Archive for the ‘Poverty’ Category

Microfinance loans – for Americans

Bangladesh’s Grameen Bank has made its first loans in New York in an attempt to bring its pioneering microfinance techniques to the tens of millions of people in the world’s richest country who have no bank account.

The bank’s entry into the US, its first in a developed market, comes as mainstream banks’ credibility has been hit by the mortgage meltdown and many people are turning to fringe financial institutions offering loans at exorbitant interest rates.

Grameen has lent $50,000 in the past month to groups of immigrant women in Jackson Heights in New York’s borough of Queens. During the next five years, it plans to offer $176m in loans within New York city, and then expand to the rest of the US.

In the US, about 28m people have no bank accounts and 44.7m have only limited access to financial institutions. People often do not hold bank accounts because they have had credit problems, have no access to a local branch or they distrust the mainstream financial system, said Jonathan Morduch, a microfinance expert at New York University.

Some microfinance experts doubt that Grameen could make an impact in the US where credit is widely available, and businesses and tax systems are much trickier to navigate than in developing countries.

Very amusing. And to think of all the bad press Hugo Chavez got with his oil. From a previous article:

The US presents a ripe market for Grameen, Mr Yunus claims, because it has a large population that sits outside the formal banking system. As many as 28m people, earning $510bn a year, do not have any relationship with a financial institution, according to the Federal Deposit Insurance Corporation.

Those who have no bank accounts rely on fringe banking services such as cheque cashers, pawnshops and payday lenders.

Payday lenders can charge as much as 1,560 per cent for a week’s cash ad- vance against forward-dated cheques, according to the Consumer Federation of America. Payday lenders made $48bn (€33bn, £24bn) in loans last year, while pawnshops’ business has been soaring as the US heads into a slowdown.

“You have the payday loans, you have the cheque cashing companies, and they’re flourishing, and they are pretty bold, the big advertisements in the newspapers, big ads on television . . . so this shows how much [of a] gap there is in the system,” Mr Yunus said.

I can understand the argument about the greater complexity of the tax system here – although that supposes that recipients are engaging with the tax system fully. A decent proportion of those Americans without bank accounts are Americans without papers, too, I would expect. One hopes his doesn’t wind up leading to a load of poor dream-chasers simply having those hopes dashed by the cruelty of the tax system (you know, the one that now doesn’t chase rich tax-evaders/avoiders, just middle-class-and-lower tax-evaders/avoiders).

Factors that cause shifts in demand: convenience, income

You will bear a vegan’s conceit, today, while I consider this openly (while going to war against an American standard):

Sales of boxed macaroni and cheese, a product category led by Northfield, Ill., based Kraft Foods, have experienced a significant rise.

The product, which debuted 70 years ago, posted 10 percent growth in 2007, due in part to soaring sales of single-serve microwaveable Easy Mac cups, which experienced a 50 percent rise in sales for the year, the Chicago Sun-Times reported Tuesday.

Harry Balzer, vice president of consumer research firm NPD Group, said about one-third of the U.S. population and half of the country’s children will feast on macaroni and cheese at some point during the next two weeks. That number marks a significant increase from 1984, when about 30 percent of the U.S. population and 40 percent of children in the country would have snacked on the popular pasta dish in a two-week period.

The factors affecting demand (i.e. causing, in this instance, an outward shift in the demand curve for macaroni and cheese) are convenience – given the pinning of the increase in popularity on the “Easy Mac” single-serve deal. Tastes, more broadly: I’ve seen more and more such products, for a range of brands, on our supermarket shelf. For all I know Kraft, in fact, may have started that trend.

The other factor, looking forward, is income. I would expect – honestly – something like macaroni and cheese to be an inferior good. I welcome correction on that, though. An inferior good is one with a negative income elasticity of demand: as incomes rise, demand decreases (because the good is inferior, yeah? People buy better/more expensive things instead).

So, facing recession (or facing proof that we’ve been in one since before Christmas), one would expect declining American household fortunes to boost demand for Kraft Mac and Cheese further.

So much for the basic economics. Let’s discuss nutrition (i.e., the part that bothers me). Wandering around the internets, I found nutritional information for the Easy Mac cups:

Easy mac cup

Which earns a “C” from Also the standard boxed (pre-maid) product:

Boxed mac and chees gives that one 2/5 for things like “health”.

Now, back at Universal Press, Harry Balzer, vice president of consumer research firm NPD Group, offered this:

“It’s almost always a main meal,” he said.

Ah. Now, I’m skinny and probably don’t eat the average amount for an adult American male (which, of course, I’m not, but (a) here I am, and (b) I imagine the same holds for comparison with Australians). There’s no way I’m going to eat 60 grammes of powdered cheese sauce and instant noodles and call it dinner.

The times that I’ve had to eat microwavable food, I’ve found that standard meals (around 280g) are way too little – 432g (the weight of a lentil soup I keep in the office) isn’t too too bad (allow me to point out that, as a vegan, I read these things as a matter of course: grocery shopping can take a while). Suppose I made an Easy Mac dinner. I’d be looking at about the same.

Conservatively, let’s say I need 420g of the stuff – that’s 6 to 7 Easy Mac cups. Now put that multiplier up against, say, the saturated fats and sodium found in Mac and Cheese. That’s a day’s carbs, a day’s saturated fats, and you just ate a dose of diabetes. All while picking up bugger all in whole grains, dietary fibre, natural minerals or vitamins.

Back at,


And this would be where the social gradient in diabetes and obesity comes in. Poor people eat energy-rich, high-caloric, cheap foods. Binding budget constraints and poor education (meaning public health educational interventions) mean that nutrition, for example, does not enter the criteria. Which is why the less-expensive juices (as in fruit juices) in my local supermarket all contain High Fructose bloody Corn Syrup. As do all the family breakfast cereals, all the processed breads – all the basic family foodstuffs.

There is a social gradient to what people eat and call food, and it isn’t pretty.

Interestingly, I found this stuff being sold at, where the comments contain the likes of:

With kids in the house you have to fix Mac & Cheese, it’s just a fact. The regular old mac & cheese takes too long to fix when a starving toddler is having a hunger induced meltdown. A few minutes in the microwave then *voila* warm food to feed the savage toddler. It’s not bad for grown ups either.

Yes, this person recommends feeding a toddler this stuff. Because making the boxed version takes too damn long. And, apparently, opening a jar of Gerber pureed vegetables just makes too damn much sense.

This is great for hungry kids to heat up anytime. My two are only 10 & 11 and they have been using the microwave for a couple of years. This is also great to send off with your college student. They might need a quick meal on those late study nights.

a) if your growing child is hungry, give them food. Give them nutrition; (b) your kid in college is not going to be able to perform well, studying, with this clogging his/her system. Teach them how to eat properly, and stay hydrated, throughout a day. You can’t just give them Mac and Cheese and a bottle of Adderall, and expect them to make it.

And this is a vegan’s conceit. I’m sorry, but there it is. I read all my ingredients, and I’m a Health Economist with a PhD. I earn enough to shop and eat properly, and know enough to do so, and how to do so. I enjoy a rare priviledge, I know. This doesn’t mean that seeing a toddler in a stroller holding crisps in one hand and lucozade in the other doesn’t send me spare.

You want to understand where American competitiveness has gone? This sort of thing will be a reason. These diets make shorter, fatter, sicker, dumber people. It isn’t kind to say so, but that doesn’t make it any less true.

Obesity, nanny states and closing the barn buffet after the fat horses have bolted

Originally spotted at Environmental Economics: House Bill 282 from the Mississippi legislature.

(1) The provisions of this section shall apply to any food establishment that is required to obtain a permit from the State Department of Health under Section 41-3-15(4)(f), that operates primarily in an enclosed facility and that has five (5) or more seats for customers.

(2) Any food establishment to which this section applies shall not be allowed to serve food to any person who is obese, based on criteria prescribed by the State Department of Health after consultation with the Mississippi Council on Obesity Prevention and Management established under Section 41-101-1 or its successor. The State Department of Health shall prepare written materials that describe and explain the criteria for determining whether a person is obese, and shall provide those materials to all food establishments to which this section applies. A food establishment shall be entitled to rely on the criteria for obesity in those written materials when determining whether or not it is allowed to serve food to any person.

(3) The State Department of Health shall monitor the food establishments to which this section applies for compliance with the provisions of this section, and may revoke the permit of any food establishment that repeatedly violates the provisions of this section.

So, to recap:

1) Restaurants can feed you shit until you become obese, and the State will do nothing to intervene, or fix the insane obeseogenic environment that prevails in the US,

2) Damage done, restaurants will stop feeding you.

3) Rather than legislate (if legislation was felt to be that necessary) in favour of, say, smaller portions (known to be a prime cause of obesity in the US), the State will also leave the environment in place in order to make more obese people,

4) Those obese people will, in turn, not get served.

Your tax dollars at work (I mean, if you live in Mississippi). You’ll note that the legislation also includes no mention of what to do about the socioeconomic gradient to the high-caloric diets people have. Me, I envisage a fat unemployed person (statistically likely to be a minority) with no car, unable to get to better nutrition and now not being served in the eateries that contributed to their obesity in the first place (although the mechanism of the obesity is left unchanged). I guess I’m just pessimistic, like that.

Coping with health-care costs: implications for the measurement of catastrophic expenditures and poverty

A new paper came down the Health Economics RSS feed (what of it? I’m a Health Economist. It’s perfectly normal), by Gabriela Flores (not that one), Jaya Krishnakumar, Owen O’Donnell and Eddy van Doorslaer.


In the absence of formal health insurance, we argue that the strategies households adopt to finance health care have important implications for the measurement and interpretation of how health payments impact on consumption and poverty. Given data on source of finance, we propose to (a) approximate the relative impact of health payments on current consumption with a coping-adjusted health expenditure ratio, (b) uncover poverty that is hidden because total household expenditure is inflated by financial coping strategies and (c) identify poverty that is transient because necessary consumption is temporarily sacrificed to pay for health care.

Measures that ignore coping strategies not only overstate the risk to current consumption and exaggerate the scale of catastrophic payments but also overlook the long-run burden of health payments. Nationally representative data from India reveal that coping strategies finance as much as three-quarters of the cost of inpatient care. Payments for inpatient care exceed 10% of total household expenditure for around 30% of hospitalized households but less than 4% sacrifice more than 10% of current consumption to accommodate this spending.

Ignoring health payments leads to underestimate poverty by 7-8% points among hospitalized households; 80% of this adjustment is hidden poverty due to coping.

They present an argument in favour of distinguishing the different impacts of catastrophic health expenditures, defined thus (and using a rural household as exemplar):

Figure 1

“Coping” consist of non-income financing of health care: savings, borrowings, selling assets. Specifically such expenditures can generate transient poverty, for households that finance such costs using household income, as well as identifying hidden poverty, for households that finance such costs with coping strategies:

Figure 2

“Hidden poverty” is defined thus:

Households that are poor on the basis of their sustainable level of consumption are not recognized as poor by conventional measures because their use of savings, assets or borrowing to pay for large healthcare costs temporarily raises their total spending above the poverty threshold.

It is more of a welfare measure of the loss of household utility/welfare, created by having to finance catastrophic care using short-term sacrifices of wealth that leave the household vulnerable to future shocks.

“Transient poverty” is short-run household poverty that could be eliminated with insurance for catastrophic care (such that households did not need to pay Out-Of-Pocket): it is the (or a heretofore non-measured part of the) opportunity cost of not having such insurance.

Why the distinction?

In the context of low-income populations with limited formal health insurance coverage, this paper argues that the strategies households adopt to finance health care have important implications for both the measurement and the interpretation of how health payments impact on household consumption, welfare and poverty. Given the availability of cross-section data containing information on the means of financing health payments, we propose that the relative impact of those payments on consumption of other goods is best approximated by payments financed from income as a proportion of that income.

Measures based on the ratio of health payments to total household expenditure, which have been used previously, overestimate the risk to current consumption induced by health payments and so exaggerate the scale of catastrophic payments. Failure to take account of the extent to which health care is financed from running down savings, borrowing and depleting assets leads to the oversight of the long-run opportunity cost of health payments.

We show how information on the source of finance can be used to uncover poverty that is hidden by conventional measures because total household expenditure is inflated by payments for health care that are financed from coping strategies. We propose that the impact of health payments on transient poverty be approximated through assessing poverty on the basis of current income both gross and net of health payments financed from income alone.

The authors consider India. Given the nature of the appreciation in health care prices here in the US, it’d make for a great study for the opportunity cost to the US economy of not having such insurance across the board.

Africa aid wiped out by rising cost of oil

In case you missed this one today.

The rising cost of oil has wiped out the benefits many African countries were expecting from western aid and debt relief over the past three years, new research from the International Energy Agency has shown.

Africa enjoyed a surge in western engagement during the UK’s presidency of the Group of Eight leading industrialised countries, culminating in a commitment by world leaders to a broad package of debt relief and increased aid at the 2005 Gleneagles summit in Scotland. But since then oil prices have steadily risen towards $100 a barrel.

Surveying 13 non-oil-producing African countries, including South Africa, Ghana, Tanzania, Ethiopia and Senegal, the IEA found that the increase in the cost of oil bought by the countries since 2004 was equivalent to 3 per cent of combined GDP.

This was more than the sum of debt relief and aid received over the past three years by the countries, which have a combined population of 270m, of whom 104m live on less than $1 a day.

The IEA’s warning comes as Senegal’s President Abdoulaye Wade said “crippling” oil prices threatened to provoke “unrest and violence” in Africa.


Measurement and malnutrition (and media)

Reading the IHT on my phone over lunch:

Child malnutrition rates have increased sharply in Darfur, even though it is home to the world’s largest aid operation, according to a new United Nations report.

The report showed that 16.1 percent of children affected by the conflict in Darfur, a vast, turbulent region in western Sudan, are acutely malnourished, compared with 12.9 percent last year. For the first time since 2004, the malnutrition rate, a gauge of the population’s overall distress, has crossed what UN officials consider to be the emergency threshold.

Just as important, the increase has occurred despite the efforts of more than 12,000 relief workers in Darfur, drawing from an annual aid budget of about a billion dollars. Aid officials said they were concerned that even with all these resources, the situation for the people in Darfur seemed to be getting worse.

Annoyingly, I cannot find the freakin’ report. Which is more than somewhat annoying. Google is letting me down. Also, it seems Somalia feels like it has missed the media cycle (joining the world media club – alumni including Kashmir, Bosnia, the West Bank, Uganda, the Congo, Tibet …).

However. Back to the story.

The report seems to confirm what aid officials in Darfur have been saying for months: that the increasingly chaotic security situation, both inside the enormous camps of displaced people and in the desiccated rural areas that are very difficult to reach even in the best of times, has gotten to the point that it is hampering the delivery of much-needed emergency food. The report said there was an “urgent need to improve security conditions.”

The new UN report was based on information collected in August and September from thousands of Darfurians affected by the conflict, including those living in squalid camps (the United Nations estimates roughly 2.2 million people have been displaced by fighting). The report cited “consistently poor infant and young child feeding practices” and a “deterioration in the overall food security situation.”

The report also showed that the percentage of Darfurians growing their own crops had decreased this year compared with last. The people surveyed said that insecurity and a lack of access to their farms were the main reasons, though Sudanese officials have hypothesized that some Darfurians may have simply grown dependent on food aid and chosen to stop farming.

Malnutrition was highest among young children, between 6 months and 29 months old, and in the North Darfur state, which is sparsely populated and very dry.

The statistics part – and this is why I wanted to find the report – has to do with the numbers because, as I began reading the story, an alternate/confounding explanation entered my head. What if (a) with more refugees, more people may be leaving? Healthier people, probably, make it out – leaving sicker people behind. Hence, up go the malnutrition rates, but not the numbers; or (b) the mortality rates for those kids are inversely related – meaning fewer kids are dying, but the next category up is living with malnutrition. Up go the numbers and the rates, but they represent kids that don’t die anymore.

Hence my desire to see the report (I think it’s the millenium goals one, also viewable here – for which it is not worth my while to pay USD20 for the statistical compendium, for one blog post). I want to see the numbers.

I’m not arguing that Darfur is full of rainbows and blue helmets, or anything, mind: this is just my statistics eye opening. I should be very surprised indeed if there’s anything at all redeeming in the numbers. The Econometrician part of my brain would also dearly like to start quantifying the money and the health outcomes. Which I choose to believe does not mean that I’m completely messed-up. Opinions differ.

Howard’s ministries: social welfare at the “very limits of acceptable conduct”


Australia’a poorest people have been pursued in an unprecedented and aggressive legal campaign over welfare payments – and the workplace relations department is under fire for running up lawyers’ bills chasing small amounts of money or cases so weak they never reach court.

The number of cases pushed through the courts by the Department of Employment and Workplace Relations has soared almost 20-fold over three years in one court alone, as pension payments are challenged and moves made to recover amounts as low $1300.

The aggressive pursuit of welfare recipients dates from 2004, when the Howard government handed the department control of a $20 billion social security budget. As secretary, Dr Boxall oversaw a significant culture change, with the number of appeals by the department to the Administrative Appeals Tribunal soaring from just 17 in 2004-05 to 202 the following year, and to 321 last year.

A lawyer who has worked closely with the department said it had pursued social security recipients to the “nth degree” – whatever the legal merits of the case. The department was “ruthless in the pursuit of any and every case” where a social security recipient may have received a small overpayment – even when it had been given wrong and misleading advice by Centrelink.

“In my experience, [the department] operated at the very, very limit of acceptable conduct,” he said.

Actually, Australia’s poorest people have nothing like that sort of thing to contend with. Our poorest people have to deal with this sort of thing:

An international student assessment reveals there’s been little improvement in Indigenous performance over the last six years.

The results of the OECD Organisation for Economic Co-operation and Development international student test shows a big gap between Australia’s Indigenous and non-Indigenous students.

Australia’s northern Aboriginal communities will bear the brunt of climate change, with increases in water-borne diseases and loss of traditional food sources, an international report says.

In the Torres Strait Islands, at least 8000 people will lose their homes if sea levels rise by 1m.

… more than 100,000 people in remote Aboriginal communities across northern Australia face serious health risks from malaria, dengue fever and heat stress, as well as loss of food sources from floods, drought and more intense bushfires.

In the remote areas of the Northern Territory, where high unemployment is rampant, the government’s main jobs program has been abolished, forcing thousands more onto welfare. Welfare payments for all Aborigines living on Aboriginal land are now controlled by government bureaucrats. Federally appointed administrators with wide powers have been imposed. The permit system, by which Aboriginal communities in the Territory controlled entry onto their land and settlements, has been abolished.

Olga Havnen, a leader of the National Aboriginal Alliance, said in a message to the protesters in Sydney that the “only visible change in most communities has been the construction of housing for government business managers.”

Doctors from across Australia have launched a high-profile attack on the Northern Territory intervention, saying it is failing indigenous people.

Writing in The Medical Journal of Australia today, the doctors criticise the intervention as disrespectful and badly thought through.

Aboriginal peoples and Torres Strait Islanders will not achieve equal health outcomes with non-Indigenous Australians until all governments properly fund and resource accessible health services and programs, and their economic, educational and social disadvantages have been eliminated.

Aboriginal peoples and Torres Strait Islanders have the poorest health of any group living in this country.

Indigenous standardised mortality ratios are more than three times the expected rate, and death rates between 25-54 years of age are 5-8 times that seen in non-Indigenous Australians.

Indigenous infant mortality rates are three times higher than for non-Indigenous infants.

The 17-year gap in life expectancy between Aboriginal and Torres Strait Islander Australians and the rest of the Australian population must be closed. It is not acceptable in 2007 for any Australian to have a 1920s’ life expectancy. The gap in life expectancy must be closed within 25 years.

I’m just saying Prime Minister Rudd has a lot of work to do. A lot can be left behind in 11 years of government by a neo-colonialist tit like John Howard.

Free Rice update

Which is to say, an update on free rice. From Lance Wiggs’ blog:

There have been 1.2 billion grains given out so far. That’s 120m correct answers – call it 130m pageviews.

At a CPM ($ per 1000 impressions) of, say, $20, that’s $2.6 million in income. At a CPM of 10 that’s $1.3m. They feel like a good range, but really I’m just guessing here. Does anyone know what sort of rates these guys would be paying? I’m confident that the revenue is at least $1m though – it could be much higher, but as you see, it will not be lower.

Rice is light: 1000 grains is about 26 grams, so 10 grains is about 0.26 grams.

Rice is cheap: 1 bagged metric tonne is $350, FOB (in the ship) at source.

So 1.2 billion rice grains is about 3,120 tonnes, or $1.09m FOB.

Therefore the site owners are making everything above a CPM of about $8.

Advertisers – if you are paying more than that, then you are enriching one John Breen, who is a very smart cookie who just happens to have also collected $1m for global poverty efforts.

I love this, and I love the moral dilemma aspect as well. Is it right to enrich John Breen when you are also enriching poor children?

I agree with him, both on the matter of the moral dilemma, and on the matter of its being worth the “entertainment premium” fairly clearly going to other people. Humans do not donate all that much: the “warm glow” is worth only so much of our money and/or time. Moreover, the human brain does not deal with large numbers well (large numbers such as the number of people living in poverty and food insecurity):

Psychologists have long observed that our ability to discriminate among quantities is finely tuned when dealing with small amounts but quickly degrades as the numbers get larger. Our ears work that way, too. When a very quiet sound becomes slightly louder, we detect the difference right away. But once a noise is really loud, it has to increase dramatically for it to seem “louder.” The same holds true for our judgments of weight and, of course, less tangible quantities like money. We’ll break the bank to save Baby Jessica, but when half of Africa is dying, we’re buying iPhones.

Which brings me back to Gates. The guy is practically a social cripple, and at times he has seemed to lack human empathy. But he’s also a geek, and geeks are incredibly good at thinking concretely about giant numbers. Their imagination can scale up and down the powers of 10 — mega, giga, tera, peta — because their jobs demand it.

So maybe that’s why he is able to truly understand mass disease in Africa. We look at the huge numbers and go numb. Gates looks at them and runs the moral algorithm: Preventable death = bad; preventable death x 1 million people = 1 million times as bad.

So perhaps we need stupid wristbands and clever internet games to get the time and money out of us. Whatever it takes.

I recommend to you one of the bloody entertaingingest (that was deliberate) ways to waste spend your time.

free ricefree ricefree ricefree rice

Originally found over at the Rolling Stone National Affairs blog, is an advertiser-sponsored site that donates money to the United Nations World Food Program according to page views – you get page views (and accumulate donated rice) by cycling through vocabulary words. How can that not be fun?

They did ask me what Kohl was, though, which seemed a bit unfair – I’m a boy.

Who pays for the donated rice?

The rice is paid for by the advertisers whose names you see on the bottom of your vocabulary screen. This is regular advertising for these companies, but it is also something more. Through their advertising at FreeRice, these companies support both learning (free vocabulary for everyone) and reducing hunger (free rice for the hungry). We commend these companies for their participation at FreeRice.

If FreeRice has the rice to give, why not give it all away right now?

FreeRice is not sitting on a pile of rice―you are earning it 10 grains at a time. Here is how it works. When you play the game, advertisements appear on the bottom of your screen. The money generated by these advertisements is then used to buy the rice. So by playing, you generate the money that pays for the rice donated to hungry people.

Who distributes the donated rice?

The rice is distributed by the United Nations World Food Program (WFP).

The World Food Program is the world’s largest food aid agency, working with over 1,000 other organizations in over 75 countries. In addition to providing food, the World Food Program helps hungry people to become self-reliant so that they escape hunger for good. Wherever possible, the World Food Program buys food locally to support local farmers and the local economy. We encourage you to visit the United Nations World Food Program to learn more about their successful approach to ending hunger.

Jump right in. I’m clearly performing like someone who’s been at their various economics degrees for 10 years – my vocabularly is not what it used to be.

Hardships increase in isolated Gaza

According to the United Nations, an average of 74 truckloads of goods a day entered Gaza in October, down from 253 truckloads a day in April. The consequences have meant a shrinking economy coupled with a severe increase in prices even for basic foodstuffs like flour, cooking oil and chicken.The average income of nonrefugees in Gaza has dropped 22 percent since June and 70 percent of them are now existing on less than $1.20 a day, compared with 55 percent in June, according to the World Food Program.Since June, wheat prices have increased 40 percent, bread prices 20 percent and rice 15 percent. But because of the inability to export, the prices of vegetables have fallen 30 percent or more, further undermining the agricultural sector.

This is not to suggest the state of Israel is inherently at fault (full disclosure: I used to ‘be’ a part of the Palestinian Solidarity Campaign – I lost interest after little of the plight of women made general discussions. I’m in favour of everyone going back to the 1967 Green Line – including returning Palestinian land and water to them. If anyone thinks the security ‘fence’ has any other purpose, they’re crazy). Hamas is a hostile presence. Perhaps legitimately, perhaps not. This is like saying the drug dealers/runners in urban slums have a legitimate complaint against the government – but they’re still working against the progress of their community, in the long run.

Ghassan Matar, 25, is a Fulbright scholar who has had to delay his studies in business information systems at Central Michigan University. “No such field of studies exists in Gaza,” he said. “My dream is to focus on outsourcing in software, so I can invest in Gaza’s human resources. Such a field can flourish even if the crossings are closed.”

But Matar, who was supposed to start school Aug. 27, is stuck in Gaza. The university, he said, has agreed to let him begin in January. “I’m afraid to lose this chance,” he said. “I’ve worked two years to get this scholarship.” He describes himself as apolitical. “I blame all the parties,” he said.

The issue of the students has embarrassed the Israeli government, which is facing lawsuits and bad publicity for denying ordinary Gazans the chance to study in the West.

His attitude is about correct. Water, land, religion – nothing can make people this irrational, for this long (to my mind, born and raised white in Australia – what would I know? I never even went hungry until I was a student, living on my own).

With closed borders, there is an interesting quirk to this inflation: there are no external markets for domestically-produced Palestinian goods, depreciating their prices; there are no domestically-produced substitutes for goods imported from/via Israel, inflating their prices considerably. Meanwhile, it seems Hamas isn’t so populist, after all:

… the problems of the students can seem minor compared to other restrictions. Marwan Sawafiri, 40, who runs the Sawafiri for Chicken shop in Gaza, said the price of chicken has risen about 40 percent since the end of Ramadan in mid-October, when Israel stopped allowing special shipments for the holiday.

Gazans raise chickens, he said. But the chickens are hatched from fertilized eggs imported from Israel and fed with Israeli chicken feed. “Now we get many fewer imports, so the prices go up,” he said.

Coca-Cola and packaged fruit juice have disappeared from shops, and a printer cartridge costs $60. Even the price of flour, considered a necessity by Israel, has gone up 40 percent, said Muhammad Hassouna, 30, who runs his family’s grocery.

Hamad Dahdar, 25, the chief butcher at a nearly empty meat shop, has been told that he can work only 20 days a month, to save other jobs. His income has gone down by a third, to $200 a month, “and you can see, we’re just standing around,” he said.

Stewing beef has gone up a third in price, “and people who once bought a kilo buy only a half,” he said. Beef and lamb are also imported through Israel and quantities are down. But taxes are not. The Hamas administration in Gaza, cut off by the Fatah-appointed government in Ramallah, is taxing imports, from cigarettes to beef. “Now we have two governments,” Dahdar said. “And both of them want to collect taxes.”

I would say that the problems of the students is, long-term, one of the greatest. Without advances in human capital, Palestine isn’t going anywhere. That said, yes – there needs to be a Palestine and Palestinians around, when they graduate. These days, it’s hard to see.

At issue is Government (big-G). Israel is not meeting its international obligations as a military occupier: the wall, the water, the Green Line, etc. This is their crime. However, even back through Arafat, our crime, as that “international”, has been to pretend that the Palestinian Authority had any sort of capability when it came to civil administration. I honestly believe Palestine will not improve in any real sense until a Kosovo-like solution is imposed.

Frankly, I wouldn’t even mind if the Israeli government moved in (I’d prefer peacekeepers and, again, whether or not I mind is hardly the point. I don’t pretend it should be), as long as they did it properly and according to civic obligations of any modern government to the people who either elected it or fell before it. Neither Hamas nor Fatah have ever met that obligation, either, and don’t look like doing so anytime soon.

Looking at Palestine as an economy, which (a) we should, but (b) I will, being an economist, the problem is textbook, in terms of the first principles for long-run economic growth: establishing stable civil administration (not, necessarily, government), establishing the rule of law and protection of private property (getting back to land, water and the wall), investing in human capital (health and education) and social capital (water, electricity, community) – none of these are being undertaken, but no economy moves without them.

If Fatah or Hamas cannot or will not do it, Israel should. If Israel cannot or will not, the rest of us should. Palestinian (and Israeli! Please do not think I’m incognisant of the two ways of this horrible street) people are just people: they want peace. They want their families, they want jobs and schools and for their children to do better in life than they did. They want no taxation without representation. I’m sure they’d prefer to be governed by their own people, but they probably want all those other things first, and they want them at least as much as we wanted them, back when we got them (more easily, I might add – we never had a sea of AK-47s making things hot).

The same goes for many other countries, all over the globe, and that’s the problem. We could do it, easily (although our performance as military occupiers might make one, rightly, hesitate). We’d just have to, probably, and certainly in the near-term, make do with less ourselves. And, then, what would our media and politicians make their money off?