The road to famine is paved with bad intentions

 

Photo source: World Food Programme

 

Famine has a seven-league reach.

Wheat prices rose 13%, roughly a seventh, on news this week that Russia would block wheat exports from Ukraine. Bread is a staple for Syria, where more than a decade of civil war has left nine tenths of the population poor. Syrians cannot afford a decent meal as it is.          

What will happen now to food prices and supply in Syria?  The answer depends on how people react to a rise in food prices. Economists calculate this reaction with an elasticity, the percentage change in one variable in response to a one-percent change in another variable.  For example, suppose that the elasticity of food demand with respect to price is -2.  Then a 1% increase in food prices will trigger a 2% fall in the amount of food that people would demand.

I know of no recent reliable estimates of this elasticity for Syria. So let’s make one up. The World Food Programme calculates that bread prices in Aleppo rose 20% immediately after the February earthquakes.  Suppose that the price increase was due entirely to the destruction of bakeries; that this destruction was proportional to the general destruction; and that the general destruction in Aleppo was proportional to the general destruction in Syria. The World Bank estimates that the February earthquakes reduced national output, real gross domestic product, by 2.3%. The implied price elasticity of food demand is -.115. That is, if prices rise 1%, demand will fall one-ninth of one percent. If prices rise 13%, demand will fall just 1.5%. In short, most Syrians will pay sharply higher prices for wheat.

But the news is even worse, because the elasticity assumes that Syrians can buy all the wheat that they want at the going price. They can’t. The power of the Syrian pound to buy imports has halved in a year, probably because the central bank lacks enough dollars to defend its currency. A Syrian can buy only half as much food as a year ago unless she cuts back on housing and transport. The central bank just gave up on an import financing platform because it couldn’t stabilize the currency, reported The Syrian Observer.

Moreover, Syrians are poor, so they cannot pay prices as high as, say, Europeans. Since Russia is reducing Ukrainian exports, buyers must decide where to cut back on their secondary sales. Undoubtedly, they will cut back on Syria rather than on Europe, since they cannot expect to make as much money in Syria. So the implied fall in wheat consumed in Syria is greater than 1.2%. On the other hand, Syria’s bumper harvest of wheat this year enabled it to halve imports, reported the Ministry of Agriculture.  If you can believe a word out of Damascus. In 2020 the agriculture minister, Hassan Qatna, who had pledged to feed the nation, blamed famine on "external factors beyond his ministry's will," such as the smuggling of food to the neighbors. (Doesn't Reuters ever check out the clippings morgue?) 

All things considered, the fall in real income for Syrians seems critical. Famine in Idlib, in the opposition region of the north, one of the poorest provinces in Syria, is likely. 

The UN's World Food Programme, in Rome, the world’s largest humanitarian agency, serves more than a third of all Syrians. Even in January, before the earthquakes and of course before the Russians blockaded Ukrainian wheat exports, it predicted that 70% of Syrians “may soon be unable to put food on the table for their families.” In March, it estimated that 12.1 million Syrians, more than half the population, are in “the grip of hunger,” whatever that means; that 2.7 million Syrians are “severely food-insecure” and that 2.9 million more Syrians ”are at risk of becoming food-insecure,” whatever that means, but anyway the latter figure is a 52% increase in one year. One of the frustrating things about the World Food Programme, and about the UN in general, is that they won’t explain satisfactorily how they arrive at their statistics. But these numbers suggest that the chances for Syrian famine are rising rapidly.

The immediate problem is to get food baskets through the Turkey-Syria crossing, al-Hawa, that the UN docily handed over to Syrian President Bashar Assad, who has a score or two to settle with the starving opposition.  But money will soon matter.  Because donations are falling, the Programme plans to stop food aid to 2.5 million Syrians beginning this month. The price of a food basket is four times the salary of a schoolteacher, reported the Programme.  One reason why nations balk at donating to the Programme, aside from the natural desire to keep the money for its own citizens, is that gifts of food to a poor nation might discourage its farmers, constricting its ability to feed itself. This is probably right in the long run. But Syria is in the hour of need.

In raising funds, the Programme has fallen behind the times. It appeals to small donors with heart-breaking testimonies and pictures (see above), a strategy that succeeded in the TV-oriented Seventies. But the big money today is in the endowments, which want careful statistics. The Programme’s use of stats is an embarrassment: Crude averages, straight-line projections based on three data points, undocumented figures, undecipherable graphs, no mathematical statistical reasoning to spoil the palate. Its food security “analysis” for Syria is more than three years old and only five pages long, including 11 photos. The analysis consists mainly of focus-group discussions.  The Programme’s real concern is illustrated by a popup window on its Web page: “Do you recall seeing or hearing anything about WFP Executive Director Cindy McCain in the last week?” Click Yes or No. –Leon Taylor, Baltimore, tayloralmaty@gmail.com

 

References

Al-Modon.  Central Bank of Syria cancels import financing platform following lira’s depreciation. Central Bank of Syria Cancels Import Financing Platform Following Lira’s Depreciation - The Syrian Observer  .  July 2023.

Aram Abdullah.  Syrian Agriculture Minister attributes failure to sanctions, climate change, smuggling.  North Press. August 18, 2021.  Syrian Agriculture Minister attributes failure to sanctions, climate change, smuggling - North press agency (npasyria.com)

Reuters.  Syria expects to halve wheat imports after 'very good' harvest, minister says.  Syria expects to halve wheat imports after 'very good' harvest, minister says | Reuters.  June 5, 2023.

World Bank. Syria Earthquake 2023 Rapid Damage and Needs Assessment (RDNA) [EN/AR] - Syrian Arab Republic | ReliefWeb.  March 2023.

World Food Programme. Hunger soars to 12-year high in Syria, WFP chief calls for urgent action | World Food Programme.  January 2023.

World Food Programme.  Syria emergency | World Food Programme (wfp.org)  June 2023.

 World Food Programme. Syria food security analysis. March 2020.

docs.wfp.org/api/documents/WFP-0000113454/download/?_ga=2.25043130.1206222107.1689959936-506538537.1689959936

Assad and the crossing

                                         Al-Hawa crossing at the Turkey-Syria border: 

                                        Will Assad really let the trucks roll? Photo source: Ghaith Alsayed, AP 

 

At first, that Syrian President Bashar al-Assad has approved the main crossing between Syria and Turkey may seem good news for refugees in northwestern Syria. To survive, they must have food and medicine from across the border. Thanks to hyperinflation, the typical Syrian earns barely enough to buy food. And Idlib Province is one of the country's poorest.

In reality, Assad’s seeming tolerance may starve Idlib.  The key is in Syria’s declaration that it will not deal with terrorists.

The opposition to Damascus is largely in the north, which is ruled by a group, Hayat Tahrir al-Sham, headed by a former leader of al-Qaeda in Iraq. Yes, they are terrorists.  The humanitarian agency of the United Nations has amply documented their atrocities. But they are also in charge. Unless Assad plans to attack them, there is no way to get humanitarian aid to the refugee camps without dealing with them. By refusing to negotiate, Assad is tightening the noose of famine around one of the last pockets of opposition to him. This might not be a coincidence. For example, Syria refuses to cooperate with the UN on supplying safe drinking water.  In Hasakah Governate of the northeast, Turkey and its allies in the Syrian opposition, the Syrian National Army, cut off water, reported North Press. Because of Syrian intransigence, we don't know what areas of this war-torn country need water, nor how much.

In general, the West does not realize how close Syria is to starving. The UN could fund only about a fifth of its request for humanitarian aid to the country, according to the Syrian Observer.

                      Residents have placed empty containers for water next to the water "tower" in Hasakah. Photo source: North Press

There’s worse. To flee to Turkey, as if the Turks would accept them, the refugees must have dollars.  They are aided somewhat by American relaxation of restraints on dollar movements in Syria; the restraints had been intended to avoid financing illegal activity by the Iranians and Hamas. But one likely source of dollars to Syria, under the table, is Russia, Syria’s ally and mentor. Western sanctions on Russia’s oil and natural gas exports have choked off its dollars, to the extent that Russia's once-comfortable current account surplus has virtually vanished. Russia no longer has dollars to supply to Damascus, so these will not trickle down to the refugees. Without dollars, they cannot migrate. They are trapped in Syria.

One solution may be for the Arab League to pressure Assad to negotiate with HTS to enable humanitarian aid to reach the refugees. Assad hungers for the League’s recognition. The question is whether the League will perceive a benefit from twisting Assad's arm. -- Leon Taylor, Baltimore, tayloralmaty@gmail.com     

Note

I thank Annabel Benson for useful comments.

 

Reference

Emma Jamal. UN expert cancels visit to Syria due to lack of cooperation. UN expert cancels visit to Syria due to lack of cooperation (npasyria.com)

Syria Allows U.N. to Use Bab al-Hawa Border Crossing for Aid Deliveries - The New York Times (nytimes.com)

Syria Permits UN Aid Deliveries Through Bab al-Hawa for Another 6 Months - The Syrian Observer

Second-hand news

                                          Is this man an economist? Ask the President.  Photo source: dreamstime.com

The New York Times, and therefore other new media, led today by reporting that June prices were only 3% above last June. President Joe Biden immediately took credit in the name of Bidenomics, his pet coinage.

But the report doesn't really mean much. True, comparing to last June does control for the season, which helps. For example, fuel and airfare prices are usually higher in the summer, because that’s when people travel. So you don't want to compare June to May to conclude that prices are rising in general. You should compare June to the previous June, because travel was popular in both months.  That’s a “year-on-year” or “year-over-year” figure.

But this isn't much information, either. It's just one month. And it's probably wrong, because of errors in gathering and computing statistics that the Bureau of Labor Statistics needs several months to correct, in updates that the news media rarely notice. It's safer to look at the year-on-year figures over several months.

The two figures below, from the US Bureau of Labor Statistics, shed light. The first graph shows the rate of change in consumer prices. This is inflation. The second graph shows the rate of change in wages. When prices rise faster than wages, the paycheck buys less. This is a fall in the real wage, which just means wages adjusted for inflation. When wages rise faster than prices, the real wage increases. By comparing the two graphs, you can infer what's happening to the wage's ability to buy.

The real story

As you can see, inflation halved in a year.  This is good news but it's thanks to the Fed's high interest rates—not to Bidenomics. In fact, Biden’s deficit share of GDP is still unusually high. In other words, government borrowing still claims a large share of the economy. The borrowing forces up prices, because the government competes with firms and households for products made by scarce workers, machines, and buildings. This is not all Biden’s fault, because he inherited Trump’s tax cut, and because Congress cuts the checks. But neither can Biden claim to be Mister Fiscal Prudence.

But back to trends. The usual story in the news media is that real wages fell during the pandemic because nobody was buying—and rose after the pandemic, when relieved consumers splurged. What actually happened was the reverse, and it illustrates the media’s (read: The New York Times’s) perpetual confusion of prices with wages.

Look at the first graph below.  Prices fell early in the pandemic. So real wages rose. In other words, labor became more expensive during the pandemic, because the shutdowns had made it hard for people to find jobs.

After the pandemic, when prices rose again, real wages fell. Labor was becoming cheaper as more people returned to work. But for several months now, real wages have risen, because the labor market has tightened. Workers are in demand, so they negotiate higher wages. This raises production costs, so firms will have to raise prices someday. In short, we haven’t yet whipped inflation.

Biden forgot to mention that people still expect prices to rise. So they will buy now, when prices are still relatively low. That by itself will push up prices. It's a self-fulfilling prophecy. And it's another reason to keep worrying about inflation.

The problem for the Fed is to keep lowering the public’s expectations of inflation, by keeping interest rates a little high. Annual inflation is roughly 4%, and the Fed would prefer 2%, for arbitrary but good-enough reasons. Basically, the Fed picked 2% out of a small hat, but it’s as good a target as any.  

A last note: Yes, Biden cherry-picks numbers. But former President Donald Trump makes up the cherries. When are newscasters going to correct them? – Leon Taylor, Baltimore, tayloralmaty@gmail.com

 

Consumer price index (urban)

                 Average hourly earnings, seasonally adjusted

Data source for both graphs: US Bureau of Labor Statistics

Reference

Inflation Drops to 3% in June - The New York Times (nytimes.com)

 

 

 

News brief: NGO publishes video, alleging Almaty sex slave beaten

 

                                             Source: Tengrinews.kz

The NeMolchiKZ Foundation ("Not Silent" in Russian) published on Telegram a video apparently of a young woman beaten at the behest of a watching man. Almaty police say they are investigating the incident.

Telegram: Contact @dina_tansari

"This is how young girls from villages are involved in sex slavery," the Foundation narrates. "First, they are beaten, intimidated, then raped, filmed, and threatened with shame. For fear of being disgraced and beaten and humiliated again, girls do everything required of them." 

Sex slavery is not unique to Almaty. In Kyrgyzstan, forced marriages account for nearly a fourth of all marriages, according to careful surveys.  In the most forced form of marriage, a man carries away a girl to his family home for sex, rendering her unfit for any other family to accept. Bride kidnappings harm the bride’s health, find Becker, Mirkasimov, and Steiner.  And babies born in such marriages are unusually likely to weigh too little, they find. This may be due partly to the stress and poor diet inflicted upon the mother, which hamper the breast-feeding that is traditional in rural Kyrgyzstan.  Bride-kidnapping also makes it hard for the woman to find a job, so she is poor, concluded Arabsheibani, Kudebayeva, and Mussurov. 

Few published studies of bride kidnappings draw upon the Life in Kyrgyzstan surveys of households, which though careful are too recent to permit firm conclusions about how bride kidnappings affect generations. One can reasonably speculate that the children born in these forced marriages will perpetuate them as adults. Breaking the cycle may require government protection of the young woman victimized.  That could include education, training, and temporary income to support her chosen life. 

-- Annabel Benson and Leon Taylor, Baltimore, tayloralmaty@gmail.com

References

G. Arabsheibani, A. Kudebayeva, & A. Mussurov. (2021). A note on bride kidnapping and labor supply behaviour of Kyrgyz women. Economic Systems, 45(4).  https://doi.org/10.1016/j.ecosys.2021.100885

C. Becker, B. Mirkasimov, & S. Steiner, S. (2017). Forced marriage and birth outcomes. Demography, 54(4), 1401-1423. https://doi.org/10.1007/s13524-017-0591-1

”Так вовлекают в секс-рабство”. В сети опубликовали видео избиения девушки в Алматы: Вчера, 16:51 - новости на Tengrinews.kz

Adventures with Social Security

                                           Signing the Social Security Act of 1935. Were two-hour 

                                            waits what FDR had in mind?  Source: Social Security History (ssa.gov)

Here’s a parable of government service. Might it apply to Kazakhstan?

When I taught in Almaty, I was robbed of my card for Social Security, the public pension program in the United States.  Identity theft is common in Central Asia. To apply for a replacement card, Social Security said I had to be in the States. It wouldn’t deal with computers in foreign countries.

Now that I am in Baltimore, I have applied. The agency says I probably don’t need a card, because I know my Social Security number. But in Kazakhstan, some banks require your card, which is why it is prone to theft. Sberbank, the Russian savings bank that had branches in Kazakhstan, wouldn’t provide access to my accounts without either my Social Security card or my original birth certificate.

So I filled out the online form. The app intoned: Fill it out again. I had to exit to avoid an infinite loop. But not to worry! Because I had completed the form, said the app, I could get my card “quickly” at the local office. No, I couldn’t get it in the mail. I had to go to Hospital Drive, Glen Burnie, Maryland.

Off I went, a $20 taxi ride. The office is in a dilapidated storefront with folding chairs and no bathroom or water cooler or even a 50-brand Coke machine visible. The one staff member in the waiting room, a security officer sitting at a desk with his hands folded, is instructed not to answer questions.

Customers are not served in order of arrival. The evident order of service depends on the Wheel of Fortune. About 40 people waited listlessly, many in wheelchairs or hobbling on the arm of a loved one, often in pain. (The Social Security program includes disability payments.)

After an hour, the supervisor stuck her head out of the office. Unfortunately, she had few case officers today. Either wait two hours or go home and make an appointment.

I went home and called up the app. Ah, you can’t make an appointment online. To set a time for a five-minute interview, you must go to the Social Security office and wait for two hours.

Joseph Heller must be spinning in his grave.

Social Security says its review of applications for benefits takes four weeks "for most people." Mine is aging gracefully into six weeks, so I sought a phone call with the mavens of review.

Social Security says it has a call-back feature, but it's always "closed." The alternative is to call an 800 number and say, "Help Desk." You can say "Help Desk" until you're blue in the face, and nothing happens. If you're still hanging grimly on to the phone, you are next treated to a long lecture about the glories of the online facility (which I'd already tried), with a menacing message about fibbing to Social Security (which I've never done). Then..."To talk to someone, just say 'Agent.'" At last! But there is no agent. Call us back when we're not so busy. Exactly when is that? Oh, maybe in the morning. Click.  A metaphor for the biggest-spending agency in American government.

I've called the 800 number, morning, noon, and bleary evening, early in the week, late in the week, at least five times, for calls lasting 14 to 29 minutes. I've never gotten through. So, at David Bobb's good suggestion, I called the Westminster office -- and got immediate help. Evidently, a Mr. Nameless (let's call him) sent me a letter asking me to prove that I was Leon Taylor. (I never received it.) I need to show a photo ID. Sounds simple!

Until you try to call Mr. Nameless. He is a very busy man, no time to pick up his phone. His recorded message instructs you to leave one, and only one, brief recorded message, and wait two business days. After calling four times in one week, I still await the honor of conversing with Mr. Nameless.

I wrote Social Security. It replied: 

"Response\11357891\WBDOC 11986\

"Thank you for contacting the Social Security Administration.  We apologize for the delay in answering your inquiry. We regret any inconvenience this may have caused.  [This is a form reply.] You can obtain the location and other information about your local Social Security office by calling our toll-free telephone number…."

Well, thank you very much. The 800 number doesn't work! I'd like to see this chatty chatbot try it. 

I replied: 

 "As usual, your response is unresponsive. I know where the Glen Burnie office is. The problem is that the average wait there is over two hours, for a five-minute interview. 

"Why can't I make an appointment by phone? It would save everyone time.  Why can't Social Security recipients even get short calls returned?  Why doesn't Social Security monitor the efficiency of its employees?"

I predict that the chatbot will be very confused.

Solutions are blindingly easy. The Glen Burnie office should

(1   *   Install its own telephone number. At present, it lists only the 800 national number. In fact, Social Security should use the 800 number anywhere only to automatically connect callers to the closest office. If its number is busy, roll over to the next closest office, 

(2   *  Let clients make appointments online or by phone.

(3   *  For drop-ins, provide estimated wait times by phone or online.

(4   *   Raise salaries, or penalize for absences, so that case workers actually show up. 

     Congressman Sarbanes, over to you.  –Leon Taylor, Baltimore tayloralmaty@gmail.com 

     

F   Notes: For comments, I thank Nicholas Baigent, David Bobb, Michael Bobb, and Randall Dittmer.

                       

F

News brief: Nuclear accident in Kazakhstan

                                           Source: maek.kz; Tengrinews.kz

A unit of the Mangystau nuclear power plant failed July 3, shutting down for a while the oil refinery at Atyrau, at the mouth of the Ural River into the Caspian Sea, in northwestern Kazakhstan, one of three large refineries in the country. (The others are at Shymkent in the south and Pavlodar in the north central region.) The government reported no injuries. Energy minister Almasadam Satkaliev said the government had known since April that the plant was in "critical" condition because it could not afford repairs and decent wages. Prime Minister Alikhan Smailov approved 3.1 billion tenge (almost $7 million) more for the plant, but Satkaliev warns that repairs may take up to eight months. The akimat (leader) of Mangystau had requested 4.9 billion tenge (almost $11 million).  Kazakhstan's government projects its own 2023 revenues at 17.8 trillion tenge (nearly $40 billion).

The government's reluctance to spend a few million dollars suggests that it is not serious about diversifying energy sources. Nuclear power provides little power in Kazakhstan, which is rich in coal, oil, natural gas (and uranium, true). Last year the energy ministry said the nuclear share of electricity might rise to 12% by 2035.  But the woeful state of the Mangystau plant indicates that this forecast may be optimistic. And it raises the prospect of a more serious accident. Everyone in the former Soviet Union remembers Chernobyl. -- Leon Taylor, Baltimore tayloralmaty@gmail.com

References  

Astana Times. Kazakh Government Approves Draft National Budget for Next Three Years - The Astana Times

Aruzhan Daribay.  "We knew that the situation was critical." ”Мы знали, что ситуация была критической” - глава Минэнерго о МАЭК: Вчера, 13:18 - новости на Tengrinews.kz 

Nuclear Engineering International.  Kazakhstan to generate 12% of electricity from nuclear by 2035 - Nuclear Engineering International (neimagazine.com)