The once-thriving practice of outsourcing manufacturing may be thwarted by rising energy costs.

According to the Wall Street Journal, many U.S. manufacturers have halted plans to build factories overseas because the costs to transport goods back home have risen. Some, such as the heater manufacturer DESA LLC, are even considering moving production back to the U.S. "My cost of getting a shipping container here from China just keeps going up — and I don't see any end in sight," said DESA retail heating division president Claude Hayes. The company now considers itself lucky to have kept its old U.S. factories.

The return of DESA's heaters to the U.S. coincides with a new report by CIBC World Markets called "Will Soaring Transport Costs Reverse Globalization?" The report argues that high energy costs could potentially reverse the outsourcing that has occurred in some areas of manufacturing. Foreign trade cannot expect the same opportunities to develop markets in India as there were 30 years ago because of today's high energy costs. This situation could give countries closer to the U.S. like Mexico a little more appeal in the future than current economic giants such as China.

But do not expect outsourcing — the major transformer of world economies in the last 30 years — to go silently into the night. As Andrew Leonard points out in his article "Who Needs Tariffs When You Have Expensive Oil?" high energy prices do not affect all aspects of global trade, including the areas of telecommunications and computers. For example, the software industry in India will continue to thrive because it thrives on cheap Internet and not natural resources. So while some manufacturing may feel the pressure of high oil prices, American companies will continue to outsource in other ways.

Energy costs won't likely come down anytime soon. Could American manufacturing make a comeback?

Photo: Mark oh! (flickr)

Children working in the Stung Meanchey Dump in Cambodia. Photo: EB78 (flickr)

Have you ever wondered what happens to the garbage after you leave it on the curb?

In developing countries, trash from the cities are commonly picked through by the poor and unwanted members of society. These trash pickers go by many names: the Zabaleen in Egypt, pepenadores in Mexico, and ragpickers in India.

These people rely on trash for their livelihoods. They spend hours sorting through these huge piles of rancid waste by hand. For them, almost everything is reusable. Organic materials are used to feed their livestock; recyclable materials are washed and resold. Indian ragpickers make only 100-150 rupees ($2.50-$3.75) for eight hours of sifting.

These overlooked members of society perform an important service for the rest of the population. In Delhi, ragpickers "represent almost 1% of Delhi's total population and handle about 20% of the city's enormous daily waste," according to Paul Colombini, who created a website on which Delhi recyclers can tell their own stories. It is estimated that these ragpickers save the city 600,000 rupees a day in trash disposal costs.

Though this work is dirty and smelly, they take pride knowing the invaluable service they perform.

We don't like attention. Rubbish is never attractive and we're quite happy carrying on quietly ... but our work supports a whole industry that's virtually invisible to most people.

Photo: Premshree Pillai(flickr)

It must be frustrating to live in a major city but face daily power outages, water shortages and the stench of manure from urban-dwelling farm animals. Any reprise from this life would be welcome.

In India, gated communities are fast becoming popular for the people that can afford them. But the protected oasis provided by many of these communities is a quick fix to India's infrastructure problems, rather than a long-term solution.

In recent years India has witnessed a boom in the upper-middle class, much of it due to outsourced jobs from the U.S. and Europe. This population can afford some of the luxuries not available to all Indians, such as reliably running water and electricity, clean streets, even 24-hour security.

They also demand special services, maids, chauffeurs and gardeners. So over time, manual laborers who populate neighborhoods these nouveau riche were trying to flee simply relocate to locations where jobs are available.

“Townships are just one example of how Indian city planners increasingly focus on the upper strata of society and ignore the vast majority of city dwellers,” believes Krishna Menon, director of the TVB School of Habitat Studies in New Dehli.

Menon also points out that gated communities gated reinforce India's traditional caste system, a system the country is trying to shed. A recent New York Times article on India's gated communities suggests that these enclosed home sites, "pressed up against the slums that serve them, has underscored more than ever the stark gulf between those worlds.”

It's not that conditions for the poor are becoming worse. But the lack of infrastructure is becoming more apparent as gated communities face some of the same problems that Indian cities do. A story in Britain's Guardian newspaper says about Central Park, a new community outside of New Dehli,

The power fails, the air-conditioning switches off and the taps run dry. Unscrupulous developers fail to deliver, confident that they will never be prosecuted by India's slow-moving legal system.

Gated communities may provide families with more security, but they don't inoculate residents against the country's deeper structural problems. Since India is the world's largest democracy, where politicians as well as developers are responsive to the upper-middle-class residents, perhaps those residents should use their collective power to bring about changes that would benefit everyone.

One of India's most famous exports, Darjeeling tea, is under threat from an indefinite strike by an ethnic Nepalese Gorkhas demanding greater autonomy in the region.

Protesters clashed with police last week, disrupting transport links, blocking road access, and shutting down many businesses in the Darjeeling hills, home to hundreds of tea gardens that produce the world-famous tea.

The crisis comes at a critical peak period for plucking highly priced "second flush" tea leaves. According to Siliguri Tea Traders Association's secretary, the unrest has caused the country's tea industry to lose the equivalent of $470,000 a day.

The Gorkhas are fighting for a separate state in West Bengal. They claim that the Indian government discriminates against them, and that they don't receive the services and infrastructure they deserve.

But while local tea exporters are becoming increasingly worried, those hardest hit by the shutdown are the tens of thousands of workers and their families whose economic wellbeing depend on the tea gardens. According to NDTV, "the shutdown means uncertainty for over 50,000 permanent workers in the tea gardens, and no wages for around 100,000 temporary workers."

Government officials are hesistant to grant the Gorkhas autonomy because they fear losing control of one of their prized exports. But the unrest threatens the tea industry's health, which is why West Bengal officials are said to be "keen" on talks to resolve the issue.

A Darjeeling tea estate in India. Photo: nac888 (flickr)

Photo: Sun Pictures / Lakshman (flickr)

Ever heard of a 13-year-old bank manager?

It’s not an uncommon sight at the Children’s Development Bank (CDB), a unique initiative by the Delhi-based NGO Butterflies that helps street children help themselves. CDB, founded in Delhi in 2001, offers street and working children the opportunity to invest in a different lifestyle.

Fear of theft and lack of future planning have often led working children to spend what little they earn on short-term pleasures, such as cigarettes or cinema tickets. By providing a safe place to hold money, however, CDB encourages them to start a savings habit.

CDB is particularly innovative in the way it is run. It works as a cooperative, in which children are both the owners and decision makers. Rules, membership standards and loan criteria are set by members who are all between the ages of eight and 18. The idea is for kids to "put money aside for themselves without worry that it will be lost or stolen, save for things that they need or want, such as clothes, (and) plan to improve themselves, by saving for education and training."

CDB now boasts more than 8,250 members and operates in 12 locations, including branches in Afghanistan, Bangladesh, Nepal and Sri Lanka.

Fuel prices have risen 40 percent since the start of the year.

Skyrocketing fuel prices make people angry. How angry you ask?

• Truck drivers in Spain started an indefinite strike on Monday, threatening to bring the entire country to a standstill. A growing number of gas stations have reported to have run out of fuel as a result, and supplies of fresh food are running low.
• From Portugal to Italy, commercial fishermen have protested rising fuel prices by blockading ports and refineries
• Last Thursday, more than 500 motorcyclists staged a “go-slow” demonstration outside Manchester, UK.
• Over in Asia, angry Indian consumers burned tires and blocked traffic after the government raised fuel prices. The protests shut down schools and businesses in West Bengal State.
• In Hong Kong, 500 buses and trucks colluded to bring traffic to a standstill in the central city.
• Enraged by the government’s recent 41-percent fuel price hike, Malaysians have planned a nationwide strike and a major demonstration in Kuala Lumpur on July 12.
• Truck drivers in Thailand are threatening to wreak traffic-havoc next week by clogging the roads with 400,000 trucks.
• In South Korea, truck drivers threatened to strike on Monday, ignoring the $10.2 billion government aid package designed to cushion the impact of soaring fuel prices.

What other angry reactions have you heard about?

"My husband lost his limbs working in the factory," Jyoti Dave, a surrogate mother in India, told Reuters. "We could not manage even a meal a day. That is when I decided to rent out my womb."

Commercial surrogacy is nothing new. In the U.S., where it is legal in many states, companies such as Growing Generations offer up to US$25,000 to surrogates while charging couples between US$30,000 and US$45,000 per child.

Today rent-a-womb has gone international. Its headquarters
are in India, where surrogate mothers can earn US$5,000 to US$7,000 per birth — income equivalent to a decade's worth of a rural wages for a woman.

These surrogates offer their services to an international clientele hailing from Italy, Singapore, Sweden and other wealthy countries. Most of these couples turn to surrogacy after multiple failed in-vitro fertilizations or repeated miscarriages. It's no surprise India appeals to medical tourists; it offers affordable service, highly qualified doctors, and fewer legal hurdles than found in other countries.

Boston Globe columnist Ellen Goodman is among critics of commercial surrogacy who are disturbed by the idea of the human body as a commodity. Others are uneasy about the ability of the wealthy to essentially rent wombs from the poor.

Many participants in international surrogacy, however, argue that they are helping those in financial desperation. "How else will us uneducated women earn this kind of money," one surrogate mother explained to Christian Science Monitor, "without doing anything immoral?"

Photo Credit: 3pom (flickr)

Technological advances have significantly impacted India's recent growth. But one technology may be causing more harm than good.

India is experiencing an alarming rise in sex-selective abortions. As the middle class has grown, more pregnant women are able to afford ultrasounds. One result is that many couples are choosing to abort female fetuses. Traditionally, boys are preferred over girls — they carry on the family name, can more easily find paid work, and don’t require expensive dowries. Even though India is becoming increasingly modernized, these traditional values remain intact.

The numbers tell the story: In 1981, India had 962 girls for every 1,000 boys. In the 2001 census, the ratio was 927 to 1,000. Indian Prime Minister Manmohan Singh recently called the problem a "national shame."

Indian society is starting to experience the repercussions. With fewer available women to marry, some Indian men are resorting to buying their brides from poor communities outside their own, the BBC reports.

Photo: greenhem (flickr)

Plastic bags have long been associated with litter and waste. The world uses tens of billions of plastic bags every year – bags that end up hanging from trees, traveling along freeways, escaping garbage cans and waste dumps.

Plastic-bag recycling rates are extremely low – about 1 to 3 percent worldwide, according to Reusablebags.com.

While plastics have helped us in many ways – medical advances, for one – by now we are seeing an increasing amount of wasteful uses. The mass production and ubiquitousness of plastic bags has hit a nerve in many developing countries. Lawmaking bodies in every region of the world have begun to regulate the use of plastics — and some are even banning the use of plastic bags outright.

Here's a partial list:

India. In August 2005, the state of Maharashtra initiated a bag ban after bags "blocked sewage and drainage systems during record monsoon rains," according to The Guardian. "Flooding and landslides killed more than 1,000 people in the state.” Anyone seen with a plastic bag can be fined 1,000 rupees, or about $25.

Kenya. The East African nation has enforced new regulations banning production and distribution of light-density bags, according to Nairobi's Business Daily (as reported by allAfrica.com). Three years ago, Kenyan researchers had appealed for a ban, and Nobel Peace Prize winner Wangari Maathai had argued that plastic bags can lead to malaria, because discarded bags left outside can fill with rainwater and breed disease-carrying mosquitoes.

Uganda and Tanzania. Kenya's neighbors also banned the use of all disposable one-use plastic bags nationwide. One Ugandan blogger wrote that “This seemingly radical step has a direct connection to human health and also to environmental well-being of citizens across Africa. Apart from the fossil fuel usage needed in their production, plastic bags have a remarkable ability to pollute across borders.”

China. Authorities announced that by this June, one-use plastic bags will be outlawed in the hope that residents will return to their old habit of using cloth bags and baskets. "Beijing residents appeared to take the ban in stride, reflecting rising environmental consciousness and concern over skyrocketing oil prices," reports National Geographic.

Some developed nations also have taken drastic steps to reduce the impact of plastics. Ireland, for example, imposed a 33-cent tax in 2002. It worked quickly to depress demand. According to the New York Times, the use of plastic bags dropped 94 percent within weeks.

A scramble for Africa’s resources and major manufacturing outlets has begun. India and China are emerging as competitors as each country looks to make its mark on the continent. India attempted to entice African leaders last week at an India-Africa Summit. The aim was to persuade them to welcome Indian investment. They are pushing to keep up with China’s plans to meet with African leaders at an even bigger summit they plan to host in May.

What could make India the one to successfully invest in Africa? For one, India has a history of close relations in Africa dating back to colonial times. Recently, India has also been a major aid donor to Africa along with sending about 9,000 UN Peacekeepers to the continent. However, India has tried to separate its recent efforts from China’s presence in Africa by insisting its interests are mostly focused on development.

Could India find a place as a new economic powerhouse in Africa?

To some the word "immigration" evokes an image of people standing in line at Western Union, waiting to wire money home to families for groceries and clothing. It happens thousands of times each day all over the world. All those remittances — the small amounts of cash wired across borders — add up to a whopping $300 billion a year.

Dilip Ratha believes this $300-billion industry can play an important role in international development. He's a World Bank employee who is working to make it easier for migrants to transfer money and direct the cost savings towards economic development in their own countries.

Skeptics argue that if remittances equaled development, Mexico would look like Switzerland. Ratha might argue that without remittances, Mexico's economy might look a whole lot worse. His new paper suggests that Africa could add as much as $3 billion to public coffers just by reducing the costs that migrants pay to send remittances. (Currently, charges on these cross-border money transfers can be as high as 10 percent.)

Ratha hopes to prove that hundreds of billions of remittance dollars can be funneled toward poverty alleviation by making simple policy changes.

His personal story has shaped his beliefs. In the U.S., he earns a salary that is 100 times what he could have earned in his birthplace of India, and his own remittances have helped build schools and pay medical bills there.

And while the negative impacts of immigration often make headlines, Ratha stresses that there are costs of not immigrating, too — costs borne by people living in poverty and by everyone in the global economy.

Photo: Thatcher Cook for Mercy Corps

Will America's economic troubles spill over to South Asian markets?

India, because of its close economic ties to the U.S., could get caught up in the downdraft. Rising inflation rates are causing the country's conservative commercial bankers to squirm in a country usually considered the poster child for modernization. India ships more of its goods to the U.S. than to any other country — so if Americans curtail their spending in an economic slowdown, Indian businesses could lose big.

How can India maintain its high rate of economic growth despite the U.S. slowdown?

The Brookings Institute calls for India’s government to economically reform by addressing its major inefficiencies in connecting the rural poor with the mainstream economies. BusinessWeek points out the need for reforms in agriculture, infrastructure, health care and education. But it adds that reform "is the last thing" on the mind of India's ruling Congress Party.

Photo: C Mulvany (flickr)

In the global rush towards biofuels, some countries are being forced to choose between affordable food and renewable energy. Many poor nations cannot afford to use staple crops like corn or soybeans as fuel. But some scientists and policymakers believe that they may have found a solution: jatropha.

Jatropha is an inedible nut that can be grown on non-arable land with little water or maintenance, and it's increasingly being identified as a possible alternative source for biofuels. Because its production would not take up valuable farmland, and would have little (if any) impact on food prices, jatropha is particularly attractive to developing countries seeking a balance between increasing energy demand and poverty alleviation.

India is currently trying to launch what would be the world’s largest jatropha biofuels project to date. Its Ministry of Rural Development has proposed a five-year, $375-million project to plant over one million acres of jatropha and research its potential as a fuel source. India is far from alone in its efforts to promote jatropha. Last year, British Petroleum signed a $160-million deal with a British biofuels firm to develop a joint venture in jatropha. A number of countries are pursuing their own jatropha projects, including South Africa, Malaysia, Brazil, Mali and others.

The BBC takes a look at the contrast between India's high rate of economic growth and the widespread poverty that continues to plague the country. Though India has become a major global player in information technology, some are worried this high-tech development will only lead to "silicon bubbles" that do little to improve conditions for the Indian poor. Anand Mahindra, managing director of one of India's largest conglomerates, disagrees:

"The IT sector was a kicker to growth," he says. "Its impact was psychological. It signalled to the world that India was much more than its old historical stereotypes. It suddenly in an exaggerated manner, if you ask me, made the world think that every Indian was smart and could fix their computers. But that helped entrepreneurs in India from all industry segments, because it gave them a more receptive environment in which to do business."