Perusing through my morning news digest, I came across an article from The Daily Mail featuring a story on the employment of child labor in cobalt mines in the Democratic Republic of Congo (DRC).
While I can be chillingly apathetic to social plight, especially, when it doesn’t concern my loved ones: something I impute to my upbringing in a third world country; I was deeply moved by this story, which shed light on the horrors of artisanal cobalt mining, employing children, working in dangerous conditions, with no safety measures, and being paid a pittance.
The kicker, though, of this story was that much of this cobalt would go into battery packs that would be installed in electric cars marketed to gullible, do-gooders around the world.
But, why would one want to buy cars that take hours to refuel and can only be refueled at specific points, thus, imposing a massive time cost on their usage? These contraptions don’t match in utility to gasoline-powered cars, let alone surpassing them. No wonder governments around the world are trying to get consumers to buy electric cars through purchase subsidies and tax exemptions of all sorts.
Ever heard of an iPhone or a Mac being subsidized or tax exempted by the government to boost sales? You won’t because products that offer value sell like hotcakes; it’s only products that don’t offer any that need government interventions to hard sell them.
Another way of hard selling electric vehicles is through ‘virtue signaling.’ The sales pitch involves promises of reducing users’ carbon footprint, stemming the tide of climate change, and protecting the environment. But most importantly, it involves washing your hands off of gasoline, a product bloodstained due to the endless wars fought over it, one of the major promulgators of environmental and social injustice and displacement of indigenous folks.
Buying electric cars is thus, a route to salvation, accumulating good Karma, penitence, and all other moral goods. More importantly, it is also a way of segregating oneself from the ranks of the ignorant, irredeemable, hopeless, uneducated folks who drive around in gasoline powered vehicles polluting the environment, melting the ice caps, perpetuating wars and injustice, and pushing the world one step closer to Armageddon. Electric cars make the do-gooders feel good about themselves.
But are electric cars the solution to environmental problems and a way to jack up one’s moral credit score?
Most electric cars run on Lithium-ion batteries because of their energy holding capacity and low-weight characteristics. As environmentalism garners mainstream acceptance and more and more people buy into its narrative, the market for these vehicles is exploding and so is the demand for Lithium-ion batteries.
Contrary to the name, Lithium-ion batteries contain not just lithium, but also cobalt, nickel, manganese, aluminum, and graphite. While nickel, manganese, and aluminum have a relatively stable supply, it is cobalt, lithium, and graphite that present predicaments that are incompatible with the narrative of environmentalism.
Most of the lithium used in electric car batteries is mined in the Lithium triangle of Latin America: an area embedded in the salt flats of Argentina, Chile, and Bolivia. Several mining companies from around the world have started operations in this region, but the news for the indigenous people isn’t good. Lithium is so valuable that it has been dubbed ‘white gold,’ but the local residents bemoan that they haven’t seen any returns from the mining operations flowing their way; despite the fact that the prized mineral comes from lands that are under their possession.
A lack of formal process to negotiate property rights between the indigenous peoples and the mining companies, compounded by lack of accountability and communication gaps has left the communities short-changed. Many indigenous representatives, who excitedly agreed to the mining operations, now regret as they grapple with reality.
One of the companies – Exar – that will begin operations in 2019 is projected to reap $250 million (in 2016 dollars) annually. The contract also requires Exar to make annual payments to the local communities – a clause that the official leader of these communities wasn’t aware of, until one of the reporters investigating the issue, enlightened him.
More worrisome than missing out on the windfall is the fear of water depletion from sources that the local communities depend upon for their survival. Scientists seem divided on this contentious issue. Regardless, locals are justified in their concerns over water, as lithium mining is a water intensive process and the region has faced persistent drought over several years.
The Democratic Republic of Congo (DRC), an impoverished country in sub-Saharan Africa, contributes to around 60% of the global supply of cobalt, an essential element in the Lithium-ion battery.
The state of affairs of the artisanal cobalt mines of DRC was the subject of an extensive article in The Washington Post. Miners, of whom children make a significant portion (about 40,000 according to UNICEF in 2012), work in unforgiving and dangerous conditions with hand tools, no safety measures, and very little oversight. Mining accidents and related deaths are common and so are the long-term health effects of coming in contact with heavy metals.
While the DRC has both industrial and artisanal mines, suppliers prefer cobalt from the latter due to the lower cost, especially when global cobalt demand is on the uptick. A major hurdle in disincentivizing artisanal operations is the inability of cobalt to be designated as ‘conflict-mineral,’ as it doesn’t fuel a war or internal conflict.
China’s record on air quality hasn’t been lustrous, with widely circulating reports of smog engulfing its major cities. But the residents of some towns in north-eastern China, much to their despair, literally get to see a special kind of luster in the air at night, when faint light hits graphite particles floating in the air.
Graphite is an indispensible element in Lithium-ion batteries and its growing global demand has lead to China’s rise as the top supplier in the market.
The Washington Post, about a year ago, published a detailed report on the effects of Chinese graphite plants on nearby villages. The presence of graphite dust on crops and in the air presents the likelihood of this toxic substance being ingested or inhaled leading to heart and lung diseases. Locals have also complained of graphite plants releasing industrial waste into nearby rivers, polluting the local water supply. This has significant effects, not only on the human population, but also on the flora that grows around these water bodies.
According to The Post, their efforts to get major firms in the consumer electronics and electric vehicles business to comment on these revelations in their supply chains were met with generic responses of appeasement or refusal to disclose suppliers or complete silence.
But, investigative reports aside, there are two big elephants in the room. First, electric cars can deliver on their claim of reducing carbon footprint, only if they are run on electricity generated from renewable energy. That seems unlikely given that only around 15% of total US electricity generation is from renewable sources (2016); the picture does look brighter across the Atlantic in the EU-28, where renewable sources produced around 29% of total electricity (2015).
The second problem is slightly complex and involves a weighing of the total fossil-fuel based energy and products that go into producing electric cars (from mining to assembly line), including individual components, against the purported energy savings and environmental benefits. In the grand scheme of things, it’s highly unlikely that electric cars will produce a net good or that they will fare any better than regular cars.
Another embarrassing problem for the Church of Environmentalism is the hypocrisy of its clergy. Al Gore, the patron saint of the green movement, according to a recent report, lives in a house that in the past year burned enough energy to power a typical American household for 21 years. Just the outdoor heated swimming pool ended up consuming energy that could power 6 typical homes. This was revealed after the release of his new documentary film, “An Inconvenient Sequel: Truth to Power,” which has him fly over melting icebergs in an aircraft running on petroleum-derivative fuel.
But Gore claims that his donations to Green Power Switch, a scheme to separate green-minded folks from their money, purge him of his sins towards Mother Nature.
Actor-turned-environmentalist Leonardo DiCaprio made headlines when he made a round trip from France to New York to accept a ‘green award.’ The close to 8000-mile long journey, completed on a private jet, didn’t please the environmental laity. But worry not because his charitable foundation, in 2016, pledged £10 million to various green initiatives.
Environmentalism, thus, is nothing but a way to feel good about yourself, to wash off the supposed sins of driving around in a gasoline powered car and using incandescent light bulbs. It’s also a great way to make bucket loads of money and undertake lucrative career transitions.
I don’t mean to suggest that oil drilling and petroleum products are good for the environment and don’t bear any social costs. They might, but they don’t push a holier-than-thou narrative and actually have to undergo strict environmental and health and safety audits, something that is lacking in the supply chain of green products.
Covid-19 and food crisis
COVID-19 has hit at a time when food crisis and malnutrition are on the rise. According to the most recent UN projections, the pandemic-induced economic slump would cause as many as 132 million people to be hungry. This would be in addition to the 690 million people going hungry now. At the same time, 135 million people suffer from acute food insecurity and in need of urgent humanitarian assistance. Although the pandemic’s transmission has slowed in certain countries and cases have decreased, COVID-19 has resurfaced or is spreading rapidly in others. This is still a global issue that needs a worldwide solution.
This epidemic threatens both lives and livelihoods. COVID-19 has had a wide-ranging and disruptive influence on the agriculture system. We fear a worldwide food crisis unless we act quickly, which may have long-term consequences for hundreds of millions of children and adults. This is mostly due to a lack of food availability — as wages decline, remittances decline, and in certain cases, food prices rise. Food insecurity is increasingly becoming a food production concern in nations that already have high levels of acute food insecurity.
Agriculture continues to serve a reliable and major part in world economy and stability, and it remains the primary source of food, income, and work for rural communities, even in the face of a pandemic. The impact of the COVID-19 pandemic on the agricultural system and sector has been wide-ranging, causing unprecedented uncertainty in global food supply chains, including potential bottlenecks in labor markets, input industries, agriculture production, food processing, transportation and logistics, as well as shifts in demand for food and food services.
The COVID-19 epidemic not only created a new sort of agricultural catastrophe, but it also occurred at a difficult moment for farmers. In most years during the last few years, global commodity output has exceeded demand, resulting in lower prices. In 2013, the Food and Agricultural Organization (FAO) predicted decreased global agricultural output growth due to limited agricultural land development, rising production costs, expanding resource restrictions, and increasing environmental concerns.
An expanding global population remains the main driver of demand growth, although the consumption patterns and projected trends vary across countries in line with their level of income and development. Average per capita food availability is projected to reach about 3,000 kcal and 85 g of protein per day by 2029. Due to the ongoing transition in global diets towards higher consumption of animal products, fats and other foods, the share of staples in the food basket is projected to decline by 2029 for all income groups. In particular, consumers in middle-income countries are expected to use their additional income to shift their diets away from staples towards higher value products. Meanwhile, environmental and health concerns in high-income countries are expected to support a transition from animal-based protein towards alternative sources of protein.
When people suffer from hunger or chronic undernourishment, it means that they are unable to meet their food requirements – consume enough calories to lead a normal, active life – over a prolonged period. This has long-term implications for their future, and continues to present a setback to global efforts to reach Zero Hunger. When people experience crisis-level, acute food insecurity, it means they have limited access to food in the short-term due to sporadic, sudden crises that may put their lives and livelihoods at risk.
However, if people facing crisis-level acute food insecurity get the assistance they need, they will not join the ranks of the hungry, and their situation will not become chronic
It is clear: although globally there is enough food for everyone, too many people are still suffering from hunger. Our food systems are failing, and the pandemic is making things worse.
How Bangladesh became Standout Star in South Asia Amidst Covid-19
Bangladesh, the shining model of development in South Asia, becomes everyone’s economic darling amidst Covid-19. The per capita income of Bangladesh in the fiscal year 2020-21 is higher than that of many neighbouring countries including India and Pakistan. Recently, Bangladesh has agreed to lend $200 million to debt-ridden Sri Lanka to bail out through currency swap. Bangladesh, once one of the most vulnerable economies, has now substantiated itself as the most successful economy of South Asia. How Bangladesh successfully managed Covid-19 and became top performing economy of South Asia?
In March 1971, Sheikh Mujibur Rahman declared their independence from richer and more powerful Pakistan. The country was born through war and famine. Shortly after the independence of Bangladesh, Henry Kissinger, then the U.S. national security advisor, derisively referred to the country as a “Basket Case of Misery.” But after fifty years, recently, Bangladesh’s Cabinet Secretary reported that per capita income has risen to $2,227. Pakistan’s per capita income, meanwhile, is $1,543. In 1971, Pakistan was 70% richer than Bangladesh; today, Bangladesh is 45% richer than Pakistan. Pakistani economist Abid Hasan, former World Bank Adviser, stated that “If Pakistan continues its dismal performance, it is in the realm of possibility that we could be seeking aid from Bangladesh in 2030,”. On the other hand, India, the economic superpower of South Asia, is also lagging behind Bangladesh in terms of per capita income worth of $1,947. This also elucidates that the economic decisions of Bangladesh are better than that of any other South Asian countries.
Bangladesh’s economic growth leans-on three pillars: exports competitiveness, social progress and fiscal prudence. Between 2011 and 2019, Bangladesh’s exports grew at 8.6% every year, compared to the world average of 0.4%. This godsend is substantially due to the country’s hard-hearted focus on products, such as apparel, in which it possesses a comparative advantage.
The variegated investment plans pursued by the Bangladesh government contributes to the escalation of the country’s per capita income. The government has attracted investments in education, health, connectivity and infrastructure both from home and abroad. As a long-term implication, investing in these sectors helped Bangladesh to facilitate space for businesses and created skilled manpower to run them swiftly. Meanwhile, the share of Bangladeshi women in the labor force has consistently grown, unlike in India and Pakistan, where it has decreased. And Bangladesh has maintained a public debt-to-GDP ratio between 30% and 40%. India and Pakistan will both emerge from the pandemic with public debt close to 90% of GDP.
Bangladesh’s economy and industry management strategy during Covid-19 is also worth mentioning here since the country till now has successfully protected its economy from impact of pandemic. At the outset of pandemic, lockdowns and restrictions hampered the country’s overall productivity for a while. To tackle the pandemic effect, Bangladesh introduced improvised monetary policy and fiscal stimuli to bring them under the safety net which lifted the situation from worsening. Government introduced stimulus package which is equivalent to 4.3 percent of total GDP and covers all necessary sectors such as industry, SMEs and agriculture. These packages are not only a one-time deal, new packages are also being announced in course of time. For instance, in January 2021, government announced two new packages for small and medium entrepreneurs and grass roots populations. Apart from economic interventions, the government also chose the path of targeted interventions. The government, after first wave, abandoned widespread lockdown and adopted the policy of targeted intervention which is found to be effective as it allows socio-economic activities to carry on under certain protocols and helps the industries to fight back against the pandemic effect.
Another pivotal key to success was the management of migrant labor force and keeping the domestic production active amidst the pandemic. According to KNOMAD report, amidst the Covid-19, Bangladesh’s remittance grew by 18.4 percent crossing 21 billion per annum inflow where many remittance dependent countries experienced negative growth rate. Because of the massive inflow of remittance, the Forex reserve of Bangladesh reached at 45.1 billion US dollar.
Bangladesh’s success in managing COVID19 and its economy has been reflected in a recent report “Bangladesh Development Update- Moving Forward: Connectivity and Logistics to strengthen Competitiveness,” published by World Bank. Bangladesh’s economy is showing nascent signs of recovery backed by a rebound in exports, strong remittance inflows, and the ongoing vaccination program. Through financial assistance to Sri Lanka and Covid relief aid to India, Bangladesh is showcasing its rise as an emerging superpower in South Asia. That is why Mihir Sharma, Director of Centre for Economy and Growth Programme at the Observer Research Foundation, wrote in an article at Bloomberg that, “Today, the country’s 160 million-plus people, packed into a fertile delta that’s more densely populated than the Vatican City, seem destined to be South Asia’s standout success”. Back in 2017, PwC (PricewaterhouseCoopers) report also predicted the same that Bangladesh will become the largest economy by 2030 and an economic powerhouse in South Asia. And this is how Bangladesh, a development paragon, offers lessons for the other struggling countries of world after 50 years of its independence.
Build Back Better World: An Alternative to the Belt and Road Initiative?
The G7 Summit is all the hype on the global diplomatic canvas. While the Biden-Putin talk is another awaited juncture of the Summit, the announcement of an initiative has wowed just as many whilst irked a few. The Group of Seven (G7) partners: the US, France, the UK, Canada, Italy, Japan, and Germany, launched a global infrastructure initiative to meet the colossal infrastructural needs of the low and middle-income countries. The Project – Build Back Better World (B3W) – is aimed to be a partnership between the most developed economies, namely the G7 members, to help narrow the estimated $40 trillion worth of infrastructure needed in the developing world. However, the project seems to be directed as a rival to China’s Belt and Road Initiative (BRI). Amidst sharp criticism posed against the People’s Republic during the Summit, the B3W initiative appears to be an alternative multi-lateral funding program to the BRI. Yet, the developing world is the least of the concerns for the optimistic model challenging the Asian giant.
While the B3W claims to be a highly cohesive initiative, the BRI has expanded beyond comprehension and would be extremely difficult to dethrone, even when some of the most lucrative economies of the world are joining heads to compete over the largely untapped potential of the region. Now let’s be fair and contest that neither the G7 nor China intends the welfare of the region over profiteering. However, China enjoys a headstart. The BRI was unveiled back in 2013 by president Xi Jinping. The initiative was projected as a transcontinental long-term policy and investment program aimed to consolidate infrastructural development and gear economic integration of the developing countries falling along the route of the historic Silk Road.
The highly sophisticated project is a long-envisioned dream of China’s Communist Party; operating on the premise of dominating the networks between the continents to establish unarguable sovereignty over the regional economic and policy decision-making. Referring to the official outline of the BRI issued by China’s National Development and Reform Commission (NDRC), the BRI drives to: “Promote the connectivity of Asian, European, and African continents and their adjacent seas, establish and strengthen partnerships among the countries along the Belt and Road [Silk Road], set up all-dimensional, multi-tiered and composite connectivity networks and realize diversified, independent, balanced, and sustainable development in these countries”. The excerpt clearly amplifies the thought process and the main agenda of the BRI. On the other hand, the B3W simply stands as a superfluous rival to an already outgrowing program.
Initially known as One Belt One Road (OBOR), the BRI has since expanded in the infrastructural niche of the region, primarily including emerging markets like Pakistan, Bangladesh, and Sri Lanka. The standout feature of the BRI has been the mutually inclusive nature of the projects, that is, the BRI has been commandeering projects in many of the rival countries in the region yet the initiative manages to keep the projects running in parallel without any interference or impediment. With a loose hold on the governance whilst giving a free hand to the political and social realities of each specific country, the BRI program presents a perfect opportunity to jump the bandwagon and obtain funding for development projects without undergoing scrutiny and complications. With such attractive nature of the BRI, the program has significantly grown over the past decade, now hosting 71 countries as partners in the initiative. The BRI currently represents a third of the world’s GDP and approximately two-thirds of the world’s entire population.
Similar to BRI, the B3W aims to congregate cross-national and regional cooperation between the countries involved whilst facilitating the implementation of large-scale projects in the developing world. However, unlike China, the G7 has an array of problems that seem to override the overly optimistic assumption of B3W being the alternate stream to the BRI.
One major contention in the B3W model is the facile assumption that all 7 democracies have an identical policy with respect to China and would therefore react similarly to China’s policies and actions. While the perspective matches the objective of BRI to promote intergovernmental cooperation, the G7 economies are much more polar than the democracies partnered with China. It is rather simplistic to assume that the US and Japan would have a similar stance towards China’s policies, especially when the US has been in a tense trade war with China recently while Japan enjoyed a healthy economic relation with Xi’s regime. It would be a bold statement to conclude that the US and the UK would be more cohesively adjoined towards the B3W relative to the China-Pakistan cooperation towards the BRI. Even when we disregard the years-long partnership between the Asian duo, the newfound initiative would demand more out of the US than the rest of the countries since each country is aware of the tense relations and the underlying desperation that resulted in the B3W program to shape its way in the Summit.
Moreover, the B3W is timed in an era when Europe has seen its history being botched over the past year. Post-Brexit, Europe is exactly the polar opposite of the unified policy-making glorified in the B3W initiate. The European Union (EU), despite US reservations, recently signed an investment deal with China. A symbolic gesture against the role played by former US President Donald J. Trump to bolster the UK’s exit from the Union. As London tumbles into peril, it would rather join hands with China as opposed to the democrat-regime of the US to prevent isolation in the region. Despite US opposition, Germany – Europe’s largest economy – continues to place China as a key market for its Automobile industry. Such a divided partnership holds no threat to the BRI, especially when the partners are highly dependent on China’s market and couldn’t afford an affront to China’s long envisaged initiative.
Even if we assume a unified plan of action shared between the G7 countries, the B3W would fall short in attracting the key developing countries of the region. The main targets of the initiative would naturally be the most promising economies of Asia, namely India, Pakistan, or Bangladesh. However, the BRI has already encapsulated these countries: China-Pakistan Economic Corridor (CPEC) and Bangladesh-China-India-Myanmar Economic Corridor (BCIMEC) being two of the core 6 developmental corridors of BRI.
While both the participatory as well as the targeted democracies would be highly cautious in supporting the B3W over BRI, the newfound initiate lacks the basic tenets of a lasting project let alone standing rival to the likes of BRI. The B3W is aimed to be domestically funded through USAID, EXIM, and other similar programs. However, a project of such complex nature involves investments from diverse funding channels. The BRI, for example, tallies a total volume of roughly USD 4 to 8 trillion. However, the BRI is state-funded and therefore enjoys a variety of funding routes including BRI bond flotation. The B3W, however, simply falls short as up until recently, the large domestic firms and banks in the US have been pushed against by the Biden regime. An accurate example is the recent adjustment of the global corporate tax rate to a minimum of 15% to undercut the power of giants like Google and Amazon. Such strategies would make it impossible for the United States and its G7 counterparts to gain multiple channels of funding compared to the highly leveraged state-backed companies in China.
Furthermore, the B3W’s competitiveness dampens when conditionalities are brought into the picture. On paper, the B3W presents humane conditions including Human Rights preservation, Climate Change, Rule of Law, and Corruption prevention. In reality, however, the targeted countries are riddled with problems in all 4 categories. A straightforward question would be that why would the developing countries, already hard-pressed on funds, invest to improve on the 4 conditions posed by the B3W when they could easily continue to seek benefits from a no-strings-attached funding through BRI?
The B3W, despite being a highly lucrative and prosperous model, is idealistic if presented as a competition to the BRI. Simply because the G7, majorly the United States, elides the ground realities and averts its gaze from the labyrinth of complex relations shared with China. The only good that could be achieved is if the B3W manages to find its own unique identity in the region, separate from BRI in nature and not rivaling the scale of operation. While Biden has remained vocal to assuage the concerns regarding the B3W’s aim to target the trajectory of the BRI, the leaders have remained silent over the detailed operations of the model in the near future. For now, the B3W would await bipartisan approval in the United States as the remaining partners would develop their plan of action. Safe to say, for now, that the B3W won’t hold a candle to the BRI in the long-run but could create problems for the G7 members if it manages to irk China in the Short-run.
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