World Economic News
UN Report: Growing Poverty for Much of World's Population
The decade of the 1990s was one of growing poverty and genocide for vast numbers of the human population, reveals the United Nations' Human Development report for 2003, released July 8. Here are some of its conclusions:
For developing countries overall compared to 1990:
* 54 are poorer now;
* 34 have a lower life expectancy;
* 21 have more people are going hungry;
* 14 have more children dying before age 5;
* 12 have shrinking primary school enrollment;
* 2.4 billion people don't have access to adequate sanitation;
* 1.2 billion people live on less than a $1 equivalent per day;
* 1 billion people don't have access to improved water sources;
* 10.7 million children, in 2000, age five or younger, died of preventable diseases.
Of 54 countries with declining income per capita, 20 are in sub-Saharan Africa, 17 in Eastern Europe and the Commonwealth of Independent States (CIS), six in Ibero-America and Caribbean, six in East Asia and the Pacific, and five in Arab states.
The embedded axioms of environmentalism, free trade, and post-industrial low-technology development that characterize much of the UNDP report, lead to deadly so-called "solutions" which will perpetuate, rather than halt, this cycle of imposed death. For example, "Growth is more likely to benefit poor people if it is ... labor intensive ... rather than capital intensive." Or its call for elimination of tariffs and subsidies.
Venezuelan Banking System Faces Imminent Collapse
The banking system of Venezuela is on the verge of a collapse comparable to 1994, when the private banks' indulgence in a pyramid of self-lending, led to their stunning demise, according to economic analysts interviewed by The Miami Herald. The Herald reported July 14 that 60% of Venezuela's bank deposits are in the form of state debt paper, where that figure had only been 25% in 1994. Given the weak state of the economy, no one is seeking bank credit except the Chavez government, which is committed to paying 20% interest on that credit. When either the government is unable to pay interest on that debt or the banks' depositors decide to pull their accounts and put them into gold, real estate, or take them out of the country, the banks will collapse like a house of cards, say these analysts.
"This explosion of the economy is coming, and among the first victims will be the banking system," says Jorge Salazar Carrillo, director of the Center for Economic Research of Florida International University. "The Venezuelan banking system is seriously threatened by an explosive debacle. Today the banking system is full of paper. In 1994, the banks were full of self-loans. In 1994, there was in effect an illiquidity situation. Today, there is a potential insolvency situation."
Economist Alexander Guerrero warns, "The Venezuelan banking system depends heavily on public finances. In other words, the fate of the banks is tied to the fate of the government, which at the same time, has very bad finances." Guerrero summed it up: "The growing government debt to the banks is moving toward insolvency, because the economy is in strong contraction, and it is not generating the resources with which to pay that debt."
The state of the Venezuelan economy is so bad, that the Chavez government has ordered an extension until January 2004 of a decree first imposed last April, prohibiting any more private or public layoffs, in hope of containing the rage of a growing army of unemployed as long as possible. Venezuela's collapsing private sector is furious at this latest maneuver by Chavez. Nor will his gesture ease the rising unrest within the population, as shortages of everything from beef, chicken, and eggs, to rice, powdered milk, and flour are steadily worsening. Agriculture Minister Efren Andrade has already announced that "emergency measures" are being taken to increase national supplies, but he did not elaborate on what those measures might be.
Notably, in the midst of this devastation, Venezuela's foreign creditors are receiving assurances from President Hugo Chavez that the foreign debt will be paid on time. Finance Minister Tobias Nobrega announced this week plans to issue between $500,000 and $4 billion in international bonds this year, as part of a debt swap and new financing strategy to cover an estimated $4.7 billion deficit. At least $2.2 billion in foreign debt payments must be paid between August and September of this year alone.
Sub-Saharan Africa 'Left Behind' in Race for Development
The United Nations Human Development Report 2003 cited above, says that sub-Saharan Africa is a region "left behind" in the race for development in the 19902. It reports the economies of this region "have not grown," with "half of Africans living in extreme poverty and one-third in hunger, and about one-sixth of children die before age 5the same as a decade ago." At these rates of stagnation or negative growth, "Sub-Saharan Africa will not reduce poverty until the year 2147 or child mortality until 2165!"
In addition, "Africanization" is spreading. "People in Central and Eastern Europe and the CIS ended the 1990s less healthy and with lower average incomes than people in Latin America and the Caribbean," the report states. Further, during the 1990s "Poverty more than tripled, to almost 100 million people25% of the region's population."
Tibet Hydropower Project Could Light Up Asia
China will go ahead with a feasibility study on the Yarlung Zangbo-Bramaputra-Jamuna hydropower project in October, the Chinese news agency Xinhua announced July 17. The China Water Conservancy and Hydropower Planning and Designing Institute, which is running the feasibility study, has already sent an expert team to the area to begin preliminary work in late June.
This project involves digging a 16-kilometer-long tunnel through the mountain wall of the world's deepest canyon, where the Yarlung Zangbo makes a "U-turn" and drops 2,755 meters over 500 kilometers. The Yarlung Zangbo River is called the Brahmaputra in India and Jamuna in Bangladesh. The project, according to the new Xinhua report, could generate 68 million kilowatts of powerthe same capacity as 60 typical large Western European nuclear power plants!
This could light up a lot of Asia.
It would also control the water flow on the Brahmaputra-Jamuna, which, if fully coordinated with India and Bangladesh, would be critical for flood control during the monsoon.
Past press reports have stated that there have been discussions going on between China and India on this project for several years.
China-India Border-Trade Task Force Established
The confederation of Indian Industry (CII) is setting up a task force on expanding border trade with China through the Nathu La pass in Sikkim, it was announced in mid-July.
When Indian Prime Minister Atal Bihari Vajpayee was in China in June, the two sides signed an agreement to open the almost 5,000-meter-high pass for trade. The CII will advise the state of West Bengal, where Kolkata (Calcutta) has the nearest major seaand airports to Sikkim and Tibet. Border trade through Nathu La was stopped by the 1962 China-India border war.
"The task force will calculate border trade volumes and suggest infrastructure investment structures," the CII announced. "We will advise both the state government and the Centre and all relevant bodies." CII expects bilateral trade between the two countries to be somewhere near $20 billion by 2008.
More Development Projects Under Discussion in South Asia
The perspective of the Grand Tibetan water power project getting closer to realization, also provides new options for the development of infrastructure in Bangladesh. A branch of the Brahmaputra River, which is to benefit from the Tibetan project, is the Jamuna River in Bangladesh.
The completion of the multipurpose Jamuna River Bridge, which is essential to establish direct railway communication between central, northwestern, and southwestern Bangladesh, is dependent on a lot of river bank fortification and other construction work.
Railway issues also came up during the latest session of the Joint Economic Commission in Dhaka, presided over by the Foreign Ministers of India and Bangladesh: The Indian government said it is committed to renew state-to-state credit to Bangladesh, in the range of 2 billion rupeesmost of which would be available for railway transport improvements on the Bangladeshi side.
On July 9, Bangladeshi Communications Minister Nazmul Huda announced that his government would give new emphasis to the development of railway transport, especially of links to the country's neighbors. He made direct reference to the Jamuna River Bridge project, as crucial in this respect. Railway communication with India, Nepal and Bhutan had priority, Nazmul Huda said, adding the perspective of a link to the project of the Transasian Railway, via Myanmar.
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