Last night, NBC late-night comedian Jay Leno -- hosting U.S. President Barack Obama this week -- riffed extensively on the international implications of the increasingly catastrophic AIG bailout during his monologue:
[The AIG executives] bankrupt the company, took $170 billion of our dollars and they're giving out bonuses. You know the main thing they want to reward their people for? Convincing the Treasury Department to give $170 billion dollars to a failing company, so they can give out bonuses for a job well done. You know what "AIG" stands for -- anybody know? Adventures in Greed.
They don't have to account for any of us. Now it turns out they gave $35 billion -- not million, $35 billion -- of our money to bail out European banks. See, this is how a global economy works. Our hard-earned tax dollars are used to bail out German banks for making bad investments in American companies that shut down because the Japanese owners moved the whole thing to India, China, and Mexico. Boy, you thought St. Patrick drove the snakes out of Ireland? Let's send him down to Wall Street!
Turns out, Leno's right. This week, AIG released a document listing the "financial counterparties" who received $101 billion directly from the U.S. government's "emergency loan." AIG used more than of half the Treasury funds to pay down money owed for things like credit default swaps -- most of which went to foreign companies' coffers. Using data BusinessWeek broke down, we made the above chart.
Funny how the comedians are besting the finance experts now, huh?
If you haven't yet had a chance to read E.J. Graff's superb piece "The Lie We Love" from our November/December issue, it's now available for free on ForeignPolicy.com. The piece is an exploration of the dark side of global adoption and the myth that millions of healthy babies are waiting for adoption in the developing world. Too often, Graff argues, these infants are "manufactured" to meet Western demand.
To accompany the piece, Brandeis University's Schuster Institute for Investigative Journalism has put together this online map showing the countries where the most serious adoption irregularities occur. Click through for in depth country data and check back as more countries are added:
Along with many other aspects of customer service, U.S. debt collection has been outsourced to Indian call centers. As Emily Wax reports in a great piece for the Washington Post, the collection agents, who adopt fake American names and accents when talking to customers, have a unique perspective on the U.S. mortgage meltdown:
The subculture of call centers tends to foster a cult of America, an over-the-top fantasy where hopes and dreams are easily accomplished by people who live in a brand-name wonderland of high-paying jobs, big houses and luxury getaways.
But collection agents at this call center outside New Delhi are starting to see the flip side of that vision: a country hobbled by debt and filled with people scared of losing their jobs, their houses and their cars.
"Lately, 25-year-old Americans are telling me that they are declaring themselves bankrupt," said Chaturvedi, raising her eyebrows in shock. "These days the situation is so emotional, so fragile. We have to have so much empathy and patience."
"It's like people are totally drowning," said Omkar Gadgil, 24, who goes by the alias Richard Rudy and was a math major in college. He is brainy and considered the office expert on the intricacies of debt collection. "There has just been years of overspending and now: the crash."
In the past, debt-saddled customers were often annoyed by Chaturvedi's calls from the open-air office at Aegis BPO Services. But now they seem depressed, defeated. Even the men sob into the phone, several agents said.
Sadly, I have a feeling that these customers would be pretty enraged if they realized where the sympathetic voice on the phone was coming from. In moments of severe economic distress, people tend not to marvel at the wonders of globalization.
Capitol Hill seemed like the center of the universe last night as U.S. senators scrambled to save U.S. workers, students, and Joe Sixpack from financial disaster. But what about the other constituents of America's economic domain? I'm talking about other countries. How have they reacted to this spiraling crisis? Let's take a look at a few major players:
I use a 1-5 scale to indicate how urgent the crisis is for a country -- 1 means not at all concerned, and 5 represents hair-on-fire panic.
Japanese Finance Minister Shoichi Nakagawa is not worried:
I understand that the impact (of the financial crisis) on the Japanese economy is very small compared to that in the
U.S.and Europe," Nakagawa said. "I expect the Japanese markets to undergo a thorough risk analysis and act calmly."
While the government of the world's No.2 economy is closely monitoring the situation and does urge swift approval of a bailout by the U.S. Congress, some also believe the crisis is a golden opportunity for Japanese banks to expand their international influence. Nomura Holdings has already picked up Lehman Brothers' Asia operations and Mitsubishi UFJ Financial Group is slated to become Morgan Stanley's largest shareholder. Japanese banks will probably be on the prowl for more good deals.
Continental Europe (4)
There would be something comical, even pleasurable, in watching the frenetic agitation of the banking world," wrote Laurent Joffrin, editor of Libération newspaper, “if millions of jobs were not at stake, not to mention the economic balance of the planet.
"Schadenfreude" is on everyone's lips, of course in Germany, but especially in France, as the above comments, quoted by The Economist, show. Sentiments are deeply conflicted though. Political leaders feel vindicated about the misgivings they've held about "Anglo-Saxon" free markets, but are struggling to contain knock-on effects from the U.S. crisis since European markets are so tightly intertwined with those of the United States.
For French President Nicolas Sarkozy, "the idea that markets are always right was a mad idea." But he has personally striven to promote more competition in France and is likely to pursue regulatory reform, rather than a rollback of market liberalizations.
With a string of bank failures, a gummed up credit market, and housing woes of their own, British authorities are moving to ensure financial stability at home, but are also looking to Washington for leadership. Deposit insurance has been upped from £35,000 to £50,000. David Cameron, the opposition leader, ended his attacks on Labour's economic policies and vowed that American-style partisan strife would not catch on across the pond.
Chinese Premier Wen Jiabao says he's very "concerned" about the U.S. crisis and that China should "make a foothold in expanding domestic demand." Since China's economy relies so much on exports, its growth rate could take a hit if demand from U.S. consumers slows. Not to mention the sizeable stakes its sovereign wealth fund has in Blackstone, the $119 billion private equity fund, and (former) investment bank Morgan Stanley. So, there's one reason why the Chinese government may be very interested in a bailout of U.S. financial firms.
All of these countries are eagerly waiting to see if the proposed U.S. bailout will pass the House this week. Whether the U.S. financial juggernaut can stage a comeback and lend some degree of stability to markets will have a huge impact on how countries around the world proceed.
When Wall Street sneezes, does the world catch a cold? Based on a grim tour of financial markets around the globe, I'd say the answer is yes:
In Russia, trading was shut down for a second day in a row to stop a tumble in markets, even after the central bank offered the three largest banks $44 billion in loans. The fall dates back to the war in Georgia, during which $35 billion of foreign investment fled the markets, and even before then. In the Middle East, stocks fell also -- part of an ongoing downward trend in that region this year.
Shares of Britain's largest mortgage lender, HBOS Plc, fell 52 percent, traders fearing that the lender might not have access to cash. Lloyds TBS bank might buy the troubled firm. European stocks fell, while three-month Libor (a common reference rate for the cost of borrowing in dollars) rose to its highest since 1999.
Japan's central bank injected over $29 billion into the financial system, while Australia's central bank added another $3.5 billion in the name of reassuring investors. Korea and Singapore promised they were ready to step in and do the same if necessary. Despite the bailout of AIG, customers lined up across Asia to cancel their policies with the insurance company. An index of Chinese mainland stocks in Hong Kong took a 4.2 percent dive.
The Brazilian stock market hit its lowest mark since 2007 thanks to fears that lending would become more costly in the coming weeks. Markets in Chile, Argentina, and Colombia were also down. Home construction companies in Mexico also looked shaky. There are fears that Venezuela might default on its exchange rate.
So, to the anxious folks on Wall Street, take heart: You're not alone.
This week's map is the centerpiece of The Box, a new multimedia project from the BBC. The producers have painted an ordinary shipping container with the BBC logo, outfitted it with a GPS transmitter, and released it into the wilds of global shipping routes. Along the way, the Beeb will be producing video and text content on trade and globalization, based on the box's activities.
You can follow the progress with only a few hours delay here. After its launch last Monday, the box picked up a shipment of scotch whisky in Glasgow and is now back in the South of England waiting to be shipped off to East Asia.
Also be sure to watch Declan Curry's feature on how the standardization of shipping containers made much of what we call globalization possible. It's truly one of the more underrated technological innovations of recent history.
(Hat tip: Ethan Zuckerman)
It may not be the preferred measure by economists and policy makers, but the Canadian government has noticed an interesting trend among organized crime groups -- they, too, are ditching the dollar:
The weakened US dollar has fallen out of favor with organized crime groups to pay for drug shipments or to settle scores, a Canadian government report said Friday. And if the greenback continues its slide in 2008, as expected, more and more criminals are likely to exchange euros for illicit goods, said Criminal Intelligence Service Canada in its annual report.
The report also cites increasing incidence of "environmental crime" -- groups developing "underground markets for electronic waste and scarce natural resources." If nothing else, Canadian organized crime seems to be ahead of the curve. Money laundering and racketeering sound so 20th century.
On this August Friday afternoon, you're surely looking for a distraction or two if you are unlucky enough to be at the office like the rest of us. Look no further than FP's latest (first?) interactive quiz: Spot the Fake Drug. Given a choice between real medicines and counterfeit ones, can you recognize the dangerous fakes?
And check out Roger Bate's fascinating -- and disturbing - (subscribers-only) look at the growing global fake drug trade in the latest issue of FP. He reveals how counterfeiters in India and China mix chalk and dust into phony Viagra pills and cancer meds that are sold around the world. After taking the quiz, you may be more worried than ever about these fakes winding up in your neighborhood pharmacy.
Daniel Gross tries to explain why Maine lobster is getting less expensive while other foods are doing the opposite:
At root, the global forces that are driving up the price of food don't significantly affect the vacation lobster business in Maine. Commercial and consumer demand doesn't vary much for off-the-boat lobster. Sure, many lobsters are sold to processing plants. But unlike other seafood products—think of canned tuna, or clam sauce, or frozen fish fillets—lobster is not produced or marketed on a mass global scale, which also means there are no speculators trying to make a killing on lobster futures. The fact that people are eating more and better in China and India isn't much boosting the demand for lobsters from Maine. Even in the United States, lobster remains to a large degree a regional product. [...]
With demand down, and with distributors facing higher costs, there has been significant pressure on lobster producers to keep costs low.
Isn't this analysis too complicated? Isn't Maine lobster simply a luxury good, the price of which falls when times get tough and demand -- primarily from the United States and Canada -- drops? That's what one ShopRite owner thinks:
The price has come down, but more important, what I'm hearing is, the supply side to supermarket retailers is better because tourist consumption is down in Maine," he said. "So there's been more consistent supply."
(Hat tip: Tyler Cowen)
In India, more women are wearing jeans and other Western clothing. That's bad news for sari weavers in the city of Varanasi. Demand for Varanasi's famed, 6-meter silk saris, which have been hand-woven there for centuries, is falling, as the Christian Science Monitor recently reported.
The problem is due to much more than changing fashions, however. The hand-woven saris -- which typically have ornate patterns and scenes, such as Mughal processions of horses and elephants -- have to compete against cheaper copies that are churned out by machines, some of which are in China. The result: Varanasi's hand loom weavers are plunging into grinding poverty.
In the face of creative destruction, perhaps weavers could reframe their product. "What we really need is for crafts in India to reposition themselves, like in Italy, where handmade has a high value," Adarsh Kumar of the All India Artisan and Craftworkers Welfare Association told the CSM.
Indeed, couldn't ornately woven fabric be used to make table linens, decorative sofa pillows, tunic shirts that could be paired with jeans, and even Western-style dresses? And all marketed to people worldwide, not just Indians? In fact, one Canada-based businesswoman is using such logic to preserve alpona, another Indian art form that's been in decline.
It looks like the business savvy to reposition Varanasi saris hasn't yet materialized. And if it doesn't, weavers' lives may be left in tatters.
A few weeks back, I blogged a Times of India story about how China's construction boom was driving up iron prices, resulting in widespread theft of manhole covers in Mumbai.
Now, the New York Times is reporting that the epidemic of manhole theft is spreading throughout the United States as well. In Philadelphia alone, 2,500 covers have been stolen in the last year, costing the city at least $300,000. Widespread manhole-cover theft has also been reported in Long Beach, Cleveland, Memphis, Miami, and Milwaukee. Some cities are now switching to plastic covers or welding down the metal ones.
Police are trying to crack down on junkyards, but as one North Philadelphia scrap metal collector reports, the demand curve is not in their favor:
These guys here," Mr. Sergeant said, pointing at one scrap yard, "They’d buy a police cruiser and melt it down if we brought it in. The prices for metal are just that good these days."
The September cover of Esquire is going to be pretty cool. An electronic ink diplay, built on the same technology that E Ink used in the Amazon Kindle, will flash the words "the 21st Century Begins." The logistics of pulling of this feat are a story in globalization:
First Esquire had to make a six-figure investment to hire an engineer in China to develop a battery small enough to be inserted in the magazine cover. The batteries and the display case are manufactured and put together in China. They are shipped to Texas and on to Mexico, where the device is inserted by hand into each magazine. The issues will then be shipped via trucks, which will be refrigerated to preserve the batteries, to the magazine's distributor in Glazer, Ky.
So, has the magical world of Harry Potter and its animated Daily Prophet sprung into being? Esquire Editor-in-Chief David Granger sees a bright future for e-ink:
Pointing to the prototype sitting on a conference room table, Mr. Granger said, "The possibilities of print have just begun. In two years, I hope this looks like cellphones did in 1982, or car phones."
Alternatively, it could look a lot like this.
It was only a matter of time before the declining dollar affected the world of sport. In years past, the Europe's prime basketball talent bolted across the pond for the superior pay and play of the NBA. Now, the trend appears to be heading in the opposite direction, thanks to the rising euro and an influx of Russian investment in the European league. Suddenly, playing in Europe doesn't sound like such a bad idea after all.
Former New Jersey Net Bostjan Nachbar (above left, with Dallas's Dirk Nowitzki) is the latest player to spurn the NBA and sign a more lucrative contract with a European team, which pays in the much more attractive euro, and often tax-free:
The NBA had better be careful," Nachbar said. "European teams are offering a lot of money. It's much more, considering there are no taxes, than what I could make signing for the midlevel exception."
Once confined to players with previous overseas experience, the trend is spreading to home-grown Americans, too. Highly rated high schooler Brandon Jennings, struggling with academic issues, shocked the college basketball world by opting to play in Europe instead of attending school. And Atlanta's Josh Childress, unhappy with the state of contract negotiations with the Hawks, is weighing an offer to play in Greece.
Scrap metal is piled up at a metal recycling facility on July 17 in Chicago, Illinois. With scrap metal prices near historic highs, many communities are experiencing an increase in thefts of metal including cemetery ornaments, plumbing pipe, gutters, and even manhole covers.
Coors, Miller, and now Anheuser-Busch are all owned by foreign conglomerates. So where can a patriotic guy find an all-American brew these days?
Believe it or not, Pabst Brewing Company is now the largest American-owned brewer. But Pabst doesn't even brew its own beer anymore. All 29 Pabst beers, from Schlitz, to Lone Star to Colt 45 to the legendary Pabst Blue Ribbon are outsourced to SAB Miller, based in South Africa.
Next on the list comes Boston Beer Company, which counterintuitively bottles its famous Sam Adams lager in Pennsylvania.
Third is D.G. Yuengling and Son Inc., known far and wide as America's oldest brewery, operating in Pottsville, PA since 1829.
Here's the full list of America's top American-owned breweries according to the Brewer's Association:
The globetrotting documentarians over at Current Vanguard have just posted an interesting new short film from the Philippines, where the primary export is the country's own citizens.
"Destination Anywhere" looks at the 20 million Filipinos who work abroad in fields ranging from housekeeping to medical care. The billions of dollars in remittances they send home every year account for about 10 percent of the Philippines' GDP. While this is generally viewed as positive for economic growth (President Gloria Arroyo has described the overseas workers as "heroes of the republic".) it doesn't do much for the kind of longterm development and savings that could stimulate job creation at home. Plus, as the film's director, Tracey Chang, finds, there are enormous social costs when you consider the Philippines' millions of separated families.
For more on the relationship between remittances, corruption, and poor economic planning, check out "The Remittance Curse" in the current issue of Foreign Policy.
The first Olympic medal ceremony took place Thursday near Tiananmen Square, as the 6,000 gold, silver, and bronze medals were formally presented to organizers of the Beijing games.
Assembled in a mint in Shanghai and a product of Melbourne-based BHP Billiton Ltd., the metals themselves are a story in globalization. The gold and silver medals are comprised of silver from Australia (the gold medals are plated with gold from Chile) while the bronze medals are smelted from Chilean copper. A ring of Chinese jade from the Qinghai province adorns each.
The combined lode cost BHP, the world's largest mining company, over $1 million in raw materials. Although the company declined to comment on the specific values of the medals, the rising cost of commodities was not enough to deter the mining giant.
For one, the Olympic sponsorship was merely a drop in the bucket for BHP, a billion-dollar corporation. Second, for BHP, it's all about the big picture. Iron ore -- not gold, silver, or bronze -- is the BHP's primary product, and while the company and China have tussled in the past, China comprises 20 percent of BHP's business (already up from 12.5 percent when the agreement was announced in 2005). Apparently, a little Olympic goodwill can go a long way.
Monday's ruling by a French court that eBay must pay French luxury goods manufacturer LVMH $60.8 million and do more to prevent counterfeit sales (think: fake Louis Vuitton handbags) raises big questions about globalization and the future of e-commerce.
As International Herald Tribune blogger Daniel Altman puts it, who should police the Internet? There's a potential slippery slope here, Altman points out, if countries are left to their own devices and sue portals such as Amazon for books considered libelous or YouTube for videos considered indecent.
The French, at least, have a history of holding Internet providers accountable for content hosted on sites they own. There's precedent in the United States, too, from the 2001 decision ordering Napster to prevent illegal file sharing between users of its site.
To some, Monday's ruling reeks of protectionism. The ruling condemns eBay's unauthorized sales of certain perfumes, limiting the sale of these luxury items to approved channels such as perfume and department stores, not the open market.
What's the answer? Leaving regulation to national courts may lead to a hodgepodge of different rulings in different countries, making it difficult for multinational firms to navigate.
Altman asks if a "global authority" to help nations and multilationals sort out e-commerce is necessary. Perhaps, but it's hard to imagine what such an authority would look like or how it would operate. I think it's safe to say eBay is on its own for now.
As the general election heats up, John McCain is adamantly proclaiming himself a free trader while attempting to paint Barack Obama as a protectionist. But the attempted hostile takeover of Anheuser-Busch by Belgain brewery InBev may place McCain in a precarious political position.
McCain, who sided with the Bush administration during the Dubai Ports World controversy two years ago, has been mum on the issue so far. The spotlight instead has focused on his wife, Cindy, who owns beer distributor Hensley & Co. and some $1 million in Anheuser-Busch shares and would stand to benefit from a deal.
With tradition and patriotism on one side, and financial gain and free trade principles on the other, McCain faces a tough choice. Although his reputation as a straight-talking maverick precedes him, I wouldn't be suprised if politics won out, just as it did with McCain's support of offshore drilling and Obama's decision to forgo public campaign financing.
The reason? Missouri, which went Republican the past two presidential elections, could be in play this year. Missouri politicans from both sides are lining up against the deal, and saveAB.com, which has garnered over 59,000 signatures on its online petition offers the following message, dripping in election year rhetoric:
Like baseball, apple pie and ice cold beer (wrapped in a red, white and blue label), Anheuser-Busch is an American original. ... With your help we can fight the foreign invasion of A-B. We will fight to protect this American treasure. We will take to the Internet, to the streets, to the marble halls of our capitals, whatever it takes to stop the invasion.Stay tuned to see what McCain and Obama have to say. Anheuser-Busch has rejected the takeover bid, but don't think InBev is going to give up without a fight.
If you're a struggling American newspaper trying to maintain quality and improve local coverage, what's one possible solution?
Outsource to India, says the deputy editor of the Orange County Register, California's fifth-largest newspaper. On a one-month trial basis, Mindworks Global Media, an India-based company, will copy-edit some of the Register's stories and lay out pages for a community newspaper at the same company that owns the Register.
This isn't the first time an American news outlet has outsourced to India. Last year, Passport blogged about a Pasadena, California, news Web site that hired Indian journalists to cover meetings of the Pasadena City Council, which are broadcast over the Internet.
There are bound to be some hiccups and gaffes along the way, but it could work better than expected. Mindworks says on its Web site that its workers are "trained thoroughly to become familiar with the client publication and the region," and some employees are bound to have been educated at American universities. And perhaps articles about India and other countries will include more nuance and context.
For American editors and reporters, increased outsourcing is understandably scary. But what if it's key to fundamentally reinventing newspapers, whose U.S. circulation and advertising revenue have been plummeting? Those of us who work in journalism will have to up our game and make ourselves relevant. It's creative destruction at work.
Jeff Rubin, chief economist at CIBC World Markets, a top Canadian investment bank, has put together a fascinating PowerPoint presentation (ppt) on "The Age of Scarcity." Here's one slide that illustrates the astonishing rate at which the world is decreasing its reliance on the U.S. economy:
(Hat tip: Paul Kedrosky)
Via World Politics Review and 2point6billion comes this story from the Times of India about Mumbai's mysterious manhole shortage. It seems that in the last few months, over 1,500 manhole covers have been stolen from the city and surrounding region by organized gangs, with predictable consequences for sanitation and safety.
Who's the culprit? According to local authorities, it's China, where massive Olympic construction projects have driven up the global prices for iron ore. The municipality bought the covers for about $80 and they're now selling on the black market for about $130.
A senior official said that he/she had also heard of thefts being reported in Europe and North America. Just to bring things full circle, many of those covers were also probably manufactured in India.
July 11 could not come fast enough for a few million folks dying to get their hands on the new faster, sleeker, cheaper iPhone 3G. (Count me in.) But what I found most interesting about Steve Jobs's big announcement yesterday is Apple's abandonment of its iPhone business model so far: exclusive carrier agreements.
In the six countries where you can officially get an iPhone, Apple has signed deals with mobile carriers (such as AT&T here in the United States) that give Apple a cut of the revenue from the carriers' service plans. But within weeks of the iPhone's launch last year, a massive global gray market in hacked iPhones emerged -- much to Apple's surprise. The company still made money on iPhone handsets, but it was missing out on millions of dollars in revenue it could have gotten from its partners, since more than a million new iPhone users were using hacked phones on different carriers. So, instead of pursuing what was clearly an untenable course, Apple yesterday switched gears, dropping plans for exclusivity agreements in new markets. In other words, they learned from the gray market that their business model simply wasn't the best way to go:
We've changed our business model, from getting a cut of the future revenues to just a more traditional model," Mr. Jobs said in an interview on Monday. "That’s enabled us to roll out around the world much faster."
As for the new business agreement in the States, Apple and AT&T will no longer share revenues as of yesterday. But it still sounds like AT&T will be the exclusive carrier through the end of its multi-year contract, believed to be five years. At the very least, it will be harder to gripe about AT&T's slow download speeds on the new 3G network.
FP readers already know the story of "How Sushi Went Global." And it's generally no secret that you can get a spicy tuna roll everywhere from Bangalore to Belize. But barbecue? Yes, apparently slow-cooked pig's butt is starting to go global, too.
The word out of the 2008 World Championship Barbecue Cooking Contest, the world's largest pork BBQ contest held last weekend in Memphis, is that the globalization of barbecue is in the "embryonic" stages.
The trend can apparently lead to some awkward interactions:
At one point this year, a member of the Deominox team [from Belgium] was trying to talk his way in past the gate. The 'good old boy' working the entrance [had to ask for] help.... The language barrier almost got the Deominox team disqualified when it turned in its blind box in the whole-hog contest. Two of the non-English-speakers handled the delivery, but they missed the deadline after walking past signs they didn't understand. A sympathetic official interceded and successfully made the case for giving the team a break and letting their samples be judged...."
Now, before getting carried away about diluting of an American icon, it's important to remember that around two-thirds of this year's contestants still hailed from Tennessee. Perusing the list of winners, I don't see any foreign teams. Nor did I see baby backs on the menu the last time I was in Beijing. Of course, that was two years ago....
Fans of the NBC show "The Office" know that the TV show is based on a British series of the same name that first aired on BBC back in 2001. What they might not know is that similar to telenovelas, reality shows like "Big Brother," and other TV genres, it's truly gone global. The French have "Le Bureau," the Quebecois have "Le Job," the Germans have "Stromberg," and Chileans are about to air their own version of the show too.
What viewers might not realize is that the show is actually, well, "Japanese" in origin. On "Saturday Night Live" this past weekend, series creator Ricky Gervais talked about how the Asian version first inspired him. Then he presented the following clip. Enjoy!
In the United States, the Oreo cookie is a classic. Millions of American children have enjoyed dunking the sweet treat -- white cream sandwiched between two round, crisp, chocolate cookies -- in milk as an afternoon snack.
Kraft Foods, makers of the Oreo, introduced the cookie to China in 1996. But the Chinese didn't exactly take to them. So starting in 2005, the Wall Street Journal reports, Kraft engaged in a classic case of adapting a product to suit local tastes. The Chinese found the cookies too sweet, so Kraft reduced the sugar in them. China was developing a thirst for milk -- a product that traditionally hasn't been a Chinese dietary staple -- so Kraft launched a campaign, complete with Oreo ambassadors, to "educate" the Chinese on how to dunk the cookies in milk.
The most radical change was in the shape. Noticing that sales of wafer cookies were increasing faster than those of traditional biscuit-like cookies, a new version of the Oreo was created: a long, narrow, layered stack of crispy wafers and vanilla and chocolate cream, all coated with chocolate. Whoever said Oreos have to be round?
Of course, amid rising food prices and increased demand for chocolate (whose consumption in China has nearly doubled in the past five years), the success of the Chinese Oreo brings to mind the broader question of "Can the World Afford a Middle Class?," a topic recently addressed in FP and one that fans the flames of Chinese frustrations with the West.
(Meanwhile, Oreos have been trying to colonize British biscuit tins, the BBC reports.)
A poem that has been circulating on the Internet lately offers insight into the frustrations that many Chinese -- including those studying in the United States -- feel in reaction to criticisms that have been leveled against their country in recent times. An excerpt is below:
When we have a billion people, you said we were destroying the planet.
When we tried limiting our numbers, you said it is human rights abuse.
When we were poor, you thought we were dogs.
When we loan you cash, you blame us for your debts.
When we build our industries, you called us polluters.
When we sell you goods, you blame us for global warming.
When we buy oil, you call that exploitation and genocide.
When you fight for oil, you call that liberation and democracy.
Ah, globalization at work: Workers at a factory in China's southern Guangdong province were making "Free Tibet" flags, naively unaware of what the colorful flags -- banned in China -- represented.
The owner of the factory said the orders for the flags had been placed from overseas.
Earlier this month, the documentary version of FP Editor in Chief Moisés Naím's bestselling book Illicit aired on the TV channel PBS in the United States. The film and book documents how -- as the book's subtitle says -- "smugglers, traffickers, and copycats are hijacking the global economy."
Those copycats who profit off pirated DVDs had better be careful, though. The doggy duo of Lucky and Flo are out to get them. The black Labs are the first canines to have been trained to sniff out the polycarbonates found in DVDs and CDs. Although they can't differentiate between legit and pirated discs, their noses lead human investigators to discs that are hidden in cargo that has been declared as having other items, such as clothing. Lucky and Flo have been so successful that they've even received death threats from crime syndicates.
Check out a video of the furry crime fighters here:
"The Simpsons" is inappropriate for children, but "Baywatch Hawaii" is alright. At least that's what the government of Venezuela says. The National Telecommunications Commission opened an inquiry last week, saying that viewers had complained about "The Simpsons" and that the network airing it could be held responsible for violating the country's Law on Social Responsibility in Radio and Television. On Friday, channel Televen said it was yanking the yellow cartoon family from its 11 a.m. slot, and replacing it with the babes in bikinis of Baywatch.
I guess it doesn't sound totally crazy if you think about it from a cultural perspective. After all, Bart is constantly disrespecting his parents, and I suppose one might not want young kids to get that message. But beauty on the beach... is that a universal Venezuelan value, no matter the age? At any rate, don't have a cow, man! Televen still might still choose to air "The Simpsons" in a different time slot.
Passport, FP’s flagship blog, brings you news and hidden angles on the biggest stories of the day, as well as insights and under-the-radar gems from around the world.