Protests over mining

This story is perfectly timed for my Year 13 students as they start their final A2 module. I doubt that many of them spotted this on Tuesday night - they may have been doing some revision for their synoptic module (or I hope they were!).

According to this BBC report, 10,000 people encircled the Niyamgiri hills in Orissa to protest at the ruling of India's Supreme court to allow a UK based firm to begin mining bauxite in the hills. Local tribes view the hills as sacred and mining activities clearly threaten their culture and way of life. Vedanta argues the extraction of bauxite will earn valuable export revenue, generate jobs and increase the standard of living for local people and that such natural resource endowments provide the key to economic development in the area.

Campaigners on the other hand argue that "India's rush to development should not come at the expense of traditional and sustainable ways of life of tribal and marginalised people".

There are lots of issues in this story which we will explore over the coming months including:

• the meaning of development;
• the charactreristics of developing countries;
• the role of multinationals;
• sustainable development.

My challenge to Year 13 students
Best response to the two questions below by the end of this week
1. What is the difference between economic growth and development?
2. To what extent are global patterns of trade determined by countries' resource endowments?

Is there a future for the UK steel industry?

The Independent makes this its Big Question for the day after Corus announced it was laying off 3,500 workers, 2,000 of them in the UK.

The demand for steel is a textbook example of 'derived demand' - steel is demanded primarily by the car manufacturing and construction industries, so falling demand in these sectors has reduced the demand for steel. In turn this has created excess supply in the industry and over-capacity. The response is to cut jobs. Whether these jobs are lost permanently depends upon a number of factors. An eventual upturn in demand should ensure a revival of output (hence why Corus has mothballed production facilities rather than closed them). However, strong competition from China may mean that production of steel in the UK and the rest of Europe is simply too costly - despite the huge gains in labour productivity in the last twenty years.

The Independent's coverage of the big steel question is excellent and well worth reading

My challenge to Year 10 students

What is meant by labour productivity?

Click on the chart at the top right of this blog and tell me by how much productivity in the UK steel industry has increased since 1988.

Is your essay worth £1000?

The Royal Economics Society's essay competition for A Level economists offers £1000 for the best essay from an A Level student (£500 for the second best).

The 2009 essay title is certainly topical:

'Are economic recessions inevitable?'

Anyone interested in entering the competition should see SDW for further details as soon as possible.

Spotting the green shoots

With the recession only just officially confirmed, it is way too early to be talking about the 'green shoots of recovery'.

But what will these shoots look like and how do we spot them when they emerge?

This short BBC video interview with four economists helps to understand the signs. It is likely to be a long time before we spot them though.

Recession tracker

The word 'tracker' raises my blood pressure - a series of blunders by my mortage broker resulted in me moving from a 'tracker' mortage to a fixed rate mortage some 5 months ago. The dramatic decrease in interest rates since then is having little impact on the family finances!

That aside, the BBC's 'recession tracker' is a great resource for economics and business students. It gives the latest data and news on GDP, unemployment, interest rates, house prices and repossessions on a single page.

Check it out here.

Impact of exchange rates on business

My Year 11 GCSE students have had a quick introduction to exchange rates in today's lesson. Tomorrow we will be considering the importance of exchange rates to business. A great illustration of the problems created by changes in exchange rates is to be found in today's news, with British Airways experiencing rising costs due to the fall in the value of sterling on foreign exchange markets.

Click here to read the short BBC article about the impact of the exchange rate on BA's costs.

Other useful weblinks

Robert Peston on the impact of the weak pound on retailers such as Next

Latest on the falling pound

The New Capitalism

Robert Peston is undoubtedly the face of reporting when it comes to the events of the last three months. He has led with 'scoops' (some have said inside information) of troubles in the financial sector and definitely been one step ahead of the story.

His analysis of what went wrong and what the future of capitalism holds is well worth sixth form students of economics reading. You can read what he has to say here and you might want to follow his blog (if you aren't already) by clicking here.