Archive for month: January, 2020

On Sunday afternoon at the gym as I looked up from the bike to the bank of televisions above, all but one was talking about the death of Kobe Bryant, his daughter and the seven other unlucky souls (one TV incessantly played Law and Order reruns*). It did not matter whether the channel was on ESPN, CNN, MSNBC, or even Fox News, everyone was fixated on Kobe. Perhaps that was to be expected but what was interesting was they were all covering the story in the same way—a tragedy, obviously, but all with reverence for Kobe Bryant and respect for his many basketball accomplishments. As a lifelong Seattle Supersonic fan, I almost always rooted against Kobe on the court and was occasionally troubled by his off court behavior such as the credible allegations of rape against him in 2003. But in death, Kobe appears to have done what no one else has—temporarily united the country, as usually when I look at the gym’s TVs they are all covering completely different worlds–Fox, MSNBC and CNN were identical.** Plus, in listening and reading about Kobe in recent days it appears he learned and grew from his past transgressions and acted in some ways to atone for them,*** including in his stellar support of women’s basketball. And so we find ourselves finally, belatedly cheering for him, a man who continued to learn and improve, which is better than most of us do. And we root for China to behave better in possible epidemics, boo corruption around the world and take a timeout to compare China and America’s trade with the world. It’s this week’s International Need to Know, taking last minute clutch shots on international information and data.*At this point we suspect the Law and Order universe is part of Scientology or some other cult, what else could explain its ubiquitousness?

***Though perhaps the woman in Colorado may understandably not be satisfied

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

Love in the Time of Corona

The woman we were meeting with, after shaking our hand, began coughing and sneezing, and now we hope our flu shot really worked. But while it is true, as health authorities remind us, that currently the regular old flu is currently killing far more people, the corona virus we warned readers about way back on January 9th is nothing to, uh, sneeze at. That’s partly because China’s honesty with information is a bit like the woman we met with—we’d prefer they’d been more upfront about the problem before shaking the world’s hands.  In the initial stages of the emergence of the virus, China was more interested in controlling the spread of information than the spread of the virus. For nearly a month after it was clear there was a new virus and that it could be transmitted person-to-person, China worked to prevent such information getting to its own citizens (though it appears on January 8 they did inform WHO). Probably due to pressure from China, WHO did not initially assess the risk as “high” but rather as only “moderate.” They continue to prevent Taiwan’s participation with WHO. This is a good illustration of the challenge we discuss in our upcoming book of China’s interest in transforming the international world order into one with Chinese characteristics. Now the heavy government pendulum of China has swung towards ruthlessly controlling movements of people to abate the spread of the virus. Perhaps this is the right course of action, and certainly it is an open question of how prepared the U.S. is for such a disease outbreak, but China’s infusing global organizations the world relies on with their authoritarian culture, is a trend the world needs to recognize and address.

The Good, The Bad and The Corrupt

Last week while you were buying the last N95 mask left on the shelf and switching channels from the impeachment hearings, Transparency International released their 2019 report on corruption around the world. Their index rates countries on their perceived level of public sector corruption on a scale of 0 to 100 with 100 being squeaky clean and 0 as corrupt as a White House impeachment lawyer. Europe was the least corrupt region according to their rankings and Sub-Saharan African the most corrupt. 22 countries have improved their scores since 2012 and 21 countries have gotten worse, including Canada and the United States. The three countries which improved the most are Greece, Guyana and Estonia. Scan the top and bottom ten below for the cleanest and dirtiest countries.

China Vs. U.S. Trade With World

In our forthcoming book about how China has changed and how the U.S. and world should address this, we note the extraordinary success of China’s economy, and how important it is to the world economy. Visual Capitalist illustrates this with a graphic showing how the U.S. was the main trading partner to the world in 1980 and today China is. They note that “…before 2000, the U.S. was at the helm of global trade, as over 80% of countries traded with the U.S. more than they did with China. By 2018, that number had dropped sharply to just 30%, as China swiftly took top position in 128 of 190 countries.”  Trade is also a much larger component of world GDP today at 59 percent compared to 1980 when it accounted for only 20 percent of GDP. When grappling with concerns about the authoritarian nature of China and its interest in infusing the previous international rule-of-law order into one with Chinese characteristics, any strategy must understand China’s economic power and influence.

One of the more troubling aspects of our times is the fetish against the free press, including too often by the current U.S. President. So we are only offering constructive criticism not attacking the media when we write that Reuters owes its readers an explanation for its Wednesday, January 8 (Seattle Times) article reporting that a “Canadian security source” asserted the Ukraine airliner was not shot down by a missile but instead was a matter of technical issues. Reuters reporter, David Ljunggren, claimed this source thought “there was some evidence one of the plane’s engines had overheated.” Shortly, thereafter, Reuters followed up with another article stating, “Five security sources—three Americans, one European and one Canadian—told Reuters the initial assessment of Western intelligence agencies was that the plane had suffered a technical malfunction and had not been brought down by a missile.” We understand initial information is often wrong but anyone with half a brain knew from the beginning that mechanical problems were not the cause of the crash. Even our quarter size, non-aerospace, non-Iran expert brain knew this article was BS that very night (our “security sources,” i.e. our spouse, can confirm this). So the question is who were these “intelligence” and “security” sources? Were they really in a position to know? Were they feeding Reuters false information on purpose? Did Reuters stop to think how illogical the assertion was that the plane exploded and then crashed due to mechanical failure? Reuters owes its readers a forensics accounting of how they got this article so wrong. Their reporting was rebroadcast throughout the night and even the next morning by everyone from NPR to other distinguished publications with potentially troubling ramifications for Boeing and others. As Tom Cruise yelled in A Few Good Men, we want answers…and in this case we can handle the truth. And we present the truth to you today on world GDP growth since 1950, an update on a still underrated country and the continued success of Vietnam. It’s this week’s International Need to Know, the first quarter Houston Texans, the second quarter Kansas City Chiefs of international news and data.

We would be remiss if we did not note the passing of another New Orleans music icon last week—5th Ward Weebie. A rapper, and major foundation of the New Orleans Bounce scene (a form of hip hop, where twerking originated). He is featured in Trombone Shorty’s Buckjump. RIP. (Mailchimp is having troubles loading videos so we can only link to Buckjump)

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

2020 is Better Than 1950

In our upcoming speech on globalization and inequality, one of the points we make is the world is much better today than it was 70 years ago. Inequality is a challenge but as we work to fix that problem we shouldn’t destroy what helped the world succeed the last 70 years. To that point, Our World in Data graphically shows this in the chart below (click on the chart to enlarge and see each country better). What it shows is that the average person in the world today is now 4.4 times richer than they were in 1950. Almost every country in the world is wealthier today than in 1950 with nine countries now 15 times wealthier than they were 70 years ago. Unfortunately, nine countries are poorer today than they were in 1950. Any guesses who they are? But shifting back to the winners, Taiwan, which recently re-elected their President, had an income of $1400 in 1950. Today, Taiwanese are among the richest in the world. We will have more to say about Taiwan in our upcoming book about China and the U.S. Stay tuned!

Somewhat Underrated Country Update

Since Prime Minister Abiy Ahmed won the Nobel Prize, I suppose we can’t call Ethiopia the most underrated country in the world, but it is still somewhat underrated. For example, did you know Ethiopia had the second highest rate of GDP growth last year? Yep, Ethiopia grew at 10.6 percent in 2019, just behind Nauru* and continued a 13 year run of high rates of economic growth. But it is not all rosy news. Ethiopia’s inflation rate reached 19 percent in 2019, much higher than previous years. Its unemployment rate has also increased significantly in recent years, and its exports have slowed. These headwinds are why the World Bank is predicting Ethiopia will only grow at 6.3 percent in 2020. We shall see. In the meantime, the reformist minded Abiy is still planning on elections for this May and June. This coming year could be a pivotal one for our underrated country.

*Who knew there was a country called Nauru? Did C.S. Lewis make this up? Talk about underrated. 

Vietnam’s Continued Rise

We head back to Vietnam in a month and a half, and as always, are looking forward to it. No country has gained more from the U.S. – China trade war than Vietnam. In fact, as you see in the chart below, no country received more manufacturing foreign investment than Vietnam since 2014. On our trip to Vietnam last year we saw some of this investment up close, including a shoe factory that moved there from China in 2015. GDP in Vietnam grew at 7 percent in 2019 and the country is likely to see strong growth this year too. Our biggest fear for Vietnam is Trump will discover it and start imposing tariffs on goods coming from there. For anyone who cares about trying to reform China, this would be one of the most short-sighted policies possible. Which is why we worry it will happen. In the meantime, Vietnam’s strong economy is also illustrated by the number of foreign retailers interested in entering the market or expanding their presence there. Japanese and Korean retailers such as Uniqlo and Lotte both have big plans there. That’s another data point, perhaps even more significant than GDP, of Vietnam’s success. It remains one of the four most important countries in the world, as we explain in our upcoming book.