Following on from the previous post about inequality, here's an interesting article in Foreign Policy by Francisco Rodriguez, chief economist to the Venezuelan National assembly from 2000-04. Rodriguez deconstructs the belief, prevalent among not only Hugo Chavez supporters but also his critics, that Chavez has redistributed resources to the poorest in Venezuelan society.
Certainly, there is a wide range of different opinions of Chavez and his government, which we might summarise as follows:
a) Chavez is a dictator who is buying support by redistributing the oil wealth. He will eventually make himself president for life, let all the terrorists camp out in his back yard and form some kind of nuclear alliance with Iran
b) Chavez is popular among many in Venezuela because he has used the oil price boom to establish promising though rather haphazard social programes for people who have always been marginalised. He's an annoying (though occasionally amusing) demagogue who has authoritarian tendencies and but has won his elections fair and square
c) Chavez is the reincarnation of Simon Bolivar and Che Guevara combined, a charismatic leader who is righting the wrongs of centuries and setting a model for 21st century socialism.
What supporters and opponents alike (I'm more or less category B) agree on is that Chavez has redistributed wealth and prioritised helping the poor. Yet this orthodoxy is precisely what is questioned by Francisco Rodriguez. Having worked closely with the Venezuelan adminstration, Rodriguez argues that the perception that Chavez has done a lot for the poor is mainly the product of good public relations campaigns.
Although poverty in Venezuela was reduced from 53 to 27 percent between 2003 and 2007, Rodriguez claims this is almost entirely due to rapid economic growth in the wake of the oil boom. The one percentage point reduction in poverty for every point of GDP growth is a poor return, says Rodriguez, compared with other (unnamed) developing countries which have managed two points of poverty reduction per point of GDP growth. In addition, he says:
The average share of the budget devoted to health, education, and housing under Chávez in his first eight years in office was 25.12 percent, essentially identical to the average share (25.08 percent) in the previous eight years. And it is lower today than it was in 1992, the last year in office of the "neoliberal" administration of Carlos Andrés Pérez -- the leader whom Chávez, then a lieutenant colonel in the Venezuelan army, tried to overthrow in a coup, purportedly on behalf of Venezuela's neglected poor majority.
The further statistics Rodriguez cites include:
-- the Gini coefficient (a way of measuring income inequality, the higher the worse) increased from 0.44 to 0.48 between 2000 and 2005
-- infant mortality has dropped, but at the same rate (3.3 percent per annum) as the previous nine years, and much less quickly than in Argentina, Chile and Mexico (5.2--5.5 percent per annum)
-- the percentage of underweight babies, percentage of people without access to running water, and percentage of people living in house with earthen floors all slightly increased between 1999--2006
-- the much vaunted Robinson literacy programme shows "little evidence [of having] had any statistically distinguishable effect on Venezuelan illiteracy"
The most notable policies of the Chavez administration, according to Rodriguez, have in fact been its nationalisations and expansion of state economic (rather than social) activities. These appear to be leading to a re-run of the 'macroeconomics of populism', a particularly Latin America affliction where expansionary government policies eventually lead to balance of payments problems, spiralling inflation, and a decline in real wages (Alan Garcia's 1985-90 mandate in Peru perhaps winning the prize for the most disastrous example of this cocktail).
His concluding paragraphs strike me as rather wise and, for those who've paid attention to any of my previous posts, run along similar lines to other conclusions I've favoured:
It would be foolhardy to claim that what Latin America must do to lift its population out of poverty is obvious. If there is a lesson to be learned from other countries' experiences, it is that successful development strategies are diverse and that what works in one place may not work elsewhere. Nonetheless, recent experiences in countries such as Brazil and Mexico, where programs skillfully designed to target the weakest groups in society have had a significant effect on their well-being, show that effective solutions are within the reach of pragmatic policymakers willing to implement them. It is the tenacity of these realists -- rather than the audacity of the idealists -- that holds the greatest promise for alleviating the plight of Latin America's poor.
Categories: development, Latin America
Sunday, March 30, 2008
Friday, March 21, 2008
Thoughts for Food
Writing in Dissent Magazine, Thomas Pogge takes on the complex issue of international economic growth and inequality. His main aim is to take issue with the idea that 'first we've got to grow the cake before we share it out' and the assumption that the best way to reduce poverty is through all-out economic growth that will benefit all through trickle-down processes. Instead he suggests that more equitable economic growth may be of much greater benefit to the poorest, even if it's a little slower, at a very small opportunity cost to the richest.
Pogge's starting point is one of nifty dynamic graphs of international GDP per capita (at purchasing power parity) along the lines of those developed by and displayed on the
Gapminder website. This one was displayed in the March 2004 issue of the Economist as a piece of one-upmanship on market globalisation critics. Charted at country level, poorer countries have grown more slowly over the last twenty years than rich countries. However, when you account for each country's population (changing the size of the dots on the graph) , the slope of the trend is reversed, thanks to the success of China and India.
All very well, says Pogge. But this considers only one of the dimensions of inequality -- between countries. Also relevant is inequality within countries. Little can be inferred about the poverty-reducing effect of a country's growth in average wealth if all the extra income is going to the richest. For example, survey data indicates that the income of the bottom decile in the United States is not much more than that of the bottom decile in Hungary, and only half that of the bottom decile of Japan or Norway.
Pogge makes what I agree is the important point that the relative income share is also important to consider, because "many things money can buy are positional or competitive: political influence, for instance, and access to education and even health care depend not merely on how much money one has to spend but also on how much others are willing and able to spend on those same goods".
That is a point that can be disputed at an ideological level, and then we get into complicated debates about rewards and incentives. But even if we just stick to differences in absolute income levels, the situation is a lot more extreme when developing countries are considered. For example, the income of the poorest decile in Turkey is nearly three times that of Colombia's poorest (although the two countries have a similar GDP per capita at PPP), and the lowest decile in Colombia earns only 7.4% of the average national income. Even more strikingly, in Vietnam, which is only half as rich as Colombia, the poorest decile has an income more than twice as high as the poorest decile in Colombia.
Pogge goes on to consider China, the great poster child for development through maket globaisation. While he acknowledges that there have been large gains for Chinese, including the poorest, he wonders whether even greater reductions in poverty could have been possible with more equitable growth. Between 1990 and 2005, the national per capita Chinese income grew by 236 percent, but that of the bottom decile just 77 percent, while their relative share declined from 30 to 16 percent of the average. Had the relativities been retained, suggests Pogge, even at the expense of a couple of percentage points of growth per annum, the poorest 40 percent of Chinese would all be better off in absolute terms than they are today.
Finally, he considers inequality between human beings world wide. Here he suggests that China's success may have been at the expense of the global poor elsewhere. With only a limited amount of access possible to the still-protected markets of the rich and powerful nations, could China have crowded out the gains of other developing nations by winning the race to the bottom in terms of labor and environmental standards? It's a provocative thesis, but if valid, would be a caution against supposing that other nations can simply follow China's path.
Overall, comparing humans to other humans paints the most dramatic picture of all. Sticking to PPP terms, the poorest quintile of humanity controls just 0.4 percent of the world's wealth, while the richest 1 percent controls 31.6 percent. Doubling the wealth of the bottom two quintiles (40 percent) of the world's population would take just 1.5 percent of the wealth of the top 1 percent. Pogge concludes:
Most of the massive severe poverty persisting in the world today is avoidable through more equitable institutions that would entail minuscule opportunity costs for the affluent. It is for the sake of trivial economic gains that national and global elites are keeping billions of human beings in life-threatening poverty with all its attendant evils such as hunger and communicable diseases, child labor and prostitution, trafficking, and premature death. Considering this situation from a moral standpoint, we must now assess growth—both globally and within most countries—in terms of its effect on the economic position of the poor.
It's a good argument that helps cut through some of the ideological fog in all the contradictory statistics. But it still leaves the massive question of just how you do engineer economic growth with less inequality. If it requires 'more equitable institutions', what are these equitable institutions, and how should they work?
Pogge's starting point is one of nifty dynamic graphs of international GDP per capita (at purchasing power parity) along the lines of those developed by and displayed on the
Gapminder website. This one was displayed in the March 2004 issue of the Economist as a piece of one-upmanship on market globalisation critics. Charted at country level, poorer countries have grown more slowly over the last twenty years than rich countries. However, when you account for each country's population (changing the size of the dots on the graph) , the slope of the trend is reversed, thanks to the success of China and India.
All very well, says Pogge. But this considers only one of the dimensions of inequality -- between countries. Also relevant is inequality within countries. Little can be inferred about the poverty-reducing effect of a country's growth in average wealth if all the extra income is going to the richest. For example, survey data indicates that the income of the bottom decile in the United States is not much more than that of the bottom decile in Hungary, and only half that of the bottom decile of Japan or Norway.
Pogge makes what I agree is the important point that the relative income share is also important to consider, because "many things money can buy are positional or competitive: political influence, for instance, and access to education and even health care depend not merely on how much money one has to spend but also on how much others are willing and able to spend on those same goods".
That is a point that can be disputed at an ideological level, and then we get into complicated debates about rewards and incentives. But even if we just stick to differences in absolute income levels, the situation is a lot more extreme when developing countries are considered. For example, the income of the poorest decile in Turkey is nearly three times that of Colombia's poorest (although the two countries have a similar GDP per capita at PPP), and the lowest decile in Colombia earns only 7.4% of the average national income. Even more strikingly, in Vietnam, which is only half as rich as Colombia, the poorest decile has an income more than twice as high as the poorest decile in Colombia.
Pogge goes on to consider China, the great poster child for development through maket globaisation. While he acknowledges that there have been large gains for Chinese, including the poorest, he wonders whether even greater reductions in poverty could have been possible with more equitable growth. Between 1990 and 2005, the national per capita Chinese income grew by 236 percent, but that of the bottom decile just 77 percent, while their relative share declined from 30 to 16 percent of the average. Had the relativities been retained, suggests Pogge, even at the expense of a couple of percentage points of growth per annum, the poorest 40 percent of Chinese would all be better off in absolute terms than they are today.
Finally, he considers inequality between human beings world wide. Here he suggests that China's success may have been at the expense of the global poor elsewhere. With only a limited amount of access possible to the still-protected markets of the rich and powerful nations, could China have crowded out the gains of other developing nations by winning the race to the bottom in terms of labor and environmental standards? It's a provocative thesis, but if valid, would be a caution against supposing that other nations can simply follow China's path.
Overall, comparing humans to other humans paints the most dramatic picture of all. Sticking to PPP terms, the poorest quintile of humanity controls just 0.4 percent of the world's wealth, while the richest 1 percent controls 31.6 percent. Doubling the wealth of the bottom two quintiles (40 percent) of the world's population would take just 1.5 percent of the wealth of the top 1 percent. Pogge concludes:
Most of the massive severe poverty persisting in the world today is avoidable through more equitable institutions that would entail minuscule opportunity costs for the affluent. It is for the sake of trivial economic gains that national and global elites are keeping billions of human beings in life-threatening poverty with all its attendant evils such as hunger and communicable diseases, child labor and prostitution, trafficking, and premature death. Considering this situation from a moral standpoint, we must now assess growth—both globally and within most countries—in terms of its effect on the economic position of the poor.
It's a good argument that helps cut through some of the ideological fog in all the contradictory statistics. But it still leaves the massive question of just how you do engineer economic growth with less inequality. If it requires 'more equitable institutions', what are these equitable institutions, and how should they work?
Wednesday, March 19, 2008
Modernisation, Shmodernisation
Excuse the potted summaries of my development studies lectures. They are part of my 'diary', which will contribute to a portion of my course work grade.
A couple of weeks into the lectures, we got to Modernization Theory, the starting point for any discussion of development theories. This comes from the period around the end of the Second World War, when there was a surge of interest in how the poor benighted masses of the world could improve their lives by becoming much more like us in the West.
On the one hand, getting the starving natives to the point of having a refrigerator and a car in the driveway would make them less susceptible to the Red Peril. On the other hand, if you were a communist, modernisation had to be part of the glorious dialectical march of history.
According to the standard view, modernisation happens along a number of different dimensions. To the uninitiated, a lot of this will look less like a theory than the set of assumptions we still go by most of the time.
Population -- high birth and death rates give way to a period of rapid population growth, then finally to a stabilising population with both birth and death rates low.
Economy -- subsistence agriculture with little specialisation and exchange through reciprocity eventually sees production removed from consumption, a high degree of specialisation, and exchange through money rather than reciprocity.
Society -- tribal societies where kinship networks dominate and social status is inherited give way to meritocractic societies based on the nuclear family and a secular, scientific education. Class becomes a key organising factor of society.
Politics -- tribal groups with local control and close association between political and religious leaders give way to the modern democractic state with mass participation in politics based on political parties, separation of church and state, and mass communication through the media.
Geography -- modernisation diffuses through space, with transport, trade and urban centres hastening the process of modernisaton and vice versa. The spread of modernisation can be measured by things like kms of roads, telephone connections, kids in school, and newspaper circulation (and nowadays mobile phones and internet connections).
Although we are about to learn about all the critiques of modernization theory and how it has been superceded by theories that are more sophisticated or diametrically opposed, much of it clearly still drives how we think about the world. For example, a lot of people might have had deep reservations about the likelihood of the neoconservative dream of turning Iraq into a 'modern, secular liberal democracy' and thereby 'transforming the Middle East'. More people still rejected the means by which it was to be achieved. But there was certainly a general sense that it was a desirable goal.
A couple of weeks into the lectures, we got to Modernization Theory, the starting point for any discussion of development theories. This comes from the period around the end of the Second World War, when there was a surge of interest in how the poor benighted masses of the world could improve their lives by becoming much more like us in the West.
On the one hand, getting the starving natives to the point of having a refrigerator and a car in the driveway would make them less susceptible to the Red Peril. On the other hand, if you were a communist, modernisation had to be part of the glorious dialectical march of history.
According to the standard view, modernisation happens along a number of different dimensions. To the uninitiated, a lot of this will look less like a theory than the set of assumptions we still go by most of the time.
Population -- high birth and death rates give way to a period of rapid population growth, then finally to a stabilising population with both birth and death rates low.
Economy -- subsistence agriculture with little specialisation and exchange through reciprocity eventually sees production removed from consumption, a high degree of specialisation, and exchange through money rather than reciprocity.
Society -- tribal societies where kinship networks dominate and social status is inherited give way to meritocractic societies based on the nuclear family and a secular, scientific education. Class becomes a key organising factor of society.
Politics -- tribal groups with local control and close association between political and religious leaders give way to the modern democractic state with mass participation in politics based on political parties, separation of church and state, and mass communication through the media.
Geography -- modernisation diffuses through space, with transport, trade and urban centres hastening the process of modernisaton and vice versa. The spread of modernisation can be measured by things like kms of roads, telephone connections, kids in school, and newspaper circulation (and nowadays mobile phones and internet connections).
Although we are about to learn about all the critiques of modernization theory and how it has been superceded by theories that are more sophisticated or diametrically opposed, much of it clearly still drives how we think about the world. For example, a lot of people might have had deep reservations about the likelihood of the neoconservative dream of turning Iraq into a 'modern, secular liberal democracy' and thereby 'transforming the Middle East'. More people still rejected the means by which it was to be achieved. But there was certainly a general sense that it was a desirable goal.
Friday, March 14, 2008
Joe Stiglitz and His Discontents
Friday evening we went to see Nobel prize winner, former Clinton adminstration and World Bank honcho and best selling author Jospeh Stiglitz 'chat' with NZ-domiciled economic journalist Rod Oram as part of Readers and Writers week at the Wellington International Festival.
In the course of the hour or so of discussion we got for the $25 entry fee, Stiglitz:
--reiterated that 'there needs to be a balance' between the responsibilities of markets and government. He cited his own work on information asymmetries as demonstrating why markets aren't always efficient, and pulled out what was no doubt a favoured quote that 'the reason why the invisible hand is invisible is that in many cases it isn't actually there' .
-- heaped special praise on the the Scandinavian countries as having effectively struck that balance and having succeeded through 'investing in their young people' and being prepared to pragmatically review and revise policies.
-- stressed that governments need to implement redistributive policies to compensate those who lose out under international trade and globalisation. He (to my moderate surprise) slightly favoured Obama to achieve this in the US, but said that 'the policy differences between the two [Democratic candidates] are much less than those with McCain'.
-- argued that central banks should not be restricted to narrow inflation-only targets, but should also have economic growth and employment as objectives. He suggested that former Federal Reserver chairman Alan Greenspan bore some of the blame for the current credit crisis, by encouraging people to take out variable-rate mortagages.
-- in response to the inevitable 'but is economic growth sustainable' audience question, agreed that better measures of economic wellbeing and progress than simple GDP need to be developed, factoring in environmental degradation, resource depletion and so forth (check out the work of Partha Dasgupta for what these might look like).
When asked about whether he preferred a cap-and-trade system or carbon tax, he said that the two were near enough to equivalent if emission credits are auctioned. Giving away the emissions allowances -- as is set to happen in New Zealand -- he thought would 'give scope for corruption'. Ideally, said Stigliz, there should be a fully international auction of emissons permits.
Stiglitz came across as the atchetype sensible progressive, spontaneuously applauded on occasions by the 1,500 or so right-on middle class Wellingtonians. With his friendly-bear demeanour and softly gruff tones, he reminded me of another maverick New England academic, philosopher Daniel Dennett. As was the case when I watched Dennett tear apart creationists in front of a group of atheist or agnostic philosophy students, I thought it might be more fun to see Stiglitz put his well-reasoned messages to a crowded town hall in rural Texas, or maybe Te Kuiti.
In the course of the hour or so of discussion we got for the $25 entry fee, Stiglitz:
--reiterated that 'there needs to be a balance' between the responsibilities of markets and government. He cited his own work on information asymmetries as demonstrating why markets aren't always efficient, and pulled out what was no doubt a favoured quote that 'the reason why the invisible hand is invisible is that in many cases it isn't actually there' .
-- heaped special praise on the the Scandinavian countries as having effectively struck that balance and having succeeded through 'investing in their young people' and being prepared to pragmatically review and revise policies.
-- stressed that governments need to implement redistributive policies to compensate those who lose out under international trade and globalisation. He (to my moderate surprise) slightly favoured Obama to achieve this in the US, but said that 'the policy differences between the two [Democratic candidates] are much less than those with McCain'.
-- argued that central banks should not be restricted to narrow inflation-only targets, but should also have economic growth and employment as objectives. He suggested that former Federal Reserver chairman Alan Greenspan bore some of the blame for the current credit crisis, by encouraging people to take out variable-rate mortagages.
-- in response to the inevitable 'but is economic growth sustainable' audience question, agreed that better measures of economic wellbeing and progress than simple GDP need to be developed, factoring in environmental degradation, resource depletion and so forth (check out the work of Partha Dasgupta for what these might look like).
When asked about whether he preferred a cap-and-trade system or carbon tax, he said that the two were near enough to equivalent if emission credits are auctioned. Giving away the emissions allowances -- as is set to happen in New Zealand -- he thought would 'give scope for corruption'. Ideally, said Stigliz, there should be a fully international auction of emissons permits.
Stiglitz came across as the atchetype sensible progressive, spontaneuously applauded on occasions by the 1,500 or so right-on middle class Wellingtonians. With his friendly-bear demeanour and softly gruff tones, he reminded me of another maverick New England academic, philosopher Daniel Dennett. As was the case when I watched Dennett tear apart creationists in front of a group of atheist or agnostic philosophy students, I thought it might be more fun to see Stiglitz put his well-reasoned messages to a crowded town hall in rural Texas, or maybe Te Kuiti.
Sunday, March 09, 2008
Development and Dependence
One of the recommended books to consult in our Development Studies course is a text of sorts called The Companion to Development Studies, edited by Vandan Desai and Robert Potter,
Heading straight for the bits on Latin America, I found confirmation that Eduardo Galeano's poetically fist-shaking The Open Veins of Latin America had its intellectual foundations in a body of work called dependency theory
As described in my review of Open Veins, Galeano describes an exploiting 'core', which dominates industrial production (and makes the decisions), and an exploited 'periphery', which provides raw materials and cheap labour. Core-periphery relations can exist between continents (eg, Europe--Latin America), between countries (eg, Brazil--Paraguay) and within countries (eg, Lima--Andean Peru)
Dependency theory originated with a group of Latin American economists who worked with the United Nations in the aftermath of World War 2 and came to present a peculiarly Latin American perspective on development. Dependency theory was notable in being the first body of thought on these issues that actually originated in the 'developing' world. It's easy to spot its origins in Marxism -- for many dependency theorists, the 'underdevelopment' of the third world periphery is a necessary correlation of the development of the rich countries. Exploitation is seen as inherent in the very nature of capitalism.
A brief glance through the short articles in Desai and Potter told me that dependency theory has been critiqued from several quarters. There have been technical criticisms from within Marxism, which made me glaze over a little even in the one-paragraph versions. There have also been arguments that dependency theory requires excessive ad hoc adjustment to fit the very diverse kinds of economic relations that exist at different places and times.
With a bit more reading, I'm likely to agree with the latter views. However, as I noted in the review, it doesn't need to be a grand theory, and you don't need to be a Marxist, to find Open Veins a compelling historical account of Latin America's economic and political history that strikes to the root of the continent's problems.
As also noted, the book ends in the mid-70s, amidst a dark wave of miltary dictatorships but before the numerous economic crises of the 80s and 90s. The controversies resulting from these events suggest that the debate about dependency theory is far from dead. As I read further, I expect to hear more about how, as colonialism has ended and local democracy has strengthened, the power relations of core and perpiphery have been perpetuated through mechanisms such as debt and trade rules. I might even try to contribute some such thoughts myself.
Categories: development, Latin America
Heading straight for the bits on Latin America, I found confirmation that Eduardo Galeano's poetically fist-shaking The Open Veins of Latin America had its intellectual foundations in a body of work called dependency theory
As described in my review of Open Veins, Galeano describes an exploiting 'core', which dominates industrial production (and makes the decisions), and an exploited 'periphery', which provides raw materials and cheap labour. Core-periphery relations can exist between continents (eg, Europe--Latin America), between countries (eg, Brazil--Paraguay) and within countries (eg, Lima--Andean Peru)
Dependency theory originated with a group of Latin American economists who worked with the United Nations in the aftermath of World War 2 and came to present a peculiarly Latin American perspective on development. Dependency theory was notable in being the first body of thought on these issues that actually originated in the 'developing' world. It's easy to spot its origins in Marxism -- for many dependency theorists, the 'underdevelopment' of the third world periphery is a necessary correlation of the development of the rich countries. Exploitation is seen as inherent in the very nature of capitalism.
A brief glance through the short articles in Desai and Potter told me that dependency theory has been critiqued from several quarters. There have been technical criticisms from within Marxism, which made me glaze over a little even in the one-paragraph versions. There have also been arguments that dependency theory requires excessive ad hoc adjustment to fit the very diverse kinds of economic relations that exist at different places and times.
With a bit more reading, I'm likely to agree with the latter views. However, as I noted in the review, it doesn't need to be a grand theory, and you don't need to be a Marxist, to find Open Veins a compelling historical account of Latin America's economic and political history that strikes to the root of the continent's problems.
As also noted, the book ends in the mid-70s, amidst a dark wave of miltary dictatorships but before the numerous economic crises of the 80s and 90s. The controversies resulting from these events suggest that the debate about dependency theory is far from dead. As I read further, I expect to hear more about how, as colonialism has ended and local democracy has strengthened, the power relations of core and perpiphery have been perpetuated through mechanisms such as debt and trade rules. I might even try to contribute some such thoughts myself.
Categories: development, Latin America
Tuesday, March 04, 2008
History Marching On?
One of the advantages of two-hour lectures is that you get potted summaries of frighteningly dense academic texts, which you later recall as actually having read.
Tonight we were introduced to the work of two historians called M P Cowen and R W Shenton, who, in a work of apparently monumental difficulty, tease out the difference between what they call 'immanent' and 'intentional' development.
According to the authors, 'immanent development' is the organic, undirected, potentially chaotic process exemplified by the Industrial Revolution. It involves rapid technological change, massive urbanisation, and the overthrow of old values and institutions, destroying while it creates.
'Intentional development' is the intervention of governments and other institutions to control and direct development. It aims to slow down urbanisation through favouring rural development, and preserving some parts of existing customs and institutions. Most of what we think of as 'development projects', by government agencies and NGOs, would fall into this category.
It helps to learn that Cowen and Shenton are Marxists, disapproving of 'intentional development' as a reactionary impediment to the glorious march of history. Seen in this light, their characterisation of 'intentional development' sounds similar to the attitudes of magazine Spiked, whose contributors like Frank Furedi and Brendan O'Neill are cuttingly scornful of the concept of 'sustainable' development and lambast the 'eco-miserabilists' that are pessimistic about human progress.
Spiked writers are contemptuous of the patronising do-gooding of western agencies who set African villagers' sights on a donkey-powered well, rather than a modern reticulated water system. O'Neill has launched an attack on the practice of offsetting carbon emissions by discouraging third-world farmers from using energy-intensive technologies -- something he calls 'eco-enslavement'.
The description of intentional development also sounded to me like Alan Garcia's slogan of 'responsible change' with which he carved out his position in the 2006 Peruvian elections. But if you look closely, here the concept described by Cowen and Shenton is flipped on its head. In Garcia's case, the 'change' didn't refer to development, but to redistributive policies and more help for the poor. 'Responsible' referred to not trying to regulate and redistribute too much -- i.e. not doing anything radical that might frighten investors and financial markets.
This suggests that, since the late 1980s, the dynamic march of global capitalism has come to be seen as the orthodox state of affairs, and upholding it is in effect the conservative position.
The 'immanent', grassroots tendency in many countries is to seek stability and security, and to oppose or put conditions on the unsettling flux of capitalism. This is now seen as radical.
Garcia's actual behaviour in government has been rather different from promised, with less 'change' and rather more 'responsibility' to the business elites that the likes of La Republica columnist Humberto Campodónico claim are his taskmasters. He has declared certain major mining projects as 'in the national interest' and called those who oppose them 'old communists'.
Pondering these paradoxes led me to wonder whether there aren't two conflicting kinds of 'intentional development'. Sure, the NGOs are squirreling away, trying to promote productive rural communities, just as Cowen and Stenton say. But they're overshadowed by the alliance between business elites and government, which pushes more rapid economic transformation than would occur naturally.
There's a name for this -- corporatism. It's at the heart of what Noami Klein is critiquing (in a sometimes overblown, but broadly effective style) in her book The Shock Doctrine. The 'creative destruction' of unfettered capitalism might have originally been an 'immanent' process driven by new technologies and organic social changes. But as Klein and others have argued, in recent times it has often been imposed from the top down.
Tonight we were introduced to the work of two historians called M P Cowen and R W Shenton, who, in a work of apparently monumental difficulty, tease out the difference between what they call 'immanent' and 'intentional' development.
According to the authors, 'immanent development' is the organic, undirected, potentially chaotic process exemplified by the Industrial Revolution. It involves rapid technological change, massive urbanisation, and the overthrow of old values and institutions, destroying while it creates.
'Intentional development' is the intervention of governments and other institutions to control and direct development. It aims to slow down urbanisation through favouring rural development, and preserving some parts of existing customs and institutions. Most of what we think of as 'development projects', by government agencies and NGOs, would fall into this category.
It helps to learn that Cowen and Shenton are Marxists, disapproving of 'intentional development' as a reactionary impediment to the glorious march of history. Seen in this light, their characterisation of 'intentional development' sounds similar to the attitudes of magazine Spiked, whose contributors like Frank Furedi and Brendan O'Neill are cuttingly scornful of the concept of 'sustainable' development and lambast the 'eco-miserabilists' that are pessimistic about human progress.
Spiked writers are contemptuous of the patronising do-gooding of western agencies who set African villagers' sights on a donkey-powered well, rather than a modern reticulated water system. O'Neill has launched an attack on the practice of offsetting carbon emissions by discouraging third-world farmers from using energy-intensive technologies -- something he calls 'eco-enslavement'.
The description of intentional development also sounded to me like Alan Garcia's slogan of 'responsible change' with which he carved out his position in the 2006 Peruvian elections. But if you look closely, here the concept described by Cowen and Shenton is flipped on its head. In Garcia's case, the 'change' didn't refer to development, but to redistributive policies and more help for the poor. 'Responsible' referred to not trying to regulate and redistribute too much -- i.e. not doing anything radical that might frighten investors and financial markets.
This suggests that, since the late 1980s, the dynamic march of global capitalism has come to be seen as the orthodox state of affairs, and upholding it is in effect the conservative position.
The 'immanent', grassroots tendency in many countries is to seek stability and security, and to oppose or put conditions on the unsettling flux of capitalism. This is now seen as radical.
Garcia's actual behaviour in government has been rather different from promised, with less 'change' and rather more 'responsibility' to the business elites that the likes of La Republica columnist Humberto Campodónico claim are his taskmasters. He has declared certain major mining projects as 'in the national interest' and called those who oppose them 'old communists'.
Pondering these paradoxes led me to wonder whether there aren't two conflicting kinds of 'intentional development'. Sure, the NGOs are squirreling away, trying to promote productive rural communities, just as Cowen and Stenton say. But they're overshadowed by the alliance between business elites and government, which pushes more rapid economic transformation than would occur naturally.
There's a name for this -- corporatism. It's at the heart of what Noami Klein is critiquing (in a sometimes overblown, but broadly effective style) in her book The Shock Doctrine. The 'creative destruction' of unfettered capitalism might have originally been an 'immanent' process driven by new technologies and organic social changes. But as Klein and others have argued, in recent times it has often been imposed from the top down.
Tuesday, February 26, 2008
Why Do I Care?
One of the assignments in the Master of Development Studies programme is to keep a 'journal' of our own 'ideas on development theories and issues' You can imagine that I hardly greeted this task with too much trepidation, given that my amateur musings on trade, energy, poverty reduction, labour rights, economic growth, government policy etc have themselves formed a kind of intermittent journal over the last couple of years.
Indeed, it will be an excellent excuse to follow through with a number of ideas for posts that I had shelved or never started, as priorities such as work, other projects, and generally having a life have intruded.
The suggested starting point for our 'journals' is to bring it all back to our raison d'etre for being interested in development.
So here is my two cents' worth.
Those of us in the handful of 'first world' countries roughly defined by OECD membership are among the few materially luckiest people to have ever lived. About two hundred years ago, things started changing for our forebears in Northern Europe. Whether through the dynamism of the new industrial economies, rapacious exploitation of raw materials from recently 'discovered' colonies, or the unprecedentedly cheap energy delivered by fossil fuels, economic growth started to accelerate. This allowed the production and adoption of a range of new technologies that have literally transformed the world.
We've ended up with longer, healthier, more comfortable lives, and individual freedoms unthinkable even a couple of of generations ago.
Greater material wealth hardly brings utopia. There is some evidence that the contribution of wealth to happiness tops out at between $15,000--20,000 USD per capita. Humans seem to have an in-built status anxiety that means relative wealth differences create stress even when everyone is better off.
Nevertheless, you'd have to be quite perverse to wish yourself into a different place and time. Apart from a very, very few people who really want to live in mud huts, most people who completely reject the 'system' in which they were born and grew up, do so in bad faith. From a personal perspective, having the freedom to travel, and being able to afford effective laser eye surgery, are two things I remain eternally grateful for.
In my view, working out how the rest of the world can have the same opportunities is at least a very interesting puzzle. Ensuring that they do, has at least some moral weight.
There are other, more pragmatic reasons for supporting global development. Increasing prosperity is what writer Robert Wright calls a 'non-zero sum game'. People are just as naturally greedy and conniving when they're rich as when they're poor -- but when there are more riches to go around, there's less of an imperative to grab someone else's share. Greater prosperity gives people more time and space to learn to tame their more venal impulses. If we care about reducing the number of people getting shot or blown up, supporting sustainable material wellbeing is a necessary -- though probably not sufficient -- condition.
It also appears that there may be a tipping point of prosperity when societies begin to see the natural environment as something precious that needs to be cared for, rather than an adversary to be exploited. Again, material prosperity allows us to care about more than where the next meal is coming from.
That's the potted summary of my overall philosophy. My detailed views, and my obsessions and prejudices, mostly derive from my personal experiences living and travelling in Latin America.
Before I ever made it to the continent, I thought I knew something about its history and politics. It's hardly a surprise that my instintctive sympathies were firmly left-wing. I'd been inspired by seeing a film sympathetic to the Sandinista revolutionaries in Nicaragua, and stirred by stories of CIA conspiracies to undermine democratic progress at the behest of neocolonial corporations like United Fruit. On the other hand, reluctant readings of excerpts from the Economist had partially eroded any faith in romantically socialist alternatives.
I was aware that a common way of engaging in these countries -- and a good way to get to stay around -- was working in some kind of aid or development project. But the more I travelled, the more I wondered how I could offer 'assistance' to anyone. For a clumsy gringo with a bright backpack and not even much money, it seemed far more likely to be the other way around. The young guys manouvering dilapidated chicken buses around impossible mountain bends; the women handweaving elaborate and colourful textiles; the peasant farmers raising corn and chickens on difficult patches of land: all were far more capable than I of meeting life's practical challenges.
It's true that their were deep inequalities and horrible injustices on view. But I found that many of my preconceptions were undermined or turned on their head. Some of the charming, educated people that I met and were treated kindly by could probably be characterised as part of the 'oligarchy'. On the other hand, I felt it difficult to engage with the working people and campesinos, except occasionally after a bottle of aguardiente. The villains of some of my reading, the 'oppressive' police and military, were staffed by guys from the same working class, mestizo background as the workers and farmers. And I had to acknowledge that as a vulnerable lone traveller, it was sometimes a comfort to see them around.
I also began to see ways in which people's problems were in part due to simple things that they themselves could change.
Most people were eager to see tourism -- yet couldn't see that the tendency to harass, rip off and otherwise squeeze out every last penny from visitors was the quickest way to ensure they didn't stay around and spend more money. Worse was the tendency to behave the same way towards each other.
After more time spent in Peru in particular, and study of its history, politics and culture, I started to better understand the underlying reasons for these things -- but continued to believe they could be different.
If I've ended up with any strong belief about development, it would be a kind of militant pragmatism. To take advantage of the potential of the modern economy, there are probably some sine qua nons relating to containing inflation and keeping a relatively stable currency. Beyond that, what works for a particular country will depend very much on that country's people, culture, history, and even physical geography.
I'm sceptical about the simplistic narratives that blame all Latin America's problems on outside exploitation. But I'm far more irritated by those neoliberals who would remake countries in the image of their textbook, based on highly ideologised theories, without any appreciation of the realities of individual societies, or even of their own countries' histories.
One thing I believe firmly is that the countries of Latin America -- and by extension other 'developing ' countries -- ought to be able to work out their own priorities and the mix of policies that will best meet the needs of their citizens.
Categories: development, Latin America
Indeed, it will be an excellent excuse to follow through with a number of ideas for posts that I had shelved or never started, as priorities such as work, other projects, and generally having a life have intruded.
The suggested starting point for our 'journals' is to bring it all back to our raison d'etre for being interested in development.
So here is my two cents' worth.
Those of us in the handful of 'first world' countries roughly defined by OECD membership are among the few materially luckiest people to have ever lived. About two hundred years ago, things started changing for our forebears in Northern Europe. Whether through the dynamism of the new industrial economies, rapacious exploitation of raw materials from recently 'discovered' colonies, or the unprecedentedly cheap energy delivered by fossil fuels, economic growth started to accelerate. This allowed the production and adoption of a range of new technologies that have literally transformed the world.
We've ended up with longer, healthier, more comfortable lives, and individual freedoms unthinkable even a couple of of generations ago.
Greater material wealth hardly brings utopia. There is some evidence that the contribution of wealth to happiness tops out at between $15,000--20,000 USD per capita. Humans seem to have an in-built status anxiety that means relative wealth differences create stress even when everyone is better off.
Nevertheless, you'd have to be quite perverse to wish yourself into a different place and time. Apart from a very, very few people who really want to live in mud huts, most people who completely reject the 'system' in which they were born and grew up, do so in bad faith. From a personal perspective, having the freedom to travel, and being able to afford effective laser eye surgery, are two things I remain eternally grateful for.
In my view, working out how the rest of the world can have the same opportunities is at least a very interesting puzzle. Ensuring that they do, has at least some moral weight.
There are other, more pragmatic reasons for supporting global development. Increasing prosperity is what writer Robert Wright calls a 'non-zero sum game'. People are just as naturally greedy and conniving when they're rich as when they're poor -- but when there are more riches to go around, there's less of an imperative to grab someone else's share. Greater prosperity gives people more time and space to learn to tame their more venal impulses. If we care about reducing the number of people getting shot or blown up, supporting sustainable material wellbeing is a necessary -- though probably not sufficient -- condition.
It also appears that there may be a tipping point of prosperity when societies begin to see the natural environment as something precious that needs to be cared for, rather than an adversary to be exploited. Again, material prosperity allows us to care about more than where the next meal is coming from.
That's the potted summary of my overall philosophy. My detailed views, and my obsessions and prejudices, mostly derive from my personal experiences living and travelling in Latin America.
Before I ever made it to the continent, I thought I knew something about its history and politics. It's hardly a surprise that my instintctive sympathies were firmly left-wing. I'd been inspired by seeing a film sympathetic to the Sandinista revolutionaries in Nicaragua, and stirred by stories of CIA conspiracies to undermine democratic progress at the behest of neocolonial corporations like United Fruit. On the other hand, reluctant readings of excerpts from the Economist had partially eroded any faith in romantically socialist alternatives.
I was aware that a common way of engaging in these countries -- and a good way to get to stay around -- was working in some kind of aid or development project. But the more I travelled, the more I wondered how I could offer 'assistance' to anyone. For a clumsy gringo with a bright backpack and not even much money, it seemed far more likely to be the other way around. The young guys manouvering dilapidated chicken buses around impossible mountain bends; the women handweaving elaborate and colourful textiles; the peasant farmers raising corn and chickens on difficult patches of land: all were far more capable than I of meeting life's practical challenges.
It's true that their were deep inequalities and horrible injustices on view. But I found that many of my preconceptions were undermined or turned on their head. Some of the charming, educated people that I met and were treated kindly by could probably be characterised as part of the 'oligarchy'. On the other hand, I felt it difficult to engage with the working people and campesinos, except occasionally after a bottle of aguardiente. The villains of some of my reading, the 'oppressive' police and military, were staffed by guys from the same working class, mestizo background as the workers and farmers. And I had to acknowledge that as a vulnerable lone traveller, it was sometimes a comfort to see them around.
I also began to see ways in which people's problems were in part due to simple things that they themselves could change.
Most people were eager to see tourism -- yet couldn't see that the tendency to harass, rip off and otherwise squeeze out every last penny from visitors was the quickest way to ensure they didn't stay around and spend more money. Worse was the tendency to behave the same way towards each other.
I was also surprised by the prevalence of nationalism. While it seems clear to an outsider that the ordinary people of Latin American countries have far more in common with each other than with their local elites, it was depressingly common to see people with unexamined hostility towards a neighbouring nation based on the territorial squabbles of a hundred years ago. Attitudes about race and ethnicity could charitably be described as unreconstructed.
After more time spent in Peru in particular, and study of its history, politics and culture, I started to better understand the underlying reasons for these things -- but continued to believe they could be different.
If I've ended up with any strong belief about development, it would be a kind of militant pragmatism. To take advantage of the potential of the modern economy, there are probably some sine qua nons relating to containing inflation and keeping a relatively stable currency. Beyond that, what works for a particular country will depend very much on that country's people, culture, history, and even physical geography.
I'm sceptical about the simplistic narratives that blame all Latin America's problems on outside exploitation. But I'm far more irritated by those neoliberals who would remake countries in the image of their textbook, based on highly ideologised theories, without any appreciation of the realities of individual societies, or even of their own countries' histories.
One thing I believe firmly is that the countries of Latin America -- and by extension other 'developing ' countries -- ought to be able to work out their own priorities and the mix of policies that will best meet the needs of their citizens.
At the same time, I would call into question any notion of some kind of Hegelian pathway to a 'state of development' that more or less resembles how we live. For all the difficulties of Latin America, there are many aspects of life there that are preferable to New Zealand.
Latin America retains many traditions, languages, skills and cultural memories that have been steamrolled over in many industrialised societies. People have much warmer and more regular contact with their families and neighbours, and those who have visited western countries are often horrified at the neglect sometimes suffered by elderly parents. Children may in my view be over-indulged, but Latin Americans would be rather shocked that what has most stirred New Zealanders to political action in the last couple of years has been defending the right to hit their kids.
Life is intense, exciting, passionate. Romance exists -- though gender politics are often fraught. Music and dancing are part of everyday life. Middle class people like my friends Hugo and Lizbeth have lives that are a little less comfortable and more chaotic than New Zealand suburbanites, but enjoy less commuting and better parties They get to eat a homecooked meal around the kitchen table at lunchtime.
It may sound like a pious cliche, but for me international development is about an exchange of experiences and perspectives, ideally for mutual benefit.
Categories: development, Latin America
Monday, February 25, 2008
The Andean Observer
It's taking a while, and involves more work than you might imagine, but I'm gradually putting together my website, the Andean Observer. The site has several purposes, reflected in its different sections:
1. To bring together my dilettante-ish collection of writings on Latin America, including travel stories, accounts of life in Peru, vaguely journalistic pieces of reporting and opinion, and retellings of the strange and spooky stories told by local people.
2. To be a showcase for the susbtantial collection of photos from Latin America, and also to use them as a basis for commenting on the strange and wonderful places, people and things that don't necessarily fit in the confines of a story or article.
3. In due course, to provide a section giving travel information and advice, in a similar, though perhaps slightly less irreverent, fashion as my 'guide to New Zealand'. This would include the kind of material I've been asked to provide on several occasions by people who've wanted some background before travelling to Latin America, which I've ended up squeezing into one or more lengthy emails.
4. To be a platform for new blogging, stories and photos when (let's rule out the 'if') I make it back to spend more time in Latin America.
Some people have commented to me that I can't really claim to be interested in 'Latin America' when Peru is far and away the dominant topic. That may be fair enough, but some of the stories and photos do (or will) touch on Bolivia, Colombia, Chile, Argentina, Ecuador, Brazil and Guatemala, so I defend the description of the site as covering 'Peru and beyond'.
The site is still a terrible mess of bits and pieces -- there are dead links, fragments of text, photos missing or in the wrong place, unformatted screeds of text, and so forth. Most of the stories and articles aren't even up yet. It will be a while before I even get around to my intended task of sprucing up several of the more prominent stories to make them punchier and more interesting. It's also true that the site has a very, very basic design, and still retains aspects of the blogger.com template that was the original homepage (the site is hosted on my own server space, but the blog content is sent there through Blogger). I may try and make it a bit prettier at some stage, although that's not really my forté.
When the site close to being acceptably complete I will pester readers of this blog to check it out, and make a serious effort to attract wider attention through link exchanges and other methods. In the meantime, I'd welcome any constuctive comments on ways to make it more attractive and accessible -- for example, are the resizable thumbnails on the 'images' pages a good way of presenting these photos?
Also, far be it from me to solicit ad clicks, but if anyone were to visit the site and become interested enough in the products advertised in the Google AdSense spaces to follow those links, I would be credited with a few cents for each 'click-through', which would in turn go some tiny way towards making the whole effort sustainable.
1. To bring together my dilettante-ish collection of writings on Latin America, including travel stories, accounts of life in Peru, vaguely journalistic pieces of reporting and opinion, and retellings of the strange and spooky stories told by local people.
2. To be a showcase for the susbtantial collection of photos from Latin America, and also to use them as a basis for commenting on the strange and wonderful places, people and things that don't necessarily fit in the confines of a story or article.
3. In due course, to provide a section giving travel information and advice, in a similar, though perhaps slightly less irreverent, fashion as my 'guide to New Zealand'. This would include the kind of material I've been asked to provide on several occasions by people who've wanted some background before travelling to Latin America, which I've ended up squeezing into one or more lengthy emails.
4. To be a platform for new blogging, stories and photos when (let's rule out the 'if') I make it back to spend more time in Latin America.
Some people have commented to me that I can't really claim to be interested in 'Latin America' when Peru is far and away the dominant topic. That may be fair enough, but some of the stories and photos do (or will) touch on Bolivia, Colombia, Chile, Argentina, Ecuador, Brazil and Guatemala, so I defend the description of the site as covering 'Peru and beyond'.
The site is still a terrible mess of bits and pieces -- there are dead links, fragments of text, photos missing or in the wrong place, unformatted screeds of text, and so forth. Most of the stories and articles aren't even up yet. It will be a while before I even get around to my intended task of sprucing up several of the more prominent stories to make them punchier and more interesting. It's also true that the site has a very, very basic design, and still retains aspects of the blogger.com template that was the original homepage (the site is hosted on my own server space, but the blog content is sent there through Blogger). I may try and make it a bit prettier at some stage, although that's not really my forté.
When the site close to being acceptably complete I will pester readers of this blog to check it out, and make a serious effort to attract wider attention through link exchanges and other methods. In the meantime, I'd welcome any constuctive comments on ways to make it more attractive and accessible -- for example, are the resizable thumbnails on the 'images' pages a good way of presenting these photos?
Also, far be it from me to solicit ad clicks, but if anyone were to visit the site and become interested enough in the products advertised in the Google AdSense spaces to follow those links, I would be credited with a few cents for each 'click-through', which would in turn go some tiny way towards making the whole effort sustainable.
Saturday, February 16, 2008
The Academic Life
Well, I've finally gone and done it. Gone back to school, that is. From next week, I'll be formally enrolled in a Master of Development Studies at Victoria University here in Wellington.
Development studies is based in the department of geography, but is an 'interdiscplinary' programme, straying into economics, political science, environmental science, and others. This appeals to a dilettante like me. Professionally, it appears to be a pathway into all kinds of international do-goodery in the institutional or NGO sectors, as well as good background for further academic study or the kind of serious journalism that I'd love to do on a fulltime basis.
I understand from the teaching staff that students are expected to become especially interested in development issues in a particular region of the world. That's fine, since for me Latin America is a no-brainer. For those who are either interested or bored silly by the regular musings here on development issues in Latin America, it's hard to know yet whether there will be more or less blogging on these topics as the essays and assignments cut in.
In any case, I've done the natural thing for someone with an obsessive interest in Latin American issues -- pay large sums of money to carry on reading and writing about them.
No, wait...
The downside is that with the need to work a little less to fit in the study, finance may not permit the yearly visit to South America, meaning that I risk losing some of my personal connections with the place. The upside is that when I do make it back, there, I'll have sound academic reasons for staying around for a while.
Development studies is based in the department of geography, but is an 'interdiscplinary' programme, straying into economics, political science, environmental science, and others. This appeals to a dilettante like me. Professionally, it appears to be a pathway into all kinds of international do-goodery in the institutional or NGO sectors, as well as good background for further academic study or the kind of serious journalism that I'd love to do on a fulltime basis.
I understand from the teaching staff that students are expected to become especially interested in development issues in a particular region of the world. That's fine, since for me Latin America is a no-brainer. For those who are either interested or bored silly by the regular musings here on development issues in Latin America, it's hard to know yet whether there will be more or less blogging on these topics as the essays and assignments cut in.
In any case, I've done the natural thing for someone with an obsessive interest in Latin American issues -- pay large sums of money to carry on reading and writing about them.
No, wait...
The downside is that with the need to work a little less to fit in the study, finance may not permit the yearly visit to South America, meaning that I risk losing some of my personal connections with the place. The upside is that when I do make it back, there, I'll have sound academic reasons for staying around for a while.
Monday, February 04, 2008
On the Road, Irreverently
Road Junky is a web site aimed at travellers and adventurers -- wannabe and otherwise, which has the singular aim of not being the Lonely Planet.
It's a mixture of travel stories, best and worst lists, written and visual dispatches, and destination guides. The latter are described as 'irreverent', skipping all the long list of hostels and eateries from the Lonely Planet but touching on themes that are too sensitive for the latter publication -- such as romance and drugs.
The content ranges from somewhat sophomore to gonzo-like brilliance. Stumbling across it by chance, I liked some of the material, and took the liberty of sending them some of my own stories.
The reply suggested that I write a guide to New Zealand, which I've now gone ahead and done (one of the reasons for being a little quiet in blogland of late). It isn't as amusing and edgy as some of the stuff on there, but hopefully will pass muster.
I understand they're putting my 'guide' up within the next month. If possible, I may also eventually serialise some of it here.
Update: my 'guide to New Zealand' is now up on the home page at Road Junky.
It's a mixture of travel stories, best and worst lists, written and visual dispatches, and destination guides. The latter are described as 'irreverent', skipping all the long list of hostels and eateries from the Lonely Planet but touching on themes that are too sensitive for the latter publication -- such as romance and drugs.
The content ranges from somewhat sophomore to gonzo-like brilliance. Stumbling across it by chance, I liked some of the material, and took the liberty of sending them some of my own stories.
The reply suggested that I write a guide to New Zealand, which I've now gone ahead and done (one of the reasons for being a little quiet in blogland of late). It isn't as amusing and edgy as some of the stuff on there, but hopefully will pass muster.
I understand they're putting my 'guide' up within the next month. If possible, I may also eventually serialise some of it here.
Update: my 'guide to New Zealand' is now up on the home page at Road Junky.
Friday, February 01, 2008
Democracy Under All Circumstances?
A very interesting piece in the Economist reports the results of the Latinobarómetro survey, a five-yearly study by a Santiago-based nonprofit research group of Latin Americans' attitudes of to politics and economics.
I haven't had a chance to properly check out the Latinbarometro website itself and some of their links seem to be dead ends, so I'm relying on the Economist's summary. The 2007 survey involved face-to-face interviews with 20,212 people by local opinion-research companies in 18 countries. That doesn't seem very many, and I wonder whether the full diversity of views in, say, Brazil is really captured by a sample of a couple of thousand people.
Nevertheless, the beauty of this survey is that it is repeated regularly, so it shows changes in attitudes over time.
There's a fair spread of views on politics. The countries that most agree with the statement that 'democracy is preferable to any other type of government' are stable, moderate Costa Rica and Urugay. But also high up are Venezuela, Bolivia and Ecuador. The Economist interprets this as reflecting the rise to power in these countries of openly leftist governments that have made a prominent issue of representing previously excluded groups.
In countries with orthodox market economies like Brazil, Mexico, Chile, Colombia and Peru, the proportion of people favouring democracy is lower, and has actually declined in recent years.
The proportion of people who believe that 'in certain circumstances an authoritarian government can be preferable to a democratic one' is also higher in Peru and Chile (around 20 percent) than in many other countries.
Least likely of all to favour democracy and most amenable to authoritarian role are the Central American countries of El Salvador, Guatemala and Honduras, along with Paraguay. These are among the poorest and most corrupt countries in the region, and the survey results likely reflect despair at the weakness of the state in performing its basic functions. However, there are incresingly favourable attitudes towards democracy in Nicaragua, another country to recently elect an openly leftist leader (Sandinista throwback Daniel Ortega).
For anybody who has followed my previous comments about deep frustration in Peru with the pace of change and the fragility of democracy there, these are borne out by the survey findings
Since 1996, Peru has seen a big drop in people preferring democracy (63 to 47 percent), and an increase in those who support authoritarian rule (from 13 to 22 percent). Peruvians are also second-to-least likely to be satisfied with how democracy is working in their country (ahead of only Paraguay). Less than 20 percent were 'satisfied' or 'very satisfied', down from 30 percent in 1996.
That was in the dark days of the authoritarian rule of the now-despised Fujimori. Back then, a return to full democracy would have appeared to promise much. The current scepticism may well reflect just how little 'responsible change' the Peruvian electorate feels it has seen in the intervening years.
I haven't had a chance to properly check out the Latinbarometro website itself and some of their links seem to be dead ends, so I'm relying on the Economist's summary. The 2007 survey involved face-to-face interviews with 20,212 people by local opinion-research companies in 18 countries. That doesn't seem very many, and I wonder whether the full diversity of views in, say, Brazil is really captured by a sample of a couple of thousand people.
Nevertheless, the beauty of this survey is that it is repeated regularly, so it shows changes in attitudes over time.
There's a fair spread of views on politics. The countries that most agree with the statement that 'democracy is preferable to any other type of government' are stable, moderate Costa Rica and Urugay. But also high up are Venezuela, Bolivia and Ecuador. The Economist interprets this as reflecting the rise to power in these countries of openly leftist governments that have made a prominent issue of representing previously excluded groups.
In countries with orthodox market economies like Brazil, Mexico, Chile, Colombia and Peru, the proportion of people favouring democracy is lower, and has actually declined in recent years.
The proportion of people who believe that 'in certain circumstances an authoritarian government can be preferable to a democratic one' is also higher in Peru and Chile (around 20 percent) than in many other countries.
Least likely of all to favour democracy and most amenable to authoritarian role are the Central American countries of El Salvador, Guatemala and Honduras, along with Paraguay. These are among the poorest and most corrupt countries in the region, and the survey results likely reflect despair at the weakness of the state in performing its basic functions. However, there are incresingly favourable attitudes towards democracy in Nicaragua, another country to recently elect an openly leftist leader (Sandinista throwback Daniel Ortega).
For anybody who has followed my previous comments about deep frustration in Peru with the pace of change and the fragility of democracy there, these are borne out by the survey findings
Since 1996, Peru has seen a big drop in people preferring democracy (63 to 47 percent), and an increase in those who support authoritarian rule (from 13 to 22 percent). Peruvians are also second-to-least likely to be satisfied with how democracy is working in their country (ahead of only Paraguay). Less than 20 percent were 'satisfied' or 'very satisfied', down from 30 percent in 1996.
That was in the dark days of the authoritarian rule of the now-despised Fujimori. Back then, a return to full democracy would have appeared to promise much. The current scepticism may well reflect just how little 'responsible change' the Peruvian electorate feels it has seen in the intervening years.
Saturday, January 26, 2008
The Myth of Bloated Bureaucracy
A really interesting new web site is Entitleme. The site provides a calculator that allows you to compare the amount of tax you pay in New Zealand and Australia at various income levels, factoring in any rebates and tax credits.
Also interesting are the pie graphs in the bottom part of the page, which show how those tax dollars are spent by the government. Take a look at the sliver that takes up 4.3% of the New Zealand pie called 'core government services'. This is the name for all the ministries and departments that make up what used to be called 'the public service', and I believe also includes prisons.
More on them in a minute, but first, consider the size of the pie itself. The proportion of the country's gross domestic product taken up by government taxation and spending is a source of considerable angst for many neoliberal pundits. In New Zealand, it is between 35 and 40 percent, depending on who you believe. This is about the OECD average. Nevertheless, Business Roundtable think pieces and op-eds from hawkish economicsts go to considerable lengths to argue that it's too high. Some have suggested that there should be an agreed, or even legislated, limit on the government's share of GDP -- given wholesale acceptance of Milton Friedman's pronouncement that most of what the government does is a dead loss to productivity.
These pundits often salt their economic jargon with talk about 'bloated bureaucracy', and place a lot of emphasis on the increase in the number of public servants under the current government. They give the impression that the salaries of chaps in ties take up a significant chunk of taxpayers dollars. A common anecdote is about the increase in central Wellington office rents over the last couple of years, due to demand from the various ministries. Some even go so far as to blame the country's macroeconomic ills on the hordes of 'pdf pushers' spilling out of offices along Molesworth St and The Terrace, claiming that their high wages are creating inflation and pushing up interest rates.
It may therefore come as a surprise that, as a burden on the country's economy and taxpayers, the cost of the public service almost fails to register.
A look at the Entitleme pie confirms this. New Zealand's GDP is about $160 billion NZD. Let's go with the worst case scenario and take the government's share of that to be around 40 percent -- $64 billion. The amount spent on 'core government services' (bureaucracy) is therefore 4.3 percent of this number -- about $2.5 billion.
That still sounds like quite a lot. Surely if you slashed the bureaucracy a bit, it would ease the deadweight burden on the economy? Ok. Let's say we entirely eliminate every bureaucrat, every government job, every department, ministry, commission and quango. This would free up the same amount of money as if New Zealand's GDP grew by 3 percent, rather than 2 percent, for just one year.
Yes, just one extra good year of dairy prices and tourism would create enough extra money to compensate for the wages of all 40,000 pdf pushers who squirrel away generating paper, or whatever it is they do.
What say you, the hardworking productive taxpayer, decide not to be so generous, and insist on firing the lot of them. Wouldn't that bulk up the hip pocket? Well, if you divide that $2.5 billion among New Zealand's 2.1 million taxpayers, there would be enough for an average tax cut of about $20 a week. At current prices that would get you maybe two-and-a-half beers.
Of course, there would be nobody to keep a record of how much tax you had paid, let alone check whether it was the right amount or what it had been spent on. And if you were to write a letter demanding answers on any of these issues, be prepared for the $120 'processing fee' that, say, Electorate Communications Consultancy Services would charge you for a standard answer (I'm basing the amount on what it costs foreigners to apply for a New Zealand visa).
Moral of the story, if there is one? Go ahead and believe, based on evidence or simple prejudice, that there are too many government bureaucats, and that they are overpaid and unproductive. Bemoan the fact that they are raising prices for office space in a few Wellington streets that could better used by, um, firms of lawyers and accountants. But don't take seriously the idea that they are somehow sucking up large portions of the country's wealth.
Also interesting are the pie graphs in the bottom part of the page, which show how those tax dollars are spent by the government. Take a look at the sliver that takes up 4.3% of the New Zealand pie called 'core government services'. This is the name for all the ministries and departments that make up what used to be called 'the public service', and I believe also includes prisons.
More on them in a minute, but first, consider the size of the pie itself. The proportion of the country's gross domestic product taken up by government taxation and spending is a source of considerable angst for many neoliberal pundits. In New Zealand, it is between 35 and 40 percent, depending on who you believe. This is about the OECD average. Nevertheless, Business Roundtable think pieces and op-eds from hawkish economicsts go to considerable lengths to argue that it's too high. Some have suggested that there should be an agreed, or even legislated, limit on the government's share of GDP -- given wholesale acceptance of Milton Friedman's pronouncement that most of what the government does is a dead loss to productivity.
These pundits often salt their economic jargon with talk about 'bloated bureaucracy', and place a lot of emphasis on the increase in the number of public servants under the current government. They give the impression that the salaries of chaps in ties take up a significant chunk of taxpayers dollars. A common anecdote is about the increase in central Wellington office rents over the last couple of years, due to demand from the various ministries. Some even go so far as to blame the country's macroeconomic ills on the hordes of 'pdf pushers' spilling out of offices along Molesworth St and The Terrace, claiming that their high wages are creating inflation and pushing up interest rates.
It may therefore come as a surprise that, as a burden on the country's economy and taxpayers, the cost of the public service almost fails to register.
A look at the Entitleme pie confirms this. New Zealand's GDP is about $160 billion NZD. Let's go with the worst case scenario and take the government's share of that to be around 40 percent -- $64 billion. The amount spent on 'core government services' (bureaucracy) is therefore 4.3 percent of this number -- about $2.5 billion.
That still sounds like quite a lot. Surely if you slashed the bureaucracy a bit, it would ease the deadweight burden on the economy? Ok. Let's say we entirely eliminate every bureaucrat, every government job, every department, ministry, commission and quango. This would free up the same amount of money as if New Zealand's GDP grew by 3 percent, rather than 2 percent, for just one year.
Yes, just one extra good year of dairy prices and tourism would create enough extra money to compensate for the wages of all 40,000 pdf pushers who squirrel away generating paper, or whatever it is they do.
What say you, the hardworking productive taxpayer, decide not to be so generous, and insist on firing the lot of them. Wouldn't that bulk up the hip pocket? Well, if you divide that $2.5 billion among New Zealand's 2.1 million taxpayers, there would be enough for an average tax cut of about $20 a week. At current prices that would get you maybe two-and-a-half beers.
Of course, there would be nobody to keep a record of how much tax you had paid, let alone check whether it was the right amount or what it had been spent on. And if you were to write a letter demanding answers on any of these issues, be prepared for the $120 'processing fee' that, say, Electorate Communications Consultancy Services would charge you for a standard answer (I'm basing the amount on what it costs foreigners to apply for a New Zealand visa).
Moral of the story, if there is one? Go ahead and believe, based on evidence or simple prejudice, that there are too many government bureaucats, and that they are overpaid and unproductive. Bemoan the fact that they are raising prices for office space in a few Wellington streets that could better used by, um, firms of lawyers and accountants. But don't take seriously the idea that they are somehow sucking up large portions of the country's wealth.
Tuesday, January 15, 2008
South Island Summer
Here are some more photos from Christmas and New Year in Canterbury. The majority are thanks to my girlfriend Paola and my sister Cecilia (who has a flash camera with fancy lenses). At this time of the year, stringing together a coherent series of words just seems a bridge too far, but I have a new stack of blog posts lined up for the near future.
As always, click to enlarge.
Playing frisbee, Motunau beach, North Canterbury.
Dozens of roses, Christchurch botanic gardens.
Butterfly on mountain daisy, near Lake Coleridge, Canterbury high country.
Lake Coleridge, Canterbury high country (featuring my Mum and Dad).
Sunset over Motunau Beach, North Canterbury.
As always, click to enlarge.
Playing frisbee, Motunau beach, North Canterbury.
Dozens of roses, Christchurch botanic gardens.
Butterfly on mountain daisy, near Lake Coleridge, Canterbury high country.
Lake Coleridge, Canterbury high country (featuring my Mum and Dad).
Sunset over Motunau Beach, North Canterbury.
Saturday, January 12, 2008
Dolphin's Smile
This is the only half-decent shot I managed to get of the Hector's dolphins in Akaroa harbour. There were at least four or five of them around the boat, dipping and skimming between the waves for about half an hour.
So why didn't I get a better picture?
Because, as soon as they appeared and looked interested, us tourists were eagerly scrambling off the boat to swim alongside the world's smallest and rarest dolphins.
Despite the rarity of their species, these little dolphins are not hard to find in waters around Banks Peninsula, and after what must must be seemingly endless boatloads of gawping visitors, are are still curious enough to take an interest and indlulge in a bit of frolicking.
The scenario is that a boatload of tourists, already wrapped up in their hired wetsuits, heads down the long, narrow Akaroa harbour looking for the dolphins. Once a pair or group of four are spotted, you have to wait to see whether the dolphins are interested in 'playing' It's against environmental ethics -- and the permit of the tour company -- to bother dolphins that are engaged in some other activity and that don't first approach the boat.
Fortunately, the first group of four that we encountered began to circle our vessel, darting back and forth in the classic signs of curiosity. Our dolphin guide explained that once off the boat we had to form a loose circle. The dolphins come close to check you out, using their echolocation to find out what you are. Group too close together, and to the dolphins you appear as a twenty-legged monster. Spread further apart, and they can recognise you as individual humans.
There was a freshening northeasterly in Akaroa harbour, and as we got closer to the heads the onshore wind was stirring up the sea. It was the first time I'd worn a wetsuit and it was slightly disconcerting. The buoyancy of the suit makes it easier to stay afloat, but throws you off balance when trying to swim. Your legs are pushed upward, making you feel like you're being tipped forward and downwards.
As we treaded water and tried to stay stable in the choppy waves, the handful of people on the boat were shouting out where the dolphins were as they zipped in and out of our group. "Right behind you!" "There! Just by your left shoulder!". Of course, with about ten people in the water, it was hard to know exactly whom the dolphin was 'right behind'. I was constantly swivelling around to catch a glimpse of a dolphin fin, slicing through the waves
I'm not confident with the mask and snorkel, and the waves were making it difficult to use them, so I had to stay above the water. Some of the others managed to get an underwater view. The closest the dolphins came to me was zipping by about three or four metres away. It was still a pretty unique and inspiring encounter with the natural world.
Categories: dolphins, Akaroa, New Zealand
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.
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.
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.
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%.
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.
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.
Categories: Alan Garcia, economic development, Peru, el perro del hortelano, Amazon
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.
Categories: Alan Garcia, economic development, Peru, el perro del hortelano, Amazon
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