to ensure that it will award a domain name only to groups that provide proof of their green credentials, thus making .eco into a cyber environmental certificate. Dot Eco is promising 50% of their profit to green causes, and it has no defined if they will be vetting any company to get the .eco domain. Note the difference between offering a percentage of sales versus profits.

Of course, Gore and Gorvachev do not mention the amount of money that they expect to make with the .eco domain. The price tag is $100,000 USD, but the Daily Telegraph calculates is worth billions.

The problem I see with this internet news is the bastardization of the words sustainability and green. The word sustainability has been cheapen down in the media to mean “ecologically friendly”, ignoring the economic and social factors inherent to it. I do not want to start raging again the concept of “green” that neohippies all over the world are spewing guised as knowledge. This is the mob I refer to in my quote, the people that promote green business until big business want to go green, then they will cry foul and hypocrisy. The fact that they do not mention the huge profit they can make from the domain also makes me wonder how innocent the business are. It is OK to make loads of money, but is not OK to pretend all you want is a better world; Sustainability is about BOTH, and the fact that they do not recognise it shows how the leaders become the followers of wannabe good-doers.

Who are this companies to decide who is green and who is not? Certain companies are not environmentally friendly by nature, e.g. oil companies, but they are companies like British Petroleum with a CSR and some like Pemex or Shell. A lot of companies, specially organic promoters, lie about the goods of their “green” products. As students of sustainability, we have it hard enough to define which companies are or are not following sustainable practices, we do not need self serving institutions policing the internet, which is the ultimate free expression medium.


6th August 1945

August 6, 2009

Violence is the last resource of the Incompetent.
~Isaac Asimov

On August 6th, 1945, the city of Hiroshima, and 90,000 persons, ceased to exist.

By December, the number would rise to 140,000.

Lest We Forget.


Nationalism, Multiculturalism, Assimilation, and Patriotism

August 5, 2009

Could I have someone to relate to? See, I’ve been travellin’, travellin’ forever, and now that I found a home, feels like I’m in Heaven.
~Hans Zimmer (The Traveling Song)

Anybody that has been in this planet the last fifteen years have heard how the world is getting smaller: Globalisation, global citizenship, the global village, and the flat world. Pundits are announcing the end of the nation-state, the end of the local community, and the coming era of the global person. They claim that nationalism is dead, and that ethnicity will only matter in history books. Nicholas Negroponte went as far as stating that nationalism is a disease. There are voices claiming that “The debate on national identities has become obsolete”.

I’ve been around the world in the pourin’ rain,
Feelin’ out of place, really fellin’ strange,
Take me to a place where they know my name,
Cuz I ain’t met nobody that looks the same

As a student of sustainability, it is very important to understand the social fabric of a given society. We target three bottom lines: Economic, Ecological, and Social, and you cannot target the social bottom line with a “one size fit all” culture that the Western in general and the United States in particular pretend to impose. Legions of immigrants come to Europe and Angloamerica, and they integrate, and they prosper, and for some, nationalism is a matter of the past, since they went to belong to their new home. But for every successful immigrant, there may be another who did not prosper, and there are thousands who are still in the homeland, keeping their own culture alive.

The United States still possesses the unique ability to assimilate new citizens of every race, religion, and culture into the fabric of its national and economic life, but the United States is not the world. Jerry Z. Muller declares:

Americans also find ethnonationalism discomfiting both intellectually and morally. Social scientists go to great lengths to demonstrate that it is a product not of nature but of culture, often deliberately constructed. And ethicists scorn value systems based on narrow group identities rather than cosmopolitanism. But none of this will make ethnonationalism go away. Immigrants to the United States usually arrive with a willingness to fit into their new country and reshape their identities accordingly. But for those who remain behind in lands where their ancestors have lived for generations, if not centuries, political identities often take ethnic form, producing competing communal claims to political power. The creation of a peaceful regional order of nation-states has usually been the product of a violent process of ethnic separation. In areas where that separation has not yet occurred, politics is apt to remain ugly.

I’m a fish out of water, Lion out of the jungle,
(He a fish out of water, loin out of the jungle)
I need my peoples, my peoples, take me to my peoples,
(He got jungle fever, show him some love, show him love)

Nationalism leads to wars. In Europe, after the conflicts of 1914 and 1939, a web of transnationals institutions were created, first to integrate Germany in a trade-dependent Europe, then to resist Soviet pressure, and finally to become a supra-state. Educated Europeans and North Americans like to think that nationalism is behind and that the globe is now a village. However, for the thousands of Latin Americans, Asians, and Africans who died every year trying to reach the promise land, the frontiers are no so open.

Just gotta have someone, gotta have someone, to relate to, to relate to,
(I found a brand new home)

In 1900 there were many states in Europe without a dominant nationality, by 2007 there were only two: Belgium is close to break up, and Switzerland, where the domestic ethnic balance of power is protected by strict citizenship laws. We also have Canada, where the ethnic division between French and English is a constant burden to Canadians.

Ethnonationalism has played a larger role in modern history than is commonly understood. Look at the post cold-war conflicts: Yugoslavia, Rwanda, the partition of Czech and Slovaks… Some places inside the Francophony only welcome francophone immigrants, and even in cities like Toronto, they are huge areas where people from one ethnicity dwell.

There are two ways of thinking about national identity. One is that all people who live within a country’s borders are part of the nation, no matter their origins. The other one is ethnonationalism, which defines a nation as a shared heritage, a common language, a common faith, and a common ethnic ancestry. Québec was recently recognised as a nation by the Prime Minister of Canada. Ethnonationalism draws much of its emotive power from the idea that the members of a nation are part of an extended family, ultimately united by ties of blood. It is the subjective belief in the reality of a common “we” that counts.

The end of the British mandate of Palestine created Israel, where two ethnics, Jews and Palestinians, have been unable to live in peace for 61 years. The independence of Algeria saw the end of the Algerian-European ethnic, which was force to go back to Spain and France. In Sudan, a civil war between the Islamic North and the Black South is still hot.

We, as promoters of sustainability, need to take the idea that nationalism is dead into serious consideration. The worlds elite, that probably include all my readers (Westerns with access to internet and an interest about social issues) and fellow bloggers belong indeed to a supranational, non-ethnic world, but for each of us there are thousands and thousands who still believe that they only be home when everybody look like them.

Travelin’ the world like a tourin’ man,
Been around the planet in a foreign land,
I’ve seen things that I thought I’d never see,
Take me to a place where they look like me.


New Comic

July 31, 2009

The most erroneous stories are those we think we know best – and therefore never scrutinize or question.
~Stephen Jay Gould

I decided to go all the way and create a comic strip about sustainability. Since my favourite characters are the neohippies, I would like you to introduce Wann Abe and Hippe Te. He is a PhD student from UBC, she is a rich, alternative artist, and both live, where else? in Vancouver.

More Characters coming soon! Click on the image to go to Socialist!

socialist090731

Any resemblance to any real character is pure vengeance.


Economic Development and Women Freedom

July 22, 2009

I would rather trust a woman’s instinct than a man’s reason. 
~Stanley Baldwin

I am giving up. I have been reading, for about one month, literature about the relationship between the wealth of a country and the participation of women in that society.

I wanted to find whether there is a relationship between the wealth of a country and the freedom that woman enjoy (or exert). Furthermore, I wanted to find which precedes what, under the “green” (or politically correct?) assumption that the more freedom women enjoy, the wealthier the country is.

According to a 2007 PriceWaterhouseCoopers Women Economic Participation:

It is apparent that any success in promoting gender diversity in the workforce will have a tangible positive impact on economic growth in both the developed and the developing worlds, and that continued focus on this area is therefore warranted

The study compares data from Brazil, China, France, Germany, India, Spain, Sweden, and the United States. Furthermore, The Economist declares that women contribute more to the GNP that new technology or emergent economies (“The Importance of Sex,” April 12 2006).

There are several indicators about women welfare: government legislation, access to education, availability of child care, good business practices, and positive societal perceptions, but the one we have stats for is participation in the workforce, and we can argue that the participation in the workforce is reflection on how easy women can get in the workforce and how easy they can remain there (benefits, equal payment, maternity leave, etc). I am then comparing data from 1980 to 2005 to see the relationship between working women and the wealth of a nation, as measured as GNP per capita. Sadly, after a month of efforts I cannot prove the thesis and, if any, I have found controversial results.

Let see a map relating the % of women in the workforce and the GNP per capita of all the countries in the world, first from 1980, then for 2007. The data is available at gapminder.org.

In 1980, the wealthiest countries in the world are the Oil-rich Arab states (in green) where women rights are very limited, and the participation of women in the workforce is small. In contrast, the poorest countries in the world have a high participation of women in the workforce, arguably for the need of two incomes in these countries’ families.

1980

25 years later, the difference is not much, except that the Oil-rich countries have less income and more women labour force.

2005

With this evidence I venture that the premise that a rich nation will give its women more freedom (measuring as the % of labour participation) is not completely correct. What about the more accepted view that the more women in the workforce make a nation wealthier? Since the poorer the country, the more participation of women due to economic needs, we need to isolate countries and put them on a time line. Does the condition of the country improve as more women participate on the market force? The results are extremely confusing, let’s look at the eight countries form the PWC report:

8study

The DEVELOPED countries increase women participation AND increase level of income. China gets richer but women stay in home, India gets also richer but sends women home, and Brazil manages to stay as poor as 25 years ago despite the steep increase of women in the workforce. Since the PWC study excludes Africa and the Arab countries, let’s see what happened around the world.

Chile, Canada, and Austria pretty much increase participation of women and level of income…

ChCanAus

 Mauritius and India increase income but send women home.

MauInd

Vietnam and Uganda started with pretty much equally in gender in the workforce and then increase the income…

VieUga

And some Latin American and Arab countries increase the participation of women but remain in the same income bracket.

rest

So, it is in developed and western societies where we can appreciate the relation between women participation and level of income. These societies usually are very open and protective to women’s right, and they keep increasing their level of income, but we have examples when participation of women remains low and the income still increase. The subject is too complex to be analysed here, and surely will continue to generate rivers of digital ink in the coming years.


A Brave New Iran

June 22, 2009

Fight till the last gasp
~William Shakespeare

Courage, my friends from Iran; The world prayers are with you.

Fight for your liberty, fight for your people, fight for your sons, and the great Persian Culture we all respect and admire.

آزادی آزادی خدا بزرگ است

آزادی آزادی خدا بزرگ است!

آزادی آزادی خدا بزرگ است!