Predicting the future is here! Well, maybe not quite, but data scientists are currently working hard to accurately predict rebellions, ethnic violence, insurgencies, and mass atrocities around the world through the use of supercomputers and algorithms. With the current political situations and turmoil in countries like Ukraine, Venezuela, Thailand, Syria, and Egypt, making these types of accurate and reliable predictions can be very valuable information.
So far there have been several attempts to calculate these types of predictions. For instance, Duke University’s Ward Lab collects and deciphers big data using several software programs that analyze news articles from around the world in order to make predictions about which countries are most at risk for rebellion, increase in insurgency, ethnic violence, domestic crisis, and international crises. Ward Labs have seen some success in accurately making these predictions. In July they estimated that Paraguay had a 97% chance of insurgency, which later proved to be accurate when guerilla attacks increased. Additionally, in October, Ward Labs predicted that Thailand was at a 95% risk for a domestic crisis, and in December predicted that Iraq’s probability of having an international crisis was 99%; both predictions have since proven to be true. Ward Labs has not been able to predict everything, though; the current crisis in Ukraine was not on their lists until after the protests had begun. This is okay, however, as they maintain that their main objective is to test theories, and making accurate predictions is a difficult thing to do.
USAID is even getting in on the action, partnering with Humanity United to create the Tech Challenge for Atrocity Prevention. This worldwide technology competition challenges participants to use current technology to create innovative ways of preventing atrocities. One of the challenges in the competition is to create a model or algorithm to predict where future atrocities are most likely to occur. Xiaoshi Liu won this challenge, earning himself $12,000 USD. His algorithm creates decision trees for every five day period, using data from the most recent atrocity and social-political records. If his model is indeed effective, it will help USAID effectively calculate what countries need help most and mitigate any damages.
Helping data scientists make these predictions is Kalev Leetaru, creator of the Global Database of Events, Language, and Tone (GDELT). GDELT is a database that stores information about political events from around the world. Listing who did what to whom, when, and where, GDELT has recorded more than 200 million events going back to 1979, and plans to go even further back to the year 1800. Every day, information is gathered by examining news reports from all the countries in the world, and through sentiment analysis – a computer automated method to determine the attitude of the writer or speaker – GDELT is able to catalogue human behavior and beliefs across the world. GDELT is available to the public, and has since provided many political scientists the information with which to test their theories and make predictions about future events.
Making accurate and reliable predictions has proven to be hard; there are always going to be variables that are impossible to envision, such as plane crashes with political leaders on board, or natural disasters that wipe out cities. We may never be able to make perfect predictions, but with the growing popularity of the business, we are certainly getting better at it. There is a future for predicting the future.
Last month the Consumer Financial Protection Bureau (CFPB) proposed a revision to its Remittance Transfer Rule that would bring any private or public company conducting more than one million yearly money transfers under its jurisdiction. The reform would require these organizations be subject to the CFPB’s remittance procedures and regulations established last October. It would hold companies accountable for:
- Disclosing remittance information to customers such as receive date, fees, and exchange rates
- Allowing customer disputes and refunds over remittance errors
- Permitting customers to cancel remittance orders within 30 minutes of being sent
According to the CFPB, there are 25 non-bank institutions that make more than one million international money transfers a year, and that send over 80% of yearly remittances. All of these companies would fall under the expansion of the remittance act and would be subject to regulation. The proposed change is a large step forward for remittance protection because it places private companies formerly exempt from the Dodd-Frank Act under the CFPB’s jurisdiction. Previously, only large public institutions such as banks were subject to remittance regulations. This new standard would attempt to level the playing field and prevent companies such as Western Union from improperly exploiting customers with limited access to money transfer locations.
The new legislation is unique in its approach as to what qualifies as a large money transfer company. Instead of monitoring the amount of money transferred, it monitors the number of transfers. The reason the CFPB decided to establish the regulation with a transfer minimum instead of a dollar minimum is due to a lack of knowledge about the remittance market. The CFPB has a better idea of the number of remittances each company sends yearly and is less knowledgeable about how much money each company sends. Setting the threshold at one million international transfers a year allows the regulation to encompass more companies than if the CFPB had tried to establish a monetary quota.
What does this proposal mean for US remittances? The regulations could be a step in the right direction and the change could lead to an increase in US remittances or at least a more favorable attitude towards US remittance procedures. They recognize that money transfers are a profitable business that companies can use to exploit people with inelastic demand who want to send money internationally to friends or family members in need. But until the proposal is actually passed, it is difficult to say exactly what impact it will have on US remittances.
Some argue that the new regulations do not go far enough. The change does not impose any regulations on fees or exchange rates across companies, one of the greatest hindrances to remittances. Even with these regulations, it is still the customer’s responsibility to research the exchange rate and fees to find the best price. Companies also still have the power to establish unfavorable exchange rates and fees for the customers with more limited options, knowing that in certain areas there are few other money transfer companies. But this legislation could be a precursor to large scale changes in CFPB remittance policies.
There is no guarantee, however, that this act will actually pass. It faces opposition from the small business community. The Dodd-Frank Act labels any business making less that $19 million a year a small business and small businesses are exempt by law from the regulation of the Dodd-Frank Act. Of the 25 institutions that the proposed changes would encompass, ten make more than one million yearly transfers but still qualify as small businesses. The big question is whether the CFPB has the right to enforce regulations on small businesses even though the regulations may be in the public’s best interests.
Africa is a continent of vast natural resources, and the West African coastline is no exception. Large portions of the West African population rely on the coast for their livelihoods. In the region, 1.6 billion tons of fish, estimated at a value of $3 billion, is caught off the coast of West Africa. This figure directly or indirectly employs over 3 million people, and represents up to 10% of GDP in countries, such as Guinea-Bissau and Sierra Leone. It is also estimated that up to two-thirds of the animal protein consumed in coastal West African states is fish, highlighting its importance as an economic and nutritional resource for West Africans. Unfortunately, Africa is also a continent used to exploitation from people outside of their borders. In West Africa, this has manifested itself in the form of massive trawlers, particularly from Europe and Asia, appearing along its coasts.
These trawlers are largely involved in what is known as IUU fishing, or Illegal, Unreported, and Unregulated fishing. This is a more comprehensive way of thinking about fishing, as it involves not only the act of fishing, but also the illegal trade of the fish and the demand by consumers for those products. The trawlers usually fish in areas near the shore and then either mix them with legal catches in the Canary Islands or in refrigerated vessels known as “reefers”. The effect of IUU fishing in most of these countries are unsustainable practices of overfishing. It also takes away the livelihoods of some of the poorest people on earth. Illegal trawling has been estimated at $1 billion, while the Ivory Coast reported in 2010 that their catch was down by 30%. The end destination tends to be vessels from China, South Korea, Belize, and the EU, with 25% of European fish coming from West Africa.
It has been difficult for the West African governments and their populations to cope with the international trawlers. Corruption is a big issue with the granting of licenses for some of these vessels. Even when caught, most of the captains or crew members offer policemen and fisheries officers a bribe to look the other way, typically in the thousands of dollars according to a source in the Guinean military. These West African states also tend to be weak in the international arena. The largest fine ever levied against one of these trawler operators was $1 million by Liberia in 2013. However, according to the Senegalese Fisheries Minister, Haidar el Ali, these vessels can haul in 3,000 tons of fish with an estimated value of $100,000 in one trawl, highlighting how weak a deterrent some of these fines can be.
Even against these long odds, governments and civil society organizations are starting to turn the tide. Greenpeace has been active in mobilizing Senegalese fishermen against the Common Fisheries Practice of the EU, which defines how EU fishing vessels are allowed to operate worldwide, particularly by pushing the cancellation of subsidies for fishing fleets far from EU shores. Furthermore, 29 fishing licenses were cancelled in 2012 in Senegal after 52,000 small-scale fishermen threatened action against both the illegal fishing fleet and the government over alleged impropriety of the granting of licenses. The aforementioned Mr. el Ali has also been more active in his pursuit of justice, seizing vessels and establishing fines for repeat offenders. Internationally, there has been a call by the former UK foreign secretary and current president of the International Rescue Committee, David Milliband, to an international ocean-police force to stop the estimated illegal fishing of $10-24 billion worth of fish worldwide. At a more practical level, the Environmental Justice Foundation has raised money to equip local fishermen in Sierra Leone to track illegal trawlers and identify them so that they can be passed on to EU and African authorities, while pushing South Korea and Panama to act on vessels under their flags. The actions of illegal trawlers have been extremely problematic for the West African population, but continued action and coordination of governments, along with continued success by civil society organizations there may be hope for West Africans along the coast.
Ever since the financial crisis and recession hit in 2007, there has been an increased interest in inequality and it’s effects on economic growth. Most of these arguments have been founded on questions of morality, but also some on pragmatism. Emmanuel Saez at the University of California-Berkeley found that 95% of income gains in the two first two years of the recovery after the Great Recession have gone to the top 1% of income-earners in the United States, leaving the rest of society lagging. More globally, 85 of the richest families in the world control ₤1 trillion ($1.6 trillion), roughly the same as the bottom 3.5 billion people.
The issue of inequality and its effects on growth have been debated for a while. One of the earliest hypotheses was put forward by Simon Kuznets back in the 1950s and 1960s, known as the Kuznets curve. This curve basically showed that, empirically, economic development results first in increasing inequality, reaches a peak, and then reduces inequality. The growth in countries like South Korea and Taiwan has largely debunked this hypothesis. An argument put forward by some academics and leaders is that inequality provides incentives for entrepreneurship due to the fact that they have so much to gain. In poor countries, Robert Barro has written that inequality can lead to growth by letting a few individuals get a good education and invest in businesses. Others, in particular Nobel laureate Joseph Stiglitz, have argued that global inequality distorts economic growth through political economic power that promotes rent-seeking and weak corporate governance over strengthening human capital and ideas of fairness.
Through this quagmire, the IMF recently waded into this global argument with a new paper written by Jonathan Ostry, Andrew Berg, and Charalambos Tsangarides about both the effects of inequality on growth and redistribution’s inequality on growth. In particular, they make a distinction between what they call “market inequality”, which is inequality before taxes and transfers, and “net inequality”, or inequality after taxes and transfers. One of the main conclusions from the study is that more unequal societies tend to redistribute more. This is mostly skewed from industrial states, especially in Europe, that have large amounts of redistribution, cutting down their net inequality.
The bulk of this study focuses on the findings that the higher the net inequality, the lower the real growth rate on GDP. It also finds no statistical significance on redistribution affecting GDP growth. An example given is that an increase in inequality from the level of the United States (ranked 37) to the level of Gabon (ranked 42) would shave 0.5% off of GDP. The last part of the study looked at the duration of the growth spells. Again, the results show that higher rates of inequality are correlated with a higher risk that the spell of growth will end. Turning to redistribution, if there is already a large amount of redistribution in society, such as in some of the developed countries, further redistribution hurts growth. However, for the lower 75% of countries in the world, redistribution has no discernible effect on the duration of growth.
There are a few caveats that need to be addressed with this study, though relatively minor ones. As with any statistical study, these are only correlations, and correlation should not be confused with causation. Data on redistribution is also light, with this study using a proxy of direct taxes and subsidies. Amazingly, they don’t include government provisions, such as health and education. Both of these factors have been proven in various studies to have positive impacts on growth, including studies from the World Health Organization showing adult survival rates improving GDP growth to studies by Eric Hanushek and Ludger Woessmann showing how years of schooling is correlated with higher GDP growth. As these factors are a little more difficult to quantify, it’s understandable that they were not included in the redistribution factors. However, the results of these studies, along with others, show a general trend that countries could improve education and health spending along with other measures to reduce inequality while having economic growth at the same time.
Last Thursday, the Hudson Institute hosted a discussion with Nina Munk on her book The Idealist: Jeffrey Sachs and the Quest to End Poverty. The book follows Sachs’ work to end poverty through Millennium Villages. The project provided improved fertilizer and mosquito nets to fourteen rural villages in Sub-Saharan Africa. Many in the development community view the project as a failure because of its inability to create sustainable development. Munk used the discussion to highlight the overarching themes in her book and to answer audience questions about her experience working with Sachs.
One major theme repeatedly appeared throughout the discussion: NGO and development accountability. Munk attributed a large portion of the Millennium Village failures to a lack of accountability. According to Munk, throughout the project Sachs refused to take the advice of on-the-ground development workers. He ignored the varying cultures, infrastructures, and economies of each village and how that would impact the individual development of each village. Quantitatively, the project seemed to be a success. It increased the corn production of villages and reduced starvation. But the increased corn production did not translate into long-term economic gains. The starving villagers were fed but what the project did not solve was the lack of a market or infrastructure to sell corn.
Munk claims that Sachs’ project needed an accountability structure. There were no measures to evaluate the success of the project beyond the quantitative numbers. There was no consequence for a failed venture and even now Sachs refuses to acknowledge the shortcomings of the project. She equated the Millennium Village to a game of whack-a-mole. One problem would be solved only for six more problems to crop up. An accountability structure could have evaluated the project from the beginning and addressed its shortcomings in a timely fashion.
During the discussion Munk put forth the question of how to translate low hanging fruit into sustainable development beyond simple quantitative measures. An evaluative structure needs to be in place to measure the holistic success of development projects. The development community cannot afford to base success on purely quantitative measures. Munk claims the development community has a fear of failure and as a result does not acknowledge its mistakes. Making a humorous, yet genuine, suggestion, Munk proposed every organization should have a “Failures” section on its website. This way there is transparency across the development community and it can continue to learn from its past mistakes.
One attendee brought up a great question concerning the accountability of publicly traded companies compared to non-profits and development work. If an official in a publicly traded company breaks the law or creates a failing project, he is held accountable, whether it be through fines, prison time, or unemployment. Why then does the development community not have the same punishments for failure? There are no consequences for organizations creating unsuccessful development projects. The people who suffer most are those that are supposed to benefit from development projects. Should an industry that deals with human livelihood have strict punishments for failure?
The point of accountability is especially salient considering the financial outlook on development. As Munk described it, the amount of money, private or public, put towards development is not going to radically change in the coming years. It maintains consistent, incremental growth. Development work needs an accountability structure to ensure that this money is not going to waste. Munk claims the development community needs to be upfront about what it can and cannot accomplish so that it does not waste money on impossible projects that have already failed in the past.
Please click here to watch the full discussion with Nina Munk.
The recent uptick in violence in Syria had made it nearly impossible for aid organizations to deliver supplies to Syrian citizens caught in the crossfire of a civil war. Civilians trapped in the Syrian city of Homs because of bombings, sniper fire and roadblocks are low on food and medicine. Fortunately, aid organizations brought supplies to around 700 people and transferred them to a safer section of the city that was once a beacon of culture and civilization. Scenes like this are happening all across Syria, with pro-Assad forces and opposition fighters exchanging gunfire while women, children, and the elderly attempt to flee or seek shelter from the fighting.
Recently, negotiations between Syrian pro-government and opposition leaders have fallen apart. Mediated by the United Nations in Geneva, Switzerland, the first round of talks that began in late January failed to accomplish much aside from hurt feelings on both sides of the negotiating table. Ten days later, in a second attempt at a dialogue, UN officials looked to ease the chaos breaking out in the Syrian city of Homs by coming to a transfer of power agreement with the Assad government. Lakhdar Brahimi, the UN mediator who took the lead in talks with the Assad government, apologized to the Syrian people after negotiations for a transitional government fell through.
On February 10 a cease-fire facilitated the evacuation of citizens and allowed supply trucks and aid workers to give care to the remaining civilians trapped within the crumbling city walls. The cease-fire was, unfortunately, the only positive progress made since talks began in January. Meanwhile, what little is left of Homs continues to be a battleground for opposition and government forces, an estimated 2,500 Syrians caught in their wake. Photos of the devastation have triggered media outlets to post “before and after” pictures of some of the most treasured monuments in Homs and across Syria.
The UN Security Council came to an agreement on Feb 22 that gives the Assad government and the opposition forces 30 days to comply with a set of humanitarian goals. Russia and China, who are part of the five permanent Security Council members, came out in support of the resolution. All 15 members of the Security Council voted in support of the resolution. Among other humanitarian goals, the resolution calls for:
- The cessation of all forms of violence, some of which will be considered war crimes when the conflict is over.
- The protection of civilians from indiscriminate aerial attacks, including the use of barrel bombs.
- The expansion of humanitarian relief operations and the movement of medical supplies across the Syrian border.
- The safe evacuation of all citizens who wish to leave the besieged cities.
- The end of arbitrary capture and torture of civilians.
Still, the resolution saw opposition from Syria’s UN Representative Bashar al-Jaafari, who claimed that the humanitarian aid has a political agenda. United States Secretary of State John Kerry recently spoke out against the violence in Syria, putting greater pressure on Russia to tone down their support for the Assad regime. The United States continues to meet with world leaders, but a clear solution to the crisis in Syria has evaded them. Some feel that Assad is using these attempts at diplomacy as a buffer until his military can win the civil war against the government opposition fighters. Others remain hopeful that the dialogue at the UN brought forth the demands of both sides, even though no agreement could be reached.