Kurt Johnson

As a follow-on to the last post, see this Wikipedia article on controlling malaria and yellow fever during the construction of the Panama Canal. Malaria and Yellow Fever incidence was reduced dramatically without the benefit of any advanced pharmaceuticals or chemical treatments; instead workers eliminated standing water and sprayed simple chemical treatments where needed. The results are clear:

I find this interesting because Africa has such a skewed capital/labor ratio that the control methods used in 1906 are probably not completely inappropriate for Africa today; in other words, they don’t have a lot of capital to spend on new pharmaceutical treatments but they do have surplus labor (i.e., high unemployment rates and lots of people employed in unproductive jobs) that could be employed in the kind of massive civil engineering that the US used to control mosquitoes in Panama.
To solve the malaria problem in Africa, might we be better off employing Africans in civil engineering programs rather than paying for R&D to develop new drugs in US/European labs?

In the last few weeks Wharton has hosted a number of great speakers on international development topics. One of the large consulting firms presented their work on malaria in Africa which included this data:

First, I can’t find the primary article this data comes from (although the chart is repeated in several publications from WHO, RBM, and Harvard speakers). Second, I’m sure there are huge uncertainties in the acccuracy of malaria statistics in Africa today, let alone in 1930. With those disclaimers, Africa’s performance is shocking. While all other regions have been constantly reducing deaths from Malaria since 1930, Africa has experienced rising deaths with the most severe increases occurring since 1970. Put another way, Africa’s share of world malaria deaths has risen from 3% in 1900 to over 90% in 2000.
China and Asia experienced a precipitous decline in deaths over the period; presumably African nations had access to the same knowledge base of control techniques and treatments. What’s the explanation for Africa’s trends going the wrong way? Does it make sense to invest in R&D for new drug therapies before addressing why previous therapies failed in Africa?

Source

http://www.washingtonpost.com/ac2/wp-dyn/A38725-2005Apr8?language=printer

Paul Volcker (ex Federal Reserve chairman) is concerned about the continuing US current account deficit and the lack of political initiative to fix it before a crash becomes inevitable (non-technical, from the Washington Post):

The difficulty is that this seemingly comfortable pattern can’t go on indefinitely. I don’t know of any country that has managed to consume and invest 6 percent more than it produces for long. The United States is absorbing about 80 percent of the net flow of international capital. And at some point, both central banks and private institutions will have their fill of dollars.

I don’t know whether change will come with a bang or a whimper, whether sooner or later. But as things stand, it is more likely than not that it will be financial crises rather than policy foresight that will force the change.