Who's afraid of Vietnam?

Newsweek has a really positive report on the Vietnam economy. Some quotes:

Economic reforms pushed by Southern entrepreneurs have fueled an economy that's grown nearly as fast as China's over the last decade. Manufacturing jobs are plentiful, and the national poverty rate has plummeted from 57 percent in 1993 to about 18 percent today.
...
[Vietnam] could become Southeast Asia's most important industrial economy in the coming decades, with the potential to surpass Thailand. This year alone, Vietnam is on track for $7 billion in foreign direct investment, roughly the same as giant India."
...
Often compared to China, Vietnam is actually more similar to Taiwan circa 1970, an economy then burgeoning with small and medium enterprises ready to burst onto the global scene.

A few weeks back Enda led me to this post from a Malaysian concerned about Indonesia's progress. It's was sad to realize that our advancement is seen with worry by others. I thought, "why couldn't we grow together?"

And now I'm in his shoes. As a fellow south-east Asian, I thought I should be proud of Vietnam's achievement, but I'm getting shivers instead. For example, I'm afraid that investments would keep going to Vietnam instead of Indonesia.

Apparently, developing countries' economic progress is also seen with shivers by free-trade protagonists of the developed world. Guardian's senior economics commentator, William Keegan, told the dilemma of "someone who had been a senior international official promoting free trade and open markets for many years." This person "had met an old friend whose previously successful US furniture business had collapsed in the face of the kind of international competition that he (the former official) had been busily promoting."

My dad once told me of a "negative" character common to the old people from our village that should be avoided: "happy to see others miserable, miserable to see others happy." But now it seems that such character is the dominant mindset.

I don't know whether I should be sad, happy, or just embrace this with a straight face.

Pic source: Newsweek.

technorati tags: political-economy, Vietnam, free-trade

Wasting rice

Tempo Interactive reported that

1. Indonesia needs up to 195 thousand tons of rice by the end of this year. There is a gap between rice production and consumption rate.
2. Not only rice production can't keep up with population growth, but in following years it is expected to decline due to decrease of the harvest field measurement and land fertility.

A few days ago a friend forwarded me an email that seem to be written by someone called Tarunajaya. It talks about how everyday rice is wasted by people who don't finish their meals:

Ceritanya ada seorang anak SD yang memenangkan suatu perlombaan pembuatan makalah dikampungnya. Masalah yang diangkat oleh anak ini sederhana sekali, yaitu pemborosan beras orang indonesia. Makalah ini dia susun melalui pengamatan saat bekerja membantu di warung dekat rumahnya.

Dalam pengamatannya dia menghitung bahwa rata-rata orang yg makan disana menyisakan 2 atau lebih sendok nasi atau 200 butir nasi setiap piringnya.

Kemudian dia menghitung, berarti setiap hari setiap org membuang 200 x 3 kali makan = 600 butir nasi. 100 butir beras kira-kira 5 gram. Sehingga kalau dikonversikan berarti setiap hari setiap org membuang 30 gr beras. Kalau org Indonesia ada 200 jt berarti terbuang 30 gr x 200jt = 6.000 jt gr = *6.000 ton beras SETIAP HARI*. Iya, satu hari saja sedemikian banyak beras yg terbuang.

The point is that rice is available. It's just that people who has it are wasting it. A classic problem of wealth distribution, rather than production. Amartya Sen has covered this since he wrote Poverty and Famines over two decades ago.

technorati tags: economics, rice, food-distribution

The economics of increasingly disasterous global warming

From BBC, a couple of weeks ago (link via John Orford):

A report by economist Sir Nicholas Stern suggests that global warming could shrink the global economy by 20%. But taking action now would cost just 1% of global gross domestic product.

Studies about global warming are nothing new. What's interesting about the Stern Report is that it's "the first major contribution to the global warming debate by an economist, rather than an environmental scientist."

[The report] warns that if no action is taken:

• Floods from rising sea levels could displace up to 100 million people
• Melting glaciers could cause water shortages for 1 in 6 of the world's population
• Wildlife will be harmed; at worst up to 40% of species could become extinct
• Droughts may create tens or even hundreds of millions of "climate refugees"

...
The review coincides with the release of new data by the United Nations showing an upward trend in emission of greenhouse gases - a development for which Sir Nicholas said that rich countries must shoulder most of the responsibility.

John Orford suggested to use Pigouvian Taxes as disincentives to pollution:

Pigou noticed that production often causes costs to the environment which the company themselves don't have to pay. Obviously the users of the environment generally have to pay the cost sooner or later in some form.

Pigou's idea was to tax the sale of products depending on how polluting they were, in effect the government would recoup the cost to the environment of the product. Consumer's would directly see the high cost of highly polluting products, which would give them an incentive to seek out less polluting products and firms to pollute less.

technorati tags: economics, global-warming

In defense of rural-urban migration

Kompas this weekend featured a special report on rural-urban migration. Two main arguments were presented in favor of this: the "no-alternative" argument, and the "rights-based" argument.

The "no-alternative" argument basically says that life in the villages sucks. Due to failure of rural livelihoods, some of the younger females had to become commercial sex workers, older males day laborers.

Marco Kusumawijaya, as proponent of the "rights-based" argument, said,

Wartiyah, like all migrants, including the Governor, came to Jakarta to look for a better life...
[...]
The job of cities is to respect this right, help them go through the process of becoming good urban dwellers, and as far as possible serve them as citizens who give governments a reason for being.

However, two city governments (in Bandung and Makassar) complain about rural-urban migration. They say,

For those who come and work, it's no problem. But for those who can't find work and become homeless, they becomes a heavy burden for the government.

What? You mean if they're unemployed in the village, it's not your burden? You're lucky Indonesia doesn't have to pay a stiped for the unemployed (like in some welfare states), and you're complaining that the people are taking care of their own lives, whereas the government has failed to do so?

To give more weight to the migration proponents, let me propose a third argument: that "urbanization is good" and should be prepared for with optimism. More labor in cities enable cheaper cost of everything, i.e. construction, food, domestic help, factory-based production. Low-income rural migrants keep cities competitive.

Imagine if you have to pay double for your food and triple for your babysitter (because it's so hard to find cheap labor). Then you'd probably demand more wage from your employer. If so, then the employer might think that your city is not competitive anymore, and they'll move their business to another city. What do you say now?

Why do we keep blaming the negative effects rural-urban migration to the low capacity of our migrants? Why don't we blame the entrepreneurs who are not ready to absorb such opportunity? Why don't we blame our education system that failed to prepare its citizens to become able workers? Why don't we thank the positive effects of having rural migrants in the city, such as the cheap food and services that we consume, and maybe our job too?

technorati tags: cities, urbanization, migration

Problems in water supply privatization

Ater 10 years of privatization, it seems that neither the government nor the private sector can deal with Jakarta water provision satisfactorily.

First off, government-owned Regional Water Corporations (PDAMs) are a mess. According to a Ministry of Public Works publication (Implementation of Safe Water Provision System 2005), PDAM's piped water system only serves 42% of the urban and 8% of the rural populations in Indoneisa. Out of 318 PDAMs nationwide, only 10% are "healthy". "Leakage" (both in the literal and connotative sense) reach 36%.

That's why in Jakarta PAM has joint contract agreements with PT PAM Lyonnaise Jaya (Palyja) and PT Thames PAM Jaya. However, after 10 years of privatization, Kompas reported that the tug-of-war between PAM and their private foreign counterparts are going strong.

Regarding privatization, a PAM representative said,

there's no benefit for PAM, only for the foreign counterparts. We're only sucked dry, and consumers are put at a loss.

The Amrta Institute of Water Literacy said that problems include high fee paid to the foreign companies for expatriats and loan guarantee. And,

Although Palyja claim deficit, in reality they received profits of Rp 115 billion in 2004 and Rp 58 billion in 2005. Meanwhile, PAM's debts keep increasing.

This is exacerbated by the fact that the National Audit Agency (BPK) can only audit the PAM, but not Palyja or Thames PAM Jaya.

There seems to be a growing movement to return PAM to being a national/government-run agency. This should be seen with caution: do we really want to return to the classic condition of PDAM "sickness" and water/money "leakages"? But if we hand everything over to the private sector, it seems that nothing much is changing, while profits are taken away.

Maybe the best way out is self/collective management, as we have in the villages.

PS:
1. See AMPL's workshop on water and sanitation regulatory framework.
2. See Walhi's take on Water Resource Law no. 7/2004
3. See Water Justice: resource center on alternatives to privatization

Update:
1. Enda said: "There's one great article (... on Fortune) about water privatization that says water will be the oil of 21st century...". I couldn't get access to the Magazine's special report in 2000, but found this, this, this, and this instead.

2. UNDP's Human Development Report for 2006 is titled Beyond Scarcity: Power, Poverty and the Global Water Crisis.

technorati tags: water, privatization, political-economy

Less e-mail, more SMS

Indonesians may think e-mail is "more advanced" than SMS/text messaging. SMS has been widely used since the cellphone boom in the late 1990s, while e-mail tends to be for the rich who can afford a computer.

In the US, it may be the other way around. When I was in LA in 2003-04, SMS was not very popular. I'd send one to my friend and she wouldn't know how to open or reply it.

But that is changing. At least among the young Americans. For them, now, "e-mail is for old people." Students still use e-mail to correspond with professors, but with friends they'd use more SMS, Instant messaging, or social networking sites such as MySpace. A major reason for the first two is that they accomodate more real-time communication.

So just because cellphones are cheaper than computers, it doesn't mean that SMS is "less advanced" than e-mail. In the future,

mobile phones will be the prime means of accessing the web for users in developing countries.

Links are from varnelis.net. Apophenia further explains what she means by "email is dead"

technorati tags: ICT-for-development

Holcim, Grameen Bank, and housing for the poor

Just found out that Nobelaureate Muhammad Yunus, co-founder of Grameen Bank, is also a founding member of the Holcim Foundation for Sustainable Construction Advisory Board.

Holcim has been very active in building a strong social face in Indonesia, especially since the Aceh reconstructions. The Grameen Bank approach is gaining popularity here as well, which is crucial in getting conventional bank’s attention to the poor as clients.

Are we seeing a light in the effort to bring private sector financing to enable the poor to build houses?

Just to balance things off: my friend was outraged when he found out about Yunus and Holcim. He said, "See.. this whole Grameen Bank thing is part of the global capitalism scheme!"

Previous post on problems with low-income housing mortgage

technorati tags: housing, poor

AMARC 9: World Community Radio Gathering

The 9th World Conference and General Assembly of community radio broadcasters (AMARC 9)is coming up on November 11th. Combine is sending 2 people there.

An interesting topic to be discussed at AMARC 9 is the social impact of community radios. What difference do community radios make, nowadays? The World Congress on Communication for Development apparently didn't think there's much difference. Here's how AMARC viewed their stand:

Radio specialists are dismayed that the global meeting has overlooked the vital role of community radio in empowering people and strengthening democracy in many regions, including, conflict places.

id21 insights stands by AMARC and says that community radios provide "voices for change."

While much of the debate focuses on the Internet, many planners and practitioners have begun to realise that it is to traditional media, such as radio, that poor people are most likely to turn for access to information and voice.

technorati tags: ICT-for-development, community-radio, AMARC

Bush's war hurts Americans too

Hizbut Tahrir rallied today to reject Bush's plan to visit Indonesia.

Many Indonesians, however, have not realized that Dubya's war is not only hurthing the rest of the world, but US citizens too. Wokusch's article on dissidentvoice said that:

... the endless war on terror requires a permanent war economy, with taxpayers subsidizing the military industry at the expense of domestic social programs and global security. In 2000, for example, the US military budget was roughly $289 billion, but the administration's military budget request for 2007 has soared to $462.7 (billion).

Could it be that the war has caused the recent US deficits?

When Bush took office in 2001, for example, the annual surplus was $284 billion. He turned that surplus into a deficit of $248 billion by 2006, a staggering loss of over $530 billion in five short years.

It should be interesting to compare this data with profits that some companies, like Halliburton maybe, has made over those years.

technorati tags: politics, bush, war-economy

The source of Jakarta's congestion

Head of Jakarta Transportation Agency, Mr. Nurachman, is optimistic that Jakarta's traffic congestion problem will be solved in 5 years. That is if people use the busway. This statement was given at Metro TV's Padamu Negeri talk show this evening.

I think the theme of the talkshow, "Busway: Source of Jakarta's Congestion?" was ridiculous. Apparently many people are aggravated that the building of busway lines have taken so long, and taken valuable traffic space away. Nurachman, however, said that the main problem lies in the 300 new cars and 1,500 new motorcycles which are "born" everyday in Jakarta.

The head of Indonesia Transportation Society suggested that the government should conduct better public communication and be open to dialogues on problems caused by the process of building busway lines.

Previous post on Busway here.

technorati tags: cities, jakarta, busway