Books vs. Window Coverings?

From a recent New York Times article titled All of Inflation’s Little Parts:

“Each month, the Bureau of Labor Statistics gathers 84,000 prices in about 200 categories — like gasoline, bananas, dresses and garbage collection — to form the Consumer Price Index, one measure of inflation.

It’s among the statistics that the Federal Reserve considered when it cut interest rates on Wednesday. The categories are weighted according to an estimate of what the average American spends, as shown below.”

According to this chart the average American spends the same amount on books (0.01%) as they do on window coverings (0.01%). An interesting statistic and one that I imagine is similar in other parts of the Western world. I wonder if this is perhaps due to increases in internet penetration which, according to this 2006 Pew Internet and American Life report, stand at around around 73% in the US. Perhaps people are simply accessing information in different ways.

Commodity Price Rises IV

While 2008 forecasts predict production increases in the major rice growing countries (particularly Bangladesh, China, India, Indonesia, Myanmar, the Philippines and Thailand), this will be due to specific government incentives to increase production in response to already stretched supply and demand relations.

Production increases in these countries will go some way in minimising the harmful effects of what is predicted to be a dismal production year in Australia due to drought and the previously mentioned shifts toward producing crops for biofuel usage within more developed agricultural economies.

All these factors combined mean that at the end of the day the prices of various staple commodities around the world are rising and are not likely to slide or even plateau into the near future.

As it is with most disasters, both natural and man-made, the poor are typically the ones forced to bear such shocks severely and too often, silently. However, with recent demographic shifts related to income growth, we are today seeing a new politically aware constituency also hit hard but unlike the poor, these new middle classes are able to make their grievances quite vocal.

Back in 1998, the Asian Development Bank (ADB) released a study titled “Bangladesh 2020: A Long-run Perspective Study” which predicted that Bangladesh would become a “middle income” country by 2020. And so today Bangladesh serves as a good example where an emerging middle class is feeling the effects of commodity price rises and is not keeping quiet about it.

Price hikes in specific commodities can, as one article (sorry – can’t find the URL) on ReliefWeb puts it:

“…cause potential economically destabilizing interferences to the trends in economic development that have served these middle classes so well. In addition to this, in socially unstable countries, middle class populations (Bangladesh, China, India, Nepal, Pakistan, the Philippines, Timor Leste and Vietnam), governance is also threatened…”

This sentiment is echoed in the ADBs recent Asian Development Outlook 2008 which can be found here.

In a recent Dow Jones article (again, I’m finding it difficult to reference this one) it is stated:

“Rising prices are making food inaccessible to many low-income families and this could spark instability in at least seven of the 14 Asian countries the U.N. World Food Program operates in, Paul Risley, Asian spokesman for the WFP, told Dow Jones Tuesday. “Rising food prices may cause social instability and violence, which may even escalate to wider political instability in at least seven Asian countries,” Risley said, declining to name the countries.”

…to be continued…

Commodity Price Rises III

Similar to the shifts in productive land use taking place in China (mentioned previously here), related changes are also taking place in areas such as the grain belt of the USA.

In the biofuel market, sugar crops and other plants which naturally produce oil are increasingly being harvested as a source of fuel in order to reduce the reliance on crude oil imports experienced by developed economies. Farmers are shifting from traditional cattle and crop production to harvesting grains as a fuel source, thus affecting global agricultural markets.

This shift is summed up well in this paper prepared by the International Fund for Agricultural Development (IFAD) where it states:

“The emerging biofuels market is a new and significant source of demand for some agricultural commodities such as sugar, maize, cassava, oilseeds and palm oil.

These commodities, which have predominantly been used as food, are now being grown as feedstock for producing biofuels. Significant increases in the price of crude oil allow them to become viable substitutes in certain important countries that have the capacity to use them. This possibility is increasingly leading to the implementation of public policies to support the biofuels sector, which further encourages the demand for these feedstocks.”

So, to support the shifting nature of demand, farmers are moving from using land for the production of traditional crops and livestock to the production of ‘cash crops’. In the case of China, grain is being produced in place of rice. In the case of the US, farms that once dotted the US ‘grain belt’ states of Ohio, Indiana, Illinois, Missouri, Iowa, Wisconsin, Minnesota, Nebraska and Kansas are now shifting production from feedstock to be sold as biofuel.

While some economies such as the US are able to handle what can sometimes be very rapid shifts, many are simply not able to accommodate these ’shocks’. In some countries a population may be unwilling or unable to make the necessary transition, in other countries a government may not have the capacity to implement polices which facilitate this transition in a way that minimizes the often associated social and economic disruption.

…to be continued…

ANZAC Day commemorative Service at Camp Phoenix, Timor-Leste

Road Resurfacing in Dili 24.04.08

Commodity Price Rises II

…continued from Commodity Price Rises I…

“Pork’s centrality to Chinese cooking is reflected in the fact that when people refer to meat, by default they mean pork. On a menu, dishes with pork simply say “meat.” If the meat isn’t pork, then an additional qualifier (cow – meat for beef, for example) is required.” – Pork Consumption in China

As a general rule, one of the first changes to occur in a population earning significantly more than the generation previous to it, is a shift in diet. The choices available to this population are greater by way of their income and this typically leads to an increased meat intake as meat is generally considered a more efficient source of protein, iron, calcium, enzymes, vitamin B12 and amino acids necessary to sustain healthy, active and productive human life. The following graphs found in an FAO publication by Andrew W. Speedy titled “Overview of world feed protein needs and supply” show dramatic increases in meat production over the past two decades in both developed and developing countries.

The FAO report mentioned above actually disaggregated the data to show how rises in pork production account for much of the rise in general meat production throughout the world. The report then goes even further, giving the reader an idea as to the percent of pork production taking place in China by showing pork production within the developing world excluding China. As you can see, pork production in China accounts for over 80% of pork production throughout the developing world.

The following graph shows that those provinces in China with the highest rates pork consumption per capita are also those with the highest incomes per capita. Thus, a rise in pork consumption, coupled with the knowledge that pork is held in such high regard by the Chinese, serves as a practical indicator of development in China.

While India, being predominately Hindu, is not seeing such a rapid shift from vegetable to meat (in this case it would be beef) based diets, reports such as this one are reporting similar dietary shifts taking place in spite of social and religious taboos on beef consumption .

…to be continued…

Commodity Price Rises I

For quite some time now, NGOs and various UN agencies (particularly FAO and WFP) have been alerting humanitarian workers to the recent and dramatic rises in the cost of commodities typically used in relief situations such as rice, cooking oil, grains and other dietary staples. The two graphs above, found on WFPs World Food Situation site show just how steep these rises have been.

Since January 2008, the price of rice throughout the world has increased a staggering 20% according to the FAO All Rice Price Index. These graphs and accompanying data shows just how steep and rapid these increases have been.

The reasons behind these sudden price increases are various and complex. The following few posts will be my own very basic and likely to be horribly flawed attempts at understanding these recent commodity price rises. I hope to eventually conclude with some ideas as to how their rises may impact in Timor-Leste.

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As the poor typically spend a far higher percentage of their income on food, such price rises have a particularly devastating impact on those most vulnerable not only in terms of their ability to access basic food items but also to the potential for new or reinvigorated conflict spurned on by this lack of access to something so vital to sustaining life. However it seems that one of the reasons why these recent price hikes are getting so much attention around the world is that not only are the poor suffering but so too are those existing in what are the new middle classes of Asia, Africa, South America and elsewhere.

The rapid pace of urbanization and socio-economic development currently taking place in places like China and India has meant a burgeoning middle class is now demanding access to new forms of transport, accommodation and other various public works infrastructure. This in turn has driven consumer demand for things such as cheap and efficient transport options, material goods such as televisions and air conditioners and many other basic commodities some in the West might assume are symbolic of what ‘development’ amounts to.

However, in order to service these new demands, the production and provision of these symbols of material wealth requires energy. Energy is essential to produce these goods. Energy is needed to transport goods, energy is required to market goods and in almost all cases, energy is necessary to make possible the consumption of these items. For example, a microwave can be produced, marketed and transported into ones kitchen but it is useless without a sufficient source of power to run it.

Economists and politicians are in agreement that the trend toward income growth and economic development in places like China and India is reshaping the dietary habits and associated demand for food commodities within the millions of kitchens of these new middle classes. And how is their diet changing? Well in the case of China, its pork.

…to be continued…

Earthquake near Dili

Timor-Leste experienced a magnitude 6.0 earthquake this morning.

I was at gym at the time however I did feel the whole building shake. The only other person at the gym continued lifting weights and didn’t appear to notice anything out of the ordinary which made me wonder whether I was making the whole thing up. My fears were unfounded when I arrived home soon after to read…

The U.S. Geological Survey (USGS) which monitors earthquake all over the world has generated this site with information about the latest quake. The USGS also has a great page of maps and other GIS images concerning the quake which can be accessed here.

According to the USGS, Dili was experiencing ‘moderate’ shaking and damage is not expected. I have not heard any reports of damage related to the quake.

The image below (courtesy of USGS) shows seismic activity from 1990-present.

Google Earth Overlays for Timor-Leste

After reading MapAction’s recently released briefing paper (courtesy of humanitarian.info) regarding Google Earth (GE) and its potential in the humanitarian sector, I have been inspired to update my version of GE to version 4.3.7191.6508 (Beta) and overlay various satellite and other images onto 3D rendered terrain of Timor-Leste.

At first glance there does not appear to be a huge volume of high resolution satellite imagery publicly available over the net however it was interesting to consider just how such technology could be used for things such as community mapping or assessing water infrastructure projects.

A search of UNOSATs website turned up this page containing a pre-disaster overview, a shaded relief overview and a map of population distribution in Timor-Leste, all of which I was able to overlay in GE. However, even though they are all listed as being high resolution images, viewing them in this way doesn’t really provide any additional insight.

This link [PDF] contains a high resolution PDF map of Timor-Leste which I intend to convert to an image file and then overlay in GE.

Similarly, ReliefWeb hosts dozens of PDF maps of Dili, the districts and Timor-Leste however all are stored in PDF format. The Perry-Castañeda Library at the University of Texas has an online library containing maps of Timor-Leste which can be found here but again, they will need to be converted to an image file before being overlayed.

It was interesting to play with and while internet connection speeds mean GE in Timor-Leste can sometimes a slightly frustrating experience – it has certainly got me thinking.

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MapAction’s briefing paper titled “Google Earth and its potential in the humanitarian sector” can be downloaded from here.

Also – related to Timor-Leste and GE is the Dili place marks KMZ file put together by Diligence which can be downloaded here from his blog. This is a great resource for anyone living in Dili.

President José Ramos-Horta Returns to Dili

The citizens of Dili line the streets to welcome back the President of Timor-Leste, José Ramos-Horta