Government, energy & environment

No job, no money and no prospects

We have held back from writing about the Arab Spring because, in our view, it is still far too early to judge whether recent events constitute a cohesive Arab uprising, which regimes will eventually collapse, and what will replace them. However, a few months ago there was an excellent series of articles in Foreign Affairs magazine, one of which, Demystifying the Arab Spring, began:

“In Tunisia, protesters escalated calls for the restoration of the country’s suspended constitution. Meanwhile, Egyptians rose in revolt as strikes across the country brought daily life to a halt and toppled the government. In Libya, provincial leaders worked feverishly to strengthen their newly independent stake. It was 1919.”

This passage can be interpreted in many ways. First, while history doesn’t always repeat, it sometimes rhymes. Second, revolutions occurred well before Twitter, Facebook and mobile phones were invented.For example, events in Tahir Square in 1919 were sparked by the reporting of a speech made by the then US President, Woodrow Wilson, on the telegraph rather than the internet. Having said this, the use of social media was clearly significant, but so too were a number of other factors.

Putting aside the individual sparks that created these protests (not confusing catalysts with causes) what Tunisia, Egypt and Libya have in common are five things. First ageing, autocratic and out of touch leaderships. Second, restrictions on individual freedom, including press freedoms. Third, high levels of corruption. Fourth, high numbers of well-educated young people and, fifth, very high levels of youth unemployment.

To this list add access to mobile communications and social media, demographics (especially the percentage of young people aged 15-29), the provision (or lack) of basic services, and possibly food costs and inflation. In the case of Egypt, the army also played a critical role.

Despite the commonalities, each case is different in many ways and the path each country eventually takes may diverge. However, the main lesson is that, if people, especially young, educated people, do not feel they have any long-term prospects, or do not share in the opportunities afforded to others, there will be trouble. Leaders of other nations outside the Middle East take note.

A critical path

You might think it odd to use a painting of Mao Zedong to promote a Chinese restaurant like the “Red Leader” Hot Pot Eatery. Mao was, after all, responsible for starving at least 30 million Chinese between 1959 and 1961. But perhaps the staff, dressed up as Mao’s Red Guards inside the themed eatery, are too young to see the irony. Welcome to the new China, a land of complex contradictions.

2011 marks the 90th birthday of the founding of the Chinese Communist Party (CPC). The party was set up to promote the interests of the ordinary working class, for example, staff washing dishes or waiting tables at the Hot Pot Eatery. But the CPC is now widely seen in China as representing an entrenched elite. It is run by people who eat in restaurants where a single meal costs more than many workers make in a year. Only 9% of CPC members are now classified as ‘workers’, while the other 91% are government officials, businessmen, college graduates and the military. No wonder the current Chinese Prime Minister, Wen Jiabao, has described China’s economy as: “unstable, unbalanced, uncoordinated and unsustainable”.

One should not forget that what was once an isolated rural nation is now the world’s second largest industrial economy, or that millions of Chinese have been lifted out of severe poverty by the actions of the CPC. But a primary objective of the CPC has always been its own survival and the CPC will go to great lengths to silence any dissent. And herein lies a potential problem. The unwritten social contract, initially drawn up by Deng Xiaoping, is that anyone is China can do what they like so long as they do not threaten the state or question the CPC’s monopoly of power. This works if most people are getting richer.

But what if China’s new middle class becomes more demanding or a severe economic downturn creates a decline in wealth? Or what happens if the government comes under more pressure from the working class to increases wages or distribute the new wealth more evenly?

So far things have remained relatively calm. But as China prepares for a change of leadership in 2012, some critics are starting to argue there needs to be a change of direction. The Chinese economy needs to shift from being export-led to focusing more on internal consumption. More problematic is what happens if the recent hyper-growth comes to an end? What happens if the unwritten social contract starts to be openly challenged and calls for greater democracy are met with resistance?

One result could be serious social upheaval, which is probably why China now spends more on domestic security than external defence. The recent Arab revolutions have clearly spooked the CPC leadership and, on top of this, social inequality is getting worse not better. (The number of people in relative poverty - those with less than 50% of the median income - grew from 12.2% of the population in 2002 to 14.6% in 2007).

Last, China’s demographic dividend – an abundant supply of cheap labour that underpinned the export-led manufacturing boom – is now ending. Critics argue that China is losing competitiveness in labour intensive industries while failing to develop new sources of growth from value-added innovation. In other words, being the cheapest is not a sustainable long-term position.

The future of Universities

A new white paper looking at the UK’s university sector has shed some light on how further education might evolve in the UK. In the middle – the squeezed middle – are the traditional universities and especially the old polytechnics recently re-branded as universities. These are likely to come under attack, from the elite universities that are free to set their own fees and attract students from a global market, and from the new insurgents. The latter are mostly for-profit companies, such as Kaplan and Pearson that aim to build market share through non-traditional business models and pricing (eg, part-time degrees and distance learning).

Some members of the squeezed middle will do well, especially those that focus on niches or stress the quality of their courses or overall student experience. Others are likely to struggle or, in extreme cases, go to the wall. The final result is more choice and deregulation should mean more innovation. However, one could argue that there is still no alternative to the idea of purely academic education.

What’s missing, some argue, is what the old technical colleges used to offer – somewhere for people to go if they prefer to use their hands rather than their heads. Similarly, modern apprenticeships are sadly lacking. This means many young people get pushed into courses (and jobs) that don’t suit them or feel they have failed because they didn’t get into university. Time for a rethink.

The future is bright, it’s floatovoltaics

What can the owners of agricultural lakes, mining ponds, reservoirs, hydroelectric dams and canals do to make their assets more productive? One idea is to float solar panels on top of them to generate power. For example, an Australian company called Sunengy, is interested in developing floating solar farms in regions with abundant water resources but troubled by electricity shortages. SPG Solar, also interested in the same technology, says that when they hook up 2,016 floating panels, this should generate one megawatt of electricity at peak output.

There’s a cooling effect at work here too. Putting panels on top of still water inhibits the growth of algae by partially blocking sunlight. Farmers who own a dam during a drought can put panels on top of whatever water they have to keep their asset productive. This obviously links with geo-engineering and the idea of floating tiny mirrors on the world’s oceans to reduce warming.