Tuesday, July 20, 2010

Where do remittances come from?

Courtesy of the Inter-American Development Bank, we get this nice map breaking down the sources of US remittance flows to Latin America by state (click to enlarge).

No real surprises here but it's a kinda nice map, no?

Monday, July 19, 2010

Toward a better understanding of poverty (wonkish)


Allow me to get my wonk on. It's becoming an increasingly mainstream idea that our traditional poverty measures just don't cut it. For years the UN Human Development Report has been playing with alternative measures. Well, this year we get the latest: the Multidimensional Poverty Index (MPI). In their own words, the new index "measures the combination of deprivations that each household experiences. The MPI uses microeconomic data to reflect the percentage of households that experience overlapping deprivations in three dimensions—education, health and living conditions." This month we get a lil taste of what's to come. The Oxford Poverty & Human Development Initiative (OPHI), with the support of the United Nations Development Programme, have released some preliminary results (104 developing countries) in advance of the upcoming 2010 Human Development Report to be released in the fall. 

First off, a little bit more about the MPI. The idea is that by looking beyond mere income poverty, one can ascertain a better understanding of the specific things (health, education, sanitation, electricity), that contribute to the overall picture of poverty. Governments, NGOs, or even random bloggers can then look at the data to figure out what the greatest needs are, and where it makes sense to intervene. The MPI also calculates the intensity of poverty by looking at how many different measures a certain population is lacking. As OPHI notes, "A person who is deprived in 70% of the indicators is clearly worse off than someone who is deprived in 40% of the indicators."

Sounds good in theory, but what about in practice? Well, some countries have already adopted a similar index, including Mexico. The index can be tailored to individual countries specific circumstances, different countries have different needs, different areas in need of improvement. In Mexico for instance the indicators used are: Current income per capita, Education, Access to healthcare, Access to social security, Housing quality and space, Basic services in homes, and Access to food. In December 2009 Mexico became the first country to implement a form of the MPI, with some astonishing results. As OPHI writes:

The results show that there is a striking contrast between deprivation in income-only and the multidimensional measure: only 1.2 per cent of indigenous people are vulnerable strictly in terms of income. Even across the entire population, only 4.4 per cent of Mexicans are income vulnerable only, whereas 44.2 per cent live in multidimensional poverty.

The measure distinguishes between a household which is poor in one dimension and one that is poor in several dimensions simultaneously. It is also decomposable by population group (indigenous/non-indigenous, over 65, under 17, etc) and by geographic regions. 



For example, comparison of Mexico City and Oaxaca shows that households in Oaxaca are more deprived in terms of basic services at home, but residents of the Mexico City are lacking in healthcare access. Nationally, the rate of extreme multidimensional poverty (defined as at least three deprivations plus insufficient income) is 10.5 per cent with an average of 3.9 deprivations, whereas among the indigenous people of Mexico the rate of extreme multidimensional poverty is 39.2 per cent with an average of 4.2 deprivations.

Some really interesting and positive findings. Positive in the sense that one can gain a much more accurate picture of what the problems are, and where they are. I would think that these sorts of measures would gain in popularity pretty quickly, maybe especially in Latin America. Venezuela, although not included in the preliminary findings, would stand to be an ideal candidate for this measure. Poverty measures in Venezuela largely rely solely on income, but over the last decade access to health care, education, food, etc. have, by and large, all increased dramatically. A new poverty measure may more accurately reflect that reality.

In any case, onto the data. One thing to remember though is that not all these numbers are from the same year. Bolivia for instance is calculated based on 2003 data, Argentina with data from 2005. Also, for each country measured there is a more detailed country breakdown, so if you got a hankerin' to see the complete breakdown of poverty in, say, Burkina Faso, look no further. Perhaps the coolest thing about the data is the interactive map that lets you scroll over countries, sort the data every which way, and is pleasing on the eyes as well. But, since it's not embeddable, we'll just give you less pretty, but just as useful charts. I suggest checking out the site though and playing with the data yourself.

Let's take a look at the three dimensions the MPI looks at, deprived in education, deprived in health and deprived in living standards. But first a look at the percent of people who are MPI poor, after being put through Maladjusted Charts™:


Pretty interesting stuff here. First thing that jumps out at me is the low levels seen in many countries, especially Ecuador for example, with just 2.2% of people MPI poor (2003 data). Compare this to the 51.2% poverty rate from 2004, based on CEPAL's numbers. My gut reaction is that this could be counter-productive by making it look as though poverty isn't as big an issue, although maybe it's just a reflection of some really outstanding social policies. On the other end of the spectrum, free market darling Peru has an outstanding 19.8% of her people MPI poor (the data is from 2004).  This puts Peru closer to the Central American countries than to most of South America.

Next, we'll take a look at the breakdown of those "poor and deprived in education":

So for instance Brazil, who is at the lower end of MPI poverty rates, still has a significant problem with access to education. This is the type of analysis these alternative measures allow. On the other hand, it seems like Peru's high MPI poverty rate is not being driven by a lack of access to education, but perhaps health? Let's take a look:

So, it doesn't look like access to health care is driving Peru's high MPI rate, must be the final measure, "poor and deprived in living standards". Colombia, where there is currently a pretty large debate over health care, ranks pretty poorly here with 17.5%. Argentina, middle of the road for education, has the top rank in health. Finally, a look at living standards, which includes things such as electricity, sanitation, having a floor, cooking fuel, etc.


Indeed, here we see that Peru's high MPI rate is largely driven by deprivation in living standards, even topping Bolivia and Honduras in this category. Although for the most part you can tell what is causing the MPI rates by looking at these three measures, the specific country breakdowns provided by OPHI are even more detailed and contain pretty lil pie charts like this one, for Peru:


You might need to click that for a larger image, but you can see the green shaded area (living standards) makes up the largest contribution to MPI. Although it's pretty evenly distributed, a lack of cooking fuel is a significant driver. Overall, a high level of child mortality is the leading contributor to Peru's MPI. Each country that the researchers look at are broken down like this, so I chose to look at Peru, but go to the site and pick your poison. The country breakdowns also include comparisons to the national poverty measure, and other measures like % living on $2 a day, $1.25 a day, etc.

There's a lot to chew on here, and plenty more you can find out over at the database, but definitely some food for thought. I'm not sure if this is the best measure, and as the example of Mexico shows, it may be more beneficial to tailor these indexes on a country level, although this would sure make comparisons harder. What is clear is that how one calculates poverty has a significant impact on the results, and it would certainly behoove us all to have a more accurate picture of what poverty is, and how to combat it. I'm sure there are flaws here, not the least of which is the outdated data, but I commend the researchers at OPHI and UNDP with a solid step in the right direction.

(cartoon from Polyp, check out the website for more)

Do financial markets think Spain will default?

Sorta!

But that won't stop the government and european authorities from inflicting pain on their populations in the name of fiscal austerity.

As I'm sure Maladjusted's readers already know, Spain is the latest object of European sovereign debt fears. Following Greece's lead, Spain's borrowing costs have increased over the last two months on concerns that the government won't be able to service it's debt and will face a rollover crisis. As a consequence the government is moving ahead with large austerity plans--cutting spending and raising taxes while unemployment remains above 20 percent.

Advocates of austerity claim that if the government doesn't make tough choices to bring down its deficit and reassure creditors interest rates will spike emerging market-style, causing the debt to explode. Spain, the argument goes, will find itself forced to default on its debt, potentially bringing down the whole Eurozone with it.

Austerity advocates, in other words, argue that markets think Spain is in danger of defaulting, and if we don't heed their warning we'll have serious trouble. But first of all, that's a stupid anthropomorphism (markets don't have agency or thoughts, last time I checked). But more to the point, assuming markets are capable of "thinking" anything, do they actually think Spain is in danger of defaulting?

Well, one way of answering that question is to use the price of credit default swaps (CDS) on Spain's public debt--that is, how much it costs to insure oneself against the possibility of a default.

[Spain: Implicit probably of default, April-July, 2010]


The graph above, courtesy of Maladjusted Graphs™, shows the "implicit" probability of default on Spain's government bonds. The idea is simple: the price of ensuring oneself against a default should reflect the chance of default and how much of their money investors expect to get back in the event of a default (i.e. how big of a "haircut" bondholders expect). In other words, the price of a CDS should equal the chance of default times the haircut rate. The price to insure oneself against default is higher the higher the expected chance of default and the larger the haircut.

So, the orange line above shows the implicit probability of default under a relatively optimistic assumption about the size of expected haircuts. In this case, I'm assuming markets only expect to lose $10 on every $100 worth of bonds. As can be seen above, under this assumption at the beginning of April markets only thought there was an 11% chance of default. But then as all the sovereign debt hysteria surrounding Greece started making headlines markets started to "think" the chance of default was much higher, reaching 28% on May 6.

But here's the thing. This is only the case if markets expect the default to be a very small one. Getting back 90% of your money when a government defaults is relatively rare in the history of sovereign debt crises.

So, what if we assume Spain is like Argentina or Russia and if the government defaults investors would only get back $30 for every $100? Well, the yellow line above shows just this scenario, and as can be seen the chance of default is really, really low. In fact, the crisis hysteria back in May shows up as nothing but a tiny blip, peaking at a terrifying 3.9%!

So what's the moral of the story?

The fact of the matter is that if markets really do think a default is likely, it's not reflected in market prices, which are, after all, the only coherent measure of what markets "think." That, or they don't expect to take a very big hit in the unlikely event the government decides to default.

In other words, markets either think Spain is like Argentina but the actual chance of default is really low or they think the chance of default is high but don't expect to actually lose any significant amount of money.

Then do the markets think Spain will default? Sorta! Should the government heed their warning? No! But that doesn't mean it can't seriously structurally maladjust itself to fight imaginary threats in the meantime.

Sunday, July 18, 2010

Weekend Update



Shall we begin:

  • Our journey through the intertubes begins with the 10 year commemoration of beloved Plan Colombia, which was last Tuesday. WOLA has the good word.  Despite the popular belief that it has been a "success", WOLA writes:

    Looked at more closely, though, Colombia’s security gains are partial, possibly reversible, and weighed down by “collateral damage.” They have carried a great cost in lives and resources. Progress on security has been stagnating, and even reversing. Scandals show that the government carrying out these security policies has harmed human rights and democratic institutions. Progress against illegal drug supplies has been disappointing. And wealth is being concentrated in ever fewer hands.

    Check out the link to read the whole report, complete with all the statistics (complete with pretty charts) to back it up.
  • In the polling department, Otto's got the breakdown in Peru. Puts it better than I could, so in his own words: "Lord help the world, Keiko "I'm not the continuation of Fujimori policies" Fujimori (make that Fuji-Freakin-Mori) is ahead with 22% of voter intention. Second is Luis "Interesting" Castañeda and third....still creeping up...is ex-Pres Alejandro Toledo, who still has my five bucks as most likely winner right now (and I'm no real fan of his, before you say anything)."
  • Sue Myrick (R-NC) takes home the "wild-eyed theory of the week", from Peter Krupa at Lat/Am Daily. Ladies and gentleman, your U.S Congress.
  • Great post at the Mex Files on a Spanish vocab website that is "entertaining and instructing in equal measure". Check out some hilarious examples. Or check out the site itself, "Effective Swearing in the D.F."
  • Colombia made a totally unsurprising announcement, saying there are guerilla camps on the Venezuelan side of the border. They even gave the coordinates, 23 kilometers from the border. C'mon Colombia, that's a pretty big, remote border. I'm not impressed. I also would disagree with Boz that Uribe is doing Santos a favor by taking the hit right before he leaves office. If Santos denounces the whole thing and calls for dialogue with Chavez directly then maybe he makes out okay, but it is pretty unreasonable to think that Chavez wouldn't hold Santos, who was responsible for the raid into Ecuador, as equally responsible for this.  There was just no need to make a big public display over this except to do exactly that; make a big public display.  Now Colombia says they will take it to the OAS on Thursday. If you want to listen to the whole thing, you can do it at the OAS website, might prove entertaining.
  • Benjamin Dangl at Upside Down World, shares his Foreward to Raul Zibechi's book, "Dispersing Power: Social Movements as Anti-State Forces", recently translated into English.  To read some recent article's of Zibechi's, check them out at Foreign Policy in Focus.
  • Good and bad news out of the case that pitted "Crude" director Joe Berlinger against Chevron, another subplot of the $28 billion lawsuit against Chevron brought by communities in Ecuador's Amazon. Lisa Derrick, at La Figa (FDL) has the dirty details.  Berlinger still has to hand over footage to Chevron, but conversations "with defendants, lawyers and their families are protected."
  • The New York Times has a long article on "cattle-ranching drug barons" who are destroying parts of the Maya Biosphere Reserve, the largest swatch of protected land in Central America. 
  • Great article (in Spanish) in La Jornada, on the reasons why both the National party and Liberal party are pushing for Zelaya's return to Honduras. The National party wants to gain recognition from countries other than Peru and Colombia, the Liberal party needs him to avoid marginalization, and it's the first priority of the Resistance, who just appointed him coordinator. For more on Zelaya's relations with the Liberal party and the Resistance, and for all your Honduran needs, be sure to keep apace with Honduras Culture and Politics.
  • In the latest example of the US' intervention in Central America coming back to haunt them...and others, the Washington Post has a long report on how Mexican drug cartels are stepping up their use of grenades. And where did they find all these grenades? From the WaPo: "The administrations of Ronald Reagan and George H.W. Bush sent 300,000 hand grenades to friendly regimes in Central America to fight leftist insurgents in the civil wars of the 1980s and early 1990s, according to declassified military data obtained through the Freedom of Information Act by the Federation of American Scientists." And according to the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives, some 90% of the grenades in Mexico are at least 20 years old. Check out the article for more.
  • A real interesting article in the Economist on Brazil becoming "one of the world's biggest aid donors." Like China, Brazilian aid does not come with "Western-style conditions". The head of Brazil's development agency explains, "Marco Farani, the head of ABC, argues there is a specifically Brazilian way of doing aid, based on the social programmes that have accompanied its recent economic success. Brazil has a comparative advantage, he says, in providing HIV/AIDS treatment to the poor and in conditional cash-transfer schemes like Bolsa Família. Its tropical-agriculture research is among the world’s best. But Brazil also still receives aid so, for good or ill, its aid programme is eroding the distinction between donors and recipients, thus undermining the old system of donor-dictated, top-down aid." Sounds like a positive development, although problems clearly remain as the Economist article notes.
  • The generally odious Andres Oppenheimer writes something worth a damn for a change. Comparing the US' denial of a visa for Hollman Morris to "a page right out of the Cuba-North Korea-Iran playbook." Most interesting fact from the piece though comes from the PEN Club, a free press group, who estimate that "about 250 academics, journalists and writers had their visa denied between 2001 and the end of the Bush administration," for ideological reasons. 
  • Finally, mad props to Argentina, who passed a law recognizing same-sex marriages last week. Glenn Greenwald has a nice take and relates it to the treatment of the issue in the U.S. Greenwald writes, "That's what is most striking here:  this is not happening in some small Northern European country renown for its ahead-of-the-curve social progressivism (though gay marriage or civil unions are now the norm in Western Europe).   Just as is true for Brazil, which I've written about before with regard to my personal situation, Argentina is a country with a fairly recent history of dictatorships, an overwhelmingly Catholic population (at least in name), and pervasive social conservatism, with extreme restrictions on abortion rights similar to those found on much of the continent.  The Catholic Church in Argentina vehemently opposed the enactment of this law.  But no matter.  Ending discrimination against same-sex couples is understood as a matter of basic equality, not social progressivism, and it thus commands widespread support." For the contrast with the U.S., check out the link.

Saturday, July 17, 2010

Warning: This movie may contain revolution footage


From the San Francisco Chronicle review of "South of the Border":


Advisory: Violence, corpses, revolution footage.

Really? Don't want to rile up the youth I suppose.





(image from vencentral)

Thursday, July 15, 2010

Who said the press was free

This needs no additional commentary, from Jeremy Bigwood writing for NACLA:

Buying Venezuela’s Press With U.S. Tax Dollars

The U.S. State Department is secretly funneling millions of dollars to Latin American journalists, according to documents obtained in June under the Freedom of Information Act (FOIA). The 20 documents released to this author—including grant proposals, awards, and quarterly reports—show that between 2007 and 2009, the State Department’s little-known Bureau of Democracy, Human Rights and Labor channeled at least $4 million to journalists in Bolivia, Nicaragua, and Venezuela through the Pan American Development Foundation (PADF), a Washington-based grant maker that has worked in Latin America since 1962. Thus far, only documents pertaining to Venezuela have been released. They reveal that the PADF, collaborating with Venezuelan NGOs associated with the country’s political opposition, has been supplied with at least $700,000 to give out journalism grants and sponsor journalism education programs.

Until now, the State Department has hidden its role in funding the Venezuelan news media, one of the opposition’s most powerful weapons against President Hugo Chávez and his Bolivarian movement. The PADF, serving as an intermediary, effectively removed the government’s fingerprints from the money. Yet, as noted in a State Department document titled “Bureau/Program Specific Requirements,” the State Department’s own policies require that “all publications” funded by the department “acknowledge the support.” But the provision was simply waived for the PADF. “For the purposes of this award,” the requirements document adds, “ . . . the recipient is not required to publicly acknowledge the support of the U.S. Department of State.”

Before 2007, the largest funder of U.S. “democracy promotion” activities in Venezuela was not the State Department but the U.S. Agency for International Development (USAID), together with the National Endowment for Democracy (NED). But in 2005, these organizations’ underhanded funding was exposed by Venezuelan American attorney Eva Golinger in a series of articles, books, and lectures (disclosure: This author obtained many of the documents). After the USAID and NED covers were blown wide open—forcing USAID’s main intermediary, Development Alternatives Inc. (DAI), a Maryland–based contractor, to close its office in Caracas—the U.S. government apparently sought new funding channels, one of which the PADF appears to have provided.

Although the $700,000 allocated to the PADF, which is noted in the State Department’s requirements document, may not seem like a lot of money, the funds have been strategically used to buy off the best of Venezuela’s news media and recruit young journalists. This has been achieved by collaborating with opposition NGOs, many of which have a strong media focus. The requirements document is the only document that names any of these organizations—which was probably an oversight on the State Department’s part, since the recipients’ names and a lot of other information are excised in the rest of the documents. The requirements document names Espacio Público and Instituto Prensa y Sociedad, two leading organizations linked to the Venezuelan opposition, as recipients of “subgrants.”

I urge you to go read the whole thing. Seriously, do it. Also make sure to check out the documents for yourself.

I told you to come back for an update....

As most of you have already realized, and some of you have let me know in comments, the statement from the French Foreign Ministry that I posted yesterday was an extremely well done and brilliant hoax. Did I know that when I posted it? Yes (astute readers may have noticed the post was tagged with "yes-men").

So why didn't I tell you, the faithful readers? Simple, it would have blown their cover! As of last night, I wasn't aware of anybody who had publicly labeled it a hoax, you think I could be the first? No way. The point was for the statement to get as much attention as possible, and downright shame the French government...what if some press agency used da google and saw my blog post outing it as a hoax? I would have ruined it all! And so I'm glad I didn't, even if it was slightly deceptive. So, did any major news outlets pick it up? I don't think so, but here is a snapshot of AFP's website this morning (not sure if the link will still work):



The headline reads: "France Pledges € 17 Billion to Help Haiti".

Okay, so my guess is that this is actually just part of the hoax (I swear, I don't know). In any case, today there are multiple news stories about how a fake press statement went out, but you know what? Mission accomplished. As Brooke Jarvis writes for YES!:

While the fake news release—a common tactic of the prankster activists the Yes Men, but not yet traced to a particular group—doesn’t seem to have fooled any major news outlets, it did bring the debt (and its contradiction with France’s public stance) into the spotlight.
And after all, that is what it is all about. So to those aspiring "Yes-Men" out there, keep up the good work.

Wednesday, July 14, 2010

BREAKING NEWS: France finally agrees to pay colonial debt to Haiti

The following is a press release that went out this morning from the French Ministry of Foreign Affairs, check the link for the video:

FOR IMMEDIATE RELEASE

JULY 14, 2010

France leads Haiti donors with €17 billion pledge
New reconstruction framework marks "new era of cooperation"

Video: www.diplomatiegov.fr/

PARIS--France today announced the boldest initiative yet for Haiti's reconstruction following the devastating January 12 earthquake. In a press conference this morning, the French Ministry of Foreign and European Affairs unveiled a new bilateral Framework Initiative for Haiti's Reconstruction (FIHR).

A spokesperson for Minister Bernard Kouchner emphasized in a special Bastille Day address that the new agreement marked "the dawn of a new era of cooperation between France and Haiti."

"Whereas our nations' relations were, historically, at times tumultuous, today we start with a clean slate united by compassion and cooperation," Ministry spokesperson Natalie Lacroix stated.

Under the FIHR, France has committed to pay back the historic indemnity of 90 million gold francs which Haiti paid to the French republic following the Caribbean nation's independence from France. Including adjustments for inflation and a minimal interest rate of 5 percent per annum, this sum is today valued at € 17 billion (21 billion USD).

Lacroix stated: "In the context of the present global financial crisis, some will say this is no time for the launch of such an ambitious initiative. Yet it is precisely in such times of crisis, particularly as we work to rebuild the global financial system, that our deepest-held values are most important. 'Liberty, equality and fraternity': these must be the pillars of the new global financial architecture if we want to assure that-this time around-Haitians too can share in economic development."

The Ministry is encouraging other governments to follow the French example, and "take responsibility and action to correct the mistakes of the past in this hour of Haiti's greatest need."

The Ministry's full statement is available at: www.diplomatiegov.fr/

Media Contact:
Laurence Fabre
Tel : (+33) 970 44 6727
Email : presse@diplomatiegov.fr

Great statement, and about damn time! Hopefully other governments follow this extraordinary move by France. Check back tomorrow for an update.

Tuesday, July 13, 2010

More on capital controls from writers less lazy than me!

That's right: more productive corners of the intertubes have been busy covering the ongoing debate on capital controls. As our readers might recall, the IMF reversed it's long standing opposition to their use, accepting them as part of a macroeconomy's "policy toolkit." Dani "master of development policy" Rodrik referred to the IMF's policy change as "the end of an era of finance." True Stuff.

Well that was sooooo a few months ago.

Now Ilene Grabel over at Triple Crisis quite correctly points out that capital controls have become part of the "new normal" of the aftermath of the financial crisis. In other words, what was considered sacrilege before the world downturn has been, if not openly endorsed, for the most part accepted:
"But something happened on the way out of the global financial crisis. Policymakers have been quietly imposing a variety of capital controls, often marketing them with Madison Avenue savvy simply as prudential tools (akin to what Epstein, Grabel and Jomo KS termed “capital management techniques”)...The “market’s response” to these various controls—a surprising silence and, in some cases, tacit approval. The response by economists at the IMF has been in the same vein... And so it is that capital controls have quietly become another element of the new normal."
Also, Kavaljit Singh over at Vox has a very nice column reviewing new capital controls to curb volatility and increasing speculative financial flows in South Korea and Indonesia:

These new curbs are in response to growing concerns over short-term capital inflows. Given the historically low levels of interest rates in most developed countries, Indonesia has received large capital inflows since 2009. Unlike other Asian economies such as Singapore and Malaysia, the Indonesian economy showed some resilience during the global financial crisis. Despite hiccups in the financial markets, the Indonesian economy registered a positive growth of 6.0% in 2008 and 4.5% in 2009, largely due to strong domestic consumption and the dominance of natural resource commodities in its export basket... Yet due to the massive speculative capital inflows, the Indonesian authorities remain concerned that its economy might be destabilised if foreign investors decide to pull their money out quickly... Analysts believe that these policy measures may deter hot money inflows into the country and monetary policy may become more effective. Yet they expect tougher measures in the future if volatility in capital flows persists.

In anycase, quit hanging around here and go read these two excellent pieces yourself.

The free trade sickness

From a new NBER working paper we learn that free trade agreements are like a virus. Yes indeed, FTAs are "contagious" in that countries are more likely to "catch" the free trade bug if a nearby country is already ill. True story... sorta.

Abusing an already over-abused metaphor, the paper mentioned above seeks to explain why new waves of trade liberalization are usually clustered in particular geographic regions.

And you know what? No developing region of the world caught the bug quite as bad as Latin America.

[Developing regions: number of free trade agreements]

One thing to notice: the bug doesn't seem to have been very contagious before 1976. Why?

Well... you see, when the famous British virologist, Dr. Adam Smith, discovered the free-trade virus towards the end of the 18th century it simply wasn't very contagious. Yes indeed, discovered during a brief visit to a pin factory, the virus was seemingly benign and exhibited the potential to improve welfare around the world by causing the infected to divide their labor--but it was very difficult to become infected. Upon further experimentation by Smith's colleague, Dr. David Ricardo, it was discovered that the virus, if capable of infecting entire nations, would cause those infected to specialize in that which they had a comparative advantage in.

Unfortunately, after years of experimental trials, it was concluded that intense and prolonged ideological exposure was necessary for the virus to spread, relegating its existence to the deepest and darkest backwaters of the world economy.

But all of this began to change in the late 20th century when, due to an unknown event, the virus mutated into a highly contagious and extremely dangerous version. During this time countless developing countries fell ill, lowering their tariffs at alarming rates exhibiting a reckless disregard for their national health... and stuff.

Anyway, the moral of the story is that I read dumb academic shit so that you don't have to! Oh, and even frivolous scholarly articles that revolve around silly metaphors sometimes have a grain of interesting information.

The End.

Monday, July 12, 2010

Weekend Update

Lets keep it brief today:


  • The mainstream media finally noticed that Colombia journalist Hollman Morris was denied a visa by the US. A week or so later, not too bad. With more coverage comes more details, and this looks pretty bad. From the WaPo, "He was ineligible, U.S. officials told him, under the "terrorist activities" section of the USA Patriot Act." Really, the Patriot Act? Mother fuckers.  I mean the only evidence of any "terrorist activities" is Uribe calling him "an accomplice to terrorism" last year. Amazing what a US ally can get though, right?

  • On the same subject, Forero, the author of the WaPo story linked above, makes the same point both maladjusted and others made when the story first broke, "According to documents prosecutors have made public, the DAS had begun a campaign to discredit Morris by tying him to the FARC. Among the strategies were plans to "press for the suspension of the visa." I thought the US cut ties with the DAS though? Hmmm. At least the "DAS's possible role in providing the United States with information on Morris has raised concerns among some Democratic lawmakers on Capitol Hill."

  • To Panama, where the latest seems to be an agreement being reached between dem gov'ment and striking workers. Official numbers have two killed with plenty more injured over the last few days. Reports indicate that the strikers have secured a temporary suspension of at least part of the law that caused all this. Check out Bananama Republic for some background and commentary, as this isn't getting the attention it deserves in the eng. lang world.

  • Honduran Foreign Minister Mario Canahuati announced that Honduras will be opening a new military base in Guanaja, one of the Bay Islands. The US supported it, presumably with cash flow. But hey, the possibility of Zelaya closing down the Soto Cano air base definitely had nothing to do with the coup, no way.

  • Also on Honduras, a new documentary that looks worth a watch. head over to Quotha, where you'll find the appropriate links.

  • Finally, big ups to Spain. Also to Uruguay's Diego Forlan, who was my favorite player to watch during this years Cup, and took home the Golden Ball as the tourney's best player. So we'll end this with a video breakdown of each of Forlan's five goals. The best one's are 3-5, but watch them all:

Wednesday, July 7, 2010

Mid-Week Update

Posting has been light on accord of certain holidays and certain weather patterns that make computer use uncomfortable. But it's time to catch up with a lil journey through the intertubes.

  • From the current edition of The Nation, a detailed look at corn and Mexico. Clearly corn has a special cultural and historical place in Mexico, yet from NAFTA to GM crops farmers are under increasing pressure. On a similar note, Jan McGirk reports for Huff Post on the upcoming harvest of Mexico's first GM crop. The ban on GM crops was recently overturned. Money quote, from Clinton's science and tech point-woman, "We preach to the world about science-based regulations but really our regulations on crop biotechnology are not yet science-based."

  • A pair of articles over the week or so look at the role foreign political consultants played in the recent Colombia election. First, Marc Ambinder at The Atlantic writes on Ravi Singh, who's role maladjusted had previously pointed out. Singh runs Electionmall.com, and is widely credited with leading Obama's social media campaign. Ambinder writes that after Santos lost ground in the polls to Mockus, "Then Singhs's team, working with the Web 2.0 Victory Team, along with local agencies and talent including Sistole, SigmaMovil and Servinformacion, kicked into gear, live-streaming his campaign speeches (Colombia has a 45 percent net penetration level), collecting 4 million emails, producing a "SuperSantos" video game (fight drug dealers!), organizing debate-watching parties, and helping voters find their polling places." Impressive.

  • Next is the Miami New Times' report on J.J. Rendon, who is referred to as "Latin America's Karl Rove". Ouch! He's another character that maladjusted wrote a bunch about back during the campaign. About how this guy was basically Karl Rove, running a smear campaign.  Guy is a seriously shady character, linked to the right in Venezuela, Mexico and most recently before Colombia, Honduras. The article is a must read.

  • Via The Harpers blog (on the Blog Roll to your right), new information comes to light about Nixon and Kissinger's involvement in a string of assassinations in Chile. Scott Horton quotes Jeff Stein from the WaPo Spy Blog, "President Richard M. Nixon and his national security adviser, Henry A. Kissinger, joked that an “incompetent” CIA had struggled to successfully carry out an assassination in Chile, newly available Oval Office tapes reveal. At the time, in 1971, Nixon and Kissinger were working to undermine the socialist administration of Chilean President Salvador Allende, who would die during a U.S.-backed military coup two years later." Click here to see the transcript. Horton adds the necessary background, "The comments plainly revolve around the death of Chilean General René Schneider, who was the commander-in-chief of Chile’s armed forces around the time of the 1970 presidential election that brought Allende to power. Within the Chilean military, Schneider resolutely opposed any coup d’état and insisted that the democratic process be respected. The CIA and Kissinger apparently concluded that he had to be eliminated so that the Allende government could be removed."

  • Our fav secretary of state HRC went to Europe last week, using the equation to slip in some insults towards Venezuela. But don't worry, the next day she made a statement congratulating Venezuela on their independence day (July 5). Water under the bridge right? Wrong: "This new attack against our country from Hillary Clinton ... demonstrates a policy of intrigue, aggression and desperation," foreign minister Nicolas Maduro said. She did manage to slip in some backhanded shit in the congratulations though.

  • The one year anniversary of the Honduran coup was a little while ago, today, news from Chile that the US is still actively lobbying governments that have yet to recognize Pepe "reconciliation" Lobo. Chile is apparently quite divided over recognizing the Honduran government, there is currently a bill in the Senate which will be voted on next week that asks Pinera to recognize Lobo.

  • Also on Honduras, and for those in the greater DC area. Tomorrow there will be a showing of the documentary "Quien Dijo Miedo", supposedly a real solid movie on the coup. It's playing at the E Street Cinema for one night only, tomorrow at 6:30.

  • Throughout the blogosphere we go....to Otto, who gives us the best take on the federal lawsuit against the Arizona immigration law. Check out the linky to watch the video.  Also props to Otto on a real nice smackdown of some douchey LA Times film critic who apparently doesn't know his ass from his elbow when it comes to Latin America. The WaPo, the NYT and the LATimes now all with epic fails on "South of the Border".

  • Also on Arizona, a nice short post from The Mex Files on the success of the Sonora boycott of Arizona, titled "Immigrants don’t kill jobs… stupid politicans do". This is great, "The Sonoran boycott alone has cost 30 Arizonians their jobs:  probably all “native born” citizens.  They can thank their idiot governor for that."

  • This has already gotten a lot of attention, but Peter Krupa over at Lat/Am Daily wrote over the weekend on the invasion of Costa Rica by the yankees. Okay, not exactly, but go check it out. Love this line, "Anyway, keep ironing around that wrinkle fellas. You’ll win the war on drugs any day now." Well said.

  • On the "war on drugs", the Just the Facts blog has a long post debunking 5 assumptions of the war that is worth a read.

  • This is also a bit old, and got passed around the web pipes like a, well, a pipe, but is worth pointing out in case anybody missed it. Glenn Greenwald had the story last week. A study done by the Harvard Kennedy School shows how the mainstream media covered waterboarding over the last 100 years, concluding "that the technique, almost invariably, was unequivocally referred to as "torture" -- until the U.S. Government began openly using it and insisting that it was not torture, at which time these newspapers obediently ceased describing it that way". Greenwald's description is spot on, as always, writing that the study "provides the latest evidence of how thoroughly devoted the American establishment media is to amplifying and serving (rather than checking) government officials."

  • Dean Baker, at his Beat the Press blog, points out some "affirmative action" with regards to Mexico in Simon Romero's latest New York Times piece (cribbed from Otto, and not like the guy has a stellar rep anyway). Baker calls out Romero for citing Mexico's 4.5% first quarter growth as impressive. Baker writes, "This is actually rather weak growth given that Mexico's economy contracted 6.5 percent last year. By comparison, Brazil and Peru, two of the other countries highlighted in the article anticipate growth of more than 7.0 percent in 2010. Neither experienced a downturn as sharp as Mexico's."

  • Last, but certainly not least, over at Tim's El Salvador blog, we get the latest in the ongoing case in Spain over the 1989 killing of  6 Jesuit priests in El Salvador. Tim writes, "The bombshell revelation was that the witness apparently testified that president Alfredo Cristiani had advance knowledge of the assassinations and approved them." And who is this Alfredo? Well none other than "the current head of ARENA following that party's loss of the presidency to the FMLN in 2009". Awesome!
Now hopefully we can get back to your regularly scheduled programming.

Friday, July 2, 2010

The Count

31...

...is the gap in percentage points between male and female hourly wages in Latin America. That's right, the region has made great progress in addressing gender disparities but income gaps nevertheless remain quite large.

For the full scoop head on over to Eclac, where you'll find a new report out this week on regional progress towards achieving the UN's Millennium Development Goals (MDGs). As usual, this publication is a wonk's statistical wet dream and contains far more fascinating information than could ever be adequately covered here. So go check it out, here.

But what's there to learn about gender equality in the region from the report's myriad of tables and graphs?

Insight number one is that gender disparities don't seem to be driven by educational differences. In most countries of the region men and women exhibit very similar levels of enrollment in both primary and secondary schooling (but not so similar when it comes to tertiary schooling).

Insight number two is that in most countries women have begun to diversify away from purely agricultural employment. In this area, both Venezuela and Colombia stand out for making the most progress.

Insight number three: wage equality has steadily improved since 1990 but the gap with respect to men still remains large. However, as can be seen below, the gap is significantly smaller for salaried employees.

[Average hourly and salaried income of women, compared to men, urban areas (in percentages)]
The blue line shows women's average hourly income in relation men, the purple line shows average salaries in relation to men and the black line, 100 percent, represents men's wages. The first thing to notice is the big improvement since 1990. However, as can be seen from the dotted trend line to the right of 2008, the gap continues to narrow at the current pace it won't completely close even by the year 2015.

Now, an implication of the difference in relative gaps between hourly and salaried employees is that the lower your income, the less equality you should expect vis a vis men. And this takes us to insight number four: Latin America has A LOT of women in politics. No, seriously. It beats every other developing region of the world except for the Caribbean.

[Percentage of members of parliament that are women, 1990, 2005 and 2009]

So the moral of the story is... more equality for women in the heights of power and wealth but significantly less futher down on the socioeconomic stratum.

But hey. Stop reading my ramblings and go enjoy your freakin' weekend.

Lat/Am Daily is back...

...and Peter Krupa has been making up for lost time with several good posts well worth a read. Who's this douche Obama appointed to head USAID's programs in Latin America? Why does so much cash on the US/Mexico border smell like laundry detergent? Go find out.

Thursday, July 1, 2010

Argentina, where economic growth is a bad thing

Only with Argentina, whom investors and the business community (and press) clearly haven't forgiven for defaulting in 2001, can rising GDP forecasts be reported as a bad thing. Bloomberg reported yesterday that RBS raised their estimate of Argentina's GDP growth this year from 4.4% to 7%. Amazing you might say, that would put Argentina at the top of the hemisphere, and be a seriously nice way to rebound out of the world recession, but wait. According to RBS:

“This ‘full throttle’ growth strategy is likely to exacerbate current distortions in the economy,” RBS economist Boris Segura wrote in a report today from Stamford, Connecticut. This would leave “a heavy legacy to the next administration,” Segura said.

You know, if the US undertook a serious stimulus and our GDP forecast went up that much, this would probably be straight from a set of Republican talking points. I can see it now, "This 'full throttle' government spending is only going to drive the nation further into debt. Mr. Obama is going to leave this country in ruins for whoever our next President will be."In fact, I bet they've already said that.

Just a reminder that when reading the mainstream media's coverage of Latin America, it reads more like FOX News' coverage of Obama than what passes for good journalism on domestic issues.

Ideological Labels Are Fun: Colombia and Chile

Did you know that, despite simplistic labels to the contrary, the US' favorite client state actually is not the free-market paragon most people think? That's right, I'm talking about the supposedly "free-market" darling Colombia, which according to a new Inter-American Development Bank (IADB) working paper has been pursuing extensive industrial policies for quite some time.

The economic merits of these policies aside, this underscores that just because a country has a horrible human rights track record and is in the State Department's pocket, it doesn't necessarily mean it's also "neoliberal." In other words, the media (especially up north) likes to assume Colombia is "market-friendly" simply because it is US-friendly and has signed a handful of Free Trade Agreements. But in reality it has also been pursuing fairly heterodox policies for a while.

One obvious example of this is Colombia's long-running affair with capital controls. As maladjusted has pointed out before, Colombia's regulations on international capital flows are currently the highest in the region. During the 1990s, when South America regained access to international capital markets and all the cool kids on the block were liberalizing, Colombia had smart regulations in place to tax inflows. This helped reduce flow volatility, prevented excessive exchange rate appreciation and lengthened the maturity of foreign liabilities (which lowers the likelihood of experiencing a financial crisis).

In any case, the point is that when it comes to labeling a country's economic policy, what's accurate is seldom the same as what is politically sexy. The truth in South America has always been more nuanced than "neoliberal countries grow, leftist countries don't."

A natural parallel in this regard is the case of Chile, which to much fanfare staked out claims to first world status last year when it was officially admitted to the OECD. The conventional narrative holds that Allende's socialist policies were destroying the country before the free-market champion Pinochet took power and, with help from the Chicago boys, set the foundations for the country's future prosperity. But, of course, the reality isn't so simple.

Chile hasn't prospered because of pure neoliberalism. It has prospered because of resource nationalism (even Pinochet was smart enough to keep the state-owned copper company, CODELCO), the state promotion of exports (salmon, wine, and virtually every other major export success have received extensive gov. assistance) and, on the macroeconomic level, well devised capital controls (Chile is actually the paradigmatic example of success in this area).

Whatever.

Dichotomies challenged. Reality trumps ideological labeling. And I'm a closet post-modernist. The End.

Wednesday, June 30, 2010

U.S. to Hollman Morris: Stay Out!

Just in case you needed further evidence that the Obama administration is continuing with the same policies towards Latin America as the Bush administration, prominent Colombian journalist Hollman Morris, who Big 'Al Uribe once called a "an ally of terrorism," was denied a visa by the US embassy in Bogota, this according to Matthew Rothschild at The Progressive. Morris was headed to the US after being selected as a fellow by the Neiman Foundation at Harvard.

You may remember from a post awhile back, that Morris was the target of a smear campaign by the DAS. The link was to Plan Colombia and Beyond who had the documents outlining DAS movies against not only Morris, but other opposition groups and journalists as well. Adam Isaacson wrote at the time:

Here are the files obtained by Hollman Morris, with English translations. They go beyond surveillance and wiretapping to reveal what it calls a “political warfare” campaign of dirty tricks and threats against President Uribe’s political adversaries. They date from 2005, the last year of Jorge Noguera’s tenure as DAS director.

The guy digs deep, goes where people don't want him to go and is a verifiable bad ass.  As Rothschild writes, quoting heavily from Human Rights Watch, who gave him a "Defender of Human Rights" award in 2007:

“A journalist and human rights activist, Morris has dedicated his career to uncovering the truth about atrocities committed on all sides: by right-wing paramilitaries, left-wing guerrillas, and government authorities,” said Human Rights Watch in granting him the award. “Morris has faced serious harassment and death threats for his work. . . . Human Rights Watch honors Morris for his courage and unfaltering dedication to exposing Colombia’s most egregious human rights abuses.”

But I suppose he's been just a bit too critical of the US' favorite ally to be welcome into the States, eh? Lets get this right, guy exposes DAS misdeeds, the US needs to cut off assistance to DAS, Colombia needs figure out a new way to spy on the president of Ecuador, and run smear campaigns against their opponents, and then the US denies this guy a visa? Sure sounds like the State Department is on the right side of this one! In fact, if you look at the image above, you'll see "Gestionar la suspension de la visa" as one of DAS' courses of action against Morris...Really State Department? Really? Straight outta the DAS playbook? Damn, that's just low.


(image from Plan Colombia and Beyond)

Making the Case for Argentina

Not sure who to root for with the quarterfinals of the World Cup starting tomorrow? Well, Dave Zirin makes the case for Argentina, who in addition to playing "with the wicked grace of decades past", brings it politically as well:


At a training session in South Africa, the entire Argentine team unfurled a banner that read, "We Support the Grandmothers of the Plaza de Mayo for the Nobel Peace Prize." The group has in fact been officially nominated for the prize and Abuelas president Estela de Carlotto, is in South Africa, meeting with Nelson Mandela and other world leaders. She has also been publicly and literally - embraced by Maradona. The critical work that Abuelas has done will only receive a greater spotlight if Argentina continues to advance. This makes all those connected with Argentina’s dirty war, who still hold tremendous power in the country, increasingly, and deliciously, apprehensive.

I can certainly understand, and have heard from numerous people, that these kinds of political concerns shouldn’t play into our rooting interests when it comes to the World Cup. It should just be about the game. But this is like wishing a double cheeseburger didn’t have cholesterol. There is simply no sporting event on earth more entangled in politics than this brilliantly bombastic tournament. Anytime you have half the earth tuned in - as colonies play their former colonizers and dictatorships challenge democracies - politics follow like rainbows after rain. As long as politics are part of the mix, we might as well support a team that in addition to epitomizing the beautiful game stands with a beautiful cause. Viva Argentina!




I urge you to go read the whole thing, only Dave Zirin can quote from Galeano and Yahoo! Sports writers in the same piece. For those of us who enjoy our sports almost as much as our politics, Zirin is a must read


(image also from Zirin)

Tuesday, June 29, 2010

How Not To Normalize Relations in One Easy Step


This must have made for one hell of a phone call. Following Santos’ victory in Colombia's presidential elections last Sunday, Ecuadorian president Rafael Correa called him to congratulate him on his victory. Needless to say relations between the two countries are a lil rocky, I mean, a court in Ecuador recently issued an arrest warrant for the Colombia president-elect. In any case, following the phone call there was much hoop-la about the normalization of relations, yadda, yadda…well, how’s this for normalization (via Bloomberg):
Colombian police have been tapping the telephones of Ecuador’s President Rafael Correa and government and military officials since 2008
 But what's more is it’s not like Santos was an innocent bystander in any of this, the report includes this juicy lil nugget:

Colombian President Alvaro Uribe and incoming President Juan Manuel Santos have been briefed at least three times on the operation, which began in the aftermath of a Colombian raid on a rebel base camp inside Ecuador in March 2008

Which brings us back to that phone call. Can’t you just imagine Santos answering Correa’s call, while three giggling DAS agents in a sixth story apartment in Quito listen in? Yup, got it.

Not to worry though, it’s not like Ecuador is the only one to get this special treatment. From EUObserver:

A group of MEPs is calling for action as further details of an alleged covert operation conducted by the Colombian intelligence agency (DAS) continue to emerge, with one of its reported aims being to undermine the authority of the European Parliament.

Recently released documents that were confiscated from the DAS by the Colombian Attorney General's office highlight the nature of "Operation Europe."

Its objective was to "neutralise the influence of the European judicial system, the European Parliament's human rights sub-committee, and the office of the United Nations High Commissioner for Human Rights," reads one text seen by this website.

And yes, the “alleged action in Europe includes phone tapping and the interception of emails”.

Sunday, June 27, 2010

Weekend Update

 

South America continues rolling through the World Cup, Uruguay and Argentina advance, Chile and Brazil meet tomorrow...
  • This is some serious structural maladjustment shit right here: While calling for austerity in Greece and elsewhere, the IMF and World Bank approve "have pushed ahead with pay raises above the rate of inflation for thousands of workers". WaPo has the story.

  • More Jessica Jordan is a good thing. The Telegraph takes a look at their native beauty's new role as "Director for Development of Frontier Zones and Macroregions" in Bolivia. For background, check out El Duderino's profile of Jordan from awhile back. 

  • With the one year anniversary of the Honduran coup tomorrow, 27 US lawmakers sent a letter to Hillary Clinton concerning ongoing rights violations. The number of slain journos so far this year is 9, for those at home counting.

  • Earlier in the week, various places got nose deep in some stats on cocaine production in South America. Bottom line, the UN and US have very different numbers, Colombia is doing better, Peru much worse...down in one place, up in another...how long are the suits really going to keep up this nonsense "war on drugs", seems like they "learn" the same lessons every few years or so.

  • The vultures are circling again after the latest round of debt swaps in Argentina.  Finance Minister Bodou says that that "a total of 92.4 per cent of the nearly $100bn on which the country defaulted in 2001 has been restructured after including the results of an earlier swap in 2005." But fear not, billionaire hedge fund managers and all around douchey-douche vulture funds are still bitching and moaning about evil Argentina.

  • The Huff Post is a wonderful place, but they need some better oversight. On Friday they let Nancy Soderberg use their space for pure propaganda without even identifying who she represents. Soderberg is the former US ambassador to the UN under Clinton (which the Huff Post says), but she also represents the American Task Force Argentina, a group led by vulture funds that has continually railed on and brought litigation against Argentina for the better part of the last decade. On Friday, she wrote:


    Last month, Argentina put forward its Global 2017 bond offering but the markets are not buying, forcing the government to extend its offer until June 22, a stunning vote of no confidence in the policies of President Kirchner. The international message to Argentina was loud and clear: No deeds, no prize. Investors don't trust you, or your policies. Looking over Argentina's record on financial responsibility, it's no wonder why.

    Nevermind that Argentina has reached an agreement with 92.4% of bondholders; these assholes bought in late for cheap and intend to reap massive profits no matter how they get 'em, and Nancy Soderberg has been enlisted to do their bidding. It's a shame the Huff Post allowed this without having her disclose her troubling ties.

  • Juan Forero in the WaPo takes a look at the daunting back log of human rights cases facing Colombia, and the implications for both Santos and the US. I know Maladjusted has ragged on Forero before, but he does a nice job of showing how the US support for Colombia despite the serious rights abuses has prevented improving relations with other countries in the hemisphere. Money quote:


    But Washington's closest ally in the region, Colombia, has been the source of the most serious cases of abuse before the commission, investigators familiar with the cases said. In all, the commission is evaluating 1,055 cases. Dozens of the cases of serious violations took place during Uribe's administration. 
  • Finally, as a follow up to this post from last night, and for a good laugh, a picture of the best mis-pic in recent memory...maybe even better than the old dusty farts at WaPo not knowing who Evo is, courtesy of The New York Times, via Howard Kurtz:

Presidential edition of Whats Wrong With This Picture?

UPDATE BELOW

Last Wednesday the Washington Post style section ran a story on the front page about Oliver Stone's new movie "South of the Border". The story included a picture of the six current South American presidents that Stone interviewed. But, wait, there was one tiny little problem...take a look at the picture below:


(Top, Chavez, Correa and de Kirchner. Bottom, Lugo, Morales and da Silva)

You may have noticed, something is amiss.....got it yet??? Answer and more after the jump.

Friday, June 25, 2010

The Count: childhood poverty


45 and 17.9...

...are the percentages of children and teenagers in Latin America living in poverty and extreme poverty defined in terms broader than simple income. That's right, ECLAC has a new research bulletin out giving us a sneak peek of an upcoming ECLAC and UNICEF report on poverty trends throughout the region.

The idea is simple. Much like the World Bank's Human Opportunity Index (HOI), which sets out to measure access to the resources that grant a child the opportunity to succeed in life, this new measure of childhood poverty is based on the notion of human rights--both social and economic. In other words, going beyond the mere notion of income, a child is considered poor if any of his or her basic rights are violated. The six rights explicitly considered are:
  1. Nutrition: defined in terms of weight and size by age.
  2. Clean drinking water: taking into account it's origin, supply and accessibility.
  3. Sanitation: defined as relative access to a sewer system.
  4. Housing: considering the number of people per room, the building materials of the roof, floor and walls.
  5. Education: in terms of assistance and number of completed school years.
  6. Information: defined as access to electricity and having a radio, tv or telephone.
So how much of a difference does this new measure make? A LOT. The pie chart below shows the percentages of different poverty classifications for the whole region. Light blue is outside of poverty, dark gray represents income poverty, light gray is poverty in terms of both income and the absence of rights, and green is poverty just in terms of the violation of rights. In other words, without the new methodology, we'd be ignoring all of the green chunk and a big part of the light gray chunk.



Now, as usual, the Count asks: what does the country breakdown look like? And you'll find just such a thing right below, courtesy of Maladjusted Graphs™.

[Percentage of children and teenagers living in poverty and extreme poverty, circa 2008]
As can be seen above, the top five on the list are, in order, Costa Rica, Chile, Uruguay, Argentina and Venezuela. On the other extreme, the five countries where children are worse off are, again in order, El Salvador, Guatemala, Nicaragua, Bolivia and Peru. (so much for Peru's economic miracle, no?)

Well there you have it folks. Yet another welcome attempt to challenge the misleading simplifications of standard statistical indicators.

Thursday, June 24, 2010

Cocaine+Futbol+World Cup=Great Documentary

If the equation above confuses you, or pops up on your screen when your boss is looking over your shoulder, apologies. But bear with me here. First off, I'm back and props to my comrade Gringo Juan for holding it down while I was off gallivanting through the woods. I also got to catch up on some reading and watching, the reading recommendation is still a few days off, but let's get to the movie recommendation: "Two Escobars".

It's a documentary by Jeff and Michael Zimbalist which aired as part of ESPN's 30 for 30 series. I know, ESPN, not exactly who you would turn to for your documentary needs, but this one is well worth the time.

It traces the rise of Pablo Escobar and Colombian futbol (and star player Andres Escobar, the only Colombian ever to be offered a spot on Inter Milan). Everyone knows Pablo, but not everyone knows he was a futbol fanatic and also played a huge role in the barrios in Colombia, especially Medellin. In his more formative years, he donated soccer fields in poor neighborhoods throughout the country, but even in his later years the passion for soccer never left him. Colombia was far from a soccer powerhouse and much of the top talent often left for bigger money and more fame overseas in Europe....until the cocaine cash started to flow, that is.

All of a sudden not only could club teams keep the top talent, but players from all over the region were coming to play in Colombia. Turns out a soccer organization is a really good way to launder money, ticket sales being in cash and all. Every drug lord had a team, or two. Pablo was no exception, and the other Escobar, Andres was quickly rising to the top of his profession.

Colombia became one of the favorites to win the 1994 World Cup, and as violence raged at home, the national soccer team became the Colombian government's best PR tool. The team was a way to show the world that Colombia was not just about violence and to give Colombians an escape from the everyday hardships. But, just as Pablo's notorious run came to a crashing halt, so did Colombian soccer.

I really don't want to give much more away, it's a tragic and fascinating story, and incredibly informative to boot (not bad for an ESPN docu). As much as the story can carry the movie on its own, the historic footage is really the icing on the cake. Colombia, in their bright jerseys, played some beautiful futbol back in the day and they've got the footage to prove it. As an example of some of the team's flair, here's a clip that you may have seen before, Colombian goalie Rene Higuita's infamous scorpion kick:



Damn. Unfortunately, Higuita was not on the team for the '94 World Cup, for reasons that you will find out when you watch the movie. Not only is there amazing footage of the national team, but also of the brutally deadly drug war, including some footage of Pablo that is really stunning. Pieced together with interviews with such characters as Pablo's right hand man (in jail for murder) and his cousin, it makes for a must watch. It doesn't paper over the massive atrocities that Pablo is responsible for, but neither does it just give you one side of the story. Footage from his funeral shows the thousands and thousands of grieving Colombians, mostly from the barrios, who had lost one of the only men who had truly provided for them. Nor does it overlook the heavy hand of Carlos Castano and Los Pepes (later of AUC paramilitary fame), and their support from El Norte. Perhaps, since its a sports network, the political considerations don't weigh as heavily, but good for ESPN for airing this informative, entertaining, and deeply tragic documentary.

Here is a 5 minute introduction to the movie, and below, the upcoming schedule for when it will be on ESPN, ESPN deportes, and ESPN classic.



Saturday June 26, 10PM ESPN Classic, Friday July 2, 1am ESPN 2, Sunday July 4, 1pm ESPN 2. Check your local listing, all times EST.

For the record, I was not paid to shill for this movie, it just kicks ass.

Wednesday, June 23, 2010

Pinera's approval rating now 54%

Chile's Center for the Study of Contemporary Reality (CERC, for it's spanish initials) today released the results of it's new public opinion poll. It shows Piñera's approval rating at a solid 54%. Though not directly comparable, this is one point higher than the Adimark poll released last month.

Not surprisingly, Piñera's approval rating is significantly lower in the areas most affected by last February's earthquake, coming in at 48%.

On an interesting side note, the CERC poll also shows that while Piñera's approval is high, 68% still want Bachelet to be president again. This is the bizarre state of affairs of Chilean politics today. One of the most successful political coalitions in the history of Latin America is voted out of office and replaced by a centrist conservative pledging change...who then proceeds to behave exactly like the coalition he replaced while his predecessor remains as popular as ever.

Monday, June 21, 2010

The impact of large natural disasters on economic growth

In the aftermath of the earthquakes in Haiti and Chile it is natural to wonder what impact these two terrible events will have on these countries' future economic growth. Will the damage permanently lower output and burden future generations with the reconstruction bills? Or will the post-disaster construction boom and opportunity for structural change act as an economic stimulus, ushering in a new period of rapid growth?

Well, the folks over at the Inter-American Development Bank have clearly pondered these two questions more than I have. And their results are not exactly what one would expect.

Using a large comparative sample of severe natural disasters, the authors take advantage of the fact that natural disasters are a random event to tease out their causal effects on growth. In other words, the paper attempts to approximate a laboratory setting by also putting together a "synthetic" counterfactual of what would have happened in disaster countries if the natural disaster had never happened (they do this by grabbing a bunch of similar countries and weighting them to approximate the initial conditions of the disaster countries).

The results can basically be summarized with the graph below. It shows the path of real GDP per capita in actual disaster cases and in the counterfactual cases. Real GDP per capita is set to zero on the year of the crisis.

So what does this tell us? Well, disasters appear to have no effect on per capita income. In fact, the path of real GDP per capita following disasters perfectly mirrors the counterfactual index.

There were, however, two exceptions to the rule:
"Contrary to previous work, we find that natural disasters, even when we focus only on the effects of the largest events, do not have any significant effect on subsequent economic growth. Indeed, the only two cases where we found that truly large natural disasters were followed by an important decline in GDP per capita were cases where the natural disaster was followed, though in one case not immediately, by radical political revolution, which severely affected the institutional organization of society. Thus, we conclude that unless a natural disaster triggers a radical political revolution, it is unlikely to affect economic growth."
So there you have it. From the perspective of GDP per capita, a profoundly flawed but nevertheless indispensable measure of economic welfare, even the most severe natural disasters do not have an effect. So what's the moral of the story here? Is this a tale about human resilience in the face of calamity? Or is it another sobering lesson in the perils of statistical abstraction?