Archive for January, 2008

Human Trafficking — the Dark Side of Globalization

29 January, 2008

The ease with which we can now travel, send money, and communicate has dramatically reduced the costs of shipping human beings — into prostitution and forced labour. Our recent post highlighted Hatti and Maiti Nepal and their work to help those trafficked in Nepal. The plight of Nigerian children trafficked through Manchester is reported here.

Now, Emma Thompson and Sam Roddick have teamed up to highlight this modern slavery at a UN forum which meets in Vienna in February (go to UN.GIFT). They are backing an art installation that dramatically explores globalization’s dark side.

7 cargo containers illustrate what happens to women sold into the global sex trade. Each container — by a different artist — shows the stages of the trafficking process, starting with hope and then descending into fear and despair.

The installation was first shown last September in London’s Trafalgar Square, to much praise (video here). Emma Thompson is Chair of the Helen Bamber Foundation, which helps the victims of human rights violations and raises awareness of human trafficking. (Helen Bamber herself worked to help concentration camp victims).

Last week, 11 Romanian children were taken into care after being seized from alleged child traffickers (who were using them for crime on Britain’s streets, including Manchester, in a modern version of Oliver Twist). Go here for why kids in Romania still get a hard deal.

The choice of containers for the exhibition is inspired. Globalization would not have been possible without the container. The introduction of this humble steel box from the 1950s onwards allowed a much faster turnaround at ports, thereby dramatically cutting the costs of global trade. Now it is used to smuggle people.

Abandoned containers have been turned into homes by the poor. But now the construction industry is starting to use them to build affordable homes (there is one housing development in London). And a new school in Cape Town is built using containers (go here)

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Get Your Cheap Designer Handbags Here

26 January, 2008

Just joking, wanted to get your attention.☺ But if you do need a good bag then go to Hatti Trading, a social enterprise that supports survivors of human trafficking as well as disadvantaged and stigmatized women in Nepal.

Nepal’s poverty is among the world’s worst. A difficult terrain makes it hard to eke out a living, communications are limited to outlying areas, and infectious disease is rampant. Deforestation and now global climate change threaten the sustainability of many communities. And the on-off 11-year old conflict adds to the impoverishment. As a result about 7 million people (30% of the population) live below the poverty line. There are big caste-based differences in poverty incidence and human development outcomes, with many in the lower castes living in chronic poverty (see this ADB study).

One positive development is the flow of remittances from Nepalis abroad — which are especially important to impoverished rural areas. This has reduced poverty from 42% to 31% over the last 10 years — good progress, especially during conflict (see World Bank).

But despite this good news on the direction of poverty, many young girls are still sold into prostitution and bonded labour. Trafficking of girls to India is prevalent. Escape is difficult (and dangerous). And their communities may not take them back if the girls do get out — making it difficult to find any kind of livelihood. Unfortunately many then get sucked back into their former ‘life’ with all its attendant risks.

Hatti Trading helps these girls to make a new start. It works with local charities such as Maiti Nepal to rescue and rehabilitate victims, and to generate the kinds of livelihoods that end the poverty and misery driving girls into the hands of traffickers.

For us scholarly types Hatti bags are excellent for carting your books around. For techies there is a great laptop bag. And they might stay in fashion longer than any designer bag.

Charles Taylor faces Justice. But Justice isn’t Enough

25 January, 2008

Liberia’s ex-president Charles Taylor now sits in the dock in The Hague, charged with 11 counts of war crimes in neighbouring Sierra Leone. (The International Criminal Court in The Hague has loaned the UN-backed Special Court for Sierra Leone their facilities). The smartly-suited Taylor pleaded innocent. He has the ‘distinction’ of being the first former African state to go before an international war-crimes court. Chad’s Hisène Habré is up next, in a special court in Dakar, Senegal.

In the trial’s opening days, one witness, a churchman, described how child soldiers did their ‘work’; the ‘Small Boys Unit’ was especially brutal. But it’s not enough to provide accounts of Sierra Leone’s atrocities — these are well documented. To get a conviction a clear link has to be established between Taylor and events in Sierra Leone. Specifically, how he (allegedly) financed and guided the Revolutionary United Front (RUF). To work, the trial must be scrupulously fair.

Is all this worth it? (Yes: it sends a clear message. And a war-crimes tribunal is not expected any time soon in Liberia, so charging Taylor with crimes in Sierra Leone at least gets him into the Dock). Will it be a deterrent? (Increasingly so: worldwide, 10 ex-presidents and military dictators are facing the law on human rights charges. And for despots still in power, it might disturb their sleep). Can it provide true justice? (Only partly, many despots die safely in their bed — like Uganda’s Idi Amin. And you can’t bring back Liberia and Sierra Leone’s many dead). Will it slow down peace deals (Maybe, the Lord’s Resistance Army in Uganda are worried that they will end up in a court like Taylor: but that’s not a good reason to press ahead with capturing and trying war criminals).

However, removing individual ‘spoilers’ is not enough. Removing one Charles Taylor leaves many potential Taylors to take the stage if conditions remain ripe. This includes the poverty that supplies their recruits. You have to recreate a working relationship between the state and the people to deliver broad-based recovery (see my paper here).

A better and more prosperous future removes the oxygen in which the Charles Taylors of this world thrive. There is now lots of action in this area. See for example TechnoServe which helps rural entrepreneurs rebuild after war. The resulting employment at least offers an alternative livelihood to the violence that youngsters otherwise get sucked into. They also need a good education; especially the small boys (and girls) who get caught up in militias through no fault of their own (a big issue in northern Uganda).

Taylor’s case is expected to last at least a year, and you can track it at the Crimes of War web site. And for the bigger picture on how to deal with these bullies read the excellent Brian Urquhart in the NYRB. Stephen Ellis provides the background to Liberia in the authoritative Africa Yearbook.

Meanwhile, if Taylor has a broadband connection from his lodgings in The Hague, he should check out this UNICEF commercial against war — featuring those friendly Smurfs (go here). He can even learn to hum the tune…

David Beckham — New Goal: Ending Child Poverty

23 January, 2008

Former Manchester United star and UNICEF Goodwill Ambassador David Beckham has appealed for the world to get moving on child poverty during a 4 day visit to Sierra Leone — where 27 per cent of children die before they reach five (in a country rebuilding after years of civil war). Dad-of-three Becks can be seen in a YouTube video here, visiting health clinics and feeding centres. “It’s shocking and tragic, especially when the solutions are simple”, he said.

And undernourished mothers produce weak children: with poverty being transmitted across the generations (check out CPRC policy briefs and CHIP).

Becks was appointed a UNICEF Goodwill Ambassador in 2005. You can see a video of him discussing his role here. He was inspired by UNICEF’s rapid action in dealing with the Asian Tsunami disaster, as well as his involvement with the United for UNICEF programme (under which Manchester United has raised £ 2 million since 1999).

Becks also took time out to kick a ball around with some of the locals (go here). Manchester United has a keen following in West Africa, recently boosted by signing Angolan forward Manucho who joins after the Africa Cup of Nations. Three United Stars — Ryan Giggs, Rio Ferdinand, and Patrice Evra (born in Senegal) — feature in UNICEF AIDS-awareness posters in Sierra Leone (go here).

Meanwhile, Posh and the Spice Girls play Manchester …….

US Property — Prices Come Down, Poverty Goes Up

22 January, 2008

Big shifts in the US income distribution continue. Trade and technology are all doing their work. But another cause is the asset price inflation of the last few years, now halted in its tracks — and going rapidly into reverse. Homeowner bankruptcies were up about 25% in 2007. Lenders are aggressively tightening their standards in areas where house prices are falling most — thereby driving demand and prices down further (Florida and Mississippi have the worst mortgage delinquency rates).

Tough if you are in the lower middle-class, even tougher if you are on a low income — and managed to get a NINJA (No Income, No Job, No Assets) mortgage a couple of years ago.

America’s financial wizards are getting a good kicking: rightly so. They repackaged the NINJA’s and sold them on to delighted financial markets — who were desperate for yield (every asset went up in price over the last five years, the consequence of the post 9-11 rate cuts and booming emerging markets: so yields fell everywhere. Heck, even Latin American debt looked good. See my paper here). The US authorities were quite happy: the global savings glut got recycled into the US, thereby financing a record external deficit. Now things look positively Argentinean for the US economy: boom-bust-boom-and bust again (see Paul Krugman in the NYT).

The property downturn is biting into revenues. States and local governments have done well over the last few years — the housing boom pushed up property taxes. Property is now being valued downwards, so taxes will fall. Funds for urban regeneration will take a hit. So, don’t expect America’s deprived neighbourhoods to get much better soon.

This all plays out in an election year (didn’t you notice?). The voters that count in US politics are not the poor but in the middle-income and lower-middle-income ranges. Its that part of the income distribution which presidential candidates keep an eye on. The Democrats are playing to the ‘anxious middle’ — America’s middle-class that isn’t as secure as it once was. Hilary Clinton started to do this in December when she cast doubt on the ‘virtues’ of free trade (see our December posts).

In the meantime America’s food banks will get even busier; America’s Second Harvest distributes two billion pounds of donated food and grocery products annually, and demand rose through 2007 as the housing crisis came on. But the food banks don’t have enough food to distribute, because America’s farmer are selling to China or turning to biofuel crops. So America’s poor face a double squeeze: job losses, and higher food prices. Expect child poverty rates to go up shortly — especially in urban low-income neighbourhoods with high rates of home foreclosure.

One effect of a US recession (or near-recession) will be fewer jobs for illegal immigrants (already happening in construction). So despite the political heat from the immigration issue, this might become less of a concern in US politics over the next year or two as recession bites. But it will be a big worry in Mexico and central America, as remittances dry up. The financial wizards have already marked down Mexico’s stockmarket, expecting the country to take a macro-hit — thereby recouping their losses on the NINJAs.

Does Growth Reduce Poverty? – It Does and it Doesn’t

22 January, 2008

The good news from the UN’s recently released World Economic Situation and Prospects is that the developing world’s economies grew on average by just under 7% last year. Only 9 countries saw their GDP fall (see our recent post).

So what does this mean for the world’s poor?

God gave economists two hands. On the one hand, poverty should fall. On the other hand, it might not. And growth sometimes increases poverty. This is a three-hand issue.

Let me explain.

On the one hand, the link between growth and poverty is now well-sorted out conceptually. If initial inequality is high, then growth’s effect in reducing poverty is modest. (In their recent BWPI working paper Ajay Chhiber and Gaurav Nayyar work through the effects). It stands to reason that if you own a 1,000 acres of prime land and agricultural prices are booming (which they are in Brazil as sugar-based ethanol production rises) then you will make more from growth than if you have an acre of scrub. The upshot: 7% GDP growth will benefit the poor most in the least unequal societies.

On the other hand, many chronically poor people exist outside the main growth poles (dirt poor, environmentally-stressed regions, cut off from major markets, for instance). Or they are too sick to be productive. Unless they get help (maybe that cousin who now has a job in a boom area) then growth might not do much for them. This is so even in China, where growth is going at 10 per cent a year (see this NYT report).

And on my third hand, some folk are ‘adversely incorporated’ into the market-economy. Their assets get stolen by richer folk — urban land that suddenly becomes valuable for commercial development for instance (in South Asia’s booming cities, but this is also happening in parts of Africa: Addis Ababa is one case). So, their lot gets worse with growth. In the global boom of the late 19th century, whole swathes of African smallholders were dispossessed to create what is today one of the world’s most unequal societies: South Africa. Which is why many South Africans don’t feel they get much from today’s boom — a big issue in the lead up to the 2009 elections. (On South Africa see the CPRC working paper by Andries du Toit and David Neves).

Now, God also gave economists two feet, and 10 toes, so……(to be continued).

Fitting Britain’s Richest into Manchester City’s Stadium

21 January, 2008

The top 0.1 per cent of the UK’s income distribution — that’s 47,000 people with a pre-tax income of more than £350,000 — would be just enough to fit into Manchester City’s Stadium (at least they could afford a season ticket).

This, and other gems, are contained in ‘High Income Individuals: Racing Away?‘, a new Institute of Fiscal Studies study. The top 0.1 per cent has an average pre-tax income of £780,000 per year (for our American readers, that’s about $1,500,000). The average pre-tax income of all income tax payers is £25,000 per year. The top 10% have seen faster income growth than the population as a whole, and the top 0.1% have experienced the fastest growth of all — globalization is of enormous benefit to the UK’s financial sector (and Premier League football players aren’t doing too badly either).

UK Income inequality is now at its highest level since the 1940s. And, northerners tend to have much lower average incomes than southerners, as Sir Stuart Rose, boss of M&S recently pointed out (story here). So, more sales of champagne in the south than flat caps in the north.

Yet, Britain is still significantly less unequal than the US: our Gini coefficient is 0.35, while the US Gini is 0.46 (the higher the Gini, the more unequal the society). Income inequality started to rise in the 1980s (Tony Atkinson’s WIDER annual lecture explains why). Still, the Guardian’s leader today is right to wonder whether everyone is getting “a fair kick of the ball” (as UK Chancellor of the Exchequer, Alistair Darling, recently stated).

Now, how many of Britain’s richest are playing for United or City? (That’s enough football for now – ed.)

Reasons to be Cheerful, Part 1

20 January, 2008

The late, great, Ian Dury, had a hit with his song ‘Reasons to be Cheerful‘ back in the 1970s. So, with the start of the new year, and in the spirit of the song, lets list some reasons to be cheerful in the first month of 2008:

1. The One Laptop Per Child is now shipping — over a quarter of a million to Peru alone; it sells at $188, and a new commercial venture aims to get these computers down to $50 (see our recent post).

2. The World Bank’s soft-loan arm (the International Development Association) got replenished late last year — after worries that the Wolfowitz debacle would sink the Bank’s funding, the donors rallied round, and Britain became IDA’s biggest contributor (giving the Americans pause for thought: see ‘Bested by the Brits’ in the NYT here).

3. More Americans started to treat climate change seriously. And the Europeans got their act together, and pressed the US hard at the Bali meeting in December (see a summing-up on the CDG blog here). The Republicans ended their state of denial about climate change, finally catching up with the big shift in public opinion (see The Economist here).

4. Economic growth in the developing world keeps motoring, despite the US buckling under the sub-prime mortgage crisis. The South — or at least the Asian part of it — might be decoupling from the North, for the first time.

5. Remittances from North to South continue to rise. Africans living in the UK send home some $400 million a year to relatives (but African governments need to do more to help these transactions, and the resulting investments).

6. The Micro-finance game just keeps getting bigger. What used to be a minority sport has now gone main stream. Lots of product innovation going on, with micro-insurance now starting to catch up. ASA of Bangladesh comes top in a recent Forbes ranking of Microfinance institutions.

7. The Ghanains are punching above their weight in the world of diplomacy. Ghana’s President John Kufuor (also chairman of the African Union) and Kofi Annan are trying to bang heads together in Nairobi to resolve the elections crisis — in the pleasant but firm way only Ghanains can.

8. Iain Duncan Smith, ex leader of the Conservatives, gave a barnstorming performance at the Blackpool party conference on the theme of Britain’s ‘broken society’. And he’s highlighted the Manchester of poverty alongside wealth.

9. More young people than ever want to get involved with development. Why? Maybe its all the travelling during those gap years or older siblings burnt out by the corporate world. Check out the BOND (British Overseas NGOs for Development) site here. If you are a young economist take a look at the ODI Fellowship scheme.

10. The Web makes it possible to find almost any piece of poverty research you want. For those of us who started out in the days of type-written manuscripts this is still amazing.

er, that’s it…. but I’ll try and think of more, and return with Part 2 soon

Incidentally, Ian Dury was one of UNICEF’s childrens ambassadors in his last days. There’s a great pic of him here with a Zambian boy on one of his Africa trips. He campaigned tirelessly to eradicate polio having been disabled by the disease when a child (relatively common in Britain of the late 194os when he got it).

Thinking of a career change?

15 January, 2008

Thinking of a career change? Bored with your office job, and only 4 weeks paid holiday a year? Need to get out more? We have just the job for you.

Become a coal miner in Kyrgyzstan. You can start early: ten years old is acceptable. Over on the Childhood Poverty Research and Policy Centre (CHIP) they have a film about a Bakyt, an 11 year old coal miner. Go here to see the movie. One to think about next time you are sitting warm in another dull meeting.

Tired and Restless? Worried about the MDGs?

13 January, 2008

Can’t get to sleep at night? Tired and restless with worry about the MDGs? Wake up thinking: its now 2008 and the Millennium Development Goals are supposed to be done by 2015 — its only 7 years away until the world announces: absolute poverty has been halved (and other good things).

Then you need to start reading ‘The Making of the Millennium Development Goals‘ by David Hulme, now out in the BWPI working paper series. David tells the inside story of how we got to where we are. And how likely it is that the MDGs can really be achieved. Its results-based management in an imperfect world. There are more papers on the MDGs on the way. And do check out CPRC’s assessment of how things stood at the MDG mid-point (July 2007) for chronically poor people. In the meantime, try and sleep easy.