Ansgar Gabrielsen was not thinking about a global domino when, just three months into his job as Norway's trade and industry minister, he made the decision to legislate gender equality in the boardroom. But today, eight years later, that is exactly what has happened and now many in the executive world are flocking to Oslo to learn about Norway's legislation and the impact it has had on business.
Thanks to the quota, 40 per cent of the directors of Norway's largest, publicly traded companies are women, up from a mere six per cent just four years ago.Gabrielsen's argument was simple: change was happening at a snail's pace and something had to be done. When he first proposed the legislation in 2002, women in Norway made up more than 70 per cent of the workforce but 76 per cent of companies had no women on their boards.
"This had to change," Gabrielsen recently told an international forum of business executives and politicians to discuss the Norwegian experience. "I always felt diversity was important for business."My goal was not to achieve gender equality, although that was a direct result. My thinking was that we had invested millions of dollars to educate our daughters, in fact 65 per cent of students in universities are women, and we were not using this significant resource.
"It didn't make sense. I really think you get the best ideas when men and women work together in equal numbers.
A ways to go
While this notion of combining the talents of men and women is gaining some currency in management circles, the conference was told that when it comes to the boardroom there is still much work to be done.
The latest research from Catalyst, a non-profit organization that seeks to help women advance in business, offers a sobering global breakdown. In Australia, 8.3 per cent of board members are women, while the corresponding figure in China is 7.2 per cent and in Japan, less than one. French Finance Minster Christine Lagarde, is a strong supporter of a boardroom quota law for France. But she says it shouldn't be forever.
In Canada, 14 per cent of board positions in the top 500 companies are held by women; 15.2 per cent in the U.S.According to the European Professional Women's Network, the proportion of women on the boards of the 300 largest European companies has grown to just 11.7 per cent in 2010 up from eight per cent in 2004.
At the current rate of growth, parity could be reached in 16 years — too long for those who are looking to Norway as a guide.
In fact, Spain and the Netherlands have passed similar quotas, with a deadline for compliance of 2015. Iceland is aiming for 2013 for companies with 50 or more employees.Belgium, Britain, Germany and Sweden are considering legislation. And the debate has begun in Australia, as well. France, which ranks 46th on the World Economic Forum's 2010 Gender Equality Report, trailing Canada, the U.S. and most of Europe, is currently in the midst of enacting quota legislation and, perhaps not surprisingly, there is little opposition.
"The general public is in favour of this," says Anne Bouverot, a senior executive at France Telecom Orange. "The financial crisis has helped. People feel there is something wrong with corporate governance and it is time for a change."
Indeed, the French legislation could be passed any day now. Companies will have three years to achieve 20 per cent female representation on their boards and six years to get to Norway's aggressive 40 per cent quota. In Canada, only Quebec has legislated gender parity for the boards of its Crown corporations and is on track to have 50 per cent female representation by December 2011. Elsewhere, Liberal Senator Céline Hervieux-Payette introduced a private member's bill in June 2009 calling for gender parity on the boards of federally-controlled public companies. But it does not appear to have picked up much traction.
Widen the search
Norway, it should be noted, has long been concerned with gender equality and, in fact, introduced voluntary quotas as far back as the 1970s to boost the number of women in politics. Elin Hurvenes, founder . It worked. Today, five of the seven political parties here are led by women. The minister of gender equality is a man who is preparing to take a four-month parental leave to care for his daughter and the minister of defence is a woman.
Still, the boardroom quota created a nationwide uproar when it was proposed in 2002. Many CEOs were loudly against it, arguing there were not enough qualified women to fill the quota. (Similar arguments were heard in Quebec in 2006.) Many women, young women in particular, were also opposed. They did not want to be seen as not having earned their place at the table. Mai-Lill Ibsen, a former CEO of Citibank Norway and a member of several corporate boards was one of those women.
"I was not in favour of quotas or the law because it smacks of discrimination and it limits the shareholders' rights to govern their companies," she told the Board Impact Conference in Oslo."That said, I have been the lone woman on boards characterized by men past their prime for many years. I certainly wanted more diversity because diversity adds value but I wanted it to happen naturally." Now that the legislation, passed in 2003, has been fully implemented and integrated-state-owned companies had to comply by 2006 and publicly listed companies had until 2008 or risk being de-listed-the quota has been accepted and applauded.
"What we have seen is that it is not even a discussion any more," says Ibsen. "I am still for the carrot, not the stick, but I cannot fault the state for trying to make this happen faster." Not surprisingly, she noted, it was not difficult to find qualified women. The quota merely forced corporate committees to widen their search.
Read more: http://www.cbc.ca/world/story/2010/10/20/f-bitti-gender-parity.html#ixzz16OoSK9cZ
Friday, November 26, 2010
Thursday, November 25, 2010
400th Post- Quatar and Boeing don't see eye to eye
The Dreamliner which was forced to land in Texas after an on-board fire Continue reading the main story
The chief executive of Qatar Airways has criticised Boeing over delays to the 787 Dreamliner, reportedly saying that it has "clearly failed". Akbar Al Baker said he had been "taken aback" by the problems that have plagued the delivery of the aircraft, the Reuters news agency reported. Meanwhile, Boeing has announced it is revising its schedule after a fire on a test flight earlier this month.
It had hoped to begin delivering the plane at the start of next year.
'Foreign debris'
Production of 787s is about three years behind schedule, with delays mainly a result of the supply and fitting of parts. A test flight had to be aborted on 9 November after a fire broke out on board. Boeing has blamed a piece of "foreign debris" in a power panel. Qatar Airways has ordered a minimum of 30 Dreamliners, with the first due to be delivered in the last quarter of next year.Mr Al Baker was also dismissive of the Bombardier C-Series planes Speaking at a news conference in Paris, Mr Al Baker said he had not expected such delays from Boeing, because the US-based company had "pride in its quality"."They hav e very clearly failed," he added.
He added that Qatar Airways was considering buying more Airbus A380s on top of the five already ordered from Boeing's arch-rival. Mr Al Baker was also critical of Bombardier of Canada, which has been trying to break Boeing's and Airbus' stranglehold of the airliner production business.He said Qatar Airways had been forced to cancel a planned order for the company's C-Series planes in July over concerns about their engines."If they do not roll up their sleeves pretty fast then the [new Airbus A320] NEO will eclipse them," he warned.
The chief executive of Qatar Airways has criticised Boeing over delays to the 787 Dreamliner, reportedly saying that it has "clearly failed". Akbar Al Baker said he had been "taken aback" by the problems that have plagued the delivery of the aircraft, the Reuters news agency reported. Meanwhile, Boeing has announced it is revising its schedule after a fire on a test flight earlier this month.
It had hoped to begin delivering the plane at the start of next year.
'Foreign debris'
Production of 787s is about three years behind schedule, with delays mainly a result of the supply and fitting of parts. A test flight had to be aborted on 9 November after a fire broke out on board. Boeing has blamed a piece of "foreign debris" in a power panel. Qatar Airways has ordered a minimum of 30 Dreamliners, with the first due to be delivered in the last quarter of next year.Mr Al Baker was also dismissive of the Bombardier C-Series planes Speaking at a news conference in Paris, Mr Al Baker said he had not expected such delays from Boeing, because the US-based company had "pride in its quality"."They hav e very clearly failed," he added.
He added that Qatar Airways was considering buying more Airbus A380s on top of the five already ordered from Boeing's arch-rival. Mr Al Baker was also critical of Bombardier of Canada, which has been trying to break Boeing's and Airbus' stranglehold of the airliner production business.He said Qatar Airways had been forced to cancel a planned order for the company's C-Series planes in July over concerns about their engines."If they do not roll up their sleeves pretty fast then the [new Airbus A320] NEO will eclipse them," he warned.
Wednesday, November 24, 2010
Can Coke save lives in Africa?
Travelling through a remote part of north-eastern Zambia in 1988, Simon Berry was struck that no matter where he stopped, people would ask him: "Would you like a Coca-Cola?"With just two people for every square kilometre, it was of the most sparsely populated places in the world.In this area today, one in five children dies before their fifth birthday, most from dehydration caused by diarrhoea. In a region where the challenging logistics of getting medical supplies to mothers was killing children, Coke was readily available.
Unused space
Mr Berry's idea was simple: Put medicine in crates of Coca-Cola. Wherever you could buy Coke, you could also get life-saving treatment."I thought if we can get Coca-Cola to all these places, why can't we do a similar thing for very simple medicines?" he told BBC World Service's Health Check programme.
"We've got this wedge-shaped container that clips down between the bottles in a crate so it makes use of unused space. "That container, in principle, could carry anything to the same places that Coca-Cola gets to as long as, obviously, it didn't need to be cold."He says carrying the medicine - in what they are calling "pods" - will not add burden to the work of the delivery staff."In Zambia, they've just changed the bottles. They're still 300ml, but they're slightly shorter and they're much lighter. They're about a third lighter than they were before. "They go in the same crates - so actually if you put five of these pods in those lighter-bottle crates, it still weighs less than the crate did just with Coca-Cola before."
For now, ColaLife - the group behind the project - will be focusing on providing supplies for new mothers, such as oral rehydration salts used to treat diarrhoea.But as the project grows, Mr Berry says they will look at each area and work out which supplies are most desperately needed.Before that growth, however, ColaLife will need the backing of the US conglomerate.Coke's international government relations manager Euan Wilmshurst says the company would prefer to share the know-how behind its distribution systems, rather than the crates of bottles.
The medicine fits into the unused space of a typical coke crate "Rather than us taking on the physical distribution, which I think we all know has its challenges, at this stage we're just trying to impart our knowledge of how we manage our supply chains, our routes out to the most remote areas, share that developed capacity with those that are dealing with medical logistics in countries like Tanzania."We believe that if this is successful it's a model we can roll out more widely and we believe it's a sustainable way that we can help and contribute to health and development."
However, while Mr Wilmshurst says the company is keen to focus on knowledge-sharing rather than aiding distribution, he does welcome Mr Berry working with local companies - bottlers - to get medicine packed into drink crates."Over the last two years we've looked a lot at our distribution system and how we could use it to benefit the communities," Mr Wilmshurst continued."Having looked at it, we believe it's something probably for our local bottlers, our local companies, to look at. We know that Simon's had some discussions around that."ColaLife will be carrying out a trial run in Zambia to gauge the idea's effectiveness. Mr Berry's view is that local companies involved could eventually be given a financial reward - therefore increasing its take-up.
"We will assess the ability for new mothers to pay for this," he suggested. They wouldn't be able to pay very much, but they'll be able to pay something, especially if we do social marketing to turn a need into a demand. "Then, we will subsidise at the distributor level to a level that the distributor can make some money, the wholesaler can make some money and so can the retailer make some money. And the mother can buy these things at a price she can afford. "That subsidy mechanism is well-rehearsed already within the developing world health structure, it is a recognised way of actually getting stuff there without completely undermining the commercial channels that already.
Travelling through a remote part of north-eastern Zambia in 1988, Simon Berry was struck that no matter where he stopped, people would ask him: "Would you like a Coca-Cola?"With just two people for every square kilometre, it was of the most sparsely populated places in the world.In this area today, one in five children dies before their fifth birthday, most from dehydration caused by diarrhoea. In a region where the challenging logistics of getting medical supplies to mothers was killing children, Coke was readily available.
Unused space
Mr Berry's idea was simple: Put medicine in crates of Coca-Cola. Wherever you could buy Coke, you could also get life-saving treatment."I thought if we can get Coca-Cola to all these places, why can't we do a similar thing for very simple medicines?" he told BBC World Service's Health Check programme.
"We've got this wedge-shaped container that clips down between the bottles in a crate so it makes use of unused space. "That container, in principle, could carry anything to the same places that Coca-Cola gets to as long as, obviously, it didn't need to be cold."He says carrying the medicine - in what they are calling "pods" - will not add burden to the work of the delivery staff."In Zambia, they've just changed the bottles. They're still 300ml, but they're slightly shorter and they're much lighter. They're about a third lighter than they were before. "They go in the same crates - so actually if you put five of these pods in those lighter-bottle crates, it still weighs less than the crate did just with Coca-Cola before."
For now, ColaLife - the group behind the project - will be focusing on providing supplies for new mothers, such as oral rehydration salts used to treat diarrhoea.But as the project grows, Mr Berry says they will look at each area and work out which supplies are most desperately needed.Before that growth, however, ColaLife will need the backing of the US conglomerate.Coke's international government relations manager Euan Wilmshurst says the company would prefer to share the know-how behind its distribution systems, rather than the crates of bottles.
The medicine fits into the unused space of a typical coke crate "Rather than us taking on the physical distribution, which I think we all know has its challenges, at this stage we're just trying to impart our knowledge of how we manage our supply chains, our routes out to the most remote areas, share that developed capacity with those that are dealing with medical logistics in countries like Tanzania."We believe that if this is successful it's a model we can roll out more widely and we believe it's a sustainable way that we can help and contribute to health and development."
However, while Mr Wilmshurst says the company is keen to focus on knowledge-sharing rather than aiding distribution, he does welcome Mr Berry working with local companies - bottlers - to get medicine packed into drink crates."Over the last two years we've looked a lot at our distribution system and how we could use it to benefit the communities," Mr Wilmshurst continued."Having looked at it, we believe it's something probably for our local bottlers, our local companies, to look at. We know that Simon's had some discussions around that."ColaLife will be carrying out a trial run in Zambia to gauge the idea's effectiveness. Mr Berry's view is that local companies involved could eventually be given a financial reward - therefore increasing its take-up.
"We will assess the ability for new mothers to pay for this," he suggested. They wouldn't be able to pay very much, but they'll be able to pay something, especially if we do social marketing to turn a need into a demand. "Then, we will subsidise at the distributor level to a level that the distributor can make some money, the wholesaler can make some money and so can the retailer make some money. And the mother can buy these things at a price she can afford. "That subsidy mechanism is well-rehearsed already within the developing world health structure, it is a recognised way of actually getting stuff there without completely undermining the commercial channels that already.
Tuesday, November 23, 2010
Monday, November 22, 2010
Sunday, November 21, 2010
Saturday, November 20, 2010
Beijing orders China's banks to increase reserves in new move to curb lending, inflation
China has ordered its banks to hold back more money as reserves in a new move to curb lending and cool inflation. The order Friday Nov. 19, 2010, was China's second reserve increase in two weeks and came as Beijing tries to restore normal financial conditions and curb inflation after its recovery from the global meltsdown.
BEIJING, China - China ordered its banks Friday to hold more money as reserves in a new move to curb lending and rising inflation that communist leaders worry might stir unrest. It was China's second reserve increase in two weeks and came as Beijing tries to restore normal financial conditions following its recovery from the global crisis and cool inflation that surged to a 25-month high in October.
The move comes amid heightened tensions between the United States and China over the nations' currency and economic policies. Critics says China could cool its economy and tame inflation by letting its currency, the yuan, float freely against the dollar. China has steadfastly refused, keeping the yuan closely tied to the dollar. That makes its exports cheaper overseas and U.S. products less competitive in China. U.S. manufacturers and members of Congress contend that gives China an unfair advantage.
Federal Reserve chairman Ben Bernanke added his voice to the critics on Friday. China's policy of keeping the yuan artificially cheap is distorting the global economy, he said. China is not likely to change its currency policy under pressure from the U.S. But it is taking steps to cool its economy. Analysts expect China to announce an interest rate hike before the end of the year, its second after a surprise increase Oct. 19, but there was no word Friday of any changes in rates.The state-owned banking industry was ordered to set aside an additional 0.5 per cent of deposits as reserves, effective Nov. 29. Reserves vary by institution but could be as high as 19 per cent for the biggest commercial lenders.
Economists say money flooding through the economy from China's stimulus spending and heavy bank lending helped to push inflation to 4.4 per cent in October, well above the government's three per cent target. Politically sensitive food costs jumped more than 10 per cent. Poor families in China spend up to half their incomes on food and communist leaders see inflation as a possible trigger of unrest.
Regulators worry that excessive lending is fuelling overspending on real estate and other assets and might leave banks burdened with unpaid loans if ill-considered projects default.China is taking steps to cool its economy and fight inflation at the same time the U.S. Federal Reserve is trying to boost economic growth and ward off the threat of deflation, a destabilizing drop in prices and wages. The Fed launched a $600-billion bond purchase program earlier this month, hoping to lower interest rates and spur more borrowing and spending.
"The differences between the two countries couldn't be more extreme," said Julia Coronado, chief economist at BNP Paribas.
BEIJING, China - China ordered its banks Friday to hold more money as reserves in a new move to curb lending and rising inflation that communist leaders worry might stir unrest. It was China's second reserve increase in two weeks and came as Beijing tries to restore normal financial conditions following its recovery from the global crisis and cool inflation that surged to a 25-month high in October.
The move comes amid heightened tensions between the United States and China over the nations' currency and economic policies. Critics says China could cool its economy and tame inflation by letting its currency, the yuan, float freely against the dollar. China has steadfastly refused, keeping the yuan closely tied to the dollar. That makes its exports cheaper overseas and U.S. products less competitive in China. U.S. manufacturers and members of Congress contend that gives China an unfair advantage.
Federal Reserve chairman Ben Bernanke added his voice to the critics on Friday. China's policy of keeping the yuan artificially cheap is distorting the global economy, he said. China is not likely to change its currency policy under pressure from the U.S. But it is taking steps to cool its economy. Analysts expect China to announce an interest rate hike before the end of the year, its second after a surprise increase Oct. 19, but there was no word Friday of any changes in rates.The state-owned banking industry was ordered to set aside an additional 0.5 per cent of deposits as reserves, effective Nov. 29. Reserves vary by institution but could be as high as 19 per cent for the biggest commercial lenders.
Economists say money flooding through the economy from China's stimulus spending and heavy bank lending helped to push inflation to 4.4 per cent in October, well above the government's three per cent target. Politically sensitive food costs jumped more than 10 per cent. Poor families in China spend up to half their incomes on food and communist leaders see inflation as a possible trigger of unrest.
Regulators worry that excessive lending is fuelling overspending on real estate and other assets and might leave banks burdened with unpaid loans if ill-considered projects default.China is taking steps to cool its economy and fight inflation at the same time the U.S. Federal Reserve is trying to boost economic growth and ward off the threat of deflation, a destabilizing drop in prices and wages. The Fed launched a $600-billion bond purchase program earlier this month, hoping to lower interest rates and spur more borrowing and spending.
"The differences between the two countries couldn't be more extreme," said Julia Coronado, chief economist at BNP Paribas.
Thursday, November 18, 2010
Levi's, Wal-Mart, and Gap Top Apparel Supply Chain Compliance Survey
Report provides scorecard of top apparel manufacturers
SAN FRANCISCO, Nov. 16, 2010 /PRNewswire-USNewswire/ -- Levi Strauss and Co., Wal-Mart Stores, The Gap Inc., Hanesbrands, Nordstrom, and Gildan Activewear scored highest on a unique survey of global supply chain compliance programs of U.S. apparel brands and retailers released today by corporate responsibility group As You Sow.
"Towards a Safe, Just Workplace: Apparel Supply Chain Compliance Programs" features a scorecard and report that provides for the first publicly available comparable baseline data to evaluate the compliance programs of many of the top apparel companies doing business in the U.S. The project was designed to provide information on the substance and scope of programs developed to improve factory working conditions.
The report ranks the resources allocated and actions companies are employing on key compliance actions such as factory auditing, remediation, continuous improvement, collaboration, company management accountability, and transparency. "The report demonstrates that several major brands are employing an impressive amount of resources to address social compliance in their supply chains, but that other popular brands are lagging," said Amy Galland, Research Director, As You Sow.
Major recommendations for companies include:
•Put more resources into continuous improvement and capacity building
•Emphasize initiatives that empower workers
•Integrate factory compliance performance into compensation for executives
•Analyze purchasing practices and commit more resources to improve practices (As You Sow released a report on this challenge earlier this year)
•Increase detailed public reporting on specific supply chain audit findings and remediation actions
"Global sourcing has sparked controversies over factory working conditions for more than a decade. We are pleased with the leadership shown by the top scorers in our survey, but more than 15 companies in this sector should be willing to publicly discuss how they are managing these issues," said Conrad MacKerron, Senior Program Director at As You Sow, who conceived the project after involvement in shareholder dialogues with many companies on labor and human rights issues. The report offers valuable data for other companies to compare themselves with, and for stakeholders to use to further verify company claims. As You Sow plans to follow up with companies that did not respond to the survey.
The report is available here: http://bit.ly/SJWReport
SAN FRANCISCO, Nov. 16, 2010 /PRNewswire-USNewswire/ -- Levi Strauss and Co., Wal-Mart Stores, The Gap Inc., Hanesbrands, Nordstrom, and Gildan Activewear scored highest on a unique survey of global supply chain compliance programs of U.S. apparel brands and retailers released today by corporate responsibility group As You Sow.
"Towards a Safe, Just Workplace: Apparel Supply Chain Compliance Programs" features a scorecard and report that provides for the first publicly available comparable baseline data to evaluate the compliance programs of many of the top apparel companies doing business in the U.S. The project was designed to provide information on the substance and scope of programs developed to improve factory working conditions.
The report ranks the resources allocated and actions companies are employing on key compliance actions such as factory auditing, remediation, continuous improvement, collaboration, company management accountability, and transparency. "The report demonstrates that several major brands are employing an impressive amount of resources to address social compliance in their supply chains, but that other popular brands are lagging," said Amy Galland, Research Director, As You Sow.
Major recommendations for companies include:
•Put more resources into continuous improvement and capacity building
•Emphasize initiatives that empower workers
•Integrate factory compliance performance into compensation for executives
•Analyze purchasing practices and commit more resources to improve practices (As You Sow released a report on this challenge earlier this year)
•Increase detailed public reporting on specific supply chain audit findings and remediation actions
"Global sourcing has sparked controversies over factory working conditions for more than a decade. We are pleased with the leadership shown by the top scorers in our survey, but more than 15 companies in this sector should be willing to publicly discuss how they are managing these issues," said Conrad MacKerron, Senior Program Director at As You Sow, who conceived the project after involvement in shareholder dialogues with many companies on labor and human rights issues. The report offers valuable data for other companies to compare themselves with, and for stakeholders to use to further verify company claims. As You Sow plans to follow up with companies that did not respond to the survey.
The report is available here: http://bit.ly/SJWReport
Wednesday, November 17, 2010
Tuesday, November 16, 2010
Monday, November 15, 2010
Businesses concerned by water use
By Roger Harrabin Environment Analyst, BBC News
Some 60% of firms have already set performance targets on the way they use water.Future water shortages are a growing concern for business, according to a global survey published today.
The research shows that more than half of the 147 firms responding expect problems with water in the next 1-5 years.
It says 60% of firms have already set performance targets on the way they use water.
The report predicts that the issue will get much worse as the world demand for water is projected to soar over the next few decades.
The UK's chief scientist John Beddington has warned that water scarcity will form part of a perfect storm of environmental problems. Today's report from consultants ERM was requested by institutional investors who want to know how much risk their investments face from water problems.It shows that 39% of the firms are already suffering from water related issues - including disruption from drought or flooding, declining water quality, and increases in water prices.Sectors reporting the greatest exposure to water risks include food, drinks & tobacco and metals & mining.
Firms are increasingly recognising the risk to their brand if they are seen to be wasteful with water in countries where it is in short supply.The growing demand for companies to measure their performance mirrors the existing trend for firms to measure their output of greenhouse gases. The ERM report says if firms measure their use of a commodity they tend to draw up policies over the use of that commodity.But it says water differs from carbon in the sense that there are often alternatives to fossil fuels but there are no alternatives to water.
The challenge lies in managing what we have among competing users, whether they are firms, communities or natural systems.The research was organised by the Carbon Disclosure Project, which does research on behalf of 137 institutional investors representing US$16 trillion of holdings.Jacqueline McGlade, director of the European Environment Agency, welcomed the disclosure initiative. "Climate change is altering global water availability, meaning greater scarcity in some regions and more flooding in others. We must adapt our infrastructure and our consumption," she said.
Some 60% of firms have already set performance targets on the way they use water.Future water shortages are a growing concern for business, according to a global survey published today.
The research shows that more than half of the 147 firms responding expect problems with water in the next 1-5 years.
It says 60% of firms have already set performance targets on the way they use water.
The report predicts that the issue will get much worse as the world demand for water is projected to soar over the next few decades.
The UK's chief scientist John Beddington has warned that water scarcity will form part of a perfect storm of environmental problems. Today's report from consultants ERM was requested by institutional investors who want to know how much risk their investments face from water problems.It shows that 39% of the firms are already suffering from water related issues - including disruption from drought or flooding, declining water quality, and increases in water prices.Sectors reporting the greatest exposure to water risks include food, drinks & tobacco and metals & mining.
Firms are increasingly recognising the risk to their brand if they are seen to be wasteful with water in countries where it is in short supply.The growing demand for companies to measure their performance mirrors the existing trend for firms to measure their output of greenhouse gases. The ERM report says if firms measure their use of a commodity they tend to draw up policies over the use of that commodity.But it says water differs from carbon in the sense that there are often alternatives to fossil fuels but there are no alternatives to water.
The challenge lies in managing what we have among competing users, whether they are firms, communities or natural systems.The research was organised by the Carbon Disclosure Project, which does research on behalf of 137 institutional investors representing US$16 trillion of holdings.Jacqueline McGlade, director of the European Environment Agency, welcomed the disclosure initiative. "Climate change is altering global water availability, meaning greater scarcity in some regions and more flooding in others. We must adapt our infrastructure and our consumption," she said.
Sunday, November 14, 2010
Saturday, November 13, 2010
Japan vis a vis China
The Asia-Pacific countries, which together account for more than half the world's total economic output, will explore ways of reaching agreement on a Free Trade Area of the Asia-Pacific, as well as closer economic integration across the hugely diverse region.
This agenda aims to build a sense of inter-dependence and shared interests through the common benefits of open trade, investment and what is called "human security". But as this week's G20 summit in Seoul showed, core issues like adjusting international currency values and dropping protective trade barriers multilaterally, are fraught with difficulties. Increasingly, economic and security problems have become intertwined and barely distinguishable from each other - especially in Asia where the interests of the US, China, Russia and Japan converge.
Japan has much to lose if a peaceful new order cannot be established in its own neighbourhood. So does it have the ingenuity and strength to help bring it about?
'Paralysed'
Many experts in East Asian affairs say that the Japanese have only grown more inward-looking as the challenges have multiplied. A territorial row with China has raised nationalist tensions on both sides Foremost among those are the inexorable rise of China, North Korea's acquisition of nuclear weapons, and Japan's own clumsy handling of relations with its main ally, the United States. Andrew Oros, an American political scientist and author on Japanese security issues, says the Japanese now appear overwhelmingly pessimistic about the future.
Speaking at a conference last week, Dr Oros said that recent events had shown Japan's political leaders were "more or less paralysed" in the face of hard strategic choices. The current Democratic Party of Japan (DPJ) government led by Naoto Kan has failed to resolve a long-running dispute over the planned relocation of a large US Marine base to a less crowded part of Okinawa, in the face of strong hostility from the local population to any American military presence. Mr Kan's predecessor, Yukio Hatoyama, resigned in June amid confusion over the base issue, as well as charges that he was edging Japan's strategic stance away from the US and a bit closer to China.
Japan's economy has experienced several years of lean growth Japan's perceived diplomatic weakness was exploited by Russia's President Dmitry Medvedev in early November when he made the first ever visit by a Russian leader to the Kuril islands, which the Japanese call their "Northern Territories". The trip underlined Russia's intention to ignore Japan's claim to recover the islands which the Red Army seized in the closing days of World War II. At home, a rapid series of government collapses mean that Mr Kan is Japan's fifth prime minister in only four years. And a recent clash with China over the Japanese-held Senkaku islands in the East China Sea, which China also claims and calls Diaoyu, showed how far Japan is from a relationship of trust with its giant neighbour.
Japan arrested and then released the crew and captain of a Chinese fishing boat which collided in September with two Japanese patrol vessels. But the Chinese, far from dampening down the row, encouraged mass displays of popular anti-Japanese feeling, banned exports to Japan of rare earth metals vital to Japan's hi-tech industries and started a diplomatic chill which will be tested at this weekend's summit.
For its part, Japan is anxious about Washington's decision to open a US-China "strategic dialogue", and there is so much talk of the United States and China becoming the world's most important decision-makers, a so-called "G2".
Tomohiko Taniguchi, a former Japanese foreign ministry spokesman turned strategic analyst, says China's vast size, super-fast economic growth and expanding naval power mean that Japan faces the prospect of Chinese dominance for the first time in more than 1,000 years. Nothing would be more humiliating for Japan, he says, than "having to kowtow to the rulers in Beijing".
The Japanese government insists that it has a sound overall strategy. It continues to rely heavily on the 50-year-old US-Japan alliance while itself maintaining a defensive "posture" in line with Japan's postwar "peace constitution". But Japan is also seeking a wide consensus for more meaningful security ties with other democracies like Australia, India and countries in Southeast Asia - and even with the Atlantic alliance, NATO.
Japanese officials point out that the country is still in the top five among the world's givers of development aid, despite its recent years of lean economic growth at home. It is the number one aid-giver to India. Japan's advanced technology is also vital to the joint programme with the US to develop ever more sophisticated missile defence systems - something that is crucial for Japan's homeland defence against North Korea's repeated missile tests in the sea close to Japanese territory. This policy mix involves many levers, but it leaves Japan open to the charge that it seeks to be "all things to all people".The core reality for Japan is that the 50-year era of its amazing ascent, under American protection, to become an economic superpower is now being challenged by strong global power shifts. An even greater challenge for Japan may be to cast off the inward-looking mindset of its leaders that has evolved during the years of plenty, and start to show political leadership to match its economic power.
This agenda aims to build a sense of inter-dependence and shared interests through the common benefits of open trade, investment and what is called "human security". But as this week's G20 summit in Seoul showed, core issues like adjusting international currency values and dropping protective trade barriers multilaterally, are fraught with difficulties. Increasingly, economic and security problems have become intertwined and barely distinguishable from each other - especially in Asia where the interests of the US, China, Russia and Japan converge.
Japan has much to lose if a peaceful new order cannot be established in its own neighbourhood. So does it have the ingenuity and strength to help bring it about?
'Paralysed'
Many experts in East Asian affairs say that the Japanese have only grown more inward-looking as the challenges have multiplied. A territorial row with China has raised nationalist tensions on both sides Foremost among those are the inexorable rise of China, North Korea's acquisition of nuclear weapons, and Japan's own clumsy handling of relations with its main ally, the United States. Andrew Oros, an American political scientist and author on Japanese security issues, says the Japanese now appear overwhelmingly pessimistic about the future.
Speaking at a conference last week, Dr Oros said that recent events had shown Japan's political leaders were "more or less paralysed" in the face of hard strategic choices. The current Democratic Party of Japan (DPJ) government led by Naoto Kan has failed to resolve a long-running dispute over the planned relocation of a large US Marine base to a less crowded part of Okinawa, in the face of strong hostility from the local population to any American military presence. Mr Kan's predecessor, Yukio Hatoyama, resigned in June amid confusion over the base issue, as well as charges that he was edging Japan's strategic stance away from the US and a bit closer to China.
Japan's economy has experienced several years of lean growth Japan's perceived diplomatic weakness was exploited by Russia's President Dmitry Medvedev in early November when he made the first ever visit by a Russian leader to the Kuril islands, which the Japanese call their "Northern Territories". The trip underlined Russia's intention to ignore Japan's claim to recover the islands which the Red Army seized in the closing days of World War II. At home, a rapid series of government collapses mean that Mr Kan is Japan's fifth prime minister in only four years. And a recent clash with China over the Japanese-held Senkaku islands in the East China Sea, which China also claims and calls Diaoyu, showed how far Japan is from a relationship of trust with its giant neighbour.
Japan arrested and then released the crew and captain of a Chinese fishing boat which collided in September with two Japanese patrol vessels. But the Chinese, far from dampening down the row, encouraged mass displays of popular anti-Japanese feeling, banned exports to Japan of rare earth metals vital to Japan's hi-tech industries and started a diplomatic chill which will be tested at this weekend's summit.
For its part, Japan is anxious about Washington's decision to open a US-China "strategic dialogue", and there is so much talk of the United States and China becoming the world's most important decision-makers, a so-called "G2".
Tomohiko Taniguchi, a former Japanese foreign ministry spokesman turned strategic analyst, says China's vast size, super-fast economic growth and expanding naval power mean that Japan faces the prospect of Chinese dominance for the first time in more than 1,000 years. Nothing would be more humiliating for Japan, he says, than "having to kowtow to the rulers in Beijing".
The Japanese government insists that it has a sound overall strategy. It continues to rely heavily on the 50-year-old US-Japan alliance while itself maintaining a defensive "posture" in line with Japan's postwar "peace constitution". But Japan is also seeking a wide consensus for more meaningful security ties with other democracies like Australia, India and countries in Southeast Asia - and even with the Atlantic alliance, NATO.
Japanese officials point out that the country is still in the top five among the world's givers of development aid, despite its recent years of lean economic growth at home. It is the number one aid-giver to India. Japan's advanced technology is also vital to the joint programme with the US to develop ever more sophisticated missile defence systems - something that is crucial for Japan's homeland defence against North Korea's repeated missile tests in the sea close to Japanese territory. This policy mix involves many levers, but it leaves Japan open to the charge that it seeks to be "all things to all people".The core reality for Japan is that the 50-year era of its amazing ascent, under American protection, to become an economic superpower is now being challenged by strong global power shifts. An even greater challenge for Japan may be to cast off the inward-looking mindset of its leaders that has evolved during the years of plenty, and start to show political leadership to match its economic power.
Friday, November 12, 2010
Currency war's key battlegrounds
By Andrew Walker Economics correspondent, BBC World Service
It has been called a "currency war", by the International Monetary Fund's managing director and the Brazilian finance minister among others. IMF chief Dominique Strauss-Kahn told the BBC last month that there were signs that countries were trying to use their currencies "as a weapon".
For his part, Brazil's Guido Mantega said competitive devaluations by advanced countries amounted to a new trade war."We're in the midst of an international currency war," he told a meeting of industrial leaders in September. "This threatens us because it takes away our competitiveness."
There are several main elements, two of them fairly new, but the first is a long-standing one.
China versus the US
It is China's policy of managing its currency and limiting its movement against the US dollar. It has been through several phases and during the financial crisis, China went back to keeping the yuan from rising.
China is trying to hold the yuan's value down. Since just before the Toronto G20 summit in June, it has eased the controls and allowed the currency to move up against the dollar, but by less than 2.5% (as of now). And because the dollar has fallen, the yuan has dropped against many other currencies as well. Why the Chinese reluctance to allow the yuan to rise much? A fear of job losses among export industries that would be made less competitive. The rise against the dollar has not been enough to satisfy the US, where there is a long standing complaint that China manipulates its currency to gain an unfair advantage. The cry is: "It costs American jobs."
US economic policy
Many in the US complain about China, but are their hands entirely clean? Some in the rest of the world say not. The dollar has fallen sharply in recent months, because interest rates are low, so investors have been seeking higher returns in emerging economies. They need to buy the currency of the country concerned to make those investments. That tends to push its value up, while the dollar, which they are selling, tends to fall.
And the effect is aggravated by the Federal Reserve's other policy, known as quantitative easing. The Fed buys financial assets and the money it pays with has to be invested somewhere. The weak dollar has an advantage for the US - it's that competitiveness issue again. It should help American exporters. The US has a large trade deficit, so more exports could help fix that. Some even argue that the Fed's policies are actually intended to weaken the dollar and help the US economy recover by exporting more.
Emerging economies
The Fed's policies have led to a wave of money-seeking opportunities in the emerging economies. That tends to push their currencies up, undermining their competitiveness. There is also the risk of bubbles in financial and property markets. And capital inflows can go into reverse - as they did in the Asian crisis in the 1990s.
So the third element in the currency "war" is the resistance of emerging economies, and some developed ones too. Brazil and Thailand have used tax measures to slow the inflows. Japan, South Korea and others have intervened in the currency markets, buying foreign currency in an attempt to interrupt the rise of their own.
There is a view that they will just have to live with it. The upward pressure on the currencies of many emerging economies reflects the fact they are more growing strongly than the US. It is difficult for them to manage, but the underlying reason is that they are doing relatively well.
Economic imbalances
The currency war is closely linked with another theme that has been troubling many economists for several years, that of global economic imbalances. In international terms, it is trade that is unbalanced. Actually, the thing that is most often the focus is the "current account balance", which means trade in goods and services plus some financial items, including remittances that migrant workers send home. Usually, though, trade is responsible for most of the current account imbalance.
Some countries have large trade surpluses, notably China, Germany, Saudi Arabia and Russia. The big deficit country is the United States. Some countries at the eye of the European storm have hefty deficits too - Greece, Portugal and Spain. Britain also has a deficit, although as a share of national income, it is not all that large. The other side of international imbalances is high savings at home with a surplus country such as China, and relatively low savings in a deficit country such as the US. Household savings have risen in the US, the UK and other deficit countries, because consumers are borrowing less in the wake of the financial crisis. But international imbalances also reflect how much governments borrow and in many deficit countries that has risen, partly offsetting the increase in private savings. Why does all this matter? Those countries where saving has risen desperately want to export more. They want to sell more abroad to make up for consumers at home drawing in their horns.
That is true of the US, Britain and many others. They could do that more easily if consumers in China and the other surplus countries were willing to buy more imported goods. A rise in China's currency would not be a cure-all, but it would probably help.
It has been called a "currency war", by the International Monetary Fund's managing director and the Brazilian finance minister among others. IMF chief Dominique Strauss-Kahn told the BBC last month that there were signs that countries were trying to use their currencies "as a weapon".
For his part, Brazil's Guido Mantega said competitive devaluations by advanced countries amounted to a new trade war."We're in the midst of an international currency war," he told a meeting of industrial leaders in September. "This threatens us because it takes away our competitiveness."
There are several main elements, two of them fairly new, but the first is a long-standing one.
China versus the US
It is China's policy of managing its currency and limiting its movement against the US dollar. It has been through several phases and during the financial crisis, China went back to keeping the yuan from rising.
China is trying to hold the yuan's value down. Since just before the Toronto G20 summit in June, it has eased the controls and allowed the currency to move up against the dollar, but by less than 2.5% (as of now). And because the dollar has fallen, the yuan has dropped against many other currencies as well. Why the Chinese reluctance to allow the yuan to rise much? A fear of job losses among export industries that would be made less competitive. The rise against the dollar has not been enough to satisfy the US, where there is a long standing complaint that China manipulates its currency to gain an unfair advantage. The cry is: "It costs American jobs."
US economic policy
Many in the US complain about China, but are their hands entirely clean? Some in the rest of the world say not. The dollar has fallen sharply in recent months, because interest rates are low, so investors have been seeking higher returns in emerging economies. They need to buy the currency of the country concerned to make those investments. That tends to push its value up, while the dollar, which they are selling, tends to fall.
And the effect is aggravated by the Federal Reserve's other policy, known as quantitative easing. The Fed buys financial assets and the money it pays with has to be invested somewhere. The weak dollar has an advantage for the US - it's that competitiveness issue again. It should help American exporters. The US has a large trade deficit, so more exports could help fix that. Some even argue that the Fed's policies are actually intended to weaken the dollar and help the US economy recover by exporting more.
Emerging economies
The Fed's policies have led to a wave of money-seeking opportunities in the emerging economies. That tends to push their currencies up, undermining their competitiveness. There is also the risk of bubbles in financial and property markets. And capital inflows can go into reverse - as they did in the Asian crisis in the 1990s.
So the third element in the currency "war" is the resistance of emerging economies, and some developed ones too. Brazil and Thailand have used tax measures to slow the inflows. Japan, South Korea and others have intervened in the currency markets, buying foreign currency in an attempt to interrupt the rise of their own.
There is a view that they will just have to live with it. The upward pressure on the currencies of many emerging economies reflects the fact they are more growing strongly than the US. It is difficult for them to manage, but the underlying reason is that they are doing relatively well.
Economic imbalances
The currency war is closely linked with another theme that has been troubling many economists for several years, that of global economic imbalances. In international terms, it is trade that is unbalanced. Actually, the thing that is most often the focus is the "current account balance", which means trade in goods and services plus some financial items, including remittances that migrant workers send home. Usually, though, trade is responsible for most of the current account imbalance.
Some countries have large trade surpluses, notably China, Germany, Saudi Arabia and Russia. The big deficit country is the United States. Some countries at the eye of the European storm have hefty deficits too - Greece, Portugal and Spain. Britain also has a deficit, although as a share of national income, it is not all that large. The other side of international imbalances is high savings at home with a surplus country such as China, and relatively low savings in a deficit country such as the US. Household savings have risen in the US, the UK and other deficit countries, because consumers are borrowing less in the wake of the financial crisis. But international imbalances also reflect how much governments borrow and in many deficit countries that has risen, partly offsetting the increase in private savings. Why does all this matter? Those countries where saving has risen desperately want to export more. They want to sell more abroad to make up for consumers at home drawing in their horns.
That is true of the US, Britain and many others. They could do that more easily if consumers in China and the other surplus countries were willing to buy more imported goods. A rise in China's currency would not be a cure-all, but it would probably help.
Supercomputers 'will fit in a sugar cube', IBM
Supercomputers 'will fit in a sugar cube', IBM saysBy Jason Palmer
A pioneering research effort could shrink the world's most powerful supercomputer processors to the size of a sugar cube, IBM scientists say.The approach will see many computer processors stacked on top of one another, cooling them with water flowing between each one.
The aim is to reduce computers' energy use, rather than just to shrink them.Some 2% of the world's total energy is consumed by building and running computer equipment.Speaking at IBM's Zurich labs, Dr Bruno Michel said future computer costs would hinge on green credentials rather than speed.Dr Michel and his team have already built a prototype to demonstrate the water-cooling principle. Called Aquasar, it occupies a rack larger than a refrigerator.
IBM estimates that Aquasar is almost 50% more energy-efficient than the world's leading supercomputers."In the past, computers were dominated by hardware costs - 50 years ago you could hold one transistor and it cost a dollar, or a franc," Dr Michel told BBC News.Now when the sums are done, he said, the cost of a transistor works out to 1/100th of the price of printing a single letter on a page.Now the cost of the building the next generation of supercomputers is not the problem, IBM says. The cost of running the machines is what concerns engineers."In the future, computers will be dominated by energy costs - to run a data centre will cost more than to build it," said Dr Michel.The overwhelming cause of those energy costs is in cooling, because computing power generates heat as a side product.
Cube route
"In the past, the Top 500 list (of fastest supercomputers worldwide) was the important one; computers were listed according to their performance. The Aquasar - built on a series of water-cooled servers - is the size of a chunky refrigerator "In the future, the 'Green 500' will be the important list, where computers are listed according to their efficiency."Until recently, the supercomputer at the top of that list could do about 770 million computational operations at a cost of one watt of power.The Aquasar prototype clocked up nearly half again as much, at 1.1 trillion operations. Now the task is to shrink it."We currently have built this Aquasar system that's one rack full of processors. We plan that 10 to 15 years from now, we can collapse such a system in to one sugar cube - we're going to have a supercomputer in a sugar cube."
Mark Stromberg, principal research analyst at Gartner, said that the approach was a promising one. But he said that tackling the finer details of cooling - to remove heat from just the right parts of the chip stacks - would take significant effort.
Third dimension
It takes about 1,000 times more energy to move a data byte around than it does to do a computation with it once it arrives. What is more, the time taken to complete a computation is currently limited by how long it takes to do the moving.Air cooling can go some way to removing this heat, which is why many desktop computers have fans inside. But a given volume of water can hold 4,000 times more waste heat than air. The Aquasar system is made from green record-breaking Blade servers However, it adds a great deal of bulk. With current technology, a standard chip - comprising a milligram of transistors - needs 1kg of equipment to cool it, according to Dr Michel. Part of the solution he and his colleagues propose - and that the large Aquasar rack demonstrates - is water cooling based on a slimmed-down, more efficient circulation of water that borrows ideas from the human body's branched circulatory system.
However, the engineers are exploring the third dimension first. They want to stack processors one on top of another, envisioning vast stacks, each separated by water cooling channels not much more than a hair's breadth in thickness.Because distance between processors both slows down and heats up the computing process, moving chips closer together in this way tackles issues of speed, size, and running costs, all at once.In an effort to prove the principle the team has built stacks four processors high. But Dr Michel concedes that much work is still to be done. The major technical challenge will be to engineer the connections between the different chips, which must work as conductors and be waterproof. "Clearly the use of 3D processes will be a major advancement in semiconductor technology and will allow the industry to maintain its course," Gartner's Mark Stromberg told the BBC.
"But several challenges remain before this technology can be implemented - issues concerning thermal dissipation are among the most critical engineering challenges facing 3D semiconductor technology."
A pioneering research effort could shrink the world's most powerful supercomputer processors to the size of a sugar cube, IBM scientists say.The approach will see many computer processors stacked on top of one another, cooling them with water flowing between each one.
The aim is to reduce computers' energy use, rather than just to shrink them.Some 2% of the world's total energy is consumed by building and running computer equipment.Speaking at IBM's Zurich labs, Dr Bruno Michel said future computer costs would hinge on green credentials rather than speed.Dr Michel and his team have already built a prototype to demonstrate the water-cooling principle. Called Aquasar, it occupies a rack larger than a refrigerator.
IBM estimates that Aquasar is almost 50% more energy-efficient than the world's leading supercomputers."In the past, computers were dominated by hardware costs - 50 years ago you could hold one transistor and it cost a dollar, or a franc," Dr Michel told BBC News.Now when the sums are done, he said, the cost of a transistor works out to 1/100th of the price of printing a single letter on a page.Now the cost of the building the next generation of supercomputers is not the problem, IBM says. The cost of running the machines is what concerns engineers."In the future, computers will be dominated by energy costs - to run a data centre will cost more than to build it," said Dr Michel.The overwhelming cause of those energy costs is in cooling, because computing power generates heat as a side product.
Cube route
"In the past, the Top 500 list (of fastest supercomputers worldwide) was the important one; computers were listed according to their performance. The Aquasar - built on a series of water-cooled servers - is the size of a chunky refrigerator "In the future, the 'Green 500' will be the important list, where computers are listed according to their efficiency."Until recently, the supercomputer at the top of that list could do about 770 million computational operations at a cost of one watt of power.The Aquasar prototype clocked up nearly half again as much, at 1.1 trillion operations. Now the task is to shrink it."We currently have built this Aquasar system that's one rack full of processors. We plan that 10 to 15 years from now, we can collapse such a system in to one sugar cube - we're going to have a supercomputer in a sugar cube."
Mark Stromberg, principal research analyst at Gartner, said that the approach was a promising one. But he said that tackling the finer details of cooling - to remove heat from just the right parts of the chip stacks - would take significant effort.
Third dimension
It takes about 1,000 times more energy to move a data byte around than it does to do a computation with it once it arrives. What is more, the time taken to complete a computation is currently limited by how long it takes to do the moving.Air cooling can go some way to removing this heat, which is why many desktop computers have fans inside. But a given volume of water can hold 4,000 times more waste heat than air. The Aquasar system is made from green record-breaking Blade servers However, it adds a great deal of bulk. With current technology, a standard chip - comprising a milligram of transistors - needs 1kg of equipment to cool it, according to Dr Michel. Part of the solution he and his colleagues propose - and that the large Aquasar rack demonstrates - is water cooling based on a slimmed-down, more efficient circulation of water that borrows ideas from the human body's branched circulatory system.
However, the engineers are exploring the third dimension first. They want to stack processors one on top of another, envisioning vast stacks, each separated by water cooling channels not much more than a hair's breadth in thickness.Because distance between processors both slows down and heats up the computing process, moving chips closer together in this way tackles issues of speed, size, and running costs, all at once.In an effort to prove the principle the team has built stacks four processors high. But Dr Michel concedes that much work is still to be done. The major technical challenge will be to engineer the connections between the different chips, which must work as conductors and be waterproof. "Clearly the use of 3D processes will be a major advancement in semiconductor technology and will allow the industry to maintain its course," Gartner's Mark Stromberg told the BBC.
"But several challenges remain before this technology can be implemented - issues concerning thermal dissipation are among the most critical engineering challenges facing 3D semiconductor technology."
Thursday, November 11, 2010
Call to stop fossil fuel subsidy
By Roger Harrabin Environment analyst
Political inertia may be one of the blockages to progress. A global energy think tank has urged nations to stop subsidising fossil fuels as soon as possible.It says that last year governments, mainly in the developing world, spent $312bn subsidising coal oil, gas and coal.This was even though they agree these fuels cause climate change.The International Energy Agency says removing the subsidies would be the quickest way to control the soaring demand for energy. It would also cut CO2 emissions by 5.8%
But the IEA report admits that vested interests and political inertia will be major barriers to making progress on the issue.
Cutting out fossil fuel subsidies by 2020 would allow fuel prices to rise and reduce overall energy consumption 5% - this equates to all the fossil fuel used by Japan, South Korea and New Zealand.
The move would cut greenhouse gas emissions by an estimate 5.8% - two gigatonnes - by 2020. It would also free up government cash to use on other measures.
Resource depletion
The IEA's World Energy Outlook 2010 says: "Subsidies that artificially lower energy prices encourage wasteful consumption and undermine the competitiveness of renewable and more energy-efficient technologies."
It also points out that the subsidies hasten the depletion of resources.
Subsidies have traditionally been granted to politically-connected industries with close links to politicians.
The majority are offered in developing countries, according to the IEA. Some countries say they need the subsidies to make energy affordable. But the report says very few schemes actually benefit the poor. The report notes that in 2009 APEC and the G20 agreed to phase out fossil fuel subsidies over time, but the IEA admits: "Steep economic political and social hurdles will need to be overcome to realise lasting gains."
For decades, Germany subsidised coal because it wanted to continue producing domestic coal and to avoid the political ramifications of the massive social disruption that would be caused by allowing mining areas to stop working. The subsidies are now slowly being phased out. Nobuo Tanaka, head of the IEA said: "Getting the prices right, by eliminating fossil-fuel subsidies, is the single most effective measure to cut energy demand in countries where they persist, while bringing other immediate economic benefits", said.
The IEA also warns that the failure to reach a strict emissions agreement at Copenhagen makes it much more difficult and expensive to achieve the stated UN goal of stabilised emissions at a level equated with a temperature rise of 2C.
It says the failure increased the cost by $1 trillion. And it warns that if countries adopt their Copenhagen pledges in a "cautious" manner, their emissions cuts would fall far short of the mark. Commenting on the report, Friends of the Earth's head of climate Mike Childs said: "The outlook for the planet is grim unless governments commit to tough international action to rapidly reduce our reliance on fossil fuels and tackle climate change."
UK Energy and Climate Change Secretary Chris Huhne said in response to the IEA report:
"The IEA delivers a blunt message ahead of the Cancun climate conference that cleaning up our energy systems now is cheaper than delay.
"The Copenhagen commitments would soften predicted oil price increases, but the IEA still thinks prices could be some 40% higher by 2035. The age of cheap energy is over.
"We need to go further and faster in getting ourselves off the oil hook - and on to clean green growth. Greater energy independence - with more renewables, clean coal and nuclear - is the best way to protect our consumers and our country from energy shocks to come."
The Outlook calculated subsidies by comparing the price of fuels to consumers with the price on the international markets. The most subsidies were offered by Iran (66$bn); Saudi ($35bn); Russia (£34bn); India ($21bn); and China ($19bn). IEA economist Marco Baroni told BBC News that the totals did not include government subsidies to fossil fuel producers. Some estimates, he said, suggested these could be as high as a further $100bn - but the data was hard to come by.
Nor does the total include the tacit subsidy given to fossil fuels because fuel taxes globally do not match the external damages caused by burning fossil fuels. Lord Stern estimated climate damages from fossil fuels of between 5 and 20% of GDP. A comprehensive estimate would also include damages to human health from local pollution and damage to buildings and crops by acid rain. The Chinese government admits that its soaring economic growth rate would be slashed if environmental damage from fossil fuels was fully taken into account.
Political inertia may be one of the blockages to progress. A global energy think tank has urged nations to stop subsidising fossil fuels as soon as possible.It says that last year governments, mainly in the developing world, spent $312bn subsidising coal oil, gas and coal.This was even though they agree these fuels cause climate change.The International Energy Agency says removing the subsidies would be the quickest way to control the soaring demand for energy. It would also cut CO2 emissions by 5.8%
But the IEA report admits that vested interests and political inertia will be major barriers to making progress on the issue.
Cutting out fossil fuel subsidies by 2020 would allow fuel prices to rise and reduce overall energy consumption 5% - this equates to all the fossil fuel used by Japan, South Korea and New Zealand.
The move would cut greenhouse gas emissions by an estimate 5.8% - two gigatonnes - by 2020. It would also free up government cash to use on other measures.
Resource depletion
The IEA's World Energy Outlook 2010 says: "Subsidies that artificially lower energy prices encourage wasteful consumption and undermine the competitiveness of renewable and more energy-efficient technologies."
It also points out that the subsidies hasten the depletion of resources.
Subsidies have traditionally been granted to politically-connected industries with close links to politicians.
The majority are offered in developing countries, according to the IEA. Some countries say they need the subsidies to make energy affordable. But the report says very few schemes actually benefit the poor. The report notes that in 2009 APEC and the G20 agreed to phase out fossil fuel subsidies over time, but the IEA admits: "Steep economic political and social hurdles will need to be overcome to realise lasting gains."
For decades, Germany subsidised coal because it wanted to continue producing domestic coal and to avoid the political ramifications of the massive social disruption that would be caused by allowing mining areas to stop working. The subsidies are now slowly being phased out. Nobuo Tanaka, head of the IEA said: "Getting the prices right, by eliminating fossil-fuel subsidies, is the single most effective measure to cut energy demand in countries where they persist, while bringing other immediate economic benefits", said.
The IEA also warns that the failure to reach a strict emissions agreement at Copenhagen makes it much more difficult and expensive to achieve the stated UN goal of stabilised emissions at a level equated with a temperature rise of 2C.
It says the failure increased the cost by $1 trillion. And it warns that if countries adopt their Copenhagen pledges in a "cautious" manner, their emissions cuts would fall far short of the mark. Commenting on the report, Friends of the Earth's head of climate Mike Childs said: "The outlook for the planet is grim unless governments commit to tough international action to rapidly reduce our reliance on fossil fuels and tackle climate change."
UK Energy and Climate Change Secretary Chris Huhne said in response to the IEA report:
"The IEA delivers a blunt message ahead of the Cancun climate conference that cleaning up our energy systems now is cheaper than delay.
"The Copenhagen commitments would soften predicted oil price increases, but the IEA still thinks prices could be some 40% higher by 2035. The age of cheap energy is over.
"We need to go further and faster in getting ourselves off the oil hook - and on to clean green growth. Greater energy independence - with more renewables, clean coal and nuclear - is the best way to protect our consumers and our country from energy shocks to come."
The Outlook calculated subsidies by comparing the price of fuels to consumers with the price on the international markets. The most subsidies were offered by Iran (66$bn); Saudi ($35bn); Russia (£34bn); India ($21bn); and China ($19bn). IEA economist Marco Baroni told BBC News that the totals did not include government subsidies to fossil fuel producers. Some estimates, he said, suggested these could be as high as a further $100bn - but the data was hard to come by.
Nor does the total include the tacit subsidy given to fossil fuels because fuel taxes globally do not match the external damages caused by burning fossil fuels. Lord Stern estimated climate damages from fossil fuels of between 5 and 20% of GDP. A comprehensive estimate would also include damages to human health from local pollution and damage to buildings and crops by acid rain. The Chinese government admits that its soaring economic growth rate would be slashed if environmental damage from fossil fuels was fully taken into account.
English Language Chinese Blog sites
Some English-language Chinese blog sites
www.chinasmack.com translates Chinese posts and comments into English, usually covers pop culture.
www.chinalyst.net streams updates from member blogs.
www.danwei.org bills itself as a website about media, advertising and urban life in China.
www.shanghaiist.com focuses mainly on the goings-on in Shanghai, but also has links to stories about the rest of China.
www.zonaeuropa.com covers social issues and examines English- and Chinese-language media about China.
www.chinasmack.com translates Chinese posts and comments into English, usually covers pop culture.
www.chinalyst.net streams updates from member blogs.
www.danwei.org bills itself as a website about media, advertising and urban life in China.
www.shanghaiist.com focuses mainly on the goings-on in Shanghai, but also has links to stories about the rest of China.
www.zonaeuropa.com covers social issues and examines English- and Chinese-language media about China.
Wednesday, November 10, 2010
Indonesia- Diversity and Democracy
US President Barack Obama has held up Indonesia as an example of how a developing nation can embrace democracy and diversity. He was speaking in Jakarta on a visit to the world's largest Muslim nation.
Mr Obama said innocent people across the world were still targeted by militants but emphasised that the US was not at war with Islam.Analysts say it is his biggest attempt to engage the Islamic world since a speech in Cairo last year.
Mr Obama was speaking at the University of Indonesia, before an audience of 6,000 people.
'Shared values'
In his address, he touched on the four years he spent in the country as a child and emphasised the importance of Indonesia's example as a growing economy and a majority-Muslim nation that is largely tolerant of other religions.
"Today, I return to Indonesia as a friend, but also as a president who seeks a deep and enduring partnership between our two countries," he said.
"Because as vast and diverse countries; as neighbours on either side of the Pacific; and above all as democracies - the United States and Indonesia are bound together by shared interests and shared values."
Barack Obama applied the personal touch with great aplomb: reminiscing about the Indonesia he once knew, then praising the progress it has made from dictatorship to vibrant, booming democracy. He repeated its national motto - "Unity in Diversity" - holding Indonesia up as an example for others to follow. Mr Obama then pressed home his support for democracy, human rights and religious tolerance. The young audience at the University of Indonesia cheered, and much of the rest of the country was charmed. They could perhaps once again think of the President of the United States as one of their own.
He also highlighted the role religion had played in Indonesia's development, praising the country's spirituality and "rich diversity".
"Just as individuals are not defined solely by their faith, Indonesia is defined by more than its Muslim population," he said. "But we also know that relations between the United States and Muslim communities have frayed over many years. As president, I have made it a priority to begin to repair these relations." He said more work needed to be done to address "the issues that have caused tensions for many years" but appealed for unity to defeat "violent extremists".
"I have made it clear that America is not, and never will be, at war with Islam," he said.
"Instead, all of us must work together to defeat al-Qaeda and its affiliates, who have no claim to be leaders of any religion - certainly not a great, world religion like Islam. But those who want to build must not cede ground to terrorists who seek to destroy. This is not a task for America alone." But among the kind words for his hosts, there was also a thinly-veiled swipe at China, says the BBC's Guy Delauney in Jakarta - in particular its treatment of political dissidents."Prosperity without freedom is just another form of poverty," Mr Obama said. "Because there are aspirations that human beings share - the liberty of knowing that your leader is accountable to you - and that you won't get locked up for disagreeing with them." Mr Obama's trip to Asia covers four successful democracies - and shows the direction the US would like others to follow, our correspondent says.
Difficulties
The president also revisited some of the themes he raised in his June 2009 speech in Cairo: the conflicts in Iraq, Afghanistan and between Israel and the Palestinians.Mr Obama said Indonesia was defined by more than its Muslim population In a reminder of the difficulties he faces on that last front, Israel decided to build more apartments for Jewish settlers in disputed East Jerusalem.
Peace talks between Israel and the Palestinians resumed in September after a break of almost two years but were suspended after a few weeks when a freeze on the building of Jewish settlements expired.When Mr Obama delivered his Cairo speech he was riding a wave of goodwill, says the BBC's Middle East analyst Roger Hardy. But since then, the mood has changed. Recent polls show that in key parts of the Muslim world his credibility has slumped. Mr Obama had earlier addressed many of the same themes in a wide-ranging news conference with President Susilo Bambang Yudhoyono. The president's short trip has afforded him little leisure time, but before the university speech Mr Obama and his wife Michelle managed a visit to Jakarta's Istiqlal mosque, the largest in South-East Asia.He has been forced to leave Indonesia about two hours early so his flight can outrun the volcanic ash cloud thrown up by the recent deadly eruption of Mount Merapi. Indonesia is the second stop on his four-nation tour of Asia after India. The next stops are South Korea for the summit of G20 leaders and finally Japan.
Mr Obama said innocent people across the world were still targeted by militants but emphasised that the US was not at war with Islam.Analysts say it is his biggest attempt to engage the Islamic world since a speech in Cairo last year.
Mr Obama was speaking at the University of Indonesia, before an audience of 6,000 people.
'Shared values'
In his address, he touched on the four years he spent in the country as a child and emphasised the importance of Indonesia's example as a growing economy and a majority-Muslim nation that is largely tolerant of other religions.
"Today, I return to Indonesia as a friend, but also as a president who seeks a deep and enduring partnership between our two countries," he said.
"Because as vast and diverse countries; as neighbours on either side of the Pacific; and above all as democracies - the United States and Indonesia are bound together by shared interests and shared values."
Barack Obama applied the personal touch with great aplomb: reminiscing about the Indonesia he once knew, then praising the progress it has made from dictatorship to vibrant, booming democracy. He repeated its national motto - "Unity in Diversity" - holding Indonesia up as an example for others to follow. Mr Obama then pressed home his support for democracy, human rights and religious tolerance. The young audience at the University of Indonesia cheered, and much of the rest of the country was charmed. They could perhaps once again think of the President of the United States as one of their own.
He also highlighted the role religion had played in Indonesia's development, praising the country's spirituality and "rich diversity".
"Just as individuals are not defined solely by their faith, Indonesia is defined by more than its Muslim population," he said. "But we also know that relations between the United States and Muslim communities have frayed over many years. As president, I have made it a priority to begin to repair these relations." He said more work needed to be done to address "the issues that have caused tensions for many years" but appealed for unity to defeat "violent extremists".
"I have made it clear that America is not, and never will be, at war with Islam," he said.
"Instead, all of us must work together to defeat al-Qaeda and its affiliates, who have no claim to be leaders of any religion - certainly not a great, world religion like Islam. But those who want to build must not cede ground to terrorists who seek to destroy. This is not a task for America alone." But among the kind words for his hosts, there was also a thinly-veiled swipe at China, says the BBC's Guy Delauney in Jakarta - in particular its treatment of political dissidents."Prosperity without freedom is just another form of poverty," Mr Obama said. "Because there are aspirations that human beings share - the liberty of knowing that your leader is accountable to you - and that you won't get locked up for disagreeing with them." Mr Obama's trip to Asia covers four successful democracies - and shows the direction the US would like others to follow, our correspondent says.
Difficulties
The president also revisited some of the themes he raised in his June 2009 speech in Cairo: the conflicts in Iraq, Afghanistan and between Israel and the Palestinians.Mr Obama said Indonesia was defined by more than its Muslim population In a reminder of the difficulties he faces on that last front, Israel decided to build more apartments for Jewish settlers in disputed East Jerusalem.
Peace talks between Israel and the Palestinians resumed in September after a break of almost two years but were suspended after a few weeks when a freeze on the building of Jewish settlements expired.When Mr Obama delivered his Cairo speech he was riding a wave of goodwill, says the BBC's Middle East analyst Roger Hardy. But since then, the mood has changed. Recent polls show that in key parts of the Muslim world his credibility has slumped. Mr Obama had earlier addressed many of the same themes in a wide-ranging news conference with President Susilo Bambang Yudhoyono. The president's short trip has afforded him little leisure time, but before the university speech Mr Obama and his wife Michelle managed a visit to Jakarta's Istiqlal mosque, the largest in South-East Asia.He has been forced to leave Indonesia about two hours early so his flight can outrun the volcanic ash cloud thrown up by the recent deadly eruption of Mount Merapi. Indonesia is the second stop on his four-nation tour of Asia after India. The next stops are South Korea for the summit of G20 leaders and finally Japan.
Tuesday, November 9, 2010
Energy price spike looms, agency says
International Energy Agency says governments are unprepared for rise in demand
The International Energy Agency warned Tuesday that governments aren't doing enough to prepare for the next spike in energy prices.The Paris-based IEA said more must be done to increase energy efficiency and boost green technologies in order to meet what it predicts will be a 36 per cent jump in energy demand — increasingly driven by China — between 2008 and 2035.
IEA Executive Director Nobuo Tanaka said more must be done to increase energy efficiency and boost green technologies. The IEA — a policy adviser to 28 member countries, mostly industrialized oil consumers — predicted in its annual World Energy Outlook that global oil demand will rise to 99 million barrels a day by 2035.That would be some 15 million barrels a day higher than last year, but a slower increase than the 105 million barrels a day by 2030 it forecast last year.Still, it said this will push supplies to near their peak over the coming decades, endangering government pledges to limit the increase in global temperatures to two degrees Celsius.Executive Director Nobuo Tanaka said the energy world is facing "unprecedented uncertainty."
He said the Copenhagen Accord on tackling global warming and an agreement among G20 countries to phase out subsidies are positive steps but more needs to be done to use energy more efficiently.The IEA estimated China's demand will jump by 75 per cent, accounting for more than a third of the increase in demand.
A wind turbine near Pincher Creek, Alta. The IEA says investment of $5.7 trillion US is needed over 2010-35 to produce more electricity. "It is hard to overestimate the growing importance of China in global energy," Tanaka told reporters in London."How the country responds to the threats to global energy security and climate posed by rising fossil fuel use will have far-reaching consequences for the rest of the world."
The IEA report predicted that oil prices could soar as high as $135 US a barrel and are expected to average $113 a barrel by 2035, compared to an average of $60 in 2009, as higher prices are needed to bring demand into balance with supply.The Organization of Petroleum Exporting Countries will account for 50 per cent of the world's oil supply by 2035 as production from outside the group falters, it said.OPEC, which already pumps around 40 per cent of the world's oil, last week forecast that world energy demand will rise by 40 per cent in the next three decades even as the appetite for oil shrinks because some of the need will be met by other sources.The IEA report said that investment of $5.7 trillion is needed over 2010-35 to produce more electricity, while biofuels need another $335 billion.The agency also forecast that consumption of natural gas will increase 44 per cent to 4.5 trillion cubic meters in 2035, from 3.1 trillion cubic meters in 2008.
Read more: http://www.cbc.ca/money/story/2010/11/09/iea-world-energy-report.html#ixzz14p3U7vkT
The International Energy Agency warned Tuesday that governments aren't doing enough to prepare for the next spike in energy prices.The Paris-based IEA said more must be done to increase energy efficiency and boost green technologies in order to meet what it predicts will be a 36 per cent jump in energy demand — increasingly driven by China — between 2008 and 2035.
IEA Executive Director Nobuo Tanaka said more must be done to increase energy efficiency and boost green technologies. The IEA — a policy adviser to 28 member countries, mostly industrialized oil consumers — predicted in its annual World Energy Outlook that global oil demand will rise to 99 million barrels a day by 2035.That would be some 15 million barrels a day higher than last year, but a slower increase than the 105 million barrels a day by 2030 it forecast last year.Still, it said this will push supplies to near their peak over the coming decades, endangering government pledges to limit the increase in global temperatures to two degrees Celsius.Executive Director Nobuo Tanaka said the energy world is facing "unprecedented uncertainty."
He said the Copenhagen Accord on tackling global warming and an agreement among G20 countries to phase out subsidies are positive steps but more needs to be done to use energy more efficiently.The IEA estimated China's demand will jump by 75 per cent, accounting for more than a third of the increase in demand.
A wind turbine near Pincher Creek, Alta. The IEA says investment of $5.7 trillion US is needed over 2010-35 to produce more electricity. "It is hard to overestimate the growing importance of China in global energy," Tanaka told reporters in London."How the country responds to the threats to global energy security and climate posed by rising fossil fuel use will have far-reaching consequences for the rest of the world."
The IEA report predicted that oil prices could soar as high as $135 US a barrel and are expected to average $113 a barrel by 2035, compared to an average of $60 in 2009, as higher prices are needed to bring demand into balance with supply.The Organization of Petroleum Exporting Countries will account for 50 per cent of the world's oil supply by 2035 as production from outside the group falters, it said.OPEC, which already pumps around 40 per cent of the world's oil, last week forecast that world energy demand will rise by 40 per cent in the next three decades even as the appetite for oil shrinks because some of the need will be met by other sources.The IEA report said that investment of $5.7 trillion is needed over 2010-35 to produce more electricity, while biofuels need another $335 billion.The agency also forecast that consumption of natural gas will increase 44 per cent to 4.5 trillion cubic meters in 2035, from 3.1 trillion cubic meters in 2008.
Read more: http://www.cbc.ca/money/story/2010/11/09/iea-world-energy-report.html#ixzz14p3U7vkT
Monday, November 8, 2010
US chooses India
I have been wondering for awhile which way the Americans would jump for the future of their economy. Would it be China or would it be India? Obama has made it clear from his recent announcement in India that he would back a seat for India on the UN Security counsel that the US is jumping in with India. With China holding so much of American debt, with the long standing relationship with India's high tech sector and with the current issues of monetary policy between China and the US, I can see Obama's logic.
India is not expected to prevail against China in the short run but because of their youthful, well educated population. The expectation of the world is that India will ultimately surpass China. China has the lead in terms of the world economy today but many people worry that its one child policy will come back to bite them as their population is aging rapidly.
India is a stable and committed democracy. It also appears to me to be more warlike in its leanings. China on the other hand is resisting democracy and it run by committees who target long term solutions to today's and the future's issues. Democracies can be slower to adapt because there are more people to include in the deliberations and the decisions. Governments like China's can do more long term strategic planning that will be followed through. While China has an aging population, China is not short of people in any age category (except perhaps marriable young women).
For my life time, I am still putting my money on China. They have historically been focused, productive, less warlike (which I see as a severe drain on potential prosperity) and they hold many of the financial cards at the moment. Canada has the resources that it needs and Canada does not have to choose in an either or fashion between these two nations.
India is not expected to prevail against China in the short run but because of their youthful, well educated population. The expectation of the world is that India will ultimately surpass China. China has the lead in terms of the world economy today but many people worry that its one child policy will come back to bite them as their population is aging rapidly.
India is a stable and committed democracy. It also appears to me to be more warlike in its leanings. China on the other hand is resisting democracy and it run by committees who target long term solutions to today's and the future's issues. Democracies can be slower to adapt because there are more people to include in the deliberations and the decisions. Governments like China's can do more long term strategic planning that will be followed through. While China has an aging population, China is not short of people in any age category (except perhaps marriable young women).
For my life time, I am still putting my money on China. They have historically been focused, productive, less warlike (which I see as a severe drain on potential prosperity) and they hold many of the financial cards at the moment. Canada has the resources that it needs and Canada does not have to choose in an either or fashion between these two nations.
Sunday, November 7, 2010
How do we break the corruption cycle?
HUGUETTE LABELLE
Public perceptions of corruption in governments across the world highlight the intense degree to which corruption continues to exist and ruin lives. For the poorest nations, in particular, corruption remains an enormous drain on resources sorely needed for education, health and infrastructure.
A small number of countries continue to be widely perceived as virtually free of corruption — Finland, Iceland, Denmark and New Zealand. By contrast, the peoples of dozens of countries continue to be seen as the victims of rampant corruption perpetrated by politicians and civil servants who abuse their public positions for personal gain. For the past dozen years, Transparency International has annually published a corruption perceptions index; this year's report, the largest ever ranking 180 countries, again shows that corruption remains widespread and a serious obstacle to poverty alleviation and economic growth.
There are examples of positive change. Most important, a number of countries, including some of the poorest, have achieved improvements in their rankings, such as Namibia, Seychelles, South Africa, Swaziland, Costa Rica, Croatia, Cuba, Czech Republic, Dominica, Italy, Macedonia, Romania and Suriname. But 40 per cent of the countries with a score of 3.0 or less (a score of 10.0 means squeaky clean) are classified by the World Bank as low-income countries. Somalia and Myanmar share the lowest score, 1.4, in this year's index.
Poor countries face enormous challenges battling corruption in an environment of severe deprivation. But corruption is not simply a problem of poor countries, as continuing corporate and government scandals show. And with the cross-border nature of corruption in poorer countries, rich and poor nations share the heavy responsibility of breaking the corruption cycle.
Corruption isn't just brown envelopes slipped under tables or passed in dark alleys. Too often, it has meant wholesale theft of public resources by leaders and senior public officials exploiting pliant or non-existent enforcement systems. Billions of dollars of this money, so desperately needed in the poorest countries, has quietly traversed borders and been comfortably nestled in bank accounts in the financial centres of some of the wealthiest places on Earth.
That developing countries face such barriers in terms of recovering their money seems like a slap in the face. There are steps that can be taken, by many different stakeholders, to help stop this injustice and return money to countries that desperately require funds to improve the lives of their citizens.
To begin, developing countries should use aid money to strengthen their governance institutions and ensure that strengthened integrity and corruption prevention is an integral part of their poverty reduction programs. A key institution to reform is the judiciary. Corrupt judicial systems facilitate corrupt politicians. Judicial independence, integrity and accountability must be enhanced to improve the credibility of justice systems where corruption is high. And a clean and capable justice system is essential if developing countries are to manage the complicated and opaque legal process of recovering stolen assets parked abroad.
When the institutions of corrupted countries cannot protect the lives and interests of their citizens, the international community — civil society, business and government — must step up and act. Eradicating safe havens for stolen assets, as prescribed by the landmark United Nations Convention against Corruption, and the development of uniform expedited procedures for the identification, freezing and repatriation of the proceeds of corruption are essential steps. So, too, is the recent launch of the UN and World Bank's Stolen Asset Recovery Initiative, designed to help less developed countries recover stolen assets stashed abroad. Clear escrow provisions for disputed funds are essential.
The world's wealthiest governments must strictly enforce the OECD Anti-Bribery Convention, which criminalizes the bribery of foreign public officials. Lack of compliance with the convention's provisions continues to hinder corruption investigations and prosecutions.
Wealthy countries must also acknowledge their role and regulate their financial centres more strictly. Focusing on the roles of trusts, demanding knowledge of beneficial ownership and strengthening anti-money-laundering provisions are just a few of the ways that rich governments can tackle the facilitators of corruption.
Multinational companies have to do more to clean up international business. They must not only introduce but implement effective anti-bribery codes, and ensure that they are adhered to by subsidiaries and foreign offices.
Finally, civil society has an essential role in strengthening the accountability of governments, bringing expertise on technical issues and helping to stimulate demand for reform. In both high-and low-income countries, governments must ensure there is space to operate.
The international community must work together to take these already accessible steps to stop corruption and ensure that developing countries have the resources to improve their citizens' lives. Working together is the key to ensure that the corruption perceptions index is the bearer of good news.
Huguette Labelle is chair of Transparency International.
Public perceptions of corruption in governments across the world highlight the intense degree to which corruption continues to exist and ruin lives. For the poorest nations, in particular, corruption remains an enormous drain on resources sorely needed for education, health and infrastructure.
A small number of countries continue to be widely perceived as virtually free of corruption — Finland, Iceland, Denmark and New Zealand. By contrast, the peoples of dozens of countries continue to be seen as the victims of rampant corruption perpetrated by politicians and civil servants who abuse their public positions for personal gain. For the past dozen years, Transparency International has annually published a corruption perceptions index; this year's report, the largest ever ranking 180 countries, again shows that corruption remains widespread and a serious obstacle to poverty alleviation and economic growth.
There are examples of positive change. Most important, a number of countries, including some of the poorest, have achieved improvements in their rankings, such as Namibia, Seychelles, South Africa, Swaziland, Costa Rica, Croatia, Cuba, Czech Republic, Dominica, Italy, Macedonia, Romania and Suriname. But 40 per cent of the countries with a score of 3.0 or less (a score of 10.0 means squeaky clean) are classified by the World Bank as low-income countries. Somalia and Myanmar share the lowest score, 1.4, in this year's index.
Poor countries face enormous challenges battling corruption in an environment of severe deprivation. But corruption is not simply a problem of poor countries, as continuing corporate and government scandals show. And with the cross-border nature of corruption in poorer countries, rich and poor nations share the heavy responsibility of breaking the corruption cycle.
Corruption isn't just brown envelopes slipped under tables or passed in dark alleys. Too often, it has meant wholesale theft of public resources by leaders and senior public officials exploiting pliant or non-existent enforcement systems. Billions of dollars of this money, so desperately needed in the poorest countries, has quietly traversed borders and been comfortably nestled in bank accounts in the financial centres of some of the wealthiest places on Earth.
That developing countries face such barriers in terms of recovering their money seems like a slap in the face. There are steps that can be taken, by many different stakeholders, to help stop this injustice and return money to countries that desperately require funds to improve the lives of their citizens.
To begin, developing countries should use aid money to strengthen their governance institutions and ensure that strengthened integrity and corruption prevention is an integral part of their poverty reduction programs. A key institution to reform is the judiciary. Corrupt judicial systems facilitate corrupt politicians. Judicial independence, integrity and accountability must be enhanced to improve the credibility of justice systems where corruption is high. And a clean and capable justice system is essential if developing countries are to manage the complicated and opaque legal process of recovering stolen assets parked abroad.
When the institutions of corrupted countries cannot protect the lives and interests of their citizens, the international community — civil society, business and government — must step up and act. Eradicating safe havens for stolen assets, as prescribed by the landmark United Nations Convention against Corruption, and the development of uniform expedited procedures for the identification, freezing and repatriation of the proceeds of corruption are essential steps. So, too, is the recent launch of the UN and World Bank's Stolen Asset Recovery Initiative, designed to help less developed countries recover stolen assets stashed abroad. Clear escrow provisions for disputed funds are essential.
The world's wealthiest governments must strictly enforce the OECD Anti-Bribery Convention, which criminalizes the bribery of foreign public officials. Lack of compliance with the convention's provisions continues to hinder corruption investigations and prosecutions.
Wealthy countries must also acknowledge their role and regulate their financial centres more strictly. Focusing on the roles of trusts, demanding knowledge of beneficial ownership and strengthening anti-money-laundering provisions are just a few of the ways that rich governments can tackle the facilitators of corruption.
Multinational companies have to do more to clean up international business. They must not only introduce but implement effective anti-bribery codes, and ensure that they are adhered to by subsidiaries and foreign offices.
Finally, civil society has an essential role in strengthening the accountability of governments, bringing expertise on technical issues and helping to stimulate demand for reform. In both high-and low-income countries, governments must ensure there is space to operate.
The international community must work together to take these already accessible steps to stop corruption and ensure that developing countries have the resources to improve their citizens' lives. Working together is the key to ensure that the corruption perceptions index is the bearer of good news.
Huguette Labelle is chair of Transparency International.
Saturday, November 6, 2010
Starbuck's Status
Starbucks' profits jump as sales climb
Starbucks' strategy of trying to win back business in the US is paying off -Starbucks sees its profits triple
Coffee giant Starbucks has reported a sharp rise in profits thanks to strong sales which comfortably beat analysts' expectations. Net profit for the three months to the beginning of October came in at $278.9m (£171.4m), an 86% jump on the $150m the company made a year earlier. Revenue for the period was $2.84bn, up from $2.42bn.
As a result of the strong performance, Starbucks raised its profits forecast for next year.Net profit for the year to the beginning of October more than doubled, from $390.8m to $945.6m.
Sales boost
"I am delighted with the record fourth quarter and full-year results we announced today," said Starbucks boss Howard Schultz. "These results are particularly gratifying in light of the formidable economic challenges that our customers and we continue to confront in virtually every country and every market in which we operate."
Revenues rose in large part due to an 8% rise in like-for-like sales, which strip out the impact of sales from new stores.The results pushed the firm's shares higher in after-hours trading.
Starbucks has been focusing on winning back business in the US and focusing on core markets, while closing underperforming stores, since Mr Schultz returned to the top job in January 2008.
Starbucks' strategy of trying to win back business in the US is paying off -Starbucks sees its profits triple
Coffee giant Starbucks has reported a sharp rise in profits thanks to strong sales which comfortably beat analysts' expectations. Net profit for the three months to the beginning of October came in at $278.9m (£171.4m), an 86% jump on the $150m the company made a year earlier. Revenue for the period was $2.84bn, up from $2.42bn.
As a result of the strong performance, Starbucks raised its profits forecast for next year.Net profit for the year to the beginning of October more than doubled, from $390.8m to $945.6m.
Sales boost
"I am delighted with the record fourth quarter and full-year results we announced today," said Starbucks boss Howard Schultz. "These results are particularly gratifying in light of the formidable economic challenges that our customers and we continue to confront in virtually every country and every market in which we operate."
Revenues rose in large part due to an 8% rise in like-for-like sales, which strip out the impact of sales from new stores.The results pushed the firm's shares higher in after-hours trading.
Starbucks has been focusing on winning back business in the US and focusing on core markets, while closing underperforming stores, since Mr Schultz returned to the top job in January 2008.
Friday, November 5, 2010
Harsh Global Criticism of Stimulus
China, Germany and South Africa criticise US stimulus while the US central bank hopes that the move could boost the US economy's recovery as the Fed pumps $600bn into US economy.
Germany, China, Brazil and South Africa have criticised US plans to pump $600bn (£373bn) into the US economy.German Finance Minister Wolfgang Schaeuble said the US policy was "clueless" and would create "extra problems for the world". The US Federal Reserve could weaken the US dollar and hurt exports to America.
China's Central Bank head Zhou Xiaochuan urged global currency reforms, while South Africa said developing countries would suffer most. He did not elaborate how the system should be changed.
'Undermining the G20'
South Africa's finance minister Pravin Gordhan warned that "developing countries, including South Africa, would bear the brunt of the US decision to open its flood gates without due consideration of the consequences for other nations." The US policy "undermines the spirit of multilateral co-operation that G20 leaders have fought so hard to maintain during the current crisis," he said.The heads of state and government of the G20 group of the world's leading nations is due to meet in a week in South Korea, with currencies and trade imbalances high on the agenda. The US central bank announced on Wednesday that it would spend $600bn to buy government bonds, in the hope that the cash injection can kickstart the country's economy.
However, this weakens the dollar, making imports from around the world more expensive for US consumers.
'Clueless'
“It is not that the Americans have not pumped enough liquidity into the market and now to say let's pump more into the market is not going to solve their problems” Wolfgang Schaeuble-German finance minister.
"If the domestic policy is optimal policy for the United States alone, but at the same time it is not an optimal policy for the world, it may bring a lot of negative impact to the world," said Mr Zhou.
"There is a spill over."
China's Vice Foreign Minister Cui Tiankai said the Federal Reserve had the right to take steps without consulting other countries beforehand, but added: "They owe us some explanation." Germany's finance minister Wolfgang Schaeuble said on German television that "with all due respect, US policy is clueless." "It is not that the Americans have not pumped enough liquidity into the market and now to say let's pump more into the market is not going to solve their problems." He added that the German government was going to hold bilateral talks with US officials and also discuss the topic at the G20 summit in Seoul next week. On Thursday, Brazil's finance minister Guido Mantega had warned that the Fed's move would hurt Brazil and other exporters.The latest move by the Fed has been dubbed QE2 as it follows the central bank's decision to pump $1.75tn into the economy during the downturn in its first round of quantitative easing.
Germany, China, Brazil and South Africa have criticised US plans to pump $600bn (£373bn) into the US economy.German Finance Minister Wolfgang Schaeuble said the US policy was "clueless" and would create "extra problems for the world". The US Federal Reserve could weaken the US dollar and hurt exports to America.
China's Central Bank head Zhou Xiaochuan urged global currency reforms, while South Africa said developing countries would suffer most. He did not elaborate how the system should be changed.
'Undermining the G20'
South Africa's finance minister Pravin Gordhan warned that "developing countries, including South Africa, would bear the brunt of the US decision to open its flood gates without due consideration of the consequences for other nations." The US policy "undermines the spirit of multilateral co-operation that G20 leaders have fought so hard to maintain during the current crisis," he said.The heads of state and government of the G20 group of the world's leading nations is due to meet in a week in South Korea, with currencies and trade imbalances high on the agenda. The US central bank announced on Wednesday that it would spend $600bn to buy government bonds, in the hope that the cash injection can kickstart the country's economy.
However, this weakens the dollar, making imports from around the world more expensive for US consumers.
'Clueless'
“It is not that the Americans have not pumped enough liquidity into the market and now to say let's pump more into the market is not going to solve their problems” Wolfgang Schaeuble-German finance minister.
"If the domestic policy is optimal policy for the United States alone, but at the same time it is not an optimal policy for the world, it may bring a lot of negative impact to the world," said Mr Zhou.
"There is a spill over."
China's Vice Foreign Minister Cui Tiankai said the Federal Reserve had the right to take steps without consulting other countries beforehand, but added: "They owe us some explanation." Germany's finance minister Wolfgang Schaeuble said on German television that "with all due respect, US policy is clueless." "It is not that the Americans have not pumped enough liquidity into the market and now to say let's pump more into the market is not going to solve their problems." He added that the German government was going to hold bilateral talks with US officials and also discuss the topic at the G20 summit in Seoul next week. On Thursday, Brazil's finance minister Guido Mantega had warned that the Fed's move would hurt Brazil and other exporters.The latest move by the Fed has been dubbed QE2 as it follows the central bank's decision to pump $1.75tn into the economy during the downturn in its first round of quantitative easing.
Thursday, November 4, 2010
Buying Back Debt- What does it mean?
What has the Fed actually announced?
The Federal Reserve will buy $600bn (£373bn) of long-term US government debt, known as Treasuries, by the end of June. This is equivalent to about 4% of the US economy's annual output.
It is in addition to the Fed's previously announced plan to reinvest $250bn-$300bn of repayments it is due to receive on its existing $1.25tn portfolio of US mortgage debt over the coming year.Together, the moves equate to $110bn of Treasury purchases per month.
Why is the Fed doing this?
The US economy has slowed down markedly in recent months.
But the Fed is also worried about falling inflation, which it described as "trending lower".
Consumer prices inflation has fallen below 1%, but other measures suggest inflation has fallen even lower.
In previous speeches, Mr Bernanke made clear that the Fed would not tolerate deflation - or falling prices.
Deflation can become self-perpetuating - as has become the case in Japan in the last 20 years - because consumers may postpone spending decisions in the expectation of cheaper prices.
Falling prices and wages would also make it more difficult for Americans to pay off their debts.
Isn't this what everyone was expecting?
Almost. The markets had expected the headline number to be $500bn.
Markets have been expecting some form of quantitative easing (QE) ever since Mr Bernanke openly discussed the option in a speech to fellow central bankers at Jackson Hole in August.
Even the rough parameters of the policy announcement - that it would be a much smaller than the Fed's preliminary round of QE, worth around $1.75tn - were flagged up a week in advance via the Wall Street Journal.
Why is it so much smaller this time?
During the financial crisis, the Fed took a "shock and awe" approach, with the aim of restoring confidence in a financial system facing total meltdown.
This time, the aim is to help the flagging economy, and there is less of a sense of urgency.
Mr Bernanke has expressed concerns that QE is untested in the US, apart from during the exceptional circumstances of the financial crisis.
So he wants to dripfeed QE into the economy and see what the reaction is before deciding whether to open the spigot more.
This more cautious approach is also needed if Mr Bernanke is to keep the support of more sceptical colleagues on the Fed's policy-setting committee.
What did the markets make of it?
The dollar and US government bond prices were extremely volatile as the announcement was made, as investors put in place last-minute bets.Against the euro, the dollar moved up and down 1% in the space of a minute.
But in the immediate aftermath of the announcement, the dollar, US government bonds and US stocks all remained largely unchanged. This is because the decision was largely guessed by markets in advance.
The dollar has already fallen about 10% against the euro since Mr Bernanke's Jackson Hole speech in August.
How does QE work?
In theory, it should influence the economy through a number of channels:
the Fed buys US government bonds, pushing their price up and long-term interest rates down
banks, flush with cash, lend more of it out
easier and cheaper borrowing encourages companies to invest
investors who sell the bonds to the Fed use their new cash to buy other assets (equities, corporate bonds), which pushes their prices up
higher asset prices make people feel richer, so they spend more
more dollar cash in circulation depresses the dollar's value compared to other currencies, making the US economy more competitive, and raising import prices in dollars.
So what's the controversy?
First of all, it's unclear whether QE will work as intended:
banks may refuse to lend the new cash, because they are still worried about loan losses
companies may refuse to invest - even if they can borrow more cheaply - because consumer spending is so weak
it probably won't stop house prices falling further, and this is the main reason consumers are afraid of spending and banks are afraid of further loan losses.Even advocates such as economist Paul Krugman are pessimistic about its chances of success, although they say it is still worth a shot.
Second, many critics fear longer-term consequences:
it could be too successful, and lead to high inflation
it could create more asset bubbles, which will eventually pop, bringing the financial system down again
it could spark a "currency war", with other central banks trying to devalue their currencies, which could in turn descend into a damaging trade war when the Fed tries to sell all its government bonds back to the market, it may have to do so at a much lower price, leaving it dependent on the Treasury for a bail-out.
The Federal Reserve will buy $600bn (£373bn) of long-term US government debt, known as Treasuries, by the end of June. This is equivalent to about 4% of the US economy's annual output.
It is in addition to the Fed's previously announced plan to reinvest $250bn-$300bn of repayments it is due to receive on its existing $1.25tn portfolio of US mortgage debt over the coming year.Together, the moves equate to $110bn of Treasury purchases per month.
Why is the Fed doing this?
The US economy has slowed down markedly in recent months.
But the Fed is also worried about falling inflation, which it described as "trending lower".
Consumer prices inflation has fallen below 1%, but other measures suggest inflation has fallen even lower.
In previous speeches, Mr Bernanke made clear that the Fed would not tolerate deflation - or falling prices.
Deflation can become self-perpetuating - as has become the case in Japan in the last 20 years - because consumers may postpone spending decisions in the expectation of cheaper prices.
Falling prices and wages would also make it more difficult for Americans to pay off their debts.
Isn't this what everyone was expecting?
Almost. The markets had expected the headline number to be $500bn.
Markets have been expecting some form of quantitative easing (QE) ever since Mr Bernanke openly discussed the option in a speech to fellow central bankers at Jackson Hole in August.
Even the rough parameters of the policy announcement - that it would be a much smaller than the Fed's preliminary round of QE, worth around $1.75tn - were flagged up a week in advance via the Wall Street Journal.
Why is it so much smaller this time?
During the financial crisis, the Fed took a "shock and awe" approach, with the aim of restoring confidence in a financial system facing total meltdown.
This time, the aim is to help the flagging economy, and there is less of a sense of urgency.
Mr Bernanke has expressed concerns that QE is untested in the US, apart from during the exceptional circumstances of the financial crisis.
So he wants to dripfeed QE into the economy and see what the reaction is before deciding whether to open the spigot more.
This more cautious approach is also needed if Mr Bernanke is to keep the support of more sceptical colleagues on the Fed's policy-setting committee.
What did the markets make of it?
The dollar and US government bond prices were extremely volatile as the announcement was made, as investors put in place last-minute bets.Against the euro, the dollar moved up and down 1% in the space of a minute.
But in the immediate aftermath of the announcement, the dollar, US government bonds and US stocks all remained largely unchanged. This is because the decision was largely guessed by markets in advance.
The dollar has already fallen about 10% against the euro since Mr Bernanke's Jackson Hole speech in August.
How does QE work?
In theory, it should influence the economy through a number of channels:
the Fed buys US government bonds, pushing their price up and long-term interest rates down
banks, flush with cash, lend more of it out
easier and cheaper borrowing encourages companies to invest
investors who sell the bonds to the Fed use their new cash to buy other assets (equities, corporate bonds), which pushes their prices up
higher asset prices make people feel richer, so they spend more
more dollar cash in circulation depresses the dollar's value compared to other currencies, making the US economy more competitive, and raising import prices in dollars.
So what's the controversy?
First of all, it's unclear whether QE will work as intended:
banks may refuse to lend the new cash, because they are still worried about loan losses
companies may refuse to invest - even if they can borrow more cheaply - because consumer spending is so weak
it probably won't stop house prices falling further, and this is the main reason consumers are afraid of spending and banks are afraid of further loan losses.Even advocates such as economist Paul Krugman are pessimistic about its chances of success, although they say it is still worth a shot.
Second, many critics fear longer-term consequences:
it could be too successful, and lead to high inflation
it could create more asset bubbles, which will eventually pop, bringing the financial system down again
it could spark a "currency war", with other central banks trying to devalue their currencies, which could in turn descend into a damaging trade war when the Fed tries to sell all its government bonds back to the market, it may have to do so at a much lower price, leaving it dependent on the Treasury for a bail-out.
Tuesday, November 2, 2010
Dell reaches for the clouds with Boomi deal
Dell says the acquisition will help it expand into cloud computing. Computer giant Dell has announced a deal to buy cloud-computing company Boomi for an undisclosed price.Dell has been looking to acquire cloud computing technology, which allows users to access files or services remotely over the internet, rather than just from their own local servers. It recently lost a bidding war with Hewlett-Packard for cloud firm 3Par, despite being the preferred bidder.
Dell is the world's third largest computer maker.
It said the deal for Pennsylvania-based Boomi would "help businesses reap the full benefits of cloud computing"."Twenty-six years ago we helped accelerate the move to client-server computing," said Steve Felice, president of Dell's consumer and small and medium-sized businesses division. "Today we'll help drive a similar transformation with customers turning to the cloud to drive costs down and innovation up."
Cloud computing can allow businesses to cut data storage costs by delivering software, data storage and other services to customers via the internet.
Dell is the world's third largest computer maker.
It said the deal for Pennsylvania-based Boomi would "help businesses reap the full benefits of cloud computing"."Twenty-six years ago we helped accelerate the move to client-server computing," said Steve Felice, president of Dell's consumer and small and medium-sized businesses division. "Today we'll help drive a similar transformation with customers turning to the cloud to drive costs down and innovation up."
Cloud computing can allow businesses to cut data storage costs by delivering software, data storage and other services to customers via the internet.
Monday, November 1, 2010
US personal income falls unexpectedly in September
Americans cut back on their savings as consumer spending continued to grow despite falling incomes US personal income registered an unexpected fall in September, while consumer spending was also weak, data from the Commerce Department shows.Households saw their earnings fall at an annualised rate of 0.1% compared with August, the largest fall in personal income in 14 months
In August, incomes rose by a revised 0.4%.
The market is expectating that the Federal Reserve will announce a new round of quantitative easing this week.
Consumer spending still rose by an annualised 0.2%, according to the new data, indicating that Americans cut back on their savings - to 5.3% of their income, from 5.6% in August - in order to maintain their spending.
The US savings rate has hovered around 5.5%-6% since the depth of the recession at the beginning of 2009, having risen from a low of just over 1% in the middle of the boom in 2005.But the increase in consumption was slower than the 0.5% recorded in the last two months, and also below the 0.4% expected by the markets.The new figures will not greatly affect analysts' views on the overall performance of the US economy during September, as GDP figures for the third quarter of the year were released last week. Market reaction was muted, with the dollar almost unchanged against the euro immediately following the data release. However, analysts say the data does reveal a sharper slowdown than expected in consumer spending that could be a drag on growth during the remainder of the year.
In August, incomes rose by a revised 0.4%.
The market is expectating that the Federal Reserve will announce a new round of quantitative easing this week.
Consumer spending still rose by an annualised 0.2%, according to the new data, indicating that Americans cut back on their savings - to 5.3% of their income, from 5.6% in August - in order to maintain their spending.
The US savings rate has hovered around 5.5%-6% since the depth of the recession at the beginning of 2009, having risen from a low of just over 1% in the middle of the boom in 2005.But the increase in consumption was slower than the 0.5% recorded in the last two months, and also below the 0.4% expected by the markets.The new figures will not greatly affect analysts' views on the overall performance of the US economy during September, as GDP figures for the third quarter of the year were released last week. Market reaction was muted, with the dollar almost unchanged against the euro immediately following the data release. However, analysts say the data does reveal a sharper slowdown than expected in consumer spending that could be a drag on growth during the remainder of the year.
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