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3 Posts authored by: Eric Chiang

When I mentioned to friends that I was planning a trip to Kazakhstan, the most common response was “that’s where Borat is from”, referring to the fictional character portrayed by Sasha Baron Cohen in the popular 2006 comedy film. But unlike the impoverished backward nation portrayed in the movie, visitors to Kazakhstan will find a destination far different than one might imagine.


Kazakhstan is a mountainous country, nestled in Central Asia with the Tai Shan Mountains serving as a backdrop to Almaty, its largest city. Economically, Kazakhstan had benefited tremendously in the late 2000s and early 2010s when the price of oil and natural gas (its most abundant resources) peaked. But unlike other developing countries which had squandered their oil wealth due to corruption, Kazakhstan invested heavily in infrastructure and education, leading to beautiful, modern cities with wide avenues and efficient public transportation systems.


Kazakhstan’s emphasis on education, especially science and math, can be tied to its important role as the home and original launch site (which remains today as a result of a lease agreement between Kazakhstan and Russia) of the Russian Space Program. Ensuring all citizens have access to both primary and higher education is a key government priority that has led Kazakhstan to experience rapid economic growth. A visit to Astana, the capital, might confuse a weary traveler with other dynamically growing cities such as Dubai or Shanghai. Kazakhstan’s infrastructure development allowed it to bid for the 2022 Winter Olympic Games. Although it lost its bid to Beijing, Kazakhstan made a positive impression on the Olympic Committee, making a future bid more likely to be successful.


And perhaps the most striking observation of Kazakhstan is its people. Most Kazakhs resemble the Chinese more than Russian in physical appearance. In terms of tourism, although there are plenty of hotels, modern airports, and beautiful attractions, one will find very few American and European tourists. For that reason, very few Kazakhs speak English, and English signs are not very common. But that should not deter one from visiting this beautiful country. Just turn on the Google Translate app, and venture out and interact with some of the most-friendly people in the world.


- Eric Chiang, Author of Economics: Principles for a Changing World

Among the most famous and popular animals in the world is the panda bear, whose existence in the forests of central China had been threatened by deforestation and economic development throughout the 20th century. Since the 1970s, however, conservation efforts have allowed the panda population to nearly double, allowing scientists and tourists from around the world to observe their majestic qualities and playful personalities.


On a recent visit to Chengdu (currently the fourth largest city in China with a population of over 14 million), I enjoyed a unique experience unavailable anywhere else in the world. In the foothills of the Qionglai mountains about an hour’s drive west of Chengdu is the Dujiangyan Panda Research Center, which is home to approximately 20 pandas including U.S.-born pandas Tai Shan (born in 2005) and Bao Bao (born in 2013), both of whom were born in the National Zoo in Washington D.C. and subsequently returned to China under the panda lease agreement.


Unlike many zoos outside of China which are privileged to host usually at most two pandas at a time, the Dujiangyan Panda Center allows tourists to visit over a dozen pandas for a small admission fee of about $12. However, for a significantly larger “donation”, one can experience pandas much more up close. For a payment of about $120, one can become a “volunteer” for the day, helping to prepare food for the pandas and cleaning up their dens.


But the ultimate experience requires one to plunk down an additional $300. This buys you 20 seconds to sit alone with and hug a panda cub, just enough time to capture priceless memories via photos and video. Despite the hefty fee, demand is very high and the experience (limited to 20 persons per day) sells out weeks in advance. All of the funds collected are used to advance further conservation efforts, which has recently allowed the panda to be removed from the endangered species list.

 


- Eric Chiang, Author of Economics: Principles for a Changing World

Among my most memorable trips in recent years include visiting remote towns in the Arctic, where there are no roads connecting to other towns, and limited access to waterways due to the sea being frozen for much of the year. In two towns that I visited, Barrow, Alaska, and Iqaluit, Nunavut, the only viable means of transport for passengers and goods is by air.

 

For most of us urban-dwellers and rural residents who live in towns connected to one another, we are accustomed to seeing prices of everyday consumption goods based on the cost of raw materials and other inputs that contribute to their wholesale price. The difference in retail prices between a department store in Akron and a convenience store in Los Angeles is based on factors such as competition, economies of scale, and taxes. But one input we often take for granted is the transportation cost, given the efficiencies of the shipping industry that allow goods to be transported quickly and efficiently throughout the country.

 

However, in the Arctic north, prices are largely dependent on transportation costs, because everything other than the few locally-made items is delivered by air. Therefore, retail markups are largely calculated based on the wholesale price plus a large premium for the air freight. Consequently, prices for heavy household items such as laundry detergent and cat litter that typically sell for less than $10 at a Walmart or Target can be five to ten times that cost in Iqaluit. Moreover, heavy items that are also perishable such as orange juice and milk can have an even higher markup. Meanwhile, goods that are relatively light and have a longer shelf life, such as microwave popcorn, have prices that are much closer to what we are used to.

 

Visiting towns that are largely cut off from the rest of the world provides a unique perspective to market pricing, which subsequently influences the goods that residents in these faraway places consume.