Hemp production in PakistanIn September 2020, the Pakistani Government approved industrial hemp production, legalizing hemp and allowing hemp farming in agricultural sectors. Hemp is a type of cannabis plant, used commonly for medicinal purposes due to its cannabidiol (CBD) concentration. Considering the many benefits of hemp production, this landmark decision brings exciting possibilities for many areas in Pakistan. Since the economy of Pakistan has been long in need of a boost, the new approved hemp production and legalization is said to bring economic benefits to the country.

The Economic Benefits of Hemp Production

Officials in Pakistan’s government encouraged hemp legalization and production in efforts to relieve fiscal deficits and Pakistan’s struggling economy. Considering the industrial hemp market is worth about $25 billion globally, Pakistan’s science and technology minister, Fawad Chaudhry, says Pakistan is aiming for a profit of $1 billion over the next three years by joining the global hemp market. Exports in hemp can target CBD oils and cannabis-based products and can be a sustainable cotton replacement during slowdowns within the cotton industry.

A Sustainable Replacement for Cotton

Hemp production in Pakistan is most exciting to the workforce, especially for farmers participating in hemp markets and those working within the cotton industry. Cultivating hemp will create more jobs for the small-scale farmers responsible, but more importantly, become a sustainable replacement for cotton in Pakistan’s markets. As the fourth biggest cotton producer in the world, Pakistan’s cotton production has been declining due to climate change, water scarcity, locust attacks and industrial imbalances such as declining prices and low-grade seeds. The hemp plant’s stalk has strong properties of cellulose-rich fiber which is an effective ingredient in the making of paper, rope, construction and reinforcement materials, due to its strong fiber components. Hemp, therefore, makes for a worthy sustainable replacement to cotton.

Hemp Research Possibilities

For researchers, hemp production in Pakistan is exciting for many reasons. With the new hemp legalization, hemp research is no longer taboo, according to Muhammed A. Qayyum, an advisor in the Pakistani government and the director of Medics Laboratories. With this new allowance, researchers can delve into more potential applications of hemp in medicine and more.

Medicinal Properties of Hemp

Advocates have listed numerous medicinal properties to hemp, more specifically, the chemical cannabidiol (CBD) within the plant. Cannabis is seen as medically beneficial as the cannabinoid compound is said to relieve pain and regulate appetite, mood, memory inflammation, insulin sensitivity and metabolism. Hemp is also a valuable food supplement, incorporated in gluten-free products to increase nutritional value from hemp’s high levels of fiber and proteins.

The Potential of the Hemp Industry in Pakistan

With this new federal approval, Pakistan can enter global markets as a new exporter of CBD with the ability to generate millions of revenue similar to China, the United States and India. Hemp production in Pakistan opens up a wide range of possibilities but also brings thousands of jobs across multiple fields such as farm work, production, marketing, transportation, research and medicine. As a flexible crop, the hemp market can address several demands, from textiles, clothing, home furnishing and industrial oils to cosmetics, food and medicine.  Holding an overall market value of more than $340 billion and 263 million cannabis consumers worldwide, Pakistan’s economy can shift dramatically with the newly approved hemp production.

Linda Chong
Photo: Flickr

U.S. Benefits from Foreign Aid to Equatorial Guinea
People often think of foreign aid as the provision of emergency assistance without many tangible benefits in return. However, providing foreign aid offers numerous benefits to countries such as the U.S. For the U.S., Equatorial Guinea is by far one of the most important potential trading partners in the world, and aid to Equatorial Guinea is one of the surest ways to create such partnerships. The U.S. benefits from foreign aid to Equatorial Guinea, as it gains access to one of the world’s largest energy exporters.

Equatorial Guinea and Its Neighbors

In order to see how the U.S. benefits from providing aid, it is important to first understand the situation in Equatorial Guinea. As a largely underdeveloped country, Equatorial Guinea also suffers from the woes that plague many of its continental neighbors.

Political turmoil and internal corruption have caused sharp drops in foreign development assistance to the country since 1993. For example, in 2013 the government cracked down on freedom of assembly by shutting down protests and arresting political dissenters, sparking international outcry.

In addition, worsening economic conditions have caused the country’s economy to shrink by nearly 25 percent since 2014 despite this trend of reversed growth being rare among African countries. Most African states have managed to maintain positive economic growth rates in spite of rampant poverty.

For example, although Equatorial Guinea’s fall in growth stabilized at -3.2 percent in 2017 from its all-time low of -9 percent in 2015, most of its neighbors have maintained positive growth rates for years.

Cameroon to the north had GDP growth of 3.2 percent for 2017 and hasn’t dipped below zero since 1993. To the south, Gabon had a growth rate of 1.1 percent for 2017. Although Gabon’s growth has steadily declined since 2008, Equatorial Guinea is unique for having a consistently negative rate several years in a row.

Increasing Economic Prosperity

Nonetheless, the country has a strong export-based economy. In 2016 alone, Equatorial Guinea exported around $4 billion worth of goods, while importing a little over $1 billion. Its trading power has made it one of the few countries in the world with a trade surplus, especially one of that magnitude.

Equatorial Guinea’s economic health relies heavily on its natural resources. In 2016, its largest exports consisted of crude oil (which comprised over half of its exports, at $2.79 billion out of $4.06 billion) and petroleum gas (which accounted for approximately $762 million). Increasing global demand for oil, coupled with heavy reliance on this finite energy product, could make Equatorial Guinea one of the most important developing economies in the 21st century.

The Value of Foreign Aid and Investment

Equatorial Guinea’s economic potential suggests that it is a viable potential trading partner for any country, and providing foreign aid to Equatorial Guinea may be a strong gage for determining how robust such potential trade agreements could be. Increased foreign aid could encourage Equatorial Guinea to work with donor countries in opening new supply chains through trade agreements, complementing international development assistance with long-term economic partnerships.

Providing foreign aid will also help Equatorial Guinea grow its economy and reach its full potential. For example, as foreign donors began slashing development funds to Equatorial Guinea between 2010 and 2014 (from $85 million to $520,000 respectively), its economy began to contract several years later, from $22 billion in 2012 to $12 billion in 2017.

However, despite such alarming figures, there has been some help in the form of an increased focus on infrastructure development. In 2015, China agreed to commit $2 billion to Equatoguinean infrastructure. This support has not only helped revitalize Equatorial Guinea’s economic growth but also brought Equatorial Guinea and China closer together diplomatically.

Equatorial Guinea and the U.S.

In contrast, the U.S. has no trade agreements with Equatorial Guinea. In fact, it currently exports more to Equatorial Guinea (at $278 million) than it imports (at $193 million), signaling a large trade imbalance for Equatorial Guinea.

Furthermore, the U.S. does not supply any foreign aid to Equatorial Guinea. However, it does provide a generous amount to Equatorial Guinea’s neighbors; in 2017, Cameroon received approximately $80 million in U.S. foreign aid funds, while Gabon received over $2 million.

Increased foreign aid to Equatorial Guinea is one of the most practical ways to improve trade relations between the two countries. Each nation has something that the other needs. As one of the wealthiest countries in the world, the U.S. has plenty of foreign aid funds available (specifically, a foreign assistance budget of $50 billion in 2015) to improve the economic outlook of Equatorial Guinea.

Additionally, as one of the largest oil harvesters in the world, Equatorial Guinea has a slew of energy reserves available to export to the U.S., at a total of 1.1 billion barrels of oil as of 2012. It is evident that the U.S. benefits from foreign aid to Equatorial Guinea, due to greater access to a growing Equatoguinean hydrocarbon sector.

How the U.S. Benefits from Foreign Aid to Equatorial Guinea

A diversified import sector is critical to the financial well-being of any country. For the U.S., an oil industry with diversified imports creates stable international supply lines and an even stronger economy. Equatorial Guinea’s resources and economic potential suggest that it could be an ideal trading partner.

The U.S. benefits from foreign aid to Equatorial Guinea by improving relations between the two states and opening up new energy markets for American consumers. In addition, robust trade agreements could yield incentives for elevated oil production, thus helping to reverse Equatorial Guinea’s negative economic growth.

– Vincent Giordano

Photo: Flickr

Hunger in Guadeloupe

Guadeloupe is an island and French territory located in the Caribbean. Hunger in Guadeloupe has long been an issue, and that problem has evolved over the past decade.

In 2008, a food crisis struck the Caribbean. Many countries, such as Haiti, had trouble feeding their entire populations. Thousands of citizens from these countries began to riot and protest in the streets, and the Guadeloupean government was worried the same would happen in the island nation.

However, Guadeloupe has an advantage: France. Guadeloupe receives nearly 80 percent of its food as imports. This means that despite tropical issues that affect the Caribbean, the island doesn’t have to worry about feeding its people.

Just a few years after this crisis in 2011, Guadeloupe had an undernourishment level below 5 percent, which is on par with America and many other developed nations. Solving the problem of hunger in Guadeloupe with imports seems like a wonderful answer; however, it doesn’t come without some problems as well.

Guadeloupean people now rely on these imports, urged by the French government to export most of their domestic goods, and their preferences have become based on Western tastes. The problem with a lot of westernized food is that it is full of preservatives and has higher calorie counts than are necessary. Hunger in Guadeloupe no longer refers to undernourishment in the sense of too little food, but instead too little nutrients.

The scientific journal Diabetes and Metabolism found that depending on the particular part of Guadeloupe, rates of obesity vary between 17.9 to 33.1 percent. Another study by Women Health shows that there is an association between low education and low income with obesity. Imports are more expensive than healthy, locally grown fruit. This often causes families to resort to the unhealthy options simply due to cheaper prices.

To help stop this growing obesity rate, the Guadeloupean government must reduce the nation’s dependency on imports by using this rich, tropical farmland to grow fruits and vegetables. The only way they can do this is to work with the French government to encourage them to stop pushing for such great quantities of exports. Not only would this help provide healthier options, but it would help the local economy. More agriculture would provide more jobs to reduce the poverty rate, which is around 12.5 percent.

Scott Kesselring

Photo: Flickr

Poverty in Saint LuciaSaint Lucia is a popular tourist destination in the Caribbean, with tourism increasing each year. In 2014 alone, 338,158 visitors stayed on Saint Lucia, a six percent increase from 2013. Although Saint Lucia is a thriving tourist destination for those with expendable income to relax, many of its citizens face poverty. Poverty in Saint Lucia, as found by UNICEF, measures at 18.7 percent of households and 25.1 percent of individuals.

UNICEF’s Poverty Assessment Report for Saint Lucia highlights 10 main causes of poverty in Saint Lucia. The first of these causes is the decline in earnings from the banana industry. The agriculture industry employs 21.7 percent of Saint Lucia’s labor force. Agricultural Minister Ezechiel Joseph stated that there is a demand for Saint Lucia’s bananas, but that banana farmers need “to be able to produce the fruit in a sustainable basis.” Greater productivity and consistency are needed to satisfy potential buyers, recover the failing banana industry and reduce poverty in Saint Lucia.

An additional cause of poverty in Saint Lucia is the developing light manufacturing industry. Some of Saint Lucia’s light manufacturing exports include clothing, electronic components and corrugated cardboard boxes. While Saint Lucia produces quality products and has been commended for its strengths in light manufacturing by the Caribbean Export Development Agency, the Commerce Minister of Saint Lucia noted that there is work to be done to improve competitiveness and export potential in order to keep up with growing international competitors. The light manufacturing industry in Saint Lucia has the potential for great economic gain for the country, but has yet to bring that gain to fruition.

Failings by the government also contribute to poverty in Saint Lucia. In its report, UNICEF highlights poor infrastructure’s role in contributing to continued poverty in Saint Lucia. Many communities lack electricity, safe drinking water and usable roads, isolating them from other communities and limiting the types of industries in which they can take part. For these communities, agriculture is the main industry and is not likely to be a lucrative venture.

Additionally, the government is limited in its resources to provide a “safety-net” for those facing poverty because of its own financial difficulties. This compounds the problem of poverty in Saint Lucia; as the government faces hard times, it cannot provide as many services to its people, increasing the level of poverty for its citizens.

To truly alleviate poverty in Saint Lucia, economic expansion is key, particularly in the agriculture and ligh manufacturing industries, as these employ most of Saint Lucia’s poor. If these industries grow and compete in the international market, Saint Lucia’s poorest citizens will find themselves with more jobs, more money and greater peace of mind.

Mary Kate Luft

Photo: Flickr

American Car Sales, The Roads of India
American cars have populated roads from Texas to Vermont to Oregon for decades, yet domestic sales growth is not what it once was. India is the next emerging market with vast potential for American car sales, and companies are vying for dominance.

General Motors (G.M.) and Ford are two of the biggest auto companies that export American cars around the world. In recent years, this model made by the U.S. has shifted to opening new manufacturing and distribution systems across the world.

India is an emerging market in the global auto sales industry and G.M. and Ford have both invested early, resulting in competition for popularity, market share and profit. Based on the current circumstances, it appears that Ford has the advantage. Ford has made large investments in production plants, including the Sanand and Chennai Vehicle Assembly and Engine Plants, each with a price tag of $1 billion. Together, the combined production capacity of these plants is 440 thousand vehicles per year. Ford has seen steady increases in production from just over 14 thousand to 26.4 thousand cars sold in August of 2014, and 2016, respectively.

In contrast, G.M. has just halted a planned $1 billion investment which was aiming to double G.M.’s market share by 2020. Unpredictable consumer patterns and possible new environmental regulations may play a part in this development. Monthly sales are declining over time for G.M, with sales struggling to rise above 4,000 units in early 2015.

In India, only 18 per 1,000 individuals own a car, compared to the 800 per 1,000 in the U.S. India also saw the largest percentage increase in sales from January to November of 2015. The lack of saturation in the Indian market presents a huge potential for growth in American car sales, yet what remains to be seen is how American companies will re-invent themselves to be desirable in the eyes of the people of India.

In the past, U.S. companies brought models of the European theater to developing countries with reliable success, expanding American car sales into new markets. However, this tactic has proven ineffective in India where customers will not jump to a higher price bracket. These companies are attempting to figure out ways to follow the market much more closely than they have before, and it is proving more difficult than anticipated.

India is on the edge of an explosion in car sales as a result of the growing middle class that will disseminate out of the cities and into more rural areas. As this inevitable future approaches, the possibility of capitalizing on this growth becomes less and less certain for new companies that wish to enter this market. Will Ford and G.M. be flexible enough to attract the people of India to companies rooted in decades of American success?

Patrick Tolosky

Photo: Flickr

thai rice exports
Three years since the Thai government instituted a controversial rice subsidy policy, Thai rice exports are expected to regain a top spot in the world – reaching number two, just behind India.

Thailand was the world’s number one exporter of rice until 2011 when the government began paying rural farmers more for their rice than the market price in an effort to boost rural income. The government would purchase the rice from farmers at 50 percent the market rate and instead of exporting it, the majority was stockpiled in warehouses. The hope was that by withholding the rice from the global market, prices and local farmers’ incomes would increase.

What resulted however was other countries began to fill the gap as Thailand withheld their exports. Vietnam and India knocked Thailand from the top exporter position, costing the country $9.2 billion.

The subsidy expired this past February, leaving the country with 10-15 million metric tons of rice (two years’ worth of exports) left over. Much of that rice was held in storage and is now rotting or has been stolen; leaving Thai rice prices 30 percent lower than before the subsidy.

Thailand’s white rice price is currently quoted at about $380 to $390 per ton, which is around $25 and $40 less than what is offered by Vietnam and India. However, other factors such as weather could affect production. The El Nino effect, which is expected to be a factor later this year, could cause less rainfall during India’s monsoon season, resulting in a loss in rice output for India and giving Thailand the boost it needs to reclaim its former top spot.

Thailand’s population is 65 percent rural and 35 percent urban meaning that rice cultivation plays a major factor in the livelihood of much of the population. While Thailand is also grappling with a recent coup, making up for the losses from the past couple of years is a major priority as the new government works to establish legitimacy in the countryside.

General Prayuth recently ordered state-owned farm banks to disburse $2.7 billion owed to 800,000 farmers who were left unpaid for months for their rice. The government has also pledged to help with production costs including fertilizer and seeds – although it will avoid giving cash handouts. This distribution means that the government will absorb the losses from the old rice as a way to create stability and get the country’s rice production back on stable food.

While government relations may remain precarious over the coming months, it seems that Thailand will continue to develop and focus on providing its population the ability to be on top in rice exporting.

— Andrea Blinkhorn 

Sources: Which Country, FAO 1, FAO 2, World Bank, The Wall Street Journal
Photo: Flickr

Negotiations for a trade such as this has been in the works for seven years, though only now are the extensive efforts coming to fruition. Concluding with a deal on April 7, Japan and Australia finally reached an accord on a free trade agreement between the two countries.

Prime Minister Shinzo Abe of Japan and Australian Prime Minister Tony Abbott express mutual respect for one another, citing security and neoliberal economic agendas as important ties that have connected the two men and their respective nations for some time. A Joint Declaration on Security Cooperation, renewed in 2010, was initially signed between Japan and Australia in 2007 as a formal recognition of their devotion to the defense and support of one another. The Declaration came after years of informal cooperation, in such contexts as United Nations peacekeeping operations in the 1990s. More recently, Abbott has praised Japan’s democratic values and presence in international security activity.

Japan’s agriculture lobby, however, expressed concerns of an internationally aggressive competition and was opposed to easing access to food imports. Though Abe clearly favored opening Japan’s economy to increased competition, Australia was understandably concerned that the rigorous final round of negotiations would fall through as a result of the Japanese lobbying group’s hold on the ruling party that it elected. Yet the signed agreement builds on a trade treaty of 1957 that contributed heavily to the positive sentiment between the two nations. The new free trade agreement, then, is expected to build on the great business and cultural relations, and is consequently considered by many trade officials to be the best deal the Japanese economy has ever granted to another country.

The final version of the free trade agreement calls for joint compromise in both economies. While Japan is now required to phase out its current 38.5 percent tariff on Australian beef exports, Japan will end tariffs on Japanese vehicles, electronics and household appliances. Within 15 years, the Japanese beef tariff is expected to reach only 23.5 percent, with a subsequent decrease to 19.5 percent in 18 years. The Australian Trade Ministry also reported that Japan would increase cheese imports and simultaneously phase out tariffs on fruits, honey, vegetables, nuts and wine. Prime Minister Abbot has thus declared that Japan is “Australia’s best friend in Asia.”

Some argue that the free trade agreement between Australia and Japan, in bringing both nations closer to the United States as a result, could risk a free trade agreement with China, Australia’s number one trade partner. However, Japan is Australia’s number two partner, and the political and security ties could make a difference in the long run. After seven years of intense negotiations, one can only hope that Australia and Japan have made the correct decision.

– Jaclyn Stutz

Sources: The Conversation, Sydney Morning Herald
Photo: The Sydney Morning Herald

China has more than likely overtaken the US as the world’s top trading nation, a title the US has held for decades. According to the latest data, China’s total trade has grown at an annual rate of 7.6 percent to an incredible $4.16 trillion last year. While the US has yet to release it’s full-year figures, it’s trade for the first 11 months of 2013 totaled only $3.5 trillion.

In 2009, China became the world’s biggest goods exporter. Along with that, its imports have also risen amid an expanding economy. “It is very likely that China has overtake the US to become the world’s largest trading country,” said Zheng Yuesheng, a spokesman for China’s custom’s administration.

However, concerns in recent months over the accuracy of China’s export data have been brought to light. There has been speculation that some Chinese exporters may be overstating their shipments in an attempt to evade restrictions on importing funds into the country.

Sun Junwei, China economist at HSBC in Beijing, has said the measures that were implemented to weed out fake trade activities appear to be working. Junwei believes that compared to last year, these activities have actually decreased.

Even when addressing the inflated numbers, some analysts believe that China would still take the top spot from the U.S.

“The gap between the overall trade of China and the US is likely to be almost $250 billion in 2013,” Rajiv Biswas, chief economist Asia-pacific at IHS, told the BBC.

China’s growing trade prowess has been fueled by economic growth of around 10% a year in the past three decades. This progress has propelled the country up the list of biggest economies, it’s middle class garnering wealth and boosting its’ overall global trade.

This progress can be attributed to a shift from the production of textiles and light industrial products to more sophisticated products including cell phones and other gadgets. The amount of available labor has allowed for this incredible increase.

China has also recently overtaken the U.S. as the biggest oil importer of oil, amid rising demand for fossil fuels. However, this has brought in an assortment of environmental difficulties that the government is still having difficulties addressing.

Mr. Zhen predicts that because of structural reforms in China and a lowered outlook for commodity prices, an even stronger trade performance by China is possible in 2014.

The first time China became the world’s biggest goods exporter was in 2009, and now its total exports and imports make up for more than 1/10th of the total world trade, up from 3 percent in 2000.

The economic competition between America and China is a favorite subject of the American people as well as a motive for a large number of decisions undertaken by politicians. President Obama has used this competition to enforce education initiatives to fend off countries such as China that will “out-compete” the U.S.

If the latest prediction out of the Centre for Economics and Business Research is correct, then the Chinese economy will grow larger than America’s in 2028. However, predictions stating that its economy will surpass ours in 2016 have been made while others stake claims that it already has.

In terms of economic output per capita, however, the U.S. is still vastly ahead of the Chinese by a factor of more than eight. This is because there are far fewer Americans than Chinese, so even if the outputs were equal, there’s a lot less people to share it with. Meaning, the average American is wealthier than the average Chinese.

Ultimately, it becomes important to note rather than “beating” the Chinese, it is more important to collaborate with our cousins across the globe, with hopes to increase the goods and services available to the U.S.

Chloe Nevitt
Feature Writer

Sources: BBC, CNN, RT, TIME
Photo: Sino Mania