The Count

[editor's note: The Count would like to apologize for failing to count during his regularly scheduled counting time.]

0.84, 1.15, 2.7, 5.94...

...is the percent of GDP it would cost to transfer one poverty line to poor children in Chile, Brazil, Venezuela and Bolivia, respectively. Yes indeed, as promised, here's another excerpt from ECLAC's new report, showing that the relative cost of eliminating childhood poverty is rather low and well within reach.

The graph below shows the result of a simulation estimating the cost of transferring the income equivalent of one poverty line to children around or younger than five years old. The yellow line shows the estimates for every child and the blue line shows the costs for only children from vulnerable households. Also, as can be seen, the relative cost is lowest in countries with a higher level of development.

[Cost of transferring one poverty line to children younger than 5, around 2008, in percent of GDP]

Quite astoundingly, Chile could transfer enough money to eliminate poverty for every child with just 0.84 percent of GDP. Even Bolivia, with a far lower level of development, could theoretically get rid of poverty with a relatively small 5.94 percent of GDP.

Of course, this type of exercise is a pure abstraction and takes for granted all sorts of institutional and implementation hurdles. But it's certainly food for thought, no?

Best Breakdown of the First Round in Colombia

Want the most detailed, complete breakdown of the first round available? Check out the coverage at FiveThirtyEight. Geographical breakdown? Check. Vote by poverty level? Check. Exactly how bad were the polling companies? Check. Does Mockus have a chance? Check (and the answer is pretty clearly no).

As a teaser lets rip the image showing the polling companies margin of error:



Gross. Go check out the whole post, which is definitely worth a read. Here's to hoping they keep the international coverage going.

(side note: congrats to FiveThirtyEight for partnering up with the New York Times)

Super Bear...

...is a great new blog that's well worth your time. Interested in the politics of international development agencies from the perspective of an intelligent and all around cool multicultural dude? Want to brush up on your cultural theory and get smart excerpts from philosophy's greats? Or are just interested in a good read? Well, Super Bear will satisfy you in all of these departments. So go ahead and check it out, here.

ECLAC's Time for Equality

A couple weeks ago maladjusted gave you a sneak peek of ECLAC's new document "The Time for Equality," outlining a regional agenda to promote social equality. Well, the final version is now out and it's safe to say it's a must read for anyone interested in the state of development in Latin America and where the region might be going in the future. This ambitious document is essentially a development blueprint for the region calling for a return of the State as a leading actor in the promotion of economic development and social equality.

The full report comes in at a whopping 290 pages, so this one will take a bit to digest since clearly I can't do justice to this high quality and book-length document in a single post. But you can be sure the Count will soon share many of its insights.

But in the meantime I'll leave you with a simple question included in the report: why equality and why now?

• equality is tremendously important for social cohesion. When wealth is concentrated and growth isn't shared broadly an "expectations gap" is created that "increases social conflict, which erodes government legitimacy and threatens the sustainability of growth."

• equality is more conducive to "authentic competitiveness." Which is to say that there are large long-term productivity gains from an egalitarian society in which everyone has the opportunity to make use of their talents and labor and the environment aren't over exploited. "In the long-run there's a virtuous circle between smaller social gaps, smaller productivity gaps and a more dynamic and sustainable growth. The evidence is conclusive, in the sense that economic development and social equality tend to converge."

• the experience of the recent crisis suggests that highly unequal societies that are overly dependent on financial sectors tend to be more volatile and carry significant costs in terms of poverty and general welfare.

In any case, this is all just a really tiny flavor of all the good stuff included in the document, so I strongly urge all of you to check it out (no english version yet, but it should be out soon).

An Independent Foreign Policy

By now you have all heard about Israel's attack agaisnt the aid flotilla, killing at least 19 people, and injuring scores more. So while virtually the entire world has been extremely vocal condemning the attack, the US has been conspicuously quiet. One region not scared to speak up and condemn Israel...the new power bloc of Latin America. So while we got a statement like this about the US:

"We'd like to express our thanks to the United States that worked behind the scenes to water down the [statement] at the United Nations," said Mark Regev, an Israeli government spokesman.

We get this from Brazil (via Xinhua):

The Brazilian Foreign Ministry in a statement said that "Brazil strongly condemns the Israeli attack, because there was no justification for the military intervention against a pacific convoy with strictly humanitarian character. The event is worsened, according to the available information, because it occurred in international waters."

"The event must be investigated independently to make completely clear the event based on Humanitarian and International Laws," the ministry said.

Brazil added that this event "once more shows the need of immediate lifting the embargo in Gaza, in order to guarantee people's freedom of transit and their free access to food, medicines and consumption goods in that region."

The article contains statements from Argentina, Chile, and Mexico in addition to Brazil. Venezuela was also quick to offer their condemnation. Nothing really to add here, just pointing out the latest example of one of the most profound changes in the region over the last decade, an independent foreign policy.

On a separate note, the fact that the US is working behind the scenes to dilute the UN statement reminds me a lot of the Honduran coup. The forum then was the OAS, but the US ambassador worked hard to dilute or block anything that the OAS tried to do. Good ol' U.S. of A, using their relative power to protect their right-wing "allies" since....well I don't know, always?

(image is a poster from a Brazilian cartoonist Carlos Latuff, via Canadian Dimension.)

Adimark poll: Piñera's approval rating goes up

Last Friday the Chilean polling company Adimark released its latest monthly government performance poll. It shows Piñera's approval at its highest level since he took office, with 53% up from 50% last month. The overall gov.'s approval rating also went up 4 points, from 51% to 55% after having dropped sharply from 60% in April.

Also, there are no surprises here when it comes to the income demographics of Piñera's approval rating. The highest income groups, "ABC1" below, still supports him the most. And there's a clear downward trend down the income ladder.

Market Reaction to First Round in Colombia

Just a quick look at the market reaction to Sunday's election. There was a lot of talk about how Mockus didn't scare investors, that may be true, but there is a lot of coverage today about how happy the markets are at Santos' big first round. As Marcelo Ballve pointed out, there was some risk surrounding the "unpredictability factor", and so Santos' big win appears to have taken that out of the equation.


First, Reuters:

The peso currency and benchmark TES bonds firmed on Monday, while the country's risk rating on JPMorgan's EMBI Plus index fell 8 points to 231 points.

"Now there is much more certainty about what might happen and what lies in store for the country. As well economic matters, the teams are well regarded. That generates stability and confidence recovers," said Alexander Cardenas, director of economic research at Colombian brokerage Acciones and Valores.

And, from Bloomberg:

The yield on Colombia’s benchmark 11 percent bonds due July 2020 fell three basis points, or 0.03 percentage point, to 8.04 percent at 11:02 a.m. New York time, according to Colombia’s stock exchange. The bond’s price rose 0.207 centavo to 120.003 centavos per peso.

…

“The market knows Santos,” said Bertrand Delgado, a senior Latin America economist at Roubini Global Economics, a research company in New York.

So Mockus may not have been bad, but the markets have spoke, and they clearly like Sunday's results. At least for now, it appears the country does too (I know polling in Colombia is notoriously bad, but seriously, you gotta wonder about this one, right?).