1. The Times has an interesting story that points to the problems with phasing out plastics in food packaging.
Plastic works well to slow the decay of vegetables and fruit. That means less produce is tossed into the garbage, where it creates almost 60 percent of landfill methane emissions, according to a 2023 report by the Environmental Protection Agency. A Swiss study in 2021 showed that each rotting cucumber thrown away has the equivalent environmental impact of 93 plastic cucumber wrappers. Food is the most common material in landfills.
Ultimately the problem with such transitions lies in the reluctance of societies as a collective to come around to abandon their food habits.
Consumers increasingly report that using less plastic and packaging matters to them, but their shopping habits tell a different story. American shoppers bought $4.3 billion worth of bagged salad last year, according to the International Fresh Produce Association. Marketing experiments and independent research both show that price, quality and convenience drive food choices more than environmental concerns... Battle lines seem to be drawn between the never-plastic crowd and shoppers who prefer the ease of fresh salad greens delivered to their door. “The packaging conversation is being held hostage by one side or the other,” said Max Teplitski, chief science officer of the International Fresh Produce Association.
2. Some of the DBT programs make no sense. Sample the DBT to parents to buy textbooks and uniforms for school children in Bihar which was launched in 2017 and wound up in 2022 after failure and criticism. A 2018 survey found that only 18% of students purchased textbooks with the DBT money.
In the case of Bihar, contextual and operational failings like parents without bank accounts and problems with implementation contributed to the low uptake. But even without these, it's likely that a significant share of parents would not have purchased textbooks.
3. Story of a failed PPP in healthcare
In 2002, the Karnataka government set up the Rajiv Gandhi Super Specialty hospital in Raichur and handed over the 73-acre campus with hostel, staff quarters and hospital building to Apollo Hospitals Enterprise Limited to provide specialised treatment for various diseases. The state government drew up an agreement to pay Rs 1 crore per month for revenue expenditure to Apollo. Under the terms of the agreement, the private hospital would have to provide free treatment to below-poverty-line patients in Raichur. A decade later, a state government inspection of the hospital found that it lacked several services that were part of the agreement. Out of 340 beds, only 154 were functional, of which only 58% were occupied by patients in 2010-’11. The below-poverty-line patients admitted covered only 11% of total beds in hospital. In May 2012, the Karnataka government terminated the agreement with Apollo.
4. Quick commerce (q-commerce), the hyper-localised 10 minute grocery delivery model, is surging in India, driven by Blinkit and Instamart. Zomato purchased the struggling Blinkit two years back and has turned it around. Interestingly Instamart is owned by Zomato's food delivery rival Swiggy. Each has a 40% market share. As a Ken story writes, India's q-commerce market can be traced back to Swiggy in August 2020 promising 45 minute grocery delivery, followed by Zepto in April 2021 promising delivery in 10 minutes, and then Blinkit (Grofers then) following suit in December 2021.
I think it's misleading to revise the priors on scepticism about the long-term potential of q-commerce in India. For all its spectacular growth, Blinkit's revenues in three quarters of 2023-24 have been just Rs 1530 Cr ($185 million). There's some more runway available to absorb the pent-up demand for q-commerce. Like with all else in the ultra-price-sensitive Indian market, this demand too is likely to reach its limits soon. q-commerce priced at sustainable levels is likely to be attractive to only the high-income class, a tiny market segment.
5. Janan Ganesh has an excellent oped that gives a different explanation for the rise of populism and other societal ills afflicting western countries - the disease of success.
Problems of success are harder to fix because, almost by definition, you wouldn’t want to remove the underlying causes of them... The best explanation for the strange turn in politics over the past decade is too much success, for too long. Few voters in the west can remember the last time that electing a demagogue led to total societal ruin (the 1930s). The result? A willingness to take risks with their vote, as a bank that has forgotten the last crash starts to take risks with its balance sheet. What the economist Hyman Minsky said of financial crises, that stability breeds instability, could be the motto of modern politics too... The most important populist breakthrough, Donald Trump in 2016, happened in a super-rich country, seven years into an economic expansion. The Brexit campaign won most of England’s affluent home counties.Populism can’t, or can’t just, be the result of scarcity. It can’t be solved through more and better-distributed wealth. In fact, to the extent that it liberates people to be cavalier with their vote, material comfort might make things worse. Faced with problems of failure — disease, illiteracy, mass unemployment — western elites are supremely capable. When it comes to even apprehending problems of success, less so... Modernity — a world in which most people live in cities, have freedom from clerics and communicate across great distances at low cost — came along about five minutes ago in the history of civilisation. Economic growth was itself an almost unknown phenomenon in the three millennia before 1750. It would be strange if such abrupt and profound change hadn’t had some unintended consequences. The story isn’t phone-induced stress or even low birth rates. The story is that we haven’t experienced much worse.
6. It's ironical that cheap Chinese solar exports are accompanied with weak Chinese solar companies (propped up only by massive subsidies)
Chinese solar-panel makers... account for 80 per cent of global production capacity. But the cost of that victory is now looking too high. China dominates the solar panel sector’s entire supply chain. Prices, which are nearly two-thirds lower than US counterparts, have helped it to win market share. Every year, this price gap widens. There was another 40 per cent price cut in 2023. China’s dominance has come from years of investment. It ploughed over $130bn into the solar industry last year — into production capacity increases. Chinese makers are able to build over 860 gigawatts of solar modules annually. The biggest advantage Chinese companies have is scale. Due to the sheer size of the domestic market — which added a record 217 gigawatts of solar last year — companies invested heavily in larger scale manufacturing and automation. That is paying off today. Another 600 gigawatts of annual capacity is expected to start operations this year. That would be enough to cover the world’s total demand through 2032, according to energy research group Wood Mackenzie...The weak stock performance of Chinese solar cell manufacturers reflects that mismatch. Longi Green Energy Technology, JA Solar Technology and Trina Solar are down more than 50 per cent in the past year. Longi, China’s largest business in the sector which has grown to become the world’s second most valuable solar energy group, trades at 18 times forward earnings. That is less than half the valuation of smaller US peers. Operating margins have halved over the past four years.
7. Big Tech has come to see fines as a legitimate cost of doing business. Worse still, very little of those imposed finally get paid.
Damien Geradin, an antitrust lawyer who has represented companies in probes against Apple and Google, said fines did not work as deterrents. He said: “A fine is a cost of doing business for Big Tech and the level of profit of these companies is such that no fine will exceed the profit of ignoring the law.”
8. Gillian Tett points to a new paper by Ken Rogoff et al which points to a secular decline in real interest rates over the last seven centuries.
The chart is certainly not smooth. Two big inflection points occurred during the 14th-century Black Death pandemic, and then the European “Trinity” financial crisis of 1557. There were smaller inflections in 1914 and 1981. But what is more striking than these inflections is how rare they are. While long-term rates have often moved in response to recessions, defaults, financial shocks and so on, they almost always revert to trend after a decade or two. As the economist Maurice Obstfeld has pointed out, the result is that they look like mere “blips” from a long-term historical point of view. To put it another way, modernity triggered an inexorable decline in the long-term price of money, and was doing this well before we started to fret about ultra-low rates in the 21st century.
On the reasons, Tett summarises the points made by Rogoff et al and what it means going forward.
The real reason, they say, for falling borrowing costs is not economic shifts, but an issue economists often ignore — the nature of finance. A combination of modern capital markets, risk analysis and innovation around using collateral to back loans has made money more efficient... A key distinction between modern and premodern societies is that innovations ranging from double-entry book keeping to computers have left us believing that we can predict, manage and price future risks, without relying on gods, as our ancestors did... And what does it mean for current rates?... Adopting an eight-century timeframe suggests that the ultra-low rates we saw in the early 21st century were a slightly excessive deviation from the trend. It should thus be no surprise that long-term rates have corrected upwards, particularly given that the short-term neutral rate has probably risen.
9. Nice graphic that shows how after 35 years, the Nikkei has come full circle.
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