by Alex Evans | Mar 17, 2008 | Climate and resource scarcity, Global system
As you watch the ongoing tailspin in the dollar’s value and ponder to yourself whether Ben Bernanke is really going to reduce interest rates by a whole percentage point tomorrow, spare a thought for those poor countries – like Ukraine, China and Saudi Arabia – whose currencies are pegged to the dollar. Inflation in all of them is going through the roof as it is, thanks to food, energy and other commodities.
Here’s Ed Yardeni of Yardeni Research:
In emerging economies, core inflation for most people is mostly determined by the prices of food and energy. In these countries, central bankers (who aren’t as politically independent as their counterparts in advanced economies) are reluctant to tighten monetary policy too aggressively to fight inflation because this might trigger a recession, which could be politically destabilising.
So they are increasingly letting their currencies appreciate as their primary anti-inflation policy. This means they are increasingly less willing to prop up the dollar, which then pushes up the key commodity prices that are causing their inflation problem.
David Bowers of Absolute Strategy Research puts it like this: “By failing to recognise the external dimension to the credit crunch, the Fed could introduce a new source of instability.”
by Alex Evans | Mar 17, 2008 | Global system, Influence and networks, South Asia
While China is blocking websites in the hope of preventing news of security force brutality from seeping out, Xinhua is busy denouncing the Dalai Lama as a “master terror maker”. In fact,
The Dalai Lama and his clique have never for a day refrained from violence and terror. His childhood teacher, an Austrian, was a Nazi…
You have to be kidding. Hard to see how China’s going to make a success of the Olympics if this is the best they can come up with on media relations. Moises Naim looks pretty prescient in the light of his observation last November that when the world’s entire activist contingent descends on Beijing,
…the government will inevitably attempt to control and repress the activists. And that will be a new and frustrating experience for a centralized government that is not used to containing well-organized, media-savvy foreigners who work through highly decentralized, international, nongovernmental organizations that know how to mobilize public opinion to advance their causes.
Charlie Beckett, who runs the Public Media Forum at the London School of Economics, reports that the Chinese have been seeking his advice on managing the media better – though it’s not clear how they’d manage to effect such a sea change in so little time, even assuming they were inclined to.
It’s tempting to feel a sense of schadenfreude as China trips itself up over and over again while carrying the Olympic torch, given its appalling human rights record. But on the other hand, remember David Miliband’s observation when he spoke in China last month:
We will only resolve [shared threats like climate change and fragile states] through a new bargain between major states in the international community, embedded in our bilateral relationships, multilateral institutions, and not least the partnership between China, the world’s fastest growing economy, and Europe, the world largest single market. Isolation would be a disaster for that process and there is too much at stake. That is why my message to British people back home is simple. Do not boycott the Olympics, celebrate them instead.
The risk is that if China manages to cock up the Olympics as royally as she seems poised to, then at best it will make it harder to engage her on issues like climate change where there can’t be any solution without her. The world needs China to feel safe to come out of her shell – and this is the best prospect for long term progress on human rights record too (look at Burma, after all – hard to see many signs there of isolation being an effective driver of change).
At worst, of course, the Olympics could go bad at the same time as other chickens (like food inflation or a sharp economic slowdown) come home to roost too – and then all bets would really be off. As Naim commented last year,
It’s fair to say that the Chinese government probably had no idea what it was getting into when it applied to host the Olympics in 2000.
Update: some good reporting here from ITN.
[youtube:http://www.youtube.com/watch?v=xbTsNu08Xqs]
But as Blake Hounshell notes, the LA Times reckons that China’s media strategy is working well for its intended audience – at home:
One key factor is a media strategy that, while still blunt and heavily reliant on censorship and propaganda, shows more nuance than usual for the lumbering Communist Party.
This last week the government has used something it traditionally viewed as a big negative, any suggestion that it’s not in total control, to its advantage by going large with print, still and video coverage of Tibetans attacking Han Chinese in the Tibetan capital, Lhasa, and destroying their property.
Not only does this rather ironically paint the Chinese state and its massive police force as something of a victim, analysts said, but it also stirs up feelings of fear and anger among many Han, the nation’s majority population, that add a personal dimension to the riots.
by David Steven | Mar 15, 2008 | Conflict and security
In a recent post on Global Dashboard, I wrote about resilience, drawing on thinking that Alex and I have been developing together for a new project we hope to launch later this year.
The post was triggered by David Miliband’s argument that one of the defining features of the era we live in is a shift in the balance of responsibilities between state and citizen. It was a mistake to assume this would lead to greater stability, I argued. The key question is whether, when faced with a distributed threat, our systems become more resilient or less so.
Lloyd Anderson, head of science at the British Council and an ecologist, pointed out to me that it is helpful to think about three levels of influence on a system: trends, stresses and shocks.
Trends are gradual shifts in a system’s composition and context. Shocks are immediate and catastrophic. Stresses sit somewhere in the middle, and tend to affect a complex system in a particular way. Under pressure, the system ‘resists’ change up to an unpredictable point. It then shifts rapidly – and usually irreversibly – to another equilibrium.
We pay plenty of attention to shocks and trends. The former sell newspapers, while the latter keep social scientists in work. But stresses are deadly, both because they fly beneath the radar, and because they have the potential to lead to deep-seated changes that undermine the basis of our way of life.
Take two examples: the 2003 heat wave in Europe and the slow-burn insurgency in the Niger delta. (more…)
by Alex Evans | Mar 12, 2008 | Climate and resource scarcity
Our friends at Avaaz have a new campaign on biofuels (full text below the fold). Biofuels are already absorbing 20 per cent of the US corn crop, and that figure’s expected to rise to 32 per cent by 2016. As Avaaz’s email puts it,
Each day, 820 million people in the developing world do not have enough food to eat. Food prices around the world are shooting up, sparking food riots from Mexico to Morocco. And the World Food Program warned last week that rapidly rising costs are endangering emergency food supplies for the world’s worst-off. How are the wealthiest countries responding? They’re burning food.
Go sign the petition to G20 leaders in advance of this weekend’s summit…
(more…)
by Alex Evans | Mar 12, 2008 | Climate and resource scarcity, Economics and development
As if to prove the point I made back in January about Ban being the ‘scarcity SG’, given his interest in climate change and water scarcity, here’s a piece of his on food prices from the Washington Post today. What he thinks needs to be done:
First, we must meet urgent humanitarian needs. This year, the World Food Program plans to feed 73 million people globally, including as many as 3 million people each day in Darfur. To do so, the program requires an additional $500 million simply to cover the rise in food costs. (Note: 80 percent of the agency’s purchases are made in the developing world.)
Second, we must strengthen U.N. programs to help developing countries deal with hunger. This must include support for safety-net programs to provide social protection, in the face of urgent need, while working on longer-term solutions. We also need to develop early-warning systems to reduce the impact of disasters. School meals — at a cost of less than 25 cents a day — can be a particularly powerful tool.
Third, we must deal with the increasing consequences of weather-related shocks to local agriculture, as well as the long-term consequences of climate change — for example, by building drought and flood defense systems that can help food-insecure communities cope and adapt.
Last, we must boost agricultural production. World Bank President Robert Zoellick has rightly noted that there is no reason Africa can’t experience a “green revolution” of the sort that transformed Southeast Asia in previous decades. U.N. agencies such as the Food and Agriculture Organization and the International Fund for Agricultural Development are working with the African Union and others to do just this, introducing vital science and technologies that offer permanent solutions for hunger.
