Tag Archives: economics

Reason and Instinct

[Originally published in the Vanuatu Daily Post’s Weekender Edition.]

Public health is a human rights issue. Medical services, though, are ultimately ruled by economics. The tension between the two will never be resolved. It will, however, shape our future in ways that are impossible to measure.

This morning over coffee, I received news that the 15 year old daughter of a friend had passed away. She’d been ill for over a month, but a full diagnosis was never made. All anyone knew was that her head ached terribly.

Within an hour of hearing this, I learned of the untimely death of Ture Kailo, MP for TAFEA Outer Islands.

Ture was well known in Vanuatu. During his tenure as DG of the Ministry of Youth Development and Training, he was a consistent champion of youth issues and a friend to many local NGOs. Many took heart when, after his politically motivated ouster from the Ministry, he announced his candidacy for national office. Everyone I spoke to expressed deep regret at his passing, noting that Vanuatu politics has suffered a real and measurable loss.

Cases like these often define the debate over national health care policy. The loss of prominent individuals like Kailo demonstrate in unambiguous terms just how much we stand to lose when we lose a single life.

But what of my friend’s young daughter? The magnitude of her mother’s loss is of course immeasurable. And who can tell what she might have achieved?

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Action and Reaction

[Originally published in the Vanuatu Daily Post’s Weekender Edition.]

For every action, there is an equal and opposite reaction.

When Isaac Newton first formulated his third law of motion, he codified a long-observed phenomenon. Wits have suggested a fourth law: ‘No good deed goes unpunished.’

At the Lowy Institute’s recent conference, The Pacific Islands and the World, attendees witnessed two contrasting views of Vanuatu. The gathering, timed to coincide with the Pacific Forum, was attended by dignitaries from major global institutions as well as government leaders from throughout the region. It was billed as an opportunity to discuss the impact of the global economic crisis on vulnerable Pacific Island nations.

By all accounts, though, Vanuatu has been less affected than the global economic giants. Mid-year numbers do indicate a slight slow-down, but in real terms, our economy’s still growing fairly well. In a recently published briefing paper by the Pacific Institute of Public Policy, Nikunj Soni and the Australian National University’s professor Stephen Howes point to tourism and construction as the leading drivers of this growth.

But they are quick to note that the environment is as critical to this success as the actual business opportunities. One noteworthy chart clearly shows the rise in economic activity starting in 2003, about the same time as major budgetary and macro-economic reforms began to take hold in Vanuatu.

The briefing paper goes on to highlight the fact that none of this growth would have been possible without social stability. That may seem like so much common sense to some. Civil disturbance and political turmoil are seldom on a tourist’s must-see list. Likewise with home buyers.

But what brings this stability about?

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Harbour, not Hideout

[Originally published in the Vanuatu Daily Post’s Weekender Edition.]

A prominent US liberal blog recently ran a story, titled “So Go Already” that captured in a nutshell the deep resentment that many, Americans especially, are feeling toward those captains of enterprise who continued to receive massive payouts even as the financial service companies they guided were foundering in bankruptcy.

Reacting to a rather blithe and blinkered editorial on tax havens published by the right wing Washington Times, the article ranted, “If you don’t like paying taxes here on the millions you’ve made or that someone made for you, you’re free to take your shekels and move.”

Both Right and Left utterly miss the point.

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Elephants

[Originally published in the Vanuatu Daily Post’s Weekender Edition.]

“Living next to you is in some ways like sleeping with an elephant. No matter how friendly and even-tempered is the beast, if I can call it that, one is affected by every twitch and grunt.”

Canadian Prime Minister Pierre Trudeau offered this wry description of relations between Canada and the US at the Washington Press Club back in 1969. Had he been a ni-Vanuatu politician addressing the press in Canberra, he might have used an aquatic simile, but the message would have been the same.

In recent years, Vanuatu has been learning to manoeuvre in this demanding and rather tricky role. To further complicate things, there is more than one elephant in this particular bed. Between the EU, the WTO, China and our other regional neighbours, trade and aid negotiators in Vanuatu have had their hands full.

Happily, 3000 years of practice in patient negotiation and peace-making have so far paid off. To mix metaphors, Vanuatu has of late consistently punched well above its weight when it comes to negotiating this sometimes parlous state of affairs.

But our work isn’t finished yet, and if anything, the stakes are higher now than they’ve been in years. Time is not on our side and the elephants are encroaching once again.

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Appropriate Technology – Take Two

[This week’s Communications column for the Vanuatu Independent.]

I got some really good feedback from last week’s proposal to create incentives for those kinds of computer equipment that are most suited to creating opportunity and improving access to information for ni-Vanuatu.

Not all of the news was necessarily good, but all of it was useful. Daryl Moon, who runs the local Datec store, responded that he’d done a little math on the issue, and he found that computer vendors would certainly be able to sell computers for less if they were constructed locally from tariff-exempt components.

But he went on to explain that in order to justify hiring extra staff for that purpose, he would have to sell 20 computers per week – a number which, he suspected, exceeds the weekly sales of all local computer retailers combined.

I also had discussion with a few local economists and trade experts. One of the issues raised was the difficulty of actually measuring the outcome of such tariff exemptions. Generally speaking, government is willing to accept a drop in revenues in one area provided that it sees an increase elsewhere (VAT income from increased sales, for example) or that the social benefit is sufficient to merit the cost.

As I reflect on these conversations, I’m beginning to realise that, ultimately, the most compelling argument for Appropriate Technology incentives is not economic in nature. The capstone on this discussion is a moral one.

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The Price of Democracy

[Originally published in the Vanuatu Daily Post’s Weekender Edition.]

As I write this, Vanuatu’s members of Parliament are plodding through the Government’s budget bill. It’s an unusual second consecutive week of work for our MPs, and though everyone is intent on seeing the job completed, they’re giving the work the attention it deserves.

Opposition members have kept cabinet ministers on their collective toes. Following a salvo of incisive questions from across the floor, Finance Minister Molisa sent his staff back to the Ministry with instructions for more detailed briefing materials. The lights were burning into the small hours at Finance.

Measured in strictly procedural terms, progress may be slower than Speaker George Wells might want, but the Opposition, looking revitalised and with a newfound sense of purpose, has been… well, doing its job, to be frank. That’s a refreshing – and timely – first.

It may seem silly to outsiders, but I’m not the only one here who’s taken some encouragement from these few weeks of Parliamentary process. After years of listening to the same tiresome tirades against do-nothing politicians, we are at last seeing something genuinely newsworthy in Vanuatu politics: A thorough and detailed investigation of how the nation spends its money.

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Boom or Bust?

[This week’s Communications column for the Vanuatu Independent.]

We need fiber, and we need it soon.

No, I’m not talking about changing the nation’s diet. I’m talking about fiber-optic cable. Made of very long strands of glass fiber, this kind of cable has the unique ability to allow light to turn corners. This means that we can shoot tiny laser pulses into one end of it and have them emerge intact from the other end, even if it’s thousands of kilometers away.

The result? Fast, very high-capacity communications become possible. In laboratory experiments, researchers have achieved rates of up to 14 trillion bits of data per second. Current commercial implementations don’t go nearly that fast, but even a single thread of fiber a few millimeters wide can carry billions of bits every second. Just a few strands would be enough to increase Vanuatu’s total available bandwidth to a large multiple of its current capacity.

So what’s the catch? Why haven’t we invested in a fiber connection yet? Fiji has it, and so does New Caledonia. Why not Vanuatu?

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Nice Work if You Can Get It

Andrew Sullivan links to a few posts about the continual struggle to make the Internet pay. Personally, I find both sides of this online payment argument silly. Neither Felix Salmon nor Seth Roberts are on the mark, and neither of them really understand what motivates people to make payments for non-material goods delivered over the Internet.

Micro-payment for Internet content is not flawed in and of itself. Like so many nice ideas, though, it has few decent exemplars at this stage of the development of the Internet.

People will find a way to manage micro-payments, and some people will profit thereby. Why? Because people are willing to reward people for their contributions. Radiohead made significant profits from the online release of their album ‘In Rainbows’. Many people paid more than the recommended minimum contribution Radiohead requested. President Obama’s online campaign was premised not on sales but on the moral argument that people should participate in the process of change. The monetary exchange in each case was symbolic; it was not payment for services rendered but reward for exemplary behaviour.

This really is the crux of the issue: Internet content is part of a gift economy, an economy of plenitude that bears a stronger resemblance to the West Coast native practice of potlatch than anything Adam Smith might have envisioned.

Simply put, people don’t pay for things on the Internet; they don’t have to. So we create content as a labour of love, and if people value it, they reward us, first with their attention, then, in certain circumstances, with their material support.

I put all my columns and photos online simply out of a desire to communicate. The fact that I’ve been able to parlay this output into a consultancy that is earning me more now than my previous salaried position is more than a happy accident, that’s true. My web presence is my calling card. But I would publish my material online regardless. The bottom line is that I love the act of creation, and I feel gratified when people derive some value from it.

Some people have recognised my expertise in my particular niche of the online world – and its applicability to their needs – and that provides enough income enough to keep me working online. Their rewards make my online work possible.

Lastly: Seth’s response is based on a false premise. The vast majority of Open Source developers are well remunerated for their efforts. This is a perfect case in point: Those who benefit from an improved environment (in this case, commoditised, easily customised software) are usually willing to reward those whose work improves it.

None of us have a well-developed understanding of how things will play out in online content creation. But we have to stop thinking about it in terms of product and sale. It’s reward for services rendered.

Shifting Ground

[Originally published in the Vanuatu Daily Post’s Weekender Edition.]

Much has been written since New Year’s about the rise in bus fares. Scarcely a day goes by but someone submits a long and thoughtful letter deploring the increase and suggesting ways to help drivers earn more without charging more.

The reasons for this are obvious. If someone takes the bus to and from work every day, they now spend 6,600 vatu a month just for the privilege of keeping their job. And that’s ignoring using the bus for anything but work. Add in a trip to the market on the weekend, a few visits with family in the course of the week, bus fare for the children to get to and from school… suddenly transportation takes a bigger slice of the household income than just about everything except rent.

We’ve known for some time that it’s very hard for the average ni-Vanuatu to make a living wage. Just about every family I know supplements their cash income via informal channels. They run tiny little mom-and-pop nakamals and road markets that are profitable only because family in the village send them produce at only slightly more than cost. They sew or repair much of what they wear, and wear it until it’s unrecoverable. They grow what they can on whatever land they have. They hold fund-raising when cash shortages become critical.

None of that is enough. The plain fact is this: The more people depend on the cash economy in Vanuatu, the more poor people we will see.

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Lost in Translation

[Originally published in the Vanuatu Daily Post’s Weekender Edition.]

Poetry is what gets lost in the translation – Robert Frost

This quotation is one of those handy catch-all phrases that scholars love to use to explain – and often excuse – people’s inability to capture the essence of a statement when it’s translated between languages and cultures. Examples of miscommunication between peoples are everywhere.

One of the most startling examples of the limits to cross-cultural communication occurred during US-Russian nuclear talks. Disarmament expert Geoffrey Forden writes:

‘It turns out that when the US START II treaty negotiators tried to explain to their Russian counterparts the need for a “strategic reserve” of nuclear warheads, they called it a hedge. The Russian interpreters alternately translated that as either “cheat” or “shrub”.’

You can imagine the confusion and consternation this would have caused. More than poetry was at stake in this particular translation.

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