Articles for Economics

7/31/2019 Articles for Economics

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Food exports to reach $30b by 2020: minister

Despite the expected blow to Koreas agricultural industry in the wake of its free trade pactswith the United States and the European Union, the nations food exports will top $30 billion

by 2020, the agriculture minister said. Listing the fresh wave of K-pop as a major potentialboost to the industry, Agriculture Minister Seo Gyu-yong expressed full confidence intripling the exports target in less than a decade. I have no doubt that agro-fishery exports canreach $30 billion by 2020. This is a very feasible number if the figure grows by about 20

percent annually, Minister Seo said in an interview with The Korea Herald last week.I am confident that the country can make it onto the top 10 largest food exporter list withinthe next decade. Free trade agreements pose challenges to the sector, but new markets arealso opening up for us with the deals, Seo said. The ministrys export target for this year is$10 billion. Pointing to positive responses to Korean food from Spain and Japan, where hemade recent trips, Seo said K-food would become ever more popular on the back of K-pop.Hongcho, a raspberry flavored red vinegar, has become so popular in Japan because K-pop

group Kara modeled for it there. K-pop stars are really a springboard to the K-food industryand the marketing help there will greatly enhance exports, Seo said. Seo, who orchestratedsupport measures for the sector hit by the FTAs, said the agro-fisheries industry needs to gothrough reform as trade barriers fall.The FTAs pose challenges, but they are also anopportunity. Farmers wont be able to survive with the old style of leasing on a small patch ofland. Their business models should turn into capital intensive, technology-intensive ones,the minister said. He said reform has become an issue of survival with the Korea-U.S. freetrade agreement, which is expected to wipe out at least 12.67 trillion won in local productionin the agriculture and livestock industries over the next 15 years, according to governmentestimates. Seoul in January assigned an additional 2.9 trillion won in support to cushion theimpact of the Korea-U.S. FTA. Of the 2.9 trillion won, 2 trillion won will be used as directfinancing and 900 billion won in tax benefits. The government will inject 10 trillion won($8.64 billion) over the next decade to modernize production facilities. The total set aside assubsidies and investment for the agro-fisheries industry is 54 trillion won by 2017. Seowelcomed the governments push to ink another trade pact with China and called it anunavoidable choice this trade-dependent country needs to make. Were currentlyconducting working-level discussions with China. The Agriculture Ministry will do the verybest to protect the sectors that stand to lose the most with competition from China, Seo said.The government will first seek ways to protect farmers of red pepper, garlic, onion andseafood, clear that out with the Chinese counterpart, and proceed to other negotiations, headded.

Labor shortages big topic for local farmers

IDALabor shortages, immigration and promoting local farm products were some of the

hot topics at a town hall meeting on agriculture Monday night hosted by state Rep. Dale Zorn

and two other state officials. Almost 30 growers from the county attended the nearly two-

hour forum at Ida Township Hall. Lack of workers has always been a problem, but some

farms are finding it increasingly more difficult to find laborers to plant and harvest crops.

Although a shortage of hired hands is not a serious problem in Monroe County, it is

becoming a bigger issue for the rest of Michigan, particularly in the prime fruit-growing areas

of west Michigan. Part of the reason is the nations crackdown on illegal immigrants and a

proposed new federal regulatory program called e-verify that may be scaring off somepotential migrant workers. The legislation is directed at public employees and contracts and


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doesnt include agricultural workers yet, Rep. Zorn said. However, if the bill is changed to

include farming, violators and farm employers could be subject to paying heavy fines. Im

hearing from some vegetable processors that it may scare off legal immigrants wanting to

come here, the Ida Republican said. Its an important issue to the security of our state and

nation. We pay a lot of health care for illegals. Much of Michigans agricultural economy istied up in fruit production and growers cant get enough help to pick the crop, noted John

Delmotte, an Ida grower. That issue (E-verify) came up at a meeting I was at recently, Mr.

Delmotte said. Many (farms) are having trouble now getting help. Its more oppressive than

a help. Tom Woelmer of Monroe said some migrants who are working legally are worried.

The whole immigration system and the process for becoming a citizen is broken down,

Jerry Heck, a Monroe producer, added. Both Mr. Woelmer and other growers lamented the

loss of the green card system formerly used in the 1980s that provided migrants legal

permits to do seasonal work on farms in the state. It worked great at the time, but they did

away with it in the 90s, said Dave Ruhlig, owner of a large produce farm in Carleton.

Canadas model is a good system for greenhouse people. They go to the Canadian

parliament, tell them how many workers they need and the government provides so many

documents for them to work. After they have fulfilled their obligation, they go back to their

country because many have family back there. Roger Bezek of Maybee asked why Michigan

stopped printing directories of u-pick operations and roadside stands in the state. Gordon

Wenk, deputy director of the Michigan Department of Agriculture and Rural Development,

told the group that the state is working harder with the Pure Michigan campaign to market

more products made in Michigan. There is so much name recognition across the nation, it

just makes sense to tie in with Pure Michigan, Mr. Wenk said. There are so many great

stories to tell in Michigan. We have more diversity in this state than any other state butCalifornia.

China is Running Out of Cheap Labor

Labourers work on the terminal as construction is underway at the new Hefei Xinqiao airport

and its four runways, in Hefei, east China's Anhui province on March 14, 2012, which is

schedule to be completed by end of this year. , STR / Getty Images. A friend who works at an

international financial institution sends this thought: China might beprobably is

beginning to experience something of a labor shortage. Unskilled peasants are still flooding

into the cities, but not in the numbers they once were and, frankly, given the demographics ofthe country, probably won't again for another half century at least. So wages are going up,

even for mostly unskilled workers. Up by a lot, very quickly. This is forcing some employers

of very low-end labor in businesses with very severe cost pressures to relocate out of high-

cost China to other places with bigger surpluses of peasants and other low wage people. The

stable onesVietnam, Malaysia, Indonesia and Indiaand even the unstable oneseast

Africa, Pakistan, Honduras, El Salvador. But think about the scale of that problem. A country

of more than a billion people that we once thought had an essentially unlimitedsupply of ultra

cheap workers just doesn't have as many as we thought a decade ago.My very rough and

inexpert, off the top of my head calculation is that all those places with remaining surpluses

of ultra low-cost labor have, maybe, 20 or 25 years of supply on hand.


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In two decades, a lot could happen. One of them being a global shortage of ultra low-wage

workers. Even at that point, there will still probably be millions of people who want to come

to the US and work for relatively low pay doing relatively low-skill jobs. But it is also

possible that low-wage workers will be in such low supply that US firms just won't be able to

hire any, either here in the US or abroad. We have to think through what that means forimmigration policies. I'm just back from my fourth trip to Seoul in 18 months. I note that

even cab drivers and hotel maids in Korea are Korean. And cabs in Seoul are really, really

inexpensive. Gas isn't inexpensive. But cabs are. So it's not like being a cab driver pays better

in Korea than it does here. And hotel rooms aren't notably more expensive, so I'm sure hotel

maids aren't better paid. But somehow Korean hoteliers find Koreans to clean rooms and taxi

cab companies find Koreans to drive cabs. Makes me wonder, as I think you do, whether you

really could run a successful high-income country without mass immigration from pretty poor

countries.

Kharif season: Crops to face 10 percent water shortage in Apr-Sept 2012

KARACHI: The agriculture sector of the country will face an overall 20 percent water

shortage from April to June 2012, sources in the Indus River System Authority (IRSA) said

on Friday. Major crops including wheat, cotton, rice and maize will face more than 10

percent water shortage for irrigation from April to September 2012 during the Kharif season,

an expert in Sindh Agriculture Forum (SAF) said. Due to short release of water in the canals

system, the farmers in Punjab and Sindh will get around 10 percent less water for Kharif

crops against their respective water requirements, he added. Punjab will get around 31.65-

million-acre-feet water during April-September 2012 while Sindh farmers will get about

28.85-million-acre-feet water during April to September 2012, the SAF expert maintained.Although the IRSA officials have made efforts to release maximum quantity of irrigation

water but due to high temperature and low water level in dams, it is not possible to release

more water during April to September 2012, he added. Total availability of water for

irrigation purpose will stand at around 63.90-million-acre-feet out of which water share of

Balochistan will be around 2.55-million-acre-feet and Khyber Pakhtunkhwa about 850,000-

acre-feet-water. The sowing of major crops including cotton crop in Sindh and Punjab is

expected on 8.5-million-acre-land and rice is expected to be cultivated on 6-million-acre-

land, he added. The cotton sowing will likely suffer a decline of around 2 million bales while

rice around 1.5 million tonnes. The SAF experts said the country is heading towards theworst water shortage in the next couple of years due to insufficient water management

practices and storage capacity. Pakistan has the right to oppose the Kishanganga project

because its diversion will reduce 16 percent of the power generation capacity of the 969

megawatts (MW) Neelum-Jhelum power project on the same river downstream Muzaffarabad

in Azad Kashmir. A report by the Washington DC-based Woodrow Wilson Centre has

described Pakistans watershortage as deeply troubling. The underground water level has

gone down from about 70-100 feet to 1,000 feet and has been termed as a worsening

situation.

During IRSA Advisory Committees meeting, IRSA Chairman Mazhar Ali Shah said effortsare being made by the authority and also by the government to ensure maximum need of


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water to the farming community. In this regard IRSA and Water and Power Development

Authority (WAPDA) are concentrating to maintain balance in releasing water for hydropower

generation and irrigation purposes. International Water Expert Bashir Malik, who has also

served United Nations and World Bank as chief technical adviser said, the cheapest and

environment-friendly solution to water and energy crisis in Pakistan is the Kalabagh Dam,which can only be built by a patriotic and brave leader having the courage to break all the

barriers in the best national interest. Malik said Save Water Save Pakistan Forum will initiate

a campaign to highlight water and energy crisis and their solution at national level for which

they will have dialogues with the national leadership besides conducting seminars and

conferences with the help of technical and legal experts.

National Income Gains In 2010 Concentrated Among 15,600 Super-Rich Households

March 15 (Reuters) - The aftermaths of the Great Recession and the Great Depression

produced sharply different changes in U.S. incomes that tell us a lot about tax and economic

policy. The 1934 economic rebound was widely shared, with strong income gains for the vast

majority, the bottom 90 percent.In 2010, we saw the opposite as the vast majority lost

ground. National income gained overall in 2010, but all of the gains were among the top 10

percent. Even within those 15.6 million households, the gains were extraordinarily

concentrated among the super-rich, the top one percent of the top one percent. Just 15,600

super-rich households pocketed an astonishing 37 percent of the entire national gain. The

different results in 1934 and 2010 show how a major shift in federal policy hurts the vast

majority and benefits the super-rich.

NEW POLICY BOOSTS THE RICH

Starting in 1933, government policy aimed to improve the lot of the vast majority through

such policies as massive government-financed jobs and construction programs. But since

1980 policy has focused on helping the already rich get richer still with such policies as lower

taxes and fewer audits. The updated figures illustrating income changes, all in 2010 dollars,

come from analysis () of the latest IRS data () by economists Emmanuel Saez and Thomas

Piketty. Saez received the 2009 John Bates Clark Medal, awarded to the economist under 40

who has made the greatest contribution to that field, and a 2010 MacArthur genius grant.

Their data expands on what I reported first last fall - median pay fell in 2010 to its lowest

level since 1999 (). Saez and Piketty show that the vast majority's average adjusted grossincome, of which wages are just a part, was $29,840 in 2010. That was down $127 from 2009

and down $4,842 from 2000. Most shocking? The average income of the vast majority of

taxpayers in 2010 was just a smidgen more than the $29,448 average way back in 1966. At

the top, the super-rich saw their 2010 average income grow by $4.2 million over 2009 to

$23.8 million. Compared to 1966 their income was up on average by $18.7 million per

taxpayer.We should expect this pattern of concentrated gains weighted toward the very top to

continue unless we change our policies.Saez shows () that the top one percent's share of real

income growth is increasing with each economic expansion and it matters not whether the

president is a Democrat or Republican. The top one percent enjoyed 45 percent of Clinton-eraincome growth, 65 percent of Bush-era growth and 93 percent of Obama-era growth, though


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that is only through 2010. While markets are a factor, I think the evidence makes clear that

government policy is at the core of the differing fortunes of the vast majority and the super-

rich. Inaugural addresses of Franklin Roosevelt and Barack Obama bring this into sharp

focus. Both spoke of the need for restoring confidence, while denouncing greed and

irresponsible conduct. Roosevelt in 1933 specified "callous and selfish wrongdoing" bybankers abusing a "sacred trust." Obama vaguely referred to the "consequence of greed and

irresponsibility on the part of some." Roosevelt said that "our greatest primary task is to put

people to work" () Obama, again less specific, spoke of government that "helps families find

jobs at a decent wage" (). Roosevelt brought in trustbusters, reformers and even an expert at

Wall Street manipulations to implement policies benefiting the vast majority.

FINANCIAL INSIDERS

By contrast, while Obama called Wall Street executives "fat cats," he surrounded himself

with financial insiders with the exception of Elizabeth Warren, the Harvard bankruptcy

expert now seeking election to the U.S. Senate. His administration has failed to prosecute the

central figures in the frauds that created our economic distress. Government policy can

change again and for the better. We can create a growing economy with widely shared

prosperity. We need to increase spending on education and research to maximize returns from

human capital. We need to create jobs rebuilding our decaying infrastructure so people and

goods move efficiently. We need to honor markets, letting mismanaged banks and insurers

receive their just desserts in U.S. Bankruptcy Court. We need to adjust our focus away from

financial sector profits to people. We need to reform taxes to discourage capital withdrawals

and offshoring and, instead, encourage reinvestment of profits at home. If we don't, the vast

majority will see their incomes go on eroding slowly while those at the top enjoy an ever-larger share of national income and wealth. The inevitable result will be economic, political

and social instability - not a pretty picture for anyone.

Adding People to the Climate Change Equation

Peoples behavior has been noticeably absent in science on sustainability, but a conference

before Junes U.N. summit offers some hint human processes may join natural ones in

developing solutions. Research scientist Gail Osherenko is blogging for Miller-McCune from

the Planet Under Pressure Conference in London. For other posts from her, click here.

Changing how business and government operate can be a slow and difficult process. Butaltering the way science is done is even stickier and more ponderous. Nonetheless, scientists

from a wide range of disciplinary backgrounds at this weeks Planet Under Pressure

Conference moved a step closer to creating a new, integrated entity to coordinate and

advance research on global environmental change. A key aspect of the integration is

including behavioral science to a much greater extent in a field that has been seen as a

biophysical sciences playground. As David Willetts, Britains Minister of State for

Universities and Science, said in his closing-day address, At this conference, the social

sciences and humanities are taking center stage.


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The conference, held in London, is itself a buildup to the 2012 U.N. Conference on

Sustainable Development, dubbed Rio+20 as it marks two decades since the groundbreaking

United Nations Rio summit that produced two landmark treaties, the Convention on

Biological Diversity and the Framework Convention on Climate Change. Planet Under

Pressures conferees developed a four-page State of the Planet Declaration summarized here:

Humans have driven the planet into the Anthropocene, a new era marked by human

domination of Earths systems.

We are on a course for profound changes that are likely to be hi ghly destructive to human

wellbeing.

We need to change course in this decade. For the science community, this requires a new

contract between science and society, which includes business, NGOs, civil society,

international agencies and governments.

In response to the need for science that is solution-oriented, integrated and international,

five large global environmental research programs (represented among the organizers of the

conference) support a major research initiative, Future Earth: research for global

sustainability.

A transition team will launch Future Earth formally at RIO+20 in June and expects to have a

new governing council in place by January 2013. Creation of Future Earth may not look like

a momentous accomplishment after 18 months of planning by the science community, but it

is far more than moving the deck chairs on the Titanic. As a researcher myself, I can attest

that social science has had difficulty joining and finding research partners within the bigglobal change programs, where funding for biophysical and natural sciences far exceeds

support for researchers working on governance, risk assessment, human behavioral change or

other social phenomena. Johan Rockstrom, co-chair of the Future Earth transition team and

executive director of Stockholm Resilience Center, introduced Future Earth as a new

contract between science and society. Its core principles are international, integrative and

solution-oriented research. He called for fierce urgency and a great transformation as we

head into a 3-degree warmer planet. Future Earth recognizes that things are interconnected

and takes advantage of 30 years of earth system science generated from the global

environmental change community. He welcomed existing programs to be part of FutureEarth. Now, the research community is welcoming and funders (especially the Belmont

Forum, whose members include science funding agencies from 10 countries and the

European community) demand integration of natural and social science as well as research

userspolicymakers, regulators, NGOs, communities and industryas they search for

solutions to address water shortages, food security, and human health. They recognize, for

example, that the social sciences and humanities will be necessary to understand how to

modify the diet of the developed world so that grain to feed livestock can be used to feed

humans and to reduce pollution from overuse of nitrogen-rich fertilizers. Britains Willetts

called for a commitment to mainstreaming sustainable development even as he

acknowledged that working together across disciplinary boundaries can be as tough as


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working across national ones. We can focus on physical and natural science phenomenon,

but what is most important to meeting the challenge is understanding and changing human

behavior. As an example, he noted, 30 percent of all food grown worldwide is lost in the

long journey to reach consumers, and in some cases 50 percent is lost. To remedy this waste,

we need to understand consumer behavior. Understanding human behavior might need tostart close to home for many of the academics. A Postdoc under Pressure texted a question

to the conference on why there was no discussion of the pressures scholars face in

universities, which seldom recognize interdisciplinary research and only credit publication in

journals from traditional disciplines. Rockstrom sympathized, I know many postdocs under

pressure. Willetts highlighted three priority research areas where interdisciplinary

approaches are essential:

Changing how urban and national infrastructure is planned and developed in order to live

with environmental changes.

Improving forecasting and response to the risks of climate change to prevent further losses.

Climate change has already cost trillions of dollars and thousands of lives with the poorest

and most vulnerable people suffering most.

Implementing full-cost accounting for planet-warming carbon emissions, which is necessary

in moving to a decarbonized economy.

Willetts stressed the need for collaboration, both international and among business, science

and government to meet these three research challenges. And yet, he concluded, I sit here as

an embarrassed U.K. citizen where my own British MP has yet to commit that he will go to

Rio. Planet Under Pressure organizers also aimed to energize and motivate governments to

attend and take action at Rio+20. Elizabeth Thompson, executive coordinator of Rio+20,

assured conference participants, very intense negotiations have been going on in New York

this past week, and (Rio+20) will be important to catalyze change for a global green

economy. She also shared news of a new higher education sustainability initiative by the

Secretariat for the U.N. Conference on Sustainable Development calling on universities and

business schools to teach sustainable development. Stand by to see if Rio+20 catalyzes

change and if Future Earth revamps global change science to produce real solutions for this

planet under pressure.

Blackberry admits consumer market failure

RIM said it would focus its consumer efforts on targeted offerings that tap the company's

strengths. That includes devices that employees will want to buy on their own and bring to

the corporate environment. The company was exploring partnerships and other opportunities

for consumer products that are not deemed central. "We can't do everything ourselves but we

can do what we're good at," RIM CEO Thorsten Heins said. RIM announced the changes as it

announced quarterly results that fell short of Wall Street expectations. Net loss was $US125

million ($A120.70 million), or 24 cents a share, in the fiscal fourth quarter. This compares

with $US934 million, or $1.78 per share, a year ago.After excluding one-time items, adjustedincome was 80 cents per share, a penny short of expectations from analysts polled by


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FactSet.Revenue fell 25 per cent to $US4.2 billion from $US5.6 billion. Analysts were

expecting $US4.5 billion.For the full fiscal year, RIM earned $US1.2 billion, or $2.22 a

share, on revenue of $US18.4 billion. That compares with net income of $US3.4 billion, or

$6.34 a share, on revenue of $US19.9 billion in fiscal 2011. In extended trading after the

results came out, RIM shares fell 33 cents, or 2.4 per cent, to $13.40. During the regularsession, the stock increased 6 cents to close at $13.73. RIM has had limited success trying to

enter consumer markets in recent years, and Heins said a turnaround required "substantial

change". "We believe that BlackBerry cannot succeed if we tried to be everybody's darling

and all things to all people," said Heins, who took over the company in January. "Therefore,

we plan to build on our strength." The Canadian company has long dominated the corporate

smartphone market, with its BlackBerrys known for their security and reliability as email

devices. US President Barack Obama refused to part with his BlackBerry after he took office.

RIM has sought to expand its appeal to consumers, but it has had trouble because the phones

aren't perceived to be as sexy as its chief competitors. RIM has been counting on

improvements with its forthcoming BlackBerry 10 system, but that has faced multiple delays.

BlackBerrys also lag iPhones or Android phones when it comes to running third-party

applications. For that reason, BlackBerrys are losing ground even in the business world, as

employees demand iPhones or Android devices over BlackBerrys.Apple sold 37 million

iPhones in the last three months of 2011 - more than what RIM shipped in the past three

quarters combined. RIM shipped 11.1 million BlackBerrys in the latest quarter, which ended

on March 3.RIM also bombed in its efforts to produce a tablet computer to compete with

Apple's iPad. Among other things, the PlayBook received negative reviews because it

launched without an email program and the popular messaging service BlackBerry

Messenger. In December, the tablets that originally cost $US500 ($A483) were selling for$US200 ($A193), below the cost of making them. BGC Financial analyst Colin Gillis said:

"They are conceding the high-end consumer market with all these services that are wrapped

around the platform."

Euro To Extend Rally As EU Boosts Firewall To EUR 800B

The major theme last week was buy European majors, sell commodity currencies. The euro

was firm on anticipation of the finance ministers meeting during the weekend and on

expectation that there would be a final agreement on boosting the firepower of euro zone's

bailout funds. Such expectation was fulfilled as EU finance ministers concluded the meetingby raising the ceiling of the combined lending power of ESM and EFSF to EUR 800b. On the

other hand, commodity currencies, in particular aussie, was pressured on concern of slow

down in China. US dollar was mixed as equities consolidated while treasury yield dipped for

most of the week. Fiscal year-end repatriation balanced selling pressure in the Japanese yen

and most yen crosses were stuck in range last week. Our view on long European/commodity

crosses was correct last week as as GBP/AUD, AUD/CHF and EUR/AUD occupied the top

three positions in the top movers table. The bias is still there and we'd continue to favor

stronger rise in EUR/AUD and GBP/AUD this week. In particular, EUR/AUD could break

through 1.3 psychological level as reaction to the euro zone finance meeting news. Buying in

EUR/AUD could intensify if the official Chinese manufacturing PMI to be released on


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Sunday dipped below 50. Though, we'll hold back on this view if the Chinese data beat

expectation and would assess the outlook again after the week starts. We also mentioned last

week that we favored short in commodity/yen crosses. Such a strategy wasn't fruitful last

week as repatriation buy in yen was not strong enough. We anticipated a slightly deeper

pullback in yen crosses but that didn't happen. Indeed, the tide seemed to be turning to yenshorts against. Technically, we should note that most yen crosses seemed to have completed a

three wave consolidation on Thursday or Friday and we'd possibly likely seen upside

breakout this week. In addition, we should note the strong rebound in US treasury yield on

Friday, which could also mark completion of recent pull back. 2.3% in 10 year US yield will

be watched this week and if broken, stronger selloff in the Japanese yen would likely be seen.

Anything other than commodity currencies against yen would be favored. That is, we would

prefer long in USD/JPY, EUR/JPY and GBP/JPY. Though, considering the above strategy of

long EUR/AUD, GBP/AUD etc., we slightly prefer long in USD/JPY this week as a

hedge.After the meeting in Copenhagen, euro zone finance ministers have agreed to mobilize

an "overall firewall" of approximately EUR 800b, more than USD 1T. The detail of the

program is that before July 2012, EFSF is the main instrument. After July 2012, ESM is the

main instrument and EFSF will only continue to program that has already started. But during

the the transitional period between July 2012 and mid-2013, EFSF can still engage in new

programs to "ensure a full fresh lending capacity" of EUR 500m. And the overall ceiling of

ESM/EFSF will be raised to EUR 700b even after mid-2013, as programs started by then

would continue. In addition to the mentioned EUR 700b, EUR 59b out of EFSF and EUR

53b out of the bilateral Greek loan facility has already be paid. So altogether, the total is

around EUR 800b. Besides, EU finance ministers also agreed to accelerate and make

available the paid-in capital of the ESM. Two tranches of capital will be paid in 2012, one inJuly and one by October. Another two tranches will be paid in 2013 and the fourth tranche

will be paid in 1H 2014. And to maintain a 15 ratio between the paid-in capital and

outstanding amount of EMS issuances, the paid-in could be further accelerated. Also, euro

zone finance ministers pledged an additional EUR 150b bilateral contributions to the IMF.

IMF chief, Lagarde welcomed the decisions to "strengthen the European firewall. And EU

ministers now urged IMF to increase its resources by raising as much as $ 600b in April in

Washington. ECB Vice President Vitor Constancio played down the significance of raising

the IMF warchest to euro zone but empathized that it's "not a specific fund or specific

account for Europe" but "a recognition that in general for the world economy the IMF needs

to have more resources". However, it's known that BRICS countries would only support

increase in IMF resources if they are give more say. So such political development would be

watched in the coming weeks.

Carbon or resource rent tax?

The ANC appears ambivalent about introducing a carbon tax if its policy discussion

document on state intervention in the minerals sector is anything to go by. The document

was released on Monday, barely two weeks after the treasury, in its 2012 budget, announced

plans for a carbon tax as early as 2013-2014. Although the ANC laid out plans for a resource

rent tax (RRT) instead, the two taxes showed remarkable similarities, according to local


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experts. In its document the ANC stated that the carbon tax "could be extremely damaging to

our economy and should be put on hold". It was deemed costly and would "potentially render

many energy-intensive beneficiation operations unviable". The report stated that the carbon

tax should be "reconfigured", possibly by a higher resource rent tax linked to carbon

emissions and a basket of supply and demand side measures to reduce emissions. The ANCproposed, after a normal return on investment was achieved, roughly about 15%, a resource

rent tax of 50% on all mining yields. It was estimated this would yield R40-billion a year. But

in its discussion document on social transformation, the ANC highlighted the need to put a

price on carbon, other pollutants and "the overexploitation of a scarce resource though

mechanisms such as taxes, natural resource charges or tradable permit systems". It also

highlighted the need to introduce policy measures to support mitigation efforts, including

developing carbon budgets for significant greenhouse gas emitting sectors and subsectors.

Tax just over a R100 a tonne

The treasury proposed, above agreed-upon thresholds, a tax of R120 a tonne of carbondioxide equivalent emissions. According to the Budget Review, a basic tax-free threshold of

60% was envisaged. But the treasury suggested a higher tax-free threshold for process

emissions and limitations of the cement, iron and steel, aluminium and glass sectors to

mitigate emissions over the near term should be considered. It stated that there should be

additional relief for trade-exposed sectors or industries up against international competitors

that did not face similar taxes and emphasised the necessity of a phased approach, which

began modestly and increased over time. The treasury is due to publish a draft policy paper

on the implementation of a carbon tax by April.

Private sector sceptical

But the private sector has grave reservations over the implementation of such a tax and

particularly over the threat it would pose to the competitiveness of South Africa's carbon-

intensive mining and manufacturing industries. This is compounded by the fact that South

Africa's electricity generation accounts for about half of all the country's greenhouse gas

emissions. Peet du Plooy, programme manager for sustainable growth at research institution

Trade & Industrial Policy Strategies, outlined the many similarities between the two

proposals . Both, he said, could be considered as environment-related taxes as they were

levied on natural resources, namely minerals and carbon emissions. Both aimed to price

scarce commodities and were tools to improve intergenerational equity, he said. Even the

form of the two taxes was similar, he said, with the carbon tax kicking in only above a certain

threshold, similar to the existing carbon tax on vehicles. "A carbon tax that kicks in only

above a certain threshold acknowledges that, in the course of economic activity, some carbon

emissions are inevitable and, in the short term, unavoidable," said Du Plooy. "The revised

form of the carbon tax is, in a way, a tax on excess carbon emissions. The rationale for the

RRT is similar. It recognises that, for mineral resources to be extracted, the companies that do

so must be able to make a profit but argues that an excess profit, or rent, is neither sustainable

nor fair." The way in which the tax would be levied -- through rates, thresholds and

exemptions -- as well as how the revenues were used were of massive significance, Du Plooysaid.


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Carbon tax to be reinvested?

The treasury's carbon tax model, done by the United Nations University World Institute for

Development Economics Research, showed that if the revenues were recycled in the form oftax breaks on income, for example, there was a small negative impact on gross domestic

product (GDP), he said. But if the revenues were reinvested, there was a significant positive

overall impact on GDP. Both a resource rent tax and a carbon tax should be implemented at

modest but escalating rates to avoid a shock to the economy, Du Plooy said. The revenues

should be combined to fund an offshore, independently managed sovereign wealth fund with

a specific investment mandate. This could include investments in low-carbon technology,

green infrastructure and securing strategic minerals. It could also target currency stabilisation,

although this mandate would have to be managed separately. But, he said, there were risks

attached to carbon taxes. "Unless a way is found to reduce the impact on the poor, such as

free basic electricity, a carbon tax would disproportionately affect them. "At high levels it

can also put some competitiveness strain on energy-intensive and export-exposed sectors."

But he said that studies done by the University of Cape Town's Energy Research Centre on

the application of carbon taxes on South African exports showed that they would have a

small negative impact on energy-intensive and export-exposed sectors, mainly on the non-

ferrous metals such as aluminium and coal. But this could be offset largely by participation in

global carbon markets. Last week World Wide Fund for Nature (WWF) South Africa

released a discussion document on carbon tax design options. In it, it stated that temporary

mitigation support agreements could assist local companies to remain competitive and create

incentives for firms to reduce emissions. These agreements would require companies to"undertake mitigation or related activities to qualify for temporary relief from carbon pricing

and are thus likely to be more acceptable to policymakers than simple time-bound relief

mechanisms". But, given the lack of capacity in both the private and public sectors to

implement these, it recommended that they should be confined to a small set of commitments

that were easy to verify and the sectors included should be kept to a minimum. Richard

Worthington, manager of the climate change programme at the WWF, said that a resource

rent tax should not be implemented before a carbon tax. "If you don't have a carbon tax and

introduce an RRT, you provide the government with an incentive not to introduce a carbon

tax because they are already receiving additional revenue," he said. "There is also anincentive to keep the cost of carbon emissions to society as a whole externalised. In principle

we should deal with the cost borne by society as a whole first." But this was not to say that a

resource rent tax did not have merits and should not be implemented, he said.

Foreign investors call for reforms of Myanmar's banking sector

SINGAPORE : Foreign investors are calling for reforms in Myanmar's banking sector to

facilitate more investment and currency flows. They say a proper banking system and

transparent laws will enable investors to transfer funds more easily into the country.

Presently a visitor to Myanmar must be prepared for no auto-roaming services on mobilephones, no easy Internet connectivity, no global ATMs and no acceptance of credit cards at


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most outlets. However despite all these shortcomings, Myanmar remains an attractive

destination for both tourists and businessmen. Analysts say this would boost its hospitality

industry. And one such beneficiary would be the Pan Pacific Hotels Group. The hotelier had

acquired a hotel in the former capital, Yangon eleven years ago. Patrick Imbardelli, President and

CEO of Pan Pacific Hotels Group, said: "Operating a hotel in a location like that is always

difficult especially in the early days. You want to import items, you want to open the restaurants

at certain hours, you want to do certain things, the banking environment etcetera. It has been very

difficult but we have been there eleven years, we been very focus on what we do. We been

working very closely with the authorities to ensure not only with compliance but working

together to have an environment where foreigners feel comfortable." Currency controls is another

common grouse among visitors. Visitors are not allowed to bring in more than US$2,000 per

person into the country. Also, visitors are not allowed to use their own foreign handsets but need

to switch to domestic handphones. As a result, visitors may be uncontactable during their stay

in Myanmar. Johannes Lund, analyst at Control Risks, said: "The banking system is

underdeveloped and needs to get clear rules on profit repatriation for example, and for that tohappened, you need certain legal frameworks including an investment law. (Another) thing

they are addressing at the moment is the dual exchange rate." The Myanmar government says

it will float its currency, the Kyat, from 1 April. Fourteen banks - 11 private and 3 state-run

ones - would initially take part in a daily auction to determine a reference rate for the

currency. Currently, the official rate is 6.4 kyat to a US dollar for their imports although the

black market exchange rate is going at about 800 to 820 to one US dollar. Jim Rogers,

Chairman of Rogers Holdings, said: "One of the problems with investing in Myanmar has

been the currency. There were 7 or 8 exchange rates, you could not even know how to invest

in Myanmar. This is wonderful news, they have been working on the currency, it is good for

Myanmar. The problem from my point of view is that I am an American and Americans are

not allow to invest in Myanmar." Still, analysts expect foreign investors to rush into

Myanmar once the door is opened. This is to gain first-mover advantage in this resource-rich

market.

EPA discusses Intellectual Property rights

WAM Abu Dhabi, April 1st, 2012 (WAM) -- The Emirates Publishers Association (EPA) in

collaboration with Emirates Intellectual Property Association (EIPA) organized a panel

discussion titled "Intellectual Property Rights" on the sidelines of its participation at the Abu

Dhabi International Book Fair 2012. The forum was aimed at discussing the legislative

framework set by the UAE to protect the publishing sector and the Intellectual Property rights

of publishers, authors and illustrators, as well as losses resulting from violation of property

rights in the world. The panel discussion, sponsored by the UAE Social Welfare Fund, was

attended by Dr. Abdul Qadous Abdul Razzaq Al Obaidli, Board Chairman and Founder of

the Emirates Intellectual Property Association (EIPA); Jawad Al Redha, EIPA member and

Chairman of the Computer Program Producers' Association in the Middle east; Abdul

Rahman Al Muaini, EIPA Secretary General; and Kholoud Al Nuaimi, Manager of Cultural

Programs at the Executive Office of Sheikha Bodour bint Sultan Al Qasimi, as well as a

number of UAE, Arab and international publishers participating in the book fair. During thediscussion, Dr. Abdul Qadous Al Obaidli highlighted the status of Intellectual Property laws


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and penalties applied against violators. He made a presentation on the concept of Intellectual

Property and explained how individuals and organizations can protect their rights and prevent

piracy, stressing the need to raise the public awareness about the importance of protecting

Intellectual Property as well as the negative effects and damages resulting from piracy and all

kinds of violations. Dr. Al Obaidli noted that the UAE has managed to put itself at theforefront of Arab countries in the field of protection of Intellectual Property rights, although

it has been a few years since it issued Intellectual Property protection laws. "Participating in

the Abu Dhabi Book Fair 2012 offered us an important opportunity to highlight the principles

of the Intellectual Property association and emphasize its clear-cut stand to implement further

procedures in order to consolidate the principles of protecting the rights of Intellectual

Property as well as to fight and eliminate all forms of piracy and counterfeiting". Jawad Al

Redha, EIPA member and Chairman of the Computer Software Producers Association in the

Middle East, outlined the UAE's laws on protecting the publishing sector against piracy and

violation of the rights of publishers and authors, patents and trademarks. He underlined the

most prominent efforts made by the UAE to update its legal system and its pioneering role in

enacting laws that protect various sectors related to Intellectual Property rights, including the

publishing sector. Al Redha summarized losses suffered by computer software

manufacturers around the world as a result of piracy and continuous violation of Intellectual

Property rights. He referred to the negative effects of piracy and violation of Intellectual

Property on investment, as many manufacturers are reluctant to enter markets that do not

protect their trademarks. He observed that losses resulting from theft of Intellectual Property

rights globally increased from $51 billion in 2009 to $59 billion in 2010, explaining that there

is now $63 of counterfeit products for every $100 of their genuine equivalent. Speaking on

this occasion, Sheikha Bodour bint Sultan Al Qasimi, EPA Chairperson, said IntellectualProperty protection is one of the most important factors in helping promote the global publishing

industry due to its role in respecting the rights of publishers, authors and illustrators, which would

have moral and material impacts on them, as well as positive results on the performance of all

those working in this field." Sheikha Bodour praised laws and legislation enacted by the UAE to

protect Intellectual Property rights and penalties against violators of Intellectual Property rights in

the country. She pointed out that the UAE has made remarkable achievements within a few

years, and expressed her hope that the UAE would take further measures regarding Intellectual

Property in order to be among the group of pioneering countries in preventing violations of

Intellectual Property rights. This comes at a time when the UAE has reaffirmed its commitment

to international laws related to publishing, and its entry into many of the various agreements, it isa signatory to the Berne Convention, the Treaty of the World Intellectual Property Organization

and the TRIPS Agreement of the WTO, and the Arab Convention for the protection of copyright,

also classified as Athalawly the Arab world, and is one of the top 30 countries globally in the

protection of copyright and Intellectual Property. On the same day, a workshop was held entitled

"Addressing Publishing in the UAE" in the presence of members of the Board of Directors of the

Association, during which a number of issues and developments that concern the publishing

sector were discussed. They also addressed ways to remove obstacles facing publishers which

are hindering their efforts to develop the publishing sector, a goal that tops the Emirates

Publishers Association's priorities in its effort to help publishers and facilitate their mission,

guide them and exchange views with them the best possible solutions.

Documents

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