Economist 4/29/16

  1. Migrants and refugees arriving in Australia by boat have grown into an outsized political issue over recent years. Although fewer than 70,000 people reached the shores of a country of 24m between 1990 and 2013, the need to “stop the boats” has frequently decided elections. In 2001 the Australian government denied entry to its waters to a Norwegian ship, the MV Tampa, that had rescued 433 refugees adrift in the Pacific. Despite international condemnation, the policy proved a vote-winner at home, and John Howard’s incumbent Liberal Party was re-elected weeks later. Mr Howard then introduced the Pacific Solution, which included the construction of two offshore detention centres, on Manus Island and on Nauru. Since then, governments have vacillated on the centres. They were closed in 2008 under Kevin Rudd’s Labor Party administration, but were opened again in 2012 by his successor, Julia Gillard, in response to a renewed rise in boat arrivals.The deal struck by the Gillard government has been a failure. Although the number of boat arrivals has dried up, the Australian government has spent billions of dollars in keeping the migrants and refugees in detention.The fate of the detainees remains unclear.
  2. Some 850m Indians live in rural areas, and nearly 60% of them depend on farming for survival.India has more people living in poverty than any other country—260m by the World Bank’s count—and 80% of them live in the countryside.Farmers are poorer than urban folk the world over, but the difference in India is stark: the median annual wage for a farmer, at 19,250 rupees ($290) including the implied value of the food they consume, is barely two months’ minimum wage in Mumbai. Data from 2008 show the rural-urban wage gap at 45%, versus around 10% for China and Indonesia.Much of that is down to low productivity: farmers in India grow 46% less rice per acre than their Chinese counterparts and 39% less wheat. Less than half of Indian farmland is irrigated. That leaves farmers at the mercy of the monsoon, which dumps the lion’s share of annual rainfall in just a few months over the summer.
  3. By the government’s own assessment, Indian farmers are “locked in” to low-value crops such as wheat and rice, even as increasingly affluent city types demand fruit, vegetables and meat. Making the switch to bananas and chillies is potentially lucrative.But the transition needs agricultural infrastructure such as cold storage as well as access to credit, which is not usually forthcoming for farmers.Only a tenth of the money the government spends in rural areas goes on investments that might boost yields. Much more is squandered on subsidies that encourage farmers to grow staples while occasioning vast corruption.Non-farming income in rural areas has also suffered. A small guaranteed-employment scheme has helped relieve acute distress, but only goes so far. Other forms of employment available outside cities, notably in mining, are in the doldrums.
  4. Spirit, uncharitably dubbed “America’s most hated Airline“, has once again found itself at the tail end of the American Customer Satisfaction Index (ACSI) for Airlines. The ranking, which was topped by JetBlue and Southwest, draws on detailed interviews from a pool of 70,000 American consumers to rate the service of over 40 industries across ten broader fields. For the field of travel an average airline-industry score of 72 was the worst performer, ranking below average industry scores of 74 for hotels and 79 for online travel sites.Scores improved for the airline industry as a whole, probably because cheaper fuel costs have pushed down prices and freed funds for better customer care.Many travellers, however, will roll their eyes at yet another airline ranking. Each year Skytrax releases its own international ranking, which was headed by Qatar Airways in 2015. (In Skytrax’s ranking JetBlue, the top airline in the ACSI survey, was ranked 50th.)
  5. International SOS (ISOS), the world’s largest travel-security firm counts nearly two-thirds of the Fortune Global 500 companies as clients. It operates 26 other centres across the world. The firm says they have never been busier.Globalisation (ever-increasing business travel and tourism), political instability (spreading in an arc from the Gulf to sub-Saharan Africa) and fear of terrorism in places previously thought safe (such as Istanbul, Jakarta, Paris and Brussels) are all drivers of the business. So too is China’s expanding international footprint.Since 2001 ISOS has grown from revenues of $250m a year and 2,500 employees to $1.5 billion and a staff of 11,000, which includes over 5,000 medical professionals and 200 security specialists. Operating from around 1,000 locations in 90 countries, it takes nearly 5m assistance calls every year.Although support when an emergency strikes is what gives clients reassurance, ISOS and its smaller rivals, such as Annapolis-based iJet and Anvil Group, a British firm, emphasise that risk mitigation starts with understanding where and how threats arise and knowing how to avoid or deal with them.

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