China

China May Succeed Where the West Failed -- In Africa

China's attitude towards Africa was apparent in a slogan at a summit on Africa in Beijing. Photo: <a href="http://www.flickr.com/photos/stephenrwalli/295101176/">stephenrwalli (flickr)</a>
China's attitude towards Africa was apparent in a slogan at a summit on Africa in Beijing. Photo: stephenrwalli (flickr)

Deborah Brautigan doesn't argue with critics who call China's interest in Africa self-serving. But she may be one of the first American academics to declare that China's deeds will be good for Africa, too.

It's an argument she expands in The Dragon's Gift, a new book analyzing the development of China's Africa policies over the last few decades.

Brautigan asserts that China's investments are integrating African countries into the global economy more quickly because, unlike Western countries, the nation invests in an array of industries. In Angola, for example, China has built roads, schools, hospitals, and irrigation systems in the country's interior — even though its oil wealth is far offshore. Brautigan also cites a telling remark by a Nigerian diplomat: "The Chinese are trying to get involved in every sector of our economy. If you look at the West, it's oil, oil, oil and nothing else."

And on a continent rife with corruption, China's style of development actually leaves less room for embezzlement than does the World Bank model, points out a book review in The Morning Star. Rather than funneling money through potentially corrupt government officials, China pays Chinese companies to head up infrastructure projects.

Brautigan acknowledges that China's behavior in Africa is sometimes far from saintly. Some have complained that Chinese companies do not respect local labor laws, as happened at a mine in Congo, and others worry that Chinese companies will have a negative environmental impact on the continent.

While not negligible, Brautigan sees these violations as small in comparison to what China's investments could mean for Africa, and in comparison to the failed promise of other foreign aid there. As an AidWatchers review noted, this "book seeks to compare Chinese aid to Western aid as it really is, not as we wish it were."

A Once-Red Country Helps Make the World Greener

China's carbon-capture technologies help reduce emissions from coal plants. Photo: <a href="http://www.flickr.com/photos/ishmattpics/3707081549/">ishmatt (flickr)</a>
China's carbon-capture technologies help reduce emissions from coal plants. Photo: ishmatt (flickr)

At first glance, China appears to be exacerbating global climate change. The world's most populous country is the fastest growing industrial economy and the single biggest source of carbon emissions.

On the other hand, China may be helping green the world by making environmentally friendly technologies more affordable, says The Wall Street Journal.

China's vast market and economies of scale are bringing down the cost of solar and wind energy, as well as other environmentally friendly technologies such as electric car batteries. That could help address a major impediment to wide adoption of such technologies: They need heavy subsidies to be economical.

In other words, manufacturing anything in China makes it cheaper, and that applies to green technologies, too. That's been a major factor in the 30-percent drop in the price of solar panels over the past year, reported NPR.

The WSJ goes on to note that the country's research into carbon-capture technologies is also cutting-edge, working on procedures that could cut down on emissions from coal plants by storing some of the carbon produced underground rather than releasing it into the atmosphere. Manufacturers in developed countries are already interested in how they can apply it to their own facilities.

It's hard for any country to make the switch to greener energy sources, but if China succeeds in fostering innovation and cutting technology costs, the process could make the transition easier for countries all over the world.

How to Irrigate On A Shoestring

Topics: Agriculture, Food, Water
Countries: China, Ethiopia, India
A homemade drip-irrigation system. Photo: <a href="http://www.flickr.com/photos/careofcreation/2122650793/">Care of Creation (flickr)</a>
A homemade drip-irrigation system. Photo: Care of Creation (flickr)

Flood irrigation: that's how poor farmers in developing countries usually water their crops. It's wasteful and too water-intensive to work in the dry season, but until recently there haven't been other viable options — a traditional drip irrigation system could cost thousands of dollars.

But social entrepreneurs like Paul Polock and the California-based company, Driptech are working to change this by helping poor farmers set up low-cost drip irrigation systems. Driptech can sell their irrigation system for $30 in places like India, China and Ethiopia, because they use cheaper materials and have developed a new (top-secret) method for punching the holes in the irrigation tubes, according to the San Francisco Chronicle.

As Business Week notes, the technology could be transformative:

Experts say low-cost irrigation could alter the economics of food. Subsistence farmers may be able to grow excess crops they can sell. Countries that rely on food imports could see their dependence on outsiders decline.

The innovation has allowed poor farmers to save "water, labor, and time — all while growing a valuable dry-season crop that greatly increased their annual income," boasts Driptech's website.

Driptech plans to relocate their manufacturing facilities to the countries where their products are sold. The company's blog notes that this "will help support the local economies while cutting out transportation costs and headaches."

Selling redesigned products to the poor can be a profitable business model, as some companies in India have also discovered. (I wrote about this phenomenon in "Selling to the Poor, On Terms They Can Afford"). In line with this trend, Driptech expects to make money while helping poor farmers start to turn a profit of their own.

A Climate of Displaced People

A man delivers his goods through a flooded street in Mumbai, India. Photo: <a href="http://www.flickr.com/photos/hussain_quantum/3698717526/">Hussain_Quantum (flickr)</a>
A man delivers his goods through a flooded street in Mumbai, India. Photo: Hussain_Quantum (flickr)

It should be no surprise that armed conflicts force millions of people from their homes each year. In fact, 4.6 million people were displaced by conflict and war in 2008. But I was shocked to learn that the number of people displaced by climate change is four-times greater than those displaced by conflict. That's about 20 million people — roughly the population of Australia — that have been forced to relocate because of natural disasters like flooding, earthquakes and storms.

This figure comes from a joint study by the United Nations Office for the Coordination of Humanitarian Affairs and the Internal Displacement Monitoring Centre and is the first large-scale look at how climate change is effecting human populations. It provides data on exactly how carbon emissions have affected human lives, and it offers a somewhat harsh glimpse into what will happen if the situation is left unchecked.

Mines in Mongolia

What will the growth of the Mongolian mining industry mean for the country's nomadic herders? Photo: Thatcher Cook for Mercy Corps
What will the growth of the Mongolian mining industry mean for the country's nomadic herders? Photo: Thatcher Cook for Mercy Corps

Mongolia could soon be home to the largest copper mine in the world.

After years of negotiations, Western mining companies Rio Tinto and Ivanhoe are close to reaching an agreement with the Mongolian parliament to develop significantly the Oyu Tolgoi mine. Mineweb reports that the untapped deposit contains 78 billion pounds of copper and 45 million ounces of gold. If all goes to plan, the massive investment would double the size of Mongolia's economy and create thousands of jobs, according to NPR.

The economic crisis has hit Mongolia harder than most countries in East Asia. One in four people are out of work, NPR reports. The country’s nomadic herders – 40 percent of the population – are struggling after the price of cashmere dramatically declined earlier this year (see Manasi Sharma’s Downturn in the Gobi). Now, some are hailing Oyu Tolgoi as an immediate economic fix.

But there are several obvious challenges. First, Mongolia is highly corrupt. It is ranked 102 out of 180 countries in the latest Transparency International index, an annual rating of perceived levels of corruption (defined as the abuse of public office for private gain). Additionally, the editorial in Mineweb suggests that Russia and China may have inordinate influence over Mongolia’s mining industry. Given these two factors, how much will the average Mongolian gain?

Lastly, there are the social implications of this investment to consider. For many nomadic herders, shifting to industrial mining jobs is far from ideal, but there isn’t much else to turn to. People are desperate now that raw cashmere and other materials do not provide a reliable way to feed and clothe families. "They are losing their land, their animals, and even their culture," reported NPR’s Louisa Lim, "for a few specks of gold."

Guide to the Global Summit

The G-20 is meeting this week in Pittsburgh, Pennsylvania. Chaired by President Barack Obama, the purpose of the summit is to, “review the progress made since the Washington and London Summits and discuss further actions to assure a sound and sustainable recovery from the global financial and economic crisis.” I’ve heard of the G-8, but the G-20? I began to wonder about this alphanumeric soup of organizations. Who are they and what are they concerned with? The following scorecard should help interested followers of this subject keep track of the major players.

The G-6: Organized in 1975 by the finance ministers of Germany and France who were frustrated with the formality and structure of larger international meetings, the G-6 and subsequent evolutions of this body are strictly informal bodies that meet to discuss economic issues of mutual interest. After the creation of the G-8, the term G-6 is now used to refer to the six most populous members of the European Union. The member countries are: the United States, United Kingdom, France, Germany, Italy, Japan

The G-7: Formed in 1976, this is an informal forum for the finance members of seven big industrial economies to discuss economic issues and seek agreement. Member countries include: Canada, France, Germany, Italy, Japan, United Kingdom, United States. Now also includes the European Union.

The G-8: An evolution of the G-7, membership grew to include Russia. The European Union is a limited member; it cannot host a meeting or hold the presidency of the body. Members are: Canada, France, Germany, Italy, Japan, United Kingdom, United States, Russia. European Union (limited member)

The G-8 plus Five: Recognizing the growing influence of other countries, the original group sometimes broadens their meetings by including the Outreach Five. As with all meetings, other countries are sometimes invited to attend. Members: Canada, France, Germany, Italy, Japan, United Kingdom, United States, Russia. European Union (limited member) Plus: Brazil, China, India, Mexico, South Africa.

The G-20: According to their website, “[t]he G-20 was created as a response both to the financial crises of the late 1990s and a growing recognition that key emerging-market countries were not adequately included in the core of global economic discussion and governance.” Where the earlier groups (G-6 through G-8) were organized around the industrialized countries of the world, the G-20 begins to bring emerging economies into the dialog. Their first meeting was in Berlin, Germany. The Managing Director of the International Monetary Fund (IMF) and the President of the World Bank, plus the chairs of the International Monetary and Financial Committee and Development Committee of the IMF and World Bank, also participate in G-20 meetings on an ex-officio basis.

The G-20 is made up of the finance ministers and central bank governors of 19 countries: Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, United Kingdom, United States, European Central Bank

The G-33: The name for a group of developing countries that coordinates on trade and economic issues. It was created in order to help group countries which were all facing similar problems and give a unified voice to countries that were traditionally excluded from discussions among the industrialized countries. Members: Antigua & Barbuda, Barbados, Belize, Benin, Botswana, China, Côte d’Ivoire, Cuba, Democratic Republic of the Congo, Dominican Republic, El Salvador, Grenada, Guyana, Guatemala, Haiti, Honduras, India, Indonesia, Jamaica, Kenya, Laos, Mauritius, Madagascar, Mongolia, Mozambique, Nicaragua, Nigeria, Pakistan, Panama, Peru, Philippines, St Kitts & Nevis, St Lucia, St Vincent & the Grenadines, Senegal, South Korea, Sri Lanka, Suriname, Tanzania, Trinidad & Tobago, Turkey, Uganda, Zambia and Zimbabwe.

There are other groups variously labeled as G-8, G-20, G-33, and even N-11 (countries which Goldman Sachs considered in 2005 to have a high potential of becoming the world’s largest economies this century: Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippines, South Korea, Turkey and Vietnam).

One of the best, reliable, sources of information about these groups and their members may be found on the websites of the World Trade Organization and the previously mentioned G-20.

You can Track the ongoing discussions of the Pittsburgh G-20 Summit here. But be prepared for slow page loading. It is a very busy website.

Keywords: G-8, G-6, G-20

Young Americans Look To China For Employment

 Working in China seems to be an attrative option for many American graduates Photo:<a href="http://www.flickr.com/photos/keso/494003749/"> flickr(keso) </a>
Working in China seems to be an attrative option for many American graduates Photo: flickr(keso)

How far from home will you go for a job? For some people, the answer is "pretty far."

The New York Times reports a rise in the number of recent college graduates traveling from the U.S. to China in search of a decent job.

According to a recent New York Times article, "they are lured by China’s surging economy, the lower cost of living and a chance to bypass some of the dues-paying that is common to first jobs in the United States.”

In the current job market, these graduates would be lucky to and a entry-level job in the U.S., but in China they stand a shot at higher-level jobs. Some more entrepreneurial types are starting their own businesses. And Chinese businesses seem to be quite pleased they're coming. Not only do they value their English language skills, but they also appreciate their general knowledge of Western culture.

Sister(city)hood Goes Beyond Cultural Exchange

Thomas Benke (center) works with Sichuan Research Institute of Environmental Protection chemists and OFSSA staff to set-up the Gas Chromatograph. Photo: Courtesy of Thomas Benke.
Thomas Benke (center) works with Sichuan Research Institute of Environmental Protection chemists and OFSSA staff to set-up the Gas Chromatograph. Photo: Courtesy of Thomas Benke.

Four years ago, a petrochemical plant on the border of China and Russia spilled 100 metric tons of the toxic chemicals into a tributary of the Amur River. The river is the main drinking supply for a town in Russia named Khabarovsk, and it put hundreds of thousands of lives at risk.

Naturally, Khabarovsk turned to Moscow for help. But they also contacted a group of friends in Portland — including my dad.

My dad, Thomas Benke, has been involved in the Portland-Khabarovsk Sister-City Association, or PKSCA, for many years. And his actions after the toxic spill showed me that sister-city associations can be a means for not only cultural exchange but also serious global cooperation.

PKSCA implements a wide reach of humanitarian programs in Khabarovsk that include solid-waste management, emergency services, educational exchanges, hospitals, orphanages, and village schools. And it, along with Oregon Fujian Sister State Association (OFSSA), has responded to disasters such as chemical spills and earthquakes. My dad has volunteered for both. One of his main motivators has been to help preserve the environment. (He holds degrees in chemical engineering and environmental law.)

There is an undeniable synergy between a clean environment and economic development. The old idea that there must be some trade-off between economic development and environmental protection in developing economies is gradually being replaced by the realization that the foundation of economic development — a healthy workforce — thrives on clean air, clean water and an unpolluted landscape.

My father explained to me that soon after the spill in Khabarovsk, he traveled there to deliver and introduce a Gas Chromatograph, a device for testing drinking water in disaster areas. The device was purchased by the City of Portland. In May 2007, PKSCA followed up by inviting two chemists from the Vodokanal (Khabarovsk Water Bureau) to work with the Portland Water Bureau and the Oregon Department of Environmental Quality. Most importantly, PKSCA set up a training session at SRI Instruments in Los Angeles — the company that built the Gas Chromatograph. SRI Instruments' contribution was substantial — they built a specialized device that could detect the contaminants in the Amur River and provided free repair for the device.

Not only did PKSCA quickly respond to the water crisis in Khabarovsk, but by providing further training sessions in the United States, they also sustained and fostered a stronger more informative relationship between Portland and Khabarovsk officials, as well as sister-city board members.

On May 12, 2008, an 7.9 magnitude earthquake struck China’s Sichuan Province, killing tens of thousands of people and displacing nearly five million. Immediately, Fujian Province requested assistance from its Sister State, Oregon, for whatever aid they could provide. Below, Thomas described the international and OFSSA response to the crisis.

The world responded with cash and supplies. The people of Oregon donated cash generously through several local and international non-profit organizations. The Oregon-Fujian Sister State Association, because of its unique relationship with Fujian Province, resolved to do more — to donate emergency response tools that would leverage Sichuan Province’s capacity to respond.

The pre-existing relationship of trust between the two jurisdictions allowed Fujian province to request help from Oregon. The Sister-Province relationship made all the difference — we were able to overcome the cultural issues of pride and face that might have otherwise required Fujian province to decline aid. It's all about overcoming the formidable cultural barriers, and I think that that's the key.

It's the difference between your neighbor, somebody in your community coming in and offering help as opposed to a stranger from someplace you know nothing about.

When my dad first explained sister city associations right after the toxic spill four years ago, I thought he was obsessed with his involvement in both organizations. Now about to graduate from college, I plan to follow his lead and hope to work internationally for an NGO.

Mekong Dams Cause a Stir

The Mekong River. Photo: <a href="http://www.flickr.com/photos/tashandsmoked/1357553641/">tashandsmoked(flickr)</a>
The Mekong River. Photo: tashandsmoked(flickr)

Before it reaches the sea, the Mekong River travels more than 2,500 miles through Tibet, China, Burma, Thailand, Laos, Cambodia and Vietnam. It is estimated that more than 60 million people depend on the river in some way. But the dams are changing the river and impacting the people who depend on it.

For better or worse, four dams are already in place and 11 are on their way, most of which will be in China.

China is working to reduce their dependence on coal, and get more power from renewable sources like hydroelectricity, according to IRIN, the UN news agency, which reports that "governments downstream claim the hydroelectric dams will cut electricity costs."

The dams currently generate over 3,000 megawatts of electricity, says Radio Free Asia. A Portland General Electric representative told me that's enough electricity to power a city about the size of Portland, Oregon — with a population of 575,000 people — for an entire year.

Besides energy, the dams also help to regulate the rivers flow. As IRIN reports, supporters are saying this is a pretty impressive perk, since the region's unpredictable rains often times cause a flood or drought.

But others, including locals, don't think so highly of the dams.

According to the Foundation for Ecological Recovery, the river's fishing industry alone is worth up to $3 billion annually, and the existing dams are already decreasing that profit. Mekong fisherman Ouy Chai tells Al Jazeera that "before you could catch 10-20 fish in one day and now you can fish all week and not catch anything." His wife says, "I'm scared. What will be left for our children and grandchildren to eat?"

In the same vein, many environmentalists are saying that the dams are harsh on the environment, causing erosion and harming biodiversity. Nguyen Huu Chien, head of the environment and natural resource management program at Can Tho University, tells Radio Free Asia that "it is like a blood vessel in the human body. When we build dams, it is like a blockage in the veins: it will definitely affect other areas."

Despite the protesting and petitioning efforts of those against the dams, IRIN reports that two new ones are currently underway.

China Going Green?

China's Three Gorges Dam, the world's largest hydro-electric power station. Photo: <a href="http://www.flickr.com/photos/pvcg/3412711352/">PVCG (flickr)</a>
China's Three Gorges Dam, the world's largest hydro-electric power station. Photo: PVCG (flickr)

Can China go green without disrupting their economic growth?

Fossil fuels provide most of the energy powering the world’s post populated country, but last month China committed to producing more energy from cleaner sources.

Liu Zhenya — the president of China's largest electric provider — said that China aims to produce 35 percent of its energy from "low-emissions" sources by 2020 at a press conference in Beijing, tells Bloomberg.com.

China is currently the world's leader in renewable energy production. However, a study by Wharton University shows that low emissions sources like hydro-electricity, wind power, and solar power make up only 8 percent of the nation's total energy capacity.

China’s demand for energy is expected to double over the next decade as well — increasing consumption rates, massive amounts of industrial exports, and construction growth could potentially push electricity consumption to nearly 8 trillion kilowatt-hours a year. At that rate China would consume twice as much the United States, which is the next biggest energy consumer after China.

Considering that China’s growth in energy consumption has more than tripled the world’s average in past years and nearly 90 percent of China's energy still comes from coal and oil, the Wharton University report estimates that the nation will need $3.7 trillion to maintain its projected energy growth.

For China, the numbers don’t add up. Their demand for energy is going to double over the next eleven years and the majority of their energy capacity is highly dependent on coal. The climb to 35 percent is either going to be relatively steep or they are going to spend a lot of money converting fossil fuels.

Responding to the Global Food Crisis

By the summer of 2008, the price of rice had increased five times from the average price in 2005. Photo: Thatcher Cook for Mercy Corps
By the summer of 2008, the price of rice had increased five times from the average price in 2005. Photo: Thatcher Cook for Mercy Corps

The following post is from One Table, a Mercy Corps campaign to fight world hunger by investing in the world's women.

Today almost a billion people worldwide are unable to buy or grow enough food to avoid malnutrition. That's 120 million more than were hungry in 2006.

What happened? Basically, the world saw dramatic spikes in food prices. But there were many underlying causes of what's known as the global food crisis:

  • Drought and other climate-related problems that resulted in smaller harvests
  • Changing diets — rise of the middle class in India and China and an increased demand for food, especially meat, which requires large amounts of grain to raise
  • Diversion of crops from food production to the production of biofuels
  • High fuel prices during 2008 — if it costs more to transport food, prices go up
  • Declining investments in agricultural productivity — total agriculture development aid to poor countries plunged from $8 billion in 1984 to $3.4 billion in 2004. At the same time, the developing world's cities have been ballooning with people who do not grow any of their food
  • Export bans and restrictions last year in several major grain-producing countries like China as governments sought to lower food prices for their own citizens, with the result of reducing the global supply on hand.

While food prices have come down from their highs of 2008, they remain substantially above historic levels. Many economists feel this trend, which most severely affects those who can least afford it, is likely to continue for some time.

The economic, health and societal costs of the global food crisis have been severe. One of the first things Mercy Corps did to figure out how and where to direct our efforts was to survey the communities where we work. We discovered that within communities Mercy Corps serves, roughly 70 percent of income is spent on food, and 80 percent of the population had been affected by rising food prices over the past year. The survey also confirmed something we already suspected: that families were coping with higher prices by eating fewer meals, selling off household belongings, going into debt and removing children from school so that they can work.

In addition to being a record year for food prices, it's also been a record year for our food security team, allowing Mercy Corps to aggressively respond to this crisis. We now have 17 programs in 13 countries designed specifically to respond to this on-going problem. Through support from donors including USAID, the Bill & Melinda Gates Foundation, the Gap Foundation, the Hunger Site, and private individuals, our Food Crisis Response employs a strategy designed to ensure that the groundwork for increased prosperity in the future is laid — even while addressing the immediate problem of accessing sufficient food.

Food distributions, much of which are specifically targeted to improve child nutrition, are taking place in Tajikistan, Kyrgyzstan and Zimbabwe. Meanwhile, in the Central African Republic, India, Indonesia, Liberia, Nepal, Niger, Somalia, Sri Lanka, Uganda and again Zimbabwe, Mercy Corps is helping hungry households to access food by providing employment opportunities, agricultural training and inputs (such as seeds and tools), and helping people establish and grow small businesses.

Combined, these programs are reaching almost 1.5 million individuals who have been directly impacted by higher food prices. Overall, Mercy Corps’ Crisis Response will lead to a sustainable increase in income for these people, leading in turn to greater food security over the long-term.

China's Not So Cheap Anymore

Workers at a footwear factory in Dongguan, China. Photo: <a href="http://www.flickr.com/photos/clayirving/486823098/sizes/m/">clayirving (flickr)</a>
Workers at a footwear factory in Dongguan, China. Photo: clayirving (flickr)

Made in China.

It's a label you might associate with cheap labor and mass production — but a recent study featured in BusinessWeek says that China's products may no longer be the best bargain for U.S. companies.

Outsourcing to mainland China has several "hidden costs" related to rising labor and currency rates, the report reveals. In the last three years, the yuan has gained ground on the weakened U.S. dollar and factory workers wages are going up. This translates to a drop in the average price gap between China and U.S.-manufactured products — from 22 percent to 5.5 percent.

And when you add in the costs that come with producing goods halfway around the world — storage fees, shipping delays and the price to repair or replace high-tech product parts — the ultimate savings are minimal. "A couple of years ago, outsourcing to China was a no-brainer," says Stephen T. Maurer, director of AlixPartners, the firm that led the study. Now, he tells BusinessWeek, manufacturers are thinking twice about where to send their business.

Some U.S. companies are turning to Mexico, where manufacturing rates are cheaper than China's and suppliers across the border are more accessible.

That doesn't necessarily mean that the label "Made in Mexico" will replace "Made in China." Low wages for factory workers still make China a top competitor when it comes to labor-intensive products like toys and clothes.

India's Outsourcing Woes

A call center in India.  New U.S. policies against outsourcing jobs overseas will hurt India's IT sector the most. Photo: <a href="http://www.flickr.com/photos/dgrobinson/382439150/">David Robinson (flickr)</a>
A call center in India. New U.S. policies against outsourcing jobs overseas will hurt India's IT sector the most. Photo: David Robinson (flickr)

In spite of the global recession's painful effects on most of the world's economies, India has managed to stay stable. The country even expects its economy to grow by 5 percent this year. However, this prediction came before President Obama announced that his administration would be cutting tax breaks and refusing bailout money for companies outsourcing jobs overseas.

Rising unemployment in the U.S. has renewed the political and economic debate over shipping jobs abroad. More than 1,000 U.S. firms that have outsourced jobs abroad are being criticized for taking jobs away from Americans. Countries like India — which gets more than 60 percent of its outsourcing work from U.S. businesses — will likely be hit the hardest by the Obama administration’s protectionist approach to reviving the U.S. economy.

President Obama also announced a hiring ban on foreign workers for companies receiving federal bailout money. Of the 65,000 H1-B work visas that the U.S. issues annually, 21,667 have been for Indian citizens who mostly join the information technology industry. These non-immigrant visas are granted to educated and skilled foreign workers.

But the U.S. is not alone in adopting policies against outsourcing jobs and limiting foreign workers. In Persian Gulf countries like the United Arab Emirates, millions of Indians who are employed in the construction and banking industries have been laid off and forced to return home. In the United Kingdom — where Indians are one of the most prevalent immigrant groups — the government has announced plans to potentially limit foreign workers to sectors of the economy that have documented labor shortages.

New policies against hiring foreign workers in the U.S. may have a long-term impact that policymakers are not anticipating, according to a study by Duke and Harvard researchers. With increased job opportunities in places like India and China, more than 100,000 foreign workers could leave the U.S. for jobs in their home countries. The study found that many Indian professionals in Silicon Valley have already left, and predicts many more will leave to start businesses in India.

This is bad news for the long-term economic recovery of the U.S. because nearly half of Silicon Valley start-ups, including Google, were started by immigrants, the lead Harvard researcher tells BusinessWeek. This long-term “brain drain” will mean that “when we start recovering ... the people we need are going to be in India and China,” according to the researcher, Vivek Wadhwa.

The U.S. has historically welcomed immigrants and their innovative ideas. A reversal of policy could prove to be very harmful — hurting economic growth and limiting the expansion of key industries.

Economic Crisis Fueling Social Unrest

Police in Reykjavik, Iceland after a violent protest turned into a riot on January 20. Photo: <a href="http://www.flickr.com/photos/finnurmalmquist/3215651009/">finnur.malmquist (flickr)</a>
Police in Reykjavik, Iceland after a violent protest turned into a riot on January 20. Photo: finnur.malmquist (flickr)

It’s a lot worse than just about everyone thought. By some estimates, the economic crisis could cost 50 million jobs worldwide. That's a catastrophic number, and even their potential loss is already fueling some discontent and sounding alarms.

Worried about the ripple effects of widespread unemployment, the U.S. Central Intelligence Agency recently added the state of the economy to the agency's list of top security threats. Retired Admiral Dennis Blair, the U.S. Director of National Intelligence, warned that "economic crises increase the risk of regime-threatening instability if they persist over a one-to-two-year period."

On the international stage, United Nations Secretary-General Ban Ki-moon voiced his concern: "If not handled, today’s financial crisis will become tomorrow’s human crisis. Social unrest and political instability will grow, exacerbating all other problems."

Violent flare-ups over the economic recession and resulting unemployment are already occurring all over the globe.

In Pakistan, chronic power outages have forced many textile factories to close down for hours at a time, triggering thousands of angry protesters to set fire to the state-owned power company's office. Government cuts in Lithuania’s social programs prompted protesters to pelt the parliament building with eggs and rocks ; at least 14 people were injured and 84 detained. Chinese police officers are now undergoing special training to deal with expected social unrest over factory closings that have left millions of migrant workers out of a job.

Iceland and Latvia serve as extreme examples of the devastating consequences from the declining state of the worldwide economy: both countries’ respective governments collapsed under the pressure of the economic crisis.

However, security experts are concerned about other forms of collateral damage that extend beyond protests. Bruno Tertrais, a strategic and security expert at the Foundation for Strategic Research in Paris tells Time Magazine that he believes the biggest threat to international security is "the collapse of regimes vital to maintaining international order." Tertrais cites Somalia as an example — a place where, after the collapse of its government, piracy has gained a foothold and severely disrupted shipping routes along the horn of Africa.

Extreme poverty has always posed a threat, especially in the world’s emerging economies. However, the breadth and force of the current global economic crisis poses a threat to all nations, whether rich or poor.

Announcing the Weekly Comment Contest Winner!

This week's comment contest winner is anonymous, which is technically against the rules, but we liked the comment anyway.

Anonymous commented on a 2006 article that questions whether China or India will become the dominant global force of the 21st century.

This is a belated comment on the article in June 2006. I believe many Indians these days have moved on from the pre-2006 India Shining or India Poised hype.

I am responding in particular to the comment in the 2006 article that the economy China has only recently overtaken that of Britain despite Britain having a small population and resources compared with China because 'Britain has all of the economic dynamism associated with free societies.'

If that be the case, why is India's economy, being a democracy which adds creativity and dynamism to an economy (according to the author) and not to mention a population which will soon bigger than that of China is not bigger than that of China's or indeed that of Japan's, Germany's, Britain's, France's and Italy's?

As to people in India feel empowered by the ballot box why do so many Indian people choose to live in slums then? Surely such empowered and happy people will choose better than living in slums? Perhaps Indian people need so many religions in their country to tell they really live in a wonderful paradise?

As to the better command of English, of course, India is notorious for poor literacy rate in the world especially amongst the female population. Successful economies like Japan and Germany, of course prove that you need more than being able to speak English to make your a country a success.

Global Envision is offering a $25 cash prize to the weekly comment contest winner. Read more about the contest here, and good luck!


Stories We're Watching

For India’s Newly Rich Farmers, Limos Won’t Do

International Herald Tribune - Fri, 03/19/2010 - 00:48
Land acquisition for expanding cities and industry has created pockets of instant wealth, creating a new economic caste in India: nouveau riche farmers.

Africa Could Join High-Speed Science Network

All Africa - Thu, 03/18/2010 - 12:45
African science ministers are hoping to extend a high-speed fiber optic network — currently linking Egypt to the northern hemisphere — to other countries in Africa.

Vision for Africa

Daily Nation - Thu, 03/18/2010 - 12:30
Africa’s economic future and the challenge of uniting people and nations drew eminent politicians and scholars into a historic public debate in Nairobi on Thursday.

'Quiet Corruption' Hurting Africa's Poor

San Francisco Chronicle - Mon, 03/15/2010 - 09:22
A World Bank report says teachers and other public servants who don't show up for work are fueling "quiet corruption" throughout Africa that is disproportionately hurting the continent's poor.

Industrial Output Up; Hopes For Factories Grow

NPR - Mon, 03/15/2010 - 08:45
Industrial production edged up 0.1 percent in February, beating expectations and marking the eighth straight monthly increase.

Recent comments

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