From The Economist - InvestingChannel

From The Economist

Here are some recent excerpts from The Economist, which caught my attention:

More muslims please:

Three things account for America’s relative security. The first is its distance from the Middle East; the second is decent law enforcement, especially by the FBI, which since 2001 has partly turned itself into the internal spy agency America lacked. Its counter-terrorism staff, whose number has grown by 2,000, are investigating links to IS in 50 states. By far the most important reason, however, is that American Muslims are less interested in being radicalised than their European counterparts.

They are richer, better educated and altogether better integrated into the mainstream. Though less than 1% of America’s population, they account for 10% of its doctors; in 2011, less than half said that most of their closest friends were Muslims.

What Europe gets wrong:

A series of problems, however, hinder the smooth movement of refugees into European workplaces. The first, and broadest, of these is legal. America generally lets in people it has already screened and recognised as refugees, and allows them to start work almost immediately. There are plenty of low-paid jobs waiting for them, and they typically integrate, and learn English, quickly. Europe mostly gets asylum-seekers, and keeps them waiting, sometimes for years, for refugee status. In this legal limbo they typically get welfare and shelter but are usually barred from work, and even from state-funded language lessons.

Europeans have been too slow to grasp that getting newcomers quickly into the labour market is “the only way” to integrate them, says Demetrios Papademetriou of the Migration Policy Institute in Washington, DC.

A surprising data point from Germany:

Even before this year’s surge, western Europe had lots of immigrant students. According to the Organisation for Economic Cooperation and Development (OECD), the proportion of 15-year-old schoolchildren in Spain who are foreign-born rose from 3% to 8% from 2003 to 2012 (though in Germany it fell by about the same amount).

And these students may help boost education standards in Sweden:

Most important, European governments need to treat refugee children as an opportunity rather than a problem. Driven by a desperate desire for a better life, they and their parents tend to be hard-working and ambitious. Europeans worried about migrants studying beside their children should take comfort: the most important predictor of pupils’ school results is their parents’ level of education, and about half of the refugees reaching Europe from Syria have university degrees, according to UNHCR, the UN refugee agency (though other surveys put this number far lower). “Sometimes I joke that Syrian children may help reverse [our decline in] PISA results in maths,” quips Ms Hadzialic. If they are integrated properly, she may be right.

The 50% figure is wrong, although of course if you get your news from the sludge media you’d assume they are all rapists.

Last year I pointed out that almost all the population growth over the next century would be in Africa.  That’s even more true today:

Alarmingly, population growth in Africa is not slowing as quickly as demographers had expected. In 2004 the UN predicted that the continent’s population would grow from a little over 900m at the time, to about 2.3 billion in 2100. At the same time it put the world’s total population in 2100 at 9.1 billion, up from 7.3 billion today. But the UN’s latest estimates, published earlier this year, have global population in 2100 at 11.2 billion—and Africa is where almost all the newly added people will be. The UN now thinks that by 2100 the continent will be home to 4.4 billion people, an increase of more than 2 billion compared with its previous estimate.

“Alarmingly”?  I’m not sure the Ethiopians are alarmed to be alive:

(Ethiopia is Africa’s second-most-populous country after Nigeria; by some estimates it has nearly 100m people.) Most women still have four or five children. The standard family plot has shrunk to less than a hectare.

Yet, despite these self-imposed brakes, Ethiopia’s economic progress has been spectacular. Its growth rate, if the latest official figure of 11% is true, is the fastest in Africa; and even the lower figure of around 8%, which the IMF and many Western analysts prefer, is still very perky. Social and economic indices are reckoned to have improved faster than anywhere else in Africa, albeit from a low base. Extreme poverty, defined as a daily income of under $1.25, afflicted 56% of the population in 2000, according to the World Bank, but had fallen to 31% by 2011 and is thought to be dipping still. The average Ethiopian lifespan has risen in the same period by a year each year, and now stands at 64. Child and infant mortality have dived. Protection for the rural poor in time of drought, which presently afflicts swathes of the north and east, is more effective than before. The government has “the most impressive record in the world” in reducing poverty, says a British aid official.

This excellent article in The Economist points out that, throughout the developed world, minorities are rapidly integrating into the native population. Residential segregation is falling fast.  I’ve never believed that whites would become a minority in America (although I hope I’m wrong.)  One reason is that intermarriage rates are very high:

In London whites and black Caribbeans marry or cohabit in such numbers that there are now more children under five who are a mixture of those two groups than there are black Caribbean children. Marriages between whites and Asians are growing, too. America is mixing just as quickly. In 2014, Mr Frey calculates, 19% of new American marriages involving whites and 31% involving blacks were mixed-race. The share for both Hispanics and Asians was 46%. The children of such unions can be hard to deal with statistically. So in the future the numbers will probably underestimate the speed of desegregation.

My daughter is has a white dad and an Asian mom, and is generally regarded as “white.”  In the future, there’ll be millions more like her.  In the 22nd century, America will be beige, unless by then genetic engineering allows each person to pick their skin color.

Unfortunately, Puerto Rico just died of SIIDS (sudden infant industry death syndrome):

Federal investment and tax breaks helped Puerto Rico develop from a sugar-based economy to a pharmaceutical-manufacturing hub. But once producers like Ireland and Singapore began to compete and the tax preferences expired, the island did not develop a new comparative advantage. As part of the United States, Puerto Rico could not devalue its currency, and the national minimum wage inflated its labour costs. But being American offered benefits as well. Residents could move to the States to find work, and were eligible for federal welfare payments if they stayed. Meanwhile, the government could issue tax-exempt municipal bonds, prized by mainland investors.

As a result, the economy slowly hollowed out. The population has fallen from 3.9m to 3.5m during the past decade, with young workers accounting for much of the exodus. Those who stayed tended either to depend on the state—as students, public employees, pensioners or recipients of federal largesse—or to fall into the sprawling underground economy and bustling drug trade. Candidates from across the political spectrum have won office by keeping the gravy train running: more than a third of Puerto Rican schoolchildren are classified as having special needs, inflating the teacher-to-pupil ratio, and the island’s health plan for the poor would be the envy of any American state. A paltry 40% of working-age boricuas are in the labour force, and just 57% of personal income in Puerto Rico comes from formal private jobs, compared with 76% for the 50 states, according to José Villamil, an economist. Investment has collapsed, from 27% of GNP in 2001 to 13% today. Yet retail sales have held steady since 2008. The only way to maintain consumption was via massive borrowing: during the past 15 years, the government’s nominal debt load has tripled.

Just wait until the US mainland gets that $15 hour minimum wage.  Perhaps our unemployed poor can then move north to Canada.

On a lighter note, the annual Holiday double issue was as delightful as always, with the three standout articles discussing Tibetans, Gujaratis, and master/slave dynamics on a desert island.  Here’s an excerpt from the Tibetan articlewhich erases any doubts about the evil nature of China’s government.  (It discusses the boom in a medicinal caterpillar.  But read the entire issue.):

Caterpillar fungus has also been a direct cause of violence among Tibetans, and between Tibetans and caterpillar-poaching Hans. In parts of the plateau, the annual rush for fungus is Klondike-like. In a report by the Communist Party committee of Nangqian county in Yushu, a village official says: “Caterpillar fungus has turned people bad. It has made them think only of money and caused them to lose their sense of family, friendship and humanity.” Complaints abound about Tibetans frittering away their caterpillar money on gambling and booze (there are few opportunities for Tibetans to find decent work in cities, where jobs usually go to Hans or Huis).

Mr Mayong, the guide, insists that in his experience, fellow villagers are courteous to each other in their collective scramble. That is not how it works between rival villages, however, or when caterpillar poachers invade a village’s territory. In 2013 two people were killed in another part of Qinghai when villagers shot at rivals. The Dalai Lama, Tibet’s exiled spiritual leader, said fungus-fuelled fighting had caused “disgrace to the Tibetan people” and a “crisis” on the plateau.

During this year’s harvest season, security forces in some parts of the plateau warned that the task of “stability preservation” was “grim”. In Shangri-La, a Tibetan town in Yunnan province (so named in 2002 in order to attract more tourists), police told residents to give up any hidden guns as the season approached. In one county of the TAR, villagers were told they would be banned from harvesting caterpillar fungus for a year if they used any outsiders to help—an attempt, partly, to curb the kind of violence that has sometimes broken out between Tibetans and Han fungus-gatherers.

The environmental fallout has been considerable, too. For a time before the earthquake in Yushu, the horse festival (which includes yak races—a perilous sport for the riders) offered a clue to one aspect of this. It was in the elaborate traditional costumes that rural Tibetans like to wear on special occasions. Enriched by caterpillar fungus, some took to augmenting their garb with the skins of leopards and tigers smuggled from India through Nepal.

Local officials in Tibet were of little help in stopping this. According to Emily Yeh of the University of Colorado at Boulder, they wanted to encourage festivals as way of attracting tourists from the rest of China; exotically dressed Tibetans were seen as crowd-pullers. Counties in some parts of the Tibetan plateau “competed to show off their wealth and development status through the hyperbolic display of jewellery and pelts on the bodies of their Tibetan participants [at festivals], often so much that participants had trouble walking under their weight”, she said in a paper published in 2013. Popular singers began sporting pelt trims on their music DVDs. This surprising—and tragic—side-effect of demand for a purported aphrodisiac came to an equally unexpected end. In 2006, at a prayer ceremony in India attended by thousands of Tibetan pilgrims, the Dalai Lama called on Tibetans to cease wearing animal furs. The impact was immediate. From across Tibet reports emerged of Tibetans piling up their furs and burning them: given the garments’ huge value, an extraordinary display of devotion to the Dalai Lama. Anxious Chinese officials tried to ban such bonfires and arrested the organisers. In some places they even ordered Tibetans to wear their furs at festivals.

But the Dalai Lama’s injunction held firm. Despite a stepped-up campaign by the government to vilify the exiled Tibetan leader since the unrest in 2008, Tibetans appear largely to have heeded him. India’s tiger population fell from 3,642 in 2002 to a low of 1,411 in 2006. Since then it has climbed back up to 2,226. Your correspondent did not spot any furs looking like those of rare animals at this year’s festival in Yushu. In the privacy of Tibetans’ homes, the Dalai Lama’s popularity is evident. One yak-herder, in her tent on the 4,500-metre pastures of Lanweilaha Mountain, gets out her box of recently harvested caterpillar fungi. She keeps it under a portrait of the Dalai Lama (banned in some parts of the plateau) which has a strip of yellow cloth draped over it as a symbol of respect.

Only China’s government would order people to wear tiger skins.

PS.  The Gujarati article makes me more pessimistic about India—can you guess why?