The EU-IMF team's arrival in Dublin was watched by both local news and civilian protestors. Photo: William Murphy (flickr)

As of November Ireland joined the ranks of Greece and Portugal as the latest European country to accept a bailout. The country’s economic crisis of 2008 led individuals and companies to begin pulling their funds from Irish banks, with net result of 70 billion euros withdrawn in 2010.

The proposed $113 billion IMF loan prompted protests in Dublin, says The Guardian. Not unexpectedly, some are viewing Ireland's economic situation as part of one homogenous crisis.

But is it really logical to group Ireland troubles with Greece, Spain and Portugal? Given the domino effect occurring in Europe concerning bailouts, the parallels seem unavoidable, however The Financial Times finds the comparison illogical.

Ireland is nothing like Greece. Back in 2007, Ireland’s net public debt was just 12 percent of gross domestic product. This compares with 50 percent in Germany and 80 percent in Greece. Spain, too, had net public debt in 2007 at just 27 percent of GDP."

Ireland in reality is unlike the other European nations that have accepted bailouts. As The New Yorker explains, Ireland’s economy went sour for different reasons than Greece and Portugal. A combination of the property market’s collapse and bailing out the banks sent Ireland into this economic pit.

It’s more realistic to compare Ireland with Iceland, argues a recent article from The Economist. The article suggests the government of Ireland would do well to learn from the more conservative approach taken by Iceland's government in repairing their economy. Iceland didn’t elect to bail out its banks and saw a 15-percent drop in GDP, compared with Ireland's 14-precent drop in GDP despite bailing out their banks. Iceland, however, not being a member-country of the European Union was spared the political pressure the government of Ireland felt to accept an IMF bailout.

Ireland's economic issues, according to The New Yorker, have shown that their membership to the EU may very well be their plight. And in reality the advice streaming from Germany, France and the United Kingdom has been of little help. Cutting government spending and raising taxes reduces demand in the economy, which makes recessions worse, explains The New Yorker.

Ireland doesn't have an economy that will yield positive results from the advice dispensed by their European counterparts according to. NPR notes that when a nation as small as Ireland — with a population 4 million — has an unemployment rate of 14 percent, it makes a noticeable dent in the workforce [discuss]. According to The New Yorker, the country is in dire need of both foreign and government investment to create jobs and combat unemployment. Unfortunately neither are possible given Ireland's shaky economic condition and the government's consistent inability to stabilize the crisis.

Yesterday, the The Financial Times wrote about plans to sell Ireland's debt in the form of euro zone bonds. But will this really stem the crisis? The Financial Times argues that instead of improving the situation, this will put other euro zone members attempting to sell their bonds at a disadvantage.

A revolutionary microbicidal gel can reduce a woman's chances of acquiring HIV by 54 percent. Photo: Cassandra Nelson/Mercy Corps.

Funding was a huge topic of concern at this year's International AIDS Conference, which took place last week in Vienna. Scientists, survivors, activists and others striving to defeat HIV are worried because key donor nations have been cutting funding since the recession hit, says Reuters.

The trouble is, these cuts are coming at a critical moment in the fight against AIDS. Just this week, the New York Times reported on a new vaginal microbicidal gel that cuts women's chances of contracting HIV by 54 percent. The gel places a rare power in the hands of women, and one dose could be even cheaper than a condom. Moreover, earlier this month scientists reached a critical breakthrough in the search for an HIV vaccine. The Wall Street Journal described the discovery:

HIV research is undergoing a renaissance that could lead to new ways to develop vaccines against the AIDS virus and other viral diseases. In the latest development, U.S. government scientists say they have discovered three powerful antibodies, the strongest of which neutralizes 91 percent of HIV strains, more than any AIDS antibody yet discovered.

As developments like these bring scientists closer to an ever-elusive AIDS vaccine, their research needs funding now more than ever, reports the Washington Post. At the conference, Global Fund director Michel Kazatchkine told Reuters that his agency needs $20 billion over the next three years to carry this research forward. And in an interview with CNN, Bill Clinton warned donor nations that reduced funding now will mean more gruesome costs later.

If we all do this, the consequences will be calamitous and you'll spend more money later ... You'll start having large numbers of people dying again, you'll have more political instability, more economic collapse, and it's going to cost us more money later. So it's not only going to be a humanitarian crisis. You'll pay now or pay later. So if it's at all possible, hang in there.

HIV/AIDS programs have saved and prolonged the lives of millions, but at the moment 5 million more are still in need of drugs. As a result, activists like Desmond Tutu are looking to President Obama to renew his financial commitment to AIDS funding.

An estimated 8.4 million payroll jobs were lost during the recession. Photo: wools (flickr)

What's most effective in helping people climb out of poverty? Jobs and education, according to New York Times columnist Nick Kristof, who cites several recent studies by economists.

Quality youth education programs targeting youth pay off immediately and in the long run — especially those that focus on ninth-grade students, considered a critical juncture for at-risk youth. And jobs are important because they boost entire families.

But as Kristof points out, both employment and school funding have been severely affected by the economic crisis, "harming the two most effective stairways out of poverty." In response, Kristof is calling for a greater commitment.

This wave of research suggests that there’s no magic bullet, that helping people is hard, and that even when pilot programs succeed they can be difficult to scale up. But evidence also suggests that we increasingly have the tools to chip away at poverty. We know what to do if we just can summon the political will.

Officially, Detroit's unemployment rate is 27 percent. But this number doesn't factor in people that are underemployed or are unemployed and have given up on the job search more than a year ago. In reality, the Detroit News says, unemployment is closer to 45 percent if you factor in these groups. That's nearly half of the motor city's workers.

Detroit mayor Dave Bing commented on the situation in a statement for the Detroit News:

Jobs are the key to revitalizing Detroit ... The statistics tell part of the story, but we can't run from the reality that the need for jobs and investment is far greater than any statistic could measure.

A Detroit street. Photo: NoneOther... {Captured In Lights}...(flickr)

Unemployment is already high in Mexico. It could be even higher if Mexican workers in the U.S. went back. Photo: Aneas (flickr)

Mexican workers often come to the United States to earn money and send it to their relatives back home. But NPR reports that as the U.S. economy has gotten worse, some of these worker's families are sending them money from Mexico.

It's a phenomenon that could have a positive economic impact: These reverse remittances, as they're called, allow the migrants to keep searching for higher-paying work than they could get in Mexico, explains an NPR report. These reverse remittances may also prevent a flood of returnees from further devastating Mexico's economy and increasing unemployment.

When the U.S. economy rebounds, these workers are well-positioned to start sending remittances back to their families again.
These remittances play a big roll in Mexico's economy — they're the country's second-largest source of foreign income.

Still, the total dollar amount of reverse remittances remains small in comparison to the traditional southward flow of cash and there is no reliable data about its overall volume, points out a World Bank report.

As one Mexican father of a migrant worker told the New York Times, “We have an obligation to help them [until they find work again]. They’re our sons. It doesn’t matter if they are here or there."

A street dentist in India. Photo: Christian Luna (flickr)

Would you want an unlicensed dentist working on your teeth?

You might if, like many of India’s poor, you lacked the money to see a professional. By your willingness to pay for these services, you’d also be creating a kind of employment for someone who could never find work in a traditional medical office.

Workers like these amateur dentists are part of India's informal sector, made up of the small-business employees like cleaners, agricultural workers, and hawkers of street goods who work for cash without a contract or benefits. Although India is best-known for its high-tech economy, the Indian government estimates that more than 93 percent of Indian workers are informally employed.

The informal sector didn't benefit much from India's tech boom, but its extra-stretchy quality actually makes India's economy stronger, says businessman Semil Shah. Why? For starters, he explains, the informal economy "provides markets for goods and services that may not have been otherwise traded." Others also see the the informal economy as a safety net for workers, since it gives more work possibilities to those who've lost jobs in the formal sector. Because of this, the informal sector may help sustain India through the global economic crisis, reports CNN.

However, maintaining a large informal economy isn't the long-term answer for India's poor, many researchers say. Life in the informal sector is harsh, since employment is often uncertain and poorly-paid. Moreover, working conditions aren't always good and competition can be stiff, especially when workers from the formal sector flood back in. Without a safety net of their own, informal workers hit the ground hard when they fall.

Despite all the drawbacks, many out-of-work Indians would probably agree that the uncertainty of informal work trumps the certainty of no work at all.

What will the growth of the Mongolian mining industry mean for the country's nomadic herders? Photo: Thatcher Cook for Mercy Corps

Mongolia could soon be home to the largest copper mine in the world.

After years of negotiations, Western mining companies Rio Tinto and Ivanhoe are close to reaching an agreement with the Mongolian parliament to develop significantly the Oyu Tolgoi mine. Mineweb reports that the untapped deposit contains 78 billion pounds of copper and 45 million ounces of gold. If all goes to plan, the massive investment would double the size of Mongolia's economy and create thousands of jobs, according to NPR.

The economic crisis has hit Mongolia harder than most countries in East Asia. One in four people are out of work, NPR reports. The country’s nomadic herders – 40 percent of the population – are struggling after the price of cashmere dramatically declined earlier this year (see Manasi Sharma’s Downturn in the Gobi). Now, some are hailing Oyu Tolgoi as an immediate economic fix.

But there are several obvious challenges. First, Mongolia is highly corrupt. It is ranked 102 out of 180 countries in the latest Transparency International index, an annual rating of perceived levels of corruption (defined as the abuse of public office for private gain). Additionally, the editorial in Mineweb suggests that Russia and China may have inordinate influence over Mongolia’s mining industry. Given these two factors, how much will the average Mongolian gain?

Lastly, there are the social implications of this investment to consider. For many nomadic herders, shifting to industrial mining jobs is far from ideal, but there isn’t much else to turn to. People are desperate now that raw cashmere and other materials do not provide a reliable way to feed and clothe families. "They are losing their land, their animals, and even their culture," reported NPR’s Louisa Lim, "for a few specks of gold."

After two boom years, The Wall Street Journal reports that the U.S. agricultural sector is expecting this year's profits to be below the 10-year average.

The July 18 issue of the Economist. Photo: The Economist

During the boom years of the 1990s, economists like Alan Greenspan became celebrities. Their speeches and writings were closely studied by those hoping to know where the market was going next. But thanks to the collective failure of economists to predict the worst economic crisis in decades, those shining reputations are now tarnished.

Now the profession of economics is hurting. The July 18 issue of The Economist cautions against an economist backlash, warning against the logic that "if economists got things wrong, then politicians will do better."

In its crudest form — the idea that economics as a whole is discredited — the current backlash has gone far too far. If ignorance allowed investors and politicians to exaggerate the virtues of economics, it now blinds them to its benefits. Economics is less a slavish creed than a prism through which to understand the world. It is a broad canon, stretching from theories to explain how prices are determined to how economies grow. Much of that body of knowledge has no link to the financial crisis and remains as useful as ever.

Despite the vigorous defense of the discipline, the Economist goes on to note that two sub-fields of economics do require reform. Macro-economists, who study the impact of factors like unemployment and inflation on economic growth, use quantitative models to forecast economic trends. The most common models failed to take into account potential failures of the financial system and therefore failed to predict the scale of the recession. Some economists are using complex computer simulations to test and improve existing models.

Financial economists, those that examine the prices of financial instruments like stocks and bonds, need to focus on how risk impacts the financial system, according to another Economist article. The increasing use of psychology in economics provides one opportunity for these economists to better understand risk.

Managing Director of IMF Dominique Strauss-Kahn speaks at the World Bank/IMF spring meeting of 2009. Photo: World Bank Photo Collection (Flickr)

Earlier today the International Monetary Fund (IMF) announced plans to provide up to $17 billion in desperately-needed assistance to poor nations over the next five years. IMF managing director Dominique Strauss-Kahn was quoted in a press release that outlined the details of this historic response by the fund.

This is an unprecedented scaling up of IMF support for the poorest countries, in sub-Saharan Africa and all over the world... The G20 asked the Fund to help respond to the global economic crisis, which has hit the low-income nations so hard, and we are responding with a historic set of actions in terms of support for the world’s poor. The new resources and new means of delivering them should help prevent millions of people from falling into poverty.

This has been reposted from the Mercy Corps blog.

I’ll get right down to it: I was disgusted, then furious when I read this morning that an energy trader might receive a $100 million bonus this year. The headline reads “Big Bonuses Are Back on Wall St.”

Dozens of financial services companies are now partially owned by the U.S. government (who has also covered huge percentages of their losses with federal bailout money) and are still posting quarterly losses in the billions of dollars. Yet they — and other Wall Street entities — continue to dole out bonuses that very few of us can even fathom.

Wall Street claims that such exorbitant bonuses are necessary to “retain top talent.” They’d have you believe that this is some kind of meritocracy, simply market forces at work. But when taxpayer money is involved, I believe it becomes something quite different: offering a $100 million bonus to one man is blatant kleptocracy.

I did some figuring. If I work until I’m 65 years old and average a salary of $60,000 per year, I will make $2.52 million over the course of my career. In other words, it would take me almost 40 lifetimes to earn as much as this man will be handed as a one-year bonus.

My father made just over $1 million, total, working 34 years for the same company. While I realize that inflation over a few decades must be factored in, the pay discrepancy between the average American worker and Wall Street executives is monstrous — but not as monstrous as the gap between those executives and hard-working folks in developing countries:

• The average worker in Bosnia and Herzegovina earns $7,700 each year (calculated by per capita income). Assuming that worker has a career spanning 40 years, it would take him or her 325 lifetimes to make $100 million.
• Nepal is one of Asia’s poorest countries — annual per capita income is only $1,040. It would take the average Nepali worker 2,404 lifetimes to bring home the amount of money that one financial services firm wants to give a single person as bonus pay.
• In Central African Republic, where per-capita income is only $740 per year and life expectancy 44 years for a typical male, it would take someone who worked for 30 years of that short life an astonishing 4,505 lifetimes to earn the $100 million casually paid out as an annual bonus to one man.

There are no easy answers to these glaring gaps. Obviously Wall Street has not learned its lesson from helping precipitate the global economic crisis — a crisis that is making millions of people around the world, including hundreds of thousands of Mercy Corps beneficiaries, suffer more than ever. Please take this as just a bit of perspective from one person who is pretty damned angry about it all.

People protest government bailouts and exorbitant executive pay on New York City's Wall Street. Photo: Walking Off the Big Apple (flickr)

The collapse of Iceland's three largest banks earlier this year sent ripples through the country's economy. In time the bank's collapse led to high inflation rates, protests, rising unemployment, and eventually, a resignations by many government officials. This Wall Street Journal video takes a closer look at Iceland's economic crisis, and how Icelanders are fairing under the country's new economic reality.

Rooftops of a Mumbai slum. Photo: Kaustav Bhattacharya (Flickr)

One in every five people living in Indian cities live in slums. And India wants to move all those people — 62 million to be exact — out of the slums in five years by promoting what they're calling "ultra-low-cost housing."

The Economist reports that ultra-low-cost housing are multi-story flat developments built outside of cities where land is cheaper. Companies like Tata Housing are building units that are teeny and no more than three stories tall so they don't require steel framing or skilled labor to build.

Initial challenges surfaced when low-income citizens failed to meet traditional loan requirements. But recently, two government-backed banks have agreed to provide more capital to finance companies. This allows those companies to provide loans to low-income people that would have previously been rejected.

However, the government banks require the purchasers to validate their income and pay 25 percent of the cost up-front. Some of the cheapest flats are $4,500, and a down payment would be close to $1,200. Slum dwellers usually earn about $1,900 per year. These obligations coupled with transportation costs to and from the developments make ultra low-cost housing much less affordable.

Although India's goal of a slum-free nation is admirable, it is ambitious and quite unrealistic. With India's population ballooning, it will take more than ultra low-cost housing to transition millions on the verge of poverty to the middle class.

"Greed is ok when you let others profit from it, but greed for oneself is bad, it makes you ill," the Dalai Lama said in an interview with Welt Online. Photo: Giandomenico Ricci (flickr)

At the beginning of July, two influential religious and spiritual leaders made statements within days of each other about the financial crisis and the responsibility of the wealthy to help the poor: Pope Benedict XVI and the Dalai Lama.

In the past month we have watched the world's wealthiest and most powerful meet to discuss the economic crisis and the future for the international community's poorest members. The WTO warned of the dangers of protectionism while meeting in Geneva. The UN announced that the number of hungry people now exceeds one billion worldwide. And the G-8 announced a $20-billion commitment to fight hunger when they convened in Italy for their annual summit. The comments by the Pope and the Dalai Lama seem particularly relevant considering these recent events.

On July 7, a letter written by Pope Benedict XVI was sent to all Bishops of the Roman Catholic Church, entitled "Charity in Truth." In the letter the Pope questioned the value of today's corporations.

Today's international economic scene, marked by grave deviations and failures, requires a profoundly new way of understanding human enterprise. Without doubt, one of the greatest risks for business is that they are almost exclusively answerable to their investors, thereby limited in their social value.

Earlier in that same week, the Dalai Lama was interviewed by the German news site, Welt Online. In the interview the Dalai Lama talked about the role he sees for corporations and the wealthy to make a positive difference for the world's poor. When questioned about globalization, the Dalai Lama responded:

I am essentially a supporter of globalization. In the past societies and countries could seal themselves off from the rest of the world, but today this has become impossible. When we search for organizations that have the capacity and ability to improve our world, global companies are at the top of the list. In particular integrated global corporations are in an ideal position to support developing countries to close the gap to leading national economies.

He also talked about greed as a root cause of the financial crisis, but was careful to note that wealth on its own "is not necessarily a bad thing."

Wealth is not necessarily a bad thing when it has been earned in an honest manner and neither other individuals nor the environment suffered for it. As Buddhists we recognize that wealth is a basic prerequisite for a happy life. But a billionaire also only has ten fingers. He can fit three or four rings on each finger, but that would look weird. The satisfaction many millionaires who don’t share their wealth have in their heads is fictitious and not real. Rich people should help reduce poverty.

Amid the flurry of black suits, interpreters and diplomatic cordiality we might usually associate with discussions of trade and economic policy, the sentiments expressed by Pope Benedict XVI and the Dalai Lama offer additional views about wealth and responsibility that are worthy of reflection.

A group of boys fish beside the resident garbage dump in Equatorial Guinea. Photo: John & Mel Kots (Flicker)

Equatorial Guinea is, to most, a relatively unknown country squeezed between Cameroon and Gabon on Africa’s eastern coast. But this tiny country with a spotty past is a rarity in today's economic climate. The New Yorker's Steve Coll recently traveled to Equatorial Guinea and reports that somewhat amazingly, Equatorial Guinea's economy is relatively stable.

Coll’s short piece is accompanied by photos, which are perhaps the most effective way to communicate his point: That the citizens of Equatorial Guinea are finally reaping the benefits that 20 years of oil revenue — wealth that had only been shared among the country's political elites until very recently.

Equatorial Guinea is by no means a success story yet, as many citizens still don’t have access to potable water and more than 70 percent live below the poverty line.

Perhaps Coll is prematurely hopeful, but the modest economic gains made Equatorial Guinea amid a global economic downturn are worthy of notice nonetheless.