Archive for the tag 'economics'

Coco Jambo, or The Biofuel Conundrum

nadim July 31st, 2008

This video is another gem from DoubleTake.tv, a site that contains a growing collection of short Baha’i-inspired documentaries. Watch how an innovative “white bloke” living on the island of Vanuatu rolls up his sleeves and gets down to finding a homegrown solution to the problem of rising fuel prices.

Finished watching?

Let’s reflect for a moment on the video and then turn our thoughts towards the bigger picture…


The Biofuel Conundrum

Biofuel production is without doubt one hot topic these days. It provokes an entire spectrum of opinions from advocates and critics alike. Having initially been devised as a mechanism to reduce the world’s dependence on crude oil, the mass production of biofuel using food crops has precipitated another crisis — in the form of rocketing food prices and increased global famine. What are the possible reasons for this wretched situation? Was this outcome inevitable, or was it somehow avoidable?

Being a regular user of public transport, I’ve had to endure yet another rise in the base taxi fare, as well as a significant price rise for bus tickets, all in the past month. Clearly, biofuels haven’t lowered fuel prices — not for me anyway — and the trip over to the local grocery store is becoming more and more of a nervous window-shopping experience. So what exactly has gone wrong?

As usual, I dive into the World Wide Web to try and figure things out. A Time magazine article, Solving the Biofuels vs. Food Problem, points out that in 2006 alone the U.S. produced 4.86 billion gallons of corn ethanol. That sounds like a lot, but what does it really mean? Well, United Nations expert Jean Ziegler, explains that it takes the same amount of corn to produce 13 gallons of ethanol as it does to feed a child for one year. Divide 4.86 billion by 13 and we have 374 million starving children who could have been fed, all by a single country!! And this was back in 2006 — I can only imagine the numbers would have shot up by now. Ziegler, clearly exasperated by this situation, goes on to comment:

…the effect of transforming hundreds and hundreds of thousands of tons of maize, of wheat, of beans, of palm oil, into agricultural fuel is absolutely catastrophic for the hungry people… So it’s a crime against humanity… What has to be stopped is… the growing catastrophe of the massacre (by) hunger in the world.

Based on this statistic alone, it would take a foolhardy person to reject Ziegler’s statement outright.

When Baha’u'llah, Prophet Founder of the Baha’i Faith, pronounced that the prevailing world order is “lamentably defective”, need we look any further for proof?

Couldn’t They Have Waited?

Both Ziegler and the author of the Time article state that non-food alternatives for biofuel, such as switchgrass (which is energy-efficient) and Jatropha shrubs (which grow well on poor land), are only a few years away from becoming viable for mass production. The Science Blog reports on an even more promising alternative, a grass called Miscanthus. Why then, do the economically advantaged countries not wait a little while longer? Surely it should be obvious that all this excess corn can quite easily feed the world’s hungry population. Why do these countries ruthlessly trade human lives in order for their citizens to drive a few extra miles on the highway?

In the masterpiece entitled Century of Light, which examines the successes and failures of the 20th century, the The Universal House of Justice explains:

Tragically, what Bahá’ís see in present-day society is unbridled exploitation of the masses of humanity by greed that excuses itself as the operation of “impersonal market forces”… What they find themselves struggling against daily is the pressure of a dogmatic materialism, claiming to be the voice of “science”, that seeks systematically to exclude from intellectual life all impulses arising from the spiritual level of human consciousness.

(Commissioned by The Universal House of Justice, Century of Light, p. 137)

This captures, in essence, what Baha’is believe to be the root cause of humanity’s ills. What is completely disregarded by our present economic and political systems are those universal spiritual qualities spoken of in the Holy Books of the world’s religions — justice, honesty, trustworthiness, generosity, love of one’s neighbour and so on. Indeed, it is puzzling to observe how these guiding principles, which govern the behaviour of righteous individuals across just about every society, are conveniently swept under the rug in debates on international policy.

Having said this, individual transformation, although vital, is alone not enough. It is becoming increasingly urgent for nations to acknowledge that they belong to a single common homeland known as planet Earth, and that the good of the whole can never be achieved without sincerely seeking the best for each and every part. This implies moving from a culture of competition for natural resources towards one of collaboration. The implications of this change of thinking would be nothing short of revolutionary, and revolution, it seems, is precisely what is needed.

Sure, it is easy to pass this off as some fanciful notion and continue seeking the latest popular explanation as to why our world systems are just so volatile. Commonly-heard phrases like “economic downturn”, “instability in the Middle East”, “rising interest rates”, “loss of investor confidence”, “farm subsidies” are forever making the rounds in the media, and people blindly accept these for the very reason that they are impersonal. These phrases, in my opinion, are comfortable to accept because they do not challenge the status quo. They do not challenge ingrained patterns of human and societal behaviour. Instead, all they do is mask the reality that we are governed by a system that has long passed it’s sell-by date; one which is described as “morally and intellectually bankrupt” by The Universal House of Justice. The only solution that will ensure a long-term future of peace and prosperity is spiritual — it can only be spiritual.

But what to do about the biofuel problem?

Ahh, the million dollar question. Obviously there is no such thing as a quick fix. Nevertheless, Baha’is believe that even the most complex economic problems can be solved through the application of spiritual principles. Now, supposing for a moment that Tony Deamer’s coconut fuel initiative in Vanuatu became a candidate for large-scale production. What are some questions that we would hope the Government would ask? What are some suggested potential international guidelines on this matter? Here is a quick list that came to my mind:

  • What is the nutritional value of the crop in question? Is it a viable source of food for the world’s population?
  • What is the current economic state of the country in question? In what ways can the money saved on importing fuel be channeled towards improving education, health care etc?
  • Will the by-products of the fuel extraction process have any worth or be discarded as waste?
  • What is the potential environmental impact in terms of greenhouse gas emissions etc?
  • How do we “give back” to the land what has been taken from it?

In terms of coconut fuel in Vanuatu, you may find it interesting to read this article, in which Tony Deamer addresses some of the above questions.

Do you have any personal thoughts on this issue?

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God is not partial and is no respecter of persons

nooshin July 1st, 2008

There is something clearly wrong in the economic system of the world today and it is the most vulnerable who are having to pay the price. Since the start of 2006, the average world price for rice has risen by 217 percent, wheat by 136 percent, maize by 125 percent and soybeans by 107 percent, (according to a Wikipedia entry on 2007-2008 world food price crisis). These price hikes have sparked a wave of protests around the world: from Haiti to Kenya to Indonesia to Egypt and Ivory Coast.

In an interesting article (Hoarding Nations Drive Food Costs Ever Higher, 30 June 2008), the New York Times explains that since 1980 “even as trade in services and in manufactured goods has tripled, adjusting for inflation, trade in food has barely increased. Instead, for decades, food has been a convoluted tangle of restrictive rules, in the form of tariffs, quotas and subsidies….[T]he world is increasingly dependent on a handful of countries…that are still exporting large quantities of food…. [P]oor countries have frequently cut farm assistance programs and lowered tariffs to balance budgets and avoid charging high prices to urban consumers. But they have found that their farmers cannot compete with imports from rich countries — imports that are heavily subsidized”.

In our Economics 101 lectures we were taught about Adam Smith’s ”invisible hand“, about comparative advantage and the importance of free trade.  By the time we made it to post-graduate courses, our lecturers could no longer hide the fact that Messers Smith, Keynes and Friedman did not have it all worked out, and that in fact “free market forces” did not have the power to fix everything.

In a statement entitled Valuing Spirituality in Development (18 February 1998), the Baha’i International Community posits an entirely different view of economics:

Central to the task of reconceptualizing the organization of human affairs is arriving at a proper understanding of the role of economics. The failure to place economics into the broader context of humanity’s social and spiritual existence has led to a corrosive materialism in the world’s more economically advantaged regions, and persistent conditions of deprivation among the masses of the world’s peoples. Economics should serve people’s needs; societies should not be expected to reformulate themselves to fit economic models. The ultimate function of economic systems should be to equip the peoples and institutions of the world with the means to achieve the real purpose of development: that is, the cultivation of the limitless potentialities latent in human consciousness.

There is a very useful tool that economists use to measure the inequality of wealth distribution. The Gini Coefficient is a ratio between 0 and 1, with 0 being perfect equality.  The map below illustrates the 2007/2008 Gini Coefficient for the world, as based on a recently released Human Development Report by the UNDP.  The darker the colour, the more unequal is the distribution of wealth in that country.

Addressing the problem of the extremes between wealth and poverty, the Universal House of Justice said this, in their 1985 message to the world The Promise of World Peace:

The inordinate disparity between rich and poor, a source of acute suffering, keeps the world in a state of instability, virtually on the brink of war. Few societies have dealt effectively with this situation. The solution calls for the combined application of spiritual, moral and practical approaches. A fresh look at the problem is required, entailing consultation with experts from a wide spectrum of disciplines, devoid of economic and ideological polemics, and involving the people directly affected in the decisions that must urgently be made. It is an issue that is bound up not only with the necessity for eliminating extremes of wealth and poverty but also with those spiritual verities the understanding of which can produce a new universal attitude. Fostering such an attitude is itself a major part of the solution.

Unbridled nationalism, as distinguished from a sane and legitimate patriotism, must give way to a wider loyalty, to the love of humanity as a whole. Bahá’u’lláh’s statement is: “The earth is but one country, and mankind its citizens.” The concept of world citizenship is a direct result of the contraction of the world into a single neighbourhood through scientific advances and of the indisputable interdependence of nations. Love of all the world’s peoples does not exclude love of one’s country. The advantage of the part in a world society is best served by promoting the advantage of the whole.

It is important for all of us, especially those from more developed countries, to remember our responsibilities to the rest of the world and to not take our material comforts for granted, as if they are somehow our “God-given rights”.  The resources of the world are the God-given patrimony of every member of the human race.

God is not partial and is no respecter of persons. He has made provision for all. The harvest comes forth for everyone. The rain showers upon everybody and the heat of the sun is destined to warm everyone. The verdure of the earth is for everyone. Therefore there should be for all humanity the utmost happiness, the utmost comfort, the utmost well-being.

But if conditions are such that some are happy and comfortable and some in misery; some are accumulating exorbitant wealth and others are in dire want — under such a system it is impossible for man to be happy and impossible for him to win the good pleasure of God. God is kind to all. The good pleasure of God consists in the welfare of all the individual members of mankind.

(‘Abdu’l-Bahá, Foundations of World Unity)

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