World rates of chronic undernourishment are down by 40 percent in the last 20 years.
November 26, 2014
THE NUMBERS: Fastest reductions in chronic undernourishment, 1990/1992 to 2012/2014 *–
* UN Food and Agricultural Organization estimates. FAO defines “chronic undernourishment” as “a state, lasting for at least one year, of inability to acquire enough food, defined as a level of food intake insufficient to meet dietary energy requirements,” and defines hunger (though not famine) as “being synonymous with chronic undernourishment.”
WHAT THEY MEAN:
From Mayflower passenger Edward Winslow, the single eyewitness account of the first Thanksgiving in 1621:
“We set the last spring some twenty acres of Indian corn, and sowed some six acres of barley and peas, and according to the manner of the Indians, we manured our ground with herrings or rather shads, which we have in great abundance, and take with great ease at our doors. Our corn did prove well, and God be praised, we had a good increase of Indian corn, and our barley indifferent good, but our peas not worth the gathering, for we feared they were too late sown, they came up very well, and blossomed, but the sun parched them in the blossom.
“Our harvest being gotten in, our governour sent foure men on fowling, that so we might after a speciall manner rejoyce together, after we had gathered the fruits of our labours ; they foure in one day killed as much fowle, as with a little helpe beside, served the Company almost a weeke, at which time amongst other Recreations, we exercised our Armes, many of the Indians coming amongst us, and amongst the rest their greatest king Massasoyt, with some ninetie men, whom for three dayes we entertained and feasted, and they went out and killed five Deere, which they brought to the Plantation and bestowed on our Governour, and upon the Captaine and others. And although it be not always so plentifull, as it was at this time with us, yet by the goodness of God, we are so farre from want, that we often wish you partakers of our plentie.”
How many people are safely ‘farre from want’ this Thanksgiving?
1. One way to answer: “more than ever before.” The UN Food and Agricultural Organization has done five estimates of hunger rates and totals since the early 1990s, which cover the world as a whole and 115 individual countries. The first, covering the period 1990-1992, found 1 billion people chronically undernourished – 18.7 percent of the world’s people, or about 1.01 billion men, women, and children. Rates of hunger were above 30 percent of population in 33 of the survey’s 115 countries, and above half in 9. By the 2000-2002 survey these figures had dropped to 14.9 percent of world population and 930 million people; the most recent, for 2012-14, finds 805 million people or 11.3 percent of the world population hungry, and only one country, Haiti, with a rate of chronic undernourishment still above 50 percent.
Over a generation, then, hunger has been in steady retreat. By country, over the full 20 years of these surveys, Georgia and Thailand have both cut chronic undernourishment by over 80 percent; ten more countries have done nearly as well, with Angola, Armenia, Cameroon, Djibouti, Myanmar, Nigeria, Peru, Sao Tome, St. Vincent, and Vietnam all cutting undernourishment rates by more than 70 percent. By region, Southeast Asia’s decline has been fastest, down from 31 percent in 1990-1992 to 10.7 percent, with Latin America next at 60 percent. Nor has this progress slowed: about 9 million people have been escaping hunger annually in the short three years since FAO’s 2009-2011 survey.
2. A second answer: “far too few.” FAO’s report finds 805 million men, women, and children worldwide still chronically undernourished in 2012-2014 (76 million in South Asia, 227 million in sub-Saharan Africa, 64 million in Southeast Asia, 31 million in the Middle East, and 37 million in Latin America and the Caribbean) and believes that in 13 countries, more than 30 percent of people remain hungry. These are the Central African Republic, Chad, Congo, Ethiopia (though Ethiopia, focus of the 1989 “Live Aid” appeal, has cut chronic undernourishment from 75 percent of population in 1990 to 55 percent in 2000 and 35 percent in 2012-2014) Madagascar, Namibia, North Korea, Rwanda, Tajikistan, Tanzania, Zambia, and Zimbabwe along with Haiti.
Hunger remains a presence in the United States as well. The Department of Agriculture’s most recent Household Food Security in the United States, released September 2014, finds 5.6 percent of the country’s 121 million households suffering from “very low food security,” meaning that “the food intake of some household members was reduced and normal eating patterns were disrupted at times during the year due to limited resources.” Pilgrim destination Massachusetts and North Dakota have America’s lowest rates of food insecurity, but even in these states, USDA estimates find about 3 percent of households with very low food security.
So a generation of remarkable progress, in which fear of hunger has vanished from many millions of lives. But on this 393rd Thanksgiving weekend, not all are far from want, and the fight against hunger is not yet won.
FAO’s State of Food Insecurity in the World 2014: http://www.fao.org/publications/sofi/2014/en/
The World Food Program USA seeks emergency help for aid to Syria, Iraq, Gaza, South Sudan, the Central African Republic and West Africa: http://wfpusa.org/hungerhotspots
Bread for the World’s 2015 Hunger Report examines women as food producers, the “feminization” of hunger and poverty, and rural female empowerment as part of the end of hunger: http://hungerreport.org/2015/
The Alliance to End Hunger: http://www.alliancetoendhunger.org/
Oxfam America on national policies, the role of small-scale farming, and more: http://policy-practice.oxfamamerica.org/work/food-agriculture-livelihoods/
At home -
USDA’s Household Food Security in the United States 2014: http://www.ers.usda.gov/publications/err-economic-research-report/err173.aspx
And Massachusetts then and now -
Edward Winslow describes Plymouth Colony fisheries, agriculture, and farm trade with the Wampanoag:
“… For fish and fowl, we have great abundance; fresh cod in the summer is but coarse meat with us; our bay is full of lobsters all the summer and affordeth variety of other fish; in September we can take a hogshead of eels in a night, with small labor, and can dig them out of their beds all the winter; we have mussels and othus at our doors: oysters we have none near, but we can have them brought by the Indians when we will; all the spring-time the earth sendeth forth naturally very good sallet herbs: here are grapes, white and red, and very sweet and strong also. Strawberries, gooseberries, raspas, etc. Plums of three sorts, with black and red, being almost as good as a damson: abundance of roses, white, red, and damask; single, but very sweet indeed.”
Winslow’s “Mourt’s Relation,” 1621 (modernized spelling). The First Thanksgiving account is near the end of Part VI: http://www.histarch.illinois.edu/plymouth/mourt1.html
The Greater Boston Food Bank, 2014: http://www.gbfb.org/our-mission/hunger.php
The Wampanoag today: http://www.mashpeewampanoagtribe.com/
More than half of the world’s worst-paid jobs vanished in the last generation.
October 8, 2014
THE NUMBERS: Workers earning $1.25 per day or less,*
* ILO 2014 estimates, wage equivalents in constant 2005 dollars.
WHAT THEY MEAN:
Some startlingly good news from the International Labor Organization’s World of Work Report 2014, released last May:
“In 1994, 39 per cent of the developing world’s workers were living with their families in extreme poverty (on less than US$1.25 in consumption per household member per day). By 2004, this figure had fallen to around 25 per cent and, by 2014, it is estimated to have fallen to 13 per cent. As a result, there are 417 million fewer workers living in extreme poverty now than there were two decades ago.”
What is happening? The world of very low-income work can be described in four short points:
1. An eighth of the world’s workers earn extremely low incomes. By the ILO’s count, this morning 3.33 billion men, women, and children will make the trip from home to office, factory, construction site, shop, restaurant, and field. About 375 million of these workers – one in every eight – will earn $1.25 or less by evening. (And their take-home pay will be lower still, since even a minimal 25 cents for lunch and 10 cents for transport takes more than a quarter of a $1.25 worker’s daily earnings). These are the world’s working poor: about 155 million in South Asia, 130 million in sub-Saharan Africa, 43 million in China and Southeast Asia, and the rest scattered around the Middle East, Haiti, the Andes, New Guinea, and other places with pockets of deep poverty.
2. Few extremely low-income workers earn regular wages. About 22 percent of extremely low-wage poor workers are not paid at all. These are family members helping in subsistence farming, small shops, or similar work. Another 62 percent are “own-account” informal workers – day-laborers and other temporary employees looking for odd jobs or seasonal work on plantations and construction sites. Only about 15 percent of very poor workers get regular wages or paychecks, and likewise few work in places where safety, pay, and other benefits are inspected by local governments or international businesses and agencies.
3. Most extremely low-income workers are rural. Nearly two-thirds of extremely low-income workers – 64 percent of them, or 240 million men, women, and children – are farmers or hired farmworkers. By comparison, ‘industrial’ work in factories, mines, quarries, fishing boats, and construction sites employs about 65 million very low-income people. Services, a much larger employer, account for the remainder of very low-income work in industries like maid work, deliveries, and so on. Combining these percentages with the ILO’s 375 million-worker estimate, the world of extremely low-wage work looks like this:
** “Industry” in ILO’s definition includes manufacturing, construction, mining/quarrying, and fisheries.
Farms and fields are also where most child laborers work – the ILO’s 2012 estimate found 98 million of the world’s 168 million child laborers in agriculture. Though little data exists for their earnings, a separate 2007 ILO study of child labor in four countries found them (though not always) often earning less than adults for comparable jobs, suggesting that the count of very low-income workers probably includes many of the world’s child workers.
4. Each day since 2007, the count of extremely low-income jobs has been dropping by about 53,000. The ILO’s estimates over time find the count of very poor workers down from 811 million in the early 1990s, to 491 million in 2007, to 375 million in 2013. The child labor estimates don’t go as far back, but are also down: 245 million in 2000 to 215 million in 2008, and the 168 million for 2012. Admitting uncertainties in measurement and daily fluctuations, this suggests that each day 32,000 boys and girls exit child labor, and 53,000 workers move out of very low-income life.
In effect, by the end of today’s workday, the world will have shed tens of thousands of its worst and most exploitative jobs, and a considerable number of children will have moved from labor sites to schools. These are quiet and small shifts, unlikely to distract many people from the crimes, follies, and misfortunes of tomorrow’s morning news. But at the bottom, without attracting much attention, life appears to be getting better.
What explains this? The answer seems to combine structural demographic trends with an assortment of clever policies:
(1) Demographic trends appear to be steadily pushing down low-income work and child labor. Agricultural work, the center of both, provided 54 percent of developing-world jobs in the early 1990s, and 39 percent today. As farms and fields have given way to offices, shops, and factories, extremely low-income work and child labor have declined while wage-paying employment and lower middle-class jobs have grown.
(2) Creative social and economic-development policies deserve credit too. The World Bank cites Brazil’s Bolsa Familia, which offers stipends to low-income families that keep children in school, as an effective way to help bring down child labor rates; and the ILO uses Chile in fruits and salmon, Peru in fresh vegetables, and Madagascar and Uganda in organic produce, as effective in raising the incomes of rural workers and their families.
Data on low-income work and child labor -
ILO’s 2014 World of Work, with the agriculture/industry/services divisions of labor by wage rate on page 11, and estimates for totals of very low-wage on page 41: http://www.ilo.org/global/research/global-reports/world-of-work/2014/WCMS_243961/lang–en/index.htm
Marking Progress Against Child Labor, the International Labor Organization’s 2013 report: http://www.ilo.org/global/about-the-ilo/newsroom/news/WCMS_221568/lang–en/index.htm
And from 2007, ILO researchers study the wages and incomes of child laborers in Uganda, India, the Philippines, and Ghana: www.ilo.org/ipecinfo/product/viewProduct.do?productId=7065
The World Bank looks at Brazil’s Bolsa Familia : http://web.worldbank.org/WBSITE/EXTERNAL/NEWS/0,,contentMDK:21447054~pagePK:64257043~piPK:437376~theSitePK:4607,00.html
The ILO offers success stories from Egypt, Cambodia, Uganda, Colombia, and the United States on reducing hazardous child labor: http://www.ilo.org/ipecinfo/product/viewProduct.do?productId=19315
And the U.S. Department of Labor’s International Labor Affairs Bureau manages U.S. child labor reduction programs and reporting: http://www.dol.gov/ilab/issues/child-forced-labor-trafficking/
And a bit more context –
Where do these 53,000 workers go? An uncertain, but probably significant, number of them are children moving from work to school. Otherwise, $1.25-per-day workers escaping extreme low-wage work don’t get very far away. Instead they move slightly up, into a group of 457 million workers earning somewhere between $1.25 and $2.00 per day.
According to the ILO, these workers are also mostly rural people. Farmers and farmworkers accounting for 58 percent of the total, or about 265 million people. This pool of workers is also shrinking in percentage terms – down from 23.6 percent of developing-country workers in 1994 to 16.9 percent today. The absolute numbers have changed less; the ILO’s estimates are 410 million $1.25-to-$2 workers in 1991, 498 in 2007, and 460 million as of 2013. Combining both groups, the full pool of poor workers under $2 per day, has (a) contracted by about half in percentage terms, from 69 percent of developing-country workers in 1994 to 32 percent today; and (b) shrunk by just under a third in actual numbers, from 1.2 billion people to 840 million.
2014 Arctic ice minimum: 5.02 million square kilometers.
September 24, 2014
THE NUMBERS: Greenhouse gas emissions plus deforestation carbon equivalent by country, in billions of tons carbon-equivalent* -
|WORLD||35.0 billion tons||45.9 billion tons|
* From World Resources Institute, Climate Analysis Indicators Tool, at http://cait2.wri.org
WHAT THEY MEAN:
The Arctic sea ice expands and contracts each year like a lung – growing through the autumn and winter towards its late-March peak, then shrinking over the summer to its smallest expanse, the annual “minimum,” in mid-September. The National Snow and Ice Data Center in Colorado believes this year’s minimum came last Wednesday:
The Arctic’s sea ice cover appears to have reached its minimum extent on September 17, 2014. Sea ice extent on that day was measured at 5.02 million square kilometers (1.94 million square miles). It was the sixth-lowest extent recorded since satellites began measuring sea ice in 1979. The number is above the 2012 record extent but is still below the long-term average.
In context, 5.02 million square kilometers is 1 percent of the earth’s surface, or in land-equivalent terms between Australia’s 7.2 million square kilometers. and the European Union’s 4.4 million. The 2014 minimum is well above the record 3.4 million square kilometer low of 2012, but about 1.7 million sq. kms. smaller than the 6.7 million average from 1980-2000. The ice-volume estimates done by University of Washington’s Polar Studies Center – 8.15 million cubic kilometers in 2014, as against a 1980-2000 average of 12.9 million cubic kms – suggest that the 2014 sea ice is on average about two feet thinner than it was a generation ago.
Like other climate-change phenomena, shifts in ice coverage depends on many factors – short-term issues like seasonal storms and cloud cover, which combined to help create the extreme 3.4-million sq. km. minimum in 2012, the lowest figure ever measured; the long-term interplay of low-albedo dark water and bright Arctic sun, which reinforces itself as ice cover shrinks; and the human-influenced trends in gas emissions and deforestation. The world’s great and wise are meeting today to discuss these issues at the UN’s Climate Change Summit in New York. As they do so, they can look back on a millennial record as follows:
Emissions: Since the Kyoto Conference at the end of 1997, total greenhouse emissions – carbon dioxide, methane, and so on – have grown by about a third, or by 10.9 billion tons of carbon equivalent. The largest story in this is Chinese industrial growth: Aggregates of all gases find Chinese emissions accounting for 6.3 billion or three-fifths of the total between 1998 and 2011. Using more up-to-date estimates which cover carbon dioxide emissions alone (CO2 accounts for about two-thirds of emissions), the Netherlands Environmental Protection Agency places Chinese net growth at 6.3 billion out of 10.1 billion tons net increase of CO2 from 1997 to 2012, with the 9.9 million tons in total emissions estimated for 2012 nearly as much as those of the United States, the European Union, and Japan combined.
Elsewhere in the world, developed-world emissions have been stable or dropping. The U.S. and EU are both down about 7 percent from their 1997 CO2 totals, with drops of 10 percent or more in Germany, France, and the United Kingdom. Japan, Canada, Australia, and Russia, though, are all slightly up. No cause for smugness in the U.S. – while the financial crisis and the natural gas boom together cut emissions sharply between 2007 and 2012, early estimates for 2013 suggest an upturn of 3 percent, or 150 million tons. Indian emissions, meanwhile, are up about a billion tons per year, accounting for 10 percent of the net increase; Korea and Taiwan combine to add 0.3 billion tons, Brazil and Mexico 0.25 billion tons, and the rest of the world 2 billion more.
Carbon sinks: Trends in forest cover and other factors that pull carbon out of the air are is similar. Since the late 1990s, forest coverage in the big northern-hemisphere countries – the U.S., Canada, and Russia – has remained stable. China’s cover has risen from 19 percent to 23 percent of land area, offsetting about 0.3 billion tons of extra gas emissions; the European Union’s cover is up from about 37 to 38 percent of land area. Near the equator, though, the big forests have continued to shrink more rapidly than northern forests have grown: Brazil’s coverage has dropped from 65 percent to 61 percent of land, Indonesia’s from 55 percent to 52 percent, Congo’s from 69 percent to 68 percent, and Papua New Guinea’s from 66.5 to 63 percent. Altogether, world coverage is down about 1 percent since the turn of the century, from 40.4 billion sq. kms. to 40.1 billion sq. kms. as of 2011, an aggregate loss roughly equivalent to the land area of Japan.
In sum, the Summit participants contemplate a record which is very sobering but not hopeless: (1) generally negative trends in emissions and carbon sinks; (2) examples of success, especially in Europe, and some long-term evidence that development can bring both carbon-efficiency and rising forest coverage; and (3) less time to change.
The UN’s climate change summit: http://www.un.org/climatechange/summit/
Secretary of State John Kerry on U.S. policy: http://www.state.gov/secretary/remarks/2014/09/231950.htm
The European Union’s approach: http://ec.europa.eu/clima/policies/brief/eu/index_en.htm
And the Sydney-based Lowy Institute offers a guardedly optimistic look at Chinese climate policy, guessing that Chinese emissions may peak in 2025 and then begin to decline: http://www.lowyinstitute.org/publications/chinas-climate-change-policies-actors-and-drivers
Trends & data: emissions and sinks -
WRI’s “Climate Analysis Indicators Tool” has data through 2011 for all greenhouse gases and land use: http://cait2.wri.org/
The Netherlands Environmental Agency estimates carbon dioxide emissions by country through 2012: http://www.pbl.nl/en/publications/trends-in-global-co2-emissions-2013-report
Data for CO2 only, 1997-2012 –
|WORLD||24.4 billion tons||34.5 billion tons|
The World Bank has forest-cover estimates by country and region, 2000-2011: http://wdi.worldbank.org/table/3.1
… also from the World Bank, forest cover by country back to the 1980s: http://data.worldbank.org/indicator/AG.LND.FRST.ZS
And reports and assessments from the Intergovernmental Panel on Climate Change: http://www.ipcc.ch/
Trends & data: Arctic ice -
Arctic sea-ice and other estimates from the National Snow and Ice Data Center: http://nsidc.org/news/newsroom/arctic-sea-ice-reaches-minimum-extent-2014
Arctic ice volume estimates from the University of Washington’s Polar Science Center: http://psc.apl.washington.edu/wordpress/research/projects/arctic-sea-ice-volume-anomaly/
60 export credit agencies operate worldwide.
September 17, 2014
THE NUMBERS: Export credit, tied aid, & other export financing worldwide, 2013 -
|U.S. Ex-Im Bank||$14.5 billion|
* Ex-Im Competitiveness Report 2013; $286 billion total for OECD members, China, India, Russia, and Brazil; no estimates available for export credit agencies in 25 smaller countries outside the OECD. Does not include all forms of public credit.
WHAT THEY MEAN:
Introducing the 2013 Annual Report of Germany’s export credit agency, Euler Hermes Gesellschaft, Economic Minister Sigmar Gabriel provides context for ProgressiveEconomy’s newest paper – a look by Executive Director Ed Gresser at the Congressional debate on whether to ‘reauthorize’ the Export-Import Bank of the United States. Here is Herr Gabriel:
“Exporting strength and competitiveness are central pillars of the German economy and guarantors of high employment. With its export credit scheme, the Federal Government provides an important contribution to safeguarding the success of Germany as a source of productivity and innovation.”
Gabriel’s Annual Report finds Hermes providing 28 billion euros in loans, insurance, and other forms of export credit – roughly $35 billion – in 2013 to support 866 transactions, including shipments of three petrochemical plants to Central Asia and the Middle East, four aluminum rolling mills to China, 96 airplanes, 12 cruise ships, a wind farm in Ireland, and much else. Hermes in turn is only one of 60 public export credit agencies around the world – every major economy runs one, as do Sri Lanka, Ecuador, Slovenia, Luxembourg, and so on more – which together provide $300 – $400 billion in export credit, tied aid, and investment financing per year. The Ex-Im Bank of China outdid Hermes with $45 billion; Japan’s rather different program accompanied $2.1 billion in credit with $33 billion in tied aid and investment finance; France’s program did $9.5 billion, and the U.S. Ex-Im Bank did $14.5 billion.
Gabriel is an advocate of better international rules to limit and regularize these agencies. (The OECD export-credit agreements, applying to Europe, Japan, Canada, Australia, Korea, and so on, do not cover the agencies run by China, India, Brazil, and other emerging economies). But he strictly rules out any German withdrawal from the field:
“The export guarantee scheme of the Federal Government is one of the main cornerstones in the promotion of trade by the Federal Republic of Germany.”
Against this crowded and complex backdrop, Congress is deciding the fate of the American Ex-Im Bank. An 80-year-old agency launched in tandem with Franklin Roosevelt’s “Reciprocal Trade Agreements Act” in 1934, Ex-Im employs 412 people and made 3,900 grants of loans, guarantees, and insurance last year, for projects ranging from a $400 textbook sale to Nigeria to multibillion dollar transactions in power, aviation, and subway systems comparable to (and often competing with) the German program. Its charter must periodically be renewed by Congress, with the next deadline coming in October. If it doesn’t happen, Ex-Im ceases operations.
Gresser’s paper observes that this debate is really less about whether a public role in export credit is a good thing per se, than whether the U.S. ought to drop out while other countries continue their programs. This noted, it argues for renewal of the charter on four grounds, viewing Ex-Im as:
(a) A useful support for export-based growth in the immediate future, with the U.S. economy continuing to need to tap foreign demand in the long recovery from the 2008-2009 financial crisis;
(b) An important means to support large-scale sales of power equipment, urban infrastructure, aviation, and other long-term contracts for developing countries where private credit is less easily available, and also a way to help introduce new exporters and smaller businesses to exporting – that is, under Ex-Im’s charter, “filling market gaps that the private sector is not willing or able to meet, such as volumes or length of repayment beyond the scope of commercial lender capacity and reasonable risks that the private sector is unable to cover.”
(c) A valuable lender-of-last-resort tool to be kept in reserve in the event of future financial crisis and sudden collapses of private credit; and
(d) A matter of legitimate national self-interest, ensuring that in a world of $300 billion or more in annual public credit, the agencies run by other governments do not place U.S.-based businesses and their workers at impossible disadvantages.
Gresser on Ex-Im Bank renewal: http://progressive-economy.org/2014/09/16/reauthorize-the-export-import-bank
Ex-Im Bank’s policy and financial commitments compared to institutions abroad (see pp. 17 and 107 of the 2013 Competitiveness Report for figures): http://www.exim.gov/about/library/reports/competitivenessreports/
Taking into account tied aid, investment promotion, and other forms of export credit, the Competitiveness Report estimates $286 billion for the OECD countries’ agencies plus those run by China, India, Brazil, and Russia. A quick table drawn from the report, limited to a very strict definition of export credit (i.e. without market window, untied loans, or investment support, and noting that Japan, Germany and others provide much of their support in these forms) finds $149 billion worldwide in new medium- and long-term credit coming from the 31 OECD members plus China, India, Russia, and Brazil in 2013. Ex-Im provides about 10 percent of this total:
|Total OECD + BRIC||$149 billion|
|U.S. Ex-Im Bank||$14.5 billion = 10%|
Rep. Denny Heck (D-WA) suggests a larger credit authorization: http://dennyheck.house.gov/media-center/press-releases/democrat-proposes-lending-increase-for-export-import-bank-to-support-us
Rep. Jeb Hensarling (R-TX) proposes abolishing the Bank: http://hensarling.house.gov/media-center/press-releases/a-time-for-choosing-the-main-street-economy-vs-the-washington-crony
And Ex-Im President Fred Hochberg with the administration perspective: http://www.exim.gov/newsandevents/events/speechesandtestimony/2014-Export-Import-Bank-Annual-Conference.cfm
Minister Gabriel introduces Germany’s annual export credit agency report: http://www.agaportal.de/en/aga/downloads/jahresberichte.html
Japan’s Nippon Export and Investment Insurance Agency: http://www.nexi.go.jp/topics/en/
China’s Export-Import Bank: http://english.eximbank.gov.cn/tm/en-TCN/index_617.html
And the international context -
The OECD’s export credit rules: http://ww w.oecd.org/tad/xcred/eca.htm
Reauthorize the Export-Import Bank
September 16, 2014
Congress this fall will consider ‘reauthorization’ of the Export-Import Bank of the United States, in an environment in which the 80-year-old Bank has received closer scrutiny than ever before. The Bank’s critics are mistaken. Its mission remains valid and its operations remain important. On four grounds of good public policy and for legitimate national self-interest, Congress should approve the reauthorization and renew the Bank’s charter:
1. In the short term, Ex-Im has an important role in ensuring sustained export-based growth for the U.S., with domestic demand still weak in the aftermath of the financial crisis.
2. Over longer periods, a well-managed public export credit program helps meet unique and carefully defined needs when private credit is scarce, such as for some smaller businesses newly involved in exporting and long-term developing-country imports for power, aviation, and urban infrastructure.
3. Ex-Im is a useful insurance policy against future crises in which private credit may again become unavailable.
4. And in a world of 60 export credit agencies worldwide, in which export credit agencies in China, Germany, Japan,, France, Brazil, and all other major economies provide at least $300 billion in commitments of loans, credit guarantees, insurance, tied aid, and other supports, the United States has a legitimate and strong self interest in averting the systemic disadvantage that could emerge for American exporting businesses and their workers should the Ex-Im Bank be closed.
For the full text of the paper: