The reusable olive oil bottle -- a staple on restaurant tables across Europe, evocative of summers in Tuscany and vineyards in southern Spain -- has been banned from restaurants by the powers that be in Brussels, in a move the European Commission has sought to frame as a consumer protection measure. Critics, however, see it as an attempt to prop up a struggling olive oil industry and representative of the European Union's bureaucratic overreach.
Reusable bottles, the Commission claims, are unhygienic, and there's a risk that they could be refilled with unknown, cheap, and low-quality oils. The AP has more:
"This will ensure a high-quality product for consumers," said Rafael Sanchez de Puerta of the Copa-Cogecas federation (a European farmers federation). Also, by displaying the name, origins and storing conditions, "this will help to preserve the image of olive oil."
Many, however, are unconvinced.
"With the euro crisis, a collapse in confidence in the EU, and a faltering economy, surely the commission has more important things to worry about than banning refillable olive oil bottles?" inquired one British member of the European Parliament. Germany's Suddeutsche Zeitung newspaper, meanwhile, called the regulations the "silliest" rules since the EU's infamous attempt to regulate the curvature of cucumbers.
Of course, the requirement that olive oil must be served in pre-packaged factory bottles, with tamper-proof nozzles and standardized labeling, is the sort of regulation that people love to mock. And others have voiced the more serious concern that, by placing an emphasis on standardized packaging, the regulations could help out large-scale olive oil producers -- many of which are located in some of Europe's weakest economies -- at the expense of smaller farms.
But consumers could actually use more protection when it comes to olive oil. The staple is one of the most fraud-prone agricultural products in Europe, in part because it's so much more valuable than other forms of oil and remains relatively easy to doctor with cheaper products like soybean and other seed oil. ("Profits were comparable to cocaine trafficking, with none of the risks," one investigator told writer Tom Mueller, who later went on to write a book about olive oil fraud). The EU, in fact, has an olive-oil task force dedicated solely to stopping trafficking in dodgy extra-virgin.
Still, this kind of large-scale fraud takes place at the level of producers and bottlers -- not at the restaurant table.
Iran's English-language, state-sponsored media service PressTV may have stumbled onto something, in spite of itself. An article published Thursday cites a bizarre YouTube rant by financial analyst and PressTV contributor Mike Stathis (author of recent articles "Jewish Mafia tied to death of America" and "Zio-Saudis use petrodollar to wage war," which are as unhinged as their titles suggest), in which he accuses Starbucks of blocking PressTV's website but not, for example, pornographic websites.
The YouTube video, which PressTV's article does not link to, lays out Stathis's conspiratorial theory, which is that Starbucks is censoring PressTV's site as part of an effort by a hypothetical Jewish cabal to control U.S. opinion. Stathis has some unkind things to say about Starbucks CEO Howard Schultz and investment guru Peter Schiff (no, he does not connect those dots beyond "they're both Jewish"; yes, it's just as nonsensical in the video). And he takes a break from his rant to talk to a pornographic webcam recording he claims he's accessing from a Starbucks. The whole thing is strange and uncomfortable to watch, and not terribly work appropriate. I can't say I recommend it.
Here's the thing, though: Stathis is on to something. On Friday, I walked across the street to Starbucks. Sure enough, PressTV's website wouldn't load. In an effort to find another website that wouldn't load (and probably put myself on a few watch lists), here are some other sites I tried: Iran's other English-language state news agency Fars, the Syrian Arab News Agency, Russian propaganda machine Pravda, white supremacist web forum Stormfront, and PornHub, which is exactly what it sounds like. They were all accessible -- at the glacial speed of coffee shop Wi-Fi, but accessible. I walked two blocks to another Starbucks. Once again, PressTV gave me an error message, while Stathis's crazy YouTube video loaded without a hitch. Same thing at a third Starbucks. Back here at the FP office: PressTV's site loaded, no problem.
When reached for comment, Laura Mill, a spokesperson for Starbucks, told FP, "We do not filter our content or websites that can be accessed in our stores in the U.S. There're some global nuances, but in the U.S. there's no filtering." IT specialists at Starbucks told her the site might be blocked by the Internet service provider.
Starbucks's Wi-Fi is provided by AT&T, which did not reply to a request for comment by press time. But PressTV was easily accessible on the protected Wi-Fi network at the AT&T store across the street from one of the Starbucks locations I visited Friday. Starbucks's Wi-Fi also has AT&T terms and conditions that users agree to when logging in. And buried in the fine print, AT&T passes the buck back to Starbucks:
The owner or operator of the Location may have implemented URL filtering or other content filtering services which block access to certain websites or content while at the Location ('content filtering').
As it happens, AT&T's terms and conditions protect it from liability for just about any disruption in service you can imagine (and a few that you probably didn't think of):
AT&T will not be liable for any failure of performance, if such failure is due to any cause beyond AT&T's reasonable control, including acts of God, fire, explosion, vandalism, nuclear disaster, terrorism, cable cut, storm or other similar occurrence, any law, order or regulation by any government, civil, or military authority, national emergencies, insurrections, riots, wars, labor difficulties, supplier failures, shortages, breaches, or delays, or delays caused by you or your equipment.
Something does seem to be blocking access to PressTV at Starbucks, but whether that's a person or just a glitch -- and why PressTV and not, say, the Fars News Agency as well -- remains unclear. But if you think it's evidence of a grand conspiracy to deprive the American public of Iranian propaganda, maybe it's time to take off your tinfoil hat.
I didn't think it would be hard to find "9 Disturbingly Good Jihadi Raps" online, but it was. There were, of course, the stylings of al-Shabab's rapper laureate, Omar Hammami, and the music video for "Dirty Kuffar," which was designed to go viral on social media sites like YouTube and Dailymotion.
But the most professional-sounding jihadi raps weren't on YouTube or SoundCloud -- they were tracks off M-Team's album "Clash of Civilizations." And to listen to them, I bought the songs on iTunes. They're also available for download from Amazon.com and Google Play, and they can be listened to on Spotify.
M-Team (that's short for Mujahideen Team) offered some bold thoughts about violent jihad in their debut album:
SPOKEN: Today is the day of retribution!
Today is the day of jihad!
Today is the day of victory or martyrdom,
so all you who believe, raise your hand and ready your weapons...
SUNG: Bust your weapons, take off oppression,
take their lives and right-hand possessions,
snatch a politician out the election,
give him injections, lethal infections...
The revolution, kaffir execution,
the true solution, the day of retribution!
"It's certainly very provocative," Rolling Stone associate editor Simon Vozick-Levinson told me when I asked him what he thought of it. "Rap and hip hop in particular are effective ways of getting a message out to a broader audience. If you have a strong conviction, putting it to a catchy beat is a good way to get your message across. To a Western audience, it's going to be pretty shocking."
It's also hardly the first time music has encouraged violence. And it's not just rap; before songs like "Cop Killer" and "Fuck tha' Police" in the early 1990s, there were controversies over groups like Black Sabbath and Twisted Sister. But is there a point where musicians go too far for mainstream music outlets?
Graham James, a spokesman for Spotify, said they were looking into M-Team's work and pointed out that Spotify, in its company policy, "reserve[s] the right to remove content that, in Spotify's opinion, is likely to incite hatred or discrimination of any kind, be that race, religion, sexuality or otherwise, or content that is deemed offensive, abusive, defamatory, illegal, pornographic or obscene in anyway." But he also expressed concern about using the policy for anything other than exceptional circumstances. "It's a very slippery slope. If you start taking down things you find objectionable, where do you ultimately draw that line?" he told FP. (Representatives from iTunes did not respond to requests for comment.)
Vozick-Levinson agrees: "Artists test boundaries, like Ice-T's song 'Cop Killer.' But that song didn't lead to an epidemic of violence; that song is a work of art. Time has shown that censorship isn't the answer. The better choice is to discuss these things and why they're objectionable rather than try to censor them."
And its worth noting that, like Ice-T, who went from rapping about shooting cops to playing a detective on Law & Order: Special Victims Unit, M-Team took a decidedly more moderate tone in their sophomore album, "My Enemy's Enemy." As Daveed Gartenstein-Ross, a fellow at the Foundation for Defense of Democracies and jihadi rap critic, described it on Twitter, "M-Team's later deviations diminish their jihadi cred. Kind of like how Katy Perry's later music diminishes the credibility of her early work as a gospel singer."
In a country where land is such a precious commodity, you might think that suddenly having more acreage would be a blessing. Instead, it's sparked yet another political fight.
As it has for decades, the water level of the Dead Sea is dropping at a rate of more than three feet a year -- largely as a result of dams built in Israel, Jordan, and Syria, and water subsidies that make agricultural irrigation cheap and wasteful. This, in turn, has caused the shoreline to recede and exposed 35,000 acres of new, unclaimed land.
Today, the Israeli newspaper Haaretz reported that, after two years of legal battles, the Israeli Civil Adminstration has decided that the new coastline is state land. The decision comes despite the claims of neighboring Palestinian communities that their holdings previously extended to the waterline, and that the newly exposed land should therefore be theirs as well. According to the Haaretz report, the Civil Administration could not verify these claims.
Shoreline property is a particularly valuable resource on the Dead Sea. Resorts built on beachfront property 20 years ago now have to shuttle tourists to the water's edge. The sea's southern portion is hydraulically engineered and entirely artificial -- pumps transport water from the north into "evaporation pools" in the south for the production of potash and other cosmetic products that capitalize on the sea's supposed healing properties.
The Haaretz article notes that the Israeli government will use the land for tourism projects, but whether the territory can sustain development is uncertain; the exposed land is pockmarked by large sinkholes where now-dry aquifers have collapsed, and the runoff that does make it to the Dead Sea is polluted by sewage. The new land may be more trouble than it is worth, but that's not likely to defuse the fight over who controls it.
NASA image by Robert Simmon
We here at Foreign Policy had been preparing for the day Cyprus's banks reopened by collecting pictures of bank runs from around the world -- on the chance that this morning we'd wake up to long lines of frantic depositors.
But with headlines like "Euro Rises Amid Cyprus Calm" and "All Is Calm as Cyprus Banks Re-Open After 12 Days," that idea has sort of fizzled out. (Come back to this space next time there really is a bank run, though, for some great pictures!)
So instead, we present you with this: a Cyprus so calm that a man feels comfortable standing in front of a bank with a parrot on his head.
Yiannis Kourtoglou/AFP/Getty Images
What would you do if you bought a shiny new Apple computer (from what looked to be a shiny Apple store) only to find out that the store that sold it to you was a total fraud? We're guessing there would probably be some screaming involved. For customers in the Chinese city of Kunming, the revelation that their city's Apple hub was a counterfeit (albeit, a damn impressive counterfeit), has led to angry customers demanding refunds.
‘When I heard the news I rushed here immediately to get the receipt, I am so upset,' a customer surnamed Wang told Reuters, near tears. ‘With a store this big, it looks so believable who would have thought it was fake?'
Wang, a petite, 23-year-old office worker who would not give her first name, spent 14,000 yuan ($2,170) last month buying a Macbook Pro 13-inch and a 3G iPhone from the Kunming store. She wasn't issued a receipt at the time, with staff telling her to come back later.
‘Where's my receipt, you promised me my receipt last month!' Wang shouted at employees, before being whisked away to an upstairs room.
On Wednesday, an American blogger living in Kunming first wrote about the store, which popped up in her neighborhood:
They looked like Apple products. It looked like an Apple store. It had the classic Apple store winding staircase and weird upstairs sitting area. The employees were even wearing those blue t-shirts with the chunky Apple name tags around their necks ... We struck up some conversation with these salespeople who, hand to God, all genuinely think they work for Apple.
The store said its products were genuine Apple computers and were being sold at the same price as you would find on Apple's website. And staff said they were angry by all the media attention the blog has caused.
"The media is painting us to be a fake store but we don't sell fakes, all our products are real, you can check it yourself," one employee told Reuters. "There is no Chinese law that says I can't decorate my shop the way I want to decorate it."
President Obama will consult with 20 CEOs of major U.S. companies today to get their advice on how to stimulate U.S. economic growth and create more American jobs.
The premise of these kinds of meetings is that the heads of American headquartered companies like GE, Google, PepsiCo, and Motorola have a special concern for the fate of the U.S. economy and useful advice on how to fix it. But do they? Are these really American companies in any way other than that they happen to be incorporated in Delaware of some other U.S. state, and do these CEOs have or even can they have the best interests of the American economy at heart?
Remember that most of these companies sell and produce far more outside the United States than inside. They often have many more employees outside the United States than inside and a large proportion of their shareholders are also not American. They must deal in most cases with more than 100 presidents and prime ministers of countries in which they have major interests. In the case of the European Union they must deal with officials in Brussels who are responsible for an economy that is about a third larger than the United States. In Beijing and New Delhi they must deal with governments that are currently driving the development of economies that are almost surely going to become larger than the U.S. economy in the next twenty to forty years.
Also remember that these companies have greater financial power and greater production capacity than all but a handful of countries. They are quasi-sovereign entities and their CEOs are in many respects more akin to powerful heads of state than to your average everyday businessman. It is not a criticism of them to point out that their interests may or may not be congruent with America's interests. Motorola and Cisco, for example, do a large portion of their production in China. They benefit from China's undervalued yuan that allows them to have artificially low production costs. Obama badly needs China to stop manipulating its currency to be undervalued if he wants to realize his goal of doubling U.S. exports. But a halt to China's currency manipulation is not necessarily in the interests of the companies that do a lot of their production there. So what will the CEOs say to Obama about currency manipulation?
A particularly troubling aspect of the global business situation is the affect of the asymmetry of global political organization. In democratic Washington, for instance, the CEOs of these companies are major political players. They have their PACs, legions of lawyers and lobbyists, and ready access to the highest levels of government. Moreover, they can take the U.S. government to court anytime and win. In authoritarian Beijing, on the other hand, not only are the CEOs not political players, they need to pay careful attention to which way the winds are blowing. So in a funny way, they may have to be more responsive to the wishes of the authoritarian governments than to those of the democracies. And certainly it is easier for them to lay off workers and close facilities in the U.S. than it is in most other countries in which they operate including the EU and Japan.
This is not to say that Obama should not be meeting with them. Some CEOs like GE's Jeffrey Immelt seem to have had some second thoughts about off-shoring their production and have even brought some production back to the U.S. from abroad. So it will no doubt be informative for Obama to listen to what they all have to say. But he must do so with a clear understanding of the fact that his problems are not necessarily their problems and indeed may be the source of some of their success.
It would really help if the U.S. government had a clear articulation of the U.S. national economic interest. But it does not, and this is all the more reason for Obama to be non-committal about what he hears.
Indeed, rather than listening too much, the President ought to use this occasion to act like Chinese, Singaporean, Israeli, and French leaders and tell the CEOs that they really need to invest in America. He could remind them that when they need help in protecting their intellectual property and in protesting discriminatory policies abroad, it is not to the Chinese or E.U. or South Korean or other authorities to whom they turn for help. Rather it is to Washington. He could also remind them that more of their innovation comes out of U.S. laboratories and universities than anywhere else and that to keep it going more investment and U.S. based production is also necessary. He should make it clear that he'll be watching their investment announcements and that while he will strive to make America more attractive for their investments, he also expects the companies to do their best to make it or provide the service in America.
After all, what America makes (including services provision) makes America.
Clyde Prestowitz is president of the Economic Strategy Institute and author of The Betrayal of American Prosperity.
JIM WATSON/AFP/Getty Images
Last week we listed some items that are growing in popularity among China's increasingly wealthy middle class, along with some of the impacts of these recent obsessions, including jade. One major consequence not included in the list is the fact that China's passion for jade has been criticized by both human rights groups and the U.S. government for financing Burma's military dictatorship.
Brian Leber, a Chicago-based jeweler involved in efforts for an industry-wide boycott of jewels from Burma, wrote in to remind us that the Southeast Asian country is not only home to one of the world's most repressive regimes, it also has millions of kilograms of jadeite -- the most expensive and most sought after jade in China.
U.S. trade sanctions on Myanmar that specifically targeted the military junta's trade of jadeite have apparently done little to quell the Chinese appetite for the fine gem: According to the U.S. Government Accountability Office, jadeite from Myanmar has, unlike other gems, continued to be "primarily purchased, processed, and consumed by China."
Indian-U.S. relations are going to be pretty important for the foreseeable future. I'd imagine, then, that implicitly threatening the victims of the Bhopal Union Carbide (now owned by Dow Chemical) disaster of 1984 to be quiet or else isn't a very smart thing.
Apparently deputy National Security Adviser Mike Froman didn't get that memo.
India's Planning Commission deputy chairman sent Froman an e-mail requesting U.S. assistance in securing a loan from the World Bank. Froman replied that he'd look into it, and then proceded to lose all common sense:
While I've got you, we are hearing a lot of noise about the Dow Chemical issue. I trust that you are monitoring it carefully... I am not familiar with all the details, but I think we want to avoid developments which put a chilling effect on our investment relationship.
In case, like Froman, you're not familiar with the details of Bhopal, 25 years ago, a large amount of methyl isocyanate leaked from the plant and spread over the city, killing at least 3,000 immediately and contributing to the deaths of approximately 25,000 more. Local journalists had repeatedly warned that the plant suffered from lax safety regulations to no avail. Birth defects, cancers, growth deficiency, and other health issues are abnormally high in the affected area.
Finally last June employees of the plant received punishment. Local Indian managers were convicted, but received what were perceived as little more than slaps on the wrist. Campaigners have demanded Union Carbide -- including then chairman Warren Anderson -- itself be reprimanded, but no action has been forthcoming. Amnesty International called the convictions "too little, too late."
Making Froman's e-mail even more asinine, his threat wasn't even credible. Regardless of further actions taken against Dow Chemical, the U.S. is going to invest a lot of money into India for both geopolitical and economic reasons -- making Froman's message one that really should have stayed in his drafts folder.
The Sydney Morning Herald reports that in an effort to secure the release of four of its executives who were convicted on corruption charges in China last week, mining giant Rio Tinto has secured the services of a guy who knows a thing or two about making deals with Beijing:
Dr Kissinger, 87, is well known in China since his secret 1971 meeting with Premier Zhou Enlai paved the path for the US president Richard Nixon's historic meeting with Mao Zedong.
The Herald understands Dr Kissinger helped secure a meeting on Rio's behalf with Wang Qishan, a Politburo member and former banker who handles many of China's international financial affairs.
As FT Alphaville notes, Kissinger's consulting firm advises corporate clients on government relations and is very active in China.
Hat tip: China Digital Times
GoDaddy, the web domain registration company better known for its risque Super Bowl commercials than its political principles, announced today that it will stop registering domains in China in protest against cyber attacks and censorship:
"We believe that many of the current abuses of the Internet originating in China are due to a lack of enforcement against criminal activities by the Chinese government," Christine Jones, Go Daddy Group Inc general counsel, told a congressional commission hearing on Wednesday.
She said GoDaddy had repelled dozens of extremely serious attacks that appear to have originated in China in the first three months of 2010. GoDaddy would, however, continue to manage .cn domain names of existing customers.
"Our experience as been that China is focused on using the Internet to monitor and control the legitimate activities of its citizens, rather than penalizing those who commit Internet-related crimes," Jones said.
I'd be interested to know how much business GoDaddy is actually doing in China. Maybe I'm just being cynical, but since GoDaddy's whole business model depends on grabbing media attention, they may figure that the good publicity is worth taking a hit in the Chinese market. Not sure if it will be as effective an attention-grabber as those Danica Patrick ads but worth a shot I suppose.
Today, in Zimbabwe, a highly controversial new law requiring businesses to be majority-owned by indigenous Zimbabwean citizens comes into effect.
Within the next 45 days, every company with an asset value over $500,000 needs to submit paperwork detailing the racial background of its shareholders. If the company has a majority of white or foreign shareholders, the Indigenization and Economic Empowerment Act -- brainchild of President Robert Mugabe, whose catastrophic land reform act caused hyperinflation and famine -- requires it to transfer shares to indigenous Zimbabweans.
The goal of the law -- "a deliberate involvement of indigenous Zimbabweans in the economic activities of the country, to which hitherto they had no access, so as to ensure the equitable ownership of the nation's resources" -- is a noble one. But the law is a calamity that promises to drive away foreign dollars and further the impoverishment of average Zimbabweans.
Facing the law, which Prime Minister Morgan Tsvangirai lobbied against and which many believed would never actually be enacted, uncounted companies are simply pulling out. 51 percent is a controlling stake. That means that if you're the head of, say, a South African soda company's Zimbabwean unit, in 45 days, you have a new boss -- shareholders appointed by a branch of Mugabe's government. Foreign direct investment, so vital to the economic growth of low-income countries, has already fallen off and will continue to crater.
Plus, the law, which creates an agency to help distribute shares to indigenous Zimbabweans, will likely only benefit a tiny handful of elites. "We fear that this could lead to a creation of new minority blacks who will just replace the minority whites," Lovemore Matombo, the head of Zimbabwe's Congress of Trade Unions, told AFP.
And how does Mugabe's government determine who qualifies as an "indigenous Zimbabwean" anyway? What about people of mixed race, naturalized citizens, or citizens by marriage? The law says the category includes "any person who before the 18th April 1980" -- when Zimbabwe was officially founded -- "was disadvantaged by unfair discrimination on the grounds of his or her race." That means the new law inverts the guidelines of the racist Rhodesian government, which as a foundational principle discriminated against black and mixed-race people.
Peter Macdiarmid/Getty Images
The Heritage Foundation has pulled together a fascinating study of Chinese investment -- showing (with really nice charts and maps!) just where all of those yuan are heading overseas.
A few things to note, plus one question....
The Toyota logo is displayed on a box of auto parts at City Toyota February 5, 2010 in Daly City, California. Toyota Motor Corp. President Akio Toyoda issued an apology today for saftey issues that have prompted the recall of nearly 4 million Toyota cars and trucks that could have accelerator pedals that can stick.
Justin Sullivan/Getty Images
I hadn't seen this earlier: John Pomfret relays word that Google's declaration that it would no longer comply with Chinese Internet censorship rules was a verboten subject in Davos this year.
"At China's request, that topic was left off the table at this year's World Economic Forum in Davos, Switzerland, Josef Ackermann, chief executive of Deutsche Bank and co-chairman of the event, told Bloomberg News," he writes.
So now China is capable of silencing debate in what's supposed to be an open forum?
Here's more from Bloomberg, which quotes Ackermann saying "China didn't want to discuss Google":
At Davos, participants such as financier George Soros, economist Joseph Stiglitz and French President Nicolas Sarkozy debated technology topics such as social networking and 3-D features used in the motion picture "Avatar." The discussion didn't include the conflict between China and Google, even in panels such as "The Rise of Asia" or "Redesigning the Global Dimensions of China's Growth."
Way to tackle the tough issues, guys.
Google CEO Eric Schmidt did briefly raise the subject on his own, however, according to the Wall Street Journal:
"We like what China is doing in terms of growth...we just don't like censorship," Mr. Schmidt said, speaking at the World Economic Forum's annual summit here. "We hope that will change and we can apply some pressure to make things better for the Chinese people." [...]
Mr. Schmidt maintained Friday that Google wants to continue operating in China. But he said the company didn't want to do so if it had to operate under China's censorship laws. To operate its Web site, Googe.cn in China, Google had to agree to censor its results.
"We would very much like to stay in China. We would very much like the censorship we oppose to improve in China," Mr. Schmidt replied.
Li Keqiang, China's vice premier, didn't address the issue in his speech, but apparently insisted in private that foreign companies must follow Chinese laws.
European leaders are starting to follow suit; Britain's five largest banks have agreed to publish the pay of their key staff members, and will spread bonus payments over three years. French president Sarkozy has announced a set of even tougher and more broadly applied regulations.
Of course, not everyone thinks that bonus reforms are the way to go. Nobel prize-winning conomist Robert F. Engle III says
We shouldn't ban bonuses, but restructure the way they're paid so they're more commensurate with the risk the company is taking....What's important is we give the banking system the right incentives to figure this out. When companies get too big and too complex to fail, they would face a higher tax rate, which would go into a rescue fund. The banks are not excited about it, they would rather go back to business as usual."
Izhmash Arms, makers of the developing world's favorite automatic weapon, the AK-47, is facing bankruptcy, thanks to competition from cheap knockoffs:
According to Izhmash Arms' parent company, the Rosoboronexport State Corporation -- which has a monopoly on supplying Russian arms to the international market -- there are about eight countries in which dozens of business are making their own versions of the Kalashnikov. And they are doing this without passing on any licensing fees to the Russians.
And now it appears that the financial difficulties facing the weapons manufacturer have reached crisis point: its very existence is threatened. A businessman in Izhevsk has filed a motion to declare Izhmash Arms bankrupt because of outstanding debts of around 8 million rubles (around €180,000 or $265,000). The case has caused a sensation in Russia because for a long time the Russian armaments industry has been one of the only industries considered competitive on an international basis. And Izhmash, which was founded in 1807 by Russia's royals, is one of the largest firearms manufacturers in Russia.
However, arms exports have fallen dramatically over the past year, falling from around $10.8 billion (€7.4 billion) worth of weaponry in 2007 to a mere $3.5 billion (€2.4 billion) in 2008.
According to the Der Spiegel article, Izmash's problems are partly of its own making. Licenses to manufacture the AK were granted generously to like-minded regimes throughout the third world during the Cold War. After the Soviet Union fell, the companies that were already making the weapons saw no reason to stop.
RAUL ARBOLEDA/AFP/Getty Images
In an interview with Der Spiegel over the weekend, ousted Honduran President Manuel Zelaya suggested that he had gained the support of a number of sportswear companies who manufacture their products in Honduras:
SPIEGEL: Do you see an opportunity for dialogue with the new regime?
Zelaya: International pressure would have to be increased for that to happen. It affected the coup leaders when Washington suspended their diplomatic visas, and the sanctions are also taking effect. In many ports, goods coming from Honduras are no longer being unloaded. The German firm Adidas, along with Nike and clothing manufacturer Gap, have announced that they will cancel orders from Honduran factories unless democracy is restored. [Emphasis mine.]
Zelaya seems to be embellishing to say the least. He is likely referring to a letter the companies wrote to Secretary of State Hillary Clinton last week urging her to seek a negotiated compromise to the crisis in Honduras. Here's an excerpt:
While we do not and will not support or endorse the position of any party in this internal dispute, we feel it is necessary in this case to join with the President of the United States, the governments of countries throughout the Americas, the Organization of American States, the UN General Assembly and the European Union in calling for the restoration of democracy in Honduras.
The letter doesn't say anything about canceling orders. And while the organizations mentioned in the above paragraph all support Zelaya's reinstatement, it's hardly a ringing endorsement for his position.
I called Nike's media relations department today and spokesperson Kate Meyers denied that there were any plans to cancel orders:
We have no plans to alter our supply orders from Honduras, whatsoever. One of the aims of the letter is to support workers’ rights and civil liberties. Canceling our orders wouldn’t be the way to go about that.
LA Times' blogger Catherine Lyons has some useful background on why the apparel companies are getting involved with the situation in the first place.
ALFREDO ESTRELLA/AFP/Getty Images
They may be leftists, but the current and former president of Argentina have no aversion to making money on the side.
Rory Carroll in the Guardian reports that Cristina Fernandez Kirchner, elected in 2007, and her husband Nestor, the previous president, have done pretty well for themselves:
New figures show that since Nestor and Cristina Kirchner came to power in 2003, they have presided over a remarkable sixfold increase in their own wealth.
The couple have racked up a fortune through property speculation and investments that have thrived even as the economy has faltered. Last year alone their wealth jumped 158% to £7.3m...
According to information the couple supplied to the anti-corruption office, they own 28 properties valued at $3.8m, four companies worth $4.8m and bank deposits of $8.4m. Last year they sold 16 properties, almost tripling their bank accounts, and expanded their hotel business in El Calafate, a tourist magnet. Their debts also jumped because of bank loans.
Knowing Argentina's history of corruption, the open disclosure by the first couple of their wealth is actually kind of reassuring.
But now, with Argentina fighting to avoid a recession and public debts mounting across the country, the Kirchners would do well to apply that same financial acumen to the country's problems. Otherwise, they will face increasingly tough questions about how they had so much time for their own finances when they were supposed to be focusing on those of Argentina.
DANIEL GARCIA/AFP/Getty Images
The Christian Science Monitor highlights an April report by the International Food Policy Research Institute entitled "'Land Grabbing' by Foreign Investors in Developing Countries." The report details purchases of farmland in developing countries by China, South Korea, India, and a handful of gulf states.
Another analysis of the "land-grabbing" trend relased in June by the U.N. Food and Agricultural Organization and two other agricultural research groups examines more closely the potential positives and negatives of the purchases.
Increased investment may bring macro-level benefits (such as GDP growth and improved government revenues), and may create opportunities for economic development and livelihood improvement in rural areas.
But as governments or markets make land available to prospecting investors, large-scale land acquisitions may result in local people losing access to the resources on which they depend for their food security – particularly as some key recipient countries are themselves faced with food security challenges.
And, as Devindeer Sharma from India's Forum for Biotechnology and Food Security told the Telegraph on June 28, there is a high chance of a local backlash and investors will have to avoid a neo-colonial image:
"There are 80 Indian companies trying to get land in Ethiopia, and it's all to be imported back to India. The government of India has been encouraging them," he said, and warned of danger if famine returned to Africa.
"If food is being shipped out and poor people are dying, what will happen? There would be riots," he said.
Thoughts? Is the investment good or bad for the recipient countries?
RANCOIS XAVIER MARIT/AFP/Getty Images
Teenagers are consuming more media, but in entirely different ways and are almost certainly not prepared to pay for it. They resent intrusive advertizing on billboards, TV and the Internet. They are happy to chase content and music across platforms and devices (iPods, mobiles, streaming sites). Print media (newspapers, directories) are viewed as irrelevant.
Texting is still key and use of new data services limited due to cost.
Teenagers listen to a lot of music, mostly whist doing something else (like travelling or using a computer). They are VERY reluctant to pay for it (most never having bought a CD) and a large majority (8/10) downloading it illegally from file sharing sites.
Conclusions? Teenagers don't have any money and they like free things. Also, eight out of ten of Robson's friends are downloading music illegally.
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Via Mike Allen, fun facts about General Motors:
GM has a $458 million market capitalization now - it was $59 BILLION nine years ago. GM will have 40,000 people building cars in America. It had 400,000 in the 1970s.
As Allen points out, if you're an American taxpayer, you're now the proud owner of this white elephant.
In contrat to vlogging, live-journaling Russian President Dmitry Medvedev, Prime Minister Vladimiur Putin has generally preferred to let his actions do the talking. But this Friday, Putin will make his debut as a magazine columnist in the monthly magazine Russian Pioneer. But don't expect an ideological pean to the glories of sovereign democracy.
Putin's topic is management, specifically "why it's hard to fire people." But the released exceprts of the column, as printed by The Independent, do seem to offer a few clues to recent Kremlin infighting though:
Conflicts within a team, especially within a big team, always arise," writes Mr Putin, in extracts leaked to a Russian news agency. "This happens every minute, every second – simply because between people there are always clashes of interest."...
"I can say honestly that while I was president, if I hadn't interfered in certain situations, in Russia there would long ago ceased to have been a government." ...
"In contrast to previous, Soviet rulers, I always do it personally. I usually call the person into my office, look them in the eye, and say: 'There are concrete complaints. If you think this isn't true, then please, you can fight against it; argue your case'."
Photo by Junko Kimura/Getty Images
Just a week ago, the Gray Lady published a story rhapsodizing about Norway's fiscal responsibility. An oil exporter, Norway saved (saved!) its surpluses, giving it deep reserves today. And yesterday, it published a story explaining that Norway too has dipped into a recession.
Gawker's headline: "Norway, which proved last week that socialism beats recessions, is now in a recession."
The Atlantic, piling on, with the subtle headline "The New York Times Knows a Lot about Norway": "Don't papers have an obligation to treat their subjects with consistency? I know a lot can change in week, but still!"
I get the tweaking; the NYT story was fairly fawning, and they might have waited for the latest numbers.
But still, the coverage seems fair. Norway's entered a far gentler recession far later than its peers. It still has a budget surplus -- meaning its stimulus spending isn't sending it into debt. Its unemployment numbers remain enviable. It's in a recession, but has avoided the wreckage of its peers.
So, go on, Norway. Sometimes least-bad is best.
Photo: Ragnar Singsaas/Getty Images
Today, U.S. Treasury Secretary Timothy Geithner and President Barack Obama laid out a plan to create and enforce stricter tax regulations for U.S. corporations. Obama's opening salvo from the presser:
Most Americans meet their responsibilities because they understand that it's an obligation of citizenship...and yet, even as most American citizens and businesses meet these responsibilities, there are others who are shirking theirs.
He went on to describe the U.S. tax code as "full of corporate loopholes that [make] it perfectly legal for companies to avoid paying their fair share."
That's right. He was talking about "tax havens": not just countries in which major U.S. corporations hide from U.S. taxes, but a big fat open season sign for fire and brimstone metaphors and sword of Damocles swinging. Democratic speechwriters must adore tax havens. They're like the Newt Gingrich of tax policy: always there to beat up.
Rhetorical fury aside, tax havens really do allow U.S. companies to shore up a whole lot of money, money which Obama hopes to use to revamp the U.S.'s healthcare system, among other things. Interesting factoids from the Treasury release:
The closing of three major tax haven loopholes should garner $190 billion in tax revenue for the government in the next ten years.
Another big beneficiary of the changes? Lobbyists. Corporate America isn't going to like this -- and they're going to pay a lot of money to see the repeal of these changes.
An epidemic of "bossnapping" is sweeping France as employees at French subsidiaries of Sony, Caterpillar, 3M and a Hewlett-Packard have in recent weeks taken their bosses hostage to protest cutbacks. The AP's Greg Keller writes:
So far none of the boss-nappers has been prosecuted and none of the bosses hurt. Workers sometimes even make efforts to make their boss' night at the office more comfortable.
During his boss-napping in March, 3M manager Luc Rousselet told reporters "everything's fine," and workers brought him a meal of mussels and French fries for dinner. [That's him enjoying his meal in the photo above.]
Seizing bosses is not a new tactic in France, with examples of boss-napping dating back decades in a country famous for its strikes and known as a place where workers aren't afraid to put up a fight.
But the phenomenon has jumped to the front pages of French newspapers in recent weeks as the Europe-wide recession has sparked a fresh wave of boss-napping episodes.
Average Frenchmen and women seem to take a forgiving view of the practice. A poll earlier this month showed 55 percent of them judged "justified" boss-nappings, factory and road blockades and other "radical and violent social acts."
French bosses aren't going to take this lying down though:
The phenomenon has sparked a cottage industry in advice for executives worried they could be locked up. One Paris management consultant has begun promoting a "survival kit" for potential boss-napping victims, including a cell phone pre-programmed with the numbers of family, police and a psychologist, and a change of clothes.
Niel is giving his clients a list of "10 anti-boss-napping tips," which include gauging your staff's mutinous instincts beforehand and choosing a neutral observer to calm things down if and when a boss-napping does break out.
I imagine a good number of our readers are sitting at work right now. If your boss is looking at you funny, it's possible he or she might just be "gauging your mutinous instincts."
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Liberia, with the aid of the World Bank, has been negotiating with vulture funds holding $1.2 billion of its debt. You know what vulture funds are, right? They’re evil hedge-fund types who buy up debt at pennies on the dollar, and then sue for repayment in full, with interest and penalties and everything.
Just look at the deal they drove in this case! Liberia, one of the poorest countries in the world, is going to have to pay them, er, nothing at all. The World Bank is kicking in $19 million, a few rich countries are matching that sum, and the vultures are walking away with a not-very-princely-at-all $38 million, or just 3 cents on the dollar. Which probably barely covers their legal fees, let alone the amount they paid for the debt in the first place.
Let's read that again: the World Bank and Liberian government negotiated a deal so that vulture funds holding $1.2 billion in debt ended up with a check for $38 million -- three percent!
It's distressing that Liberia got in such a bad fix. It needed to raise funds and banked on future growth to make the payments -- but a bloody civil war meant it couldn't. The original lenders decided to sell the loans off to vulture and hedge funds who drove a hard bargain. Which meant that at one point, Liberia owed seven times its national income to creditors.
So, the balance sheet -- in redux:
Ultimately, though, Liberia isn't the story here. Emerging market and developing economies, like Liberia, will be among the hardest-hit in the Great Recession. Unlike OECD countries, they won't be able to issue debt or raise funds easily. They'll need the help of the international community -- and especially international organizations -- to ensure that their loans come with advisement and affordable repayment options.
The hero here's the World Bank. Suddenly, it and the IMF -- especially the IMF, perhaps -- have become the world's most important international organizations.
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Two out of four chapters of the IMF's major World Economic Outlook are available -- the other two are expected on April 22.
The short of it? Bad news.
Chapter three includes a long comparison of the current Great Recession with the Great Depression of the 1920s. Ours is now a global down-turn, a "synchronized downturn," the paper argues -- that makes it worse. The only available counterballast lies in coordinated, synchronized governmental spending. Nevertheless, there are worrisome parallels.
There is continued pressure on asset prices, lending remains constrained by financial sector deleveraging and widespread lack of confidence in financial intermediaries, financial shocks have affected real activity on a global scale, and inflation is decelerating rapidly and is likely to approach values close to zero in a number of countries. Moreover, declining activity is beginning to create feedback effects...
The fourth chapter takes a look at how the crisis originated in advanced economies, and spread like wildfire to emerging economies.
As the crises in advanced economies continue to deepen, and trade and capital flows decline further, exchange rates and financial systems in emerging economies could come under more severe pressure. In turn, a broad-based economic and financial collapse in emerging economies would have a significant negative impact on the portfolios of advanced economies....
In light of such cross-country spillovers, there is a strong case for a coordinated approach to a range of policies...
So, some predictions for chapters one and two, and for the IMF in general.
Bloomberg reports that the holding company for collapsed New York investment bank Lehman Brothers is hanging on to a valuable asset until prices rebound, to help pay off the company's creditors.
The asset? Uranium. How much? Enough for a bomb, if you knew how to do it.
Lehman, once the fourth-largest investment bank, has an estimated $200 billion in unsecured liabilities left to pay. The uranium, which may be as much as 500,000 pounds, might fetch $20 million at today’s prices of about $40.50 per pound, said traders who asked not to be named because of the confidential nature of the data. Marsal said the traders’ estimate of Lehman’s uranium holding is “reasonable,” while declining to be more specific....
Lehman “tested” the uranium market after its bankruptcy filing in an effort to raise cash, pulling back after it did because “everyone was low balling,” Marsal said. With $10 billion in the till today from other asset sales, Lehman isn’t in a hurry any longer to sell uranium, he said.
“We plan on gradually selling this material over the next two years,” he said. “We are not dumping this on the market and have no fire-sale mentality.”
Speaking with the New York Times, a top Chinese economist explained why China is cutting its holdings of U.S. bonds by quoting John Maynard Keynes: “If you owe your bank manager a thousand pounds, you are at his mercy. If you owe him a million pounds, he is at your mercy.”
With that reasoning in mind, China sold U.S. Treasuries and other foreign bonds in the first two months of the year; it returned to buying them in March. Around two-thirds of China’s foreign reserves are held in dollars.
That bulk holding has complicated relations between the two economic super-powers during the Great Recession. Chinese Premier Wen Jiabao and the central bank governors have expressed concern about the U.S. economic situation and their exposure to it -- though the resumption of purchases in March suggests they may believe the outlook is better.
Still, numerous economists and policy experts have suggested careful, controlled, slow draw-down would be a good thing for both countries.
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