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[EPILOGUE] Pax Indica

The Indian Subcontinent in 2050

A timeline of events in the Indian subcontinent between 2035 and 2050.

The Great Indian War (2033-2038)

Rise of DUSS and PRT
Beginning in 2033 and lasting until mid-2038, the Great Indian War was, without a doubt, the bloodiest continental conflict since the Second World War, resulting in the deaths of over sixty seven million people including military casualties and civilian deaths and over two trillion dollars in terms of property damage and instrumental in completely changing the face of both Indian and Asian geopolitics forever. What began as ethnic and socioeconomic strife back in the 20s would spiral into a full-fledged continental war within ten years and while most scholars and historians regard 2033, the year of the declaration of independence of the southern Dravidian states, as the start of the Great Indian War, some argue that the war had begun as early as 2027 in the manner of ethnic and religious pogroms in India, especially targeted towards southern Indians and Muslims. Reaching a wide audience and acquiring great popular support for their separation from India, both the Dravidian Union of Socialist States and the People's Republic of Telangana were successful in keeping their territories under control despite heavy assaults and slowly chipped away at more and more territory; the city of Bengaluru, the tech capital of India, would fall to the DUSS in November 2035, a massive blow to an already deprecated morale in the Indian Army. The fall of the city also led to the Congress, already having been elected by a thin margin, to be voted out and replaced by the BJP although this time under Amit Shah, the assassinated former Prime Minister Modi's personal friend and ally. The civil strife in Maharashtra finally finds a voice in the newly rejuvenated Republican Marathi Congress (formerly the Republican Party of India), championing Marathi nationalism, secularism, anti-casteism, and laissez-faire capitalism with a focus on creating a welfare state. The party does not take up arms, however, and continues with its stance of non-violent resistance. Negotiations regarding increased autonomy with Delhi fail as the Indian economy completely collapses and inflation goes sky high, further cementing the idea of secession among all active groups and in states that had previously remained pro-Delhi as the odds of a return to a 'normal India' shrink away.
Indian GDP (incl. secessionists) in 2035: $6.4 trillion
Indian GDP (incl. secessionists) in 2036: $4.9 trillion
Indian GDP (incl. secessionists) in 2037: $3.7 trillion
The Gandharan Spring
Elsewhere, however, the archrival looks on while lapping up new and old investments and local growth as foreign investment meant for India is siphoned away to Pakistan, Southeast Asia, and even Central America. While civil strife continues in India, an entirely different movement strikes Pakistan - one demanding change, equality, and justice for all. While the Islamic Republic had slowly shied away from its Islamic morals and assumed a more pragmatic approach to world affairs and had significantly benefited from this new policy, it hadn't anticipated a social revolution to begin within its own borders. The thousands of coffee cafes established in its major (and liberal) cities became a breeding ground for new thought while the newfound prosperity through rapid economic development and industrialization led to a mass wave of 'wokeness' among the population. The annual women's march, coffee shop discussions, the emergence of Latin Urdu, and a new wave of Urdu poetry in the newly standardized Latin script became a part of a newly emerging unitary culture that transcended the bounds of ethnic nationalism and culminated into a cultural renaissance as people found new ways to express themselves, their words, and their art. Marches and protests to reduce military spending and the establishment of proper universal healthcare and social security became a norm as the country dived deep into what came to be known as the Gandharan Spring - named so after the ancient scholarly state of Gandhara. Economically, the Pakistani GDP exceeds $1.5 trillion in 2037 as new investments pour in and local industry, both large and small, prosper and the newly built planned city of Şahinpur becomes a major hub of technological innovation in Asia.
Total Collapse
But back in India, war was the only thing on the minds of the common people. Mass migrations across state and international lines further impacted local economies and the Dravidian cause became further ignited with the BJP's return to power, once again sparking ethnic conflict between the citizenry. Pogroms and killings continue as almost every state is plunged into anarchy over hyperinflation, ethnic and religious tensions, and the collapse of the Indian federation. Courts and the judiciary became irrelevant as the Constitution devolved into nothing more than a piece of paper and civil rights eroded away in the name of security and 'national integrity'. The Indian military, by now the only functional organ of the Delhi-based Indian government, becomes plagued with deserters and a collapsed morale among all ranks with nearly all but the staunchest of (Hindu) nationalists unwilling to fight to 'preserve the union'. Popular support for the Indian government is limited only to the states of Uttar Pradesh and Bihar at this point with almost all other states in active revolt or too preoccupied with anarchy and ethnic, religious, or political unrest. Both the DUSS and PRT have gained strategically important and economically vital territory with the former gaining control of Madurai, Coimabatore, and Kochi port as well as large swathes of countryside in its claimed territory while the latter gained control over Hyderabad, the economic and political capital of Telangana.
But all was not rosy for the secessionists in the south either. With supplies running low and exhaustion high among its ranks, both the DUSS and PRT wanted, nay, needed, a quick end to this war. And that would come albeit not in a way they would've anticipated. In early July, Kashmir rose in uproar. While pro-Pakistani/independence militias had been active in the region since the departure of the British, this new uprising was far more organized and effective and an entire new front was opened up for the Indian government to worry about. This was also the first time the term 'Great Indian War' would be used to describe the civil strife going on in India. In response, the Indian military cracked down hard on the secessionists and news of continued war crimes in Kashmir would not be well-received by the neighbor to the west.
Here's Johnny!
True to its newfound commitment to 'neutrality', the Islamic Republic of Pakistan had remained neutral since the declaration of independence of the two southern secessionist groups. > On the eve of July 21, 2037 one of the few remaining squadrons of the Indian Navy intercepted an arms shipment from Djibouti en route to the southern port city of Kochi which had fallen into the hands of the DUSS and while it had been widely accepted that that country had been involved in this war in some capacity, the capture of the shipment finally sealed the deal for the hot-headed government of PM Amit Shah and the BJP. Although the shipment had decidedly come from Pakistan, the government in Islamabad wholly denied any involvement in the affair and called for 'peaceful dialog' between Delhi and the secessionists. Over the last two decades, the Islamic Republic had begun to care a lot about its international image, reflected in the permanent invitation it received from the United States to the G20, but the BJP, already seething with hatred for the country and holding it responsible for Narendra Modi's assassination all those years ago (that would ultimately snowball into the Great Indian War), would have none of it.
The very next day, the Indian military conducted a strategic surgical strike against a Pakistani military base in Gilgit-Baltistan which it defined as a 'warning shot' for its western neighbor to not interfere in its internal issues. All it did was ignite a national fervor that couldn't be extinguished even with the coldness of the deepest abyss. The three Pakistani soldiers killed in the strike were awarded the Nişan-i-Haider, the highest military award in the country, and Pakistan entered the Great Indian War with a declaration of war against the Republic of India on July 22, 2037.
The End
The initial Indian strike against Pakistan killed three Pakistani soldiers. The counterstrike conduced by the Pakistan Army as its first response killed forty seven Indian soldiers and disabled two Rafale fighter aircraft. But that was only the start.
During the kerfuffle between the two archrivals, major new developments would spring up across the rest of the subcontinent especially in the DUSS and Maharashtra. The Marathi Congress, beefed up with major donations (later revealed to be major Maharasthra-based businessmen such as Ambani and Tata as well as from anonymous accounts owned by REDACTED), took control of key buildings and locations in the state, including the very import Port of Mumbai, and declared independence from India as the Maratha Republic. In the south, ideological drift between the DUSS and PRT led to an end to an otherwise quite beneficial partnership between the two. The same ideological drift would begin to take hold within DUSS as well. Kerala, notable for its high standards of living and prosperity compared to other parts of India, began to wonder if it may be better off on its own just as Telangana had split to form a smaller but ultimately more manageable sovereign state. But the war had now escalated to a degree not initially imagined as the two competing megapowers of the region, India and Pakistan, finally came to a head.
While Pakistan had built up to a parity with its larger and traditionally stronger rival, it was the exhaustion of Indian forces that would give the smaller state the primary advantage early in the war as the fresh and qualitatively superior Pakistan Army blitzkrieged into Kashmir with its tank fleets of high-end Haider main battle tanks and state-of-the-art Griffin III IFVs, capturing Srinagar, Jammu, and the Siachen Glacier within twenty four hours of the declaration of war. Already exhausted in fighting the upstart rebels in the region, the Indian Army personnel stationed in Kashmir quickly resorted to defensive tactics as the invasive force rapidly captured town after town, putting sixty thousand of the ninety thousand strong Indian force under siege within just the first three days of conflict.
To the south, the Pakistan Navy destroyed the Indian naval bases in the state of Gujarat (the last pro-Delhi state on the western seaboard) and deploy a major submarine squadron in the region to deter any harassment from the massively depleted Indian Navy as it made its way south, breaking the blockade deployed against DUSS thus allowing relief aid (and weapons) to once again reach the rebels. But the actual intent of their move south would be revealed with the rapid landings of troops on the many tiny islands that made up the Lakshadweep union territory and the occupation of all government buildings and posts in the archipelago. By the end of the month, the Indian territories of Kashmir and the Lakshadweep islands had both been occupied by the invading Pakistani forces and a shockwave rocked the entire subcontinent to its core. The All India Trinamool Congress declared the independence of 'Kalinga Ganga' - a federation of the Indian states of West Bengal, Orissa, Jharkhand, and Chhattisgarh to 'oppose the fascist tendencies of the Delhi-based Hindi' with their capital in Kolkata. The Sikhs of Punjab declared the independence of the 'Khalsa' - the Sikh brotherhood worldwide - and called on all Sikhs to return home. In Delhi, Prime Minister Amit Shah handed power over to the military who declared martial law across the country, dissolved the Parliament, and declared the Constitution void. The Maratha Republic took this time to announce Pune, not Mumbai, as the capital of their nascent state.
At this time, cracks within the DUSS also began to show as the state of Kerala announced its separation from the socialist federation, declaring the People's Republic of Keralam, a social democratic state based on the principles established by the Self-Respect Movement and the original Dravidar Kazhagam rather than the European-derived ideology of the DUSS. Elsewhere, the Pakistan Navy crossed by Sri Lanka - where it refueled and restocked - and entered the Bay of Bengal to open up a brand new front in this massive continental war.
The Indian Army attempted five times to break the 'iron wall' - the Pakistan Army's three-thousand strong fleet of M1PK Matin tanks - but failed to make a dent, losing whatever was left of their morale and drive with every failed attempt. Indian formations were ripe targets for the Pakistan Air Force which maintained total air superiority in the war with its advanced aerial fleet of F-35s and AF-1 fifth generation plus fighter aircraft and this support allowed the Pakistanis to break into India proper on January 26, 2038 as they crossed the Punjab and seized control of the state for the newly declared Khalsa while the southern command crossed the Rann and captured all of the Kutch beyond the disputed border at Sir Creek. Already halved by personnel deserting and refusing to follow orders and to defections to the declared secessionist states, the defeated Indian Army was the first to capitulated following Pakistani landings on the Andaman and Nicobar Islands and the capture of Port Blair, Mayabunder, and Car Nicobar by Pakistani Marines.
The Indian Air Force was the next to follow. Having been defeated in the air, the IAF wouldn't find peace on the ground either as the enemy flew sortie after sortie, wrecking almost every airbase with its advanced platforms such as the F-35 and the AF-1. The defections to DUSS, PRT, Kerala, Maratha Republic, and Kalinga didn't help either and whatever was left of the Indian air fleets was lost in a final sortie over the city of Chandigarh as Pakistani troops crossed into the state of Haryana and came within two hundred kilometres of Delhi.
The last two states to secede from the Union were Goa and Garhwal, the latter of which claimed the northern Himalayan states of Himachal Pradesh and Uttarakhand as their rightful territory while the former declared the small coastal state of Goa as its rightful sovereign territory. With two hundred thousand personnel in Kashmir, one hundred thousand in Gujarat, and about five thousand split between Lakshadeep and Andaman & Nicobar, the Pakistan Army entered Delhi on July 2, 2038 and forced the surrender of the final vestiges of the Indian military high command (and government) thus bringing the Great Indian War to a conclusion.
Treaty of Dharamsala
On August 14, 2038, exactly ninety one years after the independence of the subcontinent from British colonial rule, representatives from all belligerents of the Great Indian War met at the Himalayan capital of the newly-declared sovereign state of Garhwal to sign a treaty to decide the future of the Indian subcontinent and to ensure that this war would be the last of its kind, at least in the Indian subcontinent. The following are the salient features of the Treaty of Dharamsala.
  • The Republic of India will be dissolved and its membership in all international organizations voided.
  • All nuclear weapons and facilities to manufacture more nuclear weapons will be dismantled.
  • No new sovereign state in the subcontinent will be regarded as the lawful successor state to the Republic of India and will seek memberships on their own merit.
  • All new sovereign states will commit to the ideals of democracy, justice, and freedom.
Besides these salient points, all representatives set out to solve any territorial disputes that might cause tensions in the future. Pakistan claimed full sovereignty over the union territories of Jammu and Kashmir, Ladakh, Lakshadweep, and the Andaman and Nicobar Islands as well as the Kutch region of the state of Gujarat. Garhwal claimed full sovereignty over the Indian states of Himachal Pradesh and Uttarakhand. Khalsa (Republic) claimed full sovereignty over the Indian state of Punjab and the union territory of Chandigarh. Kalinga Ganga claimed full sovereignty over the states of West Bengal, Chhattisgarh, Orissa, and Jharkhand. Kamarupa claimed full sovereignty over the Seven Sister States. The Maratha Republic claimed full sovereignty over the state of Maharashtra. The DUSS claimed full sovereignty over the states of Tamil Nadu, Andhra Pradesh, and Karnataka as well as Puducherry, Karaikal, and Yanam districts of the union territory of Puducherry. Keralam claimed full sovereignty over the state of Kerala as well as the district of Mahe. PRT claimed full sovereignty over the state of Telangana. Nepal claimed sovereignty over the state of Sikkim. And finally, Gangarashtra claimed full sovereignty over the states of Haryana, Rajasthan, Gujarat, Uttar Pradesh, Madhya Pradesh, and Bihar as well as the union territories of Delhi, Daman and Diu, and Dadra and Nagarhaveli.
Helpful map of the Treaty of Dharamsala

Rebuilding and the Mandala (2039-2044)

The conclusion of the Great Indian War completely changed the face of the subcontinent and left a permanent mark on world history. The dissolution of India left its archrival Pakistan as the new regional power in South Asia, further contributing to its rise as a major power. Outmatching any of the successor states of its once powerful rival in all relevant terms, the leadership in Islamabad instead adopted a different approach towards cementing its role as the leader of a new subcontinent. Instead of going the route of Russia and forcing its less powerful partners into being subservient subjects as seen in the USSR, the leadership instead looked towards Germany's role in the European Union not just as a leadership role but as a bonafide future for the Indian subcontinent. But first, it had to solve the rapidly rising issue back home.
In 2039, the Pakistani economy crossed the $2 trillion mark, solidifying its position as the largest economy in South Asia and among the largest in all of Asia as it overtook the severely damaged economy of South Korea following the end of the Second Korean War. Already being a 'permanent invitee' to the G20, it was also awarded India's now-vacant seat in the forum. But the renaissance that had sprung up during the Great Indian War had now become more than a social idea to be amused by. This Gandharan Spring had become the most important issue at home, inviting comparisons to the civil rights and counter-culture movements of the United States in the twentieth century. Pakistani cinema and television turned away from romantic dramas and towards something of more substance, tackling complex issues in a conservative, Islamic society such as drug use and pre-martial sex, women's empowerment and feminism, anti-state and anti-government feature films, and even films and dramas openly based on the Hindu heritage of the nation. Urdu literature, this time in the Latin script, saw a renaissance of its own and several instances of prose and poetry saw global success, works based on heritage and social issues rather than Islamic glory and prestige. Madrasahs became empty as parents chose functional skill over Islamic jurisprudence, attracting the ire of the mullahs who denounced the 'ever increasing degeneration' of the nation. But this was much bigger than them. The newly annexed territories of Jammu and Kashmir and the Andamans had brought in a, albeit small, but influential population of Hindus into the fold and they assimilated into this new Gandharan culture with ease.
Elsewhere, the Great War had left the rest of the subcontinent in a sorry state. Mass immigration and uncontrolled inflation had broken local economies while warfare had taken a severe toll on infrastructure. As relief, Islamabad organized the Hindustan Fund - a locally raised sum to help the broken economies of post-war India to once again find their footing and become functional sovereign states instead of going the route of Afghanistan and becoming burdens. Of course, such a task could never be accomplished by Pakistan alone and while the state did deliver about $88 billion in aid to the post-war states of the subcontinent over five years, substantial aid from the European Union, the United States, and China was significant in rebuilding these broken states. It is estimated that the total aid offered to these economies was in excess of $500 billion, enough to lay a groundwork on which to build new foundations for new states.
In 2043, the Pakistani economy crossed $3 trillion and accounted for almost half of the entire economy of the Indian subcontinent. But the Gandharan Spring had reached it breakout point and soon enough, the state would need to make some very crucial decisions.
On January 1, 2044 about forty million people across the country conducted what would come to be known as the Great Gandhara March, this time demanding significant decreases in military spending, a strong and robust healthcare and social security system, equality and liberty regardless of race and religion or any other personal metric, and a full transparent democratic system, calls that were then addressed personally by the state leadership and would be answered in the following two months.
On March 21, 2044 the state conducted a mass referendum to answer a singular question, threatened by a mass exodus of the younger, more progressive caucus of the People's Party if the demands were not addressed.
"Should Pakistan retain Islam as its official religion?
The answer was a resounding seventy eight percent no with an almost eighty five percent turnout. But this would only open the floodgates to a complete and total overhaul of the country. A second referendum would be held the next month asking the question,
"What should Pakistan's official name be?"
[ ] Islamic Republic of Pakistan
[ ] People's Islamic Republic of Pakistan
[ ] Republic of Pakistan
With eighty four percent of all votes choosing the final option, the official name of the country was changed once again to the name it had been awarded with the Constitution of 1962: the Republic of Pakistan. More questions were asked in five more referendums as Sharia-inspired laws were removed the penal code including the hotly-contested and controversial blasphemy law (which was amended to include all religion with a dramatically lighter punishment rather than being completely removed). Laws made through the controversial Hudood Ordinance of former military dictator Zia ul-Haq were completely scrubbed and the death penalty finally abolished as the country came more and more into its form as a modern nation-state.
In the Indian subcontinent, the gracious foreign aid brought the broken economies of the new states back to life as life began to settle into a normal routine once again but everyone knew that things would never, ever be the same as they once were. Several monuments were erected to honor the sixty seven million killed in senseless warring and brutality and all Indian leaders vowed to never allow a repeat of what had occurred again. The South Asian Association for Regional Cooperation (SAARC) was redefined and rebuilt from the ground up to allow a better and more productive platform to settle disputes and to deter any future wars between new or old Indian states. A new age of cooperation would take over the subcontinent as nearly all states, regardless of ideology, became willing allies or at least established warm and cordial relations with one another, especially Pakistan and Gangarashtra. With the latter still being seen by some as the natural (if not recognized) successor state of the Republic of India as well as the strongest among all new country in the subcontinent, it was natural for the two to work towards establishing a regional environment conductive towards peace and dialogue and lead by example. With Gangarashtra toeing the line, it became quite easy for the modern Pakistani state to ensure the loyalties of other new states both to itself and to one another as it formulated a new plan to formalize the future of the region and to guide it towards a vision of peaceful cooperation, development, and shared dignity.

Indian Union (2045-2050)

Treaty of Panjim (2041)
Post-war India was not that different from post-war Europe. Both destroyed by a dangerous ideology, it was necessary for all peoples to work together to ensure that such an event could never take place again. To accomplish this, the Europeans established several commissions and organizations to negate the extreme nationalism that had ravaged Europe. European integration was seen as the antidote to such an event occurring again and the same was done with post-war India. It was easy to point out the Hindu nationalist ideology as the force that tore the subcontinent to shreds and caused the deaths of almost seventy million people. To counter the ideology and to further promote, representatives from all successor states met at the Goan capital of Panjim in 2041 to discuss the future of the Indian subcontinent. It was identified that while being proud of your nation and heritage is no crime, its devolution into hatred for other peoples is an ideology that must be combated at all cost. As part of this treaty, all Indian states agreed to curb all extreme nationalist parties and groups and denounce unwarranted religious and ethnic aggression both publicly and in their actions, leading to major purges across the region but especially in Pakistan (which continued to weaken the military-mullah consortium), the DUSS, Gangarashtra, and the Maratha Republic.
Treaty of Kandy (2042)
An year after the conference at Panjim, the Indian leaders met once again to do something of more substance and significance, this time in the Sri Lankan city of Kandy. Discussing further integration in the Indian subcontinent, several proposals were put forward including a bid to host a major sports tournament together (recommended by Maharashtra), to invite all leaders of the G-20 to visit the Indian states (recommended by Kalinga Ganga), to create a legislative assembly - an Indian parliament, per se - to sign off on any new laws established by any Indian state (recommended by Pakistan) but finally it was a suggestion from the representatives of Keralam that all other attendees agreed upon. A university to be established anywhere in the subcontinent, ultimately agreed upon to be in the city of Alappuzha in Keralam, to focus entirely on Indian studies including history, geopolitics, economics, and to provide training to students who will embody the values of unity and peace among all Indian peoples. Funded by all Indian states (except for Garhwal and Kamarupa which cited financial issues), the university would be established later than year with construction on the urban campus completing in early 2044. The institute would train future leaders, diplomats, and bureaucrats from all corners of the Indian subcontinent.
Treaty of Lahore (2044)
With the College of Indian Studies in full swing and the economies of all Indian states now rebounding from the damage suffered during the Great Indian War, leaders from the Indian states met once again to discuss further integration, this time in the second largest city of Pakistan - Lahore. A historical capital of several empire that once spanned the entirety of the subcontinent, the millennia old history of the city offered a great insight into the long and varied history of the Indian peoples. This was also where the idea for an Indian Council, created to uphold human rights, democracy and the rule of law in the Indian subcontinent, would be conceived and later brought to fruition which would establish the foundations upon which the future Indian Union would be built.
The Indian Council would become an official United Nations Observer party in 2047, an year after its establishment with the following members.
Country Capital
Pakistan Islamabad
Gangarashtra New Delhi
Khalsa Chandigarh
Garhwal Dharamsala
Kalinga Ganga Kolkata
Nepal Kathmandu
Bhutan Thimphu
Bangladesh Dhaka
Kamarupa Guwahati
Maratha Pune
Telangana Hyderabad
Goa Panjim
DUSS Bengaluru
Keralam Thiruvananthapuram
Sri Lanka Colombo
Maldives Male
Treaty of Karachi (2046)
Meeting in the largest and wealthiest city in the Indian subcontinent, the conference at Karachi would establish what would become the Indian Union in 2049. At the conference, especially called by the leaders of Pakistan, Gangarashtra, and the Maratha Republic, all members of the Indian Council would decide to establish the Indian Cooperative Council (ICC) - a customs union between all members of the Indian Council to promote further economic cooperation between all Indian states. All major languages of the Indian subcontinent such as Hindustani, Bengali, Marathi, Gujarati, Tamil, Telugu, Malayalam, Kannada, Punjabi, and Sindhi were recognized as official languages while English was declared the working language for all official business within the ICC. Two major organs of the council were established - the Indian Commission and the Indian Parliament. A third organ was created with the annexation of the Indian Council into the ICC with the first major amendment to the ICC charter through the Treaty of Delhi (2047).
Treaty of Kolkata (2049)
The second amendment to the ICC created (or brought back) the Indian Rupee, originally pegged to the Pakistani Rupee due it being the strongest currency among the sixteen member states of the ICC. The currency was adopted in Pakistan, Khalsa (Republic), Garhwal, Gangarashtra, Kalinga Ganga, Kamarupa, and the Maratha Republic the year it was introduced and by the Maldives and Telangana in 2050. Increased trade made possible through the single currency and the liberalization of trade between the Indian states led to rapid economic growth among all member states and further improvements in terms of HDI and per capita income.
Treaty of Visakhapatnam (2050)
The name of the Indian Cooperative Council was changed to the Indian Union (IU) and the three organs were located permanently instead of revolving annually. The Indian Council was relocated to the city of Dharamsala, the Indian Commission was relocated to the city of Panjim, while the Indian Parliament was relocated to the city of Alappuzha in Garhwal, Goa, and Keralam respectively. Encompassing agreements such as single market, common currency, customs union, free trade and movement, and a mutual defense treaty, the Indian Union has the potential to become one of the key players in global geopolitics and affairs if it manages to remain stable for at least the next ten years.

Peace in India (2050-?)

While it may seem like a little early to make such statements, the successful integration of post-war Indian subcontinent into a function Indian Union has led many to claim that we may finally have established peace in the most populous region in the world. But the sky's only the limit and there's quite a lot that is still to be done.
Future Milestones
To remain functional and retain its relevance, any organization must continue to evolve with time and conquer new frontiers for the prosperity of its stakeholders. While the Indian Union is a promising step towards a peace Indian subcontinent, many have already identified key milestones the union must tackle together including a unified space research organization that will be discussed at the special conference at Allapuzha in 2051, the expansion of the unified currency to all members of the Indian Union, and the possible expansion of the IU to include new members such as Myanmar and Afghanistan, both of whom have expressed strong interest in joining the union. But for now, Pax Indica has set in and how long that may last is anyone's guess.
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[EVENT] The Marudai Times: Director-General Lauds Progress in Tamil Literacy

Director-General Lauds Progress in Tamil Literacy
MARUDAI, TAMILAKAM: The Director-General gave a speech today at No. 2 Public School of Kalligudi, recognizing the achievements of Mrs. V. Aakaanksha, this years recipient of the $15,000 Teacher of the Year prize. V. Aakaanksha, a maths and physics secondary school teacher, was recognized for her ongoing efforts in the community of Kalligudi. She donates half her salary back to the community, helping to buy school supplies and meals for some of the poorest segments of the city, embodying the spirits of Tamil connectivity and socialist collectivism as efforts to develop the region continue.
The development of rural regions is a top priority of the Directorate, said the Director-General, embodied by the remarkable advances in literacy over the past two years, almost doubling the literacy of Tamil-speakers. The State Subcommittee for Adult Education was recognized for leading the effort and the creation of the Community Literacy Goal program, implemented in conjunction with the tireless efforts of the Directory for Education, the Subdirectory for Rural Education, the State Subcommittee for Municipal Partnerships, and the countless Municipal Councils and Departments that implemented the program in regions like Kalligudi.
When asked what she will do with the prize, V. Aakaanksha was modest. "This money will allow us to finish paying off our farm, and start our family. It is truly a blessing." The writing staff here at the Marudai Times would like to personally congraulate this inspiring young lady on her achievement - it is an inspiration to all Tamil.
New Port Facility Plans Revealed in Tamil Eelam
VALIKALUM, TAMILAKAM: The Valikalum Municipal Council agreed today to the terms of the Marudai Central Bank Development Fund, established last year by consent of the 12th State Sub-Committee on Economic Planning, and will begin breaking ground on a new harbor facility that will improve connectivity between Nadu [mainland] and Eelam [Sri Lanka]. This plan represents the first foray into new infrastructure spending as part of the current Three Year Plan, and will greatly expand the economic productivity of the region, making the free movement of labor and goods cheaper, more feasible, and more secure.
The Subdirectory of Ports & Harbors has already approved the facility's planning documents, and, following direction of the Eelam Regional Subcommittee on Regional Infrastructure, the 8th State Subcommittee on Infrastructure, the Directory of State Infrastructure and the Subdirectory of Maritime Trade, has approved the proposal to fast-track the construction of this vitally important facility. Despite an initial schedule of nearly two years to complete, the Director of State Infrastructure appeared today with the Mayor of Valikalum to emphasize that he believed the project could be completed in less than half that time!
The harbor facility, which will be named the Netaji Shubhas Chandra Bose Port, is expected to become a keystone of the state's economic and strategic plans for the region, and an exemplar of the types of projects the 5th Three Year Plan for the Development of the Tamil People will accomplish.
Rural Development Continues under the Three Year Plan
SRISALEM, TAMILAKAM: The opening of the new Srisalem-Macherla State Highway was attended today by the Subdirector for Roads, the first project completed under the authority of the 5th Three Year Plan for the Development of the Tamil People. "This road represents the increasing connectivity of our urban centers, and is a symbol of our continued prosperity."
The Srisalem district, in Telegu Region, is part of a historically underserved region of the country. Populated heavily by the Telegu minority, the allocation of funds into the region is significant for decreasing the isolation and marginalization of our Nation's ethnic minority groups. "The Development Plan promises progress to all our people, and collectively, we will grow healthier, happier, and stronger. This is the first of many such projects in Srisalem, advancing the welfare of all Tamil citizens. [In Telegu] We are better together."
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Sweden’s Famously Stealthy Submarine Is Now Even Quieter

Go Sweden! Thanks for that job done!
What's the difference inSweden and Switzerland. Switzerland has an economy more like The United States. They complain over there that the Franc is overvalued and they are not paid enough to live. Sweden has progressive taxation and income distribution and has a more stabler economy because of it. Stockholm is the Capital of Sweden since 1523 A.D. It shares the Scandinavian Peninsula with Norway. Coming up is the Difference between Norway and Normandy.
Here's a map of Sweden and Norway:

Location of Sweden Map from Encyclopedia Britannica Online.
Encyclopedia Britannica States," The country has a 1,000-year-long continuous history as a sovereign state, but its territorial expanse changed often until 1809. Today it is a constitutional monarchy with a well-established parliamentary democracy that dates from 1917. Swedish society is ethnically and religiously very homogeneous, although recent immigration has created some social diversity. Historically, Sweden rose from backwardness and poverty into a highly developed postindustrial society and advanced welfare state with a standard of living and life expectancy that rank among the highest in the world. "
Here are the Facts of Sweden according to Merriam-Webster:
Official Name: Konungariket Sverige (Kingdom of Sweden)
Form Of Government: constitutional monarchy with one legislative house (Riksdag, or Parliament [349])
Head Of State: King: Carl XVI Gustaf
Head Of Government: Prime Minister: Stefan Löfven
Capital: Stockholm
Official Language: Swedish
Official Religion: none
Monetary Unit: Swedish krona (SEK)
Currency Exchange Rate:
1 USD equals 9.879 Swedish krona
Population:
(2019 est.) 10,284,000
Population Rank:
(2018) 89
Population Projection 2030:
11,261,000
Total Area (Sq Mi)**172,750
Total Area (Sq Km)**447,420
Density: Persons Per Sq Mi(2018) 64.7
Density: Persons Per Sq Km(2018) 25
Urban-Rural Population:
Urban: (2018) 87.4%
Rural: (2018) 12.6%
Life Expectancy At Birth:
Male: (2017) 80.7 years
Female: (2017) 84.1 years
Literacy: Percentage Of Population Age 15 And Over:
Male: 100%
Female: (2008) 100%
GNI (U.S.$ ’000,000)
(2017) 529,460
GNI Per Capita (U.S.$)
(2017) 52,590
Here's what The CIA World FactBook has to say about Sweden: (Here are some highlights):
Sweden’s small, open, and competitive economy has been thriving and Sweden has achieved an enviable standard of living with its combination of free-market capitalism and extensive welfare benefits. Sweden remains outside the euro zone largely out of concern that joining the European Economic and Monetary Union would diminish the country’s sovereignty over its welfare system.
Timber, hydropower, and iron ore constitute the resource base of a manufacturing economy that relies heavily on foreign trade. Exports, including engines and other machines, motor vehicles, and telecommunications equipment, account for more than 44% of GDP. Sweden enjoys a current account surplus of about 5% of GDP, which is one of the highest margins in Europe.
GDP grew an estimated 3.3% in 2016 and 2017 driven largely by investment in the construction sector. Swedish economists expect economic growth to ease slightly in the coming years as this investment subsides. Global economic growth boosted exports of Swedish manufactures further, helping drive domestic economic growth in 2017. The Central Bank is keeping an eye on deflationary pressures and bank observers expect it to maintain an expansionary monetary policy in 2018. Swedish prices and wages have grown only slightly over the past few years, helping to support the country’s competitiveness.
In the short and medium term, Sweden’s economic challenges include providing affordable housing and successfully integrating migrants into the labor market.
Agriculture - products:
This entry is an ordered listing of major crops and products starting with the most important.
barley, wheat, sugar beets; meat, milk
Industries:
This entry provides a rank ordering of industries starting with the largest by value of annual output.
iron and steel, precision equipment (bearings, radio and telephone parts, armaments), wood pulp and paper products, processed foods, motor vehicles
Unemployment rate:This entry contains the percent of the labor force that is without jobs. Substantial underemployment might be noted.
6.7% (2017 est.)7% (2016 est.)country comparison to the world: 101
Population below poverty line:National estimates of the percentage of the population falling below the poverty line are based on surveys of sub-groups, with the results weighted by the number of people in each group. Definitions of poverty vary considerably among nations. For example, rich nations generally employ more generous standards of poverty than poor nations.
15% (2014 est.)
Household income or consumption by percentage share:Data on household income or consumption come from household surveys, the results adjusted for household size. Nations use different standards and procedures in collecting and adjusting the data. Surveys based on income will normally show a more unequal distribution than surveys based on consumption. The quality of surveys is improving with time, yet caution is still necessary in making inter-country comparisons.
lowest 10%: 3.4%highest 10%: 24% (2012)
Budget:This entry includes revenues, expenditures, and capital expenditures. These figures are calculated on an exchange rate basis, i.e., not in purchasing power parity (PPP) terms.
revenues: 271.2 billion (2017 est.)expenditures: 264.4 billion (2017 est.)
Taxes and other revenues:This entry records total taxes and other revenues received by the national government during the time period indicated, expressed as a percent of GDP. Taxes include personal and corporate income taxes, value added taxes, excise taxes, and tariffs. Other revenues include social contributions - such as payments for social security and hospital insurance - grants, and net revenues from public enterprises. Normalizing the data, by dividing total revenues by GDP, enables easy comparisons acr . . . more
50.6% (of GDP) (2017 est.)

Now for Switzerland:

Map of Switzerland
It's rights next to France and Austria and is the size of Half of Scotland according to Encyclopedia Britannica online; This map is from their page.
According to Merriam-Webster:
Dialing code: +41
Population: 8.57 million (2019)
Currency: Swiss franc
Swit·​zer·​land | \ ˈswit-sər-lənd \variants: or French Suisse \ ˈswʸēs \ or German Schweiz \ ˈshvīts \ or Italian Svizzera \ ˈzvēt-​tsā-​rä \ or Latin Helvetia \ hel-​ˈvē-​sh(ē-​)ə \

Definition of Switzerland

landlocked country (a federal republic) in western Europe in the Alps; capital Bern area 15,937 square miles (41,277 square kilometers), population 8,293,000
see also SWISS entry 1 sense 1
Britannica states: " For many outsiders, Switzerland also evokes a prosperous if rather staid and unexciting society, an image that is now dated. Switzerland remains wealthy and orderly, but its mountain-walled valleys are far more likely to echo the music of a local rock band than a yodel or an alphorn. Most Swiss live in towns and cities, not in the idyllic rural landscapes that captivated the world through Johanna Spyri’s Heidi (1880–81), the country’s best-known literary work. Switzerland’s cities have emerged as international centres of industry and commerce connected to the larger world, a very different tenor from Switzerland’s isolated, more inward-looking past. As a consequence of its remarkably long-lived stability and carefully guarded neutrality, Switzerland—Geneva, in particular—has been selected as headquarters for a wide array of governmental and nongovernmental organizations, including many associated with the United Nations (UN)—an organization the Swiss resisted joining until the early 21st century. "
According to CIA"S World Factbook. Switzerland's Economy is as such:
Switzerland, a country that espouses neutrality, is a prosperous and modern market economy with low unemployment, a highly skilled labor force, and a per capita GDP among the highest in the world. Switzerland's economy benefits from a highly developed service sector, led by financial services, and a manufacturing industry that specializes in high-technology, knowledge-based production. Its economic and political stability, transparent legal system, exceptional infrastructure, efficient capital markets, and low corporate tax rates also make Switzerland one of the world's most competitive economies.
The Swiss have brought their economic practices largely into conformity with the EU's to gain access to the Union’s Single Market and enhance the country’s international competitiveness. Some trade protectionism remains, however, particularly for its small agricultural sector. The fate of the Swiss economy is tightly linked to that of its neighbors in the euro zone, which purchases half of Swiss exports. The global financial crisis of 2008 and resulting economic downturn in 2009 stalled demand for Swiss exports and put Switzerland into a recession. During this period, the Swiss National Bank (SNB) implemented a zero-interest rate policy to boost the economy, as well as to prevent appreciation of the franc, and Switzerland's economy began to recover in 2010.
The sovereign debt crises unfolding in neighboring euro-zone countries, however, coupled with economic instability in Russia and other Eastern European economies drove up demand for the Swiss franc by investors seeking a safehaven currency. In January 2015, the SNB abandoned the Swiss franc’s peg to the euro, roiling global currency markets and making active SNB intervention a necessary hallmark of present-day Swiss monetary policy. The independent SNB has upheld its zero interest rate policy and conducted major market interventions to prevent further appreciation of the Swiss franc, but parliamentarians have urged it to do more to weaken the currency. The franc's strength has made Swiss exports less competitive and weakened the country's growth outlook; GDP growth fell below 2% per year from 2011 through 2017.
In recent years, Switzerland has responded to increasing pressure from neighboring countries and trading partners to reform its banking secrecy laws, by agreeing to conform to OECD regulations on administrative assistance in tax matters, including tax evasion. The Swiss Government has also renegotiated its double taxation agreements with numerous countries, including the US, to incorporate OECD standards.
GDP (purchasing power parity)
$523.1 billion (2017 est.)
$514.5 billion (2016 est.)
$506.5 billion (2015 est.)
note: data are in 2017 dollars
GDP (official exchange rate)
$679 billion (2017 est.)
GDP - per capita (PPP):
$62,100 (2017 est.)
$61,800 (2016 est.)
$61,500 (2015 est.)
note: data are in 2017 dollars
Gross national saving:
33.8% of GDP (2017 est.)
32.3% of GDP (2016 est.)
33.9% of GDP (2015 est.)
GDP - composition, by end use: 53.7% (2017 est.)
government consumption: 12% (2017 est.)
investment in fixed capital: 24.5% (2017 est.)
investment in inventories: -1.4% (2017 est.)
exports of goods and services: 65.1% (2017 est.)
imports of goods and services: -54% (2017 est.)
GDP - composition, by sector of origin:
agriculture: 0.7% (2017 est.)
industry: 25.6% (2017 est.)
services: 73.7% (2017 est.)
Agriculture - products: grains, fruits, vegetables; meat, eggs, dairy products
Industries: machinery, chemicals, watches, textiles, precision instruments, tourism, banking, insurance, pharmaceuticals
Industrial production growth rate: 3.4% (2017 est.)
country comparison to the world:92
Labor force**:**5.159 million (2017 est.)
country comparison to the world:81
Labor force - by occupation:
agriculture: 3.3%
industry: 19.8%
services: 76.9% (2015)
Unemployment rate:
3.2% (2017 est.)
3.3% (2016 est.)
country comparison to the world: 40
Population below poverty line:
6.6% (2014 est.)
Household income or consumption by percentage share:
lowest 10%: 7.5%
highest 10%: 19% (2007)
Budget:
revenues: 242.1 billion (2017 est.)
expenditures: 234.4 billion (2017 est.)
note: includes federal, cantonal, and municipal budgets
Taxes and other revenues:
35.7% (of GDP) (2017 est.)
country comparison to the world: 60
Budget surplus (+) or deficit (-):
1.1% (of GDP) (2017 est.)
country comparison to the world: 33
Public debt:
41.8% of GDP (2017 est.)
41.8% of GDP (2016 est.)
note: general government gross debt; gross debt consists of all liabilities that require payment or payments of interest and/or principal by the debtor to the creditor at a date or dates in the future; includes debt liabilities in the form of Special Drawing Rights (SDRs), currency and deposits, debt securities, loans, insurance, pensions and standardized guarantee schemes, and other accounts payable; all liabilities in the GFSM (Government Financial Systems Manual) 2001 system are debt, except for equity and investment fund shares and financial derivatives and employee stock options
country comparison to the world: 119
Fiscal year:
Inflation rate (consumer prices):
0.5% (2017 est.)
-0.4% (2016 est.)
country comparison to the world: 30
Current account balance:
$66.55 billion (2017 est.)$63.16 billion (2016 est.)
country comparison to the world: 7
Exports:
$313.5 billion (2017 est.)
$318.1 billion (2016 est.)
note: trade data exclude trade with Switzerland
country comparison to the world: 17
Exports - partners:
Germany 15.2%
US 12.3%
China 8.2
%India 6.7%
France 5.7%
UK 5.7%
Hong Kong 5.4%
Italy 5.3%
(2017)
Exports - commodities:
machinery, chemicals, metals, watches, agricultural products
Imports:
$264.5 billion (2017 est.)
$266.3 billion (2016 est.)
country comparison to the world: 18
Imports - commodities:
machinery, chemicals, vehicles, metals; agricultural products, textiles
Imports - partners:
Germany 20.9%, US 7.9%
Italy 7.6%, UK 7.3%
France 6.8%
China 5%
(2017)
Reserves of foreign exchange and gold:
$811.2 billion (31 December 2017 est.)
$679.3 billion (31 December 2016 est.)
country comparison to the world: 3
Debt - external:.
$1.664 trillion (31 March 2016 est.)
$1.663 trillion (31 March 2015 est.)
country comparison to the world: 12
Exchange rates:
Swiss francs (CHF) per US dollar -0.9875 (2017 est.)
0.9852 (2016 est.)0.9852 (2015 est.)
0.9627 (2014 est.)
0.9152 (2013 est.)
And their Military is such as CIA states:
Military expenditures**:This entry gives spending on defense programs for the most recent year available as a percent of gross domestic product (GDP); the GDP is calculated on an exchange rate basis, i.e., not in terms of purchasing power parity (PPP). For countries with no military forces, this figure can include expenditures on public security and police.
0.68% of GDP (2018)0.68% of GDP (2017)0.68% of GDP (2016)0.66% of GDP (2015)0.66% of GDP (2014)country comparison to the world: 138
Military and security forces**:This entry lists the military and security forces subordinate to defense ministries or the equivalent (typically ground, naval, air, and marine forces), as well as those belonging to interior ministries or the equivalent (typically gendarmeries, bordecoast guards, paramilitary police, and other internal security forces).
Swiss Armed Forces: Land Forces, Swiss Air Force (Schweizer Luftwaffe) (2019)
Military service age and obligation**:This entry gives the required ages for voluntary or conscript military service and the length of service obligation.
18-30 years of age generally for male compulsory military service; 18 years of age for voluntary male and female military service; every Swiss male has to serve at least 245 days in the armed forces; conscripts receive 18 weeks of mandatory training, followed by six 19-day intermittent recalls for training during the next 10 years (2019)
Refugees and internally displaced persons:
refugees (country of origin):
34,072 (Eritrea)
16,565 (Syria)
12,282 (Afghanistan)
5,744 (Sri Lanka) (2018)
stateless persons:
49 (2018)
Illicit drugs
a major international financial center vulnerable to the layering and integration stages of money laundering; despite significant legislation and reporting requirements, secrecy rules persist and nonresidents are permitted to conduct business through offshore entities and various intermediaries; transit country for and consumer of South American cocaine, Southwest Asian heroin, and Western European synthetics; domestic cannabis cultivation and limited ecstasy production.
Here's an article about an International Dispute with the European Union (EU): https://www.express.co.uk/news/world/1283471/eu-news-switzerland-rejected-membership-bloc-twice-spt
When looking to solve problems with countries, look at their economy and study it.



submitted by jeskalana to u/jeskalana [link] [comments]

[Expansion] The First Congress of the Hindu Rashtra

June 2027
As the Hindutva movement in India continues to turns its eyes abroad, it has become increasingly important for the various segments of the movement to keep in contact with one another. What was once a movement wholly contained within India has spread not just throughout South Asia, with Hindutva groups working in Sri Lanka, Bhutan, and Nepal, but also throughout the world. With the United Hindu Party's successful overthrow of the weak Chinese puppet government in Suriname, Hindutva has entered the halls of government in a second country. This, if nothing else, is cause for celebration. The Supreme Court of India might have dealt a defeat to the BJP and its allies, but their success in Suriname proves one thing: they may have lost the battle, but they have not lost the war.
To this end, the Rashtriya Swayamsevak Sangh has taken it upon itself to organize the first annual Congress of the Hindu Rashtra. Held in New Delhi, the Congress is intended to serve as a meeting point for all of the different organizations of the Sangh Parivar, regardless of their nation of origin. Invites have been sent out to the numerous SP organizations within India, as well as their affiliates in Bhutan, Nepal, Sri Lanka, and Suriname.
The venue itself is the prestigious Taj Palace in New Delhi. Located just a short drive away from Indira Gandhi International Airport, the Taj Palace is nestled in the bustling heart of New Delhi, just a block away from the University of Delhi and the Diplomatic Quarter while overlooking the Central Ridge Reserve Forest. No expense has been spared for the conference. The main hall, a massive 13,000 square foot room, has undergone renovations in preparation for the conference, with the north wall of the conference hall adorned by a massive matte painting of Akhand Bharat--the undivided Indian subcontinent--and her personification, Bharat Mata. Her image looms over every meeting in the space--a reminder of what it is that has brought them all together today.
With so many important right-wing figures gathered in one place, the Taj Palace is an attractive target for Naxalites, Islamists, and other terrorist elements in Indian society. As such, security at the venue is extremely tight. In addition to the standard complement of police, the attendance of several key individuals from the Indian government (including Amit Shah, the Minister of Home Affairs) has led to a massive showing by the National Security Guards. For those not fortunate enough to have the protection of the Indian state, the RSS has ensured to have a significant paramilitary force on standby (which leads to some tension with the uniformed Indian personnel on site--especially on Day 3 of the Congress, when ten RSS members are alleged to have broken off from the Congress to harass the Muslim residents of a nearby neighborhood).
Almost more important than the public events of the Congress, though, were the backroom meetings and breakout events. For the first time, RSS members from outside of India were given access to the brightest minds of the Indian Hindutva movement. Breakout meetings taught them the latest in organizing tactics, leadership, and propagandizing, ensuring that when they returned to their home countries, they would be well-equipped to grow the Hindutva movement.
[S] The most important meeting, though, actually occurred several blocks away in an entirely different hotel, away from the press coverage of the main event. Here, representatives of the major organizations of the Sangh Parivar--largely the RSS, the BJP, and their foreign affiliates (Suriname excluded) met to discuss the issue of Akhand Bharat. Here, the leaders of the various institutions agreed that the existing collaboration between the nations of South Asia had brought unprecedented prosperity to the region. The unity of South Asia on the international stage had enabled them to negotiate massive free trade agreements, bringing millions of jobs to South Asia and dramatically improving the quality of life in the region, even while furthering their goal of marginalizing Muslims and homogenizing the Hindu population. But there gains might be temporary if not secured now. All it took was one bad election--one bad decade--and all their progress could be swept away. If they were to secure the gains of their movement, the time had come for them to work towards the creation of the new state. [/S]
On the fifth day, the closing ceremony was headlined by Jagat Prakash Nadda, President of the Bharatiya Janata Party. In his speech, he spoke of the "...historical unity of the Hindu people... being recreated in this room" and called for "the elevation of the historical ties of the Hindu people--the Hindu Rashta." As the end, he was met with a standing ovation.
submitted by TheManIsNonStop to Geosim [link] [comments]

Cheap isn't Evil; Evil is Evil

Cheap isn't Evil; Evil is Evil

China, Poverty, and Practical Ethical Sourcing

Discussions of ethical sourcing tend to be very narrow, which is a problem because the ethics of production sourcing operate very differently in the macro versus the micro. On the micro, we obviously have a preference for sending business to factories that pay good wages, offer benefits, etc., but on the macro the competitive pricing of impoverished geographies with cheap labor attracts money that lifts entire populations out of poverty.

(Using 2011 PPP dollars, data sources at end)
To illustrate this point, I’m going to walk through bare-bones of how farsighted policymakers in China and global demand (especially US demand) for cheap production from 1990–2014 combined to form the largest movement of human beings out of poverty in history. Then, I want to briefly discuss how to merge the macro and micro picture of sourcing ethics to form a framework that I think leaves two routes for companies to approach “practical ethical sourcing”.

Macro Ethics: What China Did

Here’s a very simplistic account of what happened with China since 1990. The competitive advantage of cheap labor and production allowed Chinese businesses to grow massively, selling to other countries who outsourced their production to Chinese factories. This created a positive trade balance (how much more a country exports than it imports), which meant a large positive “current account” for China (trade balance plus a few other metrics of income from other countries).
Generally speaking, this kind of competitive advantage erodes in two ways:
  1. Your currency gets more expensive, which raises production costs in foreign currency terms. This happens because exporters are selling goods in large quantities to foreign countries (let’s use US entities as the base case here). Those exporters get dollars for their goods, and then have to buy yuan with those dollars to pay production costs in China. Basically this means a whole lot of dollars being sold to buy yuan, pushing the price of the yuan up.
  2. Wages rise. This happens because export businesses see such good demand that they keep cropping up and keep hiring until all the cheap labor is basically hired, and then they start pricing the labor more competitively with each other and driving up labor costs (wages). Basically more demand for workers in China means higher wages in China.
Chinese policy makers knew this was going to happen, and thought “we don’t want a strong currency, we want a middle class,” so they began offsetting the upward pressure on the yuan by accumulating reserves — mostly dollar reserves. This meant that rather than being eroded through currency appreciation, the competitive advantage would be eroded through increasing wages (see “Appreciation Note” at end).
So how does this work? The Chinese government needs to sell a lot of yuan for dollars — enough to counter the buying pressure from all the export income being used to buy yuan.
The way this mechanically works is the Chinese government goes out and buys enough US government bonds to offset the the massive inflow. They sell yuan for dollars to buy US bonds, and the yuan stays flat against the dollar instead of rising. The Chinese government can make as much yuan as they want, so there’s no reason to bet that they’d run out of yuan to sell.
You’ll notice a few things in the chart below: the overall scale of both grows massively over the time period, and they grow roughly in line with each-other as reserve purchases offset the current account income. The reserve accumulation here is outpacing current account inflows in part because there are additional pressures to offset at times (foreign investment), and in part because I’m proxying it with an imperfect solution that will capture some appreciation of the reserves (see “Analytics Note” at end for explanations of this and some other important analytical choices like why this isn’t in GDP terms, etc.). You’ll also notice the picture gets a little messy in the post-crisis period, which makes sense as global demand constricted and capital flows got kind of wack.

(Data sources at the end)
In the early nineties, the Chinese government had unified the swap and official exchange rate, creating a 33% devaluation overnight, and then began to directly intervene in the currency’s value. Because the government was buying dollars (selling yuan) at the same rate that the exporters (and others) were buying yuan (selling dollars) the yuan avoided rapid appreciation. Instead, they allowed it to just make slow and steady gains over time.

(Data sources at the end)
The impact of this was that China retained a competitive advantage in the export market for longer than it otherwise would, and the advantage would only erode through rising wages. As continued demand for cheap production meant expansion of production facilities, new jobs, and demand for workers, wage competition took over and started to improve the income of Chinese workers.

(Data sources at the end)
This wage increase means more money every month for a previously impoverished segment of the world population — a massive impact in terms of human well-being.

(Using 2011 PPP dollars, data sources at end)
Nothing like that, on that sort of scale, has ever happened. But, things like that do happen on smaller scales in smaller countries all the time when competitive export pricing allows them to increase their wealth through global export markets and policymakers make good choices.
If you care about wealth inequality in a global sense, and about redistribution of wealth to poorer nations, then a lot of good is done by globalization of supply chains and demand for cheap labor (to the degree that this can ultimately translate to higher wages over time). Market dynamics distributing demand to geographies with cheap production can lift entire populations out of poverty. Today, the countries this most aptly applies to are the cohort of Bangladesh, Sri Lanka, etc.
Does this justify human rights violations?
No. It does not.
Were early industrial revolution coal mining towns that verged on slave labor “fair game” because they increased the wealth of the population over a few generations?
No.
That macro picture is all well and good, but as individuals who are decision-makers on these things, we have our own moral obligation to maintain a threshold of ethical treatment regardless of the optimization of profits. Pay attention to what your factories do, of course, and don’t work with people who dehumanize their workers.
The take-away of the macro picture is just this:
Cheap isn’t evil. Evil is evil.
So, how do we resolve this macro picture with obvious micro-ethical factors as we decide how to support better working conditions and avoid flagrant exploitation?

Practical Ethical Sourcing and Where you Have Impact

Despite the example above, you are not doing the world any particular positive good by choosing cheap factories. Unless you are in charge of manufacturing for a massive company that is a driver of the global market, your choices don’t move the needle on this dynamic. Whether or not you outsource your factory to a poorer country with cheaper labor, those large orders that do have an impact are driven by publicly traded companies whose decision makers, while not actually legally bound to maximize profitability, generally only have their job if they continue to do so. Demand will funnel to cheap production.
Does that mean that your choices have no impact at all?
No not necessarily.
To synthesize: there are functionally two ways to run a good, impactful business with “Practical Ethical Sourcing”:
Version 1: Go with a competitive production option, and make sure between comparably costed options you pick one that doesn’t have specific practices you find unacceptable (i.e. meets your threshold criteria for ethical practices). For example — refuse to work with factories that employ child labor (and make your own list of other practices you won’t tolerate). This is where most businesses who are primarily focused on product and producing value for customers, but also want to maintain ethical standards they are comfortable with, should operate. There is already pressure against most of the worst manufacturing processes, and by consciously avoiding giving evil factories your business you can participate in the process of “starving them out” of the global export market. You are having an impact through who you don’t give money to.
Version 2: Give your production orders to someone so ethically focused and otherwise non-competitive that orders coming from you are a needle-mover on their probability of survival. To really work it has to be the primary focus of your business and brand, such that you can target your branding materials toward the audience who is willing to spend the premium to cover the additional cost of your “super-ethical” production (or else it isn’t sustainable as a business). The basis of the impact here relies on the fact that the factory is uncompetitive outside of a willingness to pay an ethical premium, so you probably need to be non-competitively priced for retail to maintain margins — which means finding the consumers willing to pay that premium. As an example: T-shirts made form recycled tired tires might not be the best Ts, or the cheapest, but you can make it your business to find the people willing to buy them and generate income for the people who make them. You are having an impact by who you do give money to.
It’s usually a problem if a business is falling somewhere in the spectrum between Version 1 and Version 2. They run the risk of either being
  1. More about storytelling than impact — maybe they advertise the fact that they produce in a high-wage geography (as though that is necessarily morally superior) or generally inflate the benefits of insignificant production choices (a lot of B Corps are like this; I’m considering writing an article about B Corps and how little that means), or
  2. A bad business that won’t sustain itself, and therefore wont have lasting impact — maybe they are trying to sell products with expensive, alternative, hyper-ethical production processes at competitive retail prices to the general market (possibly, in that case, funding a good brand and broken unit economics with VC money that will inevitably run out).
I know that this perspective doesn’t harmonize with some of the ethical “ra-ra”ing around certain brands. I’m trying to think this through with data, basic principles, and an eye towards the practical realities of running a business. I would love to hear your thoughts.
— — — — — — — — — — — — — — — — — —
Data Sources:
https://www.ceicdata.com/en/indicatochina/gdp-per-capita
http://povertydata.worldbank.org/poverty/country/CHN
https://www.theglobaleconomy.com/China/
— — — — — — — — — — — — — — — — — —
Appreciation Note: You can make the contention that an rising yuan is equivalent to increasing wages, but in effect that is only true to the degree that the wage-earner is buying imports. Wage inflation through a tight labor market more effectively redistributes income share from business owners to workers, while currency appreciation simply has a deflationary impact through diminished import costs (and probably a more positive impact on large holders of Yuan denominated assets who are already wealthy enough to spend abroad).
Analytics Note: (1) I’m using YoY change in FX reserves incl. Gold as my “Reserve Accumulation”. This is not a perfect approximation of the flow I would ideally use (reserve purchases) because of reserve asset (especially non-dollar reserve asset) price movements. I think it’s a reasonable enough proxy for the purposes of this post. (2) I also don’t mean to totally ignore other flows and pressures, but won’t do the full balance of payments analysis needed to paint the whole picture — in this case most notably the rest of the capital account. It would only be to demonstrate why these are the important flows I’m talking about. I fear losing the reader’s interest going through why a bunch of other things aren’t the important thing. (3) In this case not doing in GDP terms because I also want to get across the point that the whole scale of the current account and the reserve accumulation is growing. (4) If anyone here has done BoP analysis they’re probably foaming about the fact that the outflows aren’t negative. I thought that might confuse some people, so I didn’t do it. (5) I’m focusing on 1990–2015 because in 2015 some of this dynamic shifted, as there was enough pressure of wealthy folks moving money out of china that the government actually started to sell some reserves (and devalued the yuan 1.5%). The fact that enough people in China had enough money to cause problems with outflows (as well as bust up some real estate markets like Vancouver and Sydney) actually shows that the policy worked.
submitted by misterACK to malefashionadvice [link] [comments]

Cheap isn't Evil, Evil is Evil

Cheap isn't Evil, Evil is Evil
Discussions of ethical sourcing tend to be very narrow, which is a problem because the ethics of production sourcing operate very differently in the macro versus the micro. On the micro, we obviously have a preference for sending business to factories that pay good wages, offer benefits, etc., but on the macro the competitive pricing of impoverished geographies with cheap labor attracts money that lifts entire populations out of poverty.

(Using 2011 PPP dollars, data sources at end)
To illustrate this point, I’m going to walk through bare-bones of how farsighted policymakers in China and global demand (especially US demand) for cheap production from 1990–2014 combined to form the largest movement of human beings out of poverty in history. Then, I want to briefly discuss how to merge the macro and micro picture of sourcing ethics to form a framework that I think leaves two routes for companies to approach “practical ethical sourcing”.

Macro Ethics: What China Did

Here’s a very simplistic account of what happened with China since 1990. The competitive advantage of cheap labor and production allowed Chinese businesses to grow massively, selling to other countries who outsourced their production to Chinese factories. This created a positive trade balance (how much more a country exports than it imports), which meant a large positive “current account” for China (trade balance plus a few other metrics of income from other countries).
Generally speaking, this kind of competitive advantage erodes in two ways:
  1. Your currency gets more expensive, which raises production costs in foreign currency terms. This happens because exporters are selling goods in large quantities to foreign countries (let’s use US entities as the base case here). Those exporters get dollars for their goods, and then have to buy yuan with those dollars to pay production costs in China. Basically this means a whole lot of dollars being sold to buy yuan, pushing the price of the yuan up.
  2. Wages rise. This happens because export businesses see such good demand that they keep cropping up and keep hiring until all the cheap labor is basically hired, and then they start pricing the labor more competitively with each other and driving up labor costs (wages). Basically more demand for workers in China means higher wages in China.
Chinese policy makers knew this was going to happen, and thought “we don’t want a strong currency, we want a middle class,” so they began offsetting the upward pressure on the yuan by accumulating reserves — mostly dollar reserves. This meant that rather than being eroded through currency appreciation, the competitive advantage would be eroded through increasing wages (see “Appreciation Note” at end).
So how does this work? The Chinese government needs to sell a lot of yuan for dollars — enough to counter the buying pressure from all the export income being used to buy yuan.
The way this mechanically works is the Chinese government goes out and buys enough US government bonds to offset the the massive inflow. They sell yuan for dollars to buy US bonds, and the yuan stays flat against the dollar instead of rising. The Chinese government can make as much yuan as they want, so there’s no reason to bet that they’d run out of yuan to sell.
You’ll notice a few things in the chart below: the overall scale of both grows massively over the time period, and they grow roughly in line with each-other as reserve purchases offset the current account income. The reserve accumulation here is outpacing current account inflows in part because there are additional pressures to offset at times (foreign investment), and in part because I’m proxying it with an imperfect solution that will capture some appreciation of the reserves (see “Analytics Note” at end for explanations of this and some other important analytical choices like why this isn’t in GDP terms, etc.). You’ll also notice the picture gets a little messy in the post-crisis period, which makes sense as global demand constricted and capital flows got kind of wack.

(Data sources at the end)
In the early nineties, the Chinese government had unified the swap and official exchange rate, creating a 33% devaluation overnight, and then began to directly intervene in the currency’s value. Because the government was buying dollars (selling yuan) at the same rate that the exporters (and others) were buying yuan (selling dollars) the yuan avoided rapid appreciation. Instead, they allowed it to just make slow and steady gains over time.

(Data sources at the end)
The impact of this was that China retained a competitive advantage in the export market for longer than it otherwise would, and the advantage would only erode through rising wages. As continued demand for cheap production meant expansion of production facilities, new jobs, and demand for workers, wage competition took over and started to improve the income of Chinese workers.

(Data sources at the end)
This wage increase means more money every month for a previously impoverished segment of the world population — a massive impact in terms of human well-being.

(Using 2011 PPP dollars, data sources at end)
Nothing like that, on that sort of scale, has ever happened. But, things like that do happen on smaller scales in smaller countries all the time when competitive export pricing allows them to increase their wealth through global export markets and policymakers make good choices.
If you care about wealth inequality in a global sense, and about redistribution of wealth to poorer nations, then a lot of good is done by globalization of supply chains and demand for cheap labor (to the degree that this can ultimately translate to higher wages over time). Market dynamics distributing demand to geographies with cheap production can lift entire populations out of poverty. Today, the countries this most aptly applies to are the cohort of Bangladesh, Sri Lanka, etc.
Does this justify human rights violations?
No. It does not.
Were early industrial revolution coal mining towns that verged on slave labor “fair game” because they increased the wealth of the population over a few generations?
No.
That macro picture is all well and good, but as individuals who are decision-makers on these things, we have our own moral obligation to maintain a threshold of ethical treatment regardless of the optimization of profits. Pay attention to what your factories do, of course, and don’t work with people who dehumanize their workers.
The take-away of the macro picture is just this:
Cheap isn’t evil. Evil is evil.
So, how do we resolve this macro picture with obvious micro-ethical factors as we decide how to support better working conditions and avoid flagrant exploitation?

Practical Ethical Sourcing and Where You Have Impact

Despite the example above, you are not doing the world any particular positive good by choosing cheap factories. Unless you are in charge of manufacturing for a massive company that is a driver of the global market, your choices don’t move the needle on this dynamic. Whether or not you outsource your factory to a poorer country with cheaper labor, those large orders that do have an impact are driven by publicly traded companies whose decision makers, while not actually legally bound to maximize profitability, generally only have their job if they continue to do so. Demand will funnel to cheap production.
Does that mean that your choices have no impact at all?
No not necessarily.
To synthesize: there are functionally two ways to run a good, impactful business with “Practical Ethical Sourcing”:
Version 1: Go with a competitive production option, and make sure between comparably costed options you pick one that doesn’t have specific practices you find unacceptable (i.e. meets your threshold criteria for ethical practices). For example — refuse to work with factories that employ child labor (and make your own list of other practices you won’t tolerate). This is where most businesses who are primarily focused on product and producing value for customers, but also want to maintain ethical standards they are comfortable with, should operate. There is already pressure against most of the worst manufacturing processes, and by consciously avoiding giving evil factories your business you can participate in the process of “starving them out” of the global export market. You are having an impact through who you don’t give money to.
Version 2: Give your production orders to someone so ethically focused and otherwise non-competitive that orders coming from you are a needle-mover on their probability of survival. To really work it has to be the primary focus of your business and brand, such that you can target your branding materials toward the audience who is willing to spend the premium to cover the additional cost of your “super-ethical” production (or else it isn’t sustainable as a business). The basis of the impact here relies on the fact that the factory is uncompetitive outside of a willingness to pay an ethical premium, so you probably need to be non-competitively priced for retail to maintain margins — which means finding the consumers willing to pay that premium. As an example: T-shirts made form recycled tired tires might not be the best Ts, or the cheapest, but you can make it your business to find the people willing to buy them and generate income for the people who make them. You are having an impact by who you do give money to.
It’s usually a problem if a business is falling somewhere in the spectrum between Version 1 and Version 2. They run the risk of either being
  1. More about storytelling than impact — maybe they advertise the fact that they produce in a high-wage geography (as though that is necessarily morally superior) or generally inflate the benefits of insignificant production choices (a lot of B Corps are like this; I’m considering writing an article about B Corps and how little that means), or
  2. A bad business that won’t sustain itself, and therefore wont have lasting impact — maybe they are trying to sell products with expensive, alternative, hyper-ethical production processes at competitive retail prices to the general market (possibly, in that case, funding a good brand and broken unit economics with VC money that will inevitably run out).
We’re thinking through these problems in real time as we make sourcing decisions. For us, we think the best way is to set an ethical standard of practices we are unwilling to participate in, and then within those reasonable constraints source cost effective production. Looking at factories, we aren’t throwing out certain options simply because the wages there are low compared to the US.
We plan to make sure that we’re ethically comfortable with the factories we use to produce — for our own sake. We want to make a good business that brings great value to our consumers, and doesn’t compromise our ethics. I hope anyone interested in assessing the ethical promise of brands found value in this perspective, and I especially hope it is useful to anyone out there who is trying to navigate their own production sourcing decisions.
I know that this perspective doesn’t harmonize with some of the ethical “ra-ra”ing around certain brands. I’m trying to think this through with data, basic principles, and an eye towards the practical realities of running a business. I would love to hear your thoughts.
— — — — — — — — — — — — — — — — — —
If you’re interested, come join the discussion at MeritStore
— — — — — — — — — — — — — — — — — —
Data Sources:
https://www.ceicdata.com/en/indicatochina/gdp-per-capita
http://povertydata.worldbank.org/poverty/country/CHN
https://www.theglobaleconomy.com/China/
— — — — — — — — — — — — — — — — — —
Appreciation Note: You can make the contention that an rising yuan is equivalent to increasing wages, but in effect that is only true to the degree that the wage-earner is buying imports. Wage inflation through a tight labor market more effectively redistributes income share from business owners to workers, while currency appreciation simply has a deflationary impact through diminished import costs (and probably a more positive impact on large holders of Yuan denominated assets who are already wealthy enough to spend abroad).
Analytics Note: (1) I’m using YoY change in FX reserves incl. Gold as my “Reserve Accumulation”. This is not a perfect approximation of the flow I would ideally use (reserve purchases) because of reserve asset (especially non-dollar reserve asset) price movements. I think it’s a reasonable enough proxy for the purposes of this post. (2) I also don’t mean to totally ignore other flows and pressures, but won’t do the full balance of payments analysis needed to paint the whole picture — in this case most notably the rest of the capital account. It would only be to demonstrate why these are the important flows I’m talking about. I fear losing the reader’s interest going through why a bunch of other things aren’t the important thing. (3) In this case not doing in GDP terms because I also want to get across the point that the whole scale of the current account and the reserve accumulation is growing. (4) If anyone here has done BoP analysis they’re probably foaming about the fact that the outflows aren’t negative. I thought that might confuse some people, so I didn’t do it. (5) I’m focusing on 1990–2015 because in 2015 some of this dynamic shifted, as there was enough pressure of wealthy folks moving money out of china that the government actually started to sell some reserves (and devalued the yuan 1.5%). The fact that enough people in China had enough money to cause problems with outflows (as well as bust up some real estate markets like Vancouver and Sydney) actually shows that the policy worked.
submitted by misterACK to Libertarian [link] [comments]

Cheap isn't Evil, Evil is Evil

Cheap isn't Evil, Evil is Evil
Discussions of ethical sourcing tend to be very narrow, which is a problem because the ethics of production sourcing operate very differently in the macro versus the micro. On the micro, we obviously have a preference for sending business to factories that pay good wages, offer benefits, etc., but on the macro the competitive pricing of impoverished geographies with cheap labor attracts money that lifts entire populations out of poverty.

(Using 2011 PPP dollars, data sources at end)
To illustrate this point, I’m going to walk through bare-bones of how farsighted policymakers in China and global demand (especially US demand) for cheap production from 1990–2014 combined to form the largest movement of human beings out of poverty in history. Then, I want to briefly discuss how to merge the macro and micro picture of sourcing ethics to form a framework that I think leaves two routes for companies to approach “practical ethical sourcing”.

Macro Ethics: What China Did

Here’s a very simplistic account of what happened with China since 1990. The competitive advantage of cheap labor and production allowed Chinese businesses to grow massively, selling to other countries who outsourced their production to Chinese factories. This created a positive trade balance (how much more a country exports than it imports), which meant a large positive “current account” for China (trade balance plus a few other metrics of income from other countries).
Generally speaking, this kind of competitive advantage erodes in two ways:
  1. Your currency gets more expensive, which raises production costs in foreign currency terms. This happens because exporters are selling goods in large quantities to foreign countries (let’s use US entities as the base case here). Those exporters get dollars for their goods, and then have to buy yuan with those dollars to pay production costs in China. Basically this means a whole lot of dollars being sold to buy yuan, pushing the price of the yuan up.
  2. Wages rise. This happens because export businesses see such good demand that they keep cropping up and keep hiring until all the cheap labor is basically hired, and then they start pricing the labor more competitively with each other and driving up labor costs (wages). Basically more demand for workers in China means higher wages in China.
Chinese policy makers knew this was going to happen, and thought “we don’t want a strong currency, we want a middle class,” so they began offsetting the upward pressure on the yuan by accumulating reserves — mostly dollar reserves. This meant that rather than being eroded through currency appreciation, the competitive advantage would be eroded through increasing wages (see “Appreciation Note” at end).
So how does this work? The Chinese government needs to sell a lot of yuan for dollars — enough to counter the buying pressure from all the export income being used to buy yuan.
The way this mechanically works is the Chinese government goes out and buys enough US government bonds to offset the the massive inflow. They sell yuan for dollars to buy US bonds, and the yuan stays flat against the dollar instead of rising. The Chinese government can make as much yuan as they want, so there’s no reason to bet that they’d run out of yuan to sell.
You’ll notice a few things in the chart below: the overall scale of both grows massively over the time period, and they grow roughly in line with each-other as reserve purchases offset the current account income. The reserve accumulation here is outpacing current account inflows in part because there are additional pressures to offset at times (foreign investment), and in part because I’m proxying it with an imperfect solution that will capture some appreciation of the reserves (see “Analytics Note” at end for explanations of this and some other important analytical choices like why this isn’t in GDP terms, etc.). You’ll also notice the picture gets a little messy in the post-crisis period, which makes sense as global demand constricted and capital flows got kind of wack.

(Data sources at the end)
In the early nineties, the Chinese government had unified the swap and official exchange rate, creating a 33% devaluation overnight, and then began to directly intervene in the currency’s value. Because the government was buying dollars (selling yuan) at the same rate that the exporters (and others) were buying yuan (selling dollars) the yuan avoided rapid appreciation. Instead, they allowed it to just make slow and steady gains over time.

(Data sources at the end)
The impact of this was that China retained a competitive advantage in the export market for longer than it otherwise would, and the advantage would only erode through rising wages. As continued demand for cheap production meant expansion of production facilities, new jobs, and demand for workers, wage competition took over and started to improve the income of Chinese workers.

(Data sources at the end)
This wage increase means more money every month for a previously impoverished segment of the world population — a massive impact in terms of human well-being.
(Using 2011 PPP dollars, data sources at end)

Nothing like that, on that sort of scale, has ever happened. But, things like that do happen on smaller scales in smaller countries all the time when competitive export pricing allows them to increase their wealth through global export markets and policymakers make good choices.
If you care about wealth inequality in a global sense, and about redistribution of wealth to poorer nations, then a lot of good is done by globalization of supply chains and demand for cheap labor (to the degree that this can ultimately translate to higher wages over time). Market dynamics distributing demand to geographies with cheap production can lift entire populations out of poverty. Today, the countries this most aptly applies to are the cohort of Bangladesh, Sri Lanka, etc.
Does this justify human rights violations?
No. It does not.
Were early industrial revolution coal mining towns that verged on slave labor “fair game” because they increased the wealth of the population over a few generations?
No.
That macro picture is all well and good, but as individuals who are decision-makers on these things, we have our own moral obligation to maintain a threshold of ethical treatment regardless of the optimization of profits. Pay attention to what your factories do, of course, and don’t work with people who dehumanize their workers.
The take-away of the macro picture is just this:
Cheap isn’t evil. Evil is evil.
So, how do we resolve this macro picture with obvious micro-ethical factors as we decide how to support better working conditions and avoid flagrant exploitation?

Practical Ethical Sourcing and Where You Have Impact

Despite the example above, you are not doing the world any particular positive good by choosing cheap factories. Unless you are in charge of manufacturing for a massive company that is a driver of the global market, your choices don’t move the needle on this dynamic. Whether or not you outsource your factory to a poorer country with cheaper labor, those large orders that do have an impact are driven by publicly traded companies whose decision makers, while not actually legally bound to maximize profitability, generally only have their job if they continue to do so. Demand will funnel to cheap production.
Does that mean that your choices have no impact at all?
No not necessarily.
To synthesize: there are functionally two ways to run a good, impactful business with “Practical Ethical Sourcing”:
Version 1: Go with a competitive production option, and make sure between comparably costed options you pick one that doesn’t have specific practices you find unacceptable (i.e. meets your threshold criteria for ethical practices). For example — refuse to work with factories that employ child labor (and make your own list of other practices you won’t tolerate). This is where most businesses who are primarily focused on product and producing value for customers, but also want to maintain ethical standards they are comfortable with, should operate. There is already pressure against most of the worst manufacturing processes, and by consciously avoiding giving evil factories your business you can participate in the process of “starving them out” of the global export market. You are having an impact through who you don’t give money to.
Version 2: Give your production orders to someone so ethically focused and otherwise non-competitive that orders coming from you are a needle-mover on their probability of survival. To really work it has to be the primary focus of your business and brand, such that you can target your branding materials toward the audience who is willing to spend the premium to cover the additional cost of your “super-ethical” production (or else it isn’t sustainable as a business). The basis of the impact here relies on the fact that the factory is uncompetitive outside of a willingness to pay an ethical premium, so you probably need to be non-competitively priced for retail to maintain margins — which means finding the consumers willing to pay that premium. As an example: T-shirts made form recycled tired tires might not be the best Ts, or the cheapest, but you can make it your business to find the people willing to buy them and generate income for the people who make them. You are having an impact by who you do give money to.
It’s usually a problem if a business is falling somewhere in the spectrum between Version 1 and Version 2. They run the risk of either being
  1. More about storytelling than impact — maybe they advertise the fact that they produce in a high-wage geography (as though that is necessarily morally superior) or generally inflate the benefits of insignificant production choices (a lot of B Corps are like this; I’m considering writing an article about B Corps and how little that means), or
  2. A bad business that won’t sustain itself, and therefore wont have lasting impact — maybe they are trying to sell products with expensive, alternative, hyper-ethical production processes at competitive retail prices to the general market (possibly, in that case, funding a good brand and broken unit economics with VC money that will inevitably run out).
At MeritStore, we’re thinking through these problems in real time as we make sourcing decisions. For us, we think the best way is to set an ethical standard of practices we are unwilling to participate in, and then within those reasonable constraints source cost effective production. Looking at factories, we aren’t throwing out certain options simply because the wages there are low compared to the US.
We plan to make sure that we’re ethically comfortable with the factories we use to produce — for our own sake. We want to make a good business that brings great value to our consumers, and doesn’t compromise our ethics. I hope anyone interested in assessing the ethical promise of brands found value in this perspective, and I especially hope it is useful to anyone out there who is trying to navigate their own production sourcing decisions.
I know that this perspective doesn’t harmonize with some of the ethical “ra-ra”ing around certain brands. I’m trying to think this through with data, basic principles, and an eye towards the practical realities of running a business. I would love to hear your thoughts.
— — — — — — — — — — — — — — — — — —
If you’re interested, come join the discussion at MeritStore
— — — — — — — — — — — — — — — — — —
Data Sources:
https://www.ceicdata.com/en/indicatochina/gdp-per-capita
http://povertydata.worldbank.org/poverty/country/CHN
https://www.theglobaleconomy.com/China/
— — — — — — — — — — — — — — — — — —
Appreciation Note: You can make the contention that an rising yuan is equivalent to increasing wages, but in effect that is only true to the degree that the wage-earner is buying imports. Wage inflation through a tight labor market more effectively redistributes income share from business owners to workers, while currency appreciation simply has a deflationary impact through diminished import costs (and probably a more positive impact on large holders of Yuan denominated assets who are already wealthy enough to spend abroad).
Analytics Note: (1) I’m using YoY change in FX reserves incl. Gold as my “Reserve Accumulation”. This is not a perfect approximation of the flow I would ideally use (reserve purchases) because of reserve asset (especially non-dollar reserve asset) price movements. I think it’s a reasonable enough proxy for the purposes of this post. (2) I also don’t mean to totally ignore other flows and pressures, but won’t do the full balance of payments analysis needed to paint the whole picture — in this case most notably the rest of the capital account. It would only be to demonstrate why these are the important flows I’m talking about. I fear losing the reader’s interest going through why a bunch of other things aren’t the important thing. (3) In this case not doing in GDP terms because I also want to get across the point that the whole scale of the current account and the reserve accumulation is growing. (4) If anyone here has done BoP analysis they’re probably foaming about the fact that the outflows aren’t negative. I thought that might confuse some people, so I didn’t do it. (5) I’m focusing on 1990–2015 because in 2015 some of this dynamic shifted, as there was enough pressure of wealthy folks moving money out of china that the government actually started to sell some reserves (and devalued the yuan 1.5%). The fact that enough people in China had enough money to cause problems with outflows (as well as bust up some real estate markets like Vancouver and Sydney) actually shows that the policy worked.
submitted by misterACK to Capitalism [link] [comments]

Why UNP lost the Sinhalese

What we just experienced was undoubtedly the most eventful week since January 2015. The people of Sri Lanka have voted to end a five year long nightmare. Gota’s victory was not unexpected, but the sheer magnitude of the victory certainly was. What we saw was the reaction of a down trodden, persecuted, humiliated majority community to all the suffering and indignities they had undergone for the past five years. The events that took place in Sri Lanka between January 2015 and November 2019 will be a valuable case study for all multi-ethnic, multi-religious nations as to what could happen when the majority community of a nation is used as a doormat by the minority communities.
Over the past five years, UNP politicians went out of their way to insult and humiliate the Sinhalese and especially the Sinhala Buddhists. The Tamils and Muslims reacted positively to such Sinhala politicians. The way to curry favour with the minorities and to obtain their votes was to heap insults on the Sinhalese. During the past five years, the well known Sinhala ditty "Sinhalaya modaya, kevum kanna yodaya" was the clarion call of the yahapalana government. At election time, the Sinhalese were divided between the two main political parties, a situation which allowed the minority political parties organized on the basis of either ethnicity or religion to tip the balance in favour of one political party or another.
It is no secret that members of the minority comunities generally held the Sinhalese in contempt because they thought they could always prevail against the divided Sinhalese by manipulating the democratic system to their advantage. This attitude cannot be blamed only on the ethnicity and religion based political parties. Such political parties have contributed to the problem no doubt, but this isolationist, exclusivist anti-Sinhalese, anti-Sinhala Buddhist attitude has seeped into the very fiber of the being of most Tamil and Muslim Sri Lankans. There are exceptions to this no doubt, but the fact of the matter is that the vast majority of the Tamils and Muslims in this country are communal minded. One has to call a spade a spade and this has to be discussed openly.
Communal minded minorities
The communal mindedness of the Tamils and the Muslims has to be taken out of the realm of taboo topics by the Tamils and Muslims themselves. If one reads Armand de Souza’s book ‘Hundred Days in Ceylon under Martial Law 1915’ and other sources on the 1915 riots, the cause of the communal disturbances was not due to anything that the Sinhalese did, but because a certain community of Muslims did not want a Buddhist procession to go past one of their mosques. At the same time, another community of Muslims in the same area had no issue with the Buddhist procession going past their mosque.
That was in an era when there was no Wahabism, no Al Qaeda and no ISIS and the Muslims were a minority in British Ceylon. It is mind boggling to think that a communal riot can be sparked off simply because a Buddhist religious procession went past a mosque. One would think that a communal riot would need a more cogent cause such as at least a brawl between two groups resulting in several deaths or something of that nature. The very fact that a Buddhist procession could not go past a mosque without sparking off a riot shows that the Sinhalese were treated with contempt by at least a section of the Muslims even at that time.
What has happened today is that with the Wahabi contagion, that attitude seems to have affected the Muslim community in general. Not that this attitude on the part of minority communities has no justification. The average Sinhalese can be bought for a mess of pottage. A few roofing sheets, and some handouts can change Sinhalese voting patterns but that will not happen to the same extent among Tamils and Muslims. As the old saying goes, you get only what you deserve and as far as the Sinhalese go, any negative attitudes the minorities may have towards them was not without justification.
It’s just that during the past five years, this was taken too far for even the cringing, servile Sinhalese to stomach. Many people thought the anti-Sinhalese, pro-minority bent in the UNP was due to Ranil Wickremesinghe’s leadership. It was so to some extent no doubt. We never saw such an attitude in the UNP during the J.R.Jayewardene, Premadasa and D.B.Wijetunga eras. Nor have we read of such an attitude during the Dudley Senanayake and D.S. Senanayake eras. The only approximation to what was experienced under Ranil Wickremasinghe’s watch would be the Sir John Kotelawala era.
However, the anti-Sinhala Buddhist attitude reached a new level of insidiousness with the emergence of Sajith Premadasa in the UNP. What was open and infantile earlier became hidden and crafty. Maximum emphasis was placed on duping the gullible Sinhalese with welfare measures while pledging what was essentially the division of the country to the Tamils. Just days before the election, the then Opposition Leader Mahinda Rajapaksa in a statement described the UNP’s policy as follows:
"The chapter on constitutional reform in the manifesto of the UNP presidential candidate contains provisions to replace the unitary state with a formulation that describes Sri Lanka as an ‘undivided and indivisible’ state. This is accompanied by the pledge that governmental power will be devolved to the provinces to the ‘maximum extent possible’. Identical provisions can be seen in the draft constitution tabled in Parliament by the Prime Minister in January this year.
"The UNP manifesto also contains provisions to expand the powers and functions of the provincial councils, to set up a second chamber in Parliament made up of provincial council representatives in order to curb the powers of Parliament, to allow the provincial units to raise funds independently, to place district and divisional secretaries under the provincial councils and to create a Constitutional Court, which will adjudicate in disputes between the center and the provincial units. Like the draft constitution, the UNP presidential election manifesto also aims to turn Sri Lanka into a loose federation of virtually independent provincial units.
"The draft constitution sought to describe Sri Lanka as an ‘ekeeya rajya’ in Sinhala and as an ‘orumiththa nadu’ in Tamil while carefully refraining from using the English phrase ‘unitary state’ which has specific constitutional connotations. Thus the label of a unitary state would have remained in Sinhala while in Tamil and English Sri Lanka would no longer be recognized as a unitary state. A similar deviousness is to be seen in the UNP presidential election manifesto. Though great care has been taken to avoid using phrases like ekeeya rajaya or unitary state, it has a reference in Sinhala to ‘maubime ekeeyathwaya’, which translates into English as ‘the unity of the motherland’.
"The phrase ‘maubime ekeeyathwaya’ has no constitutional value but it can be used to misleadingly suggest to Sinhala readers that the manifesto seeks to uphold the unitary state. Significantly, the UNP manifesto has refused to use even the Sinhala phrase ‘ekeeya rajya’ that had been conceded earlier in the PM’s draft constitution to assuage Sinhala sentiments. There is a clearly apparent hardening of the federalist position in the UNP manifesto. This is the first time that a mainline political party has included in an election manifesto provisions to dismantle the unitary state and to create a federal state in its place. Therefore this is a matter that needs to be taken very seriously."
A new level of insidiousness
The SLPP was not able to take political advantage of the UNP’s open sellout to the separatist lobby due to two reasons – on the one hand, the constitutional subterfuge involved was too complicated for the average voter to understand - indeed it was hardly understood clearly even by most politicians. Secondly, even if the issue had been understood by the opposition politicians there was not enough time to get the message across to the public. The question is whether Sajith was aware of the contents of the chapter on constitutional reform in his manifesto until it was in print and drew flak from the opposing side? Even though he went around the country brandishing a copy of his manifesto and saying that it was his own thinking, everyone knows that manifestoes are normally not prepared by election candidates themselves.
It’s always a team of experts who prepares the manifesto for the candidate. So was this chapter on constitutional reform introduced into his manifesto without his knowledge? It is well known that the UNP manifesto was prepared in a hurry and was in fact the last manifesto to be launched by the main political parties. The evidence that we have to the effect that Sajith was fully aware not only of the contents of the chapter on constitutional reform but also its implications was that at a press conference held quite some time before the UNP manifesto was released, Sajith stated that his position was ‘the maximum devolution of power within an undivided and indivisible Sri Lanka’.
At that press conference he avoided the use of the term unitary state. This indicates that he was well briefed as to the concepts and terminology involved and the chapter on constitutional reform in his manifesto was not something introduced without his knowledge.
Sajith Premadasa is not Maithripala Sirisena. In 2015, when the newly elected yahapalana government went to Geneva and betrayed the country, they deliberately posted a doctored Sinhala translation of UNHRC Resolution 30/1 on the official foreign ministry website in order to mislead the Sinhala reader as to the actual contents of that document. It was obviously this doctored translation that was given to President Sirisena by his foreign minister. So for a while we saw a war of words between the President and the opposition with the former insisting that Resolution 30/1 was a great achievement and the latter shouting from the rooftops that Sri Lanka had been betrayed. It would have taken months for President Sirisena to realize that the opposition was right.
In Sajith’s case however the situation was obviously very different. He is English educated and quite capable of understanding the connotations of the words used. The indications are, that he knew from the very beginning what the chapter on constitutional reform in his manifesto would contain. In speaking to the Mahanayakes we heard Sajith mention the word ekeeya rajya but that phrase does not appear anywhere in his manifesto. In the manifesto itself we find the phrase ‘maubime ekeeyabawa’ but that is not a reference to a unitary state. However it could be used to mislead those unfamiliar with constitutional phraseology into thinking that it is a reference to the unitary state.
In the last few days in the run up to the poll, Champika Ranawaka went to see the Ven Mahanayake Theras with a letter saying that the UNP was for an ekeeya rajya. This was nothing but the same kind of chicanery that we saw in 2015. Maithripala Sirisena stated publicly that he was going to abolish the executive presidency, and he signed agreements with various political parties and oganisations saying that he would abolish the executive presidency, but his manifesto stated deviously that the constitution will be amended only to the extent that a referendum is not made necessary. That precluded the abolition of the executive presidency. What we saw with regard to constitutional reform in Sajith Premadasa’s manifesto was very similar. The TNA knows that what Sajith promised them through his manifesto was a federal state and they made the decision to vote for the UNP on that account.
All this is a cause for worry because it shows that the younger generation in the UNP has become much more devious and sophisticated in their treachery than the older generation. On the one hand they play the role of a populist politician, patting people on the back, giving people houses and jobs, promising to give Janasaviya on top of Samurdhi, free meals to school children, free school uniforms, free shoes, free sanitary pads for women so as to buy Sinhala votes and then pledging to give the Tamils a federal state so as to get their votes as well. What the 2019 presidential election campaign showed beyond any doubt is that the UNP’s problem is not just Ranil Wickremasinghe, but runs far deeper and getting rid of RW will not cure the problem but will probably make things worse.
Promoting a Vibheeshana
The people realised this instinctively which is why they did not fall for the wolf in sheepskin trick when the UNP and the Tamil and Muslim political parties associated with them dumped Ranil Wickremasinghe and adopted Sajith Premadasa as their champion. They supported Sajith because they thought he could deliver to them what RW could not. Even after this resounding defeat, the Tamil and Muslim political parties have not got out of the "Sinhalaya modaya kevum kanna yodaya" frame of mind. Mano Ganesan and Rishard Baithiudeen now claim that the Tamils and Muslims were not being ‘jaathiwadee’ because they had all voted for a Sinhala Buddhist. Such claims insult the intelligence of the voting public.
The Tamils and Muslims voted for Sajith Premadasa because he was willing to do their bidding – to be a Vibheeshana to the Sinhalese. RW was also willing to do the bidding of the minorities and he too wanted to contest. But the reason why the minority parties backed Sajith was because they thought that the latter would be better able to deceive the Sinhalese. This election result has put paid to that kind of politics. It is certainly true that at a future election the minorities could always pull off another 2015 style coup by ganging up behind a Sinhala leader who was willing to do their bidding, but the reaction to that could well be a 2019 style turn of events the next time around. In 2015, the coup was unexpected. But after the bitter lessons learnt, voters will always be vigilant at every election.
The odds that were stacked against the majority community all these years are now somewhat even. For that we have to thank the yahapalana government formed in 2015. Do we want a ding dong electoral battle between the minority communities and the majority community? That is entirely for the minority communities to decide. There is of course a question over whether the Tamil and Muslim reaction to Gota’s Presidential candidacy was due to his being the main architect of the war that crushed LTTE terrorism and the erroneous belief that he was behind the anti-Muslim Bodu Bala Sena. The BBS was actually used by certain local and international forces including the Jathika Hela Urumaya and Norway, to oust the Rajapaksa government. The US Embassy in Colombo also played a major role in this and we commented on it in this column at that time.
Such factors would have contributed to the extreme reaction on the part of the minorities and it may be surmised that if the candidate had been Mahinda Rajapaksa, the reaction may have been somewhat different. However it is also the reality that the reaction to MR would only have been marginally different. The communal minded majority of Tamil and Muslim voters don’t want to see a proper Sinhala leader in office. Communal politics was first started by S.J.V.Chelvanayagam in the 1950s by mooting a Tamil state A ‘Thamil arasu’. The Tamils of Indian origin were first organised in trade unions which later became political parties. Then the Muslims started communal politics in the 1980s. Because the Sinhaese were divided, it was possible for the Tamils and Muslim political parties to align themselves with various political parties and call the shots in the governments that were formed since the 1990s.
This reached its apogee in 2015, when a President was elected to power without getting the majority of the majority community vote. Outside the north and east, President Maithripala Sirisena had lost the election and he managed to win only due to the overwhelming majorities received from the north and east. Having reached its highest point between 2015 and 2019, the worm has turned, and the Sinhalese have hoist the Tamils and the Muslims with their own petard. Now each Tamil and Muslim individual will have to take a personal decision and decide whether this narrow minded communalism was going to continue or whether they were going to reject communal politics and become members of the SLPP and the UNP instead of being members of Muslim or Tamil based political parties. The choice is theirs.
What the presidential election 2019 showed for the first time was that the Sinhalese can play the same game that the Tamils and Muslims have been playing for decades. Until S.J.V.Chelvanayagam came along in the mid-1950s, the Tamil leadership of the north personified in G.G.Ponnambalam got on fine with the Senanayakes who led the UNP. He was so close to the Senanayakes that he even got involved and fell victim to the internal conflicts in the UNP. Until M.H.M.Ashraff came into the scene in the 1980s with his divisive message, the Musims were well integrated in the two main political parties.
There were more Muslims in the UNP than in the SLFP but both political parties had respected Muslim leaders whose names are closely associated with the histories of those political parties. So it’s not as if national politics has never existed among Tamils and Muslims in this country. In 1952, even Chelvanayagam lost his seat to a UNP candidate. That was before communalism became the main determining force in northern politics. We once had a past that was exemplary. Each Tamil and Muslim living in this country will have to make an individual decision as to whether we are going to go back to the rational past or to continue with the irrational present.
-C.A. Chandraprema
submitted by UNSC_MC_117 to srilanka [link] [comments]

China, Poverty, and Practical Ethical Sourcing

China, Poverty, and Practical Ethical Sourcing
Discussions of ethical sourcing tend to be very narrow, which is a problem because the ethics of production sourcing operate very differently in the macro versus the micro. On the micro, we obviously have a preference for sending business to factories that pay good wages, offer benefits, etc., but on the macro the competitive pricing of impoverished geographies with cheap labor attracts money that lifts entire populations out of poverty.

(Using 2011 PPP dollars, data sources at end)
To illustrate this point, I’m going to walk through bare-bones of how farsighted policymakers in China and global demand (especially US demand) for cheap production from 1990–2014 combined to form the largest movement of human beings out of poverty in history. Then, I want to briefly discuss how to merge the macro and micro picture of sourcing ethics to form a framework that I think leaves two routes for companies to approach “practical ethical sourcing”.

Macro Ethics: What China Did

Here’s a very simplistic account of what happened with China since 1990. The competitive advantage of cheap labor and production allowed Chinese businesses to grow massively, selling to other countries who outsourced their production to Chinese factories. This created a positive trade balance (how much more a country exports than it imports), which meant a large positive “current account” for China (trade balance plus a few other metrics of income from other countries).
Generally speaking, this kind of competitive advantage erodes in two ways:
  1. Your currency gets more expensive, which raises production costs in foreign currency terms. This happens because exporters are selling goods in large quantities to foreign countries (let’s use US entities as the base case here). Those exporters get dollars for their goods, and then have to buy yuan with those dollars to pay production costs in China. Basically this means a whole lot of dollars being sold to buy yuan, pushing the price of the yuan up.
  2. Wages rise. This happens because export businesses see such good demand that they keep cropping up and keep hiring until all the cheap labor is basically hired, and then they start pricing the labor more competitively with each other and driving up labor costs (wages). Basically more demand for workers in China means higher wages in China.
Chinese policy makers knew this was going to happen, and thought “we don’t want a strong currency, we want a middle class,” so they began offsetting the upward pressure on the yuan by accumulating reserves — mostly dollar reserves. This meant that rather than being eroded through currency appreciation, the competitive advantage would be eroded through increasing wages (see “Appreciation Note” at end).
So how does this work? The Chinese government needs to sell a lot of yuan for dollars — enough to counter the buying pressure from all the export income being used to buy yuan.
The way this mechanically works is the Chinese government goes out and buys enough US government bonds to offset the the massive inflow. They sell yuan for dollars to buy US bonds, and the yuan stays flat against the dollar instead of rising. The Chinese government can make as much yuan as they want, so there’s no reason to bet that they’d run out of yuan to sell.
You’ll notice a few things in the chart below: the overall scale of both grows massively over the time period, and they grow roughly in line with each-other as reserve purchases offset the current account income. The reserve accumulation here is outpacing current account inflows in part because there are additional pressures to offset at times (foreign investment), and in part because I’m proxying it with an imperfect solution that will capture some appreciation of the reserves (see “Analytics Note” at end for explanations of this and some other important analytical choices like why this isn’t in GDP terms, etc.). You’ll also notice the picture gets a little messy in the post-crisis period, which makes sense as global demand constricted and capital flows got kind of wack.

(Data sources at the end)
In the early nineties, the Chinese government had unified the swap and official exchange rate, creating a 33% devaluation overnight, and then began to directly intervene in the currency’s value. Because the government was buying dollars (selling yuan) at the same rate that the exporters (and others) were buying yuan (selling dollars) the yuan avoided rapid appreciation. Instead, they allowed it to just make slow and steady gains over time.

(Data sources at the end)
The impact of this was that China retained a competitive advantage in the export market for longer than it otherwise would, and the advantage would only erode through rising wages. As continued demand for cheap production meant expansion of production facilities, new jobs, and demand for workers, wage competition took over and started to improve the income of Chinese workers.

(Data sources at the end)
This wage increase means more money every month for a previously impoverished segment of the world population — a massive impact in terms of human well-being.

(Using 2011 PPP dollars, data sources at end)
Nothing like that, on that sort of scale, has ever happened. But, things like that do happen on smaller scales in smaller countries all the time when competitive export pricing allows them to increase their wealth through global export markets and policymakers make good choices.
If you care about wealth inequality in a global sense, and about redistribution of wealth to poorer nations, then a lot of good is done by globalization of supply chains and demand for cheap labor (to the degree that this can ultimately translate to higher wages over time). Market dynamics distributing demand to geographies with cheap production can lift entire populations out of poverty. Today, the countries this most aptly applies to are the cohort of Bangladesh, Sri Lanka, etc.
Does this justify human rights violations?
No. It does not.
Were early industrial revolution coal mining towns that verged on slave labor “fair game” because they increased the wealth of the population over a few generations?
No.
That macro picture is all well and good, but as individuals who are decision-makers on these things, we have our own moral obligation to maintain a threshold of ethical treatment regardless of the optimization of profits. Pay attention to what your factories do, of course, and don’t work with people who dehumanize their workers.
The take-away of the macro picture is just this:
Cheap isn’t evil. Evil is evil.
So, how do we resolve this macro picture with obvious micro-ethical factors as we decide how to support better working conditions and avoid flagrant exploitation?

Practical Ethical Sourcing and Where you Have Impact

Despite the example above, you are not doing the world any particular positive good by choosing cheap factories. Unless you are in charge of manufacturing for a massive company that is a driver of the global market, your choices don’t move the needle on this dynamic. Whether or not you outsource your factory to a poorer country with cheaper labor, those large orders that do have an impact are driven by publicly traded companies whose decision makers, while not actually legally bound to maximize profitability, generally only have their job if they continue to do so. Demand will funnel to cheap production.
Does that mean that your choices have no impact at all?
No not necessarily.
To synthesize: there are functionally two ways to run a good, impactful business with “Practical Ethical Sourcing”:
Version 1: Go with a competitive production option, and make sure between comparably costed options you pick one that doesn’t have specific practices you find unacceptable (i.e. meets your threshold criteria for ethical practices). For example — refuse to work with factories that employ child labor (and make your own list of other practices you won’t tolerate). This is where most businesses who are primarily focused on product and producing value for customers, but also want to maintain ethical standards they are comfortable with, should operate. There is already pressure against most of the worst manufacturing processes, and by consciously avoiding giving evil factories your business you can participate in the process of “starving them out” of the global export market. You are having an impact through who you don’t give money to.
Version 2: Give your production orders to someone so ethically focused and otherwise non-competitive that orders coming from you are a needle-mover on their probability of survival. To really work it has to be the primary focus of your business and brand, such that you can target your branding materials toward the audience who is willing to spend the premium to cover the additional cost of your “super-ethical” production (or else it isn’t sustainable as a business). The basis of the impact here relies on the fact that the factory is uncompetitive outside of a willingness to pay an ethical premium, so you probably need to be non-competitively priced for retail to maintain margins — which means finding the consumers willing to pay that premium. As an example: T-shirts made form recycled tired tires might not be the best Ts, or the cheapest, but you can make it your business to find the people willing to buy them and generate income for the people who make them. You are having an impact by who you do give money to.
It’s usually a problem if a business is falling somewhere in the spectrum between Version 1 and Version 2. They run the risk of either being
  1. More about storytelling than impact — maybe they advertise the fact that they produce in a high-wage geography (as though that is necessarily morally superior) or generally inflate the benefits of insignificant production choices (a lot of B Corps are like this; I’m considering writing an article about B Corps and how little that means), or
  2. A bad business that won’t sustain itself, and therefore wont have lasting impact — maybe they are trying to sell products with expensive, alternative, hyper-ethical production processes at competitive retail prices to the general market (possibly, in that case, funding a good brand and broken unit economics with VC money that will inevitably run out).
At MeritStore, we’re thinking through these problems in real time as we make sourcing decisions. For us, we think the best way is to set an ethical standard of practices we are unwilling to participate in, and then within those reasonable constraints source cost effective production. Looking at factories, we aren’t throwing out certain options simply because the wages there are low compared to the US.
We plan to make sure that we’re ethically comfortable with the factories we use to produce — for our own sake. We want to make a good business that brings great value to our consumers, and doesn’t compromise our ethics. I hope anyone interested in assessing the ethical promise of brands found value in this perspective, and I especially hope it is useful to anyone out there who is trying to navigate their own production sourcing decisions.
I know that this perspective doesn’t harmonize with some of the ethical “ra-ra”ing around certain brands. I’m trying to think this through with data, basic principles, and an eye towards the practical realities of running a business. I would love to hear your thoughts.
— — — — — — — — — — — — — — — — — —
If you’re interested, come join the discussion at MeritStore
— — — — — — — — — — — — — — — — — —
Data Sources:
https://www.ceicdata.com/en/indicatochina/gdp-per-capita
http://povertydata.worldbank.org/poverty/country/CHN
https://www.theglobaleconomy.com/China/
— — — — — — — — — — — — — — — — — —
Appreciation Note: You can make the contention that an rising yuan is equivalent to increasing wages, but in effect that is only true to the degree that the wage-earner is buying imports. Wage inflation through a tight labor market more effectively redistributes income share from business owners to workers, while currency appreciation simply has a deflationary impact through diminished import costs (and probably a more positive impact on large holders of Yuan denominated assets who are already wealthy enough to spend abroad).
Analytics Note: (1) I’m using YoY change in FX reserves incl. Gold as my “Reserve Accumulation”. This is not a perfect approximation of the flow I would ideally use (reserve purchases) because of reserve asset (especially non-dollar reserve asset) price movements. I think it’s a reasonable enough proxy for the purposes of this post. (2) I also don’t mean to totally ignore other flows and pressures, but won’t do the full balance of payments analysis needed to paint the whole picture — in this case most notably the rest of the capital account. It would only be to demonstrate why these are the important flows I’m talking about. I fear losing the reader’s interest going through why a bunch of other things aren’t the important thing. (3) In this case not doing in GDP terms because I also want to get across the point that the whole scale of the current account and the reserve accumulation is growing. (4) If anyone here has done BoP analysis they’re probably foaming about the fact that the outflows aren’t negative. I thought that might confuse some people, so I didn’t do it. (5) I’m focusing on 1990–2015 because in 2015 some of this dynamic shifted, as there was enough pressure of wealthy folks moving money out of china that the government actually started to sell some reserves (and devalued the yuan 1.5%). The fact that enough people in China had enough money to cause problems with outflows (as well as bust up some real estate markets like Vancouver and Sydney) actually shows that the policy worked.
submitted by misterACK to ethicalfashion [link] [comments]

Cheap isn't Evil, Evil is Evil: A Practical Framework for Ethical Sourcing

Cheap isn't Evil, Evil is Evil: A Practical Framework for Ethical Sourcing
Discussions of ethical sourcing tend to be very narrow, which is a problem because the ethics of production sourcing operate very differently in the macro versus the micro. On the micro, we obviously have a preference for sending business to factories that pay good wages, offer benefits, etc., but on the macro the competitive pricing of impoverished geographies with cheap labor attracts money that lifts entire populations out of poverty.

(2011 PPP dollars, sources at end)
To illustrate this point, I’m going to walk through bare-bones of how farsighted policymakers in China and global demand (especially US demand) for cheap production from 1990–2014 combined to form the largest movement of human beings out of poverty in history. Then, I want to briefly discuss how to merge the macro and micro picture of sourcing ethics to form a framework that I think leaves two routes for companies to approach “practical ethical sourcing”.

Macro Ethics: What China Did

Here’s a very simplistic account of what happened with China since 1990. The competitive advantage of cheap labor and production allowed Chinese businesses to grow massively, selling to other countries who outsourced their production to Chinese factories. This created a positive trade balance (how much more a country exports than it imports), which meant a large positive “current account” for China (trade balance plus a few other metrics of income from other countries).
Generally speaking, this kind of competitive advantage erodes in two ways:
  1. Your currency gets more expensive, which raises production costs in foreign currency terms. This happens because exporters are selling goods in large quantities to foreign countries (let’s use US entities as the base case here). Those exporters get dollars for their goods, and then have to buy yuan with those dollars to pay production costs in China. Basically this means a whole lot of dollars being sold to buy yuan, pushing the price of the yuan up.
  2. Wages rise. This happens because export businesses see such good demand that they keep cropping up and keep hiring until all the cheap labor is basically hired, and then they start pricing the labor more competitively with each other and driving up labor costs (wages). Basically more demand for workers in China means higher wages in China.
Chinese policy makers knew this was going to happen, and thought “we don’t want a strong currency, we want a middle class,” so they began offsetting the upward pressure on the yuan by accumulating reserves — mostly dollar reserves. This meant that rather than being eroded through currency appreciation, the competitive advantage would be eroded through increasing wages (see “Appreciation Note” at end).
So how does this work? The Chinese government needs to sell a lot of yuan for dollars — enough to counter the buying pressure from all the export income being used to buy yuan.
The way this mechanically works is the Chinese government goes out and buys enough US government bonds to offset the the massive inflow. They sell yuan for dollars to buy US bonds, and the yuan stays flat against the dollar instead of rising. The Chinese government can make as much yuan as they want, so there’s no reason to bet that they’d run out of yuan to sell.
You’ll notice a few things in the chart below: the overall scale of both grows massively over the time period, and they grow roughly in line with each-other as reserve purchases offset the current account income. The reserve accumulation here is outpacing current account inflows in part because there are additional pressures to offset at times (foreign investment), and in part because I’m proxying it with an imperfect solution that will capture some appreciation of the reserves (see “Analytics Note” at end for explanations of this and some other important analytical choices like why this isn’t in GDP terms, etc.). You’ll also notice the picture gets a little messy in the post-crisis period, which makes sense as global demand constricted and capital flows got kind of wack.

(Sources at end)
In the early nineties, the Chinese government had unified the swap and official exchange rate, creating a 33% devaluation overnight, and then began to directly intervene in the currency’s value. Because the government was buying dollars (selling yuan) at the same rate that the exporters (and others) were buying yuan (selling dollars) the yuan avoided rapid appreciation. Instead, they allowed it to just make slow and steady gains over time.

(Sources at end)
The impact of this was that China retained a competitive advantage in the export market for longer than it otherwise would, and the advantage would only erode through rising wages. As continued demand for cheap production meant expansion of production facilities, new jobs, and demand for workers, wage competition took over and started to improve the income of Chinese workers.

(Sources at end)
This wage increase means more money every month for a previously impoverished segment of the world population — a massive impact in terms of human well-being.

(Using 2011 PPP dollars, sources at end)
Nothing like that, on that sort of scale, has ever happened. But, things like that do happen on smaller scales in smaller countries all the time when competitive export pricing allows them to increase their wealth through global export markets and policymakers make good choices.
If you care about wealth inequality in a global sense, and about redistribution of wealth to poorer nations, then a lot of good is done by globalization of supply chains and demand for cheap labor (to the degree that this can ultimately translate to higher wages over time). Market dynamics distributing demand to geographies with cheap production can lift entire populations out of poverty. Today, the countries this most aptly applies to are the cohort of Bangladesh, Sri Lanka, etc.
Does this justify human rights violations?
No. It does not.
Were early industrial revolution coal mining towns that verged on slave labor “fair game” because they increased the wealth of the population over a few generations?
No.
That macro picture is all well and good, but as individuals who are decision-makers on these things, we have our own moral obligation to maintain a threshold of ethical treatment regardless of the optimization of profits. Pay attention to what your factories do, of course, and don’t work with people who dehumanize their workers.
The take-away of the macro picture is just this:
Cheap isn’t evil. Evil is evil.
So, how do we resolve this macro picture with obvious micro-ethical factors as we decide how to support better working conditions and avoid flagrant exploitation?

Practical Ethical Sourcing and Where You Have Impact

Despite the example above, you are not doing the world any particular positive good by choosing cheap factories. Unless you are in charge of manufacturing for a massive company that is a driver of the global market, your choices don’t move the needle on this dynamic. Whether or not you outsource your factory to a poorer country with cheaper labor, those large orders that do have an impact are driven by publicly traded companies whose decision makers, while not actually legally bound to maximize profitability, generally only have their job if they continue to do so. Demand will funnel to cheap production.
Does that mean that your choices have no impact at all?
No not necessarily.
To synthesize: there are functionally two ways to run a good, impactful business with “Practical Ethical Sourcing”:
Version 1: Go with a competitive production option, and make sure between comparably costed options you pick one that doesn’t have specific practices you find unacceptable (i.e. meets your threshold criteria for ethical practices). For example — refuse to work with factories that employ child labor (and make your own list of other practices you won’t tolerate). This is where most businesses who are primarily focused on product and producing value for customers, but also want to maintain ethical standards they are comfortable with, should operate. There is already pressure against most of the worst manufacturing processes, and by consciously avoiding giving evil factories your business you can participate in the process of “starving them out” of the global export market. You are having an impact through who you don’t give money to.
Version 2: Give your production orders to someone so ethically focused and otherwise non-competitive that orders coming from you are a needle-mover on their probability of survival. To really work it has to be the primary focus of your business and brand, such that you can target your branding materials toward the audience who is willing to spend the premium to cover the additional cost of your “super-ethical” production (or else it isn’t sustainable as a business). The basis of the impact here relies on the fact that the factory is uncompetitive outside of a willingness to pay an ethical premium, so you probably need to be non-competitively priced for retail to maintain margins — which means finding the consumers willing to pay that premium. As an example: T-shirts made form recycled tired tires might not be the best Ts, or the cheapest, but you can make it your business to find the people willing to buy them and generate income for the people who make them. You are having an impact by who you do give money to.
It’s usually a problem if a business is falling somewhere in the spectrum between Version 1 and Version 2. They run the risk of either being
  1. More about storytelling than impact — maybe they advertise the fact that they produce in a high-wage geography (as though that is necessarily morally superior) or generally inflate the benefits of insignificant production choices (a lot of B Corps are like this; I’m considering writing an article about B Corps and how little that means), or
  2. A bad business that won’t sustain itself, and therefore wont have lasting impact — maybe they are trying to sell products with expensive, alternative, hyper-ethical production processes at competitive retail prices to the general market (possibly, in that case, funding a good brand and broken unit economics with VC money that will inevitably run out).
We’re thinking through these problems in real time as we make sourcing decisions. For us, we think the best way is to set an ethical standard of practices we are unwilling to participate in, and then within those reasonable constraints source cost effective production. Looking at factories, we aren’t throwing out certain options simply because the wages there are low compared to the US.
We plan to make sure that we’re ethically comfortable with the factories we use to produce — for our own sake. We want to make a good business that brings great value to our consumers, and doesn’t compromise our ethics. I hope anyone interested in assessing the ethical promise of brands found value in this perspective, and I especially hope it is useful to anyone out there who is trying to navigate their own production sourcing decisions.
I know that this perspective doesn’t harmonize with some of the ethical “ra-ra”ing around certain brands. I’m trying to think this through with data, basic principles, and an eye towards the practical realities of running a business. I would love to hear your thoughts.
— — — — — — — — — — — — — — — — — —
If you’re interested, come join the discussion at MeritStore
— — — — — — — — — — — — — — — — — —
Data Sources:
https://www.ceicdata.com/en/indicatochina/gdp-per-capita
http://povertydata.worldbank.org/poverty/country/CHN
https://www.theglobaleconomy.com/China/
— — — — — — — — — — — — — — — — — —
Appreciation Note: You can make the contention that an rising yuan is equivalent to increasing wages, but in effect that is only true to the degree that the wage-earner is buying imports. Wage inflation through a tight labor market more effectively redistributes income share from business owners to workers, while currency appreciation simply has a deflationary impact through diminished import costs (and probably a more positive impact on large holders of Yuan denominated assets who are already wealthy enough to spend abroad).
Analytics Note: (1) I’m using YoY change in FX reserves incl. Gold as my “Reserve Accumulation”. This is not a perfect approximation of the flow I would ideally use (reserve purchases) because of reserve asset (especially non-dollar reserve asset) price movements. I think it’s a reasonable enough proxy for the purposes of this post. (2) I also don’t mean to totally ignore other flows and pressures, but won’t do the full balance of payments analysis needed to paint the whole picture — in this case most notably the rest of the capital account. It would only be to demonstrate why these are the important flows I’m talking about. I fear losing the reader’s interest going through why a bunch of other things aren’t the important thing. (3) In this case not doing in GDP terms because I also want to get across the point that the whole scale of the current account and the reserve accumulation is growing. (4) If anyone here has done BoP analysis they’re probably foaming about the fact that the outflows aren’t negative. I thought that might confuse some people, so I didn’t do it. (5) I’m focusing on 1990–2015 because in 2015 some of this dynamic shifted, as there was enough pressure of wealthy folks moving money out of china that the government actually started to sell some reserves (and devalued the yuan 1.5%). The fact that enough people in China had enough money to cause problems with outflows (as well as bust up some real estate markets like Vancouver and Sydney) actually shows that the policy worked.
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Tag Archives: Margin Trading Sri Lanka. First Capital, Investment Banking in Sri Lanka, Market Update, Press, Research, Sharemarket investment in Sri Lanka, Sri Lanka, Stock Market. Listed firms earnings dip 2% to Rs. 60 b in Sept. December 18, 2017 SEO - Epitom. Margin Trading. Peoples Merchant Finance PLC (PMF) is licensed as a margin provider under the category of a Market intermediary from the Securities and Exchange Commission of Sri Lanka. Margin trading is a popular product with traders who trade frequently on the stock Exchange. Tag Archives: Margin Trading in Sri Lanka. First Capital, Investing in Sri Lanka, Investment Banking in Sri Lanka, Press, Sharemarket investment in Sri Lanka, Sri Lanka, Treasury Bonds and Bills. First Capital records Rs. 231 Mn PAT 2016/17. May 19, 2017 Nisansala Munasinghe. (f) Pledged securities may only be re-pledged by the Margin Provider to entities licensed by the Central Bank of Sri Lanka and only up to a maximum of 100% of the value of the margin loans portfolio. (g) The Margin Provider shall not extend margin facilities to its employees for the purchase of securities. The 50% upper limit is set by the Colombo Stock Exchange (CSE) and the Securities and Exchange Commission of Sri Lanka (SEC). In order to obtain a Margin Trading facility the borrower has to fill up a Margin Trading account opening form and sign a Margin Trading agreement providing an undertaking from the stock brokering firm pledging his/her ...

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Atrad ඔන්ලයින් ඇප් එකෙන් කොහොමද ගනුදෙනු කරන්නේ CSE, Online Trading System [ Atrad ]

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