Short Cuts (VIII)

Time waits for no one, week comes to an end and here you have more short readings for the weekend:

1. 70 years ago, on April 26th of 1937, the Condor Legion, then commanded by Hitler, indiscriminately bombed a small town in the Basque Country called Gernika with the approval of Franco. It was the first time civilians were the main target of military actions... the horrible scenes led Picasso to paint one of his most famous paintings (in the picture).

2. Watch out if you drive in Africa! According to the latest WHO report entitled Youth and safety:

Africa's roads are by far the world's most dangerous with more than 24 in
every 100,000 of the continent's population dying on them annually

So, now we can say that investing in infrastructure not only promotes economic growth but also implies important savings in terms of lives!

3. In this short piece from The Washington Post Bill Easterly offers his views on the actual situation of the World Bank. According to him, the Wolfowitz's affair is just only another problem to add to the structural ones. It's worth a reading!

4. Boris Yeltsin died this week. He was in command of Russia while the "dark" processes of privatisation took place. Stiglitz wrote a lot about this issue in his Globalization and its Discontents.

5. Yes... Rodrik has recently set up his own blog!

Trade for development?

Here we go again! Another round of negotiations has taken place in Delhi in an attempt to revive stalled (but also unequal) global trade agreements. Something really shocking is that despite this persistent lack of agreement, and according to the latest WTO report, last year international trade grew faster than in 2005. Another important idea is that "not everything comes from China". According to this same report, and quoting Evan Davies from BBC News:

"In terms of exports of goods alone (which account for four-fifths of global trade), Germany is the world leader, with the US second and China third."

There are some questions I would like to raise concerning this issue in terms of its consequences for developing countries:

1. The ideological and intellectual basis that sustain these rounds of negotiations sometimes forget that increasing trade is a mean to achieve better economic and social conditions, not an end in itself. The WTO 's main goal is to fix and enforce fair trade deals conducive to better economic ans social conditions.
   
2. LDCs are obsessed with achieving greater access to agricultural markets in developed countries. Certainly this is a good start, but their advancements today in accessing these markets in developed countries has a big cost: the opening of their markets to services and industrial goods originated in developed countries. Moreover, great distribution groups (mainly from 1st world countries) play a major role in making the profits go back to developing countries.
   
3. Modernization and development can't be sustained in the export of products made with cheap labour force. Developed countries today are those that made possible to generate products with more added value based in technology and well prepared human capital.
   
4. These round of trade negotiations should also consider the free movement of temporary workers from developing to developed countries!
   
5. Conditions today are very different from those faced by nowadays developed countries. Developed countries today protected their infant industries (the international competence wasn't that fierce!) and developed efficient public sectors to deal with the risks associated to more open markets.
   
6. China and India have recently joined the WTO, whereas their impressive economic performance dates back from almost 2 decades ago!

More ideas on this issue here (in Spanish, though!)

Sant Jordi / Saint George

Here, today, men give roses to women, and women give books to men. Strange, eh? 'cause women in Spain read much more than men! (here the news! and some data)

Anyway, have a nice day!

Short cuts (VII)

Here we go again with some more short cuts to get the good but dispersed information and events around the world!

1. I certainly do not believe that being able to "almost freely" buy an automatic gun is the main reason for last week tragedy in Virginia University. In these and in other horrible experiences in the past, other reasons might have played an important and deeper role. Elements such as social cohesion, the feeling of being considered part of a family, a community, a project; increasing individualism in society,... and many others come to my mind. Societies, everywhere in the world can create disappointed individuals, but I'm completely sure that restricting the access to weapons would avoid "unregrettable" consequences. Here is an interesting debate on the issue!

2. A great classic on the East Asian Miracle and the WC, by Paul krugman: Dutch Tulips and Emerging Markets

3. ODA from developed towards developing countries fell during last year. DAC provides the official info. If we consider the different types and conditions of aid under the umbrella of these overall figures reality would be even worse... but again, the debate should move from quantity towards quality!

Good news at the global level

Data, data, and more data... The World Bank has recently published its latest estimates concerning the advancements against underdevelopment (the World Development Indicators). At the global level, the fight against poverty seems to be working. People in the world living in abject poverty (with less than $1 a day) has diminished between 1990 and 2005 by around 265 million people. A great success considering population growth and that this has taken place in developing countries.

Besides this bright picture there are other questions not directly confronted by this Bretton Woods organisation...

• It seems that there is much more consensus in the analysis of the number of poor people people than in how getting out of poverty. China is the champion country in terms of reducing the number of poor people. And China, as well, has chosen its own path towards development (one which really lies far from the recommendations of International Organisations such as the World Bank or the IMF). On the opposite side, we find Africa and Latin America, two of the best students in the Washington Consensus graduate courses but the worst in terms of poverty reduction.
  
• Other important question refers to the World Bank... is this one the appropriate organisation to analyse and determine the number of poor people in the world? I mean, given that the World Bank is the most important organisation to fight against this global illness, shouldn't his progress be scrutinised by an independent organisation?... may be we should think about he creation of an independent organisation to set the size of poor people in the world, no?

Additional thought: in the interesting book Freakonomics (here you can find the blog), the authors distinguish among economic, moral and social incentives. Do the countries dealing with the world bank face any moral incentives to follow the world bank recommendations after the recent Wolfowitz's nepotist behaviour towards his partner? The board of governors of the Bank should ask for his resignation. By doing that, the Bank would recover most of its legitimacy towards its "customers".

Short Cuts (VI)

The weekend is back... and with it, more short cuts:

1. For those interested in clear cut data on development issues, you should have a look at these interesting maps developed by the World Bank.

2. Wanna check what happened (is happening) in Darfur? Interesting ICT applications towards the fight against atrocities against human being! Follow this link.

3. The vital signs of Latam according to the Mackinsey Quarterly: simple, but with the main important ideas on the region (subscription required! it's worth it, though!) Maybe one should complement this information with the recently aired Statistical yearbook for Latin America and the Caribbean, 2006. Some things seem to be working in the region: poverty is decreasing, inflation remains low, growth remains stable, public finances in order..., how sustainable is this positive evolution? how much of this can be explained by external factors such as the increasing demand of natural resources present in the region?

3. Bad news for Wolfowitz's war against corruption. He seems to be the first one in not reaching his own predicaments... how can you fight corruption if you are seen as a nepotist?

Short Cuts (V)

A longer list of short cuts as I expect not to be connected to the Internet until next week. The reason, spring break!, which in Spain means: scary people looking like old fashioned KKK supporters rallying in the streets.

Much more interesting stuff in the following links:

1. Always wanted to study at the MIT but not smart enough? now you can! A really interesting initiative... is the MIT doing some type of "educational dumping" or is it too confident on signal theories?

2. Ever wondered about the meaning of certain songs? then you should visit this web. And about the relationship between song lyrics and economics? then look at this blog, via marginalrevolution.

3. From aggressive marketing to soft marketing... or from hard power to soft power, this is what the US should have to be doing. At least this is what Bou thinks after reading Nye's "The paradox of American Power"!

4. Jokes about economists and economics. I like this one:

A physicist, a chemist and an economist are stranded on an island, with nothing to eat. A can of soup washes ashore. The physicist says, "Lets smash the can open with a rock." The chemist says, "Lets build a fire and heat the can first." The economist says, "Lets assume that we have a can-opener..."

Paul Samuelson

5. Some youtube rarities... learning philosophy with the Monty Python.

The synergies in development: from plans to strategies

The more one reads about development, the more one realises about the complementarities existing among different policies and initiatives. We could even talk about "the economies of scale of development".

For example... how are we gonna reduce maternal mortality if we don't have appropriate roads that can make women arrive to hospital in due time? How will we be able to attract new teachers to schools in isolated rural areas if facilities are not appropriately set up? How are we gonna have adequate teachers if they die of AIDS before being adequately trained? How can we develop an adequate industrial policy if we don't have an appropriate judicial system capable of pursuing corruption?

If we accept these preliminary facts, then we can understand why underdevelopment can be "understood" as "being trapped in a vicious cycle" (see this World Bank report for this same case in LATAM), but also, why international cooperation agents and donors should agree and talk about consensuated strategies and not about isolated plans when defining their development assistance initiatives in LDCs. Bilateral and multilateral donors should look for the economies of scale existing in ODA, something which is currently not happening!

Unfortunately, we live in a world of limited resources (and political interests, of course!), and it is impossible to face all the symptoms associated to underdevelopment (lack of human capital, lack of access to sanitation facilities, to water, pervasive corruption, unpaved roads, and many many more...). The solution lies then in an appropriate sequencing, and prioritising the interventions under the umbrella of an adequate strategy taking into account the peculiarities (be they social, institutional and economical) of the country considered.

An example adapted to the study of the constraints of economic growth can be found in "Growth Diagnostics" by Hausmann, Rodrik and Velasco. A good summary here.