In a daily analysis from last week, Council on Foreign Relations senior fellow Benn Still suggested that the United States is “exporting inflation worldwide.” The latest action by the US Federal Reserve may have staved off inflationary disaster domestically but only to the detriment of other nations who peg their currency to the dollar.

Venezuela struggled with inflation rates over 20 percent in 2007 (Bloomberg). Argentina and Bolivia face similar concerns. Official data puts Russian inflation for 2007 at nearly 12 percent (Forbes). Several Gulf Arab states also find themselves with inflation over or near 10 percent. In China, rates near 7 percent registered in December 2007 represent the highest inflation in over a decade. China’s Prime Minister Wen Jiabao recently announced Beijing would freeze short-term energy prices in an attempt to curb consumer price increases (NYT).

Rapidly rising prices for palm oil and other kinds of vegetable oils are having a huge impact in the developing world, where many families grow their own food but must purchase oil in which to cook it. As the International Herald Tribune reports, this increase in the cost of edible oils is only the most recent development in the emerging global problem of rising food prices.

The New York Times is producing a fascinating series of articles and multimedia examining the human toll, global impact and political challenge of China's epic pollution crisis.

Today the Economist posted a briefing on the 2008 Freedom of the World report published by the Heritage Foundation and the Wall Street Journal, concluding that in recent years "African countries have made negligible progress liberalising their economies."

For the most part, although not without exception, the Heritage Foundation’s correlation between incomes per head and economic freedom holds good. Seven of the ten economically most free African economies (Mauritius, Botswana, South Africa, Namibia, Tunisia, Swaziland and Cape Verde) are, in fact, middle-income states. Uganda, Madagascar and Kenya, however, are very low-income countries.

Photo: Danny McL (flickr)

It is shocking to read and hear about elections dissolving into civil crisis as we are seeing in Kenya right now. However, as a Kenyan friend of mine is warning, we should be reluctant to take media portrayal of an event as absolute truth:

“When it comes to international media I am nothing short of disgusted. The international community has a very bad (not to mention ignorant) view of Africa. So when something happens to slightly re-affirm that view they have a field day with it. I am not in any way trying to downplay what is happening in Kenya but you all have to understand that there are those of us who voted for the current president and are happy with the outcome. However, a happy Kenyan is not deemed 'newsworthy' as compared to a disgruntled rioter. That is the sadistic nature of journalism.

Before I watched the international coverage on the Kenya, I used to feed on everything the news said. At least now I know to take everything with a pinch of salt...Kenya has 42 tribes, that's why I don't see the Rwanda scenario playing out. However, the biggest tribe (the Kikuyu) are scattered everywhere in Kenya. There's even a joke that they are found everywhere in the world. The opposition has decided to eliminate Kikuyus in the opposition strongholds..thus the killing. Only because the president is Kikuyu. Apart from those places in Western Kenya, the rest of us are fine...it's very unfortunate and maybe the Kofi Annan team will realize that this has shifted from a political crisis to a humanitarian crisis.”

It is hard to understand the political situation going on in countries far away from us, ruled in a way unknown to us. Judi, my friend, makes a provocative argument about the desire to sensationalize stories rather than give bare-bones facts of the matter in cases like these, and it is difficult to know where to go to learn exactly what is taking place without hyperbole.

Today the Christian Science Monitor posted an article about how the declining dollar is affecting migrant workers in the United States:

Across the US, the falling dollar value has sent ripples through immigrant communities that send money to family overseas. As some currencies for developing countries have risen substantially against the dollar, many immigrant workers are increasing their workweek by up to 20 hours or taking second jobs. If the dollar's slide continues, the US may become less attractive to migrant workers, analysts say.

Photo: Shirine Bakhat/Mercy Corps

Today's Christian Science Monitor has a hopeful piece on female entrepreneurs in Afghanistan.

The success of Sediqi and a handful of other Afghan businesswomen come amid difficult circumstances, despite steady growth in the overall economy. In the face of a resurgent Taliban, stagnant reconstruction, and the high-profile kidnappings of foreign aid workers, these women push forward, propelled by entrepreneurial grit and desire to support their families. While no official figures track their numbers, they can be found in pockets of Afghanistan, launching consultancies, furniture factories, and printing houses. Many of them say better business conditions, rather than more talk of their plight, are critical.

Today, IRIN, the UN Office for the Coordination of Humanitarian Affairs, brings attention to power shortages in South Africa which have halted production and created job losses for miners. The slow down of one of South Africa's most important industries may have a serious impact on government goals of job creation and poverty alleviation.

Any job losses in the mining sector could have an impact on the South African Development Community (SADC), warned Lesiba Seshoka, spokesman for the National Union of Mineworkers (NUM). South African mines employ 460,000 workers - 40 percent of them from neighbouring countries - and shutting down operations had already affected the incomes of casual workers...

South Africa's economy needs to grow at least 6 percent annually to keep unemployment from rising above the official estimate of 25 percent, although independent economists have put the joblessness rate at nearer to 40 percent.

According to Schussler, economic growth could slow from over five percent in 2007 to three percent in 2008 as a result of the outages and anticipated slower growth in the global economy. The South African economy is the most influential in the region, and any contraction could have a ripple effect on neighbouring countries.

Most Americans were shocked at the violence following Kenya's December 2007 elections. Many think of Kenya as the one stable country in the horn of Africa-- a tourist destination for safaris, not bloodshed. The Council on Foreign Relations published a great report Friday, outlining the economic and political factors which have played a role in the continuing violence.

The report outlines how ultimately economic and ethnic factors are inherently linked. While Kenya has not traditionally been a country with strong ethnic divisions (citing a poll in which 70% of the population would rather be identified as Kenyan rather than according to tribal affiliations), wealth is unevenly divided among various ethnic groups. For example, "the head of the Nairobi Stock exchange, the Central Bank of Kenya, and Kenya Electric Generating Company, the region’s largest power generator, are all Kikuyu (Bloomberg)." I might add, so is the current President Mwai Kibaki.

Kenyans see democracy and economic growth as inextricably linked. Their main aspiration for democracy, according to Afrobarometer, is that it will create more equitable distribution of economic opportunity. For Kenya’s economy to take off, it must distribute power among ethnic groups. “Kenya could be a shining example,” says Barkan. “But it could unravel further politically and the economy could become moribund.” Juma believes for regional imbalances to be addressed, the country needs to upgrade its infrastructure. He suggests that a large-scale government employment scheme, structured like the New Deal in the 1930s United States, could employ youth to do this.

This inequality (which is compared to levels in Liberia and the DRC), coupled with corruption and strong man political practices has resulted in the violence that has claimed an estimated 800 lives.

Bill Gates gave a major speech at the World Economic Forum in Davos on Wednesday, calling for creative capitalism to do a better job of serving the world's poor as well as the rich.

In a lengthy interview he gave with the Wall Street Journal prior to the speech, Gates expressed concern for how "capitalism, while so good for so many, is failing much of the world." His recommendation is for companies to dedicate a larger percentage of their resources toward figuring out how they can make money by doing business with and improving the lot of the neediest third of the world's population.

Video of the entire speech is available here.

Today allAfrica revealed how increased funding to the UN's Rural Livelihoods and Economic Enhancement Program will teach Malawi's farmers how to benefit from increased market competition in the agricultural sector.

The program seeks to encourage production based on market needs rather than traditional small scale subsistence needs.

Most assume that China will experience a significant downturn in growth as a result of the recent scare in the US economy. But on January 3rd The Economist published an article suggesting that growth of GDP in China is less dependent on the export of cheap goods to Western consumer markets.

The headline ratio of exports to GDP is very misleading. It compares apples and oranges: exports are measured as gross revenue while GDP is measured in value-added terms…
Once these adjustments are made, Mr Anderson reckons that the "true" export share is just under 10% of GDP. That makes China slightly more exposed to exports than Japan, but nowhere near as export-led as Taiwan or Singapore.

We've all heard globalization linked to the growth of multi-national corporations. However, an article from yesterday's Business Week takes a look at how globalization is driving the growth of small entrepreneurs.

"These young entrepreneurs are trying to make their marks independent of what their fathers and grandfathers have done. These young people and their companies are growing fast and becoming relevant on the global scale," he says. While previous generations were often constricted by government red tape and low customer expectations, younger entrepreneurs who take their cue from the international business models they see online are more open to new ideas and are setting higher standards for their companies.

Photo: Costa Rica from Above. BlindAmbitionBlog (flickr)

This week, Norway declared that it will become the world’s first carbon-neutral country, by 2030. It turns out that the idea of “going carbon-neutral” is becoming quite the fashion around the globe, though – and Norway might find more competition than it bargained for: In 2007, Costa Rica announced it's intention to become carbon neutral by 2021, the 200th birthday of the Central American country. If Costa Rica meets its goal, it will beat Norway to claim the title of first carbon neutral country.

Update: In the weeks since this was posted, the United Nations has launched the Climate Change Network, which aims to unite global responses to climate change. Since Norway announced its intention to go carbon-neutral, three more countries have made the same declaration: Iceland, New Zealand, and Monaco. A National Geographic News article posted in March figured that Costa Rica was most likely to win the race to carbon-neutrality, considering for example that 80 percent of that country’s energy comes from renewable resources already.

Today the BBC posted a video that took a closer look inside Kibera, a large urban slum of Nairobi. Kibera is experiencing a water and sanitation crisis as nearly one million people are living in the slum without a suitable water supply.