Economist 5/19/14

  1.  BUYING ‘Fair Trade’ coffee is not really helping the very poor, new research suggests. By comparing living standards in Fair Trade-certified producing areas in Ethiopia and Uganda with similar non-Fair Trade regions, four development economists from the School of Oriental and African Studies (SOAS) in London found that Fair Trade agricultural workers often earned lower incomes.SOAS researchers found regular rural communities enjoy a higher standard of living than seasonal and casual agricultural workers who received an apparently subsidised wage for producing Fair Trade exports.
  2. MUCH of Serbia, Bosnia and eastern Croatia are under water. Flood maps marking the affected areas make it look as though a vast inland sea has suddenly appeared across the region. Tens of thousands of people have been evacuated. In Serbia some 300,000 do not have access to clean water or electricity. One third of Bosnia, an area that is home to 1.2m people, has been affected by the floods. So far the number of dead in Serbia and Bosnia is believed to be just under 50, a toll likely to rise.In only a few days around three months’ worth of rain has fallen, so even the most prepared of countries would have been in trouble.In only a few days around three months’ worth of rain has fallen, so even the most prepared of countries would have been in trouble.The trauma of the floods has triggered a wave of solidarity across the former Yugoslavia. Croatian and Slovene military helicopters are flying rescue missions in Bosnia. 
  3. China’s Environmental Protection Law has been amended for the first time since it was passed in 1989. The new provisions, due to take effect in January, will allow for stiffer fines against polluting companies, detention of negligent executives, protection for whistleblowers, and penalties for officials who fail to enforce laws. In much of China’s countryside, water and soil are as badly polluted as the air in its cities.Another recent report, based on official statistics from a range of government agencies, said that 85% of the length of China’s six biggest river systems consisted of water deemed undrinkable even after treatment. The proportion of groundwater that is polluted rose from 37% in 2000 to 60% in 2013.
  4. Federal Reserve’s programme of quantitative easing (QE) is what will happen to the vast stockpile of bonds it has accumulated in its efforts to lower interest rates. The problem with the Fed’s pile of assets is that it has a corollary in the form of a hoard of cash kept at the Fed by banks. It now stands at around $2.6 trillion Of the inflation that was supposed to erupt when the banks began lending this money there is little sign. Instead, the Fed has the opposite problem. There are so many dollars sitting idle that they risk interfering with the Fed’s conventional method for setting short-term interest rates.Before QE came along, the Fed would raise what is known as the Federal-funds rate by selling assets and thus draining the supply of reserves, forcing banks who need more to borrow from others. But it is hard to drive rates up like this if banks have so much cash they need never borrow. The Fed can also offer banks term deposits and since September has experimented with “reverse repurchase agreements”, in which it in effect borrows from money-market funds using some of its bonds as collateral.
  5. A RECENT move to introduce physical education to government girls’ schools met the same response as most attempts to give Saudi women equal rights with men. Since last year the authorities have been giving licences to private sports clubs for women, a far cry from 2006 when Lina al-Maeena had to register her ladies’ basketball team in Jeddah as a company. Since taking power in 2005, King Abdullah, the ageing monarch, has given women a bigger role in public life. In 2009 Norah al-Faiz was appointed deputy minister for education, the highest post attained by a woman in government. Last year 30 women took their seats in the Shura Council, a consultative body of 150 members, also appointed by the king. And women are due for the first time to vote and stand in municipal elections—the only ones permitted in the kingdom.  The guardianship rule—under which women must get permission from their husband, father or, less commonly, brother or son, to travel, work or get medical treatment—remains in place, in effect treating half the adult population as minors. Yet women can be held criminally responsible. Last month the local media reported that a woman had been sentenced to 150 lashes and eight months in jail for the crime of driving a car. The kingdom still ranks 127th of 136 in the UN’s gender-gap index.

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