jueves, 30 de junio de 2011

Cheese and Diet Coke vs Guaca and Tortillas

Cheese and Diet Coke, the two things I miss from home (home has become a blurry concept). Yesterday, I decided to prepare some Guacamole and Chapati (greasy tortillas) to feel closer to my beloved Mexico. I was very careful in cutting the tomatoes, the onions, putting enough lemon and, of course, leaving the avocado peat inside the guaca. The chapatis received much less oil than the usual and were especially flattened (I miss tacos!). Add some beans, and there it was a fantastic dinner! The chapatis were so crispy that I could actually eat them as a taco filled with guaca and beans. I was so happy. So I thought to myself, I could actually live here...

What would I miss? Lot's of things... People of course but what would I really miss from my home (Mexico/New York)? Movie theaters would be top of the list, but you can actually get most movies in the streets (in the informal market), so if desperation would come I could always see the damned movie (Harry Potter). As I thought of the things I crave at night I realized that the two things that are really making me have strange dreams are Cheese and Diet Coke.

I found a dairy a week ago, the only in town, they make all the cheese for Muzungus in the area. The cheese is not bad and it has become a weekly tradition to go and buy as much cheese as I can carry. Ugandans don't eat cheese, my theory is that the lack of electricity in the country does not allow for adequate handling of the product and as a result it never penetrated the Ugandan cuisine. People really don't like cheese, one of my roomates at the house actually refused to eat a plate of pasta when I mentioned there was some little cheese in it. He told me he doesn't like cheese because it tastes like soap.
The first time I went to the dairy, the taxi driver that took me was intrigued to know what that thing I was carrying was and where did it come from. He had never seen or ate cheese in his life (24 years old). Life without cheese... That is something I could not live without. No quesadillas, no cheese sandwiches, no parmesan on pasta, no pizza. It is truly amazing to live in a country where goats are everywhere (really everywhere, jumping and eating anything they see) and there is NO goat cheese at all.

On the other hand Diet Coke is one of these very bad habits that one catches and struggles to abandon. I have to say that I crave the caffeine that comes in that sweet carbonated drink. I quit normal coke so many years ago to avoid the 300 calories that each canned soda contains and I am not used to the taste anymore. I don't know if it is just me or I have truly devloped a physical dependence to it. On fridays, I go to a hotel out of town that has a pool, a hot shower with pressure and Diet Coke... I like cold beer, but when I drink that 600 ml plastic bottle of cold diet coke I truly say ahhhhhhhhhhhh...

A stupid post fo a stupid day...

P.S. Coca cola did not pay me to do this post, no cows or goats were hurt in obtaining my beloved cheese.

Next week: Cheddar and Edam cheese Ugandan style!

martes, 28 de junio de 2011

Like an idiot.

Yesterday I talked with one of my contacts here in Uganda. We discussed some of the projects we are working on. My contact asked me some questions that not only was unable to reply to but made me feel like an idiot because I did not know the answer.
Matooke truck

One example:

Contact: "So we are working right now with a very interesting new cooking practice"
Me:"How much does it cost?"
Contact:"24,000 for materials and another 24,000 for maintenance over the 10 year life time"
Me: "(Playing smart) So it would be around 1,000 UGX per year per person considering an average household of 5.4 (Stats Bs since there are no 0.4 of humans)" - Should have asked: "How do you know it lasts ten years if it is a new practice?"
Contact: "Yes, that is around 50 cents of a Dollar per year per person, the only issue is that the household has to put a large sum upfront, but after we did the demonstration it was a complete success", "It has to be done right after the harvesting season since farmers don't have ways to store their produce and wait until prices are higher"
Me: "(Aja - Show off time) You know in this area there has been developments of commodity storage provided to farmers, you pay a moderate sum of 7 USD per month to store your crops until the prices go up, it seems to be working great" (31% of the population in Uganda still live with less than 1.25 USD per year).
Biker like an icon
Contact: "Oh! Ya! And how many people actually used it last season?"
Me: "Huh? Well... Ahem, A very interesting question! (This answer was learned during my graduate education), I will have to comeback to you later" - (What an idiot!) - "You know what, I can see your experience in the field and perception to see through things by the nailing questions you make"
Contact:"Well I've been two years in the field and I have heard it all"
Me: "... (Thinking to myself) I wish I could develop that skill"

This is a great problem in the International Development industry, everyone says that this or that works and actually: no one really knows. Statistical methodologies like RCT (randomized control test), quasi-experiments and difference-in-difference tests are some of the preferred methods, but after reading study after study and critic after critic it seems that answering the question: "What does really work?" is quite complicated.

Houses in Uganda
Munzungu! Munzungu!
I had a dream, that with satellite imagery we could actually measure facts, not self-reported improvements or random surveys but real images. Problem right now is that access to data is limited. I have imagery from 2003, the project I am working on started in 2006. I can only measure the past, not the present, the future seems even more blurry. Any ideas?





I sometimes miss working for the car industry...

lunes, 27 de junio de 2011

The value of a human life. Supply and Demand?

What is the value of a human life? Many will reply: it is invaluable.

Sounds good, but not true... Our planet is invaluable and yet we seem to be in the process of putting a value on everything in it, call it ecosystem services and the internalization of externalities. I just payed 500 USD to spend one hour observing Gorillas, basically I considered that I was willing to pay 500 USD not only to see the Gorillas but to make sure that they are not exterminated by the needs of the villagers surrounding the park. We are analyzing the value of animals, plants and full ecosystems to decide if it is worth it to save them from extinction/degradation or not. We are discounting their future value to decide if we should just consume them today or tomorrow. The methods we are using to evaluate these "ecosystem services" to internalize their social value in markets can also be used to evaluate the value of human life.

The answer to my first question appears to be: it depends... In Somalia? What if you are a central american passing through northern mexico states? A congolese man in the rubber plantations of Belgian King Leopold II? An indigenous person in the Mexico of 1900? It seems the value of life is pretty low in these cases.

Sunday I had an experience that triggered this poor and scandalous reflexion. I was in a small Ugandan town, three muzungus hiking in the area. We stopped to wait for the rest of the crew and some young Ugandans with a soccer ball started throwing it at us. We rapidly formed a circle and began comparing soccer skills between Ugandans and Americans (some people think Obama is the president of the whole American continent and Mexico is sometimes part of the US for practical purposes). Things were actually going pretty well. In two seconds everything changed, a small child no more than three years old was crossing the street and uphill a boda (motorcycle) was coming down full speed. Some were screaming at the driver to stop, others at the child, some tried to get him, others just were completely paralyzed just expecting the impact ad its definitive consequences. There was nothing to do, I only had time to realize there was going to be blood spilled and that the happy day was over. But there was divine intervention, the driver did not stop, didn't even slow down, he moved his bike a little bit at the last second. This 10 mm move was enough so that the small child was not hit by the motorcycle but only by the knee of the driver. He did fly one meter and turned around from the strength of the impact, but he seemed to be all right. The kid started crying, his mother came, picked him from the ground and took him home. The motorbike driver stopped 100 meters away, turned his head and drove as fas as he could. The kid to my left hit the soccer ball and we resumed playing... Just like that... I guess you get over accidents that almost happened than those did happen.

My stomach was in shambles, I just couldn't believe how close I had been to get spilled with this little kid blood. Later that day I learned that this type of accidents do happen often, when the driver does kill or severely hurts someone, he better run as fast as he can. If the community catches him, they will beat him to death. An eye for an eye... In tis case it seems that the value of a human life is another human life.

This experience has truly left a mark in me, I just can't stop thinking about it. One of my colleagues at work told me that his mother did not gave him a name until he was five years old (the highest vulnerability period for a child). In a country where 138 children of 1000 die before their fifth birthday then it makes a little sense. Another shocking experience is the answer to the typical question "How many sibling do you have?" which often comes in the form of "Alive or dead?" or "My mother had 8 of us but only 5 remain". One of the taxi drivers I hire to move around the city told me he has 20 siblings... All from the same mother! This woman has to be an extraordinary character, after numbers were added, multiplied, I came to the conclusion that she had to spend 27 years producing (this is like ford factory production line) babies, she spent 10.5 years pregnant. Why do people have such a number of children? It makes no sense at all. I get the different hypothesis of why some countries only have two children per couple and others eight. But 20? That is some intensity. Is it because they value life too much? Is it because of fear to their husbands? Is it because children serve as a retirement fund in poor countries? Is it because having many children is a sign of wealth and status? I do not know.

A couple of days ago, we talked to a woman that told us that she actually preferred being pregnant because without her period she could be more efficient in the field. When it came every month it was a problem since work was much harder when women have no access to sanitary pads or any other feminine hygiene product due to prices. I dod not buy her story 100% but she had a point.

So solving the worlds problems include:

1- Washing machines for everyone.
2- Reduce fertility rates to the stable level
3- Produce a low cost alternative to deal with women's period

So how much is a life worth? Try to quote how much you are worth if you sold your organs to people that need them. That is a lot. Think of the indebted father who commits suicide so that his life insurance allow his children to move on with their lives.

lunes, 13 de junio de 2011

Above the airline

Not much to say today. Long discussions about the idea that democracy is only good when society is sufficiently educated and until then its better to have a strong leader (dictator) to guide development...

Statistic of the day:

Hans Rosling says that 2 Billion people live below the poverty line with an income lower than 2 USD per day, 28% of the population consume 8.3% of energy. Then we have 3 Billion people earning between 2 and 40 USD per day, 43% consume 25% of the energy. Then one billion above the washline (they have washing machines) with incomes between 40 and 80 USD per day, 14% of the population consumes 16% of the energy consumption in the world. Finally we have those that live above the airline (travel by plane on holiday once a year) with incomes above 80USD. 14% of the population consumes 50% of the total global energy consumption.


Hans Rosling and the magic washing machine | Video on TED.com

Sahara.
Manhattan.

The city of hope.

Chicago.

La sierra de Guadalupe, DF
La torre Latino, DF

Iztaccihuatl y Popocateptl


San Luis Potosi.
Toluca de Lerdo.





Chalco de Diaz Covarrubias, DF

Mi plane!
Peña de Bernal



Missisipi Delta.

Desierto de Sonora
Desierto de Sonora II






Hermosillo, SO.
DF blurry


Monterrey, NL

Baja California Sur
Sea of Clouds

domingo, 12 de junio de 2011

Statement of purpose

As the end of the first week comes to an end, I find myself reflecting on the purpose of my latest endeavors.

A question comes to my mind, what am I doing here? But not from the ego... What can I bring to the table that can truly be of value to the future generations of Ruhiirans? After a few days at the MVP(Millenium Village Project) office, one full day visit to the "field" (a strange way of referring to the village where the community that is receiving external support to improve their wellbeing live) and a weekend of leisure watching zebras; I keep asking myself this question...

I don't consider myself an idealist, not even an optimist. I believe that poverty is an inherent product of our social system and that "eradicating poverty" is sort of saying "saving the environment". Both phrases are quite nice for christmas cards. So, you might ask, what the hell are you doing there?


This beautiful girl asked
for 5 pesos before I took the picture.
Kids fishing in Chacahua, Oaxaca. 
This little guys need some shoes!
This guys need access to water!
Only 2 Billion people have
access to washing machines.
2 out of 7 humans.



































Well there is one thing I do believe in. I believe that when people believe in the prospects of a better future they do make an effort to improve their living conditions. 

For example, Mexico is a country where you see people throwing garbage everywhere, fro their car windows, on the streets. The cynicism reaches its paroxysm when you see signs that say "those that are surprised throwing garbage here will be escorted to the nearest police station" and people concentrate their garbage bags around the sign. I also remember climbing some mountains, only to discover empty plastic bottles in the cracks of rocks on the top. The question is why do we do it? It is a major conspiracy by the G8? A tremendous plan by corporations to monopolize a new product/service. Is it a natural outcome of capitalism? I am afraid the answer is no...

Inequality in Mexico is increasing,
as a result insecurity has made better off
mexicans to start living in private streets
 that slowly become bunkers from reality.
Santa Fe, Mexico.
Unsustainability at its peak.
Just a nice house.
The richest man in the world...
 is not American, he is Mexican.
Makes sense since Mexico
 is the richest country in the world...
Wait...
Not!














In the past 10 years, I've had a myriad of conversations about the problems that humanity is causing/suffering and the causes/solutions to them. In the population of conversations I have detected two stereotypes that make me sad...


On the one hand, you have those that do believe that things are going well, they do not want to see the problems. They have famous replies like: "The poor are poor because they chose to". I remember a conversation in the vicinities of Columbia University with a friend of mine, I mentioned the term sustainable development. My friend replied: "That is a meaningless concept! It just idealistic crap and what does that mean anyway". I replied with serenity: "I believe you are mistaken, the concept is actually the most important of all. Sustainable development is the process of achieving wellbeing in a durable manner. Economic development (not infinite growth) that is socially equitable and environmentally responsible taking into consideration the present and the future generations".

This is not at all an abstract thought or an idealistic concept. It has many ambiguities that we need to clarify, true. But it's about the fact that we live in a finite planet, with finite resources, that require certain systems to work in a determined way to maintain ecosystem services working in certain margins so that we may use these resources to increase our wellbeing and satisfy our needs in a way that allows for future generations to enjoy at least the same level of wellbeing we are having today. Of course for the whole system to be stable (I said stable not static!) you need to make sure that every community in the planet has access to a minimum level of wellbeing (it does not mean that we will all be equal!). My friend stood up when I pronounced the socially just words and replied angrily that that was not possible, almost calling me a communist (which apparently is the worst insult one can receive). I did not reply, there are times when there is just nothing to be said...

But the worse kind in this category are those that know what is wrong and they want to take advantage that they are on the good side of things (above the airline --- Hans Rosling concept of the Billion people around the world who have the possibility to fly for leisure once every year). After a couple of drinks in a certain party, someone said to me: "stop your blablabla Stephane, we are here because we want POWER". Straight from a scene of star wars...
Rural house in Dominican Republic
Slum in Iztapalapa.
The most populous and highest
 growing Municipality in the Country.
Uganda

On the other hand you have the conspirationists/ecocomunalist/antisystemist. It is the complete opposite from the previous kind. While the first kind are happy with the way things are, they want to maintain the status quo. You have the second kind, those that see the system as completely flawed and want to start from zero, or almost. In this category you have those that believe that all the bad in this world comes from governments, corporations, the rich and the capital. They see the poor and not so poor as victims of a world conspiracy to take over every soul. They claim that man has never been on the moon, that 9/11 was a plot by the US government, that vaccines are a conspiracy by pharmaceutical companies to make us weaker so we buy their products.

Some of the people in this category strongly believe that we were happy before, in the times before technology and the industrial revolution, that people were truly happy 1,000 years ago and we were all friends and sang Kumbaya. Unfortunately this eden seems to have never existed,  ötzi the Iceman was killed by other humans as far as 5,300 years ago. We exterminated megafauna in North America 10,000 years ago (still debatable). Until the discovery of antibiotics and vaccinations the average life expectancy was 40 years old. So the once we were happy delusion is far from the reality.

Others want revolution, not the slow kind, the radical. They believe that expelling foreign capital/interests from the country is the only way to end inequalities, we have an interesting experiment of this strategy, Haiti. 

I saw this stencil in Mexico this May.
It promotes extremism, I don't like it.

In the meantime people are still throwing their garbage everywhere in Mexico city... 

I really think that people need to believe that they are the change in the world, that things do matter and that every little effort we do in this generation will be enjoyed by the next. That we shouldn't think that just because those generations won't pay us back we should not see any incentives to do it. If we really think like that then stop having children. Let's pick our battles and make a little effort every day. Pick one thing you will do in a more sustainable manner this year and play accordingly. Use less water to wash your dishes, buy a compact car instead of a hummer, throw the garbage where it belongs, demand that human rights are respected, complain! Complain about the things that don't work and imagine how things could and should be different, and then do something about it.

So what am I doing here? I will be doing maps... 

Honestly I will stop wasting neurons trying to understand if foreign aid is a type of neocolonialism or not, I will stop asking myself if the world bank is helping or hurting the developing world (another meaningless concept that I will explore in future posts), I will stop asking myself if this project has truly improved the lives of Ruhiirans and if it can be sustainable when the project leaves, I will stop asking myself if this makes any sense and focus on what I can contribute here. 


Monitoring, measuring, evaluating and planning for the future. How? With geographical information systems. I will provide a set of maps that will show in a very clear and understandable way, what is the next step, where are the gaps of the project, what additional infrastructure is needed, why are some new borns still dying, who is being left out. My expectation is that the conciliatory effect that my maps had in the automotive industry have the same effect in the development world. My purpose is to help moderate constructive discussions about what needs to be done to improve things. 

Be the change you want to be? I'll map the change I want to see...

viernes, 10 de junio de 2011

GDP as a way to measure successful outcomes... Not!

We tend to assume that our purpose as a specie is to improve our wellbeing. We try to define wellbeing in a way that is global, we assume that higher life expectancy, higher literacy rates and higher income per capita. Since there is a correlation of many of the factors that we consider to be associated with wellbeing to income per capita, and because measuring GDP (Gross Domestic Product - PIB in Spanish) and population are quite easy to do. We have focused on measuring the wellbeing of societies by considering only the growth rate of GDP per capita over time.

Ruhiira has deforested most (only 5% of original area remains)
of its land for agricultural expansion
and biomass requirements for cooking and heating
(No electricity was available)
But there are clear indicators that this approach is not the best way to measure success. We are being unsuccessful at achieving this era of global property. Increasing gaps between the richest individuals of the planet and the bottom one Billion that live with less than 1.25 USD per day (around 45 USD per month or 600 USD per year) are one of the symptoms of a sick system. Increased loss of biodiversity, ecosystem degradation and climate instability that affects future prospects of development are also showing alarming trends that tell us that no everything is going as planned.

For example, take two poor countries, both have a GDP of 100 and both have 100 ha of remaining natural forests. These forests provide ecosystem services in the form of biomass (10USD per year if substituted by natural gas), protection against soil erosion (50 USD per year), water recharge to underground reservoirs and in general protection from extreme runoff (30 USD), finally provides natural habitat to species that also provide ecosystem services such as pollination (10 USD). In country A a leader that has understood the importance of sustainable development, decides to start a national agroforestry business and maintain the natural forest intact,  The wood provided by this sustainable agroforestry scheme provide 400 USD per year. So country A has now a GDP of 500 USD.

El desierto the Atacama, what can you observe from the picture?
What do you think is the GDP of the area? 0?
well no they have the largest deposits of
 copper and other minerals that you crave for.
Still I would not like to live in there...
Country B, is more short sighted and decides to take advantage of the forests that exist and starts cutting them to sell them as precious wood, a revenue of 1000 USD. So country B has a GDP of 1,100 now.

GDP tells us that country B was more effective than country A in increasing the wellbeing of its population, right?

Well actually no, in 10 years time, A will be having a GDP of 500 USD and Country B will have a GDP of 100 USD. Damned. What went wrong? We are not considering the transformation of natural capital. In the end most of the wealth that countries produce still come in one way or another from natural capital. Country A created 400 units of wealth maintaining 100 units of natural capital per year untouched, in reality country A is more efficient in the creation of wealth. Country B created 1000 units of wealth by destroying 100 units of natural capital that will not replenish, so in fact the destruction of natural capital in 20 years is 2000, the real wealth created by country B is 1000 - 2000 = -1000. Country A in the same period created 400x20 + 100x20 = 500x20 = 10000 units of wealth. Now makes sense?
This is called GDP efficiency, its the ability of a country to create wealth by minimizing the loss of natural capital.

Los Viveros de Coyoacan provide
one million tree seedlings per year
for reforestation projects around Mexico City
(AKA the city of hope)
Another example, assume that the same two poor countries discover large amounts of oil. Country A decides to use the revenue from oil to build roads, the roads are a ublic good that allows the majority of the population to increase tranportation and especially trade. In a few years 80% of the population has managed to increase their income per capita by 200%. Country B gives the right of exploitation of the oil to a local private company, the CEO being a close cousin of the president (could be a multinational but don't want to enter in the discussion related to foreign investment), the family of the president manages to become very very rich and there are some spillover effects to other industries that are owned by a handful privileged in this country. After a couple of years the GDP of A and B are the same, but in country A 80% of the wealth is concentrated by 60% of the population and the poorest individual lives with 5 USD a day. In country B 80% of the wealth is concentrated by 20% of the population and the poorest individuals live with less than 1USD per day. Where do you think there is more wellbeing?
Average GDP per capita is the same right? So? Is it the same situation?

I call this GDP distribution, I want to live in country A, and you?




Let's start using our brains...

jueves, 9 de junio de 2011

Women empowerment or lettuces in your balcony?

I am unsure if I have truly explained what I am doing in this project. I guess the story has to do with a quite successful consultant that one day decided that his comfort zone was asphyxiating him. So he quit his well-paid job, gave up his nice apartment with an astonishing view at the city of hope (Mexico City of course), his car, his furniture and the most important: left a girl that seemed to be perfect for establishing a head (literal translation of sentar cabeza in mexican). These sacrifices were made hoping to make a better impact in the world. My major desire is that when my grandchildren ask me why the world changed so much in my lifetime and I explain the reasons I can answer to the terrible question of: "And what did you do to prevent it from happening?" with a convincing response.

The purpose of my actual studies is to understand the complex systems of human-natural interactions in the road towards development. Specifically the multiple challenges in each sector and how these challenges are all interconnected in a complex manner, meaning that you can have positive and negative feedbacks that intensify small changes in one variable.

If I eat one more plantain I will truly go crazy.
My project has to do with the use of GIS to provide a cross-sectoral decision-support analysis that helps answer some questions in this development aid project (not to be confounded with a humanitarian effort). The idea is that by orchestrating a set of proven interventions we can provide sufficient traction to a community to lift herself out of the vicious cycle of generalized extreme poverty.

When I first came to Columbia I was completely focused on Urban Agriculture and appropriate self-sustaining technologies that should help us produce all of our needs in a grassroots initiative. I remember one of my first conversation with one of my colleagues was that the single most important thing was women empowerment and girl education. I was shocked by this idea, a single magic bullet sector could solve things in the short-run. I argued back that for me there was no single intervention and that increased agricultural yields where in any case more important than who goes to school. WIthout food it doesn't really matter that you are teaching them how to use wikipedia.

The reaction was: "So basically you are comparing lettuces with women".

School garden with lettuces. Girl enrollment has also increased thanks to a couple of interesting interventions. The answer is women and lettuces... and men and tomatoes.. and maps?
What do you answer in this situation? I just sighed and thought that there is very long road to walk to be able to talk openly about gender issues.

I like women and I like lettuce but if god had wanted me to eat that much lettuce he would have made me a rabbit.

Anyway, those that achieve food and water self-sufficiency have a much greater resilience too any socio-natural disaster.


So start growing your own lettuces...

P.S. By the way we have been without water for two days already...

miércoles, 8 de junio de 2011

About risk aversion, motorcycles and discount factors

Economists assume that in general individuals are risk adverse by nature, that is they will prefer a certain outcome to a probabilistic scenario in which they might win or loose. There is an equation that allows to determine at which point individuals will rather play the game and risk their wellbeing and when they will not play and keep the safe outcome.

Over the past few days I have came to the realization that the level of risk aversion is not personal but geographical. Indeed it seems that in the developing world people  care less about the really bad outcome, taxis are inexistent here and all there is are motorcycles that drive like mad men everywhere. They usually have no permits, no helmets, the bikes are falling apart and they think they are running the Paris - Dakar (that is now in Argentina due to crazy motorcycles jumping in the track in the eurafrican side of the world...) and yet they are quite convenient. You just yell boda boda, tell him where you want to go and how much he will charge you (usually you try to halve the munzungu price). And you hop on in behind, grab something and expect that the very high rate of accidents that occur will hit the guy in front or behind you. But this is something I would never do in New York or in Mexico. 

So why do I do it? Is it because I value less my life when I am in Africa? Is it because there are not many other options? Is it because you figure that if that grandma can do it why shouldn't you? Is it thirst of adventure? Is it because it's super cheap? Is it plain stupid stupidity?

No matter why it turns out that foreigners tend to take more risks as the levels of development go down. Would it be the same the other way around? What if you teleported all Mbararians to the USA and offered them health insurance (assuming they could pay it without important sacrifices), would they purchase safety and peace of mind? Or would they culturally act different and not get the insurance?

Let's assume it is not a cultural decision. What if Ugandans in the USA bought insurance and United Statians (Because America IS a continent while Africa IS NOT a country) in Uganda would ride Boda Bodas. This would mean that there is something about the natural/social environment in the geographical locations that reduces the risk adversity of individuals.

If you've read this far you might say: "What is your point?"

My point is the following, economists are debating if acting again climate change is economically efficient. To decide if the investment in mitigation strategies are worth the effort, they are using the discount factor [see post], indeed a shilling today is worth more than a shilling tomorrow. So the discount factor is the extra amount you will have to increase my consumption in the future for me to sacrifice one unit of consumption in the present. Indeed we tend to value more the present than an uncertain future. So w\William Nordhaus and Lord Nicholas Stern, two important economists, have tried to evaluate the costs of action versus the costs of inaction in reference to the threat of climate change. Each one has set their own estimate for the discount factor and they have made extense calculations to try an emit a recommendation on the future of humanity. But if risk aversion changes from country to country and even inside a country, then probably the value of the present over the future is different inter and intra nationally. If different groups of people have different levels of discounting  the future across the globe. This means that economists are oversimplifying the issue at hand. Would it not be necessary to take the different discount factors, weight them according to population and then make an estimate of the result of the cost-benefit analysis to make this decision that will affect the whole world?

I guess most economical models need a little revamping into the era of mass data analysis so that many of the oversimplifications made because of a lack of computing power should be revisited to truly model the homo economicus complex system and try and find better tools to predict the future and make policy decisions.

This thoughts come to me as I come back from visiting the rural area where the project I will be working on is based. The area is really poor and I truly find myself revisiting my argumentations on sustainable development and poverty alleviation. The human specie is indeed complex and very simple at the same time, my conclusions are the same:
Ruhiira, Uganda. The green is Matoke/Plantain/PlatanoMacho, deforestation has been severe. Imagine no roads, no hospitals, no access to markets, no clean water, no sanitation, no schools, no nothing a couple of years ago...

1- We need to reduce population growth
2- We need to shift from non-renewable resources to renewable rational use of resources and improve efficient use of resources with technology and internalizing the social and environmental externalities of economic growth
3- We need to stop having blind faith in the market based approach and acknowledge that markets do tend to fail and lead to inefficient outcomes
4- We need to reduce inequalities in life opportunities amongst humans --- inter and intra country
5- We need to start valuing ecosystem services and protecting common goods

This guys were really excited to say hello. 
6- we need a new framework for planetary governance (UN revamp)

Tomorrow I promise I will finally explain what I am doing here and what exactly I will be working here.

Stay tuned...



martes, 7 de junio de 2011

Order 1,2,3

The lack of scientific approach to problems has a pervasive effect on the decisions we make. Opinion based decisions are one of the elements that can most harm any organization of project. In order to take a decision we usually have to compare among different alternatives. Money, time and other resources are limited and require to be consumed with adequate prioritization.

The past few days I had a couple of strong discussions that almost made me loose my temper. I have been wanting to write this post for a very long time and the expectations have risen so much that I will never actually write it with the quality and depth it requires. The original idea comes from my father, I tend to bounce my ideas and dilemmas with him, especially discussing the future challenges faced by humanity and he usually asks me if the problem or solution I am talking about is order 1,2 or 3. This approach has been very useful in prioritizing and detecting irrelevant arguments that people tend to defend. Instead of giving a long explanation I will give two examples about what I mean with this.

The other day I was talking about the carbon footprint and the issues around GHG emissions (because it is obviously a subject I don't think about often). I was talking to a very environmental-wise person who was mentioning how he was almost totally sustainable, the person was judging my meat eating habits. At some point in the conversation he mentioned that he took 20 planes in the past year. I couldn't help but giggle at his efforts to reduce his emissions. He came back at me saying that since I smoke cigarets the discussion was over. Was it?
What are the orders?

20,000 Kf air travel = 7 T CO2 per year
Eat meet in 90% of your meals = 2 T CO2 per year
Smoke 1 pack per day = 0.197 T CO2 per year
You can decide orders. I know there are other externalities that I am not considering in these products but I like how illustrative this example is. Really care about the environment, stop flying, don't become a vegetarian.

The second topic is about malaria and bed nets, 300 Million cases of malaria happen every year around the world, A very large number occurs in south saharan africa. The health, education and economic impacts of this situation are severe, a study suggests that countries with endemic malaria n the developing world have a annual GDP growth 1.3% less than countries that do not suffer from this problem but have similar situations. Until recently the donor organizations would only provide free bed nets to pregnant women and small children under the argument that if you give it for free to everyone you will be promoting market inefficiencies and promoting lazy behaviors. But other actors differed and argued that in this particular case it made sense to give free bed nets to every poor household, this would cut the transmission rates and effectively end endemic malaria in these areas because of a hoard effect (less people infected means less parasite available for the mosquito to pass it on). While having this discussion, my interlocutor came with an argument that she had probably read in one of those poor blogs that only try to criticize any development intervention. Providing bed nets for free is bad because you are destroying the bed net industry of sub saharan africa. I don't know if you are puking or saying hey that might be right. Let me explain:

It is true that we you provide free or subsidized imported goods in a country where those goods are produced you create an effect of unfair competition that reduces the profits of the companies and can lead to their bankruptcy. An example are the exports of surplus corn from the USA that were produced with government subsidies. Dumping if you like. This is the perverse effect that free trade agreements have sometimes when there are production subsidies in a country.

But...

Come on, the bed net industry? What percent of the national GDP does the bed net industry accounts for? How many people work in this industry? What is the income impact on the population?

Compared to reducing the amount of sickness days and lives lost to Malaria, is this really comparable? The conversation with this person was over afterwards.

Order 1,2,3...

Hope it makes sense.

The free rider dilemma

There are several types of goods that we humans usually consume. They can be divided into four major categories, goods can be rival or non-rival, they can also be excludable or non-excludable. The typical good is the rival and excludable, for example cookies, if I have a cookie and eat it it means you can't eat it any more. If I have the cookie it means you don't have it. Easy as pie...

But things get more complicated, for example a sunset is a non-rival non-excludable good, if I consume it you can also consume it without it running out. I can't protect you from having access to the sunset so it is non-excludable. Usually you can't make business with this type of good. I love this kind! Roads would fall into this category assuming there is no traffic.

Then you have excludable, non-rival goods, these are interesting, you can only have access to the good if you are member of a "club" but the good does not run out. For example a network of ex-alumni is one example of this type. Going to Columbia university gives you access to an amazing network of people you probably would not be able to access if you did not study there.

And then...

The big problem. Goods that cannot be excluded but that are rival. The common goods. These goods are available to every one but they run out if used in excess. For example: fisheries, pastures, forests, rain or the atmosphere. The problem is that since everyone owns the ressource and it runs out, the incentive in a world of game theory (individualistic, maximizing profit type) the best response is to consume as much as you can. If you don't cut that tree today someone else will and leave you with reduced profit. This idea is recognized by Garret Hardin in his 1968 article "The tragedy of the commons". Climate Change is the perfect example, we share the atmosphere, we release CO2, if I limit my emissions I affect my growth and other countries will still emit, maintain their growth and affect my climate. The "rational" response is to not reduce emissions.

UNDP Intern House. AKA Big Brother Uganda




I will be sharing the UNDP intern house with 7 other people and we are sharing quite a large amount of goods. Water, gas, a bathroom, the fridge, cleaning. The first day in the house I asked the veterans (who usually due to their time in the house have more experience and rights than the rest of us: better rooms, better bed nets, better furniture) what the rules of the house were. The current chief of the house told me there where not rules, everyone just did what he thought would be more adequate, so I asked if they did not fear that the showering schedule would be a problem, or if the limited amounts of water wouldn't be rapidly exhausted if we did not set some limits. Also who would clean the bathroom? The answer is that they did not had any problems before.

I will exaggerate the situation for the purposes of this blog, anyhow if you read this far you are used to my style of writing and now I tend to exaggerate and play devil's advocate.

As a result for the past few days we are all rushing to the toilet from 6:30 to 7:30 to see if we can get the next spot under the shower. A bit inefficient... But what has started to worry me is the water availability, before we came the house had an average of 4 interns at any time, now we are 8. The first day I did the effort of showering in three minutes, turn the water off to put soap and shampoo and tried to wash the dishes with as little water as I could. But I have been observing the water practices of the others and realize that unless we set rules it is not worth to make such sacrifices. So today I took a nice shower of 4 minutes without turning the water to soap and shampoo myself.

This afternoon we ran out of water... A disaster in a toilet for 8 people, especially if it lasts more than a couple of hours. We could not cook, we had to eat out tonight. When we were coming back one of the guys that has been longer in the house mentioned we might want to get a bigger tank of water...

Micro tank of water.
I guess you could either see our situation as anarchy or maybe community management of resources, in any case the free rider threat looms over us now. I have been leaving with roommates for the past four years and up to now it has worked quite fine. But 8 people in the Big Brother house might be a little bit too much for my non-planning strategy. Two experiments under way:
1- Left my toothpaste in the bathroom - let's see if someone else finds it convenient to use it instead of buying their own.
2- I am really intrigued to see who will be the first to clean the bathroom and his motivations to it, as our cleaning/working for others limits are reached by each one of us, I wonder how long will pass until we make a bathroom cleaning schedule. Until then I will be analyzing the free rider dilemma on this aspect.

I am a terrible cook, so I have offered to do the dishes as often as needed (I am not the only free rider in the cooking sector), I hope that my wonderful cook colleagues consider my specialization useful (a specialty that is very hard to defend, computers, GIS and economics are quite useless in this situation, and black humor has little value also).

Oh! The water is back, I hope I can use it, I have to run... Drank too much beer (that it seems we never run out :))