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   In recent months alarm bells have started sounding about the rise of inequality in China. Breakneck economic growth has brought riches to a few, a comfortable life for an urban minority and not much to the rural majority.

If left unchecked, the thinking goes, rising inequality could turn into a tidal wave of social unrest that could even threaten the Communist Party's grip on power.

The party appears concerned enough about the widening gulf between rich cities and poor countryside that the incoming leadership has made raising rural incomes a top priority, at least in its rhetoric.

But inequality is not, in fact, a serious threat to social stability. To understand why, one must first recognise that inequality is a far more complex phenomenon that casual discussion usually suggests.

There are at least three different types of economic inequality in China; inequality in individual incomes, inequality between urban and rural incomes, and inequality between the richer (mostly coastal) and poorer (mostly inland) provinces. This week we will look at the first type; next week, at the other two.

It is beyond doubt that inequality in individual incomes has been growing faster in China than anywhere else in the world. The usual measure of this kind of inequality is the Gini coefficient, which ranges from 0 (all incomes are equal) to 1.0 (one person has all the income).

Between 1990 and 2000, China's Gini coefficient rose from 0.36 to 0.44. This level of inequality is about average for Asian developing countries and well below that of famously stratified societies such as Brazil and India. But China is the only significant economy in Asia where the Gini has risen steadily.

The trend is worrisome but not catastrophic. A poor country that suddenly starts getting richer will naturally see a rise in income inequality.

This inequality can become a social problem not when the Gini rises to a particular level, but when large groups of people are imprisoned in have-not status. This stratification can have social causes, such as ethnic, caste or apartheid barriers; or geographic or political obstacles may prevent people from moving from poor areas to regions with more opportunity.

But China has far fewer ethnic or caste barriers than most other developing countries. And as we showed last week, contrary to popular opinion, China's labouring masses are among the most mobile in the world.

This is not to say such work is always pleasant or safe. But the problem of sweatshop labour is not a problem of inequality, it is a problem of justice.

The solution lies not in equalising the wages of worker and boss, but in creating and enforcing suitable labour laws.

The pressure on the government to provide a modicum of justice for its poorer citizens is probably greater in China than elsewhere. Gross inequality in countries like India is sanctioned by well-entrenched social and religious systems, which encourage people to accept their lot.

China has smashed all such systems. The only guarantors of social stability are the state's police power and its promise that everyone has a chance to improve his or her lot. If the pace of economic growth starts to slow, the government must be able to show the have-nots that the game has not been rigged against them.

But again that is a problem of justice, not inequality.

Research by the China Economic Quarterly. (www.theceq.info)

www.fijilive.com Monday February 10, 2003

Fiji's Assistant Minister for Agriculture, Sugar and Land Resettlement, Isireli Tuvuki and Ambassador to the European Union, Isikeli Mataitoga are currently lobbying in Brazil for preferential access to EU markets. They are part of the African Caribbean Pacific (ACP) group of Sugar Ministers representing the three geographical regions of the ACP, which are suppliers of sugar under the Sugar Protocol. The purpose of the mission is to consult the new President of Brazil, Luiz Lula da Silva, of the socio-economic implications of the European Union Sugar Challenge brought by Brazil and Australia under the Dispute Mechanism of the World Trade Organisation. Mr Mataitoga said in the context of the consultation process in connection with the EU Sugar Challenge in the WTO brought by Brazil and Australia, both countries had made assurances that their challenge was not intended to undermine the preferential access of ACP sugar exports to the EU market. Mr Mataitoga said many ACP state countries, which were likely to be affected by the WTO challenge, were either small, least developed, developing islands or landlocked countries, and single commodity exporters. "Their inherent constraints and vulnerability inhibit them from reaching competitive levels and absorbing change in the same timescale as the more developed countries like Brazil." In addition, Mr Mataitoga said most of the development and diversification in most of these ACP countries was often severely restricted by geographical isolation, small domestic market, severe agro-climatic conditions and natural disasters, and the absence of economies of scale. Mr Mataitoga attended the meeting as an ex-officio Chairman of the ACP Sugar Consultative Group. The meeting will be over two days and the lobby mission will meet with Brazil's Minister for Foreign Affairs and the Minister of Agriculture and possibly with some members of the Senate.

www.vheadline.com Posted: Sunday, February 09, 2003 - 1:11:38 AM By: Will West

Date: Sat, 8 Feb 2003 00:52:38 -0800 From: Will West thewillies@cox-internet.com To: Editor@VHeadline.com Subject: A Letters to the Editor Submission

Dear Editor: The (perhaps fatal) damage Chavez has inflicted upon Venezuela's democratic form of government is unforgivable.  It is my belief that, in the long run, maintaining a healthy, functioning democratic form of government (including a "loyal opposition") will do more to increase and ensure the prosperity of all Venezuelans than any amount of heavy-handed economic tinkering.

Comparisons between Chavez and Hitler are obvious -- not with regard to the scale of the evil they represent, but with regards to the similar patterns their careers have followed thus far.  Several observers of the Venezuelan situation have noted this similarity, but let me mention one more example:  Both Hitler and Chavez have used gangs of armed thugs to intimidate (and worse) those who disagreed with them.  Hitler had the S.A., the brown shirts, while Chavez has his Bolivarian Circles (who have been used to intimidate and harass the free press, attack and kill protesters, etc.).  How can educated people reconcile support of Chavez (as a benign socialist?) with his use of Hitlerian (fascistic) tactics?  Can any good can come of this practice?

It seems as if many of Chavez's most vociferous supporters in the "Letters" area of VHeadline profess ideologies to the extreme left.  Although there is nothing necessarily wrong with being a leftist, it is the extremity of their position that seems to allow them to overlook Chavez's many negative aspects and to justify his actions.  Their devotion appears to be driven more by their own ideology than by any real resemblance between Chavez and a benign leftist head of state.

Do the ends Chavez envisions justify the means means he has chosen? 

What price is he willing to have his people pay in order to enforce his will? 

Is any price whatsoever acceptable? 

Where does Hugo Chavez Frias draw the line between acceptable means of political/economic change and unacceptable?

I ask these questions in order to give your readers who are Chavez apologists a way to determine for themselves if the label "extremist" (for whom the ideological end ALWAYS justifies the means) fits, or if their ideology is leavened with some modicum of humanity.

• Lest anyone believe that I am some kind of right-wing, whacko extremist, let me say that I have never been accused of extremism (I lack the energy).

The only area in which my views even approach extremism regards my belief that functioning democratic forms of government are far and away superior to all others when it comes to ensuring the greatest degree of human happiness and prosperity for the largest proportion of people.  I would be greatly relieved if more Chavistas shared this belief.

Sincerely, William West thewillies@cox-internet.com

www.vheadline.com Posted: Sunday, February 09, 2003 - 11:44:22 AM By: Patrick J. O'Donoghue

Datanalisis poll director Luis Vicente Leon has told subscribers that the only way to get rid of democratically-elected President Hugo Chavez Frias is by reinforcing an opposition campaign of radical civil disobedience.

• El Universal has leaked part of the company’s January 22 report to clients concluding that Chavez Frias rejects the validity of democratic institutions.

Leon bases his latest private report on the concepts of US scholar Gene Sharp regarding the conduct of dictators … “dictators do not negotiate” … “violence or coups generally fail.” He says institutional change through legal means or moderate protest isn’t an option when confronted with the government’s non-democratic character.

Insisting that "dictatorships have a knack of avoiding the law being used against them" and “unfortunately, it includes any attempt at reforms, constitutional amendments, early elections etc.”

www.forbes.com Reuters, 02.09.03, 3:04 PM ET By Nicholas Winning

SAO PAULO, Brazil, Feb 9 (Reuters) - Latin America's main stock markets are set for another choppy week as traders brace for a possible investor retreat if the United States goes to war with Iraq. "They just want confirmation about when it (war) is going to start and then after that we will probably see some more speculation about how long it is going to take and how it will affect capital flows to the region," said Aryam Vazquez, Latin American market analyst with IDEAglobal in New York. Stocks in Mexico and Brazil, the region's biggest economies, have been in the red for year and no recovery is seen until Iraq fears ease. Smaller markets in Chile and Argentina could creep higher, traders said. In BRAZIL, official inflation data on Thursday will be watched for clues about whether the Central Bank has space to ease its 25.5 percent interest rate. Independent data shows prices remain stubbornly high, and investors also fear high international oil prices could fuel price rises in Brazil. "Inflation will become a major issue because everyone was expecting it to come off in January and it hasn't happened," said Alvaro Teixeira, head of sales at Bradesco brokerage in Sao Paulo. Brazil's Bovespa <.BVSP> index fell 5 percent last week on Iraq war jitters. It stands almost 8 percent below where it began 2002 despite some market-friendly moves from the government of President Luiz Incaio Lula da Silva. The new government on Friday raised its budget surplus target to 4.25 percent of gross domestic product from 3.75 percent, a move some investors hailed as further proof of a commitment to fiscal restraint. In MEXICO, investors remain worried a war in Iraq would undermine the U.S. economy, the destination of 90 percent of Mexican exports and a major source of investment capital. The IPC benchmark stock index<.MXX> fell 1.5 percent last week, leaving it 4.3 percent weaker than where it began 2002. And Mexico's peso currency hit new closing lows despite a move by Mexico's central bank to tighten monetary policy to meet its ambitious 2003 inflation target of 3 percent. The bank on Friday posted January inflation of 0.40 percent, the smallest rise in prices for the month since record-keeping began in 1969. In CHILE, traders said the blue-chip IPSA index<.IPSA> could draw support from last week's positive U.S. labor data, although Iraq could ruin the mood. The IPSA firmed 1.3 percent last week, leaving it 1.5 percent ahead this year. "With U.S. stocks so weak for the last 10 days, we think the bourse could react positively to these data as long as there is no serious news about the conflict (in Iraq)," said Lorena Vasquez, an analyst with BCI brokerage in Santiago. In ARGENTINA, investors said stocks would creep higher, although the benchmark MerVal <.MERV> index has seen little action as players sought better short-term returns in treasury bills or fixed-term deposits. In late January the International Monetary Fund (IMF) approved a rollover of $6.78 billion in debt payments Argentina owes as the country fights a four-year recession that led to the world's biggest sovereign debt default and a fierce currency devaluation. The MerVal gained 2.7 percent last week, and now stands 7.6 percent higher than where it began 2002 as investors key into the presidential race ahead of the April 27 elections. "Little by little the market is consolidating higher ... while keeping a careful eye on local politics," said Mariano Arnau of Raymond James brokerage in Buenos Aires.