Automation’s Effect on Developing Countries, Dementia around the World and where the Millionaires are

We read earlier this week that seeing live music reduces your stress levels. That’s according to a new study from the Imperial College of London. Levels of the stress hormones cortisol and cortisone both decreased in the volunteers who attended concerts as part of the research. The study also says, “It is of note that none of these biological changes were associated with age, musical experience or familiarity with the music being performed.” Apparently the study only had volunteers attend classical musical concerts so no word on whether seeing Metallica, Jurassic 5 orHardwell will calm our savage beasts. But even as we stationed a classical cellist near our keyboards, we still became stressed at the effect automation may be having on developing countries, worry about where dementia is most prevalent but we remain calm, cool and collected about where in the wild millionaires are to be found. It’s this week’s International Need to Know, keeping a constant drum beat on the strange rhythms of a complicated world.

Without further ado, here’s what you need to know.

Automating Against Development

As we are fond to point out, the last forty years have been remarkably good for we humans. More people have risen out of poverty during that time period than at any other time in history, both in raw numbers and in percentage of the population. The rapid development of South Korea, Taiwan, Singapore, China and India has alleviated poverty and pain for hundreds of millions of people. The hope is additional countries will follow suit. But will automation make that more difficult to do in the future?  A new study by the International Labor Organization (ILO) paints some red-alarm shades of worry on the matter. The ILO analyzed five ASEAN countries–Cambodia, Indonesia, the Philippines, Thailand and Vietnam–which account for 80% of the ASEAN countries workforce, to determine which sectors are most at risk for automation. They found that “approximately 56 per cent of all employment in the ASEAN-5 is at high risk of displacement due to technology over the next decade or two.” For Cambodia, which because of China’s rising labor rates, has become a large textile hub, the ILO already sees automation endangering jobs: “…close to half a million sewing machine operators face a high automation risk.” As Tyler Cowen points out in a new eBook, “At a growth rate of five percent per annum, it takes just over eighty years for a country to move from a per capita income of $500 to a per capita income of $25,000.” We need additional countries to achieve the rapid growth that led to the large alleviation of poverty the last 30 years. But will automation make that more difficult? While we wait to find out, check out Asian country labor costs below:

   

 

Live Long and Don’t Get Dementia

We were perusing data on which countries have the highest rates of dementia (What? What do you do for fun and recreation?). They are unsurprisingly all highly developed countries whose populations have lengthy life spans. But, they do not correlate completely with life expectancy. As you can see below, only three countries (those shaded in yellow) are in the top ten for both dementia rates and life expectancy. Of course, all of the countries with the top ten highest dementia rates are in the top 40 of countries with the highest life expectancy–the United States is the lowest, ranked 31st for life expectancy. Also of somewhat interest, all the countries in the top ten rates of dementia, save the geographically diverse United States, are countries located fairly far north. Not until Cuba, which has the 15th highest rate of dementia, do we find a country that is not fairly far north. Chile and Uruguay are 16th and 17th but they are somewhat south though not as far south as the top ten are north (in Chile’s case it is north and south but the main population center is about mid-way). Thus ends our unscientific meanderings into world health. We await our NIH grant where we can control for diet, genetic diversity and other factors.

Who Wants to be a Millionaire?

Many months ago we pointed out where the billionaires are. But that is a particularly rare species, surviving in the wild through luck, circumstances and, of course, often hard work and a good idea. But where are the millionaires? No surprise, the U.S. is home to the largest percentage of the world’s millionaires with a whopping 46%. Next up is the UK, Japan, France, Germany and then comes China. A pretty remarkable feat for China, all accomplished in the last 35 years. Scan the list below with whatever greed and envy you care to bring to the table, er, pie chart.

      

Voting Against Democracy, Good News and Diversifying Genomes

Life rhymes in coincidences, hums in ironies and occasionally crashes the hi-hat cymbal with karma. We were well aware of this yesterday while driving and listening to the radio news tell us of Ford’s announcement that they will release a fully driverless car without a steering wheel or pedals in five years for use in ride sharing fleets. Even as we listened and noted that Delphi will beat Ford to the punch in Singapore in 2019, a taxi in front of us careened across two lanes in order to make a sudden right turn. We have great empathy for the millions who will be put out of work by this rapidly advancing technology but will gladly see that particular taxi driver off the road. Even so, we would swerve across a busy six-lane highway to tell you about democracy’s difficulty in getting a date, remind you even so that the world is getting better and examine whose genomes are being sequenced. It’s this week’s International Need to Know, striving to be the Michael Phelps/Katie Ledecky of international information.

Without further ado, here’s what you need to know.

Voting Against Democracy

The slow arc of history towards liberalized democracies seems to have taken an unfortunate bend in recent years. Twenty years ago, it seemed inevitable that we were moving towards a world full of such political systems. But a coup in Turkey, the rise of authoritarian parties in a number of countries and the slow pace of democratic reform in others, has led a number of people to express concern about the path of our world. So we were curious what people think about democracy nowadays and it turns out there are indeed some worrying trends in people’s attitudes. Via Timothy Taylor we were pointed to The Democratic Disconnect which looks at surveys over the years of people’s views on democracy. Fewer people today in Europe (and the U.S.) have a positive view of what Churchill called the worst political system save all others. And it’s younger folks and rich people who most skew against democracy. In the Netherlands for example, “Only one in three Dutch millennials accords maximal importance to living in a democracy.” And it’s not just that a rising number of people are dismissive of democracy but also that growing numbers of people favor authoritarian rule: “In Europe in 1995, 6 percent of high-income earners born since 1970 favored the possibility of “army rule”; today, 17 percent of young upper-income Europeans favor it*.” So I guess young, rich people are our most likely future brown shirts. Obviously we need an AI to rule over us all and tell us to be democratic. Er, uh, or something like that.

  

*I’m still diving into the data for countries like China and India. More, perhaps, on those later.

And Now for Some Good News
Perhaps we should leaven the news of people’s increasing appetite for authoritarianism with a longer view of how well the world is doing over all. The Human Development Index (HDI) measures key dimensions of human progress over time. It includes life expectancy, health outcomes, literacy rates and access to education and GDP growth. The better a country does at these things the higher their HDI score. It purposely looks not just at economic growth but at a variety of factors that make people healthy, wealthy and wise. As you can see in the chart below, the trend for all regions is up and has been since 1870 (a very good year for wine and human development which may not be a coincidence). The only blip during that time period is Eastern Europe and Russia from about 1970 to 2000. But even they are up in the last 15 years. This two century good trend is something we may want to remind all those wanting to tear apart our world and its institutions.

Diversifying Genomes

The cost to sequence genomes has come down dramatically in the last decade, falling to around US$1000. In fact, we expect over the next five years, it will become affordable for most Americans and other high income countries’ populations to have their genomes sequenced. A prediction far more reliable than an American swimmer’s story of being robbed in Rio. Putting aside for the moment how useful it is to sequence genomes to improve health outcomes, we should note that in many parts of the world it is not affordable. As you can see in the chart below, by far Africa has the least number of genome sequencing centers. The United States, China, and parts of Europe lead the way. Given the seeming importance in diversity of samples, developing more genomic efforts in under-utilized countries will be important. And if costs keep coming down dramatically as expected, affordable. 

    

Brazil’s Dirty Water, China’s Grand Ambitions and Who is Using the Internet

Recently International Need to Know had the occasion to test out a virtual reality device and coincidentally shortly thereafter we met with the head of a virtual reality company. We’ve been curious about this technology but skeptical of just how earth shattering some claim it will be. But, when we tried out the technology not only were we impressed we immediately imagined dozens of applications for its practical use–from real estate to training to therapeutic uses. Of course, the head of the company has many more ideas in more depth than ours. We are living in a sci-fi world, or at least on the brink of it. But when we took off the goggles, removed the headphones and set down the controllers, we gazed steely-eyed at the reality of Brazil’s water issues, wondered at the expansive imagination of China’s government, and considered where the largest number of Internet users are.  It’s this week’s International Need to Know, augmenting reality with facts, analysis and critical information.

Without further ado, here’s what you need to know.

Thirsty Brazilians

Almost as much attention has been focused on Brazil’s water as on gold medals at the Olympic Games this week. What with blue water turning to a suspicious green and athletes told to keep their mouths shut (always good advice for the finally retiring athlete that was Alex Rodriguez), Brazil’s polluted water is much in the news. But did you know that Brazil has more water than any other country, controlling 20% of the world’s water supply? And yet, Brazil has water shortages. Their problem is not quantity, it’s quality. Or even more accurately, policies and practices affecting water management. About 62% of Brazil’s energy comes from hydropower. But the real water hog in Brazil is agriculture. Irrigation for agriculture consumes 72% of Brazil’s water. Of course, the fact that so much of Brazil’s water is polluted is a problem as well. Only 43% of Brazil’s toilets are connected to a networked sewage system. The good news is that is up from 33% in 2004 so progress is being made. Brazil has the water they need (it is a resource rich country after all) but it is in desperate need of reforms to have clean abundant water. Like the movie, Chinatown, water is a metaphor for the corruption and stasis that plague Brazil as a whole.

China’s Marshall Plan?

When people discuss China’s external activities most of the focus is on their shenanigans* in the South China Sea or on its large infrastructure investments in Africa. But we’ve been tracking what is being called “One Belt, One Road”, a plan to build infrastructure as China works to create a modern day Silk Road. The plan would build highways, rail, ports and more stretching from Moscow to Jakarta (see Bloomberg map below). Essentially One Belt, One Road (a great title for an old country western song, btw), would connect China to the west by a land route through Central Asia and via maritime routes to the south through Southeast Asia, South Asia, Africa, and Europe. Estimates are that China will spend $1.4 trillion on this effort over the next 30-40 years, which one analyst notes is more in real dollars than the U.S. spent on the Marshall Plan after World War II. China trade with the countries affected by One Belt, One Road is already worth $1 trillion. If this ambitious new infrastructure effort creates economic development in these countries, China’s economy stands to reap the benefits. A Bloomberg article notes the ”soft power” that China wields with this plan. And certainly so. But, will China be able to continue such spending with slower economic growth? And how much mal-investment will take place in such a grand scale endeavor? In fact, China’s large investments in Africa have suffered from backlash and misallocation of resources and we should expect more of the same with One Belt, One Road. Nonetheless, such a grand undertaking affecting such a large chunk of the world economy deserves our continued attention.

 *A technical term that Foreign Policy Magazine should use more often

Internet Users Around the World

The Internet feels ubiquitous nowadays but there are still large swathes of people without access to the medium that provides essential viewing of cat videos. Which countries are the top users of the Internet? Scale matters so China is number one even though only just over half the country has Internet access. Still that means 721 million Chinese use the Internet and with a 2.2% growth rate, millions more are coming online in the future. Only a third of India has access to the Internet but that country’s large population means despite low rates of usage, it is still in second place with 462 million Internet users. And, India has a remarkable 30% growth rate so that low rate of Internet usage is transforming quickly. Iceland has the highest percentage of its population using the Internet–100%.  Every single person in the country uses the Internet. I would have thought that grandma Bjarkardóttir was disconnected but apparently not. The top ten list for your perusal below.

   

E-sports, Threatened Korean Pop Stars and Who is Buying our Houses

International Need to Know is prone to contrarianism, of which we are not necessarily proud–it is a vice like any other, occasionally useful and entertaining but also easily bent to mischief. So as we witness this summer of discontent with violence both real and rhetorical pounding us from every direction, our natural inclination is to see the blue skies, hear the birds chirping and taste the good times. After all, despite all the bad news the all-consuming media presents every hour of the day, by many measures, we live in one of the most peaceful times in human history. Populations are healthier. People around the world are more prosperous. Crime is down to near historic lows. So I read with interest (beware: it contains strong off-color language) an explanation of why we feel like the world seems doomed even as we live in relatively good times. But neither misanthropy or optimism prevented us from examining the emergence of Esports* around the world, the threat against Korean pop stars, and who around the world are buying up our houses. It’s this week’s International Need to Know, your clear eyed, full hearted, can’t lose look at our Friday Night Lights world.

Without further ado, here’s what you need to know.

Be a Good eSport*

Even as Russian swimmers down their Olympic sorrows in straight vodka rather than their usual THG-laced cocktails, we saw an article about the Brazilian soccer player Wendell Lira retiring to play videogame soccer. This led us to wonder about the rise of E-sports and how long the Olympics, full of corruption and polluted waters, will be larger than the E-variety. There are now close to 200 million regular viewers of Esports around the world and viewership is increasing at a rapid rate each year. The top esport players earn more than $1 million per year (we hear the sound of INTN readers rushing to buy Xboxes). So where are the largest centers of E-Sports? Lo and behold, they are not dissimilar to which countries will win the most medals over the next two weeks. Thumbs and screens are gaining on the javelin. Below are the top ten Esport countries compared to the top countries likely to win Olympic medals:

China Pops K-Pop

Analysts and experts continue to worry about the tensions in Asia between China and its neighboring countries, whether over the South China Sea disputes or military realignments. It’s one thing when these tensions could spill over into military action or endanger merchandise trade, but have things gone too far when K-pop stars in Korea are at risk? The Hollywood Reporter informs us that China is retaliating against Korea’s decision to deploy a U.S.-made missile defense system by banning K-pop stars from appearing on Chinese television. “According to two sources cited by the South China Morning Post, China’s national media regulator informed TV stations in Guangdong Province that TV shows featuring South Korean pop stars would not be granted approval to air ‘in the near future.'” Markets are betting on Chinese retaliation as “shares in South Korean entertainment companies took a dive Tuesday.” In case you don’t know, Korean pop music and TV dramas are very popular in China. But Gangnam Style might be going out of style in China, or at least among its leaders.

Whose Buying Your House?

The worldwide headquarters of INTN is in Seattle, a place that has seen rapid increases in housing prices over the last few years. Traditionally Seattleites curse the hated Californians for moving up to the Pacific Northwest and spoiling our pristine area with their, well, evil California-ness, including driving up our housing costs. But recently Seattleites also worry about Chinese driving up the cost of residential real estate. So we ask which international populations are buying houses in the United States? The National Association of Realtors tell us to Blame Canada, at least until last year when Chinese did indeed surpass Canadian buyers as the largest foreign buyers of residential real estate. That trend continues so far in 2016. The top five states attracting international buyers are Florida, California, Texas, Arizona, and New York. Washington is the fourth-largest destination of foreign buyers from China so we may be able to credit (blame?) Chinese at least for a little bit of the rise in our property’s value.  By the way, half of foreign buyer purchases were made using all cash.

  

*Is it “eSports” or “esports” or “E-sports”? We dove down some deep, dark Internet holes to find out, including a long and rancorous Reddit thread (what’s more amusing [and dispiriting] than watching people cruelly insult others for how they spell a word that didn’t even exist a decade ago?), and we could find no consensus. Clearly the UN Security Council needs to take this up at its next meeting in October.