NINA SIMONE – The House of The Rising Sun (Best Version) Lyrics
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Without further ado, here’s what you need to know.
Our Cultural Distances
How important is culture to a country’s economic and political success? We have no idea but some researchers have attempted to quantify just how culturally similar countries are to each other. Or, as they ask, “Just how psychologically different are the nations of the world compared to each other and to the over-scrutinized United States?” They come up with some interesting answers. Countries in general are more culturally distant from China than they are from the United States. And Hong Kong is just as culturally close to the U.S. as it is to China (or distant, depending on your point of view). India has the most cultural diversity within its country, the United States the least (making New Orleans just that more special for its distinctness). Yemen is most culturally distant from China and the second most culturally distant country from the U.S, which I guess makes them pretty unique. Given the checkered history between the two, Vietnamese may be surprised to learn they are culturally closest to China. Although we are unqualified to vouch for their methodology, the study looks at a variety of cultural factors, including individualism, long-term orientation, value of hierarchy and others. We await a study of the culture of the researchers.
Is It Safe?
A former boss once told us that innovation is successful in places where it is okay to fail. So we’re very innovative. We have written that China does not get enough credit for being technologically innovative; case in point Chinese researchers apparently have succeeded in transforming copper into gold. But is the Chinese government now implementing policies that will put such innovation at risk? You’ve heard of the social credit system they have been instituting. They’ve now also begun instituting such a system for its scientists, according to an article in Nature (via Marginal Revolution). “Researchers in China who commit scientific misconduct could soon be prevented from getting a bank loan, running a company or applying for a public-service job. The government has announced an extensive punishment system that could have significant consequences for offenders — far beyond their academic careers.” As in the broader social credit system created in China, accused researchers will be banned from flying and getting on trains, along with losing grants and promotions. At the same time, on China’s popular Wechat app, censorship is on the rise at the same time as many Chinese receive their news via WeChat. But if you were wanting to read about the arrest of Huawei’s CFO, you were out of luck, according to the Vancouver Sun. Draconian consequences for failure and increased censorship could smother Chinese innovation in its high-tech, Internet of Things cradle.
Breaking News: Gender Inequity Still Exists
All over the world. But there have been some slight improvements over the last year according to the World Economic Forum’s 2018 Global Gender Gap Report while noting “there is still a 32 percent average gender gap that remains to be closed.” The annual report benchmarks 146 countries across four categories: economic opportunity, educational attainment, health factors and political empowerment. The largest gender disparity is in political empowerment. The smallest disparity is in education and health. Healthy, wealthy and wise? We’re doing okay on two out of three. Europe and North America lead the way on having the best gender equity with the Middle East bringing up the rear. Worrisomely, Africa has regressed in the last year. In terms of countries, Iceland is tops for gender equity while Yemen comes in last. Peruse the top and bottom tens below.
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admin2018-12-27 11:00:162019-01-10 04:51:51Our Cultural Distances, Is it Safe, and Gender InequityIn openings, we prefer whimsy, metaphors and analogies, punctuated with a bit of joy and a dash of amusement. In these weekly missives, we have often pointed out that we live in the most peaceful, prosperous time in all of human history. And this remains true. But today we open by directly stating we are entering an age perhaps as dangerous as any since the 1950s. This is both because of advances in technology and because of the new geopolitical age that has emerged. First, as technology has become more powerful and democratized, Moore’s Law of Mad Scientists looms ever larger: “The minimum IQ required to destroy the world drops by one point every 18 months.” Our forthcoming novel premised on this law also grows ever closer to completion. Second, the combination of a more powerful China and a U.S. in leadership retreat raises another flag of danger. China’s ascension and America’s relative descent were inevitable, given the Economic Center of Gravity has shifted east into China. But the transition from one great power to another is almost always rife with danger. So though we usually try to write about what’s not at the top of the news, today we begin with what was the most important news of last week–the much covered arrest of Huawei’s CFO, then dive into what should have been a big story last week–the first commercialization of self-driving cars, and end with some surprising news in Tehran. But because even in the most direst of times, there is always joy, whimsy and amusement to be found, and because we will again be in New Orleans next week (INTN will return on Dec 27) for Reveillon dinners, Professor Longhair tributes and Creole Christmas tours, we offer first this trailer for a movie on New Orleans dancing. It’s this week’s International Need to Know, buckjumping to the world’s complicated beat.
BUCKJUMPING | Trailer
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Without further ado, here’s what you need to know.
Arrested Development
The arrest of Huawei’s CFO Meng Wanzhou in Vancouver, Canada, just up the road from INTN’s worldwide headquarters, apparently at the behest of the U.S. government, was indeed the world’s most important news story last week. Why so important? It marks a new front in the increasingly frigid war between China and the United States (and other western nations). It occurs as China’s economy is slowing with lots of rumors the government will inject large stimulus to keep the economy humming and as deflation is clawing into its economy. The assumption has always been that China’s ruling government must have high economic growth to justify its continued existence. But, as we wrote a while back, the election of Donald Trump has accelerated China’s political prominence in the world. The Center of Economic Gravity shifting east meant regardless that China will play a much larger role in the world going forward. But the U.S., by pulling away from leadership in the world, accelerated that process. All well and good except that for all of the U.S.’s faults, and they are many–as in any institution involving that very imperfect species known as humans–America is not an authoritarian government with no sense of rule of law.* China is. Indeed, China has censored reports on the arrest of Ms. Meng. It continues to “re-educate” millions of Uighers. Rather than the current rule-based world order in which it is relatively easy to do business, China promotes a more opaque one that is based on its ascending interests, not on rule of law. Already China has detained a former Canadian diplomat and two other Canadians in retaliation for Ms. Meng’s arrest. What comes next, the reactions of the various parties and reactions to the reactions, will help set up the next 20 years of geopolitical transition.
*The current U.S. president is not an argument that the U.S. no longer has rule of law. Although he has complete disregard for the law and other conventions, the American system of checks and balances is, well, checking him and balancing him. That is a very different scenario from the system in China.
Self-Driving Cars are Here
As we noted, the two most important news stories last week were the arrest of the Huawei CFO in Canada and Waymo’s launching of commercialized self-driving taxi service in Phoenix. The latter received almost no press coverage for reasons that elude us. But that a company is now charging for self-driving car service (even if there is still a safety driver in the car) is a revolutionary step for technology, the economy and humankind. But our beat is international so we are here to show you where autonomous vehicle pilot programs are taking place in the world. The U.S. is first to be sure but there are also pilot programs in the UK, Australia, Switzerland, Netherlands, France, China and, of course, Singapore. However, the U.S. Congress this week is rebelling against legislation that would help ease the entry of autonomous vehicle technology in the market. So our bet is still on Singapore, with perhaps China right behind. Either way, we are entering a new world with autonomous vehicles now commercialized. Buckle your seat-belts, autonomously driven or not.
Tehran is Sinking
Tehran is literally sinking and not in the figurative way people often use the word “literally” as if they meant sinking under sanctions or government repression. No, according to an article in Nature, Tehran, the capital of Iran is “falling by as much as 25 centimetres a year, and that the collapse is spreading to encompass the city’s international airport.” This rate of metropolitan falling is among the highest in the world and is due to the “depletion of groundwater aquifers, which are being sucked dry to irrigate nearby farmland and serve greater Tehran’s 13 million or so residents.” That sinking feeling Iranians have is the damage to infrastructure they are witnessing and the fact that this is an apparently irreversible problem because the ground beneath the city has lost its porosity—water can’t fill into that ground anymore. This is likely to lead to more flash flooding and other problems in the city. Environmentally, the ground is sinking beneath our feet.
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admin2018-12-13 11:00:062019-01-10 04:47:55Arrested Development, Self-Driving Cars Are Here, and Tehran Is SinkingLast weekend we attended a benefit concert for Seattle Children’s Hospital at which three very diverse bands played. The Head and the Heart, a local Seattle band, were the headliners–a folkish trio, full of earnest melodies and lyrics. The second band of the night was New Orleans’ Preservation Hall Jazz band, who blew the house down with the rollicking, grooving northern Caribbean sounds that infuse the crescent city. The trombone player astonished with his sound, exuberance and the fact that he is somehow overweight despite his being in constant motion throughout the show (we imagine he must lie down on a comfortable couch the other 22.5 hours of the day). The opener was Kyle Craft, a young sapling singer-songwriter out of Portland, Oregon who somehow synthesizes glam and southern rock. So the three bands were diverse in types of music, age, race and in many other ways. The audience? Not as much. We feel there is a larger point to be made here about the current state of America, its political and other divides, but while we reach for it, we examine the glam of rich Indians, earnestly apologize for placing Singapore above Rwanda and riff on the jazz of Chinese-English misinterpretations. It’s this week’s International Need to Know, crafting and preserving important international matters while using both our head and heart.
Kyle Craft – “Exile Rag” (Recorded Live for World Cafe)
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Without further ado, here’s what you need to know.
The Increasing Number of Rich Indians
As the world watches China and the U.S. stomp around each other in a drunken global scavenger hunt, India continues to make stealthy progress.Take rich people for instance. India is growing them much faster than the rest of the Asia Pacific. Quartz India reports that, “In 2017, the number of high net worth individuals (HNWIs) in India grew 20% year-on-year, higher than in any other country, to 278,000.” The average growth rate of HNWIs (defined as people who have at least $1 million in investment worthy assets) in other Asia Pacific countries is in the 10 percent range. The increasing number of wealthy Indians is driven by a fast growing economy–India’s GDP more than doubled in the last decade. Coupled with strong GDP growth, however, India also is experiencing growing inequality—it is the 12th most unequal country in the world when measuring its gini coefficient (a crude measure of inequality). Of course, when you compare the overall number of HNWIs rather than the increase of them, India lags far behind Japan and China (see second chart below). Nonetheless, India is growing fast. Don’t tell Trump or Xi.
Never Mind Singapore, Rwanda!
So last week we were touting Singapore as ahead of the curve in preparing for drone deliveries. It took less than a week for us to sit corrected at our keyboard because it turns out Rwanda of all places is ahead in the drone delivery deployment game. This is due to the Silicon Valley based company Zipline partnering with the Rwandan government on delivering medical supplies. Says Zipline in an article on techmoran.com, “We now deliver over 35% of Rwanda’s national blood supply outside the capital city of Kigali, and we are saving lives everyday.” Zipline’s drones have a 160 km range and can carry 1.5 kilos (3.3 pounds for you non-metric heathens) of cargo. According to the article, “Health workers place delivery orders by text message and receive their package within 30 minutes on average.” Zipline so far has contracts in Rwanda and Tanzania and is about to enter the Nigerian market. Africa was an early adopter of cellular technology because of its lack of landline infrastructure, leapfrogging over developed countries in this technology. Perhaps the same will hold true for drone technology. Sorry Singapore.
Zipline drones airdrop medical supplies to African villages
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I Refuse to Translate That
During the dinner in Buenos Aires last weekend with the Trump and Xi camps, many people noted the only two women in the room were the two interpreters. Some wags also noted the two most important people in the room were women. Indeed, we have been in meetings where interpreters selectively translated the participants’ words, perhaps for good reason. So, maybe you were thinking translating apps could alleviate that problem. Apparently not if you are using the Chinese translating app, iFlytek. According to cnet.com, a software engineer tweeted that the app “censors politically-sensitive phrases.” Says cnet.com, “when she tried to translate certain phrases such as “Taiwan independence,” “Tienanmen square” and “Tienanmen square massacre” from English to Chinese, the system failed to churn out results for sensitive terms or names.” Cnet tested this and did not find the software as censorious as the software engineer did, but noted it would stifle certain sensitive terms. Interestingly, the app would translate Winnie the Pooh from English to Chinese. Maybe China really is opening up due to pressure by Trump. Or maybe Winnie the Pooh is more powerful than we realize.
We are reading a wonderful book, A Gentleman in Moscow, about an aristocratic Russian Count who after the 1917 revolution, has his life spared by the Bolsheviks but is essentially placed under house arrest the rest of his life in the Metropol Hotel, where in 2005, we once stayed of our own free will. The book charts a wonderful evolution of the Count, who as the revolutionaries become worse and worse, he becomes better and better. The novel has been a wonderful companion while we played a small part in assisting someone through a troubled time, including through our tangled, corrupt health care system. Our view of this person has changed often during the process, which is more a reflection of our shortcomings than any they may have. Indeed the Count has similar thoughts in a much more dramatic situation than ours and comments during the novel, “By their very nature, human beings are so capricious, so complex, so delightfully contradictory, that they deserve not only our consideration, but our reconsideration—and our unwavering determination to withhold our opinion until we have engaged with them in every possible setting at every possible hour.” And so too our world where we reconsider people’s mental images of the globe, the delightfully contradictory wagers on Singaporean technology and the complex digital competitiveness of countries. It’s this week’s International Need to Know, the Count of international data, the Baron of international information.Without further ado, here’s what you need to know.
Your Mental Image of the World is Likely Wrong
Along with our astute INTN readers, we like to think we have a pretty good understanding of the world, including basic facts about its geography. But more than likely we are overconfident in our knowledge as this National Geographic article illustrates. For example, the article informs us that most people think all of Africa is below the equator. But that is not true, around two-thirds of Africa is north of the equator. And the venerable old publication also notes that most people believe Europe is essentially at the same latitude as the United States but is actually more contiguous with Canada: “Paris is further north than Montreal, Barcelona is at a similar latitude as Chicago, and Venice lines up with Portland, Oregon.” People think these European locations are further south because their weather is warmer. But these warmer climes are due to the Gulf Stream bringing warmer currents, not because of the cities’ latitudes. What other knowledge do we all possess that we are overconfident about?
We Drone on About Singapore
Singapore has long been our bet for where autonomous vehicles will successfully be commercialized first, but Waymo is costing us money by preparing to commercialize autonomous taxis next month in Phoenix. (Now that we can legally bet on sports, when will we be able to wager on technology? Oh, wait that’s the stock market). But, rising out of the phoenix of autonomous vehicles, Singapore appears to lead in deploying drones. According to the South China Morning Post, “Companies have already started testing the devices for commercial use, mainly in an area of over 200 hectares (500 acres) dotted with high-rise buildings and shopping malls, specially designated by the government for the trials.” In Singapore they are concentrating on activities such as package delivery and security. One of the delivery tests is being conducted by a hospital to transport blood samples and specimens which obviously requires high safety standards. It’s one thing to have Amazon accidentally drop some fuzzy slippers on you, another to have blood douse an innocent bystander. Keep an eye on Singapore’s drone efforts, perhaps using a drone equipped with a camera.
Singapore launches drone experiment BBC News
Who is Digitally Competitive?
Madonna is wrong, or at least out of date*—we live in a digital world, not a material one. Or so it seems when I’m at the barbershop and everyone gazes down at their smartphones, scrolling, scrolling for that next bit of digital serotonin. So which countries are the most digitally competitive? The IMD World Competitiveness Center’s 2018 rankings unsurprisingly has the U.S. at the top. However, would you have guessed Singapore is second? Actually, that’s not too surprising either. In fact, one must scan down to number 17 to find the first true surprise with the UAE ranked above countries such as Germany, Japan, Ireland and Estonia. IMD’s rankings are based on factors such as the availability of talent in the country, quality of education, regulatory environment, availability of capital and level of adaptability in integrating technology into its economy. If one took only the urbanized part of China, we expect it would rank in the top ten.
*As is this joke but we couldn’t come up with a Lady Gaga gag
At the risk of offending a large segment of our readership, we dive into dangerous waters. We don’t mean to speak ill of the recently deceased and may Stan Lee rest in peace, but a statement from Lee condemning bigotry we have seen repeatedly on social media is what is wrong with his work, or rather what is distressing about how pervasive comic book sensibility has become in popular culture over the last two decades. Lee paints a comic book picture of bigotry. The biggest challenge we face from bigotry/prejudice is not in your face racism and antisemitism of the likes of Charlottesville, it’s the more more subtle institutional racism found in housing policies, hiring practices and other areas that create different economic castes, especially for African-Americans. Yes, we need to condemn blatant racism such as what happened at Charlottesville (the lowest of hurdles that our current president could not jump over), but tackling the more subtle racism will provide far more benefits to society. We do not begrudge Lee for the “universe” he created and are glad so many children and teenagers were so entertained by it. But other than George Lucas (and now we’ve offended the rest of our readership), has anyone else been more responsible for the infantilization of American popular culture and all the associated effects of that phenomenon? We take an adult’s eye view of economic gravity, are mature about who is open for business, and with nothing but sophistication examine Amazon’s global reach. It’s this week’s International Need to Know, eliminating the “pows” and “kabooms” from international analysis and data.
We’ll be busy making cornbread stuffing for Thanksgiving next week–we’ll be back on November 29
Without further ado, here’s what you need to know.
Economic Gravity and The 3rd Most Important Question
The current U.S. president is an accelerator of global trends that were going to occur anyway, they just are happening more quickly because of him. This is because the world, or at least the world’s economy, continues to shift on its axis. We remind you in the graphic below that the economic center of gravity in the world has been shifting back towards Asia. The U.S. President not participating in the ASEAN Summit in Singapore this week, or the APEC Summit in Papa New Guinea, are more examples of his “nationalist” approach and abdication of U.S. leadership in the world. All of it accelerates China’s efforts to exert leadership and other countries finding new ways to thrive and survive in the world, ones that don’t include the U.S. in the equation. In Singapore, China will push its Regional Comprehensive Economic Partnership, a trade deal to rival the Trans Pacific Partnership (TPP). You remember TPP, the trade deal the U.S. pulled out of in 2017 and that has been ratified so far by seven of the 11 countries in the pact, awaiting approval of only Brunei, Chile, Malaysia and Peru. China aims to supplant TPP. Either way, Asia has set sail with the U.S. ashore. Economic gravity has shifted to Asia and so too will political gravity, it’s just happening sooner than expected. The big question is how much will that line in the economic gravity map turn south which is to say how fast will India grow over the coming years? India is about to surpass Britain in GDP, the country that once ruled it. And politically, India is the world’s largest arms importer and has the fifth-largest defense budget. Whither India is one of the three most important geopolitical questions of the next twenty years.
McKinsey calculated where the economic centre is “by weighting national GDP by each nation’s geographic centre of gravity; a line drawn from the centre of the earth through the economic centre of gravity locates it on the earth’s surface.”
Open for Business
When we started our consulting business a few years ago, it was very easy to do with low barriers to creating and running our business. However, that is not true for all businesses as our real estate developer friends are always complaining to us about how hard it is to build a house in the Seattle region. But where in the world is it easiest to do business? The latest edition of the World Bank’s Doing Business report tells us New Zealand is a business person’s dream, followed by Singapore, Denmark (not just a place for social safety nets and environmentalism—something both sides of the politically wide aisle in America could learn from), Hong Kong, South Korea and, of all places, Georgia. Afghanistan tops the list of most improved countries for doing business since last year, followed by Djibouti, China and Azerbaijan, which makes us question the methodology of Doing Business. Actually, in regards to China, it does appear the government has made it easier for Chinese businesses to operate. Now if only they did the same for foreign businesses. Also of note, one-third of all business regulatory reforms last year took place in Africa.
Amazon’s Global Reach
We like and use Amazon but read with some distress that one of its two so-called HQ2 locations will be in Queens, New York. Queens is the last affordable borough in the city and some of New York’s last remaining authentic delis reside there. We fear that neither of those will be true in a few years with Amazon flooding through the borough. But what about the corporate megalith’s global presence? Which country is the location with the largest number of titles in Amazon’s Prime Library, for example? The U.S., of course. And next at the top of the list are all English speaking countries, including the UK, Canada (apologies to Quebec), Australia, New Zealand and Ireland. The UK is the cheapest location for streaming a video on Prime, and Singapore and Latvia the most expensive. Last year, according to Statista, the United States accounted for a large majority of Amazon’s revenue, followed by Germany. This includes both ecommerce and revenue from web services (where Amazon currently gains most of its net revenue). The UK and Japan are the next two largest net revenue generating countries and the rest of the world barely totals as much as Germany accounts for by itself. Amazon is a huge American company but not yet dominating worldwide.
As the media beats the dead horse race of the American mid-term elections, we were reminded of what elections are supposed to be about while standing in line to talk to a health insurance consultant as part of our continuing struggle to restore our left knee to full functionality. A woman who had just finished talking to the benefits consultant walked past us with the look of one trapped in a DMV office for six hours, muttering, “It’s too *&%$ing hard.*” Only a few hours earlier we were helping an international visitor in need of medical help. We brought her to a health care facility who discovered that her insurance, purchased here in America to take care of her during her year-long work visit, did not provide coverage for the medical condition she had. We would not have been surprised if she too felt compelled to utter the same epithet that the other woman did, but she merely muttered, “This would never happen in my country.” The American health care system combines the worst aspects of capitalism and socialism, a Fitzgeraldian irony polishing the American dysfunctional policy shoe, the ultimate dab of the Nurse Ratched policymakers. So we limp into this week discussing change—how much there has been in the world’s top companies, the lack of it in certain European cultural views and how much immigrants to Sweden experience. It’s this week’s International Need to Know, if not trying to cure the world, placing an informational stethoscope to its beating heart.
*INTN is family-oriented. To see the unedited quote you have to subscribe to premium service.
Without further ado, here’s what you need to know.
A Change is Gonna Come…and Has
We have expressed concern in this space about the incentives and policies that favor large companies over small. In America, everything from land use to the way environmental protection is regulated to patent law gives big business an advantage. However, when we look at the global list of the largest companies in the world as measured by revenue, there has been significant change since 2008. Visual Capitalist graphs this list and finds,“43 of the 100 companies on top of today’s list were not there ten years ago.” Among the biggest changes are the increase in Chinese companies. In 2008 there were only three Chinese companies on the top 100 list, today there are 21. However, all three Chinese companies in the top ten are state owned enterprises such as China National Petroleum. Will they be there in 2028? And despite many people expressing concern over the power that technology companies have over all of us, “only a handful of tech companies have cracked the top 100.” Scan the whole list to confirm or challenge your biases, or perhaps both.
Change Hasn’t Come
Companies change more quickly then culture. This is evidenced in a Pew Global survey of European attitudes on issues such as gay marriage, acceptance of Jews and Muslims, and interest in religion. For example, according to Pew, “Majorities in all of the surveyed Western European countries favor same-sex marriage, while majorities in almost all of the Central and Eastern European countries oppose it.” Just over 73 percent of French people support gay marriage, but a gay couple may want to hold off on buying a cake in Hungary where only 27 percent support gay marriage. Central and Eastern Europeans are less willing than Western Europeans to accept Muslims and Jews into their family or as neighbors (never mind a gay Muslim or Jewish person). Perhaps Muslims and Jews in the Middle East have more in common than they realize. It may not be a coincidence that Eastern Europeans are far more religious than Western Europeans, “majorities say that being Christian – whether Catholic, Orthodox or Lutheran – is an important element of being “truly Lithuanian,” “truly Polish,” etc.” Like the United States, the EU’s constituent parts are very different.
But Change Has Come to Sweden
At first blush, Sweden may seem a homogeneous country that keeps on chugging economically and socially in a calm, never changing way. This is not true. Sweden has changed its economic policies and politics often over the years and over the last few decades has become a large recipient of immigrants. In fact, as a new paper reports, “As of 2016, about 17% of the Swedish population was foreign-born, compared to less than 7% in 1970. By comparison, the share of foreign-born in the United States was at about 13% in 2013.” So how are these immigrants doing economically? Immigrants to Sweden do relatively well when normalizing for starting income. But the paper’s author also reports, ”that immigrant children born into poor families are slightly more likely than similar natives to both reach the top of the income distribution and to stay at the bottom.” They are also considerably more likely to obtain a college degree. Immigrant children coming from “refugee-sending” countries such as Iran, Syria and Bosnia have higher incomes and inter generational mobility than other immigrants in Sweden. Why this is, is a mystery. Or, as the author says, “Further research is needed.” That is something that never changes.
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admin2018-11-08 11:00:412018-11-08 19:09:04Change of the Top Companies, Change in European Cultural Values, Change among Swedish ImmigrantsEven as the baseball season has ended and leaves us, as Bart Giamatti wrote, to face the fall alone, a video reminds us of standing outside Safeco Field on a warm summer eve, in a long security line as a recorded voice scolded us regarding the myriad of stadium prohibitions–what we cannot bring in with us, what we can’t say, what we can’t do. Rather than a feeling of welcoming to America’s pastime, instead the aura outside the ballpark is one of entering a federal penitentiary. Ahh, but in China, as you see in the video on Twitter (which we can’t figure out how to embed in this post but urge you to click on the link) when you board a train you are warned “your behavior will be recorded in an individual credit system” and are told how you can avoid a “negative record of personal credit.” And we wonder, as did the person who filmed the video, if this is our dystopian future. We are against this future, at least for the common people, but could see how it might be put to good use for certain public figures, even certain presidents, perhaps. But maybe that is what we are all destined to become: celebrities in a paparazzi, tabloid world, our full foibles, minor and major, tuned into and judged by the whole wide world, or at least by a governing minority. As we duck away from photographers hiding in the hedges, we dive deep into Chinese dog obedience rules and their relation to China’s economy and politics, provide an update on the world’s most underrated country and explain how Central America is changing. It’s this week’s International Need to Know, the Jaime Lee Curtis of international news and data–exposing the demons and welcoming the heroes.
Without further ado, here’s what you need to know.
Obedient Chinese Dogs, Humans Less So
So about China’s social credit system, where they monitor and grade people’s behavior, ala a certain Black Mirror episode. It has come to our attention that in Jinan, China instituted a dog-owner rating system, monitoring and grading dog owners on walking their dogs without a leash, not cleaning up after them and keeping them from barking. The government claims marked improvement in dog owners behavior since implementing the system (as with economic data, one raises a skeptical eye or perhaps stops wagging the tail). Speaking of Chinese economic data, George Magnus claims further evidence of an economic slowdown by noting that urban employment growth is slowing (see graph below). Urban jobs are mainly service jobs and those, Magnus says, are not as plentiful as before. And yet China is presumably employing more censors. Perhaps they would like to install some in Brazil where a populist (the world overflows with them) has been elected president, one with a distinctly anti-China perspective. “The Chinese are not buying in Brazil. They are buying Brazil,” the new President of Brazil Jair Bolsonaro has warned repeatedly. Which is all to say that China may find dog owners easier to regulate than other countries and their own economy.
World’s Most Underrated Country Update
Back in July, we reported on the undernoted success of Ethiopia—it has been the fastest growing economy in Africa the last ten years among other positive developments—and today we provide an update that reflects both the country’s positives and continuing challenges. A few weeks ago the reform minded Prime Minister* Abiy Ahmed reshuffled his cabinet and appointed a Minister of Peace charged with tackling (what’s a more peaceful verb we could use?) the continued ethnic violence in the country. According to Reuters Africa, “About 2.2 million people out of a population of 100 million have been displaced since clashes broke out last year, many of them between rival ethnic groups.” In addition to striving for ethnic reconciliation, the Prime Minister is gung-ho on gender equality–after the cabinet reset, now half of the ministers are women. And this week the parliament appointed Ethiopia’s first woman president, Sahle-Work Zewde. Ethiopia has many challenges to face but given its political and economic trajectory we continue to search for an Ethiopian ETF.
*Unlike Saudi Arabia’s ostensibly reform-minded MBS, Ethiopia’s Prime Minister Ahmed has not had any journalists murdered. In fact, since taking office he has freed journalists, bloggers and political prisoners arrested by prior administrations.
Changing Central America
The world is ever changing as we were reminded recently when we traveled to Walla Walla, once a sleepy farming community that is now a hung-over wine oasis with 200 wineries dotting the area. The old cliché is generals are always fighting the last war, which Noah Smith quantifies smartly in terms of immigration and allows us to once again point out there are fewer Mexicans living in America than five years ago. This, as Smith points out, is because Mexico has become richer and is having fewer babies. So fewer Mexicans feel the need to leave their country seeking economic opportunity and more are returning home to take care of aging parents. The same pattern, Smith shows, is emerging in Central American countries—El Salvador, Honduras and Guatemala. In each of these countries, as in Mexico a generation earlier, fertility rates are falling rapidly. At the same time, GDP is rising rapidly and is crossing the $8000 per capita mark, a point at which populations’ emigration levels usually start decreasing. Like most parts of the world, Central America is not static, it is ever changing—and so too will the U.S. immigration debate ten years from now.
We spotted him towards the back of the large event space, as always looming large just outside of the spotlight. We were attending the inaugural New Orleans Food and Funk Fest which his company was organizing in Seattle featuring chefs and musicians from New Orleans. Although we had never met him, his life had impacted ours, and countless others, in a myriad of ways, from the technology he pioneered as a young man, to his real estate endeavors that transformed the city we live in, to his research in cutting edge areas of science, to his efforts to save elephants, to his promotion of the arts, including this very festival we were attending. Years before, when our father-in-law worked for him as a janitor, he flew our father-in-law on his private plane to Portland to watch a Trail Blazers game. This night he stood quietly next to another man, perhaps a friend or bodyguard. As this most private of men saw us walking towards him, we could see a look of discomfort creep onto his face. But when we merely thanked him for organizing this festival because of our love of New Orleans, he smiled and relaxed. Both he and I expressed our admiration for the Crescent City and then we left him to his private thoughts, as we headed for alligator cheesecake and beignets. Perhaps our favorite marker of his life is the incredible diversity of friends and acquaintances lamenting his passing—musician Quincy Jones, cognitive psychologist Steven Pinker, comedian and fellow New Orleanphile Harry Shearer, philosopher Marshawn Lynch, rock band Pearl Jam, hack politician Newt Gingrich and many others from a panoply of life–science, sports, music and more. And, although not a friend, we too lament. RIP Paul Allen, our favorite, and this is not meant as a joke, Seattle billionaire. It’s this week’s International Need to Know, All Along Paul Allen’s Watchtower as we gaze upon and comment on our complicated world.
We are again on the road next week. INTN is back with scary world stories on Halloween
Without further ado, here’s what you need to know.
Asia’s Most Trade Dependent Country Meets U.S.-China
As China and the U.S. continue a battle of the economic bulges, which countries may benefit? Vietnam, the most trade dependent country in Asia, as measured by exports as a percentage of GDP, is an excellent candidate. Over the last decade, Vietnam’s exports have quadrupled to well over $200 billion. According to Natixix, “Out of Vietnam’s top ten export items, eight are included in higher U.S. tariffs for China, which means that Vietnam has become a relatively more competitive location for those items via tariff arbitrage in addition to labor cost differential.” Even before the tariff war, some assembly was being moved to Vietnam because of rising labor costs in China. And, Vietnam is the fourth-largest recipient of foreign direct investment in all of Asia, behind only China, Singapore and India. Vietnam, unlike China, is seeing a decrease in the number of state-owned-enterprises (25 percent decrease since 2011), and does not have as much debt as China. Vietnam still has a rigid governance structure and perhaps someday Trump will aim his trade bazookas at this southeast nation, but for now, keep an eye on Vietnam as the U.S. and China continue to do economic battle.
Who is Winning the World Popularity Contest?
China is likely to grow in influence over the coming years, despite whatever policies are pursued by the current U.S. Administration and despite any dark roads down which President Xi may lead his country. China’s growing influence will be one of the most important factors affecting world affairs in the coming decades. Unless China moves away from authoritarianism and censorship, it won’t be an entirely benign influence. As it turns out, we are not alone in such worries. Whatever concerns people have about the United States and its current leadership (concerns we also share), there is still a clear preference over China. According to a recent Pew Global survey, “a median of 63% across the nations surveyed say having the U.S. as the world’s leading power would be better for the world. In contrast, just 19% say a world in which China was the leading power would be better.” This preference is even higher in Asia, where more than 70 percent of most countries’ residents prefer U.S. leadership to China’s. The only countries in the survey to prefer China to the U.S.? Argentina, Tunisia, and yes, of course, Russia.
Who is Getting Cyber-attacked the Most?
The last few years you may have seen a lot more news about cyberattacks—unless you’re one of the victims in which case maybe you can’t access the Internet…which I suppose means you aren’t reading this. But, which countries are victims of the most targeted attacks? The cyber security company Symantec provides some answers, including what we mean by “targeted attacks”: “an attack directed at a specific target or targets as opposed to widescale indiscriminate campaigns.” Unsurprisingly, the U.S. tops the list of countries suffering targeted attacks. But surprisingly, at least to us, India comes in second. Japan, Taiwan and Ukraine round out the top five. For malware, Ireland, Australia and New Zealand top the list. South Africa has the highest phishing rate, Saudi Arabia the highest spam rate and Ukraine, China and Indonesia suffer the highest rates of mobile malware. The whole report is worth perusing as cyberattacks are increasingly the medium of nation-state battles.
We attended the Jeff Tweedy solo acoustic show earlier this week. For those that don’t know Tweedy, he is the founder and leader of Wilco, and before that was in one of the seminal alt-country* bands, Uncle Tupelo. One of my favorite photos of all time comes from The Anthology disc of Uncle Tupelo, a reissue of then mostly out of print albums. It shows the three members of Uncle Tupelo, including Tweedy, sitting on a roof top, bottles of cheap beer in their hands or at their feet, in the full cradle of youth. It is a photo of dreams, hopes and aspirations–perhaps even the creative tension that eventually tore the band apart–catching a moment in time, a moment that only comes at that tender age in humans, projects and countries. It is a photo of youthful innocence. At the Moore Theater, Tweedy–an occasionally irascible and tortured character historically–is much older, grizzled even, heavier and yet it was the most content and happy we’ve ever seen him. He was, as always, a great performer, which made us happy, and we wonder if the guy in the photo with the beer would have aspired to the man he is today? As we aspire for all people, projects and countries to settle into such good and productive places, we cast an eye on the international make-up of the Nobels, Asia’s robotic future and Japan’s rapidly aging society. It’s this week’s International Need to Know, a lover of Red, Red Wine, not a fighter of it.
*Has the term”alt-right” ruined the term “alt-country?
–We’ll be on business in New Orleans next week (no, really, we’re attending a conference…but we do plan on having a po’ boy and catching some music as well). International Need to Know will return on October 18th.
Okay, that’s enough ado…
Without further ado, here’s what you need to know.
Nobel Prizes in International Trade?
Earlier this week the Nobel Prize in Medicine was awarded to two researchers, one from Japan and one from America, who independently did work on how to use the body’s immune system to fight cancer. Given a friend of ours was recently saved by such technology, we are especially heartened by this award. The Nobel also spurred us to ponder about innovation around the world and China-U.S. competition. Historically, the U.S. dominates the list of Nobel Prize winners with 371 going to those working in the United States. But nearly 40 percent of those American Nobel prize winners were immigrants, originally hailing from other countries. The more countries that create ecosystems where good ideas can flourish, the better for the whole world. After all, everyone will benefit from better anti-cancer treatments (with time those treatments will be economically viable all over the globe). Meanwhile, China wants to be less reliant on U.S. technology and the U.S. wants to be less reliant on China for manufacturing and assembly. We assert the world is more successful when its great economic and innovation bakery is franchised throughout the world, not when we all retreat to our own kitchens aiming to serve only our own dining tables. This, we realize, is an unpopular thought as much of the world turns against globalization. Perhaps soon the world will turn in a more productive spin.
Asia’s Future is Robotic
Asia’s rise has been one of the world’s most important events of the last 40 years and is reshaping our world. One illustration of Asia’s leading role is the number of robots it deploys. Nearly 65 percent of the world’s industrial robots are deployed in Asia. That’s a function of Asia’s prowess in manufacturing and assembly but also its openness to new technology. Within Asia, China is home to half the industrial robots. By robot density (number of robots per 10,000 workers), Korea, Singapore and Japan are three of the top four in the world. But as the IMF points out, Asia “is also the region with the highest robot production—Japan and Korea are the world’s top two producers, with market shares of 52 and 12 percent, respectively.” When we wrote a few weeks ago about which countries fear automation the most, Asian countries were among the least scared (with the exception of Japan which fears loss of jobs—but see story below). Maybe they are short sighted or maybe there is an ingrained optimism among nations on the rise.
The Incredibly, Remarkably Old Japan
Even given our obsession with demographics and the well-known fact that Japan has the grayest of demographics, we were still taken aback to learn that now 20 percent of Japanese are 70-years-old or older. That’s an extraordinary number of really old people. According to the Nikkei Asian Review, “The 70-and-over segment of the population grew to an estimated 26.18 million, or 20.7%. That marks an increase of 1 million from last year, driven by baby boomers born from 1947 to 1949.” And when we consider Japanese 65 and older, it goes up to 28 percent of the population. Remarkably, those 65 and older make up over 12 percent of the Japanese workforce. Maybe those old Japanese are worried about losing their jobs to robots. In fact, engadget reports that a Japanese company has developed a robot that installs drywall (please send them to our house immediately—we have a drywall project to complete). Japan is in the vanguard on how to cope with an aging population. Other countries may match Japan’s graying demographics someday. How they manage those demographics will be a big test.
【HRP-5P】Humanoid Robot【産総研公式】
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We tread trepidatiously into the roiling, boiling controversial waters of the US Supreme Court nomination to raise a, well, under raised concern. Brett Kavanaugh went to Yale. It’s not that we have anything against that prestigious institution but we would like to point out that every other US Supreme Court Justice also either attended Yale or Harvard. We’re all for more racial, ethnic and gender diversity on the court but how about some scholarly institutional diversity as well? We could point to all sorts of scientific studies on the dangers of everyone in an organization coming from a similar background, some of them perhaps even conducted by researchers at Yale and Harvard, but it should be obvious, especially in these times, how detrimental to the Republic it is to have all of our Supreme Court Justices, who hold so much power, to all come from the same caste. So let’s give someone a chance from Arizona State, or UC Davis or Willamette or some other non Ivy League school (preferably west of the Mississippi) a chance to join the mighty nine. If the voters of Washington state, or any other state for that matter, were foolish enough to elect us to the U.S. Senate, we’d vote against Kavanaugh on those grounds alone. But we expect voters around the globe will entrust us to tell you about the continued good news in our world, polluted Chinese data and who is imprisoning people. It’s this week’s International Need to Know, pounding our gavel on the under known, important data and info of our little world.
Without further ado, here’s what you need to know.
The Good Outweighs the Bad
Recently we were involved in a conversation with a few people on where a visiting Chinese professor should live in our fair region. Like my colleagues, I want to ensure the professor lives in a safe area and has a good experience. But, my colleagues talked like the Seattle region is a combination of Escape from New York and the Bride vs the Crazy 88 scene in Kill Bill 1. I tried to remind them we are living in the safest era in human history and that crime remains at historic lows.* They did not believe me and perhaps you will not believe us when we tell you that extreme poverty in the world is at an all time low so strong is the cultural zeitgeist for end-of-times thinking. But it is true. The latest World Bank findings show that “The percentage of people living in extreme poverty globally fell to a new low of 10 percent in 2015 — the latest number available — down from 11 percent in 2013.” Now there are reasons to worry. The rate of progress is slowing. And in Sub-Saharan Africa, the total number of people living in extreme poverty actually increased from 2013 to 2015, though the percentage of the extreme poor in Africa declined. There is still lots of work to do and reasons to be concerned but we should also remember, as World Bank President Jim Yong Kim said on release of this data, “Over the last 25 years, more than a billion people have lifted themselves out of extreme poverty, and the global poverty rate is now lower than it has ever been in recorded history. This is one of the greatest human achievements of our time.” Our world is experiencing a market failure in the supply of hope and reason.
*In fact, the latest data was released this week and crime–murders, other violent crime and property crime–are all lower in 2017.
Chinese Pollution and Polluted Data
In this space we have often expressed optimism about clean energy and prospects for soon reaching peak carbon energy usage. But if there is one recurring theme of INTN, it is that we all should be less sure of ourselves, especially, well INTN itself. We have often optimistically pointed to China’s clean energy efforts and plans but recent data shows that unfortunately their power consumption and pollution emissions are up. Industrial power consumption rose 8.8 percent year over year in August, according to China’s National Energy Administration. And Greenpeace reports that “China’s carbon emissions have risen this year by an amount that experts say is globally significant.” We are still cautiously optimistic although less so about the short term. China has been on track to meet its emission targets for the year 2030. But there are some short term worries as this data illustrates. And, of course, another worry is Chinese data itself. Some analysts point to the increases in emissions and use of power as evidence of a growing economy. But, some of these analysts claim it is also evidence of China inserting bundles of credit into the economy to prevent it from slowing. This happens at the same time China claims it is deleveraging (all the while official GDP figures maintain an eerie consistency). China’s data is more unreliable than ever, something we’ll delve into deeper in a future edition.
Help, I’m Being Held Prisoner
We have begun listening to the third season of the Serial Podcast. It focuses on the U.S. judicial system and confirms our bias that America imprisons too many people. The U.S. imprisons more people per capita than any other country in the world. But that’s fairly well known. Perhaps less famous are the other top imprisoning countries. Our World in Data tells us that El Salvador is second, followed by Turkmenistan, Thailand, Cuba and the Maldives. By contrast, the countries imprisoning the fewest people are Guinea Bissau, Faeroe Islands, the Central African Republic and Comoros which just goes to show that prison rates don’t tell the whole story of a country’s livability and success.
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