Archive for category: Economy

Information and stories about economy.

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Economy Strong, Poverty in Israel

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Over the last several years, Israel has enjoyed economic growth and low unemployment. Unfortunately, that is not all good news. A report recently released by Israel’s National Insurance Institute and the Central Bureau of Statistics indicate that over 1.7 million people, or 23.5 percent of the population, live below the poverty line. Of the 1.7 million people living in poverty, 817,000 of them are children and 180,000 of them are elderly. In addition, one in five households is living at or below the poverty line.

In recent years, Israel has been seen as up and coming in the high-tech sector, drawing international attention. Even though Israel is seeing significant progress, The Organization for Economic Cooperation and Development (OECD) released a statement saying, “Israel’s output growth remains relatively strong, unemployment is at historically low levels…However, average living standards remain well below those of top-ranking OECD countries, the rate of relative poverty is the highest in the OECD area.” The report also adds that the poverty problem is affecting some groups more than others, “Among Arabs and in the rapidly growing ultra-Orthodox Jewish community poverty is over one in two, mainly due to low employment rates among Arab women and ultra-Orthodox men”

The OECD indicated that Israel surpassed some of the average measures of other OCED members; it ranked far below average in similar social themed categories. These categories included housing, education and skills, social connections, work life balance, environment quality, personal security, and civic engagement. Fixing some of these social problems could help alleviate poverty in Israel. Action that should be taken should target groups that are endemic with poverty and other related problems such as Arabs and the ultra-Orthodox Jewish community.

The OECD did offer several options for different solutions that could help alleviate poverty in Israel. One major suggestion was to improve education, especially in areas with severe levels of poverty. Another suggestion was to begin the process of pension and welfare reform to ensure that it is capable of coping with an aging population. Finally, the OECD favored sales tax increases over income tax increases so the tax does not become more of a burden on already cash-strapped families.

– Colleen Eckvahl

Sources: Your Middle East, JTA
Photo: Ivarfjeld

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Merchant Marines and Food Aid Bill

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For some, the U.S. Merchant Marine represents an organization that shuttles American imports and exports around the world during peacetime while becoming a naval auxiliary during wartime. For others, they represent the largest obstacle to food aid reform.

Current food aid regulations stipulate that at least 80% of aid must be shipped by U.S. citizens on U.S. flagged vessels. Critics argue that needless money and time is spent hauling items around the world when food could be purchased locally in a much more timely fashion.

President Obama proposed a food aid overhaul in 2014’s fiscal budget that would reach an estimated 2 to 4 million more people within the year. Specifically, he wished to expand local and regional procurement procedures and food vouchers.

U.S. mariners were not amused by this proposal, however. When the food aid amendment attached to the farm bill reached the Congress floor, maritime lobbyists worked strenuously to ensure it wouldn’t pass, and succeeded.

The U.S. merchant marines provide a unique service for the United States. As they are not employed by United States military, they are able to service both the government and private sector.

The duality of their role in regard to the United States is significant for a number of reasons. The Navy League, a special interest group representing the U.S. maritime community, reports that they provide over 33,000 jobs for Americans, account for $1.9 million in economic output and $24 million in household earnings. Although food aid reformists argue that the shift in these numbers would be slight, by only a few hundred, Merchant Marine advocates contend that change would usher in the end of the merchant marines all together.

The Merchant Marine’s ability to transport troops and supplies during wartime, known as sealift, may be severely impacted if reform results in job loss. The U.S. Maritime Service was established by President Roosevelt in 1938 in anticipation of needed shipping vessels to both the European war front and Pacific Theater. The Merchant Marine provided invaluable service during the war, and current mariners argue that their services are still necessary.

Despite the mariners concerns, the Obama Administration has plans to counteract any negative effects the reform may usher in by providing aid directly to the U.S. Merchant Marine.

The administration proposes shifting $25 million of the efficiency savings that will be obtained through the food aid reform to the Department of Transportation’s Maritime administration. According to the White House International Food Aid Fact Sheet, this additional funding will provide a vehicle to support sustainment of militarily-useful vessels and a qualified pool of citizen merchant mariners.

Although this may not be the solution the merchant mariners were hoping for, the strong advocates for food aid reform may ensure that this is the best they can expect.

– Emily Bajet

Sources: The Center for Public Integrity, U.S. Merchant Marine FAQ, The Maritime Executive, The White House: International Food Aid Fact Sheet
Photo: Giphy.com

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UN Economic and Social Council

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On January 23, 1946, the first session of the United Nations Economic and Social Council (ECOSOC) was held.  Almost 68 years later, ECOSOC is still grappling with the world’s economic, social and environmental challenges.  The broad categorization is daunting, especially since the Council and its subsidiary bodies are responsible for about 70 percent of the entire U.N. human and financial resources.  The span of ECOSOC encompasses economic, social, cultural, educational and health concerns, according to the U.N. Charter.  The Council’s subsidiary bodies demonstrate the diversity under ECOSOC’s umbrella of responsibility: U.N. Forum on Forests, Commission on Narcotic Drugs, Commission for Social Development, and the various regional commissions.

The U.N. General Assembly elects the 54 member-governments, with each region allocated a certain number of seats.  The U.S.’ three year term began in 2012 and will end in 2015.  The Colombian representative is currently President, with four Vice-Presidents from Albania, Austria, Pakistan and Sudan.  The year 2013 has seen major reform efforts from the Council, aiming to make ECOSOC more effective, more issues-oriented, and more responsive.  For example, the Commission on Sustainable Development held its final session in September after it was slated to be dismantled due to lack of progress in its sector.  The chairperson acknowledged that though the Commission greatly influenced the 21st century environmental goals, it did not create the change sought out by the larger Council.

As a result of its extensive areas of focus, ECOSOC is one of the most important humanitarian bodies in the United Nations.  One of the early acts by ECOSOC was to adopt the Commission on Human Rights’ Universal Declaration of Human Rights, an early stepping-stone in the path to equality.  The current reforms mark an important return to an issue-centered approach that many hope will lead to greater progress in the subsidiary bodies’ foci.

– Katey Baker-Smith

Sources: UN News Centre, UNISDR

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Cambodian Garment Worker Clash Turns Deadly

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One bystander was killed and 20 people were injured when police clashed with protesting garment workers in Phnom Penh, Cambodia on November 12, 2013.

Workers at the SL Garment Processing Ltd. Factory, one of the largest in Cambodia and a supplier to many western brands including Gap and H&M, marched from the factory towards Prime Minister Hun Sen’s Phnom Pehn home to protest unfair wages and poor factory conditions. They were, however, blocked by police at Stung Meanchey bridge. Reports differ on which side started the violence, which escalated to more than 100 police officers firing tear gas, rubber bullets and live ammunition into the crowd, who were armed mainly with rocks and sticks. Police arrested 37 people, including seven monks, who were later released.

The march marked the three-month anniversary of 4,000 workers walking out of the SL factory to protest the presence of armed military police, which they viewed as an intimidation tactic meant to expel unions. Company shareholder Meas Sotha incited rage among workers with his claim that police were only there to protect the factory. SL 2 joined the strike, demanding raised salaries as well as a $3 per day lunch stipend and Sotha’s ousting.

Conditions in Cambodia’s more than 500 garment factories, though better than in some areas of the nation, are dismal. Wages are low—workers at SL, for example, make just $75 monthly—and factories are unsafe, with poor ventilation, recent collapses and regular fainting masses of malnourished workers. About 500,000 Cambodians work in garment and shoe factories, supporting the industry that accounts for 80% of the country’s exports. In 2012 alone, Cambodia exported $4.45 billion in products to the United States and Europe.

The protests erupted at a time of international attention on the garment industry following several deadly incidents at factories in Bangladesh, including a factory collapse at Rana Plaza that killed over 1,100 people in April. According to the New York Times, many multinational organizations are now looking to Cambodia as an alternative to factory locations in Bangladesh. Unfortunately, in Cambodia, strikes are frequent, though factory concessions are small and rare.

Workers at Alim Cambodia Co. Ltd. blocked a road in Phnom Phen on November 13, 2013 also protesting for higher wages. The demonstration was short-lived, breaking up due to rain when protestors became concerned they would get sick.  The Alim protestors were demanding a $1 lunch stipend, and were angry that the factory was paying new workers $93 monthly to their $89.

The Cambodian government has made few efforts to back garment workers, and seems largely indifferent to workers’ rights. In fact, government-official-mediated talks about wages between unions and SL ended in a deadlock.  Although the Cambodian People’s Party raised the monthly minimum wage from $61 to $75 earlier this year, reports by the local Community Legal Education Center and United Kingdom-based organization Labour Behind the Label found that a single garment worker needs at least $150 monthly to cover basic needs.

The United Nation’s International Labor Organization (ILO) released a report calling for the compliance of the Cambodian government and garment companies in improving workplace conditions in the garment industry, specifically concerning fire safety, child labor as well as worker safety and health. The ILO also announced in September it plans to continue the practice of “naming and shaming” factories that violate the law.

– Sarah Morrison

Sources: The New York Times, NPR, The Cambodia Daily: Garment Worker Clash, The Cambodia Daily: Protest, AlJazeera, AlJazeera America

Mining in Tibet

The Tibetan Autonomous Region, a territory of China, is a resource-rich land, ripe with large stores of copper, oil, lithium, chromite, uranium and gold.

As a result, the government of China displaces numerous Tibetans. The Central Tibetan Administration reports that around 240 mining sites have replaced once-nomadic sites. The China National Gold Group is a government-sponsored organization that owns mines in the Tibetan plateau.

The Stop Mining in Tibet movement states that local Tibetans do not benefit in any capacity from the numerous mines that have sprung up. Stop Mining in Tibet equates the process as looting and calls for its immediate termination. Canadian corporations, in collaboration with the Chinese government, exploit the mines and not only negatively affect the Tibetans in the area, but also do ecological damage to the Tibetan plateau.

Mining sites created near the continent’s largest rivers, such as the Yangtze and the Yellow, are threatened with pollution of its waters. The pollution poses such a danger that India, Pakistan, and Bangladesh may also be affected by polluted waters because they are downstream.

Historically, Tibetans limited their mining, considering the land to be sacred. Now, many of Tibet’s resources are funneled straight into the rapidly industrializing China, with very little benefit towards the pastoral Tibetan community.

Furthermore, with over 6 million nomadic Tibetans in the region, this displacement comes at a time when Tibetan refugee acceptance is in a current decline, according to the BBC.

Displacement of the pastoral communities in Tibet was alleged to have begun in the early 2000s, but recent reports have seen the phenomenon gain more ground. Further information is largely limited, as foreign reporters are restricted in their coverage by the Chinese government.

This past April, a landslide found over 80 miners trapped in the Jiama mine. The Chinese government stated that mining did not cause the landslide, but the Tibetan government in exile, operating from India, claims otherwise.

The majority of the miners found trapped were Han Chinese, with a report of only two Tibetan miners. The majority of miners are not Tibetan themselves, but rather hail from outside the Tibetan region.

With the Chinese government claiming Tibetan land for the betterment of China and a Tibetan government operating from a large distance away, pastorals are left to the whims of governmental decree. In this case, scores of their community are largely displaced. Protest movements exist – but what is a land-rich in resources is sorely lacking in human rights.

– Miles Abadilla

Sources: BBC 1, 2, Central Tibetan Administration, The Economist, Stop Mining Tibet
Photo: Asia News

A Sustainable Dubai: Reality or Fiction?

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United Arab Emirates largest city-state of Dubai follows a new mantra. The drive to become a sustainable city has become their chief ambition. In October, Dubai held a three-day convention with over 167 countries consuls to win a bid to host the World Expo. The exhibition showcases developments in sustainability, the international financial system, and advocates improvements in the “quality of life for the world’s population.”

Dubai considered hosting vital to its development. Previous hosts of the expo experienced striking economic growth. 2010 host Shanghai developed into the profitable and “cultural” hub of China, previously an industrial outpost.

Oil discovery in the 1960’s brought tremendous wealth. Unfortunately, unlike other cities in the U.A.E., Dubai had “limited” oil “reserves”. By the 1980’s, drastic economic reforms were instituted in Dubai. The Crown Prince at the time Sheik Mohammed bin Rashid al-Maktoum proclaimed Dubai a “free-trade oasis”  in an effort to attract foreign corporate business interests.

Economic sustainability without oil became substantial. Dubai transformed into a colossal “global financial center”, flaunting feats of architecture, such as “record-setting skyscrapers.” Dubai’s repeal of pseudo-feudal land system in 2002 was fundamental. The new land-system allowed foreign investors to own land, not just lease its use.

Real estate in Dubai became desired. Many intrigued foreign investors were escaping political instability, legal difficulties, and fiscal insecurity. Dubai’s real estate appealed to “magnates” and “kleptocrats.” Dubai was publicized as a first-rate investment.

Immigrants were captivated by “tax-free salaries,” while affluent “expatriates” and “international businessman” saw the metropolis as a tariff-free ‘capitalist paradise’. Over “96 percent” of the cities working population is “foreign born.” Jobs became abundant in the expanding economy. Dubai began looking to foreign nations for their “luxuries, laborers, architects, accents, even its aspirations.”

The 2008 global economic crisis altered Dubai. Land prices diminished by 50 percent.  Countless “abandoned construction projects” littered the cities scenery. Dubai’s excessive spending on infrastructure left the country with a debt that was over “100 percent” of their GDP. Undeterred by their financial woes, Dubai has shown signs financially rebounding.

Oil was no longer its key economic foundation, becoming responsible for only five percent of its annual GDP. Dubai enacted legislative measures to make Dubai “sustainable, livable and comfortable.”

The Arab Spring’s “after-shocks” enticed international business to “relocate to the city.”, persuaded by it’s political stability. Dubai’s location near the “emerging economies of Africa, India and East Asia” became vital to investors.

Their sustainability approaches attracted “sustainability professionals” who see the emerging green initiatives as profitable. Many migrant workers who came for employment are finding Dubai as the preferred option than returning to their “home country.”

Socially responsible measures promote more environmentally safe and more economically viable development projects. New construction ventures boast new features such as “reduced electricity and water consumption.” Dubai began promoting comprehensive “recycling programs” and developing “solar energy plants.”

Dubai focused on using more “local materials and services” rather than importing and being more fiscally responsible with expansion projects. Many of the ‘pet’ projects that were derailed by the economic crisis are expected to return in the future, but under stricter procedures to mix environmental sustainability and economic responsibility.

Time will tell whether Dubai can actually become a sustainable city. Many of their ventures are still only in the planning stages, and increasingly poor financial choices are still affecting their economic recovery. The first step in recovery is realizing the problem that resulted in the situation, and Dubai’s shift in rhetoric shows a city that wants to move past their irresponsible choices.

– Joseph Abay

Sources: Gulf News 1, 2, BBC News 1, 2, The National 1, 2, 3, The Independent, The Guardian, Gawker, Next City, Zayed University, TIME, Expo 2020 Dubai, ZME Science, The Lawyer, KTN
Photo: Florida International University

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More than Moved

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In the midst of international mourning for Nelson Mandela and in an attempt to drive home the message of International Human Rights Day, a Brazilian NGO posed a provocative question on Tuesday, December 10.

A billboard designed by Conectas Human Rights, featured an image of Nelson Mandela and the question, “Do you feel moved by his legacy?” The text then urged the Brazilian population to act upon their emotions and “Do more than be moved.”

This campaign is driven by recent public opinion polls that reveal a negative feeling toward human rights issues in Brazil and support for more stringent laws and regulations.

Respondents to surveys administered across 134 municipalities in June 2013, support the reduction of maximum crime penalties from 18 years of age to 16, based on a belief held by 60% of the sample population that criminality is the result of ‘bad character.’

Moreover, the Datafolha Research Institute released data that reveal 26% of self-identified conservative-leaning respondents believe that homosexuality must be discouraged by society as a whole, whilst 33% believe that poverty is the result of laziness.

These emerging public opinions are linked to a reduction in funding for human rights groups, namely through foreign aid.

Brazil is widely considered to be an emerging market, the country’s role as 2014 World Cup host is evidence of this image but it disguises the fact that a growing economy does not automatically address human rights issues as seen through the need of foreign aid in assisting structural development.

It is estimated that 60% of the country’s NGOs relied on foreign aid for 80% of their budgets in 2003. Between 2008 and 2009 this aid decreased by 30% and again by another 49% in 2010 alone.

Executive Director of the Brazil Human Rights Fund, Ana Araújo, reminds us that Brazil was marked by dictatorship as recently as 30 years ago, a type of legacy that differs greatly from the one being celebrated across the globe on International Human Rights Day 2013.

Araújo argues that domestic support for human rights groups is the next, though not imminent, step, suggesting that emerging powers require more support, not less, to ensure that their emergence is ‘just.’

– Zoë Dean

Sources: Global Voices Online, Universo Online: CNT, Universo Online: Rightist Leanings, Open Democracy

Mixed Policy for Banks in India

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Raghuram Rajan took office as the governor of India’s central bank in September. His liberal vision of India’s financial sector was meant to boost economic growth and help the poor. In 1969, India’s former prime minister, Indira Gandhi, nationalized most of the banks in India. Since India’s presidential election in 1969, there have been many reforms to the country’s banking system, but the system is a mix of new liberal policies and right-wing conservative policies, creating an ambiguous mixture that is India’s current banking system.

The Reserve Bank of India’s (RBI) hybrid system may promote social inequality and create an unstable economic atmosphere. Many problems plague India’s banking sector, including bad debts, low bank reserves and mediocre capital levels and the fact that only 35 percent of adults have bank accounts.

At least half of all rupee trading is abroad, and two large foreign banks in India have operations that are 1.9 times bigger than their local counterparts. RBI’s hybrid system may promote social inequality and create an unstable economic atmosphere. The difficulty and lack of opportunities to save money perpetuates poverty and makes it hard for the government to collect taxes.

The RBI’s growing independence has led to the Bank no longer setting the interest rates that banks must charge. However, the system controls the assignment of credit, requiring banks to invest 23 percent of their deposits in government bonds and save an additional four percent with the RBI.

The rules that govern the debt market mean 58 percent of banking system deposits are based on government preference. Rajan’s position at the RBI creates hope for extending finance to more Indians. New banking laws will make it easier for foreign banks to expand, provided that they set up local subsidiaries that the Indian government can regulate easily. One of Rajan’s goals is to methodically end the way that banks are forced to purchase government debt. In addition, Rajan has vowed to make new rules that will stop business magnates from exploiting the country’s fragile banking system and force banks to recognize debts that would otherwise sour.

– Daren Gottlieb

Sources: The Economist, Rediff News

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Global Unemployment

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Many countries measure their unemployment rate differently. However, unemployed people are individuals who are actively seeking for job but could not obtain jobs. Reason for unemployment varies from economy downturn, and changes of particular industry to lack of required skills.

In third world countries, global unemployment is cause by overpopulation and lack of education. Unemployment rate is one of the biggest indicators of the economy, but it is also one of the biggest indicators of poverty. Countries with high unemployment rate normally have high level of poverty.

An example of the relationship between poverty and unemployment rate is Greece. In 2008, Greece unemployment rate was 7.7%, but after the economics crisis, the unemployment rate rose to 23.8% in 2012. The same situation is spotted in Spain. Spain’s unemployment rate in 2012 is 24.9%. Even though these numbers are high, but African countries are at alarming levels. Some high unemployment rates in Africa are: Kenya (40%), Congo (49.1%), and Djibouti (59.5%).

In the United States, the unemployment rate is only 7.7% in 2013, but it results in slow economic recovery and more people each day is living under poverty level. With only half of the population employed, these countries do not have enough income to distribute among all their citizens.

Half of the people are unable to support themselves with adequate shelters, food, and medical supply. In developed countries such as the United States, the government offers welfare for unemployed citizens to maintain the standard of living. However, in developing countries, welfare programs do not exist or are very limited. Unemployed individuals are struggling every for their basic needs.

When the world economy is recording due to the emerging market, many people are still suffering from the impact of the economic crisis.

– Phong Pham

Sources: Huffingtion Post, International Labour Organization, Trading Economics, Global Finance

10 Global Trends for 2014

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The World Economic Forum recently published a report answering the question, “What are the top trends facing the world in 2014?” Based on a poll of 1,592 leaders from academia, business, government, and non-profits, the report determined 10 global trends to expect in the coming year.

1. Increasing Tensions in the Middle East and North Africa

For the post-Arab Spring countries, promise and hope has given way to uncertainty. A debate continues about whether or not to keep religion and government separate while unemployment persists. The report recommends an entrepreneur-friendly climate to help promote economic growth for the masses, which in turn would build stability.

2.  Widening Income Disparities

The gap between rich and poor is a major challenge for most of the world. The problem is seen as the most pressing issue amongst North Americans.

3. Persistent Structural Unemployment

History has shown that chronic joblessness is tied to social unrest, especially among a young generation growing up in hopelessness. A solution: train and offer mentorship to young adults so that they could develop in roles that show promise for career growth. Governments should create incentives for companies to create jobs and invest in their workers.

4. Intensifying Cyber Threats

Emerging technologies are outpacing security. Technology allows us to operate remotely more than ever, but our vulnerabilities to hackers increase. Rather than attempting to prevent all possible forms of hacking, the report suggests that we ensure that it’s not catastrophic to get hacked.

5. Inaction on Climate Change

There is action and attention towards climate change, but not at the scale that is needed.  For example, there is $1 trillion of cumulative investment in renewable energy. However, $1 trillion per year is needed.

6. Diminishing Confidence in Economic Policies

The pop of the American housing bubble retrospectively revealed the deficiencies in US economic policies. The Pew conducted polls across the globe that showed people voicing similar widespread concerns about economic conditions in their countries. Europeans were particularly disillusioned.

7.  A Lack of Values in Leadership

People in Latin America and sub-Saharan Africa do not trust that their leadership, even when elected, will act in the interest of the common good. Free press is important for promoting accountability along with the sharing and understanding of various values.

8.   The Expanding Middle Class in Asia

More than any other region, Asians are hopeful about the economic prospects for the next generation. This is a result of free market reforms, investments in science, technology and education, a culture of pragmatism, meritocracy, and peace, and a strong the rule of law. Nonetheless, there is a need to make sure this generation of Asians does not negatively impact the global environment more than it needs to.

9.  The Growing Importance of Megacities

According to the United Nations Population Division, more than half of the world’s population lives in urban areas. By 2025, there will be 35 megacities in comparison to 22 in 2011.

10. The Rapid Spread of Misinformation Online

One-third (30%) of the world’s youth have been active online for at least five years, according to the International Telecommunication Union. Social networking has also spread around the world. Rumors fly easily when there are 1 billion tweets produced every two-and a-half days

– Maria Caluag

Sources: Pew, World Economic Forum
Photo: National Post