Jump start

China plans to dominate the electric-car market


Three years ago, the Chinese government unveiled policies to propel sales of all-electric vehicles (ie, ones that can’t use petrol at all) to 500,000 by 2015 and 5m by 2020. But barely 8,000 electric cars were sold last year. Almost all of them went to government fleets. Despite lavish subsidies—in Shenzhen, consumers were offered 120,000 yuan per vehicle—electric cars still cost more than the petrol-powered sort. The lack of recharging stations also hurts. McKinsey, a consultancy, argues that the Chinese government overreached by pushing for a leap straight to all-electric cars. It reckons China has fallen from third place to fifth in the global electric-car race (it lags even America), but can get back on track by supporting plug-in hybrids as a bridging technology.

Jump start

China plans to dominate the electric-car market


Three years ago, the Chinese government unveiled policies to propel sales of all-electric vehicles (ie, ones that can’t use petrol at all) to 500,000 by 2015 and 5m by 2020. But barely 8,000 electric cars were sold last year. Almost all of them went to government fleets. Despite lavish subsidies—in Shenzhen, consumers were offered 120,000 yuan per vehicle—electric cars still cost more than the petrol-powered sort. The lack of recharging stations also hurts. McKinsey, a consultancy, argues that the Chinese government overreached by pushing for a leap straight to all-electric cars. It reckons China has fallen from third place to fifth in the global electric-car race (it lags even America), but can get back on track by supporting plug-in hybrids as a bridging technology.

(Source: economist.com)

@1 year ago with 1 note
#the economist #the economist daily chart 

Poverty, inequality and redistribution

Governments can reduce poverty and inequality through taxes and cash transfers. Successful programmes such as Progresa-Oportunidades in Mexico and Bolsa Família in Brazil have helped reduce poverty and inequality in the last couple of decades, but compared with rich countries, Latin American countries still fall short. According to a new report by the OECD, a club of mostly rich countries, Chile is the group’s most unequal member. It also finished third from the bottom, ahead only of Mexico and Israel, in relative poverty, measured by the share of the population earning less than half the median income. (Brazil fares even worse in both categories, but is not part of the OECD). Government spending on health, education and social policies is low, around 16% of GDP; the OECD average is around 27%. While the government has introduced Ingreso Ético Familiar, the new cash transfer programme only targets the extreme poor. More efficient and progressive taxes would raise revenues and reduce inequality. Tax evasion by corporations and individuals alone is estimated to cost the government some 2.5% of GDP. Chile’s economy grew by 6.6% last year, but will slow to around 4% this year. Better job opportunities and higher quality education are needed to improve labour productivity and boost growth.



Correction: An earlier version of the text said government social spending was much higher, this was in fact total spending. This was corrected on January 17th 2012.

(Source: economist.com)

@2 years ago
#The Economist #The Economist Daily Chart 
Shoot ‘em up

Video games will be the fastest-growing form of media


OVER the past two decades the video-games business has gone from a cottage industry selling to a few niche customers to a fully grown branch of the entertainment industry. According to PricewaterhouseCoopers (PwC), a consulting firm, the global video-game market was worth around $56 billion last year, and has grown by over 60% since 2006, when the Nintendo Wii console was launched. The gaming industry is more than twice the size of the recorded-music industry, nearly a quarter more than the magazine business and about three-fifths the size of the film industry. PwC predicts that video games will be the fastest-growing form of media over the next few years, with sales rising to $82 billion by 2015. The biggest market is America, whose consumers this year are expected to spend $14.1 billion on games, mostly on the console variety. Consoles also dominate in Britain, the fifth-largest gaming market. In other parts of Europe, and particularly Germany, PC games are more popular. China has overtaken Japan to become the second-biggest market, and  is one of the fastest-growing, with sales rising by 20% last year.  

Shoot ‘em up

Video games will be the fastest-growing form of media


OVER the past two decades the video-games business has gone from a cottage industry selling to a few niche customers to a fully grown branch of the entertainment industry. According to PricewaterhouseCoopers (PwC), a consulting firm, the global video-game market was worth around $56 billion last year, and has grown by over 60% since 2006, when the Nintendo Wii console was launched. The gaming industry is more than twice the size of the recorded-music industry, nearly a quarter more than the magazine business and about three-fifths the size of the film industry. PwC predicts that video games will be the fastest-growing form of media over the next few years, with sales rising to $82 billion by 2015. The biggest market is America, whose consumers this year are expected to spend $14.1 billion on games, mostly on the console variety. Consoles also dominate in Britain, the fifth-largest gaming market. In other parts of Europe, and particularly Germany, PC games are more popular. China has overtaken Japan to become the second-biggest market, and  is one of the fastest-growing, with sales rising by 20% last year.  

(Source: economist.com)

@2 years ago
#the economist #the economist daily chart 
Energy: The dirty, clean Czech Republic


Since 1990, the Czech Republic has reduced its greenhouse gas emissions by over 30%, far exceeding the Kyoto Protocol target of 8%, according to a recent country report by the OECD. But its emission intensity, (the level of emissions per unit of economic output) is one of the highest among the mostly rich-country group of the OECD. The country’s primary energy supply is coal, which helps explain its high carbon emissions. But unlike any of the other carbon-intense economies, the Czech Republic also uses nuclear power. This explains why it has been able to do so well against Kyoto targets, despite also having lots of old coal-fired plants (they had an average age of 50 in 2009).

Energy: The dirty, clean Czech Republic


Since 1990, the Czech Republic has reduced its greenhouse gas emissions by over 30%, far exceeding the Kyoto Protocol target of 8%, according to a recent country report by the OECD. But its emission intensity, (the level of emissions per unit of economic output) is one of the highest among the mostly rich-country group of the OECD. The country’s primary energy supply is coal, which helps explain its high carbon emissions. But unlike any of the other carbon-intense economies, the Czech Republic also uses nuclear power. This explains why it has been able to do so well against Kyoto targets, despite also having lots of old coal-fired plants (they had an average age of 50 in 2009).

(Source: economist.com)

@2 years ago
#The economist #the economist daily chart 
Incomes: Inequality street

Income inequality is rising in rich countries


THE gap between rich and poor has grown ever wider in wealthy countries over the past three decades. A new report by the OECD has reams of data on this phenomenon and is well worth looking at. The Gini coefficient, a measure of inequality in which zero corresponds to everyone having the same income and one means the richest person has all the income, increased by almost 10% from 0.29 in 1985 to 0.32 in 2008, for working-age people in OECD countries. The trend is caused by earnings: the pay of the richest 10% of employees has increased at a far greater rate than that of the poorest 10% of employees. Within the upper echelons, the top 1% have reaped the greatest gains. Technology has disproportionately benefited high-earning workers, who also spend far longer at work than do low-earners. High earners marry other high earners. And governments are doing less to redistribute wealth than they have done in the past. So far, so familiar. But the report also argues that globalisation is not a significant cause of inequality, and that one of the many reasons for the rise in income inequality is that more people are in work now (or at least they were before the financial crisis hit) compared with the 1970s.

Incomes: Inequality street

Income inequality is rising in rich countries


THE gap between rich and poor has grown ever wider in wealthy countries over the past three decades. A new report by the OECD has reams of data on this phenomenon and is well worth looking at. The Gini coefficient, a measure of inequality in which zero corresponds to everyone having the same income and one means the richest person has all the income, increased by almost 10% from 0.29 in 1985 to 0.32 in 2008, for working-age people in OECD countries. The trend is caused by earnings: the pay of the richest 10% of employees has increased at a far greater rate than that of the poorest 10% of employees. Within the upper echelons, the top 1% have reaped the greatest gains. Technology has disproportionately benefited high-earning workers, who also spend far longer at work than do low-earners. High earners marry other high earners. And governments are doing less to redistribute wealth than they have done in the past. So far, so familiar. But the report also argues that globalisation is not a significant cause of inequality, and that one of the many reasons for the rise in income inequality is that more people are in work now (or at least they were before the financial crisis hit) compared with the 1970s.

(Source: economist.com)

@2 years ago
#The economist #the economist daily chart 
US birth rates: Baby bust

The birth rate for teenagers in America falls to a record low


JUST over 4m babies were born in America in 2010, some 3% less than the previous year, according to a recent report from the Centres for Disease Control and Prevention. In 2010 the total fertility rate of 1,932 births per 1,000 women fell further below the replacement rate of 2,100 births for the third year running. The slowdown of the economy and immigrants returning home are thought to help explain this. The birth rate decreased in women of all ethnic groups, and women aged 40-44 were the only age group that had more babies in 2010 than in 2009. Meanwhile, the birth rate for teenagers aged 15-19 continues to fall. Last year it reached a record low of 34.3 births per 1,000 females, a decline of 9% and the largest annual drop since 1946-47. The birth rate for even younger girls between 10 and 14 (not shown on the chart) has also fallen steadily, from 1.4 in 1990 to 0.4 in 2010. 

US birth rates: Baby bust

The birth rate for teenagers in America falls to a record low


JUST over 4m babies were born in America in 2010, some 3% less than the previous year, according to a recent report from the Centres for Disease Control and Prevention. In 2010 the total fertility rate of 1,932 births per 1,000 women fell further below the replacement rate of 2,100 births for the third year running. The slowdown of the economy and immigrants returning home are thought to help explain this. The birth rate decreased in women of all ethnic groups, and women aged 40-44 were the only age group that had more babies in 2010 than in 2009. Meanwhile, the birth rate for teenagers aged 15-19 continues to fall. Last year it reached a record low of 34.3 births per 1,000 females, a decline of 9% and the largest annual drop since 1946-47. The birth rate for even younger girls between 10 and 14 (not shown on the chart) has also fallen steadily, from 1.4 in 1990 to 0.4 in 2010. 

(Source: economist.com)

@2 years ago
#The economist #the economist daily chart 
Comparing India and China: Chasing the dragon

How the Asian superpowers compare on various measures of development


IN THE recent Singapore Grand Prix, a car belonging to the Force India team reached the finish line just 111 seconds after the leader. Today’s chart uses a stopwatch to compare India’s progress in development against another pace-setter, China. The chart shows the number of years that have elapsed since China passed the development milestones that India has now reached. India’s income per head, for example, was about $3,200 in 2009 (holding purchasing power constant across time and between countries). China reached that level of development nine years ago. The lag in social progress is much longer. A child’s odds of surviving past their fifth birthday are as bad in India today as they were in China in the 1970s. Moreover, the chart does not necessarily imply that India in nine years’ time will be as rich as China is today. That is because China grew faster in the last nine years than India is likely to grow over the next nine. We stopped the clock at $3200 per head. But China did not stop racing ahead.

Comparing India and China: Chasing the dragon

How the Asian superpowers compare on various measures of development


IN THE recent Singapore Grand Prix, a car belonging to the Force India team reached the finish line just 111 seconds after the leader. Today’s chart uses a stopwatch to compare India’s progress in development against another pace-setter, China. The chart shows the number of years that have elapsed since China passed the development milestones that India has now reached. India’s income per head, for example, was about $3,200 in 2009 (holding purchasing power constant across time and between countries). China reached that level of development nine years ago. The lag in social progress is much longer. A child’s odds of surviving past their fifth birthday are as bad in India today as they were in China in the 1970s. Moreover, the chart does not necessarily imply that India in nine years’ time will be as rich as China is today. That is because China grew faster in the last nine years than India is likely to grow over the next nine. We stopped the clock at $3200 per head. But China did not stop racing ahead.

(Source: economist.com)

@2 years ago
#the economist #the economist daily chart 
European bail-outs: Pay pals

Who’s paying for the euro-area bail-out?


PORTUGAL’S bail-out means another stage in Europe’s debt crisis and another call on non-European coffers. The total €865 billion ($1.2 trillion) pot available for euro-area rescues looks enormous, more than enough to cope with Greece, Ireland and Portugal’s anticipated needs besides. Almost half of that comes from the European Financial Stability Facility, a €440 billion euro-zone fund whose major contributors are Germany, France and Italy. But the EFSF’s effective lending capacity is only €250 billion, because only six of its 17 members have a AAA credit rating. European leaders have pledged to bring the fund’s actual firepower up to €440 billion by the summer but in the meantime the IMF has more cash on hand, at €280 billion. If all that money were used (a very big if), America would end up lending indebted euro-zone nations €50 billion.

European bail-outs: Pay pals

Who’s paying for the euro-area bail-out?


PORTUGAL’S bail-out means another stage in Europe’s debt crisis and another call on non-European coffers. The total €865 billion ($1.2 trillion) pot available for euro-area rescues looks enormous, more than enough to cope with Greece, Ireland and Portugal’s anticipated needs besides. Almost half of that comes from the European Financial Stability Facility, a €440 billion euro-zone fund whose major contributors are Germany, France and Italy. But the EFSF’s effective lending capacity is only €250 billion, because only six of its 17 members have a AAA credit rating. European leaders have pledged to bring the fund’s actual firepower up to €440 billion by the summer but in the meantime the IMF has more cash on hand, at €280 billion. If all that money were used (a very big if), America would end up lending indebted euro-zone nations €50 billion.

(Source: economist.com)

@3 years ago
#The economist #the economist daily chart 

The bank of SMS: Banking on the move in Africa

AFRICA is the continent where “mobile money”—monetary transactions on mobile phones—is by far the most advanced. According to a new survey of financial habits by the Gates Foundation, the World Bank and Gallup, in 20 countries more than 10% of adults said that they had used mobile money at some point in the previous 12 months; 15 of those countries were in Africa. For the most part, mobile phones are a substitute for traditional banks, enabling people who live miles from a branch or ATM to use financial services. This is especially important in a country like Somalia, which lacks a functioning government but where 34% of adults use mobile money (often to receive remittances from family members abroad). But sometimes, mobile banking seems to go hand in hand with the spread of traditional banking. In Kenya, where a staggering 68% of adults use mobile money (by far the highest rate in the world), half also have paper-based bank accounts.

(Source: economist.com)

@2 years ago with 1 note
#the economist #The Economist Daily Chart 

Russia’s economy

Despite not seeing double-digit economic growth for over ten years, and been hit hard by the recession in 2009, Russia has had an average annual growth rate since 2000 of over 5%. And according to the OECD, a mostly rich-country think-tank, Russia’s economy will expand by 4% this year and next. While inflation is set to be over 8% this year, high for a middle-income country, at the beginning of the 2000s, it was over 20%. The unemployment rate has followed a similar pattern and is now below the OECD average. Labour force participation rates are also high. But perhaps Russia’s most striking achievement is its fiscal performance. In contrast to persistent budget deficits in the 1990s, up until recently Russia enjoyed a series of surpluses, thanks to high and rising oil prices, economic growth, fiscal reform and prudent management. Revenues from oil and gas, which by 2008 accounted for a third of all government revenues (some $200 billion), were used to repay external debt and build up assets in a stabilisation fund, which was recently used to inject a fiscal stimulus. But Russia’s budget balance is dependent on the oil price. Strip oil out and its public finances have been deteriorating since 2005. Reducing the public budget’s dependence on oil revenues would further modernise its economy. The OECD would also like to see a more business-friendly environment and effective social policies to reduce income inequality.


(Source: economist.com)

@2 years ago
#the economist #The Economist Daily Chart 
This time we really mean it

Very few euro-area countries have observed the agreed budget-deficit limit in recent years


EUROPEAN Union leaders are heading to Brussels for a showdown with the dread beast Merkozy. The German chancellor and the French president are seeking to rewrite the compact at the heart of the euro zone to ensure that the fiscally feckless can never again threaten the currency’s stability. The pair want euro members to reduce their annual budget deficits to no more than 3% of GDP, and they want each of them to write German-style “debt brakes” into their constitution to make such limits legally binding. Ne’er-do-wells will face the wrath of the European Commission.

Not everyone agrees with this approach. Some sniff hypocrisy: in the early years of the euro both France and Germany flouted the 3% deficit limit of the Stability and Growth Pact, which aimed to bind euro countries to the so-called “Maastricht criteria” designed to keep members in fiscal shape. Others point out that fiscal waywardness was not the main cause of the crisis: Spain and Ireland, two of the most troubled countries today, ran budget surpluses in 2007. Others still fear that too much belt-tightening now will throttle growth; as the chart below shows, many euro-zone countries are a long way off the 3% limit. But Merkozy’s critics will face a formidable adversary.

This time we really mean it

Very few euro-area countries have observed the agreed budget-deficit limit in recent years


EUROPEAN Union leaders are heading to Brussels for a showdown with the dread beast Merkozy. The German chancellor and the French president are seeking to rewrite the compact at the heart of the euro zone to ensure that the fiscally feckless can never again threaten the currency’s stability. The pair want euro members to reduce their annual budget deficits to no more than 3% of GDP, and they want each of them to write German-style “debt brakes” into their constitution to make such limits legally binding. Ne’er-do-wells will face the wrath of the European Commission.

Not everyone agrees with this approach. Some sniff hypocrisy: in the early years of the euro both France and Germany flouted the 3% deficit limit of the Stability and Growth Pact, which aimed to bind euro countries to the so-called “Maastricht criteria” designed to keep members in fiscal shape. Others point out that fiscal waywardness was not the main cause of the crisis: Spain and Ireland, two of the most troubled countries today, ran budget surpluses in 2007. Others still fear that too much belt-tightening now will throttle growth; as the chart below shows, many euro-zone countries are a long way off the 3% limit. But Merkozy’s critics will face a formidable adversary.

(Source: economist.com)

@2 years ago
#The economist #the economist daily chart 

Incomes: Inequality street

Income inequality is rising in rich countries

THE gap between rich and poor has grown ever wider in wealthy countries over the past three decades. A new report by the OECD has reams of data on this phenomenon and is well worth looking at. The Gini coefficient, a measure of inequality in which zero corresponds to everyone having the same income and one means the richest person has all the income, increased by almost 10% from 0.29 in 1985 to 0.32 in 2008, for working-age people in OECD countries. The trend is caused by earnings: the pay of the richest 10% of employees has increased at a far greater rate than that of the poorest 10% of employees. Within the upper echelons, the top 1% have reaped the greatest gains. Technology has disproportionately benefited high-earning workers, who also spend far longer at work than do low-earners. High earners marry other high earners. And governments are doing less to redistribute wealth than they have done in the past. So far, so familiar. But the report also argues that globalisation is not a significant cause of inequality, and that one of the many reasons for the rise in income inequality is that more people are in work now (or at least they were before the financial crisis hit) compared with the 1970s.

(Source: economist.com)

@2 years ago with 1 note
#the economist #The Economist Daily Chart 

Corruption and development: Corrosive corruption

A correlation between corruption and development

THE use of public office for private gain benefits a powerful few while imposing costs on large swathes of society. Transparency International’s annual Corruption Perceptions Index, published on December 1st, measures the perceived levels of public-sector graft by aggregating independent surveys from across the globe. Just five non-OECD countries make the top 25: Singapore, Hong Kong, Barbados, Bahamas and Qatar. The bottom is formed mainly of failed states, poor African countries and nations that either were once communist (Turkmenistan) or are still run along similar lines (Venezuela, Cuba). Comparing the corruption index with the UN’s Human Development Index (a measure combining health, wealth and education), demonstrates an interesting connection. When the corruption index is between approximately 2.0 and 4.0 there appears to be little relationship with the human development index, but as it rises beyond 4.0 a stronger connection can be seen. Outliers include small but well-run poorer countries such as Bhutan and Cape Verde, while Greece and Italy stand out among the richer countries. 

(Source: economist.com)

@2 years ago
#the economist #The Economist Daily Chart 
Financial markets: Déjà vu

Bank share prices are close to their 2008-09 lows 


WILD gyrations in stockmarkets; banks’ share prices falling like stones; politicians stepping in to back-stop lenders for fear of collapse. The echoes of 2008 are alarming. Morgan Stanley is one of the big casualties: fears apparently caused by its exposure to European assets led its share price to fall by 17% over the past two days of trading. You have to go back to December 3rd 2008 to find the last time the bank’s stock closed at the same price as it did on October 3rd, even if it still sits 36% above its 2008 nadir. A French bank, Société Générale, has already breached its 2009 low, hitting €15.31 in late September, although it has bounced back by 24% since then. Bank stocks may now be approaching levels seen in the depths of the financial crisis but broader stockmarket indices still have a long way to go to reach that mark. That won’t last if the banks get into real difficulties.

CORRECTION: An earlier version of this chart overstated the share prices of the British banks by a factor of 100. This was corrected on October 5th 2011. Sorry. 

Financial markets: Déjà vu

Bank share prices are close to their 2008-09 lows 


WILD gyrations in stockmarkets; banks’ share prices falling like stones; politicians stepping in to back-stop lenders for fear of collapse. The echoes of 2008 are alarming. Morgan Stanley is one of the big casualties: fears apparently caused by its exposure to European assets led its share price to fall by 17% over the past two days of trading. You have to go back to December 3rd 2008 to find the last time the bank’s stock closed at the same price as it did on October 3rd, even if it still sits 36% above its 2008 nadir. A French bank, Société Générale, has already breached its 2009 low, hitting €15.31 in late September, although it has bounced back by 24% since then. Bank stocks may now be approaching levels seen in the depths of the financial crisis but broader stockmarket indices still have a long way to go to reach that mark. That won’t last if the banks get into real difficulties.

CORRECTION: An earlier version of this chart overstated the share prices of the British banks by a factor of 100. This was corrected on October 5th 2011. Sorry. 

(Source: economist.com)

@2 years ago with 1 note
#the economist #The economist daily chart 
Emerging-market currencies: Retreat!

The emerging markets are winning the currency war


A YEAR ago Brazil’s finance minister, Guido Mantega, declared that the world had entered into a “currency war”. He worried that in a depressed global economy, without enough spending to go around, countries would sally forth and grab a bit of extra demand for themselves by weakening their currencies. The dollar, for example, fell by 11% against Brazil’s real in the year to August 2011. Like other emerging economies, Brazil fought back by imposing taxes and other restrictions on foreign purchases of local securities. But the invasion of foreign capital that so worried Mr Mantega has now turned into a shambolic retreat. The outflows have dragged down the exchange rates of almost every emerging economy since the beginning of August. Having spent much of the past year fretting about their currencies’ rise, central banks across the emerging world have now intervened in the markets to slow their currencies’ fall. In a currency war, where each side fights to gain competitiveness against the others, these tumbling exchange rates presumably count as victories. But they are Pyrrhic. A cheaper real, zloty and rupee will help emerging economies win a bigger share of global spending, but that is small consolation if global spending declines.

Emerging-market currencies: Retreat!

The emerging markets are winning the currency war


A YEAR ago Brazil’s finance minister, Guido Mantega, declared that the world had entered into a “currency war”. He worried that in a depressed global economy, without enough spending to go around, countries would sally forth and grab a bit of extra demand for themselves by weakening their currencies. The dollar, for example, fell by 11% against Brazil’s real in the year to August 2011. Like other emerging economies, Brazil fought back by imposing taxes and other restrictions on foreign purchases of local securities. But the invasion of foreign capital that so worried Mr Mantega has now turned into a shambolic retreat. The outflows have dragged down the exchange rates of almost every emerging economy since the beginning of August. Having spent much of the past year fretting about their currencies’ rise, central banks across the emerging world have now intervened in the markets to slow their currencies’ fall. In a currency war, where each side fights to gain competitiveness against the others, these tumbling exchange rates presumably count as victories. But they are Pyrrhic. A cheaper real, zloty and rupee will help emerging economies win a bigger share of global spending, but that is small consolation if global spending declines.

(Source: economist.com)

@2 years ago
#the economist #the economist daily chart 
Jump start

China plans to dominate the electric-car market


Three years ago, the Chinese government unveiled policies to propel sales of all-electric vehicles (ie, ones that can’t use petrol at all) to 500,000 by 2015 and 5m by 2020. But barely 8,000 electric cars were sold last year. Almost all of them went to government fleets. Despite lavish subsidies—in Shenzhen, consumers were offered 120,000 yuan per vehicle—electric cars still cost more than the petrol-powered sort. The lack of recharging stations also hurts. McKinsey, a consultancy, argues that the Chinese government overreached by pushing for a leap straight to all-electric cars. It reckons China has fallen from third place to fifth in the global electric-car race (it lags even America), but can get back on track by supporting plug-in hybrids as a bridging technology.
1 year ago
#the economist #the economist daily chart 
The bank of SMS: Banking on the move in Africa

AFRICA is the continent where “mobile money”—monetary transactions on mobile phones—is by far the most advanced. According to a new survey of financial habits by the Gates Foundation, the World Bank and Gallup, in 20 countries more than 10% of adults said that they had used mobile money at some point in the previous 12 months; 15 of those countries were in Africa. For the most part, mobile phones are a substitute for traditional banks, enabling people who live miles from a branch or ATM to use financial services. This is especially important in a country like Somalia, which lacks a functioning government but where 34% of adults use mobile money (often to receive remittances from family members abroad). But sometimes, mobile banking seems to go hand in hand with the spread of traditional banking. In Kenya, where a staggering 68% of adults use mobile money (by far the highest rate in the world), half also have paper-based bank accounts.

(Source: economist.com)

2 years ago
#the economist #The Economist Daily Chart 
Poverty, inequality and redistribution

Governments can reduce poverty and inequality through taxes and cash transfers. Successful programmes such as Progresa-Oportunidades in Mexico and Bolsa Família in Brazil have helped reduce poverty and inequality in the last couple of decades, but compared with rich countries, Latin American countries still fall short. According to a new report by the OECD, a club of mostly rich countries, Chile is the group’s most unequal member. It also finished third from the bottom, ahead only of Mexico and Israel, in relative poverty, measured by the share of the population earning less than half the median income. (Brazil fares even worse in both categories, but is not part of the OECD). Government spending on health, education and social policies is low, around 16% of GDP; the OECD average is around 27%. While the government has introduced Ingreso Ético Familiar, the new cash transfer programme only targets the extreme poor. More efficient and progressive taxes would raise revenues and reduce inequality. Tax evasion by corporations and individuals alone is estimated to cost the government some 2.5% of GDP. Chile’s economy grew by 6.6% last year, but will slow to around 4% this year. Better job opportunities and higher quality education are needed to improve labour productivity and boost growth.



Correction: An earlier version of the text said government social spending was much higher, this was in fact total spending. This was corrected on January 17th 2012.

(Source: economist.com)

2 years ago
#The Economist #The Economist Daily Chart 
Russia’s economy

Despite not seeing double-digit economic growth for over ten years, and been hit hard by the recession in 2009, Russia has had an average annual growth rate since 2000 of over 5%. And according to the OECD, a mostly rich-country think-tank, Russia’s economy will expand by 4% this year and next. While inflation is set to be over 8% this year, high for a middle-income country, at the beginning of the 2000s, it was over 20%. The unemployment rate has followed a similar pattern and is now below the OECD average. Labour force participation rates are also high. But perhaps Russia’s most striking achievement is its fiscal performance. In contrast to persistent budget deficits in the 1990s, up until recently Russia enjoyed a series of surpluses, thanks to high and rising oil prices, economic growth, fiscal reform and prudent management. Revenues from oil and gas, which by 2008 accounted for a third of all government revenues (some $200 billion), were used to repay external debt and build up assets in a stabilisation fund, which was recently used to inject a fiscal stimulus. But Russia’s budget balance is dependent on the oil price. Strip oil out and its public finances have been deteriorating since 2005. Reducing the public budget’s dependence on oil revenues would further modernise its economy. The OECD would also like to see a more business-friendly environment and effective social policies to reduce income inequality.


(Source: economist.com)

2 years ago
#the economist #The Economist Daily Chart 
Shoot ‘em up

Video games will be the fastest-growing form of media


OVER the past two decades the video-games business has gone from a cottage industry selling to a few niche customers to a fully grown branch of the entertainment industry. According to PricewaterhouseCoopers (PwC), a consulting firm, the global video-game market was worth around $56 billion last year, and has grown by over 60% since 2006, when the Nintendo Wii console was launched. The gaming industry is more than twice the size of the recorded-music industry, nearly a quarter more than the magazine business and about three-fifths the size of the film industry. PwC predicts that video games will be the fastest-growing form of media over the next few years, with sales rising to $82 billion by 2015. The biggest market is America, whose consumers this year are expected to spend $14.1 billion on games, mostly on the console variety. Consoles also dominate in Britain, the fifth-largest gaming market. In other parts of Europe, and particularly Germany, PC games are more popular. China has overtaken Japan to become the second-biggest market, and  is one of the fastest-growing, with sales rising by 20% last year.  
2 years ago
#the economist #the economist daily chart 
This time we really mean it

Very few euro-area countries have observed the agreed budget-deficit limit in recent years


EUROPEAN Union leaders are heading to Brussels for a showdown with the dread beast Merkozy. The German chancellor and the French president are seeking to rewrite the compact at the heart of the euro zone to ensure that the fiscally feckless can never again threaten the currency’s stability. The pair want euro members to reduce their annual budget deficits to no more than 3% of GDP, and they want each of them to write German-style “debt brakes” into their constitution to make such limits legally binding. Ne’er-do-wells will face the wrath of the European Commission.

Not everyone agrees with this approach. Some sniff hypocrisy: in the early years of the euro both France and Germany flouted the 3% deficit limit of the Stability and Growth Pact, which aimed to bind euro countries to the so-called “Maastricht criteria” designed to keep members in fiscal shape. Others point out that fiscal waywardness was not the main cause of the crisis: Spain and Ireland, two of the most troubled countries today, ran budget surpluses in 2007. Others still fear that too much belt-tightening now will throttle growth; as the chart below shows, many euro-zone countries are a long way off the 3% limit. But Merkozy’s critics will face a formidable adversary.
2 years ago
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Energy: The dirty, clean Czech Republic


Since 1990, the Czech Republic has reduced its greenhouse gas emissions by over 30%, far exceeding the Kyoto Protocol target of 8%, according to a recent country report by the OECD. But its emission intensity, (the level of emissions per unit of economic output) is one of the highest among the mostly rich-country group of the OECD. The country’s primary energy supply is coal, which helps explain its high carbon emissions. But unlike any of the other carbon-intense economies, the Czech Republic also uses nuclear power. This explains why it has been able to do so well against Kyoto targets, despite also having lots of old coal-fired plants (they had an average age of 50 in 2009).
2 years ago
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Incomes: Inequality street

Income inequality is rising in rich countries

THE gap between rich and poor has grown ever wider in wealthy countries over the past three decades. A new report by the OECD has reams of data on this phenomenon and is well worth looking at. The Gini coefficient, a measure of inequality in which zero corresponds to everyone having the same income and one means the richest person has all the income, increased by almost 10% from 0.29 in 1985 to 0.32 in 2008, for working-age people in OECD countries. The trend is caused by earnings: the pay of the richest 10% of employees has increased at a far greater rate than that of the poorest 10% of employees. Within the upper echelons, the top 1% have reaped the greatest gains. Technology has disproportionately benefited high-earning workers, who also spend far longer at work than do low-earners. High earners marry other high earners. And governments are doing less to redistribute wealth than they have done in the past. So far, so familiar. But the report also argues that globalisation is not a significant cause of inequality, and that one of the many reasons for the rise in income inequality is that more people are in work now (or at least they were before the financial crisis hit) compared with the 1970s.

(Source: economist.com)

2 years ago
#the economist #The Economist Daily Chart 
Incomes: Inequality street

Income inequality is rising in rich countries


THE gap between rich and poor has grown ever wider in wealthy countries over the past three decades. A new report by the OECD has reams of data on this phenomenon and is well worth looking at. The Gini coefficient, a measure of inequality in which zero corresponds to everyone having the same income and one means the richest person has all the income, increased by almost 10% from 0.29 in 1985 to 0.32 in 2008, for working-age people in OECD countries. The trend is caused by earnings: the pay of the richest 10% of employees has increased at a far greater rate than that of the poorest 10% of employees. Within the upper echelons, the top 1% have reaped the greatest gains. Technology has disproportionately benefited high-earning workers, who also spend far longer at work than do low-earners. High earners marry other high earners. And governments are doing less to redistribute wealth than they have done in the past. So far, so familiar. But the report also argues that globalisation is not a significant cause of inequality, and that one of the many reasons for the rise in income inequality is that more people are in work now (or at least they were before the financial crisis hit) compared with the 1970s.
2 years ago
#The economist #the economist daily chart 
Corruption and development: Corrosive corruption

A correlation between corruption and development

THE use of public office for private gain benefits a powerful few while imposing costs on large swathes of society. Transparency International’s annual Corruption Perceptions Index, published on December 1st, measures the perceived levels of public-sector graft by aggregating independent surveys from across the globe. Just five non-OECD countries make the top 25: Singapore, Hong Kong, Barbados, Bahamas and Qatar. The bottom is formed mainly of failed states, poor African countries and nations that either were once communist (Turkmenistan) or are still run along similar lines (Venezuela, Cuba). Comparing the corruption index with the UN’s Human Development Index (a measure combining health, wealth and education), demonstrates an interesting connection. When the corruption index is between approximately 2.0 and 4.0 there appears to be little relationship with the human development index, but as it rises beyond 4.0 a stronger connection can be seen. Outliers include small but well-run poorer countries such as Bhutan and Cape Verde, while Greece and Italy stand out among the richer countries. 

(Source: economist.com)

2 years ago
#the economist #The Economist Daily Chart 
US birth rates: Baby bust

The birth rate for teenagers in America falls to a record low


JUST over 4m babies were born in America in 2010, some 3% less than the previous year, according to a recent report from the Centres for Disease Control and Prevention. In 2010 the total fertility rate of 1,932 births per 1,000 women fell further below the replacement rate of 2,100 births for the third year running. The slowdown of the economy and immigrants returning home are thought to help explain this. The birth rate decreased in women of all ethnic groups, and women aged 40-44 were the only age group that had more babies in 2010 than in 2009. Meanwhile, the birth rate for teenagers aged 15-19 continues to fall. Last year it reached a record low of 34.3 births per 1,000 females, a decline of 9% and the largest annual drop since 1946-47. The birth rate for even younger girls between 10 and 14 (not shown on the chart) has also fallen steadily, from 1.4 in 1990 to 0.4 in 2010. 
2 years ago
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Financial markets: Déjà vu

Bank share prices are close to their 2008-09 lows 


WILD gyrations in stockmarkets; banks’ share prices falling like stones; politicians stepping in to back-stop lenders for fear of collapse. The echoes of 2008 are alarming. Morgan Stanley is one of the big casualties: fears apparently caused by its exposure to European assets led its share price to fall by 17% over the past two days of trading. You have to go back to December 3rd 2008 to find the last time the bank’s stock closed at the same price as it did on October 3rd, even if it still sits 36% above its 2008 nadir. A French bank, Société Générale, has already breached its 2009 low, hitting €15.31 in late September, although it has bounced back by 24% since then. Bank stocks may now be approaching levels seen in the depths of the financial crisis but broader stockmarket indices still have a long way to go to reach that mark. That won’t last if the banks get into real difficulties.

CORRECTION: An earlier version of this chart overstated the share prices of the British banks by a factor of 100. This was corrected on October 5th 2011. Sorry. 
2 years ago
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Comparing India and China: Chasing the dragon

How the Asian superpowers compare on various measures of development


IN THE recent Singapore Grand Prix, a car belonging to the Force India team reached the finish line just 111 seconds after the leader. Today’s chart uses a stopwatch to compare India’s progress in development against another pace-setter, China. The chart shows the number of years that have elapsed since China passed the development milestones that India has now reached. India’s income per head, for example, was about $3,200 in 2009 (holding purchasing power constant across time and between countries). China reached that level of development nine years ago. The lag in social progress is much longer. A child’s odds of surviving past their fifth birthday are as bad in India today as they were in China in the 1970s. Moreover, the chart does not necessarily imply that India in nine years’ time will be as rich as China is today. That is because China grew faster in the last nine years than India is likely to grow over the next nine. We stopped the clock at $3200 per head. But China did not stop racing ahead.
2 years ago
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Emerging-market currencies: Retreat!

The emerging markets are winning the currency war


A YEAR ago Brazil’s finance minister, Guido Mantega, declared that the world had entered into a “currency war”. He worried that in a depressed global economy, without enough spending to go around, countries would sally forth and grab a bit of extra demand for themselves by weakening their currencies. The dollar, for example, fell by 11% against Brazil’s real in the year to August 2011. Like other emerging economies, Brazil fought back by imposing taxes and other restrictions on foreign purchases of local securities. But the invasion of foreign capital that so worried Mr Mantega has now turned into a shambolic retreat. The outflows have dragged down the exchange rates of almost every emerging economy since the beginning of August. Having spent much of the past year fretting about their currencies’ rise, central banks across the emerging world have now intervened in the markets to slow their currencies’ fall. In a currency war, where each side fights to gain competitiveness against the others, these tumbling exchange rates presumably count as victories. But they are Pyrrhic. A cheaper real, zloty and rupee will help emerging economies win a bigger share of global spending, but that is small consolation if global spending declines.
2 years ago
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European bail-outs: Pay pals

Who’s paying for the euro-area bail-out?


PORTUGAL’S bail-out means another stage in Europe’s debt crisis and another call on non-European coffers. The total €865 billion ($1.2 trillion) pot available for euro-area rescues looks enormous, more than enough to cope with Greece, Ireland and Portugal’s anticipated needs besides. Almost half of that comes from the European Financial Stability Facility, a €440 billion euro-zone fund whose major contributors are Germany, France and Italy. But the EFSF’s effective lending capacity is only €250 billion, because only six of its 17 members have a AAA credit rating. European leaders have pledged to bring the fund’s actual firepower up to €440 billion by the summer but in the meantime the IMF has more cash on hand, at €280 billion. If all that money were used (a very big if), America would end up lending indebted euro-zone nations €50 billion.
3 years ago
#The economist #the economist daily chart