Chart of day: Rapidly falling under-5 mortality across Africa

From Global Development blog via Craig Nordin:

Under-5 mortality (per 1,000 live births) in selected
sub-Saharan African countries surveyed since 2005

Go to the blog post for analysis. My point:  interesting how opening up to globalization coincides with this.  Not arguing initial causality, which is multivariate.  Point is:  opening up to globalization certainly doesn't "impoverish" along these crucial lines.

This joyous development begets a demographic dividend, which sets a clock a'ticking.  How Africa handles this historic opportunity is crucial of course, but clearly this is the best problem yet for the continent.

And what is progress other than moving off worse problems to better ones?

This story is nothing new.  We saw doubling of human life expectancy across 20th century (started in low 30s in 1900 and reached 65 by 2000) and that was almost all about reducing under-5 mortality - and that was overwhelmingly due to vaccines, with clean(er) water a crucial second.

To what extent China can copycat the fracking revolution in US

Big FT piece.

China, we are told, has enough shale gas to cover its needs for 200 years.  It currently has no commercial production but wants to reach 60B cubic meters by 2020. A number of big Chinese and foreign energy firms are currently exploring China, with Sinopec running the big Tarim basin that is routinely described as the biggest in the world.

Dozens of exploratory wells have, so far, yielded mixed results.  The geology is just not the same as the US - more complex, so serious additional innovation will be required.  China's reserves are deeply buried and feature more clay, which is far harder to break up to release the gas.

China also lacks the US's existing pipeline network and trained personnel.

To overcome the stiffness of its three primary national energy companies, China has allowed foreign companies in and plans to liberalize prices on oil so its own companies will invest more.

Then there's the Chinese investment in US firms over here, a development that's been met with far less resistance than when CNOOC tried to buy Unocal seven years ago.  CNOOC plopped a solid $2b into Chesapeake Energy to access some of this technology.

This will be one follow-on to the US fracking revolution worth watching closely.

How fast King Coal gets fracked

Fascinating to watch all the "they're trying to kill clean coal" commercials on TV that target some politician, the Obama administration or so on (evil regulators).  In truth, what's killing King Coal right now is the uber-cheap price of gas in the US.  

Citing a WSJ story, the millions BTU price of natural gas in the US is about half of what it was just a year ago, and that previous price was at least half of the average global price - which is rising in most places given the lack of LNG and the difficulty in buying it for most emerging market players.

So, amidst that crazy glut in the US, made all the more worse by the mild winter that did not much draw down US natural gas stocks, and we're seeing stunning drops in the US use of coal to generate electricity. It fell by almost one-fifth (!) in the fourth quarter of last year, and we're expecting first quarter news any day now.

But as I've noted before, the answer for coal is exports.  The energy value of our coal is significantly higher than that found just about anywhere else, so if new market export relationships can be built, we can displace a lot of less-valuable coal from other sources.

My prediction is that America becomes a huge and important coal source for both India and China.  Just give it enough market change.

What got me tuned in on all this?  Wikistrat's recent simulation on the "North American Energy Export Boom."

Planning for less Chinese growth

Citing FT here (pic from NYT), but there's been a slew of stories recently in WSJ and FT on same subject:  Western companies planning for less exports to China and looking more to home markets as a result.

As one exec put it: "The problem in emerging markets for us is really isolated to China."

Here also: "... the speed of the slowdown in Chinese demand has taken companies by surprise."

This is the higher labor costs kicking in prior to the domestic consumption driver kicking in enough to compensate for it - the essence of the middle-income trap.  

Doesn't mean companies don't expect growth in China or aren't planning on it.  Just means all this hype about the Chinese economy ruling all is rapidly dissipating.

West's conundrum on Syria

WSJ story: "Syria attacks seen as sign of extremists' rise."

Reason why, in a column a bit back, I argued for quasi intervention (imagining something in air control along Turkish border + arms support to rebels) is that, the longer this goes on, the more it becomes next natural cause celebre for AQ and associated.

So conunudrum is usual one: people say, don't get involved because we encourage terrorism/are forced to ally with terrorists.  Problem is, best way to ensure their growth is to sit back and let civil strife unfold over longer haul now made possible by our inaction.

We also buy lots of stiff-arming diplomatically from great powers generally because we don't resolve this.  If we went harder and faster, we'd still get stiff-armed, but speeding the killing also speeds the great-power dynamics past this dispute.

We all know we'll be in semi-aggressive stance on Syria so long as Assad remains, so why not get it over with? Why not speed the kiliing?

My preference is always the "damned if you do" variant.

No question about the "right side of history" here.

Chart of the day: remittance "corridors"

From the Economist.

I just love global maps indicating flows - naturally.

What do we see here?

Per my vernacular, in sheer volumen we see New Core being fed remittances by expats living in Old Core.  But when it comes to countries relying heavily on remittances as percentage of GDP, it tends to be mostly Old/some New Core and it all pretty much goes to Gap countries.

Per my flow concept:  whatever the resource, it flows from regions where it is plentiful (here, earning opportunities) to where it is less so.  Yes, we think of India, China, Mexico as New Core and thus "made," but all share the reality of significant numbers of rural poor.  In truth, in most New Core countries, there is massive internal remittances flows.

What I love about this:  this is the best foreign aid there is, because people use it as they see fit.  

You may say to yourself:  What a drain on Core - especially US!

Studies have shown, however, that expats living in new countries spend something like 90% of their earnings in-country, sending about 1/10th home.  It's just that those flows still number in the billions, swamping anything we do on official developmental aid.