Yet, the urban middle class youth is in revolt in Brazil, Turkey and other fast-growing countries. The controversy around Easterlin Paradox, a key concept of happiness economics, suggests that happiness grows more slowly than incomes. Leaders in many emerging countries are today confronted with a dilemma that reflects the dual rural-urban structure of their large societies. While the internet-savvy young urban middle-class has left poverty behind and demands voice, participation and efficient public services, there still coexist the poor in the rural hinterland striving to leave individual poverty behind.
Exit, voice and loyalty, the late Albert O Hirschman´s intriguing basic categories that drive societal change, can be used to better understand the current conundrum. Loyalty, through adherence to a political party or to religion, can block change but is waning. Exit and voice have different potential in a rural-urban context: exit from the rural to the urban sector is a preferred option for the rural poor but is mostly a one-way street; whence voice as the preferred option for the urban middle class.
Much of the emerging-country middle class is fragile. Lousy education, poor health and urban congestion are the biggest risks to the lower strata of the middle class, by way of social and economic exclusion. A higher proportion of middle-class citizens translates into higher prices for private schools, hospitals and transports or, alternatively, overcrowding. The private provision of quality public services is a socially dividing, hence limited, costly option. In other words, exit to private education and health services – an option for the “happy few” – will raise prices to the point that it triggers voice while the size of the middle class rises.
“First-world soccer stadiums; third-world schools and hospitals”, was one of the slogans advanced by Brazil´s protesters. Brazil has already spent more than $3bn, three times South Africa’s total four years earlier, and only half the World Cup stadiums are finished. Public health spending occupies a mere 4 per cent of GDP in Brazil (despite a constitutional declaration for universal health care rights), compared to 6 in Turkey and 7 in the OECD on average. The latest PISA test scores rank Brazil 57th out of 65 survey countries for mathematics, Turkey is ranked 43rd. These numbers suggest that there is a political and social premium on best practices in the governance and allocation of public spending of tax receipts. Apparently, that premium has not been reached.
Emerging-country leaders might ignore the insights of the OECD Latin American Outlook 2011 at their peril. The policy recommendations put forth there rightly emphasize the need for “fiscal legitimacy”. To avoid the emerging middle class blues, public finances need to strengthen the social contract, provide better opportunities for the vulnerable people and better quality public services. Middle-income citizens are more willing to pay taxes for services, such as transport, health care and education, if they perceive them to be of high quality and if “white elephants” – trophy public investments with little social value – are avoided.
Grace Poe’s emergence as a potential “third force” in Philippine politics has led many commentators to ask if something fundamentally new may be emerging this presidential season: a major candidate who is neither backed by the administration nor is seen to lead the opposition to it.
But a look back at previous post-Marcos elections suggests a very different interpretation is more plausible.
Poe, like all major presidential contenders, has aligned herself with one of the two major “narratives” of Philippine politics, that of “reformism” or “good governance” carried out by “moral leaders.”
She is seemingly aligned against a “populist” narrative of helping the poor against an uncaring elite that Vice President Jejomar “Jojo” Binay has made his own following in the footsteps of former president Joseph Estrada. (READ: Battle of Aquino, Binay narratives)
Thus it is not surprising that Poe has won strong support from the middle and upper classes while basking in the favorable publicity provided by the press. In the same manner, Binay enjoys a core support of the poor while being denounced as corrupt by many key elites.
Some 250 miles above the Earth, a flock of shoebox-size Dove satellites is helping to change our understanding of economic life below.
In Myanmar, night lights indicate slower growth than World Bank estimates. In Kenya, photos of homes with metal roofs can show transition from poverty. In China, trucks in factory parking lots can indicate industrial output.
Images from these and other satellites, combined with big-data software, are helping to create what former NASA scientist James Crawford calls a “macroscope” to “see things that are too large to be taken in by the human eye.” Aid organizations can use the results to distribute donations. Investors can mine them to pick stocks.
“This is one of those really rare game changers that come along very infrequently but has the ability to remake the whole stock- and economic-research industry,” said Nicholas Colas, chief market strategist at Convergex Group, a New York-based brokerage. “We still make monetary policy in this country based on surveys of a few thousand households and businesses.”
China's move to weaken the yuan last week could head off further similar "adjustments", and the yuan is likely to move in both directions as the economy stabilizes, Ma Jun, chief economist at the central bank said on Sunday.
The People's Bank of China (PBOC) shocked global markets by devaluing the yuanCNY=CFXS by nearly 2 percent on Aug. 11. The PBOC called it a free-market reform but some saw it as the start of a long-term yuan depreciation to spur exports.
The yuan's drop last week and its increased flexibility could help "sharply reduce the possibility" of similar adjustments in future, Ma said.
In the near term, it is more likely there will be "two way volatility," or appreciation and depreciation of the yuan, Ma said in a question-and-answer statement sent by email.
The central bank would move only in "exceptional circumstances" to iron out "excessive volatility" in the exchange rate, Ma said.
Ma played down market fears that a "currency war" could be triggered by China's devaluation, which dragged some other Asian currencies to multi-year lows.
"China has no intention or need to participate in a 'currency war'," Ma said in the statement.
The death toll in China from explosions at a warehouse storing hazardous materials rose to 112 Sunday, as authorities worked to remove chemical contamination.
Some 95 people, including 85 firefighters, remain missing following the blasts Wednesday night in the port city of Tianjin, 75 miles east of Beijing, the state-run Xinhua News Agency reported.
State-run news publications The Paper and the Southern Metropolis reported that the warehouse was storing 700 tons of sodium cyanide — 70 times more than it should have been.
Sodium cyanide is a toxic chemical that can form a flammable gas upon contact with water, and several hundred tons would be a clear violation of rules cited by state media that the warehouse could store no more than 10 tons at a time, the Associated Press reported.
That's a key question because Iran's nuclear deal with the West could lift crippling sanctions, and pave the way for tons of Iranian oil to hit the market. A surge in Iranian exports would only deepen the oil supply glut that has sent prices to fresh six-year lows this week to below $43.
Iran claims it's not stockpiling oil in tankers in the Persian Gulf, but no one believes it. Up until recently, energy experts thought Iran's vessels held 30 million to 40 million barrels of oil.
But maritime surveillance firm Windward has harnessed sophisticated technology to determine Iran is actually hoarding 50 million barrels of oil. That's up nearly 150% from April 2014 when Windward started tracking this closely-watched metric.
Somebody had to go first—why not the Swiss?
News that Switzerland has become the first Western country to start lifting sanctions on Iran will no doubt be followed swiftly by reports of other nations (and corporations) seeking some of the Islamic Republic’s soon-to-be-unfrozen billions. Russia and China have already begun talking up arms sales to Tehran; over the weekend, Moscow sent a pair of warships to the port of Anzali, to display Russian naval wares.
Sources told Platts that the maiden trade was completed at $7.20 per mmBtu and the cargo will be delivered onboard the 162,000 cbm Clean Ocean LNG carrier in July to an Asian buyer.
Cheniere has chartered the vessel from Dynagas on a five-year deal ending in the second quarter of 2020 with an option to extend the deal for additional two years. The vessel has been chartered together with two Teekay’s 173,400 cbm LNG carrier newbuilds under construction by Daewoo Shipbuilding & Marine Engineering of South Korea scheduled for delivery in the first half of 2016.
Cheniere plans to market up to 5 mtpa of LNG from its US-based export projects through its office in Singapore.
The Clean Ocean LNG carrier is currently on idle offshore Singapore, according to shipping data.
Executives of Occidental Petroleum Corp., on Thursday reported finding savings by extracting more oil for less money and reinvesting that money in the Permian Basin, where the company is the biggest oil producer in the region.
Oxy, as the company is known, saved about $450 million by cutting costs during the first half of the year, and it channeled that money into the Permian Basin, where crude production grew by about 78 percent in the second quarter compared to the same period last year.
Incoming CEO Vicki Hollub attributed those efficiency gains to reduced drilling and completion times aided by technological improvements in geophysical modeling, drilling fluid systems and 3-D seismic imaging.
In the Permian Basin, the company saw the time it takes to drill a well drop from about 40 days to about 20 days. Well costs dropped from $10.9 million to $6.8 million. Hollub said the goal is to shave another $600,000 off those costs.
Oxy’s report represented the latest case of Permian Basin oil and gas producers showing they can continue to drive up production amid low oil prices. That is an upside for energy and production companies who depend on continued production gains, said Joseph Triepke, a financial analyst from Odessa and managing director of Oilpro.com.
But building production in a region that already pumps more than 2 million barrels of oil per day offers little relief to the oilfield services companies who make up some of Odessa’s top employers, Triepke said. That’s because the price drop resulted in part from global oversupply, and worry mounts that continued production growth will put more downward pressure on oil prices.
So far, Oxy executives reported that company managers shifted employees around rather than opt for shrinking their workforce.
“In previous industry down cycles we’ve seen in the industry overreact through widespread layoffs,” Hollub said. “We’re taking a different approach with our response to lower oil prices and have deployed many of our engineers in the early stages of their careers out into the field where they have replaced contractors. They are successfully helping to optimize our base production, improve drilling times and gain on the ground experience.”
In the first half of the year, Oxy executives reported drilling 47 wells — 42 of which were horizontal. And they placed 71 wells, some drilled before 2015, on production.
Hollub pointed to two of those wells as some of the best-producing ever in the Permian Basin, producing about 2,400 boe per day at their peak rates. Both were in the Delaware Basin west of the Odessa-Midland area, including parts of New Mexico.
The population of a U.S. oil boomtown that became a symbol of the fracking revolution is dropping fast because of the collapse in crude oil prices , according to an unusual metric: the amount of sewage produced.
Williston, North Dakota, has seen its population drop about 6 percent since last summer, according to wastewater data relied upon heavily by city planning officials.
They turned to measuring effluent because it was a much faster and more accurate way to track population than alternatives such as construction permits, school enrollment, tax receipts or airport boardings.
U.S. Census Bureau figures are usually too old as a full-fledged population count only happens once a decade, with sporadic updates in between. That’s not going to catch any swift changes in the population of cities like Williston.
“Here in Williston, the growth rate is not predictable,” said David Tuan, director of the city’s public works department. “Measuring wastewater flow tends to be the most-efficient way to track population.”
The recent high-water mark for Williston’s population was 33,866 in August of last year, just before the oil price collapse. Crude oil has fallen more than 50 percent in the past year and hurt many companies’ finances, leading to massive cost cutting, including the cancellation of projects and lay offs.
By June of this year, the town had shrunk to 31,800 people, according to the sewage data.
“I attribute that to the slowdown in oil prices,” said Tuan.
Among the companies who have made big job cuts here are Halliburton Co and Schlumberger NV, alongside many smaller peers.
SunEdison (NYSE:SUNE) has experienced a disastrous past month, with the stock price approximately halving during this time period. With a growing number of acquisitions and businesses, SunEdison is clearly making investors more wary of a possible overextension. SunEdison's recent Q2 earnings results only further stoked this sentiment, as the company reported a whopping $263M in net losses. Despite the fact that the company crushed its growth guidance, delivering 404 MWs of solar/wind projects during the quarter, losses are clearly becoming a focal point for investors.
With 8.1 GW of pipeline projects and a growing number of businesses, investors are right to be increasingly focused on losses. As debt has been one of the primary reasons for solar bankruptcies over the past decade, growth may become irrelevant if the company's losses keep piling up. With debt levels starting to surpass the double digit billions, SunEdison is clearly one of the riskier solar plays. While SunEdison is still likely undervalued at current valuations(especially after its recent drop), the risks associated with this stock are only rising. Some of the downsides of SunEdison's incredibly ambitious approach are finally started to show.