Almighty Dollar
On May 4, Guatemala joined the move towards dollarization in Latin America, as the government finally implemented a law making the US dollar (and any other currency) legal tender alongside the quetzal, in any transaction when both parties agree. Officials insisted that "this is not dollarization" because the quetzal will continue in circulation and will float in relation to the dollar. An article in the Financial Times noted that the dollar had a strong unofficial status in the country, where mortgages and cars were already priced in dollars. (For more on this topic, see "Dollars for the Americas" in our April 23-27 List-Serv).
Shipping and Seafarers Revisited
Last week, we ran information about Flags of Convenience in the shipping industry. Just a few days later, we received "The World of Work," the magazine of the International Labour Organisation, which shed additional light on the changes underway in international shipping, the world's most globalized industry. The article notes that over the past decade, there has been a sharp decline in the wages of seafarers from rich countries, while at the same time there has been a rise in wages of seafarers from poor countries – suggesting a leveling-out of the worldwide wage system in the industry. Some examples: Australian able seafarers have seen a 65 percent wage decline in the past 7 years, while Japanese and German seafarers in the same basic category have seen a 53 percent decline in the same period. At the same time, wages have increased between 25 and 91 percent for seafarers from Bangladesh, Hong Kong (China), Myanmar, China, India and Poland.
The ILO's Joint Maritime Commission has announced an agreement, known as the "Geneva Accord" to improve safety and working conditions in the maritime industry and to update the ILO minimum wage for seafarers to US$450 per month. A conference scheduled for 2005 will address all these issues, but in the meantime the ILO agreement is expected to be widely followed. It is the world's first global wage and working condition agreement -- quite an amazing development, even if it falls far short of ideal standards. There are 50,000 ships engaged in international trade, with 1.25 million seafarers employed. Catering and hotel staff on passenger ships are not covered by the data or the agreement.
We encourage readers to look into the history of merchant shipping, seafaring, and shipbuilding, which were the first modern forms of wage labor and very politically influential. The word "strike" came into the English language from an eighteenth century action by sailors in London to strike (take down) their sails and refuse to work. Historian Peter Linebaugh writes about the huge shipbuilding works of the Royal Navy in Greenwich, which was the world's largest "factory" in the seventeenth century. Marcus Rediker's Between the Devil and the Deep Blue Sea (Cambridge University Press) is an especially good book on seafaring in the age of sail.
Gridlock and Market Freedom
Data released on May 7 provides fresh evidence of the woes of an auto-based transportation system in the USA. The Texas Transportation Institute issued its annual report on US road traffic congestion and found that the average driver in the United States spent 36 hours stuck in traffic during 1999, up from 11 hours in 1982. In Los Angeles, the most auto-bound city in the country, drivers spent 56 hours caught in traffic in 1999 and in Atlanta the figure was 53 hours. The report measured the difference between congestion-free travel time and actual travel time. According to the study, the cost of the delays was $78 billion in wasted time and burned gasoline.
We were inclined to think that Europe had more enlightened transportation policy, with its high gasoline taxes and excellent rail systems. But a visitor from the Old World told us recently that rail privatization is resulting in the closure of less profitable branch lines, cutting back on public transport and forcing citizens to turn to automobiles. The Greens in the German coalition government have attracted intense public criticism for their new gasoline tax, which hits citizens just as privatization is reducing public transport options. Britain's rail crisis has had the same effect of privileging automobiles, deluging roads with vehicles and making transport both more expensive and slower.
US Congress Breaks Its Deal with the UN
Reacting to the news that the United States had failed to be re-elected to the UN Commission on Human Rights, the US House of Representatives acted on May 10 to block an arrears payment of $244 million to the United Nations next year. The Senate would also have to pass the legislation and the President would have to sign it if it were to become law. The House action sent a strong signal that Congress won't abide independent UN multilateral decision making or elections that it disagrees with. The action on the arrears also would break the carefully-constructed deal, put together last December by US Ambassador Richard Holbrooke, that offered the United States a reduced assessment rate in exchange for paying some of its arrears. The United States has not paid the $582 million of arrears due this year as part of the deal. In fact, the US has not paid a single dime towards the UN Regular Budget since January 1.
And now for the week's links . . .
