Category Archives: Uncategorized
Trading in trade offs: the Bangladesh factory collapse
Take a look at this image, if you haven’t already.
It’s a haunting photo from within the factory building in Bangladesh where to date over 800 workers have been found dead after the unsafe structure, the site of five garment factories, collapsed with thousands inside it last month. These avoidable deaths came even after workers expressed fear of widening cracks in the walls days before.
To peer into this intimate moment of unspeakable tragedy, the culmination of a chain of exploitation that begins right under our noses, seems almost intrusive: perhaps a condemnable continuation of this ethos of detachment that allowed this collapse of human dignity to occur in the first place. In life, and in death, we consume them and what they create; their bodies byproducts of the most trivial appetites of our everyday “advanced” existence.
Or maybe to look and reflect on it is the least we can do?
Having studied trade and the debate over the role of labour standards in several of my classes at Korbel, I can say that my reading has taught me there are no easy answers here, and I must admit to finding comfort in the numbing apathy induced by mental and geographic distance.
But if we are to look at their bodies, might we take from this image a sense that it is incumbent upon each of us to continue to trouble ourselves with the question of how we move from this place: a place where people are continually reduced to disposable inputs whose lives have less value than the capacity to fulfill a supply order on time. Or perhaps more importantly, with understanding how we got to this point to begin with. I am totally guilty of failing to do so.
Do You Eat Ethically?
Disclaimer: This post has nothing to do with GFTEI or Korbel! Instead, it relates to an event I recently attended in Denver which I believe included important lessons for everyone who eats out in America today. Let me know what you think…
Do you eat ethically? If you live in Colorado, the health nut heaven of America, where our love of all things organic and locally-sourced is inversely matched only by the smallness of our waists, chances are you care a lot more than the average American about the ethical quality of your food: whether it is locally sourced, organic, humanely-raised, sustainable, and most of all, makes you feel good.
Case in point: in 2010, Boulder was named “America’s Foodiest Town” on the basis of it having, among other things, “quality farmers’ markets, concerned farmers, dedicated food media, first-rate restaurants, talented food artisans, and a community of food lovers.”
In Boulder, and indeed all over Colorado, it is hard not to be bombarded when perusing a menu (if you happen to be lucky enough to be a middle-class person with disposable income to spend on good food) with head-spinning descriptions of how ethical, how healthy, how spiritually wonderful, your meal is going to be.
One might feel relatively satisfied by simply mustering the ability to choose what to eat from among these at times elaborate choices. Let’s imagine that once you’ve made your selection, you chose ethical food, by all the typical foodie standards. But having done so, can you be satisfied you are really eating ethically? This is the question that Saru Jayaraman, co-founder of the Restaurant Opportunities Center-United (ROC-United) poses in her new book, “Behind the Kitchen Door.”
Jayaraman, a Yale law graduate who founded ROC 12 years ago, is blowing the lid off the reality of the restaurant industry, currently the fastest growing sector of the US economy in terms of employment. Beyond the certificates telling us our restaurants are health and safety certified, and our menus are ethical, there is a grubby situation behind the kitchen door.
And it’s a reality that you should be concerned about whether you are care about workers rights, or just about your own health. Which is what makes Jayaraman’s organization, her book, and her infectious verve so exciting – it’s got such potential. Potential to change the lives of the over 20 million people (1 in 10 workers) in this sector if it succeeds, and a significant chance to in fact succeed, because it appeals to both progressives and to those who just like to eat.
As Jayaraman pointed out during a recent visit to Denver to speak at an event organised by Colorado Jobs With Justice, the fact that restaurants are working extremely hard to cater to the foodie market did not happen overnight. It was a result of the release of several books and documentaries that lit a spark under the national foodie conscience. In so doing, “ethical” food became a permanent part of a modern foodie’s lexicon. Books/documentaries like Eric Schlosser’s Fast Food Nation (2003), Michael Pollan’s The Omnivore’s Dilemma (2006) and Food, Inc. (2008) played a huge part in this.
One of the most compelling components of Jayaraman’s argument for restaurant workers’ rights builds on this sea change in consumer preferences. It’s the idea that if we care about the chickens, pigs and vegetables that become our dinners, we should care about the hands that prepare them and serve them: about the bussers, servers and others who are behind the kitchen doors.
The facts of their situation are shocking: The federal minimum wage for “tipped” restaurant workers has remained at $2.13 per hour for the past 22 years (the federal minimum wage for non-tipped workers is $7.25). This means it has not even risen in line with inflation (so essentially, it has decreased). Worse still, workers oftentimes do not make the tips necessary to make up the difference since 1 in 5 do not receive the tips that are owed to them – the tips that are supposed to make up the majority of their salary. Paid sick days are a benefit not enjoyed by 90% of those who work in the sector. Segregation is also rampant in the industry, with white workers twice as likely to get (somewhat better paid) jobs as servers than Latino or black workers.
What all of these statistics equate to is “incredible poverty” among those working in the industry. In fact, says Jayaraman, restaurant workers suffer poverty at three times the rate of other workers, and are twice as likely to use food stamps. This inability to make a “living wage” and the lack of paid sick days also means a greater likelihood that those who are sick are going to be forced to come to work anyway (because they can’t afford not to), and pass their germs on to you via your dinner which they are preparing.
This unsavoury reality reflects the powerful lobbying influence of the National Restaurant Association (the “other NRA”!), ROC’s main opponent in its fight for restaurant workers’ rights. In 1996, when Herman Cain (remember him?) took over as President of the NRA, he struck a deal with President Bill Clinton and his fellow Democrats. In so doing, the Pizzaman’s enduring legacy became the ongoing economic injustice meted out to restaurant workers nationwide: In exchange for a federal increase in the regular minimum wage, the tipped minimum wage was de-coupled from the “regular” version. The result: despite occasional increases in the regular minimum wage, the tipped version hasn’t changed since 1991. Consequently, recent talk by President Obama of raising the minimum wage would have no effect on restaurant workers even if it were to be acted upon.
For the last 12 years, ROC has been working on building the “groundswell” which they see is now needed to overcome the influence of the NRA and get congress to recognize restaurant workers’ fundamental rights to decent working conditions via legislation. Their innovative efforts, which include producing a diner’s guide to ethical eating (available in smart phone app form to help you find ethical eateries), have been met with major victories, as well as a backlash from the NRA, which Jayaraman says only adds further validity to ROC’s mission.
“It’s clear they don’t have anything legitimate to say about raising the tipped wage from $2.13, and are therefore trying to attack us as individuals,” said Jayaraman, who recently appeared as a guest on MSNBC’s Up With Chris Hayes, and found the NRA refused to send a representative to appear along side her to respond.
Whether it’s the realisation that those who are putting food on your table may not have the means to put food on their own, or simply the cringe that crosses your face when you think about the hands of a sick worker preparing your food which urges you to action, Jayaraman recommends several practical steps that each of us can take to begin to address this disturbing scenario.
When you eat out, you can choose to select restaurants that are truly ethical using ROC’s Dining Guide. Perhaps more efficaciously, as a paying customer you can choose to say something to managers at restaurants which aren’t. Jayaraman recommends approaching them with the following: “I loved your food, I love your service, what I’d really love to see is the opportunity for some of your Latino bussers to work as servers. Or for your employees to receive paid sick days…”. While this might not elicit an immediate reaction, “if a manager were to hear it 10-15 times a week, he would definitely start to think about it,” suggests Jayaraman. You can also pressure your elected representatives to support raising the tipped minimum wage and paid sick days for restaurant workers. As Jayaraman tells us, as consumers we “don’t just hold forks when we eat, we hold incredible power.”
Goodbye, cruel world.
Winter Quarter 2013 Assignments
As it turns out, this quarter is turning into a bit of a mindbender. 18 significant assignments in total, including 2 research papers, 2 research paper prospectuses, 2 accounting projects, 4 discussion papers, 2 exams and countless other time-consuming THINGS over the course of the next 10 weeks (not to mention READING for said assignments, being a research assistant, running a student organisation….eating? shopping for food to eat? cleaning? laundering? exercising?….and…oh yes….applying for JOBS). Excuse me while I go and bury my head in the snow outside for a second.
OK, done.
BRING IT ON, Winter 2013.
(NB: Above link will download the document onto your computer. I tried to just display it here, but it didn’t comply. You are warned. But it’s not a virus, I promise).
Drawing Gold From the Moon
The title of this blog is a quote from a famous historian of international finance, Barry Eichengreen, about how Britain used its power to maintain the classical gold standard monetary regime from 1870 – 1914. Essentially, what he is talking about is the fact that Britain maintained a gold standard (where all currencies are tied to a certain quantity of gold) without actually having very much gold. Somehow, someway, it was able to avoid a massive financial crisis simply by making people believe it knew what it was doing, or if they didn’t believe that, it made sure they acted like they did anyway.
Nowadays people like Ron Paul talk about a return to a gold standard as the be all and end all of the world’s problems. A gold standard system is seen as one where there was stability; not like the turbulent financial environment we find ourselves in today. But there’s a few things that get overlooked when you hear these calls for such a return, and one of those is POWER.
According to its proponents, the Classical Gold Standard, and the Gold Exchange Standard that came between World War Two and ended in the 1970s were periods where States played by the “rules” of the international system and as such, prosperity and joy reigned.
In actual fact, in the Classical Gold Standard, the British used their imperial power over their downtrodden colonies to maintain the system (pretty sure India doesn’t want a return to the Classical Gold Standard for this reason). Meanwhile, in the Bretton Woods period, the US as the hegemonic power essentially ran the show. It did so somewhat benevolently at first (if by benevolent you mean that in pursuing its own self interest it let some other countries do what was in their interest too for a while) but ultimately it went a little power mad and started aggressively pursuing global financial liberalisation simply because it realised that having inadvertently opened the Pandora’s Box of financial globalisation as it pursued other objectives, it was gaining a new structural power vis a vis other states within this financially liberalised international system. Most importantly, it could exploit that power even as it (like all other States) lost sovereignty to the whims of the financial markets and its merry band of speculators. This, very basically, is what the US has been up to in the international financial system from the 1970s until today.
Anyway…to cut a long story short, I wrote an essay about all of this for my International Monetary Relations class, and here it is, in Wordle form, because I thought it looked pretty cool:
Inequality
During my time at Korbel I was introduced in an academic way to the concept of inequality. As a result, I ended up doing a paper on it for one of my classes, and following that, I decided to look at the issue of inequality in The Bahamas.
Here is something I wrote for The Tribune in Nassau, Bahamas, about inequality. Let me know what you think.
The Bahamas is Becoming Increasingly Unequal
By ALISON LOWE
Nellie Day – remember her? She wrote an article claiming that the majority of Bahamians live in shacks made of straw and wood, while a wealthy elite can afford mansions made of concrete and strong enough to withstand a hurricane. Her clearly poorly-researched and shoddy article appalled The Bahamas at large and soon after it was removed from the US-based travel website where it had been posted, and the author was forced to issue an apology.
While Nellie Day’s claims were clearly enormously exaggerated, there is an aspect of our development experience which her controversial article touched upon which may in fact hit somewhat close to home The factual accuracy of her article notwithstanding, Day did what something our politicians might do well to do more of: talk about inequality. Inequality is an often-cited aspect of development, but it is scarcely mentioned in The Bahamas. What actual evidence is there for what inequality looks like in The Bahamas, and should we care either way?
Data is scarce (The Bahamas and the Caribbean as a whole is what has come to be termed a “data poor region”, which severely impedes progress in policy-making) but I did find something to answer my question – and the findings are troubling. A country’s Gini coefficient measures inequality, on a scale of 0 to 1, with 1 representing total inequality. The Bahamas has the highest inequality in the entire Caribbean, according to a recent study by the United Nations Economic Commission for Latin America and the Caribbean, with a Gini coefficient of 0.57. Secondly, inequality is only increasing.
In the Department of Statistics’ most recent Labour Force Survey, a graph showing trends in income distribution from 1973 to 2011 shows a laudable closing of the income inequality gap from one of quite severe income inequality in the Bahamas in 1973 to a vastly improved position by 1989. However, the next point at which data is available – 1999 – shows that the 1990s were a turning point for income inequality trends. From 1999 onwards, income inequality has been increasing in The Bahamas. That is to say the rich hold a higher proportion of overall income in comparison to the less well off. To be clear, the increase is not massive, but it is a negative trend. Meanwhile, data also shows that the share of the overall wealth of The Bahamas held by the poorest 20 per cent of the population has not changed at all in percentage terms in at least 38 years. While their absolute household income has increased the bottom 20 per cent’s share of total household income has remained in the vicinity of 4 – 5 per cent. .
My intention in writing this article is both to bring these facts to the fore, and to suggest that inequality is something we should be talking about as a society. Firstly, I believe it would be beneficial to consider what took place in the 1990s that may have contributed to this negative trend emerging. At first glance, the growing gap seems counterintuitive, considering that the ‘90s saw the Atlantis resort come on stream, in what has been talked about by many as a moment which contributed to the emergence of a substantial middle class in the Bahamas. Secondly, what does high and growing inequality say about the health of our nation and its future development? There are many well-respected academics and policy makers who tell us that a society with high levels of inequality is more likely to suffer from lower growth, higher crime and poor health and to be generally less happy. Thirdly, how can we stop, slow or reverse this trend? And should we?
As we consider these questions, it is worth noting that the economic crisis is likely to have significantly worsened this inequality. Indeed, the evidence is already being seen. In a shocking report in January 2012 which received far less attention than the seriousness of its contents warranted, Tribune business editor Neil Hartnell pointed out that Department of Statistics figures show that the number of Bahamian households surviving on less than $5,000 per year has increased by an “alarming” 83 per cent in the past four years. Additionally, between the years 2007 to 2011 there has been a 33 per cent or one third increase in the number of households earning a total of $20,000 or less, with the number of such households increasing from 24,780 to 33,015. It is possible that the wealthy have also lost out to an extent, but with a greater safety net, more secure jobs and income-yielding assets their fall in income will not have been nearly so great. This has been the trend worldwide – it is the less well-off, those who are already more vulnerable, who have fallen the furthest due to the economic downturn.
But why should we care? There are several very good reasons which are commonly advanced. While I will not attempt to definitively link these issues to inequality, I think it is certainly worth considering them, given that academic and public policy reports worldwide have found that there are strong reasons to believe that the interconnections are very real.
The first is crime. In one of the most comprehensive reports to ever have been produced on crime in the Caribbean, a 2007 joint report of the UN and the World Bank, “Crime, Violence and Development: Trends, Costs and Policy Options in the Caribbean”, the authors describe the disastrously high levels of crime in the region and find evidence to suggest that countries with higher levels of inequality have higher rates of both murder and robbery, no matter their overall level of wealth. This is not to say that other factors do not come into play – indeed, it is likely that crime grows through some of the same channels that contribute to inequality (such as structural unemployment and poor education outcomes) , but it is also possible that the mere fact of inequality becomes an independent source of crime.
The second reason to care about inequality is its possible long term economic implications. Some argue that efforts to make a society more egalitarian will come at the expense of economic efficiency and growth; that it is through being able to reap large rewards that the wealthy will go on to spur further growth through investment and innovation and, if not, the economy will be stifled. Others suggest this is a fallacy. In his own article trumpeting the need to redress America’s income imbalances, Nobel Laureate economist and former chief economist for the World Bank, Professor Joseph Stiglitz of Colombia University, points to countries such as Sweden which are both economically healthy and the most “equal” of all modern economies. In one of his own recent articles on the topic of inequality, Stiglitz states that overall it is “well documented that countries that are more unequal don’t do as well, don’t grow as well and are less stable.” For one possible reason why this might be, we only have to link this back to the UNODC report’s connection of inequality with crime, factoring in the impact of crime on private business activity, on human capital, and crime’s ability to encourage brain drain – the urge for those with the intellectual and material capital to leave the country and perhaps never come back – to see how inequality could cut growth. Add in the impact on health and education of a large group of people getting stuck at the bottom of the ladder and how this would affect their ability to contribute to economic activity and there is further intuitive evidence of why inequality may hurt growth and stability.
You might also consider how higher levels of inequality can signify less “equality of opportunity”, such that children born of poor parents are less able to live up to their potential, or as Stiglitz puts it, how “lack of opportunity means that a country’s most valuable asset – its people – are not being fully used”. Here he was referring to the situation in the United States of America, where inequality is the highest in the developed world, and, according to Stiglitz, is now at such an “intolerable” level that the country will “pay the price”. But in a country with as few people as The Bahamas it is arguably even more important that we ensure that each person can live up to his or her full potential to contribute to our society.
Reinforcing Stiglitz’s observation, with regard to why high inequality in the US is indeed a problem, the Organisation for Economic Development and Cooperation (OECD) warned the US in June that it must fix its inequality level, noting impacts on health, education, innovation, and economic wellbeing. Meanwhile, the extent of inequality in the U.S. is one of the main messages of the “Occupy” movement, which has managed to play a major part in bringing the issue into the mainstream agenda and political debates. “Occupy” complains, and Stiglitz also contends, that inequality distorts political outcomes as those at the top gain a disproportionate voice in the political process. When this occurs, both democracy and economic growth are undermined, as “rent-seeking” behaviour causes those who already have wealth to bend political outcomes to their own benefit rather than that of the economy as a whole.
As for what the data may tell us so far, it is hard to decipher exactly what role, if any, inequality may have played in stymying economic activity in The Bahamas. Between 1980 and 1990, GDP growth averaged 3.5 per cent in The Bahamas, while between 1990 and 2000, as inequality stopped narrowing and began to grow, it averaged 1.85 per cent. From 2000 to 2010, as already high levels of inequality trended higher, there was an average of only 0.84 per cent growth, but this period also saw both the effect of the slowdown in tourism following 9/11 and the global downturn post-2008 financial crisis. Overall, from 1980 to 2011, growth averaged a low 2.11 per cent. Given that the increase in inequality beginning in the 1990s was only a minor one, I would suggest that it would have been unlikely to have had any major effect on economic growth over and above these other global factors to date, but this is not to say that in the long run, and with a continued worsening of inequality levels, it could not have an impact.
Potential social and psychological implications of inequality should also factor into the debate. We must consider how high inequality could lead to a deterioration of social cohesion within a society, which is the foundation upon which “democracy – or, indeed, any type of peaceful, contented society – ultimately rests.”, as recently stated by Robert Skidlesky, famed biographer of John Maynard Keynes, and Professor Emeritus of Political Economy at Warwick University, U.K. Skidelsky is one of many eminent social scientists who have raised red flags in recent years about the effects of inequality.
As for why inequality in the Bahamas may be on the rise, there are several potential causes which spring to mind. Firstly, our economic model as a whole. We have traditionally sought to attract high net worth individuals to The Bahamas to set up residence. As “usual residents”, some of them and their particularly large household incomes will have factored into the Department of Statistics report of November 2011 in which the trends in inequality are perceptible. We may want to consider to what extent the inequality which causes us to be ranked the most unequal in the Caribbean is due to this fact alone, or due to other more systemic issues.
A systemic issue affecting income inequality is long-term structural unemployment. Structural unemployment is joblessness that comes about due to a lack of fit between the skills individuals have and the jobs being created. Between 1995 and 2011 the average unemployment rate in The Bahamas, notwithstanding the rise of Atlantis and the relative boom period of the mid-2000s, remained at a stubborn 10 per cent. Hence although in economically good times, jobs were being created, there remains a core group of individuals who are not suited to benefit from them. In this regard, if we care about inequality, this is yet another reason to focus on education and to what extent our inadequate education system is growing this proportion of the population, as business leaders commonly complain, and therefore contributing to further inequality today, and into the future.
Taxation surely must bear some of the blame, too. Just this week we have seen the announcement of a forum to discuss future taxation options for the Bahamas, with one of the recognized reasons why this is needed being the question of “equity”. As it stands, the Bahamian taxation system which relies most heavily on tariffs on imports for revenue creation, is regressive. The poor pay relatively more of their salaries in tax than the rich. When you take more money out of the pockets of the less-well-off, you not only limit their disposable income, but you reduce their pool of resources which they can save towards options like college for their children, or investment in property and other income-generating assets, for example. By allowing the wealthy to pocket a greater share of their incomes, you leave them with yet more options for investment in activities that will increase their incomes further. Additionally, by continuing the use of a taxation system that in general sees this nation collect a lower-than-average amount of revenue as a proportion of GDP than other countries, as the tariff-based system does, you limit the ability of the government to potentially engage in meaningful public investment that will benefit the most vulnerable. All of this has a knock-on effect on social mobility and inequality in the long run. Similarly, the lack of an inheritance tax allows the wealthy to pass on money and property to their heirs without paying any tax on these assets, as would be the case in many jurisdictions worldwide. This too will perpetuate and even have a “snowball” effect on inequality in The Bahamas. Children of the wealthy can receive property and money that they in most cases played no part in producing/obtaining, increasing their options and life chances with no input of their own, without making any contribution to the state which might wish to take redistributive steps to assist those whose initial life chances are not so rosy.
The Bahamas has taken significant steps on its development path, but high and rising inequality has been a largely un-discussed side effect of our progress over the past several decades. If unaddressed, some experts would say it will derail our progress and turn back the clock on the advancements that we have made. Or it could be that inequality has little to do with our most serious problems. But as the country with the highest inequality in the Caribbean that continues to rise, isn’t it time we talk about it?
Do as I say, not as I do?
It’s always fun to find evidence of hypocrisy and realpolitik laid bare in the news… On one front you have the US government pandering to domestic constituencies and trying to eek out advantage for its companies by appealing to the Gods of Free Trade and Fairness, while on the other, you hear examples of its own disregard for Free Trade norms. It essentially always comes down to who has the bigger stick.
In this case, China has a very big stick, and the US has a pretty big one too, so we’ve got quite an evenly matched pairing. Today’s spat sees the US accusing China of plying its car industry with “illegal subsidies” that are accused of making US car producers noncompetitive and forcing the outsourcing of US car manufacturing. President Obama has been bashed recently in the presidential campaign by Republican candidate, Mitt Romney, for being too “soft” on China (whatever that may mean…) and so for him this is clearly a strategic move.
The gem of this piece, however, is the quote from the White House spokesperson who tells us from his extremely high horse that “The key principle at stake is that China must play by the rules of the global trading system“.
Meanwhile, down in the Caribbean, a gathering of micro states with comparatively tiny sticks is calling on the US to do the same thing.
Rum is a historically Caribbean product, linked to the production of sugar cane which began with colonisation. It wouldn’t be an overstatement to say it’s also a way of life in the Caribbean, not to mention a major source of foreign exchange and tax revenue, to the tune of around $750m annually.
But all this is under threat now, because of the very same “illegal subsidies” that the US is handing to its rum producers in Puerto Rico. The US gives back the excise tax raised on sales of Rum from Puerto Rico and the US Virgin Islands to those territories, who then distribute it to producers as a subsidy to their production.
For Diageo PLC, which makes Captain Morgan rum, this will amount to $2.7billion over 30 years in handouts from the Puerto Rican government, and this is but one of the ways in which its production is made cheaper by US government intervention that has increased significantly in recent years.
So far Caribbean community governments are seeking to talk it out with US, going for a “negotiated settlement” over the issue, when they could have threatened the US with a World Trade Organisation (WTO) trade complaint, as the US has done with China over its “illegal subsidies” to its car industry. But of course, their sticks are smaller, and they depend very heavily on the US economy in so many ways, that the Caribbean governments so far have not taken this step.
Exactly where this “negotiated” deal over the US’s massive subsidies to its rum producers stands today, it is not clear, but what is clear is that if it continues for much longer, Caribbean rum producers, the jobs of all of those who they employ, and who work at companies which supply them with their raw materials, will come under increasing strain, and may even be forced out of business after hundreds of years of production. This is the last thing the economically vulnerable Caribbean needs right now. Faced with all sorts of structural challenges, and continuing to battle with the fall out from the US-led global financial and economic crisis, most Caribbean states have seen unemployment rise, government revenue fall, and public debt climb to Greek-style levels in many cases.
This case is also interesting from the point of view of The Bahamas, which was the Caribbean base for much of Bacardi’s production until several years ago. Today The Bahamas remains the only country in the western hemisphere to have not joined the WTO. This means that, if we had interests which were threatened in this case, we would not be able to make a complaint through the WTO on the matter, meaning our producers’ interests would be at a severe disadvantage.
This is why it is important that the Bahamas continues to push ahead with WTO accession, since without it, it will (as Trade minister Ryan Pinder has pointed out) be all the more difficult to sustain those producers who are currently in the Bahamas or to attract new ones, as we hope to do.
Nassau: Miami: Denver
A five hour stop in Miami can mean only one thing: the dog days of summer are over and I’m on my way back from The Bahamas to Denver to start classes again. Although it was an intellectually stimulating few months at ECLAC in Trinidad, I’m still keen to get back into course work. Having already established that I am showing major symptoms of being an unsalvageable nerd, this should be of no surprise to anyone who reads this blog by now.
Class-wise, this quarter I am signed up for International Monetary Relations with Professor Ilene Grabel, International Business Transactions with Josiah Hatch and International Project Analysis with Thomas Laetz.
Grabel’s IMR (and her “Finance and Development” class, which I’ll get to take next quarter) is essentially why I will get to put “global finance” in my degree title. It’s about the theory, policy, political economy and history of the international organization of money and finance. There’s a lot about today’s international financial arrangements that we may take for granted, but it wasn’t always so.
Think about how in almost any Hollywood movie you’ve ever seen, a ransom for a kidnapping in some far flung country is always expected to be paid in US dollars. Why is that? Well it’s due to international financial arrangements. The US dollar, for a variety of historical, political and economic reasons, is considered the international reserve currency of choice and for this reason, it’s the currency of choice for “business transactions” for everyone from a major international company to your local kidnapper.
It wasn’t always this way– the British pound Sterling used to be the most in-demand form of moolah. Furthermore, the US might not always maintain this “exorbitant privilege” in the future, if, for example, the US were to make imprudent policy decisions like failing to raise the debt ceiling, or showing that its politicians may be unable to come to do so, as seemed to be about to happen in 2011. The fact that the US dollar is the international reserve currency and others are not both signifies the political and economic power the US holds in the world, and also confers upon the US additional economic and political advantages in the international arena. These include things like having it debts to foreign creditors denominated in its own currency, which means it will never have to worry about an exchange rate shift causing its debt to increase, as other countries do. The way international finance is currently “arranged” has significant implications for investment, employment, inflation, income distribution and class conflict not only in the US but in all advanced and developing economies, so I see this class as absolutely critical to developing my understanding of the global economy.
Hatch’s IBT class lets me build on my intended concentration in international trade, as it delves into the legal aspects of the international trade regime, which will be useful should I end up working in this field. As Mr Hatch puts it, the class provides the “intellectual and practical skills essential for evaluating and conducting global business transactions” and an understanding of the “major role that business interests now play in international affairs”. Among other things, we’ll look at international trade agreements and the role of the World Trade Organisation. All useful stuff considering I came to Denver wanting to understand more about such agreements and organisations, given The Bahamas’ increasing involvement with both.
Lastly, I am doing International Project Analysis, which is a class I decided to take up only recently but which I hope will provide me with some practical skills in the area of project design and implementation that will come in handy should my work post-Korbel ever call on me to take the lead in such activities.
Outside of class I’ll be keeping busy with a few other things, among them, being a Research Assistant for Professor Grabel, which is an opportunity I am extremely honoured to have been offered. Forgive me if as a GFTEI student I’m a little biased, but Professor Grabel does some of what I consider the most interesting research at the Josef Korbel School of International Studies and the University of Denver, looking at international financial arrangements and their impact on developing economies, and vice versa, and often as part of consultancies for organisations like the UN and the World Bank. I can’t help but think that assisting her will be a great learning opportunity, both in terms of the research process and the particular topics I’ll be covering.
I also somehow ended up taking on a role in the Latin American Studies Association, as its President for 2012. Along with the rest of the LASA officers, we’re hoping to continue to offer a chance for students with an interest in Latin America, as I have, to hear interesting speakers from the region, or with expertise about the region’s issues; to attend Spanish-speaking “charlas” (informal chats) where they can practice their language skills; and to join social events like Latin American movie nights. One of the topics that the other LASA officers and I have talked about pursuing in more depth through LASA is drug policy – – – what is the impact of US drug policy on the Latin American region? What are Latin American government attitudes towards the drug war and how are they changing? What are the security, health, and development implications of pursuing one or other policy towards drug production and trafficking? With increasing numbers of Latin American leaders or former leaders questioning the US strategy, and their own in response, I think it is a great time to put some focus on this critical issue.
And finally, re: my Latin American interest and ongoing desire to be fluent in Spanish, I just signed up for some Spanish classes in Guatemala – so that’s something else I’ll be doing over the next couple of months. However, given time and financial constraints, I’m not going to be flying to Xela, Guatemala, twice a week. No, Julio Morales and I (my Spanish teacher) will be communicating via Skype thanks to Celas Maya Online. I’d recommend checking it out if you want to improve your own Spanish skills. Definitely much cheaper than classes in person in the States, and with the added advantage of getting to feel like you take a little trip to Latin America each week, to chat with a native speaker. Si, se puede!
Reading this back just now my heart gave a little flutter of fear and trepidation….Have I over-extended myself? Am I going to pull this all off? And will I manage to do so while implementing my extremely over-ambitious new post-Trinidad exercise regime which involves running, jumping, kicking, punching, crunching and abs-blasting my way through every single class on offer at the Ritchie Center gym, signing up for masters swimming classes and training for a marathon?
Did someone just increase the number of hours in the day to 30?
I think I need a beer!
Week eleven, I’m in heaven…
Yes, I just chose that title because it rhymes.
I can’t believe it is already the last week of my internship here at ECLAC in Trinidad and Tobago. Next Monday I leave to take a quick trip home to the Bahamas before I make my way back to Colorado for my last year (*sniff*) of my Masters program at Korbel.
These last two weeks in particular have been moving very quickly at the office, as assignment after assignment has come rolling in. It would not be an exaggeration to say that my fellow intern and I at the Economic Development Unit have very much been treated as members of the office…. that is, we have essentially been doing the work of real staff members, with all the pressures and deadlines that go with it. Ultimately I think it had a lot to do with shortages of ACTUAL staff…but it certainly gave us an opportunity to be exposed to the work of the unit* (see below for further comments).
For example, over the last two days, I have prepared part of a presentation for the Director of our unit, the Economic Development Unit, to make at the 34th Session of ECLAC in San Salvador at the end of the month, where ECLAC will launch its major new publication, “Structural Change for Equality”, as well as speaking notes on the Bahamian and Barbadian economies in 2012 for the Executive Secretary (basically the head honcho) of ECLAC itself, Chile-based Alicia Barcena.
Meanwhile, I have been trying to find time to finish my own presentation which I will make at the end of the week to the entire ECLAC Port of Spain office on some of the work I have done while I’ve been interning, some reflections and recommendations.
To give you an idea of some of the other tasks I will be mentioning during that presentation, here’s a few:
+ Researching policies implemented by Caribbean governments in 2011 that could be said to be ongoing responses to the financial crisis and global economic downturn that began in 2008, which will be included as an appendix to the Economic Survey 2011 document published by ECLAC Port of Spain
+ Collecting and analysing trade data from the UN Comtrade database to try to identify some trends and points of interest which could form a part of a new study on trade in the Caribbean which is to be put together by the unit in the coming year
+ Writing two articles for UN magazine, FOCUS, on Caribbean economic trends in 2012 and Social Protection challenges and solutions in the region
+ Researching and writing on the subject of disunity in Caricom in 2012, for the “Paninsal” publication produced by ECLAC’s Santiago office
+ Conducting a literature review of recent trade literature relating to the Caribbean and trade theory in general
+ Attending seminars and conferences, including everything from a seminar on Caribbean development held at the Port of Spain office, to a speech given by Chinese prime minister Wen Jia Bao on Latin American-Chinese relations.
And that’s not even half of it.
If you are thinking about interning with the UN, or ECLAC in particular, feel free to comment with any questions.
To finish up, here’s some photos….two of my hilariously windowless and blank-walled office…and one of myself and my lovely fellow EDU members:
* It also gives more pause to think about the fact that the UN does not pay its interns when it seems that they are not only getting a work experience but filling for official staff due to the shortages created by the current hiring system, which is in need of reform (see previous post). The fact that it does not do so, or indeed, does not even provide a stipend of some kind to cover basic expenses, is something that I feel I have a responsibility to point out whenever possible having been able to gain first hand experience of the fact that interns do *real* work and having considered the fact that by providing no financial support whatsoever to people essentially working for it for extended periods of time, it seems to go against the type of basic principles the UN stands for. That is not to say that in many other ways individual staff at ECLAC have, in the ways that they can, been very considerate and supportive of us as interns, and even expressed their own conviction that the lack of stipend is unfair.
Bahamas goes GOLD!
As a proud Bahamian, it would be remiss of me not to brag about my little country of 350,000 people’s recent historic win in the Men’s 4 x 400 relay final at the Olympics on Friday. Half of the office at ECLAC was in our conference room glued to the TV screaming on Trinidad and Tobago (who got a bronze) and The Bahamas at 4.20pm that afternoon! Awesome way to end the week.
The Bahamas has typically punched above its weight at the Olympics, winning the most medals per capita in 4 out of the last 5 Olympics (OK, just 1 or 2 medals in each case, but still…. not bad for a country which is smaller than most neighbourhoods in any major city!).
This time around, we achieved some great feats – getting the first Bahamian swimming finalist in Arianna Vanderpool Wallace’s 50m Freestyle Final and reaching the final in several other sports, but it wasn’t until we stormed passed the US in the last leg of the 4 x 400 to relieve them of a gold they have won in every Olympics since 1984 that we could be sure we weren’t going home empty handed! The relay team of Chris Brown, Demetrius Pinder, Michael Mathieu and Ramon Miller pulled out the incredible win to come in .33 seconds ahead of the US team and a full couple of seconds ahead bronze place winners Trinidad and Tobago to get the gold.
Congrats Team BAH! But also congratulations to Trinidad and Tobago, JAMAICA (The cry in Jamaica being “ONE, TWO, THREE!” when Usain Bolt, Yohann Blake and Warren Weir took 1st, 2nd and 3rd place for Jamaica in the incredible 200 metre final, following Bolt’s own world record breaking win in the 100m sprint), and ofcourse Kirani James of tiny little Grenada for winning that country’s FIRST EVER Olympic Medal – a GOLD in the 400m sprint final!
The Caribbean has been proving it can beat the best this year. As someone for whom the question of how The Caribbean can regain and improve its competitiveness in a global environment is an academic and potentially and future professional concern…seeing the region prove its ability to do so in the sports arena is somehow a great encouragement. It shows that with the right investments, Caribbean people can be the best in the world. Friday’s race and the screams of the ECLAC office staff – who hail from all parts of the Caribbean – suggested to me that that sports are one of the few areas which have the ability to totally unite Caribbean people. All anyone wanted was for a Caribbean person to win, whether it be The Bahamas, Trinidad or Cuba! (all the Caribbean countries represented in the race).
With the type of performances the Bahamas has shown in this and previous Games I hope that The Bahamas’ government sees the benefit of investing in sports in the Bahamas, and doing so in a way that gets young Bahamians in general keen to participate and compete. In this regard, I think we have to take tips from Jamaica who have proven to be the champions of sprint training regimes! However, it’s important we don’t just think about sprinting when we think sports. One of the things I have been really impressed by in Trinidad and Tobago is the amount of sports activity going on in the country, with Trinbagonians young and old. Every day I walk around the Savannah on my way home from work and see amateur teams enjoying a game of rugby, football, cricket and even martial arts. On Saturdays and Sundays teams can be seen flying up and down pitches all around Trinidad in the intense humidity and heat. Thinking about why it might be that we don’t see this so much in The Bahamas, I’m concerned it’s got a lot to do with a lack of open spaces, but I’m sure there’s a role to play for schools too. And of course there’s a virtuous cycle effect, where the more young people see sports as a part of their daily lives and those of the people around them, the more they will try to be involved. We need to do more to encourage this in The Bahamas.
So…….Go BAHAMAS!
Josef Korbel School / Global Finance, Trade and Economic Integration 