1. Rising fuel costs make outsourced manufacturing less desireable. The cost of shipping manufactured goods from low-cost countries such as China is now such that it’s beginning to outweigh the price benefits of low wages. As a result, manufacturers in Western countries are becoming competitive again.
2. If the rising cost of oil is reversing the outsourcing of things, there is no such barrier to the outsourcing of knowledge work. Students in the UK have been found outsourcing their assignments to graduates in lower-cost countries. Universities are stumped for a solution. “The problem is definitely getting worse, it is hard to detect, the number of these sites is spreading all the time and it is impossible for us to monitor all of them.”, says one administrator.

Will these two trends develop and become persistent? The consequence will surely be a globalisation very different from what we first anticipated - manufacturing becoming strong and locally-based again, while intellectual work becomes the most competitive (and dishonest?) sector…

The worrying thing is whether it can last - not just here, but everywhere. Looking at my RSS feeds, I see many worrying trends:

• the price of oil is rocketing - $200/barrel soon? - and that’s affecting our entire society. In the US, the consequences will be felt most of all; Paul Krugman talks about this in today’s IHT, for example.
• One consequence is the rising price of food, for example, partly because so much agriculture is based on oil-derived fertilisers, partly because of the substitution of crops for ethanol production instead of food crops. (This situation may soon get much, much worse as the Ug-99 fungus looks set to devastate wheat production throughout Asia and the Middle East).
• The rise in food prices has already sparked food riots in Africa, Asia, and the Caribbean. What happens when people realise that their government is not capable of ensuring affordable food? Of course, they lose faith in the government and, eventually, seek more effective affiliations - perhaps criminal, or insurgent… and these groups are getting more and more powerful, with sometimes international or global influence. This is the kind of trend that John Robb is documenting in Global Guerillas, and it can make worrying reading. Just as a thought, who do you think will be strengthened by food riots in Afghanistan?

So the future looks tough. I don’t think it will necessarily be the Grim Meathook Future that did the rounds a year or two back; there will be technical fixes, and new discoveries, and political initiatives. At least, I really hope there will. Still, it’s worth reading and comparing two IHT articles on transition from abundance to scarcity and self-reliance. Which one would you choose for yourself?

1. Voluntary simplicity re-emerges. A renewed trend in the US of affluent, educated professionals shedding their possessions, and opting for a simpler lifestyle as on-line homesteaders, or techno-nomads.
2. Living off the land in a post-Soviet world. When their economic and political world collapsed, well-off skilled workers in Kyrgzstan were forced to become subsistence farmers. They were the lucky ones, perhaps, with land and clean water.

Like I say - which transition would you prefer? What’s the best way to prepare?

I spent a long time last night  trying to submit my Singaporean tax return. My last employer had entered all the necessary details, so that was already on the system. Very convenient. However, the job before that had overlapped into 2007 slightly, and that employer hadn’t been connected with the tax system, so I had to amend the form to add on that income, subtract CPF, etc.

Except - it wouldn’t work. Every time I tried to submit, I was stopped by a pop-up that informed me “Only positive numbers are accepted”. Try what I might, this stumped me. There was nothing in the FAQ.  Why on earth was the system thinking that I was inputting negative numbers?

Eventually, after much frustration and wasted time, I had an inspiration. What if I took off the 67 cents from the end of the amount..? Bingo! It worked!

Note to the retard who wasted my time - find a dictionary, please! “Positive number” and “round number” are very different things!

Sometimes I really have to wonder why Singapore persists in calling itself an English-speaking country…

This recession, which was sparked off by the US housing bubble and compounded by bankers’ recklessness, has been a long time coming. Steven Roach at Morgan Stanley was warning about it even before I took my MBA, so it’s not as if we haven’t seen it coming.

What has come up swiftly and without much warning, and may yet bite us hard, is the shortage of food staples - rice, especially. With a number of media sources warning of food riots and social instability as a consequence, this is likely to be tough all around.

The people who are going to suffer the most are the ones Niti is investigating at the bottom of the pyramid - and this is going to be very different from anything we’ve seen before.

I remember, as a child, seeing the pictures of the famine in Cambodia, and the appeals for public donations. I helped to organize a Blue Peter Bring & Buy sale at my primary school to contribute. Soon afterwards, the focus shifted to Ethiopia. Here I oversimplify horribly, of course, but in essence the famine victims here had to be essentially passive, waiting for external food aid to arrive.

In a lesser case of food shortage, citizens in the old Soviet Union had to opportunistically join queues as soon as they saw one forming, hoping it meant that a delivery of food or other scarce goods had just arrived - even when (famously) they often didn’t know what they were waiting for until they reached the head of the queue. This would just be luck of the draw.

What difference will it make when the poor, who are most desperately affected by food shortages, all have mobile phones? Will governments and aid agencies use it to inform people of deliveries, and in this way alleviate anxiety? Will be see spontaneous, SMS-directed “hunger mobs” flash-forming on the rumour of food availability (either delivery, storage or hoarding)? And what will it mean for us when instead of seeing appeals for donations on TV, the hungry millions are calling us for help personally?

RMB99: advert next to public newspaper board. These boards are still pretty common around Beijing, with the day’s paper there for passersby to read.

RMB 199, in the window of a phone shop at Wudaokou. With a constant influx of new students - Chinese, Western, and (in large numbers) Korean - the phone market is intensely competitive here. A cluster of shops make it a great place to look for that new phone, regardless of budget.

A Motorola Smart Rider Phone:

To survive, a large-scale guerrilla movement, or insurgency, must have a message, a purpose, that resonates to at least some degree with the feelings and beliefs of the population in which it exists. There must be enough people who are broadly sympathetic, in order to supply recruits, shelter, and material support.

What does it take to turn the people against the guerrilla?

The people of Afghanistan know what the Taliban are like. The Taliban used to rule the country, and their treatment of women, their bans on popular culture, their public executions, and so on, were not enough to make the people turn against them and stand up to them.

After the American-led invasion, the Taliban were forced to retreat to their heartlands, and the areas of Pakistan where they had deep support. And yet, people there are suddenly prepared to stand up to the Taliban, with force if need be.

What happened?

The Taliban destroyed mobile phone masts.

Claiming that the Pakistani military, and Western armed forces, were tracking militants by locating their phones, the Taliban opted to take down the network - and provoked an immediate and forceful backlash from the ordinary people, for whom the mobile phone has been a life-changing technology. Even the Taliban’s own fighters are angry.

According to Afghanistan’s Minister of Telecommunications:

“The people said please … repair the infrastructure and we will guarantee the security of the tower,” Sangin said. “We believe that if the Taliban continue with these kinds of activities the hatred will increase against them, and as a result we are awaiting a change in their policy.”

Of course, mobile phones are no panacea. We’ve seen plenty of examples of their use to enable terror and death. However, this example clearly shows how the mobile phone is successfully improving the lives of impoverished communities in developing countries, and bringing them the benefits of integration with the wider world.

Amongst the foreigners here in Beijing - I hesitate to say ‘expatriates’, which is too loaded a term - there’s a common meme that Beijing now is like Paris between the wars, a society in flux, open to new ideas, prosperous whilst still cheap to live in; I have to agree, and it means that this city - and Shanghai, and Kunming, and Xi’an, and many others - are drawing in young, creative, adventurous people, who are engaging in a fertile exchange with the local scenes. Many of these people (I suspect) will be culturally influentual in the future, and are being shaped and influenced by China.

So, having felt all that for a while, it’s really interesting to see something on the same lines appear in the IHT today: For a new generation, land of opportunity may lie in China, not the US.