...Second Life offers an unprecedented opportunity for global meetings which are not just interactive and participatory, but which are also carbon neutral. And the UN is watching closely to see if...Second Life provides a domain where non-profits and NGOs might promote campaigns and share ideas as never before.

Developments also quotes Dahlia Khalifa on the benefits of Second Life:

I think Second Life today offers a great chance to reach out globally, like we never have before.

So Second Life offers two potentially important benefits to the development community - reducing the carbon footprint of conferences and increasing the global reach of initiatives like the Doing Business report. Developments speculates about a third possible benefit. Second Life is also home to a virtual economy in which avatars truck and barter in Linden dollars - a virtual currency. But these virtual dollars can be cashed in for real dollars, and apparently one enterprising individual, a German user named Ailin Graef, managed to rake in a million US dollars. Perhaps Second Life could offer citizens of developing countries opportunities to earn a real living through their online activities - contingent, of course, on having access to sufficient bandwidth.

I'd like to suggest a fourth - and perhaps even more important - opportunity represented by virtual worlds like Second Life. One of the questions that Dahlia Kahlifa received during the Second Life event really struck me:

One of the most interesting questions I got from the audience was whether or not Doing Business benchmarking methodology could be applied to the economy of Second Life. I had to think about that one for a few seconds. My answer was that yes, in principle, it could. To the degree that economic activity in Second Life and across its various islands is regulated by laws and procedures, it might be possible to rank where it is easiest to do business.

One of the biggest problems faced by development economics is that it is virtually impossible to test out macroeconomic policy prescriptions. Sure, we can compare, for example, different reforms carried out in the transition countries to try to figure out what was the best way to privatize state-owned enterprises, but at the end of the day we can never be sure that one policy was better than another. Did the Czech Republic's economy do better than Bulgaria's because of its reforms or because of initial conditions? Would the reforms implemented in the Czech Republic have played out the same way as they did in Bulgaria? There's no real way to answer these question with finality - at least not in the same way as microeconomic questions, which are made somewhat more pliable through randomized evaluations.

Virtual worlds offer a very partial remedy to this problem. I could imagine certain macroeconomic policy prescriptions being tested out in virtual worlds to see what the end effect looks like. One of the real moneymakers in Second Life is real estate - virtual real estate commands real money. Perhaps a virtual world offers an opportunity to test out ways to deal with asset bubbles a la the subprime crisis. Two researchers have also looked at the outbreak of a disease in an online gaming world to try to understand how people react to an epidemic. As they put it, "appropriate exploitation of these gaming systems could greatly advance the capabilities of applied simulation modelling in infectious disease research." Perhaps even Doing Business reforms could be tested to see what kind of outcomes result from particular reforms.

Video of the Second Life Doing Business Event:

The fact is that millions of very poor growers of rice and other food products are much better off as a result [of rising prices]. The poor that are affected the worst are the urban poor, not the rural poor.

Nevertheless, the net effect of rising food prices on global poverty in the short term is probably still negative, given the number of urban poor. But in the longer run, it's more of an open question. A permanent rise in food prices might prompt a shift in the allocation of labor to the agricultural sector. (This is the kind of thing that may already be happening in Brazil and could spread to other emerging markets.) Increased demand for agricultural labor could help reduce poverty, but it is not without risks.

If we are to believe the dire predictions of a recent report from Oxfam, climate change is making the agricultural sector increasingly risky because of much more variable weather patterns. Last week Oxfam released a report on the effects of climate change on poverty in Uganda called Turning Up the Heat. Among its dire predictions, the report claims that

[t]he future outlook, however, is bleak: if average global temperatures rise by 2 degrees more - as they are almost certainly going to do - then most of Uganda is likely to cease to be suitable for coffee. According to the UN Environment Programme, only patches of land on the periphery would still be able to grow coffee. This may happen within about 40 years, or perhaps as little as 30.

I won't try to get into assessing the validity of this kind of prediction. That's a risky business in and of itself. But I will point out that Oxfam is definitely not the only one making the point that developing nations will bear the brunt of climate change - this piece from the Atlantic concurs. These two trends together - a shift in labor to the agricultural sector and increasingly volatile weather patterns - seem to me to pose a serious long-term risk to poverty reduction efforts.

In May 2008, the Levada Center released the results of another survey (in Russian) that gives a picture of Russians' vacation plans across a number of years. Respodents were asked about their summer plans each year from 1997 to 2008. One of the options was "We're not going on vacation, there's no money for it." ("не поедем отдыхать, нет денег") The number of respondents giving this answer declined from 25 percent in 2001 to 17 percent in 2006 - a reflection of the respectable economic growth Russia experienced during this period. However, there has been a slight uptick in the last two years - 22 percent of Russians in 2008 said there wasn't enough money for a vacation. I just wonder if the Russians have managed to come up with a neologism as horrible as "staycation"?

Just recently, the EU approved the extract of the baobab fruit as an ingredient in foods in the European market. If you're like me, until today you had never heard of the boabab fruit (pictured right). According to the proprietor of the African Kitchen Gallery Restaurant in central London, "It is very nutritious, full of vitamin C and vitamin A. It has a very special flavour, but the closest I can get to it is jackfruit, which is like melon." That doesn't sound too bad to me.

Over at the Cheetah Index, blogger Chido Makunike has a mixed reaction to the EU's approval (Hat tip: Global Voices Online): 

There are many things about this developing export niche that will only become clear with time. I don’t think anyone yet knows what the potential size of this new export niche will be although the phrase “billion dollar industry” has been thrown about.

The baobab tree’s life cycle can be hundreds of years. It is obviously not cultivated, so the extract falls in the realm of naturally-growing, simply harvested “agro-forestry” products. Countries will have to take steps to ensure that the new interest in baobab will not cause over-exploitation or misuse; to make sure that harvesting is done in a sustainable way.   

But being a non-cultivated forest product, who “owns” the baobab fruit? Can anybody just take a truck into the forest, collect the fruit and export it? Obviously the sudden dramatic change in the economic importance of the baobab will open up many questions that will need regulation.

In other words, it looks like the baobab fruit could face the familiar economic problem of the tragedy of the commons. Without an obvious method to allocate property rights to the baobab tree, the fruit could be harvested in unsustainable quantities. And while Trade Theory 101 provides strong conclusions about the benefits of free trade, one has to wonder if in this particular case trade with the EU might exacerbate the tragedy of the commons, i.e. overharvesting of the boabab fruit.

There are solutions, however, that would both allow for the benefit of free trade and limit harvesting to a sustainable level. A blogger on African Agriculture discusses food processing in Tanzania:

Conserving indigenous and wild trees is now a viable economic venture in Tanzania...The fruit from these trees is processed into jams, juices and wines. So passionate are the farmers about conservation projects in the area that they have taken to policing the vast woodlands against loggers.

Mwadawa Luziga spends much of her day in the woodlands and she doesn’t regret it. She says it is now rare to see anyone destroying wild and indigenous trees because women conservation groups have taught the community at large that it is import to conserve such trees.

We believe that the Internet is a transformational force for societies. And it's making us all much more powerful as individuals, regardless of whether one is in New York, Stockholm, Bujumbura, Ouagadougou, or Cape Town. Regardless of background, education, social status, gender, age or economic situation, online access to information enables people to create opportunities for themselves. Seeing a student in a cybercafe doing his research using a search engine, a businessman chatting with a colleague abroad with instant messaging, or a young woman posting her photos to a social networking site - it's clear the extent to which academic, business and social life is fundamentally changing all over Africa.

Reactions from the blogosphere at White African and do good well.

Update: Fellow PSD blogger Giulio Quaggiotto pointed out to me that that's not all Google is doing in Africa. The company opened a development office in Nairobi last September. The New York Times notes that

[t]o be truly creative in a technological backwater is to defeat geography. Even as powerful a technological force as Google might not succeed. But dreaming of greatness, Kenyans are pushing Google to expand into completely new areas.

Employing a pair of randomized evaluations of computer use in classrooms in Gujarat, India, Linden found that computers improve learning outcomes when they are used as a complement to the normal curriculum, rather than as a replacement for the standard offering. He also found that the weakest students benefitted most, as the computers allowed for further practice of material already covered in the classroom. Finally, Linden also found that the computers were about as cost-effective an intervention as girls scholarship programs, cash incentives for teachers, and textbooks.

These results seem almost too commonsensical to have required the expense of randomized evaluations, but I think it's important to remember claims that have been made that programs like OLPC would completely revolutionize the classroom. It seems that technology can bring improvements, but they are incremental and not revolutionary.

Update: I should add that Linden's study was funded by infoDev, which houses an impressive collection of literature on ICT and education. Thanks to Ana Carrasco for alerting me to this.

Attempts to square the circle between business efficiency and social needs have been getting ever greater attention. The conversation over at Creative Capitalism is but one example among many. Harvard Business School has been working on these issues since at least 1993 through its Social Enterprise Initiative. Its most recent working paper, The Future of Social Enterprise, adds a new angle to the dialogue. 

This new working paper lays out possible future scenarios for the development of the social enterprise sector. The paper lays out four possibilities depending on the future flow of funding and the ability of the sector to demonstrate results. In a high octane version of the future, the social sector would demonstrate high performance and receive large inflows of funding from inherited wealth and technology entrepreneurs. The devil is in the details, however. How often is it possible for the social sector to measure and demonstrate results when it doesn't have a financial bottom line?

The working paper acknowledges this issue but doesn't resolve it. But in an online dialogue run by the authors of the paper, some participants outline approaches to this problem. I quote from perhaps the most thoughtful response so far, contributed by Barbara Schmidt-Ramer, director of Vencer Juntos:

Measuring impact is one of the biggest challenges I've been facing in the last five years as a social entrepreneur engaged in a venture of identifying, funding, training and developing entrepreneurs in some of the poorest regions of the interior of Brazil where market-driven investments and jobs are non-existent. Applying my know-how acquired at HBS and in the consulting industry, we built a computerized performance measurement system that tracks the financial performance of the new mini ventures funded.

Based on those quantitative measurements, we would have to conclude that the project is so far a failure and needs to close down. However, field visits and interviews with the clients tell a different story and indicate a success that deserved to be continued and expanded. One finding is that the clients themselves are very satisfied and have much more modest ambitions and goals than we, the social entrepreneurs. What looks like an insignifant improvement in income and quality of life to us is a big success to our clients.

...

Conclusion: the definition of a return on social investment is an extremely important but very difficult and complex exercise. Narrowly defined performance indicators from business alone will not provide the answer. The task must be a true interdisciplinary effort, drawing on know-how from business, the social sciences, funders, practitioners and clients.

There is considerable debate about whether the mobility of highly skilled labor constitutes a brain drain or a brain circulation. A publication of the Association of Universities and Colleges of Canada makes it clear that to the extent there is a brain drain, then Canada is a large beneficiary (Hat tip: GlobalHigherEd). Between 2001 and 2006, more than 3,000 Chinese PhD holders emigrated to Canada. Another 1,200 Indian PhD holders emigrated to Canada in that same time period. I have to wonder how many yuan and rupees the Chinese and Indian governments spent on educating these individuals before they took their skills elsewhere?

The government spends nearly $7 billion per year investigating companies for procedural infractions, Prime Minister Vladimir Putin said Monday, calling on the government to change fundamentally its approach toward regulating business...

The comments came as Putin was discussing a package of bills aimed at protecting the rights of small and medium-sized businesses. The proposed legislation would simplify business registration, eliminate insurance on certain goods and limit government intrusion by criminalizing extra-procedural investigations conducted by police and Interior Ministry agents, the news agency said.

Despite the current economic boom, small and medium-sized businesses have failed to develop apace. The problem is not so much finding labor or the high cost of real estate but the time and manpower wasted dealing with an unruly and corrupt bureaucracy, said Katya Malofeyeva, chief economist at Renaissance Capital.

In the 2008 rankings on the ease of doing business, Russia ranked 106, well behind neighboring Poland, which ranked 74. These measures should go a long way in helping Russia catch up.

In terms of business ownership, Banerjee and Duflo conclude that there is not much difference between the poor and the middle class. Rather, the big difference is in the type of employment:

Nothing seems more middle class than the fact of having a steady well-paying job. While there are many pety entrepreneurs among the middle class, most of them do not seem to be capitalists in waiting. They run businesses, but for the most part only because they are still relatively poor and every little bit helps. If they could only find the right salaired job, they might be quite content to shut their business down. If the middle class matters for growth, it is probably not because of its entrepreneurial spirit.

...

The reason why this matters—indeed why it might matter a lot—is that it leads us to the idea of a "good job." A good job is a steady, well-paid job—a job that allows one the mental space needed to do all those things the middle class does well. This is an idea that economists have often resisted, on the grounds that good jobs may be expensive jobs, and expensive jobs might mean fewer jobs. But if good jobs mean that children grow up in an invironment where they are able to make the most of their talents, one might start to think that it may all be worth it.

While this paper is obviously an important contribution, I question the authors' conclusion. I suspect they are correct that having a steady job helps for doing "all those things the middle class does well." Having some kind of steady income stream allows for long-term planning and investment, e.g. paying for private schooling for one's children. But the unspoken assumption in their conclusion is that private entrepreneurialism cannot be identical with "a steady well-paying job." In many of the countries included in the authors' dataset, these two things may not be identical. But perhaps this just means that the conditions for small enterprises is precarious for any number of reasons - credit constraints, poor market access, arbitrary regulations. Given that the data presented in the paper is only descriptive, it is hard to preclude the possibility that the best course of action may be to improve the operating environment for small businesses so that this form of employment is much more steady.

Update: Whatever the characteristics of the middle class, it looks like it's set to grow at a rapid pace. A post over at the Adam Smith Institute discusses the expanding middle.

I spent part of the weekend reading The Captive Mind, a noteworthy book by Czeslaw Milosz. Milosz was a Polish emigre and wrote this book in 1953 - also a noteworthy year, since both Joseph Stalin and Klement Gottwald died in 1953. It's a quick read on the plight of eastern European intellectuals during and after the Second World War, and well worth the investment of time.

There was one passage that particularly struck me that seems to give a bit of insight into what we might call the origins of capitalism. In a chapter entitled "Man, This Enemy", Milosz had this to say about the petty bourgeoisie in the people's democracies:

The petty bourgeoisie, that is the small merchants and craftsmen, cannot be taken so lightly. They constitute a powerful force, one that is deeply rooted in the masses. Hardly is one clandestine workshop or store liquidated in one neighborhood than another springs up elsewhere. Restaurants hide behind a sliding wall of a private house; shoemakers and tailors work at home for their friends. In fact, everything that comes under the heading of speculation sprouts up again and again. And no wonder! State and municipal stores consistently lack even the barest essentials...      

All this creates a field for private services. A worker's wife goes to a nearby town, buys needles and thread, brings them back and sells them: the germ of capitalism. The worker himself of a free afternoon mends a broken bathroom pipe for a friend who has waited months for the state to send him a repair man. In return, he gets a little money, enough to buy himself a shirt: a rebirth of capitalism.

...if Coca-Cola's predications are anything to go by, Africa's future is mostly bright. The company expects sales in Africa to grow by an annual 10-13% over the next few years.

If we were to extend this index to other parts of the world, we'd find one country experiencing a troubling trend - Russia.

An article in the Associated Press reports that Coke is being pushed out of the market by kvas. If you've never had the pleasure of drinking kvas, this wikipedia entry will give you an idea of what you're missing. It's a mildly alcoholic drink made from bread. While it was popular during Soviet times, it fell to the wayside in the 1990s. But it has been making a comeback in a big way - sales of bottled kvas have tripled in the last three years.

Can this trend really tell us anything about happiness or even prospects for economic growth? Obviously, the case isn't really comparable with many African states. But I think it says something. The transition from communism in Russia and in many other countries can in many ways be seen as a form of globalization, as most communist states were not integrated into the global economy. Perhaps the rise of kvas and the decline of Coke indicates in a small way the high water mark of that process of globalization that began two decades ago. What that says for economic growth, much less happiness, is hard to know.

In any case, while looks obviously matter in the adult entertainment industry, how much looks matter for the rest of us has been open to speculation. Now, at least according to some critics, it appears the High Court of India has decided to enforce the beauty premium as a matter of law. The High Court recently ruled in favor of Air India, which limited overweight staff to working on the ground. Writing in an op-ed in Ethical Corporation, Mallen Baker had harsh words for the decision:

I am not one of those who argues that fat is the new thin, and everybody should just be encouraged to feel great about themselves whatever size they are. If you are overweight, there are good reasons why you should do something about it. Health-wise it is better, most importantly.

But I am just not convinced that the Air India action in this case is anything other than a variant of the “young and pretty” stewardess argument. It is discrimination, plain and simple.

While it may or may not be the case that this is simple discrimination, there is a lot of evidence that attractiveness does play a significant role in earnings and career success. In an earlier blog post, Stephen Dubner discusses some of the research documenting the existence of a beauty premium. Although the research is not all unequivocal, it looks like tall people and those with whiter teeth earn more. Surveys in countries around the world have also found evidence that attractive people earn more.

So here's my (really unserious) question. Let's assume for a second that discrimation against the unattractive is regressive. If the result is greater inequality, does this then call for some kind of progressive policy to mitigate this inequality? Hopefully, pondering that will help keep you occupied for the weekend.

If you haven't seen it yet, you should really check out HealthMap, a website created to aggregate health-related news and produce heat maps of potential disease outbreaks. HealthMap's creators - researchers associated with Children's Hospital Boston and Harvard Medical School - just released an open access article describing the motivation behind HealthMap and the promise it holds:

The goal of HealthMap is to deliver real-time intelligence on a broad range of emerging infectious diseases for a diverse audience, from public health officials to international travelers...Ultimately, the use of news media and other nontraditional sources of surveillance data can facilitate early outbreak detection, increase public awareness of disesase outbreaks prior to their formal recognition, and provide an integrated and contextualized view of global health information.

One of the supporters of the project, head of Google.org Larry Brilliant, has high hopes for HealthMap. According to an article in Wired, he had this to say in 2006:

I envision a kid (in Africa) getting online and finding that there is an outbreak of cholera down the street. I envision someone in Cambodia finding out that there is leprosy across the street.

HealthMap isn't quite there yet - you can see this after playing around with the online tool and drilling down to some of the developing countries. The creators of HealthMap are well aware of this, and they discuss the issue in their recent article, stating that "there are critical gaps in media reporting in tropical and lower-latitude areas, including major parts of Africa and South America—the very regions that have the greatest burden and risk of emerging infectious diseases." The authors conclude that more work needs to be done to capture "locally feasible channels of communication." They also mention mobile phone alerts as a way to get information out to people.

I have a minor suggestion for them - treat mobile phones as two-way devices. In countries where information infrastructure is lacking, no amount of tinkering with news aggregation is going to give a very accurate picture of what's happening on the ground. Mobile phones hold the promise to overcome that problem. Mobile phones have managed to spread rapidly throughout the developing world as a device capable of providing basic banking services. A recent article in American Banker give examples of just how rapidly this technology is spreading: 76 percent of Turks own cell phones, compared to 26 percent with internet access; M-Pesa, a mobile-banking company in Kenya, has 1.6 million subscribers; 30 million South Africans own a cell phone. Many companies continue with plans to expand rapidly.

In theory, at least, owners of cell phones could send text messages to report outbreaks of disease. HealthMap's creators would have to figure out a way to aggregate this type of information. However, if banks can offer financial services over cell phones to the previously unbanked, it seems to me that it would be possible to deal with this kind of data problem. I am sure there must be other obstacles to this kind of effort - thoughts?   

While real estate has been taking a hit in many parts of the world, there is at least one place that is booming - Turkmenistan. Sebastien Peyrouse, writing in the CACI Analyst, describes the scene in Ashgabat, Turkmenistan's capital:

In the city center, expropriations are continuing as former Soviet quarters are razed to make way for grand, green esplanades and new building-lined avenues. Apart from administrative buildings, dozens of residential buildings with marble facades have also materialized.

The two big players in this construction boom are French and Turkish firms, and competition is getting stiff. Between construction firms from the two countries, they've managed to take in contracts worth somewhere between 2.3 and 2.5 billion euros. That's a tidy sum. It makes you wonder how the rest of the country is faring, in particular the rural areas, since the agricultural sector accounts for the livelihood of half of the population according to the most recent World Bank data.

Of course, Ashgabat is not the only place benefitting from the construction boom. A lot of money is pouring into a planned tourist area in the port city of Turkmenbashi. According to Peyrouse, this will be

   ...the site for an immense complex that will include sixty hotels, as well as restaurants, shopping center, activities and leisure centers, an artificial river, and also a free trade zone to encourage foreign firms to set up there. The total cost of the complex is estimated at US$5 billion.

Unfortunately, as Peyrouse notes, this location may not be optimal for tourism since "the sea there is cold and polluted." I still suspect it will fare better than the ice palace that Turkmenistan's former President Saparmurat Niyazov ordered to be built in 2004.

Of course, Turkmenistan's rural areas aren't totally missing out on the construction boom. Apparently, rural areas will see "the construction of several grain silos...the construction of a factory...[and] several health centers." I just wonder why the Turkish and French firms don't seem to be competing to get these contracts?

Manufacturers use a greenhouse gas called nitrogen trifluoride to make the televisions...As a driver of global warming, nitrogen trifluoride is 17,000 times more potent than carbon dioxide.

Air Products, one company that produces the gas for electronics, says that "very little is released into the atmosphere." Interestingly, however, a recent Air Products 'Safetygram' had this to say about nitrogen trifluoride (aka NF3):

NF3 can be manufactured, used, and disposed of in a safe and environmentally responsible manner. NF3 poses a minimal environmental hazard due to its nonreactivity and insolubility in water under normal conditions. Air Products has sponsored research at the Massachusetts Institute of Technology to study the reactivity of NF3 in the atmosphere. Also, Air Products continues to conduct
and/or support the analysis of emissions from semiconductor manufacturing production tools.

I poked around Air Products's website for a bit but was unable to find any numbers on emissions of this gas. However, I did run across this press release from 2007, which suggests they have been rapidly increasing production of the gas.

Given the amount of resources expended on the G8 - think of the jet fuel, huge dinners, and 20,000 police officers mobilized for security - many bloggers have happily pointed to the irony of world leaders discussing the food crisis and global warming. But one blogger in Japan going by the name of fookpaktsuen offered a novel proposal: run the G8 meetings via Skype (Hat tip: Global Voices Online). Here's what he had to say (translation courtesy of Global Voices Online):

Over 20,000 police officers were mobilized from Shikoku and Kyushu…and global warming is the main agenda, while the fact is that holding this summit is itself “earth-unfriendly”...If terrorist attacks are considered a threat, then instead of all state leaders getting together, it's better to have the meeting over Skype. The number of police on defense was larger than that of the 120 protesters in the anti-Summit demonstration, [which took place] in a rural area far away from the summit. It's absurd.

Indeed, Skype does have a conference call tool, and I have to say that I love the image of Bush, Brown, Sarkozy, and all the rest discussing global warming with headsets on like the ones pictured here. Then again, perhaps with the money they save on fuel and security they could afford to shell out a few more bucks for something a little more sophisticated. 

However, non-profits are often overlooked because most non-profit activity is not incorporated into the system of national accounts that govern reporting of economic activity. Some fellows at Johns Hopkins University have been clamoring for change. The Johns Hopkins Center for Civil Society Studies released a publication called Measuring Civil Society and Volunteering that argues that non-profit activity should be added to measures of gross domestic product. According to data they have collected on eight OECD countries:

[Nonprofit institutions] account for an average of 5 percent of Gross Domestic Product...[and] outdistances [the contribution] of the utilities industry and is on a par with that of the contruction and finance industries.

The scholars at the Center for Civil Society Studies also dispel another myth in their report. The nonprofit sector is not primarily dependent on philanthropic revenue - about 38 percent of its revenue comes from fees and charges and 35 percent from philanthropy.

Of course, the picture in OECD countries may look quite different from that in developing countries. While the data available for developing countries is limited, it suggests there are some important differences. A study from the Center put out in 1997 came to the following conclusion:

Compared to 4 or 5 percent of the labor force in the developed countries...nonprofit organizations in the developing world generally employ fewer than 2 percent of the workforce.

Given that non-profits often focus on providing social services that may have particular benefit to the poor, perhaps non-profits deserve more attention as part of the "private" sector that requires development.

[W]e find little systematic evidence suggesting that the maritime transport revolution was a primary driver of the late nineteenth century global trade boom. Rather, the most powerful forces driving the boom were those of income growth and convergence. Finally, we suggest that a significant portion of the observed decline in maritime transport costs may have been induced by the trade boom itself.

This is obviously a bit of speculation on my part, but I wonder if this finding suggests that the current rising cost of fuel will do little to dampen global trade nowadays?

Clarification: I should make clear that I am speculating about the impact of the cost of fuel on the cost of transportation and how that would effect global trade. Obviously, the rising cost of fuel will also have consequences for GDP growth, which may also harm global trade flows.

The G8 continues its meetings in Tokayo, Japan, and there has been a flurry of press releases and statements. Just a week ago, the Financial Times was speculating that the G8 leaders might backtrack on the commitment made at Gleneagles to increase aid to Africa to $25 billion by 2010. However, it looks like the G8 leaders have reaffirmed this commitment in a press release on Development and Africa:

At the mid-point to the Millennium Development Goals (MDGs), although progress has been made, significant challenges remain. We renew our commitment to these goals by reinvigorating our efforts, and by strengthening our partnerships with, as well as encouraging the efforts of, the developing countries based on mutual accountability...We are firmly committed to working to fulfill our commitments on ODA made at Gleneagles, and reaffirmed at Heiligendamm, including increasing, compared to 2004, with other donors, ODA to Africa by US$ 25 billion a year by 2010.

Deeper into the press release, after addressing health, water, and education, the G8 leaders also give a shout out to the private sector:

We encourage African countries to improve their investment climate and to continue their efforts for economic and governance reform to stimulate the increased flows of private capital...We are committed to working with Africans to create conditions that can lead to an increase of private investment through various measures.

And just a little further down, the G8 agrees to:

...encourage companies to consider how, in pursuing their business objectives, they can contribute to poverty reduction.

The odd thing, it seems to me, is that nowhere in this press release is there any mention made of connections between private sector-led growth and achievement of the Millennium Development Goals in health, water, or education.

To take but one example, the press release stresses the need to train large numbers of health workers to achieve a threshold of 2.3 health workers per 1000 people. Training all these new health workers will be expensive, and the private sector will undoubtedly have to be a part of it, as private education providers have grown dramatically all over the world. Yet no connection is made between improving the climate for the private sector and increasing the healthcare workforce. Connecting the dots could make both of the G8's goals—private sector-led growth and the Millennium Development Goals—more achievable.   

I haven't quite figured out what the connection is, but some folks have apparently found a link between organic farming and the iPhone 3G. An organization called Waiting for Apples is pulling a bit of a publicity stunt in New York by waiting in line days in advance of the release of the iPhone 3G, due to be out this Friday. What exactly is Waiting for Apples advocating? It's not 100% clear from their website. But here is what they're doing while waiting for the new phone:

• We will drink NYC's renowned tap water.
• We will have local healthy food (especially Apples) delivered by our community gardener friends, Greenmarket farmers, and locavore restauranteurs via bicycles and pedicabs.
• We will compost our foodscraps, to help sustain our fragile soil.
• And most importantly, we will talk to whoever happens to stop by about local organic farming as a critical element to sustainable healthy living, food security, youth education, and climate change mitigation.

An article posted in PC World suggests that's not all they're doing:

[A]s Gignilliat [one of the organizers] put it, "We think it's a good idea to grow food," he said. "It's just a good thing." His demeanor and manner of speaking suggested he may support not only growing plants, but also smoking them.

Perhaps this is how the organizers found the connection between organic farming and the iPhone 3G? I'm not sure about that, but I am sure there will be more antics in the remaining days before the release of the iPhone. You can keep up with the goings-on at heyheygig's photostream on Flickr. (It looks like this is the fellow discussed in the PC World article named Heyward Gignilliat.) He's also got a lot of other cool pics besides those of the Waiting for Apples event, including some colorful cars in Veracruz. I suppose you can have a look at those after attending to your organic tomatoes.

The Africa SMME Awards are presented to businesses that strive for excellence in order to be competitive in national, regional, and international markets. These businesses are well established, in good financial shape and enjoy a reputation for quality, integrity and service. Furthermore, they act in a socially responsible manner and create a work environment in which their employees can learn and grow.

The Africagrowth Institute is looking for nominees until the end of July, so you still have time to make a submission.

If you want some inspiration before making your nomination, you can do a little background research on entrepreneurship in Africa by reading David Fick's Africa: Continent of Economic Opportunity (pictured). In this 500+ page volume, Fick tries to make clear that "[w]hile many write off Africa as the continent of despair, other enterprising individuals and organisations have recognized the huge, untapped potential of Africa and are actively pursuing business ventures across the continent."

For a long time, the title of richest man in Europe fell to Ingvar Kamprad, the founder of Ikea. It seems, though, that his title may have been taken away. Rinat Akhmetov (pictured), a Ukrainian businessman, may now hold that honor, at least according to an article in the Korrespondent (Hat tip: Ukrainiana). According to the Korrespondent, Akhmetov is worth some $31.1 billion, while Forbes has Kamprad pegged at 'only' $31 billion. If it's true, this development would be consistent with a Merrill Lynch/Capgemini study showing that Western Europe is losing its share of the world's billionaires because of large gains in developing and transition countries. 

However, Akhmetov is not the only person with a claim to be richest man in Europe. According to Stanislav Belkovsky, a "controversial political scientist," Vladimir Putin is worth some $40 billion. Putin declined the honor of this particular title, calling the political scientist's claim "trash."   

Creative Capitalism: A Conversation is a web experiment designed to produce a book -- a collection of essays and commentary on capitalism, philanthropy and global development -- to be edited by us and published by Simon and Schuster in the fall of 2008. The book takes as its starting point a speech Bill Gates delivered this January at the World Economic Forum in Davos. In it, he said that many of the world's problems are too big for philanthropy--even on the scale of the Gates Foundation. And he said that the free-market capitalist system itself would have to solve them.

It sounds like an interesting experiment (although the fall 2008 date for a book sounds a bit, eh hem, ambitious). So far, they've gotten posts from the likes of William Easterly, Milton Friedman (ok, this one is a reprint), Clive Crook, and Richard Posner, among others.

This collection of commentators has made for a pointed discussion. Here are some of my favorite bits:

Ed Glaeser:

Milton Friedman's 'The Social Responsibility of Business' is a great essay which reminds us that the anthropomorphic tendency to treat corporations as independent actors is an error. Corporations represent shareholders and their primary obligation is to enrich those shareholders. When corporate chieftains use their shareholders' money to support pet social causes, they are depriving their shareholders of the right to make their own decisions about charity and they are taking credit for the largesse of their investors.

William Easterly:

Falling all over ourselves apologizing for capitalism and then offering a token amount of corporate philanthropy to try to repair its imagined defects is lame. If consumers of corporate products want those corporations to give a little bit of the money to the poor, then I am sure corporations will respond to demand. But this is small stuff as a force against poverty based on any available track record. A more reliable path to success against poverty is to simply take advantage of all the power of conventional capitalism that has already been abundantly demonstrated in the steady fall of global poverty over the decades.

Paul Ormerod had this to say about Bill Gates:

Academics should be feeling pretty pleased with this debate, regardless of the stance which they take. Men who have made stupendous amounts of money seem to really, really want to be remembered for the profundity of their thoughts rather than their mere financial success. Mr Gates, with his concept of creative capitalism, joins Mr Soros with his invention of ‘reflexivity'.

And Bill Gates himself:

Well [creative capitalism is] not completely well defined. It’s a phrase that I used in a speech at Harvard a year ago, because I totally believe in markets as such powerful forces for drawing out innovation and creating things that are sustainable. And yet, you do get trapped in this situation where the markets serve where the dollars are, so you don’t get markets meeting the needs of the poorest. And so how do you bootstrap or support the needs of the poorest so markets are reaching out to them.

My one question is this - who's going to buy this book since it's all online for free? Too bad there were no economists to advise them on this experiment...

Update: It looks like the folks over at Creative Capitalism have picked up on this post. I have actually managed to come in for some harsh criticism from some of the commentors. I should note that the final line in this post - "there were no economists to advise them" - was meant as a bit of irony, considering the number of outstanding economists contributing to the conversation. I think I'll have to buy the book myself now...

A Difficult Road: India faces a struggle to upgrade its roads, railways, and ports.

Emerging Markets: Not the haven investors hoped they’d be.

Hot Money: Who isn’t putting their money into China?

Private Equity: It’s taking off in Africa.

A Global Union: United Steelworkers and Unite take the first step toward a global workers union.

Privatization Czar: Chubais says “don’t privatize everything.”

$2,300 Car: India’s Tata Motors plans on beginning production of the Nano minicar later this year. (My question: Does it come with an iPod?)

Bread Basket: Brazil offers credit to farmers to increase agricultural output, tamp down inflation.