Water and food security

I attended a talk the other day by Tim Costello, CEO of World Vision Australia. He talked about his recent experiences in Ethiopia and climate change in general. He talked about how the future, unless we act fast, will be one of skirmishes over food and water.

And a report is now suggesting that the global cost of adapting to climate change could be at least 2–3 times more than the previous estimate from the United Nations Framework Convention on Climate Change (UNFCCC) (which was between US$49 billion and $171 billion from 2030).

I’ve blogged about this many times before. We all need to be turning our minds to coping in a world with scarce water and diminishing food supplies. South Africa is expected to run out of available water reserves by 2025; one quarter of the planet’s population could be affected by flooding due to warming in the Arctic outstripping predictions; and Australia will literally be toast. Climate change scientists are predicting that Australia’s temperature will increase more than the average global temperature rise with more days over 35 degrees C. This will be accompanied by water shortages, due to evaporation, and loss of biodiversity.  August has seen very warm weather in NSW and Queensland for example. The Bureau of Meteorology has confirmed that this is almost certainly going to be the hottest August on record.

Climate change will alter where people can find water, grow food and live. And the result of this will be “forced” migration as people search for water and food and communities (and possibly nations) will be in conflict over dwindling natural resources.

Pause: if you don’t belive in global warming, this is the time to buzz off to another blog.

Climate change has contributed to social insecurity before. Temperature shifts of even a few degrees can lead to conflict gradually over the long term. Modern humans, for example, moved into Europe, pushing Neanderthals into the northern part of the continent where colder temperatures (and clashes with humans) led to Neanderthals being kaput. Theories suggest that climate change, leading to warmer weather in Europe, triggered the interaction of human societies with Neanderthals.

Peasant revolts occured in China, between 700 and 900 AD, due to weak summer monsoons that failed to develop over the Pacific Ocean. Crops failed to grow and intrastate conflict weakened, and eventually led to the complete collapse of, the Tang Dynasty.

Diminished long-term rainfall patterns around 860 AD led to crop failures for the Mayans and warming temperatures (along with Spanish conquistadors and other factors) led to skirmishes within the Mayan empire and its eventual demise.

So wars and conflicts have historic links to climate change. By 2050, I can imagine a world nothing like we have now. Perhaps only a quarter of the estimated 9.2 billion people in 2050 will have clean water, regular food and a secure pension (Government pensions will surely be kaput as nations struggle to finance the affects of climate change and the long-term fallout from the GFC stimulus packages).

I’ve been reading various reports on what our future world will be like – it’s not pretty, especially when it comes to community and national security. I thought I’d share these resources with you and encourage you to read them so that you can start to think (if you’re not already) about how to protect yourself and your family.

The International Institute for Sustainable Development’s report on rising temperatures and rising tensions is a must read. Also their report on climate change and security in Africa (Africa surely must be the canary in the coal mine).

The International Food Policy Research Institute has a number of useful resources on climate change. You can download discussion papers, powerpoint presentations and watch webcasts. Two focus briefs I found of particular interest – Adaptation to Climate Change and Climate Change in Africa: Key Facts & Findings.

The International Food Policy Research Institute will be launching a new study in Bangkok in late September entitled “Addressing Climate Change in the Asia and Pacific Region: Building Climate Resilience in the Agriculture Sector”.  The study warns that by 2050, if we keep going with our stupid ways, the yields of irrigated crops in South Asia will decrease significantly – maize (-17%), wheat (-12%) and rice (-10%) – because of climate change-induced heat and water stress. The result? Food scarcity will lead to higher prices and reduced caloric intake across the region.

The question will be how do we adapt and cope in this rather frightening future? Will genetically-modified crops be bred, which can withstand hotter temperatures and how safe will these GM crops be? Will the planet groan under the sheer weight of 9+ billion people by 2050 (I’ve also predictions of 11 billion)?  Will we be forced to secure our land and homes from waves of forced migrants seeking out water and food?

2050 and beyond

The astronomer royal, Martin Rees, has been looking into the future.  He is offering up predictions for 2050. You know I love a good prediction or two, so really interesting to read about what he thinks might be in store for us. Much of what he says, we already know – by 2050, the planet will be staggering under the weight of a global population of 9 billion and the world will be warmer.  Beyond this, Rees suggests:

• CO₂ concentration levels will reach twice the pre-industrial level by around 2050 if we keep with business as usual
• the entire solar system might have been explored and mapped by tiny robotic craft
• long range space flights to Mars and beyond
• altered human beings – through mind-enhancing drugs (didn’t that happen already in the 1960s?!!); genetics; or cyborg techniques
• the human lifespan could be greatly extended
• widening gulf between what science enables us to do and what applications it’s prudent or ethical to pursue.

I think that last point is spot on. I’m not sure that ethical issues surrounding genetics or gene therapy are keeping pace with science. The modification of an individual’s genotype has great future prospects. Tinkering around with human genes could mean that a person will not have to suffer cystic fibrosis or Huntington’s disease for example. A fetus with a genetic defect could be treated and cured before it is born. Hereditary disease might become a thing of the past and lifespans extended. All good.

But then there’s the darker side of genetic engineering. We’ve all read about designer babies, genetically engineered so they are aesthetically pleasing to society as a whole, or we can imagine some psycho cloning a whole lot of athletic, blonde men for a private army. I’m no geneticist, but seems to me that the human body is a complex maze of biological pathways and interconnections. So if you tinker with a gene, what are the side effects or long term ramifications elsewhere within the body?

What makes humanity so splendid is diversity, uniqueness, individuality. Every human is different. There’s a wonderful variety of hair and eye colours, statures, physical appearances. Isn’t it this diversity that makes humanity strong and able to evolve and cope with diseases or other onslaughts? If we are all genetically engineered, then I wonder what vulnerability factor is introduced. If an unknown disease came along, would a genetically engineered population be able to withstand it, since it seems to me that biological diversity provides humanity with the means to battle a variety of diseases.

And then there’s transgenics – where scientists tinker around and develop organisms that have a novel trait not normally found within a species. Golden rice is but one example of a transgenic organism. There are three categories of transgenics: animal-human combination; animal-animal combination; plant-animal-human combination. We’ve all read about pig organs, for example, being explored as an alternative for human organ transplants (known as xenotransplantation). But consider the ethical issues – and these are just some that come immediately to mind:

• what might be the health risks? Take golden rice – it is engineered to overproduce beta carotene and retinoids derived from beta carotene may be toxic and cause birth defects.
• would human-animal organisms be viewed as a lower order of being that would not be worthy of full respect or dignified treatment? I can imagine a whole class of “slave chimeras” being created for the purposes of doing low-grade or demeaning work.
• at what point would organisms, which possess a particularly human phenotype or exhibit certain human behaviours, be considered “human”? Indeed, if we start tinkering around, would the whole notion of what it means “to be human” change or will it need to expanded?
• if animal genes are inserted into a human embryo, what possible effects might there be on the individual identity of the future person? At the early stage of life, cells are growing and changing – how might the introduction of animal genes significantly alter a human’s make-up and identity? Genetic instructions are contained within an embryo, so if you introduce foreign material from an animal, are you potentially affecting the development of the human?
• would the animal-human combination need to be given rights and special protections?
• could new diseases emerge due to the close proximity of animal and human tissue?
• might unexpected new deformities and disorders be created in animal-human entities?

I read this article recently and in the paper is an interesting argument:

“The animal and plant kingdoms—the kingdom of genes—contain vast amounts of genetic information of potential value to humanity. Humans have many unique and valuable qualities, like the capacity for high-level moral reasoning. But they also have many limitations, which other animals and plants do not. We age faster than some animals,we do not have sonar, acute sight, hearing, smell, or the capacity to photosynthesize or produce our own essential nutrients. And we are susceptible to diseases other animals are not. These limitations are genetic. By understanding how genes contribute to function we could use these genes, or artificial copies of their sequences, to overcome the limitations of being human.”

I get this. It’s a logical argument. And it comes from a position of acknowledging that the human being does not have moral superiority. But are we opening the proverbial Pandora’s box or will we simply be mining the kingdom of genes to produce a more robust, disease free human?

Some simple questions

The United States has spent US $11.6 trillion (and counting) on bailouts and stimulus packages. Click here to see how the US Government has used taxpayer dollars. The Australian Government has coughed up AU $42 billion so far – to get people spending on retail goods, to fund infrastructure spending and building works at schools. Mind you, it seems that a whole lot of dead people benefited from the $900 handout too (around 16,000 individuals) along with people with an overseas residential address in countries like the UK, US, France, Germany and Brazil. Talk about a waste of taxpayer’s hard-earned dollars.

Meanwhile, GM and Chrysler bite the dust, filing for Chapter 11 bankruptcy and leading to unemployment for tens of thousands.  In the United States, 14.5 million people are looking for work; in Australia, the jobless rate is around 5.7% and predicted to rise to 8.5% over the next 12 months as Australia starts to feel the ferocious bite of the GFC (although we had a positive growth quarter in March).  State governments are running out of money – just look at California, a US state that is taking a real beating. Tax refunds, welfare cheques and student loans were suspended from February 1, 2009 as the State had no cash. At least 43 US States are struggling with budget shortfalls. And in Australia, we’ve just heard the news that our universal free health care system may no longer be free within five years, leaving sick people to be – well, sick – if they can’t cough up the money to pay for health care.

When you read about the likes of AIG having the hubris to pay senior employees millions of dollars in bonuses after receiving US$165 million in federal aid, you have to start asking some very simple questions. Not pointy-headed economic questions, just simple ones like:

• how are governments going to provide for the unemployed? help them to survive and not be stripped of dignity? how will the homeless be given shelter and fed?
• what happens when State governments run out of money, to the extent that the elderly and sick are not cared for?
• how do we regulate the economy and get governments to step in and address market failure? (basically a return to Keynesian economics)
• should we be reversing the privatization of infrastructure and banks? The three hallmarks of privatization are divestiture, deregulation and outsourcing and look at where this has got us – concentration of wealth; the stripping of public resources; social objectives subordinate to the profit motive; private companies making a profit and serving the needs of those who can or are willing to pay the most, whilst the needs of the majority are not forefront – this is undemocratic. And the thing I really fear is the privatization of water – there would be no guarantee that water could be delivered safely to the public at an affordable price. And if you can’t pay for water, you will be denied a basic human right.
• what are governments going to tell the elderly and the sick or youth who will be expecting jobs? – oops, sorry, we spent all your taxpayer dollars and can’t help you.
• how do we rebuild a sense of community and neighbourliness in our society? if we can’t look to government to support us now in this financial mess or in the future because we’ll be saddled with government debt – how do we help ourselves and others?
• how are we going to avoid or cope with civil unrest? The GFC is causing hardship; there is anger against Wall Street; millions are losing jobs; more people are homeless; we are wary about being burdened with government obligations that may take generations to repay.

And it’s pretty clear that governments are bracing themselves for civil unrest. Let’s look at some examples:

• the CIA has added the economy to its daily security briefing for the White House – looking at the GFC and its cascading effects on the stability of countries throughout the world;
• in the UK, MI5 has plans to cope with civil disorder and the army is on standby. The DCDC (Development, Concepts & Doctrine Centre, UK Ministry of Defense) warned in 2007 in their strategic trends report (p81) that: “the middle classes could become a revolutionary class….The growing gap between themselves and a small number of highly visible super-rich individuals might fuel disillusion with meritocracy, while the growing urban under-classes are likely to pose an increasing threat to social order and stability, as the burden of acquired debt and the failure of pension provision begins to bite”.
• and I’ve told you before about H.R. 645, which established FEMA camp facilities on military installations in the United States – these centres would be used to provide temporary housing, medical and humanitarian assistance in the event of a national emergency eg civil unrest
• I’ve also told you before about a US Army think tank report – Known Unknowns: Unconventional “Strategic Shocks” in Defense Strategy Development – and on p32 of this report it says: “Widespread civil violence inside the United States would force the defense establishment to reorient priorities….to defend basic domestic order and human security. Deliberate employment of weapons of mass destruction or other catastrophic capabilities, unforeseen economic collapse, loss of functioning political and legal order, purposeful domestic resistance or insurgency, pervasive public health emergencies and catastrophic natural and human disasters are all paths to disruptive domestic shock”.

So if we put all of this together, what do we have?

• when we all realise that the bailouts and stimulus packages have failed to correct rampant capitalism and we are all laden with increasing taxes to prop up ailing governments – we will wake up and say we’ve had enough;
• when people can’t afford to pay for health care; when the elderly do not get pension support; when an urban underclass is saddled with debt – there will be civil unrest;
• when the future is one of food scarcity and water wars – there will be civil unrest;
• and when that time comes, the military is ready and able to step in and take control.

Is our civilisation doomed?

Have you heard of Lester Brown or read any of his articles? If not, do yourself a favour and go here. Brown is an American environmentalist and prolific author who has been saying for ages that the biggest threat to global stability is the potential for food crises. He’s no crackpot. He has a degree in agricultural science. He’s toughed it out in India where he learnt about food/population issues. He’s worked for the US Government and, in the 1970s, founded the Worldwatch Institute.

Now, one of his articles has been just been published in Scientific American and the title is ominous – “Could Food Shortages Bring Down Civilization”. (I can give you the short answer: YES).  It’s scary reading but let me give you the key concepts. Then go off and read his article.

• Food scarcity and the resulting higher food prices are pushing poor countries into chaos
• Such “failed states” can export disease, terrorism, illicit drugs, weapons and refugees
• Water shortages, soil losses and rising temperatures from global warming are placing severe limits on food production
• Without massive and rapid intervention to address these three environmental factors, a series of government collapses could threaten the world order

Brown says: “Our continuing failure to deal with the environmental declines that are undermining the world food economy—most important, falling water tables, eroding soils and rising temperatures—forces me to conclude that such a collapse is possible.” And here are some more sobering stats:

• In six of the past nine years, world grain production has fallen short of consumption, forcing a steady drawdown in stocks of grain. There are now only 62 days of grain stock in reserve.
• But world grain prices in the spring and summer of 2008 climbed to the highest level ever.

Hungry people start protesting in the streets when they can’t afford basic food supplies and governments start to teeter. We’ve already seen food riots in Haiti, Indonesia, the Philippines and Cameroon. Troops had to open fire in Somalia when people rioted over high food prices. In Africa, prices of some staple foods have increased more than 50%. I’ve been seeing articles recently predicting food riots in the United States. Heck, even scientists are jumping up and down warning about impending food shortages given predictions that food consumption will jump 50% by 2030 as the world population exceeds 8.3bn. One scientist says: “There is a significant likelihood that, without investing in the science to deliver higher crop yields, we will not have the kinds of food levels we need to ensure food security.”

So when nation states can no longer provide food security, then you have a situation where law and order breaks down and civil unrest takes over. And one of the biggest issues our world faces is rapidly falling water tables. 70% of the world’s freshwater is used for irrigation of crops and rainfall is not refilling irrigation wells fast enough. And so water shortages will result in food shortages. China’s wheat crop, for example, which is the world’s largest, has declined by 8% since it peaked at 123 million tons in 1997. Half of India’s wells have dried up already.

And here’s the bit in the article that really freaked me out: “Topsoil is eroding faster than new soil forms on perhaps a third of the world’s cropland. This thin layer of essential plant nutrients, the very foundation of civilization, took long stretches of geologic time to build up, yet it is typically only about six inches deep. Its loss from wind and water erosion doomed earlier civilizations.“

So what’s the answer? Brown says: “Since the current world food shortage is trend-driven, the environmental trends that cause it must be reversed. To do so requires extraordinarily demanding measures, a monumental shift away from business as usual—what we at the Earth Policy Institute call Plan A—to a civilization-saving Plan B.” And what is Plan B?

• cut carbon emissions by 80% from their 2006 levels by 2020
• stabilization of the world’s population at 8 billion by 2040
• the eradication of poverty
• the restoration of forests, soils and aquifers

Plan B is outlined in Brown’s book.  I just hope that we all start taking this seriously. I’ve said before on this blog that I think the future will be full of wars over water, civil unrest over food scarcity and all sorts of security implications due to the planet heating up. Brown has identified in his article the 20 countries in the world that are closest to collapse (with Somalia being the worst):

Somalia
Sudan
Zimbabwe
Chad
Iraq
Democratic Republic of the Congo
Afghanistan
Ivory Coast
Pakistan
Central African Republic
Guinea
Bangladesh
Burma (Myanmar)
Haiti
North Korea
Ethiopia
Uganda
Lebanon
Nigeria
Sri Lanka

Will you have the right stuff?

I often wonder what sorts of skills will be required of future workers. One can only imagine what whiz bang technology will be available that will require a whole different skillset; what new industries will be created; and what current jobs and industries will bite the dust.

So I found this article on 10 Workplace Skills of the Future very interesting. The Institute for the Future has identified the skills you and I need to develop to face the future. Some of the names of the skills are a tad odd but here they are:

• Ping Quotient (what the?) – The Institute says this is about responsiveness and reach. Your ability to engage with other people and to work within a network and with others in the network.
• Longbroading The ability of see the big picture, systems thinking, understanding how a network nests within wider networks.
• Open Authorship We’re certainly seeing this skill on the increase – creating content for public modification; the ability to work with multiple contributors.
• Cooperation Radar Seems this skill is almost an intuitive ability to sense who the best workers would be to have on a particular project or task.
• Multi-Capitalism I couldn’t agree with this one more. Because of the global financial hissy fit, I think we will see different economic models being put forward as complements to capitalism and also different notions of what constitutes “capital” will need to be understood. So this skill will require fluency in working and trading simultaneously with different hybrid capitals eg natural, intellectual, social, financial, virtual.
• Mobbability Again, I think we have seen this skill on the increase.  It’s your ability work with and simultaneously coordinate large groups.
• Protovation This skill focuses on rapid innovation in iterative cycles and increasing the speed of failure. And not being afraid of failure. 
• Influency I think this skill is one knowledge managers are already well-versed in, particularly when it comes to storytelling. Influency will require us to be persuasive and tell compelling stories in multiple social media spaces (with each space requiring a different persuasive strategy and technique).
• Signal/Noise Management Pattern-recognition, filtering out noise, filtering meaningful information from all the stuff that we get hit with on a daily basis.
• Emergensight This is not a typo. Emergensight is the ability to prepare for and handle surprising results and complexity that come with coordination, cooperation and collaboration on extreme scales.

What do you think of these skills? Would you add to them?

2019: emerging technologies

Regular readers know I like nothing better than a doomsday or conspiracy theory. The second best thing for me is reading about what amazing futuristic technologies will be available. The book I’m reading at the moment (see ThinkingShift Book Club on right hand side bar) talks about how every 5000 years there is a civilisation cycle (I’ll outline the theories in a future post) and a major shift in social relations. So the author reckons we are just at the beginning of the next 5000 year cycle, which will be characterised by networked organisations and social networking technologies. He also covers the Kondratieff Wave I blogged about recently.

Anyway, in the course of doing some research on 2022 (yep, I like to plan ahead), I came across this video from Microsoft, which imagines the future. Emerging technologies envisioned are transparent glass between classrooms where drawings and language translation can happen in real time; a digital wallet; an electronic newspaper and digital medical records.

When I see visions around emerging technologies that will help you (and in my case, stop me from carrying around a wallet the size of a small house), then this offsets all the biometric identification craziness. So watch this video and be inspired. Bring on 2019!

Igor’s predictions

Dear American readers. Forget the global financial hissy fit. You have more urgent things to worry about. A Russian dude has been predicting since 1998 that the United States will break up, be no more, kaput by June or July 2010. Okay, mark those months in your calendars and pack the cat!

Russian academic, Igor Panarin, has been saying that an economic and moral crisis will hit the US and cause civil unrest, ultimately leading to the disintegration of the good old US of A.  Well, a break-up into six regional areas along ethnic lines. And like vultures, foreign powers will then move in.

Up until recently, the Russian professor was probably considered a bit of a looney but seems he’s being listened to now (particularly by the Russians who are most likely salivating over their Cold War enemy being kaput as well as blaming the US for their current financial woes).

Panarin is a former KGB analyst and is now Dean of the Russian Foreign Ministry’s academy for future diplomats. He has been warning that the “The dollar isn’t secured by anything… The country’s foreign debt has grown like an avalanche; this is a pyramid, which has to collapse.” He predicts that the US will plummet into worsening unemployment and family savings will be wiped out as the financial crisis worsens (which I believe it will in 2009). Dissatisfaction and civil unrest will escalate.

Panarin believes that Prez Obama’s election and first few months in office will be a veil of hope and Americans (and the world) will hope he can work miracles. However, Panarin darkly warns: “But when spring comes, it will be clear that there are no miracles.” The United States will then fracture into six parts: the Pacific coast; the South; Texas; the Atlantic coast, central states and the northern states. Hedging his bets, Panarin reckons it’s a 55-45% chance that the US will fragment and become the Former United States of America.

This Russian dude suggests that as the financial crisis worsens, the wealthier states will hoard their funds, withholding them from the Federal Government and secede from the Union. So California will become The Californian Republic largely under the influence of China.  The Texas Republic will be controlled by Mexico (Mexicans: you may wish to reconsider this as ex-Prez Bush has returned to live out his sunset years in Texas).

Washington, D.C. and New York will form an “Atlantic America” that may join the European Union (so you’d better start learning German or French). Canada will swoop in on the northern states and rename them as “The Central North American Republic.” Hawaii will be a protectorate of Japan or China. And Alaska? Well, the Russians will gobble Alaska up and Sarah Palin will be closer to Russia than she ever thought she was!

The handy map that accompanies this post will help you decide, based on the US state you now live in, which new independent country you should apply for citizenship from and what new language you should learn pretty fast.

I’m not really sure how the Americans are supposed to slug it out in this predicted break up. Will the North and the South have a rerun of 1861? Or will the six regions, that fall into supposed ethnic categories, battle it out? And what will happen to the Greenback? Don’t worry: apparently, the US, Canada and Mexico secretly agreed in 2006 to implement a new currency unit: the Amero.

Perhaps we could dismiss this guy as a looney tune if it wasn’t for a couple of things: he did correctly predict an economic collapse back in 1998 or so, 10 years before our current financial crisis. And there is a precedent for whacko predictions coming true – French political scientist, Emmanuel Todd, correctly predicted the collapse of the former Soviet Union 15 years beforehand when he was 25 years old.

Personally, seems to me this all smacks of anti-Americanism especially when you read that Panarin’s Moscow office is stuffed full of statues of double-headed eagles (the symbol of czarist Russia) along with pennants on the wall bearing the emblem of the FSB, the KGB’s successor agency.

If I were going to predict how the US would break up, I’d say it would go this way:

This is the so-called Jesusland Map, with blue states forming the United States of Canada and the red states being Jesusland (states that vote based on strong moral values).

You can watch a video of Panarin here. And if you read Russian, here’s an interview with Panarin.

You know: just in case this dude is right, here’s some advice for Prez Obama. Since he seems to be modelling himself on Abraham Lincoln, remember his words:

“America will never be destroyed from the outside. If we falter and lose our freedoms, it will be because we destroyed ourselves.” –Abraham Lincoln

Image credit: WSJ

What may emerge

I recently offered up my predictions for 2009. I decided to stick my neck out. Based on everything I’ve been reading, I looked at possible outcomes for 2009. One of the things I really think will occur is increasing civil unrest due to continuing (more likely worsening) economic conditions.  I also wondered whether some employers might cut workers’ pay due to global economic woes and whether there would be a return to a simpler life.

Well, a few items popped up in the news over the last week showing that my “predictions” might not be totally scatter-brained!

A US Army think-tank report has been released, which warns that the economic crisis could lead to civil unrest within the US and call for military intervention. The report is entitled Known Unknowns: Unconventional “Strategic Shocks” in Defense Strategy Development and you can read it here.  In part, the report says:

“Widespread civil violence inside the United States would force the defense establishment to reorient priorities….to defend basic domestic order and human security. Deliberate employment of weapons of mass destruction or other catastrophic capabilities, unforeseen economic collapse, loss of functioning political and legal order, purposeful domestic resistance or insurgency, pervasive public health emergencies and catastrophic natural and human disasters are all paths to disruptive domestic shock”. (p32)

It also suggests that the Obama Administration could face a “strategic shock” within the first eight months of office (p2). The report reminds us that the Bush Administration faced the strategic shock of 9/11 within its first eight months. Of course, the report is based on scenarios that may or may not happen. That’s an Army think-tank’s job. But civil unrest seems to be a prominent scenario.

Remember that I blogged about the return to the Homeland of the US Army 3rd Infantry Division’s 1st Brigade Combat Team in October 2008 and the death of Posse Comitatus. I asked whether the return of a highly trained military team to the US was in anticipation of civil unrest. If you missed these posts, go here, here and here.  Combined with this report, I do wonder whether the US Army is preparing to work with civilian authorities in containing civil unrest they believe will arise as the US sinks further into Recession during 2009.

Seems a return to a simpler life is happening. The New York Times reports that the economic downturn has led to a boom in craft sales because people are starting to make gifts themselves. Sales at a crafts store in Portland, Oregon in the run up to Christmas 2008 were up 33% whilst department stores and other traditional retailers faced a 7.4% decline in sales. For the first time, I made my Christmas gifts – calendars and mousemats of my photos.

And finally, a CBS news item tells of employers forcing employees to have time off without pay. Universities and factories in the US, for example, are requiring employees to take a temporary unpaid layoff to cut costs. The number of temporarily laid off workers has hit a 17-year high. The University of Maryland Medical Center told 67,000 of its 80,000 employees to take unpaid time off as it struggles with a budget crisis. And Professors at Winthrop University in South Carolina are taking nine days of unpaid leave but have been told not to cancel classes or miss meetings. In other words, business as usual but you get no pay! I believe that 2009 will see more of this – enforced unpaid leave, workers being asked to take a haircut on salary and being told to work harder for less.

UPDATE: I’ll keep adding to this post throughout 2009 as I find more that supports what I think will be happening. Prez-elect Obama has declared the US economy is “very sick” and the US job figures due out in early January will be sobering with economists expecting the jobless figure to rise by 500,000, bringing the total US job losses for 2008 to about 2.5 million. (6/1/09)

7/1/09 China warns of social unrest. Despite increasing unemployment, 80% of jobless migrant workers will remain in the cities rather than returning to the countryside. A recent public security report says that the first half of 2009 will witness social unrest triggered by the global financial crisis.

10/1/09 Japanese companies that once employed for a lifetime now sacking thousands. US unemployment surges to 16-year high.

15/1/09 Massive drop in full-time jobs in Australia and pension queues grow.

18/1/09 Eastern Europe braces for a violent “spring of discontent” as global economic downturn is generating a dangerous popular backlash on the streets.

18/1/09 UK unemployment to soar to 3.4 million as global financial crisis deepens.

19/1/09 THE BRANDS are beginning to be affected by the global financial crisis. Recession fears stalk Milan catwalk.

20/1/09 many Russian workers agree to take huge salary cuts as GFHF hits Russia.

21/1/09 Iceland’s Government is on the point of collapse as angry protesters stake out the Parliament in Reykjavik.

26/1/09 Obama increasing US trade protectionism.

29/1/09 The IMF is slashing global forecasts and is forecasting the worst year for the world economy since the Great Depression. The IMF puts global growth at 0.5 per cent in 2009 — a dramatic revision downwards from a forecast of 2.2% just two months ago.

1/2/09 Protectionism was one of the factors that turned a US financial crisis into a global depression in the 1930s. The US House of Representatives has tagged a Buy American clause onto the Obama administration’s $819 bn (or more) fiscal stimulus bill.

11/2/09 UK jobless total hits 10-year high and facing return of 3-day working week (last occured in 1970s).

24/2/09 Economic crash will fuel social unrest.

5/3/09 Mass unemployment escalates in Europe & US, inviting social & political instability.

Ringing in 2009

I said in a previous post that I don’t like uneven numbers, so already I’m not liking the sound of 2009. Normally, I don’t offer up my own predictions – basically, I’d be worried that one year later, when my predictions turned out to be oh so ridiculous, I’d have serious egg-on-face. But I’ve been reading heaps on the global economy and other stuff, so I’m going to outline what I think 2009 might bring us based on all my readings and thinking. Leave a comment if you have other thoughts.

1. Re-invent yourself as a Chief Financial Officer. This would be have to be the dream job of the moment. With the GFHF (global financial hissy fit), employees are being shown the door and companies are literally vanishing overnight. Organisations left standing require a magician to navigate them through economic hell – the CFO!  Organisations will do some internal reckoning and look at their exposure. Pity I suck so badly at finance.

2.  We’ll all be in economic hell along with the CFO.  Obama’s stimulus package (or as I believe it’s now called, Economic Recovery Plan) and the Rudd Government’s attempts to kick-start flagging economies seem to assume that this is all that’s needed. The spending that sustained us all over the last few years was based on the housing bubble, which has well and truly burst. Before that, it was the tech bubble.  So unless a new bubble comes along, I’m not sure how things will recover once the Recovery Plans run out of steam. What will be the basis of a post-GFHF economy? Manufacturing? Real Estate? Financial industry? How do you build a sustainable economy without bubbles and Government “recovery plans”? All the devastating forces are still ripping into the economy – housing slump, decrease in consumer confidence and the hedge funds and banks I reckon are still to reveal exactly what they’ve been up to (so probably more bailouts will be required, further burdening the taxpayer). And I don’t see how leaders like PM Rudd are going to really help the situation with the Christmas hand-out, telling us to spend up big. It’s the consumerist, American-style capitalist model that got us into the GFHF situation in the first place. A rethink of this model needs to take place pronto.

I reckon 2009 will see formal admission by the IMF that the global economy is in Recession. Despite Obama and the atmosphere of hope around his Administration, I don’t think he’ll be able to overcome rising unemployment in the US and a deepening Recession in that country throughout 2009. I wouldn’t be surprised if some US States declare themselves “bankrupt”. Let’s just hope we don’t see signs of hyperinflation.

Banks will screw you and me. Consumer credit will be restricted and if you’re late with a payment, watch out, they will hit you with penalties at high interest rates. But Governments will probably increasingly take direct control of banks.

I also think that employers could get nasty. Knowing that people are fretting about keeping their jobs, wages could be cut and more demands made on staff to “do more with less” – leading to worker stress and gloomy moods.

3.  There will be a trend towards living a simpler life. Yep, I know that many people have been calling for a return to a less materialistic world for some time. But I think 2009 will see a conscious shift towards making your own stuff, doing with less voluntarily. The GFHF has scared the bejesus out of us. Anyone under the age of 80 years has no memory of what it’s like to live through a Depression. But we’ve all heard the stories. As a result, I think we’ll start to re-examine our lives with a view towards having less personal debt and going back to basics – like lay-bys, eating at home more, less reliance on outside entertainment and so on. Heck, even I am looking to invest in a sewing machine to make my own clothes (and I’ve never been known for my sewing abilities). I want more control over what materials I can choose. I want clothes that aren’t “Made in China”, poorly made and destined to fall apart within a season.

We will no longer sit back and accept that CEOs get paid exorbitant salaries and bonuses. We will not suffer fools – greedy bankers and financial advisors. We will return to saving and investing wisely and seeking long-term financial security not just short-term profits. We will need to reflect and adapt because a very different GFHF world awaits us.

4.  Because of the ongoing economic uncertainty and people worrying about jobs and losing homes, I think we’ll see an increase in civil unrest.  There could be a rekindling of socialist ideals.

5.  There will be some industries or professions you’d like to be in because they will see an increase in popularity. During the Great Depression, people went to the cinema to relieve anxiety. Women still bought lipsticks and cosmetics to make them feel better. So I reckon the entertainment and cosmetics industries will thrive.

6.  We’ll expect more from our politicians. Instead of party bickering, we will be looking for strong leadership to guide us through 2009. Hopefully, this will start with Obama. We will expect increased cooperation between political parties and on the international stage as Governments and politicians collaboratively address economic issues.

7. Politically, Afghanistan will start to haunt Obama. There will be further strife between India and Pakistan. I think we’ll see a rise in trade protectionism. So for example, already you see Russia raising tariffs on autos to prop up its ailing car production industry (mmmm….wonder if there will be a call for the return of Communism there?). The EU is busy accusing the US of taking a more protectionist stance on trade. I think that increased protectionism will be a huge threat to the global economy in 2009 because it will lead to a collapse in global trading.

8.  The global climate is stuffed and continues to be stuffed. 2009 will see more wild weather patterns. I think it will be chaotic and all at a rate faster than predicted.  We’ll have to take ourselves off the snooze alarm but it might be way too late to get serious about climate change. I think we’ll start to see the first skirmishes over resources.  I was reading recently about a worldwide shortage of seed. For example, soybean seed has been in short supply and alfalfa seed supply is tight. We’ve already seen food riots breaking out in Morocco, Yemen, Mexico, Guinea, Mauritania, Senegal and Uzbekistan. And of course farmers are probably going to face a tough time getting credit to buy seeds. This will all get worse in 2009 leading to food shortages and skirmishes affecting the stability of regimes.

World food security is measured by grain inventories and the really bad news is that only 50 days of grain inventories are available, compared with 115 days in 2000. This is the lowest amount of available grain reserves since 1960.

I’m not sure there’s much to look forward to actually, particularly in the UK. But I also think it is a temporary situation. We will ride it out and come out the other side okay, maybe in 2010 or 2011. But we’ll be in a very different post-GFHF world that will require us to adjust, adapt and learn to focus less on ourselves. We’ll realise that in our global environment, everything is connected and that a crisis here or a skirmish there can have a ripple effect and ultimately impact you and me.  I have left out the prediction that there will be disappointment with Obama in 2009 as that’s a separate post.

What are your predictions based on what’s going on in your country or what you see going on around the world?

1972: did they get it right?

Are you worried about 2009? I’ve been chatting to friends and some work colleagues about Christmas – are they going to ignore the financial hissy fit and help spend our way out of a recession? Or will they be tightening the belts? It’s business as usual for me. I don’t celebrate Christmas anyway – no, I’m not part of some weird cult that doesn’t recognise the holiday period. I oppose it on commercial grounds. It’s just a huge excuse for shops and department stores to cash in, whilst we all go silly in the Silly Season and party away on credit cards. Then get a humungous headache in January when the credit card bill arrives. So I skip the Silly Season. Mostly everyone I’ve spoken to is using Christmas as a way to forget the 2008 meltdown (guess that means hangovers) and they are going to spend.

So I’ve been contemplating 2009. I hate years with odd numbers so already I don’t like the sound of the upcoming year! I’m no genius when it comes to economics so I’ve really been trying to educate myself on who/what/why – how the hell did we get to this point of the world teetering on the brink of a global depression, sorry recession? As part of my ferreting around, I came across a New Scientist article. Perhaps I shouldn’t have read it – pretty gloomy.

Apparently, more than 30 years ago, it was predicted that the wheels would come off the global financial system in the 21st Century. Way back in 1972, the Club of Rome published a book called Limits to Growth. I’ve always wondered if the Club of Rome dudes are some secret squirrels up to shadowy stuff. But they’re a global think tank : an NGO founded in 1968. And they meet in some villa in Rome or used to, not sure if they still do. I’ve often thought of setting up a secret squirrel club in Newcastle and starting  the myth that we are privy to some secret about the Knights Templar and the Holy Grail. But the Club of Newcastle just doesn’t have the same ring to it as the Club of Rome.

I digress! So they published this book in 1972, which rang the alarm bells by saying exponential economic growth could not be sustained and the financial system would meltdown and we’d also see environmental collapse. Actually, it was a report to the Club of Rome written by a Harvard biophysicist and her colleagues and apparently it caused worldwide outrage and condemnation at the time. I can’t recall a thing from 1972 (okay I was around then!). Actually, I don’t recall much from 2002 either!

I’ve managed to track down a used copy on Amazon and hope to get it before Xmas so I can subject myself to prophesies of doom and gloom. Computer models were used  (hard for me to think of computer models way back in 1972) to investigate five major trends of global concern – accelerating industrialisation, rapid population growth, widespread malnutrition, depletion of nonrenewable resources and a deteriorating environment. And the news wasn’t good even then.

The report predicted:

• sometime in the next 100 years, the planet would reach the limit of growth it could tolerate
• the result would be a sudden and uncontrollable decline in population and industrial capacity
• when many different quantities are growing simultaneously in a system and when all the quantities are interrelated in a complicated way, analysis of the causes of growth and of the future behaviour of the system becomes very difficult. So it’s unlikely that future historians will pinpoint climate change say as the reason for collapse.

So the book was all about the shortages we would face in the 30 years following 1972 but the 1980s and 1990s didn’t really bring that – we all partied up. But recently, I’ve been noticing references to the Club of Rome and this 1972 book. Back in October, Margaret Atwood (a novelist I very much like) was pretty well ripped to shreds in an article in the Ottawa Citizen for mentioning Limits to Growth in a New York Times article she wrote about the credit crisis. Well, I can’t say I disagree with what Atwood said:

“If fair regulations are established and credibility is restored people will stop walking around in a daze, roll up their sleeves and start picking up the pieces. Things unconnected with money will be valued more — friends, family, a walk in the woods. ‘I’ will be spoken less, ‘we’ will return, as people recognize that there is such a thing as the common good….If fair regulations are not established and rebuilding seems impossible, we could have social unrest on a scale we haven’t seen for years.”

There was neo-con rebuff of the Limits of Growth in the 70s. Yale economist Henry C Wallich declared it “a piece of irresponsible nonsense” and the authors were accused of being “a group of scientists going by the pretentious name “The Club of Rome”. Check out the Wikipedia entry to read more about the book and its modelling.

But back to where I was heading. Now, a CSIRO scientist, Graham Turner, has compared the book’s predictions with data since 1972. And it still ‘aint looking too good. Turner reckons the five variables the modelling was based on are still on track for collapse some time after 2020. To avoid falling into the black hole of doom and gloom, Turner says we must pursue an alternative model:  stopping population growth, resource depletion and pollution.  A CSIRO press release says:

”The real-world data basically supports The Limits to Growth model. It shows that for the first 30 years of the model, the world has been tracking along the unsustainable trajectory of the book’s business-as-usual scenario. The original modelling predicts that if we continue down that track and do not substantially reduce our consumption and increase technological progress, the global economy will collapse by the middle of this century. We’ve had the rare opportunity to evaluate the output of a global model against observed and independent data. The contemporary issues of peak oil, climate change, and food and water security, resonate strongly with the overshoot and collapse displayed in the business-as-usual scenario of The Limits to Growth.”

Seems as though this Australian scientist is the first to actually test the predictions and the really dire bit that scared the bejesus out of me is that the recommendations offered up in 1972 were never seriously examined or implemented. So we’ll be toast by about 2020 if not before and the Club of Rome dudes got it right!  Where’s an application form to join this Club?!

You can listen to a podcast by Turner here. Warning: you might need a Valium or vodka after listening to it. There’s also a 30-year update of the original 1972 book available. One of the authors, Donella H Meadows is dead – shame because I’d love to hear what she’d have to say right now. But one of the other authors, Professor Jorgen Randers, is still kicking around and speaking at conferences. You can listen to what he has to say in this podcast. The third author, Dennis L. Meadows, is also still around. Let’s hope their 1972 work is now taken seriously. Because if it’s not……