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Archive for the ‘Economy and Business’ Category

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The recent bankruptcy of Kodak – America’s largest photographic film company – is expected to affect employees and photographers alike, especially those who rely on the film, paper and chemicals Kodak has produced since the 19th century.  

Jim Megargee compares himself and others like him to dinosaurs on the brink of extinction.  He is a traditional photographer confronted by the threat that digital technology poses to the developing and printing of images in a darkroom.

“There’s a physical difference between a silver print and a digital print,” he said.  “There’s just a physical difference to them.  It’s something not many people think of.  With a silver print, that’s actually an etching on paper into a silver layer that’s embedded in the paper.  With the digital print it’s ink on paper.”

Megargee says the Kodak bankruptcy is not the end of the world for darkroom photographers – at least not yet.  He says plenty of supplies are available, although some products have been discontinued.

“What happens to the photographer when you lose a material, like your favorite film gets taken off the market and the company stops making it, there are other companies,.” he said.  “They’re not going to replace that film, but it may be a similar product.”

But discontinuing any given material means a loss of jobs for the people who produced it.

“Personally, [I am] very concerned,” said Ray Rock, one of the employees at Kodak headquarters in Rochester, New York facing possible unemployment.  “I still need a few more years before I can get retirement benefits, we’ll see what happens.”

Observers say Kodak is likely to continue as a corporation by capitalizing on some of the digital imaging technology that it pioneered.

“My hunch is they will be mostly an intellectual property company, meaning it will just be collecting revenue from licensing its patents and technology,” said Bruce Upbin, managing editor of Forbes magazine.

Jim Megarkee says he can create a fine art print in less than an hour.  He jokes that photographers who trade traditional photography for digital go over to what he calls “the dark side” [ie. the enemy].  He cautions that doing it right is not as easy as pressing a button.

“It’s not unusual to see someone sitting at a computer station and trying to do the same thing and taking two, or three or four hours,” he said.

Megarkee says that comparing traditional chemical photography with digital is like comparing water colors and oil paintings – they are very different.  This dinosaur is hoping for a continued supply of traditional products to prevent his extinction.

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In a year of protests in the Arab world, high food prices helped to make oppression, corruption and poverty under autocratic leaders even more intolerable.

“Prices are so expensive,” said one protester about Egypt’s leaders. ” What shall we do right now? We have to stay until they are gone and give a chance to others who can satisfy our needs.”

Price spike

The political fires that burned across North Africa, many say, were kindled in Russia last summer. Extreme drought triggered wildfires and destroyed one-third of the country’s wheat harvest. Russia refused to export the rest of its harvest. Markets panicked and food prices shot up.<!–IMAGE–>

“Definitely, it is one of the causes of the Arab Spring,” says Shenggen Fan, director-general of the International Food Policy Research Institute.

In 2008, the last time global food prices spiked, Egypt was one of several countries hit by food riots and demonstrations.

Fan believes the return of high prices in 2011 offers some important lessons. “Food price hikes will come more often, and more frequent. So this is the first lesson we learned. Second, food prices obviously will remain very high.”

Food prices will remain high and volatile, Fan says, because demand for food is increasing and supply is not keeping up. This year the world population hit seven billion, with another two billion expected by mid-century. People in emerging economies like China are eating more meat, which requires more animal feed.

Feeding biofuel

But demand for food is just one factor, according to Cornell University economist Chris Barrett. “It’s also the diversion of food and feed to the production of biofuels.”

In the United States, 2011 was the first time more maize went to make ethanol fuel than to feed animals.

Meanwhile, the pace of farm productivity gains has been slowing, Barrett says.

“What we’re seeing right now is the bitter harvest of very poor investments in agriculture research over, really, the last 20 years.”

That means a few bouts of bad weather can cause serious disruptions in world food markets today. And those disruptions are becoming more likely with climate change.

Political realities

Farm ministers from the G20 leading and emerging economies met for the first time this year to discuss the crisis. In 2009, G8 leaders pledged $22 billion to developing-world agriculture. But not much came of the meeting, or the pledge, from countries with financial troubles of their own, Barrett says.<!–IMAGE–>

“The political realities of domestic troubles in the major economies are effectively choking off concerted public-sector response right now, which is a real concern.”

But while those domestic troubles continue, so do the forces pushing food prices up, says Fan, of the International Food Policy Research Institute.

“So if we do not invest in agriculture, do not invest in food production, we will continue to see tightening supply. We will continue to see high prices.”

The good news in this is that high prices always encourage farmers to grow more. A record harvest in 2011 is helping to temper food prices in many, though not all, regions of the world.

In Egypt, for example, food prices have continued to rise. Elsewhere, experts do not expect much downward movement in the cost of food. High and volatile food prices are in the forecast for 2012 and beyond.

As new governments brought to power by the Arab Spring revolts work to deliver economic prosperity to their people, they are looking to Europe as a potential market and aid donor. The continent’s economic troubles could make it more difficult, however, for the Arab governments to reach their goals.

Egypt’s popular revolution, and others in Tunisia and Libya, promised democracy and freedom from repression. They also unleashed pent up demands for more prosperity, a goal that depends in large part on international markets and investors.

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Risk analyst Anthony Skinner of the Maplecroft company said, “This will have a bearing on how deep their pockets are, or how deeply they actually stick their hands into their pockets, and churn out revenue and aid to these markets, which have suffered a lot of turbulence in Libya, Tunisia and Egypt. So, of course this will have a bearing on the overall ability of such markets to recover.”

At the London School of Economics, Professor Iain Begg said Europe’s economic problems will be felt differently in the various Arab Spring countries.

“I think we need to look at the individual countries in the Arab world because they’re very different in their characteristics. Libya is an oil-rich country, and although it will take some time to get the oil revenue flowing again, Libya will benefit from losing its isolation. Much more difficult is Egypt, which is a very populous country, with fewer immediate export potentials,” said Begg.

Libyan businessman Salem al-Maiar said demand will be important for Libya, too, particularly as it moves to diversify its oil-dominated economy.

“In the past 40 years the oil was the backbone of the economy, and it’s high time now to think seriously about diversifying and liberalizing the economy,” he said. “Tourism… we have five UNESCO heritage sites registered in Libya. It is a beautiful country. You have the sea, the archaeology, the Sahara within 20-25 kilometers from each other.”

Tunisia has long taken advantage of its location to earn money from tourism, mainly from Europe. But that was down sharply this year after the first Arab Spring revolt in December and January, and only now is beginning to come back.

Still, the ongoing downturn looms, although Begg said 2011 may prove to have been the worst year of the European economic crisis.

“With very few exceptions, the European countries are expected to grow the rest of this year, and certainly into 2012. So it continues to provide a potential market for the Arab countries. If it were to switch to a significant recession, then I’d start to be worried. But I don’t think it will,” said Begg.

Moreover, Anthony Skinner said European investors soon may find the Middle Eastern countries more attractive.

“In terms of transparency,  in terms of there being a potential shift towards a more liberal democratic system, all of this, of course, bodes well for the individual countries concerned,” said Skinner.

The joy and optimism of the Arab revolutions was bound to be followed by the more sober reality of developing countries in a global economic downturn. Now, experts say, the new Arab governments need to fulfill their political promises, be economically innovative, and hope their key markets and aid donors don’t go broke.