Category: Economics

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Economics Environment Politics & government Science & technology

[691] Of worst floods, rice and climate change

Northern Malaysian states on the Malay Peninsula are suffering the worst flood in 30 years . It has been raining like crazy. Even in Kuala Lumpur, located hundreds of miles south, it’s been raining like cats and dogs. I’m surprised that the city hasn’t experience any flood.

The sky is starting to remind me of Ann Arbor; I could hardly see the sun everyday. Southern Thailand isn’t spared too. If borders are drawn with a huge pen, the floodwater would’ve erased them with ease. After all this, the weather still won’t relent.

The Weather Channel. Fair Use.

As you can see, it won’t end soon. Also, check out a current tropical storm that will hit Vietnam anytime soon today.The floodwater, among other things, affects rice harvest in Malaysia. Paddy fields are devastated by the overflowing water. This is especially bad considering that northeast Malaysian states are the main rice producers in Malaysia and that the fields are scheduled for harvest in this coming January. Looks like the rice industry will have to import more rice soon. I doubt local fields will be able to provide the share it usually offers to the market.

Worse, it isn’t just Malaysia that will suffer shortage of rice. Vietnam, which is one of the largest rice producers in Southeast Asia, suffers the same situation. Prices of rice in Southeast Asian markets should go up in the near future given that supply has been cut.

Digressing, price of chicken has gone up by 20 sen. Earlier, I had predicted a price decrease due to bird flu. Unfortunately, while playing around with the demand curve, I’d overlooked the supply function. The hike in chicken prices, ignoring inflation, could be due to the culling of chickens in Asia. With this flood, price could go up further, assuming demand curve is constant.

Though heavy raining this time of the year is typical in this part of the world, this year, the amount of rainfall is above average. Consider also the current situation in China and Japan – record breaking snowfall – and Vietnam – also record breaking rainfall. Finally, keep in mind that 2005 is, according to World Meteorological Organization, the second hottest year on reliable record.

Climate change? Too soon to ascertain but it’s good to keep the possibility in mind.

p/s – Kristof versus O’Reilly. Fight! This is the best yet since Bush versus Kerry.

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Economics Politics & government Society

[690] Of Bolivia, coca and cocaine

Very soon, the Bush administration might have another source of headache. Bolivians have just elected a socialist and an ally of Venezuelan Chavez as President. Some have gone farther and declared that this is Washington’s nightmare.

Bolivia Elects a President Who Supports Coca Farming

By JUAN FORERO
Published: December 19, 2005

LA PAZ, Bolivia, Dec. 18 – Evo Morales, a candidate for president who has pledged to reverse a campaign financed by the United States to wipe out coca growing, scored a decisive victory in general elections in Bolivia on Sunday.

What interest me the most about Morales is that he’s a former coca farmer.

Coca could be processed into cocaine. During the US War on Drug, the US had aggressively conducted coca eradication in Bolivia. Coca eradication continues even today. But not for long it seems.

Furthermore, Morales’ party, Movement to Socialism – scary name by the way – has its origin as a coca interest group. Given the US hostility towards coca farming, it won’t take a rocket scientist to predict what Bolivia’s foreign policy will look like.

But what will happen to coca plantation? Will there be an expansion? If yes, would there be an increase of cocaine in the world market?

I think yes.

p/s – Boris tagged me but I’m being rather uncreative at the moment. But I’ve thought of one. I love old weird nationalistic songs. Currently, I can’t get Ca-na-da, a song popular in 1967 celebrating 100 years of confederation, out of my head. The song could be heard at Expo 67. Found it while looking for Malaysia Forever, another nationalistic song sung in 1963 in Malaysian Singapore if I’m not mistaken.

So, one down, four to go.

Categories
Economics Liberty

[686] Of levy on CD-R

I had wanted to blog about the Music Council of Malaysia’s call for a levy on blank CD-R earlier. For some reason however, it slipped off my mind. Thanks to an article in The Star today, it came back to me. I think, if you’ve been reading enough of my stuff, you know what I’ve to say. For those that don’t, I’m don’t share the same table with the Music Council.

The Music Council, according to an article in The Star, states that:

…it had asked for the levy because it is concerned over the loss in revenue to the music industry whenever customers make copies of music CDs (see In.Tech, Dec 8). It believes that two out of three CD-Rs sold in the country are used for copying audio-visual material.

The Recording Industry Association of Malaysia claimed that such ‘home recordings’ are a serious problem for the industry.

The nature of the issue is almost similar to protectionism. Yet, this case isn’t quite about competition because the music and CD-R aren’t very comparable. But the bottomline is, an industry is trying to make their product relatively more competitive to some other good not by increasing the quality of their good but instead by forcing the other good’s cost to go up. In the end, it’s nothing more than an interest group with protectionism in mind.

Earlier, Malaysian telcos dealers and distributors have requested the certain Malaysian authority to restrict competition because competition hurts their profit.

By saying that I disagree with the levy, I’m not saying I accept piracy. Duplicating copyrighted media without permission, as much as I hate to admit it, is plain stealing. Still, accussing everybody that uses CD-R is involved in piracy is unfair. Imposing blanket levy is even more unfair.

What the music industry needs is a stronger anti-piracy enforcement, not protectionism. In fact, I’d rather see stakeholders in the music industry to initiate legal actions against those involved in piracy, like what the Recording Industry Association of America (RIAA) has been doing against illegal file sharers for the past few years in the US. Legal actions won’t introduce market frictions, unlike levying. At least in the long term.

p/s – for the whole morning, I couldn’t access my own site. I couldn’t access a few other sites like Screenshots either.

pp/s – turned out it wasn’t just me. There was a network outage near Putrajaya yesterday. (via)

Categories
ASEAN Economics

[681] Of India’s deal is no FTA

India must be dreaming. It wants a free trade treaty with ASEAN but at the same time wants too many stuff excluded from the FTA. What was India thinking? Did they think they can bully us into it?

I’m glad to know that ASEAN, represented by Malaysian trade minister, gives India a solid no today. I think India hasn’t realized that ASEAN doesn’t take shit.

No FTA is better than one-sided FTA. ASEAN deserves a better deal.

Categories
Economics Politics & government

[680] Of Pengkalan Pasir and Malaysian general election in 2008: hypothesis testing

So, Barisan Nasional won Pengkalan Pasir with a slim margin. A recount confirmed BN’s victory. But does this mean PAS in deep shit? More precisely, if this by-election acts as a signal for the next Malaysian general election, does this mean support for Barisan Nasional’s growing in Kelantan?

Quite hard to say. Let’s see some statistics to see how hard it is.

First of all, we know from the New Straits Times that the first count showed that BN received 7419 votes, PAS 7290, Ibrahim Ali 414 and there were 160 spoiled votes. In total, 15283 votes.

Now, let’s assume two things to make life simpler.

Kick Ibrahim Ali out of our equation, like how he was kicked from UMNO. And then, we shoved all the spoiled votes into Ibrahim Ali’s throat before we kick him. That leaves us a total of 14709.

Thanks to the two assumptions, now we have only BN and PAS to worry about. The assumptions help making things easier since it allows us to use bootstrapping method – the easiest way to get a standard error. Bootstrapping gives us a standard deviation of roughly 0.5 with 60.64 for SE.

Now, my hypothesis is that the difference between BN and PAS – a difference of 129 votes – is zero. That makes t = 129/60.64, which makes t about 2.13. t is as in the t-distribution.

Using t-test, the hypothesis at 25% significance level is rejected.

However, at 10% and lower significance levels, the hypothesis is significant. Doesn’t necessarily mean it must be accepted but it can’t be rejected.

So, did anybody win outright statistically? I don’t know. It’s likely the answer is no. More importantly, if this is a signal of things to come in 2008, Pengkalan Pasir is a crystal ball with industrial defect.

Anyway, given this entry is written at 2 AM, you might be reading crap with bad statistics. Hah!

Heh. I myself am not convinced with the statistics; the hypothesis testing in particular looks odd. I’ve done this before extensively but I haven’t touched real statistics in a long time. So, you are more than welcomed to check them up or even refined them to include Ibrahim Ali and the spoiled votes.