Live Updates from the Bolivia Protests

For background information about the Bolivia's current conflict, please see the previous post, "President Morales’s Christmas Gift to Bolivia: Double the Cost of Living," which explains the origins of the unrest. In this blog, I've documented the events stemming from Sunday afternoon's announcement regarding lifted petroleum subsidies. The updates below work their way up in chronological order with the most recent post un-italicized at the top.

Update Wed 12:16 PM:  THE RETURN TO NORMAL PRICES has gone rather smoothly.  Spending New Years Eve in a small mountain town, bus tickets there during the 'gas crisis' cost between 35bs - 50bs.  The return fare with the reinstated subsidy only cost 15bs.  While most prices have dropped back, bread in Cochabamba still hovers at their non-subsidized prices.  This has caused some minor marketplace skirmishes, but should soon similarly return to last month's prices.  If President Morales remains set on removing these subsidies, he will most likely do so in a gradual fashion, so as to not abruptly shock the economy.

In his speech to the public this past weekend, the President said, "We need the measure, but it is not appropriate.  I understand the recommendations of workers and social organizations...The blow was hard for the national economy, but we are responsible to the Bolivian people."

Update Fri 10:15 PM:  Happy New Year Bolivia! Univision reported that at 10:15 PM, President Evo Morales announced the reinstatement of the petroleum subsidies.  These will be signed into effect on Monday morning.  The people's voice has been heard!


Update Fri 10:15 AM: Traffic has resumed normalcy.  Cars flood streets again, which I hope means that buses will take us later to the town Coroico for New Years.  The worst appears to be over, but I'm still curious to see the political fallout and future implications of the riots and the price hikes.


In 2005, when Carlos Mesa was President, Mesa proposed a 10% petroleum price rise.  Evo Morales, then a powerful union leader, attacked Mesa, saying, "If he doesn't lift this mandate, Carlos Mesa will become Bolivia's biggest enemy."  Morales continued, "If the president doesn't listen to the people, we will force an early election."  Mesa caved into Evo's demands (article in Spanish).


Now, it's strange to watch Morales, the voice of the poor and indigenous make a 72% price rise in gasoline without similar opposition.  New grassroots leadership hasn't yet emerged to counter mandates like this from the president's office.  It also shows that with his previously strong convictions against such a decision, Evo's hands must be tied and the country must truly be struggling financially with unsustainable subsidies.  It will be interesting to see the continued fallout from the riots and from the gasoline changes.


Photo Recap of the Day:


(With surprisingly good resolution from my cellphone camera)

Burnt car on the barricade line while military police confront protesters.

Protesters organize while burning their own blockade further down the highway.

Roadblock line as left unattended during lunch break.
The charred remains of tires draw the El Alto-La Paz border.

Military Riot Police storm in on their motorcycles.

Tear Gas.  Enough said.

An SUV that tempted fate and ventured too close to the blockade.

Military police arrive as the eight lane tollbooths burn.

Update Thurs 10:44 PM: As the day progressed, the streets lightened up. Cars were no longer scarce by the time my brother arrived at four, although whenever a taxi passed, people still stopped them and launched rocks at the windows.  Protesters continued to block the entrance to the airport to cab drivers.  We found a taxi outside the airports boundaries who agreed to drive us through slow, windy back roads to La Paz.  We finally made it.


When we reached the city, I called my girlfriend Vivi who works on the governor's legal team.  She informed me that protesters had taken over the plaza in front of the presidential palace and began storming the government buildings.  All workers vacated the premises.


By night time, we were able to hail cabs with much less effort than earlier in the day.  Even though the protest seemed to be losing steam, it's still uncertain how Bolivian anger will carry over.  Tomorrow we plan to take a bus ride to a mountain town on the edge of the Amazon to celebrate New Years.  I hope we get there painlessly.


Update Thurs 1:29 PM: For my last trip to the blockade before my brother arrives, I watched in amazement as the rioters destroyed the highway tollbooths and then light them on fire.  Riot police showed up as an organized motorcycle gang and shot three rounds of teargas into the crowd.  When the mob dispersed, the military set up a police line, affronting the protesters.  Literally ten feet from the action, I watched as an officer picked up a rock off the ground, threw it at the protesters, then yelled, "They're throwing rocks! Attack!"  The police rushed the area occupied by the mob and people fled like scurrying mice.  Instead of chasing after the protesters and escalating the violence (which appeared to be on the brink of erupting, instigated by the riot police looking for a fight), the military police shot another three rounds of teargas into the crowd.  Instead of waiting by the front line for more skirmishes to transpire, I sought refuge again in the airport lobby.




Update Thurs 12:31 PM: I wandered back into the protests.  They now practically stretch up to the airport's entrance, but thankfully, the violence seems to have calmed down...at least for lunch break.  Looking out across the cities, tiny smoke stacks litter the skyline, seemingly rising from every other street corner.  While the smoke calmly reaches towards the clouds, lunch hour allowed everyone to relax for the moment.  At the smaller "militia" protests on the outskirts and side streets, tire fires act like bonfires as neighborhood groups sit to eat, chat, and drink beer (hopefully not a foreshadowing bad sign for later).  One of the "militias" even organized a pick-up fútbol game (I might try to join in if my brother's flight gets further delayed).  Closer to the center barricade, street vendors with push-carts feed the crowds. 

Although quiet for now, the thundering dynamite and fireworks still shake the desolate streets and I have yet to see a single store open for business.  As I returned back to the airport, a massive group marched towards the barricade, throwing rocks, yelling taunts, and denouncing the government.  Lunch break is over.

Update Thurs 10:38 AM: IT'S A WAR ZONE by the blockade.  I spent the past hour venturing down to by roadblock to see if we'll be able to cross on foot later in the day.  Dynamite explosions thundered sporadically through the air. A burning car and angry yelling marked the start of the protest (if only my cell phone took better pictures).  A cab driver who tried to drive too close to the barrier was pulled from his car, beaten, had his car kicked, and rocks thrown at the windshield.  A motorcyclist who tried to pass was turned back by the stone throwing mob.  People on foot were freely passing on the edges of the streets, while the crowd concentrated its hysteria on the military riot police awaiting orders in the divider in between the two directions of the street. I followed the stream of walkers across the barricade to the La Paz side of safety.  People  who crossed on foot were packing into military trucks like cattle or refugees to be transported to the city.

Just as I was ready to turn back and return to the airport, a panic stricken stampede ran towards La Paz away from the roadblock.  Things began turning violent as protesters from the over passing bridge began hailing larger stones and glass bottles towards the police, catching straggling walkers in the crossfire.  I followed a group who trekked through the rain gutter at the edge of the highway, which was thankfully dry, and crossed back across the El Alto border.  My brother and I will need to circumvent the blockade later when he arrives from his delayed flight.

As I walked back to the airport, the surrounding streets lay silently deserted, but the warzone blockade was quietly expanding.  Small streets were closed off by militia protestors burning tires and hauling stones to block traffic.  As they slowly crawl towards the airport, I just hope that we aren't seiged in this afternoon.  Getting back to La Paz will already be enough of an adventure.

Mobile Update Thurs 9:08 AM: The cab company called at 6:45. Last night´s blockade was lifted, but today it was already resuming.  All side streets connecting El Alto to La Paz were aready closed at this point in the morning, and protestors were already starting to take over the main highway.  We had to leave immediately.

As we drove down the highway, protestors already began occupying the street.  The four lanes were already blocked down to a single car passage.  Military police truck filled with officials waited on the edge of the designated area.  Our taxi crossed without any problems, but when I arrived at the airport, the driver refused to wait for me to pick up my brother.  He left me with the parting words, "The blockade will be fully up in less than five or ten minutes.  If I don't leave now, I won't get back."

Update Thurs 6:41 AM: Off to pick up my brother at the airport.  Found a cab company that said that they would take me to or through the blockade in El Alto.  The price is surprisingly low (from the usual 50bs to now only 65bs -- not the jump I was expecting).  Wish me luck.

Update Wed 8:59 PM: All public transportation is striking not solely because of the gas hikes.  President Morales mandated that all public transport can only raise their fares 30% instead of a 72% rise to coincide with the rise in gas prices.  Also, the banks' are shutting down tomorrow to avoid bank-runs. Already people are frantically withdrawing cash and the financial institutions announced that they will not be restocking ATMs until after the strikes subside.

Update Wed 5:39 PM: LA PAZ IS UNDER SEIGE!  The blockade has already begun, cutting off the nation's capital from its main transportation hub in El Alto.  Banks advised clients to take out whatever cash they will need for the remainder of New Years holiday.  Lines in front of ATMs, banks, and credit unions are already wrapping around street corners.  The national strike going to be big. 

Update Wed 2:31 PM: Tomorrow all public transportation services will go on strike.  Santa Cruz's strike will start tonight.  I have heard no indication of taxi drivers' involvement.

Update Wed 10:34 AM: I just got word that tomorrow morning there will be a blockade between the city of La Paz and the international airport in El Alto starting sometime between six and nine in the morning.  My brother is flying into Bolivia for New Years and is due to arrive at 6:25 AM.  This should be an interesting adventure...

Live Updates from the Bolivia Protests

President Morales’s Christmas Gift to Bolivia: Double the Cost of Living

For the Christmas Holiday I had to travel across Bolivia from Samaipata, a pueblo on the East side of Bolivia, to La Paz, the capital city in the West.  The journey is broken down into two bus rides, Samaipata to Cochabamba and Cochabamba to La Paz.  We left Samaipata at 3 o’clock on Sunday afternoon and arrived at the Cochabamba Bus Terminal twelve hours later.  While waiting for our changeover bus to arrive, the ticket counters never opened.  Scheduled departure times came and went, and still, nobody tended to the empty booths.  I finally went to the information desk.

Christmas weekend travelers wait in the
Cochabamba Bus Terminal for the government
and strikers to reach a swift agreement so that
transportation can resume.

“You didn’t hear?” The distracted girl asked.  “Last night gas prices doubled and all the bus companies are protesting!”

Overnight, the government lifted petroleum subsidies and let domestic gas price jump to those set by world-markets.  Gasoline rose 72% from 3.74bs/ltr to 6.47bs/ltr and diesel rose 82% from 3.72bs/ltr to 6.80bs/ltr.  In response to the sudden spike, bus drivers declared an inter-city transportation strike. 

Angry grassroots protestors inside the Cochabamba Bus Terminal
before organizing a roadblock.

We were stranded in Cochabamba.  Inside the bus terminal, grassroots anger was already mounting.  Community members standing on stools yelled through loudspeakers to a growing crowd, denouncing the government action that burdened travelers during the holidays and betrayed the President’s base – the poor and indigenous populations. Enraged banter quickly motivated the crowd to march to the street and block traffic passing through the city center.  The roadblocks started.

It quickly became evident that if we didn’t get back to La Paz before nation-wide strikes picked up momentum, we would easily get stuck in Cochabamba.  Once organized, public city bus and freight truck drivers will likely to put the entire country on standstill. Similar negotiations with the government in the past have lasted days, other have lasted weeks.

Beginnings of a roadblock outside the main bus
terminal in the center of Cochabamba.

On the outskirts of the bus station, we found a van that agreed to take a group of us to La Paz.  Loading into the vehicle, we caught the attention of the angry mob.  While the leaders argued with the driver, fuming followers slashed the tires of the van and shouted to us inside, “Nobody leaves the city!”

A half hour after dismounting the van, I agreed to reorganize the same group and find a willing taxi to smuggle us out of Cochabamba.  The regular bus price to La Paz is 15bs.  The cheapest any taxi was willing to transport us for was 150bs – ten times the usual fare.  Boarding the taxi on a clandestine street corner a couple blocks hidden from the eyes of roadblock, we safely secured a ride back to La Paz.

Beyond bad timing for busy Christmas travelers and New Years budgeting, lifting the petroleum subsidy will paralyze the Bolivian economy.  Since labor costs are so low, transportation already accounts for a large majority of final product prices.  Food and consumer goods will all experience similar price surges to those of petroleum, starting with the most basic basket of goods.  People will therefore cut spending and buy fewer goods, dedicating larger portions of incomes to foreign oil, transportation, and food. 

*Prices in Bolivianos (bs) per Liter. Conversion Rate 7bs:1USD.

The full value of the lifted subsidy isn't in its dollar (or Boliviano) amount; this money stimulated the economy by reducing input costs, lowering final prices, and encouraging spending.  When the subsidy was in place, the velocity of money increased, as did the demand for further production of goods.  Eliminating the subsidy has the opposite effect.  Already, back in Samaipata, stores have closed temporarily while owners wait for new market prices to settle.  The town is at a halt.  

As the Bolivian economy drastically slows, President Morales agreed to raise government wages 20%.  Unfortunately, this falls short of the compensation needed to account for other price increases. People will still have relatively less disposable income.  And when businesses look to lower prices and cut costs, jobs and wages will be the first affected.

The “let them eat cake” decision to lift the petroleum subsidy and let domestic prices rise will slow the already fragile Bolivian economy. Doubling gas and diesel prices overnight will ripple throughout the nation with tsunami-like force.  This gracious Christmas gift from President Morales, a man with a heavy socialist platform, infuriated his grassroots base.  Bolivians will not accept these price increases without a fight.

President Morales’s Christmas Gift to Bolivia: Double the Cost of Living

The Funeral of Net Neutrality

The Federal Communications Commission (FCC) just killed net neutrality.  There will be memorial services next week and Shiva will be hosted in rotating residences across Silicon Valley. 

This is the defeat of net neutrality.  Yes, you’ll hear about compromise, but the FCC’s proposal is in no way a compromise. Of the five-commissioners, not a single Republican will vote for this “compromise.” The Democrats all say that they want complete net neutrality, but had to abandon it in their “compromise” with an unmentioned party.

The committee reached their great “compromise” by separating wireless providers with those of broadband – an important concession that will allow wireless providers to distinguish between content and block that which competes with the provider.

What this “compromise” ignores, is that by definition, it is impossible to have partial net neutrality.  Giving in on net neutrality is giving in on net neutrality.  The FCC’s proposal wants to separate some content for some people, but at the same time, never discriminate against content.  This is completely contradictory since net neutrality, like free speech, is all or nothing.

By separating wireless from broadband, the FCC just said that net neutrality only exists for old technology.  Wireless devices are the fastest growing tech sector right now.  For the iPhone alone there are over 300,000 third-party apps with more than 7 billion downloads.  But now providers can block apps and prioritize content.  If the FCC is indeed sincere in its public speeches, they have yet to address how net neutrality, entrepreneurs, healthy competition, or innovation win by awarding AT&T and Verizon Wireless the right to discriminate against apps of their choosing.

Julius Genachowski, the FCC Chairman, tried to spin his proposal.  “These rules fulfill a promise to the future,” he claimed, “to companies that don’t yet exist, and the entrepreneurs that haven’t yet started work in their dorm rooms or garages.” What his words and contradictory actions indicate is that entrepreneurs get equal access to the internet on broadband devices.  However, if they want to create, say, a competitive restaurant guide for college students, but Verizon Wireless already has a contract with Zagats to promote their restaurant application, the entrepreneur will get closed out of the wireless market – the market most likely used by students.  This hurts innovation, free market capitalism, and future commerce.  Internet is the infrastructure for future businesses.  Censoring ideas because they compete with a provider should be constituted as infringement of the First Amendment, not promoted by the FCC.

This proposal is the silver bullet that will kill net neutrality.  Watch as the internet’s barriers to entry begin to climb.  Larger percentages of start-ups will emerge from other countries.  In a time when America needs innovation more than ever, creating these barriers is the absolute worst decision policy makers could place on the ailing economy.  If cutting back on technological progress is the great new idea for promoting economic stimulus, it's no wonder China and India are poised to overtake the US economy.  Mourning the loss of net neutrality is sadly just the first of many funerals soon to come.

The Funeral of Net Neutrality

Pushing China Forward: The Difficulties of Stimulating Domestic Consumption

China's struggle to control domestic markets. 

The Economist predicts that China will overtake the US’s GDP in 2019.  This has huge implications for the future of the world economy.  But when thinking about China vs the US or even vs Europe or Japan, I can’t help but feel that although the aggregate production of 1.3 billion Chinese citizens could be more than that of 300 million Americans, the Chinese aren’t world leaders in anything other than cheap exports.

China's economy still lacks a middle class and domestic industry.  Its GDP per capita is still miles behind its American, European, and Japanese counterparts. According to the IMF, the US ranks 9^th worldwide with $47,132 GDP per capita, Japan 17^th with $42,325, and China 95^TH with $4,283.  While China produces a lot, its people are still poor.  We have yet to see how the country handles the transition to an economy of consumption.  As of now, China is still just an export economy that maintains an artificially low exchange rate to propel international trade.  How will China fare when it stops piggybacking and peddling cheap goods to the rest of the world?  Some day soon, China will need to alter its domestic spending habits. 

The looming unknown is how China’s economy will react once the export focus shifts inwards toward consumption.  Strong domestic markets showing positive growth would lead to a stronger Yuan, and thus weaken exports.  Since the current trade surplus of $170.4 billion provides the investments that sustain China’s economy, domestic industry would need to fill the gap in order to maintain current growth levels. Can average citizens making $4,283 support a domestic economy that competes with America’s? 

Stimulating local commerce is not the same as forcing industrial growth.  Over the last ten years, Chinese wages, as a share of GDP, have dropped from 53% to 40% -- the opposite of what is needed to strengthen domestic spending.  If China were to raise the minimum wages, prices to manufacture would rise and cause exports to drop before domestic markets could develop.  The ruling party needs to recirculate export wealth in order to generate domestic markets.  But growing income inequality (as demonstrated by a Gini Coefficient of 0.28 in 1983 rising to 0.41 in 2010) shows China’s inability to create middle class spending, the most important factor in increasing consumption.

For China to become a world leader, it needs to first create a sustainable domestic economy.  Even if the US continues its stagnant growth, China has yet to prove that it can manufacture domestic stability as well as it produces factory exports.

Pushing China Forward: The Difficulties of Stimulating Domestic Consumption

A Physicist's Statistical Analysis of Cities and Corporations

“When a city doubles in size, it requires an increase in resources of only 85 percent…every measure of economic activity, from construction spending to the amount of bank deposits, increases by approximately 15 percent per capita...

“The modern corporation has an average life span of 40 to 50 years…as the number of employees grows, the amount of profit per employee shrinks…efficiencies of scale are almost always outweighed by the burdens of bureaucracy…the inevitable decline in profit per employee makes large companies increasingly vulnerable to market volatility...

“The impermanence of the corporation illuminates the real strength of the metropolis. Unlike companies, which are managed in a top-down fashion by a team of highly paid executives, cities are unruly places, largely immune to the desires of politicians and planners…cities are valuable because they facilitate human interactions, as people crammed into a few square miles exchange ideas and start collaborations.” -- A Physicist Solves the City, NYTimes, 12/17/2010

A Physicist's Statistical Analysis of Cities and Corporations

International Space Station Photos taken by Astronaut Colonel Douglas H. Wheelock

The Discovery takes off on September 23rd, 2010 for a
three month stay at the International Space Station.

Hurricane Earl as seen from space.  As the astronaughts move through space at
5 miles/hour in respect to Earth, the sun rises and sets 16 times each day.

My favorite shot of the collection.  Astronaut works on repairs to the space station.

Europe at night.  Notice the fog over England and the bright lights centered in Paris.

In contrast, this is Egypt.  Notice the natural concentration of life around the
Nile River and Cairo as the Biblical river spills into the Mediterranean.
The desert is void while life huddles close to water sources.

This one isn't actually from the space station.  It's the map program (ArcGIS) that I'll
use in the future to plan cities, incorporating important factors like available water sources.
The screenshot is equally as telling as the photos of human settlements above.

For the full photo set from Colonel Wheelock's stay at the space station, click here.

International Space Station Photos taken by Astronaut Colonel Douglas H. Wheelock

International Criminal Court Tries to Dissuade Election Violence

The International Criminal Court announcing indictments for Kenyan politicians 

Earlier this week, the International Criminal Court (ICC) launched initial inquiries about six high-ranking political figures regarding human rights abuses surrounding Kenya’s 2007 disputed elections.  This marks the first time the ICC is prosecuting “peace time” bloodshed, as the court attempts to establish a precedent for election related violence.

Election violence in Kenya, 2007

Despite efforts to discourage violent election disputes, after recent voting in the Ivory Coast, incumbent president Laurent Gbagbo refuses to leave office after both election and United Nation officials declared the opposition clear victors.  Gbagbo is already beginning to flex his muscles.  This morning, his security police open fired on civilian crowds, spilling blood in the streets, and leaving the first dead in what is likely to be a long, brutal, power struggle.

The Ivory Coast was once one of Africa’s strongest nations, with an established export industry (producing a third of the world’s cocoa) and a prominent port, refinery, and economic center in Abidjan.  Watching the Ivory Coast’s slow destruction as its economy unravels with increased disorder will devastate the nation.  The election winner, Alassane Ouattara, an economist and former IMF director, promises regional growth if in office.  A swift, clean transfer of power would allow for the recent surge of African investment to spill over to the Ivory Coast.  But Gbagbo’s greed will handicap the country into stagnation.

Laurent Gbagbo voting in an election
whose results he refuses to recognize

The ICC’s and the UN’s threat to organizers of violent election disputes signals that even power hungry leaders must to adhere to rules of law.  The effects of the Kenyan trials should dissuade corrupt elections once the court punishes the first batch of ruthless rulers.  But as is evident by Gbagbo’s stubbornness, it will take time to show the court’s power to prosecute.  These progressive measures to securing fair and free elections should successfully encourage more regional stability.  In reaction to the Kenyan indictments, a former human rights official noted, “This is the first time we have high-ranking people facing the law where they have no control and they can’t bribe their way out of it.”  Although promising, this deterrent hasn’t stopped the violent fallout from the Ivory Coast’s disputed elections.  Continued increases in scrutiny and accountability are the only way to end these corrupt, bloody election battles.

Read more on the Kenyan indictments, the Ivory Coast’s elections, or Gbagbo open firing on civilians.

International Criminal Court Tries to Dissuade Election Violence

"Guaranteeing people a decent retirement and decent health care does more than smooth out the rough edges of capitalism. Those guarantees give people the freedom to take risks. If you know that professional failure won’t leave you penniless and won’t prevent your child from receiving needed medical care, you can leave the comfort of a large corporation and take a chance on your own idea. You can take a shot at becoming the next great American entrepreneur." -- David Leonhardt, NYTimes, 12/15/2010

For previous discussion of why intervention allows capitalism to succeed, read the previous post, "Corporate or American Growth?"

Let’s look at two visual representations of global trends:

The first is a video from Swedish professor, Hans Rosling, comparing countries’ income growth and life expectancies over the past 200 years.  It’s interesting to watch the changes caused by the Industrial Revolution, the Great Depression, World War I, and the end of World War II, as well as, to see the state of the world today in 2010.

This next graphic is a projection of urban growth in Africa in fifteen years.  This nicely accompanies the last post, “King Abdullah Economic City,” about urban expansion and the growing demand within the regional planning industry.

From The Economist, The Urbanisation of Africa (12/13/2010)

Let’s look at two visual representations of global trends:

King Abdullah Economic City



King Abdullah Economic City, Saudi Arabia



In Saudi Arabia, half the population is under the age of twenty.  In addition to foreseeable problems with the future labor force, an unbalanced demographic distribution has strong implications for regional stability.  Responsive Saudi Sheiks address both modernity and lopsided population growth with an ambitious regional project.  In a barren desert enclave on the edge of the Red Sea, the kingdom will construct a new urban development, outside the grasp of religious clerics, to spur economic progress.

King Abdullah Financial District as
designed by Henning Larsen Architects

Saudi Arabia announced the construction of a Chinese-style “economic zone,” King Abdullah Economic City (KAEC, pronounced “Cake”).  To attract investment and talent, security protocols, reminiscent of oil compounds, will insulate Western cultural freedoms (equal women’s rights, religious autonomy, foreigner land ownership, modern technology) within its borders etched in by high-speed expressways.  What appears to be the Sheik’s personal Dubai, this special zone will disburse and re-circulate the kingdom’s oil wealth throughout the country’s economy.

Beyond overcoming religious opposition in an Islamic territory, developing a city from scratch is as awe-inspiring as flying a rocket to the moon.  Line Thorup Schultz heads the Danish team from Henning Larsen Architects that won the contract to design the kingdom’s financial district.  Ms. Schultz integrated corporate towers, 400,000 residential apartments, houses, and villas, a co-ed university campus, four underground parking lots, a circling monorail, two kilometers of air-conditioned sidewalks, countless plazas, three mosques, and one of the world’s largest and most technologically advanced ports.  The goal of King Abdullah Economic City is to diversify Saudi Arabia’s petrol-dominated economy and to create over one million jobs when KAEC is fully completed.

Bill Ch'ng, Executive Director of Malaysia
Pacific Corp, showing off a 60,000 person
development within Iskandar Malaysia 

If KAEC is as successful as the Dubai sized dreams of the Sheiks, three more zones to fuel China-like economic growth are set to be build across the country by 2030.  Each new city will focus on either scientific research, heavy industry, or agriculture.  

KAEC represents the growing demand for regional planning avant-garde masterpieces in the new millennium.  Stemming from the success of China’s “special economic zones,” most notably the city of Shenzhen, countries eager to quickly develop have constructed (or began building) Duabi, Masdar City, and Iskandar Malaysia.  While the Middle East and Asia prepare for the 21^st century, if cities focused on economic growth keep flourishing, the urban and regional planning industry will follow suit with equally fast paced and elaborate expansion.  Castles-in-the-sky will continue to become world-changing realities.

Click links for further reading on King Abdullah Economic City, Masdar City, Shenzhen, or Iskandar Malaysia.


UPDATE: "According to World Bank estimates of 2007 there are more than 3,000 projects taking place in [Special Economic Zones] in 120 countries worldwide."  AND "According to the UN’s Population Division, by 2050 around 70% of the world’s population will be living in urban areas."  This is GREAT news for the planning industry!

King Abdullah Economic City

Corporate or American Growth?

The US continues to give priority to corporate interests as the principle economic driver.  The country has thus consolidated growth interests into the success of concentrated conglomerates – and at the peril of small and medium sized businesses. 

Competition leads to innovation and growth.  It’s the plain and simple foundation of economics.  But our oligopolistic society is straying from its capitalistic "Land of Opportunities" dream. Corporate conglomerates dominate an overwhelming aggregate of industries.  Motivated by “global competition,” companies win subsidizing government breaks to perpetuate their economies-of-scale production efficiency.  The US trade balance currently registers a deficit of $458.5 billion, while the Chinese trade balance chalks-up a surplus of $170.4 billion.  Where does that leave the US in terms of global competition?  Regulatory concessions aren’t making US businesses more internationally attractive.  We’re only left with a second-rate export industry.  Domestically it’s worse.  Giving preference to larger establishments smothers smaller competition and leads to a weaker national business environment.

In perfect competition, which as a capitalistic democracy we hypothetically strive for, no participant has market power.  Wal-Marts bankrupting local shops and business does not create healthy competition.  It suppresses it.  Too-big-to-fail financial institutions do not encourage competitive forces.  They squash them.  Conglomerates force out competition through predatory economies-of-scale practices, raising barriers to entry and to success across all industries (ie a minimum size requirement).  This hinders competition, which thwarts innovation, which curbs growth.

In politics, conservatives look more like Russian oligarchs than liberals do Red Scare socialists.  Liberals needs to create a cohesive message on this front.  Anti-big business is not anti-capitalist.  Attacking corporate powers is indeed beneficial for the US economy.  Corporations are not creating jobs, despite record profits and record capital stocks.

This past quarter, American companies declared $1.659 trillion in profit, the highest amount ever recorded.  In this same time period, unemployment rates rose from 9.6% to 9.8%.  And worst of all, corporations do not redistribute these earnings throughout the economy.  Since the end of 2008, as corporate profits rose 57% or $572 billion, average workers’ salaries dropped $121 billion.  Corporate cash stockpiles grew to a historic $837 billion.  America’s corporations are monopolistic oligopolies that hoard wealth.  Companies are buying back shares instead of reinvesting profits.  They aren’t actively producing business competition.  Corporations amusingly watch as smaller competitors struggle to weather the storm of the recession.  It’s a power grab!  Corporate, “too-big-to-fail,” market dominance holds the US economy hostage in the treasure hunt for profit.

The American economy needs to reintroduce strong regulation.  Regulation that limits market power; that separates commercial and investment banking; that eliminates polarity and restores income equality; that gives preference to medium sized businesses over conglomerate consolidation; that promotes competition, job creation, and innovation in the face of bottom-line production efficiency; that cures profit-maximizing addiction so as to align business and societal ambitions.  The US is straying from the capitalistic principles that let it prosper over aristocracies.  The country needs to restore competitive capitalism in order to regain economic prosperity.

Corporate or American Growth?

"Once you have tried flying, you will walk with your eyes set in the sky, because you have already been there, and will long to go back." -- Leonardo da Vinci

"The two Hungarian Acrobatic Paraglider athletes Pál Takáts and Gábor Kézi train themselves to be the bests in the sport they live for. They travel around the world, win competition after competition, and finally reach their goal of a lifetime: to be professional athletes, who can make a living form the sport they love."

I've been trying to get my hands on this documentary all week. Unfortunately, I can't find a place to download Adrenaline & Turbulence and no local video stores carry paragliding films. (If you couldn't tell, I'm starting to get real excited to start my Level 2 Novice paragliding course next month in the high altitude thermals outside La Paz.)

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Yesterday's SpaceX Dragon Capsule
Launch (08/12/2010)

Also in aeronautic news, during their trail launch yesterday, the outer-space shuttle company SpaceX successfully sent a capsule circling Earth all morning before landing at the planned zone in the Pacific. As private sector space travel grows toward fruition, space vacations will become a more and more realistic possibility for the middle class and not just the super rich. The Japanese Rocket Society's Space Tourism Study Program estimates that in 10-20 years, the private space travel industry will have about one million visitors annually, at prices that will eventually drop down to $10,000 a flight. That's a huge improvement from Virgin Galactic's current offer of $200,000 for a five minute joyride. And companies including Virgin Galactic and Bigelow Aerospace are already planning space hotels. The future isn't as far away as some would think. Out-of-this-world space prices should reasonably drop during lifetime of this generation.

Three Senators

Lost in the desert are three senators: a Democrat, an Independent, and a Republican.  They’ve been wandering for days without food or water when they stumble upon a magic lamp with a genie inside.  The genie appears and says, “I have three wishes to grant, one to each of you.” 

Knowing it’s his lucky day, the Democrat speaks up first.  “I wish I was back in San Francisco, far, far away from the hot desert sun.”  The genie nods his head.  POOF.  The senator is back in San Francisco.

Next, the Independent steps forward.  “Like my friend, I too want to be home.  I wish I was back in Pennsylvania.”  The genie nods his head.  POOF.  The senator is back in Pennsylvania.

The genie then turns to the Republican senator.  The Republican thinks for a moment, smirks, and says, “I wish the other two senators were back stuck in the desert with me.”  POOF.

Three Senators

Power Struggles Cause Fall from Grace

“The business community cannot endure yet another crisis.”  The country’s industries, which produce more than one-third of the world’s GDP, badly need sprucing up. That will not happen if the country slides into chaos. Businessmen are conscious that they have already missed out on much of the recent spurt of investment.

The pity is that country could recover quickly if only its politics were sorted out. Its infrastructure is still relatively good. It could again become the world’s economic motor.

The passage above is taken from yesterday’s The Economist.  I removed and altered references to specific industries, ports, and regions, because of how this passage could easily be interpreted differently if taken out of context.  The paragraphs above do not in fact describe the mess on Capital Hill.  They describe Africa’s Ivory Coast (Côte d’Ivoire) after run-off elections that could easily turn violent.

After similarly comparing current US economic policy to that of 1980’s Latin America, I continue to be amazed and discouraged that a political system, once the envy of the world, is falling from grace.  Due to the same power-struggle shackles that cripple growth and development in Africa, America is falling victim.  Exchanging “the cocoa industry’s share of world supply” for “the country’s share of world GDP” and removing a sentence about an Abidjan refinery and port are the only differences above between the US and the Ivory Coast.

Power Struggles Cause Fall from Grace