With the help of Forbes magazine, we and colleagues at the Institute for Policy Studies have been tracking the world’s billionaires and rising inequality the world over for several decades. Just as a drop of water gives us a clue into the chemical composition of the sea, these billionaires offer fascinating clues into the changing face of global power and inequality.
After our initial gawking at the extravagance of this year’s list of 1,426, we looked closer. This list reveals the major power shift in the world today:the decline of the West and the rise of the rest. Gone are the days when U.S. billionaires accounted for over 40 percent of the list, with Western Europe and Japan making up most of the rest. Today, the Asia-Pacific region hosts 386 billionaires, 20 more than all of Europe and Russia combined.
China is redefining the global development agenda. While the West preaches trade liberalization and financial deregulation, China orchestrates massive infrastructure and industrial policies under regulated trade and financial markets. China transformed its economy and brought more than 600 million people out of poverty. Western policies led to financial crises, slow growth and relatively less poverty alleviation across the globe.
China is now exporting its model across the world. The China Development Bank (CDB) and the Export-Import Bank of China (EIBC) now provide more financing to developing countries than the World Bank does. What is more, China’s finance doesn’t come with the harsh conditions—such as trade liberalization and fiscal austerity—that western-backed finance has. China’s development banks are not only doing good across the world, they are helping China’s bottom line as they make a strong profit and often provide opportunities for Chinese firms.
Buzzwords and Fuzzwords — terms that became popular but mean vastly different things to different people. We’ve had a long list: development, sustainability, good governance, civil society, accountability. “Corporate responsibility” should certainly be on that list. And the avalanche of new buzzwords and fuzzwords continues: emerging markets, inclusive growth, resilience.
But today’s buzzword winner is: responsible mining. Meaning what exactly? Well, not surprisingly, as is the case with most buzzwords, it means whatever the user wants it to mean. So, let me try to distinguish among the top four uses of “responsible mining.”
To most corporate mining executives and, alas, also to many government officials, mining is responsible if it focuses on maximizing economic growth which, in turn, maximizes economic profits, which will make everyone better off and in the most efficient way. This, of course, is what neoclassical economic theory tells us. Socially, this will be responsible because the economic benefits will multiply and trickle down to the poor. In terms of environmental impact, the “environmental Kuznets curve” purportedly proves that, at least in theory, as a country grows in economic terms, certain environmental pollutants decrease.
So now India is the latest casualty among emerging economies. Over the past 10 days, the rupee has slid to its lowest-ever rate, and the Indian economy may well be on the verge of a full-blown currency crisis. In this febrile situation, it is open season for rumours and pessimistic predictions, which then become self-fulfilling.
This means that even if there is a slight market rally, investors quickly work themselves into even more gloom. Each hurriedly announced policy measure (raising duties on gold imports, some controls on capital outflows, liberalising rules for capital inflows and so on) has had the opposite of the desired effect. Everything the government does seems to be too little, too late – or even counterproductive.
These are all classic features of the panic phase of a financial market cycle. This doesn’t mean that a crash is inevitable, but clearly it is possible. The real surprise in all this is that investors and Indian policymakers are surprised. For some reason, they apparently did not foresee this turn of events, even though the story of every financial crisis of the past, and many in the very recent past, should have caused some nostrils to twitch at least a year or two ago.
The tragic loss of 23 young lives because of contaminated food in a Bihar school is unacceptable. But it is also a fact that the Mid Day Meal Scheme, under which cooked food is compulsorily provided to children in government schools, is too important and critical to give up on. The only questions that matter are: why does the scheme not work as well as it should and what can be done to fix it?
The answers are complicated. Providing nutritious food to children in schools helps address two key problems; hunger and education. Progressive political leaders found the answers in their states. In 1982, M G Ramachandran, the then chief minister of Tamil Nadu, set up the nutritious meal programme. It is legendary that he took deep interest in the working of the scheme. Former district officials will tell you of his surprise trips to schools and his fury if anything was found out of order. This was top priority, so it worked.
In the mid-1990s, the Central government adopted these ideas coming from different states and framed a national midday meal scheme. But nothing much happened. In 2001, the Supreme Court directed all governments to provide cooked food to all children in primary schools. Since then the scheme has evolved. The Central government agreed to provide free grain (rice and wheat) and funding for transport, cooking cost and recently even an honorarium for the cook. The state government is required to top up this funding; pay for vegetables and pulses; provide infrastructure in schools and manage affairs.
Rumor has it that China is set to accelerate the de-regulation of its financial system.
China is “too big to fail.” Nobody in the world can afford for financial liberalization to fail there.
For years, China has restricted the ability of its residents and foreign investors to pull and push their money in and out of the country.
While that may be illiberal, there was a sound reason for this restriction: Every emerging market that has scrapped these regulations has had a major financial crisis and subsequent trouble with growth.
Asunción Mita, Jutiapa, Guatemala: I am here as part of an international delegation — representing 22 organizations plus individuals such as myself, from 12 countries – that has come to support El Salvador’s right to stop environmentally-destructive gold mining. Half of the delegation has traveled over the border into Guatemala because the giant Lempa River that supplies most of El Salvador’s fresh water begins in the Guatemala hills where one of Canada’s largest mining firms is trying to mine gold. Environmental destruction from this mine would therefore hurt not only Guatemalans, but also millions of Salvadorans who depend on the river’s water as it winds into the Pacific Ocean a nation away.
Our delegation is the result of an almost decade-long struggle of Salvadorans to protect their communities from the ravages of commercial gold mining. That we are in Guatemala is a reminder that environmental havoc does not respect national boundaries — and that the rights of Salvadorans are interconnected with the rights of Guatemalans.
As gold and other mineral prices skyrocketed over the past decade, Canadian, US and Australian gold-mining firms have sought out veins of gold that were unprofitable when prices were low. Quite attractive is a gold deposit belt, first discovered about a century ago, which traverses the middle of Central America, including El Salvador’s northern provinces and this particular part of Guatemala.
Average national income is a notoriously imperfect measure of the average person’s well-being. The 2010 BP oil spill in the Gulf of Mexico – with clean-up and damage costs of $90 billion – added about $300 to the average American’s “income.” But it added nothing to our well-being. The world’s most expensive prison system, costing almost $40 billion per year, adds another $125 per person. This doesn’t make us better-off than people living in countries that don’t incarcerate one in every 100 adults.
Of course, national income includes many good things, too. Growing food and building homes add to national income. So does public spending on education and health care. Unlike oil spills and jails, these really do add to our well-being.
The U.N. Food and Agriculture Organization (FAO) created a stir last October with its revised estimates of global hunger. After revising the methodology used in its annual State of Food Insecurity (SOFI) reports, the FAO reported that the number of hungry had not surpassed one billion following the 2008 food price spikes, as previously reported. Indeed, the new estimates showed barely an upward blip during the food price spikes. Moreover, new trend lines based on revised estimates of past hunger suggested significant progress in reducing the incidence of hunger.
“New estimates show that progress in reducing hunger during the past 20 years has been better than previously believed,” the FAO concluded, “and … given renewed efforts, it may be possible to reach the MDG hunger target [of halving world hunger] at the global level by 2015.”
Now, a group of hunger researchers led by Frances Moore Lappe, and including Triple Crisis bloggers Jennifer Clapp, Robin Broad, and Timothy A. Wise, have published a detailed critique of the SOFI 2012 estimates and report. “Framing Hunger: A Response to ‘The State of Food Insecurity in the World 2012,’” offers recommendations to the FAO, as much in relation to the presentation of its hunger estimates as on the methodology itself.