It has been many years since rival kingdoms sent each other messages via homing pigeon, but the latest development in the killer-export dispute between the United States and China offers a new take on that old-fashioned method of communication.
According to a Chinese government website, officials recently seized a shipment of 41 pigeons and executed every last one of them. The pigeons, which originated in the United States, were destined for use as both pets and gourmet food. Chinese inspectors, however, cited a litany of problems with the shipment, including an infestation of "parrot fever," a bird-disease that can cause mild symptoms in humans. So the birds were slaughtered and incinerated.
I have, in the past, defended the Chinese from allegations that they're out to poison us; I still think Americans tend to overreact when it comes to China. On the flip side, this pigeon business is utter silliness. It's clearly just tit-for-tat escalation of a dispute that need not cause any serious trouble. If China wants to keep an open, friendly market for their exports, they're better off acknowledging problems and working to promote safety, rather than going on the offensive to find flaws with U.S. exports.
Plus, think of the innocent pigeons.
Think going to your local Safeway is unpleasant? Try shopping in South Korea. When the supermarket chain Lotte Mart attempted to be the first South Korean retailer to put U.S. beef back on its shelves last Friday, things got ugly. Protesters ransacked several stores and scuffled with the police. To make matters worse, some farmers even hurled cow dung to show their displeasure. But although the protests forced a handful of the chain's 53 stores to stop selling the beef that same day, the chaos didn't slow some eager Korean customers from gobbling up the cheaper American import. Lotte said that it had sold an estimated 2 tons worth of U.S. beef as of 2 p.m. on Friday, four times greater than the sale of imported beef the entire previous week.
Before South Korea shut its doors to U.S. beef in December 2003, citing anxiety over mad-cow disease, the country had been the third largest importer of U.S. beef. But Koreans were concerned about more than just mad-cow disease; another motive was simply to protect domestic farmers and ranchers from competition. The ban surfaced as a sticking point between the two countries during the recent negotiation of the U.S.-South Korea free trade agreement, which was finally signed on June 30th after months of grueling talks. But with a disgruntled U.S. auto industry, the road to ratification here at home is still an uneasy one (click here for a closer look at the deal). Let's hope U.S. autoworkers don't decide to fling cow manure at any Hyundais or Kias as they express their concern about the agreement.
Relax, folks, you can all go back to brushing your teeth with Chinese toothpaste: The government in Beijing has just outlawed juicing the stuff with diethylene gylocol (DEG), an industrial solvent. DEG-laden toothpaste has yet to kill anybody, but the Chinese have been feeling cautious lately. In addition to the recent ban, Beijing is gearing up to institute national food safety checks, and just executed the former head of food and drug safety. You know, just to be on the safe side.
Just when I thought the coast was clear, however, I came across the disturbing news that two new phony products have cropped up in China: Dumplings stuffed with cardboard shavings, and bogus Rabies vaccines. Talk about putting the "dim" in dim sum.
But before anybody goes back to shrieking about how China is out to kill us all, take a look at this interesting report from the New York Times. It compares the number of food shipments the United States has turned away from various foreign countries over the past year, and it turns out that China is surpassed by both India and Mexico. And if you think Chinese seafood is bad (391 shipments rejected), you'd better stay away from Danish candy (520 rejections).
So if Beijing isn't all the devil incarnate, then what's behind the hype? Sure, China has exported a few particularly nasty products in the last few years, but the "ChiComs" are no worse than some of the other top U.S. trading partners. I'd say all this hullabaloo has a lot to do with the sad fact that Americans just love to hate China. It's not a new phenomenon, but it has been magnified by China's dramatic rise. At this point, Americans (and their congressmen) will take any shot they can get at Beijing. The ultimate goal? To control the Chinese while that's still even remotely possible.
Almost exactly two years ago, the first Chinese-made car—the Landwind New Vision—arrived for sale in Western Europe. Since then, other Chinese car makers have followed suit and tried their luck in cracking the European auto market.
Peter Bijvelds, the first Dutch car dealer to sell the Landwind, has been brutally honest about the car's characteristics: "The work is really pretty bad.... The motor is also a little bit weak." In its first German automobile club crash test, the chances of the driver's survival were found to be roughly zero. Still, the fact that the Landwind is 40 percent cheaper than its European competitors has been enough to ensure its success. Bijvelds sold 500 cars in the first two weeks. As Bijvelds sums it up, Europeans "want a lot of car for a little money."
But although Chinese vehicles such as the hilariously named Hover Wingle (a Chinese SUV now being exporting to Europe, pictured above) are attracting an increasing number of middle-class customers in Europe, their safety doesn't appear to be improving yet. For instance, the new Brilliance BS6, another Chinese model, performed horribly in recent tests—as these alarming videos dramatically illustrate.
Increasingly, though, Chinese automakers are copying European safety designs and even collaborating with Western brands, including Volkswagen, DaimlerChrysler AG (now Daimler AG) and Volvo. If this trend can help make cars like the Hover Wingle not just affordable, but actually safe to drive, look for "Made in China" vehicles to take the continent by storm.
Thousands of investors have cashed in on Japan's low interest rates—the lowest in the world—and the Bank of Japan's reluctance to raise them for fear of deflation. These investors, many of them ordinary Japanese housewives, have managed this through what is known as the "yen-carry trade".
Here's an example of how it works. A Japanese investor—let's call her Mrs. Nakamura—borrows yen to buy U.S. treasury bonds. Since the cost of borrowing in Japan is so low, she can make money merely due to the difference between the T-bills' interest rate, somewhere just north of 4.5 percent depending on the maturity date, and the almost negligible rate of interest she pays on her yen loan. Even better, because the yen keeps sliding in value against the dollar, Mrs. Nakamura can sell her T-bills for dollars, buy more yen with them than the amount she orginally borrowed, and pocket the difference. Yatta! (as the Japanese often say when they're celebrating.) For now, it's a win-win investment. But is it sustainable?
According to Randall Forsyth of Barron's Online, the answer is no:
In today's markets, the ultimate contrarian bet would [be] to buy yen. Were these yen-carry trades... to be reversed, these effective yen short sales would have to be covered, meaning yen would have to be bought."
All it would take, Forsyth says, is a "flight from risk" as investors try to move their money out of an unfavorably changing investment climate such as a stock market drop, currency crash, or the bursting of a housing bubble. Alternatively, Japan's central bank could begin raising interest rates, making the carry trade far less profitable. For those who buy yen now, any of these future scenarios would be good news. As yen-carry traders scrambled to pay back their loans in Japan, the value of yen would continue to rise. Those smart enough to buy yen early would make a killing. With the size of the global carry trade standing at no less than $1,500 billion, there's a lot of money to be made—and with the yen at an all time low against the euro, there seems to be only one direction for Japan's currency to go. As Forsyth concludes, "[W]ith sentiment so overwhelmingly bearish on the currency, and fundamentals such as a record Japanese current-account surplus bullish, it's hard to see the yen going much lower." We'll see if he's right.
|12%||Percentage of the global trade in fruits and vegetables enjoyed by China's agricultural exports [link]|
||China's agricultural exports to the United States in 2006 [link]|
||Percentage of U.S. food imports that come from China [link]|
|13 million||Tons of Chinese grain contaminated by heavy metals, according to China's Ministry of Land and Resources [link]|
|30.4 million||Acres of China's arable land that are contaminated by pollution [link]|
|10%||Percentage of China's arable land that is contaminated by pollution [link]|
||Multiple by which the rice grown in Nanning, China, exceeds the allowed level of cadmium [link]|
|1.3%||Percentage of U.S. food imports inspected by the FDA [link]|
Photo: Frederic J. Brown/AFP/Getty Images
Chinese companies have come under fire in recent months for failing to stop poisonous ingredients from being used in exports like toothpaste and protein supplements used in pet foods. No doubt seeking to salve a wounded national pride, Chinese authorities struck back at U.S. regulators recently when they halted a shipment of pistachio nuts from the United States that was "rancid and infested with white ants," according to China's Xinhua News Agency.
The General Administration of Quality Supervision, Inspection and Quarantine announced the discovery yesterday. Following orders to take a closer look at U.S. goods coming into China, inspectors in Guangdong province had found the bad nuts on June 2.
Xinhua helpfully notes that eating rancid pistachios is probably not a good idea:
The rancid pistachios would have harmed people's health if they had been eaten, and the ants could have damages on buildings, houses, trees, and cables buried underneath the ground, according to officials with the administration.
Other imported U.S. products under scrutiny in China of late: raisins and nutritional supplements. Perhaps I should be careful where I buy my trail mix.
Perhaps no gun on Earth is more popular than the Avtomat Kalashnikov, or AK. What makes the AK so popular? In a recent study by Oxford University Economist Phillip Killicoat, "Weaponomics: The Global Market for Assault Rifles," two theories emerge. The first is the weapon's simplicity:
The AK-47 was initially designed for ease of operation and repair by glove-wearing Soviet soldiers in arctic conditions. Its breathtaking simplicity means that it can also be operated by child soldiers in the African desert."
But the AK is also less accurate, less safe, and has a smaller range than its competitors. So its popularity could also stem from its early competitive advantage:
In the case of the AK-47 that early advantage may be that as a Soviet invention it was not subject to patent and so could be freely copied. Furthermore, large caches of these weapons were freely distributed to regimes and rebels sympathetic to the Soviet Union - more freely, that is, than weapons were distributed by the US - thereby giving the AK-47 a foothold advantage in the emerging post-World War II market for small arms."
Either way, there's a lot of them floating around, something FP examined way back in 2004. Of the 500 million firearms found in the world today, an estimated 100 million belong to the Kalashnikov family, three-quarters of which are the famed AK-47 (the "47" refers to the year in which the rifle was designed for the Soviet army).
Killicoat also looks at the price of an AK-47 in 208 countries between 1990 and 2005. He finds that, although the average global price of an AK-47 has risen from $448 in 1990 to $534 in 2005, in African countries purchasing an AK-47 is on average $200 cheaper than anywhere else in the world. Here's why:
[T]his staggering Africa-discount is predominantly driven by porous borders. Since borders are more porous than elsewhere, the trade in assault rifles across the African continent approaches a deregulated market in which prices converge and there are only negligible trade barriers that arms supply must overcome to meet demand. At any one time, only a few African countries have very high demand for weapons due to conflict. This demand profile across the continent changes over time as localized tensions rise and recede. Porous borders enable the entire supply of weapons on the African continent to meet whichever country currently has high weapons demand.
In fact, the weapons are so ubiquitous in Africa that "Kalash," an abbreviation of Kalashnikov, has become a popular boy's name in some countries.
(Hat tip: HTWW)
Senior Afghan officials are negotiating the return of a senior Taliban commander's body, and they're seeking the return of five captured health workers as compensation. The death of Mullah Dadullah last month was heralded as a major blow against the insurgency. It's too early to tell if that is truly the case, but at least his remains may help spring some of the Taliban's victims. Hostage deals in Afghanistan have become increasingly controversial (a swap for an Italian hostage earlier this year came under intense criticism), but it's hard to quibble with this one.
I've often dreamed of finding the perfect virtual secretary to manage those mundane tasks of life—paying bills, filing paperwork, keeping track of appointments, making travel arrangements—that are difficult to manage on a hectic schedule. Now it appears that I haven't been dreaming big enough. An article in Saturday's Wall Street Journal highlights the potentially huge phenomenon of "personal offshoring":
Offshore outsourcing has transformed the way U.S. companies do business. Now, some early adopters are figuring out how to tap overseas workers for personal tasks. They're turning to a vast talent pool in India, China, Bangladesh and elsewhere for jobs ranging from landscape architecture to kitchen remodeling and math tutoring. They're also outsourcing some surprisingly small jobs, including getting a dress designed, creating address labels for wedding invitations or finding a good deal on a hotel room, for example.
Along with Guru.com, one of the bigger players is Elance, a California-based company whose site lists a huge variety of freelance jobs. Disturbingly, many of the tasks listed are in my job description: blog writing, copy editing, article writing, web layout ...
Evalueserve, the Indian research firm that wrote the white paper (pdf) that prompted the Journal's story, estimates "the total addressable market in the United States" for personal offshoring to be "easily" over $20 billion. Gulp.
The good news is that my dream of having a personal assistant is now attainable: There's GetFriday, an unfortunately named Indian company that offers a "personal virtual assistant" for as little as $7 an hour, depending on which plan you choose. So as long as I don't get offshored myself, my life may just have gotten a little easier.
When dirt-poor Mexicans took to the streets in February to decry the rising cost of tortillas, they got barely a flicker of interest north of the border. But now the soaring prices of foodstuffs—corn, oils, wheat, you name it—are hitting the people with real power: western consumers and multinational corporations. Today's Financial Times reports that Hershey's, manufacturers of sickly-sweet American chocolate, has slashed its profit forecast due to prohibitively expensive milk. Few will shed a tear for Hershey's shareholders, but the plot thickens: from China to the the U.K., the price of food is growing at nearly twice the rate of overall inflation.
That's bad news for everyone, but there is a silver lining. If grocery bills continue to balloon, many in Europe and the US.. might wonder why their tax dollars should go towards subsidizing inefficient domestic farmers and keeping out the cheap produce of agricultural powerhouses like Brazil. This could be more than food for thought; it could be fuel for action.
The Financial Times declared in a headline this week that "India is set to gain from outsourcing." Hardly breaking news. But the article goes on to discuss how, by 2010, the developing world will account for more than a quarter of all electronics manufacturing output, up from less than one fifth two years ago. Further, outsourcing is likely to propel India to increase its electronics manufacturing from $5 billion in 2005 to $38.8 billion in 2010—almost an eightfold increase. No doubt this could be a significant leap for India's electronics manufacturing industry, especially since India has traditionally been viewed as a software provider rather than a hardware provider, unlike China. But for all the hype about India's gains—and assuming that India can sustain the skill-base required to develop at this rate—the projections show that India still won't catch up to its east Asian competitor. As the FT notes:
China, which in the past 10 years has become the most important country for electronics manufacturing, will in 2010 account for 46 per cent of outsourcing work in this industry, down from 48 per cent two years ago.
So even if India will be a "big gainer, accounting for a projected 10 per cent of the total in 2010, up from 2 per cent in 2005," electronics manufacturing outsourcing will still be largely dominated by China.
Alan Blinder, the eminent Princeton economist who literally wrote the book on the subject, has been making waves lately with his confession of doubt about the benefits of free trade. Because of the wide range of jobs that can be done remotely and the massive populations of India and China entering the world's labor force, he worries that some 30 to 40 million American jobs will be at risk of offshoring.
Most other economists have rushed to the defense of free trade against this "apostasy." This laissez-faire crowd argues that Blinder fails to take into account the benefits from trade to consumers; that he underestimates the economy's ability to adjust; that the same changes he looks at open new export possibilities; and that the transition will be so gradual that it won't be a problem. And finally, there's little that can be done about it anyway.
All of the criticisms are correct. But all of them miss the point.
Blinder continues to recognize the benefits that free trade brings, and emphatically eschews any protectionism. What he is picking up on is a brewing change in the U.S. political debate over trade. So far, the losers from trade have come disproportionately from the manufacturing sector. Service sector employees and highly skilled professionals, meanwhile, benefit from lower prices and increased demand for their work. Members of those two groups, however, will be increasingly less likely to see tangible benefits that outweigh the added risk that free trade brings. Since any protectionist fix will almost certainly be a cure far worse than the disease, it is crucial to head off the development of a new anti-trade coalition before it grows too strong.
Blinder recommends a pretty standard mix of social support and education to prepare the workforce for the coming changes. But trying to address a political problem with wonkish economic policies probably won't cut it. More important will be the realization by the businesses and professionals that benefit from open economies—business services firms, technology companies, and the many exporting industries in which the U.S. still has a competitive advantage—that they need to actively defend a system that allows them to prosper.
Ever wondered why men pay more for bathing suits than women, why women pay more for hiking boots than men, or why woven wool shirts are cheaper for women? The answer, it seems, is the United States Congress, which assigns differing tariff rates for men and women's apparel. According to Michael Barbaro in the International Herald Tribune, there is no apparent pattern to the tariff rates, which sometimes favor men and at other times favor women, with as much as a one hundred percent difference in tariff rates. He also notes that "the fees tacked onto clothing, shoes and swimwear as they enter the country's ports may be the last legal form of sex discrimination in the United States, approved year after year by lawmakers and passed on to consumers." But maybe not for long.
A number of major apparel companies, including Steve Madden, Asics and Columbia Sportswear, are challenging this sex discrimination in tariffs through lawsuits against the U.S. federal government. If they win, they could earn as much as $1 billion worth of tariffs, and higher future profits as tariffs are scaled down for consistency. Of course, they run the risk of increasing the prices for consumers if the government ultimately decides to raise the tariffs to equalize the rates rather than lower them.
What's most interesting—or amusing—about this case is the utter lack of rationale for the differing rates. Some believe that it comes down to old-fashioned sex discrimination (but that doesn't explain why men/women lose sometimes and win at other times), or that it's a different form of protectionism. But the companies' lawyers, after years of scrutinizing tariff lists, international trade court records and congressional testimony, have found no explanation for the tariff discrepancies. As Daniel Altman writes in his IHT blog:
What they really show, at bottom, is how arbitrary the tariff system is in the United States. In the midst of all the talk about global, regional and bilateral trade agreements, has anyone thought to check if the present regime is even rational?"
In January, FP featured a piece about the International Breast Milk Project, in which American women who produce excess breast milk donate it for shipment to newborn orphans in Africa.
But what if the milk flow were to go in the opposite direction? What if women in developing countries were paid to ship their breast milk to moms in the West?
A recent article in Time magazine discusses wet nurses—women who are paid to breast-feed other women's babies. Apparently, the old custom is reemerging a bit in the United States. More American women work outside the home at jobs that don't make it easy to breast-feed. More women have breast implants. Some women adopt children.
As a result, a few American women have hired wet nurses through CertifiedHouseholdStaffing.com. Others buy bottled breast milk from nonprofit "milk banks." One company, Prolacta Bioscience, is the country's first for-profit processor of donated breast milk. (It sells to neonatal units, not individuals.)
But if the for-profit breast-milk industry grows (in 2005, demand for breast milk from one nonprofit association of milk banks grew 28 percent), where will companies get all their milk once altruistic donors run dry? If they follow the model of other American businesses, they might turn to the developing world for their raw material—in this case, breast milk.
It would be expensive to ship frozen milk across continents and oceans, but given that Prolacta last year was marketing milk at $35 per ounce, it's possible that paying low amounts to women in the developing world would make importing a viable business strategy.
Clearly, though, there are a lot of sensitive questions to be debated. Is this exploitation of poor women, or is it giving them income for a body fluid they supposedly can't use anyway? In India, women are already renting out their wombs to Western women. The next logical step, it seems, would be breast rental.
We witnessed the tens of thousands of demonstrators decrying the rapidly (and exorbitantly) rising price of corn in the "tortilla protests" in Mexico City earlier this year. The protests came about as a result of the growing demand for corn-based ethanol, the Bush administration's biofuel of choice. But now there appears to be a new dietary staple under threat from the rising demand for ethanol: German beer.
Der Spiegel Online reports that a 2006 barley shortage will raise the wholesale price of German beer this May. Many brewing industry lobbyists attribute the price rise to farmers forgoing barley for corn in order to satisfy the global demand for biofuels, especially from the United States. In the past year, the price of barley has doubled on the German market, from €200 to €400 per ton.
But it's not just Germany that is set to see soaring beer prices. The chief executive of Heineken (the Dutch brewer) warned in February that the expanding biofuel sector was starting to cause a "structural shift" in European and U.S. agricultural markets, which could precipitate a long-term upward shift in the price of beer. Already, futures prices for European malting barley have risen since last May by 85 percent to more than €230 a ton, and barley production in the United States has fallen to 180.05 million bushels (in 2006)—the lowest level since 1936. Global stockpiles of barley have shrunk by a third in the last two years. All of this augurs ill for beer drinkers, who may soon be paying significantly more for their pints.
|$3.7 billion||Amount of money Microsoft has committed to spending on technology and investment in China over the next 5 years [link]|
|421 meters||Height of the largest Windows Vista ad bought by Microsoft, projected on the side of the Jin Mao tower in Shanghai [link]|
|$295||Price for a basic, legal copy of Microsoft Vista in China [link]|
|$1.30 to $4.00||Price of a pirated copy of Microsoft Vista on the street in China [link]|
|244||Number of genuine copies of Microsoft Vista sold in China in the first two weeks after its launch [link]|
|86%||Percentage of software on Chinese computers that is pirated [link]|
|70%||Percentage of software on Chinese government computers that is pirated [link]|
|$3.8 billion||Estimated software losses to piracy in China in 2005 [link]|
InformationWeek reported today that hourly wages of IT professionals have hit their highest levels since 2001. A study of wage levels found that the average hourly wage of IT workers rose 5.5 percent from the first quarter of 2006 to the first quarter of 2007. Technical consultants are riding highest, pulling down an average of $83.72 per hour.
So what's behind the sudden jump in wages? "There's an unprecedented customer demand and not enough people," says Jim Lanzalotto, vice president of strategy and marketing at Yoh, the IT staffing firm that conducted the study.
But it's not only in the United States that demand for quality professionals in the IT field is beginning to outstrip supply, pushing up the price of labor. The salaries of IT workers from Central Europe to India to China have been rising—often by double-digits—every year. In India, around 1.3 million people applied to Infosys, India's IT behemoth, yet fewer than 2 percent were actually employable. The same is true for engineering, where only around one quarter of the 400,000 new engineers produced every year in India are ready to enter the real "job world." Could it be only a matter of time before outsourcing starts to look less than lucrative?
When I'm talking to leaders, and they've got an issue with American beef, it's on the agenda," Bush said. "I say, if you want to get the attention of the American people in a positive way, you open up your markets to U.S. beef."
-U.S. President George W. Bush, speaking to the National Cattlemen's Beef Association, Wednesday, March 28, 2007, on the subject of Asian import restrictions on U.S. beef
Tomorrow, March 17th, is St. Patrick's Day. To commemorate, many in the United States—both those of Irish descent those merely Irish for the day—will gather in that quintessential neighborhood watering hole, the Irish pub. But, in one of the great ironies of globalization, it turns out that the outpost of traditional Irish culture on the corner is actually a finely-tuned corporate creation. In 1991, the Dublin-based Irish Pub Company (IPCo) hit on a profitable model for fabricating and selling "authentic Irishness." Slate's Austin Kelly made the revelation last year:
In the last 15 years, Dublin-based IPCo and its competitors have fabricated and installed more than 1,800 watering holes in more than 50 countries. Guinness threw its weight (and that of its global parent Diageo) behind the movement, and an industry was built around the reproduction of "Irishness" on every continent.
Yes, that's right. Ireland exports pubs the way the United States does T.G.I. Friday's.
IPCo provides its customers with five choices of theme: Country Cottage, Gaelic, Brewery, Traditional, and Victorian Dublin. Evidently, the Irish themselves have not traditionally been wont to spend their time quaffing brews with antique farm implements lying around or pictures of James Joyce staring down from the walls. Those touches of "authenticity" were devised to make the Guinness go down more naturally in Minneapolis, Shanghai or Dubai.
Of course, in this wired-together world, it was only a matter of time until the craze for Irish pubs worked its way back to Eire herself. After proselytizing for the pub abroad, IPCo has been able to turn its sights back to the home market, and now sells its version of traditional Irishness to the Irish themselves:
IPCo has built 40 ersatz pubs on the Emerald Isle, opening them beside the long-standing establishments on which they were based.
Each year, German officials give a press conference displaying some of the contraband seized by customs police. This year, they reported that German customs seized over five times as many pirated goods in 2006 as they did in 2005.
What else did they find? More drugs. They seized twice as much hashish and nearly twice as much cocaine in 2006 as compared to the year before. And endangered species, both flora and fauna, alive and dead, were confiscated in growing numbers. Below are some of the more bizarre findings from among the 53,000 tons of smuggled plants and animals seized in 2006:
Clockwise, from left: A stuffed baby caiman lizard, an ashtray made from an endangered species of turtle, illegal wine made from cobras, an equine skull and a stuffed lion cub.
All photos Theo Klein/Getty Images News
What's your kidney worth to you? Prisoners in South Carolina may soon find that one of theirs is worth six months of freedom. In a new bill before the state legislature, prisoners will be given 180 days off their jail sentences if they donate a kidney or bone marrow.
The problem is that U.S. federal law prohibits giving donors "valuable consideration" in exchange for organs. In other words, patients in need of kidneys (or middlemen) are prohibited from giving donors money or property in order to prevent an organ market from emerging.
So, does freedom count as money or property? Hard to say. But I think the scheme in South Carolina clearly violates the law because it incentivizes donating a kidney in a coercive fashion, just as a monetary payment would. It preys upon the prisoners' situation, in the same way that offering a poor person money for his kidney does. And since prisons are disproportionately full of low-income people, this is just another way of getting one class of society to provide for the health of a wealthier class—the reason why we don't want an organ market in the first place.
Of course, the recipient rolls are still beating out the donor rolls by a mile. Perhaps there should be amendments to the law that allow incentives for dead people. Pennsylvania tried to implement a program a few years ago that would reimburse a person's family for funeral expenses if the newly deceased became a donor. Donate a kidney, let your family avoid debt for your goodbye party. Everyone's a winner.
An intriguing report from the International Crisis Group this week contains what may be the first good news to come out of Zimbabwe in years. Cracks are appearing in the ruling ZANU-PF party, the research group notes, and President Mugabe may be on his way out:
After years of political deadlock and continued economic and humanitarian decline, a realistic chance has at last begun to appear in the past few months to resolve the Zimbabwe crisis, by retirement of President Robert Mugabe, a power-sharing transitional government, a new constitution and elections. Both factions of the divided Movement for Democratic Change (MDC) opposition and powerful elements of the Zimbabwe African National Union-Patriotic Front (ZANU-PF) party support the concept in outline.
Crucially, the group found that targeted sanctions have played an important role in undermining Mugabe's support:
Targeted EU and U.S. sanctions on senior regime figures are working. ZANU-PF leaders cite their personal financial situations as motivation for wanting Mugabe out. “We have businesses which we worked hard over years to set up which are collapsing. It is about time we change course”, said a senior politburo member.
The possible implications stretch far beyond Zimbabwe. Targeted sanctions, which limit the activity of specific regime members, rather than the entire country, are a relatively recent innovation. The hope has been that they would better pressure a target government while sparing its citizens needless suffering. Officials in Sudan, Iran, and North Korea are currently on the receiving end of these appeals to their unenlightened self-interest. The news out of Zimbabwe is reason to hope they might be similarly persuaded.
A Michigan couple got a macabre surprise recently when they received two packages that they thought contained the table they'd just bought on eBay. Instead, inside the bubble wrap, they found a human liver and ear that had been culled from corpses in China and plasticized. As the New York Times reported last August, Chinese companies are churning out body parts, mostly for museums:
Inside a series of unmarked buildings, hundreds of Chinese workers, some seated in assembly line formations, are cleaning, cutting, dissecting, preserving and re-engineering human corpses, preparing them for the international museum exhibition market.
Thankfully, it sounds as if the delivery service DHL is to blame for the mistake and that eBay is still refusing to allow the sale of body parts. The liver and ear were bound for a medical research lab nearby. Police think another two dozen plasticized body parts from China are on their way to wrong addresses across Michigan. So, if you're expecting a parcel, you may want to double check the return address before opening.
African elephants are under threat again despite a 1989 ban on poaching the animals for their ivory tusks. A new study led by Samuel K. Wasser of the University of Washington estimated that around 23,000 elephants were killed illegally in 2006 alone, or one in twelve of the entire African population (when you exclude Botswana).
The striking finding is yet another sign that Asia's economic boom is having unexpected consequences around the world, since ivory is highly coveted in Japan and China for use in jewelry and for "hankos," cross sections of the tusk that are popular for use as stamps. Since the world largely lost interest in protecting African elephants during the 1990s, wholesale prices for ivory have skyrocketed to $750 per kilogram in those countries, turning tusk smuggling into a highly lucrative business and decimating the elephant population.
That's not all Wasser and his colleagues found. Taking DNA data information from the largest 535 pieces from a huge cache of smuggled ivory seized in 2002 by the authorities in Singapore, the interdisciplinary team of researchers used a new method to narrow down the range of possible geographic origins for the seized ivory. They quickly ruled out forested areas, honing in on the savanna that crosses the south-central portion of the continent. Their finding embarrassed the government of Zambia, which had claimed in documents that only 135 elephants had been killed illegally in the 10 years prior to the seizure, a number far below Wasser's estimate.
Holding African states accountable is key to halting what Wasser calls "a widespread slaughter of elephants that is getting worse by the day." But countries like Zambia have few resources with which to combat sophisticated ivory smuggling networks with deep pockets and international reach. Saving African elephants from possible extinction will require a global approach, Wasser argues, including public awareness campaigns in Asia (enlisting, say, Yao Ming as an advocate could help) and international aid to overwhelmed African governments. After all, the international community was able to halt the spread of poaching before, in 1989. Now that the scientific tools for tracking poachers are becoming more advanced, it's just a question of will.
Back in 2000, I sat in on our interview with anti-globalization activist Lori Wallach. (I was the guy running the tape recorder). Wallach had this great line, which she has often repeated, about two ships passing in the night. One ship is loaded with chopsticks cut from wood in the Pacific Northwest and being shipped to Japan. The other ship is loaded with toothpicks cut from trees in Malaysia and packaged in Japan on their way to California. How could these two companies possibly be profitable?
Wallach's illustration comes to mind when I read sustainability engineer Pablo Päster's latest column. Producing and shipping one bottle of Fiji bottled water around the globe consumes nearly 27 liters of water, nearly a kilogram of fossil fuels, and generates more than a pound of carbon dioxide emissions. No wonder that stuff is so overpriced.
Last week, the Economonitor noted that the European market for CO2 emissions had gone from a high of €31 per tonne in April to just €4.75. These prices are for the emissions trading scheme that allows countries and firms to trade their carbon emission allowances on the free market. Firms will invest to reduce their emissions, the theory goes, not only to avoid penalties for exceeding their allowance, but also to sell credits to others who can't easily afford a reduction. Similar cap and trade schemes have worked brilliantly elsewhere.
So, what's with the price plunge? A glut of credits on the market. Too many credits were allocated when the scheme began in 2005, so countries and firms are easily meeting their allowances with the credits available. Hence they have little need to buy extra credits on the open market, and the price keeps falling. Firms thus can't profit by lowering their emissions, either. With European countries already objecting to plans to cut credits in the next phase of trading slated to begin in 2008, the system looks unlikely to be the silver bullet it was intended to be.
That's why the EU's latest announcement calling for an "industrial revolution" to cut greenhouse gases should be viewed with extreme skepticism. If they can't get the economics right, the reductions in emissions won't follow.
In this year's Top Ten Stories You Missed in 2006, FP noted that "Russia and OPEC countries are moving their holdings out of dollars and into euros and yen."
And this trend will continue into 2007. The United Arab Emirates announced this week that by September, it will move 8 percent of its foreign exchange holdings from dollars to euros. The amount of money in this case is relatively small—a shift of around $2 billion. Most of the dollars in the Middle East are held not by central banks, but by state-owned investment firms. The Abu Dhabi Investment Authority, for instance, manages $500 billion.
But the message the UAE move sends is clear: the dollar is still weak and it's better to diversify.
UPDATE: See also currency expert Brad Setser's comments. Setser notes that the Saudi central bank does have huge assets, but it seems to be hanging on to its dollars... for now.
Gideon Rachman at the Financial Times wrote this week about the top five events that changed the world in 2006. His picks?
Rachman admits in the column that he's completely left off Asia. He cites the Africa-China conference, the spike in Chinese R&D spending, and the records hit by the Indian stock market as possibles, but not top five material.
So, what other events of 2006 should have made the list and didn't? I think there are at least a few strong contenders: The North Korean nuclear test in October and Hamas winning the Palestinian elections in January. What do you think? Email us and we'll post readers' suggestions next week.
While nobody's happy about rising sea levels and temperatures in hotter parts of the world, the warming of the Arctic is a different story. The melting of the sea ice during the summer months has at last made the dream of 15th-century explorers—the Northwest Passage—a reality. The new Arctic passage will dramatically reduce shipping times. But as The Economist points out, the shipping industry is not the only one that will benefit from climate change:
The biggest beneficiary is likely to be Russia itself, which encircles almost half the Arctic Ocean. Currently uninhabitable areas will become more hospitable; currently inaccessible energy resources will become more exploitable.
According to the United States Geological Service, about one-quarter of the world’s undiscovered energy reserves may be in the Arctic. [...]
Russia has claimed half the Arctic Ocean, including the North Pole, as its territory. It submitted the claim under the United Nations Convention on the Law of the Sea, but had it rejected. The convention decrees that who owns what is determined partly by the extent of a country’s continental shelf, and Russia did not have enough geological data to back up its claim. Russia is now mapping energetically, as are America, Canada, Denmark and Norway, which also border the Arctic Ocean.
Ironically, major oil producers who have invested thousands of dollars promoting "research" suggesting that global warming is a hoax are also beneficiaries of melting Arctic ice. They may find, however, that the Arctic's treasures aren't quite as rich as originally thought.
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.