Archive for the ‘Development’ Category

Doubtful if NAFTA has been good for US trade or US jobs

January 4, 2017

That NAFTA has provided benefits for Mexico and Canada is evident.

Certainly volume of trade has increased sharply since NAFTA was established in 1994. But for the US the trade deficit has also ballooned. Some US jobs have shifted to Mexico. And whether NAFTA has created any real, net benefits for the US economy is more than a little doubtful.

from Berkeley Review of Latin American Studies, Spring 2014

from Berkeley Review of Latin American Studies, Spring 2014

When Donald Trump castigates US industry for shifting jobs to Mexico, he has a point.


Natural selection is obsolete and the compassionate society needs non-coercive eugenics

March 20, 2016

Natural selection is about being “good enough” and never about excellence. It has been sufficient to the purpose to cope with the slow change of prevailing environment. It has been effective but remarkably inefficient. But now that homo sapiens has developed to the point of influencing – even if not yet controlling – the prevailing environment, the trial and error process of “natural selection” can no longer cope with the pace of change. Compassionate societies take care of their physically unfit and natural selection is effectively bypassed.

Natural selection is about “good enough”, but artificial selection could be about excellence

Natural selection has no direction. In fact it is unintended selection. It just allows for the survival and the reproduction of the “just good enough” individuals (not of the best individuals). “Evolution” is then just the resulting changes in species, where some individuals have had the genetic variation (errors or abnormalities) to be able to survive in a changed environment (habitat and/or competing species). Paradoxically, species which display a wide genetic variation in individuals (large errors), have a greater chance of surviving change. Of course, many abnormal individuals fail to survive, which is the price paid for the survival of the species. In that sense, “natural selection” sacrifices individuals for the sake of the species. The unplanned, unintended “selection” occurs primarily by the deselection of the unfit individuals. You could say it was unethical, since the end (species survival), justifies the means (deselection of unfit individuals). There is no compassion for deselected individuals in natural selection.

Excellence of a particular attribute is never selected for. Survivors are those just good enough, to live long enough, to reproduce. Evolution by this “natural selection” clearly works, but it is not intentional, is not very efficient and can only cope with slow, small changes to the environment. Rapid or large changes cannot be matched by the available genetic variation. When the genetic variation (errors) among individuals does not throw up some which can survive some external change, species go extinct. It is the selection not by a pro-active choice but by whatever is left surviving after a multitude of trials of the errors.

We are getting to the point where we are beginning to be able to discern the genetic components which, partially or wholly, determine health, disease, intelligence and behaviour of the individual. We no longer allow the sick and unintelligent to be deselected. The “compassionate society” has effectively short-circuited the natural selection process which depended on the physically “unfit” dying off. However we take no similar actions about those who are mentally or behaviourally unfit. We have started changing the environment and we have cancelled the death of the physically unfit. But we still allow the mentally or behaviourally unfit to survive and reproduce.

It is time then to also take charge of genetic selection.

We see nothing wrong in genetic intervention in preventing debilitating disease. We even allow capital punishment (abortion) where the genetic fault in a foetus is considered very large. We practice artificial selection – of a sort – with IVF and surrogate motherhood. “Genetic engineering”, and “artificial selection” are nothing but eugenics where no coercion is involved. The Nazi search for “racial purity” involved massive coercion and tried to achieve the goal of a particular physical appearance and external attributes which defined their “master race”.

But without coercion, eugenics is unexceptionable as a method to seek genetic excellence.

Eugenics:The Problem Is Coercion

Razib Khan in The Unz Review

…… the issue with nics is simple: the problem is coercion, and the rest is commentary. I understand that the public is wary and skeptical of CRISPR technology and preimplanation genetic diagnosis. The problem is that the public is also suspicious of food which has DNA in it. Genes are not magic, but that is hard to convince the person on the street. Whereof one does not know, thereof one must be suspicious.

I believe for there to be a clear discussion, one needs to take coercion off the table, and abolish its specter by stating that it just isn’t an option. Then we can have a real dialogue that gets beyond the superficiality induced by the shadow of genocide. For example, consider sentences such as the following from the op-ed above “editing genes for frivolous purposes such as increasing intelligence.” There are many technical reasons that it may not be possible to increase intelligence in the near future through genetic engineering. But would increasing one’s intelligence be frivolous? I don’t think so. Whether you agree with this project or not, it is a serious matter, and gets to the heart of what we value as human beings (or at least some of us). But the specter of genocide casts a pall on exploring these nuanced questions, and that is because of the past record of coercion in eugenics.

Natural selection together with the compassionate society results in an increase in the proportion of “unfit” individuals (physical, mental or behavioural) in the population. But we take no measures to compensate for this by increasing the genetic excellence of succeeding generations.

Natural selection is just not good enough. It can no longer keep up with the pace of change and it is not compatible with a compassionate society. Non-coercive eugenics seeking excellence, not just to compensate for the increasing number of the unfit, but mainly to improve the human condition, is necessary.



Breeding for intelligence?

Is human intelligence declining?


Chinese stocks crash another 7% while World Bank warns of further possible shocks

January 7, 2016

European stock markets can be expected to decline another 2-3% today. The Chinese stock markets hit the automatic circuit breakers soon after they opened today when they dropped another 7%. The devaluation of the Chinese Yuan continues apace with a 0.5% drop, which is the largest single day drop since August when it was devalued 2%. The Shanghai composite index is now down at 3115, down from the high of 5000 it reached in June 2015. In the meantime Brent oil fell below $35 which is the lowest since 2004.

Back in August last year I expected market “bottom” to be when the SCI was less than 3200 and oil was around $30 per barrel.

So I’m looking for the SCI at or less than 3200 and oil prices of about $30/barrel to start getting bullish again. That will not be before November/December this year.

And until then its probably best to keep cash under the mattress.

Hopefully the bottom is not too far away.

sci jan 2016 graphic by bloomberg

sci jan 2016 graphic by bloomberg

In the meantime the World Bank has released its Global Economic Prospects for 2016. WB Global Economic Prospects January 2016

While the WB expects global growth to increase slightly from 2.4% in 2015 to 2.9%, it sees some major risks ahead. The nightmare scenario is if the economies of the BRICS countries decline simultaneously and that could spillover and cause a prolonged downturn globally.

The simultaneous slowing of four of the largest emerging markets—Brazil, Russia, China, and South Africa—poses the risk of spillover effects for the rest of the world economy. Global ripples from China’s slowdown are expected to be greatest but weak growth in Russia sets back activity in other countries in the region. Disappointing growth again in the largest emerging markets, if combined with new financial stress, could sharply reduce global growth in 2016. …….

…….. Specifically, a 1 percentage point decline in growth in BRICS is associated with a reduction in growth over the following two years by 0.8 percentage points in other emerging markets, 1.5 percentage points in frontier markets, and 0.4 percentage points in the global economy. Spillovers could be considerably larger if the growth slowdown in BRICS were combined with financial market turbulence.

The World Bank ends by advising developing economies to develop resilience – which may be easier said than done

In the current environment, developing countries need to brace for possible shocks by building resilience to risks to growth. Where they are able to boost government spending or lower interest rates, they can provide support to economic activity. They can further encourage investor confidence with reforms to governance, labor market functioning, and business environments. Measures to absorb young workers or to increase workforce participation will relieve demographic pressures in many countries.

Hopefully the stimulus that low oil price provides will be sufficient to prevent the nightmare scenario.

Greenpeace endangers national economic security and is deregistered in India

November 7, 2015

Greenpeace has been deregistered in India and has 30 days to shut down. They intend to challenge the deregistration in court. But their brand of eco-fascism (“we know best what is good for you”) is a luxury that India can ill afford. When per capita energy consumption in India is just one tenth of that in Europe, and one fifteenth of that in US, Greenpeace’s attempts to block coal and nuclear power in India is unconscionable.

Greenpeace in India just reflects the views and values of its foreign membership. Most of this membership is from developed countries and represents the do-gooding, self-righteous attitudes of  a comfortable, energy-guzzling middle class. In Europe, these members are often from the hard-left who, after the fall of communism, have found themselves politically homeless. They have become a political lobby group hiding under the cloak of being a welfare organisation. They not only believe they “know best what is good for others”, they also want to impose that on others. In the developing world, Greenpeace are as “colonialist” as the empire builders of the 19th century and try to impose their values and their solutions by legal and extra-legal means. In India this colonialist attitude showed up with their local “rajahs” acting as feudal lords believing they had the right of droit de seigneur. In nearly every developing country their campaigns are opposed to development projects.

In India their efforts to show that solar energy could be an alternative to coal back-fired badly. They sponsored a solar pv installation at a village in Bihar but only ended up promoting coal power. The villagers now refer to coal power as “real power” and solar power as “fake power”.

Scientific American: Over three months, engineers set up 70 kilowatts of photovoltaic cells on the rooftop of public buildings scattered throughout the village. They installed 224 batteries to store the energy. …. All told, the installation cost 2.7 crore rupees ($407,050). ……

The day the power came was one of celebration. …. Then, the wealthy families plugged in energy-inefficient televisions and refrigerators. With the power suddenly facing heavy demand, the batteries drained within hours.

The microgrid operators scrambled to fix the mess. The village electrification committee decided to restrict electricity supply to five hours at nighttime. Greenpeace put up posters telling people not to use energy-hungry appliances such as rice cookers, electric water heaters, irons, space heaters and air coolers. ….. One month after the rollout, Greenpeace invited Bihar’s former chief minister, Nitish Kumar, to inaugurate the solar village. ……. One week later, trucks rolled in and set up a 100-kW transformer in town, connecting Dharnai to the grid. ….. Power is now free for Kumar and his neighbors who are below the poverty line. Others pay 3 rupees per kilowatt-hour of electricity. As of July, villagers were getting electricity day and night, …….

Meanwhile, enrollment in the solar program has fallen to 120 households, down from 380 at the start ……..At present, solar power in Dharnai costs at least three times as much as grid power. It can support only expensive energy-efficient appliances, such as CFL bulbs. A CFL bulb in India costs 700 rupees ($10), while an incandescent bulb costs 10 rupees (15 cents).

Now Greenpeace India has lost its registration, on the surface for violating financial regulations applying to NGO’s with foreign funding, but more fundamentally, for being anti-development and a threat to the economic security of the country.

NDTV: India has cancelled Greenpeace International’s license to operate and gave the group 30 days to close down, citing financial fraud and falsification of data, …… Last year, the government withdrew permission to Greenpeace to receive foreign funding, saying the money was used to block industrial projects.

Under the latest order issued by authorities in Tamil Nadu where Greenpeace is registered, the government said it had found that the organisation had violated the provisions of law by engaging in fraudulent dealings. ……. A government official confirmed that the closure order had been issued on Wednesday but did not elaborate.

In recent months the federal government has toughened rules governing charities and cancelled the registration of nearly 9,000 groups for failing to declare details of overseas donations.

In India, Greenpeace has blindly opposed almost every project concerned with coal mining, coal power plants, nuclear power plants, GMO crops, forest clearing, and even building of dams. They have opposed India’s tea exports in the name of supporting plantation workers. They have openly supported candidates from a particular political party (AAP). They have tried to influence elections. Agitation has been the name of their game and foreign support has been brought in to manage conflicts that they initiate. The government’s Intelligence Bureau (IB) has estimated that Greenpeace India’s activities depress growth by 2 -3%.

The New Indian Express:

Months before Tamil Nadu’s crackdown on Greenpeace, the Ministry of Home Affairs (MHA) in September had cancelled the Foreign Contribution Regulation Act (FCRA) licence of Greenpeace India. It was alleged that the NGO misused foreign funding for political activities which prejudicially affected the country’s public and economic interests.

The Home Ministry Dossier on ‘Greenpeace Activities’ with Express said that NGO was found violating the FCRA by engaging in political activities to influence and lobby for the formulation of policies of its liking. “Not only Greenpeace activists are involved in agitation, they also invited foreign activists like Emma Rachel Tranquility Gibson (UK national) for handling conflict / team dynamics, prioritisation and difficult decisions and her given task was ‘Election Project’as mentioned in the terms of reference of her job,” the MHA dossier said ……..

The financial irregularities are concerned mainly with hiding the use that foreign funds are put to:

An on-site inspection of the NGO’s accounts and records conducted on September 24 to September 27, 2014 found that Greenpeace first transferred foreign contribution received in FCRA designated bank account to FCRA utilisation account and from there to five other bank accounts without informing the authority concerned.  The NGO also shifted its office and activities from Chennai to Bengaluru without approval /intimation of the Ministry. It claimed that Greenpeace was also involved in international negative campaign against India’s most popular tea brands to reduce India’s export by publicising questionable forensic tests in an undisclosed foreign lab.

“ On October 27-28, 2013, Greenpeace India also invited a 10-member team of international activists (1 US and 9 Bangladesh nationals, nine being on tourist visa) to visit three coal block locations, Waidhan and Mudwani (Baiga Basti) in district Singrauli and Amelia to conduct an environmental study on coal blocks allocated to power plants in the district. The team also attended a meeting organised by a NTPC plant employee, Shyam Kishore……all the payments in respect of boarding and lodging were made by Greenpeace India.”


  • April 9, 2015: Centre freezes Greenpeace India’s seven bank accounts over FCRA violation
  • May 5: Greenpeace India’s executive director Samit Aich tells staffers that they have one month left to fight; face imminent shut down
  •  May 27: Delhi HC allows Greenpeace to utilise two accounts for collecting donations
  • May 28: District Registrar, Chennai, sends notice on inspection of Greenpeace India office in Chennai by Sub-Registrar (Chit & Society)
  • June 3: Sub-Registrar (Chit & Society) inspects Greenpeace office
  • June 16: Showcause notice sent by District Registrar on several irregularities and violations found during inspection
  • August 4: HC directs District Registrar to allow petitioner to peruse documents that RoS based its allegations on
  • October 5: Greenpeace sends extensive rebuttal through its counsel
  • November 4: District Registrar passes order cancelling Greenpeace India’s registration

European nuclear moratoria are ineffective and counter-productive as China plans 110 nuclear plants by 2030

October 18, 2015

Update! Numbers have been corrected. By 2030 China plans 110 nuclear plants in operation which is another 60 reactors in addition to the 50 currently in operation or under construction. (I had earlier assumed that the plan was for 110 new reactors).

The European nuclear industry is almost dead as a consequence of,

  1. the ban on nuclear power in countries which have succumbed to environmental political correctness (e.g. Sweden, Germany…)
  2. the ridiculously long and costly permitting processes (environment and safety) in countries where nuclear power has not been banned (UK, Finland…)

As a contribution to the global use (or non-use) of nuclear power, the European reluctance to use nuclear power is entirely meaningless. For the objectives of killing the European nuclear industry and raising costs for electrical power in Europe, the anti-nuclear lobby has been entirely successful.

China currently has 23 nuclear plants in operation and 27 under construction which will be in operation by 2020. By 2020 the Chinese nuclear generating capacity will have almost tripled from the 21GW, 2014 level to be about 58GW in 2020. They have just announced their next five-year plan and some long-term strategies. Another $78 billion has been earmarked to reach 110 nuclear plants in operation by 2030. These plants will be built using indigenous Chinese technology. This technology is now available for export. It is being actively considered for projects in Pakistan and Argentina and now China is even a possible investor in the UK. Each Chinese nuclear plant has a capacity of about 1.1GW (1,100MW). At $78 billion for a further 60 plants, the investment cost planned is about $1200/kW. This is incredibly low, not just for nuclear plant, but for any type of power generating plant. Even assuming a volume effect, it can be expected that Chinese nuclear power plants could be exported at about $1,200-1500/kW.

The Hindu:

China plans to build 110 nuclear power plants by 2030 with an investment of over $78 billion overtaking the U.S. which has 100 such plants amid criticism that Beijing is yet to implement enough measures to develop safety controls in existing projects.

China will build six to eight nuclear power plants annually for the next five years and operate 110 plants by 2030 to meet the urgent need for clean energy, Beijing-based China Times quoted plan analysts as saying. China will invest 500 billion yuan ($78.8 billion) on domestically developed nuclear power plants, the report said. According to the China Times, the country plans to increase its electricity generation capacity to 58 gigawatts by 2020, three times the 2014 level. 

China currently has 23 nuclear power generating units in operation and 27 under construction, about one-third of the world’s unfinished nuclear units.

The construction resumed after the Chinese government which put the brakes on nuclear power plant approvals after the Fukushima nuclear accident in Japan in 2011 permitted their construction after a safety review.

nuclear sites in china (graphic

nuclear sites in china (graphic

In Europe the Olkiluoto #3 nuclear plant of 1,600MW in Finland, was first expected to cost about $2,000/kW, but with all the delays and cost overruns it is going to end up costing about $5,300/kW. Even if the unnecessary approvals and cost overruns incurred just to satisfy the environmental lobbies were not there, the investment cost for new nuclear capacity in Europe would still be about $2,600-3000/kW (compare that with about $1,100/kW for gas fired plant, about $2,500/kW for a coal or onshore wind plant and about $6,800/kW for offshore wind power).

As a comparison, India currently has 21 nuclear rectors in operation with a capacity just under 6GW. A further 6 reactors giving another 4 GW are under construction. The Indian plan is to reach about 63GW of nuclear capacity by 2032 which, of course, will not happen. My experience of Indian power planning is that about 60% of the plan will be implemented (though the track record is improving). So it is quite probable that India will construct around another 40 nuclear reactors (@800MW/reactor on average) by 2032. (In that period Indian coal consumption would also have trebled).

At the Chinese cost of exporting nuclear plant for around $1,200-1,500/kW, it is only to be expected that the electrification of Africa and nuclear expansion in S. Asia will be satisfied to a large extent by nuclear power.  A big chunk of that would be with Chinese technology. I have no doubt that European nuclear plants operate to much higher safety standards than the current Chinese reactors, but the European nuclear industry is now dead and it is Chinese nuclear technology which will be affordable and will prevail.

Considering the goals it was set out to achieve, the European anti-nuclear stance has been totally ineffective (except locally in Europe) and grossly counter-productive:

  1. it has no long-term impact on global use of nuclear energy,
  2. it has effectively killed the European nuclear power industry,
  3. it has effectively reduced the safety levels of all those nuclear plants that will be built over the next two decades, and
  4. it has increased the cost of electric power in Europe.

It is worth remembering that while the Great 2011 Earthquake and Tsunami killed some 18,000 people in Japan, the Fukushima accident it caused has killed no-one directly due to radiation. Now, less than 30 years after the major disaster at Chernobyl, the area is very far from being some nuclear waste-land, and plant and wild-life are thriving as never before in the region.

Opportunities for wealth creation needed rather than just redistribution of wealth

October 13, 2015

Credit Suisse has published its Global Wealth report and its accompanying Databook. The data are based on the world’s adult population of about 4.8 billion. What is immediately obvious is that the wealth is very badly skewed with 71% of the world’s adults having a net worth of less than $10,000, 21% have net worth between $10,000 and 100,000 while just 8% have wealth of over $100,000. (I have also added the line of those in extreme poverty).

However my take is that the pyramid is actually a reflection of wealth creating ability.  The challenge is to make wealth creation opportunity less sensitive to the having of wealth. That suggests to me that it is not just a redistribution from rich to poor that is required in the first instance, but the provision of wealth creation opportunity for those having lower net worth. If extreme poverty can be eliminated, and wealth creation opportunity be made less dependant upon having wealth, then we will have a resultant wealth distribution that automatically matches the wealth creation ability of individuals.

CS global-wealth-report-2015 (pdf)

CS global-wealth-databook-2015 (pdf)

The global wealth pyramid is particularly interesting (wealth being taken as net worth):

It has a large base of low wealth holders and upper levels occupied by progressively fewer adults. We estimate that 3.4 billion individuals – 71% of all adults in the world – have wealth below USD 10,000 in 2015. A further billion adults (21% of the global population) fall in the USD 10,000–100,000 range. While average wealth is modest in the base and middle tiers of the pyramid, total wealth here amounts to USD 39 trillion, underlining the economic importance of this often neglected segment. Each of the remaining 383 million adults (8% of the world) has net worth above USD 100,000. This group includes 34 million US dollar millionaires, who comprise less than 1% of the world’s adult population, yet own 45% of all household wealth. We estimate that 123,800 individuals within this group are worth more than USD 50 million, and 44,900 have over USD 100 million.

Global Wealth Pyramid - adapted from Credit Suisse

Global Wealth Pyramid – adapted from Credit Suisse

The take-away from this depends somewhat on from which side of the political spectrum the data are viewed. Looking from the left it is a strident call to arms to “take from the rich and give to the poor”. But this, I think, is just a little too simplistic. How net worth is distributed generally reflects not only wealth concentration but also wealth creation. Merely redistributing existing wealth will actually reduce the total amount of wealth that is created. The bulk of wealth creation thus lies at the initiative of those having the most wealth. It is this coupling between having wealth and wealth creation opportunities which needs to be addressed. It is wealth creation opportunities for those at the lower reaches of the pyramid which is the real need. It is the cliche – but true – of giving a man a fish (wealth) or teaching him how to fish (or create wealth).

Just redistribution will not increase the world’s wealth creation and it is more likely that it will reduce most for those having the lowest net worth. And that would be entirely counterproductive.

However there is little denying that at the top of the pyramid, the concentration of net worth can be almost obscene. Just 123,800 individuals are each worth over $50 million and 44,900 of them are each worth over $100 million.

Top of the wealth pyramid from Credit Suisse

Top of the wealth pyramid from Credit Suisse

We are outsourcing our digital memories

October 7, 2015

Prior to about 1995, I held all  telephone numbers important to me in my head. Now, I can remember my own mobile number but not my wife’s. In fact there are very few mobile numbers I bother to keep in my memory at all. I rely entirely on my phone. But it must be that I have taken a decision in my subconscious not to clutter my memory with these numbers – since they are so easy to access on my device.

A new study suggests that we are damaging our long term memories by our dependence upon our digital devices. I am not convinced. I suspect they asked the wrong questions. They have not, I think, considered or sought the type of new long-term memories that are built up instead. The study is by Kaspersky Lab and therefore needs to be taken with a very large bushel of salt. It is I think rather narrow and a little trivial.

Kaspersky-Digital-Amnesia (pdf)

Connected devices enrich our lives but they have also given rise to the potentially risky phenomenon of Digital Amnesia. Many people underestimate just how exposed their externally-stored memories can be, rarely thinking about the need to protect them with IT security, such as anti-virus software. Kaspersky Lab is committed to helping people understand the risks their data could be exposed to, and empowering them to tackle those risks. 

Digital Amnesia

I cannot see that the volume of long term memories is affected. The content of the long term memories we unconsciously choose to hold changes.


An over-reliance on using computers and search engines is weakening people’s memories, according to a study.It showed many people use computers instead of memorising information. Many adults who could still recall their phone numbers from childhood could not remember their current work number or numbers of family members.

Maria Wimber from the University of Birmingham said the trend of looking up information “prevents the build-up of long-term memories”. The study, examining the memory habits of 6,000 adults in the UK, France, Germany, Italy, Spain, Belgium, the Netherlands and Luxembourg, found more than a third would turn first to computers to recall information.

The UK had the highest level, with more than half “searching online for the answer first”. But the survey suggests relying on a computer in this way has a long-term impact on the development of memories, because such push-button information can often be immediately forgotten.

“Our brain appears to strengthen a memory each time we recall it, and at the same time forget irrelevant memories that are distracting us,” said Dr Wimber. …….

….. Among adults surveyed in the UK, 45% could recall their home phone number from the age of 10, while 29% could remember their own children’s phone numbers and 43% could remember their work number.

The ability to remember a partner’s number was lower in the UK than anywhere else in the European survey. There were 51% in the UK who knew their partner’s phone number, compared with almost 80% in Italy.

The study from Kaspersky Lab, a cybersecurity firm, says that people have become accustomed to using computer devices as an “extension” of their own brain.

It describes the rise of what it calls “digital amnesia”, in which people are ready to forget important information in the belief that it can be immediately retrieved from a digital device.

The study highlights how, as well as storing factual information, there is a trend to keep personal memories in digital form. Photographs of important moments might only exist on a smartphone, with the risk of their loss if the device is lost or stolen.

My own observations about myself are that I no longer bother memorising digital information which is easily accessed on devices, but I find (or I think I find) I can remember qualitative information (colours, pictures, past conversations, smells, ideas) in much greater detail than I used to.


When the population implosion threatens …..

October 6, 2015

By 2050, virtually all parts of the world, except some parts of Africa, will be witnessing a decline in population. Until then, migrations of peoples will serve to maintain the ratio of productive to “non-productive” people. (By then, the non-productive will probably be defined as those under 20 and those over about 70). But going forward, migration from declining source populations will no longer be able to provide even a temporary solution.

The fundamental decline in fertility rates will be a consequence of the widespread acceptance of women’s rights, the increasing liberation of women in Asia and Africa, and the ready availability of contraception and abortion. Increasing longevity will mitigate population decline to some extent but will exacerbate the declining ratio of productive/unproductive population. The threat will be of an accelerating decline. Alarmism will no longer be about “population explosions” but about the coming “population implosion”. The decline of rural populations will threaten food supplies, though mitigated by increasing automations and genetically modified crops. Growth will be limited, not so much by capital or raw materials, but by the availability of personnel. In developed countries, tax revenues will stagnate or begin to decline.

Sustainable communities, somewhat smaller than the current nation states, will start husbanding their people resources and their (local) tax revenues. “National” programs – health, education and even infrastructure – will increasingly shift to be “local”. The immigration issue of the day will be about preventing any influx of non-productive peoples. Incentives will be offered to attract productive businesses and people. Some isolated areas already below critical populations or population-mixes, which survive only on subsidies, will be “abandoned” financially. That will, in turn, shift people to areas which exceed the critical mass for the provision of welfare and other services. Successful communities will be those which attract productive people and provision of local jobs, education and health services will be the competitive factors. Education services provided will be linked to performance. Health services to be provided for any individual will be judged by the cost of the service against the benefit of the individual’s remaining productive life. Health services for the elderly will gradually be removed from welfare services and will all have to be purchased. Assisted deaths for the elderly will be as readily available as abortions.

The globalisation paradigm which would have been in effect for a century will shift to a new “localisation” meme.

As power to raise revenues is devolved increasingly to smaller, sustainable communities, “national” defense budgets will be slashed. Expansionism will no longer make any sense. Conflicts may still occur over resources (water, rare metals, rare earths ….) but will decline as population declines. Virtually every local government will then be engaged in trying to increase fertility rates. Tax breaks and extra payments will be available for every child. “Political correctness” will shift to the having of many children. But all these measures will not have much effect in increasing fertility rates.

Surrogacy will pay very well until the artificial womb is developed. That will be the game changer. Then community governments will move to control artificial fertilisation from donor sperm and eggs. The birth of children will move into the “public” sphere. Genetic scanning will be increasingly used prior to allowing a foetus to develop in an artificial womb. Humans will then only be required to supply their sperm or their eggs. They will no longer be required to perform as parents. Mating will no longer be an activity connected to the production of children. The children will be brought up in community creches. The fertility rate will become a completely controllable parameter. Eventually, so will the genetic make up of the children being produced. Some will have their genes tailored to meet some specific community need. Others will be mass-produced when “drones” are required in large numbers. The most powerful committee in any community will then be that which chooses which egg will be fertilised by which sperm.

It is population decline which will lead inevitably and remorselessly to the Brave New World.

Extreme poverty at all time global low while population is at an all time high

October 5, 2015

Being poor is a relative term. To be in “extreme poverty” is an absolute measure. To be “poor” does not require being in “poverty”. The “poor” relative to the “rich” will always be with us and are just as necessary as the “rich”. In fact, that distinction between rich and poor is necessary as long as humans are to be considered individuals with aspirations and not just clones. Income inequality is often equated – especially by those with communistic leanings – with poverty, but this is simply wrong. Income inequality may be an indicator of the ratio of “poor” to “rich” but to be “poor” need have nothing to do with being in “poverty”. “Poverty” is not necessary and the goal is to eliminate extreme poverty by 2030.

The 2015 World Bank Research Note on Extreme Poverty is now out. In 2015, for the first time ever, and in spite of the global population being at an all time high, the number of people in extreme poverty has reduced to less than 10%. In spite of the population increase, the total number in extreme poverty is at the lowest in 25 years. But that is still 700 million (900 million in 2012) in extreme poverty. Sub-Saharan Africa and S Asia are where the misery is concentrated.

Extreme Poverty - World Bank 2015

Extreme Poverty – World Bank 2015

Press Release:

The number of people living in extreme poverty around the world is likely to fall to under 10 percent of the global population in 2015, according to World Bank projections released today, giving fresh evidence that a quarter-century-long sustained reduction in poverty is moving the world closer to the historic goal of ending poverty by 2030.

The Bank uses an updated international poverty line of US $1.90 a day, which incorporates new information on differences in the cost of living across countries (the PPP exchange rates). The new line preserves the real purchasing power of the previous line (of $1.25 a day in 2005 prices) in the world’s poorest countries. Using this new line (as well as new country-level data on living standards), the World Bank projects that global poverty will have fallen from 902 million people or 12.8 per cent of the global population in 2012 to 702 million people, or 9.6 per cent of the global population, this year.

Extreme Poverty contributions - World Bank 2015

Extreme Poverty contributions – World Bank 2015

Indian monsoon season ends – deficient but no disaster

October 2, 2015

The official 4 month monsoon season (June – September) has ended and the cumulative rainfall falls into the “average” category (from -20% to + 20% of the long-term average), but only just, at -14% for the country as a whole. Rainfall was high in June, quite low in July and August and recovered somewhat in September. Good rainfall continues in October as the monsoon withdraws. Much of this is in deficient regions of Central and South India which will further mitigate the deficiency numbers.

There is some relief that in spite of 2015 being an El Niño year, the overall picture is one of some deficiency but no disaster. Locally there have been wide variations, even between contiguous regions:

  • Jammu & Kashmir recorded 15% excess rains, while next door, Himachal Pradesh was 23% deficient.
  • West Rajasthan recorded 46% excess, while East Rajasthan ended 10% down.
  • Telangana remained rain deficit to the tune of 20% and Andhra Pradesh recorded 10% excess.
  • West Madhya Pradesh recorded normal rains and was at +4% while East Madhya Pradesh was 29% in deficit.
  • West Bengal recorded 8% excess while adjacent Jharkhand was 14% in deficit.
  • Both Marathwada (-40%) and Vidarbha (-11%) were in rain deficit but the variation was large.

From a growth perspective, the 2015 monsoon will be a neutral event (i.e. it will make its “normal” contribution to the economic cycle). The impact will not provide any additional impetus to growth but will not hinder growth either.

As the Reserve Bank has now reduced its reference interest rates by 50 basis points and most of the banks now seem to be passing on about 40 basis point reductions to their lending rates, the cost of lending is likely – for this year – to be have a much greater impact on the economy than the effects of the monsoon. But at least the monsoon will now play its “normal” part in feeding the economic cycle. The monsoon deficiency should not contribute too much to inflation in food prices.

The immediate impact of a good monsoon is increased employment in rural areas (September – October) followed by increased rural consumption of consumer goods (October – December) and even sales of two-wheelers and tractors (November – March). Pesticide sales increase during the monsoon and again in the following pre-monsoon period. Fertiliser sales pick-up strongly in the pre-monsoon period following a good monsoon. The December – June period following a good monsoon is when rural “investments” are mainly made (machinery, equipment, construction, consumer goods). The indirect effects of agriculture on the services and manufacturing sectors are critical. However, even more important is the effect of a good monsoon on food price stability and general economic sentiment.

But I foresee no booms or fireworks in Indian economic activity over the next 6 months. That requires – among other things – the “feel-good” factor that a bumper monsoon brings. Still, 12 months of steady, sustainable growth is probably more valuable than some short-lived volatile balloon of activity.

After the China circus, steady rather than spectacular will be a welcome relief.

Monsoon 2015 - Deficient but no disaster Source IMD

Monsoon 2015 – Deficient but no disaster Source IMD

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