India set to exempt Africa from rice ban

India set to exempt Africa from rice ban

By Joe Leahy in Mumbai and Amy Yee in New Delhi

Published: June 1 2008 18:36 | Last updated: June 1 2008 18:36

India is facing growing pressure from African countries to exempt them from export bans on rice implemented by New Delhi to curb domestic food price inflation.

The pressure illustrates how efforts by large producers such as India to control a sharp rise in food costs are hurting poor nations and giving rise to a form of rice diplomacy.

“I have a minister from Mali [here],” said Kamal Nath, India’s commerce and industries minister, in an interview with the Financial Times. “They are traditional buyers of rice so when we banned the export of our cheaper medium-quality rice, they [were] in trouble.”

Global food prices are expected to remain high over the next decade, spelling hardship for millions of the world’s poorest, the United Nations’ Food and Agriculture Organisation and the Organisation for Economic Co-operation and Development said in a report last week.

Mr Nath said India had already allowed some exports to Sierra Leone and would consider other exemptions for Africa. “We will have some carve-out to African countries depending on our own current production,” he said.

He did not give details but there is speculation that India may eventually export about 2m tonnes of rice to the least developed African countries as well as some neighbouring nations, including Bangladesh, Nepal and Bhutan.

The move fits with India’s growing diplomatic efforts to woo African nations and counter China’s rising influence in the resource-rich continent.

India’s economy continues to grow strongly, reaching a rate of 9 per cent in the last fiscal year, according to government figures released on Friday.

The new report predicted growth of 8.5 per cent this year but the rising cost of fuel has contributed to a sharp jump in inflation. In the 12 months ended May 17, it reached 8.1 per cent, a 3½-year high and well above the central bank’s target of less than 5.5 per cent.

Mr Nath said the price of imported cooking oil and lentils had more than doubled “not because of India-supply stress but international supply-side stress”.

He said: “We have no shortage of rice and wheat. Our buffer stocks are adequate. Our production has not been reduced. Food prices are driven to a large extent by sentiment and not merely by supply and demand.”

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Why free markets have little to do with inequality

By Philip Whyte

Published: June 1 2008 19:27 | Last updated: June 1 2008 19:27

Many Europeans believe liberal economic reforms are incompatible with social justice. The US and the UK, they point out, have more liberal markets for products and labour than in continental Europe – but also higher levels of poverty and income inequality. European countries therefore face a choice. They can either free their product and labour markets and accept the downsides or they can protect social solidarity by resisting Anglo-American neo-liberalism.

But the belief that market liberalisation increases social inequalities is not borne out by the evidence. The UK certainly has higher levels of poverty and inequality than France or Germany. But pointing this out is just selective use of evidence to support a predetermined conclusion. If there were a strong correlation between levels of market liberalisation and social outcomes, one would expect to see the pattern replicated across the European Union – not just in a carefully selected group of countries.

Is such a pattern discernible? No. The nation with the lowest levels of poverty and income inequality in the EU, as well as the lowest rate of long-term unemployment, is Denmark – a country with competitive product markets and some of the least restrictive labour laws. Countries with the worst social outcomes (Greece, Italy and Portugal) all have restrictive product and labour market laws. Liberalisation, it seems, no more threatens social justice than regulation guarantees it.

So what explains these differences in social outcomes? The answer, one might think, must be differences in spending by governments. Social spending is certainly high in egalitarian countries such as the Nordics. But it is just as high in France, where social inequalities are more marked. Likewise, it is as high in the supposedly heartless UK as it is in the egalitarian Netherlands. Contrary to popular belief, the UK is not governed by a callous minimal state.

The reason the Nordics and the Dutch have the most egalitarian outcomes is that they provide the best education. The correlation between educational and social outcomes across the EU is striking. People with low levels of attainment at secondary education are most exposed to the risk of poverty. Moreover, the more educated people are, the more likely they are to be in work: the employment rate for Europeans with tertiary education is 80 per cent, whereas it is just 50 per cent for those who fail to complete their secondary education.

What makes Nordic education systems special? Partly, it is quality: 15-year-olds in northern Europe have higher literacy and numeracy levels than those in southern Europe. But the length of schooling is equally important. In Denmark, Finland and Sweden, 90 per cent of 25- to 34-year-olds have completed upper secondary education – and 40 per cent have gone on to obtain tertiary qualifications. In Portugal, the respective figures are 43 per cent and 19 per cent, while in Greece they are 57 per cent and 25 per cent.

How about the UK? Public spending on education is just under 6 per cent of gross domestic product – around the EU average. The results are mixed. Studies by the Organisation for Economic Co-operation and Development show that levels of literacy and numeracy among 15-year-olds are about the same as in Germany (and higher than in France). Many international studies, moreover, rank British universities as the best in Europe. So what is the problem? The answer is that one in four children leave school before completing upper secondary education – a much higher share than the EU average.

In short, inequality in the UK seems to have more to do with high drop-out rates from upper secondary education than with the country’s privatised rail system, liberal labour laws or levels of social transfers. If this analysis is correct, it suggests that the British government faces an uphill task trying to reduce inequalities through the tax and benefits system. It also suggests that countries in which drop-out rates are high are the most exposed to increases in income inequality resulting from globalisation and technological change.

Education has long been an important determinant of countries’ wealth. As China and India become more integrated in the world economy and the international division of labour proceeds apace, it is also having an increasingly important influence on social cohesion. The European countries most at risk of rising social inequalities are those with underperforming education systems.

The writer is a senior research fellow at the Centre for European Reform

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Farmers plough back benefits from milk prices

By Michael Kavanagh

Published: June 2 2008 02:55 | Last updated: June 2 2008 02:55

Even as demonstrations by dairy farmers raged across Europe last week in protest at the poor prices received for milk, the situation in northern England was one of relative bucolic calm.

During the past few months, farmers in the region have been reaping the benefits of an improvement in prices secured for milk production that has allowed them to return to levels of income not seen since the overlapping disasters of the BSE, or “mad-cow disease”, epidemic and the subsequent outbreak of foot-and-mouth disease.

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１人あたり現金給与、0.6％増　勤労統計

　厚生労働省が2日発表した4月の毎月勤労統計調査（速報、従業員5人以上）によると、すべての給与を合わせた現金給与総額は1人あたり平均で前年同月比 0.6％増の28万1246円となった。増加は4カ月連続。基本給を示す所定内給与も同0.5％増え、25万2899円と6カ月連続で増えた。

　雇用者数は前年同月比1.7％増の4487万3000人。4年4カ月連続で前年同月を上回った。このうち正社員を中心にしたフルタイム社員の数は同 2.0％増。3カ月連続で2％を上回る高い伸びとなった。パート社員の数は0.8％増。賃金水準の比較的高い正社員が増えたことが全体の賃金水準を押し上げる要因になった。

　総労働時間は154.5時間で前月比横ばい。残業時間を示す所定外労働時間は0.8％減の11.3時間だった。

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「消費減らす」が43％、今後1年　内閣府外郭団体調査

　物価上昇への懸念から消費者の節約指向が一段と強まっている。内閣府の外郭団体、日本リサーチ総合研究所が実施した「今後1年の消費と貯蓄の見通し」の調査結果によると、今後1年間の消費支出を「減るまたは節約したい」とした回答は43.5％と、「増えるまたは充実させたい」（19.9％）の約2倍となった。

　同研究所は「所得が伸び悩むなかで生活必需品の値上げが相次ぎ、家計への圧迫感は厳しさを増している」とみている。消費支出が減る・節約したいと答えた人の割合は、昨年10月の前回調査（40.4％）も上回った。