Higher corn prices mean higher prices for all sorts of things you might not expect.

Food prices are on the rise. On the Chicago markets, the price of a bushel of wheat has gone over $10 for the first time. Soybeans are at a 34-year high. And corn is hitting new highs as well.
The International Monetary Fund (IMF) says that over the past 12 months, “the world has experienced a substantial inflationary shock in the form of higher food prices“.
Simon Johnson, chief economist at the IMF, points to three factors as responsible for the spike in prices.
First, increased demand from emerging economies like India and China, where consumers are demanding more calories in their diet. Second, weather. Droughts have had an impact in some parts of the world. But third is the contentious relationship between food and fuel. And to understand this relationship, it pays to look at corn.
Corn prices, according to the IMF, have doubled over the past two years. And in significant part, that is due to demand for the biofuel, ethanol, and the way in which ethanol policy is made in the United States.
“Corn has become all things to all people,“ says Simon Johnson. “It used to be fuel for people. Now it’s fuel for cars.“

Unintended Consequences
Making biofuels for our cars from corn is now big business.
At the Lincolnway Energy Plant in Ames, Iowa, truck after truck unloads vast quantities of corn. This plant is, in essence, a gigantic still. And it turns out 50 million gallons of ethanol every year.
Mix ethanol with petrol, say its makers, and you get a fuel which lowers harmful emissions and reduces dependence on imported oil. The IMF applauds the desire to diversify fuel sources, and to find renewable sources of energy.
But, says Simon Johnson: “The law of unintended consequences is in effect. When we increase demand for biofuels to create ethanol to mix with our gasoline to drive our cars in the United States that is increasing demand for corn.
“It’s causing the price of corn to go up and that affects both corn prices and other food prices in the United States. But affecting them in the United States is the same thing as affecting them globally.“
Larsson Dunn, a former chemistry professor who runs the Lincolnway ethanol plant, argues that Iowa, and US agriculture, are fertile and technologically advanced enough to meet demand for food and fuel.
“We have the most efficient farmers and some of the best farmland in the world in the Midwest. So we’re able to efficiently produce enough grain for food and produce surpluses for fuels.“

Alternative Uses
Because corn is such an important ingredient in our food supply, higher corn prices mean higher prices for all sorts of things you might not expect.
And the alternative uses of corn go way beyond biofuels.
At Iowa State University, scientists are pulling this grain apart and finding that its chemical constituents can make all sorts of things such as paper finished with corn-derived chemicals, charcoal briquettes bound with corn products, even a shirt woven from a corn-based fiber.

Subsidies
In the coming years, say the experts, other crops--sugar cane, switchgrass, jatropha trees--may well grow into potent sources of renewable fuels.
But, says the IMF, those crops--many of which are grown in developing countries--will make slow headway as a source of renewable fuels while ethanol policy in the United States remains the way it is.
The US government offers generous financial subsidies to companies that blend ethanol and petrol, and has placed obstacles in the way of cheaper ethanol imports.
“Industrial countries,“ writes Simon Johnson, “need to seize this moment and eliminate subsidies.“
Allowing freer trade in biofuels should, he says, help agricultural sectors everywhere.
But more people in more countries are now seeking more and better food. And if we want biofuels too, we may have to expect higher food prices.

South Korea spends $4.6 billion on language education abroad and between $2-$4 billion domestically.

Rights activists in South Korea since August have been fighting a crackdown on illegal migrant workers. But South Asian and South-east Asians are resentful that Westerners, particularly those in the country’s booming English language teaching industry, are seen differently.
“I guess the perspective of the Korean left (how they focus on migrant exploitation) is okay but that can be problematic if they are not talking about ’white migrants,’“ said Bonojit Hussain, a member of the Progressive Students’ Union in India and a graduate student at Song Kong Hoe University.
Most “progressives“ in South Korea, he suggested, highlight the “plight“ of migrant workers and push for legal reforms, but downplay issues of race, class, and nationality, particularly where it concerns English language-teaching foreign workers from the richer Western countries.
Moreover, he told Ipsnews.net that popular discourse on migration has become more politicized and the word, “migrant“ itself usually evokes negative sentiment.
“If you bring the element of class into it, not their class background in their own country but after coming to Korea--white or brown or yellow or whatever--then if you add the dynamics of class, then I think we should qualify it this way: ’working class migrant’ and ’elite migrant,’“ Hussain argued. “There is a distinction--all white migrants are elite.“
In 2006, the Korean immigration service issued 29,263 ’E-2’ visas (teaching visas) to foreign workers mostly from the US , Canada, and Australia. The number would be much higher, if English-teaching foreigners who work illegally in South Korea are taken into account.
According to a 2007 Canadian government study, South Korea spends more per capita on English language education than any other nation. Currently, it spends $4.6 billion on language education abroad and between $2-$4 billion domestically.
Meanwhile, according to Amnesty International, approximately 350,000 migrant workers--roughly 1.5 percent of the total Korean workforce--are present in this country of 20 million people. Most South Asian migrants are from Bangladesh, Sri Lanka and Pakistan, while those from South-East Asia come from Indonesia, the Philippines, and Burma.
According to Hussain, historical factors, such as colonialism, knowledge production, and hegemony have allowed white foreigners to avoid the “migrant worker“ label.
“Koreans look at even me as a migrant worker,“ said Nur Kholis, a commissioner for the Indonesian national commission on human rights, and a graduate student at Sung Kong Hoe University.
Kholis argued that South Korea’s historical allegiance to the US as well as its embrace of capitalism and Minjok ideology were mostly to blame for many Koreans’ racist perceptions towards South Asians and South-East Asians.

The hope is that it is just a question of time before banks consolidate their subprime exposure onto their balance sheets.

The European Central Bank (ECB) is keen these days to spew cash into troubled markets. On Tuesday December 18th it accepted bids from 390 banks for close to 350 billion euros in short-term money, at below-market rates (between 4.21 and 4.45 percent). Is this is a $500 billion Christmas present, or a justifiable measure to avert an unseasonal crisis?
Certainly, it was a response to a sudden jump in two-week rates to over 4.9 percent the day before--a sign that banks were hoarding more liquidity than usual at this time of year, to tide them over the Christmas period, reported Businessweek.com.
And there had also been early indications that a joint operation by central banks, announced on December 12th, to ease turbulence in the interbank money market, was going to be inadequate. Despite easier lending conditions promised by America’s Federal Reserve and the Bank of England, and despite the provision of American dollars via the ECB and the Swiss National Bank, banks were still holding onto their cash.
The underlying problem is that banks have still not taken the full impact on their balance sheets of the American subprime mortgage crisis. Many banks either own assets affected by mortgage losses, or they are funding lines of credit to structured investment vehicles (SIVs) which do, and whose valuations are shaky or impaired. Either way there is plenty of uncertainty--enough for money-market funds to prefer to reduce rather than increase their exposure to banks.
Of the three big central banks, the ECB has been the most willing to dish out cash. On August 9th, when market turbulence first hit, it called a quick tender and put 94.8 billion euros into the market. Banks can deposit all kinds of collateral with euro-area central banks in return for cash without paying a penalty rate, while, until the latest joint operation, the Fed still demanded a penalty rate as did the Bank of England, which also accepted only high-quality collateral. The ECB, a more flexible friend, has generously been providing liquidity to American and British banks too, if they have branches or subsidiaries in the euro area.
The joint operation, which also involves the Bank of Canada, was a sign that the ECB philosophy, to be generous in times of liquidity shortage, is gaining traction. Mervyn King, the Bank of England’s governor, who has taken flak previously for being too hard-line, seems to have learned something.
At a parliamentary committee hearing on December 18th he sang the praises of the anonymous auction which avoids the stigma that banks risk incurring if they come publicly to a central bank discount window--the “key lesson that central banks around the world have taken from the recent turmoil,“ King said.
But it remains to be seen whether liberal amounts of central-bank liquidity will encourage banks to do more than hoard cash. If, after the Christmas break, the interbank market still stutters, central banks will continue to have a problem transmitting their monetary-policy message to the market.
The hope is that it is just a question of time (and some pain) before banks consolidate their subprime exposure onto their balance sheets. But the fear is that trust in the banking system has been badly damaged for months to come.

Syria began participating in the International Monetary Fund’s (IMF) General Data Dissemination System (GDDS) on December 12, 2007, marking a major step forward in the development of its statistical system. Comprehensive information on Syria’s statistical production and dissemination practices now appears on the IMF’s Dissemination Standards Bulletin Board, AP reported.
To mark the occasion, the newly appointed Director General of Syria’s Central Bureau of Statistics, Shafik Arbach noted: “The Syrian authorities recognize the need and importance of improvements in the country’s statistical system. A Strategy for Statistical Capacity Building 2006-2010 had been formulated recently. Within the framework of the Strategy, participation in the GDDS has assumed a central importance in the country’s statistical development.
Syria’s GDDS participation gains even more importance at this juncture, as Syria undergoes rapid economic and structural changes. The IMF’s GDDS provides an excellent framework for the development of statistical systems. I am confident that Syria’s participation in the GDDS will ultimately lead to the production and dissemination of more reliable and timely statistics needed for economic policymaking and monitoring developments.“
Director of the IMF Statistics Department Robert Edwards welcomed Syria’s GDDS participation and observed: “Syria’s participation in the GDDS is a milestone in Syria’s statistical development. Participation in the GDDS should allow Syria to take full advantage of the framework to enhance its statistical capacity, this would encourage other countries in the region to follow the same path. The IMF and the Middle East Technical Assistance Center are ready to further collaborate with Syria.“
The GDDS was established by the IMF in 1997. It provides a framework to help countries to develop their statistical systems to produce comprehensive and accurate statistics for economic policymaking and analysis. Syria is the 90th GDDS participant.