3 great forces changing China’s consumer market

-->


For roughly three decades, China’s booming economy has offered consumer product companies some of the world’s greatest growth opportunities. China’s economic slowdown and jittery markets have raised worries that this growth story is drawing to a close. In early November 2015, for example, the government lowered its official five-year annual GDP growth target to 6.5%, the slowest pace since the 2008–2009 global financial crisis.

China’s economy is indeed struggling through a significant structural transition, and consumption isn’t rising as fast as it did during the peak boom years. But make no mistake: although the pace is slower and the course is bumpier, consumption growth is still tracing a staggering trajectory. China’s consumer economy is projected to expand by about half, to $6.5 trillion, by 2020—even if annual real GDP growth cools to 5.5%, below the official target. The incremental growth of $2.3 trillion alone over the next five years would be comparable to adding a consumer market 1.3 times larger than that of today’s Germany or UK. (See Exhibit 1.)

 

The Chinese consumer market, moreover, is in the midst of a transformation that offers tremendous new opportunities. Three great forces are ushering in this transformation: the rise of upper-middle-class and affluent households as the drivers of consumption growth; a new generation of freer-spending, sophisticated consumers; and the increasingly powerful role of e-commerce.

Research by The Boston Consulting Group and AliResearch, the research arm of Alibaba, China’s largest e-commerce company, found that these three forces of change will profoundly reshape China’s economy and consumer market over the next five years. Through 2020, 81% of consumption growth will come from households whose annual income is more than $24,000. Furthermore, consumers 35 or younger will account for 65% of growth. E-commerce will become a far more important retail channel, driving 42% of total consumption growth, 90% of that growth coming from mobile e-commerce.

The types of products fueling China’s consumer boom will also change. Services will overtake goods as the chief engine, accounting for 51% of incremental growth over the next five years. Demand for premium goods and services that enhance a personal sense of well-being—such as healthy foods, education, and travel, rather than daily necessities—will accelerate.

Companies will need a new playbook to capture the coming wave of growth. The strategies of the past will no longer be relevant.

There are several reasons to be bullish on Chinese consumption, which we project will grow 9% annually through 2020. One is that incomes are rising. Per capita income in China has been increasing at an 11% annual pace since 2010. With China’s job market tight, average wages should continue to rise over the near term as the economy shifts from low-wage manufacturing industries to better-paying service and high-tech industries.

Rising incomes—and optimism that incomes will continue to rise—have kept consumer sentiment at its highest levels since 2008–2009. (See “A Tale of Two Chinese Consumers,” BCG article, June 2015.) There has been widespread concern that recent declines in China’s stock market will dampen consumer spending. We believe such worries are exaggerated. After all, only 15% of urban households have stock investments. Furthermore, according to a survey of 2,000 Chinese consumers that BCG’s Center for Customer Insight conducted after the stock market crash, macroeconomic trends have thus far had minimal influence on consumer sentiment. Only 7% of Chinese consumers responded that stock market trends would influence their decision to spend more or less. Just 8% also cited housing-market trends. Respondents indicated that other factors would be more influential: 35% cited rising incomes, for example.

Another reason for bullishness is that average consumers are spending more, and demographic trends and the expansion of e-commerce indicate that they will continue to spend more.

To understand the implications of the three forces that are changing China’s consumer economy, BCG and AliResearch analyzed the relationships of demographic, social, and technological trends and consumption.

One key finding: a two-speed consumer economy is emerging in China. (See Exhibit 2.) High-speed growth is occurring in upper-income brackets, among the younger generation, and in e-commerce channels, but consumption growth is decelerating among lower-income and older-generation consumers and in traditional retail channels.
 

The Rise of the Upper-Middle Class. During the past few decades, China’s consumer economy has been powered by the ascent of hundreds of millions of people from poverty to an emerging-middle class, which includes households with annual disposable income of $10,001 to $16,000, and to the middle class, those with incomes of $16,001 to $24,000.

China is entering a new era. Consumption growth will be driven by the dramatic rise of upper-middle-class households ($24,001 to $46,000 in annual disposable income) and affluent households (more than $46,000). We project that by 2020, the number of upper-middle-class and affluent households will double to 100 million and account for 30% of all urban households, compared with 17% today and only 7% in 2010. Furthermore, upper-middle-class and affluent households will account for 55% of Chinese urban consumption and 81% of its incremental growth over the next five years.

Consumption among upper-middle-class and affluent households is growing at 17% per year and, by 2020, will account for $1.5 trillion in incremental spending in urban China. That compares with a 5% growth rate among emerging-middle-class and middle-class consumers. Even though their share of urban consumption will drop from today’s 48% to 39% in 2020, such households will continue to make up a market that is too enormous to ignore. Because more of today’s low-income households will enter the lower rungs of the middle class over the next five years, these segments will still account for roughly half of urban households. The emerging-middle class and middle class will remain the biggest consumers in many categories, particularly such fast-moving consumer goods as personal-care products and detergents.

Companies will have to venture far beyond China’s biggest metropolitan areas to win the loyalty of upper-middle-class and affluent households. There are high concentrations of such households in more than 2,000 Chinese cities. We estimate that to reach 80% of this market in 2020, companies will need to establish their presence in 430 cities.

We project that the number of upper-middle-class and affluent households in tier 1 cities—huge metropolises such as Beijing, Shanghai, and Guangzhou—will increase by 10% per year through 2020, reaching 30 million. But the fastest growth will be in small cities. Of the 46 million additional upper-middle-class and affluent households that will emerge in China by 2020, half will likely be located outside the top 100 cities. We classify these cities as tier 4 or lower.

The Emergence of a New Generation. People born in the 1980s, 1990s, and the first decade of this century—a segment known in China as the “young generation” as opposed to the “last generation,” consumers who were born in the 1950s, 1960s, and 1970s—are poised to become the dominant force in the consumer market. Consumption by young-generation Chinese consumers is growing at a 14% annual rate—twice the pace of consumers older than 35. The share of total consumption by the young generation is projected to increase from 45% to 53% by 2020.

Young-generation Chinese spend more than their elders. Most Chinese older than 35 have lived through periods of instability and have experienced challenging economic circumstances. They are known to be frugal. The young generation is more motivated to spend. Our data shows that upper-middle-class consumers 35 and younger average 40% higher spending, across a range of product categories, than last-generation consumers with similar incomes. In a recent BCG global consumer survey, 42% of Chinese aged 18 to 25 disagreed with the statement, “I feel I have enough things and feel less the need to buy new ones.” By comparison, 36% of U.S. and EU respondents of that age-group, 32% of Japanese, and only 26% of Brazilians also disagreed with the statement.

Young-generation Chinese also tend to be more sophisticated consumers than those older than 35. They are eight times more likely to be college graduates. They travel overseas twice as much. And they are more brand conscious than older Chinese and U.S. consumers of the same age.

The Growing Role of E-Commerce. One of the most revolutionary changes in the Chinese consumer economy has been the astounding growth of e-commerce. In 2010, online transactions made up only 3% of total private consumption. The number of Chinese online shoppers has since nearly tripled, to 410 million, as has the amount that the average consumer spends online. Online channels now account for 15% of private consumption.

Over the next five years, e-commerce could become an even more important retail channel in China. Private online consumption is projected to surge by 20% annually through 2020, compared with 6% annual growth in off-line retail sales. This means that e-commerce will account for 42% of growth in private consumption. By then, China’s online consumer market will have grown to $1.6 trillion annually—24% of private consumption. (See Exhibit 3.)


Mobile e-commerce, which already accounts for 51% of all online sales in China, compared with a global average of 35%, will grow even faster. On Taobao, a Chinese e-commerce marketplace founded by Alibaba, the share of sales transacted though mobile devices rather than PCs rose from 51% to 62% within the first three quarters of 2015 and reached 68% on the year’s Singles Day (November 11, 2015), one of China’s biggest shopping days because retailers offer special promotions. By 2020, mobile e-commerce is projected to account for 74% of all online sales in China.

In addition to offering better prices and wider selections, e-commerce actually stimulates new demand in China by filling many needs that aren’t being met at brick-and-mortar stores. For example, according to Taobao, spending by the average e-shopper on organic and imported food and beverages has expanded eightfold over the past three years. Many popular online offerings, such as organic baby foods, rice, and tea, aren’t carried in local stores.

Chinese consumers also buy higher-priced products online. Our research found that overall consumption of home care products, packaged foods, and personal-care items increases only moderately as Chinese households become more affluent. But according to Taobao sample data, online purchases in these categories increase by around 150% when Chinese households enter the upper-middle class. Online purchases nearly double again among affluent households. In large part, that’s because these consumers can find more distinctive, premium-priced products online.

E-commerce drives consumption growth by helping companies overcome distribution challenges associated with reaching a national market and by dramatically expanding the reach of their brands. We analyzed Taobao sales of several leading premium skin-care brands that already have fairly wide coverage in department stores. We found that only 55% of Taobao’s online sales originated in cities that have those goods physically available in stores; 45% of sales were from the thousands of cities that don’t have those goods in stores. The trend was similar for fashion apparel and baby education products.

The three forces of change will profoundly alter the landscape of China’s consumer market. The growing role of richer, younger, Internet-savvy consumers will boost demand for different kinds of products purchased through different kinds of retail channels. Indeed, this emerging consumer class will transform the structure of China’s economy.

Services will become the main economic engine. Powered by the growth of the upper-middle class, spending on services in China is projected to increase 11% annually through 2020, accounting for 51% of all growth in urban consumption. Spending on physical goods, by contrast, is projected to grow by 8% per year.

One reason is that wealthier consumers spend a disproportionately greater share of their incomes on services than do lower-income consumers. Although the average income of upper-middle-class and affluent households is 2.5 times higher than that of emerging-middle- and middle-class households, the wealthier spend 3.3 times more on education, culture, and entertainment. Still, upper-middle-class and affluent households spend only 1.8 times more on physical goods than emerging-middle and middle-class consumers.

The rapid development of digital channels will further enable the growth of services. Only six months after launching its lifestyle-service channel last year, Taobao had customers in 300 cities. Most were 35 or younger and were making online arrangements for home-based services. Each day, for example, 2,600 house cleaners were booked.

Value growth will replace volume growth in many categories. The huge expansion of China’s emerging-middle class over the past decades has fueled rapid revenue growth in many categories, especially fast-moving consumer goods. Volume growth in such product categories is now slowing as the market approaches saturation. Approximately 70% of such households now consume ready-to-drink tea preparations, for example, compared with fewer than 40% in 2007. Spending for many higher-value products, however, is ready to accelerate as a result of the growth of the upper-middle class. According to our analysis, as consumers enter this income segment, their consumption of luxury goods, wine, automobiles, and overseas travel increases sharply.

Consumers will engage more with brands. Young Chinese consumers are among the world’s most brand conscious. On average, the Chinese consumers aged 18 to 35 we surveyed were aware of 20 skin-care brands, for example. U.S. consumers in the same age range were aware of 14. Also, 49% of young-generation Chinese said that they advocate for brands, either personally or online, compared with 34% of U.S. consumers of similar age. Young Chinese also have a greater emotional connection with brands. A top priority of 18- to 25-year-old Chinese consumers buying skin care products is that the brands should “fit their personality” and convey that they are “young and energetic.”

In another sign of their growing sophistication, young Chinese are increasingly open to local brands. In our experience, first-time buyers of certain goods in emerging markets trust well-known international brands more than domestic ones. As consumers gain experience and become more knowledgeable about products, they explore alternatives. For example, of the Chinese consumers we surveyed in 2015, 46% said they prefer Chinese-brand home appliances—a 9-percentage-point increase over the response to that question in our 2007 survey. Similar shifts in preference were reported for consumer electronics, apparel, and skin care brands.

E-commerce, especially mobile, will transform the marketplace. Our research indicates that e-commerce will propel Chinese consumers to purchase different kinds of products—and in greater variety. Currently, there are only five categories in which at least 40% of e-commerce shoppers make purchases: casual wear, casual shoes, handbags, snacks, and smartphones. By 2020, we project, there will be 15 such categories, including small home appliances, financial services, cosmetics, and formal shoes.

Online consumers will also buy on a more global basis. Cross-border purchases are projected to account for 15% of total e-commerce in China by 2020, and they will be more varied. E-commerce is also reconfiguring the Chinese marketplace, unlocking purchasing power in more remote regions. According to Taobao, all ten cities with the highest market penetration of mobile e-commerce during the 2015 Singles Day campaign are in central and western China. The daily rhythms of China’s marketplace are changing as well, because consumers can shop online whenever they wish. Some 33% of Taobao’s online sales are transacted before 10:00 a.m. and after 8:00 p.m.

The growth of e-commerce doesn’t mean companies can ignore brick-and-mortar retail. As in developed economies, online and off-line retail are becoming increasingly intertwined. A BCG study found that before they decide to make a purchase, average Chinese consumers make contact with a product through seven different touch points, such as store displays, product promotions, or social-media comments. To capture China’s younger, more affluent consumer market, therefore, companies will have to offer a seamless experience across retail channels.

The demographic, social, and technological forces redefining the landscape of China’s consumer market will pose both huge opportunities and competitive challenges for companies. Companies that had an early start in China no longer necessarily have a competitive advantage: in many cases, they are in product categories with little appeal for the young and have been slow to adapt to new retail trends.

To win in China’s new consumer market, companies must first keep in mind that even though the era of predictably rapid, easy growth is fading, China will remain one of the world’s most important growth markets. China, therefore, must remain a priority.

Because the nature of consumption is changing dramatically, however, the winning strategies of the past are becoming outdated. Greater affluence, a new generation of consumers, and the rise of e-commerce will shift the action to different product categories, branding strategies, and retail channels.

It will be more important than ever before for companies to be highly strategic in the way they pick targets. The days are over when demand in China for virtually anything seemed insatiable. Even though overall consumption will continue to boom in China over the medium term, targeting the wrong income segment, playing in the wrong categories, and being underrepresented in the fast-growing online channels will be a formula for slow growth.

The encouraging news is that it is not too late to develop a winning Chinese growth strategy. The product preferences and brand loyalties of the upper-middle class and affluent are still being defined. With China’s economy entering an important transition phase, the ride over the next five years is unlikely to be smooth. The winners will be the companies that pursue sound strategies that are in tune with the forces of change—and stick with those strategies despite the bumpy road ahead.

Acknowledgments

This report would not have been possible without the efforts of our AliResearch partners Fei Song, Zhoupei Xie, Roy Wu, Chang Liu, Baoying Zhao, Zhengwei Jiang, and Yang Liu, as well as our BCG colleagues Stefani Bai, George Qiu, April Gu, and Heidi Huang. We thank Pete Engardio for his help in writing this report, as well as Katherine Andrews, Gary Callahan, Elyse Friedman, Kim Friedman, Abby Garland, Jessica Melanson, and Sara Strassenreiter for their contributions to its editing, design, and production.

En la prensa del mundo hablan de "papelón" y "humillación" por la falsa detención de los prófugos

The New York Times, la BBC y la agencia Reuters coincidieron en las duras críticas a la comunicación de que Víctor Schillaci y Cristian Lanatta habían sido capturados

"Gobierno de Macri: papelón devino por un intento de ayudar a los asesinos", tituló El Observador de Uruguay

Los medios del mundo no ahorraron palabras para calificar la falsa detención de Cristian Lanatta y Víctor Schillaci. "Papelón", "humillación" y "vergüenza" fueron algunos de los duros términos elegidos para definir el traspié de las fuerzas de seguridad y los funcionarios de los gobiernos nacional y bonaerense.

The New York Times: "Humillada, Argentina dice que aún continúa a la caza de los prófugos"

En base al reporte de la agencia de noticias Reuters, The New York Times tituló: "Humillada, Argentina dice que aún continúa a la caza de los prófugos". Según el artículo, el Presidente fue "humillado este sábado luego de que la Policía Federal admitiera que seguían en la búsqueda de dos de los criminales más notorios de toda Sudamérica".

BBC: "Capturan al asesino prófugo Martín Lanatta en el caso que tiene en vilo a Argentina"

En una línea similar, El Observador de Uruguay tituló: "Gobierno de Macri: papelón devino por un intento de ayudar a los asesinos". En la nota, el medio de Montevideo retomó las declaraciones de la ministra de Seguridad de la Nación, Patricia Bullrich, por la "pista falsa" que los hizo pensar que ya tenían a los tres narcotraficantes prófugos.

Reuters: "Humillada, Argentina dice que aún continúa a la caza de los prófugos"

Por su parte, la BBC tituló la noticia con un lavado "Capturan al asesino prófugo Martín Lanatta en el caso que tiene en vilo a Argentina". Pero en el texto del artículo también incluyó duras calificaciones para el gobierno de Macri. "Algunos corresponsales consideran que la rectificación de la información y que los otros dos hombres sigan prófugos es la mayor verguenza de Macri desde que llegó al poder el 10 de diciembre", define.

Folha de San Pablo: "Tras el elogio presidencial, la policía argentina niega la captura de los fugitivos"

En su edición web, El País de España tuvo una opinión similar: "Los tres peligrosos narco estaban dejando en ridículo a la policía de este país, bajo mínimos en valoración ciudadana por su alto nivel de corrupción e ineficiencia".

Di Tella dixit

En Cuadernos de la Argentina Reciente Nº 6, de la excelente publicación creada por Miguel Talento y Norberto Ivancich, hay una entrevista a Torcuato Di Tella, de la misma rescato este parrafo:

"La Alianza fue un desastre. No porque los radicales no sepan gobernar, como dicen algunos, porque los peronistas tampoco saben gobernar. A mi juicio, el problema básico que tuvo la Alianza es que no logró articulaciones con grupos de interés real que dieran sustento a esa expresión que era de centro. Algo que, además, considero imposible en la Argentina. Porque aquí, para que las alianzas de centro tengan sustentabilidad real: o se hacen con los sectores propietarios o se hacen con los sectores populares. No hay condiciones para una alianza de centro que se asiente exclusivamente en un sector de las clases medias -por más amplio que sea- y en los intelectuales. (…) Sin embargo, sólo con la ideología y los votos no se gobierna. Para gobernar se hace necesario contar con el apoyo de alguno de los grupos de interés real de la sociedad que son, por ejemplo, los grandes empresarios, la clase media, la clase obrera, los marginales, los sindicatos, los grupos intelectuales, la universidad, la iglesia, etc. Si uno no tiene el apoyo de eso, un gobierno es inviable".

Contrato de lectura y semiosis social

Eliseo Verón desarrolla la teoría de la discursividad en donde se analizan los fenómenos sociales (entendidos como procesos de producción de sentido) y cómo los discursos funcionan dentro de una sociedad.


Discurso: es una configuración espacio temporal de sentido, es decir, los discursos sociales son textos, conjuntos presentes en la sociedad que se componen de diversas materias significantes (escritura e imagen, imagen y palabra, imagen y sonido, etc.), y abarcan una forma de abordarlos que remiten a aspectos extra textuales. Este conjunto de operaciones nos da el proceso de producción de sentido, en donde se pone de manifiesto las huellas (de valoración, de interpretación, ideológicas, hasta huellas relacionadas con las condiciones sociales en que fue escrito) que la producción ha dejado en el texto.


Todo discurso se relaciona con sus condiciones de producción y las de reconocimiento a partir de determinadas reglas, Verón las llama pragmáticas.
Reglas de generación corresponden a las gramáticas de producción; reglas de lectura corresponden a las gramáticas de conocimiento (se caracteriza por reconocer esas huellas de las condiciones de producción). Estas reglas expresan “operaciones de asignación de sentido de las materias significantes”.


Para desarrollar la teoría de los discursos sociales, Verón tomo como punto de partida el pensamiento de Peirce, pero lo que le resulto más importante es la terceridad (al orden de las normas) porque supone a la primeridad (le corresponde al orden de las cualidades) y la segundidad (al orden de los hechos).


De estos tres fenómenos solo el segundo es el que se presenta como una categoría real en tanto corresponde a los hechos.

La producción y el reconocimiento de sentido son el objeto de estudio para Verón. Dentro de esta problemática se ubica el análisis del contrato de lectura, donde se encuentran los soportes de los medios de comunicación (diarios, revistas, filmes etc.) que actúan a partir del desarrollo de producción, circulación y reconocimiento. Dentro de estos discursos (según Verón) se pueden encontrar las relaciones entre los soportes y sus lectores.

“A este vinculo que se genera entre soportes por un lado y lectores por otro es lo que Verón llama contrato de lectura y forma dos niveles de funcionamiento del discurso con un soporte determinado, el enunciado que es aquello que se dice, en este caso el enunciador se posiciona de alguna manera frente al destinatario dejando huellas en el enunciado y la enunciación que es la manera en que se dice el contenido, palabras orales o escritas, imágenes, sonidos etc.”.

Umberto eco, concepto sobre lo iconico

Eco, tiene como una de sus metas principales completar de manera no-contradictoria la posición filosófica-semiótica de Peirce, de que no sólo las ideas son signos, sino que "cada vez que pensamos, tenemos presente a la conciencia algún sentimiento, imagen, concepción, u otra representación, que funciona como signo". No obstante, para que estas representaciones puedan ser estudiadas por la semiótica, tienen que estar encarnadas en expresiones materiales externas. Eco expone una serie de argumentos que demuestran, de cierta forma, que el concepto sobre icono no es suficientemente abarcativo. Estos son:


La percepción gracias a la experiencia: El ejemplo en este caso es una imagen en la que una mano ofrece un vaso de cerveza recién servida y helada. Por haber presenciado una escena real de lo mismo sabemos cómo se siente tener un vaso de vidrio mojado por la fría transpiración del vaso a causa de que la bebida que contiene estuvo conservada a pocos grados centígrados por un tiempo, y esa es la única forma que tenemos para entenderlo, si no fuese así, no veríamos más que un vaso de algún material, con cierto líquido dentro y mojado por alguna razón. El icono en este caso reproduce las condiciones de percepción del objeto que le proporcionan los códigos de reconocimiento y las convenciones gráficas.


Códigos culturales: Las características que uno ha de resaltar como más importantes para que el icono de algo o alguien sea representativo son puramente culturales. Por caso, quien no conoce a los caballos, ni asnos, ni mulos, pero si a las cebras, no necesita incluir sí o sí en la semejanza las rayas que a cualquiera de nosotros* le parece esencial para no confundir con alguno de los animales anteriormente nombrados.


Imágenes convencionalizadas: Aunque la experiencia científica del objeto demuestre lo contrario, se le asigna al mismo una representación gráfica con el fin de simplificar la tarea de establecer su semejanza, entre otros motivos. Por ejemplo, el corazón real y el corazón dibujado no son idénticos como debería ser el icono de su signo, se reducen casi todos los signos icónicos, y, sin embargo, lo denota globalmente. El proceso también es aplicable a uno de los ejemplos nombrados por Durero, en el cual el icono de un rinoceronte es una simplificación de como el rinoceronte verdaderamente es (su piel).


Por su estructura: Al dibujar las expresiones faciales en caricaturas, se reproduce cierta relación pero también diferencias de los elementos modelos de la realidad, y aún así comprendemos lo que quiere decir (aunque en la historieta, por ejemplo, tengamos la ayuda de la nube de texto).


En conclusión el concepto de estructura es válido para el signo icónico. La estructura elaborada no reproduce una presunta estructura de la realidad sino que, mediante ciertas operaciones, articula una serie de relaciones-diferencias, de tal manera que estas operaciones, en relación con las de los elementos del modelo, sean las mismas que efectuamos cuando relacionamos perceptivamente los elementos pertinentes del objeto conocido.
Por lo tanto, el signo icónico construye un modelo de relaciones (entre los fenómenos gráficos) homólogo al modelo de relaciones perceptivas que construimos al conocer y recordar el objeto. Si el signo icónico tiene propiedades en común con algo, no es con el objeto sino con el modelo perceptivo del objeto; puede construirse y ser reconocido por medio de las mismas operaciones mentales que realizamos para construir el objeto de la percepción, con independencia de la materia en la que se realizan estas relaciones. Con todo, en la vida cotidiana percibimos sin tener conciencia de la mecánica de la percepción y por lo tanto, sin plantear el problema de la existencia o del convencionalismo de lo que percibimos. De igual modo, ante los signos icónicos podemos afirmar que se puede entender como a tal lo que parece reproducir algunas de las propiedades del objeto representado. En este sentido, la definición de Morris, tan próxima a la del buen sentido, es utilizable siempre que se tenga en cuenta que sirve de artificio cómodo, y no pertenece al terreno científico.

Which wealthy countries have the worst inequality?

Inequality is on the rise in several of the world’s developed economies.




To calculate their inequality indicator (known as the MSII), Morgan Stanley uses a variety of factors, moving beyond the commonly used GINI coefficient to include measures of wage dispersion, workplace inclusion, health status and digital access. The report argues that this multifaceted approach allows for a more nuanced view of inequality.

The following chart shows scores across these variables for the countries assessed in the report, and highlights performance across all these indicators. A score of 1 indicates the highest levels of inequality.




Southern European nations and the United States have the highest levels of inequality, according to this chart. It also reinforces the traditional view that inequality is lowest in the Nordic countries, with Norway, Finland and Sweden being named the most equal societies.


These new scores emphasize the complex nature of inequality, and the potential importance of looking beyond just the GINI coefficient. For example, if we consider the case of the United Kingdom, based on the coefficient alone it would be the second most unequal society. However, Morgan Stanley would argue that this isn’t representative of the bigger picture; when other factors are considered the UK comes in at number 12.


The report also addresses the complex relationship between economic growth and inequality, concluding that long-term, entrenched inequality can cause poor economic performance. According to OECD data, inequality has indeed slowed economic growth: the report estimates that there was a reduction in potential growth of 4.7 percentage points between 1990 and 2010 (in developed economies) and by as much as 10 percentage points in the US.

Ni Sarko ni Hollande

 
Francia quiere nuevas caras

Los franceses están muy mayoritariamente en contra de que el actual jefe del Estado, el socialista François Hollande, y su predecesor, el conservador Nicolas Sarkozy, vuelvan a presentarse a las elecciones presidenciales de 2017, hasta el punto de que un 74 por ciento se oponen a cualquiera de esas dos candidaturas. Tanto Hollande como Sarkozy coinciden igualmente en el porcentaje de los que sí querrían que volvieran a disputarse la presidencia, un 24 por ciento, según los datos de una encuesta del instituto demoscópico Odoxa publicado hoy por el diario Le Parisien.


El sondeo, elaborado para medir el nivel de rechazo a la actual clase política, muestra que las personas encuestadas también desaprueban la posibilidad de que en 2017 concurran otros conocidos líderes de los grandes partidos. Sólo se salva de esa demanda de renovación el antiguo primer ministro conservador Alain Juppé, alcalde de Burdeos, a quien el 56 por ciento de las personas interrogadas les gustaría que se presentara a las presidenciales de 2017. Asimismo, un 85 por ciento rechaza una candidatura de la ex ministra ecologista Cecile Duflot, un 76 por ciento la del responsable del Partido de la Izquierda, Jean-Luc Melenchon y solo apoyan una candidatura presidencial un 38 por ciento para el actual primer ministro socialista, Manuel Valls, y un 37 por ciento para Marine Le Pen, presidenta del Frente Nacional (FN).

Arrancó la campaña por la re-re de Evo

Las recientes victorias electorales de la derecha en Argentina y Venezuela envalentonaron también a la escuálida oposición boliviana, que se fortaleció para decir “No” a la propuesta de re-reelección. Paridad en las encuestas.

 Por Sebastián Ochoa


Desde La Paz

El próximo 21 de febrero Bolivia celebrará un referéndum re-reeleccionista que aún no tiene un ganador claro. En las encuestas ambas opciones van muy parejas. En las próximas semanas, oficialismo y oposición recorrerán calles y comunidades para apalabrar cada voto. Será la culminación de un proceso que arrancó apenas finalizaron las eleccaiones de octubre de 2014, cuando Evo Morales se relegitimó por tercera vez en la presidencia. Dentro del Movimiento Al Socialismo (MAS) en ese momento empezaron a pensar cuál era el camino más conveniente para que el líder aymara pudiera postularse otra vez en 2019. Querían aprovechar que Morales estaba en el pico de su popularidad, antes de que la gestión del gobierno inevitablemente desgastara su imagen. Un año después, el contexto había cambiado en América latina. Las recientes victorias electorales de la derecha en Argentina y Venezuela envalentonaron también a la escuálida oposición boliviana, que se fortaleció para decir “No” a la propuesta de re-reelección.

Hace pocos años, en cada cumbre y encuentro de gobiernos había una foto recurrente: los presidentes Morales, Hugo Chávez, Lula da Silva, Néstor Kirchner, Rafael Correa y tantos líderes progresistas de la región estrechaban las manos. Hoy, el boliviano es el único que persiste en esta imagen. Quizás aparecen Nicolás Maduro y el presidente de Ecuador, pero bastante desvanecidos por las coyunturas con las que deben lidiar en sus territorios. La novedosa soledad de Morales en la región preocupa al MAS, que en el avance continental de la derecha ve también su inevitable avance puertas adentro de Bolivia.

El presidente Morales, de 56 años, llegó a la presidencia en 2006 con el 54 por ciento de los votos. Fue reelegido en 2009 con el 64 por ciento y también en 2014, con el 60 por ciento de los sufragios. En 2009, Bolivia dejó de ser República para convertirse en Estado Plurinacional. Además puso en vigencia la actual Constitución. Por ello, el presidente y también la Justicia local consideraron que esta debía computarse como su primera presidencia en el nuevo modelo de Estado.

En estos días, las encuestas indican que el Sí a su re-reelección ronda el 45-50 por ciento, la misma cifra en que se mueve el No. Por eso, apenas pasado el brindis de fin de año, oficialismo y oposición se metieron de lleno en la campaña por cada voto. Para convencer, el MAS hace mención a sus logros de gestión, fundamentalmente al crecimiento económico de los últimos años.

Este repunte en las cifras macroeconómicas viene atado a la venta de hidrocarburos. Este año, por la caída del precio del barril de petróleo, Bolivia recibió un 32 por ciento menos de lo esperado de ganancias. Si la cosa sigue así, Morales ya avisó que habrá que “ajustarse”.

Por su parte, la oposición trata de convencer recordando que hay una decena de personas detenidas por corrupción, todos vinculados al partido de gobierno. El caso insignia es el desfalco millonario al Fondo de Desarrollo Indígena (Fondioc), que involucra a líderes campesinos e indígenas identificados con el MAS.

El presidente Morales empezó el 2016 en la ciudad de Yacuiba, que colinda con Salvador Mazza, en la provincia de Salta. Allí, en un acto de entrega de obras transmitido por la TV pública boliviana, dijo: “Quiero decirles mi gran deseo en lo político. Vamos a ganar con el Sí el 21 de febrero de este año, vamos a ganar ampliamente, eso no está en debate. Mi gran deseo es batir nuestro récord. En los referendos hemos ganado con 67 por ciento. ¿Cómo llegar al 70 por ciento? Por eso estamos haciendo campaña, compañeros. Ya lo tenemos ganado, pero llegar al 70 por ciento sería otro récord histórico”.

Por ley, está prohibido hacer uso de bienes públicos para hacer campaña política. Por ello en el MAS creen que pueden sancionarlos. Pero en definitiva, prefieren pagar la multa y ganar más votos. “Hay que ser sincero. Aunque el Tribunal Supremo Electoral me castigue, no importa. Hasta ahora hemos ganado seis elecciones”, aseguró Morales. Si el No triunfara, el efecto sería devastador para el MAS, que ya no podría mantener la cohesión interna urdida por Morales en 10 años de presidencia.

De todos modos, públicamente se lo toma con calma. “Aunque no aprueben finalmente nuestra reelección, no importa. Hemos hecho, hicimos historia gracias al pueblo boliviano”, aseguró el presidente.

“El 21 de febrero yo también quiero saber si me quiere o no me quiere el pueblo boliviano. Es lo más democrático. Acompañaré a los movimientos sociales en esta campaña por el Sí, respetando su decisión”, dijo.

Mucho más explícito y apasionado se mostró el vicepresidente Alvaro García Linera en un acto público en la comunidad paceña de Viliroco. “Papá, mamá: no lo abandones al presidente Evo. No lo dejes solo, no lo abandonen. El presidente Evo, si tiene apoyo, construye colegios. Si no tiene apoyo, regresarán los gringos, regresarán los vendepatrias, regresarán los asesinos y a las wawas (bebés) les van a quitar todo y no habrá destino y va a haber llanto. Y el sol se va a esconder y la luna se va a escapar. Y todo va a ser tristeza para nosotros. No se olviden”.

The 20 countries with the greatest public debt

Japan, the world’s most indebted nation, is struggling to emerge from over two decades of stagnation. Greece, second in the list, is suffering a critical economic crisis. According to the IMF.

Since the early 1990’s Japan has experienced continuous stagnation. Recently, policies put in place by the Government to tackle the crisis have tended to push debt levels even higher. Currently, the Japanese Government is spending almost half of its total tax revenue on tackling the enormous debt. In spite of this, the yield on 10-year Japanese bonds remains at a surprisingly low level, under 1%.

Greece has accumulated a massive debt. On 14 July 2015, the IMF released a report addressing Greece’s debt sustainability. The introduction in the report gives an accurate image of the country’s situation:

Greece’s public debt has become highly unsustainable. This is due to the easing of policies during the last year, with the recent deterioration in the domestic macroeconomic and financial environment because of the closure of the banking system adding significantly to the adverse dynamics.

The financing need through end-2018 is now estimated at €85bn and debt is expected to peak at close to 200 percent of GDP in the next two years, provided that there is an early agreement on a program. Greece’s debt can now only be made sustainable through debt relief measures that go far beyond what Europe has been willing to consider so far.

Here are the 20 countries with the highest public debt:

Quedó descartado el encuentro entre el Papa Francisco y Macri

El Papa Francisco sigue sin recibir a Macri. No lo llamó dese que asumió, y solo atendió su llamado, cuando Macri lo llamó para felicitarlo por su cumpleaños.

Está clara la asimetría en terminos de trato dispensado entre Cristina y  Macri. el discurso del Papa, también choca con el discurso de sus voceros económicos.

El modelo de sociedad librada a las fuerzas del mercado, "«es injusto» e incluso sus efectos nocivos «matan»",  dijo el Papa Francisco ante Christina Lagarde. En el número 54 de su exhortación apostólica Evangelii Gaudium, el Papa señala: "… algunos todavía defienden las teorías del «derrame», que suponen que todo crecimiento económico, favorecido por la libertad de mercado, logra provocar por sí mismo mayor equidad e inclusión social en el mundo.

La CGT y la CTA cierran filas contra el intento oficial de limitar las paritarias

Unidad de acción: sostener el crecimiento del salario real y el empleo



Las entidades gremiales suman fuerzas de cara al diálogo económico con el gobierno y las futuras negociaciones
de salarios.
Algunos de los principales referentes de la Confederación General del Trabajo (CGT) y la Central de Trabajadores Argentinos comenzaron a unificar sus posturas contra los límites en las paritarias y el repudio a los dichos del ministro de Hacienda y Finanzas, Alfonso Prat-Gay, de que los sindicatos deben optar entre salarios y empleo.


El Movimiento de Acción Sindical Argentino (MASA), cercano a Antonio Caló, se reunirá con la CGT el lunes para emitir un comunicado al respecto, y la CTA de los trabajadores, conducida por Hugo Yasky se reunirá en un plenario nacional para defender el empleo, el salario mínimo y las paritarias libres. Ambas entidades trabajan en conjunto para emitir un pronunciamiento común, al que esperan que se sume la CTA Autónoma de Pablo Micheli, de cara a la mesa de diálogo económico y social.


"La frase de Prat-Gay no me parece feliz", sostuvo el titular del Sindicato de Vendedores de Diarios, Revistas (SIVENDIA), Omar Plaini. El gremialista cercano a Hugo Moyano agregó que "quieren condicionar con pérdida de empleo paritarias que son libres por definición. Vamos a defender nuestros derechos y nos preocupa esta situación. Nosotros no queremos ser los convidados de piedra en el diálogo económico y social".


En el mismo sentido, Yasky opinó que "este Gabinete de las multinacionales que se llama Ministerio de Hacienda pretende generar desocupación para presionar a los sindicatos. Nosotros no podemos permitir esta extorsión disfrazada de política económica de desempleo".


El referente sindical de la CTA de los trabajadores consideró que "el gobierno tiene que ser garante de las políticas de pleno empleo y paritarias libres como sucedió en estos 12 años". Por ello, desde su central gremial señaló: "Vamos a hacer un plenario nacional el próximo miércoles para definir una estrategia en consonancia con lo que ya ha planteado la CGT de Caló y vamos a trabajar para un pronunciamiento conjunto con la CGT y la otra CTA, si esta se quiere sumar."


En el mismo sentido se expidió el titular de la asociación de Trabajadores del Estado (ATE) de Capital Federal, Daniel Catalano: "Nosotros en 12 años hemos negociado salarios con inclusión, por lo que si el pretende cerrar su modelo con despidos, lo que está mal es su modelo y debería revisarlo." El gremialista advirtió que "nosotros estamos en alerta y movilización porque este gobierno persigue a los trabajadores. Esto es la tercera reforma del Estado con persecución ideológica. Hubo interrogatorios a los empleados sobre su pertenencia partidaria, revisaron sus cuentas de Facebook", dijo Catalano, y recordó que hay conflictos abiertos en el Centro Cultural Néstor Kirchner, en Vialidad y en Jefatura de Gabinete.


El secretario general del Sindicato de Mecánicos y Afines del Transporte Automotor (SMATA), Ricardo Pignanelli, concluyó que "si ellos quieren llegar a pobreza cero no tienen que amenazar con la falta de trabajo para la negociación económica. Él debería hablar de estabilidad económica y despido cero". «


Hugo Yasky
"No hay diálogo económico posible sin paritarias libres, políticas tendiendo al pleno empleo y la defensa del Consejo del Salario Mínimo Vital y Móvil. No aceptamos este apriete a gremios"


Ricardo Pignanelli
"El gobierno permitió la apertura de las importaciones de autos y partes, lo que demuestra que no valoran el contenido nacional de los vehículos y el trabajo que genera"


Omar Plaini
"Todas las medidas que tomaron favorecieron a los sectores más concentrados. Tenemos que poner en la mesa también cómo defender a los trabajadores y a los que menos tienen"


Daniel Catalano
"El diálogo que tanto pregonan es una mentira, están determinados a conducir el país por decreto. Lo del ministro es una extorsión para culpar a gremios por sus políticas"

Are you in the global middle class?

If you live in the West, you are more than likely part of the middle-income bracket or higher by global standards, according to data collected by Pew Research. Based on 2011 numbers, 56% of the world’s population live a low-income existence, with only about 13% making up the global middle class.

Middle class by global standards, however, can be substantially different to how those living in the West see it. Globally, a person living on $10-20 a day would be considered middle income. In 2011, only 16% of the world’s population could say they were living on $20 dollars or more a day.

The study takes into consideration purchasing power, so these dollar figures are made in what is called purchasing power parities, or PPP. This means the exchange rate adjusts so that an identical good in two different countries has the same price.

So where do you stand on the global scale? Use this calculator to find out.

Who owns America’s debt?

China is making headlines as it sells off large portions of the United States’ treasury bonds. But the largest owner of US debt isn’t the only one: Russia, Brazil and Taiwan are also selling off treasuries.



Who else owns America’s debt? The latest changes won’t be accounted for until the US Department of the Treasury releases its next data report, but the figures from July 2015 show China and Japan continuing to be the largest holders of treasuries. Caribbean banking centres include the Bahamas, Bermuda, the Cayman Islands, Curacao, Sint Maarten, Panama and the municipalities of Bonaire, St. Eustatius and Saba. Oil exporters include Ecuador, Venezuela, Indonesia, Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, the United Arab Emirates, Algeria, Gabon, Libya and Nigeria. The United Kingdom includes the Channel Islands and Isle of Man.

Prat Gay: "Cada sindicato sabe hasta qué punto arriesgar salarios a cambio de empleos"

El ministro de Hacienda y Finanzas advirtió a los gremios sobre los "riesgos" de las próximas negociaciones salariales con las empresas, al sugerir que las demandas de subas elevadas podrían perjudicar a los puestos de trabajo. "Cada sindicato sabrá dónde le aprieta el zapato", figuró.



"Cada paritaria discute lo que puede discutir. Me parece que acá no es solamente la dimensión del salario sino también cuidar el empleo", puntualizó Alfonso Prat Gay, quien participará del denominado "pacto social" entre sindicatos y compañías.

El ministro de Hacienda y Finanzas advirtió a los gremios sobre los "riesgos" de las próximas negociaciones salariales con las empresas, al sugerir que las demandas de subas elevadas podrían perjudicar a los puestos de trabajo. "Cada sindicato sabrá dónde le aprieta el zapato", figuró.


"Cada paritaria discute lo que puede discutir. Me parece que acá no es solamente la dimensión del salario sino también cuidar el empleo", puntualizó Alfonso Prat Gay, quien participará del denominado "pacto social" entre sindicatos y compañías.

¿Un acuerdo social para bajar salarios?

Debate.Lucio Garzón Maceda


Hace meses advertimos en esta sección de la existencia de un proyecto de acuerdo social para “reducir salarios”, pergeñado por argentinos en Ginebra. Hoy el presidente Macri anuncia que convocará para alcanzar aquel acuerdo “pro capital puro”, pero las recientes subas de precios se lo dificultan. Se pretende que los sindicatos acepten pasivamente los incrementos y, además, que acuerden los nuevos sueldos de convenio “a la baja” (ajuste), conforme inflación futura. En nuestro país, con paritarias funcionando regularmente, las negociaciones de un acuerdo social no pueden abarcar lo salarial coyuntural, por ser aquellas comisiones las que acuerdan, en estricto derecho, las remuneraciones contractuales. Tampoco debe cimentarse en engaños ni en pérdidas excepcionales para solo una de las partes, ni estar condicionado por transferencias de ingresos con excedentes extraordinarios para el capital.



Un acuerdo social equilibrado exige temas específicos, analizados con seriedad y buena fe, tales como reforma impositiva, franquicias en servicios públicos, créditos para vivienda, asignaciones familiares, competitividad, educación y formación, mejoramiento en la financiación de obras sociales, seguro de desempleo, esparcimiento, guarderías, jerarquización y empoderamiento de la Inspección del Trabajo, financiamiento de la seguridad social, políticas de participación, plena vigencia del Consejo del Salario Mínimo, combate al trabajo indecente, tercerizaciones, precarizaciones, clandestinidad, etc. Estos contenidos -con paritarias libres- permitirían, quizás, que los conglomerados sindicales y las confederaciones unitarias de actividad aceptaran negociaciones. Por ahora no hay anuencia y se opone la única central con personería gremial. A todos se les hace imposible un acuerdo a pura pérdida. Un diálogo derivado de la excepción tiene poca viabilidad; por ello los responsables gubernamentales deberían evitar insistir en una única excepcionalidad capitalista. La presión ejercida en procura de un acuerdo social y los recientes decretos de poca necesidad y mucha urgencia confirmarían un rumbo riesgoso, con violaciones a la normalidad jurídica.


Un acuerdo social serio no se hace consagrando un desequilibrio con una “distribución pro capital”, abandonando “la distribución pro trabajo”. No hay lugar para el diálogo atenuando los ingresos alimentarios de los asalariados. Guy Ryder, en su conferencia en la UIA, dijo que ningún acuerdo social puede fundarse en la excepcionalidad ilícita de vaciar de contenido a las paritarias libres.
A la inflación deben ponerle remedio los autores que violan los equilibrios, y no imponiendo un acuerdo destinado a reducirla con ajuste salarial.


Imponga y respete el Gobierno el derecho. Deje la excepcionalidad totalitaria, evitando confundirse por la “niebla de lo institucional” y por el “espíritu de la época”. No hacerlo sería peligroso.


Lucio Garzón Maceda Abogado laboralista

Jeb Bush’s fight over the Everglades.

Swamped

By Dexter Filkins








In Florida, Bush forged a landmark environmental accord—and then exploded it. Credit Illustration by Barry Blitt

On the afternoon of December 11, 2000, Jeb Bush, the forty-third governor of Florida and a member of the most dominant American political family since the Kennedys, stood in the Oval Office with President Bill Clinton to mark the signing of a landmark law intended to restore the Everglades, the majestic swamp that spans the interior of southern Florida. The legislation, overwhelmingly approved by both parties, envisioned spending eight billion dollars to revive the wetland, which, thanks in large part to heedless development, had been shrunk, chopped, polluted, and drained to the point of terminal decline. That same afternoon, the Supreme Court was hearing Bush v. Gore, the case that ended the vote-counting dispute in Florida between Clinton’s Vice-President and Jeb’s brother. But, if the occasion was awkward for Bush and Clinton, it marked a seeming triumph of federal and state coöperation. The Everglades legislation was the result of years of coördinated planning. The State of Florida and the federal government had promised to share the expense. “This is the restoration of a treasure for our country,” Bush said after the ceremony.

Less than three years later, Bush returned to Washington, this time to justify to a group of skeptical Republican members of Congress why he was dismantling one of the central provisions of Everglades restoration. Just days before, Florida lawmakers had endorsed a bill to drastically weaken pollution regulations—the result of an extraordinary lobbying blitz by the sugar industry, the largest polluter in the Everglades and one of the largest political donors in the state. Newspaper editorial boards around Florida condemned the proposal as a gift to Big Sugar, the nickname for the major interests in the state: Florida Crystals, U.S. Sugar, and the Sugar Cane Growers Cooperative. In a private meeting room at the Capitol, the congressmen who had summoned Bush said the bill was so egregious that it could threaten federal funding for the restoration. Bush insisted that he would not change his mind.

In the Presidential primaries, Bush has spoken little about his record on the environment. As he struggles to revitalize his ailing campaign, he has preferred to talk broadly about his experience as governor—an attempt to contrast himself with insurgents like Donald Trump and Ben Carson, and also with Barack Obama, who, even after seven years in the White House, is described by many Republicans as a political neophyte. (The Bush campaign declined to comment for this article.) In a speech following the recent terrorist attacks in Paris, Bush announced, “We are living in serious times that require serious leadership.” In a campaign video, recorded in what appears to be a comfortable suburban living room, he presents himself as a tough, decisive manager. “This is what leadership’s about—it’s not just about yapping about things,” he says, as an image of the White House comes on the screen. “We need to start fixing things. I said I was going to do these things, and I did them. And the result was, Florida’s a lot better off.”

What lingers in Florida is the memory of a governor who liked to announce “big, hairy, audacious goals”—often shortened to BHAG, pronounced “bee-hag”—and to pursue them zealously. Much of the time, in a state with natural bipartisan coalitions, it worked. But when it didn’t Bush pushed on, even at the price of gruelling and expensive political conflict. Nowhere was his style more evident than in his protracted struggle with the federal government over the fate of the Everglades—a fight that, according to people in both parties, could well have been avoided with a less autocratic approach. Nathaniel Reed, an Assistant Secretary of the Interior in the Nixon Administration, a friend of President George H. W. Bush, and a prominent Florida environmental activist, told me, “Jeb wouldn’t listen to anyone. He’s the most thin-skinned son of a bitch I’ve seen. If you criticize him, he never forgets it.”

The Everglades—the River of Grass, as it is called—covers nearly four million acres across southern Florida in a slow-moving sheet of water, as wide as fifty miles and, in places, only a few inches deep. The swamp is environmentally unique: home to alligators, panthers, manatees—seventy-seven endangered and threatened species in all, many of them unknown in the rest of the United States. For much of the twentieth century, as Michael Grunwald recounts, in his deeply researched book “The Swamp,” the residents of Florida waged an undeclared war on the Everglades, draining and diverting it to provide more space for development and agriculture. By the nineteen-eighties, the water flow had been so diminished that the wading birds—white ibises, egrets, herons—that had once descended by the thousands to hunt fish, had all but disappeared.

In 1988, Dexter Lehtinen, then the acting U.S. Attorney in southern Florida, sued the state regulatory body that oversaw the Everglades for failing to enforce clean-water laws. The suit was politically brazen: Lehtinen, the husband of a soon-to-be Republican congresswoman and an appointee of President Ronald Reagan, was so sure that he would not get permission from the White House that he brought the suit to court only when Reagan’s term was effectively over. The suit infuriated powerful agricultural interests, but federal officials reluctantly allowed it to go forward. Lehtinen recalled, “They ordered me to withdraw the lawsuit, and I said that would be fine, but that I was going to hold a press conference the same day and it would be on the front page of the Washington Post.”

For almost three years, lawyers representing the State of Florida fought the federal suit. Finally, in 1991, a newly elected governor, Lawton Chiles, showed up at a court hearing in Miami and astonished the audience by capitulating. “We want to surrender,” he said. “I want to find out who I can give my sword to.” The federal-state partnership that resulted would be governed by a consent decree—a legal agreement that ends a dispute without acknowledging fault—and enforced by a United States judge. In 1994, with Chiles leading the way, the Florida legislature passed the Everglades Forever Act, committing the state to reach the clean-water standards set in the decree.

That year, Jeb Bush launched his first campaign for governor. He was not quite a carpetbagger; he had come to Florida to support his father’s 1980 Presidential campaign there, then joined a real-estate and construction firm run by a prominent Miami developer named Armando Codina. But he had few local ties and an undeveloped ear for local politics. In his first campaign, he described himself as a “head-banging conservative,” and paid little attention to environmental concerns. “The environment is a big deal in Florida—every politician learns that sooner or later,” Estus Whitfield, an adviser to half a dozen Florida governors, said. Bush narrowly lost to Chiles. When he ran again, in 1998, he toned down his rhetoric and laid out specific plans to protect the environment. This time, he won.

In 2000, when an ambitious state program to acquire environmentally sensitive land was due to expire, Bush set up another one. It provided three hundred million dollars a year, enabling the state to acquire 1.2 million acres during his tenure, which helped make Florida one of the largest holders of land that is off limits to developers. “That’s big money,” David Guest, a lawyer for the environmentalist group Earthjustice, who often opposed Bush’s administration in court, said.

The Everglades presented a more complex challenge. An environmental restoration like the one in the Everglades has four main components: the quality of the water; the amount of it; the way it is distributed; and the timing of its arrival during the annual cycles of wet and dry weather. By law, only water quality was Florida’s problem exclusively; the other problems were to be addressed by both the state and the federal government. When Bush took office, a multibillion-dollar plan, drawn up by federal and state regulators, was in the works to restore the swamp’s flow. Bush picked up the discussions and, sixteen months later, reached a deal on a landmark law that committed the state to pay for half of the restoration. The bill passed the state legislature unanimously. Congress passed a tandem bill, committing four billion dollars to the initiative, known as the Comprehensive Everglades Restoration Plan; that was the bill that Bush celebrated in the Oval Office with President Clinton. Terrence (Rock) Salt, a retired senior official with the Army Corps of Engineers who helped oversee the plan’s early phases, credited Bush with securing support and funding for the law, saying, “If not for Jeb Bush, we would not be proceeding with Everglades restoration.”

The swamp’s ecosystem depends on unusually clean water. The main source of pollution is runoff from farms, especially the sprawling sugarcane farms that rim the northern tier of the Everglades. The runoff carries fertilizer rich in phosphorus, which even in tiny amounts can fuel explosions of growth—of algae and, especially, of invasive plants like cattails, which smother native plants and animal life. When Lehtinen sued the state, the levels of phosphorus were high enough to push the ecosystem to the verge of collapse. In Lake Okeechobee, at the northern boundary of the Everglades, algae blooms had become so stifling that huge groups of crawfish and snails crawled out of the water in search of oxygen. Cattails were expanding across the swamp by as much as nine acres every day.

The Everglades Forever Act, the law that Bush inherited from Chiles, divided the cleanup into two phases. The first one called for constructing storm-water treatment areas—artificial wetlands that capture and filter farm run-off—and encouraged farmers to adopt “best management practices,” like refraining from spreading fertilizer just before a rainstorm. By 2003, with the first phase under way, phosphorus levels had dropped dramatically.

The second phase promised to be much more difficult. In 2001, Bush, after consulting with his environmental regulators, had committed the state to an aggressive goal set by the Everglades Forever Act: in five years, phosphorus in the swamp would be reduced to its natural level, no higher than ten parts per billion. Soon afterward, the Audubon Society of Florida sent Bush a letter, saying, “We appreciate your wise and strong support.” “Sit down, Peter, you can’t object at a funeral.”Buy the print »

But in 2003, as Bush began his second term, scientists for the state, along with the sugar industry, concluded that Florida was likely to miss the deadline. Paul Schwiep, a lawyer who represented environmental groups, said, “Everyone started panicking.” The panic had as much to do with money as with science. State regulators had estimated that meeting the deadline would require seven hundred million dollars of additional spending. In the original plan for the cleanup, sugar farmers were required to pay a tax, but ordinary taxpayers bore the bulk of the cost. Florida voters subsequently approved a constitutional amendment requiring polluters—with sugar companies first among them—to pay far more, and, though the amendment was never enforced, it remained on the books.

To get a sense of the ecological challenges facing the Everglades, drive along the top of the levy that encircles the Loxahatchee National Wildlife Refuge, a teardrop-shaped enclave on the swamp’s northeastern boundary. Saw grass sweeps to the horizon, in a marshy expanse broken by islands of slash pines and gumbo-limbo trees. The water in the interior of the refuge, accessible only by airboat, is virtually pure; the effects of pollution come into view at the refuge’s fringe, as cattails bloom and the saw grass disappears. As you turn onto the western border, the source of that pollution presents itself: mile after mile of sugarcane fields, with runoff flowing through drainage canals directly into the refuge.

Since the nineteen-sixties, sugar has been a dominant force in Florida agriculture, with several hundred thousand acres ringing the northern reaches of the Everglades. The industry is controlled by a small number of people, principal among them Pepe and Alfy Fanjul, brothers from a Cuban family whose sugar farms were nationalized by Castro after the revolution. The Fanjuls preside over one of the world’s largest sugar empires, including Florida Crystals, which grows and refines sugar on some hundred and fifty thousand acres in the state. Their companies’ revenues, bolstered by federal price supports, have been estimated at five billion dollars a year, and the Fanjuls live in ostentatious luxury. Pepe’s eight-thousand-square-foot Palm Beach mansion is valued at about six million dollars; his yacht, the Azucar (Spanish for “sugar”), is often used for parties and charity events, following the social circuit from Palm Beach to Sag Harbor.

In addition, the Fanjuls own the largest sugar producer in the Dominican Republic, Central Romana, whose holdings also include interests in tourism, manufacturing, and real estate. A resort they own there—Casa de Campo, a seven-thousand-acre estate with its own international airport, polo grounds, and yacht basin—has hosted both Bush Presidents. In January, Hillary and Bill Clinton visited the Fanjuls there.

According to classified American diplomatic cables released by WikiLeaks in 2011, the State Department blamed Pepe Fanjul and representatives of Central Romana for much of the opposition to a regional free-trade agreement, fearing that it would harm their holdings. Fanjul, one cable said, spread rumors that the United States was revoking visas of those who opposed the trade deal—“a patent absurdity,” the cable said.

Over the years, the Fanjuls’ operations in the United States have been fined numerous times for endangering their workers, most of whom, until the mid-nineties, were brought in from Jamaica and often housed in Third World conditions. In 1992, a Florida judge awarded a group of guest workers fifty-one million dollars, ruling that companies owned by the Fanjuls and others had dramatically underpaid them. (The ruling was overturned on appeal.) Since then, many of the farmworkers have been replaced by machines, which eliminate the potential for abuse but also reduce the number of jobs that sugar creates.

The need to keep federal tariffs in place and pollution standards at bay makes for a potent incentive. “Given the choice between buying a tractor and hiring a lobbyist, the sugar industry is going to hire a lobbyist every time,” Guest, the environmental lawyer, told me. The result is that sugar, despite its relatively limited ability to create jobs, has made itself perhaps the most powerful political force in Florida. Since 1998, according to the National Institute on Money in State Politics, the sugar industry has given at least twenty-one million dollars to Florida candidates, political parties, and PACs. Estus Whitfield, the environmental adviser, said that, after each gubernatorial election, representatives of the industry sit down with the new governor to give him a list of their legislative priorities. “In almost every instance when an Everglades law, rule, or even attitude has changed, it was influenced by the sugar-cane industry,” Whitfield said.

The Fanjuls’ clout in Washington is legendary. Since 2004, according to the Center for Responsive Politics, the Fanjuls and their relatives have donated nearly four million dollars to federal candidates, parties, and PACs; last year, they spent a million dollars lobbying Congress and other branches of the federal government. The Fanjuls are scrupulously bipartisan; in 2004, Pepe raised more than two hundred thousand dollars for George W. Bush’s reëlection effort, and in 1992 Alfy was the Florida co-chair for Bill Clinton’s campaign. (In one notorious episode, President Clinton received a call from Alfy Fanjul during a tryst with Monica Lewinsky.) When Bush ran for governor in 1998, Florida law limited individual campaign contributions to five hundred dollars a person, and Super PACs were not yet legal. According to the National Institute on Money in State Politics, the sugar industry contributed only ninety-four hundred dollars to Bush in 1998 and eighty-nine hundred in 2002—but, during those years, it gave three-quarters of a million dollars to the Republican Party of Florida. Close observers of Florida politics say that, even then, the real numbers, for candidates running for statewide office, were much higher than reported, with the industry arranging support from affiliated companies and law firms that it hires. “It’s difficult to pin down, but, for a candidate like Jeb, sugar’s contribution easily approaches a half million dollars,” Bernie Parrish, a longtime lobbyist in Tallahassee, said. (Other veterans of state politics gave me similar estimates.) “As a result, Big Sugar gets what it wants out of the legislature and out of the governor’s office,” Parrish said. “It doesn’t matter who the governor is.”

Halfway through the spring, 2003, session of the Florida House of Representatives, a new bill appeared on the schedule without warning. The legislation proposed to amend the Everglades Forever Act: it pushed back the phosphorus deadlines to 2016, with another extension available after that. Its most lenient provisions allowed the deadlines to be evaded indefinitely; all that was required was that the state and the sugar industry show that they were making their best efforts. “It was basically a license for polluters to keep polluting for years and years,” Don Jodrey, a senior policy adviser at the Department of the Interior, who works on Everglades issues, said. Representatives of the Audubon Society of Florida, who had saluted Bush’s efforts on phosphorus less than two years before, said that they had no idea the legislation was coming. “We were caught completely off guard,” Eric Draper, a lobbyist for the organization who is now its executive director, said. “One hearing, and it was up for a vote.”

A reporter for the Palm Beach Post named Robert King tried to determine who had drafted the bill, but could find no one—in the legislature or in Bush’s administration—who would own up to it. But Bush and his staff appear to have had a hand in it. The bill was introduced two weeks after Bush met privately in his Miami office with Pepe Fanjul, one of Fanjul’s lobbyists, and an executive from U.S. Sugar. According to documents that I obtained from the Florida Department of State, the agenda of the meeting was “phosphorus ruling/polluter pays.”

A lobbyist for U.S. Sugar, Mac Stipanovich, told me that the Governor led a collaboration between his staff and the industry. “Jeb was very active,” he said. “He brought people to the table.” Richard Harvey, the former chief E.P.A. regulator in South Florida, said that the sugar manufacturers had agreed to draft the bill and to move it through the legislature—allowing Bush to remain out of the public glare. “The sugar industry was carrying the ball for Bush,” Harvey, who is now retired, said. “They said, ‘We are going to orchestrate this thing. We are going to get the language we want, and make sure it passes.’ Bush went along.”

David Struhs, Bush’s chief environmental regulator at the time, told me that the legislation shouldn’t have caught anyone by surprise. In 2001, when Bush declared that the new phosphorus limit would be ten parts per billion, he and his environmental team anticipated that they would fail to meet the deadline. In Struhs’s explanation, even if pristine water was flowing into the Everglades, phosphorus from previous years would keep the levels high: “The laws of man, no matter how vigorously enforced, do not trump the laws of nature.” Bush decided on the deadline, anyway, to avoid federal sanction, Struhs told me. “We couldn’t come out and say, ‘We can’t do this,’ ” he said.

Federal and state regulators, as well as environmentalists, argued vigorously that “legacy phosphorus” would not be insurmountable. “We could have met the deadlines, but it would have required a huge effort,” Guest told me. The problem, these people said, was political: the obvious likely solution was to take land being used by the sugar farmers out of cultivation. Struhs told me the industry was terrified that federal regulations would force the farmers to fallow land: “They said, ‘We’re going to be out of business in three years.’ ”

To make sure that the legislation passed, the sugar industry deployed forty-six lobbyists, according to press accounts from the time—more than one for each of the forty senators. Draper, the Audubon Society lobbyist, said that environmentalists had little hope of stopping the bill. When he heard about the legislation, he went to Ron Klein, a Democrat who was the senate minority leader, “to help us stop this thing.” Klein sent him to Screven Watson, the former executive director of the Florida Democratic Party. Watson was also a lobbyist for the sugar industry. “That’s when I knew we were doomed,” Draper said.

In the end, the bill passed the Florida senate unanimously, with the clear understanding that Bush was behind it. “We did this bill because the Governor said it was a good bill,” the senate president, Jim King, said. In the house, a small group of legislators mounted an effort to stop the bill, but they were overwhelmingly defeated. The new law marked such a departure from the original Everglades Forever Act that environmentalists devised a bitter nickname for it: the Everglades Whenever Act. Buy the print »

For Bush, the summons to Washington came even before he had signed the bill. In the ornate, high-ceilinged splendor of Capitol Conference Room H-140, he was met by a group of Republican congressmen, three of them from Florida, who helped oversee federal spending on the Everglades. They wanted to tell him bluntly that the legislation awaiting his signature could explode the partnership between Florida and the federal government.

According to two congressional staffers who attended the meeting, Bush made it clear that he had already decided. “He wasn’t really tolerating any sort of questions,” a former aide said. When the congressmen told Bush that he could be allowing an amount of pollution that would continue to harm the Everglades, he angrily dismissed their concerns. The other staff member said, “I served in government for thirty-four years, twenty on the Appropriations Committee, and I don’t think I’ve ever seen anyone act like that. Bush was angry. He was in my face. He slapped us around. He had absolutely no thought about compromising. I remember thinking, If this guy becomes President, this is not going to work.”

Struhs, Bush’s environmental aide, told me that as the Everglades legislation took shape Bush and his staff consulted with the E.P.A. to make sure that it was legal. “I had a high degree of confidence that the E.P.A. viewed this the same that we did,” he said. But, according to Jodrey, senior officials at the Department of the Interior, which is deeply involved in Everglades oversight, were mortified by the legislation. Jodrey told me his superiors decided that it was necessary to ask President Bush to intercede with his brother. “I was told to write a note in sixth-grade English asking the President to call Jeb,” Jodrey recalled. It’s unclear whether the memo went to the White House, but the President apparently never made the call.

In Miami, though, the judge who oversaw the consent decree summoned state and federal officials to explain themselves. According to Jodrey and Terrence Salt, the former Corps of Engineers official, Justice Department lawyers representing the E.P.A. were ordered not to volunteer any information to the judge. “They were muzzled,” Salt said.

After the hearing, the judge, William Hoeveler, an eighty-year-old senior judge in the Southern District of Florida, released an extraordinary court order, arguing that the law not only potentially violated the consent decree but had been passed in a shamelessly undemocratic way. “The treatment of the bill seemed calculated to avoid federal participation or public scrutiny,” he wrote. As for Bush, he said, “Apparently, he has been misled by people who do not have the best interests of the Everglades at heart.” Hoeveler was so angry that he called several reporters to expand his remarks. When his comments appeared in print, lawyers for the sugar industry pushed to remove him from the case, and he was eventually forced to step aside. Governor Bush was unfazed by the court order. “It is quite an unusual legal statement,” he said. “It didn’t have a lot of law in it.” He signed the Florida legislation a week and a half later.

Two groups sued to block the law’s implementation: a nonprofit called Friends of the Everglades, and the Miccosukee Tribe, Native Americans whose reservation lands sit inside the Everglades. Officials at the E.P.A. are obliged to decide whether local changes in water-quality standards comport with the Clean Water Act. The plaintiffs charged that the regulators, by ruling that Florida’s legislation did not amount to a substantive change in standards, had failed in their duty.

Federal officials say that the new law had been approved in a politically charged atmosphere. Harvey, the E.P.A.’s chief regulator in South Florida, said that when he raised objections he was ignored. Developers seeking permits to build on environmentally sensitive land, he said, were told to bypass him and go to E.P.A. officials in Atlanta, who were appointed by the White House. “You had a Bush in Washington and a Bush in Florida, and together they felt like they could do whatever they wanted,” Harvey said. Salt said that he and his colleagues were ordered not to speak publicly without approval from the Secretary of the Interior. “They absolutely shut us down,” Salt said. “I felt like I was getting squished.”

Federal officials and environmental activists involved in the dispute saw the new legislation as a larger effort by Jeb Bush to cut out the federal government’s role in the Everglades restoration. In 2004, he unveiled a new program to allow Florida to take greater control. The Comprehensive Everglades Restoration Plan had produced few results, and Bush blamed the federal government for not providing funds quickly enough. “Unfortunately, Congress did not live up to the promise it made,’’ he wrote in the Miami Herald. In his new plan, called Acceler8, he pledged $1.5 billion to fund eight Everglades infrastructure projects that had been part of the original CERP.

Acceler8 produced a rush of activity but modest results. Several of the projects were beset by delays, corruption, and inflated costs. A pump station in rural Collier County cost $617 million—almost twice what was budgeted. The owner of a hundred and sixty acres of scrubland, designated for flooding, refused to sell; after Bush threatened eminent-domain proceedings to force a sale, the state ended up paying nearly five million dollars. In the end, only two of the eight projects were completed, while the rest were either cancelled or given back to the federal government.

As Acceler8 got under way, Bush asked the federal government to withdraw from the consent decree that set the parameters for the Everglades restoration. The debate went all the way to the office of Gale Norton, the Secretary of the Interior. Ultimately, the department declined to release Florida from the decree. “President Bush refused to call his brother to stop the Everglades bill, but he also refused to give in to his brother’s request,” Jodrey said. “It cut both ways.”

In 2008, four years after the environmentalists and the Miccosukee Tribe sued, a federal judge sided with them in sweeping fashion. Calling the bill “an adroit legislative effort to obscure the obvious,” U.S. District Judge Alan Gold found that the Florida legislature had “violated its fundamental commitment and promise to protect the Everglades.”

The issue remained on hold until 2012, when federal and state regulators, after long negotiations, settled on a revamped plan to clean up the polluted water. Public officials, if not environmental activists, say that they are confident that the Everglades are now back on track. “We are doing very well now,” an official who works on restoration told me. “Charlie Crist? Rick Scott? No problem.”

But federal and state officials of both parties look back on Bush’s administration as a time of stalemate and lost opportunity, largely because Bush derailed the effort to clean up the water in the Everglades for nearly a decade. Under the settlement that resolved the long dispute, the clean-water standard will not need to be met until 2025. The cost of the restoration will be borne primarily by taxpayers, not by the sugar industry. “The goal of Big Sugar is always to put off the day of reckoning,” Draper said.

During the primary campaign, Bush’s few statements about the environment have been carefully tailored to disparate audiences. At a meeting of farmers in Iowa earlier this year, he called the E.P.A. a “pig in slop” and vowed to “rein in” its regulations. This fall, his campaign sent an e-mail inviting conservation leaders to join his advisers in a private conversation. “Jeb Bush values the many contributions environmental and conservation organizations make every day,” it said. “Governor Bush prioritized these issues in Florida when he was Governor and believes they deserve understanding and focus during the important policy debate that will occur in the Presidential election.”

A President who wants to aid the environment without empowering the E.P.A. will need to find an innovative way of enforcing the nation’s ecological rules. When it came to restoring the Everglades, Bush’s efforts to carve out his own path pleased almost no one. It was no surprise that delaying water-quality standards enraged environmentalists. But conservatives have also expressed displeasure with Bush’s environmental record. The Club for Growth and other proponents of smaller government have decried his efforts to buy environmentally sensitive land and to spend taxpayer money to restore the Everglades. And the G.O.P.’s libertarian wing, which sees propping up sugar prices as corporate welfare, was angered by his work on behalf of Big Sugar. Bush has been trying to square the circle. His Super PAC, Right to Rise, received half a million dollars from U.S. Sugar in the first half of this year. But in October his campaign announced that the candidate now favored a “phase-out” of the price-support system.

In April, the Fanjul family hosted a fund-raiser for Senator Marco Rubio, of Florida, another candidate for President and, despite his ties to the Tea Party, a staunch backer of price supports for sugar. The cost of entry was twenty-seven hundred dollars a person. And yet it is Bush, for now, who is forced to dispel the assumption that he is beholden to moneyed interests. Asked at one primary debate about the hundred-plus million dollars he has raised so far, he insisted that his donors have given that money only because of his conservative record. In contrast, he pointed to Donald Trump, who, as a contributor to Bush’s gubernatorial campaign, sought permission to bring casinos to Florida. Jeb said that he refused to let him. “I’m not going to be bought by anyone,” he said.

Trump, squinting at the audience, insisted that he would have found a way to get Bush to make a deal on the casino. “I promise I would have gotten it,” he said. ♦

Heinous Waste of Money Officially Begins

By Andy Borowitz

• 
  

Credit Photograph by Alex Wong/Getty Images

The two major political parties’ unconscionable waste of money officially commences this weekend, as Democrats and Republicans will soon begin spending an estimated five billion dollars of their corporate puppet masters’ assets in an unquenchable pursuit of power.

The billions, which could be spent rebuilding the nation’s crumbling infrastructure, improving schools, or reducing the scourge of malaria in Africa, will instead be squandered in a heinous free-for-all of slander and personal destruction, alienating voters as never before.

The media will inevitably focus on the personalities of the bloated roster of narcissists lusting after the White House, but scant attention will be paid to the Wall Street bankers, industrial polluters, and casino magnates whose grip on American democracy will remain vise-like.

While attention this weekend turns to the Democrats, the Republicans remain quietly confident about their chances of purchasing the nation’s highest office. In the words of one top operative, “Our billionaires can beat their billionaires.”