Sunday, August 28, 2005

Employment Protection & Unemployment

Newsweek reports that Angela Merkel, a German "right-wing" Christian, the one who's likely to kick Schröder's butt next month (which indeed is in need of some serious kicking), is not going to give up Germany's strict (and inefficient) employment protection. A quote from Newsweek: "The strict worker protections that make German companies loath to hire would be relaxed—but only for companies employing fewer than 20 workers." Germany - enjoy your high unemployment rates (soon to be 12%) and ridiculous economic growth.

Unemployment in some OECD-countries with strict employment protection:
-Italy: 8.6%
-France: 10%
-Greece: 10%
-Spain: 10.4%
-Germany: 10.6%

Unemployment in some OECD-countries with no (or very little) employment protection:
-Switzerland: 3.4%
-New Zealand: 4.2%
-Ireland: 4.3%
-United Kingdom: 4.8%
-United States: 5%
-Australia: 5.1%

You can find some success stories between these two groups of OECD countries such as Norway (has been able to invest a lot thanks to its massive oil reserves), Sweden (avoided both world wars - however, taxation and welfare programs dropped Sweden from being the 4th richest OECD country to 17th) and Austria. Denmark's unemployment rates are dropping (now at 6.2%) and they have very little employment protection laws left.

"It's an open question whether she will have the nerve to tell Germans the truth they absolutely do not want to hear: that their venerated "social market economy," stuck halfway between socialism and capitalism, no longer works and that it might be time to try something new."

CIA World Factbook
Newsweek International
Cowboy Capitalism (sources at OECD)
Johan Norberg


Sunday, August 14, 2005

Afghanistan - What's Up?

So when was the last time you heard about Afghanistan? During the past two years, Iraq has drawn almost all media attention - and for a reason. Afghanistan has experienced a bunch of both positive and negative changes ever since the US-led invasion ousted the Taleban regime. Elections took place and opium production exploded. Many warlords and militias have been disarmed and more kids are attending school. The Brookings Institution recently released studies on Afghanistan & Iraq. They paint a controversial look at the two war-ravaged countries which both suffered under sadistic regimes. Here's a quick look at some key achievements, and remaining negative aspects in Afghanistan since the Taleban was ousted:

-The size of Afghan army has grown from 390 in July 2002 to 31 000 in July 2005.
-The size of Afghan police force more than doubled from July 2004 to June 2005 and is ("police forces on duty") at 50 000 at the moment. The downside is that about 600 policemen were killed in less than a year between 2004-2005.
-The number of Afghan militia forces has decreased from 90 000 (pre-war level) to 50 000 (last December).
-The number of Afghan militia forces disarmed was at 40 000 last February.
-The number of Afghan civilians killed between March and June 2005 is at 125.
-The strenght of the Taleban is still estimated at 2000-10 000 (sketchy).
-There were four suicide bombings between January 2004 & June 2005 (26 victims).
-During the elections, about 12 election workers were killed.
-The US has lost 149 soldiers since the invasion began (plus 31 non-US NATO troops).
-The number of weekly attacks on coalition forces dropped from 10-15 in 2004 to 5 (so far) in 2005.
-ISAF (non-US NATO forces) presence in Afghanistan has risen from 5000 in 2002 to 8000 in 2005.
-OEF (US forces only) presence in Afghanistan has risen from 4000 in 2002 to 20 000 in 2005.
-Opium production increased from 185 (metric tons) to 4200 between 2001 & 2004.
-GDP Per Capita has increased from 123$ in 2001 to 228$ in 2005 (IMF projection).
-GDP growth rate in 2004 was 7.5% (IMF projection).
-Primary School Enrollment increased from 1 million (pre-war) to 4.8 million (last December), mostly due to the fact that girls started attending.

Some organizations and media outlets have conducted opinion polls around Afghanistan to find out how Afghans feel about their current situation. Here are some of the findings (check the study for sources & organizers):

89% of the population believes that Afghanistan is moving in the right direction. 84% thinks their living standards have improved since the end of the Taleban. 76% thinks their security situation improved within a year. 65% share a favorable view of the US (84% for the UN and 80% to aid workers). Disarming militia commanders and warlords seems to be a priority of most Afghans. 52% now believe that they're free to express their opinions - a major increase from 1% during the Taleban. Most people also feel more secure now than during the Taleban.

Drug production continues to be the biggest problem in the country. 40-60% of the Afghan economy is believed to be devoted to the production of drugs. And this doesn't concern only Afghanistan since a large part of these drugs are exported straight to Europe. So far, all efforts to try to deal with the problem have been ineffective.

Aid & assitance from foreign countries has been very much welcome and vital. Many nations and organizations have committed themselves to Afghanistan. The country has steadily received massive fundings from abroad but a large amount still remains to be given. USAID lists reconstruction projects and other developments - a lot of progress has been made in many significan areas. Here's some:
-"To date, USAID has built or refurbished 315 schools, primarily in remote rural areas, since 2002. An additional 184 schools are under construction."
-"(USAid has) Constructed 287 health clinics since 2002. An additional 43 clinics are currently under contract."
-"USAID is supporting privatization of state-owned enterprises as a major prerequisite for a viable market economy."

Conclusion: As the Afghan army grows and warlords are being disarmed, the security situation in Afghanistan is getting better and leaves room for other activities. It remains unclear how the Afghan government is going to deal with the massive opium fields in the country and how this affects the economy. Afghanistan undoubtedly remains a part of the third world but at least many obstacles have been removed - and the international community has promised to devote time and money to see Afghanistan become a success. That just isn't going to happen overnight.

The Brookings Institution report on Afghanistan

CIA World Factbook - Afghanistan

The Brookings Institution

USAid on Afghanistan


Tuesday, August 02, 2005

Creationism, CAFTA and the Bomb

This is going way too far. President Bush agrees with other conservative Christians about teaching Creationism (also known as Intelligent Design) in public schools. So much for the separation of church & state. Actually Bush already broke the Constitution during the very first months of his presidency by initiating faith-based programs (religious organizations will receive federal funding) to help the weak. I'm okay with the President being a Christian in his private life but using his political influence to pursue religious goals should be out of the question. The Founding Fathers would be ashamed.,2933,164446,00.html

There are also some good news. CAFTA (Central America Free Trade Agreement) has finally been signed by the President: "The signing ceremony Tuesday in the East Room of the White House comes after the administration last week eked out a 217-215 vote in the House".
Removing trade barriers and liberalizing economies is the key to economic success. Those in favor of protectionism and tariffs should note the simple fact that only open economies have succeeded in reducing poverty and distributing wealth and material goods. Those Asian & African countries with open economies have succeeded far better than protectionist countries from the same regions. Anti-globalization clowns just never get it. The sad part is that they have never had any evidence to support their claims and never will have. I won't hesitate to recommend this book to everyone interested in globalization: In Defense of Global Capitalism.,2933,164454,00.html

The 60th anniversary of the Hiroshima bombing is approaching and many still believe that dropping the big bomb was a bad thing to do. This article - Why Truman Dropped the Bomb - from The Weekly Standard is worth taking a look at and takes a very close look at the events and rumours surrounding the summer of 1945. It has been written by Richard B. Frank who also wrote Downfall: The End of the Imperial Japanese Empire. The bomb didn't only save lives but also secured a democratic & free future for Japan.