Archive - Oct 2008
A Fair-Trade Treat

In a push to raise awareness of price and labor injustices faced by cocoa farmers in West Africa, the AP reports that some churches in the U.S. are encouraging families to hand out fair-trade chocolates to trick-or-treaters this year.
The fair-trade chocolates can be purchased from Equal Exchange's website.
October 28th
The Real North Korean Crisis
When you think of North Korea, you may first think of the ongoing nuclear weapons debates and political squabble with the U.S. Yet according to the latest United Nations report, the most significant problem affecting North Koreans is the current shortage of food there.
The UN report found that more than three-quarters of North Korean families have cut their food intake to two meals per day. Even city dwellers are facing higher food prices. A recent Time magazine article says many children have stopped attending school due to hunger, while their parents search for food instead of going to work.
North Korea hasn’t seen such a devastating food crisis since the 1990s, when a famine took more than a million lives. Time blames the government for the current food shortage. In the 1990s, government officials privatized food distribution to some extent so that farmers could sell grains and food throughout the country. The result was that famished North Koreans could still find food. But in 2005, according to Time, the government broke up these markets and confiscated grain from farmers, leading to the current shortfall of production. Destructive floods in 2007 further hampered the country's agricultural production.
The UN also reported a rising number of children suffering from malnutrition and diarrhea. The food crisis guarantees more hunger-related deaths according to an expert on North Korean economy at the Peterson Institute for International Economics in Washington.
North Korea’s leadership does not want to pursue market reform according to Nicholas Eberstadt, a North Korea expert at the American Enterprise Institute in Washington. He says allowing open markets to emerge in the state dominated food distribution sector would imply a significant change of Pyongyang’s policies. Major reforms are not a part of North Korean culture or government, a regime that requires government permission to own a cell phone or computer. However, without changes in policy and perhaps even ideology, Eberstadt predicts that North Koreans will continue to experience health-related problems if the government is unable to provide basic necessities such as food.
The World Food Program has expanded their food aid program in North Korea in hopes of reaching 6.5 million people. Without additional help from donor countries, North Koreans may see the 1990s famine repeat itself.
Coming Down from an Oil High

Last week oil prices dipped under $70 a barrel for the first time in over a year. While the lower price may have Americans at the gas pump celebrating, it’s bad news for the leaders of oil-rich countries that made long term plans based on the high price of oil.
Venezuela, Iran and Russia went on a spending spree when oil hit $100 per barrel and then planned upcoming government budgets on the peak price.
The high price of oil allowed these countries to thumb their nose at the West with little risk of a response. Venezuela advanced its socialist agenda both at home and in the region. Iran ignored U.S. nuclear related sanctions, and Russia reasserted itself by invading Georgia.
But because they assumed the price of oil would stay high, they might soon be on receiving end of such gestures. The Washington Post reports that:
According to independent estimates, [Iran and Venezuela] need an average oil price of up to $95 a barrel to fund the populist subsidies and social programs they have launched in recent years — not to mention billions of dollars in arms purchases from Russia. Venezuela has been furiously importing food to fill empty shop shelves, while Iran heavily subsidizes domestic fuel.
Venezuelan President Hugo Chávez has gone on the record as unworried about the falling oil prices citing Venezuela's $40 billion in foreign currency reserves. However, Ricardo Hausmann, a Venezuelan economist who teaches at Harvard, doesn't share Chavez's confidence. “We’re in the same situation of people who have lost a limb but can still feel it. I don’t know how long it will take for Chávez to realize he’s lost a limb."
In response Iran and Venezuela pressured OPEC to cut production by 2 million barrels a day. OPEC members initially took a wait-and-see approach, wary of intensifying a global economic crisis or further decreasing global oil demand, before agreeing to cut production by 1.5 million barrels a day in an attempt to drive up prices.
But skeptics question whether significant production cuts won't simply decrease demand for oil — or whether it will influence the price at all. If OPEC can't drive prices back up to their historic highs, Venezuela, Iran and Russia may face a tough reality as they come off their own oil high.
October 26th
Economics as a Catalyst for Peace
The last divided capital city in the world is Nicosia, Cyprus. Armed soldiers line each side of a buffer zone, with Greeks living on one side and Turks on the other. The island has been at the center of a decades-long dispute between Greece and Turkey that remains one of Europe’s biggest headaches.
But Cyprus today might be closer to a solution than ever before. When Turkish forces invaded and divided the island in 1974, the two communities were separated: Turks in the north and Greeks in the south.
New, more moderate leadership in both the north and south makes unification and compromise more likely. And people in the north — whose standard of living lags far behind their southern counterparts — may be ready for the economic benefits their neighbors are enjoying.
The south has grown far wealthier than the north since 2004, when Cyprus entered the European Union. (Cyprus in this case refers to all land not part of the Turkish Republic of Northern Cyprus, often referred to as the TRNC, the northern third of the country governed by Turkey.) Cyprus adopted the euro, began receiving EU subsidies, and started trading freely within the European market. By contrast, the north has been limited to trade with Turkey, the only country that recognizes it as a legitimate state. Its GDP is around one third of the south’s.
The effects of isolation are seen clearly in north Nicosia, where homes are missing shutters, streets are full of potholes, and many wear tattered clothing. By contrast, walk 10 minutes south and just beyond the buffer zone you’ll see gourmet restaurants, chic clothing stores, and well-to-do European vacationers enjoying their afternoon frappé.
Though the gap in living standards has worsened since 2004, it could be this very disparity which ultimately brings the island together. When he took office in 2005, TRNC President Mehmet Ali Talat said finding a solution to “the Cyprus problem” would be his main initiative. Since then he has started negotiations with the south along with key international players, and has recently addressed the Council of Europe’s PACE General Assembly – the first northern Cypriot President to do so.
If the island achieves unification, both sides have much to gain. In addition to reducing poverty in the north by way of its integration into the EU, many Greek refugees who fled south in 1974 may finally have the opportunity to return home. Furthermore, the world’s last divided capital city may become whole.
October 23rd
Colombia’s Library on Legs

Imagine if you couldn’t order that book you’ve wanted off Amazon.com or take that short walk or car ride to the library either. Instead, you have to wait for your book to be delivered — by a man and his two donkeys.
According to the New York Times, that’s exactly what Luis Soriano, a school teacher from La Gloria, Colombia and his two donkeys, Alfa and Beto, have been doing for the past decade.
The idea of a Biblioburro, or “donkey library,” came to Soriano while teaching impoverished children and seeing the impact of learning how to read. He travels with his donkeys to deliver books to rural people who don't have easy access to schools or libraries. Political upheaval and drug-related violence have made his travels dangerous. Yet despite confrontations with bandits and a fall that left him with a limp, Soriano continues to venture out with his donkeys.
Soriano and his Biblioburro show what people with limited resources can and are willing to do for the sake of education. Countries with high illiteracy rates (Colombia’s is 20 percent) can learn from his idea. Building schools and libraries outside city limits can empower people to share their own knowledge. Even in the most destitute areas, people want to be educated and exposed to the outside world — even if that means bringing them a library on legs.
October 22nd
Land Reform for Chinese Farmers

Eight hundred million peasants in China have never been allowed to own their land. Under new reforms by the Chinese government, farmers can trade, subcontract or lease their land — options they have never had before.
In a rather dramatic policy shift, the government has assigned small plots to farmers in communist China. Proponents say this unprecedented plan will lead to “larger, more efficient farms that could increase output” at a time when China isn’t growing enough food to feed its own people, according to the New York Times.
Along with coping with the global economic crisis, China is trying to appease decades of rural discontent felt by farmers who have protested against their lack of land rights and the burgeoning corruption of collective ownership. Too often, “local officials and developers have illegally seized farmland for urban expansion while paying minimal compensation to farmers.”
However, opponents of this new land reform worry that millions of landless farmers will leave the countryside for better-paying work in cities. If these farmers are unable to find work, they won’t have any land left in the countryside to go back to.
Thirty years ago, economic reforms launched China’s rise. But while cities grew wealthy, the countryside remained poor. Let’s see if these reforms give Chinese farmers the same opportunities for financial gain as their urban counterparts have enjoyed.
October 21st
Bigger Paychecks, Bigger Bellies

It seems logical that a country’s rising wealth would lead to better health indicators. But the truth is that as incomes rise, obesity and other chronic diseases increase right along with them.
A recent article in the medical journal Lancet claims China’s rising rate of chronic disease is creating a “health and economic time bomb” that could offset much of the country’s economic gains. As China has grown wealthier, a combination of easy access to high-fat food, increasingly sedentary lifestyles, and a large number of smokers has contributed to the rapid increase in obesity and its comorbidities, including cardiovascular disease, diabetes, and some cancers.
In 1973, hypertension, heart disease and stroke caused fewer than half of all deaths in China. Today, these diseases are responsible for three out of every four deaths. The country's economic losses to chronic disease will reach $558 billion by 2015, according to the World Health Organization.
China is not the only place experiencing this rising-income, failing-health phenomenon. Countries of all income levels are all seeing chronic disease skyrocket. But in transitioning economies, this increase in chronic disease is creating a terrible paradox: simultaneous afflicitons of “diseases of the affluent" and diseases linked to extreme poverty. It's a "double burden," says the WHO, that's exacerbated by “inadequate pre-natal, infant and young child nutrition followed by exposure to high-fat, energy-dense, micronutrient-poor foods and lack of physical activity.”
The Lancet report urges China to promote preventive health to lower chronic-disease rates. They call for campaigns to persuade people to consume less salt, stop smoking and exercise more frequently. But if the WHO is right about pre-natal and childhood nutrition being to blame, Chinese health officials will need to focus on more than the adults' own habits. Making sure pregnant mothers and families with small kids practice good nutrition habits may be the only way to guarantee a healthier future.
October 20th
Hippos Help Alleviate Poverty in Ghana

Ten years ago, farming and hunting communities of Wechiau in the Upper West Region of Ghana had no schools, electricity, or even drinking water.
But today, thanks to a decade-long effort by the community to preserve its endangered hippopotamus population and convert the area into a wildlife sanctuary, revenues from sustainable ecotourism are being used to improve infrastructure and build schools.
With the support of organizations like the United Nations-backed Equator Initiative and Canada's Calgary Zoo, several schools have been built, solar-powered electricity has been installed and wells are being drilled to provide safe drinking water for villages throughout the sanctuary.
The Wechiau Community Hippo Sanctuary is both an innovative effort and an example of how conserving biodiversity can help reduce poverty — while benefiting animals and people at the same time.
In order to minimize human and hippo conflict and provide undisturbed grazing habitat for the hippos, the villagers have moved all farms and fishing camps two kilometers from the river. However, the local community understands that by conserving the environment, they are creating other opportunities for their community and promoting their remote district as an ecotourist destination.
It is often difficult to convince poor communities to engage in long-term environmental protection and conservation. But for the Wechiau Community Hippo Sanctuary, support from traditional chiefs and locals is strong.
This is because the sanctuary is a "genuine community-based initiative led by the traditional chiefs and people with no national government involvement." In fact, it is the first community-owned and managed large-mammal sanctuary in Ghana.
Today, the sanctuary is a testament to the possibilities of ecotourism, covering 40 km² along the Black Volta River and the home to one of the two remaining populations of hippopotamus in Ghana.
October 16th
New Approach to Food Aid in Mozambique Shows Promise. Will Others Follow?
Bill Gates recently announced his foundation will give $66 million to a UN program that takes a new approach to fighting hunger. Under this program — which also drew a $9.1 million gift from Warren Buffett’s son, Howard — the countries that typically receive food aid will now become the suppliers of that food.
Here’s how the program, called Purchase for Progress, works: The World Food Programme uses its sizable buying power to guarantee purchase of crops from the local farmers of countries that typically receive food aid. In addition to these purchase guarantees, farmers receive better farming methods, higher-yield seeds, storage for crops, and help to transport produce to markets. Farmers can then use this guarantee as collateral to borrow from local banks. With these loans, farmers can buy better equipment, hire employees, and use more advanced technology to improve what they grow. The produce is supplied to the hungry within the same region the food is grown, which allows for the capital to remain in the local economy.
WFP recently signed the program’s first contract with a cooperative of 9,500 farmers in northern Mozambique. It guarantees purchase of cowpeas from local farms — cowpeas that in previous harvests had gone unsold. The arrangement gives farmers an incentive to invest in their operations, because they’re assured of a buyer for their harvest.
The WFP’s website tells the story of one farmer who made about US$50 by selling his cowpea surplus to the agency: “I used the money to buy school things for my children, dishes and clothes for my family and even some tools to improve my house,” said the farmer, Alfredo Muarapaz.
The Government of Mozambique’s support of this project has played an important role in its success, according to WFP spokesperson Jennifer Parmelee. Getting this same level of government support may be a challenge in the 20 other countries the program will operate in.
This new approach to curbing hunger comes at a good time. With the rising cost of fuel, a main component of fertilizer, the resources that farmers need are becoming increasingly expensive and scarce.
Let’s hope that the program’s success continues — and that Howard and Bill get their friends to donate, too.
October 15th
It's Time for Poverty to Have the Spotlight

After a few fumbled attempts on their own, global financial leaders gathered in Washington D.C. last weekend to develop a joint plan to prevent the spread of the financial crisis.
Imagine if they focused just a fraction of that attention on alleviating global poverty. After all, high food and fuel prices pushed an additional 75 million people further into poverty this year.
"When food prices peaked and began to come down, despite the fact that conditions within poor countries remained hugely adverse, attention already started to wane," development economist Jeffry Sachs told Reuters. By contrast, the world's finance ministers jumped to commit incredibly large sums of money when credit markets started to fail — a crisis that continues to hold the world's attention.
"The amounts that are needed (to help the poor grow more food) are in the low billions of dollars and we're talking every day now about a new commitment of hundreds of billions for this and hundreds of billions for that," says Sachs. "The truth about poverty is that the poor don't need very much."
In other words, $700 billion — or whatever the astronomical total the worldwide bailout turns out to be — would go a long, long way.
Fighting Poverty and Pollution
In the spirit of global discussion, Blog Action Day urges bloggers everywhere to concentrate on one subject. Last year it was the environment. This year it's poverty. But who says the environment and poverty have to be addressed as separate subjects?
Van Jones agrees. He's a social entrepreneur, author of the new book Green Collar Economy and founder of Green for All.
Jones says the world faces two major crises: ecological destruction and the widening gap between rich and poor. The issues may appear different, but there is a single solution: build "an inclusive green economy strong enough to lift people out of poverty."
To Jones that means "green[ing] the bailout" by allocating $350 billion for investment in green technologies and industries: solar panels, wind turbines, weatherized buildings, wind farms and a new cadre of green-collared workers.
That's a lot of work. And there are millions of people that don't have work. I believe that the moral challenge of the next century is to connect the people who most need work to the work that most needs to be done.... We need green pathways out of poverty and into prosperity.
Jones is right. It's time we stopped thinking about these issues separately. It's time to think outside the box. It's time to green and grow the economy. Or, as Jones says in this video, it's time for a "Green New Deal."
October 12th
A Triple Threat: Food, Fuel and Financial Crises in the Developing World
First, food and fuel prices skyrocketed, causing serious problems for families in the developing world. Now, the worldwide credit crisis has delivered yet another serious blow to the economic outlook for low and middle-income countries.
At the start of the International Monetary Fund/World Bank annual meeting, World Bank President Robert Zoellick warned that the triple threat is potentially a “tipping point” that would “push poor people to the brink of survival.” World finance and development ministers urged wealthier governments not to ignore aid commitments in the midst of their own economic woes. The World Bank has developed a list of 28 of the countries most vulnerable to the triple threat of increased food and fuel prices and the financial crisis.
Not suprisingly, 13 out the 28 countries on this list are in Africa. But sub-Saharan Africa may avoid the worst of the global financial meltdown. A recent article in the Economist points out that the region has a number of things working in its favor. These include a highly regulated banking sector that is relatively unlinked to the Western financial system and natural resources that are drawing investment from countries like China, India and the United States.
Back in January, two IMF staffers noted that investor confidence in Africa was on the rise. Still, it's hard to argue that Africa can continue to make as much progress without outside help, like the promised $350 million more in agricultural loans from the 185-country-owned World Bank. “The stark reality," Zoellick says, "is that developing countries must prepare for a drop in trade, capital flows, remittances, and domestic investment, as well as a slowdown in growth."
October 10th
U.S. Economic Problems Have Ripple Effect in Mexico

As Americans grapple with plunging retirement savings, declining home values and rising gas prices, our neighbors to the south are suffering, too.
A decline in both exports — most of which go to the U.S. — and remittances are putting the brakes on the Mexican economy.
Mexican manufacturers rely heavily on U.S. consumers; Americans buy more than 80 percent of the country's exported goods. But as American consumers cut back, Mexican manufacturers are laying off workers. The Arizona Republic ran a story quoting one factory manager who cut nearly half his staff after sales dropped 40 percent.
The slowdown in the manufacturing sector has a trickle-down effect. In Nuevo Laredo, taco vendor Jorge Flores has lost 40 percent of his business in recent weeks due to the economic hard times.
Also hurting the Mexican economy is the decline in money sent back to Mexico from Mexicans living in the U.S., also known as remittances.
One in four families in Mexico relies on remittances as its primary source of income. And remittances have dropped by 12 percent in the past 12 months.
Fewer visits to Western Union are partly due to a fall in U.S. home construction, an industry staffed heavily by Mexican laborers. One day labor center in Los Angeles, for example, says there's been a drastic drop in demand for workers.
Help is on the way, according to Mexican President Felipe Calderon: Yesterday Calderon proposed a 65.1 billion pesos ($5.26 billion) stimulus package to shore up the flagging economy.
October 9th
In Afghanistan Amputees are Doing it for Themselves
How'd you like being a bicycle messenger on roads labeled "decrepit" and "all but impassable?" What about delivering documents by bike in a country where suicide bombings seem like a daily occurrence?
Now imagine doing it with only one good leg.
With some financial help from a German donor, that's just what a group of Afghan amputees is doing to support themselves and their families.
NPR reports that the men take to the street each day on their bicycles, delivering everything from documents to pizza, and insist that the absence of a limb is not an obstacle at all. The business has helped men like Abdul Khalil provide for his wife and eight children for the past six years.
The young businessmen face difficulties eking out a living in war-torn Afghanistan where one-in-ten people are disabled, but one thing is for sure — they're all glad not to have to beg to feed their families.
October 2nd
New Policies Aim to Halt Iraqi Health Care Brain Drain

In a country where kidnapping and violence towards medical workers occurs all too frequently, the Iraqi government is taking measures to stop doctors and nurses from leaving the country and convince those who have left to come back.
On Monday, Iraq announced a number of new policies aimed at creating a safer environment for medical professionals to work. Police will not be able to detain doctors without Ministry of Health permission, doctors will be permitted to carry guns, and security will be strengthened at clinics and hospitals. Iraq is also attempting to bring refugee medical workers back home through advertising campaigns and improved salaries.
According to a March 2008 report by the International Committee of the Red Cross,
the health care system in Iraq is in crisis.
More than 2,200 doctors and nurses have been killed and more than 250 kidnapped since 2003. Of the 34,000 registered doctors in 1990, at least 20,000 have left the country."
The lack of a strong health care workforce in Iraq has serious consequences. According to a report by Medact, studies have shown that the conflict in Iraq has caused a dramatic increase in death rates of children under 5, emergency aid needs, and war-related morbidity and mortality. In addition, basic health and primary care services are both hard to find and unaffordable, causing many people to either turn to underqualified practitioners or go without care.
This is not the first attempt by the Iraqi government to lure back skilled professionals: In 2005, the government announced it would double the salaries of university professors to prevent "brain drain." We'll have to see if these latest measures will be enough to improve a dangerous situation.


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