Posts tagged ‘economy’

February 28th, 2011

Estonian State Budget Visualized

Garage48.org guys had another one of their weekend hackathon events, returning to homely Estonia (after Helsinki and before Riga and Stockholm events – check them out) to focus more narrowly on building working apps that address some public service need.

There has been some fair coverage already, on the high quality output from the event (see the project list here) and some of the impediments the event revealed about things like government providing access to data freely for all kinds of app developers. (if you speak Estonian make sure to read Teller and Memokraat).

But more specifically I wanted to share a few thoughts on a special prize I got to hand out – for the state budget visualization app MeieRaha.eu (OurMoney in Estonian):

MeieRaha.eu

Why do I think it is important to visualize something seemingly as boring as a state budget?

First and foremost, it is definitely one set of data any country has to have that while touching every single person in a country is almost completely detached from any comprehension by those people. The reasons are multifold:

  • access to data – frequently checking some spreadsheet files on Ministry of Finance webpages as a pasttime, anyone?
  • volume of data – apparently the 2011 budget of relatively tiny Estonia is about 500 pages
  • bureaucratic structure and terminology – regular people have mental models derived from their own life (kids/health/work…) rather than government structure or department responsibilities (different ministries, state vs municipal, etc)
  • just too large numbers – a normal person can freely count money in the scale that they receive monthly on their own bank account, and maybe avoid major mistakes in the range of their annual income. (To argue for anything beyond look at consumer behavior before your average mortage crisis). For too many a million, 100 million or a billion blend together into abstract “a lot of money” that they are not able to grasp pragmatically, let alone have a comparative discussion around.

Understanding the dynamics of our budget, keeping it balanced, the relative scale and interconnections between income and expenditure items becomes double important before the elections (such as the ones we are in right now, to close this Sunday). Every party pays top dollar to put forward oversimplified promises in heavy pre-election advertising – but it is very hard for a voter to understand what the real cost (or alternative cost) of “free higher education for everyone”, “4-lane road from Tallinn to Riga”, “higher pensions for mothers” or rather silly “citizen salary for everyone” would be.

Taking the above thinking and some recent examples by New York Times Budget Puzzle or The Guardian’s Spending Review or Where Does My Money Go? (really, all worth checking out!), we were chatting with a few friends about a month ago on how to create something similar in Estonia before the March elections. As a citizen and technologist I am a huge supporter of anything that creates more transparency, better understanding, less populism and ultimately – more educated decisions in democracy. But as usual, everyone in that particular Skype chat though feeling very much the same played the always handy “I’m really busy this week” card and while at it I also added that if someone gets it done I’m happy to put some money in.

Though Garage48 events are never about the prospect of pay I was extremely glad that some people (namely Rene Lasseron, Tanel Kärp, Helena Rebane, Konstantin Tretjakov, Martin Grüner, Reigo Kinusar, Hegle Sarapuu, Henri Laupmaa – let me know if I’m missing someone!) came along with the idea and actually made it happen – and I got to keep my promise.

The site today works showing the actual approved 2011 budget for Republic of Estonia. You can fold items apart and together, resize the bubbles to see cross-dependencies, drag in comparison items (those gray bubbles on the bottom) and attempt to push the budget out of balance (the scales in the middle). Yes, there are a bunch of glitches here and there, but hey: what was the last piece of working software you delivered in a weekend?

On this baseline I hope at least part of the team will stick together and leverage some more organized support from research bodies like Praxis, one of the most prominent policy thinktanks around here (disclaimer: I happen to sit on the board there). There is a bunch of obvious improvements to prioritize and deliver now:

  • translations to Russian, English and other languages
  • automated and ordered data exchange with the government to manage updates (both budget changes inside a year as well as annual regular updates)
  • improved engine for budget item interdependencies, to answer questions on what could happen if unemployment rates change and thus the actual tax collection goes up or down inside a year
  • support for budget item “bundles”, for example to layer a number of budget item changes (like a certain party’s promises all together) on top of the baseline
  • figure out the social possibilities on top of this data – how do people want to customize, record and share their versions of budget changes created by a tool
  • tools for mainstream media to use this tool as a standard way to illustrate the impact of any ongoing public policy discussion
  • … — please do leave more ideas in the comments!

 

January 15th, 2009

China Is Larger Than Germany

“Well, duh”, you might say, but actually until recently it was not. GDP-wise that is. Based on 2007 numbers, the top economies in the world were:

  1. the US of A, $13.8 trillion
  2. Japan, $4.38 trillion
  3. China, $3.38 trillion
  4. Germany, $3.32 trillion

Media coverage around this change has a lot of interesting facts, worth reading Bloomberg and Washington Post for example:

China’s economy is 70 times bigger than when leader Deng Xiaoping ditched hard-line Communist policies in favor of free- market reforms in 1978.

China also has a big stake in the U.S. economy, holding $652.9 billion of U.S. Treasuries.

Since introducing free-market policies, China has lifted 300 million citizens out of poverty, according to the United Nations

Global interests spanning African oilfields and South American mines are encouraging China to add to its military might.

And speaking of the future. If both China and US were both to keep their average growth rates, it would take 18 years to change the top spot. However, in the ongoing recession the curves will start changing:

China is one of the few major economies that is on track to have positive GDP growth this year. Merrill Lynch calculates that China will have a GDP growth of 8 percent as compared with a 2.8 percent decline for the United States, a 1.3 percent decline for Japan and a 0.6 percent decline for the European Union.

Under these circumstances, we’re rather talking about a decade?

If you are interested in this power play, I recommend reading the ChinAfrica post from last summer. Or even just see the foreign exchange reserves graph from there.

January 13th, 2009

Green Cars and Economic Stimuli

Heard on the morning news that the German $66B economic stimulus package passed today also includes a measure to encourage people replace their cars. It is sort of understandable as a short term measure, as their economy is quite reliant on the infamous German car makers who, of course, are looking at a bleak 2009. Still if you think of, say, a few million germans rushing to buy new cars and dump their (probably well-running) existing ones — doesn’t sound that reasonable from long term environmental damage point of view.

I looked it up, and it comes out that…

Other measures include a 2,500 euro payment for drivers who buy a new low- emission car.

Now, depending on what “low emission” means in this case the measure could work either way – for German manufacturers or for the environment. For some reason I doubt that these two goals could be obviously achieved together, or at least perceptionally “green” and “german” are not the first semantic associations that pop into mind as a bundle when thinking about cars…

Toyota announced their new Prius yesterday. Looking slightly better (but not beautiful), adding a few interesting innovations (such as solar-paneled moonroof that generates power for the ventilation on hot days) and less than 5l/100km (50mpg) fuel consumption it is a worthy upgrade to what has already been a great if somewhat quirky car till now.

Toyota basically owns the hybrid car market, claiming 91% market share in Europe in 2006. So putting one and one together – to what extent will the German government be supporting the Japanese economy instead of their own with their new car purchase support measure?

July 1st, 2008

ChinAfrica

I very rarely have found myself spending several hours on a single magazine article, but Richard Behar‘s report on China in Africa from June issue of FastCompany is very much worth you invest that time too.

This illustration probably recaps the “what” part of the story:

The Race for Raw Materials

In a word, the chair you sit on and the computer you’re using to read this post more likely than not come from China, no surprise there. What we probably have noticed less as a trend as consumers is that the basic components for making these things, from timber to cadmium, increasingly get shipped to China from Africa.

But what is much more revealing, interesting and depressing in the same time is the “how”.

Post colonial times Europe and the US have kept investing in Africa attaching a lot of soft values to the cold hard cash as conditions: human rights, transparency, saving the environment, democratic values, public education, whatnot. (There is a lot of hypocrisy involved in that too – read part 5 on the US in Equatorial Guinea) Changing whole African societies towards this “western thinking” has slowed the inflow and efficiency of these investments down, feeding in many cases the NGO-s of the donor more than the target countries.

And now imagine that enters a player with a different valueset (communism!) and priorities (feed a double-digit economic growth of a billion+ citizens) and willingness to compromise (bribes, the Earth) … and with a wallet like this:

Beijing's Leverage

This report on what China has done in Africa over just 5 years should give you some food for thought on how the world will look like over next 50. Read it..

November 8th, 2007

A Lot Of People Doing Wrong Things in Estonia

Manufacturing: Estonia VS Germany
An interesting graph from a presentation by Ott Pärna, CEO of Estonian Development Fund (see also my post from their recent event, in Estonian). Estonian & German industries being compared here by employment (left) and value added per manufacturing area.
One common characteristic we share is that there are a lot of areas where a large share of people is adding a tiny part of the value for country’s economy. However, it is quite concerning how tilted towards the bottom (= less value) is the distribution of Estonian workforce.
It would be very interesting to see service industries in different countries being compared in a similar way – such as the software, biotech, nanotech and other innovation/R&D fields we talk so much about. Anyone have a good pointer?
PS: most value in German manufacturing is added with oil, nuclear fuel and tobacco? Scary…