Migrants and the downturn

In an interview with La Croix newspaper (in French), the OECD’s Jean-Christophe Dumont looks at how the downturn has been affecting migrants. One major issue is unemployment – in a downturn, immigrants are more likely to lose their jobs than locals. Despite this, emigrants don’t appear to be returning home in large numbers. In part that’s because job prospects back home may be as bad as in emigrants’ destination countries. But it’s also because emigration is often a long-term project involving big adjustments like resettling families, buying property and so on. Most people would think twice before undoing such changes.

Still, the slump has had a noticeable impact on one area – remittances, or the money emigrants send back home. According to World Bank estimates, they’ll be 6% lower in 2009 compared with 2008. As it’s likely to be several years before remittances return to pre-crisis levels, many developing countries will face a continuing shortfall in this important source of income.

Useful links:

International Migration: The Human Face of Globalisation

OECD work on migration

Food forethought

Is agriculture heading towards a perfect storm?

In 2008, people in Haiti were so hungry they were reduced to eating mud mixed with a little salt and margarine. A number of other countries saw riots sparked by a sudden hike in food prices, caused by a combination of factors.

Agricultural commodity prices have since fallen, but the benefits for many consumers have been wiped out by the recession, and today over a billion people in the world don’t have enough to eat.

We tend to think of food security as a problem for developing countries, and obviously the poor suffer most. However, some experts are worried that the world food system is heading into a perfect storm, as population grows by 50% from now to mid-century, agricultural land is lost to urbanisation, diets the world over shift towards the resource-intensive consumption typical of the West, and climate change throws a joker into the mix.

Many OECD governments are examining their long-term strategies for food and agriculture. The UK has just published Food to 2030, the government’s first food strategy since the post-war period.

The strategy is ambitious. Apart from seeking to produce more food in ways that protect and enhance the natural environment, it stresses the need to invest in the skills and knowledge needed to help the industry prosper. Farming as such is has only a small share in most OECD economies, but as the report points out, when you add food processing, the sector is worth over £80 billion to the UK economy and is the nation’s largest manufacturing sector.

Other goals include improved labelling so that consumers can make informed choices about what they buy and how it is produced; cutting food waste (see the post on “junked food” below); and using technologies that can create energy from the waste that can’t be avoided avoid.

The report is clear about the tensions and tradeoffs among a number of goals. For instance, increased fish consumption is one way to address low omega 3 levels in the typical UK diet, but UK aquaculture needs 10 kg of fish as feed for every kg it produces for the consumer.

The Insights series will be examining these questions in a new title on food and agriculture to be published later this year. We’ll keep you up to date with progress here on the blog, and would be happy to hear your views on feeding 9 billion people.

Cannon Law

What’s the link between how far you could fire a gun in the 17th century, the 2009 Nobel Prize for economics, and the forthcoming Insights book on Fisheries? The answer is: governance.

The last chapter of the Insights looks at how fish stocks could be managed sustainably. One of the issues is that the oceans are a global commons, with every nation having the right to travel on them and exploit what is in or under them.

It’s not an unlimited right though, being governed by the Law of the Sea. That’s where the guns come in. In the 17th century, certain aspects of territorial integrity and sovereignty were decided on the basis of the “cannon shot rule” – how far you could fire a cannon. The three-mile limit around a coast is based on this. This has now been extended to 200 miles, but that still leaves out most of the world’s oceans. (more…)

Climate change: Fisheries too

When thinking about climate change, we usually think about the Earth’s atmosphere, but oceans are affected too, with serious impacts on marine life.

According to a new study by the FAO increasing temperatures could have dire consequences for the fishing industry. Over 500 million people rely on fish as a source of protein and income, and fish provide at least half the animal proteins and dietary minerals for 400 million of the world’s poorest people.

The FAO says both marine and inland fisheries are poorly positioned to withstand the new problems posed by climate change. Marine fisheries in particular may see major decline, as they are already trying to cope with overfishing, habitat loss and mismanagement.

These issues are explored in a forthcoming Insights, Fisheries: While Stocks Last? to be published in Spring 2010 to coincide with a major OECD conference on aquaculture.

We are a bit bemused


 

A new name to add to the list of those who want to know what caused the crisis: Queen Elizabeth II. During a visit to the London School of Economics, the British monarch asked economists why they didn’t do a better job of predicting the timing and scale of the slowdown, The Observer reports. “She seemed very interested, and she asked me: ‘How come nobody could foresee it?,” Professor Luis Garicano of the LSE told the newspaper.

Stirred by the Queen’s query, some of Britain’s leading economic experts wrote to her to explain what they think went wrong. “Everyone seemed to be doing their own job properly on its own merit. And according to standard measures of success, they were often doing it well,” they told her. “The failure was to see how collectively this added up to a series of interconnected imbalances over which no single authority had jurisdiction.” While the crisis had many causes, they concluded, “[it] was principally a failure of the collective imagination of many bright people, both in this country and internationally, to understand the risks to the system as a whole.”

A crisis of (over-)confidence?

Malcolm Gladwell is probably the world’s most famous “pop” sociologist. His work often focuses on “how little things can make a big difference,” to quote the subtitle of his bestseller The Tipping Point. No surprise, then, that the financial crisis has caught his attention. Here, he argues that the roots of Wall Street’s crisis were in large part psychological: The overconfidence of many of those working in financial markets, he argues, led them to suffer from the “illusion of control” – an inability to recognise both the limits of their own knowledge and their capacity to control events. Can such overconfidence be reined in? Not easily, says Gladwell: Confidence is the lifeblood of financial markets everywhere, and it’s usually the most confident (and even overconfident) players who score the biggest wins. But if everyone becomes overconfident – i.e., if everyone acts in the hope that their bluff won’t be called – realistic assessment of risks and rewards goes out the window.