“He Doesn’t Steal, But Money Sticks to Him”

Mexico, like many places around the world, has numerous immensely imaginative one-liners to characterize corruption. Here is a sample:

  • “El que no transa, no avanza” (“Whoever doesn’t trick or cheat, gets nowhere”)
  • “No roba, pero se le pega el dinero” (“He doesn’t steal, but money sticks to him”
  • “Fulano de tal es honesto, pero honesto, honesto, honesto, ¿quién sabe?” (“So-and-so is honest; but honest, honest, honest, who knows?”
  • “Político pobre, pobre político” (“A politician in poverty is a poor politician”)
  • “No les pido que me den, sólo que me pongan donde hay” (“I am not asking for money, just to be appointed where I can get some”)
  • “Vivir fuera del presupuesto es vivir en el error” (“To live outside the federal budget is to live in error”)
  • “Amistad que no se refleja en la nómina no es amistad” (“A friendship that is not reflected in the payroll is no friendship at all”)
  • “Con dinero baila el perro, si está amaestrado” (“Properly paid and trained, a dog will dance”)
  • “No les cambies las ideas, cambiales los ingresos” (Don’t bother to change their ideas, just change their incomes”)

Source: Manana Forever?: Mexico and the Mexicans

Ciudad Juárez

At the end of last year I offered ten foreign policy predictions for 2009.  The first prediction was about Mexico:

The world’s leading narco state will, unnoticed, dissolve into total chaos destabilising the surrounding region.

In a early January 2009 John Robb suggested that Mexico would be an essential security threat to the United States:

The narco-insurgency in the northern provinces morphs into a national open source insurgency with thousands of small groups all willing to fight/corrupt/intimidate the government. Many, if not most, of these groups will be able to power themselves forward financially due to massive flows of money from black globalization. The result will be a diaspora north to the US to avoid the violence.

Since the beginning of 2009 more than 1,000 people have been killed in drug violence. In 2008 6,290 people were killed, double the 2007 death toll.

Since 1993 the City has been known for the violent deaths of hundreds of women – ‘las muertas de Juárez’ (The dead women of Juárez). According to Amnesty International , since February 2005 more than 370 bodies have been found, and over 400 women were still missing. Most of the cases remain unsolved.

In the next three weeks the Mexican Government is sending up to 5,000 new troops and federal police to the country’s most violent city, Ciudad Juárez , where law and order is on the brink of collapse.

Get us out of this mess…

I’ve been in Japan today, speaking at ‘Reforming International Institutions – Meeting the Challenges of the 21st Century’,  a seminar organized by the United Nations University and the British Embassy in Japan.

You can download my talk here (with pictures, references etc) – or the text only is available below the jump. There’s a webcast too.

Headlines:

  • It’s going to be a tough year. The financial meltdown has a long way to go, and the downturn is risking turning into a global depression.
  • Trade is a bell wether. Protectionist pressures are already on the rise. If they gain traction, take that as a warning of a wider loss of confidence in global institutions.
  • The unravelling of global economic imbalances could prove corrosive to the international order. If countries start to devalue to protect exports, expect a tit-for-tat dynamic to kick in.
  • Scarcity issues (energy, water, land, food, atmospheric space for emissions) remain the key medium term driver of global change. Commodity prices will spike again as soon as there’s recovery.
  • The downturn has stemmed the uncontrolled growth of emissions, but also lessened the chance of a robust global deal on climate.
  • Economic bad times could well drive increased conflict. A major new security threat might be the fabled black swan – hitting just when the global immune system is already overloaded.
  • If we experience a long crisis (or a chain of interlinked crises), we are likely to see either a significant loss of trust in the system (globalization retreats), or a significant increase in trust (interdependence increases). 
  • You need to stretch time horizons to get the latter – shared awareness (joint analysis of risks and challenges), as a basis for shared platforms (loose coalitions of leaders), which can lobby for a shared operating system (a new international institutional architecture).
  • 2009 sets a challenging agenda for the G20 (financial reform and economic recovery – but framed by a broader vision on climate, resources, security etc.)…
  • …the G8 (caucus of rich countries able to tee up Copenhagen and kick start development assistance if developing countries begin to teeter)…
  • …the UN (especially Ban Ki-Moon’s proposed high level ‘friend’s group’ on climate, but also as a fora for getting to grips with scarcity issues)…
  • and the Bretton Woods institutions and the WTO (first of all ensuring they keep their heads above water, then looking to ‘save globalization from itself’).
  • Oh and be ready for the backlash – people are angry and rightfully so, but that may well lead us down some populist blind alleys.

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More on cash incentives for AIDS prevention

Last May I wrote about a World Bank scheme to pay Tanzanians to test negative for sexually transmitted infections (a proxy for HIV/AIDS), and about the positive effects on health of Mexico’s Oportunidades conditional cash transfer programme (South Africa’s pension scheme has also had beneficial health impacts, as have programmes to pay US drug users not to inject).

A new study by Rebecca Thornton lends further support to the idea that financial incentives should play a part in HIV prevention. In a randomised trial of over 2,000 Malawians, she gave some participants money in return for testing for HIV and finding out their results. Those receiving the cash were on average twice as likely to turn up to be tested as those left empty-handed. Even pretty small sums, amounting to a tenth of a day’s wage, had a significant effect on the likelihood of getting tested.

Unfortunately, Ms Thornton also found that being tested didn’t have much impact on sexual behaviour (though several other studies have found that knowing you’re HIV-positive makes you less likely to indulge in unsafe sex). Still, cash incentives could be used to persuade the reluctant to adopt other preventative measures, like male circumcision, condom use or, as the World Bank hopes, to find their own ways of staying negative.

H/T Chris Blattman.

Predictions for 2009: we count our chickens before they’re hatched. Literally.

Charlie has got some debate going with his ten predictions for 2009, and I’m not going to try to rival it.  But after a year of following food prices unusually closely, I’ve decided to go where even Alex Evans has not gone before in an effort to tell the future: the official US Poultry Outlook Report – December 2008.  And no, this isn’t about avian flu.  It’s about how the global downturn is going to create a rift between increasingly internationalist turkey farmers and isolationist, America-first chicken and egg producers.  Feathers will fly!

Let’s start with chickens (to the initiated, “broilers”).  For the first nine months of last year, production was growing strongly.  But as food prices slumped over the last few months, so did the number of “chick placements” – which I assume is code for “fattening the little critters up in a big shed until they can’t walk”:

Over the last 5 weeks (8 November to 6 December, 2008), the number of chicks placed for growout averaged 7.4 per cent lower than for the same period in 2007. With uncertainties about the domestic and world economies, the trend of year-over-year declines in chick placement is expected to continue well into 2009. With smaller chick placements forecast, the estimates of broiler meat production have been adjusted downward in fourth-quarter 2008 and in the first three quarters of 2009.

Who are we going to blame for this? Foreigners. Unless they like brown meat:

All the uncertainties in the global economy have combined to sharply reduce the demand for broiler exports . . . but declining exports may be slightly mitigated by lower prices for leg quarters, the primary export.

So expect the chicken farming lobby to turn inwards. Their disinterest in foreign affairs will only be compounded by increasing imbalances in the egg market:

Shipments of all shell eggs and egg products in October totaled 17.9 million dozen, down 13 per cent from the previous year. Much of the decline is due to lower shipments to Mexico and Hong Kong.

But it’s all very different on the turkey front. There’s a glut of the damn things – more and more are being put into cold storage – and production is expected to slow  as a result. With supply higher than demand, the U.S. needs to offload large quantities of its national bird. Fortunately, there are proven markets available:

Turkey exports remained very strong in October, totaling 71.8 million pounds, up 36 per cent from the previous year. Much of the increase in October’s turkey exports was due to higher shipments to the largest markets — exports to Mexico, Canada, and the combined China/Hong Kong markets were all up considerably from the previous year.

So that’s good news… but wait a minute! Not only is China propping up the U.S. economy by buying vast quantities of American bonds, but now we discover that it will start underwriting the turkey industry? What if Beijing stopped buying? Even Mexico slapped a temporary ban on birds from some U.S. plants just before Christmas on health grounds.  And last Tuesday Russia demonstrated its resurgent nationalism by slashing its total poultry import quota from the U.S. by 1.25 million metric tons to 952,000 metric tons.  So here’s my first big question for 2009: can the U.S. poultry industry adapt to a multi-polar world?

Next week: a post in which I explain the new world order by tracking trends in the price of tea-leaves.

Ten foreign policy predictions for 2009*

  1. Mexico: The world’s leading narco state will, unnoticed, dissolve into total chaos destabilising the surrounding region.
  2. Middle East: February elections in Israel will see Binyamin Netanyahu being voted in while President Mahmoud Ahmadinejad will be voted out in Iranian elections in June.
  3. Asia: H5N1 will return with a vengeance.
  4. Bosnia: A growing culture clash between conservative Islam and the country’s avowed secularism will result in an increase in violence in the country.
  5. Africa: Robert Mugabe will be assassinated.
  6. UK: There will be no election in 2009.
  7. Turkey: Prime Minister Recep Tayyip Erdogan will abandon further attempts to join the European Union and instead turn East and focus on regional diplomacy.
  8. Iraq: Elections will be relatively peaceful in much of the country.
  9. Somalia: The US or France will be drawn into a short, intense ground war in the South West of the country.
  10. Afghanistan: In May Britain will increase the number of troops in the country. In October a European deal with the Obama administration will see France, Germany and Italy do the same.

* I will happily blog when these predictions are proven wrong.

A Bretton Woods II worthy of the name

Ahead of this weekend’s G20 summit, David and I have published a short paper entitled A Bretton Woods II worthy of the name.  Key points:

– The summit is unlikely to be able to live up to its billing.  Leaders do not yet understand the nature of the problem well enough to be able to implement viable solutions.  However, the problem is more fundamental than a simple lack of shared awareness. 

 – History suggests that leaders will only think the unthinkable on institutional reform once the challenge they face has really hit rock bottom. But history also suggests that we are wrong to think that the worst of the crisis is now past, given that many past banking crises have taken five years or more to unravel.

 – Bretton Woods 1 looked across the whole international economic waterfront in 1944, while this weekend’s summit will be much more narrowly focused.  Leaders will make a big mistake if they try and tackle finance in isolation, given the growing impact of resource scarcity, and that 2009 is supposed to see another ambitious global deal – on climate.

 – We need to recalibrate what we expect from globalization through a serious debate about subsidiarity. Where has globalization gone too far, too fast? Where do we need more integration at a global level? These were exactly the questions that preoccupied Keynes in 1933, when he weighed the relative benefits of global versus local across a range of variables.  We need a similar debate today as a precursor to serious international economic reform.

 – Leaders need to extend their horizons in (at least) five directions: onto longer time scales; beyond financial regulation into wider resource scarcity challenges; into other international processes, especially climate; towards grand bargains with emerging powers; and beyond government, to non-governmental networks.

Full version after the jump, or better yet here’s the pdf.

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