Search this site powered by FreeFind

Quick Link

for your convenience!

Human Rights, Youth Voices etc.

click here


For Information Concerning the Crisis in Darfur

click here


Northern Uganda Crisis

click here


 Whistleblowers Need Protection



February 22, 2010

The media peg on India’s “demographic dividend” is several years old. But it seemed too important to pass up, even at this late date, if only because it is seldom raised explicitly in discussions of China’s (& India’s) future. In the short-to-medium term a low dependency ratio (that of individuals in the economy relying on others for their daily living needs - the young & the aged - to the number of those capable of supporting them, i.e. those in the working age range) is generally speaking an economic plus & a high one an economic drag. While globally the overall dependency ratio is expected to be stable during the first half of this century, at 0.6, there will a significant shift in its make-up : while today’s global “old age dependency” ratio is 0.11, it will more than double to .25, while the global “youth dependency ratio” will decline from 0.50 to 0.35. Today there huge variations in the youth dependency ratio, from a low of .21 in Eastern- & .27 in Western Europe, through .29 in North America, .37 in the Asia-Pacific region & .44 in Latin America to a high of .69 in the Middle East & Africa (in part due to fertility rates as high as 6.0 in some Arab countries). And the following changes are expected in old age dependency ratios in the first half of this century : India .08 to .22, China .10 to .40, US .20 to .33, Western Europe .24 to .48 and Japan .25 to .71.

It is a sobering thought in this age of “parachute parents” worrying about the safety of their children that, according to Phil Resnick, Head of Forensic Psychiatry at Case Western Reserve University, an expert on filicide, the murder of children by their parents, that in Canada 90% of all children murdered between 1977 & 2006 were killed by family members.

The British Cabinet has been told that the British passports of Israeli residents, fakes of which were used by some of the assassination team that killed a Hamas leader in Dubai last month, had been copied by Israeli Immigration officials at Tel Aviv airport when they had briefly been taken away from them during routine checks upon their return from trips abroad. The Dubai police since also announced that at least two members of the team may have travelled on diplomatic passports, a strict non-no. If this was in fact a Mossad operation, as would seem more & more likely, it must have seriously underestimated the efficiency of the Dubai police.

The steel underground barrier Egypt is building to stop traffic through the thousand or so tunnels from its territory into Gaza, when finished a year or so from now, is expected to interdict 60% of the traffic now reaching Gaza through them, the volume of which can be gauged from the fact that one cement importer claims to be bringing in up to 200 tons of cement daily through just three of them.

THE WORLD IN 2010 (Economist, Robin Bew) 

    ∙ Much of the lift in 2009 came from massive public spending, slashed taxes & interest rates, and re-stocking. But warehouses are filling up again & production could grind to a halt unless consumers regain their nerve. Two things will happen in 2010 : in the developed countries the expectation of a V-shaped recovery will finally be laid to rest & in the developing countries policy makers will be rejigging their economies for long-term, domestic demand-driven growth; for continued high unemployment in the developed world will stand in the way of further trade liberalization & ballooning government debt there will end the pumping of more cash into the economy, much as governments might want to. 

Big challenges for both sets of governments. 


    ∙ Last year governments solved the problem & saved the world economy. This year they are the problem & there won’t be anyone to bail them out. Three factors will determine if  current fears are justified. Is the recovery self-sustaining or stimulus-induced? The scale of the souvereign debt problem, i.e. is Greece a ‘one-of’ or the canary in the coal mine? How deftly will financial policy makers orchestrate a withdrawal of the policy stimulus?

    ∙ The picture on growth is split. In the emerging economies growth is based on domestic demand while there are few signs of robust private demand growth in the rich world  (America’s recent  buoyant GDP growth numbers were misleading since half of it was due to one-time re-stocking). So, while the emerging economies can & must start winding down their stimulus before inflation gets out of hand, the G-7 Finance Ministers on February 7th rightly concluded it was still too early for them to do so. But it is unfortunate that none had credible, medium-term fiscal plans; for the sooner they make clear how they plan to address their fiscal problems, the stronger their recovery will be. 

Where’s someone to motivate people to shed “blood, sweat and tears”? 


    ∙ 9/11 raised the curtain on a world of radical Islam that had long festered in Muslim world as polls revealed a deep anger against the West & support for bin-Laden across it. But since then the moderates have been fighting back. Once Saudi Arabia doled out vast dollops of money to Islamic causes across the world to promote its fanatical Wahhabi doctrine; but, after appeasing homegrown Islamists for three decades, terrorist attacks against government buildings & oil industry compounds in 2003 opened its eyes, and in 2005 King Abdullah ascended to the throne & launched a campaign to discredit jihadism and pry control over education from the clerics. The turning point was the 2002 UNDP-sponsored study of the Arab world by Arab scholars that painted a picture of self-imposed political-, social- & intellectual stagnation from the Maghreb to the Gulf. Since then Indonesia, the world’s most populous Muslim country, has succeeding in marginalizing the once waxing Jemaah Islamiah movement, the local al-Qaeda affiliate, in Iraq even pious people were repulsed by al-Qaeda’s brutality in areas of the country it controlled, and in 2007 a one-time bin-Laden mentor, Salman al-Odah, criticized him for “fostering a culture of suicide bombings that causes bloodshed and suffering ... to entire Muslim communities and families”, Saudi Arabia’s grand mufti issued a fatwa prohibiting Saudis from engaging in jihads abroad & Abdul -Aziz el Sherif, one of al-Qaeda’s top theorists, renounced its extremism, calling on militants to renounce terrorism, and Cairo’s Al-Azhar University, the oldest, most prestigious school of Islamic learning, now routinely condemns jihadism. And most telling was that their families informed the authorities of their worries about the five Americans from Virginia arrested in Pakistan last year & about the ‘underwear bomber’.

    ∙ Polls suggest fewer people in m any Muslim countries now believe suicide bombings against civilians are justified to defend Islam : in Jordan their number has gone from 57% in 2005 to 12% today, in Indonesia those who say terrorist attacks are “rarely/never justified” has gone from 70% in 2002 to 85% today (& from 43% to 90% in Pakistan where government is waking up to the fact the extremism it fostered now threatens its survival). On the other hand, in Afghanistan jihadis have associated themselves with a movement among the majority Pashtun who feel dispossessed & in Yemen the government cannot cope & education has been ‘Islamacized’. But even if the enemy is no longer winning over Arab Street, the need remains to hunt down terrorists, even as the swamp is being drained. 

Too bad Obama allowed himself to be diverted from his original tough line on the Israeli-Palestinian peace process :for progress on thaqt score would have deprived the jihadis of its ‘marquee issue’.  


    ∙ According to JPMorgan the proposed changes to bank capital, liquidity, taxes, size & scope would reduce the average profitability of global banks by 54%, cost them US$110BN in annual earnings, require them to raise $221BN in new capital & reduce their RoE from 13.3% to 5.4% (unless they were to boost charges to their customers by one-third).  

As a big potential loser, JPM is not a disinterested bystander. And should the banks be any more ‘entitled’ to their status quo than anyone else? 


    ∙ China is racing faster than anyone else  in the world to develop clean energy despite being a “poor country” with nothing like the US research-, industrial- & economic resources. Letting this happen is criminally stupid. The future of our country is at stake. The low carbon era is coming : we can be dragged into it, or take up the challenge & remain a world leader. 

Too many of the research resources he refers to are used to develop profitable cosmetic drugs like Viagra or better military hardware rather than socially meritorious ones. China each year produces more technical graduates than there are technical students in all American universities (most of them taught by non US-born, albeit often US-educated, people). In financial markets you are only as good as your last deal & when you start resting on your laurels, you’re toast. Ditto for nations. 


    ∙ While developing country demand returned to growth in the Fourth Quarter, in the OECD countries - which still dominate the global oil market but perhaps not much longer - it remained sluggish. So global demand in  2009 was up just 0.3%, still 2% below pre-recession levels. And higher output in Canada, the US, Brazil & Russia, and cheating OPEC countries, led to supply by the late 2009 exceeding demand by 1.3MM bbld. 

China’s oil imports were up almost 50% YoY in December & 33% YoY in January; even if its base number is still relatively low, at this rate that won’t be the case much longer. 

IS IT TIME TO DUMP MY GOLD? (, Walter Updegrave) 

    ∙ Jim Rogers opined it will go to US$2,000 (by 2020) while Nouriel Roubini proclaimed this to be “utter nonsense” & argues it will settle in around the US$1,100 level.   

Roubini is the NYU prof. riding high since he forecast the financial crisis & Rogers was George Soros’ partner four decades ago in founding the Quantum Fund, the template for every hedge funds since. ‘Retired’ for thirty years, a couple of years ago Rogers liquidated his US assets & moved lock, stock & barrel to Singapore where his children are being educated in Mandarin. His is a hands-on, globally-focused track record whereas Roubini’s is more of an academic, US-centric one. And the fundamentals favour Rogers : a weaker US dollar will make for a higher US$ gold price, a stronger yuan will fuel the traditional Chinese appetite for gold & conversion of the central bank complex from a persistent net seller to a net buyer will allow the fact that newly-mined production & recycling has long fallen short of “disappearance” to finally start entering the demand/supply equation.  


    ∙ HSBC says the emerging markets have stolen the mantle of leadership from the West, with the economic crisis laying bare the strength of the industrializing-, & the weakness of the developed-, economies.  CEO Michael Geoghegan, who has relocated from London to Hong Kong in a reversal of a 1993 move, says “This underlines what we, as the world’s largest emerging markets’ bank, have known for some time ... the centre of economic gravity is shifting” & Chief Economist Stephen King “No longer is it possible to argue convincingly that the U.S. or European nations determine the agenda for the world economy as a whole.”  

PricewaterhouseCoopers expects that by 2050 the economies of China, India, Brazil, Russia, Mexico, Indonesia & Turkey will be 50% larger than those of the current G-7 countries. 


    ∙ The size of the deficit is getting all the attention. But the focus should really be on the fact that even by the President’s optimistic projections it won’t return to a “sustainable level” (defined in the Clinton years as 3% of GDP) until 2020, only then to start rising again.  

Investors funding the deficit at these low interest rates must assume the risk of not being paid back in full & on time is low. But with what - more bonds, like “an investment scheme that pays returns to investors from their own money or from money paid in by other investors” (aka a Ponzi scheme)? It’s basic economics that the price of a good of which there is an infinite supply must inevitably gravitate to zero, and if investors ever grasp this reality, US politicians will be in the same boat as Greece’s today, forced to make politically nasty & highly unpopular decisions. 


    ∙ The consensus is that, if we introduce tough regulation, suppress avarice & improve Fed policies, we can prevent another financial crisis. This is outright wrong. We experienced a classic bust. For prolonged prosperity dulls people’s sense of risk & from 1983 to 2007 we had greatest prosperity ever : inflation declined from 13% in 1979 to 1.6% by 2001, between 1980 & 2000 household securities’ holdings grew 11x to US$11TR, and the median home price rose from US$62,200 in 1980 through US$143,600 in 2000 to US$221,900 in 2006.  

Policy makers tend to fight the last war (this is why after WW I the French built the Maginot line). And as surely as night follows day, the ‘wealth effect’ characteristic of a boom era (when people feel no need to save since they’re getting richer as they sleep) is followed by a ‘negative wealth effect’ during the subsequent crash as people start saving with a vengeance (in this case because US  households saw 20% of their ‘wealth’ melt away in the 24 months ended June 30th, 2009).    


    ∙ The phrase “too big to fail” implies that some financial institutions (four or five in the US & 25 or 30 worldwide) can count on public support at critical times. This gives them a competitive edge in risk-taking & makes for a more fragile financial system. So we must find better fail-safe arrangements; for basic commercial banking is critical to a well-functioning financial system by providing a key source of credit for business, people & government.

    ∙ The starting premise for the President’s proposal to limit proprietary trading by banks is that the risks inherent in commercial banking shouldn’t be compounded by other risks, especially when they create conflicts of interests between banks’ proprietary activities & the interests of their clients.  Furthermore, that there is no need for commercial banks to engage in such activities since they can be done equally well by other, specialist entities, like hedge funds, that can, & regularly do, fail without significant risk to the system.

    ∙ Some vested interests seek a return to “business as usual”(with the continued comfort of an official safety net), arguing they and intelligent regulators & supervisors can maintain the needed surveillance, foresee the dangers & manage the risks. But I’ve been a regulator, a central banker, and a commercial bank official & director for almost 60 years & can tell you that memories always dim, individuals always change and institutional & political pressures always exist to “lay off” tough regulation, especially when times are good. 

Volcker was an early Obama supporter & now is Chairman of his Recovery Advisory Board. As Fed Chairman during the early Reagan years he “wrestled inflation to the ground”, setting the stage for over two decades of prosperity (aided by “financial disintermediation” that broadened & deepened the financial system by creating ways of funding economic activity other than bank credit, but also, in the process, increased the leverage in the system). 


    ∙ During a February 3rd news conference Baltimore Ravens’ owner Steve Biscotti said several NFL owners face financial shortfalls that could “create long-term problems for the league”. Three years ago the owners & the players’ union signed a collective bargaining agreement that he now calls bad the owners; for “I’ve got partners ... whose teams are making less money than their linebackers ... We always knew this was not a big cash-flow business ... but when you’ve got teams ... staying at the minimum of what they have to spend on the salary cap in order not to go upside down financially, we are ... having a structural problem.” 

The union claims the owners seek an 18% across-the-board pay cut, & rates the chance of a lockout in 2011 as “14 on a scale of 1 to 10". But professional sports team owners are caught between a Scylla of rising salary- & (often new) facility operating costs & a Charybdis of changing spending priorities of corporate box holders & the hoi polloi who put ‘bums in seats’. And the erosion of the other sources of income of some of them now make team ownership a less attractive ego trip. 


    ∙ The Marcellus formation lies 6,000 feet below parts of New York, Ohio, Pennsylvania & West Virginia. It is believed to hold up to 500TCF of unconventional shale gas, enough to meet US needs for up to two decades (& it is only one, albeit perhaps the largest, of ten shale gas formations identified so far in North America, incl. four in Canada). Producing this gas requires multiple hydraulic fracturing (aka ’fracking’) that forces a mix of water & chemicals down horizontal drill holes to break the bond between the gas & the host rock. But as the gas is produced, up to 40% of the water injected comes back to the surface, 5x as salty as sea water & replete with chemicals. Once it was trucked to whatever sewage treatment plant would take it which, after treating it, would flush it into nearby rivers & streams. But in October 2008 the level of dissolved solids in the water in Pensylvania’s Monongahela River, the source of drinking water for 700,000 people, was found to be way above government standards; while this was said to pose no serious threat to human health, the water tasted & smelled bad, left a film on dishes washed in it & had a corrosive effect on industrial machinery.  So Pennsylvania & West Virginia now limit the plants’ intake thereof. 

This is only half the story. The more important other half is that fracking requires up to 100x the water of conventional gas production (much of which is lost underground from the hydrological cycle & the rest of which creates an environmental problem on the surface). It has since drawn the attention of the House Committee on Energy & Commerce, and New York State has imposed a moratorium on shale gas drilling in the state to allow the process to be further evaluated, despite industry warnings that unwarranted regulation could slow the development of the resource.   


    ∙ In 1913 Los Angeles built aquaducts to move water from Owens Lake 320 kms. to the city. By 1930 it had pumped it bone dry, leaving a dessicated salt flat which it now wants to use for a 3-5 gigawatt solar farm & is fast-tracking a 32 hectare, 6-10MW, US$40MM pilot plant. 

Three to five gigawatts is over 10x California’s current solar power output, and enough to power 1+MM average homes & prevent the creation of up to 5,000 kilotons of greenhouse gases. 


    ∙ Bank of Canada Governor Mark Carney’s speech  in early February was clear, precise, descriptive of the economy’s recent past & current status but also prescriptive. He said the challenge for Canadian business now is to move beyond the cocoon of the North American economy &, more specifically, that  “Canadian business will need to develop new markets as the traditional advantage of relatively open access to U.S, markets becomes less valuable...” The question is whether it can think beyond the U.S. market. That will be hard for a country with so many branch plants, so few head offices, so much self-satisfaction & long tradition of looking South. But if we don’t , we’ll miss most of the new economic action. 

If this is going to happen, the impetus will have to come from the smaller companies (that create most new jobs anyway). 


    ∙ A report released early this month by the U.S. National Research Council summarized the research done in recent years at the Mallik methane hydrate site in the Mackenzie Delta. While the full results remain confidential, it says that extraction efforts “demonstrated sustained methane production ... (with)  continuous gas flow (during tests at) rates generally ranging from 2,000 to. 4,000 cubic metres per day.” (i.e. 75,000 to 150,000 CFD). 

Why did a US entity report on events on Canadian soil? Methane hydrate is locked in ice. Some estimates are that global reserves of the stuff, of which this is only a part, could be as much as 10x that of the known supply of conventional natural gas. But great care must be taken that it does not escape into the atmosphere once released from its frozen state because, if it did so on any significant scale, it could create environmental havoc. 


    ∙ Health Canada’s New Substances Assessment and Control Bureau by law has just 75 days to rule on whether new substances are safe & if it doesn’t, they are automatically placed on the 23,000+ name Domestic Substances List of chemicals legal for use even if not  rigorously scrutinized. A recent audit observed “the bureau has had problems meeting its legislated deadlines ... (and) was unable to identify the extent to which this has occurred.” 

And once a chemical is on the list, the Bureau cannot ever question it again. 

TORONTO WANTS NO PART OF THE G-20 (CanWest, Andrew Mayeda) 

    ∙ The city has asked Ottawa to relocate this summer’s G-20 meeting for fear of being “severely impacted” & of “serious disruptions in its downtown core”. 

The headline is wrong : what the city wants is to have it relocated from the downtown Conference Centre to the somewhat more out-of-the-way Exhibition Stadium. 


    ∙ At the very time the OECD Secretary-General Angel Gurria (a former Mexican politician) visited Israel to preach the gospel of stamping out corruption, four Israelis were caught in a US sting operation, seeking to bribe a foreign government official to buy Israeli weaponry. Last year Israel stood 32nd in Transparency International’s Corruption Perception Index, better than any of its neighbours, but not good enough for the OECD. But it needs its US$6BN in annual arms sales to sustain an arms industry it otherwise couldn’t afford. 

For the OECD this is an attempt to level the playing field for its own industry that faces competition from  Chinese companies for whom bribery is a routine marketing tool. 


    ∙ Most Israelis feel pretty safe. No suicide bombings for some time. An economy that survived the global recession better than most. A Prime Minister who has kept his centre-right support & is doing well among centre- & leftist voters (although he has lost support among the right by agreeing to a temporary freeze on construction in the West Bank). And Obama’s failure to restart the peace talks (& his backing down on his hardline on settlement construction) has left the Netanyahu & the hardliners gloating, and the Israeli peace camp marginalized.

    ∙ But warns Israeli journalist Aluf Benn in Haaretz “Experience in the Middle East shows calm can turn into tension, and tension into war, in an instance.” In 1973 the Israelis, after their victory in the 1967 War, didn’t see the Yom Kippur War coming, after the 1979 Israeli-Egypt peace treaty & the routing of the PLO in Lebanon in 1982 they were blind to the advent of the 1987 intifada, and after the Oslo peace process in the late 90's they failed to anticipate the second, more violent intifada. And there is no shortage of potential flash points. Thus, when Syrian officials recently warned that in a war Israeli cities would become targets, Foreign Minister & super hawk Avigdor Lieberman lost no time warning this would topple the Assad regime (the Syrian warning was prompted by Defence Minister Ehud Barak telling an audience that without peace with Syria, Israel could face a needless war; while intended as a wake-up call for those Israelis who cannot envisage giving back the Golan Heights & believe  “the Golan has become part of Israel”, the Syrians took as a threat).

    ∙ Both Jordan’s King Abdullah & Turkey’s Prime Minister Recep Tayyip have cautioned Israel not to get too smug, with the latter saying “Israel should give some thought to what it would be like to lose a friend like Turkey” (while once an ally of Israel to the point both countries held joint military exercises & the go-between in the Israeli-Syria peace discusions, he incurred Netanyahu’s displeasure for criticizing Israel’s assault on Gaza last year). But for every King Abdullah or Prime Minister Erdogan urging caution, there is a Silvio Berlusconi or a Mike Huckabee to reassure the Israelis they are doings things just right.  

In a case like this it is usually better to heed the advice of your neighbours than that of those in distant places whose wellbeing won’t be affected when your neighbourhood goes up in flames.  

THE DRAGON STILL ROARS (The Economist, Pam Woodall) 

    ∙ China’s GDP growth has averaged almost 10% a year for 30 years & many economists expect its economy to overtake that of the US within 20 years. But, while the same was expected of Japan in the 80's, the gap between the US & Japanese economies is wider now than it was then. So some analysts believe China now is like Japan was then, with chronic overinvestment, excess capacity & falling returns, a tidal wave of bank lending that heralds a future surge in bad loans & dangerously bubbly stock- & property markets. But China’s per capita GDP is still less than one-tenth of that of Japan or America, its economy is still in the early stages of development with ample scope for adding to productive infrastructure & lifting productivity. And its per capita capital stock is one-twentieth of Japan’s & with half of its labour force still in agriculture, it still has a lot of scope for increasing productivity by moving surplus labour into industry & services. While there is overcapacity in a few sectors, in 2009 most new investment went into infrastructure. And while Japan built roads to nowhere to prop up its economy, China’s infrastructure investments will facilitate future growth.

    ∙ Over the next decade China’s GDP growth rate will slow down, perhaps to 7%, & its future growth depend less on exports. For its share of global exports will hit 10% in 2010, up from 4% in 2000, and Japan’s experience suggests there may be limits to a country’s share of world markets; for its 10% share of world markets fell as the Yen strengthened (& China in 2010 will be under growing foreign pressure to allow the yuan to resume its climb against the US dollar). So more of China’s growth must come from domestic consumption; for while infrastructure investment boosted demand quickly, longer term more consumer spending & social services are the best way towards long-term sustainable growth.  

Japan’s export experience may not be relevant; for when its exports hit 10% of the global total its population accounted for < 3% of the global total. Taking their 1989 GDP in current US dollars as a base 100 , the US, Japanese, Canadian & Chinese economies by by 2009 they had grown to 269, 176, 260 & 1,633 respectively, although on a per capita basis the outcome was less startling : 180, 150, 153 & 488 (these numbers to varying degrees are affected by exchange rate fluctuations). And despite all talk that China is about to become the second largest economy in the world, on a per capita basis it still only ranks No. 110 


    ∙ While seeking to appease unappeasable foes like Iran & Hugo Chavez, the US treats China, its critical economic partner, like an adversary. Treasury Secretary Geithner lectured Premier Wen Jiabao on global warming, an area in which he has zero expertise, President Obama fussed in a meeting with Senate Democrats about the yuan-dollar relationship at a time investors were more concerned that China could cause the dollar to crash & Hilary Clinton took up the cudgel for Google on Internet policy, which is not a government responsibility.

    ∙ Any serious foreign policy would recognize the current regime in China is the best we can expect for now, that China revitalizing Asian entrepreneurship has been the most positive development in the world in the past 30 years, that with tens of millions of Muslim citizens China is as threatened by radical Islam as the US, & that, with a similar dependence on Taiwanese manufacturing, China’s sabre rattling vis a vis Taiwan is more theater than threat (especially since the latter’s entrepreneurs have established links with China regardless of what their governments say or do). So it is self-destructive folly to risk this core synergy by trying to score points on global warming, the yuan-dollar relationship & Internet politics. 

Small wonder this was reprinted in the China Post. Glider is a Harvard grad who once wrote speeches for Nelson Rockefeller, George Romney & Richard Nixon and now is a Senior Fellow at the Seattle-based Discovery Institute (that “seeks to produce a positive vision of future practicalities by the common sense tradition of representative government, the free market and individual liberty”) where he heads its Program of Technology & Democracy. He authored The Israel Test, which claims the root cause of the Israeli-Arab conflict is not race or religion, but human resentment of success, in the belief one person’s success comes at the price of someone else’s pain & poverty. 


    ∙ China has vaulted past Denmark, Germany, Spain & the US to become the world’s largest maker of wind turbines, is now its largest manufacturer of solar panels, and is seeking to build more nuclear reactors & develop more efficient coal-fired power plants. President Obama in his State of the Union speech alluded to this when he said “I do not accept a future where the jobs in the industries of tomorrow take root beyond our borders.” 

To compete, more than ‘talk the talk’ is needed.


(FP, Jonathan Ratner) 

    ∙ Chen Zhao of Montreal-based BCA Research says that as its gross savings rate rose from 36% of GDP in 1990 to 50% in 2007, household savings remained in the 20-25% range. 

This still leaves scope for a massive increase in demand in absolute terms. 


    ∙ In 2004 India had 1,080MM people, 672MM of them in the 15-64 age group, aka the “working age population”, & 408MM in the “dependent population”, those deemed too young or old to work. This gave India a “dependency ratio” (of the dependent- to working age-, population) of 0.6. But the fertility rate has fallen from 3.8 in 1990 to 2.9 (& is still falling); so its dependency ratio will decline to 0.4% by 2030, giving the Indian economy an edge in the GDP growth sweepstakes going forward by having more, younger & typically better-educated workers. This is called the “demographic dividend”, when labour force growth outstrips that of the dependent population. 

The decline in China’s dependency ratio from 0.7 in 1980 to the current 0.4 contributed to its meteoric growth; for its one-child policy caused the decline in the number of children to vastly outstrip the growth in the number of old people. But in the next two decades, as India’s dependency ratio declines from 0.6 to 0.4, China’s is expected to rise from 0.4 to 0.5.  


    ∙ Spanish air traffic controllers are technically civil servants but in 1999 were given control over their own salaries. So now they make an average Euro375,000, & up to Euro900,000 which has prompted emergence legislation to rein them in. 

Not surprising in a country in deep recession, with 20% unemployment & a government in dire  fiscal straits that pays foreign workers to go home provided they promise to stay away for three years.  


    ∙ It is investing US$ 1.63BN over the next two year in a JV with Cosan SA to produce ethanol from sugar cane. This is its first ever major move into biofuels & the biggest investment by any Western energy company in ethanol production. It will primarily target the Brazilian market where all new cars now must have engines that can run on a ethanol/gasoline mix.  

Sugarcane-based ethanol has a far greater energy efficiency than the corn-based stuff since there is no need to use fuel to first turn carbohydrates into sugar before converting the latter into alcohol. Meanwhile Shell’s arch rival, ExxonMobil, has turned to ‘wildcatting’ in high risk ‘frontier’ regions around the world, incl. offshore in the Philippines, the Black Sea, Libya, Brazil, Columbia, Madagascar, New Zealand and most recently the Arctic, despite the fact that over the years its track record in finding oil has not been impressive & that it has typically ended up maintaining its reserves by buying assets from typically smaller companies that are much better at that sort of thing. 


    ∙ At the end of 2009, the top five countries by windpower installed were the US (35,159MW), Germany (25,777), China (25,104), Spain (19,149) and India (10,926). And those that installed most new windpower capacity in 2009 were China (13,000MW - up 102%), the US (9,922 - 39%), Spain (2,459 - 15%), Germany (1,917 - 8%) & India (1,271 - 13%).  

Canada, with 950MW of new wind power installed in 2009 was ninth in that respect but didn’t make it into the top ten in terms of total windpower capacity (i.e. it had less than Denmark’s 3,465MW). 


    ∙ The message in Raj Patel’s The Value Of Nothing - Why Everything Costs So Much More Than We Think is summarized by this message on his website : “From the 1970's onward, our economy was hijacked by freemarket fundamentalists who mantra was greed is good, regulation is bad ... But it gets darker still : We were all along for the ride. We bought, we ate and drove more. And paid for it with debt, diabetes & pollution ... We mortgaged our future ... And called it freedom.” Patel also believes that by trying to spend our way back to normal & salvage a broken status quo we are depleting our ability to govern & address problems like unemployment, health care & climate change, & argues our problem has been our propensity to over-value destructive things - such as financial derivatives & crude oil - and under-value truly valuable things - such as sustainable food production, the climate and other market externalities that market economies take for granted. And finally that “The perpetual quest for economic growth at all cost has turned mankind into an agent of destruction through the systematic under-valuing of the eco-systems that keep our Earth alive, that the consumer economy takes for granted and won’t pay for .” 

Everybody, incl. the US Tea Party crowd, is looking for someone to blame; for it is simply too painful to even think that we all bear part of the blame, if only because we chose to believe, & continued to elect to public office, bunches of yoyos who told us there was a free lunch & who, once in office, made it their first order of business to feather their own nest & their second order of business to stay in office since far too often it was the best-paying, most ego-boosting job they never had.  


    ∙ We need a more bottom-up, citizen-led strategy for sustainable development. While in Africa there has been real improvement in the past decade, we now need a new citizen compact to build thereon. But to get it African countries need greater accountability (in which technology can be a big help), less lionizing of leaders (which makes it difficult to criticize them), more transparency (because thieves have more to hide) & more private investment (to fund a rising generation of young African entrepreneurs). 

There has been growing disenchantment among young, well-educated professionals across much of sub-Saharan Africa with the top-down approach of traditional foreign aid that often benefited political insiders more than the hoi polloi & didn’t take enough account of local sensitivities & priorities. Or as Githingo puts it “to fix Kenya, start with its people” (he headed the Kenya Chapter of Transparency International - of which his father was a co-founder - until after the 2002 election the new President, Mwai Kibaki hired him to head up the anti-corruption unit in his office, from which position he found it necessary to resign after a couple of years, by fax from London, after getting one too many death threats for getting too close to implicating powerful political insiders. 


    ∙ Twenty-five years ago 4% & 11% of California’s budgetary spending went to prisons & universities respectively; today these percentages are 9.5% & 5.7%. 

This is due in part to the “three strikes and you’re out”  policy, & in part to the rigid enforcement of parole provisions that has people, who often were jailed for minor offenses in the first place, end up back in jail for relatively minor violations of their parole provisions. 

    ∙ In Japan 46% of those over the age of 14 own a car, in the US 44% & in South Korea 26%; the corresponding numbers for China & India are 4% & 1% respectively. 

With a combined population of close to 2½BN, they present a massive potential car market. 

    ∙ Taiwan’s foreign exchange reserves are in the US$350BN range. 

In other words, more than 8x China’s on a per capita basis. And in the Fourth Quarter its GDP grew at an 18% annual rate, much faster than had been expected, & in January its exports were up 75.8%, with those to China, its biggest trading partner, up 187.8% YoY. 

Home Books Photo Gallery About David Survey Results Useful Links Submit Feedback