Poorer Countries Continue to Improve

With all that is going wrong in the world, it is crucial to keep in mind the bigger picture: although there is far too much needless misery and suffering, glimmers of progress and hope persistent nonetheless — even in the most beleaguered regions in the world.

As the above date from the the United Nations Development Programme (UNDP) shows, literally every part of the world has seen a marked improvement in their “Human Development Index” (HDI), a metric devised in the 1990s in attempt to better capture a country’s standard of living (in a way that GDP cannot). 

The Economist provides a great breakdown of how it works:

The index combines four simple measures: life-expectancy at birth; gross national income per person; average years of education; and expected years of school. First, each variable is normalised on a scale of zero to one; next, the two education variables are averaged; and finally, the index is calculated as the geometric mean of its three components. This ensures that a 1% decline in the index for life-expectancy has the same impact as a decline of the same magnitude in education. By incorporating health and schooling, the HDI seeks to provide a more comprehensive measure of quality of life than the simply material prosperity measured by GDP.

Though far from perfect, HDI is a pretty good barometer for how well a society is doing. And from the looks of it, a lot more places are doing a lot better despite ongoing issues of inequality, climate change, corruption, and other barriers to optimal growth.

In 1990 a child born in sub-Saharan Africa could expect to live just 50 years. Today, assuming current mortality trends persist, newborns can expect to live for 61 years. As a result, the gap in life-expectancy between the world’s poorest region and the global average has narrowed by four years. Similar gains have been registered in educational outcomes and income, meaning that all 189 countries with HDI scores have improved their marks since 1990, by an average of 0.5% a year. Just seven countries have seen a reduction in their HDI score since 2010, often as a result of war or famine.

Encouragingly, the HDI data demonstrate that inequality of life outcomes is declining both across and within countries. As developing countries have closed the gap with their developed-country peers, the coefficient of variation—a measure of the spread of the data across countries—of the HDI has fallen by six percentage points since 1990. Because the “raw” HDI is based on nationwide averages, it can provide a misleading picture of overall living standards in highly unequal countries, where a handful of people enjoy long, wealthy lives and advanced schooling, but the masses do not. \

However, the UNDP also publishes an “inequality-adjusted” version of the HDI, which attempts to account for the distribution of health, education and prosperity. The gap between this metric and the unadjusted HDI was slightly smaller in 2017 than it was the year before, suggesting that well-being is being shared more broadly inside countries as well as between them.

While there is still a tremendous amount of work to be done, and these gains remain tenuous in the face of a future global recession, the march of progress across the world is a hopeful sign that more political will and resources can take us further along the moral arc of prosperity and well being for more humans.

For the full ranking of countries by HDI, click here.

Food Stamps Are an Investment in the Future

That, in essence, is the finding of one of the largest studies of its kind on what is officially known as the Supplemental Nutritional Assistance Program (SNAP). Since being nationally mandated in 1975, SNAP has remained the largest national anti-hunger program: last year along, more than 40 million poor working families, people with disabilities and seniors received assistance averaging to about $125 monthly; 70 percent live in households with children.

Whatever the moral case for supporting SNAP, there is certainly an economic one, as one of the largest studies of its kind recently proved.

From Bloomberg:

The economists focus on people born between 1956 and 1981, who were young children when the program was expanding, and who grew up in families with a parent with less than a high school education. They find that access to the program as a young child significantly improved economic outcomes and health status as an adult.

In particular, food stamp access as a child was associated with much lower risk of metabolic syndrome as an adult and, especially for women, higher levels of educational attainment and income along with lower participation on means-tested benefit programs. For example, food stamp access during childhood is linked to a 5 percentage point reduction in heart disease and an 18 percentage point increase in high school completion rates, compared to those who lacked access.

This evidence contradicts some critiques of food stamps, which misleadingly argue that it’s an inefficient and ineffective program.

The authors also highlight that access seems to matter most in utero and up until age 5. Gaining access to food stamps after age 5, by contrast, didn’t improve health outcomes as an adult, perhaps because the person had already been put on a particular health trajectory by that age.

As typical in such studies, there is a question of “correlation versus causation”, but the gradual rollout of SNAP allowed the researchers to account for this because “children living in otherwise similar families either did or didn’t receive benefits depending on whether their county voluntarily participated at the time. (The researchers show that county choice seems to be unrelated to other factors that may have substantially affected children living there.)”

The study also demonstrates the importance of taking a long-term view of these sorts of programs, especially when children are involved. Various other studies suggest that investing in the formative early years of one’s life pays huge dividends later; that is obviously lost on those who focus only during the year the benefit is received. 

What the World Thinks About Pressing Economic Issues

This past Friday, Buenos Aires, Argentina hosted the 13th summit of the “Group of Twenty” (G20), which consists of 19 of the world’s largest economies plus the European Union.

Purple: G20 members | Blue: EU members not individually part of the G20 
Pink: Countries invited to the 2010 summit

Collectively the G20 accounts for around 85% of global GDP, 75-80% of world trade, two-thirds of the world’s population, and about half the world’s land area. Hence it is one of the most influential and important gatherings in the world, even though it is not a formal institution like NATO or the United Nations.

Pew recently conducted polls around the world to gauge global public opinion about some of the pressing issues on the agenda at this year’s summit.

For example, most nations are skeptical of the current economic situation, except for the Netherlands, Sweden, Germany, the Philippines and a few others. A fair number of people–notably Brazilians, Greeks, and Tunisians–had more hope for their economic future. The U.S. and Canada were interestingly pretty happy about the current state of their economies, but deeply pessimistic about their children’s future.

Similarly, most people around the world approve of trading with other countries and yet are nonetheless pessimistic about the benefits for jobs and wages. And with the notable exceptions of Poland, Japan, and Hungary, the majority of people did not think automation would make their economies efficient; moreover, no country had a majority of people agree that automation would create newer and better jobs.


Finally, the leaders of the U.S., Russia, and China — currently the top world powers — are deeply unpopular, whereas Germany’s Merkel and France’s Macron had the most global confidence (and only Merkel got a majority of confidence, albeit at 52%).

Read more from the source here

Over 70% of Greenhouse Gas Emissions Comes from 100 Companies

While we should all do our part to reduce pollution and greenhouse gas emissions, a recent study reported in the Guardian finds that such efforts will frankly be worthless so long as a handful of powerful private entities account for the vast majority of climate change-causing pollution.

The Carbon Majors Report (pdf) “pinpoints how a relatively small set of fossil fuel producers may hold the key to systemic change on carbon emissions,” says Pedro Faria, technical director at environmental non-profit CDP, which published the report in collaboration with the Climate Accountability Institute.

Traditionally, large scale greenhouse gas emissions data is collected at a national level but this report focuses on fossil fuel producers. Compiled from a database of publicly available emissions figures, it is intended as the first in a series of publications to highlight the role companies and their investors could play in tackling climate change.

The report found that more than half of global industrial emissions since 1988 – the year the Intergovernmental Panel on Climate Change was established – can be traced to just 25 corporate and state-owned entities. The scale of historical emissions associated with these fossil fuel producers is large enough to have contributed significantly to climate change, according to the report.

ExxonMobil, Shell, BP and Chevron are identified as among the highest emitting investor-owned companies since 1988. If fossil fuels continue to be extracted at the same rate over the next 28 years as they were between 1988 and 2017, says the report, global average temperatures would be on course to rise by 4C by the end of the century. This is likely to have catastrophic consequences including substantial species extinction and global food scarcity risks.

This puts addressing climate change square in the hands of executives, investors, and shareholders–the narrow class of individuals less likely to be impacted by climate change, best equipped to adapt to it, and most likely to be wrapped up in short-term gains ahead of long-term consequences.

Investors should move out of fossil fuels, says Michael Brune, executive director of US environmental organisation the Sierra Club. “Not only is it morally risky, it’s economically risky. The world is moving away from fossil fuels towards clean energy and is doing so at an accelerated pace. Those left holding investments in fossil fuel companies will find their investments becoming more and more risky over time.”

There is a “growing wave of companies that are acting in the opposite manner to the companies in this report,” says Brune. Nearly 100 companies including Apple, Facebook, Google and Ikea have committed to 100% renewable power under the RE100 initiativeVolvo recently announced that all its cars would be electric or hybrid from 2019.

And oil and gas companies are also embarking on green investments. Shell set up a renewables arm in 2015 with a $1.7bn investment attached and a spokesperson for Chevron says it’s “committed to managing its [greenhouse gas] emissions” and is investing in two of the world’s largest carbon dioxide injection projects to capture and store carbon. A BP spokesperson says its “determined to be part of the solution” for climate change and is “investing in renewables and low-carbon innovation.” And ExxonMobil, which has faced heavy criticism for its environmental record, has been exploring carbon capture and storage.

But for many the sums involved and pace of change are nowhere near enough. A research paper published last year by Paul Stevens, an academic at think tank Chatham House, said international oil companies were no longer fit for purpose and warned these multinationals that they faced a “nasty, brutish and short” end within the next 10 years if they did not completely change their business models.

It is also worth pointing out that while a large number of the corporate culprits are based in the West, overall they span most of the world: rich and poor, developed and developing, democratic and autocratic:

screenshot-www.theguardian.com-2018.10.23-10-19-00

Most of these companies are not household names, which reflects the low-key nature of the global energy industry: many of us in the developed world take for granted the seemingly endless supply of electricity, gasoline, and other energy supplies. The extraction, production, refinement, and delivery of these fossil fuels occurs unseen, involving a complex network of companies dispersed around the globe.

Thus, as with so many other solutions to climate change, there will need to be a comprehensive, globally coordinated effort by the international community to reign in on pollution and environmental degradation, in cooperation with–or even in opposition to–some of the most powerful corporate interests in the world.

Is there any possibility that the global masses can apply pressure their governments (and to a lesser degree their businesses) to take action? Are these individuals and institutions too wealthy and far removed from the public to be influenced and accountable to either governments or their constituents? What are your thoughts?

The Three Richest Americans Hold More Wealth Than Bottom 50 Percent

Using data from Forbes’ annual ranking of the 400 richest Americans, the Institute for Policy Studies, a left-leaning D.C. think tank, published a report last fall finding incredible wealth disparities in the United States. As Forbes reported:

Most dramatically, it found that the country’s three richest individuals—Bill Gates, Warren Buffett and Jeff Bezos—collectively hold more wealth than the bottom 50% of the domestic population, “a total of 160 million people or 63 million American households.” Roughly a fifth of Americans “have zero or negative net worth,” the authors wrote.

Bezos, Gates and Buffett held a combined fortune of $248.5 billion in mid-September, when numbers were locked in for the 2017 Forbes 400list. Since then that figure has risen to an estimated $263 billion, thanks largely to Bezos, whose worth has jumped more than $13 billion as the result of a surge in Amazon’s share price.

“If left unchecked, wealth will continue to accumulate into fewer and fewer hands, a trend we’ve been witnessing for decades,” wrote Josh Hoxie, one of the study’s co-authors.

Continue reading

Photos: Chinese-American Rivalry in Asia

As China grows more powerful, it is challenging America’s decades-long dominance of Southeast Asia. As New York Times reported, most countries are either leaning towards China or playing both sides to their advantage.

U.S. v. China

Even staunch U.S. allies are increasingly orienting towards China, namely in terms of commercial ties: every Asian country now trades more with China than the U.S., often by a factor of two to one, an imbalance that will only widen as China’s economic growth outpaces that of America’s.

screenshot-www.nytimes.com-2018.10.16-16-11-27

Nevertheless, many of the 20 countries caught between the two powers do not want to choose sides, instead opting to pursue “strategies intended to draw maximum benefit from both powers, minimize risks of angering either and preserve their independence”.  This is far from the clean lines drawn between the Americans and Soviets in Cold War-era Europe.

 

The Cities and Countries with the Most Super Rich

According to a report from Bloomberg, Hong Kong surpassed New York City with the highest population of people worth at least $30 million:

The former British colony saw its number of ultra-wealthy increase 31 percent last year, to about 10,000, research firm Wealth-X found, higher than the nearly 9,000-strong population of the U.S.’s largest city. Tokyo came third, while Paris beat out London to take the European crown as Brexit weighed down the U.K. capital.

The number of ultra-rich worldwide rose 13 percent last year, according to Wealth-X, totaling about 256,000 people with combined assets of $31.5 trillion. Asia saw the fastest growth, driven by mainland China and Hong Kong, the study’s authors wrote. Reflecting the region’s rise, its share of the global population of people with at least $30 million rose to just over one-fourth, up from around 18 percent a decade ago.

[…]

Women accounted for about 35,000 of the ultra-rich last year, a record-high share of nearly 14 percent, the study found.

While Hong Kong topped the city rankings, nowhere in mainland China made the top 10, despite the country being third in the list of nations. That’s because China’s wealthy are widely dispersed, illustrated by the fact it was home to 26 of the 30 fastest-growing cities for the ultra-rich.

screenshot-www.bloomberg.com-2018.09.20-16-16-47

Although the world’s wealthiest tend to concentrate in major cities — since they are centers of global trade, politics, and commerce, as well as leisure and recreation — they are dispersed enough to change the results when one looks at a national level: for example, countries like Canada and Germany are home to some of the world’s largest communities of millionaires, even though none of their cities are in the top ten:

screenshot-www.bloomberg.com-2018.09.20-16-15-56

 

Similarly, no city in mainland China made the top ten, despite the country being third in the list of nations. That is because China’s wealthy are widely dispersed throughout the numerous economic and metropolitan hubs across the country — in fact, all but four of the 30 fastest-growing cities for the ultra-rich are Chinese.

Moreover, Bloomberg notes that the sheer scale of wealth is being pushed ever upward: though billionaires are of course still rare, they are less so than they used to be; the same goes for millionaires of all levels.

screenshot-www.bloomberg.com-2018.09.20-16-16-25

One should ask how it is that the global economy can produce such unfathomable concentrations of wealth into a sliver of individuals and communities, when literally half the world remains mired in poverty (and most of the remaining half teetering). Around the same time that Hong Kong climbed to the top spot as home to the ultra-wealthy denizens, its poverty rate has increased to one out of five residents.

As Rich as Croesus

The Iron Age Kingdom of Lydia, located in what is today western Turkey, is hardly a household name, especially compared to its neighboring Greek and Persian contemporaries. Yet as far as we know, the Lydians were the first and only people to invent money as we know it: a standard, universally-accepted medium of exchange whose value is backed by a recognized authority.

Invented sometime in the seventh or sixth centuries B.C.E., Lydian coins were of high quality and stamped with the sigil or image of their ruler, allowing even the illiterate to recognize them as legitimate legal tender. They facilitated commerce between strangers by allowing them to make transactions without needing to barter goods or weigh some commodity like gold. Coins also made it far easier to travel long distances to buy things, rather than lug around cattle, gold, wheat, or some other valuable commodity. Continue reading

The Marvels of Globalization

Globalization is something. The laptop where I am typing this is Chinese (Lenovo), and the antivirus software I use to protect it is Russian (Kaspersky). The world wide web I am using was invented by a Briton (Tim Berners-Lee) and first tested in Swiss-based lab operated by a consortium of 22 mostly-European countries (CERN). My browser of choice, Chrome, was developed by a firm co-founded by a Russian Jew (Google). The messaging system I use most was invented by Swedes, Danes, and Estonians (Skype). The gas station I use most is a British-Dutch conglomerate (Royal Dutch Shell). Continue reading