Posts Tagged ‘2010’
At 21, the Human Development Report and its message of equity in 2011
Today, the United Nations Development Programme (UNDP) will release its 2011 Human Development Report, the 21st in the annual series that lets us know how well – or not – the populations in countries are doing. Whether on education, health, income, poverty, cost-of-living the human development indices are now well-constructed and evolved measures of the well-being of people. Today, we’ll know a little more about how 7 billion people live on our Earth.
This year’s ediition is called ‘Sustainability and Equity: A Better Future for All’. The HDR website has said the report will call for the urgent global challenges of sustainability and equity to be addressed together – and that the 2011 HDR identifies policies on the national and global level that could spur mutually reinforcing progress towards these interlinked goals.
These introductory articles are uniformly boring and uniformly useless to all those who deal with real questions, hard quetions and tough decisions every day. They say things like “bold action is needed if the recent human development progress for most of the world’s poor majority is to be sustained” and things like “the benefit of future generations as well as for those living today”.
This is irritating, but has become part of the HDI furniture. For some perverse reason top politicians and top UN agency muckamucks seem unwilling to cut the waffling and get on with it. Anyway. we’re interested in the rest of the report, the data, the statistics, the methodologies, the background studies and a whole bunch of related research – so that’s what this and related HDI posts will dwell on in the weeks to come.
The HDR website has mentioned that the 2011 report will talk about living standards. Here’s a sentence I want to read more about when the big package opens up: “Yet the 2011 Report projects a disturbing reversal of those trends if environmental deterioration and social inequalities continue to intensify, with the least developed countries diverging downwards from global patterns of progress by 2050.” What are the numbers that led to this prickly insight, I would very much like to see.
Look for these in the 2011 edition:
UNDP HDR 2011 International Consultations
UNDP HDR 2011 Advisory Panels
UNDP HDR 2011 Human Development Seminars
UNDP HDR 2011 Commissioned Research
Let’s look back. A year ago, in 2010 November, UNDP when releasing the HDR 2010 said that “most developing countries made dramatic yet often underestimated progress in health, education and basic living standards in recent decades, with many of the poorest countries posting the greatest gains”. HDR 2010 cautioned that “patterns of achievement vary greatly, with some countries losing ground since 1970”.
Overall, HDR 2010 showed that life expectancy climbed from 59 years in 1970 to 70 in 2010, school enrolment rose from just 55 percent of all primary and secondary school-age children to 70 percent, and per capita GDP doubled to more than US$10,000 (sorry, but this last is a particularly meaningless number). Life expectancy, for example, rose by 18 years in the Arab states between 1970 and 2010, compared to eight years in sub-Saharan Africa. The 135 cuntries studied include 92 percent of the world’s population.
Within the pattern of overall global progress, the variation among countries is striking, said HDR 2010. Over the past 40 years – that is, tilll 2010 – the lowest performing 25 percent experienced less than a 20 percent improvement in HDI performance, while the top-performing group averaged gains of 54 percent. Yet as a group, the quartile of countries at the bottom of the HDI scale in 1970 improved faster than those then at the top, with an average gain of 61 percent. Somewhat zanily, HDR 2010 then advised us that “the diverse national pathways to development documented … show that there is no single formula for sustainable progress”. Umm, we did somehow notice that, all by ourselves actually.
What was enormously useful in HDR 2010 were three new indices that the world’s rambunctious and usually argumentative development community has still not grasped firmly with opposable thumbs. These are:
• The Inequality-adjusted Human Development Index (IHDI) – For the first time, this year’s Report examines HDI data through the lens of inequality, adjusting HDI achievements to reflect disparities in income, health and education. The HDI alone, as a composite of national averages, hides disparities within countries, so these adjustments for inequality provide a fuller picture of people’s well-being.
• The Gender Inequality Index (GII) – The 2010 Report introduces a new measure of gender inequities, including maternal mortality rates and women’s representation in parliaments. The Gender Inequality Index is designed to measure the negative human development impact of deep social and economic disparities between men and women.
• The Multidimensional Poverty Index (MPI) – this is the equivalent of the 400-pound gorilla for all HDI-related stuff – it complements income-based poverty assessments by looking at multiple factors at the household level, from basic living standards to access to schooling, clean water and health care. About 1.7 billion people—fully a third of the population in the 104 countries included in the MPI—are estimated to live in multidimensional poverty, more than the estimated 1.3 billion who live on $1.25 a day or less.
So, while waiting for the goodies from HDR 2011, there are some questions that still smoulder from earlier editions. Here’s one: what does the evidence from the past 40 years tell us about the relationship between growth and changes in human development? The two-panel chart which accompanies this post (below) presents the basic result. The left panel shows a positive association — though with substantial variation — suggesting that growth and improvements in human development are positively associated.
Remember, however, that income is part of the HDI; thus, by construction, a third of the changes in the HDI come from economic growth, guaranteeing a positive association. That’s why a far more useful exercise is to compare income growth with changes in the non-income dimensions of human development (gift economies would be wonderful subjects). This has been done using an index similar to the HDI but calculated with only the health and education indicators of the HDI to compare its changes with economic growth. The non-income HDI is presented in the right panel of the chart – looking for the correlation? Remarkably weak and statistically insignificant, as they said so themselves.
That will deliver a smart kick in the collected pants of the G20 muckamucks when they assemble (what? again!) in France (Cannes) for a new episode of creative bullshitting fiscal sophistry. But, here’s the strange thing. Previous studies have found the same result. One of the first scholars to study this link systematically was US demographer Samuel Preston, whose landmark 1975 article showed that the correlation between changes in income and changes in life expectancy over 30 years for 30 countries was not statistically significant. As ideas such as ‘sustainability’ and ‘environmental’ began gaining traction from the early 1970s onwards – think ‘Limits to Growth‘ – more data became available, and other researchers obtained the same result. In a 1999 article, ‘Life during Growth‘, William Easterly found a remarkably weak association between growth and quality of life indicators such as health, education, political freedom, conflict and inequality. Easterly’s work was ignored by the bankers and their compradors for years thereafter.
Next, François Bourguignon, director of the Paris School of Economics, and several African and European colleagues concluded that “the correlation between GDP per capita growth and nonincome [Millennium Development Goals] is practically zero”. That should have been turned into a poster and hung on the wall of every bloody finance minstry from Abuja to Auckland. More recently, World Bank economist Charles Kenny recently confirmed the lack of correlation between improvements in life expectancy and growth, using both a large sample of countries over 25 years and a smaller sample covering a much longer period. I advise his still-serving colleagues to dust off his file and read his work, for the first time for them.
Well, ’nuff said. Let’s wait till the HDR 2011 starts streaming towards us, tweets and video and all.
A bumper year for India’s food production?
The third advance estimates of production of foodgrain in India has been released by the Ministry of Agriculture.
A comparison of final production of the years 1997-98 to 2010-11 (a 14-year period) with the third advance estimates shows that 2010-11 is expected to produce a record 235.88 million tons of foodgrain. This amount is higher than the 233.88 million tons of 2008-09 and the 230.78 million tons of 2007-08.
The year 2010-11 is expected to yield the third highest production of rice in the 14-year period, with 94.11 million tons, the highest production of wheat with 84.27 million tons, and the second highest production of coarse cereals with 40.21 million tons. Total cereals are to be the second highest ever in the 14-year period with production estimated at 218.59 million tons. Total pulses are expected to be 17.29 million tons, the highest in the 14-year period.
The third advance estimates will be seen by the Ministry of Agriculture and by India’s national agricultural research system (headed by the Indian Council of Agricultural Research; ICAR) as proof that the flagship programmes are delivering. These are the National Food Security Mission and the Rashtriya Krishi Vikas Yojana.
[The data file with the updated Third Advance Estimates is now ready. Get it here. The 14-year-comparison tables for foodgrain crops is available here.]
The third advance estimates for 2010-11 was released on 2011 April 06 by the Department of Agriculture & Cooperation / Directorate of Economics & Statistics / Agricultural Statistics Division.
Winter drought threatens China wheat production
The FAO has just released a special briefing on wheat production in China, through its Global Information and Early Warning System on Food and Agriculture (GIEWS). “A severe winter drought in the North China Plain may put wheat production at risk,” said the FAO. “Substantially below-normal rainfall since October 2010 in the North China Plain, the country’s main winter wheat producing area, puts at risk the winter wheat crop to be harvested later in the month of June.”
Low precipitation resulting in diminished snow cover has reduced the protection of dormant wheat plants against frost kill temperatures (usually below -18°C) during winter months from December to February. Low precipitation and thin snow cover have also jeopardized the soil moisture availability for the post-dormant growing period. Thus, the ongoing drought is potentially a serious problem.
FAO’s GIEWS said that the main affected provinces include Shandong, Jiangsu, Henan, Hebei and Shanxi, which together represent about 60% of the area planted and two-thirds of the national wheat production. According to official estimates some 5.16 million hectares out of the total of about 14 million hectares under winter wheat may have been affected in these provinces. The drought has reportedly affected some 2.57 million people and 2.79 million livestock due to the shortages of drinking water.
So far there have been some positive developments, such as the relatively mild temperatures, particularly the absence of frost kill temperatures, and the lower than average sub-zero temperature days. This combined with increased supplementary irrigation made available by the Government is likely to compensate to some extent the negative impact of low snow fall and low moisture availability. However, adverse weather, particularly extreme cold temperatures could still devastate yields. The Government has allocated some USD 15 billion to support farmers’ incomes and subsidize the costs of diesel, fertiliser and pesticide.
This drought in north China seems to be putting further pressure on wheat prices, said FAO, which have been rising rapidly in the last few months. In January 2011 the national average retail price of wheat flour rose by more than 8% compared to two months earlier and stood at 16% higher than a year earlier. Although the current winter drought has, so far, not affected winter wheat productivity, the situation could become critical if a spring drought follows the winter one and/or the temperatures in February fall below normal.
The climb to food price peak in two charts
These charts describe the 12-month rise in two indices: FAO’s Food Price Index, whose all-time high is the cause for so much alarm, and the IMF’s commodity index for food, which is less often referred to for food price burden impacts, but is no less important.
We see the index movements until the 2008 peak and the current peak of the FAO index and of the IMF food index (below). Over a year’s rise they are similar, but the worrying factor is the base for the 2010-11 rise, which is higher in both.
FAO food price index tops the 2008 peak
The UN Food and Agriculture Organization’s food price index has risen to 214.7 for December 2010, which is above its peak of 213.5 in June 2008.
This new peak, at a time when the price of crude oil is above USD 90 a barrel, is the strongest signal yet that global foodgrain supply has entered a critical phase. The FAO index has been rising steadily through the second half of 2010 – we discussed it here.
The cereal price index stands at 237.6 which is almost 40 points below the peak of 274.3 (in April 2008). The oils price index stands at 263 which is just under 20 points less than the peak of 282.6 (in June 2008). The dairy price index stands at 208.4 which is 60 points under the peak of 268.6 (in November 2007).
But the sugar and meat price indices are at all-time highs. The meat price index is now at 142.2 (in September 2008 it was 137.4 and its previous all-time high was 139.3 in September 1990). The sugar price index is now at 398.4 which is an extraordinary 180 points above its all-time high of 218 (in March 1990 – it was 207 at the maximum during 2008). The sugar price index crossed 300 in August 2008 and remained above 300 until March 2010, and again crossed 300 in September 2010.
Comparing three-month averages for the FAO food index and its main index components helps us understand how the 2010-11 food price crisis compares with its predecessor in 2007-08:
Food Meat Dairy Cereals Oils Sugar
3-month avg
at 2008 Jun 210.4 129.5 240.8 271.7 273.9 173.9
3-month avg
at 2010 Dec 206.4 141.2 206.3 227.0 242.1 373.7
A Bloomberg report quotes FAO senior economist Abdolreza Abbassian: “One might expect prices to come down in spring, and this may be in fact the worst. But given how unexpected the weather events have been, I for one would not want to bet on anything along those lines.” The report said that concern about drought doing harm to Argentine harvests helped corn jump 52% in Chicago last year and soybeans to rise 34%. Prices also gained as China, the world’s largest soybean buyer, became a net corn importer. Wheat added 47% in 2010 as Russia, hit by its worst drought in a half-century, banned all cereal exports.
“Eyes will be on the Argentina corn crop,” Abbassian said. “There is still, unfortunately, a potential for grain prices to strengthen on the back of a lot of uncertainty. If anything goes wrong with the South American crop, there is plenty of room for them to increase further.” Potential damage to South American soybean and corn crops is of greater concern for world grain prices than harm to wheat in Australia caused by floods, according to the economist. Argentina and Brazil are the world’s second- and third-biggest corn and soybean exporters after the US. “The watch is definitely on South America for the next two weeks,” Abbassian said. “Given the very tight corn market, and demand from China for soybeans and the tight soybean market, if those commodities start to rise more, that will also lift wheat.”
Agrimoney has a report polling commodities fund managers in several financial centres worldwide for their views. What they say about the impact major forecasts, such as the World Agricultural Supply and Demand Estimates, have is worth paying close attention to. The WASDE report provides the US Department of Agriculture’s comprehensive forecasts of supply and demand for major US and global crops.
Reuters has reported that India’s food inflation rose for the fifth straight week to the highest in more than a year, reinforcing fears it has spilt over to broader prices and cementing expectations of a January interest rate hike. “But the spurt in prices of many basic foodstuffs has also raised questions over the government’s ability to control price rises through monetary policy, with poor infrastructure, hoarding and supply bottlenecks contributing to stubbornly-high food inflation.”
Unseasonal rains are officially blamed for pushing up prices of vegetables such as onions and tomatoes, but some commentators point instead to poor agricultural productivity and transport after years of few reforms and weak government investment. Onion prices, a key food staple for Indian families, rose over 23% percent over the week to December 25. The food price index rose 18.3% in the year to December 25 and the fuel price index climbed 11.6%. This compared with 14.4% and 11.6% annual rises the previous week.
The Wall Street Journal has said that food prices in India are continuing their sharp rise, increasing concerns among economists about a prolonged spell of high prices and adding pressure to the central bank to raise interest rates later this month. “The Reserve Bank of India next meets on Jan. 25 to consider an interest rate rise after pushing up rates six times in 2010 – one of the most aggressive tightenings of any central bank. But calls for a further move keep coming, most recently with the International Monetary Fund saying in a report released Thursday that rates need to be higher to curb inflation.
“The central bank will need to walk a fine line, however, since liquidity within the bank system is tight and further rate hikes could exacerbate that problem, economists said. Data from the Ministry of Commerce and Industry Thursday showed that the wholesale price index for food articles rose 2.5% in the week ended December 25 from the previous week. The year-on-year inflation rate for food surged to 18.32% from 14.44% the week before. It was the fifth straight week of rising food prices, which have been hovering at elevated levels in recent months.”
Food inflation crippled India’s households in 2010
The price of a basket of staple foods has become crippling in rural and urban India. The government’s response is to favour agri-commodity markets, greater retail investment and more technology inputs. For food grower and consumer alike, the need for genuine farm swaraj has never been greater.
The retail prices of staple foods rose steadily through 2010, far exceeding in real terms what the Government of India and the financial system call “headline inflation”, and exceeding also the rate of the rise in food inflation as calculated for the country. These calculations ignore the effective inflation and its increase as experienced by the rural and urban household, and they ignore also the considerable regional variations in India of a typical monthly food basket.
Moreover, from a household perspective an increase in the prices of food staples is not seen as an annual phenomenon, to be compared with some point 12 months in the past. It is intimately linked to employment (whether informal or seasonal), net income, and the pressures on the food budget from competing demands of medical treatment, education and expenses on fuel and energy.
When real net income remains unchanged for over a year or longer, the household suffers a contraction in the budget available for the food basket, and this contraction – often experienced by rural cultivator families and agricultural labour – is only very inadequately reflected by the national rate of increase in food inflation.
An indicator of the impact on households is provided by the price monitoring cell of the Department Of Consumer Affairs, Ministry Of Consumer Affairs, Food and Public Distribution. This cell records the retail and wholesale prices of essential commodities in 37 cities and towns in India. Data over a 36-month period (2008 January to 2010 December) for the prices of cereals, pulses, sugar, tea, milk and onions reveals the impact of the steady rise in the Indian household’s food basket.
In 33 cities and towns for which there are regular price entries, the price per kilo of the “fair average” quality of rice has risen by an average of 42% over the calendar period 2008 January to 2010 December. In 12 of these urban centres the increase has been over 50% (Vijayawada, Thiruvananthapuram, Hyderabad, Bengaluru, Patna, Cuttack, Bhubaneshwar, Indore, Bhopal, Shimla, Karnal and Hisar).
The average price rise over the same period for a kilo of tur dal, for 32 cities for which there is regular price data, is 46%. In 11 of these urban centres the increase in the price of tur dal has been over 50% (Puducherry, Bengaluru, Patna, Agartala, Nagpur, Mumbai, Indore, Ahmedabad, Shimla, Jammu and New Delhi). Where wheat is concerned, from among the 27 cities and towns for which there are regular price entries over three years, in 10 the per kilo price rise is 30% and more.
If in search of a comforting cup of tea over which to rue the effect of the steady price rise, this too will cost a great deal more than it did three years ago. For 25 urban centres with regular price data, the average increase over the same period of 100 grams of loose tea leaf is 38% and in 11 of these cities and towns the increase is between 40% and 100%.
The sugar with which to sweeten that cup of tea has become prohibitively expensive over the January 2008 to December 2010 period. For the 32 cities and towns for which there is regular price data, the average price increase for a kilo of sugar is 102%, the range of increase being between 76% and 125%.
This increase for sugar – relatively homogenous for the price reporting centres – exhibits the countrywide nature of the price rise of the commodity. Nor is there a household economy case for substituting sugar for gur, or jaggery. For the 17 towns and cities reporting data for gur prices over the same 36-month period, the increase in price over the period has been an average 118% with 11 of these centres recording an increase of over 100%.
Adding a third element of higher cost to the humble cup of tea is the price of milk. For the 25 towns and cities which recorded increases in the per litre price of milk over the 36-month period (one city recorded a drop) the average rise is 37%. In seven cities a litre of milk costs at least 50% more in December 2010 than what it did in January 2008 – Ahmedabad, Bhopal, Indore, Jaipur, Jodhpur, Patna and Hyderabad.
In conspicuous contrast are the rates of increase in price of cooking media – groundnut oil, mustard oil and vanaspati. Over the January 2008 to December 2010 period the 37 urban centres recorded average price increases of 10%, 9% and 10% respectively for groundnut oil, mustard oil and vanaspati.
Finally, the volatile allium cepa, or common red onion. In 29 cities and towns reporting regularly the per kilo prices of onion, the increase in price of the vegetable has been astonishingly steep. The average increase for 29 cities is 197.5% and in 14 the increase has been 200% and above – New Delhi, Shimla, Ahmedabad, Indore, Mumbai, Rajkot, Agartala, Aizawl, Bhubaneshwar, Cuttack, Kolkata, Chennai, Hyderabad and Vijaywada. In pale comparison is the otherwise worrying average increase of 39.5% for a kilo of potatoes – this is the 36-month average increase recorded by 27 urban centres.
State of Food Insecurity 2010 – FAO says too little, too timidly
The 2010 edition of the State of Food Insecurity says much too little and what it does say is unconvincing. There is a theme for this years edition of one of the Food and Agriculture Organization’s (FAO) ‘flagship’ reports. The theme is “countries in protracted crisis” by which FAO means conflict and war, internal and external.
FAO doesn’t say so explicitly in the introduction to SOFI 2010 on its website. There’s no excuses for FAO not to when the World Food Programme, Oxfam, ActionAid and a number of international agencies and aid groups have done so, not just this year but for at least a decade.
As the world’s pre-eminent compiler of food and agriculture-related research, data and analysis, FAO ought to see itself as duty-bound to be clear and fair in its reportage but it is not.
SOFI 2010 says that the majority of the world’s undernourished people live in developing countries. Two-thirds live in just seven countries (Bangladesh, China, the Democratic Republic of the Congo, Ethiopia, India, Indonesia and Pakistan) and over 40% live in China and India alone.
The report says that “FAO’s projections for 2010 indicate that the number of undernourished people will decline in all developing regions, although with a different pace. The region with most undernourished people continues to be Asia and the Pacific, but with a 12% decline from 658 million in 2009 to 578 million, this region also accounts for most of the global improvement expected in 2010″. Where does FAO think this improvement is going to come from, given the fact that its own food price index shows how cereals have risen at a clip this year to match the rise in 2007?
Just as it did a month ago, the FAO is sounding like it is in two minds about what to report. SOFI 2010 says that “developing countries as a group have seen an overall setback in terms of the World Food Summit goal (from 827 million in 1990–92 to 906 million in 2010), while some progress has been made towards MDG 1 (with the prevalence of hunger declining from 20% undernourished in 1990–92 to 16% in 2010)”.
Which are the 22 countries covered by the ‘protracted crisis’ theme? Here they are, the numbers in total population in millions followed by number of undernourished in millions, both for 2005-07. (Why couldn’t these have been for 2009 in a report dated 2010?): Afghanistan (na / na), Angola (17.1 / 7.1), Burundi (7.6 / 4.7), Central African Republic (4.2 / 1.7), Chad (10.3 / 3.8), Congo (3.5 / 0.5), Côte d’Ivoire (19.7 / 2.8), Democratic People’s Republic of Korea (23.6 / 7.8), Democratic Republic of the Congo (60.8 / 41.9), Eritrea (4.6 / 3.0), Ethiopia (76.6 / 31.6), Guinea (9.4 / 1.6), Haiti (9.6 / 5.5), Iraq (na / na), Kenya (36.8 / 11.2), Liberia (3.5 / 1.2), Sierra Leone (5.3 / 1.8), Somalia (na / na), Sudan (39.6 / 8.8), Tajikistan (6.6 / 2.0), Uganda (29.7 / 6.1), Zimbabwe (12.5 / 3.7).
SOFI 2010 says: “On average, the proportion of people who are undernourished is almost three times as high in countries in protracted crisis as in other developing countries (if countries in protracted crisis and China and India are excluded). Nonetheless, not all countries in protracted crisis present very high levels of undernourishment as in some of these countries crises are localized to certain areas or regions. There are approximately 166 million undernourished people in countries in protracted crisis – roughly 20% of the world’s undernourished people, or more than a third of the global total if China and India are excluded from the calculation.”
The question, what happens when China and India are excluded from calculations? With the exclusions 130.4 million (China) and 237.7 million (India) fall out of the equations? Moreover, SOFI isn’t following it’s own data. The para above says 166 million (approx) undernourished in countries in ‘protracted crisis’ but the table annex shows that the 22 countries together have 146.8 million undernourished. If the larger number for the 22 countries is the 2009 estimate, then FAO could have used the same method to provide estimates for all countries for 2009.
When FAO recalculates its food price index monthly (the current index is up-to-date for September 2010) why are these estimates three years old? Why should China and India be excluded when they account for over a third of the global undernourished population? Last month FAO said that 925 million people in the world live in chronic hunger and explained that “the decline (from 1,020 million in 2009) was primarily attributable to better economic prospects in 2010 and the fall in food prices since mid-2008”. What fall in food prices? What better economic prospects?
The State of Food Insecurity 2010 is a disappointing and pedestrian effort. FAO ought to retract this version and revise it thoroughly without dwelling on themes like ‘protracted crisis’ and instead get to grips with the market- and economics-related reasons for food price spikes and the hunger they bring.