The Who song "Won't Be Fooled Again" ends with the lyric "meet the new boss...same as the old boss!" That lyric came back to mind as I read this Financial Timesarticle describing how the much-ballyhooed (by the Chinese, at least) China-Africa Development Fund is nothing but another exemplar of tied aid, with China replacing developed countries as the givers with strings attached. What else is new:
The much-trumpeted $5bn China-Africa Development Fund, portrayed by Beijing as economic assistance, will be used to invest exclusively in Chinese enterprises and their projects in the continent.
Such policy of “tying” aid to purchasing goods and services from the donor country has been attacked by development experts as wasteful and inefficient, and most donor governments have been abandoning the practice.
State-owned China Development Bank was due to launch the first $1bn phase of the fund on Tuesday for Chinese businesses whose “trade and economic activities have reached or will reach Africa”, as well as companies and projects in Africa in which Chinese enterprises have invested, according to the fund’s official mandate.
Investments will concentrate in companies and projects related to natural resources, as well as infrastructure, agriculture, manufacturing and industrial parks set up by Chinese companies in Africa, the bank said.
Tied aid has been a feature of European, American and Japanese assistance to poor nations for decades. But more recently they have been dropping such conditions, given the evidence that tying aid reduces its effectiveness by as much as a quarter.
Daniel Large, a researcher in China-Africa relations at the School of Oriental and African Studies in London, said: “This fund was announced as economic assistance with much fanfare last year but in fact it looks like more of the same and is very much anchored in China’s interests.”
Hu Jintao, the Chinese president, announced plans for the fund in November last year at a China-Africa Co-operation Summit in Beijing.
In most of its aid assistance to Africa, Beijing requires infrastructure construction and other contracts to be divided up, with 70 per cent going to “approved”, mostly state-owned, Chinese companies and the rest handed to local firms, many of which are also in joint ventures with Chinese groups...
Many aid groups and other large donors criticise Beijing for supporting unsavoury regimes in Sudan and elsewhere and say those policies are aimed solely at securing oil and mineral resources with little concern for environmental and social consequences...
CDB will manage the new fund on a semi-commercial basis by taking equity and quasi-equity stakes in Chinese firms doing business in Africa.
At a meeting of the African Development Bank in Shanghai last month, China said that it wanted to provide about $20bn in infrastructure and trade financing to Africa over the next three years.
The clip above of a 60 Minutes segment features Bangkok, Thailand's Bumrungrad Hospital, which claims to have the most international patients of any medical operation in the world (BTW, its last syllable is not pronounced like StalinGRAD or LeninGRAD; it's BumrungRAD as I managed to confuse my Thai friend by pronouncing it wrongly). As you will see from the clip, it is furnished as grandly as any luxury hotel. Indeed, it is a very $eriou$ operation; you can even use your Thai Airways frequent flier miles toward paying for your medical expenses there. Fortunately, the medical care appears to be of a high international standard as well. If you're into click-and-watch, there's another clip by Focus Asia on Bumrungrad.
I recently became interested in medical tourism as a spate of recent articles have mentioned it. In particular, the publication of Josef Woodman's recent book entitled Patients Beyond Borders: Everyone's Guide to Affordable, World-Class Medical Tourism has attracted significant press coverage to the growing prominence of the medical outsourcing trade--especially in light of the ongoing debate over unaffordable and sometimes ineffective health care in the US. First up is this article by Arthur Frommer of the well-known Frommer's travel guides:
For a travel writer, there is no surer way to attract a barrage of hate mail than to suggest foreign travel for the purpose of obtaining medical or dental treatment. Immediately, dozens of U.S. doctors and dentists accuse you of putting people's lives at risk, since only U.S. doctors and dentists are able to safely treat us. And U.S. medical and dental treatments, as we all know, are the absolute best.
If the United States had universal medical and dental insurance, and every American was able to afford treatment here at home, I would not be disposed to argue the matter. But more than 40 million Americans are without such insurance and are unable to afford many elective treatments here at home.
The proposed remedy will, therefore, not go away. Outside the United States are medical facilities and myriads of doctors and dentists willing to charge modest sums within the financial reach of nearly everyone. And more and more observers are claiming such care to be impressive and safe, the frequent equivalent of what many wealthier or insured Americans are able to obtain at home...
Let's assume that the arguments for medical tourism or dental tourism — namely, going overseas to obtain such treatment — aren't completely established. Let's assume that an operation costing a fraction of what you'd spend in the U.S. is not always guaranteed to be the equivalent of what you'd obtain at home. What do you say to the American who can't afford such treatment at home? What do you say to the person who is able to afford medical or dental treatments only if he or she can go overseas to obtain them? Do you advise such Americans simply to pass them up and do nothing about their health?
In Patients Beyond Borders, Woodman claims that the quality of the foreign facilities he describes is impressively high. He makes that claim for, among others, several leading hospitals in Bangkok and Phuket, Thailand (cardiovascular treatments, orthopedics and ophthalmology, neurology, dental care and oncology); for hospitals in Cape Town and Mossel Bay, South Africa (including the famous Christiaan Barnard Hospital, which is noted for heart- and kidney-transplant surgeries); for several highly accredited clinics in Singapore; for hospitals and clinics of every sort in Mumbai, Bangalore and Chennai, India; for low-cost dentistry in Budapest and northwest Hungary (where thousands of residents of Vienna go each year for their dental work); for cosmetic and dental care in Prague; for cosmetic surgery in Brazil (including the clinic and institute of Ivo Pitanguy, the world's most renowned plastic surgeon); for the addiction recovery and fertility clinics of Antigua and Barbados. These facilities are discussed in detail, as are the methods of traveling and staying there, the anticipated costs and the accreditation they possess.
Medical and dental tourism are obviously part of an increasing globalization of life. Just as numerous high-quality commercial and manufacturing processes are now found overseas, it is becoming fairly obvious that the medical and dental professions of numerous foreign countries also are gaining fame. They also are gaining American patients who travel there for affordable treatment.
Joshua Kurlantzick of the New York Times also vouches for the quality of medical treatment at Bumrungrad while deriding the "care" he found back home. From a political economy perspective, he also notes that medical tourism may be sucking away health care professionals in the developing world from providing care to ordinary citizens. Eventually, a shortage of medical care provision for locals may trigger a backlash against these medical tourism operations:
...my Bumrungrad doctor, trained in America, immediately put me at ease. Surrounded by a gaggle of nurses ready to care for my every complaint at any time of day, the doctor informed me, ''We're pretty sure you have dengue fever,'' referring to a dangerous tropical disease also known as breakbone fever. My temperature had topped 104, but the doctor quickly determined I did not have dengue hemorrhagic fever, the worst strain of the disease. While I rested in a spotless room, he designed a program for my recovery, recommended a week of convalescence, and prescribed an array of medication for the searing joint pain. When I visited Bumrungrad's cashier, passing the hospital's high-end restaurants and plush waiting rooms along the way, an assistant handed me the bill. For admittance to the emergency room, a consultation, a room and bags of medications, the total cost came to less than $100.
My unscheduled visit to Bumrungrad taught me an old lesson -- and a new one. For decades, Americans have known they could obtain cheaper health care abroad, and have slipped off to Mexico for small surgeries or Canada for prescription drugs. But more and more people now recognize foreign hospitals can deliver not only cheap but also high-quality health care, and are considering medical tourism even for serious health problems. When I returned to the United States, in fact, I found myself longing for Bumrungrad. On a follow-up visit to an American doctor, I waited in a small room after telling him about my dengue fever diagnosis. After a while, when he hadn't returned, I poked my head into the hall, and discovered him thumbing through a book to find information about dengue fever...
But just as American travelers begin getting comfortable with the safety of foreign hospitals, they face a new question. With developing world hospitals focusing on medical tourists, some may take doctors away from understaffed public clinics in nations like India and Thailand, potentially leading to a public backlash against medical visitors. Already, the press in Thailand and India has warned that medical tourism, which can be more lucrative for physicians, is sucking doctors away from public clinics.
Only days after my luxury dengue treatment at Bumrungrad, I saw this other side. At a larger Thai hospital where I'd walked in after feeling my fever spiking, I sat on a hard bench in the middle of a waiting room littered with cigarette butts and empty plastic bottles. For over an hour, no one called me. When a nurse finally approached me, she warned there wouldn't be any doctors around for hours, and then turned and walked away. I got up and took a cab to Bumrungrad.
The Economist notes the development potential inherent in medical tourism. Also, a backlash from medical professionals in the developed world may emerge should medical tourism eat more into their share of the business:
America's soaring health-care costs, already $2 trillion a year, are predicted to double in the coming decade. Dissatisfaction with the rocketing price of care will only get worse as demanding and health-conscious “baby-boomers” hit retirement and start to suffer the costly ailments of old age. In countries like Britain and Canada, with supposedly universal coverage, state spending is not keeping up with growing demand, so patients face long and agonising waits for operations. And in the prosperous bits of Asia and the Middle East growing numbers of people are rich enough to demand high-quality medical care that they cannot get locally.
All this presents a fantastic business opportunity for those Asian countries, principally Thailand, Singapore and India, which have excellent private hospitals that are used to treating foreigners and where costs are a fraction of those in rich countries. “Medical tourism” is booming as patients look abroad for cheap, fast treatment, often combined with a holiday afterwards. Josef Woodman, the author of “Patients Beyond Borders”, a new guide for those seeking surgery abroad, reckons that 150,000 Americans did so last year, and predicts the numbers will double this year.
Booming demand is encouraging rapid expansion at big stockmarket-listed hospital operators such as Thailand's Bumrungrad and Bangkok Dusit, Singapore's Parkway and Pacific Healthcare and India's Apollo Hospitals. This week Pacific Healthcare said it would build seven medical centres across Asia. Bumrungrad, which treated 430,000 non-Thais last year, has just expanded its Bangkok hospital and is setting up in the Philippines and Dubai...
But the Asian hospital operators are now courting American health insurers and employers desperate to rein in soaring costs. Bumrungrad's marketing chief, Ruben Toral, who was in America this week for talks with insurers and big employers, says they were very keen. BlueCross BlueShield of South Carolina already offers Bumrungrad's cut-price treatments to members whose policies do not cover the surgery they need.
To reassure foreign patients, many hospitals are seeking accreditation from the Joint Commission International (JCI), the international arm of the body that accredits American hospitals. Thailand's Bumrungrad and nine Singaporean hospitals already have JCI certificates. Raymond Chong, the boss of Bangkok Dusit's Samitivej Hospital, reckons it will be only a year or two before big American insurers and employers routinely offer patients lower premiums if they are prepared to travel to a foreign JCI-accredited hospital for surgery.
For patients, employers and insurers the benefits are clear. But the hospital operators are bracing themselves for a backlash from the rich countries' medical vested interests whose jobs are, in effect, being outsourced. Expect much shroud-waving from doctors' associations and health-care unions as they highlight the few cases of foreign surgery that go wrong—as though such a thing never happens back home.
Finally, the FT too has another nice backgrounder, along with some advice on minimizing the chances of things going wrong should you want to give medical tourism a go:
Enter countries such as India, Thailand, Mexico, Costa Rica, Malaysia and Singapore that cater to the maladies of well-heeled foreigners. In fact about 150,000 Americans a year leave the US to have medical work done and the industry is growing by about 15-20 per cent annually. The quality of care in top hospitals is said to beat most American hospitals, while providing savings of 30-80 per cent. In fact, in 10-15 years, “the best offshore hospitals will routinely be included in networks offered to insured Americans”, predicts Arnold Milstein, chief physician for the consulting firm Mercer Health & Benefits.
Not that medical tourism is a worry-free venture. From the training of foreign doctors and the conditions of far-flung facilities, to the legal limbo should something go awry, to the wisdom of getting on long-haul flights after major surgery, there are troubling questions to consider. But when patients are facing a major operation – a hip replacement, say, that could cost anywhere from $55,000-$85,000 stateside – it seems that more Americans are proving able to get beyond their doubts.
“Many people just can’t afford the procedures here in the US and the value overseas is so much greater,” says Patrick Marsek, managing director of Chicago-based group MedRetreat, which is facilitating 650 overseas surgeries for clients this year. While historically most Americans have gone abroad for dental or cosmetic work, he says, it is now extending to other areas – hip and knee replacements, heart surgery and hysterectomies.
Indeed, there is now a cottage industry growing up around medical tourism, led by companies such as MedRetreat and Planet Hospital. Not just in the US, but in countries with creaky national health systems such as the UK, where lengthy waiting lists for non-emergency surgery have spurred many to look abroad. “Now you can buy a travel package where they’ll literally handle everything for you,” says David Hancock, author of the newly published guide The Complete Medical Tourist. “They pick you up at your front door, take you to the airport, fly you in and accompany you to all clinical visits and operations. Then you’re off to a five-star hotel to recuperate for two weeks, before flying you back and getting a private car back home. And it all comes in at half of what it would be at a private hospital in the UK...”
So why isn’t everyone jetting off for a few dental crowns or a tummy tuck? For one, heading abroad will put you in a hazy legal zone should anything go wrong. Where a botched surgery might lead to a multi-million-dollar settlement in the US, malpractice awards abroad tend to be capped at a much smaller amount – never mind the potential nightmare of navigating through a foreign legal system.
To avoid ham-handed foreign surgeons, remember that all venues are not created equal. If a hospital has only done 50 relevant surgeries and cannot produce success rates or dossiers on their top surgeons – who have ideally been board-certified in the US or Europe, before returning to their home countries – steer clear.
To do medical tourism right, there are a few key steps to take. Whether you are on your own or working with a healthcare planner such as MedRetreat, look for hospitals accredited by the nonprofit Joint Commission International, and those affiliated with top American institutions.
As your search narrows, do your due diligence and find out how many surgeries your target hospital has performed, and what the documented success rates are. To wit: Wockhardt Hospital in India, which caters to foreigners, has a success rate of 98.4 per cent after 15,000 cardiovascular surgeries, which compares favourably with any US hospital and means “you won’t be coming back with a scalpel in your belly”, Woodman says.
With that in mind, here is the list of Joint Commission International (JCI) accredited organizations worldwide. Plus, here is a sample of national medical providers that have banded together to promote their services from India, Singapore, and the Philippines. The three main political economy questions, as I see it so far, are these:
Will the quality of medical services for local residents diminish as more health care professionals serve the medical tourism trade?
Will there be a backlash among developed-world health care professionals as more medical tourists go abroad in search of treatment?
Can medical tourism promote development?
On the last point there is an interesting book forthcoming concerning Medical Tourism in Developing Countries that looks quite interesting. It is more of an academic work though in contrast to the how-to emphasis of the Woodman book. Here's its description:
Western patients are increasingly traveling to developing countries for health care and developing countries are increasingly offering their skills and facilities to paying foreign customers. This international trade in medical services has huge economic potential for developing countries and serious implications for health care across the globe. The potential is explored in this book through analysis of the market for medical tourism and identification of its link to economic growth. The authors propose that medical tourism is not a universally feasible growth strategy. Instead, it is successful only in countries with economic and political advantages that enable them to navigate around international and domestic obstacles to trade in medical services. It is also suggested that a successful medical tourism industry, when coupled with cooperation between the private and public sectors, may lead to public health improvements in developing countries.
Dear readers, rest assured that I do not read USA Today on a regular basis, but this feature caught my eye. Its basic thesis is this: globalization has forced down salaries in the private sector, therefore you're better off joining the federal sector where salaries are less affected by the forces of globalization AND the pay is better on the average. Obviously, it's welcome news for this political science major. By the way, for a counterblast to the typical abuse hurled at public sector work like what the Heritage Foundation regurgitates below, read Charles Goodsell's The Case for Bureaucracy: A Public Administration Polemic. That's its title, I'm not kidding. It's an eye-opening book that makes you question the neoliberal conventional wisdom that has made prejudice against government workers an acceptable form of discrimination. Anyway, to the article:
Sometimes the easiest way to find a job that pays well is to ask a wealthy relative to hire you.
For many, that relative is Uncle Sam.
Federal workers, on average, are paid almost 50% more than employees in the private sector, an Asbury Park Press analysis of salary data shows.
The average federal worker made $59,864 in 2005, compared with the average salary of $40,505 in the private sector, according to the latest data from the U.S. Bureau of Labor Statistics.
And that pay gap appears to have widened in the first nine months of 2006.
The gap may be driven by increased competition in the private sector, where globalization and technological advances have held salaries down. Meanwhile, the federal workforce has no harsh business realities to face, said James Sherk, a labor policy analyst at the conservative Heritage Foundation in Washington [oh, that big, bad, unaccountable and bloated bureaucracy!]
"The government doesn't have to worry about going bankrupt, and there isn't much competition," Sherk said...
Private industry managers do make more than their federal counterparts in most cases. This is because a cap is imposed on many federal jobs based on the president's $400,000 a year salary. For example, the U.S. Attorney for New Jersey is in charge of all federal law enforcement in the state, but he was paid $145,400 last year. A top job in a law firm pays several times that salary.
Experts say federal workers earn more on average than private-sector workers because federal workers typically have more education, they are often unionized and they remain in their jobs longer. Federal workers usually stay longer because of good health benefits, job security and high pay.
Harvard University's John Donahue said federal jobs have become the preferred career choice for many workers as manufacturing and other jobs have disappeared.
"You have a lot of people sheltering in government from an inhospitable private economy," Donahue said [ditto].
The union that represents 600,000 federal workers cites other reports that contend federal workers are underpaid by about 18% nationally when salaries are adjusted for education and job longevity.
But even if federal workers are paid more, the American Federation of Government Employees said that shouldn't be an issue.
"We do not apologize for the fact that the federal government makes sure its lowest paid employees, who work full time year-round, don't live in poverty," said Jacqueline Simon, AFGE's public policy director. "The federal government is a model employer, as it should be..."
"We have two parallel economies: One is hyper-capitalism, and one is from the Eisenhower administration, a 'Leave-It-To-Beaver' world," said Donahue, author of the forthcoming book, The Warping of Government Work.
"The basic story is that government pays everybody the same, no matter their level of productivity," Donahue said. "But the private sector pays people differently. So the government employment becomes a safe harbor from a stormy private economy. It is a backwater. (Yet) government doesn't have the winner-take-all rules that the private sector has adopted."
♠ Posted by Emmanuel in China,Environment
at 6/25/2007 12:00:00 AM
MarketWatch recently featured an interesting article on American firms capitalizing on China's need for green technologies to reduce its environmental woes. For example, given China's dependence on coal as a power source, coal gasification may enable it to lessen emissions. There are a host of other technologies though that may help China in improving its environment. As you probably know by now, China is already the world's largest greenhouse gas emitter, or will become so this year:
Just a year before thousands of athletes and tourists descend on Beijing for the 2008 Summer Olympics, China's government recently vowed to crack down on its air pollution.
In the next three years, China aims to cut harmful sulfur dioxide emissions by 10% from their 2005 levels and rein in the heavy industrial activities that have made its cities among the smoggiest in the world.
A push to clean up its cities' notoriously grimy air -- combined with huge and growing electricity needs -- spells opportunity for the handful of international companies that make pollution control systems for the power industry.
Niche player Fuel Tech, Inc., global engineering firms Foster Wheeler Ltd. and McDermott International Inc. unit Babcock & Wilcox Co., and industrial behemoths like General Electric Co. and ABB Ltd. are all positioning themselves to sell more low-emissions electric generation parts to China.
"If you're in the air pollution control business, you go to where the need is," said John Norris, chief executive of Fuel Tech, a Batavia, Ill. company makes products to reduce plants' nitrogen oxide emissions.
"The two biggest-fossil burning entities in the world are China and the United States," he said in a recent interview.
Some 23% of Fuel Tech's $75 million in revenues last year came from international customers, with China the largest contributor. In January, it won two contracts to supply Chinese coal-fired power plants with its nitrogen oxide reduction equipment.
Norris is hopeful the government's labeling of plants using Fuel Tech gear as demonstration projects will lead to more deals. "We've got a lot of bids in there," he said.
At the other end of the spectrum, $163 billion-revenue General Electric is selling China Jenbacher engines that capture methane gas from coal mining, gas turbines that reduce nitrogen oxides, and gasification systems. The Fairfield, Conn. conglomerate is also partnering with a Chinese university to research cleaner coal generation.
"What intrigues me is going right to China and India with these technologies," said Jeff Immelt, CEO of General Electric, at a conference last month to promote the company's success selling $12 billion last year in environmentally friendly products, from cleaning systems for coal-fired boilers to wind turbines...
China's energy demand grew by a staggering 8% in 2006, nearly four times the 2.4% annual rate for the rest of the world, according to the 2007 edition of BP's Statistical Review of World Energy.
Due to its vast reserves, coal is the obvious choice for running its power plants. The country is now the world's leading coal producer, which accounts for 61% of its power generation.
"When you look at India, China, Russia -- coal is the energy source that they indigenously have, and they will use it," Steve Leer, chief executive of U.S. coal producer Arch Coal, Inc. said at an investment bank conference last week.
China is rapidly adding to its fleet of generators. Every week, the country builds the equivalent of two 500 megawatt coal-fired power plants, estimates the Massachusetts Institute of Technology. By 2030, China's coal-fired electricity generation will more than triple, say Lazard and International Energy Agency estimates. All that coal comes with a price.
Here are some of the technologies mentioned in the article sold by General Electric (GE): the Jenbacher Coal Mine Gas Engine which uses methane from coal mining operations as an energy source, the Dry Low NOx (DLN) 1+ combustion system which reduces nitrogen oxide emissions, and the Gasification Combined Cycle system which claims to reduce conventional pollutants by nearly 50%. GE now claims that its business strategy focused on green technologies called "Ecomagination" is beginning to reap tangible payoffs:
The Fairfield, Conn., conglomerate says it's already reaping benefits from a two-year push into energy-efficient equipment and technology. It reeled in $12 billion in sales last year of what it calls its "ecomagination" products, which include wind turbines, super-efficient jet engines and long-lasting lightbulbs.
"Green is green," GE Chief Executive Jeff Immelt told an audience in Los Angeles. "This is about a hard-nosed business initiative," not a soft touch to mollify critics chiding the company for its environmental policies, he added.
Faster-growing units, such as GE's energy-infrastructure practice, are hiring thousands of engineers and rolling out hundreds of new products, including the recent debut of a hybrid freight-train locomotive. Power-hungry China and India beckon.
"I think this stuff has real potential, and they're off to a good start, and that's why we continue to own the stock," said Mike McGarr, a portfolio manager and analyst for Becker Capital Management in Portland, Ore., which owns 900,000 shares of General Electric.
Selling China green technologies kills two birds with one stone. Doing so helps reduce America's trade deficit with China and China's considerable environmental problems. Becoming more energy-efficient per dollar of GDP is a goal that should be targeted not only by China but the rest of the world as well.
♠ Posted by Emmanuel in Europe
at 6/24/2007 02:30:00 AM
I had a lot of doubts about Angela Merkel becoming Germany's Chancellor, but pretty much all of them have been dispelled by this extremely able woman. Successfully hosting the World Cup, boosting Germany's economic performance, gaining consensus on climate change among G-8 members, and now reviving the DOA-MIA EU Constitution are now part of her impressive resume. Although repackaging the EU Constitution so that it didn't face the same challenges of obtaining successful referendums in member states by going down the ratification route through calling it a "Treaty" instead sounds easy, consider what she had to put up with. Those flowers from Barroso are well-deserved, indeed. First, Poland's ruling Kaczynski twins (no relation to Ted, I hope) threatened to veto any deal that didn't use a square root formula for weighing EU votes:
Poland's twin leaders Lech and Jaroslaw Kaczynski have a mathematical war cry as they try to impose their views on how a new EU governing treaty should allocate voting clout to member states: "Square Root or Death!"
The slogan is at odds with diplomatic-speak, but sums up Warsaw's uncompromising stance within the 27-nation European Union ahead of the bloc's crucial June 21-22 summit.
Jaroslaw Kaczynski, the prime minister, has said that Poland is "willing to die" to push through the changes it wants to the way EU members' voting powers are calculated, and that there will be "no horse-trading" on the issue.
Germany, which holds the rotating EU presidency until the end of this month, released a report Thursday for the summit on efforts on a new treaty to reform the bloc's institutions after French and Dutch voters spiked efforts to adopt a constitution two years ago.
The report did not mention Poland's demands, angering Warsaw, which fears losing its punch in decisions affecting the whole EU.
In a rather tasteless non-sequitur, the Kaczynskis raised the matter of Poland being ravaged by Germany in World War II as a reason why Poland's population didn't compare favorably to that of Germany:
In arguing for Poland to receive more voting influence in a reworked EU treaty, Prime Minister Jaroslaw Kaczynski has said his own reform plan takes the number of Poles killed in World War Two into account.
The prime minister told Polish state-run radio on Tuesday that his own plan for EU voting reform, which would give the Polish vote more weight than the plan endorsed by Germany, is based on the population that the country would have today had not over six million Poles been killed in the six years of World War Two.
The remarks were confirmed by the broadcaster on Thursday.
"We're only demanding that which was taken from us," Kaczynski said afterwards in an interview. "If Poland had not experienced the years between 1939 and 1945, it would today be a country of 66 million if you look at the demographic data."
During World War Two, which began when Nazi Germany invaded Poland in September 1939, around 6.5 million Poles died, including three million Polish Jews. That was about one-fourth of the pre-war population.
Today, Poland's population is just under 38 million.
Then, the supposedly pro-business Nicolas Sarkozy tried to pull a fast one by removing provisions regarding competition that could have enabled more French "national champions," though the Times took it as mere pandering on Sarko's end [sneer, jeer, boo]:
President Sarkozy’s sleight of hand in removing one of the European Union’s key objectives almost slipped through the final meeting of the 27 nations’ top diplomats preparing for the Brussels summit...
The failed EU constitution proposed that the EU shall have “an internal market where competition is free and undistorted”. The phrase was included to make free competition one of the objectives of the EU, upgrading its status from the Treaty of Rome, where it features as a sub-clause.
Minutes from Tuesday’s meeting seen by The Times show that, near the mid-point of the discussions, the Hungarians drew attention to the redrafted statement. It included commitment to the internal market but omitted the phrase “where competition is free and undistorted”.
The Hungarian questioned whether this would affect EU competition policy – a huge area of European Commission activity combating cartels and illegal state aid that could distort fair trade...
Mr Barroso explained to Mr Sarkozy yesterday that the status quo – the position of the Treaty of Rome – would have to be bolstered with a protocol to the new treaty. The pair sat together over lunch until late into the afternoon. Mr Sarkozy, who had discussed the matter with Tony Blair earlier, agreed to the compromise, although not before the French media had acclaimed a successful feat of summitry at his first European Council.
The episode is revealing about the summit debutant Mr Sarkozy and his economic doctrine, “Sarkonomics”. Compared with previous French presidents, he is a business-friendly reformer. But he has never hidden his traditional French belief that trade is too serious to be left to mere markets – or the European Union.
Mr Sarkozy won the election in May with promises to shield France from what the country sees as the hostile force of globalised trade. Like Britain, he also needs the treaty to be sufficiently different from the failed constitution to avoid holding a referendum.
For more than a decade, supposedly unfair competition from low-cost nations inside and beyond Europe has been blamed as the underlying cause of France’s domestic ills.
The first line of defence must be the European Union, but Mr Sarkozy insists that it is failing. He earned credit in the campaign with his argument that the union is acting like an innocent among predators when it aspires to scrap all internal and external barriers to trade. He has ensured the ire of Brussels – and Britain – with his demand that the EU must impose tariffs on “unfair” imports.
Mr Sarkozy’s chief villains are the United States and the emerging world giants led by China. He has waged a campaign against the EU Commission and Peter Mandelson, its British trade chief, for feebleness in the face of US pressure on farm subsidies and protection of its entertainment industry. He accuses China of forcing down its currency to flood Europe with its goods while the European Central Bank turns a blind eye to the “overvalued” euro. Never one to beat about the bush, Mr Sarkozy has repeatedly called for Mr Mandelson to be stripped of the job of negotiating trade for Europe.
Mr Sarkozy hardened his interventionist views with the French “non” in the referendum on the European constitution in 2005. Voters in France and the Netherlands rebelled because Europe was failing to protect them from the harsh winds of globalisation, he and the rest of the political world concurred.
On the night of his May 6 election victory, Mr Sarkozy sent a message to European leaders: “Do not remain deaf to the anger of the people who view the European Union not as a protection, but as the Trojan Horse for all the threats that are contained in the transformations of the world,” he said.
Sarkonomics mixes state intervention with a supply-side desire to lighten regulation. For example, he supports government promotion of “national champions” in industry while also pushing for further privatisation of state companies such as Areva, the nuclear energy giant. “In some economic sectors, the market isn’t the be-all and end-all,” Sarkozy said in a TV interview in March. “The market sees short term.”
Even incoming UK Prime Minister Gordon Brown had to tell current PM Tony Blair to reconsider Sarkozy's tomfoolery:
Gordon Brown dramatically intervened in a crucial European summit yesterday to overrule the prime minister in his last week in office and demand that Britain challenge a French move to dilute Europe's commitment to a free market.
Nicolas Sarkozy, the French president, triggered a row at the Brussels meeting by watering down a pledge to maintain "free and undistorted competition" in the operation of the single European market.
Mr Brown, who was not attending the summit, intervened with Tony Blair after the prime minister assented to the French demand. He phoned Mr Blair three times in Brussels as he digested the potential impact of the Sarkozy coup. A chastened prime minister was forced to go back to the negotiating table to demand a new "protocol" to guarantee that the EU's powers to regulate cartels and anti-trust issues were not impaired.
In summary, here are the provisions of the deal, which now requires ratification by member states, hopefully bypassing any more referendum shenanigans...
— Permanent President A powerful new post to chair European Council meetings, held for two-and-a-half years and renewable for an extra term. Tony Blair has denied he wants to be first. Status agreed
— Smaller European Commission Ends the practice of every member state having commissioner. Instead two thirds (18) will hold top jobs in Europe. Designed to streamline EU. Status agreed.
— Amending previous treaties Idea of a constitution dropped, along with references to EU flag and anthem, to stop the treaty looking like the basis of a European superstate. Instead, the reform treaty will update previous European agreements, not replace them. Status agreed
— Single legal personality The constitution carried a formal statement that would give the EU treaty-signing powers but it was objected to by several countries including Britain as giving the appearance of too much power. Status dropped
— EU Foreign Minister A single figure to represent the EU internationally, combining the role of the current High Representative and the Foreign Affairs Commissioner. Britain wanted limits on powers to ensure that job would not conflict with national foreign ministers – and never threaten Britain’s seat on UN Security Council. Status agreed after Britain retreated
— Common Foreign and Security Policy The EU constitution proposed shifting the decision-making basis for common foreign and security policy, which would threaten the British veto. Britain and others wanted guarantees in the new treaty that policy would still be decided intergovernmentally, preserving the veto. Status British position agreed
— Tax and benefits One of Britain’s “red lines” was to retain a veto over anything that would influence the tax or benefits system. Status easy to meet because there were no serious proposals for harmonising welfare systems
— European Parliament A limit of 96 on the number of MEPs for large countries, meaning that Germany will lose three MEPs, and on the minimum number of MEPs for small countries of six. Status agreed
♠ Posted by Emmanuel in China,Trade
at 6/24/2007 02:15:00 AM
China now makes almost every possible manufactured article possible as the workshop to the world. Now, Chinese officials seem bent on promoting service offshoring as the next step in the country's remarkable development story. Recently, I featured a consultancy firm's note that mentioned India's lead in acquiring financial services offshoring activity. Sure enough, the Chinese are arguably doing the right thing in joining forces with Indian business process outsourcing (BPO) powerhouse Tata Consulting. The main barrier to the China doing well in this area is its relative lack of fluent English speakers compared to India and the Philippines, though this situation may change quickly. [NOTE: Although the terms outsourcing and offshoring are sometimes used interchangeably, I have a slightly different interpretation of them. Outsourcing means contracting things previously done in-house to another firm--it can be done by another firm in the same country or another one. Offshoring, however, means having these tasks done in another country; that is, these tasks may still be done by the same firm, but in a different location.] Here is the article from the China Daily:
The government is to roll out a slew of incentives, including tax rebates and credit support, to boost the nation's services outsourcing industry, a senior official from the Ministry of Commerce said.
"The commerce ministry will work with related government departments such as the Ministry of Finance and the State Administration of Taxation to launch more favorable policies for the services outsourcing industry," Shan Qingjiang, deputy director of the ministry's department of trade in services, said.
Shan was speaking yesterday at the China International Software and Information Services Summit, a major annual event for the industry.
Ron Machan, chairman and chief executive of BearingPoint Management Consulting Greater China, said: "Government support is indispensable for China to boost the growth of the sector and build itself into a top outsourcing destination."
Already a manufacturing powerhouse, China has been making efforts to boost its services outsourcing sector over recent years in a bid to move up the value chain and boost innovation in the IT sector.
Its offshore outsourcing revenue grew more than 40 percent in 2006 to $1.4 billion, but that still accounts for just 2 percent of the global market.
According to Shan, the government will further encourage multinational companies to set up services outsourcing operations in the nation. They are also welcome to set up joint ventures with Chinese counterparts.
"We will first promote some key regions such as the Yangtze and Pearl river deltas," Shan said. [As an aside, why not move these activities inland to promote development there and lessen regional inequality? Information services don't need to be loaded onto ships.]
"Local governments will be encouraged to support major outsourcing companies in those regions."
The Ministry of Commerce launched a pilot project last year to develop 11 bases, including Beijing, Shanghai and Dalian, for services outsourcing across the country. These are expected to attract 100 multinational corporations to transfer part of their outsourcing businesses to China, and create 1,000 large-scale international services outsourcing companies.
Outsourcing companies from around the world have been expanding aggressively in China in recent years, in a bid to tap into its low-cost talent pool and take a slice of the booming IT services market. HP, one of the world's largest IT firms, currently has some 2,700 engineers in China.
Tata Consultancy Services, one of India's most powerful IT outfits, established a new outsourcing joint venture in Beijing with Microsoft and three Chinese partners in February. It expects to increase its headcount in China tenfold to 5,000 by 2010, making it one of the largest players in the country.
♠ Posted by Emmanuel in Africa,Migration
at 6/24/2007 01:57:00 AM
The New York Times has a wealth of recent stories on migration in Africa. First up is a feature by ace immigration reporter Jason DeParle on how all aspects of global migration can be found on the small island nation of Cape Verde:
Virtually every aspect of global migration can be seen in this tiny West African nation, where the number of people who have left approaches the number who remain and almost everyone has a close relative in Europe or America.
Migrant money buoys the economy. Migrant votes sway politics. Migrant departures split parents from children, and the most famous song by the most famous Cape Verdean venerates the national emotion, “Sodade,” or longing. Lofty talk of opportunity abroad mixes at cafe tables here with accounts of false documents and sham marriages.
The intensity of the national experience makes this barren archipelago the Galapagos of migration, a microcosm of the forces straining American politics and remaking societies across the globe.
An estimated 200 million people live outside the country of their birth, and they help support a swath of the developing world as big if not bigger. Migrants sent home about $300 billion last year — nearly three times the world’s foreign aid budgets combined. Those sums are building houses, educating children and seeding small businesses, and they have made migration central to discussions about how to help the global poor. A leading academic text calls this the “Age of Migration.”
But it is also the age of migration alarm, as European ships patrol African coasts to intercept human smugglers and new fences are planned along the Rio Grande. Countries that want migrant muscle and brains also want more border control. Many of them see illegal migrants as a security threat, especially in a terrorist age, and worry that large-scale migration, even when legal, can undercut wages, require costly services and subject national identities to bonfires of religious and cultural conflict.
Yet Holland — the Netherlands — now requires would-be migrants to pass a test on Dutch language and culture. Other countries have raised the cost of visa applications, discouraged applicants by requiring them to travel to the Cape Verdean capital, Praia, and placed new penalties on employers who hire illegal immigrants. While the Netherlands has long been a favorite destination for residents of this island, a Cape Verdean song now warns that “Holland belongs to the Dutch.”
Also of interest is an accompanying interactive map that graphically provides a snapshot of global migration. It consists of the (1) net flow of migrants; (2) share of total migrants; (3) share of local population; (4) money sent home by migrants through remittances; and (5) money sent home as a percentage of GDP. It is well worth viewing. Lastly, I recently featured a Foreign Policy article that described Zimbabwe as having one of the world's worst currencies with an inflation rate of 3,714% and rising. The terrible economic situation there has made several Zimbabweans flee to South Africa, which has proven to be less than welcoming:
As Zimbabwe’s disintegration gathers potentially unstoppable momentum, a swelling tide of migrants is moving into neighboring South Africa, driven into exile by oppression, unemployment and inflation so relentless that many goods now double in price weekly.
South Africa is deporting an average of 3,900 illegal Zimbabwean migrants every week, the International Organization for Migration says. That is up more than 40 percent from the second half of 2006, and six times the number South African officials said they were expelling in late 2003.
And that reflects only those who are captured. Many more Zimbabweans slip into the country undetected, although estimates vary wildly. In a nation of 46 million, most experts say, undocumented Zimbabweans could number several hundred thousand to two million.
Social tensions are ratcheting up in both nations, as Zimbabwe’s adult population dwindles and South Africans, already burdened by high unemployment, face new competition for jobs and housing. The migrants also pose a diplomatic problem, because South Africa is trying to broker an end to Zimbabwe’s long political crisis without criticizing its government or appearing to have a major stake in the outcome.
The situation is inflicting ever more misery on the Zimbabweans. The vast majority flee their country’s penury to find a way to support their families back home. But in South Africa they often find xenophobia, exploitation and a government unwilling and ill-equipped to help them.
“There’s a lot of competition” with South Africans “for other resources like housing in informal settlements, access to limited primary health care and education,” said Chris Maroleng, an expert on Zimbabwe at the Institute for Security Studies, a research organization in Pretoria.
South Africa’s government already struggles to provide free housing, medical care and employment for its own poorest, including the millions living in shantytowns. Here, where joblessness runs from 25 to 40 percent of adult workers, the Zimbabweans — now the nation’s largest migrant group — are increasingly seen as intruders, not victims, and clashes between the groups are not uncommon.
Unquestionably, the Zimbabweans are victims first. A rising number claim to be refugees from persecution by President Robert G. Mugabe’s police and by supporters of his ruling party, the Zimbabwe African National Union-Patriotic Front. Just six Zimbabweans sought political asylum in South Africa in 2001; last year, the total was nearly 19,000, more than a third of all asylum applications in South Africa.
But most are fleeing privation, not persecution. Zimbabwe’s annual inflation rate was officially 4,530 percent in May; economists say it is at least twice that. Industries are operating at barely 30 percent of capacity, unemployment exceeds 80 percent and a disastrous harvest is likely to leave up to four million in need of food aid this year.
A memorandum prepared by 34 international aid agencies, including the United Nations and the International Federation of Red Cross and Red Crescent Societies, predicted this month that the country’s economy would cease to function by the end of this year.
Remittances keep the economy afloat: half of all households get most of their money from distant friends and relatives, a Global Poverty Research survey concluded last June. More than one in five of those who sent money lived in South Africa, the most of any nation except Britain.
♠ Posted by Emmanuel in Development
at 6/23/2007 02:42:00 AM
It seems that the trend towards ever-larger urban agglomerations in the Pacific Rim shows little signs of abating, at least according to recent World Bank research by Shahid Yusuf of the Development Research Group. The map here shows major urban regions in Asia. The abstract of the paper follows:
Mega urban regions are not a passing phenomenon. They are likely to persist and to enlarge their economic footprints because they benefit from the advantages of market scale, agglomeration economies, location, and the increasing concentration of talented workers. Metropolitan regions which are polycentric, relatively well managed, and have invested heavily in transport infrastructure are able to contain some of the problems attendant upon a concentration of people and industry. Moreover, with energy and water resources becoming relatively scarce and many countries anxious to preserve arable land for farming, the economic advantages of densely populated urban areas are on the rise because they have a lower resource utilization quotient.
During the next 15 years, mega urban economies could coalesce in three Southeast Asian locations: Bangkok, Jakarta, and the Singapore-Iskander Development Region (IDR, South Johor). The Bangkok and Jakarta (Jabotabek) metropolitan regions have passed the threshold at least in terms of population size but they have yet to approach the industrial diversity, dynamism, and growth rates of a Shanghai or a Shenzhen-Hong Kong region. Singapore, if coupled with IDR, has the potential but it is still far from being an integrated urban region. This paper examines the gains from closer economic integration and the issues to be settled before it could occur.
The paper notes that a tightening of localized economic links between two sovereign nations through the formation of an urban region would involve a readiness to make long-term political commitments based on a widely perceived sense of substantial spillovers and equitably shared benefits. Delineating these benefits convincingly will be essential to winning political support and a precondition for a successful economic flowering.
♠ Posted by Emmanuel in Migration
at 6/23/2007 02:34:00 AM
Here are the results of a "historic national poll of undocumented immigrants, and their attitudes toward the provisions currently being discussed in the immigration reform debate" sponsored by Senators Diane Feinstein (D-CA) and Ted Kennedy (D-MA). It provides more fuel for the immigration debate regardless of which side you're on. From the summary:
Undocumented immigrants by an overwhelming majority are following the debate over immigration reform with close attention and would comply with proposed legislation to legalize their status, including paying stiff fines and fees and undergoing criminal background checks. Eighty-three percent say they would apply for the new “Z” work visa. Their greatest anxiety is over any requirement to return to their country of origin without a guaranteed right to return. The vast majority report that anti-immigrant sentiment has negatively impacted their families.
The “Z Visa”
1. If new immigration legislation is approved by the Congress of the United States, the overwhelming majority of Latin American undocumented immigrants – 83 percent – would apply for the new “Z” visa that would allow them to live and work in the United States legally.
The undocumented immigrants interviewed were given the following information about the new “Z” visa: “The proposed law would offer a new visa to undocumented immigrants living in the United States. To qualify for this new visa, undocumented immigrants would have to register at a government office and admit that they were in the United States illegally. The head of the family would have to pay $3,000 in fines and fees and each undocumented member of the family would have to pay an additional $2,000. Undocumented immigrants would also have to show that they have a work record in the United States and pass a criminal background check. Those who qualify could then live and work in the United States legally. They would be able to travel between the United States and their home country without problems. The new visa could be renewed every four years by paying $1,500 in fines and fees.”
A small percentage of the undocumented – 14 percent – said that they would not apply for the new visa. They felt that it would be easier to remain undocumented.
2. Substantial majorities of Latin American undocumented immigrants reported that they would be able to comply with all of the requirements of the new “Z” visa. Ninety-four percent were willing to be fingerprinted and to undergo a criminal background check; 89 percent felt that they would be able to show that they had a work record in the United States; 83 percent were willing to pay the $3,000 in fines and fees for the head of the family and the additional $2,000 for each undocumented member of the family; and 85 percent were willing to register at a government office and admit that they were in the United States illegally.
3. More than one quarter – 27 percent – of the undocumented immigrants from Latin America who would otherwise apply for the “Z” visa would not do so if they had to return to their home country to pick up their new work visa. Another 10 percent told our interviewers that they were not sure that they would still apply for a “Z” visa if one of the requirements was to return to their home country.
The “Green Card” and Citizenship
4. The study indicates that approximately three-quarters of the undocumented immigrants who are willing to apply for the new “Z” work visa would also be “very interested” or “somewhat interested” in applying for a “green card” and eventually becoming a citizen of the United States. The undocumented immigrants interviewed were given the following information about the requirements necessary to apply for a “green card” and eventually to become a citizen of the United States: “The new law would require undocumented immigrants to wait 9 to 13 years to receive a “green card” and another 5 years to become citizens. They would have to pay a $4,000 fine and pass an English proficiency test. Undocumented immigrants would also have to return to their home country to complete the application for a “green card” at the United States consulate.
5. The willingness of undocumented immigrants to return to their home country to complete the application for a “green card” depends on whether they are guaranteed re-entry into the United States. Eighty-five percent of the undocumented were willing to apply for their “green card” at the United States consulate in their home country “if they were guaranteed that they could return to the United States without a problem.” But only 35 percent were willing to travel back to their home country for that purpose if there were no such guarantee.
6. The other requirements for a “green card” and citizenship were less controversial. Ninety-two percent were prepared to pay the $4,000 fine; 90 percent were willing to take an English proficiency test; and 71 percent were prepared to wait 9 to 13 years for their “green card” and another 5 years to become a citizen.
Quality of Life Issues
7. A substantial majority of undocumented immigrants from Latin America – 78 percent – agree with the statement that “the anti-immigrant sentiment is growing in the United States” and 64 percent of them report that it is having a negative effect on their families. And they are following the debate about immigration policy in the United States Congress with a great deal of interest. Eighty percent report that they are following it “very closely” or “somewhat closely.” Nevertheless, these immigrants have a very optimistic point of view about their quality of life in the United States. Eighty percent rate it as “excellent” or “good.” And even though the annual income of the majority is less than $20,000, three-quarters of undocumented immigrants consider their economic situation to be positive.
8. Less than one-quarter - 23 percent - of the undocumented immigrants in the United States have health insurance. When someone in their family gets sick, one third of them told our interviewers that they visit a doctor's office or a community clinic, one sixth go to the emergency room at the nearest hospital while another sixth report that they try to take care of the problem at home without medical assistance. The other ten percent either return to their home country for treatment or find other ways of dealing with their health problems.
♠ Posted by Emmanuel in Trade
at 6/23/2007 02:09:00 AM
This new report by the consulting firm of Deloitte and Touche suggests that the trend towards financial services offshoring will hardly let up over the coming years. To the right is a chart depicting cost savings achieved by financial service firms that have taken advantage of offshoring. As you may have guessed, India leads the way as the destination country:
Financial services continue to lead the way in offshoring. Many of the world’s major financial institutions are continuing to set the offshoring benchmark. As offshoring matures, the gap between the best and the rest widens. This report charts the widening gulf across the financial services industry. It outlines how a small number of financial firms are outperforming the rest of the industry. The move offshore has clearly changed the dynamics of the global financial services industry.
Offshoring has matured at a rapid pace. Less than 10 percent of major financial institutions had moved processes offshore in 2001, according to research by the DTT GFSI group. By 2006, over 75 percent of major financial institutions had operations offshore. US and UK banking and capital market institutions continue to lead this shift, but mainland Europe is showing increasing interest.
Offshore headcount has grown dramatically. The DTT GFSI group estimates there has been an 18-fold increase in the average number of staff each financial institution has employed offshore over the last four years, from 150 in 2003 to 2700 in 2006. Over the last year alone, this has led the proportion of group headcount in lower cost countries to double, from three to six percent by year end 2006.
India remains offshoring’s hub but is likely to lose share in the future. The DTT GFSI group estimates that about two-thirds of global offshored staff are employed in the sub-continent. China threatens to be India’s principal offshoring competitor. Some 200 million Chinese people are currently learning English, providing a growing pool of skilled labor that may compete with India over the next 10 years. China’s share of offshored labor is already rising, with a third of financial institutions now having back-office (mainly IT) processes based in China. China’s growing competitiveness may dampen salary inflation among Indian offshoring industry workers. Further, there are growing concerns over the supply of skilled workers in India. Only 10 to 15 percent of Indian college graduates are considered suitable for direct employment in the offshoring industry. This may result in a shortfall of up to half a million professionals by 2010.
