Economic Digest – July 2018

COAL
The world’s coal market experienced an unexpected revival in 2017. The surge was driven partly by a resurgence of demand for coal in China which increased by 0.5% over the previous year after falling for three consecutive years. Although China is attempting to diversify away from the dirtiest fuels, it used more coal to satisfy its growing electricity demand. The global power sector still remains heavily dependent on coal too. Despite growth in the use of renewables in recent years, and efforts to shift power generation away from coal, it accounts for two-fifths of the total, the same share as two decades ago.

IRRIGATION
In a rural village in Chile, there are three 60-square-metre (646-square feet) nets stretched between poles on a ridge above the community. These nets capture droplets from the fog that rolls in from the sea 4km (2.5miles) away. They trickle down to a pipe, which channels the water to two troughs at the foot of a ridge from which livestock drink. The nets can harvest 650 litres (140 gallons) of water a day. Chile has been investigating fog capture since the 1950s. In another community, fog-catchers feed a plantation of olive trees which when mature, will produce olive oil worth US$12,000 a year.

CHIPS
Thousands of people in Sweden have inserted microchips into their bodies which can function as contactless credit cards, key cards and even rail cards. Once the chip is underneath your skin, there is no longer any need to worry about misplacing a card or carrying a heavy wallet. A belief in digital technology has strongly affected Swedish culture and Sweden has become one of the most successful countries in the world at creating and exporting digital products.

WILLS
In the past few decades China’s rapid economic growth has enabled many of its people to amass fortunes, big and small. The country is home to many billionaires, second only to America. With an aging population, the problem is what will happen to all this money? China has no tradition of writing wills. Scholars have found only a few examples of wills during the country’s 2,000 years of dynastic rule. After the Communists seized power in 1949, wills became redundant, the wealthy fled or had their assets confiscated. It was only in the 1980s the Communist Party gave its approval for people to get rich. One city handled 24,000 wills last year, up 20% from 2016.

ARCTIC
According to one US investment firm, the Arctic will require close to US$1-trillion of infrastructure investment over the next decade, including transportation, telecommunications and social services to support a new era of economic opportunity from energy, fishing and mining, to defence and tourism. With fewer than one million residents, the North American Arctic has no choice but to seek outside capital for its enormous strategic and economic opportunities. The question now is will the United States, Canada and Greenland, in cooperation with local and global investors, seize the opportunity to imagine, build and finance its own long view for the North American Arctic?

EMISSIONS
Norway is ranked one of the world’s happiest countries, and one of the ways they are planning on keeping their residents happy is by making the planet a better place, starting with reducing greenhouse gas emissions from international shipping and on land through several other initiatives. Norway has created the world’s first zero-emissions zones at sea. By reducing emissions from ferries and large cruise ships altogether by 2026, they are ensuring that all 1,190 of their beautiful fjords stay intact for future generations to enjoy. The Scandinavian country is the world leader in electric car ferry development and usage.

LUMBER
The US administration’s tariffs on Canadian softwood lumber are pushing up the cost of wood according to the US-based National Association of Home Builders, adding approximately US $9,000 to the cost of single-family homes in the United States. The NAHB also claims that the tariffs have added as much as $3,000 to the average price of a multi-family unit. Canadian lumber imports are currently the largest supplier to the annual US softwood lumber market, accounting for about 28% of US sales per year over the past decade.

GENES
Scientists have created pigs that are immune to one of the world’s costliest livestock diseases. They have edited the animals’ DNA to make them resist the deadly respiratory disease known as PPRS, a move that could prevent billions of dollars in losses each year. However, consumers have traditionally been reluctant to eat genetically altered animals and crops and this poses a significant barrier to farmers owning gene-edited pigs. And because genome, or gene editing (GE) is relatively new, the absence of regulations currently prevents their sale anyway.

SAND
It seems like an endless resource, especially when one imagines miles of beaches and deserts, but sand is one of the most-consumed resources on the planet, and it could be running out. This is because it is used in a lot of products, such as toothpaste, sunscreen, kitchen sinks, computer chips and glass. But the biggest consumer of sand comes from the construction industry, which uses it to make brick, asphalt and concrete. Sand and gravel are the most-extracted solid materials in the world according to the UN. Formed by erosive processes over thousands of years, it is also mined at a rate far greater than its renewal. Between 47- and 59-billion tonnes of sand and gravel are mined every year with China and India, which lead the global construction boom, being the most voracious users. Sand has also created an immense black market.

BANANAS
A British firm has joined the race to develop a banana variety resistant to diseases and climate changes that threaten to disrupt the availability of the country’s favourite fruit, or even kill it off all together. The UK alone consumes more than 5-billion bananas each year, while the fruit is a staple food in many poor countries and accounts for an export industry worth US$13-billion a year. The global supply chain is threatened by a virulent disease that has been attacking plantations in Australia, south-east Asia and parts of Africa and the Middle East

INCOME
The Finish government has decided not to expand a limited trial in paying people a basic income, which has drawn much international interest. Currently, 2,000 unemployed Finns are receiving a flat monthly payment of US$685 as basic income. Finland’s two-year pilot scheme started in January 2017, making it the first European country to test an unconditional basic income. It will not be extended after this year as the government is now examining other schemes for reforming the Finnish social security system.

SEEDS
The vault storing the world’s most precious seeds has taken delivery of consignments that now total the one million mark. More than 70,000 crops have been added to frozen storage chambers buried deep within a mountain in the Arctic Circle. New crops include cereal staples, unusual crops like the Estonian onion potato and barley used to brew Irish beer are among the new additions. The number of deposits now amounts to 1,059,646. The number excludes emergency withdrawls of about 90,000 needed to make up for precious samples stranded in Syria due to the conflict there. Crop diversity is regarded as essential for safeguarding the future of the world’s food supply amid pressures such as drought and climate change.

WATER
India is facing its worst-ever water crisis, with some 600-million people facing acute water shortages. A report that draws on data from 24 of India’s 29 states says the crisis is only going to get worse in the years ahead. The report also warns that 21 cities are likely to run out of groundwater by 2020. Indian cities and towns regularly run out of water in the summer because they lack the infrastructure to deliver piped water to every home. It is estimated that 200,000 Indians die each year because they have no access to clean water.

TOURISM
New Zealand is to tax tourists to visit, but Australians will get in free. From late next year, international visitors will pay between US$23 and $33 to get into the country. The move reflects an ongoing debate within New Zealand about the environmental and infrastructure pressures put on the country by booming tourism growth. In the year to last April, about 3.8-million tourists visited New Zealand, a country with a population of about 4.7-million.

AUTOMATION
A new survey by the OECD indicated what automation may mean for workers. It reports that 14% of jobs in 32 countries have at least a 70% chance of being automated. For another 32% of jobs, that probability hovers between 50% and 70%. This puts 210-million jobs at risk in those countries alone. Rich-country workers appear less at risk than those in middle-income countries.

HOUSING
The tech boom has pushed up property prices in the Bay area. Single-family home prices in San Jose and San Francisco have risen by 72% and 42% respectively in the past decade, compared with an increase of 10% nationally. Because of the high cost of living, a family of four with income of US$105,350 or less is now considered “low income” in San Francisco and San Mateo counties. As Bay Area companies continue to attract talent from around the world, the housing shortage will only worsen.

ICE SHEET
Researchers have found lakes that may shed light on icy worlds in our Solar System. High in the Canadian Arctic, two sub glacial bodies of water have been spotted beneath 500 metres of ice. The water has an estimated maximum temperature of -10.5C, and would need to be very salty to avoid freezing. There are thought to be similar cold, saline conditions in the subsurface ocean of Jupiter’s moon Europa, which also have the potential to host life. These are the first sub glacial lakes to be observed in the Canadian Arctic, and are estimated to cover areas of five and eight square kilometres respectively.

PASSENGERS
A total of 549-million Chinese passengers took to the air last year, compared with 184-million in 2007. Such growth has naturally been a boon to Chinese airlines. In 2010-2017 the number of people flying on China’s three biggest carriers grew by 70%.

EXPENSIVE
According to the Economist Intelligence Unit, Singapore remains the most expensive city in the world. A survey, which compares the price of over 150 items in 133 cities around the world, found that Singapore was 16% more expensive than the benchmark city of New York. Three other cities from the Asia-Pacific region (Hong Kong, Seoul and Sydney) appear in the top ten, along with five cities from Europe. Paris has risen from seventh position last year to second. Tel Aviv, which was ranked 34th just five years ago, is now in the top ten.

GLASSES
A bar in Bruges has been forced to fit an alarm system after light-fingered tourists stole 4,000 of their iconic Belgian beer glasses in just one year. Each of the roughly 1,600 Belgian beers should be served in its own unique glass, which doubles as advertising. They come in all shapes and sizes, from an Abbey-style goblet to an imitation half coconut shell.