From the EU to Latin America and much more
This week we are in the EU, focusing on protectionism & climate change. While we then move to Latin America's demography concern, we also find a 15000-year-old harbour remains in the Bay of Bengal.
EU considering “concessions” for protectionism to member countries
In April 2023, Poland and Hungary took independent measures by imposing import restrictions on Ukrainian agricultural products. This decision stemmed from extensive protests by local farmers who expressed concerns about the influx of inexpensive Ukrainian exports leading to surpluses in their domestic grain market. Notably, these actions were in defiance of the EU's common trade laws.
In the ongoing struggle to curtail Ukrainian food exports, the new government in Warsaw secured a concession from the EU.
The bloc's top trade official acknowledged that Brussels would assume control over the inflow of farm products if there was a risk of depressing prices in Poland and neighboring countries.
EU authorities have additionally disclosed contemplation of export quotas on certain sensitive products, including poultry meat, sugar, and eggs from Ukraine. This further indicates the intricate negotiations surrounding trade dynamics within the region.
Moreover, this issue has not been isolated to Poland and Hungary, as Romania has witnessed sporadic protests from farmers and truckers in the current month. Their demands primarily focus on domestic economic measures but concerns about Ukrainian competition and the insufficient regulation of Ukrainian imports and services have also been voiced.
The situation reflects a broader challenge within the European context, where economic interests, regulatory issues, and regional dynamics intersect.
Latin American countries face a big demography challenge
In 2016, Latin America experienced a decline in fertility rates, dropping below the critical threshold of 2.1 births per woman essential for population stability. This region has witnessed some of the most rapid declines in fertility rates globally.
Latin America is on the brink of a demographic shift similar to the United States, achieving in just 28 years what took the U.S. 57 years to double its population of individuals older than 65 from 10% to 20%.
The combination of increasing life expectancy and significant emigration, particularly of the working-age population, presents a pressing issue for Latin America—rapid aging.
Countries employing defined-benefit pension systems, such as Brazil and Argentina, are grappling with escalating financial burdens due to a growing number of claimants. Brazil's pension deficit, currently at 2.6% of GDP, is projected to surge to 5.9% by 2060.
Mexico, allocating nearly a quarter of its federal budget to the "well-being pension" in 2024, anticipates a doubling of the number of recipients aged over 65 by 2050.
Research by the Inter-American Development Bank indicates that the additional expenditures prompted by an aging population will lead to Latin American governments surpassing their revenues by approximately 3.8% by 2065. In contrast, the European Union faces a 1.7% gap.
Initiating reforms, Brazil raised its retirement age from the mid-50s in 2019, aiming to save $200 billion by 2029. Uruguay and Costa Rica have also implemented similar measures, raising their pensionable age to address the challenges posed by an aging population.
Investment of around €1.5tn a year is needed in the EU to address climate change issues
The European Union is advocating for an annual investment of approximately €1.5 trillion from 2031 to 2050 to achieve its ambitious goal of reducing greenhouse gas emissions to zero by mid-century, according to Brussels' latest announcement.
Brussels has outlined a comprehensive plan to slash emissions by 90% by 2040 and attain "economy-wide climate neutrality" by 2050.
The EU believes that by maintaining temperature increases within 1.5°C above pre-industrial levels, the region could save a substantial €2.4 trillion in economic losses between 2031 and 2050.
Additionally, this initiative could lead to a reduction in net costs related to fossil fuel imports by €2.8 trillion during the same period.
In adherence to the EU's climate law, member governments have committed to a 55% reduction in emissions by 2030 compared to 1990 levels, ultimately aiming for net-zero emissions by 2050.
However, some sectors, especially in industry and agriculture, argue that these targets are overly burdensome, particularly in the face of high inflation and the repercussions of the energy crisis triggered by Russia's invasion of Ukraine.
Farmers have been vocal in their opposition to environmental regulations, resulting in protests spreading across the Netherlands, Belgium, Germany, France, and Romania in recent weeks.
Highlighting the urgency of climate action, the EU also notes that climate-related weather events have led to 220,000 deaths in the region and incurred a staggering cost of €650 billion since 1980.
Submerged ancient Indian harbour found, estimated to be 15000 years old
In 2020, researchers made a significant discovery beneath the Bay of Bengal—an ancient harbor-like structure lying at a depth of approximately 80 meters. This harbor, measuring approximately 11 kilometers in length and 2 kilometers in width, was found around 25 kilometers east of Poompuhar on the Tamil Nadu coast.
This remarkable finding, estimated to be around 15,000 years old, sheds light on a bygone era of flourishing maritime trade in the region. Alongside the harbor, the researchers uncovered a network of canals designed for the movement of ships and boats.
The layout of the ancient harbor structure bears striking similarities to harbors worldwide, including Neapolis in Greece, Alexandria in Egypt, and King Louis in Mauritius. However, what sets this apart is its remarkable age, being approximately 15,000 years old—significantly older than its global counterparts, which range from 6,000 to 2,000 years old.
To unravel the mystery surrounding this ancient structure, the researchers employed ocean bathymetry and historical sea level data.
The shifting coastline and continuous rise in sea levels forced the relocation of Poompuhar three times before settling at the mouth of the river Cauvery, establishing the current Kaveripoompattinam.
This discovery provides valuable insights into the dynamic history of the region, marked by environmental changes and human adaptation.