Month: February 2012

Contradicting Developments

On Monday 6 February the ISN examined three different ways of thinking about development. High up on the international agenda are both human development and sustainable development. That makes sense. After all, those of us who are lucky enough to lead healthy and fulfilling lives still make up a minority of the world’s population. Too many people are trapped in conflict zones, live in fear of oppression, or do not even get a basic education. At the same time, climate change, resource depletion and environmental pollution have become serious security issues, and many would agree that effective measures to counter a number of worrying ecological trends need be implemented sooner rather than later.

But just how sustainable is human development? Well, as the following chart illustrates, until now it has not been sustainable at all. The chart plots countries’ HDI scores against their ecological footprint. The HDI score measures human development. The ecological footprint, which was explained in more detail in yesterday’s blog, tells us how many planets would be required if every person in the world wanted to have the same lifestyle as the average citizen in a given country:

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Development on its Head: the World Global Footprint

Economic development is generally measured by a country’s GDP. However, this hardly tells the whole story. While some countries might be very prosperous now, their future looks a lot different when the sustainability of their development path is taken into account. In the light of this week’s editorial plan topic Development: Describing and Prescribing Progress, this blog will introduce the ‘ecological footprint’ as a means to quantify the consequences of specific development paths.

Global Footprint Network, Creditor/Debtor Map 2007, from 2010 NFA, www.footprintnetwork.org

The Ecological Footprint is an accounting metric which assesses humanity’s pressure on natural resources. It establishes how much land and water area a human population requires, to produce the resource it consumes and how much of the regenerative capacity of our planet we use to absorb emissions. Together with the measure of biocapacity, which tracks how much natural productive capacity is available to meet our demands, an ecological balance sheet for the world can be established. If the global ecological footprint is larger than global biocapacity, it means that humanity is using more than can be regenerated, and processed by the biosphere.

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Business and Finance

Bitcoin, Ripples, and Reality

Many people don't value a currency operating outside the traditional financial system. Photo: Zach Copley/flickr
Back in July 2011 we blogged about Bitcoin, the world’s first digitalized, crypto-currency. At the time, many thought Bitcoin a flash in the pan, attracting attention simply because it was still relatively new and exciting – but imagined interest would soon wear off. After three years however, Bitcoin doesn’t show signs of slowing down. Our last post touched upon Bitcoin’s use for undertaking illicit activities and the lack of institutional involvement. I’m going to revisit these themes and also discuss Ripple – the next currency you’ve never heard of.

Due to the increased anonymity associated with transactions undertaken using Bitcoin, there has been a fear that illegal acts are being made a lot easier, and a lot safer to conduct. A recent article for PCPro claimed that Bitcoin “is now the currency of choice for the discerning cybercriminal.” This image problem has not been helped by articles associating bitcoins with Silk Road, an online ‘underground’ marketplace (accessible only via Tor) where all kinds of illicit goods may be purchased – weaponry, forgeries and drugs – and where the digital currency is the only accepted method of payment. This undoubtedly sullies Bitcoin’s reputation, and to a disproportionate degree: The Internet itself has facilitated commerce, and necessarily the crime which accompanies any marketplace. But security agencies can be just as resourceful as criminals, developing network analysis techniques based on statistical methodologies to detect suspicious transaction flows. Rather than a destructive force, the appearance of Bitcoin and its use for ‘bad’ as well as ‘good’ is simply another reiteration of the cat-and-mouse game played out every day between criminals and the law.

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US-India Relations: Pivot Problems

US Secretary of State Clinton delivering her remarks on “India and the United States: A Vision for the 21st Century.” Photo: US Consulate Chennai/flickr

There is a conundrum at the heart of the Obama administration’s “pivot” toward Asia, at least as it relates to India.  The US is eager to extricate itself from military conflicts in the Greater Middle East (Iraq and Afghanistan) so it can focus on a region where, as President Obama put it, “the action’s going to be.”  Shoring up the US strategic posture in East Asia amid China’s ascendance will entail a deepening of geopolitical cooperation between Washington and New Delhi.  But the quickening withdrawal from Afghanistan will increase bilateral frictions, pushing relations in the opposite direction.

The Pentagon’s just-released strategic guidance paper calls for “investing in a long-term strategic partnership with India to support its ability to serve as a regional economic anchor and provider of security in the broader Indian Ocean region.”  Both Obama during his visit to India in November 2010 and Secretary of State Hillary Clinton during her trip last summer have called on New Delhi to play a more active strategic role in East Asia.

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Business and Finance

Corporate Influence on the Global Economy

How influential are multinational corporations in today’s global economy? One way of answering the question would be to analyze the nature and extent of corporate influence in mainstream media, on governments and public policy, and on international institutions and agreements – such as at the World Economic Forum in Davos. Today, however, we  take a simpler, but nonetheless revealing, approach: comparing the economic size of corporations with the size of national economies.

The map below pairs South American countries (measured in terms of aggregate GDP) with equivalently sized corporations (measured in terms of annual revenue). Hover your mouse over a country to see how the figures compare (view large map).

If Paraguay, Guyana, Bolivia or Suriname were corporations, they wouldn’t make Fortune’s list of the Global 500.  Indeed, the GDP of those four countries combined is smaller than the annual revenue of Vinci – a construction company you’ve probably never heard of (unless you’re French).

Brazil is the only South American country whose economy clearly outsizes any of the world’s corporations. With a GDP of 2.1 trillion, its economy is roughly five times the size of Wal-Mart, the world’s largest corporation. Wal-Mart’s revenue in 2011 (~421 billion) falls between the GDPs of Saudi Arabia and Norway respectively – and exceeds the  GDPs of the next 170 countries. Maybe the G20 should consider inviting CEO Mike Duke to their next summit.