the __earthinc – Page 279 – By Hafiz Noor Shams

[1629] Of is biofuel the cause of the food crisis?

Post author By Hafiz Noor Shams
Post date Friday, April 25 2008
1 Comment on [1629] Of is biofuel the cause of the food crisis?

Roger Cohen at the NYT insists that biofuel is not the cause of food crisis, or at least not a major one if one wants to be accurate about magnitude, since it is still a small industry. Instead, he is convinced that what is causing it is protectionism.

Much larger trends are at work. They dwarf the still tiny biofuel industry (roughly a $40 billion annual business, or the equivalent of Exxon Mobil’s $40.6 billion profits in 2007). I refer to the rise of more than one-third of humanity in China and India, the disintegrating dollar and soaring oil prices.

[…]

What sense does it make to have a surplus of environmentally friendly Brazilian sugar-based ethanol with a yield eight times higher than U.S. corn ethanol and zero impact on food prices being kept from an American market by a tariff of 54 cents on a gallon while Iowan corn ethanol gets a subsidy?

[…]

The real scam lies in developed world protectionism and skewed subsidies, not the biofuel idea. [Bring on the Right Biofuels. Roger Cohen. NYT. April 25 2008]

Honestly, it is hard for me to say without looking at the data but I am leaning to his conclusion. Maybe, this warrants a short essay by itself.

Anyway, another go at the Doha Round, anybody?

Tags biofuel, fuel subsidies

Economics

[1628] Of hail Shahrir Samad!

Post author By Hafiz Noor Shams
Post date Friday, April 25 2008
3 Comments on [1628] Of hail Shahrir Samad!

KUALA LUMPUR: The restructured fuel subsidy scheme will see the removal of subsidy on diesel first.

Domestic Trade and Consumer Affairs Minister Datuk Shahrir Samad said diesel would soon be sold at the market rate at the pumps when a mechanism to deliver subsidies directly to those entitled has been decided upon. [Subsidy on diesel to go first, says Shahrir. The Star. April 25 2008]

It might be too early to celebrate but Mr. Shahrir is fast becoming my favorite minister.

Tags fuel subsidies

Economics

[1627] Of Malaysian Keynesians kicked out of the window?

Post author By Hafiz Noor Shams
Post date Thursday, April 24 2008
6 Comments on [1627] Of Malaysian Keynesians kicked out of the window?

From the look of it, many of the planned huge government expenditures are not going to happen any time soon. Where are these Keynesians now, I wonder?

For the uninitiated, one hallmark of Keynesian economic policy is the encouragement of government expenditure, especially during times of low economic activities. The rationale is that these spendings would rejuvenate a faltering economy back on its feet through the famed multiplier effect.^[1]

At this moment of uncertainty in the Malaysian economy, Keynesians everywhere would more or less give one prescription: more government spending. After the announcement of the Ninth Malaysia Plan, I had expected that the policy would be impressed upon even harder on the Malaysian leadership by Keynesians. Yet, we might be seeing a roll back on government spending.^[2]^[3]

Keynesians, where art thou to stop these rollbacks?

Mohd Hafiz Noor Shams. Some rights reserved

^[1] — See spending multiplier at Wikipedia.

^[2] — KUALA LUMPUR: The nine-month delay in the Penang second bridge project is due to problems in land acquisition, design and rising cost, said Datuk Seri Abdullah Ahmad Badawi. [Second bridge delay due to costs and design issues. The Star. April 23 2008]

^[3] — KUALA LUMPUR, April 22 (Reuters) – Malaysia has shelved plans for a bullet train linking its capital to neighbouring Singapore because of the cost, a top planning official said on Tuesday. [Malaysia drops Singapore bullet train project. Reuters. April 22 2008]