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The African Development Bank (AfDB), a strategic partner of the World Economic Forum in Africa, is represented at the World Economic Forum Annual Meetings from 25-28 January 2011 in Davos, Switzerland. On Friday 28 January, the Bank addressed the importance of development finance in the context of increased South-South partnerships.
During a high-level session on development finance attended by the heads of development Banks, the AfDB's Chief Economist, Mthuli Ncube, called for greater innovation in development finance. This, he said, should aim at supporting infrastructure investment, private sector promotion, SMEs promotion, economic transformation and diversification, job creation, higher education and skills development, regional integration, financial inclusion, climate change and food security, among others.
"Investment in regional infrastructure is important because it will increase trade activity within Africa. Investing agricultural infrastructure will help improve food security concerns," Mr Ncube said. Noting that innovative financial inclusion does require soft development finance, He cited mobile banking, which has gone a long way in bringing the poor into the formal economy, as one good example of development finance support to the sector.
According to the AfDB Chief Economist, "the process of disbursing development finance should begin to view Africa as being part of the solution to stimulating global economic growth." "Indeed, some of the fastest growing economies around the world currently are in Africa," he emphasized.
Participants at the session included Om Prakash Bhatt, Chairman of State Bank of India; Luciano Coutinho, President of Banco National, Brazil; Vladmir Dmitriev, Chairman of State Corporation Bank for Development and Foreign Economic Affairs, Russia; Haruhiko Kuroda, President of Asian Development Bank, Manila; Thomas Mirow, President of European Bank for Reconstruction and Development, London.
Source: http://allafrica.com
Monday, January 31, 2011
Sunday, January 30, 2011
DAVOS-Lobster in the mountains, riots on the Nile
The global elite, dining on Norwegian lobster and reindeer at the end of the World Economic Forum on Saturday, felt pretty chipper despite growing concerns about the inequality of the economic recovery.
While they believe the global financial and euro zone debt crises are abating, the real world intruded with a different and much more acute crisis in Egypt that made their debates about inequality and food security less theoretical than anticipated.
This year's four-day talkfest in the Swiss mountain resort of Davos was a fragmented affair.
The issue expected to dominate discussion, the euro zone debt crisis, turned out to be a relatively damp squib, with a growing consensus among bankers and policymakers that a resolution of the issue may be near.
If there was one common strand in Davos this year it was growing divisions -- whether between fast-growing emerging markets and sluggish developed world economies, or between rich and poor within countries.
As residents in Cairo and Alexandria counted the cost of a further night of clashes between protesters and police on Saturday, politicians and business leaders urged Egyptian President Hosni Mubarak to start a dialogue with his people.
The corporate world is nervous.
Egypt has, after all, been one of the darlings of African and Middle Eastern investors, and the world is stepping into unknown territory with the rapid spread of unrest from country to country, propelled by the Internet and mobile technology.
LESSON OF EGYPT
"The lesson from Egypt is clear: people will no longer accept oppression, particularly when oppression is married with rising food prices, a lack of employment and the destruction of hope for a young generation," Sharan Burrow, general secretary of the International Trade Union Confederation, told Reuters.
Yet the mood among 2,500 business leaders and policy-makers in Davos was still predominantly positive, albeit tempered with caution after the worst economic slump in 75 years.
"Compared to last year and the year before, there is certainly much greater confidence about stability, more optimism about the global economic outlook," said the International Monetary Fund's first deputy managing director John Lipsky.
For many CEOs and bankers, there is simply the reassurance of having put yet another year's distance between themselves and the collapse of Lehman Brothers in 2008, which brought the world economy to the brink.
As a result, the panicky mood evident at the last two annual meetings in Davos has evaporated and business bosses are starting to look again at spending the trillions of dollars of cash sitting on their balance sheets.
"It is quite obvious that the mood has changed. Everybody is much calmer," said Swedish Finance Minister Anders Borg.
"You see it in the meetings, without people speaking on their telephones or leaving the room or having to stand in the corner, having very difficult conversations."
As ever, this year's Davos was an eclectic mix, covering everything from macroeconomics to geopolitics to management theory to science.
But there was no single, dominant theme -- and Adair Turner, chairman of Britain's Financial Services Authority, reckons that, perhaps, is the most encouraging sign of all.
"It is a thoroughly good thing because when the world gets gripped by one big theme it usually either means there's a big disaster or else people are getting in the grip of some new irrational exuberance," he said.
Source: http://www.reuters.com
While they believe the global financial and euro zone debt crises are abating, the real world intruded with a different and much more acute crisis in Egypt that made their debates about inequality and food security less theoretical than anticipated.
This year's four-day talkfest in the Swiss mountain resort of Davos was a fragmented affair.
The issue expected to dominate discussion, the euro zone debt crisis, turned out to be a relatively damp squib, with a growing consensus among bankers and policymakers that a resolution of the issue may be near.
If there was one common strand in Davos this year it was growing divisions -- whether between fast-growing emerging markets and sluggish developed world economies, or between rich and poor within countries.
As residents in Cairo and Alexandria counted the cost of a further night of clashes between protesters and police on Saturday, politicians and business leaders urged Egyptian President Hosni Mubarak to start a dialogue with his people.
The corporate world is nervous.
Egypt has, after all, been one of the darlings of African and Middle Eastern investors, and the world is stepping into unknown territory with the rapid spread of unrest from country to country, propelled by the Internet and mobile technology.
LESSON OF EGYPT
"The lesson from Egypt is clear: people will no longer accept oppression, particularly when oppression is married with rising food prices, a lack of employment and the destruction of hope for a young generation," Sharan Burrow, general secretary of the International Trade Union Confederation, told Reuters.
Yet the mood among 2,500 business leaders and policy-makers in Davos was still predominantly positive, albeit tempered with caution after the worst economic slump in 75 years.
"Compared to last year and the year before, there is certainly much greater confidence about stability, more optimism about the global economic outlook," said the International Monetary Fund's first deputy managing director John Lipsky.
For many CEOs and bankers, there is simply the reassurance of having put yet another year's distance between themselves and the collapse of Lehman Brothers in 2008, which brought the world economy to the brink.
As a result, the panicky mood evident at the last two annual meetings in Davos has evaporated and business bosses are starting to look again at spending the trillions of dollars of cash sitting on their balance sheets.
"It is quite obvious that the mood has changed. Everybody is much calmer," said Swedish Finance Minister Anders Borg.
"You see it in the meetings, without people speaking on their telephones or leaving the room or having to stand in the corner, having very difficult conversations."
As ever, this year's Davos was an eclectic mix, covering everything from macroeconomics to geopolitics to management theory to science.
But there was no single, dominant theme -- and Adair Turner, chairman of Britain's Financial Services Authority, reckons that, perhaps, is the most encouraging sign of all.
"It is a thoroughly good thing because when the world gets gripped by one big theme it usually either means there's a big disaster or else people are getting in the grip of some new irrational exuberance," he said.
Source: http://www.reuters.com
Thursday, January 27, 2011
Davos forum: China steps up amid global recovery
DAVOS, Switzerland
It may be time to stop referring to China, the world's second-biggest economy after the U.S., as an emerging nation and focus on creating jobs now that the global recovery appears to have gotten a toehold.
That's what top business leaders, politicians and social activists discussed, among other issues, on the first day of the World Economic Forum on Wednesday.
"There is a global economic recovery," said economist Nouriel Roubini, who gained renown for predicting the crisis of 2008 and a few months ago was still warning against the possibility of a "double dip recession." He noted that "balance sheets are strong, confidence is rising," credit spreads have fallen and liquidity -- the availability of credit -- has increased.
But he warned that in the U.S. and Europe, growth remained low and unemployment high. The U.S. still faced a real estate crisis and inspired little faith in its ability to tackle its deficit and debt, while in Europe markets have forced austerity measures that endanger growth. And in an allusion to China, Roubini said there was "not enough exchange rate adjustment" and warned this could lead to "currency wars and eventually trade wars and protectionism."
The 2,500 participants at this year's meeting have focused much of their concentrated expertise on China's growing clout, simmering anxieties about Europe's debt crisis and consideration of the possible aftershocks of the financial crisis that has wrought layoffs, cutbacks and austerity measures.
With China overtaking Japan as the world's No. 2 economy last year, and growth predicted to hold steady in the upper single digits this year, panelists questioned whether Beijing hasn't already arrived at the top table.
"We have to get out of the lexicon the words 'developing' or 'emerging,'" said Martin Sorrell, chief executive of advertising giant WPP Group.
China and India have both sent their biggest ever delegations to this year's forum, spearheaded by business leaders seeking to plant their flags on a world stage previously dominated by U.S. and European companies.
"In 10 years the economies of the emerging world will be in excess to $20 trillion , which is equal to the U.S. economy," noted Azim Premji, chairman of India's Wipro.
Zhu Min, former deputy governor of the Bank of China and now a special adviser to IMF Managing Director Dominique Strauss-Kahn, cautioned that the figures obscure huge expectations among the poorest in the developing world that cannot be met soon.
The theme of this year's meeting is "Shared Norms for the New Reality," and part of that includes the new economic reality, too, and the shift of jobs from West to East is on the minds of many.
"What is missing in the West is a ... sense of urgency" about unemployment, especially among young people whose skills aren't always what the fast-evolving labor market needs, said Arianna Huffington, the co-founder and editor in chief of The Huffington Post news website, at a panel on the future of employment.
The general consensus among the CEOs present was that the most promising job markets are in the East, and the West has no easy answers.
"In terms of quantitative growth, I don't think the West can do anything," said Lars Olofsson, CEO of retailer Carrefour SA, Europe's largest employer.
Philip Jennings, head of the UNI Global Union, urged an end to austerity programs and said the Group of 20 should do more to create jobs. "People have to wake up. G20, wake up."
"If I have to go to a group of workers and I say the future is in the East, there will be more Jasmine Revolutions by the day," he said, referring to the ouster of Tunisia's president this month after weeks of protests over joblessness and corruption.
Later Wednesday, the five-day meeting features a keynote address Wednesday evening by Russian President Dmitry Medvedev, who postponed his planned arrival by a day after a suicide bombing killed 35 people in the country's busiest airport amid lax security.
The topic of Medvedev's speech hasn't been shared, but given the intense security surrounding the meeting, and the fact that terrorism remains an issue of both political and commercial concern, his audience is expected to listen keenly to what Medvedev has to say.
Source: http://www.businessweek.com
It may be time to stop referring to China, the world's second-biggest economy after the U.S., as an emerging nation and focus on creating jobs now that the global recovery appears to have gotten a toehold.
That's what top business leaders, politicians and social activists discussed, among other issues, on the first day of the World Economic Forum on Wednesday.
"There is a global economic recovery," said economist Nouriel Roubini, who gained renown for predicting the crisis of 2008 and a few months ago was still warning against the possibility of a "double dip recession." He noted that "balance sheets are strong, confidence is rising," credit spreads have fallen and liquidity -- the availability of credit -- has increased.
But he warned that in the U.S. and Europe, growth remained low and unemployment high. The U.S. still faced a real estate crisis and inspired little faith in its ability to tackle its deficit and debt, while in Europe markets have forced austerity measures that endanger growth. And in an allusion to China, Roubini said there was "not enough exchange rate adjustment" and warned this could lead to "currency wars and eventually trade wars and protectionism."
The 2,500 participants at this year's meeting have focused much of their concentrated expertise on China's growing clout, simmering anxieties about Europe's debt crisis and consideration of the possible aftershocks of the financial crisis that has wrought layoffs, cutbacks and austerity measures.
With China overtaking Japan as the world's No. 2 economy last year, and growth predicted to hold steady in the upper single digits this year, panelists questioned whether Beijing hasn't already arrived at the top table.
"We have to get out of the lexicon the words 'developing' or 'emerging,'" said Martin Sorrell, chief executive of advertising giant WPP Group.
China and India have both sent their biggest ever delegations to this year's forum, spearheaded by business leaders seeking to plant their flags on a world stage previously dominated by U.S. and European companies.
"In 10 years the economies of the emerging world will be in excess to $20 trillion , which is equal to the U.S. economy," noted Azim Premji, chairman of India's Wipro.
Zhu Min, former deputy governor of the Bank of China and now a special adviser to IMF Managing Director Dominique Strauss-Kahn, cautioned that the figures obscure huge expectations among the poorest in the developing world that cannot be met soon.
The theme of this year's meeting is "Shared Norms for the New Reality," and part of that includes the new economic reality, too, and the shift of jobs from West to East is on the minds of many.
"What is missing in the West is a ... sense of urgency" about unemployment, especially among young people whose skills aren't always what the fast-evolving labor market needs, said Arianna Huffington, the co-founder and editor in chief of The Huffington Post news website, at a panel on the future of employment.
The general consensus among the CEOs present was that the most promising job markets are in the East, and the West has no easy answers.
"In terms of quantitative growth, I don't think the West can do anything," said Lars Olofsson, CEO of retailer Carrefour SA, Europe's largest employer.
Philip Jennings, head of the UNI Global Union, urged an end to austerity programs and said the Group of 20 should do more to create jobs. "People have to wake up. G20, wake up."
"If I have to go to a group of workers and I say the future is in the East, there will be more Jasmine Revolutions by the day," he said, referring to the ouster of Tunisia's president this month after weeks of protests over joblessness and corruption.
Later Wednesday, the five-day meeting features a keynote address Wednesday evening by Russian President Dmitry Medvedev, who postponed his planned arrival by a day after a suicide bombing killed 35 people in the country's busiest airport amid lax security.
The topic of Medvedev's speech hasn't been shared, but given the intense security surrounding the meeting, and the fact that terrorism remains an issue of both political and commercial concern, his audience is expected to listen keenly to what Medvedev has to say.
Source: http://www.businessweek.com
Wednesday, January 26, 2011
Roundup: Obama urges more efforts for global economic competition while touting diplomatic gains
WASHINGTON, Jan. 25, 2011 (Xinhua News Agency) -- In his State of the Union address on Capitol Hill Tuesday night, U.S. President Barack Obama called on stepped-up efforts to spur job creation and bolster a sustained economic growth to secure a top spot in global economic competition.
JOBS AT STAKE
"We are poised for progress. Two years after the worst recession most of us have ever known, the stock market has come roaring back. Corporate profits are up. The economy is growing again," Obama said, adding that Americans never measured progress by those benchmarks alone.
"We measure progress by the success of our people. By the jobs they can find and the quality of life those jobs offer," he said, calling it "our generation's Sputnik moment."
U.S. Labor Department figures showed that the U.S. unemployment rate reached 9.4 percent in December 2010. Since December 2009, total payroll employment in the United States had increased by 1.1 million, or an average of 94,000 per month.
However, economists held that this pace was far from being robust enough to reduce the stubbornly high unemployment rate in the near future.
"At stake is whether new jobs and industries take root in this country, or somewhere else. It is whether the hard work and industry of our people is rewarded," Obama said.
OUTPACING OTHER COUNTRIES
Obama said the world's largest economy is competing with other countries in a changing world, and that the nation needs to take on new challenges to win the future, as the world and business rules had changed dramatically due to technology revolutions.
The nation had to out-innovate, out-educate and out-build the rest of the world to enjoy a better position and compete for the jobs and industries globally, he said.
"We will invest in biomedical research, information technology, and especially clean energy technology -- an investment that will strengthen our security, protect our planet, and create countless new jobs for our people," the president said, adding that the United States is aiming to become the first nation to have 1 million electric vehicles on the road by 2015.
Obama stressed the importance of the clean energy sector for the nation's economy and future. "I challenge you to join me in setting a new goal -- by 2035, 80 percent of America's electricity will come from clean energy sources," he said.
Within 25 years, Obama said, the nation's goal is to give 80 percent of Americans access to high-speed rail and within the next five years, the United States would make it possible for businesses to deploy the next generation of high-speed wireless coverage to 98 percent of all Americans.
EXPORTS, TAXES, DEBTS
"To help businesses sell more products abroad, we set a goal of doubling our exports by 2014, because the more we export, the more jobs we create at home.
Already, our exports are up," he said.
He also said recent agreements signed with India and China would support more than 250,000 jobs in the United States.
With the nation's spiking public debt inviting criticism both at home and abroad, Obama said, "I am proposing that starting this year, we freeze annual domestic spending for the next five years. This would reduce the deficit by more than 400 billion U.S. dollars over the next decade, and will bring discretionary spending to the lowest share of our economy since Dwight Eisenhower was president."
When talking about the nation's tax cuts package passed last year, Obama believed that it could help the U.S. middle class and boost business investment, but the nation could not afford a permanent extension of the tax cuts for the wealthiest 2 percent of Americans.
He reiterated his stance of simplifying the nation's individual tax code, and called on both Democratic and Republican parties to "make the hard choices now to rein in deficits" in an effort to beef up investments the nation needs most to win the future global competition.
TOUTING DIPLOMATIC GAINS
Obama touted his diplomatic achievements. Hailing the approval of the new START treaty with Russia, Obama said he believed it was a major success in "resetting" the relationship with Russia and marching toward a nuclear-free world.
He also expressed determination to keep pressure on Tehran and Pyongyang over their nuclear programs. "On the Korean peninsula, we stand with our ally South Korea, and insist that North Korea (the Democratic People's Repubilc of Korea) keeps its commitment to abandon nuclear weapons," he said.
Moreover, Obama mentioned his efforts to revitalize NATO, strengthen alliances in Asia and build new partnerships with nations like India.
SKIPPING MIDDLE EAST PEACE
Despite giving a laundry list of diplomatic efforts, Obama avoided touching upon the Middle East peace process, one of his top diplomatic priorities since inauguration.
After nearly year-long painstaking mediation by the United States, Israel and the Palestinians finally resumed their direct talks in Washington on Sept. 2, 2010.
But that optimism was short-lived. Israel failed to extend a 10-month moratorium on West Bank settlement activities upon expiration on Sept. 26, whereas the Palestinians insisted they would drop out of the negotiations should settlement building continue.
As a result, the talks grounded to a halt after only two rounds. And the United States announced in December it had abandoned efforts to push Israel to extend the moratorium.
Worse still, the U.S. State Department admitted on Monday that a leak of the Palestinian documents containing offers of major concessions to Israel will make the Middle East peace efforts more difficult.
Source: http://www.istockanalyst.com
JOBS AT STAKE
"We are poised for progress. Two years after the worst recession most of us have ever known, the stock market has come roaring back. Corporate profits are up. The economy is growing again," Obama said, adding that Americans never measured progress by those benchmarks alone.
"We measure progress by the success of our people. By the jobs they can find and the quality of life those jobs offer," he said, calling it "our generation's Sputnik moment."
U.S. Labor Department figures showed that the U.S. unemployment rate reached 9.4 percent in December 2010. Since December 2009, total payroll employment in the United States had increased by 1.1 million, or an average of 94,000 per month.
However, economists held that this pace was far from being robust enough to reduce the stubbornly high unemployment rate in the near future.
"At stake is whether new jobs and industries take root in this country, or somewhere else. It is whether the hard work and industry of our people is rewarded," Obama said.
OUTPACING OTHER COUNTRIES
Obama said the world's largest economy is competing with other countries in a changing world, and that the nation needs to take on new challenges to win the future, as the world and business rules had changed dramatically due to technology revolutions.
The nation had to out-innovate, out-educate and out-build the rest of the world to enjoy a better position and compete for the jobs and industries globally, he said.
"We will invest in biomedical research, information technology, and especially clean energy technology -- an investment that will strengthen our security, protect our planet, and create countless new jobs for our people," the president said, adding that the United States is aiming to become the first nation to have 1 million electric vehicles on the road by 2015.
Obama stressed the importance of the clean energy sector for the nation's economy and future. "I challenge you to join me in setting a new goal -- by 2035, 80 percent of America's electricity will come from clean energy sources," he said.
Within 25 years, Obama said, the nation's goal is to give 80 percent of Americans access to high-speed rail and within the next five years, the United States would make it possible for businesses to deploy the next generation of high-speed wireless coverage to 98 percent of all Americans.
EXPORTS, TAXES, DEBTS
"To help businesses sell more products abroad, we set a goal of doubling our exports by 2014, because the more we export, the more jobs we create at home.
Already, our exports are up," he said.
He also said recent agreements signed with India and China would support more than 250,000 jobs in the United States.
With the nation's spiking public debt inviting criticism both at home and abroad, Obama said, "I am proposing that starting this year, we freeze annual domestic spending for the next five years. This would reduce the deficit by more than 400 billion U.S. dollars over the next decade, and will bring discretionary spending to the lowest share of our economy since Dwight Eisenhower was president."
When talking about the nation's tax cuts package passed last year, Obama believed that it could help the U.S. middle class and boost business investment, but the nation could not afford a permanent extension of the tax cuts for the wealthiest 2 percent of Americans.
He reiterated his stance of simplifying the nation's individual tax code, and called on both Democratic and Republican parties to "make the hard choices now to rein in deficits" in an effort to beef up investments the nation needs most to win the future global competition.
TOUTING DIPLOMATIC GAINS
Obama touted his diplomatic achievements. Hailing the approval of the new START treaty with Russia, Obama said he believed it was a major success in "resetting" the relationship with Russia and marching toward a nuclear-free world.
He also expressed determination to keep pressure on Tehran and Pyongyang over their nuclear programs. "On the Korean peninsula, we stand with our ally South Korea, and insist that North Korea (the Democratic People's Repubilc of Korea) keeps its commitment to abandon nuclear weapons," he said.
Moreover, Obama mentioned his efforts to revitalize NATO, strengthen alliances in Asia and build new partnerships with nations like India.
SKIPPING MIDDLE EAST PEACE
Despite giving a laundry list of diplomatic efforts, Obama avoided touching upon the Middle East peace process, one of his top diplomatic priorities since inauguration.
After nearly year-long painstaking mediation by the United States, Israel and the Palestinians finally resumed their direct talks in Washington on Sept. 2, 2010.
But that optimism was short-lived. Israel failed to extend a 10-month moratorium on West Bank settlement activities upon expiration on Sept. 26, whereas the Palestinians insisted they would drop out of the negotiations should settlement building continue.
As a result, the talks grounded to a halt after only two rounds. And the United States announced in December it had abandoned efforts to push Israel to extend the moratorium.
Worse still, the U.S. State Department admitted on Monday that a leak of the Palestinian documents containing offers of major concessions to Israel will make the Middle East peace efforts more difficult.
Source: http://www.istockanalyst.com
Tuesday, January 25, 2011
IMF revises global growth up 0.25%
The IMF has revised global growth up 0.25 percentage points in its World Economic Outlook (WEO) update.
The fund says pro-growth policies in America will boost global economic output in 2011.
It raised its projections for the year from 4.25% to 4.5%, which also reflects “stronger than expected activity in the second half of 2010”. (article continues below)
However, the IMF warns of serious risks to the recovery, in particular the need to cope with financial difficulties in the eurozone and the developed world and overheating in emerging markets.
Source: http://www.fundstrategy.co.uk
The fund says pro-growth policies in America will boost global economic output in 2011.
It raised its projections for the year from 4.25% to 4.5%, which also reflects “stronger than expected activity in the second half of 2010”. (article continues below)
However, the IMF warns of serious risks to the recovery, in particular the need to cope with financial difficulties in the eurozone and the developed world and overheating in emerging markets.
Source: http://www.fundstrategy.co.uk
Monday, January 24, 2011
Russia could take a major role in introducing an economic security council
Russia should take a step forward to modernize international institutions and should not hide behind the UN and the Security Council. New alliances are being formed and Russia should be a part of those new alliances. These are the new organizations for the new world of the 21st century.
Valdaiclub.com interview with Wolfgang Nowak, Managing Director and Spokesman for the Executive Board, Alfred Herrhausen Society for International Dialogue
At the international economic forum in Davos, Russian President Dmitry Medvedev will present a report on the modernization of the Russian economy and on cooperation with Russia’s foreign partners. Can you assess the work that the Russian government has done thus far to expedite modernization and technical development in its economy? What, in your opinion, is the current status of these strategic objectives, and what other steps must the government take to make its country more competitive in a global economy?
Well, I will say that Russia is still a world power in terms of energy production, and not yet a world power with all of its industries. And I think that Russia is in a good position, but Russia should continue to cooperate with Western companies and become an industrial world power because Russia will have to rely on its healthy economy once the energy is gone. But at the moment, Russia is still one of the most important –maybe the most important – and most reliable world power in energy. I can also say that modernization also requires a reliable legal system, and the rule of law is very important for companies that do business with Russia. It’s very important. But let me say in conclusion: Russia is a world power in energy and the entire country is really fit to become an industrial world power, but you have to have a better infrastructure, you have to have the rule of law, and you have to invite Western companies – and, as I’m German, invite German companies – to help you modernize the country and become a major power. The CEO of Deutsche Bank recently said that we should have an economic zone that includes Russia and Europe, and I think that it would be a very good idea to pursue this and not to turn away from the obstacles.
Is it possible, in your opinion, for Russia to achieve World Trade Organization accession over the next 3-4 months?
Well, I think it might be realistic to do this in the next four months, and I think that most of the gains that have been made have been psychological, and I hope that they finish this agreement in the next three to four months. And I think there are some obstacles that have nothing to do with the economy. Russia needs to be more visible, take on a more visible role in solving international conflicts. This doesn’t mean that Russia has to follow America, but Russia has to develop its own ideas to solve these questions and to look for partners. And if you remember, there was an odd situation at the last G20 summit: suddenly China depended on Germany, and China and Germany were on the same side, contradicting the United States. I think that new alliances are being formed and Russia should be a part of those new alliances.
Regulating and controlling the post-crisis global economy remains a major problem for the G20. Could you assess the progress of the G20 on these issues? What is Russia's role in the creation of a new system for global economic regulation?
I must say I’m very much in favor of the G20 and of BRIC. I don’t have any trust in the UN. And I think Russia should take a step forward to modernize international institutions and should not hide behind the UN and the Security Council and so on. And these are also institutions from the years after 1945, but today we need modern institutions like the G20, like BRIC. And as the new Brazilian president recently said, the BRIC countries are very important for Brazil; I think they’re as important for Russia. And I think that we should find a kind of general secretary for these organizations. These are the new organizations for the new world of the 21st century, and we don’t need to always go back to the old institutions. We need new ones. Therefore, I think Russia should take on a very important role in the G20 and should also to participate in all kinds of regulations.
What principles should be followed in the creation of a global mechanism to respond to the risks of the next crisis?
This may sound a little bit contradictory for me, but the Security Council hasn’t really solved any crisis over the last few years… and in Africa, well… but what the G20 could be and inside the G8 there could be a sort of economic security council, and Russia should take a major role in it. This could be a system of warning and something that will take action when a crisis approaches. And maybe Russia could take a major role in introducing an economic security council, not with the members of the Security Council in the UN, but with the members of the G8, G20, or even, if nobody wants to follow you, they could start a small one inside the BRIC countries. This would be fantastic, I think, not only for Russia but for the whole world.
Source: http://en.rian.ru
Valdaiclub.com interview with Wolfgang Nowak, Managing Director and Spokesman for the Executive Board, Alfred Herrhausen Society for International Dialogue
At the international economic forum in Davos, Russian President Dmitry Medvedev will present a report on the modernization of the Russian economy and on cooperation with Russia’s foreign partners. Can you assess the work that the Russian government has done thus far to expedite modernization and technical development in its economy? What, in your opinion, is the current status of these strategic objectives, and what other steps must the government take to make its country more competitive in a global economy?
Well, I will say that Russia is still a world power in terms of energy production, and not yet a world power with all of its industries. And I think that Russia is in a good position, but Russia should continue to cooperate with Western companies and become an industrial world power because Russia will have to rely on its healthy economy once the energy is gone. But at the moment, Russia is still one of the most important –maybe the most important – and most reliable world power in energy. I can also say that modernization also requires a reliable legal system, and the rule of law is very important for companies that do business with Russia. It’s very important. But let me say in conclusion: Russia is a world power in energy and the entire country is really fit to become an industrial world power, but you have to have a better infrastructure, you have to have the rule of law, and you have to invite Western companies – and, as I’m German, invite German companies – to help you modernize the country and become a major power. The CEO of Deutsche Bank recently said that we should have an economic zone that includes Russia and Europe, and I think that it would be a very good idea to pursue this and not to turn away from the obstacles.
Is it possible, in your opinion, for Russia to achieve World Trade Organization accession over the next 3-4 months?
Well, I think it might be realistic to do this in the next four months, and I think that most of the gains that have been made have been psychological, and I hope that they finish this agreement in the next three to four months. And I think there are some obstacles that have nothing to do with the economy. Russia needs to be more visible, take on a more visible role in solving international conflicts. This doesn’t mean that Russia has to follow America, but Russia has to develop its own ideas to solve these questions and to look for partners. And if you remember, there was an odd situation at the last G20 summit: suddenly China depended on Germany, and China and Germany were on the same side, contradicting the United States. I think that new alliances are being formed and Russia should be a part of those new alliances.
Regulating and controlling the post-crisis global economy remains a major problem for the G20. Could you assess the progress of the G20 on these issues? What is Russia's role in the creation of a new system for global economic regulation?
I must say I’m very much in favor of the G20 and of BRIC. I don’t have any trust in the UN. And I think Russia should take a step forward to modernize international institutions and should not hide behind the UN and the Security Council and so on. And these are also institutions from the years after 1945, but today we need modern institutions like the G20, like BRIC. And as the new Brazilian president recently said, the BRIC countries are very important for Brazil; I think they’re as important for Russia. And I think that we should find a kind of general secretary for these organizations. These are the new organizations for the new world of the 21st century, and we don’t need to always go back to the old institutions. We need new ones. Therefore, I think Russia should take on a very important role in the G20 and should also to participate in all kinds of regulations.
What principles should be followed in the creation of a global mechanism to respond to the risks of the next crisis?
This may sound a little bit contradictory for me, but the Security Council hasn’t really solved any crisis over the last few years… and in Africa, well… but what the G20 could be and inside the G8 there could be a sort of economic security council, and Russia should take a major role in it. This could be a system of warning and something that will take action when a crisis approaches. And maybe Russia could take a major role in introducing an economic security council, not with the members of the Security Council in the UN, but with the members of the G8, G20, or even, if nobody wants to follow you, they could start a small one inside the BRIC countries. This would be fantastic, I think, not only for Russia but for the whole world.
Source: http://en.rian.ru
Friday, January 21, 2011
Forecasting trouble
SAMUEL GOLDWYN is one of several people believed to have said, “never make forecasts, especially about the future”. Daniel Altman, an American academic economist who once worked for The Economist, blithely ignores this advice in his new book. Indeed, he offers no fewer than 12 big predictions for what he calls the “deep factors” that will most affect the future of the world economy.
This is a bold exercise and, albeit fitfully, an interesting one. The author rightly complains that too much forecasting, not just in economics, is short-termist, looking a year or two ahead at most. It also tends to be linear: too often forecasters merely project forward recent trends. It is also clear that people tend to overestimate the immediate impact of new developments but underestimate their longer-term effects.
Mr Altman writes with some verve, yet he makes only a partially convincing case in support of his predictions. He is best on purely economic ones. Thus he is surely right to argue that China’s seemingly inexorable growth will slow, though it is less clear that China may, like Japan before it, then slip back. He is also persuasive in maintaining that the rich world’s policies on immigration (taking in the brightest and best) and the environment (transferring polluting industries abroad) will damage the poorest countries.
But he is on weaker ground in many of his broader forecasts. The suggestion that the future, like the past, will belong to the middleman may suit his view of America as the world’s salesman, but it sits ill with many other signs of disintermediation. The argument that a motley group of “lifestyle hubs”, including Bulgaria and even Tunisia of all places, will take over from the likes of London, New York and Paris as the favoured bases for the rich and successful seems fanciful.
Mr Altman is also cavalier in forecasting the demise of several of the world’s international institutions. In truth, it takes a lot to overcome natural inertia and kill any organisation. Predictions that the European Union will disintegrate economically and that the World Trade Organisation will also collapse give too little weight to the value placed on these bodies by their present and prospective members. Several countries in eastern and south-eastern Europe are eager to join the EU and even the euro; and Russia is not the only country aspiring to get into the WTO. How effective these organisations will be may be debatable, but it seems decidedly premature to write their obituaries.
Overall, the tone of Mr Altman’s book is strikingly gloomy about the future, except oddly for that of his own country. In the longer-term perspective that he favours, the gloom seems excessive. In a 1930 essay on “Economic Possibilities for our Grandchildren”, John Maynard Keynes mused on a future 100 years thence, when much of humanity would have solved the perpetual economic problem of subsistence. At least in rich countries, that future is likely to be realised, as Keynes predicted, by about 2030. Keynes’s vision of a cultural and intellectual paradise may have been naive. But Mr Altman would do well, perhaps in a second edition, to explore not just potential problems but also the effects of undreamed-of levels of prosperity, at least in Europe and America.
Source: www.economist.com
This is a bold exercise and, albeit fitfully, an interesting one. The author rightly complains that too much forecasting, not just in economics, is short-termist, looking a year or two ahead at most. It also tends to be linear: too often forecasters merely project forward recent trends. It is also clear that people tend to overestimate the immediate impact of new developments but underestimate their longer-term effects.
Mr Altman writes with some verve, yet he makes only a partially convincing case in support of his predictions. He is best on purely economic ones. Thus he is surely right to argue that China’s seemingly inexorable growth will slow, though it is less clear that China may, like Japan before it, then slip back. He is also persuasive in maintaining that the rich world’s policies on immigration (taking in the brightest and best) and the environment (transferring polluting industries abroad) will damage the poorest countries.
But he is on weaker ground in many of his broader forecasts. The suggestion that the future, like the past, will belong to the middleman may suit his view of America as the world’s salesman, but it sits ill with many other signs of disintermediation. The argument that a motley group of “lifestyle hubs”, including Bulgaria and even Tunisia of all places, will take over from the likes of London, New York and Paris as the favoured bases for the rich and successful seems fanciful.
Mr Altman is also cavalier in forecasting the demise of several of the world’s international institutions. In truth, it takes a lot to overcome natural inertia and kill any organisation. Predictions that the European Union will disintegrate economically and that the World Trade Organisation will also collapse give too little weight to the value placed on these bodies by their present and prospective members. Several countries in eastern and south-eastern Europe are eager to join the EU and even the euro; and Russia is not the only country aspiring to get into the WTO. How effective these organisations will be may be debatable, but it seems decidedly premature to write their obituaries.
Overall, the tone of Mr Altman’s book is strikingly gloomy about the future, except oddly for that of his own country. In the longer-term perspective that he favours, the gloom seems excessive. In a 1930 essay on “Economic Possibilities for our Grandchildren”, John Maynard Keynes mused on a future 100 years thence, when much of humanity would have solved the perpetual economic problem of subsistence. At least in rich countries, that future is likely to be realised, as Keynes predicted, by about 2030. Keynes’s vision of a cultural and intellectual paradise may have been naive. But Mr Altman would do well, perhaps in a second edition, to explore not just potential problems but also the effects of undreamed-of levels of prosperity, at least in Europe and America.
Source: www.economist.com
Thursday, January 20, 2011
Finding our Place in the Global Economy
The global financial crisis (crisis) did considerable damage to the British Virgin Islands economy. It weakened global demand for both the territory´s tourism product and financial services, which resulted in sharp declines in tourist arrivals and international business incorporations in 2009. While the economy improved in 2010, growth remains weak on sluggish economic recoveries in the United States (US) and Europe; and stronger financial regulation at the global level. Realizing a full economic recovery will require the territory to adapt to the new economic realities of the post-crisis world.
The two most notable outcomes of the crisis are the economic weakening of the US and Europe and the robust economic recoveries of China, India, Brazil and other emerging markets that were largely insulated from the worst of the financial turmoil. Following negative growth in 2009 and anemic growth in 2010, the US and Europe in 2011 are forecast to grow at rates of about 2.5 percent and 1.5, respectively. Their fragile recoveries are characterized by large budget-deficits, high national debts and high unemployment that are expected to be a drag on economic growth in the coming years. A growth rate of four to five percent is expected by the end of the decade.
By contrast, China and India, who registered strong economic growth in 2009 and 2010, are forecast to grow between 8 and 9 percent in 2011. In addition, Brazil and other large emerging markets are forecast to grow at about five percent and higher. Extended forecasts estimate emerging market countries as a whole sustaining high economic growth through 2020.
This shift in the global balance of economic power has serious implications for the BVI economy. Namely, the sustainability of the tourism and financial services sectors in the face of weak demand from the US and Europe. If global economic trends hold, the recovery of tourism and financial services will be constrained by low economic growth in the US and Europe over the coming years. In order to ensure the sustainability of these sectors and the economy as a whole, the BVI must adjust its economic growth strategy to fit the new global economic landscape. This will require diversifying the economy to tap new global markets and strengthening the global competitiveness of the tourism and financial services sectors.
Diversifying the Economy
The development of new economic sectors is needed in large part to broaden the territory´s economic base and to help insulate it from global economic shocks like the financial crisis.
One potential new sector is outsourcing. Economic trends in the global outsourcing market indicate that new business opportunities are emerging in North America and Europe. In their private sectors, the financial industry has come under intense regulatory and financial pressures that are driving firms to outsource their mid- and back-office functions. In their public sectors, fiscal pressure is building to reduce budget deficits at a time when governments are faced with the challenge of providing unemployment benefits to the masses of newly unemployed, social security to retirees, and healthcare benefits to senior citizens, children, military veterans and the disabled. These developments are also pushing governments at every level to outsource back-office functions and some frontline services to lower cost providers.
These developments represent business opportunities for the BVI. The territory has the corporate infrastructure to take advantage of outsourcing needs in areas such as accounting, administration, finance, records management etc. Its competitive edge lies in its ability to deliver high quality services at a lower cost than onshore. The BVI also has the distinct advantage of native English speakers and close proximity to the US and Canadian markets and somewhat farther away European markets.
Improving our Tourism Product
In the tourism sector, improving the BVI´s tourism product will require a number of measures including the implementation of customer service standards for the hospitality industry, investing in state of the art accommodations, developing alternative tourism industries, and establishing direct international flights from major tourism markets.
As the foundation of hospitality, customer service in the territory must be improved. Improving the quality of customer service will require the hospitality industry to adopt a set of minimum-- internationally recognized (e.g., The Customer Service Institute of America´s charter) --customer service standards that are supported and reinforced by training and certification of customer service professionals working in the industry. Research indicates that there is a strong correlation between high-quality customer service and return visits by travelers.
The BVI must also upgrade its accommodations to include state of the art convention, conference, wedding and entertainment facilities and services. These needs can be met in part by the development of another luxury hotel. Adding these amenities to the territory´s tourism product and putting them, and existing facilities and services, to optimal use will help the BVI to capture a greater share of the international conference, convention and wedding markets in North America, Europe and the Caribbean.
Upgrades to the BVI´s tourism infrastructure should be complemented by the availability of direct flights from North America (i.e., US and Canada), Latin America (i.e., Mexico, Brazil, Argentina and Chile) and Europe (i.e., UK, France, Germany, Italy and Spain) to the territory. However, this will only become a reality when the runway at the Terrence B. Lettsome International Airport is extended to accommodate wide-body jetliners.
Improvement of the basic fundamentals of the tourism industry should be followed by the opening up of the tourism sector for investment in emerging industries such as eco-tourism, medical tourism, health and wellness tourism and sports tourism. Special care should be given to rationally spreading tourism development across the archipelago to make the most productive use of the territory´s 40 islands, cays and islets.
Finally, the BVI´s tourism product must be aggressively marketed to the rest of the world. Marketing campaigns should not only target traditional tourism markets in the US and Europe, but also nearby emerging markets in Latin America and those far away in Asia. Ease of travel from Latin America and the availability of Spanish/English translation make the region attractive for tourism expansion. In terms of future tourism business, Asia is forecast to become the largest source of outbound tourists in two decades; a fact that cannot be ignored by the BVI.
Promoting Financial Services
In the financial services sector, incorporations have picked up since the crisis, but greater promotional efforts are needed to further raise the BVI´s profile. Current efforts would be greatly boosted by the establishment of International Finance Centre branch offices in strategic foreign locations (e.g., Brazil, Singapore, London, New York etc.). A permanent presence is necessary to achieve the level of engagement with the global financial industry needed to drive more financial services business to the territory.
The financial services sector must also strengthen its corporate infrastructure to improve its competitiveness as an offshore financial center. This in real terms means recruiting the needed accountants, insolvency practitioners, fund administrators, lawyers and other professionals that can efficiently deliver the high-quality corporate services desired by clients. The industry must also expand its range of services where possible to offer clients value added services (e.g., banking, trading etc.) in addition to fund domiciliation and international business incorporation.
Finally, in the area of shipping registration, an aggressive marketing campaign is needed to promote the BVI. In 2010, the global yachting industry improved upon its poor performance in 2009 and is expected to see an upswing in 2011. With regulatory authorities in popular Mediterranean countries like Greece and Italy cracking down on the owners of locally registered luxury vessels (e.g., megayachts/superyacht), the BVI can take advantage of the demand in these markets for shipping registration services.
Tapping Emerging Markets
In revising its economic growth strategy, the BVI must give special attention to emerging markets. Two-dozen fast growing countries, including Brazil, Russia, India and China (BRIC), are rapidly expanding their middle and upper classes. Combined, their middle classes number almost two-billion consumers who spent $6.9 trillion in 2009. By 2020, this number will rise to $20 trillion when emerging markets will account for two-thirds of the global consumer market. With respect to the new upper classes, emerging markets are experiencing the fastest increase in high net worth individuals (i.e., persons with $1 million in assets) in the world. These new consumer groups represent vast markets for the BVI and should be opened up to the territory´s tourism and financial services sectors.
Conclusion
Since the global financial crisis, the economic landscape of the world has changed. To achieve economic security, the BVI must adapt to the new realities of the global economy. This will require diversifying the economy to tap outsourcing markets in North America and Europe and strengthening the global competitiveness of tourism and financial services. It will also require tapping emerging markets in Asia, Latin America, Africa and the Middle East for business opportunities presented by their rapid growth. It is only by making these necessary adjustments to the territory´s economic growth strategy that the BVI will thrive in the 21st century.
Source: www2.bviplatinum.com
The two most notable outcomes of the crisis are the economic weakening of the US and Europe and the robust economic recoveries of China, India, Brazil and other emerging markets that were largely insulated from the worst of the financial turmoil. Following negative growth in 2009 and anemic growth in 2010, the US and Europe in 2011 are forecast to grow at rates of about 2.5 percent and 1.5, respectively. Their fragile recoveries are characterized by large budget-deficits, high national debts and high unemployment that are expected to be a drag on economic growth in the coming years. A growth rate of four to five percent is expected by the end of the decade.
By contrast, China and India, who registered strong economic growth in 2009 and 2010, are forecast to grow between 8 and 9 percent in 2011. In addition, Brazil and other large emerging markets are forecast to grow at about five percent and higher. Extended forecasts estimate emerging market countries as a whole sustaining high economic growth through 2020.
This shift in the global balance of economic power has serious implications for the BVI economy. Namely, the sustainability of the tourism and financial services sectors in the face of weak demand from the US and Europe. If global economic trends hold, the recovery of tourism and financial services will be constrained by low economic growth in the US and Europe over the coming years. In order to ensure the sustainability of these sectors and the economy as a whole, the BVI must adjust its economic growth strategy to fit the new global economic landscape. This will require diversifying the economy to tap new global markets and strengthening the global competitiveness of the tourism and financial services sectors.
Diversifying the Economy
The development of new economic sectors is needed in large part to broaden the territory´s economic base and to help insulate it from global economic shocks like the financial crisis.
One potential new sector is outsourcing. Economic trends in the global outsourcing market indicate that new business opportunities are emerging in North America and Europe. In their private sectors, the financial industry has come under intense regulatory and financial pressures that are driving firms to outsource their mid- and back-office functions. In their public sectors, fiscal pressure is building to reduce budget deficits at a time when governments are faced with the challenge of providing unemployment benefits to the masses of newly unemployed, social security to retirees, and healthcare benefits to senior citizens, children, military veterans and the disabled. These developments are also pushing governments at every level to outsource back-office functions and some frontline services to lower cost providers.
These developments represent business opportunities for the BVI. The territory has the corporate infrastructure to take advantage of outsourcing needs in areas such as accounting, administration, finance, records management etc. Its competitive edge lies in its ability to deliver high quality services at a lower cost than onshore. The BVI also has the distinct advantage of native English speakers and close proximity to the US and Canadian markets and somewhat farther away European markets.
Improving our Tourism Product
In the tourism sector, improving the BVI´s tourism product will require a number of measures including the implementation of customer service standards for the hospitality industry, investing in state of the art accommodations, developing alternative tourism industries, and establishing direct international flights from major tourism markets.
As the foundation of hospitality, customer service in the territory must be improved. Improving the quality of customer service will require the hospitality industry to adopt a set of minimum-- internationally recognized (e.g., The Customer Service Institute of America´s charter) --customer service standards that are supported and reinforced by training and certification of customer service professionals working in the industry. Research indicates that there is a strong correlation between high-quality customer service and return visits by travelers.
The BVI must also upgrade its accommodations to include state of the art convention, conference, wedding and entertainment facilities and services. These needs can be met in part by the development of another luxury hotel. Adding these amenities to the territory´s tourism product and putting them, and existing facilities and services, to optimal use will help the BVI to capture a greater share of the international conference, convention and wedding markets in North America, Europe and the Caribbean.
Upgrades to the BVI´s tourism infrastructure should be complemented by the availability of direct flights from North America (i.e., US and Canada), Latin America (i.e., Mexico, Brazil, Argentina and Chile) and Europe (i.e., UK, France, Germany, Italy and Spain) to the territory. However, this will only become a reality when the runway at the Terrence B. Lettsome International Airport is extended to accommodate wide-body jetliners.
Improvement of the basic fundamentals of the tourism industry should be followed by the opening up of the tourism sector for investment in emerging industries such as eco-tourism, medical tourism, health and wellness tourism and sports tourism. Special care should be given to rationally spreading tourism development across the archipelago to make the most productive use of the territory´s 40 islands, cays and islets.
Finally, the BVI´s tourism product must be aggressively marketed to the rest of the world. Marketing campaigns should not only target traditional tourism markets in the US and Europe, but also nearby emerging markets in Latin America and those far away in Asia. Ease of travel from Latin America and the availability of Spanish/English translation make the region attractive for tourism expansion. In terms of future tourism business, Asia is forecast to become the largest source of outbound tourists in two decades; a fact that cannot be ignored by the BVI.
Promoting Financial Services
In the financial services sector, incorporations have picked up since the crisis, but greater promotional efforts are needed to further raise the BVI´s profile. Current efforts would be greatly boosted by the establishment of International Finance Centre branch offices in strategic foreign locations (e.g., Brazil, Singapore, London, New York etc.). A permanent presence is necessary to achieve the level of engagement with the global financial industry needed to drive more financial services business to the territory.
The financial services sector must also strengthen its corporate infrastructure to improve its competitiveness as an offshore financial center. This in real terms means recruiting the needed accountants, insolvency practitioners, fund administrators, lawyers and other professionals that can efficiently deliver the high-quality corporate services desired by clients. The industry must also expand its range of services where possible to offer clients value added services (e.g., banking, trading etc.) in addition to fund domiciliation and international business incorporation.
Finally, in the area of shipping registration, an aggressive marketing campaign is needed to promote the BVI. In 2010, the global yachting industry improved upon its poor performance in 2009 and is expected to see an upswing in 2011. With regulatory authorities in popular Mediterranean countries like Greece and Italy cracking down on the owners of locally registered luxury vessels (e.g., megayachts/superyacht), the BVI can take advantage of the demand in these markets for shipping registration services.
Tapping Emerging Markets
In revising its economic growth strategy, the BVI must give special attention to emerging markets. Two-dozen fast growing countries, including Brazil, Russia, India and China (BRIC), are rapidly expanding their middle and upper classes. Combined, their middle classes number almost two-billion consumers who spent $6.9 trillion in 2009. By 2020, this number will rise to $20 trillion when emerging markets will account for two-thirds of the global consumer market. With respect to the new upper classes, emerging markets are experiencing the fastest increase in high net worth individuals (i.e., persons with $1 million in assets) in the world. These new consumer groups represent vast markets for the BVI and should be opened up to the territory´s tourism and financial services sectors.
Conclusion
Since the global financial crisis, the economic landscape of the world has changed. To achieve economic security, the BVI must adapt to the new realities of the global economy. This will require diversifying the economy to tap outsourcing markets in North America and Europe and strengthening the global competitiveness of tourism and financial services. It will also require tapping emerging markets in Asia, Latin America, Africa and the Middle East for business opportunities presented by their rapid growth. It is only by making these necessary adjustments to the territory´s economic growth strategy that the BVI will thrive in the 21st century.
Source: www2.bviplatinum.com
Wednesday, January 19, 2011
Party focuses on widening world integration strategy
On the side-line of the 11th National Party Congress, Party Central Committee member and Standing Deputy Foreign Minister Pham Binh Minh spoke with Viet Nam News over new Party foreign policy.
It has been documented at the congress that Viet Nam would be "proactive and active in international integration" instead of "international economic integration" as previously. What does this change represent?
Highlighting "international integration" in documents at the congress would open the way for the country's integration activities in all aspects, including politics, culture, security and national defence. Integration in various aspects would supplement and support each other.
The context for the policy is "proactive and active" but to what extent each sector should integrate and what is the itinerary for each sector would be mapped out so integration provides the largest possible returns.
International integration is a major orientation and a global trend, as are increased regional and inter-regional links, combined with the ever growing pace of science and technology. Integration can only be successful when the power of the nation and capacity of cadres have reached a certain level.
After 25 years of doi moi, with important results achieved in terms of international economic integration and expanded co-operation in other aspects, we have the basis to integrate faster, more pro-actively and across more sectors.
What opportunities do you see arising through international integration?
International integration is a crucial method to fully tap the country's potential and strengths. These strengths include our economic development strategy, socio-political stability, favourable geographic position in a thriving region and traditional culture. In other words, integration is important to creating an effective combination of the power of the nation and that of the current epoch.
International integration gives us a chance to more actively integrate in resolving common issues of interest to the international community, contribute properly to the construction of regional and international standards, while ensuring national interest, peace and security.
However, new challenges would arise from shifting from international economic integration to international integration. There could be more negative effects due to external factors. Uncertainties would not only relate to economics but security, politics and social issues.
Moreover, negative impacts from one aspect would spread quickly to the other. They require us to supplement and complete institutional reform and modernise the national administrative structure.
What are the other new features can be found in the Party's line on foreign affairs?
Continuing the achievements the country have gained during the past 25 years and being fully aware of domestic and the international situation, the 11th Party Congress's line on foreign affairs would be a new direction.
For the first time, the Party's documents say that benefit of the nation and people is the absolute objective of foreign affairs.
The Party has also clearly defined that Viet Nam is an ASEAN member. It is written: "Striving, together with ASEAN member states, to build South East Asia into a peaceful, stable, co-operative and prosperous region."
That definition is important in continuing to reach a consensus and agree a plan of action internally. It is a fact since joining ASEAN over the past 15 years that ASEAN plays an ever crucial role to our security and development. To other countries, particularly ASEAN members, this well-defined view in the draft Platform will act as a good signal in terms of Viet Nam's attitude and strategy towards building an ASEAN community. Viet Nam will be an "active, proactive and responsible" member and we'll be working to enhance solidarity within ASEAN.
In addition, external activities would be carried out "simultaneously and comprehensively". This represents a new step in our foreign policy. It should ensure foreign policy issues are executed in all aspects, via all channels with harmony and consensus in leadership.
What measure do you suggest should be taken to follow the above-mentioned line?
First, the implementation of the line, strategies, policies and action plans would be simultaneous.
Second, we rapidly need to increase the capacity of officials working in foreign affairs so they could meet requirements of the country during the period of qualitative integration into the region and the world. Key officials from central down to a local level must be kept abreast with knowledge on international affairs.
Third, the study of global trends and strategies adopted by partners must be taken into account because we are living in a world of swift and complicated changes and progress.
Fourth, there should be simultaneous and close co-ordination among sectors in implementing external relations. — VNS
Source: http://vietnamnews.vnagency.com.vn
It has been documented at the congress that Viet Nam would be "proactive and active in international integration" instead of "international economic integration" as previously. What does this change represent?
Highlighting "international integration" in documents at the congress would open the way for the country's integration activities in all aspects, including politics, culture, security and national defence. Integration in various aspects would supplement and support each other.
The context for the policy is "proactive and active" but to what extent each sector should integrate and what is the itinerary for each sector would be mapped out so integration provides the largest possible returns.
International integration is a major orientation and a global trend, as are increased regional and inter-regional links, combined with the ever growing pace of science and technology. Integration can only be successful when the power of the nation and capacity of cadres have reached a certain level.
After 25 years of doi moi, with important results achieved in terms of international economic integration and expanded co-operation in other aspects, we have the basis to integrate faster, more pro-actively and across more sectors.
What opportunities do you see arising through international integration?
International integration is a crucial method to fully tap the country's potential and strengths. These strengths include our economic development strategy, socio-political stability, favourable geographic position in a thriving region and traditional culture. In other words, integration is important to creating an effective combination of the power of the nation and that of the current epoch.
International integration gives us a chance to more actively integrate in resolving common issues of interest to the international community, contribute properly to the construction of regional and international standards, while ensuring national interest, peace and security.
However, new challenges would arise from shifting from international economic integration to international integration. There could be more negative effects due to external factors. Uncertainties would not only relate to economics but security, politics and social issues.
Moreover, negative impacts from one aspect would spread quickly to the other. They require us to supplement and complete institutional reform and modernise the national administrative structure.
What are the other new features can be found in the Party's line on foreign affairs?
Continuing the achievements the country have gained during the past 25 years and being fully aware of domestic and the international situation, the 11th Party Congress's line on foreign affairs would be a new direction.
For the first time, the Party's documents say that benefit of the nation and people is the absolute objective of foreign affairs.
The Party has also clearly defined that Viet Nam is an ASEAN member. It is written: "Striving, together with ASEAN member states, to build South East Asia into a peaceful, stable, co-operative and prosperous region."
That definition is important in continuing to reach a consensus and agree a plan of action internally. It is a fact since joining ASEAN over the past 15 years that ASEAN plays an ever crucial role to our security and development. To other countries, particularly ASEAN members, this well-defined view in the draft Platform will act as a good signal in terms of Viet Nam's attitude and strategy towards building an ASEAN community. Viet Nam will be an "active, proactive and responsible" member and we'll be working to enhance solidarity within ASEAN.
In addition, external activities would be carried out "simultaneously and comprehensively". This represents a new step in our foreign policy. It should ensure foreign policy issues are executed in all aspects, via all channels with harmony and consensus in leadership.
What measure do you suggest should be taken to follow the above-mentioned line?
First, the implementation of the line, strategies, policies and action plans would be simultaneous.
Second, we rapidly need to increase the capacity of officials working in foreign affairs so they could meet requirements of the country during the period of qualitative integration into the region and the world. Key officials from central down to a local level must be kept abreast with knowledge on international affairs.
Third, the study of global trends and strategies adopted by partners must be taken into account because we are living in a world of swift and complicated changes and progress.
Fourth, there should be simultaneous and close co-ordination among sectors in implementing external relations. — VNS
Source: http://vietnamnews.vnagency.com.vn
Tuesday, January 18, 2011
Hu Jintao and Barack Obama's Theater of the Absurd
President Hu Jintau visits the United States, leader of an industrial juggernaut and heir apparent to American global economic leadership.
China is growing at a breakneck pace, its exporters capturing a lion's share of global markets in strategic industries, and its citizens enjoy rising prosperity and economic security.
The United States endures a mediocre growth, its businesses fleeing for Asia and Russia, and its citizens endure falling wages and uncertain futures.
This is not how the historic struggle between socialism and capitalism was to end, but it is how President Obama willed it.
Abroad, the President refuses to defend American capitalism, and at home, he recklessly abuses private enterprise.
International competition between China and the United States is governed by rules-spelled out by the World Trade Organization and other agreements. President Obama has stood idle while China violates the letter and spirit of those rules to boost exports, restricts imports and enjoy steroidal growth that handicaps U.S.-based businesses and destroys American jobs.
Economists no less prominent than Federal Reserve Chairman Ben Bernanke, Nobel Laureate Paul Krugman, and former Assistant Treasury Secretary Fred Bergsten have joined me in enumerating how China's undervalued yuan affords its exports huge subsidies, slows U.S. growth and raises unemployment.
Krugman, Bergsten and I have suggested strategies-an import tax, counter invention in currency markets by the Treasury and a tax conversion of dollars into yuan.
Last fall at the UN, President Obama exclaimed if China does not move the United States can act unilaterally. Hu called Obama's bluff, and the President flinched.
No surprise-China won't let markets determine the value of the yuan any time soon.
Businesses are leaving the United States because of Chinese procurement regulations. For example, China requires 70 percent of the parts in turbines purchased by state-owned wind farms be produced domestically, and 80 percent of China's wind farms are state owned. As China and the United States are the two largest markets for wind turbines, only a fool would not locate production in China to service both markets.
Subsidies and similar problems persist in solar panels and for other critical emerging technologies.
The President is aware of all of this, he complains bitterly but does little, and China captures huge shares of world markets. China's success has little to do with cheap labor, because wages contribute only small amounts to high tech product prices.
The President could impose similar procurement requirements on turbines, solar panels and other products purchased with government money, and impose countervailing duties on Chinese subsidies, but he has been too busy handicapping U.S. private enterprise to be bothered.
The President obsesses endlessly about increasing social spending and federal taxes, and imposing regulations that raise the cost of doing business-for example, new health care taxes and reforms, new ineffective but burdensome bank regulations, and new permitting rules shutting down U.S. oil and gas development.
It should be no surprise small businesses are dropping health plans and even more Americans can't afford health insurance; hundreds of regional banks have failed and surviving institutions can't provide adequate credit to small businesses; and gasoline prices are soaring and BP is giving Kremlin-controlled Rosneft a 5 percent ownership stake to obtain drilling rights in Russia.
At least the Romans could take solace-they did not elect Nero. Americans chose Barack Obama to heap kerosene on anyone seeking a profit.
Seeing America's workers unemployed and living standards falling, and Barack Obama afraid to respond to Chinese initiatives, President Hu will see little purpose in heeding U.S. pleadings for market determined exchange rates and economic reforms.
To save face, President Obama will refocus summit discussions on China's shabby human rights record and political reforms. This may provide the President good press coverage but it is Theater of the Absurd.
On human rights and political reform, the United States has much less leverage than on economic issues. Why should President Hu embrace U.S prescriptions on matters that strike to the heart of the Communist Party's grasp on power?
Simply, President Obama talks the talk but doesn't walk the walk. No one sees that better than President Hu.
Source: http://nation.foxnews.com
China is growing at a breakneck pace, its exporters capturing a lion's share of global markets in strategic industries, and its citizens enjoy rising prosperity and economic security.
The United States endures a mediocre growth, its businesses fleeing for Asia and Russia, and its citizens endure falling wages and uncertain futures.
This is not how the historic struggle between socialism and capitalism was to end, but it is how President Obama willed it.
Abroad, the President refuses to defend American capitalism, and at home, he recklessly abuses private enterprise.
International competition between China and the United States is governed by rules-spelled out by the World Trade Organization and other agreements. President Obama has stood idle while China violates the letter and spirit of those rules to boost exports, restricts imports and enjoy steroidal growth that handicaps U.S.-based businesses and destroys American jobs.
Economists no less prominent than Federal Reserve Chairman Ben Bernanke, Nobel Laureate Paul Krugman, and former Assistant Treasury Secretary Fred Bergsten have joined me in enumerating how China's undervalued yuan affords its exports huge subsidies, slows U.S. growth and raises unemployment.
Krugman, Bergsten and I have suggested strategies-an import tax, counter invention in currency markets by the Treasury and a tax conversion of dollars into yuan.
Last fall at the UN, President Obama exclaimed if China does not move the United States can act unilaterally. Hu called Obama's bluff, and the President flinched.
No surprise-China won't let markets determine the value of the yuan any time soon.
Businesses are leaving the United States because of Chinese procurement regulations. For example, China requires 70 percent of the parts in turbines purchased by state-owned wind farms be produced domestically, and 80 percent of China's wind farms are state owned. As China and the United States are the two largest markets for wind turbines, only a fool would not locate production in China to service both markets.
Subsidies and similar problems persist in solar panels and for other critical emerging technologies.
The President is aware of all of this, he complains bitterly but does little, and China captures huge shares of world markets. China's success has little to do with cheap labor, because wages contribute only small amounts to high tech product prices.
The President could impose similar procurement requirements on turbines, solar panels and other products purchased with government money, and impose countervailing duties on Chinese subsidies, but he has been too busy handicapping U.S. private enterprise to be bothered.
The President obsesses endlessly about increasing social spending and federal taxes, and imposing regulations that raise the cost of doing business-for example, new health care taxes and reforms, new ineffective but burdensome bank regulations, and new permitting rules shutting down U.S. oil and gas development.
It should be no surprise small businesses are dropping health plans and even more Americans can't afford health insurance; hundreds of regional banks have failed and surviving institutions can't provide adequate credit to small businesses; and gasoline prices are soaring and BP is giving Kremlin-controlled Rosneft a 5 percent ownership stake to obtain drilling rights in Russia.
At least the Romans could take solace-they did not elect Nero. Americans chose Barack Obama to heap kerosene on anyone seeking a profit.
Seeing America's workers unemployed and living standards falling, and Barack Obama afraid to respond to Chinese initiatives, President Hu will see little purpose in heeding U.S. pleadings for market determined exchange rates and economic reforms.
To save face, President Obama will refocus summit discussions on China's shabby human rights record and political reforms. This may provide the President good press coverage but it is Theater of the Absurd.
On human rights and political reform, the United States has much less leverage than on economic issues. Why should President Hu embrace U.S prescriptions on matters that strike to the heart of the Communist Party's grasp on power?
Simply, President Obama talks the talk but doesn't walk the walk. No one sees that better than President Hu.
Source: http://nation.foxnews.com
Monday, January 17, 2011
China's fear of economic weakness carries new risks
China's main contribution to world peace has been its own development. Chinese leaders proudly maintain that economic growth has brought stability to almost a quarter of the world's population and generated new opportunities for collaboration with other nations.
This is true, but it might not be the entire truth. For all the opportunities, China's current course of harmonious development might not always be compatible with the prospect of a harmonious world.
China has never had a very harmonious view of the global economic order. It used to feel rather vulnerable when facing strong industrial markets and assertive suppliers of raw materials.
Recent history has painfully showed how economic weakness produces political vulnerability. It doesn't come as a surprise that the Chinese government has been seeking to remedy its political vulnerability through "economic security."
China has attempted to retain the commanding heights of growth, to build a league of strong Chinese industries and to gradually unfold a web of international production networks that are dominated by innovative Chinese national champions.
Yet this attempt to address economic vulnerability will cause more political insecurity. While China's industrial overcapacity has traditionally been generated mostly by foreign investors, China's expanding aid for national champions is only making things worse.
Overproduction in basic industries is now also complemented by excess capacity in high-tech like clean energy and semiconductors.
This renders China dependent on the unreliable consumer markets abroad, but also leads to growing trade frictions with other countries.
In faltering Western markets, people are starting to fear that State support for Chinese national industries is distorting competition.
But even in developing countries, there is growing concern about the terms of trade with China. China won't offset these concerns by means of checkbook diplomacy.
It is one thing to win some political goodwill by bailing out struggling governments or handing out loans to purchase Chinese products and services.
Source: http://opinion.globaltimes.cn
This is true, but it might not be the entire truth. For all the opportunities, China's current course of harmonious development might not always be compatible with the prospect of a harmonious world.
China has never had a very harmonious view of the global economic order. It used to feel rather vulnerable when facing strong industrial markets and assertive suppliers of raw materials.
Recent history has painfully showed how economic weakness produces political vulnerability. It doesn't come as a surprise that the Chinese government has been seeking to remedy its political vulnerability through "economic security."
China has attempted to retain the commanding heights of growth, to build a league of strong Chinese industries and to gradually unfold a web of international production networks that are dominated by innovative Chinese national champions.
Yet this attempt to address economic vulnerability will cause more political insecurity. While China's industrial overcapacity has traditionally been generated mostly by foreign investors, China's expanding aid for national champions is only making things worse.
Overproduction in basic industries is now also complemented by excess capacity in high-tech like clean energy and semiconductors.
This renders China dependent on the unreliable consumer markets abroad, but also leads to growing trade frictions with other countries.
In faltering Western markets, people are starting to fear that State support for Chinese national industries is distorting competition.
But even in developing countries, there is growing concern about the terms of trade with China. China won't offset these concerns by means of checkbook diplomacy.
It is one thing to win some political goodwill by bailing out struggling governments or handing out loans to purchase Chinese products and services.
Source: http://opinion.globaltimes.cn
Friday, January 14, 2011
Idea of the Day: United States and China Have Different Ideas About Global Responsibility
Chinese President Hu Jintao arrives in Washington for a state visit later this month, with hopes high in both capitals that his trip may serve to smooth out the edges of a U.S.-China relationship that has frayed over the past year. Clashes over security, the global economy, and differing political values challenge the relationship today. At the heart of many of these disputes are conflicting understandings about how a great power should act in the 21st century.
Washington and Beijing have different conceptions of global responsibility. Washington has spent decades since World War II investing in an international architecture of economic and security accords that delivered stability and enabled China’s growth. Now Washington wants Beijing to play by the rules, help improve the international system, and contribute to solving urgent global problems—many of which China helps to create, among them economic imbalances and global warming.
The United States believes China’s incredible growth rate, astronomic foreign currency reserves, and track record of making successful investments in its national priorities means it is more able than most nations to contribute to the needs of the global community. In contrast, China suspects America’s desire to see it play a larger global role is part of a strategy designed to stifle its growth and challenge its autonomy. Beijing wants to remain highly focused on its domestic problems and argues that it is being internationally responsible in many ways, whether or not it is fulfilling America’s wishes.
Reconciling the Chinese and American ideas about global responsibility involves questions of sovereignty as well. This is because China is now a “systemically important” player in many areas. In the international economy, global climate concerns, Asian regional security, cyber security, space, pandemic prevention, and other arenas, China today is more than a regular “stakeholder.” China has become, like the United States, a country on whose actions the health of the whole system depends.
Source: http://www.americanprogress.org
Washington and Beijing have different conceptions of global responsibility. Washington has spent decades since World War II investing in an international architecture of economic and security accords that delivered stability and enabled China’s growth. Now Washington wants Beijing to play by the rules, help improve the international system, and contribute to solving urgent global problems—many of which China helps to create, among them economic imbalances and global warming.
The United States believes China’s incredible growth rate, astronomic foreign currency reserves, and track record of making successful investments in its national priorities means it is more able than most nations to contribute to the needs of the global community. In contrast, China suspects America’s desire to see it play a larger global role is part of a strategy designed to stifle its growth and challenge its autonomy. Beijing wants to remain highly focused on its domestic problems and argues that it is being internationally responsible in many ways, whether or not it is fulfilling America’s wishes.
Reconciling the Chinese and American ideas about global responsibility involves questions of sovereignty as well. This is because China is now a “systemically important” player in many areas. In the international economy, global climate concerns, Asian regional security, cyber security, space, pandemic prevention, and other arenas, China today is more than a regular “stakeholder.” China has become, like the United States, a country on whose actions the health of the whole system depends.
Source: http://www.americanprogress.org
Thursday, January 13, 2011
Haiti one year on: a look at aid progress reports
The first anniversary of the earthquake in Haiti comes with a deluge of progress reports from many of the NGOs and aid agencies involved in reconstruction and ongoing relief work. We select a sample
One year ago today, a 7.0 magnitude earthquake ripped through Haiti leaving nearly a quarter of a million people dead and another 1.5 million homeless. In the weeks that followed, however, expressions of pain and mourning were accompanied by an optimism and a hope that recovery from the earthquake could "open a new chapter" in Haiti's development, providing a much-needed "fresh start" for the country. The challenge was not just to re-build but to "build back better."
Today is not just the first anniversary of the earthquake, but also the beginning of a crucial second year in relief, reconstruction and development efforts in the small Caribbean nation. The UN has estimated that 650,000 Haitians will still be living in camps by the end of 2011. Médecins Sans Frontières, meanwhile, has warned that cholera will remain a serious problem in the country for years to come.
The challenges that await Haiti provide a powerful incentive to evaluate the progress made over the last year. What worked? What failed? What has been learned from 2010 and what can we expect from 2011?
Source: http://www.guardian.co.uk
One year ago today, a 7.0 magnitude earthquake ripped through Haiti leaving nearly a quarter of a million people dead and another 1.5 million homeless. In the weeks that followed, however, expressions of pain and mourning were accompanied by an optimism and a hope that recovery from the earthquake could "open a new chapter" in Haiti's development, providing a much-needed "fresh start" for the country. The challenge was not just to re-build but to "build back better."
Today is not just the first anniversary of the earthquake, but also the beginning of a crucial second year in relief, reconstruction and development efforts in the small Caribbean nation. The UN has estimated that 650,000 Haitians will still be living in camps by the end of 2011. Médecins Sans Frontières, meanwhile, has warned that cholera will remain a serious problem in the country for years to come.
The challenges that await Haiti provide a powerful incentive to evaluate the progress made over the last year. What worked? What failed? What has been learned from 2010 and what can we expect from 2011?
Source: http://www.guardian.co.uk
Wednesday, January 12, 2011
WEF: The world economy can not 'face major new shocks'
The global economy is "in no position to face major new shocks", according to the World Economic Forum (WEF).
Its Global Risks 2011 report warns that economic imbalances, volatile commodity prices and currencies, and governments' budget shortfalls are "unsustainable".
Rapid population growth is another risk, pushing up demand for food, water and energy by 30-50% by 2030.
The WEF warns that there is no sign of governments agreeing on how to achieve sustainable economic growth worldwide.
The Global Risks report was published in the run-up to the forum's annual meeting in Davos at the end of January, which normally attracts more than 2,000 of the world's top business and political leaders.
Clusters of risk
The report identifies three clusters of risk: the world economy, suffering in the aftermath of the financial crisis and weakened by budget deficits and the cost of ageing populations; the illegal economy driven by corruption, organised crime, illicit trade and failed states; and the every growing demand for resources such as water, food and energy.
The authors, drawn from a global network of business and political leaders, try to map how a single problem in each cluster can quickly escalate and cause a wider crisis affecting other areas.
Robert Greenhill, chief business officer at the WEF, said that while it had taken months for the Wall Street crash of 1929 to affect the rest of the world, it took only minutes for the crash of 2008 to make an impact.
The report speaks of "rapid contagion through increasingly connected systems and the threat of disastrous impacts" on fragmented societies where economic imbalances undermine social cohesion.
With economies weakened by the global financial crisis and government budgets strained by the cost of supporting rapidly ageing populations, "both governments and societies are less able than ever to cope with global challenges," both man-made and natural disasters.
The WEF report, one of the gloomiest in recent years, warns that while nationalism is on the rise, there is also a "growing divergence of opinion between countries on how to promote sustainable, inclusive growth".
The G20 group of leading nations, Mr Greenhill said, had shown "an extraordinary ability to come together in a crisis". But he questioned whether the group would be "able to come together and identify and address a crisis before it happens".
John Drzik, chief executive of consulting group Oliver Wyman and one of the report's contributors, pointed to the volatility of commodity prices as a key threat to both companies and consumers.
The price of coffee was up 77%, corn up 52%, cotton up 84% and palladium up 97% in recent years, with "speculators bringing even more price volatility into the system".
The rapid growth of the world's population, he said, would increase the demand for food by 50%, for water by 30% and energy by 40% during the next two decades.
However, Mr Greenhill also stressed that it was not all gloom. Countries and companies that understood the risks, and came up with solutions to cope with the crisis, would be able to unlock "global opportunities".
By Tim Weber
Source: http://www.bbc.co.uk
Its Global Risks 2011 report warns that economic imbalances, volatile commodity prices and currencies, and governments' budget shortfalls are "unsustainable".
Rapid population growth is another risk, pushing up demand for food, water and energy by 30-50% by 2030.
The WEF warns that there is no sign of governments agreeing on how to achieve sustainable economic growth worldwide.
The Global Risks report was published in the run-up to the forum's annual meeting in Davos at the end of January, which normally attracts more than 2,000 of the world's top business and political leaders.
Clusters of risk
The report identifies three clusters of risk: the world economy, suffering in the aftermath of the financial crisis and weakened by budget deficits and the cost of ageing populations; the illegal economy driven by corruption, organised crime, illicit trade and failed states; and the every growing demand for resources such as water, food and energy.
The authors, drawn from a global network of business and political leaders, try to map how a single problem in each cluster can quickly escalate and cause a wider crisis affecting other areas.
Robert Greenhill, chief business officer at the WEF, said that while it had taken months for the Wall Street crash of 1929 to affect the rest of the world, it took only minutes for the crash of 2008 to make an impact.
The report speaks of "rapid contagion through increasingly connected systems and the threat of disastrous impacts" on fragmented societies where economic imbalances undermine social cohesion.
With economies weakened by the global financial crisis and government budgets strained by the cost of supporting rapidly ageing populations, "both governments and societies are less able than ever to cope with global challenges," both man-made and natural disasters.
The WEF report, one of the gloomiest in recent years, warns that while nationalism is on the rise, there is also a "growing divergence of opinion between countries on how to promote sustainable, inclusive growth".
The G20 group of leading nations, Mr Greenhill said, had shown "an extraordinary ability to come together in a crisis". But he questioned whether the group would be "able to come together and identify and address a crisis before it happens".
John Drzik, chief executive of consulting group Oliver Wyman and one of the report's contributors, pointed to the volatility of commodity prices as a key threat to both companies and consumers.
The price of coffee was up 77%, corn up 52%, cotton up 84% and palladium up 97% in recent years, with "speculators bringing even more price volatility into the system".
The rapid growth of the world's population, he said, would increase the demand for food by 50%, for water by 30% and energy by 40% during the next two decades.
However, Mr Greenhill also stressed that it was not all gloom. Countries and companies that understood the risks, and came up with solutions to cope with the crisis, would be able to unlock "global opportunities".
By Tim Weber
Source: http://www.bbc.co.uk
Tuesday, January 11, 2011
Public’s sense of well-being at all-time high, says report
Taub Center index reflects signs of economic recovery; haredim have higher- than-average score, despite poverty.
For the first time in two years, Israeli society is feeling more socially and economically stable, according to a report published Monday by the Taub Center for Social Policy Studies.
The Taub Index of Social Confidence, a public opinion survey examining the attitudes of 1,000 Israeli citizens on social issues such as the standard of living, employment and unemployment, economic security and exposure to violence in society, showed that overall there has been a 17-percent increase in social confidence in the country, from 56.2 points in 2009 to 66 points this past year. This is the highest index rating since the center began measuring it in 2001.
RELATED:
Israel makes major gains in raising life expectancy
The dire plight of Israel’s most poor
“The improvement seems to be for everyone across the board, although obviously there are different levels of social confidence for different population groups,” commented Prof. Ayal Kimhi, deputy director of the Taub Center and a lecturer of agricultural economics at the Hebrew University of Jerusalem.
While some sectors showed lower levels of social and economic satisfaction, according to the index’s measurements, Kimhi said that overall the study reflected a positive mood in Israeli society and clear signs of an economic recovery.
“In 2008 and 2009, after the onset of the global economic crisis, people were pessimistic, but we can see that in 2010 we are moving out of a recession, and people are far more optimistic,” he said.
Perhaps the index’s most surprising revelation had to do with the haredi population, which did not express low levels of social or economic satisfaction despite continual reports of growing poverty and economic hardship in that sector.
“The haredim do not see themselves as socially weak,” explained Kimhi. “On the contrary, they do not think they are in a bad situation, perhaps because they have a strong and supportive social network in their community.”
The index score for the haredi population rose to 68 points, much higher than in previous years and also higher than the national average, the study found.
Also revealed was the low level of social-economic confidence among Israel’s Arab population, with almost half of those questioned saying they continued to experience financial difficulties meeting their basic living needs in 2010.
Of the Arab citizens questioned for the study, 19% said they had serious financial worries, compared to only 10% of Jewish Israelis, and 15% said they felt their social and economic situation was likely to worsen in the coming year, a feeling shared by only 6% of Jewish respondents.
The situation among immigrants from the former Soviet Union was similar, with the index revealing a low social confidence score of only 61 points. Worries expressed by that population included feelings that their standard of living was not sufficiently high, and a lack of optimism about the future.
Even though the index highlights some of the wide economic gaps among various sectors in Israeli society, it also shows that the longterm trajectory has been similar, with each group’s social confidence increasing by a similar amount.
For example, divided up according to salaries, the Taub Index found that the score among those with above-average incomes was relatively high in 2010, reaching 74.4 points compared to 72.6 in 2009, and for those with lower incomes, the points increased from 49 in 2009 to 56 last year. The gap between the two groups narrowed in 2010 – from 25 to 18 points – even though those with lower incomes expressed a much lower level of social satisfaction, the report found.
Source: http://www.jpost.com
For the first time in two years, Israeli society is feeling more socially and economically stable, according to a report published Monday by the Taub Center for Social Policy Studies.
The Taub Index of Social Confidence, a public opinion survey examining the attitudes of 1,000 Israeli citizens on social issues such as the standard of living, employment and unemployment, economic security and exposure to violence in society, showed that overall there has been a 17-percent increase in social confidence in the country, from 56.2 points in 2009 to 66 points this past year. This is the highest index rating since the center began measuring it in 2001.
RELATED:
Israel makes major gains in raising life expectancy
The dire plight of Israel’s most poor
“The improvement seems to be for everyone across the board, although obviously there are different levels of social confidence for different population groups,” commented Prof. Ayal Kimhi, deputy director of the Taub Center and a lecturer of agricultural economics at the Hebrew University of Jerusalem.
While some sectors showed lower levels of social and economic satisfaction, according to the index’s measurements, Kimhi said that overall the study reflected a positive mood in Israeli society and clear signs of an economic recovery.
“In 2008 and 2009, after the onset of the global economic crisis, people were pessimistic, but we can see that in 2010 we are moving out of a recession, and people are far more optimistic,” he said.
Perhaps the index’s most surprising revelation had to do with the haredi population, which did not express low levels of social or economic satisfaction despite continual reports of growing poverty and economic hardship in that sector.
“The haredim do not see themselves as socially weak,” explained Kimhi. “On the contrary, they do not think they are in a bad situation, perhaps because they have a strong and supportive social network in their community.”
The index score for the haredi population rose to 68 points, much higher than in previous years and also higher than the national average, the study found.
Also revealed was the low level of social-economic confidence among Israel’s Arab population, with almost half of those questioned saying they continued to experience financial difficulties meeting their basic living needs in 2010.
Of the Arab citizens questioned for the study, 19% said they had serious financial worries, compared to only 10% of Jewish Israelis, and 15% said they felt their social and economic situation was likely to worsen in the coming year, a feeling shared by only 6% of Jewish respondents.
The situation among immigrants from the former Soviet Union was similar, with the index revealing a low social confidence score of only 61 points. Worries expressed by that population included feelings that their standard of living was not sufficiently high, and a lack of optimism about the future.
Even though the index highlights some of the wide economic gaps among various sectors in Israeli society, it also shows that the longterm trajectory has been similar, with each group’s social confidence increasing by a similar amount.
For example, divided up according to salaries, the Taub Index found that the score among those with above-average incomes was relatively high in 2010, reaching 74.4 points compared to 72.6 in 2009, and for those with lower incomes, the points increased from 49 in 2009 to 56 last year. The gap between the two groups narrowed in 2010 – from 25 to 18 points – even though those with lower incomes expressed a much lower level of social satisfaction, the report found.
Source: http://www.jpost.com
Monday, January 10, 2011
The OSCE and global security in the 21st century
The Astana Summit of the Organization for Security and Cooperation in Europe (OSCE), held on December 1-2, 2010, was a unique event. The decision to hold it was not easy. The balance of opinions wavered under the weight of opposing arguments until the very last moment.
Perhaps, the most serious argument against the summit was whether there was a point at all in holding a summit of an organization which, in fact, has already fulfilled its mission? The OSCE had come successful out of the Cold War era, helped dismantle the Iron Curtain, and instill the Helsinki principles in the post-totalitarian countries of Eastern Europe and the CIS.
Now, Europe has changed, and the world has become a different place. Therefore, as proponents of this view have asserted, in modern circumstances, the OSCE could only aspire to take its proud place in a global museum of history. This view is still reflected in some of the numerous assessments of the outcome of the Astana summit.
I never shared this opinion. On the contrary, I believe that the value of the OSCE is exactly in the fact that, at times of different, critical years for Europe and the world, its goals and principles have remained a universal basis for maintaining and strengthening security in the vast area of the northern hemisphere from Vancouver to Vladivostok.
In July 1992, speaking at the third summit of the CSCE in Helsinki, I called for the beginning of a similar process in the Asian continent. A few months later, in October of the same year, speaking from the rostrum of the 47th session of the UN General Assembly, I proposed the idea of convening a Conference on Interaction and Confidence-Building Measures in Asia (CICA). Today, the CICA is a successful security structure, which acquired the status of a fully-fledged international organization. Its work involves 27 Asian states. That is 90% of the continent’s area, inhabited by half of the population of the world.
Isn’t this compelling evidence of the strength of the “Helsinki Spirit” as a global factor?
The Astana summit: a step into the 21st Century
My proposal to convene the OSCE summit in Astana was based on a number of considerations.
First was my deep conviction that, in the 21 century, the OSCE can and must use all of its vast experience to build an ambitious new security system spanning the entire Eurasian continent, the space surrounded by four oceans, from the Atlantic to the Pacific, and from the Arctic to the Indian.
Second, it was important to recover the OSCE from the critical state in which it found itself.
After the 1999 Istanbul Summit, the Organization failed to keep up with the rapid pace of global change.
Although it managed to freeze the local conflicts in its area of responsibility – namely those in the Balkans, Transniestria, Nagorno-Karabakh, Abkhazia and South Ossetia, – it has not been able to find a way to resolve those conflicts. New sources of complex challenges and security threats, such as international terrorism, drug trafficking, transnational crime and illegal migration, have sprung up far beyond Europe, while the OSCE participating states have developed differing approaches to understanding the fundamental issues of military, humanitarian and economic dimensions of security.
Third, it was necessary to restore the value and effectiveness of direct dialogue among the leaders of the OSCE.
It is hard to achieve trust without direct dialogue and without summits. Some participating states have had a whole generation of political leaders who had never met each other at an OSCE summit.
I further developed all of these arguments in favour of convening a summit in an address to the OSCE Permanent Council, during bilateral meetings with my colleagues, heads of state and government, and in speeches at a number of fora held under Kazakhstan’s chairmanship in the OSCE. I am grateful to my colleagues, the heads of state and government of the OSCE, for their support of my arguments.
At the Istanbul summit in 1999, the OSCE essentially stopped at the open door of the 21st century.
Now, it was able to cross the threshold in Astana. It was a difficult step, but it has now been made.
This bold step has become a unifying success for the entire Organization, and the beginning of its renewal.
The Astana Summit, attended by 73 official delegations from all participating states and partners, as well as key international organizations, demonstrated their readiness to further the dialogue about the necessary changes in the largest international security structure.
It should be noted that the OSCE summit in Astana was simultaneous with such major international fora as the EU-Africa summit in Tripoli and the Climate Change Conference in Cancun in Latin America. Despite this, the OSCE summit in Astana became the most representative forum of the Organization.
Not without pride, I would venture that Kazakhstan’s chairmanship of the OSCE has played an important role in this success.
The energy of Kazakhstan’s chairmanship
As we assumed the OSCE Chairmanship in January 2010, we put forward a plan for the renewal of the OSCE and implemented it with the wide support of all our partners.
A key task of Kazakhstan’s chairmanship has been to expand and strengthen the field of consensus on fundamental issues of security. We have continued the process of establishing a common approach by all the OSCE participating states to the understanding of present threats and challenges.
This was especially important in order to find coordinated responses to them and, in general, to build confidence within the Organization.
Kazakhstan has introduced innovation into this process, building on multi-country dialogue through consultations with representatives of such authoritative global and regional institutions as the UN, the Comprehensive Nuclear-Test-Ban Treaty Organization, NATO, the EU, the Council of Europe, SCO, CIS, CSTO, OIC and others. Their delegations attended the Astana Summit of the OSCE.
The political lexicon of the OSCE firmly embraced the concept of a common and indivisible area for Euro-Atlantic and Eurasian security.
We have methodically worked on all three baskets of the OSCE.
Collective efforts to renew and strengthen the regime of arms control and confidence-building measures acquired new dynamics.
This makes it possible to complete the process of modernizing the 1999 Vienna Document in 2011.
At the same time, the agreement on the beginning of substantive negotiations on issues of entry into force of the Adapted Conventional Armed Forces in Europe Treaty (Adapted CFE) is of special importance.
Furthermore, the negotiation processes over settlement of frozen conflicts in the framework of the OSCE have been updated.
As the OSCE chair-in-office, Kazakhstan has worked to strengthen the OSCE’s capacity in conflict prevention, crisis management and post-conflict rehabilitation.
The work of the Minsk Group to resolve the conflict in Nagorno-Karabakh was also activated.
We have been actively involved in resolving the political crisis in Kyrgyzstan in close cooperation with the United Nations, Russia, the United States and other countries. Kazakhstan continues to play an important role in stabilizing the situation in that country and in the restoration of economic damage caused by internal conflict.
We have encouraged our OSCE partners to expand their participation in the peace settlement in Afghanistan and its economic revival.
Kazakhstan has provided Afghanistan with many different kinds of assistance.
We have allocated funds to educate domestically one thousand young Afghans who will learn the most needed peaceful professions. Food has been delivered and agreements to build several economic facilities in Afghanistan have been signed.
We are convinced that Kazakhstan’s contribution to resolving the Afghan problem could be useful as an example to all OSCE participating states.
Kazakhstan’s Chairmanship has drawn the attention of our partners to a number of issues of relevance to Central Asian security.
Specifically, we held a donor conference on the Aral Sea, and promoted the idea of adopting, in the OSCE format, the “Water and Rights” Programme as an international legal framework for resolving water issues of the region affected by water shortages.
This has become Kazakhstan’s contribution to the renewal of the economic and environmental basket of the OSCE, in light of the global trends and contents.
We have also drawn the attention of our partners in the Organization to the need for a consolidated search of ways to overcome the consequences of the global financial and economic crisis.
Kazakhstan has proposed to carry out work on the high-quality implementation of the Maastricht Strategy of the OSCE and adapting it to a post-crisis environment.
Within the third, human basket, Kazakhstan as a multi-ethnic and multi-religious state, has actively promoted the idea of an intercultural and interreligious dialogue.
Convened by Kazakhstan’s Chairmanship in Astana in June 2010, the OSCE High-Level Conference on Tolerance and Non-Discrimination confirmed the importance of the exchange of experience in ensuring interethnic and interfaith accord.
Its participants highly praised the model of peace and accord among 140 ethnicities and 46 faiths successfully implemented in Kazakhstan.
They have called for active use of the capacity of the OSCE in addressing nationalism, religious intolerance, racism, xenophobia and anti-Semitism.
Overall, Kazakhstan’s Chairmanship in the OSCE has provided dynamism to OSCE’s entire work. We approached this noble mission with a deep sense of responsibility and fully accomplished the objectives we have set for ourselves.
In their addresses at the Astana Summit, heads of state and government and heads of delegations praised Kazakhstan’s vigorous efforts as Chairman of the OSCE.
Kazakhstan, which shut down the Semipalatinsk nuclear test site, fully relinquished its nuclear arsenal, realized the idea of establishing the CICA and has actively promoted the integration in Eurasia, has once again proven itself a responsible member of the global community.
OSCE’s Global Geometry
In geopolitics, the shortest distance between the two points is not always connected by a straight line. For the OSCE, a road from Istanbul to Astana has taken eleven years.
This is why the historic value of the "Astana Commemorative Declaration: Towards a Security Community" is indisputable.
First, it confirms the relevance of the principles on which the Organization was based and the commitment of all 56 participating states to the norms and commitments adopted within it, starting with the Helsinki Final Act, the Paris Charter, the Charter of European Security, and other instruments.
Second, the Eurasian vector of the OSCE has been enshrined for the first time ever.
The Astana Declaration particularly noted that the security in the OSCE area is inextricably related to the security in neighbouring regions, especially, the Mediterranean and Asia.
It set the goal of establishing common and indivisible Euro-Atlantic and Eurasian security community as the primary goal for the OSCE in the new century.
Third, the document welcomed all initiatives to strengthen the OSCE and its ability to adequately and effectively address the challenges of the 21st century.
I would like to note that numerous proposals have been heard from the tribune of the OSCE Summit stressing shared motivation of all participating states to take the Organization to a new and higher level.
This is the essence of the "Astana spirit" brought into life in a difficult and open discussion.
An initiative by the President of the Russian Federation, Dmitry Medvedev, on the adoption of a legally binding Treaty on European Security is aimed at the creation of strong guarantees of indivisibility of the common security area.
Italian Prime Minister Silvio Berlusconi noted the importance for the OSCE of using the example of tolerance and mutual respect, which Kazakhstan and Astana demonstrated to the world during the summit.
All the ideas for strengthening OSCE mechanisms should certainly be viewed as a collective contribution to the process of rethinking the role of the Organization in consolidating global security.
I entirely support the position voiced at the Astana Summit by U.S. Secretary of State, Hillary Clinton, that, other than the OSCE, “there is no other regional organization as well positioned to do so”.
It is especially relevant when it comes to strengthening the Organization’s capacity in effectively responding to emerging threats and challenges, preventing and resolving grave conflicts in the entire area of its responsibility.
In its turn, Kazakhstan has also made proposals to strengthen the OSCE, and their significance was praised by the participants of the Astana Summit.
In our view, the global geometry of the OSCE in the 21st century should consist of the following targeted actions:
• First, Kazakhstan has called for interaction in strengthening global security among integration structures of the Eurasian continent. In terms of "East – West", it is the interaction between the European Union and NATO on one hand, and EurAsEC and CSTO on the other. In terms of "North – South", it is the interaction between the OSCE, CICA and the Organization of Islamic Conference, which Kazakhstan will chair in 2011;
• Second, we have proposed to single out the issues of financial and economic security as a separate basket of the OSCE. Today, the OSCE area and, overall, Eurasia, comprise the most promising areas of the planet’s economic growth – North America, the European Union, China, Russia, India, the Persian Gulf, and Southeast Asia. This is why it is important to look for ways of interaction among them through trust and effective security systems. I believe the OSCE has the potential to participate in the process of creating the world reserve currency, develop guidelines for coordinated monetary and financial policies, and cooperation and integration in the Euro-Atlantic and Euro-Asian area. In our view, there is a need to adopt a new document, "Maastricht Plus", in which it would be reasonable to reflect these issues. This position has received support in several speeches by heads of state and government at the Astana Summit, including by Greek Prime Minister, George Papandreou, and others. It is necessary to supplement the OSCE structure with councils on energy security and economic interaction;
• Third, in order to enhance the politico-military dimension, we have proposed to establish a specific OSCE forum to elaborate new contractual norms in disarmament and non-proliferation. There is also a need to establish the council at the level of ministers of the OSCE participating states to coordinate the fight against cross-border crime, drug trafficking and illegal migration;
• Fourth, we have called for honest and open interfaith dialogue. In his speech at the Cairo University in June 2009, US President Barack Obama fairly stated: "In order to move forward, we must say openly to each other the things we hold in our hearts and that too often are said only behind closed doors. There must be a sustained effort to listen to each other; to learn from each other; to respect one another; and to seek common ground.” I believe that it is possible to hold such a dialogue within the OSCE through the already available platform of the ‘Congress of Leaders of World and Traditional Religions’, which has regularly been held in Astana since 2003. In our view, it is necessary to develop the document “OSCE: Towards Tolerance in a New Decade,” which will outline the principles of interaction and cooperation among main religions of the world, especially between Islam and Christianity, for the sake of global confirmation of ideals of goodwill and fair world order;
• Fifth, within the OSCE, it is crucial to organize the work on forecasting various security issues as a separate dimension by creating an OSCE Security Institute.
It is also important to ensure that OSCE structures are equally deployed throughout the area of responsibility of the Organization, including in its Asian portion.
This process was initiated by the Astana Summit, held for the first time ever in Central Asia, beyond the geographic borders of Europe.
At the beginning of the century, in my book "A critical decade", I strongly refuted the thesis, imposed on us, about Central Asia as a part of a global arc of instability.
I believe in a different potential for the region: its ability to be a bridge between West and East, North and South.
After the OSCE Summit in Astana, one may say that Central Asia has avoided the fate of becoming an area with down-sized security mechanisms.
Today, Kazakhstan and all the Central Asian states have entered the international arena as an important link in strengthening Eurasian and global security.
This is necessary for strengthening our new states which will be all celebrating the 20th anniversary of their independence in 2011.
I must note that the OSCE Summit in Astana has positively influenced Kazakhstan. It has united our nation, strengthened belief in our ability to resolve incredibly difficult challenges and achieve our highest goals. We have shown that we are responsible before the world community, consistent and active in enhancing peace, stability and security.
The OSCE Summit in Astana has drawn a line under the complex period in the history of the OSCE. It opened a door into the future for the OSCE and gave it a unique chance for renewal. Now it is necessary to continue the joint work unabated. All proposals to reform the OSCE made in Astana should be thoroughly analyzed and taken into account while finalizing the OSCE Action Plan for the forthcoming years. I am convinced that the experience of Kazakhstan, which lead the OSCE in 2010, will be seamlessly developed by subsequent chairmanships: Lithuania in 2011, Ireland in 2012 and Ukraine in 2013, and others. At the same time, it is crucial that the OSCE high-level dialogue is not interrupted. This depends on the will and motivation of all OSCE participating states and their leaders. This is the main condition for ensuring the Organization’s efficiency, while strengthening the stability and security of its participating states. Globalization has closely tied the fates of different countries and peoples. We all share common objectives: peace and accord, progress and prosperity on the planet. It is these noble goals that constitute the global mission of the OSCE in the 21st century.
Source: www.neurope.eu
Perhaps, the most serious argument against the summit was whether there was a point at all in holding a summit of an organization which, in fact, has already fulfilled its mission? The OSCE had come successful out of the Cold War era, helped dismantle the Iron Curtain, and instill the Helsinki principles in the post-totalitarian countries of Eastern Europe and the CIS.
Now, Europe has changed, and the world has become a different place. Therefore, as proponents of this view have asserted, in modern circumstances, the OSCE could only aspire to take its proud place in a global museum of history. This view is still reflected in some of the numerous assessments of the outcome of the Astana summit.
I never shared this opinion. On the contrary, I believe that the value of the OSCE is exactly in the fact that, at times of different, critical years for Europe and the world, its goals and principles have remained a universal basis for maintaining and strengthening security in the vast area of the northern hemisphere from Vancouver to Vladivostok.
In July 1992, speaking at the third summit of the CSCE in Helsinki, I called for the beginning of a similar process in the Asian continent. A few months later, in October of the same year, speaking from the rostrum of the 47th session of the UN General Assembly, I proposed the idea of convening a Conference on Interaction and Confidence-Building Measures in Asia (CICA). Today, the CICA is a successful security structure, which acquired the status of a fully-fledged international organization. Its work involves 27 Asian states. That is 90% of the continent’s area, inhabited by half of the population of the world.
Isn’t this compelling evidence of the strength of the “Helsinki Spirit” as a global factor?
The Astana summit: a step into the 21st Century
My proposal to convene the OSCE summit in Astana was based on a number of considerations.
First was my deep conviction that, in the 21 century, the OSCE can and must use all of its vast experience to build an ambitious new security system spanning the entire Eurasian continent, the space surrounded by four oceans, from the Atlantic to the Pacific, and from the Arctic to the Indian.
Second, it was important to recover the OSCE from the critical state in which it found itself.
After the 1999 Istanbul Summit, the Organization failed to keep up with the rapid pace of global change.
Although it managed to freeze the local conflicts in its area of responsibility – namely those in the Balkans, Transniestria, Nagorno-Karabakh, Abkhazia and South Ossetia, – it has not been able to find a way to resolve those conflicts. New sources of complex challenges and security threats, such as international terrorism, drug trafficking, transnational crime and illegal migration, have sprung up far beyond Europe, while the OSCE participating states have developed differing approaches to understanding the fundamental issues of military, humanitarian and economic dimensions of security.
Third, it was necessary to restore the value and effectiveness of direct dialogue among the leaders of the OSCE.
It is hard to achieve trust without direct dialogue and without summits. Some participating states have had a whole generation of political leaders who had never met each other at an OSCE summit.
I further developed all of these arguments in favour of convening a summit in an address to the OSCE Permanent Council, during bilateral meetings with my colleagues, heads of state and government, and in speeches at a number of fora held under Kazakhstan’s chairmanship in the OSCE. I am grateful to my colleagues, the heads of state and government of the OSCE, for their support of my arguments.
At the Istanbul summit in 1999, the OSCE essentially stopped at the open door of the 21st century.
Now, it was able to cross the threshold in Astana. It was a difficult step, but it has now been made.
This bold step has become a unifying success for the entire Organization, and the beginning of its renewal.
The Astana Summit, attended by 73 official delegations from all participating states and partners, as well as key international organizations, demonstrated their readiness to further the dialogue about the necessary changes in the largest international security structure.
It should be noted that the OSCE summit in Astana was simultaneous with such major international fora as the EU-Africa summit in Tripoli and the Climate Change Conference in Cancun in Latin America. Despite this, the OSCE summit in Astana became the most representative forum of the Organization.
Not without pride, I would venture that Kazakhstan’s chairmanship of the OSCE has played an important role in this success.
The energy of Kazakhstan’s chairmanship
As we assumed the OSCE Chairmanship in January 2010, we put forward a plan for the renewal of the OSCE and implemented it with the wide support of all our partners.
A key task of Kazakhstan’s chairmanship has been to expand and strengthen the field of consensus on fundamental issues of security. We have continued the process of establishing a common approach by all the OSCE participating states to the understanding of present threats and challenges.
This was especially important in order to find coordinated responses to them and, in general, to build confidence within the Organization.
Kazakhstan has introduced innovation into this process, building on multi-country dialogue through consultations with representatives of such authoritative global and regional institutions as the UN, the Comprehensive Nuclear-Test-Ban Treaty Organization, NATO, the EU, the Council of Europe, SCO, CIS, CSTO, OIC and others. Their delegations attended the Astana Summit of the OSCE.
The political lexicon of the OSCE firmly embraced the concept of a common and indivisible area for Euro-Atlantic and Eurasian security.
We have methodically worked on all three baskets of the OSCE.
Collective efforts to renew and strengthen the regime of arms control and confidence-building measures acquired new dynamics.
This makes it possible to complete the process of modernizing the 1999 Vienna Document in 2011.
At the same time, the agreement on the beginning of substantive negotiations on issues of entry into force of the Adapted Conventional Armed Forces in Europe Treaty (Adapted CFE) is of special importance.
Furthermore, the negotiation processes over settlement of frozen conflicts in the framework of the OSCE have been updated.
As the OSCE chair-in-office, Kazakhstan has worked to strengthen the OSCE’s capacity in conflict prevention, crisis management and post-conflict rehabilitation.
The work of the Minsk Group to resolve the conflict in Nagorno-Karabakh was also activated.
We have been actively involved in resolving the political crisis in Kyrgyzstan in close cooperation with the United Nations, Russia, the United States and other countries. Kazakhstan continues to play an important role in stabilizing the situation in that country and in the restoration of economic damage caused by internal conflict.
We have encouraged our OSCE partners to expand their participation in the peace settlement in Afghanistan and its economic revival.
Kazakhstan has provided Afghanistan with many different kinds of assistance.
We have allocated funds to educate domestically one thousand young Afghans who will learn the most needed peaceful professions. Food has been delivered and agreements to build several economic facilities in Afghanistan have been signed.
We are convinced that Kazakhstan’s contribution to resolving the Afghan problem could be useful as an example to all OSCE participating states.
Kazakhstan’s Chairmanship has drawn the attention of our partners to a number of issues of relevance to Central Asian security.
Specifically, we held a donor conference on the Aral Sea, and promoted the idea of adopting, in the OSCE format, the “Water and Rights” Programme as an international legal framework for resolving water issues of the region affected by water shortages.
This has become Kazakhstan’s contribution to the renewal of the economic and environmental basket of the OSCE, in light of the global trends and contents.
We have also drawn the attention of our partners in the Organization to the need for a consolidated search of ways to overcome the consequences of the global financial and economic crisis.
Kazakhstan has proposed to carry out work on the high-quality implementation of the Maastricht Strategy of the OSCE and adapting it to a post-crisis environment.
Within the third, human basket, Kazakhstan as a multi-ethnic and multi-religious state, has actively promoted the idea of an intercultural and interreligious dialogue.
Convened by Kazakhstan’s Chairmanship in Astana in June 2010, the OSCE High-Level Conference on Tolerance and Non-Discrimination confirmed the importance of the exchange of experience in ensuring interethnic and interfaith accord.
Its participants highly praised the model of peace and accord among 140 ethnicities and 46 faiths successfully implemented in Kazakhstan.
They have called for active use of the capacity of the OSCE in addressing nationalism, religious intolerance, racism, xenophobia and anti-Semitism.
Overall, Kazakhstan’s Chairmanship in the OSCE has provided dynamism to OSCE’s entire work. We approached this noble mission with a deep sense of responsibility and fully accomplished the objectives we have set for ourselves.
In their addresses at the Astana Summit, heads of state and government and heads of delegations praised Kazakhstan’s vigorous efforts as Chairman of the OSCE.
Kazakhstan, which shut down the Semipalatinsk nuclear test site, fully relinquished its nuclear arsenal, realized the idea of establishing the CICA and has actively promoted the integration in Eurasia, has once again proven itself a responsible member of the global community.
OSCE’s Global Geometry
In geopolitics, the shortest distance between the two points is not always connected by a straight line. For the OSCE, a road from Istanbul to Astana has taken eleven years.
This is why the historic value of the "Astana Commemorative Declaration: Towards a Security Community" is indisputable.
First, it confirms the relevance of the principles on which the Organization was based and the commitment of all 56 participating states to the norms and commitments adopted within it, starting with the Helsinki Final Act, the Paris Charter, the Charter of European Security, and other instruments.
Second, the Eurasian vector of the OSCE has been enshrined for the first time ever.
The Astana Declaration particularly noted that the security in the OSCE area is inextricably related to the security in neighbouring regions, especially, the Mediterranean and Asia.
It set the goal of establishing common and indivisible Euro-Atlantic and Eurasian security community as the primary goal for the OSCE in the new century.
Third, the document welcomed all initiatives to strengthen the OSCE and its ability to adequately and effectively address the challenges of the 21st century.
I would like to note that numerous proposals have been heard from the tribune of the OSCE Summit stressing shared motivation of all participating states to take the Organization to a new and higher level.
This is the essence of the "Astana spirit" brought into life in a difficult and open discussion.
An initiative by the President of the Russian Federation, Dmitry Medvedev, on the adoption of a legally binding Treaty on European Security is aimed at the creation of strong guarantees of indivisibility of the common security area.
Italian Prime Minister Silvio Berlusconi noted the importance for the OSCE of using the example of tolerance and mutual respect, which Kazakhstan and Astana demonstrated to the world during the summit.
All the ideas for strengthening OSCE mechanisms should certainly be viewed as a collective contribution to the process of rethinking the role of the Organization in consolidating global security.
I entirely support the position voiced at the Astana Summit by U.S. Secretary of State, Hillary Clinton, that, other than the OSCE, “there is no other regional organization as well positioned to do so”.
It is especially relevant when it comes to strengthening the Organization’s capacity in effectively responding to emerging threats and challenges, preventing and resolving grave conflicts in the entire area of its responsibility.
In its turn, Kazakhstan has also made proposals to strengthen the OSCE, and their significance was praised by the participants of the Astana Summit.
In our view, the global geometry of the OSCE in the 21st century should consist of the following targeted actions:
• First, Kazakhstan has called for interaction in strengthening global security among integration structures of the Eurasian continent. In terms of "East – West", it is the interaction between the European Union and NATO on one hand, and EurAsEC and CSTO on the other. In terms of "North – South", it is the interaction between the OSCE, CICA and the Organization of Islamic Conference, which Kazakhstan will chair in 2011;
• Second, we have proposed to single out the issues of financial and economic security as a separate basket of the OSCE. Today, the OSCE area and, overall, Eurasia, comprise the most promising areas of the planet’s economic growth – North America, the European Union, China, Russia, India, the Persian Gulf, and Southeast Asia. This is why it is important to look for ways of interaction among them through trust and effective security systems. I believe the OSCE has the potential to participate in the process of creating the world reserve currency, develop guidelines for coordinated monetary and financial policies, and cooperation and integration in the Euro-Atlantic and Euro-Asian area. In our view, there is a need to adopt a new document, "Maastricht Plus", in which it would be reasonable to reflect these issues. This position has received support in several speeches by heads of state and government at the Astana Summit, including by Greek Prime Minister, George Papandreou, and others. It is necessary to supplement the OSCE structure with councils on energy security and economic interaction;
• Third, in order to enhance the politico-military dimension, we have proposed to establish a specific OSCE forum to elaborate new contractual norms in disarmament and non-proliferation. There is also a need to establish the council at the level of ministers of the OSCE participating states to coordinate the fight against cross-border crime, drug trafficking and illegal migration;
• Fourth, we have called for honest and open interfaith dialogue. In his speech at the Cairo University in June 2009, US President Barack Obama fairly stated: "In order to move forward, we must say openly to each other the things we hold in our hearts and that too often are said only behind closed doors. There must be a sustained effort to listen to each other; to learn from each other; to respect one another; and to seek common ground.” I believe that it is possible to hold such a dialogue within the OSCE through the already available platform of the ‘Congress of Leaders of World and Traditional Religions’, which has regularly been held in Astana since 2003. In our view, it is necessary to develop the document “OSCE: Towards Tolerance in a New Decade,” which will outline the principles of interaction and cooperation among main religions of the world, especially between Islam and Christianity, for the sake of global confirmation of ideals of goodwill and fair world order;
• Fifth, within the OSCE, it is crucial to organize the work on forecasting various security issues as a separate dimension by creating an OSCE Security Institute.
It is also important to ensure that OSCE structures are equally deployed throughout the area of responsibility of the Organization, including in its Asian portion.
This process was initiated by the Astana Summit, held for the first time ever in Central Asia, beyond the geographic borders of Europe.
At the beginning of the century, in my book "A critical decade", I strongly refuted the thesis, imposed on us, about Central Asia as a part of a global arc of instability.
I believe in a different potential for the region: its ability to be a bridge between West and East, North and South.
After the OSCE Summit in Astana, one may say that Central Asia has avoided the fate of becoming an area with down-sized security mechanisms.
Today, Kazakhstan and all the Central Asian states have entered the international arena as an important link in strengthening Eurasian and global security.
This is necessary for strengthening our new states which will be all celebrating the 20th anniversary of their independence in 2011.
I must note that the OSCE Summit in Astana has positively influenced Kazakhstan. It has united our nation, strengthened belief in our ability to resolve incredibly difficult challenges and achieve our highest goals. We have shown that we are responsible before the world community, consistent and active in enhancing peace, stability and security.
The OSCE Summit in Astana has drawn a line under the complex period in the history of the OSCE. It opened a door into the future for the OSCE and gave it a unique chance for renewal. Now it is necessary to continue the joint work unabated. All proposals to reform the OSCE made in Astana should be thoroughly analyzed and taken into account while finalizing the OSCE Action Plan for the forthcoming years. I am convinced that the experience of Kazakhstan, which lead the OSCE in 2010, will be seamlessly developed by subsequent chairmanships: Lithuania in 2011, Ireland in 2012 and Ukraine in 2013, and others. At the same time, it is crucial that the OSCE high-level dialogue is not interrupted. This depends on the will and motivation of all OSCE participating states and their leaders. This is the main condition for ensuring the Organization’s efficiency, while strengthening the stability and security of its participating states. Globalization has closely tied the fates of different countries and peoples. We all share common objectives: peace and accord, progress and prosperity on the planet. It is these noble goals that constitute the global mission of the OSCE in the 21st century.
Source: www.neurope.eu
Sunday, January 09, 2011
China's Support for Kim Jong Il Drives Japan, South Korea to Bolster Ties
China’s military buildup and failure to condemn North Korean aggression are helping Japan and South Korea overcome their economic rivalry and a decades-long legacy of distrust to pursue closer military ties.
Japanese Defense Minister Toshimi Kitazawa and his South Korean counterpart Kim Kwan Jin hold talks in Seoul today, the first in almost two years. Each country sent observers to the other’s military drills with the U.S. for the first time last year, following attacks by Kim Jong Il’s regime that killed 50 South Koreans.
The threat from North Korea may blunt opposition in the south driven by animosity toward Japan for its 1910-1945 occupation of the Korean peninsula. Closer ties between Asia’s two most developed exporters and main U.S. allies may also irk China, which bridles at America’s presence in a region where it wants to exert greater influence.
“China surely won’t approve of this, not to mention the strong opposition from South Koreans who still have bad feelings against Japan,” said Choi Jong Kun, a professor of political science and international studies at Yonsei University in Seoul. “The military relationship between South Korea and Japan still has a lot of hurdles to overcome.”
Kitazawa on Jan. 5 said he wants to discuss with Kim an agreement to share military goods and services, which Japan already has with the U.S. and Australia. South Korea’s Ministry of National Defense said that while no agreements will be signed, the meeting will “provide an opportunity to strengthen military ties to a higher level.”
Legacy of Occupation
South Korea says 176,000 of its citizens were drafted by Japan as soldiers, labor workers and sex slaves during the occupation. Japan’s Prime Minister Naoto Kan in August offered “deep remorse” for the annexation, which South Korean President Lee Myung Bak called “a step forward,” while noting there were still issues to be resolved, including victims compensation.
Japan and South Korea are also industrial rivals. While South Korea’s gross domestic product remains about a sixth of Japan’s, its economy has outperformed that of its neighbor in every quarter bar one for the past 10 years. Korea’s benchmark Kospi Index quadrupled in that period. Japan’s Nikkei 225 Share Index fell by about a quarter.
Suwon, South Korea-based Samsung Electronics Co. overtook Sony Corp., based in Tokyo, as the world’s largest maker of flat-panel televisions in the past decade, and is now the most- profitable company in the two countries. Hyundai Heavy Industries Co., based in Ulsan, helped South Korea take Japan’s place as the world’s biggest shipbuilding nation.
U.S. Urging
The U.S. is urging South Korea and Japan to boost military cooperation after North Korea on Nov. 23 shelled Yeonpyeong Island, killing four people. The U.S. and Japan also backed an international report that found a North Korean torpedo sank one of the South’s warships in March, killing 46 sailors.
Admiral Mike Mullen, chairman of the Joint Chiefs of Staff, said on Dec. 8 in Seoul that he hopes U.S. military exercises with South Korea will include Japanese participation to “cement our unified position on the threat posed by North Korea.”
China, North Korea’s biggest ally, refused to condemn either attack and criticized the Japan-U.S. drills in December as an obstacle to easing regional tension.
“Some are playing with knives and guns while China is criticized for calling for dialogue, is that fair?” Foreign Ministry spokeswoman Jiang Yu said on Dec. 2.
Credit Market Concerns
The cost of insuring Japanese and South Korea government debt jumped after the shelling. South Korea’s five-year credit default swaps rose 17 percent on Nov. 23, the biggest one-day gain in two years, data compiled by Bloomberg show. Japan’s CDS gained 27 percent in the six days following the attack.
“It’s important for the U.S., South Korea and Japan to cooperate more closely at a time when the Korean peninsula is increasingly unstable,” said Tsuneo Watanabe, a senior fellow at the Tokyo Foundation think-tank. “Japan-South Korean accords are vital for smooth operations among the three countries.”
Today’s talks coincide with U.S. Defense Secretary Robert Gates’ visit to China to mend military ties cut off a year ago after the U.S. announced a $6.4 billion arms sale to Taiwan.
Gates two days ago said Chinese military development has “the potential to put some of our capabilities at risk,” adding that the Asian country may be developing a stealth fighter more quickly than the U.S. had believed. It marked the second time in a week a Pentagon official had said the U.S. may have underestimated the speed of China’s weapons development.
Japan last month said it would shift the focus of its national defense toward China in a report that criticized a “lack of transparency” in Chinese military spending.
“South Korea’s rising global profile has helped it overcome its minority complex toward Japan,” said Dong Yong Sueng, a fellow on economic security at the Samsung Economic Research Institute in Seoul. “The current geopolitical situation serves as a good opportunity for them to overcome their history.”
Source: www.bloomberg.com
Japanese Defense Minister Toshimi Kitazawa and his South Korean counterpart Kim Kwan Jin hold talks in Seoul today, the first in almost two years. Each country sent observers to the other’s military drills with the U.S. for the first time last year, following attacks by Kim Jong Il’s regime that killed 50 South Koreans.
The threat from North Korea may blunt opposition in the south driven by animosity toward Japan for its 1910-1945 occupation of the Korean peninsula. Closer ties between Asia’s two most developed exporters and main U.S. allies may also irk China, which bridles at America’s presence in a region where it wants to exert greater influence.
“China surely won’t approve of this, not to mention the strong opposition from South Koreans who still have bad feelings against Japan,” said Choi Jong Kun, a professor of political science and international studies at Yonsei University in Seoul. “The military relationship between South Korea and Japan still has a lot of hurdles to overcome.”
Kitazawa on Jan. 5 said he wants to discuss with Kim an agreement to share military goods and services, which Japan already has with the U.S. and Australia. South Korea’s Ministry of National Defense said that while no agreements will be signed, the meeting will “provide an opportunity to strengthen military ties to a higher level.”
Legacy of Occupation
South Korea says 176,000 of its citizens were drafted by Japan as soldiers, labor workers and sex slaves during the occupation. Japan’s Prime Minister Naoto Kan in August offered “deep remorse” for the annexation, which South Korean President Lee Myung Bak called “a step forward,” while noting there were still issues to be resolved, including victims compensation.
Japan and South Korea are also industrial rivals. While South Korea’s gross domestic product remains about a sixth of Japan’s, its economy has outperformed that of its neighbor in every quarter bar one for the past 10 years. Korea’s benchmark Kospi Index quadrupled in that period. Japan’s Nikkei 225 Share Index fell by about a quarter.
Suwon, South Korea-based Samsung Electronics Co. overtook Sony Corp., based in Tokyo, as the world’s largest maker of flat-panel televisions in the past decade, and is now the most- profitable company in the two countries. Hyundai Heavy Industries Co., based in Ulsan, helped South Korea take Japan’s place as the world’s biggest shipbuilding nation.
U.S. Urging
The U.S. is urging South Korea and Japan to boost military cooperation after North Korea on Nov. 23 shelled Yeonpyeong Island, killing four people. The U.S. and Japan also backed an international report that found a North Korean torpedo sank one of the South’s warships in March, killing 46 sailors.
Admiral Mike Mullen, chairman of the Joint Chiefs of Staff, said on Dec. 8 in Seoul that he hopes U.S. military exercises with South Korea will include Japanese participation to “cement our unified position on the threat posed by North Korea.”
China, North Korea’s biggest ally, refused to condemn either attack and criticized the Japan-U.S. drills in December as an obstacle to easing regional tension.
“Some are playing with knives and guns while China is criticized for calling for dialogue, is that fair?” Foreign Ministry spokeswoman Jiang Yu said on Dec. 2.
Credit Market Concerns
The cost of insuring Japanese and South Korea government debt jumped after the shelling. South Korea’s five-year credit default swaps rose 17 percent on Nov. 23, the biggest one-day gain in two years, data compiled by Bloomberg show. Japan’s CDS gained 27 percent in the six days following the attack.
“It’s important for the U.S., South Korea and Japan to cooperate more closely at a time when the Korean peninsula is increasingly unstable,” said Tsuneo Watanabe, a senior fellow at the Tokyo Foundation think-tank. “Japan-South Korean accords are vital for smooth operations among the three countries.”
Today’s talks coincide with U.S. Defense Secretary Robert Gates’ visit to China to mend military ties cut off a year ago after the U.S. announced a $6.4 billion arms sale to Taiwan.
Gates two days ago said Chinese military development has “the potential to put some of our capabilities at risk,” adding that the Asian country may be developing a stealth fighter more quickly than the U.S. had believed. It marked the second time in a week a Pentagon official had said the U.S. may have underestimated the speed of China’s weapons development.
Japan last month said it would shift the focus of its national defense toward China in a report that criticized a “lack of transparency” in Chinese military spending.
“South Korea’s rising global profile has helped it overcome its minority complex toward Japan,” said Dong Yong Sueng, a fellow on economic security at the Samsung Economic Research Institute in Seoul. “The current geopolitical situation serves as a good opportunity for them to overcome their history.”
Source: www.bloomberg.com
Thursday, January 06, 2011
How Oil Could Kill the Recovery
There are plenty of reasons to be optimistic about the U.S. economy. Workers are earning more, consumers are spending more, banks are lending more, and companies are ready to hire more. But if there's one number that could derail the recovery, it's the price of a barrel of oil.
Economists and watchdog groups are nervously monitoring the rising price of crude, now hovering around $90 -- down from a 2008 high of nearly $150. "Oil prices are entering a dangerous zone for the global economy," warns Fatih Birol, chief economist of the International Energy Agency. "High oil prices threaten to derail the fragile economic recovery," echoes Sylvia Pfeiffer at the Financial Times. Meanwhile, other economists say there's very little reason to think oil should spook the fragile recovery.
Who should we believe, and why should we care in the first place?
WHY SHOULD YOU CARE?
The short answer is that expensive oil is poisonous to an oil-driven economy. Every severe oil spike in the last 50 years has been followed by a deep recession.
Here's the more complicated answer. The United States imported $400 billion of oil in 2008, nearly 3 percent of GDP -- or more than half the total cost of Social Security. Unlike Social Security, those hundreds of billions of dollars leave the country and don't get recycled into our economy. They're empty calories.
When gas prices rise, American consumers can buy the same amount of gas for more money, which makes us poorer; or they can buy less gas, which makes the economy weaker. In the last decade, the price of crude increased from $1.50 to $3.50, and Americans kept filling up their SUVs. Only at $4.00 did Americans recoil, reducing their total miles driven fell for the first time in 30 years by 100 billion miles.
Some economists say the oil spike helped cause the Great Recession. By making it more expensive to commute, they argue, high oil prices both made Americans poorer and reduced the demand for suburban homes, thus hastening the housing collapse. A less dramatic interpretation would say that the Great Recession was caused by the credit crunch on Wall Street, but exacerbated by the historic rise in oil prices.
In the Great Recession, the price of a barrel of oil fell by almost 70 percent. But now oil prices are climbing, for at least three reasons. First, higher global demand raises the price of oil if global supply cannot keep up. Second, as capital becomes more available throughout the world, investors might return to bidding up the price of oil. In 2008, experts estimate that up to a third of the $150 price of a barrel of oil was pure speculation rather than natural supply and demand factors. Third, in the U.S., a weak dollar makes oil, like most imports, more expensive for consumers. So what happens now?
THE CASE FOR FEAR
If you thought $4 gasoline was bad, wait a year. Americans will pay $5 for a gallon of gasoline by 2012 as global demand grows faster than oil producers' supply, predicted John Hofmeister, the former president of Shell Oil and current head of Citizens for Affordable Energy. Without a significant investment in alternative energy sources, we're on a collision course with "blackouts, brownouts, gas lines, [and] rationing."
Hofmeister's math can be summed up in one graph, from the Center for American Progress, which shows projected oil consumption for the U.S., China and India. As China and India join the global middle class, global demand for oil will skyrocket past its 2008 levels, when a barrel cost $147.
Insatiable global demand for oil isn't the only thing that could push up prices. A coup in one of the many unstable oil-producing countries could produce a supply shock. A more likely culprit would be speculation. In 2008, investors with a glut of capital placed their money on commodity futures, driving up the price of oil. As the economy recovers, those investors might return to their old habit -- especially if inflation starts to pick up in the U.S. and investors look to oil as a hedge.
Any of these scenarios are enough keep economists awake at night. "If oil prices went back to the $140 dollar range, it would be a disaster," said Daniel Weiss a research fellow at CAP, "because oil spikes almost always produce economic recessions."
THE CASE FOR CALM
"I'm not too worried about oil crippling a comeback this year," said Christopher Steiner, author of $20 Per Gallon. "There are a lot of reasons why we shouldn't expect oil to go much over $100 per barrel."
First, he cited greater supply. OPEC is producing more oil and has healthier inventories than in 2008. Second, he cited lower demand. The United States, Europe and Japan are all importing significantly less oil than we did when prices passed $140 a barrel.
"In the next few years, if we're still recovering, and China and India join the global middle class, then eventually we'll probably hit $5 gas," Steiner said. "But overall, I think 2011 will be pretty boring on the oil market. The memories of 2008 are too fresh, and nobody wants a repeat."
That includes OPEC. Extreme oil prices are obviously bad for importers, but they're also bad for exporters. Oil producers like Saudi Arabia want oil expensive enough to mint healthy revenue, but cheap enough to keep the world's consumers from fleeing to alternative sources of energy.
"The Saudis believe their ideal price is $80 a barrel," Weiss said, "because that's the price point where they can make lots of money but not spur conservation efforts."
Weiss, an advocate for developing clean alternatives to oil, acknowledged that even if alternative technologies don't come on line in the next few years, the president has ways to fight an oil spike. For example, without congressional approval he could sell oil from the Strategic Petroleum Reserve, which is now at 100% capacity with 726 million barrels, to cushion the blow for families if oil prices spike.
WHAT SHOULD WE WANT
Oil blots our economic outlook. To get the export-driven recovery White House economists want, we need two ingredients: a weaker dollar to make our goods cheap and strong foreign consumers to buy our stuff. Ironically, a weak dollar and strong global demand would also conspire to make gasoline more expensive. In fact, if you wanted to design a scenario where oil prices would not budge, you'd probably wish for a strong dollar, a weak global economy, and a slow recovery in the U.S.
So what should we wish for?
Wish for a recovery, of course. Up to a third of the $147 price tag for 2008 oil came from investor speculation, according to one congressional report, and few people expect a sequel in 2011. With inflation weak, there's little reason for investors to pile onto oil commodities as a hedge. A strong global recovery will lift global wealth. It will enrich Americans, who will buy from Asia, which will enrich Asia, which will buy from America, and on it goes.
Oil probably won't kill the 2011 economy. But eventually, the world will have to find a way to satiate its relentless and growing appetite for energy that doesn't rely on a single scarce resource.
Source: http://www.theatlantic.com
Economists and watchdog groups are nervously monitoring the rising price of crude, now hovering around $90 -- down from a 2008 high of nearly $150. "Oil prices are entering a dangerous zone for the global economy," warns Fatih Birol, chief economist of the International Energy Agency. "High oil prices threaten to derail the fragile economic recovery," echoes Sylvia Pfeiffer at the Financial Times. Meanwhile, other economists say there's very little reason to think oil should spook the fragile recovery.
Who should we believe, and why should we care in the first place?
WHY SHOULD YOU CARE?
The short answer is that expensive oil is poisonous to an oil-driven economy. Every severe oil spike in the last 50 years has been followed by a deep recession.
Here's the more complicated answer. The United States imported $400 billion of oil in 2008, nearly 3 percent of GDP -- or more than half the total cost of Social Security. Unlike Social Security, those hundreds of billions of dollars leave the country and don't get recycled into our economy. They're empty calories.
When gas prices rise, American consumers can buy the same amount of gas for more money, which makes us poorer; or they can buy less gas, which makes the economy weaker. In the last decade, the price of crude increased from $1.50 to $3.50, and Americans kept filling up their SUVs. Only at $4.00 did Americans recoil, reducing their total miles driven fell for the first time in 30 years by 100 billion miles.
Some economists say the oil spike helped cause the Great Recession. By making it more expensive to commute, they argue, high oil prices both made Americans poorer and reduced the demand for suburban homes, thus hastening the housing collapse. A less dramatic interpretation would say that the Great Recession was caused by the credit crunch on Wall Street, but exacerbated by the historic rise in oil prices.
In the Great Recession, the price of a barrel of oil fell by almost 70 percent. But now oil prices are climbing, for at least three reasons. First, higher global demand raises the price of oil if global supply cannot keep up. Second, as capital becomes more available throughout the world, investors might return to bidding up the price of oil. In 2008, experts estimate that up to a third of the $150 price of a barrel of oil was pure speculation rather than natural supply and demand factors. Third, in the U.S., a weak dollar makes oil, like most imports, more expensive for consumers. So what happens now?
THE CASE FOR FEAR
If you thought $4 gasoline was bad, wait a year. Americans will pay $5 for a gallon of gasoline by 2012 as global demand grows faster than oil producers' supply, predicted John Hofmeister, the former president of Shell Oil and current head of Citizens for Affordable Energy. Without a significant investment in alternative energy sources, we're on a collision course with "blackouts, brownouts, gas lines, [and] rationing."
Hofmeister's math can be summed up in one graph, from the Center for American Progress, which shows projected oil consumption for the U.S., China and India. As China and India join the global middle class, global demand for oil will skyrocket past its 2008 levels, when a barrel cost $147.
Insatiable global demand for oil isn't the only thing that could push up prices. A coup in one of the many unstable oil-producing countries could produce a supply shock. A more likely culprit would be speculation. In 2008, investors with a glut of capital placed their money on commodity futures, driving up the price of oil. As the economy recovers, those investors might return to their old habit -- especially if inflation starts to pick up in the U.S. and investors look to oil as a hedge.
Any of these scenarios are enough keep economists awake at night. "If oil prices went back to the $140 dollar range, it would be a disaster," said Daniel Weiss a research fellow at CAP, "because oil spikes almost always produce economic recessions."
THE CASE FOR CALM
"I'm not too worried about oil crippling a comeback this year," said Christopher Steiner, author of $20 Per Gallon. "There are a lot of reasons why we shouldn't expect oil to go much over $100 per barrel."
First, he cited greater supply. OPEC is producing more oil and has healthier inventories than in 2008. Second, he cited lower demand. The United States, Europe and Japan are all importing significantly less oil than we did when prices passed $140 a barrel.
"In the next few years, if we're still recovering, and China and India join the global middle class, then eventually we'll probably hit $5 gas," Steiner said. "But overall, I think 2011 will be pretty boring on the oil market. The memories of 2008 are too fresh, and nobody wants a repeat."
That includes OPEC. Extreme oil prices are obviously bad for importers, but they're also bad for exporters. Oil producers like Saudi Arabia want oil expensive enough to mint healthy revenue, but cheap enough to keep the world's consumers from fleeing to alternative sources of energy.
"The Saudis believe their ideal price is $80 a barrel," Weiss said, "because that's the price point where they can make lots of money but not spur conservation efforts."
Weiss, an advocate for developing clean alternatives to oil, acknowledged that even if alternative technologies don't come on line in the next few years, the president has ways to fight an oil spike. For example, without congressional approval he could sell oil from the Strategic Petroleum Reserve, which is now at 100% capacity with 726 million barrels, to cushion the blow for families if oil prices spike.
WHAT SHOULD WE WANT
Oil blots our economic outlook. To get the export-driven recovery White House economists want, we need two ingredients: a weaker dollar to make our goods cheap and strong foreign consumers to buy our stuff. Ironically, a weak dollar and strong global demand would also conspire to make gasoline more expensive. In fact, if you wanted to design a scenario where oil prices would not budge, you'd probably wish for a strong dollar, a weak global economy, and a slow recovery in the U.S.
So what should we wish for?
Wish for a recovery, of course. Up to a third of the $147 price tag for 2008 oil came from investor speculation, according to one congressional report, and few people expect a sequel in 2011. With inflation weak, there's little reason for investors to pile onto oil commodities as a hedge. A strong global recovery will lift global wealth. It will enrich Americans, who will buy from Asia, which will enrich Asia, which will buy from America, and on it goes.
Oil probably won't kill the 2011 economy. But eventually, the world will have to find a way to satiate its relentless and growing appetite for energy that doesn't rely on a single scarce resource.
Source: http://www.theatlantic.com
Wednesday, January 05, 2011
GLOBAL MARKETS-Equity, oil and euro stumble on risk reappraisal
By Mike Dolan and Jeremy Gaunt
LONDON, Jan 5 (Reuters) - World equities, oil prices and the euro retreated from early new year highs on Wednesday, with underlying economic optimism reined in by wariness about lingering debt woes, possible data surprises and wildcard risks.
In a pattern investors say may well be repeated throughout 2011, a burst of new year investor optimism over the past week quickly fell prey to profit taking and correlation trading that automatically links moves in one security to the buying or selling of another.
Commodity price falls -- which some say were accelerated by a fall in the flood-hit Australian dollar and generalised U.S. dollar strength -- continued for a second day in a row. This, in turn, all put pressure on previously buoyant world equities.
Oil, which had only a few days ago looked to be heading to $100 a barrel again, fell back below $89 a barrel in London. [O/R]. Prices of both commodities and equities, however, remained around at multi-year highs.
World stocks as measured by MSCI .MIWD00000PUS were down 0.5 percent, though still within a few points of highs last seen in the third quarter of 2008.
Europe's FTSEurofirst 300 .FTEU3 was down 1.0 percent. Earlier, Japan's Nikkei .N225 closed down nearly 0.2 percent after hitting a 7-1/2 month closing high on Tuesday.
"There might just be an element of nerves creeping back into the market as investors return to their desks," said Keith Bowman, equity analyst at Hargreaves Lansdown.
NEW YEAR HANGOVER
A number of market moves were put down to investors adjusting positions after end-of-year balancing of portfolios.
Investors were also awaiting U.S. jobs data due on Friday for confirmation that the world's largest economy is recovering, a key factor in recent equity rallies. A early cut of the month's private-sector employment reading was due on Wednesday.
"Growth in the labour market is one of the biggest deciding factors for markets this year, that is why we are seeing investors a bit cautious ahead of the (jobs) numbers. If the job figures are good, we could see a push higher," said David Jones, market strategist at IG Index.
The ADP National employment survey for December, a precursor to Friday's non-farm payrolls report, was due at 1315 GMT while U.S. ISM non-manufacturing data was set for 1500 GMT. ECON
"There is some optimism with regards to the U.S. economy, but that is mixed with concerns over where Europe is going in the short- to medium-term. We are likely to remain very data sensitive," Bowman at Hargreaves Lansdown said.
Stocks related to commodities acted as the main drag on bourses. Anglo American (AAL.L), BHP Billiton (BLT.L), Kazakhmys (KAZ.L) and Rio Tinto (RIO.L) shed 1.5 percent to 3 percent.
Commodities were hit hard on Tuesday, with the Reuters-Jefferies CRB index .CRB closing nearly 1.6 percent down as energy, metals and agricultural investors took profits on the heady gains made on thin holiday volume over the past two weeks. [COM/WRAP]
The sell-off continued in some areas on Wednesday. Copper futures, for example, fell two percent in London. The Australian dollar AUD= was down about 0.5 percent.
European chemical shares were among the fallers, with the STOXX Europe 600 chemicals index .SX4P down 1.6 percent on concerns about a slowdown in world demand.
Chemicals market leader BASF (BASFn.DE) fell 3.3 percent, with traders pointing to profit taking following a strong run. The stock had gained almost 22 percent since early October.
FIRMER DOLLAR
The dollar took some of the blame for commodities' slide, holding firm on hopes for U.S. economic recovery. [FRX/]
Market players said the dollar's rise and the partly related drop in commodities this week have been driven by position unwinding.
"The move over the past two weeks was somewhat exaggerated, having taken place in thin liquidity. With liquidity now coming back on stream, the markets are now reassessing some of the moves," said Sue Trinh, strategist at RBC Capital Markets.
The dollar index, which measures the greenback's value against major currencies, rose 0.4 percent to 79.75. .DXY
The euro dipped 0.6 percent to $1.3212 EUR=, with traders nervy over the higher yields paid by Portugal at its latest Treasury bill auction on Wednesday and reports about European Union plans to insist in future on senior creditors accepting writedowns on the debt of ailing EU banks.
Core German government bond yields fell as demand grew for safer assets and peripheral euro government debt yields climbed after the Portuguese auction.
"On the face of it the auction met solid demand given the healthy cover ratio, though this obviously comes at a much higher yield than the previous six-month Portuguese offering last September," said Credit Agricole strategist Orlando Green.
Source: www.reuters.com
LONDON, Jan 5 (Reuters) - World equities, oil prices and the euro retreated from early new year highs on Wednesday, with underlying economic optimism reined in by wariness about lingering debt woes, possible data surprises and wildcard risks.
In a pattern investors say may well be repeated throughout 2011, a burst of new year investor optimism over the past week quickly fell prey to profit taking and correlation trading that automatically links moves in one security to the buying or selling of another.
Commodity price falls -- which some say were accelerated by a fall in the flood-hit Australian dollar and generalised U.S. dollar strength -- continued for a second day in a row. This, in turn, all put pressure on previously buoyant world equities.
Oil, which had only a few days ago looked to be heading to $100 a barrel again, fell back below $89 a barrel in London. [O/R]. Prices of both commodities and equities, however, remained around at multi-year highs.
World stocks as measured by MSCI .MIWD00000PUS were down 0.5 percent, though still within a few points of highs last seen in the third quarter of 2008.
Europe's FTSEurofirst 300 .FTEU3 was down 1.0 percent. Earlier, Japan's Nikkei .N225 closed down nearly 0.2 percent after hitting a 7-1/2 month closing high on Tuesday.
"There might just be an element of nerves creeping back into the market as investors return to their desks," said Keith Bowman, equity analyst at Hargreaves Lansdown.
NEW YEAR HANGOVER
A number of market moves were put down to investors adjusting positions after end-of-year balancing of portfolios.
Investors were also awaiting U.S. jobs data due on Friday for confirmation that the world's largest economy is recovering, a key factor in recent equity rallies. A early cut of the month's private-sector employment reading was due on Wednesday.
"Growth in the labour market is one of the biggest deciding factors for markets this year, that is why we are seeing investors a bit cautious ahead of the (jobs) numbers. If the job figures are good, we could see a push higher," said David Jones, market strategist at IG Index.
The ADP National employment survey for December, a precursor to Friday's non-farm payrolls report, was due at 1315 GMT while U.S. ISM non-manufacturing data was set for 1500 GMT. ECON
"There is some optimism with regards to the U.S. economy, but that is mixed with concerns over where Europe is going in the short- to medium-term. We are likely to remain very data sensitive," Bowman at Hargreaves Lansdown said.
Stocks related to commodities acted as the main drag on bourses. Anglo American (AAL.L), BHP Billiton (BLT.L), Kazakhmys (KAZ.L) and Rio Tinto (RIO.L) shed 1.5 percent to 3 percent.
Commodities were hit hard on Tuesday, with the Reuters-Jefferies CRB index .CRB closing nearly 1.6 percent down as energy, metals and agricultural investors took profits on the heady gains made on thin holiday volume over the past two weeks. [COM/WRAP]
The sell-off continued in some areas on Wednesday. Copper futures, for example, fell two percent in London. The Australian dollar AUD= was down about 0.5 percent.
European chemical shares were among the fallers, with the STOXX Europe 600 chemicals index .SX4P down 1.6 percent on concerns about a slowdown in world demand.
Chemicals market leader BASF (BASFn.DE) fell 3.3 percent, with traders pointing to profit taking following a strong run. The stock had gained almost 22 percent since early October.
FIRMER DOLLAR
The dollar took some of the blame for commodities' slide, holding firm on hopes for U.S. economic recovery. [FRX/]
Market players said the dollar's rise and the partly related drop in commodities this week have been driven by position unwinding.
"The move over the past two weeks was somewhat exaggerated, having taken place in thin liquidity. With liquidity now coming back on stream, the markets are now reassessing some of the moves," said Sue Trinh, strategist at RBC Capital Markets.
The dollar index, which measures the greenback's value against major currencies, rose 0.4 percent to 79.75. .DXY
The euro dipped 0.6 percent to $1.3212 EUR=, with traders nervy over the higher yields paid by Portugal at its latest Treasury bill auction on Wednesday and reports about European Union plans to insist in future on senior creditors accepting writedowns on the debt of ailing EU banks.
Core German government bond yields fell as demand grew for safer assets and peripheral euro government debt yields climbed after the Portuguese auction.
"On the face of it the auction met solid demand given the healthy cover ratio, though this obviously comes at a much higher yield than the previous six-month Portuguese offering last September," said Credit Agricole strategist Orlando Green.
Source: www.reuters.com
Tuesday, January 04, 2011
Green agenda sidetracked by global economic focus
For years, the bumper-sticker slogan of the environmental movement has been: "Think globally, act locally."
As 2011 dawns, the global perspective is increasingly lost in immediate concerns about the economy while local action seems stronger than ever.
Local issues including clean water and air, recycling and transit have become givens for generations of Canadians who came of age after activism went mainstream in the 1960s and '70s. In Canadian cities, no one puts up with visible polluters any more. Recycling is taken for granted, cloth shopping bags have elbowed aside plastic and bike clothes are the new chic in some circles.
But the momentum for action on climate change, the primary focus of international environmental action for the past 15 years, has stalled.
In the recent midterm elections in the United States, the environment was rarely on the radar. The issues were the economy, jobs, health care and security. One of the big losers was any prospect that the U.S. would be going ahead with a cap and trade system for controlling greenhouse gas emissions.
The legislation that would have instituted cap and trade was already stalled before the midterm elections over concerns that it could kill jobs and the incoming Republican tide will likely wash away any vestiges of enthusiasm for further action.
More than half of the incoming Republican legislators, who are changing the balance of power in Washington, are on the record as being skeptical about climate change science.
The Conservative government in Ottawa is taking its cues on the issue from Washington. Ministers argue that we'd be risking Canadian jobs if we take action to reduce emissions that makes us less competitive with the U.S.
The waning interest in concrete action on climate change isn't found only in North America.
The lack of progress in the latest round of UN-sponsored climate change negotiations in Cancun reflected the general lack of interest in the issue among nations that are struggling through the continuing economic slowdown.
In British Columbia, Premier Gordon Campbell has made the fight against climate change a centrepiece of his regime, often to the discomfort of many in his caucus and his supporters in the business community.
With Campbell's departure early in the new year, it's not clear whether the Liberal government will be as enthusiastic about pushing forward with initiatives that can be construed as adding costs to operating a business in B.C. Some of the candidates for his job have already called for a pause on both cap and trade and further increases in the carbon tax.
What will continue is the progress being made through the pursuit of energy efficiency, driven by U.S. concerns over strategic concerns as well as fear of sharply rising energy costs.
Over the past two decades, significant gains have been made by automakers in improving the efficiency of the vehicles they manufacture.
Plug-in electric cars, which could have a significant advantage in British Columbia -- where most of our electricity is generated from water power -- are expected to be players for the next few years, but even small advances in the fuel efficiency of more conventional vehicles translate into millions of litres saved and carbon dioxide that won't be released in to the atmosphere.
The new mood in Washington is expected to take some of the heat off the Alberta oilsands, which remain the single most visible environmental issue in Canada. The oilsands, called tarsands by their opponents, are the target of multiple campaigns by the well-funded and organized international environment movement. But they also have powerful proponents among Americans who view the oilsands as a friendly source in a world where much of the available energy is controlled by more hostile regimes.
The energy battleground in British Columbia will be the $5.5-billion Enbridge Northern Gateway Project, which calls for a pair of pipelines from Alberta to the deepwater port of Kitimat.
Environmentalists and many first nations oppose the project on several grounds: the potential of a breach in the pipeline, the risk of a tanker accident and general opposition to anything connected to the oilsands.
Our need for energy will also be at the centre of what will be a continuing battle over the proposed Site C dam on Peace River, as well as controversial run-of-river hydro projects.
The fight over fish farms will also continue to fester, with part of the focus on the Cohen Commission, which is looking into what was supposed to be the collapse of the sockeye stocks before the massive run this fall raised even more questions about what is really going on.
Source: http://communities.canada.com
As 2011 dawns, the global perspective is increasingly lost in immediate concerns about the economy while local action seems stronger than ever.
Local issues including clean water and air, recycling and transit have become givens for generations of Canadians who came of age after activism went mainstream in the 1960s and '70s. In Canadian cities, no one puts up with visible polluters any more. Recycling is taken for granted, cloth shopping bags have elbowed aside plastic and bike clothes are the new chic in some circles.
But the momentum for action on climate change, the primary focus of international environmental action for the past 15 years, has stalled.
In the recent midterm elections in the United States, the environment was rarely on the radar. The issues were the economy, jobs, health care and security. One of the big losers was any prospect that the U.S. would be going ahead with a cap and trade system for controlling greenhouse gas emissions.
The legislation that would have instituted cap and trade was already stalled before the midterm elections over concerns that it could kill jobs and the incoming Republican tide will likely wash away any vestiges of enthusiasm for further action.
More than half of the incoming Republican legislators, who are changing the balance of power in Washington, are on the record as being skeptical about climate change science.
The Conservative government in Ottawa is taking its cues on the issue from Washington. Ministers argue that we'd be risking Canadian jobs if we take action to reduce emissions that makes us less competitive with the U.S.
The waning interest in concrete action on climate change isn't found only in North America.
The lack of progress in the latest round of UN-sponsored climate change negotiations in Cancun reflected the general lack of interest in the issue among nations that are struggling through the continuing economic slowdown.
In British Columbia, Premier Gordon Campbell has made the fight against climate change a centrepiece of his regime, often to the discomfort of many in his caucus and his supporters in the business community.
With Campbell's departure early in the new year, it's not clear whether the Liberal government will be as enthusiastic about pushing forward with initiatives that can be construed as adding costs to operating a business in B.C. Some of the candidates for his job have already called for a pause on both cap and trade and further increases in the carbon tax.
What will continue is the progress being made through the pursuit of energy efficiency, driven by U.S. concerns over strategic concerns as well as fear of sharply rising energy costs.
Over the past two decades, significant gains have been made by automakers in improving the efficiency of the vehicles they manufacture.
Plug-in electric cars, which could have a significant advantage in British Columbia -- where most of our electricity is generated from water power -- are expected to be players for the next few years, but even small advances in the fuel efficiency of more conventional vehicles translate into millions of litres saved and carbon dioxide that won't be released in to the atmosphere.
The new mood in Washington is expected to take some of the heat off the Alberta oilsands, which remain the single most visible environmental issue in Canada. The oilsands, called tarsands by their opponents, are the target of multiple campaigns by the well-funded and organized international environment movement. But they also have powerful proponents among Americans who view the oilsands as a friendly source in a world where much of the available energy is controlled by more hostile regimes.
The energy battleground in British Columbia will be the $5.5-billion Enbridge Northern Gateway Project, which calls for a pair of pipelines from Alberta to the deepwater port of Kitimat.
Environmentalists and many first nations oppose the project on several grounds: the potential of a breach in the pipeline, the risk of a tanker accident and general opposition to anything connected to the oilsands.
Our need for energy will also be at the centre of what will be a continuing battle over the proposed Site C dam on Peace River, as well as controversial run-of-river hydro projects.
The fight over fish farms will also continue to fester, with part of the focus on the Cohen Commission, which is looking into what was supposed to be the collapse of the sockeye stocks before the massive run this fall raised even more questions about what is really going on.
Source: http://communities.canada.com
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