From The Economist - 21 May 2009|
Buying farmland abroad
Outsourcing's third wave
Rich food importers are acquiring vast tracts of poor countries' farmland.
Is this beneficial foreign investment or neocolonialism?
EARLY this year, the king of Saudi Arabia held a ceremony to receive a batch
of rice, part of the first crop to be produced under something called the King
Abdullah initiative for Saudi agricultural investment abroad. It had been grown
in Ethiopia, where a group of Saudi investors is spending $100m to raise wheat,
barley and rice on land leased to them by the government. The investors are
exempt from tax in the first few years and may export the entire crop back home.
Meanwhile, the World Food Programme (WFP) is spending almost the same amount as
the investors ($116m) providing 230,000 tonnes of food aid between 2007 and 2011
to the 4.6m Ethiopians it thinks are threatened by hunger and malnutrition.
The Economist on the global financial crisis|
anatomy of Asian economic woes
Jan 29th 2009
IT SEEMS so unfair. Most Asian economies have been models of prudence. While
American and European households were borrowing up to the hilt, Asian ones were
tucking away their savings. While rich-country banks were piling into
ever-riskier assets, Asian banks kept their holdings of such assets small. And
while America and Britain were sucking up the world’s savings, Asian governments
piled up vast stocks of foreign reserves.
Yet many of Asia’s tiger economies seem to have been hit harder than their
spendthrift Western counterparts. In the fourth quarter of 2008, GDP probably
fell by an average annualised rate of around 15% in Hong Kong, Singapore, South
Korea and Taiwan; their exports slumped more than 50% at an annualised rate.
Share prices in emerging Asia have plunged by almost as much as during the Asian
financial crisis a decade ago. That crisis was caused by Asia’s excessive
dependence on foreign capital. This time the tigers have been tripped up by
their excessive dependence on exports.
Jan 29th 2009
AS THE lunar new year holiday winds down in China, millions of workers are
expected to stream back from the countryside to jobs in the cities. But in
Xinji, a fur- and leather-processing city in northern China and a big producer
of holiday fireworks, there will be little to go back to. The global economic
crisis has dealt a hefty blow to this once booming city.
China’s leaders are struggling to cope with the biggest upsurge of
unemployment the country has faced in years. Migrants from the countryside, the
main source of labour for export-oriented industries and construction sites,
have been the hardest hit so far. Millions have been thrown out of work. Urban
white-collar workers, for years pampered by double-digit growth, speak of
shrinking bonuses and frozen wages. Some are losing jobs, too. Students, whom
the government always fears upsetting, face the most difficult employment
prospects since the upheaval in Tiananmen Square 20 years ago. As the Communist
Party prepares to celebrate 60 years in power on October 1st, it worries that
citizens will be in a fractious mood.
Asia's economic crisis
Jan 29th 2009
CHINA’s lunar new year sees the world’s largest migration, as tens of
millions of workers flock home. Deserting for a few days the factories that make
the goods that fill the world’s shops, they surge back to their native villages.
This week, however, as they feasted to the deafening rattle of the firecrackers
lit to greet the Year of the Ox, their celebrations had an anxious tinge. Many will not have jobs
to go back to.
China’s breakneck growth has stalled. The rest of East Asia, too, which had
hoped that it was somehow “decoupled” from the economic trauma of the West, has
found itself hit as hard as anywhere in the world—and in some cases harder. The
temptation is to see this as a plague visited on the region from outside, which
its governments are powerless to resist or cure. In truth, their policy errors
have played their part in the downturn, so the remedies are partly in their
The scale and speed of that downturn is breathtaking, and broader in scope
than in the financial crisis of 1997-98. China’s GDP, which expanded by 13% in
2007, scarcely grew at all in the last quarter of 2008 on a seasonally adjusted
basis. In the same quarter Japan’s GDP is estimated to have fallen at an
annualised rate of 10%, Singapore’s at 17% and South Korea’s at 21%.
FINANCE AND ECONOMICS: Economics focus
Attacks on China’s cheap currency are overdone
CHINA has been accused of “manipulating” its currency by Tim Geithner,
America’s new treasury secretary, and this week Dominique Strauss-Kahn, the
managing director of the IMF, said that it was “common knowledge” that the yuan
was undervalued. You would assume that such strong claims were backed by solid
proof, but the evidence is, in fact, mixed.
Of course China manipulates its exchange rate—in the sense that the level of
the yuan is not set by the market, but influenced by foreign-exchange
intervention. The real issue is whether Beijing is deliberately keeping the yuan
cheap to give exporters an unfair advantage. From July 2005, when it abandoned
its fixed peg to the dollar, Beijing allowed the yuan to rise steadily, but
since last July it has again been virtually pegged to the greenback. And there
are concerns that China may allow the yuan to depreciate to help its
exporters—with worrying echoes of the beggar-thy-neighbour policies that
exacerbated the Depression. But American politicians are wrong to focus only on
the yuan’s dollar exchange rate. Since July the yuan has gained 10% in
trade-weighted terms. It is up 23% against the euro, and 30% or more against the
currencies of many other emerging economies.
A special report on the future of finance|
The golden age of finance collapsed under its own contradictions.
Edward Carr asks why it went wrong and what to do next
THE monument to Soviet central planning was supposed to have been a heap of
surplus left boots without any right ones to match them. The great bull market
of the past quarter century is commemorated by millions of empty houses without
anyone to buy them. Gosplan drafted workers into grim factories even if their
talents would have been better suited elsewhere. Finance beguiled the bright and
ambitious and put them to work in the trading rooms of Wall Street and the City
of London. Much of their effort was wasted. You can only guess at what else they
might have achieved.
When the financial system fails, everyone suffers. Over the past 22 months
the shock has spread from American housing, sector by sector, economy by
economy. Some markets have seized up; others are being pounded by volatility.
Everywhere good businesses are going bankrupt and jobs are being destroyed. For
the first time since 1991 global average income per head is falling. Even as
growth in emerging markets has come to a halt, the rich economies look set to
shrink. Alan Greenspan, who as chairman of America’s Federal Reserve oversaw the
boom, calls the collapse “a once-in-a-half-century, probably once-in-a-century
type of event”. Financial markets promised prosperity; instead they have brought
From The Economist - 12 March 2009|
The jobs crisis
The world economy faces the biggest rise in unemployment in decades. How
governments react will shape labour markets for years to come
is post-colonial thinking?
An interview with Achille Mbembe
The faults in Europe's universalism, especially when
confronting its colonial history, have nurtured a variety of critical
perspectives in the West. Talking to French magazine Esprit, theorist
Achille Mbembe says that postcolonial thinking looks so original because it
developed in a transnational, eclectic vein from the very start. This enabled it
to combine the anti-imperialist tradition with the fledgling subaltern studies
and a specific take on globalization, he says.