Economics-Watching: Third-Quarter GDP Growth Estimate Increased

[from the Federal Reserve Bank of Atlanta’s GDPNow]

The growth rate of real gross domestic product (GDP) is a key indicator of economic activity, but the official estimate is released with a delay. The Federal Reserve Bank of Atlanta’s GDPNow forecasting model provides a “nowcast” of the official estimate prior to its release by estimating GDP growth using a methodology similar to the one used by the U.S. Bureau of Economic Analysis.

GDPNow is not an official forecast of the Atlanta Fed. Rather, it is best viewed as a running estimate of real GDP growth based on available economic data for the current measured quarter. There are no subjective adjustments made to GDPNow—the estimate is based solely on the mathematical results of the modelIn particular, it does not capture the impact of COVID-19 and social mobility beyond their impact on GDP source data and relevant economic reports that have already been released. It does not anticipate their impact on forthcoming economic reports beyond the standard internal dynamics of the model.

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2023 is 4.1 percent on August 8, up from 3.9 percent on August 1. After recent releases from the U.S. Census Bureau, the Institute for Supply Management, the U.S. Bureau of Economic Analysis, and the U.S. Bureau of Labor Statistics, an increase in the nowcast of third-quarter real gross private domestic investment growth from 5.2 percent to 8.1 percent was slightly offset by decreases in the nowcasts of third-quarter real personal consumption expenditures growth and third-quarter real government spending growth from 3.5 percent and 2.9 percent, respectively, to 3.2 percent and 2.7 percent, while the nowcast of the contribution of the change in real net exports to second-quarter real GDP growth increased from 0.08 percentage points to 0.11 percentage points.

The next GDPNow update is Tuesday, August 15.

Speculative Science: The Reality beyond Spacetime, with Donald Hoffman

[from The Institute of Art and Ideas Science Weekly, July 22]

Donald Hoffman famously argues that we know nothing about the truth of the world. His book, The Case Against Reality, claims the process of survival of the fittest does not require a true picture of reality. Furthermore, Hoffman claims spacetime is not fundamental. So, what lies beneath spacetime, can we know about it? And how does consciousness come into play? Join this interview with the famed cognitive psychologist and author exploring our notions of consciousness, spacetime, and what lies beneath. Hosted by Curt Jaimungal.

[watch the video]

Movies and Chemistry: Keeping the Enchantment of Education

Several movies give you an “enchanting” back door or window into chemistry so that you can “beat” the tediousness of regular education and come into the field and its topics via these movies:

I.

The Man in the White Suit is a 1951 British comedy classic with Alec Guinness as a genius research chemist. He fiddles with his flasks and polymer and textile chemistry experiments until he invents a fabric that shows no wear and tear “forever.” This would seem like a great boon to humanity in its clothing needs but the chemist (“Sidney Stratton”) finds that both labor and management reject his discovery violently as it threatens jobs and profits. Textile or fabric polymer chemistry is at the heart of the plot.

Cry Terror! is a taut 1958 crime thriller movie with James Mason and Rod Steiger. The plot involves the terrorist threat of exploding a domestic airliner with a hidden RDX cache (a TNT successor) unless the demanded payment is made.

RDX was used by both sides in World War II. The U.S. produced about 15,000 long tons per month during WWII and Germany about 7,000 long tons per month. RDX had the major advantages of possessing greater explosive force than TNT, used in World War I and requiring no additional raw materials for its manufacture.

Semtex is a general-purpose plastic explosive containing RDX and PETN. It is used in commercial blasting, demolition, and in certain military applications.

A Semtex bomb was used in the Pan Am Flight 103 (known also as the Lockerbie) bombing in 1988. A belt laden with 700 g (1.5 lb) of RDX explosives tucked under the dress of the assassin was used in the assassination of former Indian prime minister Rajiv Gandhi in 1991.

The 1993 Bombay bombings used RDX placed into several vehicles as bombs. RDX was the main component used for the 2006 Mumbai train bombings and the Jaipur bombings in 2008. It also is believed to be the explosive used in the 2010 Moscow Metro bombings.

Traces of RDX were found on pieces of wreckage from 1999 Russian apartment bombings and 2004 Russian aircraft bombings. Further reports on the bombs used in the 1999 apartment bombings indicated that while RDX was not a part of the main charge, each bomb contained plastic explosive used as a booster charge.

Ahmed Ressam, the al-Qaeda Millennium Bomber, used a small quantity of RDX as one of the components in the bomb that he prepared to detonate in Los Angeles International Airport on New Year’s Eve 1999-2000; the bomb could have produced a blast forty times greater than that of a devastating car bomb.

In July 2012, the Kenyan government arrested two Iranian nationals and charged them with illegal possession of 15 kilograms (33 pounds) of RDX. According to the Kenyan Police, the Iranians planned to use the RDX for “attacks on Israeli, U.S., UK and Saudi Arabian targets.”

RDX was used in the assassination of Lebanese Prime Minister Rafic Hariri on February 14, 2005.

In the 2019 Pulwama attack in India, 250 kg of high-grade RDX was used by Jaish-e-Mohammed. The attack resulted in the deaths of 44 Central Reserve Police Force personnel as well as the attacker.

Semtex was developed and manufactured in Czechoslovakia, originally under the name B 1 and then under the “Semtex” designation since 1964, labeled as SEMTEX 1A, since 1967 as SEMTEX H, and since 1987 as SEMTEX 10. Originally developed for Czechoslovak military use and export, Semtex eventually became popular with paramilitary groups and rebels or terrorists because prior to 2000 it was extremely difficult to detect, as in the case of Pan Am Flight 103.

The Russian apartment bombings were a series of explosions that hit four apartment blocks in the Russian cities of Buynaksk, Moscow and Volgodonsk in September 1999, killing more than 300, injuring more than 1,000, and spreading fear across the country. The bombings, together with the Invasion of Dagestan, triggered the Second Chechen War. The handling of the crisis by Vladimir Putin, who was prime minister at the time, boosted his popularity greatly and helped him attain the presidency within a few months.

The blasts hit Buynaksk on 4 September and in Moscow on 9 and 13 September. On 13 September, Russian Duma speaker Gennadiy Seleznyov made an announcement in the Duma about receiving a report that another bombing had just happened in the city of Volgodonsk. A bombing did indeed happen in Volgodonsk, but only three days later, on 16 September. Chechen militants were blamed for the bombings, but denied responsibility, along with Chechen president Aslan Maskhadov.

A suspicious device resembling those used in the bombings was found and defused in an apartment block in the Russian city of Ryazan on 22 September. On 23 September, Vladimir Putin praised the vigilance of the inhabitants of Ryazan and ordered the air bombing of Grozny, which marked the beginning of the Second Chechen War. Three FSB agents who had planted the devices at Ryazan were arrested by the local police, with the devices containing a sugar-like substance resembling RDX.

II.

The movie Khartoum (1966) has General Charles Gordon traveling to Sudan in 1884 to quell the “mad mullah” the Mahdi. (Osama bin Laden of his day).
At the train station where General Gordon starts his trip, there’s a railway ad sign that promotes the use of “Wright’s Coal Tar Soap.”

This gives us a sign of the rise of the modern chemical industry.

III.

Think of “Sherlock Holmes” in terms of all the movies and TV series or the original stories and books:

Holmes has to explain to Watson how he survived the assassination attempt on him by Moriarty, “the Napoleon of Crime” who threw him off the Reichenbach Falls. Holmes explains that he faked Moriarty out and clung to a bush or something and was (obviously) not killed.

Holmes tells Watson what he does when he returns to civilization and travels and studies for some three years:

“I then passed through Persia, looking in at Mecca, and paid a short but interesting visit to the Khalifa at Khartoum, the results of which I communicated to the Foreign Office. Returning to France, I spent some months in a research into the coal-tar derivatives, which I conducted in a laboratory at Montpellier, in the south of France.”

The context implies the year 1894.

There is clear evidence that Mr. Holmes was deeply involved in the research of coal-tar derivatives as early as 1889 when the events of the Copper Beeches matter were transpiring.

We are told that on an evening in 1889, Mr. Holmes was seated in 221B Baker Street at the deal table loaded with retorts and test tubes. He was settling down to one of those all-night chemical researches in which he frequently indulged.

The research work was interrupted by a message of distress from Violet Hunter. Watson found that there was a train the next morning, and Holmes tells Watson:

“That will do very nicely. Then perhaps I had better postpone my analysis of the acetones as we may need to be at our best in the morning.”

It is clear that Holmes was engaged in coal-tar research long before his visit to Montpellier in the south of France.

The quotation from the Copper Beeches story refers to acetones, not to coal-tar derivatives.

“In the fractional distillation of coal-tar, the distillate separates into five distinct groups or layers, depending upon the stage of the process and the amount of heat applied. Category-one of the five includes benzene, toluene, xylenes and cumenes.

Acetones [dimethelketone-CH3COCH3] may be derived from the oxidation of cumene. And cumene [isopropylbenzene-C6H5C(CH3)2] is derived by distillation from the coal-tar naphtha fractions.”

Cumenes are derived from coal-tar, and acetones are derived from cumenes. Thus, a study of the acetones is, necessarily, research into coal-tar derivatives.

The rise of chemical engineering and organic chemistry are at the heart of the Sherlock Holmes stories.

Thus we can “climb” into chemistry via these books and movies and keep a feeling of enchantment as a kind of educational “shoehorn.”

Economy-Watching, USA: Global Supply Chain Pressure Index: April 2023 Update

[from the Federal Reserve Bank of New York]

A new reading of the Global Supply Chain Pressure Index has been posted.

Estimates for March 2023

  • Global supply chain pressures decreased again in March, falling from 0.28 to 1.06 standard deviations below the index’s historical average.
  • There were significant downward contributions by many of the factors, with the largest negative contributions from European Area delivery times, European Area backlogs, and Taiwanese purchases.
  • The GSCPI’s recent movements suggest that global supply chain conditions have largely normalized after experiencing temporary setbacks around the turn of the year.

The GSCPI compiles more than two dozen metrics across seven economies—data on global transportation costs and regional manufacturing conditions—to track shifts in supply chain pressures from 1997 to the present.

The GSCPI is updated regularly at 10 AM ET on the fourth business day of each month.

The GSCPI is a product of the Federal Reserve Bank of New York’s Applied Macroeconomics and Econometrics Center.

View the index.

Economy-Watching, USA: First-Quarter GDP Growth Estimate Decreased

[from the Federal Reserve Bank of Atlanta]

GDPNow

First-Quarter GDP Growth Estimate Decreased

On April 5, the GDPNow model estimate for real GDP growth in the first quarter of 2023 is 1.5 percent, down from 1.7 percent on April 3.

The next GDPNow update is Monday, April 10.

Want to see even more economic data? The Atlanta Fed’s EconomyNow app will put GDPNow and all its data tools right in your hands. Download it today to see the latest data on inflation, growth, and the labor market.

Movies as an Education in Global Looting: The Sea Hawk (1940)

Movies and the World as an Arena of Violent Domination and Global Looting

The classic Warner Brothers swashbuckler, The Sea Hawk, from 1940, within its romantic adventures and intricate swordfights (perhaps comparable to the car chases of later movies) is a partly historical, partly fictional version of a world built on imperial struggles and ransacking and despoiling. The hegemonic power in the West (and perhaps worldwide) is Spain. Phillip II the king-emperor wants to own and dominate and rule the whole world. In 1588, his Spanish Armada loses to England. (The British of course want to compare this to the Battle of Britain against the German Luftwaffe.)

Set in 1585, The Sea Hawk opens with King Philip II of Spain plotting world domination, laughing that all world maps will soon read simply “Spain” — once England is out of the way, of course.

The Spanish ambassador departs for England to escort his niece to Queen Elizabeth’s court, but in a spectacular sea battle, the Spanish galley is soundly damaged, boarded, raided and sunk by a group of pirates led by Captain Geoffrey Thorpe, a Sir Walter Raleigh stand-in played by Erroll Flynn. Thorpe rescues the galley slaves — they row the boat — and spares the crew, taking them aboard and delivering them to England. The jewels and other bounty (or a portion thereof) are a gift to the Queen.

His crew is part of a noble privateer coalition — the Sea Hawks — who justify their piracy as reclamation of English goods (and enslaved sailors) from the Spanish behemoth. The political fallout from Thorpe’s abduction of the ambassador forces Elizabeth to outlaw the Sea Hawks, including an official denial (and private approval) of his mission to Panama to steal a shipment of Aztec gold.

Inca gold is also mentioned in the movie as a target of robbing.

Sir John Hawkins (1532–1595), part of this group of global sailor-pirates and master-mariners, was one of the most notable sailors and naval commanders of the sixteenth century.

He is known for his pivotal role in the maritime history of England and the rise of the global slave trade.

John Hawkins, the son of a merchant, was born in Plymouth in 1532. He became a sea captain and in 1562 became the first Englishman to start capturing people in Sierra Leone and selling them as slaves to Spanish settlers in the Caribbean. (Notice that selling slaves does not discriminate against Spaniards even with Phillip II threatening England. Business is business.)

Stealing Aztec gold as part of colonial or imperial plundering and the slave trade were part of the dark side of history, something the standard history books “skate over” dishonestly.

A key scene between the Spanish aristocratic beauty and Captain Thorpe:

Doña María Álvarez de Córdoba: “I’m not in the habit of conversing with thieves. I thought I made that quite clear, Captain Thorpe.”

Captain Geoffrey Thorpe: “Why, yes, all except your definition. Tell me, is a thief an Englishman who steals?”

Doña María Álvarez de Córdoba: “It’s anybody who steals… whether it’s piracy or robbing women.”

Captain Geoffrey Thorpe: “Oh, I see. I’ve been admiring some of the jewels we found in your chest… particularly the wrought gold. It’s Aztec, isn’t it? I wonder just how those Indians were persuaded to part with it.”

The Sea Hawk (1940)

Donald Trump continues this tradition of looting when he says of Iraq’s oil:

“Think of it as our oil under their sand.”

Thus the whole world is an arena where the weak don’t have any property rights: not the oil or gold, not themselves (slavery) and not their country (colonialism).

This exploitative hierarchy and “world-system” is part of “the way of the world” and even a romantic adventure story like 1940’s The Sea Hawk gives you a Hollywoodized glimpse into its roots. Imperial struggles in the West spill over into colonization and ransacking and looting. History books one sees in high school are dishonest and in that sense uninformative or even disinformative.

The popular PBS travel series Rick Steves’ Europe unintentionally gives us a wonderful example of this notion of plunder and looting as a pillar of world history in the show on Venice. Rick Steves is talking about the various statues in Venice’s central St. Mark’s Square (Piazza San Marco), and comments “I’d call the style ‘Early Ransack.’”

This Rick Steves quip about ransacking and historical wealth-building is very informative.

Economics-Watching: Underlying Inflation Dashboard Updated

[from the Federal Reserve Bank of Atlanta, February 24, 2023]

Underlying Inflation Dashboard Updated

We’ve updated our Underlying Inflation Dashboard with data from the U.S. Bureau of Economic Analysis, the Federal Reserve Bank of San Francisco, and the Federal Reserve Bank of Dallas.

Want to see even more economic data? The Atlanta Fed’s EconomyNow app will put GDPNow and all its data tools right in your hands. Download it today to see the latest data on inflation, growth, and the labor market.

Zheng Yongnian (郑永年) on How to Address Western Public Opinion on China: Facts, Science and Reason

[from Pekingology at the Center for China and Globalization (CCG)]

“Be open, open, and more open,” especially to businesses, investors, media, universities, and research institutions. And tit-for-tat doesn’t work, the professor says.

by Zichen Wang, Shuyuan Han, and Li Huiyan

Professor Zheng Yongnian (郑永年), the Founding Director of the Institute for International Affairs at the Chinese University of Hong Kong, Shenzhen, on January 28 published an article on how China should address Western public opinion on China. His advice is in the last part of the article, and below is a translation.

(Emphasis by Pekingnology.)

First, we need to understand how such narratives are formed. Historically, China held a bias due to its self-isolation and limited knowledge of the West. Despite losing the two Opium Wars, Chinese intellectuals at that time still saw Westerners as uncivilized. It was not until China was defeated by Japan, a neighboring country once considered as China’s student, that they realized their ignorance and a need for reform. Before China’s Reform and Opening up, Chinese people barely knew anything about the West. They always assumed Westerners were in deep distress, repeating the same lack of understanding of the West.

Similarly, the West’s uncertainty and fear towards China’s rise stem from a lack of understanding and even fear of the country, and their ingrained ideology would lead to misconceptions.

China is the world’s second-largest economy. The externalities and influence of its economy on the West are obvious. Upon joining the WTO, some Chinese people also felt unsettled by the externalities of the West. Some said, “the wolf is coming.” Now it is the West that is experiencing such worries.

It is crucial to recognize the significant impact of the Western hypocritical narratives against China, even if they are based on ideology rather than facts. We must also acknowledge that ideology-based public opinion from the West can exert a powerful influence on their policies toward China.

Historically, the West tended to demonize others while presenting themselves as morally superior, which enabled them to apply Social Darwinism to international politics easily and thus legitimizing conflicts and even wars with other nations. Given the Soviet Union’s failure in the ideological arena during the Cold War, we should by no means ignore any ideology-based public opinion toward China from the West.

Second, to make rational responses to the Western ideology-based criticisms, we should draw lessons from the history of the world economy, such as the lessons of the Soviet Union, as well as our practices, such as the rhetorical battle with the West in the past few years. Coming up with an externally-facing public opinion based on a different ideology is not the most effective in addressing public opinion attacks based on an ideology. Empirically, tit-for-tat is ineffective and can worsen the situation. Again, the failure of the Soviet Union is a prime example, as its battle with a Western ideology failed. When faced with China-demonizing based on ideology from the West, we need to do the simplest thing, namely resorting to facts, science, and reason.

Third, and most importantly, China needs to prioritize its sustainable development, which ultimately benefits the country itself. It is important to recognize that the foundation of the government’s governance lies in its citizens, not Western praise. The support from its people is crucial for both the nation’s longevity and stability., China’s sustainable development also benefits the world economy by boosting its growth. As mentioned above, China has been the largest contributor to the growth of the world economy since it joined the WTO.

It is crucial to prioritize the building of a knowledge system based on China’s practical experiences. Regarding global soft power, we need a knowledge system based on our experiences rather than a certain ideology. While there has been a proposal for an autonomous knowledge system, continuous effort is still required.

Fourth, given the substantial externalities of our economy, we must further communicate and coordinate with other countries on economic policies, regardless of their respective sizes. Our duty is to fulfill the responsibility as a major player in the international community, which also benefits China.

After the 1997-1998 Asian financial crisis, China promised not to devalue its currency, and that commitment became an international public good in Asia. Similarly, after the global financial crisis from 2007 to 2008, China made similar contributions. As China re-opens its economy after the pandemic, it is important not only to take note of the hypocritical comments from certain quarters in the Western world but also to recognize the positive evaluations and high expectations from many international organizations.

Fifth, we must be open, open, and more open. Despite China’s efforts, there remains a persistent ideological camp in the West that views China through an ideological lens, a situation made worse by the past three years of the pandemic. The pandemic was so severe that it hindered travel across borders; as a result, some Western media and scholars tend to assess China through ideology since they couldn’t come here to see the facts with their own eyes.

The assessment of China through a uniform ideological lens appears to have strengthened the original Western ideological camp. However, the United States and the West have more than one ideology, and not all people believe in the prevailing ideology in the public opinion sphere. China’s openness provides a “seeing is believing” opportunity for different groups in the West. China should increase its openness to Western groups, including businesses, investors, media, universities, and research institutions. The changes in their understanding could render those ideological-based public opinions less effective.

Songs as an Informal University

We have already seen in “Songs as Another Kind of Parallel University” that trying to revive or rescue enchantment in a “disenchanted world” (Max Weber, “Entzauberung”) is a kind of philosophical “move” in love songs which has much to do with the impact on the West of the medieval troubadours.

Take this masterpiece song from the fifties musical My Fair Lady. Notice the explicit introduction of “enchantment” into the lyrics:

“On the Street Where You Live”

I have often walked
Down the street before,
But the pavement always stayed
Beneath my feet before
All at once am I
Several stories high,
Knowing I’m on the street where you live

Are there lilac trees
In the heart of town?
Can you hear a lark in any other part of town?
Does enchantment pour
Out of every door?
No, it’s just on the street where you live

And oh, the towering feeling
Just to know somehow you are near
The overpowering feeling
That any second you may suddenly appear

People stop and stare
They don’t bother me,
For there’s no where else on earth
That I would rather be

Let the time go by,
I won’t care if I
Can be here on the street where you live

People stop and stare
They don’t bother me,
For there’s no where else on earth
That I would rather be
Let the time go by
I won’t care if I
Can be here on the street where you live,
Can be here on the street where you live,
Can be here on the street where you live

The enchantment of love is also at the center of the song by Seals & Crofts, “We May Never Pass This Way (Again)” from decades ago. In the same way that Jim Morrison and the Doors capture life’s basic randomized “thrownness” (Heidegger, “Geworfenheit”), Seals & Crofts capture life’s one-time ephemerality, as the title signals immediately:

“We May Never Pass This Way (Again)”

Life
So they say
Is but a game and they’d let it slip away
Love
Like the autumn sun
Should be dyin’
But it’s only just begun

Like the twilight in the road up ahead
They don’t see just where we’re goin’
And all the secrets in the universe
Whisper in our ears
All the years will come and go
Take us up
Always up

We may never pass this way again
We may never pass this way again
We may never pass this way again

Dreams
So they say
Are for the fools and they let ’em drift away
Peace
Like the silent dove
Should be flyin’
But it’s only just begun

Like Columbus in the olden days
We must gather all our courage
Sail our ships out on the open seas
Cast away our fears
And all the years will come and go
Take us up
Always up

We may never pass this way again
We may never pass this way again
We may never pass this way again

So
I wanna laugh while the laughin’ is easy
I wanna cry if makes it worthwhile
I may never pass this way again
That’s why I want it with you

’Cause
You make me feel like I’m more than a friend
Like I’m the journey and you’re the journey’s end
I may never pass this way again
That’s why I want it with you
Baby

We may never pass this way again
We may never pass this way again
We may never pass this way again
We may never pass this way again

After deeply drinking in this and other songs, you could become more “attuned” to academic philosophy which would become less of an abstract and insipid blur. Pre-awareness and pre-understanding give you the receptivity you need and you get these from movies and songs and private life. The trick is to use meta-intelligence to straddle the campus and the off-campus worlds.

World-Watching: Small Business and Food Waste: Not a Small Problem

[from APEC News]

by Aaron Sydor

Faced with a possible food crisis, economies must work together and take action on food waste … starting at the front line with MSMEs.

Conflict, supply disruption, rising prices, and shortages are all impacting food supplies globally. Just as we are nearing some form of recovery from the pandemic, we are now facing another global challenge in the form of a food crisis – and it’s likely to get worse.

The United Nations World Food Programme (WFP) tells us that 349 million people face acute food insecurity this year — an increase from 287 million people in 2021. It is a tragedy that when the world is “hungrier than ever,” as the WFP calls it, so much food goes to waste. One-third of food production, or 1.3 billion tons per year, goes to waste globally, according to the UN Food and Agriculture Organization. It is inconceivable, then, that we don’t make the most of the food that we have.

This is a regional problem that cannot be solved by individual economies acting on their own. It must be looked at with a wider lens, such as through bodies, like APEC, that promote regional economic cooperation. APEC members acknowledge that all areas of the agri-food value chain are interdependent and that there is a need for a whole-system approach.

Among the forum’s efforts to reduce food waste is the Food Security Roadmap Towards 2030 which aims to establish an open, fair, transparent, productive, sustainable and resilient APEC food system. This corresponds to the UN and other multilateral goals by taking action through the following avenues: digital transformation; productivity and international trade; sustainability; public-private partnerships; and inclusivity, especially in the inclusion of micro, small and medium enterprises (MSMEs) along the agri-food value chain.

For more on this topic, download “Enhancing Green MSMEs’ Competitiveness for a Sustainable and Inclusive Asia-Pacific: Food Sector Waste Reduction in Food Supply Chain.” [Archived PDF]

In my capacity as the Chair of APEC’s Small and Medium Enterprises Working Group, I’d like to stress the importance of the latter: inclusivity and small business. MSMEs account for over 97 percent of all business in APEC economies and employ over half of the workforce. Any strategy for reducing food wastage will have to involve the wholesale participation of the region’s smaller businesses.

This is easier written than done. For one thing, fit-for-purpose data is scarce. No APEC economy has food waste data that is specific to MSMEs. And while all have policies and measures to address the problem of food waste, there are no large-scale direct MSMEfood waste reduction targets, policies or plans. Few have tried to reduce MSME food waste in the retail food and food service industries. Supermarkets, food storage facilities or warehouses in many APEC economies aren’t required to donate excesses.

Most entrepreneurs aren’t even aware of the problem, or underestimate its true cost. Those who do understand have limited options or capital, and are unable to find cost-effective solutions to create value out of food waste, and face problems with logistics and transportation. On top of this, there are few to no regulatory frameworks to guide them. From a technology perspective, a majority of APEC economies utilize modern technologies, including mobile applications, to reduce or manage MSME food waste/surplus food, but these modern technologies are used only by large companies in big cities.

Amid these challenges are an abundance of opportunities to help MSMEs reduce food waste. Training, policies and guidelines can aid them in improving profits by reducing costs and increasing the value added of food. They can reduce their carbon footprint, which enhances consumer demand, and divert waste to new products or bioenergy.

A November study by the APEC Small and Medium Enterprises Working Group presents case studies, identifies the best available data on food waste for MSMEs, and identifies several best practices for economies in dealing with food waste through MSME policy.

In one section, the study’s authors analyze a case study of a successful MSME, and identify four key factors contributing to its successful reduction of food waste: 1) creating a network of people — e.g., a community surrounding a farm; 2) using innovation and technology to facilitate farming and save time; 3) producing knowledge and providing it through several channels — e.g., a learning and training center, friendly guide books; and 4) considering the environment at every step of the process.

The paper, called “Enhancing Green MSMEs’ Competitiveness for a Sustainable and Inclusive Asia-Pacific: Food Sector Waste Reduction in Food Supply Chain,” [Archived PDF] is extensive and easily doubles as a handbook for anyone interested in MSME food waste, or the problem of food waste in general. It is a great example of what can be achieved when economies combine knowledge and resources in the pursuit of keeping the region inclusive, prosperous, and fed.

Aaron Sydor is the Chair of the APEC Small and Medium Enterprises Working Group.