Long Yongtu, the diplomat who negotiated China?s entry into the World Trade Organisation, has urged western governments to stop politicising trade and start telling their voters the truth about globalisation. He said that some politicians in Europe and North America had been blaming China for problems in their own economies that they had failed to tackle themselves. ?There are many misconceptions about globalisation in Europe and North America,? he said. ?Governments should not deliberately politicise trade and economic matters.? China and other developing nations in Asia did not like to be a scapegoat, he said on Saturday at the World Deauville Conference in France, which is designed to strengthen relations between Asia and Europe. ?We have to have more public education to understand that globalisation is unavoidable.?To which I say -- it would be a hell of a lot easier not to politicize trade with China if the government didn't a) intervene on a continuous basis to keep the yuan undervalued; and b) try to create companies that are global competitors but happened to be state-owned. [You're saying that these things are a big deal?--ed. I'm much less troubled than most of my readers on China's state interventions -- it's their inefficient policies, not ours. However, to ask Western governments to keep politics and economics separate when the Chinese state can't seem to do the same thing is a bit rich.] UPDATE: Based on other FT stories, I'd have to conclude that this exhortation has had exactly zero impact on either the United States or the European Union.
In a show of strength that surprised even organizers, tens of thousand of immigrants poured into the Loop Friday, bringing their calls for immigration reform to the heart of the city's economic and political power. What started as a word-of-mouth campaign, then spread through the foreign language media, grabbed the attention of the entire city by midday, as a throng 2 miles long marched from Union Park on the Near West Side to Federal Plaza. Police estimated the crowd as large as 100,000, making it one of the biggest pro-immigrant rallies in U.S. history, according to national advocates. Observers said the turnout could galvanize both sides in the immigration debate, launching a grass-roots pro-immigrant movement while provoking a backlash among those who want stricter controls. The trigger for the rally was a controversial federal bill that would crack down on those who employ or help illegal immigrants. But the broader message--carried mostly by Mexicans, but also by a smattering of Poles, Irish and Chinese--was that immigrants are too integral and large a part of Chicago to be ignored.This was the part that reinded me of Fight Club:
As they transformed the Loop with their presence, immigrants made a powerful statement elsewhere by their absence. Without his immigrant employees, a Northwest Side body shop owner gave up and closed for the day. An Italian restaurant in Downers Grove relied on temps to cook and managers to bus tables. High school students walked out en masse.... Whole shifts of workers left their jobs to underscore the importance of immigrant workers. One server from an Italian restaurant came in his work tie and apron, draped with a U.S. flag. Construction workers, still wearing hardhats, came straight from their job sites. Clerks from the El Guero market in Aurora piled into the store's delivery van, riding on produce boxes. Alex Garcia and about 10 co-workers from a Joliet commercial sign company rode a Metra train to Chicago's Union Station, walked out to Union Park, and then retraced their steps as they marched back to the Loop. "Most people don't realize how much work we do, but it's part of their daily lives," he said. "We are putting up all the buildings and cooking all the food. Today, they'll understand."With Congress already set to enhance its ability to block foreign direct investment, I, for one, look forward to a reasoned, rational debate on immigration policy.
So why does the world feel so chaotic? Why is there a growing sense that, as Francis Fukuyama put it in a provocative essay in last Sunday's New York Times Magazine, "More democracy will mean more alienation, radicalization and -- yes, unfortunately -- terrorism"?.... A second explanation of the connectedness paradox comes from Charles M. McLean, who runs a trend-analysis company called Denver Research Group Inc. (I wrote a 2004 column called "Google With Judgment" that explained how his company samples thousands of online sources to assess where global opinion is heading.) I asked McLean last week if he could explain the latest explosion of rage in our connected world -- namely the violent Islamic reaction to Danish cartoon images of the prophet Muhammad. McLean argues that the Internet is a "rage enabler." By providing instant, persistent, real-time stimuli, the new technology takes anger to a higher level. "Rage needs to be fed or stimulated continually to build or maintain it," he explains. The Internet provides that instantaneous, persistent poke in the eye. What's more, it provides an environment in which enraged people can gather at cause-centered Web sites and make themselves even angrier. The technology, McLean notes, "eliminates the opportunity for filtering or rage-dissipating communications to intrude." I think McLean is right. And you don't have to travel to Cairo to see how the Internet fuels rage and poisons reasoned debate. Just take a tour of the American blogosphere.Wait a minute -- I thought blogs were dead. How can they be passe and a conduit for rage? Huh? HUH??!! What the f@#$ does Ignatius know about blogs???!!! He's just a card-carrying member of the ELITE MAINSTREAM MEDIA!! ATTICA!!! ATTICA!!!!! OK, got that out of my system. I see the point that Ignatius and Fukuyama are trying to make -- that democratization creates real short-term problems by allowing radicals to take over governments. However, as I've said repeatedly, unless radical or revolutionary groups succeed at making the trains run on time, these groups (and blogs) become discredited and illegitimate over time. More generally:
[I]lliberal democracies are [not] necessarily better for world politics than slowly reforming authoritarian states are. But they are not necessarily worse, either. It's more a question of timing -- illiberal states that become democratic are more likely to have problems sooner rather than later, while authoritarian states that are slowly democratizing are likely to have problems later rather than sooner.Fukuyama and Ignatius are correct to raise the short-term problems that come with globalization and democratization -- but they're wrong not to stress the long-term advantages that come along as well.
At a registration drive in Pilsen, radio host Javier Salas tried to energize his countrymen about their historic opportunity to vote in Chicago for their homeland's next president. "Let's hear it!" he shouted into his microphone Thursday. "Viva Mexico!" But Salas later acknowledged that few are tuning in to that message: Three days before the registration deadline, it appears that the widely heralded debut of Mexican expatriate voting has fizzled. Since registration started in October, only about 15,500 Mexicans in the U.S. have registered to vote by mail in the July presidential election, of an estimated 4 million eligible voters. When the Mexican Congress approved the plan last year, organizers predicted a turnout of about 300,000 voters.... It's possible that many would-be voters are waiting until the last minute, election officials say, or that the final publicity push will create momentum. But for now, an experiment billed as a celebration of Mexican democracy has devolved into fingerpointing on both sides of the border, while casting doubts on the commitment of expatriates to their homeland. No one seems happy with the process, which required immigrants to register by paid certified mail and travel to Mexico to get electoral cards, effectively shutting out undocumented immigrants, who cannot easily go home. "This has all been a failure," grumbled activist Oscar Tellez of the Chicago-based United Network for Immigrant and Refugee Rights. "It is better to have no vote than this turnout." The hand-wringing has spread to Mexico, where lawmakers and pundits have questioned whether it is worth the government's expense to organize expatriate voting when so few signed up. Mexico's Federal Electoral Institute has spent $10 million on organizing the effort.The story blames cumbersome bureaucratic procedures for the low turnout, but I have to wonder -- how much of this is due to the fact that Mexicans coming to the United States don't really care about Mexican politics any more?
World Health Organisation (WHO) officials said that the 14 cases of avian flu recently discovered in Turkey were contracted through contact with infected animals and that there is absolutely no evidence that human-to-human transmission is occurring. The officials said there are different locations where the outbreaks have been confirmed, showing that it is poultry that is infected and that the deadly disease continued to be spread by infected birds and not through contamination between humans.Link via Glenn Reynolds, who has more here about US preparedness. I remain convinced that calling for the US to engage in crash preparedness can lead to more harm than good. Second, Elizabeth Rosenthal of the International Herald-Tribune reports on a very interesting development among some of the avian flu diagnoses -- they're not getting sick:
Two young brothers, aged 4 and 5, are being closely watched at the gleaming new Kecioren Hospital here, a police car at the entrance guarding a potential scientific treasure. Though both boys have tested positive for the H5N1 virus after contact with sick birds, neither has any symptoms of the frequently deadly disease. Doctors are unsure if - for the first time - they are seeing human bird flu in its earliest stages, or if they are discovering that infection with the H5N1 virus does not necessarily lead to illness. In any case, the unusual cluster of five cases detected in this capital city over the last three days is challenging some doctors' assumptions about bird flu and giving them new insights into how the virus spreads and causes disease. These cases have raised the possibility that human bird flu is not as deadly as has been thought, and that there may be many mild cases that have gone unreported.... A study released Tuesday in the Archives of Internal Medicine suggested that the H5N1 virus might cause a wide spectrum of disease, but that doctors in Asia might only detect the severest cases, the ones that went to the hospital. The four children in Ankara bolster that theoryHere's a link to the medical study abstract cited in the article. Their conclusion is a touch more neutral: "Our epidemiological data are consistent with transmission of mild, highly pathogenic avian influenza to humans and suggest that transmission could be more common than anticipated, though close contact seems required. Further microbiological studies are needed to validate these findings." Developing....
Fresh doubts were cast on the efficacy of Tamiflu as a treatment for bird flu on Wednesday night when one of the world?s most prestigious medical journals published new reports of resistance to the drug and deaths in patients in Vietnam. Menno de Jong and colleagues from the hospital for tropical diseases in Ho Chi Minh City recorded in the New England Journal of Medicine that four out of eight patients suffering from the H5N1 flu strain and treated with Tamiflu had died, including two who developed resistance. The reports increase suggested levels of resistance to nearly 10 per cent, or three out of the 31 known human cases of H5N1 treated with Tamiflu, which is marketed by Roche of Switzerland. The study raises new questions about the drug, which more than 50 governments have ordered in significant quantities in recent months to stockpile as a potential prophylactic and treatment in the case of a flu pandemic. An accompanying article in the journal reinforced calls for alternative approaches to treatment for a pandemic, including the stockpiling of the rival drug zanamivir, or Relenza.Here's a link to the actual NEJM paper for all of the M.D.s in the house. Dr. Anne Moscona has a commentary on the paper in the NEJM that's worth reading for non-doctors as well. One disturbing implication:
It is therefore worrisome that personal stockpiling of oseltamivir [Tamiflu] is likely to lead to the use of insufficient doses or inadequate courses of therapy. Shortages during a pandemic would inspire sharing of personal supplies, resulting in inadequate treatment. Such undertreatment is of particular concern in children ? the main source for the dissemination of influenza within the community, since they usually have higher viral loads than adults and excrete infectious virus for longer periods. The habit of stopping treatment prematurely when symptoms resolve (a well-established tendency with antibiotic therapy) could also lead to suboptimal treatment of influenza and promote the development of drug resistance.... Like any successful infectious agent, influenza virus will most likely evolve to evade any single drug. By targeting several points in the viral life cycle simultaneously with different drugs, we are more likely to discourage the emergence of viruses that can resist all drugs at once. But we currently rely solely on the neuraminidase inhibitors ? and solely on oseltamivir in many situations, such as in patients who cannot use inhaled medication or in patients infected with H5N1 virus, in whom systemic drug levels may be important. We must not abrogate the usefulness of these drugs by exposing circulating influenza to them in such a way as to facilitate the selection of resistant viruses. The study by de Jong et al. confirms that oseltamivir-resistant H5N1 virus is now a reality. The need to learn more about how and when resistance to the neuraminidase inhibitors develops, while we focus on the development of new antiviral drugs, is pressing. This frightening report should inspire us to devise pandemic strategies that do not favor the development of oseltamivir-resistant strains. Improper use of personal stockpiles of oseltamivir may promote resistance, thereby lessening the usefulness of our frontline defense against influenza, and should be strongly discouraged. (emphasis added)
Negotiators at the World Trade Organization have agreed on a sweeping trade deal dismantling barriers to trade in agriculture, manufacturing and services, India's trade minister said Sunday.... Delegates met overnight into Sunday and managed to overcome differences on a draft text. A final agreement on an exact date was expected later in the day, Indian Trade Minister Kamal Nath said. "We'll have a definite date," he said. "We have a deal." Nath said that ending agricultural export subsidies by 2013 would be acceptable to India, one of the leading developing nations and a key player in the rules-setting WTO.CNN reports that there's just one sticking point remaining:
Just one issue remained unresolved as World Trade Organization negotiators worked to reach a series of agreements to end agricultural, manufacturing and service trade barriers, according to a WTO official Sunday. The issue yet to be settled is the date for ending export subsidies, WTO press officer Emmanuelle Ganne told CNN.This sounds great... except I just talked to an EU official who's making the rounds in the press room and apparently that sticking point ain't going anywhere for a while. The sticking point remains ending agricultural export subsidies, and that the EU did put forward 2013 as the end date. The problem was that at the last minute Brazil pushed for an earlier date -- and it all fell apart. My hunch is that Humpty Dumpty has a decent chance of being put together again -- I think the EU is trying to tell the Brazilians and others it's either 2013 or no deal, and I suspect the Brazilians will take what they can get. One possible explanation for Nath's statement is that the Indians are trying to publicly signal to the Brazilians to accept the deal on the table. That said, the EU folks are exceedingly grumpy right now, so I wouldn't place a great deal of faith in that hunch. The hard deck for the Ministerial will be 5 AM Hong Kong time on Monday (4 PM Sunday EDT). That's when the Convention Center here has to prep for its next booking. A side note: one of the amusing features of being in the press room is seeing the pack mentalityof journalism in action. If a sufficient number of journalists are congregating around person A, then that group starts acting like a powerful magnet attracting the individual iron fillings of other journalists. Sometimes this makes a great deal of sense -- as when the EU tspokesman contradicts the India statement. Sometimes it makes no sense -- as when a great throng materialized to get their hands on... a schedule of the Ministerial's closing ceremonies. No one gives a flying fig about that. UPDATE: Both the AP and Reuters are reporting that there's a deal. The AP story has more details:
WTO negotiators reached a breakthrough on the most contentious issue of their six-day talks, agreeing that wealthy countries would eliminate farm export subsidies by 2013, according to a final draft of the accord. The deal paves the way for a broader agreement to cut trade barriers across various sectors. The breakthrough, coming after all-night negotiations, appeared to save the World Trade Organization meeting from an embarrassing collapse provided the final draft is approved by all 149 member nations and territories who are meeting later Sunday. The 2013 date was a key demand of the European Union, which held out against intense pressure from Brazil and other developing nations to phase out a significant proportion of its farm export subsidies by 2010. Developing nations say the government farm payments to promote exports undercuts the competitive advantage of poor farmers. The revised text also sets April 30, 2006, as a new deadline to work out formulas for cutting farm and industrial tariffs and subsidies - a key step toward forging a sweeping global free trade treaty by the end of next year.... The final draft also calls on wealthy nations to allow duty-free and quota-free privileges to at least 97 percent of products exported by the so-called least developed countries by 2008. In addition, the draft retained an earlier proposal that rich countries to eliminate all export subsidies on cotton in 2006.
I haven't keep current, thank goodness, on ag trade policy issues for more than 10 years. However, I suspect the lay of the land hasn't changed much: - Agricultural trade, as usual, is the biggest block to freer trade for agricultural products... but also non-agricultural products since the agricultural stalemate is holding up progress in non-agricultural talks:Given the current stalemate in talks -- and Peter Mandelson's intransigence on the EU taking the next step on ag subsidies -- it would seem that everything old is new again. However, there are two new wrinkles to current negotiations as opposed to prior rounds. First, small countries have figured out that they can use the need for consensus to threaten walkouts if they don't get something. For example, The Independent's Philip Thornton reports that the west African country of Benin is now a major player:- The EU is the biggest block to freer trade in ag products. - France is the biggest block to the EU accepting freer trade in ag products (and therefore non-ag products). - French agricultural organizations (especially FNSEA) are the biggest block to the government of France accepting freer ag trade. - French grain and meat producers are the biggest anti-free trade forces in the FNSEA.
The mood soured [at the WTO meetings] further when Benin indicated it was prepared to walk out of the talks over the failure of the US to meets its demand to end cotton subsidies. The last meeting two years ago in Cancun, Mexico, collapsed after a handful of countries walked out over cotton, depriving the WTO of the 100 per cent mandate it needs to strike a deal. Samuel Amehou, Benin's ambassador to the WTO, said African cotton producers have to compete against vast subsidies paid to US farmers. He said African states would "not accept any consensus that did not take the legitimate interests of the African farmers into account". He added: "The conference in Hong Kong is the place to hold people to their commitments." Ibrahim Malloum, the head of the African Cotton Producers Association, said he did not want a repeat of Cancun but added: "We came here to get concrete results, not to hear more proposals that will never be respected."Second, the "advanced" developing countries are getting just as good at being hypocrites on trade issues as the developed world. Consider these excerpts from Victor Mallet's FT story on Indian commerce minister Kamal Nath:
Kamal Nath, India?s commerce minister, said there would be no deal at the WTO talks in Hong Kong unless developed nations stop demanding concessions from poor countries in exchange for reducing agricultural and other protectionism that should not be there in the first place. In an interview with the Financial Times, Mr Nath said: ?What really upsets me is that developed countries are asking: ?If we stop doing what we shouldn?t be doing, what are you willing to pay us for it??? ?That approach is not one which is going to fly.? He added: ?We can?t have our economy shaken by subsidised exports of food, of grains, and at the same time we can?t have our economy shaken just as we are nurturing our manufacturing sector.?This sounds great -- but let's reconsider what Arvind Panagariyapointed out in Foreign Affairs about levels of protection in the developing and developed world.
Take sugar, for example: Sugar is highly protected in virtually all major developed and developing countries. It is subject to the following MFN rates, for example: 72 percent in South Africa, 60 percent in India and Japan, 56 percent in high-income developing Asia, 43 percent in the United States, 23 percent in Central America and the EU (and 74 percent in other European countries), 18 percent in China, and 17 percent in Argentina and Brazil. Thus, reforming tariffs on sugar will require virtually all WTO members to liberalize. The EU and the United States are major offenders, but others -- including developing countries -- are not without blame.... [T]he EU also needs compensation for its [agricultural] concessions. Recall that at Canc?n it dropped investment, competition policy, and government procurement from the Doha agenda. And because the EU does not have a comparative advantage in agriculture, it is naturally seeking cross-sector reciprocity in the form of liberalization in industrial products and services. The next step in breaking the U.S.-EU impasse is to put offers on industrial products and services on the table quickly. This would be a step forward: the elimination of tariff peaks in developed countries and liberalization by developing countries in trade in the industrial sector promise gains commensurate with agricultural liberalization. But for tariff reductions to really be beneficial, action will be required of both developed and developing countries. The gains to developing countries from lowering border barriers will be minuscule if reform is limited to developed countries.When Nath blames EU intransigence on agriculture for the talks not going anywhere, he's half right -- because at this point India deserves just as much of the blame.
International money managers are pouring funds at a record pace into the emerging markets of Latin America, Asia, Eastern Europe and Africa. Cash is gushing into mutual funds that specialize in emerging markets, and billions of dollars more are flowing into such countries from giant insurance companies and pension funds. Turkey's stock market is up more than 50 percent this year; Mexico's is up more than 30 percent; Egyptian stocks have more than doubled. And investors are snapping up bonds issued by emerging-market governments with remarkable gusto. Therein lie the makings of future disasters, in the view of many economists, market veterans and policymakers. Having pumped large sums into emerging markets at a time of low interest rates and high prices for the commodities that many developing countries produce, investors may well bolt when conditions deteriorate, with the sudden outflow of cash devastating economies and plunging governments into default. "I worry that there's this perfect storm coming for emerging markets," said Kristin J. Forbes, a Massachusetts Institute of Technology economics professor who served until early this year on President Bush's Council of Economic Advisers. To hear professional investors tell it, their current bullishness is based on the vastly more prudent economic policies that emerging-market nations have adopted. They cite the higher ratings bestowed by credit agencies such as Moody's and Standard & Poor's on countries that only a few years ago were plagued by defaults and currency devaluations. For example, government bonds issued by Mexico, Russia and Poland now qualify as "investment grade." "Those ratings have come from fundamental improvements in monetary and fiscal policy," said Dario Pedrajo, senior portfolio manager at Biscayne Americas Advisors. "Deficit spending has declined considerably in emerging-market countries." But skeptics contend that the main reason for the boom is the paltry level of interest rates in the United States, Europe and Japan, which prompts money managers flush with cash to scour the globe for investments providing at least slightly better returns. "There's just a huge amount of money sloshing around looking for a place to go," said Desmond Lachman, an economist at the American Enterprise Institute who, as a Wall Street research analyst, was one of the first to predict doom for Argentina well before its 2001 default. The problem, Lachman and others said, is that the influx of cash makes the financial strength of many countries look better than it really is -- and deludes government officials into believing that their policies must be near-perfect. "Even Turkeys Fly When the Winds Are Strong" is how Lachman put it in the title of an article he published recently in the magazine International Economy.Lachman's article is mostly about Latin America -- but this paragraph captures his jitters pretty well:
What is also surprising is how little attention Latin American investors seem to be paying to the gathering storm clouds over the global economy. How long do they think that global economic growth can be sustained at its recent pace with international oil prices likely to remain at their currently heady levels? Or how long do they think that international commodity prices will remain well bid in a world in which the Chinese economy slows under the weight of its deep macro-economic imbalances and in which Europe stagnates at a time of internal dissension and policy paralysis?There appears to be an enormous irony in the pattern of global investment flows right now. As Alan Greenspan recently noted, there has been a decline in the home bias of investment:
The decline in home bias is reflected in savers increasingly reaching across national borders to invest in foreign assets. The rise in U.S. productivity growth attracted much of those savings toward investments in the United States. The greater rates of productivity growth in the United States, compared with still-subdued rates abroad, have apparently engendered corresponding differences in risk-adjusted expected rates of return and hence in the demand for U.S.-based assets.... [S]tarting in the 1990s, home bias began to decline discernibly, the consequence of a dismantling of restrictions on capital flows and the advance of information and communication technologies that has effectively shrunk the time and distance that separate markets around the world. The vast improvements in these technologies have broadened investors' vision to the point that foreign investment appears less risky than it did in earlier times. Accordingly, the weighted correlation between national saving rates and domestic investment rates for countries representing four-fifths of world gross domestic product (GDP) declined from a coefficient of around 0.97 in 1992, where it had hovered since 1970, to an estimated low of 0.68 last year.The irony is that this home bias is affecting U.S. investors as well -- the Blustein article demonstrates that even as massive sums of savings from the developing world are making their way to the safe haven of the United States, institutional investors in this country are channeling more funds to the developng world. Does this make any sense? Most people would instinctively say no, and Blustein's implication in his article is that this crazy. My hunch is that it makes a fair amount of sense, because U.S. capital markets and financial institutions possess both a comparative and absolute advantage in coping with risk. This allows them to place large bets in developing country equity markets and earn a higher rate of return than those investing in the U.S. Then again, I don't have large sums of money invested in the Turkish stock market. Large, wealthy investors are heartily encouraged to post comments on how sanguine they feel about global equity markets.
Despite decreases in the rate of infection in certain countries, the overall number of people living with HIV has continued to increase in all regions of the world except the Caribbean. There were an additional five million new infections in 2005. The number of people living with HIV globally has reached its highest level with an estimated 40.3 million people, up from an estimated 37.5 million in 2003. More than three million people died of AIDS-related illnesses in 2005; of these, more than 500000 were children. According to the report, the steepest increases in HIV infections have occurred in Eastern Europe and Central Asia (25% increase to 1.6 million) and East Asia. But sub-Saharan Africa continues to be the most affected globally with 64% of new infections occurring here (over three million people). "We are encouraged by the gains that have been made in some countries and by the fact that sustained HIV prevention programmes have played a key part in bringing down infections. But the reality is that the AIDS epidemic continues to outstrip global and national efforts to contain it," said UNAIDS Executive Director Dr Peter Piot. "It is clear that a rapid increase in the scale and scope of HIV prevention programmes is urgently needed. We must move from small projects with short-term horizons to long-term, comprehensive strategies," he added. The report recognizes that access to HIV treatment has improved markedly over the past two years. More than one million people in low-and middle-income countries are now living longer and better lives because they are on antiretroviral treatment and an estimated 250 000 to 350 000 deaths were averted this year because of expanded access to HIV treatment.... Levels of knowledge of safe sex and HIV remain low in many countries - even in countries with high and growing prevalence. In 24 sub-Saharan countries (including Cameroon, C?te d'Ivoire, Kenya, Nigeria, Senegal and Uganda), two-thirds or more of young women (aged 15-24 years) lacked comprehensive knowledge of HIV transmission. According to a major survey carried out in the Philippines in 2003, more than 90% of respondents still believed that HIV could be transmitted by sharing a meal with an HIV-positive person.David Greising has a front-pager in the Chicago Tribune about the efforts of Abbott Laboratories to help Tanzania cope with the AIDS epidemic. The story highlights the fact that this is not simply about access to cheap medicines:
For five years now, Abbott has worked with Tanzania's government to alleviate the impact of AIDS. The experience has taught the company that the biggest obstacles are less obvious, and less readily overcome, than getting drugs to the villages. Hospital laboratories are archaic. Treatment wards are overrun with patients. There is little capacity to treat AIDS-related illnesses such as tuberculosis and malaria. Tanzania cannot adequately care for the orphans of AIDS victims. A social stigma against AIDS victims persists, which deters people from getting tested and treated for the disease. "People who simplify this into just drop-shipping gobs of drugs into remote areas of Africa, they're nuts," said Miles White, Abbott's chief executive, during a trip to Tanzania last month to review the progress of Abbott's work. "It's a lot more complicated than that.".... Dealing effectively in Africa also means avoiding pitfalls that have hit other donors. The United Nations-supported Global Fund to Fight AIDS, Tuberculosis and Malaria early this year cut off support for five programs in Uganda, citing widespread mismanagement. In Kenya, skepticism over the government's ability to deliver drugs has led church-backed organizations to form a private distribution company. Merck & Co. teamed with the Bill & Melinda Gates Foundation five years ago to launch a groundbreaking $100 million program to aid Botswana, where 37 percent of the adult male population has AIDS. But the donors have found it difficult to distribute money, in part because of bottlenecks and logistical difficulties.
India's Communist-backed government will on Thursday afternoon consider a sweeping liberalisation of foreign direct investment rules that would kick start a long-stalled programme of economic reforms. Kamal Nath, India's minister for commerce and industry, has proposed allowing 100 per cent foreign direct investment in a range of sectors, including airport construction, oil & gas infrastructure and cash & carry wholesale trading. The cabinet will also debate whether to allow FDI in the exploration and mining of coal, lignite and diamonds, and in the cultivation of important plantation crops such as coffee, tea and rubber.... India attracted $5.5bn in FDI in 2004-5, an increase of 18 per cent, but less than a tenth of the inflows into China. The government estimates that $150bn needs to be invested in upgrading the country's infrastructure over the next 10 years. If the new rules are approved, they will also allow foreign investment to come in by the so-called "automatic route", circumventing a cumbersome approvals process overseen by the Ministry of Finance's Foreign Investment Promotion Board.... The measures will disappoint the US and UK government, however, who have been lobbying aggressively for foreign direct investment thresholds to be allowed in the Indian retail sector and for the ownership ceiling to be raised in insurance. Mr Nath, in an interview on Tuesday, said he would be in a position to put a proposal to the cabinet permitting FDI in retail, allowing companies such as Wal-Mart and Tesco to enter into the $205bn Indian retail market, within three months.UPDATE: Tim Harford has an update suggesting that FDI liberalization on't be preceding as planned.
[A trailer park] is a temporary home for hundreds of LVI's workers, some of whom said they were in the United States illegally. They are commuting into New Orleans, swabbing the mold off walls, ripping the guts out of buildings, removing mountains of soggy debris. And they are stirring up resentment. Louisianians, from high-level public officials to low-wage workers, have begun to complain about the influx of outsiders they perceive as having come to profit off their pain.... Workers from all over have been pouring into Louisiana, some bused in by contracting companies, others simply turning up on their own in search of jobs. While nobody seems to know how many are here, there is plenty of work; the federal government estimates it will spend more than $450 million just to clean up hurricane debris. And as that work continues, Louisianians are casting unhappy eyes on everyone from the giant construction companies that won federal contracts to the small-town builders driving big pickup trucks with out-of-state license plates. Much of the overt hostility is focused on the army of Latino workers who appear to be doing much of the dirtiest cleanup work, often in the employ of those big companies, and often for less money that local workers might insist on.... Employers point out that they are not required to investigate the authenticity of employees' documents. And as for bringing in workers, some say they have no choice. "People in the area of impact are disjointed, disoriented," said Burton T. Fried, president of LVI Services. But in places where LVI will be working for a while, it tries to make a transition to local workers, Mr. Fried said. "The purpose is, forgetting morality, that we don't have to pay per diems, food service, transportation," he said.... Hard and unpleasant as cleanup work is, there are Louisianians willing to do it, said Barry Kaufman, the business manager of Construction and General Laborers' Local 689 in New Orleans. Mr. Kaufman has said he has at least 2,000 people willing to take cleanup jobs, although many of them - and the local's hiring hall - are now displaced in Baton Rouge, more than an hour's drive from New Orleans. "The local guys are trying, but there's nowhere for them to stay," Mr. Kaufman said, adding that one of the camps "looks like Little Mexico." The situation is new to Louisiana, which has little tradition of attracting large numbers of transient workers, unlike Florida and other booming areas, said Mark Zandi, chief economist for Economy.com. The stagnant economy here has not provided many job opportunities since 2001. The complaints also reflect the widespread frustration over the continuing lack of housing in the area. Tens of thousands of houses were destroyed by Hurricanes Katrina and Rita, leaving their former residents adrift. Businesses of all sorts are frantically advertising for workers, even as the jobless rate for Louisianians jumped to 11.5 percent in September, from 5.8 percent in August.
This is interesting stuff, but for my money, the Martinez piece in the Tribune is of greater interest because of two points not mentioned by Eaton. I've highlighted them below:
The swelling numbers of Hispanic migrant laborers, legal or not, have raised political tensions. A Tulane University historian speaks of a possible "population swap" between the city's evacuated black population and its new Latino workforce, and the backlash was fueled by New Orleans' African-American mayor, C. Ray Nagin, who recently uttered remarks deemed offensive by some. "How do I make sure New Orleans is not overrun with Mexican workers?" Nagin asked at an October forum with business people as he discussed the city's future.... As more Latinos move into the region, a September survey found that most New Orleans evacuees in Houston, a large percentage of them black, didn't plan to return. Officials don't have a count of the Hispanic workers in the Gulf Coast region, but their presence--made more visible because they are working in evacuated areas--has drawn attention to the demographic, economic and legal impacts of such a large, cheap labor force--a good portion of it composed of illegal immigrants. (emphasis added)
This story raises all sorts of uncomfortable questions about immigration, race, and the economy. For me, the big question remains -- if New Orleans was such a stagnant economy that those displaced to Houston don't want to return, just how much money should be committed to reconstruction efforts? Over at The Plank, Jason Zengerle castigates the Times and other national outlets for not reporting on Nagin's remarks. Props to Martinez and the Tribune for catching it.
While the precise number of European jihadis is impossible to pinpoint, counterterrorism officials across the Continent believe the pool of radicals is growing. A 2004 estimate by the French police found that around 150 of the country's 1,600 mosques and prayer halls were under the control of extremist elements; in a study of 1,160 recent French converts to Islam, 23% identified themselves as Salafists, members of a sect that has been associated with violent extremism. In the Netherlands, home to 1 million Muslims, a spokesman for the Dutch intelligence service says it is believed as many as 20 different hard-line Islamic groups may be operating. Some are simply prayer groups adhering to radical interpretations of the Koran, while others may be organizing and recruiting for violence. In Britain, authorities say that as many as 3,000 veterans of al-Qaeda training camps over the years were born or based within its borders. What explains the proliferation of Europe's homegrown radicals? Interviews by Time correspondents with dozens of Muslims across Western Europe reveal consistent answers as to why so many are responding to the call of extremism. Some lack a sense of belonging in European societies that have long struggled to assimilate new immigrants from the Islamic world. Many, in particular younger Muslims, suffer disproportionately from Europe's high-unemployment, slow-growth economies. Others are outraged over the bloodshed in Iraq and the persistent notion that the West is waging an assault on Islam itself. "There's a spreading atmosphere of indignation among normal Muslims that is echoing among the younger generation," says a French investigator with a decade of antiterror experience. It's echoing loudly, in part because the anger is amplified by 21st century technology. In the past, the alienated would simmer in relative isolation, unable to connect or communicate with those who shared their anger. The Internet has changed that. Critical to the rise of generation jihad has been the ease with which its members can communicate with each other and peruse controversial websites like Tajdeed.net, run by Saudi dissident and London resident Mohammed al-Massari. While his other English site hosts what he calls "philosophical discussions," the Arabic site shows gruesome videos of U.S. and British troops being blown up by Iraqi insurgents, and beheadings of kidnap victims. Al-Massari says he cannot control what is posted there. These days, the very existence of such sites alarms the British government. Prime Minister Tony Blair, in the wake of the summer bombings, vowed to crack down on "specific extremist websites." Combine alienation, unemployment, political anger and the power of the Internet, and the result is toxic.
The most disturbing aspect of Powell's story is that the turn to radicalism appears to be inculcated among second-generation Muslims:
What's striking about the rhetoric of second-generation radicals... is how much it differs from the experience of many newer arrivals to Europe. Moroccan Farid Itaiben, 30, who has lived outside Madrid for 10 years, came to Europe to find a job and a more comfortable life. "If we had work at home, believe me, we'd get out of Europe," he says. "We're not here to spread the Word, we're here simply to make a living." Itaiben has no patience for jihadis who come to Europe to fight holy war; his brother, Mohammed, was among those killed by the train blasts in Madrid on March 11, 2004. "Those people," he says, "weren't Muslims who did this thing. How can they call themselves Muslims?" It's a critical question: how do second- generation European Muslims define themselves? Many say they feel a part neither of the country of their birth, nor of their parents' heritage. That some often live on the dole, unable to find work, only enhances their sense of estrangement. The attitude of Riad, a 32-year-old French citizen who has been unemployed since 2002, is all too common. Sitting in a caf? in the Lyons suburb of V?nissieux, he says, "They say we are French, and we would like to believe that as well. But do we look like normal French people to you?" His friend Karim, 27, insists they are discriminated against because of their long beards. "Who will give us a job when we look like this? We have to fend for ourselves and find a way out."
Poor countries across Africa, Central America and the Caribbean are losing sometimes staggering portions of their college-educated workers to wealthy democracies, according to a World Bank study released yesterday. The study's findings document a troubling pattern of "brain drain," the flight of skilled middle-class workers who could help lift their countries out of poverty, some analysts say. And while the exact effects are still little understood, there is a growing sense among economists that such migration plays a crucial role in a country's development. The findings are based on an extensive survey of census and other data from the 30 countries in the Organization for Economic Cooperation and Development, which includes most of the world's richest nations. The study found that from a quarter to almost half of the college educated citizens of poor countries like Ghana, Mozambique, Kenya, Uganda and El Salvador lived abroad in an O.E.C.D. country - a fraction that rises to more than 80 percent for Haiti and Jamaica. In contrast, less than 5 percent of the skilled citizens of the powerhouses of the developing world, like India, China, Indonesia and Brazil, live abroad in an O.E.C.D. country. These patterns suggest that an extensive flight of educated people is damaging many small to medium-size poor countries, while the largest developing countries are better able to weather relatively smaller losses of talent, and even benefit from them when their skilled workers return or invest in their native lands, said Fr?d?ric Docquier, a lead researcher for the bank and an economist at the University of Leuven in Belgium.
A few thoughts:
1) Er... has Indonesia been a "powerhouse of the developing world" since 1998? 2) How much of the cause behind brain drains is simple geography? India, China, Brazil, and Indonesia are all quite distant from an OECD country -- especially for inland populations. Haiti and Jamaica are quite close. That's not the only factor (see Mozambique) but it might have been worth a mention. 3) The lead paragraphs make it sound like the brain drain is causing these countries to stay in poverty. This precludes the possibility that there are extant causes -- government corruption, weak property rights, segmented capital markets, inadequate investments in primary education -- that encouage brain drains and keep countries poor at the same time. Brain drains might be an intervening variable, but I'm unconvinced it's an underlying cause.
Here's a link to the actual World Bank report. Go check it out.
The European Union is under pressure to improve its offer on farm tariff cuts within 10 days, or risk the cancellation of December's Hong Kong trade summit, according to trade officials. Officials in Europe say that Pascal Lamy, WTO director-general, has warned them there is no point going ahead with the meeting in December without a more ambitious proposal. The other leading partners in the negotiations - the US and the Group of 20 developing countries - have also identified the EU's position as the main sticking point. "A clear and rising degree of concern has been expressed to us," said one European Commission official. The official confirmed that Mr Lamy had suggested that the next week to 10 days was the make-or-break point for the Doha round of talks. The WTO declined to comment. Cancelling a ministerial meeting, which take place every other year, would require the consent of all 148 members of the WTO and would be an admission that the round had come to a halt. The EU, which initially offered what the US says is a 24.5 per cent cut in farm tariffs, is working on a second and final offer which it hopes to present later this week, proposing cuts likely to average around 40 per cent. But such a plan would fall short of what the US says is the minimum acceptable offer - to match the G20's plan for an average 54 per cent cut.... Mr Mandelson wants an offer to at least match the cuts agreed in the previous "Uruguay round" of trade talks, which reduced farm tariffs by an average of 36 per cent. "If there is another bid, it will be a final and non-negotiable one, and will be dependent on progress in the goods and services parts of the talks," the Commission official said. John Tsang, the Hong Kong commerce secretary due to host December's ministerial, told the Financial Times that the process was "at crisis point". "This agriculture deadlock could really derail the whole project," Mr Tsang said, adding that the EU call for liberalisation in goods and services at the same time was pointless. "We all know agriculture is the key, the EU holds the key, and now is the time to turn the key."
The situation is clearly causing Peter Mandelson to get hot under the collar. Why exactly is the EU acting so obdurate on this issue? Well, it's mostly the French, and according to Thomas Fuller of the International Herald Tribune, it's the power of terroir (link via Virginia Postrel)
I believe we should stand by our target of circulating a comprehensive draft text in mid-November, which is essential for governments to prepare themselves properly. That is about 30 days from now, counting every day as a working day. The amount of ground to be covered in this very short time is very large. But I am convinced it is not impossible. It can be done, and I believe that a number of issues are ripe for rapid movement once other sectors unblock.
Well.... the problem is that the U.S. isn't the only country that needs to make concessions. There's the European Union, for example. Deutsche Welle is not optimistic:
First came the proposal to reduce agricultural subsidies; then came the backlash. Peter Mandelson, the EU trade commissioner, called for reducing subsidies under the bloc's common agricultural policy by 70 percent and farm import duties by 60 percent after 2013. Then France, along with a dozen other members, called an emergency meeting Tuesday to tie his hands. They accused him of exceeding his mandate, offering too many concessions in negotiations, and want him restricted before he goes to Hong Kong in December.
And then there's the rest of the world -- particularly the developing countries. In the Financial Times, Alan Beattie is not optimistic:
India would like to see rich countries' subsidies cut but wants to keep the tariffs that protect its millions of small, low-productivity farmers. Moreover, other countries that are even more defensive of their farmers than India and the EU complain that their views are squeezed out of a Doha round focused on liberalising agriculture. The Group of 33 poor countries, for example, of which India is a member, recently complained that ?it is unfortunate that the G33 are not invited in representative proportion to uphold their interests in the negotiations?. Japan has repeatedly complained its interests in agriculture it maintains some of the highest farm tariffs in the rich world are ignored.... The influential Group of 20 developing countries, for example, to which both Brazil and India belong, has proposed heavy cuts in subsidies for rich nations' farmers but modest tariff reductions for poorer countries, a combination the US says it cannot accept. Some observers close to the talks suspect the G20 tariff offer is already close to a red line for India.... The G20 at some point must decide whether it wants a deal, says William Cline, senior fellow at the Center for Global Development in Washington. ?If there is an insistence on keeping self-injuriously high tariffs as an option, then the thing is not going to fly."
Lamy is correct -- his timetable for negotiations is not impossible. But with this constellation of interests, it's pretty damned improbable.
Europe is not properly prepared for a flu pandemic and has inadequate supplies of vaccines and antiviral drugs, says an internal European Commission document obtained by the Financial Times. With avian flu on its borders, the human vaccine situation in the EU is ?far from satisfactory?, according to a note presented last Wednesday by Markos Kyprianou, health and consumer protection commissioner, to his colleagues ahead of a meeting of EU health ministers on October 20. Some member states have reserved all available antiviral drug supplies for years to come, leaving countries that may be first hit by the disease without any access to drugs, it adds.... The report said: ?There are complaints from member states (and third countries) that orders from some countries have reserved all manufacturing capacity for several years to come, leaving no possibilities for others who may be hit first.? It also said the situation was ?far from satisfactory?, for pandemic vaccines. ?Some member states have concluded advanced purchase agreements for the H5N1 virus vaccine?. The EU warnings of capacity shortfalls will increase pressure on Roche, sole distributor of Tamiflu the principal flu antiviral drug as Cipla, an Indian drugs company, has said it is beginning to make a generic version in defiance of patent laws.
There are going to be some nasty intra-EU squabbles if a pandemic breaks out anytime soon (which, it should be stressed, is far from certain. Experts are predicting an outbreak by 2020. So, with luck, this will turn out to be like the Y2K problem rather than the 1918 influenza outbreak). UPDATE: Tyler Cowen makes the case for not violating Roche's patent on Tamiflu.
The 1918 influenza virus, the cause of one of history's most deadly epidemics, has been reconstructed and found to be a bird flu that jumped directly to humans, two teams of federal and university scientists announced yesterday.... "This is huge, huge, huge," said John Oxford, a professor of virology at St. Bartholomew's and the Royal London Hospital who was not part of the research team. "It's a huge breakthrough to be able to put a searchlight on a virus that killed 50 million people. I can't think of anything bigger that's happened in virology for many years." The scientists painstakingly traced the genetic sequence, synthesized the virus using tools of molecular biology, and infected mice and human lung cells with it in a secure laboratory at the Centers for Disease Control and Prevention in Atlanta. The research is being published in the journals Nature and Science. The findings, the scientists say, reveal a small number of genetic changes that may explain why this virus was so lethal. It is significantly different from flu viruses that caused the more recent pandemics of 1957 and 1968. Those viruses were not bird flu viruses but instead were human flu viruses that picked up a few genetic elements of bird flu. The research also confirms the legitimacy of worries about the bird flu viruses, called H5N1, that are emerging in Asia. Since 1997, bird flocks in 11 countries have been decimated by flu outbreaks. So far nearly all the people infected - more than 100, including more than 60 who died - contracted the sickness directly from birds. However, there has been little transmission between people.
A companion piece by Gardiner Harris suggests that Democrats have officially freaked out about the avian flu problem:
Health officials have warned for years that a virulent bird flu could kill millions of people, but few in Washington have seemed alarmed. After a closed-door briefing last week, however, fear of an outbreak swept official Washington, which was still reeling from the poor response to Hurricane Katrina. The day after the briefing, led by Michael O. Leavitt, the secretary of Health and Human Services, and other senior government health officials, the Senate squeezed $3.9 billion for flu preparations into a Pentagon appropriations bill. On Wednesday, Senate Democrats plan to introduce another bill calling for the creation of a flu pandemic coordinator within the White House and a federal buy-back program for unused flu vaccines, among other measures, according to a draft of the bill. Its authors include the Senate minority leader, Harry Reid of Nevada; Senator Barack Obama of Illinois; and Senator Edward M. Kennedy of Massachusetts. Thirty-two Democratic senators sent a letter to President Bush on Tuesday expressing "grave concern that the nation is dangerously unprepared for the serious threat of avian influenza.".... Mr. Leavitt warned in the briefing last week that an outbreak could cause 100,000 to 2 million deaths and as many as 10 million hospitalizations in the United States, one person who was present said. Those numbers have been presented publicly many times before. But hearing them in closed session gave them urgency, some who were at the meeting said. The briefing "scared the hell out of me," Senator Reid said recently.
So the Times, it appears, passes the Hotline Blog's test of media relevance (link via Glenn Reynolds). Even though I've been Bush-bashing as of late, it's worth pointing out that Democrats are late to this party. Kolata says in her story that, "Bush administration officials have been talking about pandemic flu preparedness for years, and they say they will soon release a pandemic flu plan, in the works for more than a year." Harris says that, "The Senate majority leader, Bill Frist of Tennessee, said he had been delivering speeches about improving the nation's preparedness for a flu pandemic since December." Of course, let's see how the plans pan out.
The World Health Organisation has moved to play down a cataclysmic warning by one of its own officials that a pandemic caused by the bird flu virus ravaging poultry flocks in the Far East could kill as many as 150 million people. The prediction came from David Nabarro, a senior WHO expert on infectious diseases, who was appointed on Thursday as UN co-ordinator for avian and human influenza. He said the next pandemic could claim from five million up to 150 million lives.... While he did not say the 150 million prediction was wrong, or even implausible, he said it was impossible to estimate how many could die. But he reiterated the WHO calculation that countries should prepare for 7.4 million deaths globally, arguing that was "the most reasoned position". (emphasis added)
Well, I feel much better now. Even more calming is this Time.com report from Christine Gorman:
If, like public health authorities in the U.S. and many other countries, you're counting on the anti-viral drug Tamiflu (generic name oseltamivir) to save you should bird flu become pandemic, you may have to think again. A Hong Kong expert told Reuters on Friday that a strain of the H5N1 virus isolated in northern Vietnam this year is resistant to Tamiflu. More common human flu viruses have also recently been shown to be developing a resistance to another set of antivirals called adamantine drugs. If the Vietnam report proves true, the implications will be particularly worrisome for public health programs to combat bird flu: Many governments have made stockpiling Tamiflu the centerpiece of their planning for a possible pandemic. U.S. Health and Human Services Secretary Michael Leavitt wants to create a big enough stockpile to treat 20 million Americans, and about $3 billion of the $4 billion the U.S. Senate last week proposed allocating to the Centers for Disease Control and Prevention to prepare for bird flu is to be used to buy Tamiflu. Never mind the fact that Tamiflu is produced in only one facility in the world, which is unlikely to produce enough to fill everyone's stockpile for several more years. What this tells you is that the medical, private and public sectors had better have more than one big idea on how to deal with a potential pandemic of bird flu among humans. Debating ? as a number of health experts have done recently ? over whether a pandemic would kill 2 million or 150 million people is kind of beside the point.
[I]t's worth worrying about a) the possible collapse of a common language and b) the possible Quebec-like Mexification of Southern California.
For years it seemed that immigration to the United States could only rise. Now a new study, based on a year-by-year analysis of government data, shows a startlingly different pattern: Migration to the United States peaked in 2000 and has declined substantially since then.... In terms of immigrant destinations, the study confirms a long-recognized trend away from the "big six" traditionally immigrant states - California, Florida, Illinois, New Jersey, New York and Texas - which still receive 57 percent of immigrants, toward so-called new growth states like Iowa and North Carolina. The foreign-born pioneers to such states in the 1990's now serve as a magnet for friends and relatives from abroad, especially when jobs are plentiful
Bernstein's story is a riff on the Pew Hispanic Center's latest report, "Rise, Peak and Decline: Trends in U.S. Immigration 1992 ? 2004." The executive summary also observes that:
The shift of immigrant flows away from states with large foreign-born populations such as California and New York towards new settlement states such as North Carolina and Iowa accelerated during both the peak and the decline that followed.
Indeed, the report makes it clear that the shift in immigration flows to new states is a permanent and not temporary shift. Beyond allaying fears of Mexifornia, the study has two take home points. First, immigration flows follow the economy:
Rather than undergoing a continuous increase in immigrant levels as is commonly perceived, the United States experienced a sharp spike in immigration flows over the past decade that had a distinct beginning, middle and end. From the early 1990s through the middle of the decade, slightly more than 1.1 million migrants came to the United States every year on average. In the peak years of 1999 and 2000, the annual inflow was about 35% higher, topping 1.5 million. By 2002 and 2003, the number coming to the country was back around the 1.1 million mark. This basic pattern of increase, peak and decline is evident for the foreign-born from every region of the world and for both legal and unauthorized migrants. In 2004, migration bounced back to exceed 1.2 million. Whether or not this move portends further increases is impossible to predict. But even with this recent increase in migration, the most recent data show that immigration flows are at levels comparable with those of the mid-1990s and still significantly below the peak levels of 1999?2000. Both the run-up to the peak and the drop-off in immigration coincide with a variety of conditions known to influence such flows, most notably the performance of the U.S. economy. Immigration grew sharply during the rapid economic and job expansion of the 1990s and then declined as the economy went into a downturn after 2001. Measures of the change in the Mexican labor force?the largest single source of U.S. immigrants by far?follow trends closely related to the pattern of changes in U.S. immigration.
This finding probably won't surprise many economists, but it is politically significant -- because it counters the belief that immigration is some unyielding, unstoppable force. That said, the second, more disturbing take-home point is that the composition of immigration flows is changing -- and not for the better:
From 1992 to 2004, the unauthorized share of immigration inflows increased and the share that was legal decreased. By the end of the period, more unauthorized migrants than authorized migrants were entering the United States. Declines in legal immigration accounted for the largest part of the drop from the peak flows at the turn of the 21st century. From the peak in 1999?2000 to the trough in 2003, over 60% of the decrease in flow is attributable to lower levels of inflows of legal permanent residents and legal temporary immigrants counted as part of the population.
This kind of study may give greater impetus to a grand bargain on immigration reform -- in which legal immigration flows are expanded at the same time there is a crackdown on illegal immigration. [I thought the grand bargain involved a guest worker program--ed. Yeah, but my grand bargain would ditch that part -- guest worker programs don't have a great track record, and the dispersal of immigrants to non-border states would probably reduce its allure anyway.] Go check out the whole report.
[E]ven with politicians as diverse as President Bush, House Speaker Dennis Hastert, and Senators Kyl, Cornyn, McCain, and Edward Kennedy weighing in--there is much more consensus on immigration than is generally recognized. We're not quite at the point yet where, as is said about the Israeli-Palestinian problem, "everyone knows what the solution is--the only difficulty is getting there." But there is increasing agreement about the contours of the problem and even about critical elements of the solution. The emerging consensus starts with a shared grasp not just that the system is broken, but also why its breakdown is unacceptable to Americans: because of what it means for the rule of law and for our national security. Gone are the days when one side in the debate was concerned about immigrants and the other about angry native-born voters--when one side wanted expansive annual quotas and the other wanted tighter control over the system. Today, reformers as different as Kyl and Kennedy (cosponsor of the McCain legislation) recognize that robust immigration is a boon to the U.S. economy, but that we must construct a system--a more regulated, orderly system--that permits foreign workers to enter the country in a lawful manner. Both sides recognize that we need immigrants and the rule of law--that we need foreign workers, but also control. The war on terrorism demands this better control, and so, increasingly, does the public. From the Minutemen volunteers on the Arizona border to angry suburbanites in Herndon, Virginia, and on Long Island, voters are expressing frustration, and lawmakers in both parties know they must respond. Second, and even more encouraging, politicians as far apart as the president and Senator Kennedy grasp the paradoxical nature of the remedy: namely, that the best way to deliver control is not, as many reflexively think, to crack down harder, but rather to expand the channels through which immigrant workers can enter the country legally. This consensus is reflected in the competing bills in the Senate, and it is at the heart of the White House's position (a position reiterated in recent weeks in a series of private meetings with legislators). All of the current reform proposals rest on two central pillars: a guest worker program and much tougher enforcement. (emphasis added)
There might be a consensus at the elite level, but I'm very skeptical that this consensus extends down to the populace. Click here for why I'm skeptical. The interesting question is if Jacoby is correct, whether public hostility would derail any proposed reform.
Government scientists say they have successfully tested in people a vaccine that they believe can protect against the strain of avian influenza that is spreading in birds through Asia and Russia. Health officials have been racing to develop a vaccine because they worry that if that strain mutated and combined with a human influenza virus to create a new virus, it could spread rapidly through the world. (The vaccine cannot lead to such a situation because it is made from killed virus.) Tens of millions of birds have died from infection with the virus and culling to prevent the spread of the virus. About 100 people have been infected, and about 50 have died from this strain of the avian influenza virus, called A(H5N1). So far there has been no sustained human-to-human transmission, but that is what health officials fear, because it could cause a pandemic. And that fear has driven the intense research to develop a vaccine. The director of the National Institute of Allergy and Infectious Diseases, Dr. Anthony S. Fauci, said that although the vaccine that had undergone preliminary tests could be used on an emergency basis if a pandemic developed, it would still be several months before that vaccine was tested further and, if licensed, offered to the public. "It's good news," Dr. Fauci said. "We have a vaccine."
[I]t is wrong to infer from this that the world has gone "flat," and that there is no comparative advantage left. The notion of a flat world is as wrong metaphorically now as it was when Copernicus showed it to be literally wrong. To be more precise than his metaphor, Mr. Friedman has on his mind not the world but a large fraction of it -- India and China. He believes that the gradient which the citizens of these countries had to climb to get to our shores and out-compete us has now disappeared, giving way to a level playing field that we ignore at our peril. But he takes too literally his friends in Bangalore. They flex their muscles on IT the way Popeye does on spinach, and tell him that some Indians can now do anything that the Americans can do. But it is a leap to translate this into the proposition that several Indians will now do everything that the Americans do. Then again, we have Intel Chairman Craig Barrett talking about 300 million Indians and Chinese professionals who will hurtle down the flat road. And Clyde Prestowitz, in his latest book, carries the argument to its logical conclusion with the American nightmare that there will be three billion Indians and Chinese capitalists soon down that road. In truth, the flat road is not flat at all. Take the supply of educated manpower in India. Of the numbers in the age cohort for college education, only about 6% make it to college. Of these, only two-thirds graduate, and just a small fraction can read English. Of these, a further fraction can speak it; and of these, a smaller fraction still can speak it in a way which you and I can understand. The truth of the matter, therefore, is that even for the call-answer and back-office services, the numbers who will compete are only a very small fraction of the numbers being thrown about. India's huge size and the dazzle of the few Institutes of Technology are totally misleading. The road is not flat; the gradient becomes steep as wages rise for those who can manage while others cannot qualify. Again, just think back on why China has not managed to break into IT the way it has on a range of manufactures, while India has. Surely, that has to do with the fact that India is democratic and hence IT can flourish. By contrast, the CP (the Communist Party) is not compatible with the PC: Authoritarian regimes are fearful of IT -- a gigantic pothole in the road! Such fears of a flat road were rampant when many thought that Japan would be a fearsome Godzilla, trampling over our activities all around. But then it turned out that the Japanese were real klutzes in the financial sector. They still are. And remember that while the Chinese and Indians have lower wages, we have better infrastructure, stronger venture capital markets, an ability to attract talent from around the world, and a culture of inventiveness. Comparative advantage persists; the road is simply not flat.
The best rebuttal to Bhagwati's argument, by the way, is not Thomas Friedman, but labor economist Richard Freeman. So go check both of them out.
A human outbreak of avian flu could be ?nipped in the bud? preventing the deaths of millions of people in a pandemic if local public health measures are implemented quickly enough, two international research teams reported on Wednesday. The scientists, based at Imperial College London and Emory University in Atlanta, said their computer modelling revealed two key conditions that must be met to stop an outbreak at source. First, medical experts would need to identify the new viral strain a mutation of avian flu that spreads easily between humans when fewer than 40 people had been infected. Second, preventative capsules of the antiviral drug Tamiflu would have to be given to thousands of people who might have come into contact with those infected. This would require the World Health Organisation to build an emergency stockpile of 3m courses of Tamiflu to be deployed anywhere at short notice, said Neil Ferguson, head of the Imperial College team. At present the WHO holds just 120,000 courses of Tamiflu the only antiviral medicine that works well against all flu strains and can be taken by mouth but it is negotiating with Roche, the drug's Swiss manufacturer, to expand the stockpile to 1m doses or more. The company is expected to donate some or all of the Tamiflu to the WHO.
The bad news is that the computer simulations were based on "an outbreak in rural Thailand of flu caused by the H5N1 avian strain." I'm not sure how they would cope with where the strain has actually migrated. Douglas M. Birch explains in the Baltimore Sun:
A strain of avian influenza virus that can be lethal to humans has spread from Southeast Asia to poultry flocks in Russia and Kazakhstan, a scientific journal reported yesterday, leading a British researcher to warn that the virus may be approaching Europe. "If we are seeing an expansion in range, that is something we should be concerned about," Ian Brown, head of avian virology at the United Kingdom Veterinary Laboratories Agency, told the journal Nature in an article published yesterday on its Web site. A Kazakh man who works on a chicken farm recently fell ill with the symptoms of bird flu, Nature reported. The man lives in a village in the Pavlodar region of northeast Kazakhstan, near the Russian border.... Dr. Michael Osterholm, director of the University of Minnesota's Center for Infectious Disease Research and Policy, said it was too early to conclude whether the events reported in Nature represent a widening of the outbreak that has struck Southeast Asia.
Germans in particular have taken pride in their "humane" form of capitalism, characterized by relatively short working hours and high pay, in contrast to what they see as a more cutthroat, competitive American way. But as global competition grows, European firms are under pressure to trim costs. Private-equity transactions--in which investors buy up a company using substantial amounts of debt, overhaul operations, then sell out after a few years--have been common for years in the U.S. and Britain. They used to be the rare exception in continental Europe, where financial leverage has long been frowned on and relationships with investors were based on tradition. No longer. Starting in the late 1990s, all the big U.S. players, including Blackstone, Kohlberg Kravis Roberts (KKR), Carlyle Group and Texas Pacific Group, set up small-scale European operations. They're now bustling, growing rapidly and accounting for ever more of the U.S. groups' business. In four years, Blackstone's investments in Europe have jumped from about 10% to 30% to 40% of its total business, and the firm has opened offices in London, Hamburg and Paris. "It has become quite a significant part of our business," says Stephen Schwarzman, Blackstone's CEO and one of its co-founders. "It's a moment of structural change in Europe." The American moneymen last year were involved in about one-third of all European buyouts, doing deals worth more than $25 billion. That's triple the amount in 2001 (see chart). And there's no end in sight: several of the groups, including Blackstone and KKR, are in the process of setting up new investment funds aimed in part or entirely at Europe. As the American money pours in, the deals are larger, more frequent and more highly leveraged. Five years ago, the largest European buyout transactions had a value of about $1 billion. Today's biggest deals are three times as large, and several private-equity groups are poring over at least one transaction involving a telecommunications firm in Spain that is worth more than $12 billion. One reason Europe is attractive: such huge firms as electronics giant Siemens, automakers DaimlerChrysler and Fiat and the French media company Vivendi Universal have shed operations they deem no longer core to their fundamental business. Also, investors have been buying medium-size companies whose family owners are looking to sell. Once the Americans take over, they move fast, prodding the firms to make their operations leaner and frequently reshuffling management. The worse off an operation is, the more money the investors stand to make from selling after turning it around. "We like the complexity of Europe," says Jim Coulter, a San Francisco--based founding partner of Texas Pacific. "It often means there is more inefficiency."
Read the whole thing. The restructurings are causing a bit of a ruckus. That fact that these groups are headquarted in the U.S. probably doesn't help matters right now. More importantly, European unions allege that the private equity groups come with mass layoffs. I have no doubt that's true in some cases, though the funny thing is that if you read the entire article, you will fail to find a single example of a U.S. firm actually recommending mass layoffs.
North Korea, the world?s most reclusive state and one that prides itself on its communist ideals, plans to apply to the World Trade Organisation for observer status, according to a European Parliament delegation that visited Pyongyang this week. News of the plan, the first step down the long road to joining the free trade body, is likely to be met by the outside world with bewilderment, optimism and opposition in equal measure.... ?North Korea says it has been in contact with the WTO secretariat about observer status,? Glyn Ford, a British member of the European Parliament, said after the delegation for relations with the Korean peninsula met high-level North Korean officials. ?Iraq also applied so if one horse can get through the door, maybe two can.? Observer countries are allowed to participate in meetings but not be involved in the decision making process. Post-Saddam Iraq was granted the right to attend meetings and hold talks with WTO member countries in February last year. The US had vigorously opposed attempts by Iran, which it also accuses of secretly developing nuclear weapons, to gain observer status but in May agreed to allow Iran to start the membership process. The WTO on Friday said it had not received any application from North Korea.
I really do not know how much credence to put into this report. But if there's any truth to it, I'd love to be a fly on the wall when the accession negotiations start.
The G20 proposal centres on a new five-tier tariff system for developed countries, setting uniform tariff cuts in each band, and also capping the maximum tax on imports at 100 per cent. The plan offers greater leeway for developing countries, with a four-tiered system and a maximum tariff of 150 per cent. Mariann Fischer Boel, EU agriculture commissioner, said: ?We welcome the G20 proposal on market access.? Rob Portman, US trade representative, also backed the G20 plan as a potential basis for negotiations, saying: ?The US is prepared to move, and move to the middle.? The differences between the world's two largest trading blocs remain substantial, with the EU proposing a variation on the G20 plan to give it greater flexibility to resist sharp tariff cuts. The EU is also demanding that the US put on the table a plan to reduce its domestic farm subsidies as part of any negotiating package, something that Mr Portman rejected yesterday as ?not realistic?. With only about two weeks to go before a framework is needed to allow time for the detailed and difficult negotiations ahead of Hong Kong, not everybody was optimistic about a genuine resolution to the impasse. ?I am pessimistic but I want to be proved wrong,? said Supachai Panitchpakdi,the WTO director-general. ?We have days. We don't have weeks.? The G20 plan potentially faces stiff resistance from countries such as Japan, Taiwan and South Korea, which have tariffs on farm goods far higher than the caps set by the G20 proposal.
The scary thing is that what's proposed represents liberalization of a sort -- agriculture is so heavily protected and subsidized that it will take decades for complete liberalization.... if it ever happens. Supachai is more pessimistic about the overall progress of the Doha round. Click here for his statement from last week. Key paragraphs:
It is true that some progress has been made in certain areas of the negotiations. But let us be clear: this progress is nowhere near sufficient in terms of our critical path to Hong Kong, and it is not being seen in the key issues which would help unblock progress across the board. Overall, there seems to be a renewed sense of blockage and frustration. We are also seeing a resurgence of sterile debate about process, rather than negotiations on substance. I am afraid we have to face the facts. These negotiations are in trouble. Very little of the political support which has been shown at successive Ministerial meetings has been turned into concrete progress in the negotiating groups. Everyone has a generalized commitment to progress, but when it comes to the specifics, the familiar defensive positions take over.
The Scandinavian economic model, combining market flexibility with a high degree of social protection, ?is full of lessons for countries such as France, Germany and Italy?, Christian Noyer, governor of the Bank of France, has argued. The willingness of France's central bank governor to admit in an interview with the Financial Times that other countries might have found a better answer to the forces of globalisation highlights how the political debate in Paris has shifted since the country rejected the European Union constitution in May. Asked about last month?s appeal by Tony Blair, UK prime minister, for Europe to rethink its social model, Mr Noyer said: ?I tend to agree with that.? Sweden, Finland and Denmark have seen some of the fastest growth and lowest inflation rates among the main continental European economies. Sweden, which plunged into financial crises in the early 1990s, has re-invented its famed social model in the past decade. ?One of the key elements in the way these countries work is that they have mixed a greater level of flexibility in labour and product markets ? a bit like the UK economy ? with a high degree of social protection, which is traditional in continental Europe,? he said. Social protection, he added, did not mean ?a job for life even if your company is sinking. Protection means you have a social safety net to help you during a transitional period, and a whole system of education, training and retraining that obliges people to find a new job?.
Read more of the interview here -- in which he gives faint praise to new French PM Dominique de Villepin while dismissing Villepin's suggestion for closer political consultations with the European Central Bank.
Daniel W. Drezner is professor of international politics at the Fletcher School of Law and Diplomacy at Tufts University.