Economist 9/4/14

  1. THE debate over Scottish independence remains.Roughnecks have sucked 42 billion barrels of oil and gas from the sea bed; nationalists reckon the waters could cough up 24 billion more. Projections from the Department of Energy and Climate Change, by contrast, have suggested that as little as 10 billion might be retrieved. A second, fiercer, feud is over the amount of tax the North Sea would generate during the early life of a new Scottish state. Holyrood’s latest forecasts, published in May, assume that oil and gas revenues could earn the country around £34 billion ($56 billion) in the five years to 2019. That is more than twice as high as the haul predicted in July by Britain’s Office for Budget Responsibility (OBR), a watchdog, which suggests Scotland will rake in only about £15.8 billion over the same period.
  2. So how does Google Maps, the most heavily-consulted mapmaker, deal with disputed borders?Mostly Google acts like a traditional cartographer: solid grey lines mark international borders; dotted grey lines show “treaty” and “provisional” boundaries; and a dashed grey line indicates “disputed” borders between countries. But Disputed Territories, a website created by wonks at the Massachusetts Institute of Technology, identifies 12 regions where Google presents different borders to different audiences depending on where they are in the world. Crimea is one such example: when viewed on Google Maps from a browser in Ukraine, no national border is shown, including it within that country’s sovereign territory (see central picture). But when viewed from a computer in Russia the peninsula is demarked with a solid grey line as part of Russia. Viewers elsewhere see a dashed line, recognising the uncertain status of Crimea since Russia annexed it from Ukraine in March. Google also presents six versions of the borders around the Spratly Islands, which are claimed variously by Brunei, China, Taiwan, Malaysia and the Philippines.
  3. MORE than 1,900 people have so far died from Ebola in the four affected west African countries, but many more will suffer the economic consequences.Liberia has been growing at upwards of 8% over the last couple of years, but won’t expect anything like that kind of luck now. The government is still number-crunching with the International Monetary Fund, but it reckons Ebola will shave more than 2% of growth rates this year, putting estimates at 3.5%.Finance minister Amara Konneh says that’s mostly because of damage done to mining, agriculture and service industries, as investors evacuate foreign workers, borders close, and international flights are suspended. Bread-basket regions are under quarantine, making agricultural trade impossible. Sime Darby, the world’s largest listed producer of oil palm, is slowing production and Sifca Group, an Ivory Coast-based agribusiness, has halted rubber exports.
  4. The Gini index is one measure of inequality, based on a score between zero and one. A Gini index of one means a country’s entire income goes to one person; a score of zero means the spoils are equally divided. Sub-Saharan Africa saw its Gini index rise by 9% between 1993 and 2008. China’s score soared by 34% over twenty years. Only in a few places has it fallen.Does globalisation have anything to do with it?Usually, economists say no. Basic theory predicts that inequality falls when developing countries enter global markets. O A Nobel laureate, Simon Kuznets, argued that growing inequality was inevitable in the early stages of development. He reckoned that those who had a little bit of money to begin with could see big gains from investment, and could thus benefit from growth, whereas those with nothing would stay rooted in poverty.
  5. CHILE’S vast copper mines have an energy problem to match. They consume 39% of the country’s electricity. But most of them are located in the parched north of the country, and Chile’s hydroelectric power is mainly generated in the rain-drenched south. A government scheme to unify Chile’s two electricity grids, the SIC (which serves Santiago and the central heartland) and the SING (which supplies the north), will still require electricity to be piped over long distances, which is expensive. Nearby Bolivia refuses to sell natural gas to Chile because of a border dispute dating from the 19th century.As a result the mines have to get by on a mix of non-Bolivian gas, coal-fired power and diesel—a concoction as expensive as it is dirty. Chile’s mines pay twice as much for their energy as their peers in neighbouring Peru.Fed-up miners are increasingly taking matters into their own hands and turning to renewables to get their costs down. Northern Chile may be short of rain for hydro-electricity but it has plenty of sunshine and wind. On August 26th Chile launched its biggest wind farm to date on a coastal hilltop 400 kilometres north of Santiago.In theory, those projects will add 3,100 MW to the grid, enough to power dozens of mines.In practice, however, many of those projects will never see the light of day.

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