Cris Lingle on Globalization & Culture

About an year ago, I helped arrange a lecture by Christopher Lingle on Globalization and Culture. It's now up on youtube.

Among other things, Cris predicts an impending crash in China. He correctly called the last Asian crisis before it happened, so I'm thinking there's something to it. I think most of his work is based on Austrian Trade Cycle theory. I could be wrong. Here's part 2 of the talk. The wobbly camera work is mostly my bad. If you want more, here's a writeup I did based on the talk.

SAARC eviction and Property Rights

(Pic courtesy: The Daily Mirror)

In view of the SAARC summit, the Sri Lankan government decided to demolish the homes of a bunch of poor people living in 'unauthorized dwellings'. Apparently aesthetics are more important for the government than life and property of people. Writing on the topic, last Sunday's The Island makes a few interesting observations :

The houses that have been broken down were certainly unauthorized and built on state land by people who had no title to such property. But the responsible authorities permitted not just their construction but their consolidation. Water and electricity have been connected. The Colombo Municipal Council, the victims say, even made rating assessments! The occupants of these houses were not Johnnies come lately, some claiming to have lived there for 30 and 40 years. They had sunk roots in that neighbourhood, got their children into schools in the vicinity and had probably been even buying and selling houses there. [..]

The reality is that while those evicted are wrong-doers, if they have long been permitted to do what they have done, then the State and its various agencies are complicit. Out in the countryside when villagers encroach on state land and cultivate crops, such encroachments are often regularized by the authorities as it is recognized that these farmers really deserve the land they till. [..] [link]

The whole episode reminds me of the work of Hernando de Soto, the influential Peruvian economist who studied why capitalism didn't work so well in the developing world as it did in the west. His ultimate conclusion, articulated in his book, The Mystery of Capital, is simple. The reason why capitalism worked well for the west is because of it's legal institutions, or more specifically -- property rights. Much of the poor in the developing world doesn't have property rights. They may occupy a land, own a house, but they don't have the title to that property. This means that they can't get credit, can't make long-term contracts and they can't formally enter into business. De Soto argues the world's poor is essentially locked out the system while sitting on a mass of 'dead capital' which they can't profitably use, simply because, they don't own the right to property.

What should have happened then (and what De Soto has done in number of countries) is to come up with a systematic way which formalizes property based on existing understanding and "social contracts" that exists among people. What happened last week was the opposite -- instead of giving them a hand up in the ladder to prosperity, the government destroyed whatever little they had. It's a crime of the highest order.

Update (27/07/08) : Via indi.ca see this video of the police destroying the houses.

Note : I Don't have time to make a longer case for this. But do see the work of Darin Gunasekara, who created a stock market housing exchange in Sri Lanka along the same lines which de soto articulated. For more on De Soto's work check out his wikipedia page, and see this excellent speech by him in the ILD website, or better yet read his book.

In related news, I'm hitting two unbelievably busy weeks. Blogging will be slow.

Mahinda's biggest lie?

For the past few years, despite high inflation, despite the war, there's one statistic that the government had been harping about -- Sri Lanka's GDP growth has managed to hover at around 7%.

Writing for her regular column in the DM Financial Times, Anila Dias Bandaranaike, the former Asst. Governor for the central bank thinks that figure is fake. Here's a few choice excerpts :

Currently, the Department of Census and Statistics (DCS), the national statistical agency, is solely responsible for compiling and publishing these statistics. In the past, both the Central Bank and the Chamber of Commerce released their own estimates, and DCS was in the happy position of being able to cross check its own information with that of others, thereby leading to stronger and more robust estimates. Unfortunately, since the other two organisations no longer compile these data, this verification process is no longer possible. [..]

DCS, which was an independent institution directly under the President some years ago, currently falls under the Ministry of Finance. I understand that the present ST holds meetings with DCS officials to discuss preliminary GDP estimates, at which senior Treasury officials provide feedback before the estimates are finalised and released to the public. [..]

First, let’s compare agriculture production with prices. The food sub-index of the CCPI(N) rose by over 30%, rice prices rose by unprecedented levels and the Central Bank’s monthly monetary policy reviews specifically referred to the adverse impact of “domestic supply constraints” on inflation in 2008-Q1. Yet, GDP statistics recorded that production of - paddy, other field crops, vegetables, fruits and livestock - rose by between 2% and 8%. [..]

Second, although inflation rose so sharply and FMCG companies reported declining volumes in most categories, domestic trade recorded 5.5% growth in 2008-Q1. Throughout 2007 too, while agricultural and manufacturing sectors producing domestically traded goods had grown at lower rates and paddy output had declined, it was inconsistent that domestic trade had grown by a much higher rate than the goods to be traded! [..]

Fourth, road transportation reported 8% growth, although registration of new vehicles had declined by 17%, indicating lower growth in private transportation. With rising fuel costs, tightening security and road closures, what drove such high growth? [..]

The whole thing here. (unfortunately, the DM site changes the location of pages rather frequently, so if this link is broken, it's their fault.)

Interesting. Looks like somebody's being creative with their statistics.

Bono

This really touched me..

Bono, lead singer of the rock band U2, is famous throughout the entertainment industry for being more than just a little self-righteous.

At a recent U2 concert in Glasgow, Scotland, he asked the audience for total quiet.

Then, in the silence, he started to slowly clap his hands, once every few seconds. Holding the audience in total silence, he said into the microphone, 'Every time I clap my hands, a child in Africa dies.'

From the front of the crowd a voice with a broad Scottish accent pierced the quiet ...

'Well, fookin' stop doin it then, ya evil bastard!' [link]

in all the funny places...

[Link via Atanu Dey]

Priorities for global development

I wrote this post on prioritizing funding for global development issues on the Beyond Borders blog. The post is based on the Bjorn Lomborg's work at the Copenhagen consensus and this highly recommendable TED Talk. The key insight from Lomborg is basically this,

• There are lot of problems in the world - commutable diseases, AIDS, malaria, climate change - it would be great if we can solve all those problems. But we don’t.
  
  
• Contrary to the focus of many development forums, there should be a focus on solutions to problems, rather than problems themselves. Because at the end of the day it's solutions that matter no matter how grave the problem is.

Read the whole thing at BB.

Sri Lanka Celebrates Earth Hour

In typical Sri Lankan fashion - about a month late and for a few more than one hour. Ok so it was an island-wide power failure. Given the frequency of these failures, (multiple times a month where I live) the folks at Greenpeace or WWF should nominate the Ceylon Electricity Board for the Nobel Prize this year.

To me the whole Earth Hour idea is symbolically a catastrophe, and today this reminded me of a post in Cafe Hayek on the subject. Here's a key excerpt from a letter written to WWF:

You and members of your organization worry that industrialization and economic growth are harming the earth's environment. I worry that the intensifying hysteria about the state of the environment - and that the resulting hostility to economic growth - might harm humankind's prospects for comfortable, healthy, enjoyable, and long lives.

So I commend you on your "Earth Hour" effort. Persuading people across the globe to turn off lights for one hour supplies the perfect symbol for modern environmentalism: a collective effort to return humankind to the dark ages.

Do read the whole thing.

Development Indicators..

According to recent reports, Christina Caldera, a Sri Lankan student at the University of Texas made it to the PlayBoy Magazine.

Sri Lanka is really coming along, blond bimbos - check, gay celebrity - check, PlayBoy Mag - check. Next stop, um.. MILF Hunter?

Ok ok I know this is old news, but did you know Authur C Clarke was also on Play boy in 1986? So technically speaking, Ms.Caldera isn't the first Sri Lankan to be on PlayBoy. This kind of proves my point about Sri Lankan development, JR really did ruin everything.

Good intentions, Bad outcomes

Most people judge policy with intentions rather than outcomes.

So Samurdhi (the Sri Lankan hand-out scheme) is good because it's designed to give money to the poor, never mind the fact that the beneficiaries are partisans of the ruling party and it doesn't have the faintest of hope of eradicating poverty, fertilizer subsidies are considered good because it's stated aim to help the farmer, never mind the fact that most never actually receive the subsidies and distorts the market signals which clearly urge them to go into a more profitable venture. The list goes on.

Steven Levitt and Dubner, the Authors of the infamous Freakonomics, examines the law of Unintended consequences in the New York Times Magazine. a preview note from the Freakonomics blog is here.