Thursday, May 10, 2007

Random bits

Here´s a picture of the 2008 Federal Discretionary budget. I find it to be widly confusing except the statistic in the middle:

67% of the budget is for military and national security.

I think we´re going a little bit too far here, don´t you?


Here´s an interesting graph that shows Andean coca production levels from 1988. I find it interesting that the rise in Colombian coca production coincides with the initiation of aerial fumigation. While I´m sure there are other factors involved, it sure looks like this data makes the case that Coca Cartels increased planting as a response to erradication efforts (as any good businessman would do).

It also shows unequivacally that the US strategy has totally failed to control coca production, no matter how many short term reductions on a country basis you may find along the road. Overall coca production has been relatively stable and more than sufficient to meet demand.


And finally, here´s a story (english version here) from today´s El Tiempo that states that the US-Colombian free trade agreement is going to be renegotiated.

The essentials are that the Bush admin and some Dems have reached a deal on labor standards that would make free trade agreements more palatable for the Dems. This deal, if approved by the White House, would mean that the US-Colombian deal would have to be renegotiated.

Either way, I think it´s a good thing. The US-Colombian free trade deal isn´t the best thing for Colombia and highlights a bit of true stupidity from economists and free-tradists - namely, the short term costs of these types of deals. As an example, Colombia voluntarily opened up its markets in the 1990s, a trend that directly correlates to the devestation of its domestic agricultural sector and a huge spike in unemployment (7% to 17%), most of which came from the ag sector. The other correlation is the spike in coca production. Hmm....

Now, to repeat the same mistake without any concern for the short-to-medium term transition effects would be recklessly stupid. So I can only hope that any renegotiation takes the form of a serious injection of intelligence. Because the last thing we need to do is further undercut relatively weak Colombian industries by granting tariff free access to multinational giants from the north.

Unless we just don´t care about things like poverty and coca production. Which we probably don´t, but that´s a whole ´nuther story.

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