The Great Debate UK
It seems barely a week goes by without another shock report about the ever-widening gap between those at the top of the earnings distribution and the rest of us. The facts are by now well-established. Throughout the Western world, but most noticeably in Britain and America, the earnings of the top one or two percent are accelerating into the stratosphere, leaving the middle class a long way behind, and the working class completely out of sight. How can one explain this global phenomenon?
Academic economics seems to be taking a surprisingly long time to reach a definitive answer, but I suspect there will turn out to be two long term trends at work here.
First, globalisation has doubled or tripled the supply of unskilled and semi-skilled labour. As long as China remained locked in Maoist isolation and the Indian economy had to carry the full burden of the Licence Raj, their respective workforces were shut off from the global labour market. The fact that products could theoretically be manufactured far cheaper in those countries was unimportant, because in practice Western firms could never take advantage of their rock-bottom labour costs.
Now that they have opened up and it is possible to outsource manufacturing to China and the paperwork to India, there is less and less left for our workers and middle-managers to do – unless, of course, they are willing to work for more competitive (i.e. lower) wages.
By Laurance Copeland
After one year, the progress report on the Coalition reads “Moving in the right direction, but with a lot more to do”.
Nonetheless, it is a prisoner of its commitment at the outset to leave two departmental budgets untouched: the NHS and international aid. It is not simply the amounts of money involved (colossal in the case of the NHS, relatively small for aid). It is also the signal it sends that there is such a status as sacrosanct, which immediately begs the question from policemen, firemen, teachers, the legal system, the armed forces: why isn’t our budget sacrosanct too?
By Cari Guittard
The opinions expressed are her own.
A NEW NARRATIVE FOR AFRICA EMERGING
Africa’s abundance -- from diamonds and coffee to cacao, rare minerals, natural gas and oil -- is well known, though laced with images of corruption, genocide, and famine. Fifty-four nations comprise the African continent and yet how many of us can name more than a dozen of those countries and begin to differentiate their strengths commercially?
Many around the world see Africa as a monolith and through the prism of media and film which paint a decidedly negative picture. Google images of Rwanda show stark photos of starving orphaned children, mass slaughter and extreme deprivation. Which is why at a recent meeting with senior staff at the U.S. African Development Foundation (USADF) I was shocked to hear them extol the virtues of Rwanda. Rwanda was being held up as an example of an African nation leading the way in encouraging entrepreneurship and forging unique global partnerships. They even encouraged me to think of Rwanda as a travel and tourism destination. The “renaissance” in Rwanda is being seen across the continent and clearly a new narrative for Africa is beginning to emerge.
-Laurence Copeland is a professor of finance at Cardiff University Business School and a co-author of “Verdict on the Crash” published by the Institute of Economic Affairs. The opinions expressed are his own.-
China is an emerging imperial power. We can be sure of that fact, even though the Chinese Government may well have been absolutely genuine in repeating that it feels no urge for empire-building or for intervention in the affairs of other countries. It is simply the case that, if trade follows the flag, the opposite is also often true.
Some eye-catching numbers from Standard Bank out today on the influence of BRICs countries -- Brazil, Russia, India and China -- on Africa.
First off, the bank says the global recession and its recovery have been nourishing these so-called South-South ties. But it is all now ready to take off. The bank estimates:
from Chrystia Freeland:
Get ready for the next wave of globalization. The emergence of the emerging markets is old news, of course: after all, Tom Friedman discovered that the world was flat back in 2005. But even as much of the developed world is struggling with weak consumer demand and stubbornly high levels of unemployment, the emerging market countries are writing a new chapter in the story of the global economy.
We are accustomed to thinking of our economic relationship with the countries Fareed Zakaria describes as “the rest” as a two-way exchange between west and east or north and south: western companies setting up call centers in India or manufacturing their goods in China, for instance; and, more recently, savings-rich emerging market economies, especially China, investing in US treasuries, or Russian oligarchs buying London mansions.
from Africa News blog:
I’m blogging from the African Union’s annual summit in Addis Ababa and can see the Somali delegation from where I’m sitting. They’re mingling right now, cups of coffee and croissants in hand, pressing the flesh and smiling and joking with leaders and ministers from all over the continent and beyond. Delegates are responding warmly to the men who represent a government hemmed into only a few streets of the capital Mogadishu as they fight an increasingly vicious Islamist rebellion.
But you get the sense the other delegates are responding so warmly to compensate for something: The fact that the Somalis are here looking for help and nobody is really willing to stick their neck out and give it to them.
from Reuters Soccer Blog:
The bloody attack on Togo's team bus in Angola is a huge tragedy for African football and like it or not, has cast a shadow over the World Cup in South Africa in five months time -- the biggest sports event ever staged on the continent.
It is highly debatable whether the attack, which killed two members of the Togolese delegation as they arrived for the African Nations Cup and forced the squad's evacuation on Sunday, really increases the risk to teams and spectators in South Africa.
Senegal has a reputation for harmony between its Muslim majority (about 90%) and Christian minority (about 6%). President Abdoulaye Wade ranks as a Muslim champion of dialogue with Christians and even with Jews. So it came as a surprise over the holiday period that the 83-year-old leader provoked separate protests by imams and Catholics, including the country's cardinal. Even stranger, the dispute was sparked by a huge Stalinist-style statue that North Korean workers are constructing on a hill overlooking the capital Dakar.
from The Great Debate:
The world is witnessing a shift in the balance of power, from the West to the East. This shift will take place over decades, and the winners will be:
- Those economies that have financial clout, such as China
- Those economies that have natural resources, whether it be energy, commodities or water, and will include countries, some in the Middle East, some across Africa, Brazil, Australia, Canada and others in temperate climates across, for instance, northern Europe
- And the third set of winners will be countries that have the ability to adapt and change. Even though we are cautious about growth prospects in the U.S. and UK in the coming years, both of these have the ability to adapt and change.