Category Archives: Trade

The Story of Stuff

Here’s something that got me thinking:

The Story of Stuff is a 20-minute, fast-paced, fact-filled look at the underside of our production and consumption patterns, with a special focus on the United States. All the stuff in our lives, beginning from the extraction of the resources to make it, through its production, sale, use and disposal, affects communities at home and abroad, yet most of this is hidden from view. The Story of Stuff exposes the connections between a huge number of environmental and social issues and calls for all of us to create a more sustainable and just world. It’ll teach you something. It’ll make you laugh, and it just may change the way you look at all the stuff in your life forever.

Naturally, the topic is far from new to GlobaLab. I have been looking at the political economy of globalisation for months now. I agree with many of this movie’s positions, and love its simple and entertaining tone. Well done to Annie Leonard and to all those involved for translating into an easily-graspable short film some of the complexities of the global economy, particularly the commodity chains that form the backbone of world trade.

Yet, I can’t help pointing out: it’s not that simple. Describing the problem as one of ever-collapsing natural resources and abused Third World workers fighting the evil and conspiratorial plans of multinational corporations with the help of selfless international NGOs might look good on film, but is it an actual reflection of the real world?

I am not a great admirer of corporations, or a blind believer in the transparency of their CSR policies, but branding them all as Earth-destructors does not do justice to the good many of them do (in terms of job-creation, economic growth, research into innovation – including into clean energy), nor will it help change the way they behave.

And similarly, the omnipresent sanctification of NGOs fails to disclose their deep accountability limits and underlying political interests. According to One World, the NGO sector scores lower than the corporate and intergovernmental sectors when it comes to transparency, so it is legitimate to question many of their claims, especially their Doomsday positions on the environment and development.

But on one point I fully agree: consumerism lies at the centre of this system, so if we want to change it we have to start thinking of creative ways to change people’s attitude towards stuff…

Enterprising answers to development

Tomato vendor, African market

A few good sources exploring the themes of social entrepreneurship and microcredit.

Beyond Good Intentions reproduces an article from the International Trade Forum on innovative approaches to reduce poverty through trade, which are bringing business, NGOs, government and aid agencies together. Examples include Bespoke Experience, a social enterprise creating high-end tourism lodges in Mozambique, and using its profits to enable communities to work their way out of poverty.

NOW and PBS review the debate on microcredit, and whether it’s really pro-poor or simply exploiting the most vulnerable, with a focus on Compartamos, the Mexican non-profit turned for-profit microfinance institution at the centre of a fierce debate. It contains an excellent interview on the subject with Muhammad Yunus, the world-renowned founder of the Grameen Bank and father of microcredit, who also wrote another good piece on Social Business Entrepreneurs here.

Stuffed and Starved

Patel's Stuffed and Starved book-cover

You know a book is good when not one, but three different friends write to you unprompted to recommend it. And you know it’s a masterpiece when it spawns a Facebook fanclub group! So today I bought Stuffed and Starved, Raj Patel’s new study on the absurdities and political interests lying behind the current global food system, which leaves millions fighting obesity while millions more struggle to get a meal a day.

Felicity Lawrence on The Guardian sings its praise:

Unless you are a corporate food executive, the food system isn’t working for you. If you are one of the world’s rural poor dependent on agriculture for your livelihood – and roughly half the global population of 6 billion fall into this category – you are likely to be one of the starved. If you are an urban consumer, whether an affluent metropolitan or slum-dwelling industrial labourer, you are likely to be one of the stuffed, suffering from obesity or other diet-related ills.

Raj Patel’s fascinating first book examines this apparent paradox. His thesis is that the simultaneous existence of nearly 1 billion who are malnourished and nearly 1 billion who are overweight is in fact the inevitable corollary of a system in which a handful of corporations have been allowed to capture the value of the food chain. Moreover, government policies through history have been designed to control our food. Their aim has been to provide cheap food for the urban masses and so prevent dissent at home. The instruments of colonial command may have been replaced with newer mechanisms that give a greater role to the private sector, but control our food they still do with disastrous social consequences, despite all the neo-liberal rhetoric of free trade and choice.

Another book joining my awful backlog of to-do reading…

Africa Frenzy Feeds China Stock Bubble

China & Africa - C Gavin Coates 

An interesting article from the Asia Times online, republished on Dust in My Eyes‘ blog.

Africa Frenzy Feeds China Stock Bubble
Asia Times Online: China Business News
China’s stock bubble can be traced to Angola

Mar 27, 2007

By Zhou Jiangong

SHANGHAI – In recent years, many Chinese enterprises, including listed companies, have flocked to Africa in the hope of “digging up gold” in this “uncultivated continent”. However, some of the huge investment projects may be too good to be true.

Hangxiao Steel Structure, a Shanghai-listed construction company based in Zhejiang province, is being scrutinized by investors and regulatory authorities because of its huge 34.4 billion yuan (US$4.4 billion) contract with the China International Fund (CIF), a Hong Kong company, for a housing-development project called Residents’ Heaven in the southwest African nation of Angola.

Emerging from the shadow of the “Black Tuesday” slump on February 27, China’s stock market is well back on track. Hangxiao Steel, with its African investment project, has poured a little fuel on the flaming market. It says the contract for providing steel construction products and services to Angola for the public-housing project is worth 34.4 billion yuan.

However, before the company made a public announcement on March 13 of the share-price-sensitive information, its shares soared past the 10% ceiling for six days (Chinese law restricts the price of a share from going up or down by more than 10% in a trading day). The stock remained buoyant for another four days before it was suspended from trading on March 16. A couple of big money players bought millions of shares.

Analysts, investors and, eventually, the government watchdog began to doubt the authenticity of Hangxiao Steel’s Angola contract. Indeed, to a small firm like Hangxiao Steel with annual revenue of 3 billion yuan, it sounds too good to be true: according to the contract, the sale of steel construction products is worth 24.8 billion yuan ($3.2 billion) and the company will be paid another 9.6 billion yuan for its construction services in 12 cities in the African country.

Hangxiao Steel, a construction company specializing in steel structures for shopping malls, stadiums, theaters and museums, does not seem to be capable of taking on such a huge project within two years.

The amount of Hangxiao Steel’s contract, 34.4 billion yuan, is equivalent to 4.1% of the gross domestic product of Angola for 2005. But the Chinese Embassy in Angola said it had no knowledge of the Hangxiao deal.

The China Securities Regulatory Commission (CSRC) has ordered the Shanghai Stock Exchange and Zhejiang provincial securities regulatory authority to investigate suspected stock-price manipulation and insider trading. So far the company has denied that its senior executives have bought or sold its stocks.

Rumors are flying about company restructuring, mergers and acquisitions. Even loss-making companies are said to become vehicles to accommodate new assets. Such talk can trigger wild jumps in value. Some market analysts even deliberately spread false information to project rosy profit pictures for those companies whose share prices are dominated by big market players.

Read the full article here.