Cyprus made the news a while ago because of its crushing debt crisis requiring a 10 billion Euro bailout.
Less known is that Cyprus is actually two countries, one of which is Northern Cyprus, which is only recognized by Turkey. It’s safe to say, though, that Northern Cyprus’ financial health is deeply connected to that of Cyprus’.
Northern Cyprus apparently doesn’t have enough money in it’s budget to adequately monitor, test and deal with an rapidly spreading outbreak of Brucellosis among its livestock because of the Cypriot financial collapse.
Brucella is a nasty bacterial disease which I’ve written on before which includes outcomes such as fever, malaise, miscarriage, chronic arthritis and heart disease, depression, mania and death. It can infect all mammals and is highly transmissible; any contact with a bacterium will result in infection. Though only one case of human to human transmission has ever been recorded (sexual transmission), Brucella is well known as a public health threat to people who work with livestock.
Brucella is ranked among the most economically important zoonotic diseases globally, and presents threats to humans, animals and wildlife.
The chairman of the union of livestock producers, Mustafa Naimoglulari, confirmed that the brucellosis microbe has been discovered at 60 farms and criticized the authorities for not launching a fight against the disease.
He said that blood should have been taken from the animals for analysis in order to establish which of them are contaminated.
In statements to Kibris, the official responsible for agriculture in TRNC, Onder Sennaroglu said that they have taken money from UNOPS to deal with the issue, but they could not eliminate brucellosis.
He noted that he knows that money should not be an excuse, but the cost of this issue is very high. “I have to say that resources are needed, and we have no resources at the moment,” he admitted, adding that they have applied to the EU for money.
The Cypriot financial crisis has its roots in the US subprime mortgage crisis. In fact, the pattern of the precentage of debt to GDP of Cyprus follows that of the Eurozone, but rapidly increases after 2012, where the EU flattened out. Cyprus previously relied heavily on a tourism fueled real estate bubble in addition to revenues from tourism itself. As debt went bad in the US and the Eurozone, debt went bad in Cyprus. Having no other sectors to depend on, the Cypriot economy collapsed.
Now, we are seeing that the financial collapse and the loss of government revenues to support public health efforts and having deleterious effects on animal and, likely, human health.
I’m reading an article on African firms and why they don’t seem to grow.
There is an urgent need for job creation in Africa yet something seems to be stunting firm growth. This column shows that African firms are about 20% smaller than their counterparts in other locations. It suggests small firms put the brake on growth as the burden of dealing with government and labour costs may increase with size, or perhaps as they start facing trust issues between managers and workers.
Wow. This pretty much sums it up. African business can’t grow because of onerous regulation, corruption and a general problem of too many people wanting too much of the pie.
I wondered for a while why ladies selling bags of rice, for example, might choose to sell the same rice right next to one another for the exact same price to the exact same market. All of them would make much more money and market prices would be much lower and more competitive if a few of them would band together and form multi-lady shops. I thought it might be because the ladies don’t trust one another to enter such a relationship, but I’m thinking that raising the profile of an enterprise might invite all kinds of new and expensive problems. It still might be true that the ladies don’t trust one another, however.
The overall price level in Africa could also be a factor in determining the size of firms (Gelb et al. 2013). Relative to low-income comparators like Bangladesh, Vietnam and also India, African countries are considerably more costly. In absolute terms, and excluding South Africa as a middle-income country, the average purchasing power parity for a sample of African countries is about 20% higher than the average for the four poorest comparators (Bangladesh, Indonesia, Philippines and Vietnam). Africa’s higher costs may result in a lower level of competitiveness and consequently, in a distribution of firms that is different (smaller) than distributions in other countries. African firms may also face a steeper labour cost curve; as firms become larger and more productive, their labour costs increase more in other regions of the world.
Africa is just about one of the most expensive places to do just about anything, simply because you have to do and provide so much on your own. Our research activities come at incredible expense despite the fact that labor is far, far cheaper. If you need power, you have to figure a way to deliver it yourself. If you need skills, you have to pay to train up people to perform the duties you need. If you need supplies, you have to order them from overseas since very little of what you need is manufactured on the continent.
Next, I’m looking at the graphic below and seeing that Africa only spends about .8% of all worldwide R&D dollars, despite housing a sixth of the world’s population and even including South and North Africa.
The Fear: Robert Mugabe and the Martyrdom of Zimbabwe It will be a great day for the world when Robert Mugabe dies. His reign over Zimbabwe has been disastrous for the country. Once known as the “breadbasket of Africa,” it is now known as a governmental basket case of seemingly inconceivable proportions.
Godwin travelled to his home country of Zimbabwe at great risk during the 2008 Presidential elections. He documents, in a literary style a pattern of voter intimidation and unfathomed violence by Mugabe and his ZANU-PF party. The profiles of torture victims, some of whom are Parliament members and high profile party members of the opposition MDC party, are gut wrenching. While it’s hard to doubt the lengths that Mugabe would go to to maintain power, the zeal with which his supporters violate basic standards of morality is mind-boggling.
Most interesting is Roy Bennett, a white Zimbabwean former Parliament member who once justifiably physically assaulted another MP during session. Despite being beaten, tortured, humiliated, having his farm ripped violently from him during Mugabe’s land redistribution scheme and despite even having his wife beaten so badly that she lost the child, Bennett fights on for Zimbabwe’s freedom and maintain an amazingly high level of public support. Bennett eventually becomes pegged to be the Minister of Agriculture under a power sharing scheme, directly undercutting Mugabe’s racist narrative which helps keep him in power.
Godwin pulls no punches in “the Fear,” but at times the violence and inhumanity are so extreme as to be somewhat implausible. I don’t doubt the accounts of torture and targeted beatings he lists here. There are so many episodes and the nature of the violence so extreme, that even if the book were 90% lies, the situation would be one of the worst on the planet.
The book, however, is more saddening than revolting. How an educated and well endowed country like Zimbabwe, which was so full of potential following independence could sink to such low depths is not only perplexing, but thoroughly depressing. An excellent read. (BUY HERE)
Junkyard Planet: Travels in the Billion-Dollar Trash Trade A son of a junkyard owner grows up and decides to be a journalist, then goes back to the family scrap business, then writes a fantastic book about the history and current state of the worldwide junk trade.
I remember when recycling became a part of American life, but it was sold as a new phenomenon. Americans were portrayed as living a wasteful existence before recycling campaigns, throwing otherwise useful items into landfills to be buried and forgotten. Minter digs deep into the history of scrap in the US, noting that during the Depression, many people made good livings pulling and sorting trash and selling whatever was useful to whoever was willing to buy it.
The problem, apparently, isn’t in recycling or the willingness of business to reuse goods, but the costs of sorting and resorting, a problem which requires innovation. Minter points out that many innovations in recycling come from the bottom. Those willing to brave the junk heap to find gold are the most motivated to find new and efficient methods of extracting it. Even more challenging is the volatility of commoditiy prices and the sudden changes in demand for specific substances or components. The trade requires a speedy willingness to adapt, a quick sense of what buyers want and a collection of connections to link them to supply. It’s a cutthroat, though exciting business.
Though the domestic recycling and scrapping industry is a multi-billion dollar business. Now, the economics of junk span the entire glove. China, with its large supply of cheap and efficient labor has taken on a good portion of the scrap world. Minter addresses the potential hazards of scrap, much of which is sorted by hand under minimal regulation, but notes that the work is consistent and offers a way out for a lot of rural Chinese already living under squalid conditions. His easy to read assessment of the global junk trade is as much a story of the potential hazards of globalization and first world consumption as it is a celebration of the ingenuity of the bottom to offer market based solutions to the problems of potentially increasing scarcity of certain commodities. (BUY HERE).
It’s an old paper, but I just came across The Colonial Origins of Comparative Development: An Empirical Investigation
by Daron Acemoglu, Simon Johnson and James A. Robinson, originally published in the The American Economic Review back in 2001.
They take rough data of settler deaths back in the seventeenth and eighteenth centuries and plot them against the GDP of several countries from 1995. I’ve included the plot on the right. What they found was that a higher number of European settler deaths was associated with a long term decline in economic output.
Settling in the seventeenth and eighteenth centuries was a dangerous business, particularly in Sub-Saharan Africa and less so in what is now the United States, New Zealand and Australia. Malaria and yellow fever were responsible for killing up to 100% of groups brave enough to attempt the journey.
Acemoglu, et al.’s argument is as follows:
1. There were different types of colonization policies which created different sets of institutions. At one extreme, European powers set up “extractive states,” exemplified by the Belgian colonization of the Congo. These institutions did not introduce much protection for private property, nor did they provide checks and balances against government expropriation. In fact, the main purpose of the extractive state was to transfer as much of the resources of the colony to the colonizer. At the other extreme, many Europeans migrated and settled in a number of colonies, creating what the historian Alfred Crosby (1986) calls “Neo-Europes.” The settlers tried to replicated European institutions, with strong emphasis on private property and checks against government power. Primary examples of this include Australia, New Zealand, Canada, and the United States.
2. The colonization strategy was influenced by the feasibility of settlements. In places where the disease environment was not favorable to European settlement, the cards were stacked against the creation of Neo-Europes, and the formation of the extractive state was more likely.
3. The colonial state and institutions persisted even after independence.
They argue that the disease environment determined the nature of settlements, which determine the nature of institutions which, in term, determined the economic trajectory of a country.
Interestingly, they control for all of the things that one might control for, such as distance from the equator and the percentage of inhabitants that were European, being landlocked and the ruling power, ruling out the effect of some obvious potential influences. Property rights, a solid judiciary and limits on political power in the colonies and upon independence, they argue, had a greater effect on long term GDP, and the development of those institutions was enabled or inhibited by early settler mortality.
It’s a fairly compelling argument, though not without its critics.
A few gems from the paper interested me. One, the return on investment in the British colonies during the nineteenth century was a whopping 25%, far more than one could have expected domestically. In the late 19th and early 20th centuries, this dropped so that returns on colonial and domestic investments were the same.
I found (finally!) a reference to indicate the willful choosing of high altitude and thus less malarious areas for colonial settlements. Note that in Europe and the US, the location of cities is often along river ways and sea sides, where in Africa large cities tend to be placed inland (with some exceptions). There has been no industrial revolution in Africa and little regional trade (a condition which persists to this day) so that cities along water based shipping routes are not necessary. Extraction in Africa was largely done by rail, further alleviating the need to be close to rivers.
Kenya, lacking mineral or oil resources, is an agricultural economy. Specifically, they are really good at growing tea, and, to a lesser extent, coffee. This helps explain why Kenya’s developmental trajectory has been far more successful than that of other economies. Tea production is labor intensive and often depends on small and mid-sized farms which employ lots of people. Instead of money flowing in the pockets of the corrupt, who often squirrel it away in overseas accounts, money goes directly in the pockets of growers.
Kenya is the UK’s biggest tea supplier, but Egypt buys more tea by volume from Kenya than any other country. A piece in Think Africa Press today wrote on the dual problem of falling demand for tea from Egypt due to prolonged unrest, and that of falling commodity prices worldwide.
The cause of the farmers’ problems lies far to the north of the cool, tea-covered slopes of the Aberdares, in the heat of Cairo and the continuing fallout from the Arab Spring. In 2010, the last year before the uprising in Egypt, Kenya supplied the tea-obsessed UK with around half of its tea, but Egypt was the the single largest destination for Kenyan tea exports, buying nearly a fifth of what the factories around Nyeri produce. With the overthrow of President Mohammed Morsi in July 2013 and the ongoing campaign against the Muslim Brotherhood causing continued political instability, demand has plummeted and prices have gone with them.
“It’s a supply and demand issue,” says Chai Kiarie, Field Services Manager at Gitugi Tea Factory. “We produced more tea this year, but we still made nearly $2 million less than we did last year. With these problems abroad, the demand just isn’t there.”
This isn’t an isolated problem. Coffee prices, once riding high on a boom in commodity prices have been steadily falling since the financial collapse. The commodity boom was a winning sitaution for African economies and helped drive much of the rapid growth seen throughout the 00′s. Regulation has started curbing speculative practices that drove the increases, removing a source of destructive volatility which drove up food prices in developing countries, but has also decreased badly needed foreign exchange revenues.
I visited a few farms the last time I was in Kenya. Farmers aren’t waiting around for subsidies to help pull them out of a potential mess. All of the farmers I spoke with are looking for new ways to diversify their operations and meet potentially lucrative world wide demand for competitive products. All of them wanted to think of ways to increase productivity while decreasing the cost of inputs. The pressures from falling tea demand could help push them to find ways to innovate and increase both revenues and stability.
Not that the Economist has ever made a habit of ignoring tropical diseases. Far from it, the Economist as a British magazine is quite good at reporting on the Isles former colonies.
Here they’ve written on the issues of mass drug administrations as a tool in malaria eradication. Specifically, they focus on a Chinese group seeking to ramp up efforts to create a successful regimen of artemisinin and piperaquine to eliminate the disease by prophylacticly preventing infection, and interrupting the cycle of transmission long enough to eliminate the parasite entirely.
Dr Li’s approach is to attack not the mosquito, but the disease-causing parasite itself. This parasite’s life cycle alternates between its insect host (the mosquito) and its vertebrate one (human beings). Crucially, as far as is known, humans are its only vertebrate host. Deny it them and it will, perforce, wither away—an approach that worked for the smallpox virus, which had a similarly picky appetite. In the case of smallpox, a vaccine was used to make humans hostile territory for the pathogen. Since there is no vaccine against malaria, Dr Li is instead using drugs.
To date, the group has been running trials in the Comoros islands off the coast of Mozambique and had some success, but haven’t come close to full elimination. Elimination on islands surrounded by salt water (mosquitoes which transmit malaria breed in fresh water) should be a fairly easy proposition, but the issue of human mobility from the African continent guarantees reintroduction.
I’m personally involved in an island malaria elimination project in Kenya, but am under no illusions that results from an island are in the least bit generalization to the continent. Falciparum malaria is far too efficient and the lack of a winter renders transmission far too consistent to allow easy elimination. Add the issue of the intense mobility of Africans and one can’t help but be discouraged.
Dr. Li from the Guangzhou group seems to be optimistically under the mistaken impression that all it will take to eradicate malaria is the right combination of magic pills, but he’s gravely mistaken. The only thing that will consistently control malaria on the continent will be a full on, sustained assault using every tool known, along with intense economic development. The continent has only seen gains in malaria control during the 00′s, when incredible amounts of money and effort was thrown at the disease and, not coincidentally, when African economies finally started to take off. Eradicating malaria won’t be about a few pills.
More troubling to me are the ethical issues. Mass drug administrations require the participation. If even a small group of people refuse the medication, the entire effort might be for naught. Obtaining full, informed consent, however, is near impossible in these areas. While most people are willing to participate once the benefits are explained to them, the risks are often glossed over. Moreover, as communities will often follow the behavior of their neighbors or community leaders, it is difficult to judge whether people participate of their own volition or whether they are merely bowing to community pressure. Educational barriers might also compromise the ability to obtain truly informed consent.
Further, I don’t doubt the intent of the Guangzhou group, but I do wonder if Chinese institutions truly have the same level of ethical review and monitoring that United States’ institutions have (which isn’t even perfect and sometimes ill suited to developing countries). I’m sure that China would love to claim a success like malaria elimination, but I worry that a zeal for victory might lead to a violation of basic ethics and even a masking of failures, complicating the issue in the long term. I hope that I’m wrong.
Every year, Bill and Melinda Gates release a letter on the state of the Gates Foundation and the current situation of global development and health. This time Gates set out to dispel three common myths on development, namely that poor countries are doomed to be poor forever, foreign aid is a total waste and that development will just lead to overpopulation.
The first is the most cynical, but even for us development/public health folks, it’s easy to be discouraged. Pessimism aside, the data don’t bear out the assumption that developing countries are entrenched in poverty. Just about all Sub-Saharan African countries experience consistent economic growth throughout the 00′s and have seen rapid improvements in just about all of the common health indicators. People are living longer, fewer kids are dying and they’re making more money to pay for school and health care.
Over the past five years that I’ve been going to Sub-Saharan Africa I’ve seen this change on the ground. Cars are in better shape, there’s more goods on the shelves, kids are better nourished and security has vastly improved. Does this mean that all of the problems are magically going away? No, there are still vast challenges to infrastructure development, access to health care and affordable medications, educational quality, gender issues and basic business development. However, these improvements do signal that Sub-Saharan African countries are reaching a point where sustained development is possible.
I have a hard time disagreeing with Gates here, but I did find his “before” and “after” pictures of Nairobi a bit bizarre. Though Nairobi is currently going through a construction boom, I fail to see how it would look any different in 2014 than it did in 1969 after more than three decades of stagnation.
Gates second point and the hardest myth to dispel is that of the alleged ineffectiveness of aid. Bill Easterly has made a career out of aid bashing, and, unfortunately, given cynical politicians looking for policy scapegoats a point to scream to their angry constituents. In a broader sense, the screaming over aid is really a questioning of developmental policies themselves. Certainly, there are development failures. The neo-classically informed structural adjustment policies of the World Bank and the IMF during the 80′s and 90′s were, on the surface, colossal failures (Read Beyond the World Bank Agenda: An Institutional Approach to Development by Howard Stein for a great analysis). On a smaller scale, we can easily cherry pick misguided but well meaning development projects or plans that simply went awry for any number of unforeseen reasons. The recent takedown of Jeff Sachs (The Idealist: Jeffrey Sachs and the Quest to End Poverty) and the massive problems of the Millenium Village in North East Province in Kenya is a great example of the challenges a development project can face.
However, in ever insular post Iraq America, the question that is most often asked is why we should even care and does our presence merely serve to make things worse. The truth is, and the point most often overlooked, is that most development projects are international collaborations. Many projects are conducted with partners in target countries and, more often than not, projects often make up for shortfalls that hobbled governments are unable (or sometimes unwilling) to provide. Health care is one example.
Jeff Sachs wrote a nice article this morning on how effective free insecticide treated nets have been in reducing malaria incidence and mortality in Sub-Saharan Africa. Nearly half a billion free nets have been given out worldwide as of 2014 and a lot of kids are alive today who would have been dead had they been born ten years earlier. Malaria is 100% associated with poverty. Wealthy people do not get malaria, even in malaria endemic countries. Though some of the decline in malaria incidence has been due to increased affluence and urbanization of African countries, a major percentage of this decline has been due to aid programs which provide bed nets and have expanded access to life-saving malaria medications. Certainly, not all aid works, but nothing works 100% of the time, particularly when humans are involved.
Which brings us to the most cynical and offensive of Gates’ three myths. Some people truly believe that saving African kids is a bad thing. One day there will be too many of them and they will suck up the ability for the world to sustain life. Honestly, this view couldn’t be more wrong.
The poorest parts of the world are the areas which are seeing the most rapid population growth. The average Malawian woman has 8 children in her lifetime, often starting when she isn’t even yet 15 years old. It has been said that if Malawi continues on it’s current trajectory, that it will have a population equivalent to that of Japan’s by 2050. Women in water and food constrained pastoralist communities can have ten or more children. The most affluent areas of Africa are the places with the slowest population growth.
Even more incorrect is the assumption that poverty is less harmful to the environment than development. Malawi is almost entirely deforested due to extensive use of charcoal for heating and tobacco cultivation. Deforestation not only robs the earth of potential carbon sinks, but also reduces need biodiversity and directly impacts precious water resources. Africa burns unclean fuels such as charcoal and coal for heating, and the poor condition of vehicles make it a major potential source of greenhouse gases. The air in Nairobi on any given weekday is so filled with exhaust that one can become dizzy just walking around town. It is, of course, unreasonable (and stupid) to deny Africans transportation and cooking fuel, but well meaning though poorly informed armchair environmentalists in the United States would happily suggest doing just that.
Which bring me to my final point. The case against development is one that assumes that the status quo is somehow preferable to anything that might come after. The assumption is that Africans were just fine without Europeans and their planet destroying ways. There is, of course, little data on what Africa was like before Europeans started extracting resources from the continent. We do, however, know a lot about underdeveloped areas of Africa. There is evidence to suggest that some do fine. There is however, much evidence to suggest that other simply do not. The worst parts of Africa are the parts which are the least developed. They are the areas where the market doesn’t function. The areas where there is little education, no access to health care, no roads, no economy, kids regularly die, where old people are a venerated since they are so rare, where there’s violence and instability and people are entirely marginalized from any level of political participation. While development likely will never solve the worst problems (like those in Somalia), there is no case to be made that the current state of the ultra poor is acceptable on any measure, even to the poor themselves!
Alright, off to bed.
He hired sex workers in Ecuador and Mexico to interview other sex workers employed in brothels and as street prostitutes. As sex workers have a keen sense as to what clients consider “beautiful,” he relied on them to scale their looks fairly.
As much of sex work relies on friendly interactions with clients, survey staff were also instructed to assess communication skills. Sex workers were asked to report the number of hours worked in the previous week, the number of clients and the time spent with each.
Sex workers in Ecuador reported making approximately $5 per hour, where Mexican prostitutes made nearly $12 an hour. Most prostitutes worked a 40 hour week. A Mexican prostitute can expect to make about 5 times the income of an average household there. The payoff in Ecuador is somewhat less but still higher than the average.
About three quarters of each had children and between 20 and 50% of them were married. Around 1 in 10 Ecuadorian sex worker tested positive for an STI.
Arunachalam found that beautiful sex workers in brothels tended to spend more time working, more time with clients and made more money per transaction. Attractive sex workers earned approximately 15% more than average and unattractive prostitutes.
He also found that while beautiful women tended to be more likely to work in brothels, where hours are fixed, than as street prostitutes. The pay off for beauty on the street tended to be higher on the street than in brothels, however.
Beauty payoffs have been seen in other employment contexts. It has been associated with a decreased risk of being involved with crime, the likelihood of happiness, securing a job, success in politics, and in generating positive reviews from University students.
The paper “The Prostitute’s Allure: The Return to Beauty in Commercial Sex Work” is available here.
OK, back to work.