EIU Democracy Index

http://bit.ly/rcd9of

An interesting index for your perusal.

Greek Dominos

With a deficit of 10.5% and debt to gdp ratio of 150% Greece isn’t looking at all good right now. By the end of the month we will know how the situation will unravel. Merkel is urging everybody to stay calm and, for now, the markets have. But what would happen if Greece defaulted?

Banks throughout the world would face losses on Greek bonds – depending on their exposure. French banks appear to be particularly exposed; having value wiped away by the fall in bond prices this far.

The most likely thing to happen next would be a recapitalisation of international banks financed domestically leading to an increase in sovereign debt – the source of all this worry in the first place.

So where does it end? In this economists opinion, whilst it would be unlikely that countries such as France and Germany would default, these countries could face further austerity as a result of increased sovereign debt due to restructuring. It has been a sign of the times that banks are protected at the expense of the taxpayer (although i’m not saying it is a zero-sum game). This looks set to continue. Banks will find it hard to lend, net Government spending will diminish, consumption will abate and we may well see another slip into recession in a host of high income countries.

Some Maps of Relative Fuel Consumption Intensity

For your viewing pleasure: a plethora of screenshots taken from me fiddling with fuel consumption and gdp statistics. It took a while but I think its a very clear way to present the data.

In order they show:

Hydroelectric, Natural Gas, Oil, Renewables and Total Fuel Consumption over GDP for the year 2010.

Remember – the colours are not comparable between Choropleth Maps only between countries on a Single Map. I.e A black coloured country on the Renewables map does NOT equal black on the oil map.

Philippe Legrain on Immigration…

“When immigrants are working, they are stealing our jobs; when they are out of work, they are scrounging off the state. When they are poor, they are driving standards down; when they are rich, they are driving prices up. Critics fret when immigrants stick together and fret when they spread out. Immigrants cannot win: they are damned if they do and damned if they don’t. Perhaps the real problem is in critics’ heads.”

Worth pondering…take the time to read the full debate below and inform (or – I fear – reinforce) your opinions.

Find the original debate here:

http://www.economist.com/debate/days/view/732

Nationalism: Synthetic Division

Despite my father’s insistence that I should be proud of my country (Great Britain) and those that stood before me; I cannot help but feel that my position in the world is effectively random. Whilst there is certainly something to be said for an appreciation of one’s land and respect for one’s elders – particularly those that fought and died for the freedom’s we enjoy today. I do not feel alligence to a particular sovereign state or “imagined political community” as Benedict Anderson puts it. Rather I feel alligence to men and women.

Albeit equally intangible, as I have never met many of them, I feel that the distinction is integral as it does not allow my views to be distorted by considering the people of my country as any better or any worse than the people of another. I am very wary of the dangers of nationalism. Particularly in a world so fearful of a particular breed of Islamic Extremists that we now assume, prior to any evidence, that all terrorist activity must necessarily be Al-Queda related. Scary huh?

Why I am Not A Nationalist

Dry China: How bullish predictions could be distracting from future food shortages

The success of China in recent years is old news: the continued rise of the BRICs, impressive as it may be, is a fervourously reported subject. China’s economy has tripled in output – in real terms – since 2001 and is predicted to grow at roughly 8.5% in 2011. China’s population, too, is increasingly rapidly despite the infamous imposition of the ‘One Child Policy’. The number of citizens of working age has increased by almost a third in the last decade. Whilst the rapid growth of both output and population has put an expected strain on resources; China has coped well so far in increasing GDP per capita. (Despite dubious environmental damage)

What is less well known (or at least less well reported) is that water in China is gradually running out of water. Despite consuming only 15% of the water consumed by the average US-citizen and a third of the world average; China has seen repeated over-extraction in the north leading to depletion of roughly 10bn litres a year. This can only get worse if left unchanged.  The consequences so far have been grave problems with subsiding land in 50 Chinese cities and, in years of poor rain, the Yellow River does not reach the sea. Heavy pollution levels as a result of China’s rapid industrial expansion have led to hundreds of thousands being shut off from clean water. Indeed, 40% of China’s water is deemed to be of low-grade.

As 70% of China’s water is used in agriculture this situation is particularly pertinent. In the future the low levels of water could have a dangerous impact on China’s food supplies. A commisioned Inter-Ministerial study has found that production of wheat and maize could fall by 37% in the worst case scenario. In order for foodstocks to remain healthy in a country which insists on attempting to retain grain self-sufficiency there needs to be drastic changes. The largest obstacle is simple geography. Whilst 80% of China’s water is situated in the south of the country, 80% of China’s bulging population live in the east. Thus a project set to cost more than the Three Gorges Dam has been set in motion. It’s name is simply the South-North Water Diversion project (SNWD). In practise there is nothing simple about it.

Whilst it is expected to be completed by 2014 the system, which taps into the Yangtze river to deliver water to the north; stretches 474km, runs through 4 cities and 18 counties. It is one of the worlds true mega-projects. Its scale is only matched but the level of controversy surrounding it. Engineering complications, water wastage, pollution, prohibitive resulting water-prices, drying of the Yangtze river and resulting complications with water supplies in Bangladash are all valid reasons to critize the project. However in typical Chinese Communist Party fashion the project will almost certainly be finished – not least due to its urgency. Other plans to maintain food levels all involve accepting the loss of wheat production – something the Chinese government are keen to avoid. The atrocity that is the EU common agricultural policy and American tariffs on agricultural goods mean that western governments would be regarded as hipocrits if they suggested otherwise.

The Ming Dynasty fell in 1644 and a plethora of other Chinese dynasties collapsed soonafter all as a result of food complications and revolts. Nobody has forgotten the starvation that resulted as part of the ‘Great Leap Forward’ either. Rapidly rising food prices or shortages could create tensions. As a result; and given that China is experiencig rising inequality, the Chinese authorities would be wise to keep water supplies as a high priority issue in the next few years.

Greetings…

… and welcome to Economicy. If I’m honest: I was impressed that I managed to get this domain name at first. Upon reflection it has become apparant that it is because it is awful. I can only assure you that content will (edit: might) be less so. Here’s to aiming high!