Monday, December 17, 2007

The Health of Nations

A very interesting recent publication is the OECD's Health at a Glance, a summation of measurements and indicators of health status for the 30 OECD member countries.

There will be reliability and comparability issues with some of the statistics provided in the report. Generally, the high-level outcome data such as life expectancy should be accurate (although there are quibbles about things like the definition of a live birth). The detailed information such as pay rates of doctors and items of equipment should probably be taken more lightly. It's evident just by looking at these details for New Zealand that the OECD has in some cases obtained only partial information or used unreliable sources.

The publication provides demographic and economic data for context. As we know, and periodically get angsty about, New Zealand is 22nd out of 30 in GDP per capita. We're now outstripped by Spain, and just hovering above Greece. In many respects, the indicators in the report reflect this status, and place us alongside countries like the Czech Republic and Korea. New Zealand health expenditure per capita is the 10th lowest in the OECD.

Despite this, our overall life expectancy is the 11th highest in the OECD. For life expectancy at age 65, we're 11th for females and 5th for males.

This relatively good health does not appear to be due to healthy living or judicious behaviours. We're about in the middle for tobacco and alcohol consumption, but right near the bottom for several other measurements. We're 10th worst for children's dental health, 9th worst for suicide, 8th worst for deaths from road accidents, and 6th worst for obesity.

The areas we do best may surprise some people. While New Zealanders are used to moaning about our health system 'going downhill', it actually appears to do better than average.

In 30-day mortality after hospital admission for a heart attack, New Zealand is number 1. We don't do so well on the same indicator for stroke, where we are 20th. A couple of clinical people I've talked to have expressed skepticism about these results, suggesting that we may not do either as well or as badly as depicted. Australia mirrors us closely, coming 2nd for heart attack and 19th for stroke, so there may be mesurement or other issues confounding the data.

Elsewhere, our relative five-year survival rate for colorectal cancer is 4th (out of only 12 countries that can measure it) and 3rd out of 19 for cervical cancer. For breast cancer survival, New Zealand is at the OECD average, but has made the biggest improvement of any country since the last measurement period

Another of the things measured is 'perception of health status', which is the percentage of adults who report being in good health. Where do you think New Zealand would come here? Yes, we're Number 1*.

The amusing thing is that this range of dry statistics more or less reconstructs the popular stereotypes. There's evidence that the Kiwi 'she'll be right' attitude persists -- people are generally positive about their health despite not living officially very healthy lifestyles. They also like to grumble about a health system that, in its traditional role of responding to acute illness, does well by international standards.

It's interesting to look at how other countries do on the various indicators. As expected, the United States comes out near the top on some (overall expenditure and resources, some clinical outcomes) and very low down for others (obesity, road accidents, low infant birth weight, and overall life expectancy). Like New Zealand, it has positive perceptions of health status. It also has a low suicide rate and is one of five countries (along with New Zealand, Iceland, Turkey and Mexico) to have a fertility rate above two children per woman.

Another interesting case is Japan, which has the highest life expectancy of all but comes right at the bottom for perceptions of health, fertility, and suicide. People with a knowledge of Japan may have some comment on those statistics.

For some indicators, the English-speaking countries cluster together. The highest mortality rates for asthma are, in order, the UK, Australia, Ireland, New Zealand and the US. I'm not sure that anyone fully understands why this is. For obesity, the UK, US, Australia and New Zealand are four of the bottom six. The other two are Mexico and Greece, which is somewhat surprising.

One thing that interested me was the data on smoking rates. The two more developed countries that have the highest rates of smoking are Greece and the Netherlands. These countries do have higher rates of lung cancer, but are in the middle on overall life expectancy. They are also two of the countries with the lowest suicide rates. Make of that what you will.

The pattern that appears most apparent, however, is that the 'fringe' OECD countries with a GDP per capita between $10,000 and $20,000 are grouped near the bottom on many of the indicators. Up to a certain point, wealth appears to matter to health status. Past about $25,000 per capita, however, it doesn't seem to make much difference.

* As explained in the report, there are comparability issues between NZ, the US, Australia and Canada, and the other countries, but even so New Zealand is top among this group.

Wednesday, December 05, 2007

US Senate Passes Peru Free Trade Deal

After all kinds of delays and false starts , the US-Peru free trade agreement was passed on Tuesday by the US Senate with a vote of 77-18.

The Peruvians are pleased with the fact that this was an unprecedented vote in favour of a trade agreement. By comparison, the Chile agreement was passed by 65-32 while the Central American Free Trade Agreement (CAFTA) scraped through by 54-45 and is not counted as a 'treaty' by US law.

For Americans from both the main parties, the Peru deal has ended up being something of a no-brainer, for strategic rather than economic reasons. With Colombia unacceptable for the Democrats at the moment, and the rest of South America hostile or disinterested, the US was in danger of being left with no real friends between Costa Rica and Chile.

From Peru's perspective, there's not much doubt that the trade agreement will lead to further economic growth and more money flowing into the country. Whether that translates into material improvements for the majority of Peruvians depends greatly on the competence and commitment of the government. What is needed is the 'free trade agreement for the interior' promised by president Alan Garcia during the 2006 election campaign.

A good start would be to establish a system of compensation and assistance for the small agricultural producers who will be affected by competition from subsidised US imports. However, La Republica reports that the Peruvian government is still not sure of how such compensation will be provided, nor to whom. There is less than $40 million USD earmarked for this purpose, compared to a $4 billion fund in Mexico and $100 million in Chile. Minister of Argriculture Ismael Benavides said he couldn't explain the reasoning for this amount, since it was determined by the previous government. "I don't know who was the genius that came up with those figures", he said.

Monday, December 03, 2007

Chavez Not President for Life

This is an interesting turn up for the books. Venezuela's referendum on a raft of consitutional reforms, including indefinitely extending the ability of Hugo Chavez to run for president, has been won by the "No" vote.

I believe this is the right result and hope that it will be the end of the matter. I think Chavez is a bit of a clown, with the annoying habit of trying to meddle in other Latin American countries' democratic processes. I also haven't seen any convincing arguments that he's done much to sustainably improve the wellbeing of people in Venezuela.

In that respect, he's no different from anybody else who has run Venezuela. And at least his largesse with oil money has given some short-term benefits to the poor masses.

It's also highly irritating to see Chavez hyped as a major threat to freedom and democracy by the US government and elements of the media, a depiction which is lamely lapped up by the mainstream American public. The average news piece cannot mention Chavez or Venezuela without throwing in one 'dictatorial' per paragraph. Can we please remember that the leaders of the free world continue to be best buddies with Saudi Arabia? And, I mean, would you buy a used policy from this guy?

However, regardless of how good or bad a president Chavez has been, constitutional term limits are a good thing, and so are bureaucratic checks and balances. No one person is the saviour of a nation, and all power should be limited.

Thursday, November 29, 2007

For A Few Dollars More

La Republica has a graphic illustration of the struggles developing countries like Peru have had to advance over the last thirty or so years.

The table shows Peru's real per capita GDP, measured in 1994 soles, from 1967 to 2006.

As can be seen, current income per person is only a little higher than it was in the mid-60s, and has just crept above the previous high point in 1975, at the end of the presidency of nationalist General Juan Velasco Alvarado.

Each successive president has a small claim to fame. Alan Garcia's previous term saw a minor peak in 1987, before GDP crashed amidst hyperinflation. Alberto Fujimori introduced the 'Fujishock' of neoliberal reforms in 1990, but even amidst the sell-offs and influx of capital of the mid-90s, his best year was not even as good as Garcia's.

It's quite intriguing that after fifteen years of neoliberal policies, per capita income has only just surpassed what it was at the end of seven years of rule by the Soviet-aligned nationalist Velasco. However, as columnist Humberto Campodónico points out, in these last years of strong growth, wage and salary earners' share of GDP has dropped from 25 to 21.8%.

Wednesday, November 21, 2007

The True Spirit of Christmas

One of the reasons for the success of Christianity in general, and Catholicism in particular, seems to be that as it spread it didn't insist on wiping out every aspect of local religions, but creatively absorbed some of their stories, ceremonies and symbols. It's well known that Easter and Christmas are derived from pagan festivals that pre-exisited Christianity.

A whole lot of extra layers were added as Catholicism spread though Latin America. To this day the old traditions such as voodoo in the Caribbean and earth-worship in the Andes happily co-exist within and alongside Christian contexts. I recall in Guatemala there was a local 'saint' called San Simon who was also the capricious Mayan god Moshimon. People brought offerings of cigars and alcohol to the 'saint' in his church niche in return for spiritual favours.

In western culture we prefer an acknowledged duality -- we gorge on chocolate at Easter and expect presents at Christmas, while occasionally piously reminding ourselves of the 'true spirit' of these occasions. Ironically, the historical process is being repeated, as our new universal religion (capitalism) absorbs the trappings of our older ways.

In Colombia the traditions are still blended more seamlessly. Here, we teach children that the legendary Norse figure of Santa Claus will deliver them gifts at Christmas. In Colombia, the tradition is that it's the Baby Jesus who brings presents. Children are expected to write letters to the Baby Jesus, informing Him what they'd like for Christmas.

You'll excuse my flippancy in noting that as one part of an omniscient Holy Trinity, He will definitely know whether you've been naughty or nice.

Monday, November 19, 2007

Of Dogs and Demagogues

While commending Peruvian president Alan Garcia for engaging directly with the public in written form, I have to join many other critics in finding his arguments distinctly lacking and his style dogmatic and bullying.

At best, his 'dog in the manger' article amounts to a grand statement of faith in the tenets of neoliberalism, about ten or fifteen years out of date. At worst, it's an apology for a continuation of the 'open veins' economy -- sucking out the country's natural wealth for the benefit of foreigners and a small local elite.

The first major problem with Garcia's article is that he offers nothing really new. Peru's president could be channelling the International Monetary Fund as he stresses need to establish (large-scale) private property rights and declares his faith in the transformative power of 'investment'. But Peru has already had at least ten years of neoliberal orthodoxy, and five years of steady economic growth, little of which has so far trickled down to ordinary people.

It was impatience with this state of affairs that drove the 2006 election. Garcia was elected to deliver a stronger State and enact social democratic reforms. His slogan of 'responsible change' captured rather well the national mood for improving the lot of the majority, while maintaining a cautious faith in free-market fundamentals.

On the campaign trail, Garcia promised to finish the stalled General Labour Law, end large-scale employment outsourcing, establish royalty payments for mineral resources (whose soaring prices are giving mining companies bonanza profits), and review the trade agreement with the US 'line by line' to strike a better deal for Peru.

These are politically difficult tasks, and the current government can't be entirely blamed for not having made much headway with any of them. But instead of explaining how the same objectives can be achieved gradually or through different means, Garcia seems to have tossed aside any ambition for the government to play a role in building a fairer society.

Worse than Garcia's ideological swing is the weakness of his excuses for not doing more. When he says that there is no money to meet demands for a health and social security safety net he conveniently ignores the fact that Peru has the lowest tax take in Latin America, notably lower than comparable market economies like Chile and Colombia. He completely dismisses concerns about the environmental impact of mining as 'last century' but presents no plan for an independent environmental authority that might be trusted to assess the real impact of individual mining projects.

The second major problem with Garcia's rhetorical positions is that they're divisive and antagonistic. The ongoing poverty and exclusion, especially of those in the rural south of Peru, means democracy remains extremely fragile. Strike and marches are commonplace. Nationalist leader Ollanta Humala is always ready to stir up trouble, and memories linger of his brother Antauro's aborted 'uprising' at New Year 2005.

You'd assume that a social democrat with ambtions to statesmanship would try reaching out to those who voted for Humala and convincing them that more can be achieved through democratic reform than by constant fist-shaking. Instead, Garcia chooses to blame and browbeat. His tirade about the 'idleness' of the land, forests and oceans appears to imply that the occupants are themselves idle, and to be blamed for their own poverty. He accuses dissenters and and environmentalists of being 'old communists', brushing aside the same genuine concerns about the environment and labour rights that led US Democrats to insist on changes to the US-Peru trade deal.

Finally, and most seriously, Garcia offers nothing positive. There are no case studies of successful small business or communities; no empowering vision of how ordinary Peruvians can develop their unique skills and traditions into valuable niche industries -- indigenous textiles, jewellery, crafts, eco-tourism, wine and pisco, highland crops and health foods being just a few contenders.

There is dismissal of any other form of ownership other than large scale commercial property. Garcia is probably right in saying that there needs to be more medium-size farms with the ability to invest in modern production. But he fails to describe how ordinary Peruvians might make such advances themselves through co-operatives, better access to credit, or his own government's Sierra Exportadora programme. The suggestion seems to be that small landowners should just sell up to foreign investors and join the migration to the already-overcrowded cities.

The only mention of a positive example is the town of Ilo, which Garcia says is 'the most advanced in Peru' thanks to 'mining and fishing'. This is disingenuous. Ilo's progress has come after 20 years of co-ordinated community action, battling with the Southern Peru Copper Corporation to clean up the town's contaminated air and beaches As late as 1997, sulphur dioxide emissions around the town were fourteen times the level recommended by the World Health Organization.

A further irony lies in the countries he holds up as examples of progress: Germany, Japan and Korea are all relatively resource-poor nations that got where they are today through the hard work and ingenuity of their people, rather than by exploiting mines and forests.

With deep divisions that go back to the Spanish conquest, Peru desperately needs constructive leadership that convinces people they are capable of improving their own lives. Technocratic previous president Alejandro Toledo was a failure in that respect -- muddling his way to a historically low approval rating of 7 percent. Alan Garcia is a much more populist figure, with a gift for appealing directly to the public. It's a pity, then, that in this case he has wasted his considerable rhetorical talent by delivering a message that is anything but unifying.

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Saturday, November 10, 2007

Alan Garcia's Dog in the Manger

It's always good to see governments be open with the public about the vision that drives their policies and actions. It's also relatively rare that they attempt to persuade by written arguments that can be analysed and critiqued. For this reason, it's quite impressive to see Peruvian president Alan Garcia publish a lengthy op-ed in Lima newspaper El Comercio, in which he argues that Peruvians opposing greater exploitation of the country's natural resources are 'dogs in the manger' who are impeding progress.

So I've translated the entire article and posted it below. Even for those who aren't especially interested in Peru, this is an interesting contribution to the debates about economic development, environmentalism, sustainability and democracy. This is not to say that I agree with all or even most of Garcia's argument: in many respects it's disappointing, out of touch and even perplexing in its choice of theme. In another post I'll discuss some of these criticisms.

Translation note: I've kept it pretty literal, so it has a slightly awkward feel in places. Garcia uses in several places the expression 'poner en valor' (literally to 'put into value'), which I understand has no real English equivalent, being a Spanish transliteration of the French phrase 'mise en valeur'. I've generally translated this as 'to make productive'.

By Alan Garcia Perez, President of the Republic

There is great demand for legal titles to family homes. Every Peruvian knows that a legalized property that can be sold, mortgaged, or passed on through inheritance, can improve their situation. But Peru as a whole has the same problem and doesn't know it. Many of her goods can't be made productive, can't be sold, invested in, or made to generate employment.

There are millions of hectares for forestry that are idle, millions of hectares more that communities and local associations haven't cultivated nor will cultivate, as well as hundreds of mineral deposits that can't be exploited and millions of hectares of sea that are never commercially fished. The rivers that run down either side of the cordillera are a fortune that goes to the sea without producing electrical energy. There are, as well, millions of workers that don't exist, although they labour, since their jobs don't provide them with social security or a pension for later on in life, because they don't contribute what they could to building national savings.

So there are many unused resources that aren't tradeable, don't receive investment, and don't generate employment. And all that because of the taboo of left-behind ideologies, because of idleness, indolence, and the law of the dog in the manger who prays: “If I don't do it, let nobody do it”.

The first resource is the Amazon. It has 63 million hectares and abundant rainfall. Within it forestry could be established, especially in the 8 million hectares already destroyed – but for that, property rights are required; that is, a secure plot of land of 5,000, 10,000 or 20,000 hectares, since on smaller areas of land there won't be formal, long-term investment with high technology.

At present the only concessions that exist depend on the will of the Government and the bureaucrats who can [later] modify them. For this reason nobody invests, nor creates one job for every two hectares, as should be the case; nor is there wood processing or furniture exporting. For the most part, these concessions have only served to extract the finest wood, deforest and abandon the land. In contrast, formal property ownership by large collective businesses like pension funds will allow long-term investment, from planting through to harvesting, years later.

Those who are opposed say that property rights cannot be granted in the Amazon (and why so in the coast and the sierra?). They also say that granting property in large lots would give profits to big business; sure, but it would also create thousands of formal jobs for Peruvians who live in the poorest areas. It's the dog in the manger.

Let's respect the virgin native forests, but let's start with the 8 million hectares that have been turned into deserts and destroyed in recent years by the scorched-earth concessions, the [cultivation of] coca and indiscriminate logging. There, a million jobs can be created, as well as employment in the manufacture of furniture.

It's an embarassment that Chile exports US $2 billion in wood without having a hectare of the Amazon, Uruguay $1 billion, Brazil $8 billion, while Peru barely exports $200 million.

The same is true in a second area – the land. For there to be investment, secure property rights are needed, but we've fallen into the trap of granting small plots of land to poor families that don't have a cent to invest, so apart from the land, they have to ask the State for fertilizers, seeds, and irrigation technology as well as guaranteed prices. This 'minifundista' model without technology is a vicious circle of misery. We must support medium-sized properties, and an agricultural middle class that knows how to obtain resources, find markets, and can create formal employment.

But what do we see in this country? When someone sees a beautiful beach, someone else already claimed it years ago and hasn't invested a cent to make a nice swimming area, so it will stay for decades more without value. The hills that surround Lima are like that – where investment could work miracles. So are all the cement quarries claimed but never worked.

In addition, there are true peasant communities but also artificial communities that have 200,000 hectares on paper but only use 10,000 hectares while the rest is idle property, 'dead handed', while its inhabitants live in extreme poverty waiting for the State to bring them help instead of making their hills and land productive, leasing them, trading them. Because if this land is unproductive for them, it would be productive with a high level of investment and the know how that a new buyer brings.

But the rhetoric and deception says that these lands can't be touched because they are sacred objects and that this communal organization is the original organization of Peru, without realizing that it was a creation of Viceroy Toledo to round up the indigenous people into the unproductive lands.

The third area is mineral resources, of which Peru has the greatest riches in the world, not only for the quantity but also the variety of minerals, so that if there's a drop in price it can be compensated for with other products. However, barely a tenth of these resources are being exploited, because here we still debate whether mining techniques destroy the environment, which is an argument from last century. Of course it destroyed [the environment] in the past, and the environmental problems of today are basically because of the mines of yesteryear, but currently mines exist alongside cities without problem. And in any case it depends on how strict the State is in the technological requirements placed on mining companies and in negotiating greater economic and labour participation for the regions where the mines are.

When I go to the city of Ilo and see its urban development, which is the most advanced in Peru, I know it's the product of mining and the fishing industry, and it pains me to compare this with the town of Ayabaca, which has more mineral resources than the Cuajone mine in the south, but lives in great poverty. And it's there that the old anticapitalist communist of the 19th century disguised himself as the protectionist in the 20th century, and changed his shirt once more in the 21st century to be an environmentalist. But always anticapitalist, against investment without explaining how, with a poor agriculture, a leap forward can be taken to greater development.

And against petroleum they've created the figure of the 'isolated' jungle native; that is, unknown but presumed [to exist], because of which millions of hectares must not be exploited, and Peruvian oil must stay in the ground while the world price of oil is US$90 a barrel. It's preferable that Peru continues importing and improverishing itself.

A fourth area is the oceans: Japan has fewer marine riches but eats five times more fish per capita per annum than Peru, because it has developed its aquaculture. But here, whenever it is proposed to grant an area of sea for an investor to put their fish farms, this is opposed by the local small-scale fishermen who see the birth of more modern competition and say that it will block their free access and pollute the ocean, while others invoke the Sacred Sea of [Peruvian war hero Miguel] Grau, instead of accepting this activity that could generate hundreds of thousands of jobs.

In addition, Peru has enormous riches from the rain that falls in the cordillera. It's calculated that 800 billion cubic metres of water annually flows down in the rivers that head towards the Pacific and the Atlantic. Of that which goes to the Pacific, we use a small amount for agriculture and electrical generation, but with the water that goes to the Atlantic, we do practically nothing.

How to make the most of it? Now that the price of oil keeps going up, we must think about electrical generation that is renewable, almost inexhaustible, and clean. And to think about its use and sale in continental terms. Large electric plants on the Marañón and in the rapids of the lower Urubamba would allow us to sell energy to Ecuador, Colombia, Chile and Brazil. For this it would be necessary to obtain large amounts of private or international capital that needs long-term security to invest billions and be able to achieve a return on the investment. But the dog in the manger says: 'Why are they going to make money from our rivers? Better that the regional government does it' But they don't say with what money.

In fifth place, people's own labour is not made productive for those who work. Informal employment is dominant, which is work not incorporated into the economy and without legal status; it doesn't provide social security because payments are not made, and it doesn't contribute to any pension system. To give value to this work and benefit the individual, the logical thing would be to make progressive advances so that the employees of small business, who number in the millions, have in the first place the fundamental minimum rights – health insurance, a pension, and an eight hour day. That's more than they have now. This would strengthen the pension fund and health insurance fund.

But the demagogues oppose this progressive access, saying: “Full rights must be given immeidately to all the employers of small family or informal businesses”. But they don't know (or perhaps they do) that the only thing they'd achieve is that the small businessman, unable to pay these costs, would close the business and lay off lots of employees, so the cure would be worse than the sickness.

There are also others who say: “If it's not possible to provide workers all the fringe benefits and 30 days holidays just yet, the State should provide full health cover and a minimum pension without them having to contribute. But it turns out that these are the same ones who are against investment in forestry because the jungles are sacred, against opening more mines because Peru should only be agricultural, and that don't want aquaculture in the oceans. And so, without investment, without jobs created, they think that the State is a bottomless well from which all resources can eternally emerge, and they end up saying: “Cut the work day to 6 hours, pay more salaries, even if Peru doesn't produce any more”.

As a final point, I could add that neither are the brains of our students and childrens made productive. Education is delivered in the majority of cases to pass with an 11 [out of 20] instead of promoting excellence and to aim at an 18. A group of bad teachers and bad bureaucrats refuse to be evaluated in order to hide their mediocrity and so the system carries on producing worthless results. And the same ones as always say: “Give me more, without me changing or making any effort”. So, they are allies of informal mining, clandestine logging, peasant poverty, informal employment and lack of merit or effort.

Faced with the philosophy of the dog in the manger, reality tells us that we must make productive the resources that we don't use and work with more effort. We have the example of successful peoples: the Germans, the Japanese, the Koreans, and many more. And this is the bet for the future, the only thing that will make us progress.

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Wednesday, November 07, 2007

House to Vote Today on Peru Trade Deal

The United States House of Representatives, the lower chamber of Congress, is set to vote today (Wednesday 7 November) on the trade agreement with Peru. Peruvian representatives are hoping that the agreement will pass by a greater margin the US-Chile trade agreement, which was ratified in 2003 by a margin of 270 votes to 156.

The vote is expected to occur in the afternoon, after Congress receives the visiting president of France, Nicolas Sakorzy.

Update: the US House of Representatives eventually voted on the Peru trade agreement on the morning of Thursday 8 November. The vote passed 285--132. Breakdown by parties was:
Republicans: 176--16
Democrats: 109--116

There were eight abstensions from each party.

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Fireworks in Welllington

From the November 5 Guy Fawke's Day display over Wellington Harbour, taken from the top of the cable car.

Saturday, November 03, 2007

Getting Real about Climate Change

Writing in the New Zealand Herald, economics columnist Brian Fallow comes close to summarising, in punchier and more coherent form, my own, dilettante-ish musings on climate change issues. Namely:

1. The obsession with the 'costs' of responding to climate change by moving to a lower-carbon economy fails to pay enough attention to the potential gains, some of which may be very large for the countries, companies and individuals who can come up with new technologies or ways of doing things.

2. As also argued by the likes of Bjorn Lomborg, developing countries have other important priorities to do with improving the material wellbeing of their citizens. Although developing countries will have to be brought within an emissions-reduction framework in the medium-term, rich countries need to do more, earlier. To take the attitude of 'we won't commit to anything until China does' is at best hypocritical.

3. The distinction, beloved by the likes of the Business Rountable's Roger Kerr, between the 'bureaucratic regulations' of Kyoto, and 'technological solutions', is a false one. The Kyoto targets and their associated bureaucratic systems are what incentivises the development of new and innovative technologies, by setting the market conditions in which innovations are rewarded. Picking winners, such as subsidising ethanol made from corn, is the real example of bureaucratic meddling, apparently intended more to protect current interests than to address the problem.

Thursday, November 01, 2007

FTA for Peru by 15 November

In following the progress of the US-Peru free trade agreement, I've learned a bit of POLS 101 stuff about how a trade deal passes into US law. First it has to be subjected to a 'dummy vote' by the Senate Finance Committee and House Ways and Means Committee. It's at this point that the President prepares the bill that will be voted on by Congress to formally ratify the agreement.

This bill is then passed to the same committees for a formal vote, before finally going to a vote in full sessions of both the House and Senate.

The process thus has six stages in total. The Peru agreement has now passed through the first four of these stages, which is to say that, following approval in the dummy committee votes, an implementation bill has been introduced into Congress and has been passed (with unanimity) by both committees. Although the 'fast track' authority of President Bush was ended on 1 July 2007, trade agreements signed prior to this point are subject to the fast track rules. This means that once the relevant committees report back on the bill, both chambers of Congress have 15 days to vote.

By this logic, the Peru trade agreement should go to a full vote by 15 November, since the final committee vote (that of the Ways and Means Committee) occurred yesterday. The agreement will need 218 votes to pass in the House. Peruvian news sources report their officials as estimating that it will have at least 300 in favour.

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Monday, October 29, 2007

Football at the Maracana

I recently had this story published in the Christchurch Press, but this time it hasn't made it through to the NZ Stuff website, which no longer seems to be putting all the Fairfax newspapers' travel content online. So I thought I'd post it here. From my time in South America in 2004 and 2005. Photo courtesy of Ian Skipworth.

Viewed from the exit of the nearby metro station, Rio de Janeiro’s famous Maracaná Stadium looks uncannily like Wellington’s 'Cake Tin', writ extremely large. With a circular design ahead of its time, Brazil's national football ground was built for the 1950 World Cup. Originally intended to hold 200,000 people, a conversion to an all-seater format in the 1990s has reduced capacity to around half that number - but it's still one of the largest and most atmospheric sports grounds in world.

A trip to see a football game is the only real reason for tourists to come up to north Rio de Janeiro, where the Maracaná is situated. The flat, grim-looking industrial landscape surrounding the stadium reveals a different side of Rio from the showpiece golden beaches and lush, towering cliffs of Copacabana and Ipanaema on the city’s southern shores.

In the soupy March heat, throngs of people are pouring up the concrete ramp from the metro station and the surrounding streets. .Today’s game is what is known in South America as a “clásico” - a local derby between historic Rio clubs Botafogo and Flamengo. The 67,000 fans won't come close to filling the stadium, but they're enough to leave a handful of backpackers feeling swamped in the fever pitch outside the stadium.

We're rescued by a young Brazilian couple, who invite us to sit with them in the Botafogo section. Though the opposing fans are prudently separated, the vibe is relatively relaxed. There doesn’t seem to be the visceral, tribal rage toward the other side that is associated with football in London, Glasgow or Buenos Aires.

We’re a few seats away from the mandatory percussion section, which, half an hour before the game, is already hammering out rapid samba rhythms. The crowd dances and sways, while vendors stumble between the rows with awkward trays of beer and cigarettes.

Our new Brazilian friend Paolo, decked out in the black and white of Botafogo, sings along vehemently with the songs and chants in incomprehensible football-crowd Portuguese. “I’ve been a Botafogo fan ever since I can remember”, he tells me. “Botafogo is my life”. His grin indicates that he’s only exaggerating slightly.

“I don’t really care either way” confides his girlfriend Maria. “I’m from Sao Paulo”. But she knows all the words to the songs, and sings along heartily as well.

The game starts, to great excitement, and Botafogo make a bright beginning. In the first ten minutes an attack into the Flamengo penalty area produces a shot which cannons off the crossbar. There’s a gasp of disappointment from the Botafogo fans. Then, a Botafogo midfielder steps forward, and from outside the area, curls a left-footed shot into the top right hand corner of the net.

“Gooooooooal!” Our section of the crowd goes delirious. The samba rhythm doubles its speed, and the guys up the back unfurl an enormous black banner which they roll down over the twenty rows in front. We're all supposed to help make it jiggle and flutter, before it's rolled up to the back row again.

A bare-chested guy behind me has been waving a giant Botafogo flag since before the start of the game. Now he swings it in ever-widening circles. With each revolution the crossbar passes so close to my head I have to duck. On one wave I don’t move in time, and it clips my scalp.

Seeming to notice the presence of other spectators for the first time, he apologises profusely, and introduces himself. We exchange pleasantries for a moment. Then he goes back to waving the flag, and I go back to ducking.

There’s a commotion to our left. An overexcited young fan has spilt his beer on the people in front, and is being summarily ejected from the area. “With the way he acts, you’d think he was a Flamengo fan”, someone calls out. The young guy turns and waves his arms apologetically. “No, no, I’m for Botafogo” he insists. “Botafogo forever!”.

Meanwhile, Flamengo have equalized, with a simple goal after an attack down the right. Not only are the scores level, but the spark seems to have gone out of Botafogo’s play, and they look muddled. As halftime draws near, the samba slows and quietens, then eventually peters out altogether.

Things go further downhill in the second half. Fifteen minutes in, Flamengo take the lead. Again, it’s a soft goal, with a cross from the right headed straight in by a Flamengo attacker who has easily lost his marker.

Worse, Botafogo look as though they’ve forgotten how to play football. Players give the ball away, attacks break down in midfield, and passes go inexplicably nowhere.

One guy about two rows in front of us is a little drunk, and has been extremely vocal in the first half. Now he sits down and buries his head in his hands. Every so often, he gets up, walks up towards the top of the stand with his back to the game, shaking his head. Then he returns to his seat and puts his head back in his hands.

“You’re shit!” he laments loudly. “Why are you so shit?”.

With time running out, Botafogo rouse themselves for one last attack. Improbably stringing some passes together, they set up a shot, but it’s blocked. The ball pinballs around the penalty area. It hits the post, then is cleared off the line by a Flamengo defender. Just when it seems that the opportunity is lost, a Botafogo player threads a shot through the mass of bodies and into the back of the net.

Two-all! The sombre, dejected fans explode into life and surge out of their seats, and the percussion section instantly starts up the insistent samba beat again.

Flamengo kick off, but within thirty seconds, the referee blows for full time. Elation spills through the crowd. With a feeling of having got out of jail, the Botafogo fans are laughing and singing once more. The draw means that, for now, Botafogo retain their lead in the Campeonato Carioca - the Rio de Janeiro championship - and stay ahead of Flamengo in the Brazilian league

As the fans make their way patiently through the intense heat of the exit tunnel under the stadium, they’re chanting “Flamengo’s in the favela!” (the grim, chaotic shantytowns that ring Rio); “Flamengo’s in the favela!

They throng out of the ground and disperse down the ramp into the metro station or out into the streets, where the late evening sunlight is sending long shadows over the bleak landscape surrounding the stadium.

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Thursday, October 18, 2007

More Minion

A new 'spotlight' section added to the Daily Minion front page.

Saturday, October 13, 2007

The Meaning of Buffy

My first experience of Buffy the Vampire Slayer was when I caught the end of Season 3 in the United States in 1999, and then some of Season 4 when I was back there in 2000. I liked it, but never managed to fully catch up with the plot and characters, and when I came back to New Zealand I wasn't motivated enough to stay in touch with the show as it made its delayed appearance here.

That's all changed, thanks to the DVD collection of my Joss Whedon-fanatic flatmate Noam. After getting Simon and I hooked with the 14 espiodes of the excellent, cruelly cancelled sci-fi/western Firefly, Noam convinced us to dip our toes in the Buffyverse, starting with Season 1, episode 1.

Seven seasons and 145 episodes later, I'm a confirmed Buffy fan and addict, teetering on the border of geekdom. Here's my take on the ups and downs of the series.

After setting the tone with Season 1's breezy, amateurish first twelve episodes, Buffy reached its peak in the classic second and third seasons. If these represent High Buffy, Season 4 is a baroque but enjoyable, and in my view underrated, follow through. Season 5 has one of the strongest narrative arcs of any season, and an extraordinary climax that would have made a fitting end to the series had it been discontinued, as thought possible at the time.

Then to the 'difficult' season six -- which has its passionate defenders, but which I found often slow and painful. Season 7 started out like a return to the lighter spirit of Season 1, but lost its way in mid season and wrapped things up too quickly in the last few episodes. By then I was becoming occasionally frustrated at what I saw as poor decisions and a loss of concentration by the writers -- a sure sign that geekdom is at hand.

This is my ranking of the seven seasons:

1. Season Three
2. Season Two
3. Season Five
4. Season Four
5. Season One
6. season Seven
7. Season Six

So to the long-winded ruminations on theme. Buffy is best known for making a literal conceit out of the idea that 'school is hell' and at the most obvious level is a meditation on growing up.

It's an understatement to say there's a lot more going on. Coming along at just the right time for the Cultural Studies crowd, few TV shows have inspired as much attention from academics. At least six or seven Buffy-inspired books have been published, ranging in genre from philosophy to self-help. There are academic conferences, and even a periodical run by serious scholars, Slayage: the Online Journal of Buffy Studies.

Along with the obvious messages about female empowerment, Whedon and his co-creators send nods and winks in the direction of Marx, Nietzsche, Freud and Jung, and there's enough intertextuality to keep a literary theorist happy for a lifetime. The show can be interpreted as rampantly pagan or profoundly Christian and has been claimed by just about every point on the political spectrum.

A lot of this is just gleeful pastiche by the writing team. The intertextual references derive mainly from Whedon's own geekish fandom towards popular culture.

But there is a serious core that runs through the series. For me, Buffy is at root about the ongoing struggle to create a moral self out of unreliable raw material. It's portayals of selfhood, morality and freedom are sophisticated, challenging, and at time provocative.

What sets Buffy apart is its subversion of the normal expectations about narrative and character. Most fiction -- especially on TV -- is carried along by stable personalities making largely predictable choices. In the Buffyverse, things are a lot more complicated. For one thing, the Greek version of Fate is an active force . It cannot be changed, although its meaning is not always what it seems.

More interesting, though, is the show's unflinching engagement with postmodern and post-scientific deconstructions of the individual into a vehicle for competing biological and cultural agendas.

The presence of magic is the key means by which these sub-personal forces are explored. Under the influence of spells, charms and curses, characters' behaviour becomes unpredictable and transgressive. Beliefs, desires, abilities, sexual attraction, self-control and even sanity are up for grabs, and no character is spared from committing acts that leave them with shame or remorse.

Yet while these transformations are largely beyond the conscious control of individual characters, the experiences are remembered and become part of their personal histories (unlike, say, in Shakespearean comedy). Bumbling Xander's magical conversion into an elite soldier in an early episode leaves him with partly-controllable abilities that return to him in moments of crisis. Willow's encounter with her vampire doppelganger in Season 2 prefigures some of the latent elements of her character that will emerge later in the series. A crucial moment is during Season 3 when 'good vampire' Angel perfectly imitates his 'soulless' alter ego Angelus in order to set a trap for rogue slayer Faith. His ability to be so convincing forces Buffy into the discomforting recognition that Angel and Angelus are in some way part of the same being, not two entirely separate entities inhabiting the same body.

The show is also daring in its recognition of the importance of physical bodies, and other people's response to them, as determinants of character and identity. Spike's long road to redemption is an internal, personal one, but unthinkable without the chip placed in his head by the Initiative that physically prevents him from causing harm to humans. In a rather disturbing scene in Season 6, Dawn snuggles up with the lifeless, battery-powered Buffybot, drawing comfort from its resemblance to her (at that point) dead sister.

There's a monumental episode in Season 4, when Buffy and Faith swap bodies and Faith's attempt to 'own' Buffy's body by mimicking her speech and actions leads her to actually become more like Buffy. One of my favourite scenes in the whole series sees Faith, who has just taken over Buffy's body, standing in front of a mirror, making pious faces and practising saying: 'Because it's wrong'. At the climax of the episode, when she abandons her getaway to rescue a group of people trapped by vampires in a church, she utters the same phrase with a straight face.

So, Buffy is unusally radical in its recognition of the fragility of the self, the compromised nature of free will, and the non-moral bases of morality. Yet it makes clear that holding oneself together remains the fundamental human task. Moral freedom lies in the ability to evaluate one's strengths, weaknesses, and flaws, and decide what to make of them.

By this rationale, others are not be judged by whether their 'nature' is benign or monstruous, or even what they might have done, but whether there is hope that they might do other than evil (for most of Seasons 4, 5 and 6, the characters grudgingly suffer the presence of Spike because, however soulless, with his chip implanted he is harmless).

For most of its course, the show is pretty clear that you can't expect to definitively win the struggle -- those vampires always keep rising. But you can, as Buffy does, keep fighting the 'demons and the forces of darkness', day in, day out. And hopefully maintain some dignity and decency along the way.

Dark and disturbing as it often is, Buffy ultimately has a humanistic, and optimistic message. Although there will always be times when people will fail to keep a lid on their darker sides, this doesn't undermine the possibility of making things better. And as many have commented, the real glue that holds people's souls together is friendship (romantic love is at best an ambivalent force).

In another one of my favourite scenes, a monk who has been beaten to near-death by the hell-god Glory explains to Buffy that her younger sister Dawn is actually the Key, a ball of magical energy turned into human form and sent to Buffy to protect (the memories of Buffy, her family and friends have been magically altered). Buffy says to the dying monk "She's not my sister?" The monk replies: "She is...innocent". It's not what you are or where you've come from that matters -- but who you can become.

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Tuesday, October 02, 2007

Babies or Bombs?

The peace movement of the 60s and 70s had a slogan: 'Won't it be a great day when schools have all the money they need, and the air force has to run a cake stall to buy a bomber'.

These days, wits like to suggest that such a situation has come to pass in New Zealand -- except maybe for the bit about schools having the money they need.

Elsewhere, not a lot has changed. Slate's military writer Fred Kaplan discusses the budget requested by the Pentagon for the US military, a budget which for the 2008 financial year totals $500 billion, not including funding for the wars in Iraq and Afghanistan. Allowing for inflation, this is larger than at any time since the Korean War, and is more than all other countries' defense budgets combined. And when you do throw in the wars, US military expenditure is more than the entire GDP of Australia.

Kaplan describes how consideration of the Defense Bill by Congress has been characterised by a lack of interest in cost-effectiveness, or even any sense of priorities. He explains that the near-identical amounts earmarked for the different services ($130.1 billion for the Army, $130.8 billion for the Navy/Marines and $ 136.6 billion for the Air Force) are not coincidental. Service budgets have been calibrated since the 1960s, in order to avoid internecine rivalries.

A conservative on the lookout for the self-serving bureaucratic empires of 'big government' might like to start here. If ever there were an example of Milton Friedman's dictum that agencies of the state will inevitably act in their self-interest, this looks like it.

Meanwhile, President Bush has vetoed a bill that has comfortable support in the House and Senate to extend the State Childrens Health Insurance Programme (S-CHIP) to 4 million more children of low-income families. This would cost approximately $7 billion per year. Bush objects on the grounds of cost and because such an extension could be a slippery slope to 'socialized medicine'.

Of course, socializing the costs of military hardware with no apparent purpose is still ok. So it'll be the same people running the cake stalls for a while yet.

The Inca and the Alpaca

In a small side room off the hot factory floor, women in blue smocks are intently picking apart bundles of brown fleece. Despite the cramped conditions it is, according to Incalpaca administator Adrian Corso, one of the preferred tasks for factory workers. The women are selecting the finest fibres from the coat of the vicuña, rare and beautiful animal that lives above 3,800 metres on the dramatic Peruvian altiplano.

Highly prized by the Incan nobility, the vicuña's wool is now worth about $500 USD per kilogram -- more valuable by weight than silver. Most of the best-quality fleece is concentrated in a small triangle on the animal's chest, which is shorn once every two years.

In the shop out front of Incalpaca's factory in Arequipa, a shawl made of the silkily fine vicuña fleece is housed in a glass case, like a precious jewel.

But if the vicuña brings the glamour, it's the chubbier, domesticated alpaca that provides most of the substance. Adrian takes us through the production process, as piles of alpaca wool are fed through Italian-made industrial machinery to be washed, heated, cooled and dried before being spun into fabric. From there it's turned into the coats, sweaters, scarfs, shawls and rugs that form the factory's output.

In the Peruvian sierra, zone of awe-inspiring scenery but also persistent poverty, Incalpaca is an economic success story. The South American camelids -- which include the llama and wild guanaco as well as the vicuña and alpaca -- have been interwoven with the Andes' human history for at least two thousand years, and still provide the main economic sustenance for many peasant communities living in the high mountains. Traditional Peruvian weaving in alpaca wool is renowned for its skill, colour and flair.

The outside world has also long recognised the value of the remarkably strong, warm and soft alpaca fibre. Cloth from alpaca was first successfully manufactured in the English town of Bradford in the 1830s, the wool having made its way from Spain via Germany and France. In the 1950s, Incalpaca's parent company Grupo Inca and its main rival in Arequipa, Michell, began the local processing of the raw wool. But it's only in the last 25 years that export-quality garments and rugs have been produced on an industrial scale in Peru.

Now, Incalpaca's Arequipa factory employs 1200, and sends 90 percent of its products to the United States, Europe and Japan. It's one of the industries likely to benefit most from the free trade agreement with the United States set to be ratified by the US congress by the end of October. Between 2001 and 2005, the value of Peru's textile exports doubled, to more than $1 billion USD. Incalpaca and Michell together contribute about $50 million to this total. Incalpaca's general manager Germán Freyre has estimated that a trade agreement with the US could boost sales by 15 percent.

Critics of the trade agreement have raised concerns about its potential to cause environmental damage and exploitation of labour. But compared to mining, which still dominates Peru's exports, the alpaca industry gets a pass on both counts. While the factory floor is hot, it's clean, and numerous colourful warning signs place a premium on safety. The workers, who are paid production bonuses in addition to the basic wage, are certainly better off than their unemployed compatriots who have to eke out a living driving taxis or selling in the street.

And as animals adapted to the harsh conditions of the altiplano, alpacas have an inherently low environmental impact. Incalpaca still sources some of its wool from the small communities that raise alpacas in the remote highlands. It also has its own animals in open ranches near Arequipa's airport and on the Pampas Cañahuas plateau at 4,000 metres, where tourists come to watch the vicuñas. Alpacas are sensitive animals that need plenty of care and attention, and 40 more staff are employed to look after them.

Pass through the international airports in Lima or Santiago in Chile, and Incalpaca's 'Alpaca 111' shops stand out, with their shelves full of fine fleeces in earthy colours. While the garments make a fine advertisment for the Peruvian heartland, most are in very classic, conservative styles. You can't help wondering what opportunities there are for integrating the alpaca's qualities and image with more youth-oriented fashion or sportswear. Young designers in Arequipa agree, and talk eagerly about developing their own more cutting-edge lines, something that will become easier as the country's trade links are strengthened.

In the 16th century, indigenous Peruvians led the world in textile design and production. Today, Peru is gradually carving out a high value economic niche based on rediscovery of its unique crafts, traditions, and environment. Its one industry that could help the country thrive in the global economy on its own terms.

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Thursday, September 27, 2007

Bush Threatened Chile Over Iraq Vote

Spanish newspaper El Pais has published the transcript of a conversation between former Prime Minister Jose Maria Aznar, George Bush, and Condoleeza Rice at Bush's ranch in Crawford, Texas, four weeks before the invasion of Iraq in 2003. In the conversation Bush announced his intention to be in Baghdad "by the end of March" and also threatened to derail Chile's free trade agreement with the US if the Latin American nation did not back a planned second resolution on Iraq in the United Nations Security Council.

In the conversation, apparently recorded by then Spanish ambassador Javier Rupérez, Aznar asked Bush to help him secure domestic support for action against Iraq and stressed that "it's not the same to act without [the resolution] as with it". Bush assured him that "the text will be made as far as possible to help you. I'm pretty easy on the content". He told Aznar that: "Saddam Hussein is not disarming. We have to get him now...There's two weeks left. In two weeks we'll be militarily ready...We'll be in Baghdad by the end of March".

Discussing the level of Security Council support for a second resolution, Bush said that"countries like Mexico, Chile, Angola and Cameroon (temporary Council members at the time) should know that what's at stake is the security of the United States, and act with a sense of friendship towards us. [Chilean president Ricardo] Lagos should know that the free trade agreement with Chile is awaiting confirmation in the Senate and that a negative attitude in this matter could endanger its ratification".

Chilean newspaper La Nacion said that the story had been confirmed by current Chilean ambassador to the United Nations Heraldo Muñoz, who at the time was a government minister. Muñoz told a Chilean radio station that the account of threats to Chile suggested by the transcript "basically fit the truth". According to Muñoz, after "very serious discussion", the Chilean government concluded that its foreign policy of multilateralism and respecting international law could not be sacrificed.

Muñoz said that in the view of the Chilean government while there was “a certain risk for the TLC", it was decided to trust that "a lot had already been invested by the United States and ourselves in many rounds of negotiation and there weren't going to be backwards steps because if there wasn't a treaty with Chile, with which Latin American country would there be?".

The Chilean government thus agreed that "it was worth defending [our] longstanding foreign policy principles", said Muñoz.

The US-Chile free trade agreement was ratifed by the US Congress in the last week of July 2003.

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Saturday, September 22, 2007

Carbon Trading in New Zealand

The New Zealand government last week announced its latest climate change policy aimed at reducing carbon emissions towards the levels agreed under the Kyoto Protocol. It's a cap-and-trade scheme, which will be phased in for different sectors. Forestry will be the first to participate from next year; transport and major industy enter in 2009 and 2010; while agriculture (responsible for about half New Zealand's emissions) will have no commitments until 2013.

Even with the emissions measures in place, New Zealand is predicted to overshoot its Kyoto carbon emissions targets for the 2008-12 period by about 25.5 million tonnes.

The best analysis is from blogger No Right Turn , who looks at some of the implications as well as identifying some gaps and omissions. There's also a link to the full government document, The Framework for a New Zealand Emissions Trading Scheme. I guess at some point I'll be a good citizen and wade through it.

The Green Party and environmental groups such as Greenpeace criticised the announcement as too little too late, but the policy at least appears to have broad political support. Many of the proposals are similar to those in the 'Blue-Green' position paper released last year by the National Party -- who along with United Future and New Zealand First helped torpedo previous climate change measures such as a carbon tax and a 'fart tax' on animal methane emissions.

There are specific long-term targets for renewable energy and tree planting, as well as vaguer aspirational goals for things such as widespread use of electric cars.

Costs to the fuel and energy sectors are expected to be passed through to consumers, meaning an estimated 4-5% increase in petrol prices and power bills starting in 2009. The government has already promised that it will seek to compensate people on low incomes for these increased living costs.

Instead of further bureaucratically-managed subsidies, one option could be to cut tax from the first $5-10,000 of individuals' income. This is actually a Green party policy, but is also favoured by many economic liberals because it is simple, transparent and provides the right incentives. It removes tax from desirable things (earnings from work) and applies it to undesirable ones (emissions).

However, such an income tax cut is normally suggested as a tit-for-tat swap in conjunction with a carbon tax, rather than alongside a cap-and-trade scheme. Ironically, while some centre-rightists are now suggesting a carbon tax to be the most sensible anti-emissions measure, it is this part of the political spectrum which has consistently trashed the idea whenever it has been proposed.

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Monday, September 17, 2007

Peruvian Communities Vote Against Mine

Peruvian news sources report on a highly-charged plebiscite in the sierra of Piura, northern Peru, where local communities voted overwhelmingly last Sunday against the development of a planned copper mine, which local farmers and environmentalists say could poison water sources and affect biodiversity in the region .

More than 90 percent of voters in the districts of Ayabaca, Pacaipampa and Carmen de la Frontera, voted against the plans of Chinese-owned company Minera Majaz to mine copper and molibdenum in a project known as Rio Blanco. Around 60 percent of 31,000 registered electors turned out across the three districts, some walking many hours to arrive at a polling station.

The vote, which was organised by the mayors of the three district municipalities, was criticised in advance by Peru's national government, which called it 'illegal' and 'non-binding'. Peru's electoral office (ONPE) and national election jury (JNE) had refused to recognise the plebiscite, and called for the confiscation of official electoral materials that were to be used in the vote.

But the vote went ahead peacefully, despite prior claims of threats against locals who do support the mine. International observers from Ecuador, Bolivia, Canada, Spain, the United Kingdom, Germany, and Switzerland attended.

Majaz Minera is a subsidiary of British company Monterrico Metals, which has recently been acquired by Chinese consortium Zijin. Exploratory work has been occurring in the region since 2002. Preliminary results from a study by the University of Texas suggest that this phase has already caused some damage to the region's biodiversity, which includes the Andean spectacled bear and highland tapir. Local farmers fear that mining operations will diminish the quantity and quality of rivers which irrigate both the western (Pacific) and eastern (Amazonian) slopes of the Andes. The latter is a notable coffee-exporting region.

The Peruvian government has claimed that the vote was promoted by 'anti-mining' NGOs, who along with foreign missionaries it blames for stirring up opposition to the mine. Prime Minister Jorge del Castillo said that 'people who oppose investment can't demand its benefits'. President Alan Garcia called anti-mining activists 'old communists' responsible for 'a conspiracy to stop the country growing and producing'.

But analysts say that opposition owes more to bad historical experiences with mining operations in Peru. They cite lack of direct benefit for mining regions, weak governmental regulatory capability, and a poor record of mining company environmental and labour practices.

Also, Peru doesn't have a Ministry for the Environment or independent environmental agency. The organisation responsible for assessing environmental impact reports for mining projects is the Ministry of Energy and Mining, which is also charged with attracting and promoting mining investment.

Del Castillo is now calling for dialogue between the government, mining company and local authorities. District mayors have said they would be happy to engage in dialogue but that it must include community leaders from the respective districts.

The mining company, whose public face until now has been its English spokesman Andrew Bristow, says it is also prepared to talk. But for now, local communities have had the final say.

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Sunday, September 16, 2007

Trade Agreement in the Final Stretch

After many doubts and delays, there's now a better-than-even chance that Peru's free trade agreement with the United States will be ratified in the near future. According to statements made by US officials to the Peruvian media, the House Ways and Means Committee is set to hold a hearing on the 25 September, after which the agreement would be voted on sometime in October.

Of the four trade deals negotiated by the US government before President Bush's 'fast track' authority expired in June, Peru's will be the first to go to a vote, and the most likely to be approved (the others are with Panama, Colombia, and South Korea). But with some Democrats still unconvinced about the Peruvian government's commitments to enforcing labour standards, there may be yet be stumbles as the agreement goes through Congress.

When I last posted on the topic, Republicans and Democrat leaders had stuck a deal to allow the Peru and Panama agreements to be considered if their labour and environmental conditions were strengthened. Amendments were drafted, and swiftly accepted by Peru's congress. A deputation of US representatives was to visit Lima to offer 'technical assistance' to ensure that Peruvian labour and environmental standards were on the road to acceptability.

That visit in August -- where Democrat Charles Rangel met with president Alan Garcia, representatives of all political parties, and labour unions -- produced warm words and grand statements. Garcia said that the agreement could be the start of a 'new New Deal' in international commerce. Rangel opined that it could be a 'flagship' agreement, noting that 'for the first time, workers' rights will be a part of trade agreements -- to be enforced'.

But not everyone was convinced about the Peruvian commitment to improving labour standards. On the campaign trail in 2006, Garcia had promised the elimination of 'services', companies that provide outsourced labour to other businesses. But a year later Garcia had changed his tune, proposing that such companies merely be regulated rather than eliminated. In August the government announced a law would be prepared with the aim of reducing the number of employees contracted through 'services' from 20% to 10% of the workforce.

According to American magazine Inside US Trade, some Democrats are also unimpressed that their concerns about outsourcing and union rights are being addressed through a series of governmental Surpreme Decrees -- which can be modified later -- rather than through the unfinished General Labour Law. The latter is currently stalled after being negotiated over the last five years. The two largest Peruvian labor federations, CGTP and CUT, have sent an open letter to congressional Democrats asking them to vote 'no' to the trade agreement.

Nevertheless, a hearing of the Senate Finance committee on September 11 on the Peru deal met with few objections. The American labour federation AFL-CIO is agnostic about the deal and has decided to neither promote or actively oppose it, but to concentrate their efforts on opposing the Colombia and South Korea agreements. AFL-CIO policy director Thea Lee said that the new labour and environmental conditions "represent significant progress in crucial areas we have fought to achieve for many years".

Political analysts say that 60 to 120 congressional Democrats are likely to vote in favour of the Peru agreement, meaning that it would pass with a considerably more comfortable margin than the Central American FTA, which passed by 2 votes with just 15 Democrats in favour. But after all the twists and turns that have occurred so far, nothing is certain yet.

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Saturday, September 15, 2007

Fujimori to Be Extradited?

Although it hasn't been officially anounced, Chilean news sources are saying that the Chilean Supreme Court has ruled in favour of extraditing former Peruvian president Alberto Fujimori to Peru to face trial on two charges of human rights abuses and one of corruption.

Chilean daily La Nacion said that judges from the criminal wing of the Supreme Court had voted 3 to 2 in favour of extraditing Fujimori, and claimed that one of the judges had changed his opinion, reversing an earlier majority decision to reject the extradition plea.

An official announcement on the ruling is likely to be made on the 20th or 21st of September.

More to come.

Stop! I'm With APEC

Speaking of the APEC conference, one of the funniest things I've seen in a long time is this video from Australian comedy show The Chaser. The show found that people would be surprisingly accommodating to 'random security checks' in the name of the APEC conference in Sydney. Even when they were in Melbourne.

Sunday, September 09, 2007

The Nuclear Option

Around two years ago, I posted my dilettante-ish opinion that nuclear energy would need to be increasingly important if the world is to reconcile the goals of reducing carbon emissions and continuing international economic development.

That view is now firmly in the mainstream, as evidenced by the discussions at the APEC meeting in Sydney last week. Although it's a rare day when a liberal internationalist finds himself more or less in agreement with George W Bush and John Howard, this one groaned at statements by various New Zealand politicans that they would seek to 'water down' references to nuclear energy in a conference statement on climate change.

These comments were seemingly intended for a domestic audience, one that might by now be dwindling. New Zealand's 'anti-nuclear' stance was a flagship, nation-unifying policy in the 80s. But as I said in the previous post, surely that was "more a stroppy assertion of foreign policy independence than a reasoned rejection of nuclear technology".

The climate change declaration negotiated at the APEC meeting ended up being pretty motherhood-and-apple pie, with only 'aspirational' targets set But with the range of political, social and economic situations faced by the APEC countries, it's better than nothing for a week's work. While it's easy to be critical of non-binding targets, it has to be acknowledged that New Zealand and Canada, which ratified the Kyoto Protocol, have done worse at reaching their emissions target than Australia, which didn't.

However, some credit should be given to the New Zealand contingent at APEC for practicing what they preach. New Zealand prime minister Helen Clark was one of the five leaders who arrived on normal commercial flights The others were the prime ministers of Papua New Guinea and Singapore, the chief executive of Hong Kong, and, yes, Peru's austerity-promoting Alan Garcia.

On the other hand, the US contingent brought three special 747s, while they, China and Russia, demanded 'sovereign immunity' for their aircraft, exempting them from being inspected by Australian customs officials. So much for international co-operation.

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Saturday, September 08, 2007

Policy Good, Implementation Hard

The always-pithy Economist has had a couple of good dispatches recently on Peru. Both deal with the tough challenge facing the administration of Alan Garcia in delivering on his election promise of 'responsible change' to reduce poverty and develop a more inclusive economy.

As much as it was slightly bewildering to an outsider that Peru would elect Garcia again after his disastrous first term in the 1980s, it was hard to argue with most of his stated policies: austerity in central government, devolution of more resources and responsibility to the regions, rationalisation of overlapping social programmes, improvement of education standards, investment in infrastructure such as water and roads, warmer relations with Chile, free trade with the US (with a better deal struck for Peru), and the 'Sierra Exportadora' programme to help link highland farmers with coastal exporters.

The swift move to implement popular actions within the first 100 days, such as cutting his own and other politicans' salaries, suggested that Garcia might actually carry through with an ambitious programme of reform.

But with the best will in the world, turning policies into action can be harder than it looks. The first challenge described in the June 9--15 Economist is actually implementing the infrastructure and poverty reduction programmes. As anyone who has worked in government will tell you, availability of money isn't always the problem-- 'getting it out the door' can be the hardest part. The challenge is to balance the requirements for transparent process, and value for taxpayer dollars, with the need to get a move on.

The Economist reports that of the $1 billion 'investment shock' earmarked for water, roads, school and clinics, only 30% is on track to be spent in the first year. This is largely due to inexperience in local government, and there's apparently been a lot of argument about whether financial controls should be loosened to allow quicker spending. As much as rapid progress is desirable, giving too much scope for corruption in a place with Peru's history may be worse than doing nothing.

The more general challenge, as summed up by the July 28--August 3 Economist, is maintaining the confidence of the population while the benefits of economic growth are gradually distributed more widely. Peru has averaged 5% growth over the last six years -- the steadiest in Latin America. But much of the interior of the country has yet to see any real benefit, and while poverty rates are now slowly coming down, in the some parts of the sierra they have actually got worse.

During July the country was racked by protests, led by the powerful teachers union SUTEP, and there was controversy over a government decree that local government leaders were not allowed to incite or lead protests.

When I lived in Peru, strikes and protests were as regular as a Friday trip to the pub, and it was de rigeur to call for the resignation of president Alejandro Toledo. This was partly due to Toledo himself, who appeared muddling, technocratic, and out of touch. President 'Alan' has all the popular touch you could want -- as even his critics admit -- but a silver tongue is not enough to soothe the frustrations of people facing ongoing hardship. Prior to the earthquake, Garcia's approval ratings had plummeted from a year earlier, especially away from the more prosperous coast.

The real problem is that people in the Peruvian sierra have been poor and excluded for so long; any government is not just dealing with the legacy of the previous administration, but approximately 500 years of social division and neglect. Protest and atagonistic politics, as exemplified by the likes of Ollanta Humala, have become ingrained as the only way to engage.

This creates a vicious circle where people and businesses who do have some chance of making progress are hindered by the disorder and lack of confidence. Hence the attraction of an almost Blair-ist promise of 'responsible change'. But for the large mass of people struggling as much as always, 'responsible' is coming to be seen as a euphemism for 'too slow'.

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Saturday, September 01, 2007

That's My Piece of Sea

Like grownup siblings still embittered by a childhood dispute, Peru and Chile seem determined to draw out the consequences of the 19th-century War of the Pacific as long as possible.

Domainating the attention of politicians and media at the moment -- especially in Peru -- is the question of the maritime border.

Peru maintains that, while its land border with Chile was set by the Treaty of Arica in 1929, the maritime limits have never been satisfactorily settled. However, Chile says that the maritime border was defined by two fishing treaties signed in 1952 and 1954.

The technical controversy is over whether each country's 200-mile exclusive economic zone should be delimited by the geographical parallel, as agreed in the fishing treaties, or by a bisection of imaginary lines perpendicular to the respective coastlines, as established by the 1982 United Nations Convention on the Law of the Sea (see diagram, taken from Wikipedia entry on the topic.)

Peruvian governments have been trying to begin negotiations on the matter since 1986. The Chilean response has always been that the matter is settled by the fishing treaties, so there's nothing to discuss.

In 2005 the Peruvian congress drew up a law to define the 200-mile maritime zone over which it has sovereignty. This included about 38,000 sq km of water currently under Chilean adminstration -- the shaded area in the map.

With no progress possible through diplomatic channels, Peru decided to take the case to the International Court of Justice in The Hague, a decision announced by president Alan Garcia in his discourse to the nation on 28 July this year.

A preparatory step was to draw up a a cartographic map illustrating the area claimed as sovereign by Peru. The map was published in the official daily El Peruano on 12 August, prior to being presented to the United Nations

Chile's response to the publication of the map was one of official surprise and offense, claiming that the map was a unilateral action that 'ignored' the existing treaties. Chilean foreign minister Alejandro Foxley sent a formal note of protest to the Peruvian ambassador and called the Chilean amabassador to Peru back to Santiago for consultation.

But Peruvian representatives responded that there had been plenty of warning of the process that was to be followed, and Chile had been forewarned of publication of the map

Rising tensions were defused when the earthquake struck southern Peru on August 17, and Chile was among the first countries to send aid to the victims.

However on 23 August Foxley further complicated the matter, stating that settlement of long standing Bolivian claims for access to the sea could be prejudiced by Peru's claims. But this was brushed aside by Bolivian president Evo Morales, who said on a visit to the eathquake zone in Pisco that "I know the Peruvian government isn't going to be an obstacle to resolving this matter with Chile".

The whole debate is put into perspective by an entertaining piece of reportage from Rodrigo Barria Reyes of Chilean paper El Mercurio. Barria Reyes describes the fruitless search by a 518-tonne, 33-man Chilean navy vessel for a tiny 4-man Peruvian fishing vessel suspected of entering Chilean-controlled waters without permission.

The main target for Peruvian fisherman from the port of Ilo is the blue shark, whose fins are considered in some Asian markets to have potent aphrodisiac properties To reach international waters where the sharks are abundant, boats have to cross the Chilean-patrolled zone. Those that don't request permission, or fish in Chilean waters, are towed back to Arica where their cargo is dumped and they are fined and deported.

In this case the Peruvian boat was trespassing, but made a quixotic dash back into Peruvian waters before the Chilean navy could catch it. El Mercurio reports that the fisherman braving the high seas in search of shark fins make $600 for a 15-day trip. Meanwhile, Peru has set aside $2 million USD to fight the court case in The Hague.

To an outside observer, it seems incredible how much importance is attached to a patch of ocean. It's appropriate that the El Mercurio article described the tiny fishing boat as 'Lilliputian', because the way in which arcane details of geography are being scrutinised by politicians, lawyers, historians and bloggers in both countries is reminiscent of something from Gullivers Travels.

To be fair, the leaders of both countries have been at pains to stress that border issue is completely separate from the two nations' economic and social relations. Both governments have tricky balancing acts to maintain. Foxley and president Michelle Bachelet need to placate the hawks in opposition who accuse them of having a muddled and over-accommodating foreign policy, while Garcia needs to stay a step ahead of Peruvian nationalists like Ollanta Humala who are always ready to stir up anti-Chilean feeling.

Far more than the material value of the territory itself, the current fuss is a reflection of the place that the War of the Pacific continues to play in both countries' collective psyches. And while it seems to be Peru that continues to obsess over the past, some Chileans argue that there's a lot their country could do to restore good will. In a guest column in La Republica, Chilean journalist and university professor Felipe Bianchi Leiton said that Chile should formally apologise to Peru for selling arms to Ecuador during its border dispute with Peru in 1995 -- when Chile was supposed to be a guarantor of the peace.

He further argued that Chile should return the books stolen from the library of Lima during the War of the Pacific, and give up disputing denomination of origin rights for pisco. Finally, Leiton stated that Chile must accede to the Peruvian request to extradite ex-president Alberto Fujimori to face trial in Peru.

But the effort to make Fujimori face trial is a different question altogether.

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