Outside the Bubble

Ivory burnings protest poaching

On Saturday, April 30, President of Kenya Ururu Kenyatta set more than 105 metric tons of confiscated ivory and 1.5 tons of rhino horn on fire in Nairobi National Park to signal the country’s seriousness about ending illegal ivory trade (NY Times, “Kenya burns elephant ivory worth $105 million to defy poachers,” 04.30.2016). With the street price of ivory at around $1,000 per kilo, the amount of ivory burned was worth around $105 million total. In 1989, when the first ban on ivory was introduced by the Convention on International Trade in Endangered Species of Wild Fauna and Flora, large ivory burnings became more frequent in Kenya. The burning of the ivory is not only to make a statement but also because guarding stockpiles 24/7 becomes expensive over long periods of time. Elephant poaching has been a longstanding issue in Kenya as well as in many other Central and West African countries, and poachers are using increasingly powerful weapons to hunt. Despite the 30-year ivory ban, Kenya’s wild elephant population has been hunted almost to extinction. Neighboring countries are also facing this problem–an average of 30,000 elephants are killed in Africa each year and it is estimated that the African Elephant will go extinct in 20 years if killings continue at this rate (The Independent, “Kenya stages largest ivory burn in history in call to end illegal wildlife trade,” 05.02.2016). Several countries have destroyed ivory stockpiles in recent years, including a public ivory crushing event in Times Square last year. While they make a powerful statement against the illegal trade, critics have argued that burning ivory may make poaching more attractive due to the post-burning price increase. This recent burning destroyed five percent of the world’s stockpiles, creating more incentives for poachers to kill for profit (Quartz, “Kenya is burning 5% of the world’s stockpile of ivory,” 04.30.2016). Ivory is in high demand in Asian markets where consumers seek to buy ivory trinkets. China and Japan have tried to legalize the ivory trade in order to flood the market and decrease value of ivory and profitability for poachers. However, an increase of ivory in the market only removed the stigma against buying ivory (Deutsche Welle, “To burn or sell ivory: Which can put an end to elephant poaching?” 04.29.2016). Unless the demand for ivory is eliminated, this ivory burning will likely not be the last.

 

Puerto Rico faces immense debt

Puerto Rico was due to pay $470 million in debt payments by Monday, May 2, but Governor Alejandro Garcia announced on Sunday that the nation will not meet the deadline. Garcia explained that it came down to a difficult choice: making the payments or providing basic necessities for residents. Ultimately, the government chose the latter (USA Today, “Puerto Rico to default further on debts,” 05.02.2016). A bill passed last month allows Garcia to declare a state of emergency and halt payments of their total debt, $72 billion. The bill was enacted so services like schools, hospitals, police and fire safety would not be halted. As of early April 2016, Puerto Rico only had $562 million in the Government Development Bank, which would not leave much money for other services (NY Times, “Puerto Rico passes bill allowing halt to debt payment,” 04.06.2016). Puerto Rico has had serious economic problems for the past 10 years. Congress faces pressure to create a restructuring plan to deal with the tremendous debt. While there is consensus that a financial control board should be established to watch over spending in Puerto Rico, there is still conflict on whether Chapter 9 of the United States Bankruptcy Code that only allows for declarations of bankruptcies only to municipalities, not territories, could be expanded (NY Times, “Puerto Rico to miss largest payment to date,” 05.01.2016). If Congress does not approve a debt-restructuring plan, then a taxpayer-funded bailout would be the next step. The fiscal crisis is caused by several factors, one of the biggest being the U.S. federal tax code. Section 936 granted several tax incentives for manufacturers to operate in Puerto Rico, one of the biggest drivers of economic growth for the territory since the 1970s. However, Section 936 expired in 2006, marking the beginning of Puerto Rico’s recession (The New Yorker, “The Puerto Rican Problem,” 04.06.2015). With the tax provisions repealed, companies began to pull out and factories began closing down, causing high rates of unemployment and sudden decrease in economic growth. Unemployment rates in Puerto Rico are estimated at 12.2 percent, with over 45 percent of the population living under poverty levels. In addition to the decade-long recession, Puerto Rico is dealing with the first U.S. death related to the Zika virus, which is putting a strain on its public health sector and negatively impacting its tourism sector (The Wall Street Journal, “Default set to push Puerto Rico’s debt crisis onto dangerous new ground,” 05.02.2016).

—Shelia Hu, Guest Reporter

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