Monday, March 29, 2010

Cuba's food shortages

Hungry for change
The timidity of agricultural reform
Mar 25th 2010 HAVANA From The Economist print edition
TWO years ago last month Raúl Castro formally took over as Cuba’s president from his convalescent elder brother, Fidel. The switch raised hopes of reforms, especially of the communist country’s long dysfunctional agriculture. But change has been glacial. Official figures show that in the first two months of this year deliveries to the capital’s food markets were a third less than forecast. Nobody starves, but hard-currency supermarkets go for weeks without basics such as milk and bread.
What has gone wrong? Cuba’s state-owned farms are massively inefficient, and rarely provide more than 20% of the country’s food needs. Three hurricanes in 2008 made matters worse. Raúl Castro has acknowledged the problem, and introduced some changes. Idle state land has been leased to private farmers. The government has raised the guaranteed prices it pays for produce. Farmers can now legally buy their own basic equipment such as shovels and boots, without having to wait for government handouts
But farmers say that the reforms have been too piecemeal to be effective. In meetings across the country they have called for more. They want to buy their own fertilisers and pesticides, and to control distribution. The government still supplies almost everything, and does it badly. Much of last year’s bumper crop of tomatoes rotted because government trucks failed to collect them on time.
Significantly, the state-owned media have reported the farmers’ complaints in some detail. They have also announced that 100 of the most inefficient government farms will be closed. Officials are launching a pilot plan to set up market gardens close to cities. And reports from eastern Cuba suggest that food shortages there are less acute than in the capital.
But Raúl continues to move very cautiously. So Cuba will buy much of its food from foreign suppliers. Foreign exchange, never abundant—partly because of the American economic embargo—is again in short supply. The world recession cut Cuba’s earnings from nickel and tourism last year. Imports fell last year by almost 40%.
A foreign businessman in Havana says there have been signs of a further squeeze this year. Transfers abroad by foreign businesses have been blocked, or delayed, for months. The Spanish owner of Vima, a food importer which supplied many hotels and state-run restaurants, made the mistake of publicly criticising delays in getting paid. His contracts were promptly revoked. Foreign companies have been warned that the government may stop selling them staples, such as meat and rice, for their staff canteens. “They told us bluntly that their priority is feeding the general population, that the situation is very serious, and that we should make our own arrangements,” says a manager of one joint-venture.

Saturday, March 27, 2010

Latin America's unproductive economies

Service break

Mar 25th 2010
From The Economist print edition


How public policies have promoted inefficiency

ITS economies may have improved recently, but much of Latin America has performed poorly over the past two generations. The gap in income per head between the region and developed countries has widened since 1960, while many east Asian countries that were poorer have leapfrogged ahead. The root cause has been Latin America’s slow—or even negative—growth in productivity, according to a new study by economists at the Inter-American Development Bank*.








Productivity growth—gains in the efficiency with which capital, labour and technology are used in an economy—is the elusive holy grail of economic development. It is true that most Latin American countries have not invested enough, or provided their people with a good enough education (though both these things are improving). But productivity growth means squeezing more output from the same inputs. And Latin America has been particularly bad at this (see chart 1). Why?

The short answer is that the typical Latin American firm is a small, inefficient service business and may well be operating in the informal economy. Productivity growth tends to be higher in manufacturing and agriculture than in services (see chart 2). It also tends to be higher in large firms which benefit from economies of scale. And it is much higher in formal businesses, which can invest in innovation.








However, Latin American manufacturers are also much less productive than they might be. This is partly because clogged, inefficiently run ports, airports and other transport systems make freight costs unduly high—for example, it shockingly costs more to get goods to the United States from most Latin American countries than it does from distant China or Europe.

But 60% of Latin Americans work in service firms. Many of these businesses are held back by lack of credit and by public policies that give them little or no incentive to become bigger or to operate legally. Latin American tax codes are inordinately complicated: it takes an average of 320 hours per year for a firm in the region to file its tax paperwork, compared with 177 hours in rich countries. The IDB found that a disproportionate share of tax is paid by big companies. Simplified tax regimes for small companies have been set up in 13 of the 17 countries the bank studied. Perversely, that encourages them to remain small.

Only one in three Latin American workers is covered by social-security systems financed by payroll taxes. Governments have responded to this inequity by creating non-contributory pensions and other social programmes. As an unintended consequence, that means there is little incentive to leave the informal economy.

But not all is gloomy. In Chile productivity growth since 1960 has outpaced that in the United States. And since 2006 there has been “an upward blip” in productivity growth in the region as a whole, says Carmen Pagés, who co-ordinated the study. This has gone hand in hand with faster economic growth and an expansion of credit. Productivity growth in Brazil has surged recently: after being negative in the late 1990s, it rose to over 2% in 2007 and 2008 according to the Central Bank.

When economists say that productivity growth is the root cause of development they are almost stating a truism. From the late-1970s to the early 2000s Latin America suffered a macroeconomic slump, accompanied by high inflation and the destruction of credit. Political instability—and expropriations of businesses—in some countries also discouraged firms from growing. It is hardly surprising that productivity suffered.

The achievement of economic and financial stability in the past few years has in turn seen productivity growth rise. The IDB’s study shows that it could rise faster still, boosting incomes, if the politicians take productivity into account when they draw up tax, social and public-investment policies. And the economic weight of services means it is not enough for the region to talk only about export competitiveness. Productivity begins at home.


1. What do you think should be done to boost productivity growth?
2. What is the important factor to revitalize service sector?

Thursday, March 25, 2010

Middle-income and developing countries Crumbs from the BRICs-man's table. Emerging powers have helped poorer nations weather the global recession

Mar 18th 2010 From The Economist print edition



IN COLD-WAR days America and the Soviet Union vied for influence among the poor world’s minnows. Now the BRICs—Brazil, Russia, India and China—are getting into the game, and changing it. This month, Sri Lanka got $290m from China for a new international airport and $67m from India to upgrade its railways. As poor countries emerge from recession and the rich world flounders, big middle-income countries see a once-in-a-generation chance to win friends and influence people.
The process is sometimes direct (through aid, trade, remittances, investment) and sometimes indirect (through commodity prices or competition in third markets, for instance). But it is always hard to pin down. None of the new donors (all of which, except Russia, still get aid themselves) publishes comprehensive, or even comprehensible, figures. But a new study* by the Overseas Development Institute (ODI), a British think-tank, says the emerging countries (such as the BRICs) increasingly affect the growth prospects of poorer ones. In other words, after decades of talk about the importance of “south-south” ties, those links have finally started to mean something.
China is now the largest donor to Cambodia and Sri Lanka. It has a huge list of pledges to Africa. In November the prime minister, Wen Jiabao, promised $10 billion of cheap loans over three years. China has also offered debt forgiveness, new hospitals, professional training for 15,000 Africans and a doubling of aid between 2006 and 2009 (though the accounting is so opaque that this is hard to measure).
When Sudan ran into trouble repaying its $34 billion foreign debt, it turned to China, India and regional development funds in the Gulf. India lags behind China, but has helped bail out Tanzania’s financial institutions by offering special farm credit. Dirk Willem te Velde of the ODI reckons that these flows will soon become even more important. History supports that idea: Western aid tends to wane two to three years after any recession.
Trade and foreign direct investment (FDI) from the West are already falling and the middle-income countries are taking up the slack. While total FDI in Africa fell by about a third between 2008 and 2009, the flow from China soared by 80% (admittedly from a low base). Brazil says it has invested $10 billion on the continent since 2003. Since 2009, the BRICs’ deals in Africa have become a flood (see table).
Similarly for trade: poor-country exports to rich countries have fallen much faster (down by 17% in 2008-09) than those to emerging markets (down by only 7%). In three-quarters of the poor countries that the ODI looked at, middle-income countries have increased their share of trade.
The blessing is mixed. Aid agencies dub China and others “rogue donors” because they give to—and prop up—beastly regimes. Chinese aid is also usually “tied” to hospitals, roads, and equipment built or sold by Chinese companies. And much “aid” is in fact loans at near-commercial rates. African governments have had their debts to the West mostly forgiven—and are piling up new loans elsewhere.
Such aid may also be a trap. The BRICs import raw materials like copper and cotton from poor countries; rich countries tend to buy manufactured goods such as garments. So more trade with the BRICs and less with the rich world is a step down the value chain—the opposite of what China did as it grew richer. Eswar Prasad of Cornell University says the voracious appetite for raw materials of China and India may help poor countries diversify their export markets but not their industry, leaving them more dependent on volatile commodities than before. They also suffer, he notes, from China’s policy of depressing its exchange rate. That undermines their competitiveness and forces them to try to push their own currencies down.
This does not mean the BRICs have been, on balance, bad for the economic minnows. Without them, the global slump would have hit the world’s poorest countries even harder. Deborah Brautigam, author of a new book on China’s role in Africa, says the BRICs’ emergence as aid donors is as important for poor countries as was the fall of the Berlin Wall for eastern Europe. But just as that event did not solve the region’s problems at a stroke, so it is in Africa now. The search for good government goes on.


(words)

1. vied for : compete for something; engage in a contest; measure oneself against others
[SYN. compete]
2. minnows : a company or a sports team that is small or unimportant
3. remittances : a payment of money sent to a person in another place
4. pin down: define clearly, place in a confining or embarrassing position[SYN. trap], attach with or as if with a pin
5. debt forgiveness : 채무면제
6. bail out : to rescue sb from a difficult situation
7. wane : become smaller
8. slack : a noticeable deterioration in performance or quality
9. dub : to give sb/sth a particular name, often in a humorous or critical way
10. rogue : a deceitful and unreliable scoundrel
11. prop up : support by placing against something solid or rigid
12. step down : the act of decreasing or reducing something[SYN. decrease]
13. voracious : excessively greedy and grasping
14. volatile : marked by erratic changeableness in affections or attachments, tending to vary often or widely

U.N. Rejects Export Ban on Atlantic Bluefin Tuna

address:
http://www.nytimes.com/2010/03/19/science/earth/19species.html?scp=1&sq=tuna%20japan&st=cse


U.N. Rejects Export Ban on Atlantic Bluefin Tuna
By DAVID JOLLY and JOHN M. BRODER
Delegates at a United Nations conference on endangered species in Doha, Qatar, soundly defeated American-supported proposals on Thursday to ban international trade in bluefin tuna and to protect polar bears.
Atlantic and Mediterranean stocks of bluefin, a fish prized especially by Japanese sushi lovers for its fatty belly flesh, have been severely depleted by years of heavy commercial fishing, while polar bears are considered threatened by hunting and the loss of sea ice because of global warming. The United States tried unsuccessfully to persuade delegates to the Convention on International Trade in Endangered Species of Wild Fauna and Flora, or Cites, to provide strong international protection for the two species.
“It wasn’t a very good day for conservation,” said Juan Carlos Vásquez, a spokesman for the United Nations organization. “It shows the governments are not ready to adopt trade bans as a way to protect species.”
Delegates voted down the proposal to protect bluefin by 68 to 20, with 30 abstentions. The polar bear measure failed by 62 to 48, with 11 abstentions.
The rejection of the bluefin proposal was a clear victory for the Japanese government, which had vowed to go all out to stop the measure or else exempt itself from complying with it. Japan, which consumes nearly 80 percent of the bluefin catch, argued that the International Commission for the Conservation of Atlantic Tunas, or Iccat, should be responsible for regulating the fishery, not the United Nations. European Union nations, whose fleets are most responsible for the overfishing of bluefin, abstained from voting in the second round after their own watered-down proposal was rejected.
American officials expressed disappointment in the vote, but said they would keep trying in various international forums to protect the tuna and the bears.
“The bluefin tuna is an iconic fish species,” said Tom Strickland, assistant secretary of the interior for fish and wildlife and parks. “The science is compelling, the statistics are dramatic. That species is in spectacular decline.”
He said that the United States had recently declared the polar bear population to be threatened by loss of its sea ice habitat to melting. The Interior Department, he said, had designated 200,000 acres of Arctic ice as critical habitat in need of protection.
“We believe the bear is under great pressure,” he said from Washington. “It should not be traded internationally.”
Canada, Greenland and several indigenous communities, which led the effort to defeat the proposal to protect the polar bear, contended that the bear population was healthy and that it could sustain limited hunting and trade in pelts and body parts.
While there is near-universal agreement that the bluefin stocks are in danger, Japan’s argument resonated with other fishing nations, which were uneasy about what would have been the first intrusion of the endangered species convention into a major commercial fishery.
But Iccat’s own record on managing the fish is widely seen as unsuccessful: the bluefin population has declined by roughly 80 percent since 1970. And while the organization, which has no effective enforcement mechanism, can set quotas, it has set the catch above the level that its own scientists say is safe to ensure the health of the species.
A senior Japanese official said that his country shared the international concern about bluefin stocks, but that the Atlantic fisheries agency was the proper body to regulate its trade, not the United Nations convention.
Masanori Miyahara, chief counselor of the Fisheries Agency of Japan, said after the vote that Japan would now be under pressure to abide by Iccat’s new, lower quotas for bluefin harvesting, according to The Associated Press. Iccat moved in November to reduce the bluefin quota to 13,500 tons from 22,000 tons for this year, and said that if stocks were not rebuilt by 2022 it would consider closing some areas.
“I feel more responsibility to work for the recovery of the species,” Mr. Miyahara said, The A.P. reported. “So it’s kind of a heavy decision for Japan, too.”
Thursday’s vote was the second time Japan had defeated a proposal to protect bluefin. A similar proposal by Sweden failed at the 1992 Cites meeting in Kyoto, Japan.
Mr. Vásquez said it was technically possible for member nations to revisit the votes before the conference ended next Thursday, but that there was little likelihood that either measure would be resurrected.
Attention at the Doha conference will now turn to proposals to protect sharks and elephants.
The United States, the Micronesian state of Palau and the European Union are among nations proposing that several species of sharks be listed under Appendix 2 of the convention, which would require that governments monitor trade in the species but would not entail an outright ban. But with Japan leading the opposition to any United Nations involvement in the regulation of marine species, and China, the largest consumer of shark fins, strongly opposed, the prospects of a deal appear remote.
The elephant talks will center on a proposal by Tanzania and Zambia to resume trade in elephant ivory, but Kenya and some other African nations argue that trade will bring only more poaching.
David Jolly reported from Paris, and John M. Broder from Washington.

서경

Professor,
 
l post the news l will talk about as a comment in your blog. But l can not sure whether I post it to a right place. I could not find the place to email you as you showed to us in the class. So I email you in this way again. Sorry!~~


使用Messenger保护盾2.0,支持多账号登录! 现在就下载!

Wednesday, March 24, 2010

First post

This is the class blog.

Please post news stories by 5 p.m. Friday so we can read them over the weekend and be ready for Wednesday news briefing/discussion.

Nice things to note would be comments about vocabulary/language points and/or controversial or important aspects of the news items that we can talk about in class.

Thanks,

JBH