There’s a fair amount of talk again this week about the various government deficits and what to do with them. Earlier in the week the FT had a piece about the current state of play with the US deficit whilst the Economist is busy musing one more time over the ongoing saga of the EU growth and stability pact.
These two situations appear, on the surface, to be somewhat similar, but in reality it may be more interesting to consider how they differ.
Continue reading
Population changes are going to bring many cultural changes in their wake: and I’m not thinking only of immigration and multiculturalism here. Ageing populations will have different tastes and preferences, among them, apparently, will be changes in the quantity and types of alchohol consumed.
Among the explantations offered for the fact that the nation of beerdrinkers may soon no longer be one are the trend towards healthier living, economic problems (although that used to be thought to be a cause of raised consumption) and a deposit now payable on many cans and bottles. But there is no getting away from the fact that the big cause is changing demographics. Less young people means less beer. Now what else does it mean?
Continue reading
While EU politicians over at Davos have been mulling over the possibilities of Turkey’s membership of the EU, Kofi Annan apparently has things much clearer. In a speech to the European parliament he bluntly told MPs that Europe needs migrants to ensure a prosperous future and that Europeans should stop using immigration as a scapegoat for their social problems.
Continue reading
Say hello to another 1,276,000 inhabitants of the EU in 2003, bringing the total to 380.8 million people on January 1st 2004. Most of them were immigrants, out of the total increase of 3.4 people for every 1000 inhabitants, 2.6 was down to net migration while only 0.8 was accounted for by natural increase (births minus deaths).
Continue reading
On a day which sees the Parmalat heat being turned up to full blast, with a looming ‘cara a cara’ between former Chief Financial Officer Fausto Tonna and Parmalat chief legal counsel Gian Paolo Zini, and while in the United States a class action law firm has named investment bank Citigroup Inc and auditing firm Deloitte & Touche Tohmatsu among defendants in a lawsuit against the food group – a lawsuit incidentally filed on behalf of a U.S. pension fund (oh when, oh when will we get class action lawsuits here in Europe) – on such a day it might well be worth asking ourselves one simple question: is this just another one-off scandal?
Continue reading
I want to make sure Edward doesn’t miss this.
Josh Marshall quotes from a Fortune interview with Peter Drucker:
“FORTUNE: You sound fairly sanguine about the state of the U.S. economy. Do you see any danger signs?
DRUCKER: Oh, yes. The biggest problem I see is our total dependence on foreign money to cover our government debt. Never before has a major debtor country owed its debt in its own currency. It is unprecedented in economic history. Japan, by contrast, owes all its foreign debt in dollars. Now if you devalue the dollar, the Japanese economy benefits, because their imports become much cheaper. And the value of their debt goes down also. The individual Japanese companies that invest in dollars would lose, but the overall Japanese economy gains. But we have no experience about what will happen here when we owe so much debt in our own currency and we’re forced to devalue the dollar. Sooner or later, we’re going to find out.
What’s more, there is an enormous amount of surplus capital in the world for which there is no productive investment. The supply greatly exceeds the demand. So there is a very jittery body of excess money that is desperately in need of returns, and it could become panic-prone. We have no economic theory or model for this.
FORTUNE: Does the U.S. still set the tone for the world economy?
DRUCKER: The dominance of the U.S. is already over. What is emerging is a world economy of blocs represented by NAFTA, the European Union, ASEAN. There’s no one center in this world economy. India is becoming a powerhouse very fast. The medical school in New Delhi is now perhaps the best in the world. And the technical graduates of the Institute of Technology in Bangalore are as good as any in the world. Also, India has 150 million people for whom English is their main language. So India is indeed becoming a knowledge center.
In contrast, the greatest weakness of China is its incredibly small proportion of educated people. China has only 1.5 million college students, out of a total population of over 1.3 billion. If they had the American proportion, they’d have 12 million or more in college. Those who are educated are well trained, but there are so few of them. And then there is the enormous undeveloped hinterland with excess rural population. Yes, that means there is enormous manufacturing potential. In China, however, the likelihood of the absorption of rural workers into the cities without upheaval seems very dubious. You don’t have that problem in India because they have already done an amazing job of absorbing excess rural population into the cities–its rural population has gone from 90% to 54% without any upheaval.
Everybody says China has 8% growth and India only 3%, but that is a total misconception. We don’t really know. I think India’s progress is far more impressive than China’s.”
Drucker makes two very interesting points that I haven’t seen disussed anywhere else
Comments?
The sinking of a boatload of Somali immigrants off the island of Lampedusa seems to have set off something akin to a feeling of collective remorse in Italy. (Would that the human tragedy that is occuring on a regular basis just off the straits of Gibraltar could provoke a similar reaction here in Spain!) Indeed Belusconi (always the master of great theatre) appears to have had them near to tears over in Strasbourg.
Irony apart, even his old ‘enemy’ – the good-soldier schultz – is quoted as saying he has “the impression that what Mr Berlusconi said came from the heart”. He could not however resist a reference to remarks which were last year attributed to Italian Reforms Minister Umberto Bossi to the effect that he wished the navy would open fire on ships carrying illegal migrants. Schulz is quoted as saying: “We are very happy that it is not those members of your government who want these boats sunk who are responsible for this issue in the (EU) home affairs council.”
Well this is the second time this month I find myself asking whether Berlusconi is having a change of heart. Since I try not to engage in type M speculation, I don’t need to answer this. What we might note is the way Interior Minister Pisanu is making the direct link with Italy’s ageing population and (hence) pension difficulties. After the Greeks tried to raise the question in Thessalonika, we could ask ourselves whether the South of Europe (where the demographic collapse is most profound, and immigrants are traditionally less in evidence) is about to adopt a collectively different approach on this question.
Continue reading