Russian Casualty Figures in Georgia

A Russian general announced yesterday that in the conflict with Georgia 64 Russian soldiers died and 323 were wounded, a revision from earlier Russian statements that 74 had been killed and 170 wounded. Georgia's President Saakashvili said last week that by the "most conservative estimates" his armed forces had killed 400 Russian soldiers.

Comparing casualty figures for score keeping is a meaningless act, and we will probably never know the true cost in lives for any of the parties, military or civilian. What is interesting, though, is that the recent figures given by Russia seem to be plausible, a break from earlier practice.

Here are some possible interpretations of the numbers:

1. THEY LIE. Russia is well known for hiding their casualty figures in the Chechnya conflict. Soldiers' Mothers of Russia estimated 11,000 dead and 30,000 wounded Russian soldiers in Chechnya from 1999 through 2002, compared to official Russian statements at the time of 4,705 killed (a figure 57% lower than what Mothers of Russia estimated). If the same ratio were applied to yesterday's official statements then there were really 150 Russian soldiers killed. (Obviously there is no reason to think the same ratio would be used, and for all we know the number could be much higher).

2. THEY TELL THE TRUTH. Unlike in Chechnya, Russia won a swift and decisive military victory in Georgia and is now experiencing intense diplomatic pressure from the West to withdraw. Russia is being portrayed as the bad guys, and therefore may have an incentive to truthfully or even over-report their casualty figures in order to argue that the fight was not so one-sided.

3. GEORGIA CAN'T COUNT. Enemy body counts by any army, especially one in retreat, are hardly reliable, and the Georgians certainly had incentive to overstate their effectiveness. Also, they may have counted South Ossetian militia and Russian military as the same enemy since they were fighting both, and included both in the Russian casualties.

Move In Day

Thanks to my recent return from military service in Iraq, the school housing lottery administrators gave me my first choice housing, a semi-furnished studio efficiency in a brand new graduate dorm. It's a massive multi-building complex, replete with a pub and small weight room. If it weren't for classes I'd never have to go outside.

Now that I've settled in (and spent over $300 at Target), I'm ready to focus on the tasks ahead:
1. Study up for Finance II (i.e. try to remember what discount rates are)
2. Attempt to meet and befriend my new classmates (since my friends have all graduated)
3. Research the technology for my business idea
4. Write more

Iraq Exports Need to Grow

As the Memri Economic Blog reported, Iraq’s central bureau of statistics announced that total Iraqi exports of oil and goods rose by $11.9 billion from 2006 to 2007. ($41.26 billion in 2007 compared with $29.36 billion in 2006). However, $10.92 billion of that increase (92%) was due to crude oil. Since then oil exports have further increased, not just in value but in quantity, thanks in part to the improved security situation.

But, as I pointed out in my previous entry, the oil sector doesn't and won't employ many people (less than 1% of the population at best), so gains in oil production do not translate to increased employment. In a 2006 estimate the CIA estimated unemployment of 18-30%, while the Brooking Institution estimated 25-40% last year. In some villages it is much higher, and it has become clear that without employment there cannot be stability.

US administered microgrants are a small start, nurturing small service-sector businesses and restaurants, as are the small US sponsored "Industrial Zone" for vehicle maintenance, but neither can be expected to generate exports. Instead those service jobs will depend on the health of the oil industry and will suffer the swings of the market, more so when the US departs. At some point in the future we can expect the world to shift away from hydrocarbons, at which point Iraq better have an alternative money maker. The only other serious sector at this time is government, either employment by the Government of Iraq or payments from the US to stand guard (i.e. Sons of Iraq).

This article reports that one large company, Diyala Food Company, shut down, releasing thousands of employees. This is particularly sad when you consider that the US buys hundreds of millions of dollars of food for its military in Iraq, none of it from Iraq. The US should find a way to leverage its forces' huge logistical demands in Iraq, for everything from construction supplies and housing trailers to food. That would create companies that would be able to continue functioning after the US withdrawal.

The US and the Government of Iraq should consider the South Korean example. Before the Korean War the north was actually wealthier than the south due to greater natural resources. Since then, South Korea has experienced one of the fastest economic growth rates in history, largely due to heavy government sponsorship of large companies in key industries for export. There are many differences between Iraq and South Korea, large oil reserves in Iraq being one of them, but also similarities that may be instructive and which I will attempt to further explore on this blog in the future.

In Loving Memory

Last Monday my dog temporarily lost his vision so we rushed him to the vet hospital emergency room. After three nights the doctors diagnosed him with terminal cancer and predicted a life expectancy of a few weeks to months.

On Thursday he came home from the hospital a different dog. Before he would swallow whole any human food I gave him, and sometimes the hand holding it; now he refused even the finest ground beef bought specially for him. Before he could take marathon length walks; now he could barely drag himself to the bushes by the front door. Worst of all, his tail, which previously could have been harnessed as an alternative energy source to power China, now hung straight down between his legs.

He passed away today and my family is sad for the loss. We're also grateful that he was in our lives. In the bargain made eons ago between our two species, I got a good deal with this one. My family and I loved him and cared for him, but he gave at least as good as he got. For example, he somehow always knew instinctively if someone was sick, or even if my mother had a headache, and would shower them with extra affection.

He also taught us how to measure happiness in doggy units. That is, a walk makes you happy. A treat makes you happy. Seeing your family makes you very happy. Sun or snow makes you happy. Chasing a wild turkey, peanut butter and jelly sandwiches, car rides, and chest deep snow makes you ecstatic. Baths make you sad. Drying off after a bath makes you happy.

A guard dog he was not; he just assumed everyone was good. Deliverymen to our house didn’t just leave packages. They rang the door bell and waited for their visit with the dog and his 100-horsepower tail. Sometimes the dry cleaner stops by twice in the same week, I think just to say hi.

I’ll always remember how joyfully he would gallop across a field of wild flowers for no reason except to run. We may have given him love, food, and care, but he gave us back an unconditional love and taught us that it’s the small things that are best to enjoy.

In loving memory of my Buddy, February 14, 1996 - August 17, 2008.

Scooped the Wall Street Journal

UPDATE 28 AUG 08: NEW POST WITH UPDATED FINAL STANDINGS

Last Wednesday, in an entry called Armenia Leads Olympic Medal Count, I wrote about ranking Olympic countries by the ratio of their medals to population or per capita GDP instead of by the number of gold medals or their total medal count.

Yesterday's Wall Street Journal (Weekend Edition) made the same points in an article titled The Glory of Just Showing Up.

So I'm thrilled that the level of creativity and journalism at the Wall Street Journal is sufficient to meet the standards of this blog. =)

Today The New York Times Olympic Blog also published a response, in which they rank the countries using a weighted system (4 points for gold, 2 points for silver, 1 point for bronze). By their system China is in the lead.

Yesterday The Raw Feed proposed first applying a weighting system and then determining the medal to population ratio. By their count Australia is winning.

For updated rankings of total medals or gold medals by population without weighting, Simon Forsyth is keeping tally.

1000 Cameramen Named Bob at Beijing Olympics

If you've been watching the Olympics you may have noticed a multitude of cameramen wearing blue tunics emblazoned in large white letters "BOB."

No, their names are not all Bob. Actually, it stands for Beijing Olympic Broadcasting, which shoots video and radio for the media pool.

The left picture is of a BOB cameraman in action, and the second picture is of Ma Guoli, COO of BOB, in front of headquarters in 2005.

BOB projects their broadcasts will reach a "cumulative worldwide audience of more than 30 billion people", which is impressive considering there are only ~6.6 billion people in the world.

US Military Offer Blanket Support to Georgia

In yesterday's speech President Bush promised Georgia a "vigorous and ongoing" humanitarian mission carried out by the American military using aircraft and naval forces. Today Defense Secretary Robert Gates said there was no need for a US military force in Georgia (other than the "vigorous and ongoing" humanitarian mission.)

So how does that translate into action on the ground?

The "Ongoing" part:

A. 130 US troops already assigned to train the Georgian military will remain in the country. These are most likely Special Forces troops. The US has had trainers there since 2002 to train four Georgian Battalions.

B. Since 1992 the US has reportedly given Georgia $1.5 billion worth in military equipment and training as part of an effort to modernize their military to face Al Qaeda and prepare them to join NATO (and to fight in Iraq). This past year they received $6.5 million worth. It's not clear if we gave them any heavy equipment though, or just uniforms, small arms, and six helicopters. We will probably continue to give them this support, or I'd guess increase it to make up for their losses.

The "Vigorous" part:

C. Medical supplies, shelters, and bedding. The first C-17 plane landed yesterday, and another is planned today. At this pace, one planeload a day. Each C-17 can bring in up to eighteen "463L pallets", each with usable dimensions of 84" x 104", so approximately 5500 cubic feet of blankets a day.

D. An additional 12 troops to "assess the Georgian government’s humanitarian needs."

Interpretation:
Compared to the US response to the 1990 Iraqi invasion of Kuwait, the US aid for Georgia is more vigorous in speech than in practice, which we should interpret two-fold:

1. A message to the Russians that the US will not militarily confront them and will recognize the de facto annexation of South Ossetia and Abkhazia by Russia. However, the US is drawing a red line around Georgia's internal lines of communications by sending its own troops on the pretext of delivering blankets, effectively saying to Russia, leave the rest of Georgia alone.

2. A message to the Georgians that while they're US allies, they fell into Russia's trap on their own and US troops won't start World War III over two remote break-away provinces with populations that prefer Russia.

Armenia leads Olympic Medal Count

UPDATE 28 AUG 08: NEW POST WITH UPDATED FINAL STANDINGS

The Wall Street Journal today noted a controversy over the Olympic medal count, whether to rank countries by their total medal count (the US convention) or by the number of gold medals. The Beijing Olympic page ranks countries by the count of gold medals, which places China in first with 17 golds and the US in second with 10 golds, even though the US has won 29 medals overall, compared to China's 27.

The controversy is more stark further down the list. For example, Zimbabwe with 3 silvers is ranked behind Thailand with one gold, and Ukraine with 4 bronzes is behind Vietnam with one silver.

As the WSJ notes, the danger of ranking by gold medals instead of total medals is that some countries (Australia, Japan, France, Germany) are already cutting funding for sports that don't have a shot at being number one.

Usually no statistical method gives a complete picture, and the medal count is no exception. Let's take a look here at how the medal count would look if we weighted the medals counts different ways, for example, by the country's population or per capita GDP. (This is using population and GDP purchasing power parity data from the CIA Factbook, and the medal count as of this morning 13 August 2008 around 10am EST).

As you can see on the below tables, the US drops to a still respectable 9th place when measuring total medals to per capita GDP. China, still a developing country, stays in second place, and Georgia closely trails Russia.

When measuring medals to total population, Armenia is the winner with 3 medals for a population of less than 3 million. Neither the US, China, or Russia makes the top ten of that ranking. If the US won as many medals as Armenia per population, then the US would have over 300 medals.

The point is that there are multiple legitimate ways to measure medal success, and we would do well to remember that the goal of the Olympic movement is "to contribute to building a peaceful and better world by educating youth through sport practised without discrimination of any kind and in the Olympic spirit, which requires mutual understanding with a spirit of friendship, solidarity and fair play." Of course it's far easier to just count medals.

Ranked by Total Medals to Per Capita GDP
Rank	Country	Gold	Total	GDP per capita
1	Zimbabwe	0	3	$179
2	China	17	27	$5,256
3	North Korea	1	7	$1,704
4	Togo	0	1	$889
5	Kyrgyztan	0	2	$1,960
6	Russia	2	12	$14,840
7	Georgia	2	3	$4,427
8	Cuba	0	3	$4,474
9	US	10	29	$45,553
10	Tajikistan	0	1	$1,639
Ranked by Total Medals to Population
Rank	Country	Gold	Total	Population
1	Armenia	0	3	2,968,586
2	Georgia	2	3	4,630,841
3	Australia	4	12	20,600,856
4	Switzerland	1	4	7,581,520
5	Slovenia	0	1	2,007,711
6	Finland	1	2	5,244,749
7	Kyrgyztan	0	2	5,356,869
8	Azerbaijan	1	3	8,177,717
9	Slovakia	1	2	5,455,407
10	Mongolia	0	1	2,996,081

Oil sector won't save Iraq by itself

Yes, Iraq will have a budget surplus thanks to the oil sector, as much as $50bn. That's of course good news as it gives the government options, and is an indication of lessening attacks and corruption in that sector.

The oil sector in Iraq, however, has always traditionally accounted for over 95% of foreign exchange earnings, but even in 1997 employed only 0.6% of the population, according to the 2004 Journal of Economic Perspectives. (sorry the full text isn't available free). That split is typical of the oil industry: high capital, low employment.

Therefore it is unreasonable to expect the oil sector to provide enough jobs to promote security, even if it were to fully recover, and beat persistent corruption. So the question then is what will the GOI (Government of Iraq) do with the money. The right thing would be to invest heavily in industry and education to promote the economy and keep people from the temptation of accepting free-lance insurgent work. Supposedly the insurgents were offering over $500 to place an IED, which is a good deal if you're hungry. We need to start thinking of security as an economic competitor as well.

Big four sectors in Iraq in 1997:
government (20.15&)
wholesale and retail trade (19.3%)
agriculture (18.35%)
unemployment (17%)

funny military pictures

These are old but still funny military pictures.

My favorite is of the Australians bicycle jousting. Coalition troops are forbidden alcohol in Iraq and Kuwait (although some gets smuggled in), so that was probably done sober.

Many US troops receive a four-day pass sometime during their tour to Qatar, where drinking is permitted on the US air base at the designated bar. Upon reporting in soldiers are issued a ration card for up to three drinks a day. Across base the British have their own bar, the Muff, where the ration card is not strictly enforced but a host of other eccentric rules are. For example, wearing your reflective belt inside earns you a $20 penalty, as does not saying please and thank you to the bartender.

Iraq Private Sector Falters

The Coalition can do more for the recovery of Iraq by buying more supplies in Iraq instead of in surrounding countries.

The New York Times reported August 11, 2008 in this article that "the number of Iraqi government employees has nearly doubled since 2005, while private enterprise has failed to flourish amid the damaged infrastructure."

The article does not mention that Coalition Forces import nearly all of their supplies from surrounding countries, namely Kuwait, Turkey, and Jordan, instead of using their massive logistical requirements to incubate Iraqi businesses. The imports amount to hundreds of 40-foot refrigerated trucks, flatbeds, and tankers per day, such as those operated by the company Agility, which celebrated sending its 100,000th truck into Iraq for Coalition Forces almost a year ago, in November 2007.

In addition to hiring contractors to import materials including food, fuel, water, spare parts, and construction materials, Coalition Forces hire foreign companies under the LOGCAP contract to provide "field operations such as dining and laundry facilities, housing, sanitation, waste management, postal services, and morale, welfare and recreation activities; and other operations, including engineering and construction, support to communication networks, transportation and cargo services, and facilities maintenance and repair.

What if we purchased some of these materials from the Iraqis? If they built the Ziggurat of Ur over 4100 years ago, surely they can construct brick barracks today. We should be looking at ways to actively build industry in Iraq, even if it means loaning billions of dollars and creating free trade zones on our bases. The goal is not to save money, although we might, but rather to create jobs and a viable economy that will keep growing after we leave.

This article highlights a recent initiative to incubate Iraqi operated vehicle maintenance businesses on Anaconda, one of the largest US logistical bases in Iraq, and demonstrates that the security obstacles are not unsurmountable. Vehicle maintenance is not enough, however, as those jobs won't last when the US departs; Iraq needs to build exports.

Access to the world market is a necessity, and the formation of the Iraqi Trucking Network is a positive step, although of course they need something to ship, and its area of operation seems to be limited (the article says it operated successfully between Fallujah, Al Asad, Taqaddum, Ramadi and Jordan: all Sunni dominated areas in Al Anbar province).