G20/B20 2010 Canada Report by The Group of Nations

G-8

G-20

Muskoka 2010 G-8 Summit - June 25-26, 2010

G-20 Toronto Summit - June 26-27, 2010

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Welcome Message from Prime Minister Harper

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Welcome Message from President Lee Myung-bak Leaders from around the world will gather in Canada in June, then in Korea in November of this year to take part in the 2010 G-20 Summit meetings. Ever since the first G-20 Summit in Washington DC, the G-20 has acted swiftly and effectively to overcome what many considered to be the worst global crisis since the Great Depression. The G-20 has strengthened international cooperation and led to closer collaboration, helping the world on the road to economic recovery. However, many challenges still lie ahead. The Republic of Korea, as this yearâ&#x20AC;&#x2122;s chair and host of the November 2010 G- 20 Summit, will do its utmost to ensure that the global economy is placed on a path of recovery so that we achieve strong, sustainable and balanced growth. The G-20, the premier international economic forum for the developed and developing countries, will lead this effort. The Korean government and its people will do its best to ensure a successful G-20 Summit in Seoul. This unprecedented global crisis still presents challenges but the world has also been presented with a unique and historic opportunity. What we do today and how we overcome this crisis will determine our future success. The 2010 G-20 will help us fulfill our promise of a brighter tomorrow. We are looking forward to our June meetings in Canada, then to welcoming the G-20 to Korea in November.

Thank you.

President of the Republic of Korea, Lee Myung-bak

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Welcome Message from Premier Dalton McGuinty

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Welcome Message from Toronto Mayor David Miller

On behalf of all Torontonians, I extend a warm welcome to the leaders of nations and the thousands of delegates and media visiting Toronto on June 26 and 27 for the G-20 Summit. As one of the most diverse cities in the world, Toronto is uniquely positioned to host the G-20. More than half our residents were born outside of Canada so our G-20 visitors will see themselves reflected in the faces of Torontonians in our neighbourhoods, and in the businesses that serve them. It’s a key reason why millions of tourists visit this city every year, and companies from around the globe choose Toronto as a place to do business. This is a city that celebrates and embraces diversity to create a city that is liveable, prosperous and provides opportunity for all. We look forward to welcoming the world. Signed,

Mayor David Miller

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Welcome Message from Huntsville Mayor Claude Doughty

The Summit Centre is merely one small facet of Huntsville’s G-8 legacy. In addition to this exciting new facility, we are currently in the process of developing plans for our new Active Living Center. This building, which will sit adjacent to the Summit Centre, has been designed specifically with seniors and young children in mind. The Active Living Centre will stand as a testament to this community’s steadfast commitment to healthy living throughout all of life’s stages. Perhaps more significant than all other endeavors Huntsville has embarked upon this past year is the ini-

On behalf of the residents of Huntsville, Ontario, Canada, I would like to extend warm greetings and best wishes to all those visitors who will visit our community for the 2010 G-8 Summit. Huntsville is tremendously honored to have been chosen by Prime Minister Harper to host this year’s G-8 Summit. As the people of Huntsville can attest, preparing our town for the arrival of the world’s most powerful and influential leaders is undoubtedly a unique experience. Our community has been working collaboratively with our Provincial and Federal partners to ensure that Huntsville is fully prepared to showcase our piece of paradise to the world. Those familiar with Huntsville are well aware as to why the Prime Minister concluded that our town is an ideal location for this year’s annual gathering. Huntsville is located in northern Muskoka, an area of the Province that is famous throughout the world for its vast unspoiled wilderness, lakes, wildlife, and unique regional culture. Nestled among four picturesque lakes and situated on the doorstep of the much celebrated, Algonquin Provincial Park, Huntsville is home to a wide array of resorts, parks, and campgrounds. Our community is tremendously proud of its well-deserved reputation as one of Ontario’s premier destinations for adventure and recreation. Our location in the rugged heartland of the Canadian Shield affords us the ability to provide a great variety of outdoor activities ranging from the leisurely to the extreme. We are entirely committed to providing our residents and guests with the opportunity to live a healthy, active, and fulfilling lifestyle that is respectful and appreciative of our beautiful natural surroundings. Being selected as the host for the G-8 Summit has served to further our ability to offer such lifestyles. As a result of our good fortune, Huntsville has received a cash infusion from the Federal Government exceeding 28 million dollars. I am delighted to assure you that we have fully capitalized on this opportunity. From the outset of this process, Huntsville has acknowledged the immense potential for substantive community improvement accompanying our selection. Consequently, the Town has initiated, and by the time you read this, will have completed several projects of particular importance and achievement. The G-8 Legacy Fund has enabled us to take numerous steps to significantly improve our infrastructure in progressive, cutting edge ways. Our brand new 20 million-dollar Summit Centre is a massive expansion to the Huntsville Centennial Centre. True to our heritage, and in keeping with our values, Huntsville has made extensive

tiation of a long-term relationship with the University of Waterloo. This prestigious institution will soon have a brand new and custom designed permanent building in Huntsville. Devoted to the study and research of environmental science and ecosystem resilience, the new University of Waterloo building marks an exciting new beginning for Huntsville. We are honored the University of Waterloo recognized Huntsville as an absolutely ideal place to expand its operations. Huntsville provides the University of Waterloo the ability to work collaboratively with the Government of Ontario, Algonquin Park, and the Northern Ontario School of Medicine to solve the most pressing and critical issues facing our natural world. It is our goal to foster this wonderful relationship into something greater. Huntsville is confidently striving towards becoming a national—and perhaps even international—centre of environmental research. The University of Waterloo Campus is located directly above Cann Lake on a piece of property recently christened “Forbes Hill,” in honor of the longtime former owners, the Forbes family. This area is now linked by road to the nearby Summit Centre, Huntsville High School, and Muskoka Heritage Place. Forbes Hill Research Park has intentionally been developed in such a way as to easily accommodate several other building sites adjacent to the University of Waterloo building. It is our expectation that these additional sites will ultimately be used for the future establishment of more environmental science research facilities. The coming of the 2010 G-8 Summit and the establishment of the University of Waterloo Research Facility are two integral components of our town’s strategic vision. We are striving to define and brand Huntsville as a leading community for events, tourism, and environmental research. Our achievements this past year only serve to further solidify our town as a foremost destination for sporting events, conferences, and academic pursuit. Huntsville is a community that takes great pride in honoring the past while simultaneously looking with eager anticipation towards the future. The year 2010 will undoubtedly be remembered as a seminal time in the history of Huntsville. Our town is in no way lacking in ambition; in fact, spend a little time here and it will quickly become evident how passionate the people of Huntsville are about moving their community forward. I would like to personally invite you to experience all that Huntsville has to offer. Yours very truly, Yours very truly,

efforts to ensure the building is as environmentally friendly as possible. Built and outfitted with only the highest quality materials and most sophisticated technologies, the now 150,000 square foot square feet building is estimated

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to cost less per year in operating expenses than the previous Centennial Centre, which was less than half the size of the new building.

Claude Doughty Mayor

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Welcome Message from Minister Tony Clement I would like to welcome you to Canada and to my home here in Parry Sound - Muskoka for this year’s G-8 Leaders Summit. Ontario has much to offer, so I encourage you to enjoy the beauty surrounding you during your stay and learn about the exciting and innovative businesses, communities and people that make Canada extraordinary. The second largest country in the world, Canada has 10 million square kilometres of natural beauty and a wealth of resources. Three oceans line our frontiers—the Pacific Ocean in the west, the Atlantic Ocean in the east, and the Arctic Ocean in the north. Strategically located as the crossroads between the North American marketplace and the booming economies of Asia, Canada offers tremendous opportunities for companies looking to expand and export products. Since 1988 we have enjoyed and reaped the benefits of a free trade agreement with the United States, which results in over $1 trillion in merchandise trade a year. We also enjoy a strong economic relationship due to our historical ties with many members of the European Union. Whether you are considering business expansion or new North American investment opportunities, Canada should be your investment destination of choice. We have always been a trading nation and commerce remains the engine of our economic growth. Emerging from the recent global economic recession, Canada is in the best position of any G-8 country to come out strong and prosperous. Canada has the soundest banking system in the world and has received honours for its leadership in handling the economic crisis. The Economic Intelligence Unit has rated Canada the #1 place to do business in the G-7. The lowest business tax rates among the G-7 countries can also be enjoyed here. We are a nation of intelligent, educated workers, ranking #1 in the OECD in higher education achievement. We are proud of our world-class universities, and our universally acclaimed health care system. Canada boasts some of the cleanest and friendliest cities in the world, along with our spectacular scenery. When a country has as much to offer as Canada , it’s impossible to pinpoint a single reason to invest in one of the most dynamic economies in the world. The multiple advantages and unparalleled potential make it a place where businesses can achieve excellence on a global scale. In addition, Canada truly is a great place to invest, work, live and raise a family. I hope that you enjoy your time in Canada and in Muskoka and I thank you for helping us make this year’s G-8 Leaders Summit a great success!

The Right Honorable Tony Clement MP.

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Sustainable Life, Sustainable Future The governments of most nations recognize the need to develop sustainable economies. Doing so demands a reduction of the emission of greenhouse gases into the atmosphere, as well as greater energy efficiency. Nickel makes it possible for various industries (fuel cells, automotive and aerospace, to name only three) to be innovative in these areas. Nickel-containing materials offer toughness, durability, corrosion resistance, catalytic activity, and a host of other attributes to processes and products. However, the judgment of society depends on more than just economic and environmental contributions, vital as those are. Quality of life is also a measure of sustainability. Employment, occupational and community health, infrastructure – these and other social aspects need to be given due consideration. Because nickel is so rarely visible to the general public, few are aware of the economic and social dimensions of nickel. Today we care more and more about sustainability and yet we seem to know less and less about the materials that contribute to a sustainable future. Making sustainable choices should be easy. The most important applications of nickel contribute to innovation and sustainability in our daily lives. How? Living Comfortably - 60% of all nickel is used to make stainless steel. If you look around you, there will be countless examples of how this beautiful, strong and flexible material helps to improve the quality of your life, every single day. Eating and Drinking - Nickel in stainless steel makes the production, the distribution, the preparation and the consumption of food and water safe, easy and pleasurable. Staying Healthy - There have been huge advances in the technologies that keep us healthy - more effective medicines, cleaner water, new technologies and better surgical tools best and cleanest surgical materials and equipment are essential - and many of them involve nickel. Communicating - Nickel plays several different roles in technologies that have revolutionized the way in which humans communicate. Mobile phones, laptops, hand held devices and other wireless gadgets continue to appear on the market in faster and savvier models and continue to modernize our lives. Moving Around - We live in a world that never stops. And nickel plays a role in many of our key modes of transportation. Be it nickel alloys in the batteries of hybrid cars or in the turbines of jet engines, or nickel-containing stainless steel in passenger trains and subways, nickel is a crucial element enabling us all to get from place to place.

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Driving Industry - Nickel provides the properties to enable innovation, helping to advance the goals of sustainable production and consumption. Enabling Clean Energy - Global warming is one of the major challenges facing the world today. In recent years, we have seen initiatives to curb carbon emissions by developing renewable energy sources. Nickel and nickel alloys play a crucial role in the production of renewable energy – enabling clean power to be a central part of our effort to tackle global warming. Promoting Sustainable Development - The production and use of nickel supports quality employment and generates wealth on six of the world’s continents. At the same time, the state of knowledge about nickel in relation to human health and the environment has never been higher, and neither has the industry’s commitment to the management of nickel throughout its life cycle. To satisfy present and future energy needs requires the most efficient use of natural resources… and the imaginative use of non-traditional resources. Gas turbines, made of nickel-containing super alloys for its ability to high temperatures, generate electricity by utilizing waste gas from decomposing organic matter. And at the end of the life of the turbine, the nickel alloys will not be waste: they will become new nickel-containing Nickel alloys for future generations. Infrastructure built in challenging environments with nickel-containing stainless steel rebar will last without ever needing serious repair or rehabilitation. Strong, easy to work with, corrosion resistant to its core, cost effective: the right rebar for the job is the right rebar for sustainability. Today there is more reason than ever for design life to be calculated in generations, not decades. For a hungry and growing world population a secure, sustainable food supply is essential. The collection, pasteurization and delivery of pure, safe milk requires equipment built to the highest hygienic standards available. Nickel-containing stainless steels deliver this for the dairy industry as for every food processing industry in the world. And in the end, the nickel stainless steels will be recycled and ready again to minimize losses. Nickel’s high-temperature strength, ductility, toughness, electro-chemical and other properties, and ability to enhance corrosion resistance enable engineers to design structures and systems that use the Earth’s resources more wisely. Nickel is an important alloying agent in hundreds of alloys and stainless steels. It is at the heart of important battery chemistry and catalysts. And it is totally recyclable.

Publisher’s Note Publisher The CAT Company Inc G-8 summit Magazine Company Ltd The CAT Company Inc President Chris Atkins

Chris Atkins Dear G-8 Summit Readers, I would like to take this opportunity to thank all those involved for their dedication in helping make this a successful publication especially Courtney McBeth and Kirk Jowers and Rochelle McConkie from Hinckley Institute of Politics, Barry Scholl and Hiram Chodosh from the SJ Quinney Law School, Rick Schneider and Andrew Jacuzzi from Verso Paper. The CAT Company is the only publishing company that has been involved with the past fourteen G-8 Summits and is now happy to publish for the first ever G-8 – G-20 summit magazine, continuing the tradition and continuing to get great recognition as the Summit’s foremost publisher. The CAT Company continues to increase the exposure of the magazine with help from the massive growth of digital technology, using Scribd.com And to add to many other “firsts” this year, we are again the first company to launch the first G-8 – G-20 magazine app for the iPhone. This year’s G-8 will be a historical event. For the first time in the Summit’s history we will have the G-8 and the G-20 follow each other. The question dominating the event organizers and the world is this the last G-8 Summit? Or, will the G-20, a group that rose from the legacy of the G-8, take its place? It will be an interesting time to observe. I hope you enjoy our magazine and we look forward to seeing you in France for the 2011 summit, be it the G-8, the G-20, or both. Yours Sincerely

Chris Atkins Publisher and Founder, CAT Company Inc.

Advisory Board Peter Atkins Chris Atkins Jennifer Latchman Graphic Design and Art direction President Henri de Baritault President of Sales Mark R Marshall Sales Executives Chris Atkins John Armeni Guy Furl Mike Nyborg Ray Baker Hinckley Institute of Politics - University of Utah Director Kirk Jowers Intern Manager Courtney McBeth Communication and Outreach Coordinator Rochelle McConkie S.J. Quinney College of Law – University of Utah Dean and Professor Hiram Chodosh Director of External Relations Barry Scholl Thanks To Hinckley Institute of Politics S.J. Quinney Law School Verso Paper DHL Hudson Printing CRI intro60.com Deerhurst Resort Scribd.com Forbes.com BD Lilly Air Canada British Airways Tam Airlines Korean Airlines C.A.P.P. A.P.C.O. Special Thanks To Prime Minister Stephen Harper’s Office Premier Dalton McGuinty’s Office Huntsville Mayor Claude Doughty Toronto Mayor David Miller The Right Honorable Tony Clement’s MP Office President Lee Myung-Bak’s Office

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Paper provided by

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EDITORIAL EXECUTIVE EDITORS Ana Carcani Rold Kirk L. Jowers Barry Scholl Courtney H. McBeth

MANAGING EDITOR Rochelle McConkie

CONTRIBUTORS Casey Coombs, Hinckley Institute of Politics, University of Utah Kevin Michael DeLuca, Hinckley Institute of Politics, University of Utah George Loewenstein and Daniel Schwartz Ashley Edgett, Hinckley Institute of Politics, University of Utah Lauren Hansen, Hinckley Institute of Politics, University of Utah Jacob Lindsay, Hinckley Institute of Politics, University of Utah Sheldon Wardwell, Hinckley Institute of Politics, University of Utah Leslie Francis, University of Utah S.J. Quinney College of Law Amos Guiora, University of Utah S.J. Quinney College of Law James R. Holbrook, University of Utah S.J. Quinney College of Law Arnold W. Reitze, Jr., University of Utah S.J. Quinney College of Law Kel Currah, What World Strategies and Editor of The Sherpa Wayne McCormack, University of Utah S.J. Quinney College of Law Jonathan A. Muir and Ralph B. Brown, Brigham Young University Amy J. Wildermuth, Professor, University of Utah S.J. Quinney College of Law Rainer Wend Lincoln L. Davies, University of Utah S.J. Quinney College of Law Robert Atkinson, Information Technology and Innovation Foundation Johan BergenĂ¤s, The James Martin Center for Nonproliferation Studies Ron Dembo Carlos Manuel GarcĂa, Medical Doctor Robert Hornung, The Canadian Wind Energy Association

LEGAL The G-8 / G-20 Summit magazine is a yearly publication independent of political affiliations or agendas published by The CAT Company. The articles in the G-8 / G-20 Summit Magazine represent the views of their authors and do not necessarily reflect those of the editors and the publishers. While the editors assume responsibility for the selection of the articles, the authors are responsible for the facts and interpretations of their articles. Authors retain all legal and copy rights to their articles. None of the articles can be reproduced without the permission of the editors and the authors.

PERMISSIONS For permissions please email the editors at G-8aquila09@gmail.com with your requests.

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Table of Contents Welcome Message from Prime Minister Harper Welcome Message from President Lee Myung-bak Welcome Message from Premier Dalton McGuinty Welcome Message from Toronto Mayor David Miller Welcome Message from Huntsville Mayor Claude Doughty Welcome Message from Minister Tony Clement Sustainable Life, Sustainable Future Publisher’s Note EDITORIAL Table of Contents The G-8: The Greatest Show on Earth By Kel Currah, Executive Director, What World Strategies, and Editor of The Sherpa

10 12 14 16 18 20 22 24 26 28 32

Engines of Change: Motorcycles and Social and Economic Changes in Southeast Asia By Jonathan A. Muir and Ralph B. Brown, Department of Sociology, Brigham Young University

New Prime Minister of the United Kingdom JOINT G-8 BUSINESS DECLARATION April 28, 2010, Ottawa, Canada Muskoka’s Deerhurst Resort Political Capital, Capitol Hill and France By Casey Coombs, Hinckley Scholar, Hinckley Institute of Politics

34 36

G-20 Countries State Bank of India Time to End Rampant Mercantilism By Robert Atkinson, President, Information Technology and Innovation Foundation

China’s Emerging Public Sphere By Kevin Michael DeLuca, Hinckley Fellow, Hinckley Institute of Politics

Nothing to Fear but a Lack of Fear: Climate Change and the Fear Deficit By George Loewenstein and Daniel Schwartz

A Mecca for Militants - The Development of International Terrorism in Peshawar, Pakistan By Ashley Edgette, Hinckley Scholar, Hinckley Institute of Politics

Declining Biodiversity: Economic Discrepancies and Cooperative Solutions By Lauren Hansen, Hinckley Scholar, Hinckley Institute of Politics

Recommendations for Malaria Control Policy in Sub-Saharan Africa By Jacob Lindsay, Hinckley Scholar, Hinckley Institute of Politics

African Indexes Fall Short By Sheldon Wardwell, Hinckley Scholar, Hinckley Institute of Politics

Challenges for Global Health: Burdens of Disease and the Millennium Development Goals By Leslie Francis, Professor, University of Utah S.J. Quinney College of Law Global Security—An Analysis Moving Forward By Amos N. Guiora, Professor, University of Utah S.J. Quinney College of Law

54 56

Promoting Peace in Iraq by Supporting the Rule of Law By James R. Holbrook, Professor, University of Utah S.J. Quinney College of Law

Legal Issues in the Control of Geological Carbon Sequestration By Arnold W. Reitze, Jr., Professor, University of Utah S.J. Quinney College of Law and member of the University of Utah’s Institute for Clean and Secure Energy

Prosecuting Terrorism Without the Language of War By Wayne McCormack, Professor, University of Utah S.J. Quinney College of Law

Unbounded Nature: Making Roaded Landscapes More Permeable for Wildlife By Amy J. Wildermuth, Professor, University of Utah S.J. Quinney College of Law

Living Responsibility By Rainer Wend

Oil, Energy, Hindsight and Foresight By Lincoln L. Davies, Professor, S.J. Quinney College of Law, University of Utah

Global Macroeconomic Imbalances: G-20 Leaders Must Back Up Their Rhetoric with Deeds Institutional Development: How the G-20 May Help the World’s Poor Protecting Haiti’s Children: Good Intentions or Child Trafficking? The Status Report: Obama and Global Financial Stability The Zedillo Commission Report on World Bank Reform: A Stepping Stone for the G-20 Summits in 2010 BD Helps Strengthen Sub-Saharan Healthcare Through Improved Lab Performance Reaching the World’s Most Vulnerable “C20” – The Business Mirror of the G-20 The Role of Regional Organizations in Combating WMD Terrorism Johan Bergenäs – The James Martin Center for Nonproliferation Studies

100 - 123 108 124

128 128 132 134 136 138

142 146 148 150

Revolutionize the World – One Plug at a Time. By Ron Dembo

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From Sick-Care to Health-Care By Carlos Manuel García, Medical Doctor

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Wind Energy in Canada: 2009-2010 Overview By Robert Hornung, President of the Canadian Wind Energy Association (CanWEA)

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Copyright©2010 The G-8/G-20 Summit Magazine Company Ltd. and The Cat Company Inc. All rights reserved. No part of this publication can be reproduced without written consent of the publisher. All trademarks that appear in this publication are the property of their respective owners. The G-8/G-20 Summit Magazine is published independently of any government entity, and does not claim any official status for the 2010 G-8/G-20 summit in Muskoka and Toronto, Canada, and no representations have been made as such. Any and all companies featured in this publication are contracted by The Cat Company INC. to provide advertising and/or services. Every effort has been made to ensure the accuracy of information in this publication however the G-8/G-20 Summit Magazine Company Ltd. and The Cat Company Inc. make no warranties, express or implied as regards the information, and disclaim all liability for any loss, damages, errors or omissions

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G-8 profiles

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Canada

France

Germany

Japan

Italy

United Kingdom

United States of Ameica

Russia

Leader:

Prime Minister Stephen Harper

President Nicolas Sarkozy

Chancellor Angela Merkel

Prime Minister Naoto Kan

Prime Minister Silvio Berlusconi

Prime Minister David Cameron

President Barack Obama

President Dmitriy Medvedev

Geographical information:

Area: 9,970,610 km2 Population: 32.6 million (2006) Annual population growth rate: 1.0% (2006) Capital: Ottawa Official languages: English and French

Area: 550,000 km2 Population: 63.0 million (2006) Annual population growth rate: 0.5% (2006) Capital: Paris Official language: French

Area: 357,021 km2 Population: 82.3 million (2006) Annual population growth rate: -0.2% (2006) Capital: Berlin Official language: German

Area: 377,864 km2 Population: 127.7 million (2006) Annual population growth rate: -0.003% (2006) Capital: Tokyo Language: Japanese

Area: 301,255 km2 Population: 58.3 million (2006) Annual population growth rate: 0.3% (2006) Capital: Rome Official language: Italian

Area: 244,820 km2 Population: 60.5 million (2006) Annual population growth rate: 0.5% (2006) Capital: London Official language: English

Area: 9,629,091 km2 Population: 299.4 million (2006) Annual population growth rate: 0.9% (2006) Capital: Washington D.C. Official language: English

Area: 17,075,200 km2 Population: 142.8 million (2006) Annual population growth rate: -0.5% (2006) Capital: Moscow Official language: Russian

Economic data:

GDP (nominal) 2007 [2] - Total $1,436 billion - Pro capita $43,674 - % World GDP 2.6% [4]

GDP (nominal) 2007 [2] - Total $2,593 billion - Pro capita $ 42,033 - % World GDP 4.8 [4]

GDP (nominal) 2007 [2] - Total $ 3,321 billion - Pro capita $ 40,400 - % World GDP 6.2 [4]

GDP (nominal) 2007 [2] - Total $ 4,382 billion - Pro capita $ 34,296 - % World GDP 8.0 [4]

GDP (nominal) 2007 [2] - Total $ 2,105 billion - Pro capita $ 35,745 - % World GDP 3.9 [4]

GDP (nominal) 2007 [3] - Total $ 2,804 billion - Pro capita $ 46,098 - % World GDP 5.1 [4]

GDP (nominal) 2007 [2] - Total $ 13,808 billion - Pro capita $ 45,725 - % World GDP 25.3 [4]

GDP (nominal) 2007 [2] - Total $ 1,290 billion - Pro capita $ 9,074 - % World GDP 2.4 [4]

GDP (PPP) 2007 [3] - Total $ 1,270 billion - Pro capita $38,617 - % World GDP 2%[4]

GDP (PPP) 2007 [3] - Total $ 2,068 billion - Pro capita $ 33,508 - % World GDP 3.2 [4]

GDP (PPP) 2007 [3] - Total $ 2,812 billion - Pro capita $ 34.212 - % World GDP 4.3 [4]

GDP (PPP) 2007 [3] - Total $ 4,292 billion - Pro capita $ 33,596 - % World GDP 6.6 [4]

GDP (PPP) 2007 [3] - Total $ 1,787 billion - Pro capita $ 30,365 - % World GDP 2.8 [4]

GDP (PPP) 2007 [2] - Total $ 2,168 billion - Pro capita $ 35,634 - % World GDP 3.3 [4]

GDP (PPP) 2007[3] - Total $ 13,808 billion - Pro capita $ 45,725 - % World GDP 21.3 [4]

GDP (PPP) 2007 [3] - Total $ 2,090 billion - Pro capita $ 14,705 - % World GDP 3.2 [4]

Form of government:

Federal parliamentary monarchy

Presidential republic

Parliamentary federal republic

Parliamentary constitutional monarchy

Parliamentary republic

Parliamentary constitutional monarchy

Presidential federal republic

Federal Republic

G-8s held to date:

Kananaskis Summit (2002) Halifax Summit (1995) Toronto Summit (1988) Ottawa Summit (1981)

Evian Summit (2003) Lyon Summit (1996) Summit of the Arch (1989) Versailles Summit (1982) Rambouillet Summit (1975)

Heiligendamm Summit (2007) Cologne Summit (1999) Munich Summit (1992) Bonn Summit (1985) Bonn Summit (1978)

Hokkaido Toyako Summit (2008) Kyushu-Okinawa Summit (2000) Tokyo Summit (1993) Tokyo Summit (1986) Tokyo Summit (1979)

Genoa Summit (2001) Naples Summit (1994) Venice Summit (1987) Venice Summit (1980)

Gleneagles Summit (2005) Birmingham Summit (1998) London Summit (1991) London Summit (1984) London Summit (1977)

Sea Island, Georgia (2004) Denver, Colorado (1997) Houston, Texas (1990) Williamsburg, Virginia (1983)

Saint Petersburg Summit (2006)

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The G-8: The Greatest Show on Earth By Kel Currah, Executive Director, What World Strategies, and Editor of The Sherpa

When the presidential limousines have left the Deerhurst Inn and the police take away the last piece of security fencing on the 26th of June, the curtain will have come down for the final time on the greatest show on earth. The Muskoka G-8 Summit is likely to be the last G-8, a victim of the financial crisis and a global shift eastward as the G-20 becomes the premier global economic forum. But what a carnival it had become: a travelling show pitching its tents in luxurious hotels, chateaus and palaces in the eight G-8 host countries for two days of press conferences, photo shoots, and drama. By the end of its 35 year tour it had become a mega event, bringing together up to 30 heads of state and leaders of multilateral institutions, guarded by up to 15,000 police and soldiers costing hundreds of millions of dollars to stage, attracting more than 4,000 members of the press and non-governmental organizations (NGOs). And, not the least, it was often targeted by hundreds of thousands of activists taking part in protests and rallies. The G-8 created a massive amount of activity from host governments, academics, the media, and civil society. The G-8 leaders summit was not a stand-alone event. It was always preceded by a host of advance meetings of G-8 Development Ministers, Finance Ministers, and Environmental Ministers amongst others. In its last decade, the media began to use the G-8 summits as the annual moment to put global poverty on the front pages of the newspapers. As a result, groups working on poverty worked very hard to direct the media and public’s attention to their particular campaigns. Rock stars Bono and Bob Geldof took to editing special editions of national papers such as the German’s Bild in 2007, Italy’s La Stampa in 2009, and Canada’s Global

& Mail in 2010. Concerts on Africa were held and starstudded press conferences were organized during the G-8 Summits demanding justice and giving the reactions of celebrities and NGOs to the G-8 communiqués. NGOs literally created street theater during the Sum-

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mits to raise the profile of health, education, and a wide array of other concerns. Oxfam’s ‘big heads’—large unwieldy plaster-of-paris caricatures of the G-8 leaders—were recycled again and again as they traveled the globe to do media stunts. Such mini-theatrics included pictures of the G-8 leaders playing poker, swimming in the Baltic, and feasting as Roman Emperors in Rome (as Rome burned, of course). The stunts became so complex that for the 2008 Japanese G-8 one NGO rented a crane and hired a dance troop to execute its stunt. Now that the Big Tent is coming down, what will the G-8 be remembered for? Beyond dry statements on currency rates and balanced economies, it is likely that the G-8 will be remembered most for its work on global development and its pioneering initiatives forging global responses to urgent social issues. This trend began in earnest in 1998 at the Birmingham G-8, which focused on debt; it continued in 2001 in Genoa with the creation of the Global Fund on HIV/AIDS, TB and Malaria. Its crowning achievement was at the 2005 Gleneagles summit, when G-8 leaders made ambitious pledges on overseas development aid, health, HIV/AIDS and education. The G-8 undertook substantial initiatives to pool global responsibility and action on pressing global concerns that did bear fruit. As a result of these commitments millions of children in Africa are in school; millions have access to life saving drugs, and aid did increase from the G-8 countries. Despite the advances, the implementation of the commitments failed to meet the ambition of the communiqués. The “can-do” spirit behind the initiatives created in the rarified atmosphere of the summits tended to dissipate back home, especially during the crunching of national budgets: ODA and other global initiatives were easy targets to cut when money got tight. Consequently, the G-8 is likely to be remembered more for what it could have achieved than for what it did achieve. In the end, the G-8 did not make poverty history. But there is one lasting legacy of the G-8, albeit it was unplanned, unintended, and likely, regretted by the G-8 leaders: the emergence of a strong global cam-

paigning industry working on influencing the global agenda through coordinated multinational coalitions and platforms. The increased activity of the G-8 to address sustainable development grew at the same time as a coherent global community of campaigners. While there always had been international campaigns, the movement took a leap forward as it began working on the G-8. Again, the first step took place at the Birmingham G-8 in 1998 when over 70,000 activists joined hands to create a human chain around the G-8 summit venue where the leaders were meeting. The action, calling for debt relief for the poorest countries, led the assembled G-8 leaders to change their agenda and address the issue of debt. The group behind the action, the Jubilee Debt Campaign, went on to become a truly global campaign stretching from London to New Zealand. It continued its global activities at the next year’s summit in Cologne, where the G-8 countries agreed to a debt relief framework. Campaigning on the G-8 continued to grow and develop, through the lows of Genoa in 2001, the remoteness of Kananaskis in 2002, and the exclusion of Sea Island in 2004. It emerged even stronger for the 2005 meeting in Scotland. From the perspective of most campaigners, that now historical Gleneagles summit was probably the crowning achievement of massive coordinated international G-8 actions. Campaigners created Make Poverty History, a sophisticated global campaign, and organized a rally of 250,000 people to form a white band around Edinburgh Castle on the day before the summit. The movement attracted movie stars and rock stars who embraced campaigning and headlined the advertising, media work, and two concerts in the lead-up to the G-8. It was a truly international set of events that made frontpages everywhere. In between summits NGO policy specialists lobbied the G-8 Sherpas, the governments’ chief negotiators, and poured over leaked communiqués. Activists became adept at the arcane language of global negotiations. Civil society groups organized international G-8 planning meetings and circulated petitions not just to supporters in G-8 countries but to people in Africa and

Asia as well. G-8 advocacy even influenced the expansion plans of the international NGOs as groups opened offices in G-8 countries, such as Italy, to better position to influence the host government. This attention to G-8 summits bore fruit, but the return on NGO investment began to falter in the later years. No campaign, no matter how well run, could overcome the limitations posed by growth of G-8 national deficits. And the international economic crisis that began in the fall of 2008, meant global coordination on fiscal and monetary issues became the priority, shoving development aside. As a result, the G-8 has been eclipsed by the G-20 leader’s summit, which met for the first time in November 2008. In the end, the enduring legacy of the G-8 may actually be the movement it (inadvertently) did much to create. But as campaigners begin directing their energies toward the G-20 they will need to learn, adapt, and adjust their lobbying strategies: the new G-20 is a very different creature. The G-20’s mix of political systems and varying levels of restrictions on press and civil society activities will require that campaigning and advocacy models developed in the context of the G-8 be revamped. However, the structures, networks, and frameworks developed over the past decade are in place and should endure—thanks to the G-8. The annual gathering of leaders will have at least one lasting legacy for the global media to reflect on when they write their obituaries of the G-8. The greatest show on earth will not be remembered for achieving all that it promised to do. But, even unfulfilled, its commitments to Africa, health, HIV/AIDS, education, and overseas development aid were the closest the global community has ever come to taking concrete action and collective responsibility for tackling urgent development issues.

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New Prime Minister of the United Kingdom

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David was elected Leader of the Conservative Party in December 2005, on a mandate to change the Party and change the country. Since then he has set out plans to rebuild our battered economy, revive our beleaguered NHS and repair our broken society. David’s family has always been the starting point of everything he has wanted to achieve in politics. He is proud of the values that were instilled in him when he was young. Today, as a father, he knows how important quality family time is, and has made shared parental leave a priority. David, Samantha and their young children live in London and West Oxfords hire, where he has been MP for Witney since 2001. Before he became an MP, David worked in business and government. He worked as a Special Adviser in government, first to the Chancellor of the Exchequer and then to the Home Secretary. Afterwards he spent seven years at Carlton Communications, one of the UK’s leading media companies, and served on the management Board. David’s experience in business made him appreciate first hand the damaging effect which red tape and high taxes can have on job creation. At a time when the country is in recession, and people are worried about losing their jobs, he believes there is urgent need for change. He published plans for a National Loan Guarantee Scheme to get money flowing to business again. He has called for tax breaks for pensioners, and the abolition of income tax on savings for basic rate taxpayers, in the 2009 Budget. At a time when families are suffering, he has announced plans for a freeze in council tax for two years by cutting wasteful Government spending. He believes we need to cut employment costs for small businesses by cutting National Insurance and through a tax break for new jobs, and that government needs to live within its means to help tackle the doubling of the national debt. David’s vision is of a country where people have more opportunity and power over their lives; a country where families are stronger and society is more responsible; a Britain which is safer and greener.

Political party: Conservative Party Chief of State: Queen Elizabeth II Head of Government: Prime Minister James Gordon Brown Most recent election: 5 Oct 2005 Government: Lower House — Majority; Upper House — Majority Political system: Parliamentary Legislature: Bicameral, elected House of Commons, appointed House of Lords Capital: London Official language: English 61,133,205; country comparison to the world: 22nd (July 2009 est.) Population: 0.279%; country comparison to the world: 175th (July 2009 est.) Population Growth Rate: NA Currency: British pound (£) GDP (official exchange rate): $2.68 trillion (2008 est.) Predicted change: -4.1% (Q1 2009); -3.7% (2009) Composition by sector: 1.3%-agriculture; 24.2%-industry; 74.5%-services (2008 est.) Central Bank interest rate: 0.5% (7 Jan. 2010) Official reserve assets: $21,868.00 million (Nov. 2009) Foreign currency reserves: $7,730.00 million (Nov. 2009) [in convertible foreign currencies] Securities: $6,715.00 million (Nov. 2009) IMF reserve position: $0.00 million (Nov. 2009) Special Drawing Rights: $0.00 million (Nov. 2009) Gold: $0.00 million (Nov. 2009) [including gold deposits and, if appropriate, gold swapped] Financial derivatives: $-682.00 million (Nov. 2009) Loans to nonbank residents: $0.00 (Nov. 2009) Other reserve assets: $14,499.00 million Nov. 2009) Commercial Bank prime lending rate: 4.63% (31 Dec. 2008) Stock of money: NA (31 Dec. 2008) Stock of quasi money: NA (31 Dec. 2008) Stock of domestic credit: $NA (31 Dec. 2008) Household income or consumption by % share: 2.1%-lowest 10%; 28.5%-highest 10% (1999) Inflation rate (consumer prices): 3.6% (2008 est.) Investment (gross fixed): 16.7% of GDP (2008 est.) Current account balance: $-28.2 billion (lQ3 2009) Budget: $1.056 trillion-revenues; $1.214 trillion-expenditures (2008 est.) Budget balance: -14.5% of GDP (2009) Public debt: 47.2% of GDP (2008 est.) [cumulative debt of all government borrowing] Exchange rates (per USD): 0.63 (7 Jan 2010); 0.66 (7 May 2009); 0.51 (May 2008) Economic aid-donor: $9. 848 billion (2007) [ODA] Debt-external: $9.041 trillion (31 Dec. 2008) Stock of direct foreign investment: $1.445 trillion-at home; $1.567 trillion-abroad (31 Dec 2008 est.)

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Summit 2010

JOINT G-8 BUSINESS DECLARATION April 28, 2010, Ottawa, Canada

We, the most representative business associations in the G-8 countries, call on our governments to implement coordinated policies that ensure broad economic recovery and robust long term growth. This requires finding a way forward on correcting trade, fiscal and structural imbalances. Closer and more effective coordination is needed to establish a principle-based peer-reviewed framework that ensures the health and stability of the global financial markets. Businessesâ&#x20AC;&#x2122; ability to deliver much-needed jobs requires confidence in an open and rules-based trading system devoid of protectionism. Exit strategies from excessive government spending and debt must be timely and coordinated to restore private sector confidence. This will drive sustainable global growth. While climate change is not a focus of the G-8 / G-20 discussions, it is too important for us to ignore in this declaration. Our governments must reach a climate change agreement with all major emitters setting ambitious targets to meet the Copenhagen-agreed objectives with a focus on driving technology R&D and investments for a highly-efficient and non-discriminatory energy mix. The Toronto G-20 Summit must make clear progress on these matters with commitments for timely actions being achieved at the Seoul Summit.

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G-8 Business Declaration

JOINT G-8 BUSINESS DECLARATION We, the G-8 Business Leaders, have gathered on April 28-29, 2010, in Ottawa, Canada, to address urgent issues concerning the global economic agenda. Our attention is focused on improving global cooperation and effectiveness of national and international institutions, in three major areas: preventing future financial and economic crises; supporting trade liberalization and rejecting protectionism; and climate action. Progress on the challenges facing the global economy can only be achieved via constructive dialogue among all stakeholders. We respectfully provide our deliberations and recommendations to the Heads of State at the forthcoming Canadian G-8 and G-20 Summits to be held on June 25-27, 2010. Our deliberations take into account the fact that this is a unique year for the G-8 Business Summit as Canada hosts both the G-8 and G-20 Leaders Summits. We welcome our counterparts from G-20 countries at the G-8/20 Business Summit. The enhanced collaboration of the G-20 Business community is of high importance as we pave the way forward. The issues being discussed by our leaders at the G-8 and G-20 Summits require improvements to the global governance framework. Our comments are designed to encourage action that provides a strong, jobproducing economic environment. Societal challenges cannot be solved without a dynamic and growing private sector economy. In addition to generating growth and jobs, businesses increasingly play a role in addressing wider societal challenges through voluntary corporate responsibility programs which should be recognized and encouraged by governments, Governments must ensure that CSR will continue to develop on a businessled basis, without interference from legislation. The G-8 Business Leaders welcome the results of the G-20 Pittsburgh Summit, which sent a strong signal of international cooperation and support Prime Minister Harper’s view that there is a need to demonstrate real progress on previous summit commitments at the 25-27 June Summits.

1. Restore Long-term Confidence in Global Markets

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While the world economy is showing signs of recovery, growth in most countries continues to be supported by government and central bank policies. The recovery process is likely to be uneven, and the outlook uncer-

tain. The financial system remains damaged and governments must not abandon necessary financial sector reform just because the recovery is underway. We also need to avoid a repeat of past mistakes in failed financial market regulation. Governments must implement credible exit strategies, at a pace that depends on the state of the economy, from the extraordinary stimulus measures that provided much needed traction to the global economy. Confidence in public finances requires governments to unveil clear plans for significantly reducing their deficits over the medium term, with the emphasis on spending cuts on entitlements and a focus on growth generating reform policies. We recognize that, in a period of constrained spending, all governments will face major challenges and will need to prioritize policies. Greater efficiency of public administrations, credible cost- cutting measures and public-private partnerships will help redirect the resources needed to increase the effectiveness of education and training, R&D, innovation and modern infrastructure policies that enhance productivity, growth and employment. Private sector investment is needed for sustainable job creation. This will require ongoing improvements in economic conditions, business confidence and enhanced support for training displaced workers. Deliver the framework for a strong, sustainable and balanced economic recovery: Governments must steer the global economy to sustainable growth while delivering on the commitment to achieve fiscal responsibility. Sound structural reforms must be put in place to remove the weaknesses that lead to the global recession and correct trade, fiscal and structural imbalances that may set the stage for the next downturn. We call on governments to enable businesses to exert their full capacity to achieve private sector-led economic growth. As part of these efforts, governments must continue to ensure that businesses, especially small and medium-sized, have adequate and affordable access to finance. Ensure Sound Public Finances: Our governments must ensure sustained economic growth while putting a break on public indebtedness. Well-timed and coordinated exit strategies from the extraordinary fiscal measures undertaken need to be implemented to restore fiscal discipline, preserve global growth and stability, and stimulate greater investment and participation in the labour market. Public budgets need to be rebalanced with clear plans for exiting from unsustainably high levels of public debt and more efficient spending to enhance long-term growth. The ability of businesses to create jobs and contribute to social welfare would be severely

G-8 Business Declaration hampered by burdening companies with increased taxes on investment or employment. Reform the financial sector: Authorities must ensure the health and stability of the financial system through an international framework for reform. Priority should be given to ensuring adequate financial sector capital and liquidity requirements and building a principle-based global financial supervision framework through better collaboration of regulators and peer review. Each country’s regulation of the financial system must not constrain growth or innovation and must focus on restoring stability of the financial system and ensuring companies’ greater access to finance. The international framework should be designed to reflect different conditions in different countries, regions and sectors, while ensuring an effective level playing field. Concerning discussions on Basel III, government leaders must ensure that comprehensive impact assessments on credit/financing availability be undertaken as part of all new regulatory initiatives. This analysis must include cumulative effects. Enable Job Creation: Governments must continue to tackle unemployment. For too many unemployed, the return to economic growth will not see the return of their former jobs. For employers in many G-8 countries, the aging population will add significant mid-term pressure to growth strategies. Governments must focus on enhancing access to education and training in order to generate the skilled and experienced workers able to drive innovative productions and services and take advantage of the new economic opportunities. This should include expanding training opportunities by supporting apprenticeship and internship programs which provide necessary work experience and career development as well as retraining programs to help people adapt their skills to the labour market.

2. Global Governance Needed to Support Trade and Reject Protectionism Full economic recovery is only possible if nations further enhance the development of an effective and efficient rules-based trading system and champion the importance of global commerce through a strong commitment to open markets via multilateral, regional and bilateral free trade and foreign investment liberalization agreements. Empirical evidence clearly shows that robust, rules-based trade between countries is win-win, enhancing the prosperity of countries and their citizens. Conclude the Doha Round and promote free-trade agreements (FTAs): It is no longer acceptable to simply “commit” to concluding the WTO Doha Round. The time is right for governments to go beyond merely advocating for conclusion of the Doha Round, and reach

an ambitious and balanced conclusion within this year on the basis of progress already made. Political energy at the highest level should be injected to bridge the remaining gaps and ensure that any final Doha Round agreement creates new trade flows, reduces the cost of doing business across borders and increases predictability for companies. Bilateral and regional free-trade agreements as complementary measures to the multilateral process, should serve as a conduit for further liberalization of world trade in harmony with the WTO agenda and not as closed “trading clubs”. Refrain from raising or imposing trade barriers, dismantle existing ones and resist protectionism: Governments must refrain from raising or imposing new barriers to trade and investment, imposing new export restrictions or implementing measures to stimulate exports inconsistent with the WTO. Governments should also quickly take steps to remove any protectionist measures that were adopted in relation to the recession, including in stimulus plans. The lengthy list of needed reversals includes tariffs, non-tariff measures, restrictions on public procurement, subsidies, burdensome administrative procedures affecting imports, market- distorting restrictions on exports. There remains a continued need to encourage governments to jointly work to prevent and dismantle protectionist measures in collaboration with the WTO, OECD, IMF and UNCTAD. Facilitate and further protect foreign investment: Governments must refrain from raising barriers or imposing new barriers to both outward and inbound investment. Government criteria for blocking foreign investment in the defense of “national security” or of a “strategic industry” should be narrowly defined and only applied under exceptional circumstances. All international agreements must include high standards of investment protection, including non-discrimination, national treatment and fair and equitable treatment. They must also include prompt, adequate appeal mechanisms; effective compensation in the event of discrimination or expropriation; and access for companies to international arbitration to resolve disputes. Facilitate secure trade and business travel: In a world where businesses compete across borders, it is crucial that borders not act as impediments to legitimate goods and the mobility and temporary entry of business travelers. While recent terrorism incidents have spurred calls for tighter border and travel restrictions, measures for securing borders and the safety of travelers must be implemented in a manner that does not unduly burden legitimate trade or business travel. This requires clear direction that border measures must be targeted to achieve the combined objectives of higher security and trade facilitation.

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G-8 Business Declaration

Further protect intellectual property (IP) rights: IP is key to every knowledge-based economy. IP infringements result in knockoffs that unfairly compete against legitimate goods and associated services, all too often threaten health and safety, dent consumer confidence in brands and are often a major source of funding for organized crime. We call on governments to coordinate closely in fighting illicit trade practices, such as counterfeiting, trade-mark infringement and piracy. Particular attention must be given to the concrete enforcement of the TRIPS Agreement and advancing negotiations on the Anti-Counterfeiting Trade Agreement.

3. Post-Copenhagen: Global Action Needed on Climate Change While the 2009 Copenhagen climate change conference failed to reach consensus, the Copenhagen Accord represents a step forward in bringing the largest economies together in developing a long-term agreement on climate change. G-8 Business supports the development of an international agreement on climate change that includes all major economies and major greenhouse gas emitters. While the UNFCCC has been the primary forum for these discussions, the G-8/G-20 can play an important role in bringing the largest economies together to advance an agreement that will lead to a low carbon economy. Global climate action leads to business opportunities. There must be a balance between addressing climate change, which includes the advancement of clean energy development, and other global priorities, such as poverty and disease eradication. Since many developing countries are struggling to provide even the most basic necessities to their citizens, a global approach to addressing climate change will require innovative financing mechanisms to ensure their participation in climate action as well as their commitment to eliminate wasteful energy subsidies which encourage energy inefficiency.

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Conclude an ambitious international climate agreement: Building on the Copenhagen Accord agreed by all major emitters and taken note at the COP15, the agreement must include all major emitters with binding reduction commitments that establish a “level playing field”. Responsibility for action is shared by both private and public sectors. We endorse the concept of common but differentiated responsibilities. This includes developed countries working with emerging economies to achieve their twin goals of economic growth and sustainable development. An effective compliance system must be developed to enable measurable, transparent and verifiable comparison of the climate change efforts among

G-8 Business Declaration

countries. Business, which already provides significant financial support both directly and through taxes and charges, requires clarity from governments on where additional financial support will come from in future. Other general principles of a post-Copenhagen international framework include flexibility and diversity for GHG reduction. A balance between environment, energy security and economic growth must be struck. Support innovation and research and diffusion of a clean energy and low carbon technologies: A technological revolution is needed in order for the world economy to grow without accelerating climate change. Since many technologies will take decades to move from R&D to widespread implementation, governments must commit to programs that support new technology development by the private sector. A paradigm shift to a low carbon economy enabled by an optimal policy mix, will drive profitable technological innovation. This requires the future UNFCCC agreement to support a significant scaleup of investment and demonstration in eco-innovation, carbon mitigating technologies, renewable energies and energy efficiency both in the developed and developing countries. Financial and international cooperation mechanisms should be encouraged, including the use of flexible tools, such as Joint Implementation and the Clean Development Mechanism, and other incentives. Linking carbon markets, in those countries and regions that choose to utilize this option, would make them more effective and foster more cooperation on investment in low carbon or carbon mitigating projects. Concerted global support for R&D will need to be put in place in order to increase the pace of change, commercialization and deployment of these new technologies. Also required is the dismantling of trade and investment barriers for environmental technologies by rejecting “green protectionism”, liberalizing trade, increasing investment security, cooperating on global standards and opening procurement markets to competition. Protection for intellectual property rights is essential, as any measures to weaken these provisions will run contrary to efforts aimed at developing and deploying clean technologies through joint ventures, licensing and other private sector contracts for technological cooperation. Strive for a full exploitation of energy efficiency: Energy security and climate protection policies must be mutually reinforcing. Increasing energy efficiency and diversifying energy-mix and eliminating wasteful energy subsidies are of key importance for any future climate strategy. Under this framework, all energy options have to be pursued to promote a balanced and non-discriminatory energy-mix, including those from traditional, renewable and nuclear energy sources.

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Muskoka’s Deerhurst Resort An Ideal Meeting Place for Presidents, Prime Ministers and You Key global issues and the opportunity for face-toface discussions among the leaders of the world’s major industrial nations are the substance of the G-8 Summit. But after the communiqués are complete, it is often the striking settings of these annual retreats, captured in the requisite photo calls, that remain imprinted on public memory. LOCATION, LOCATION Picture the stately white halls of Heiligendamm, the swaying palms of Georgia’s Sea Island, Hokkaido’s serene mountain top, or Gleneagles rolling greens. Now, that it is Canada’s turn to host the G-8 Summit for the fifth time, Muskoka and its landmark Deerhurst Resort will proudly take their place in that historic list of venues.

Situated just two hours north of Toronto, Canada’s largest city, Prime Minister Stephen Harper dubbed it “a jewel in the Canadian Shield and an ideal location.” Deerhurst offers that sought-after balance of a secluded setting that’s relatively easy to secure, extensive facilities, easy access to transportation routes and a major airport, and proven expertise at dealing with largescale meeting logistics. “Our resort is here to create a sense of place and a seamless experience that makes it easy for the world leaders, or anyone, to focus on the business at hand,” notes Deerhurst General Manager Joseph Klein. This 6,475 square kilometer region of 1,600 pristine lakes, massive granite cliffs, and hardy maple and pine forests is no stranger to globetrotting, high profile travelers either.

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STEAMSHIPS, TRAINS & AUTOMOBILES Once the summer preserve of wealthy industrialists,

Muskoka has drawn visitors from urban hubs like New York and Philadelphia since before Canada became a country. First sportsmen’s clubs, followed by families, would arrive by train and then board steamships that dropped them off for extended stays at the region’s growing number of lakeside inns. Founded by a transplanted Yorkshire man intent on providing “first-class English service” back in 1896, Deerhurst itself has evolved from a rustic 18-room lodge, where on start-up a week’s accommodations cost $3.50 per person including meals, to a highly adaptable, 400room hotel and conference centre, renowned for offering the most on-site activities of any resort in Eastern Canada. OH CANADA A fixture of what is known nationally as simply Ontario “cottage country,” Deerhurst has also become a low-key icon of Canadians’ collective love for the rural weekend retreat. And much of Deerhurst’s expansive 315 hectares are designed with outdoor relaxation in mind, from mountain biking and horseback riding trails to parasailing, paintball and, once the snow flies, classic northern pursuits like snowmobiling and dogsled rides. Deerhurst and the region’s hundreds of travel-oriented businesses are also fortunate to be surrounded by other touchstones of Canadian life and culture This is the very landscape that inspired the country’s best known artists, the Group of Seven. And Deerhurst’s vibrant hometown of Huntsville and the whole string of neighbouring waterside communities that runs through the region have retained an enviable balance of main street charm and thriving industry. The G-8 host venue is also just minutes Algonquin Provincial Park, a highly accessible yet unspoiled Ontario wilderness playground encompassing almost 7,700 square kilometers that has inspired Canadian success stories from prime ministers to musicians and the founders of the internationally fashionable Roots clothing brand. TAKING CARE OF BUSINESS While Muskoka continues efforts to diversify, tourism remains a pivotal draw. And even play is serious business at a property like Deerhurst that has put itself on the map by hosting annual events like the world’s largest pond hockey championships and an Ironman 70.3 race. Over the past two decades, Deerhurst has strategically expanded its business beyond peak summer leisure traffic into a full-service, 4,200 square meter conference facility known for its on-site teambuilding program, turnkey themed events and top-level meetings.

“And the Summit is certainly the most important and best known executive retreat around the world,” says Klein. GREENS & GARDENS Another big draw for the corporate crowd, as well as vacationers, is Muskoka’s emergence as a major, top level golf destination. Deerhurst was the forerunner, building the highly playable par-72 Robert Cupp and Tom McBroom designed Deerhurst Highlands in 1990 to flow harmoniously around the rugged and craggy landscape. Today, it has been joined by seven more prime resort courses, not to mention the area’s many other long-term favorites including Deerhurst’s own second 18-hole course, Deerhurst Lakeside. Deerhurst’s kitchens also put its golf course areas to good use, foraging for edible ingredients served in the resort’s seasonal dishes. A founding member of the region’s fast-growing Savour Muskoka culinary trail, Deerhurst is North America’s

only resort that produces both maple syrup and wildflower honey on its own grounds as well as growing its own herbs and shiitake mushrooms, composting all its green food waste, and fueling the resort’s back-country Hummer tours and rock buggy rentals with biodiesel recycled from its kitchens’ used cooking oil. The resort also works with over 20 different local food suppliers, showcasing, like a dozen more area chefs, small business partnerships and what can be successfully produced in a relatively short northern growing season. Deerhurst Resort Executive Chef Rory Golden sees the G-8 Summit as a singular opportunity for every host

nation to showcase its heritage and bounty to the world. A proponent of “farm to fork” long before it became fashionable, Muskoka, Ontario and Canada will provide the borders for Golden’s “as local and as flavorful as possible” G-8 menu. “Wine, cheese, seafood, our country produces so many great, perhaps unexpected, flavours from coast to coast,” says Golden. “We all come from different places and cultures. But somehow when you can get people together to share over a dinner table the world seems a lot smaller,” he muses. WELCOMING THE WORLD While the eyes of the world and the needs of its most important guests come with a tight schedule and high expectations, Deerhurst is ready and waiting. “The finishing touches are in place and we just want to make sure everyone feels relaxed and at home,” Klein confirms. And while there will be lots of famous names and crowds around Huntsville this June, people in the various hotels and neighbouring towns are excited but not at all fazed by the summit. Perhaps understandable when you consider that Muskoka has long been a mecca for Hollywood celebs, National Hockey League stars and other notables, since back when Clark Gable, Ernest Hemingway and Princess Juliana of the Netherlands all summered here. Music superstar Shania Twain performed in Deerhurst’s popular stage shows before getting her big break in Nashville. And every summer theatre and music festivals across the region are packed with well known acts. “But for all of us it’s a summit in more than one sense,” said Klein. “This is a tremendous platform to showcase what our resort and region as well as Ontario and Canada represent and offer to people around the globe.” “We are honored, we are very proud, and we’re delighted to extend the very warmest and most Canadian of welcomes to the leaders, their delegations, the media, support staff, visitors and interested viewers around the world.” After June 26, 2010, when the G-8 Summit has come, and gone, one thing seems certain. Muskoka and Deerhurst will continue to be a great place to get down to work, re-connect, or just get away from it all.

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Political Capital, Capitol Hill and France By Casey Coombs, Hinckley Scholar, Hinckley Institute of Politics

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In recent years, leaders on Capitol Hill have begun to talk seriously about reviving the United States’ nuclear energy industry. Much of this discussion has cited France as the model to emulate. In 2006, for example, President George W. Bush cited France’s overwhelming reliance on nuclear-generated electricity as evidence of what an industrialized country could accomplish with this technology. John McCain, in his latest run for the presidency, also touted France as an exemplar for clean energy in the 21st Century. Most recently, President Barack Obama envisioned a “new generation of safe, clean nuclear power plants” in his State of the Union Address. He backed up these claims with more than $50 billion in loan guarantees for reactor construction; two plants are already underway in the state of Georgia using these funds. These recent—and mounting—suggestions for an abrupt change of course in U.S. nuclear energy policy

raise numerous questions: First, why is there a renewed interest in an industry whose growth was abruptly, and seemingly indefinitely, halted in the late 1970s? Second, why is France the object of so much praise? And third, is this praise justified? The answer to the first question appears to lie in concerns for environmental stewardship and energy security. Compared to coal, oil or natural gas, nuclear energy production accomplishes the now oft-touted goal of reducing greenhouse gases (GHGs), as nuclear power produces virtually zero GHG emissions. As far as energy security is concerned, nuclear power also provides a stable source of home-grown energy for the foreseeable future: The average life of a new reactor, such as those under construction in Georgia, ranges from 30 to 40 years. The answer to the second question is that France has been able to join a small group of energy-indepen-

dent (although it imports all of the uranium used to fuel its reactors), low GHG-emitting countries. Currently, France draws nearly 80 percent of its electricity from nuclear sources and gains more than 3 billion Euros per year as the world’s largest net exporter of electricity, according to the World Nuclear Association. In this light, it would seem that France’s nuclear energy industry is indeed worthy of the praise U.S. politicians have lavished upon it. Yet an examination of the full spectrum of issues that nuclear energy presents reveals a more nuanced picture. In that picture, the costs of nuclear power could outweigh its benefits. The costs come primarily from the inevitable byproduct of nuclear energy production: nuclear waste. Also known as spent fuel, nuclear waste is simply nuclear reactor fuel (most commonly, enriched uranium) that has been used to produce electricity. In France, waste is reprocessed, which is to say that plutonium is extracted from once-through waste to be used as fuel again. While reprocessing might seem to be more efficient than the United States’ once-through method, it actually produces about six times the volume of waste in the end, according to the Institute for Energy and Environmental Research. The problem with all waste from nuclear reactors, whether reprocessed or not, is that it is extremely radioactive—“high-level” waste in American legal jargon— and neither the U.S. nor France, nor any country in the world, has been able to construct a permanent disposal facility capable of handling it. The only potential site for such disposal in the U.S., Yucca Mountain, has been declared dead by the Obama administration. With no funding in this year’s federal budget, that proclamation seems accurate, at least for the time being. In the meantime, high-level waste in the U.S. is being diverted to a temporary two-step storage process. First, the waste sits in cooling pools on site for about 10 years. Then, the cooled spent fuel is transferred to dry storage in shielded concrete casks that, for now, remain on site at the power plants. While dry cask storage has been proven safe in many rigorous government trials, the 10-year period in which the highly radioactive spent fuel rods sit in cooling ponds poses a potential terrorism risk. This is not to say that the ponds represent a gaping hole in the U.S. national security apparatus, but only that there are more now than at any point in U.S. history and will only become more in number with the construction of new plants.

Indeed, in April at the 2010 World Nuclear Summit, President Obama stated that nuclear terrorism is “the single biggest threat to U.S. security, both short-term, medium-term and long-term.” This statement appears to be a direct contradiction to his recent move to revive America’s nuclear industry. Speculation has circulated that Obama’s support of nuclear energy was borne primarily out of his need for Republican support for the broader U.S. clean energy bill on the horizon. In light of his statement at the nuclear summit, plans to expand America’s nuclear energy industry after a three-decade standstill in new plant construction and in the absence of a permanent disposal facility for current and expected waste, the President’s actions are puzzling. The political capital argument does not look as strong when the latter considerations are taken into account. Several details emerge from this nuanced examination of nuclear energy. France’s nuclear industry deserves praise for helping the country reduce its GHG emissions and gain a degree of energy autonomy. Yet if concern for the environment is one of the primary reasons to transition toward nuclear energy, it would make sense to take full account of its own risks, not the least of which is nuclear waste. Similarly, if security considerations are presented as primary reasons for lessening dependence on a finite and foreign supply of energy, then adopting an energy source that is more vulnerable to terrorist threats than any of its renewable energy alternatives appears unwise. Nuclear power may or may not have a place in our energy future. But either way, the United States should not rely on unexamined analogies to foreign energy systems to make the case for what will work best at home. Doing so risks repeating the errors of our past: placing faith in nuclear technology as a simple solution when there are no easy answers. Casey Coombs is pursuing a Master of Science in International Affairs and Global Enterprise at the University of Utah. He will begin law school in Vermont in fall 2010.

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Summit 2010

China’s Emerging Public Sphere By Kevin Michael DeLuca, Hinckley Fellow, Hinckley Institute of Politics

China’s recent emergence as a world power has been accompanied by both admiration and concern. Two areas of concern are political participation and environmental protection. Too often activism in China is neglected in favor of lecturing the country about the need for democracy. Leaving aside debates over forms of political governance, such a position ignores what is happening on the ground in China. In contrast to Western stereotypes, China is the site of many vibrant forms of activism. This is especially true with respect to environmental activism. In the West, activism has revolved around concepts of the public and the public sphere. The public sphere exists when people come together to talk about general issues and express the opinions they form. The Western public sphere has been linked to institutional forms of democracy. China provides a fascinating example of a non-Western public sphere not linked to institutional democracy. Emerging in China is a wild public sphere, wherein there are no guarantees of institutional protection, but people engage in risky and powerful conversations, protests, and activism. These conversations take place in all sorts of public spaces, ranging from historic Beijing parks to internet blogs. The importance of these everyday conversations in multiple media of these wild public spheres is clear in the Chinese expression “水能载舟，亦能覆舟” (“shui neng zai zhou, yi neng fu zhou”) – the water carries the boat but can also capsize it. The government is very aware of the power of the people, and thus out of necessity listens to public opinion. Two other characteristics of modern-day China also amplify the power of the people. First, because of its communist history, corporations are not particularly

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powerful in China. So while in the United States corporations have enormous power and use lobbyists and campaign donations to gain inside access to politicians and amplify corporate voices, while sometimes muting the voice of the public, in China corporations are not an obstacle to the people speaking to the government. Second, a sense of “the commons”—the idea that people share crucial natural and cultural resources (air, water, parks, languages, the Internet, biodiversity, the oceans, and so on)— remains strong in China. In contrast, privatization has eroded the commons in the United States, so corporations have the legal right to pollute the air and water, claim copyright to words and ideas, control access to the public airwaves, patent plants and animals, and limit free speech as public markets are replaced by private shopping malls. A strong sense of the commons is a vital foundation and incentive for public engagement and participation in the public sphere. Instead of neglecting environmental activist practices because China is not a democracy, it is more productive to explore how environmental activism is practiced in China and to understand how citizens practice form publics that hold the government accountable and foment social change. In the space left, I will discuss environmental non-governmental organizations (ENGOs) on the ground in China that through their activism are constituting wild public spheres and transforming environmental practices in China. Before 1994, China had no NGOs. By 2005, the number had exploded to approximately 2,000 NGOs that were officially registered. Now there are around 3500 NGOs. The oldest registered environmental NGO, Friends of Nature, was founded in 1994. In the data-

base “Chinese Environmental NGOs online,” 137 local environmental NGOs are documented. In addition, there are numerous grass-root organizations that are not officially registered but are an important part of the environmental community in China. ENGOs are spread across China. Almost every province has one or more environmental NGO, with the most in Beijing, which has 26 local ENGOs in addition to international ENGOs like Greenpeace and the World Wildlife Fund. Yunnan province, renowned for both its biodiversity and ethnic diversity, is also home to many ENGOs. These ENGOs work on a diversity of environmental issues—including protecting water resources, recycling, desertification, biodiversity, wetlands preservation, animal protection, and so on. ENGOs are diverse in organizational forms. There are registered ENGOs, non-profit enterprises, unregistered voluntary groups that function as ENGOs, unregistered Web-based groups that operate mainly through the Internet, student environmental associations, university research centers, and government-organized NGOs (GONGOs) established by government agencies. These ENGOs perform a wide range of activities:

4) Legal assistance a. Center for Legal Assistance to Pollution Victims conducts research on topics concerning environmental law and enforcement. 5) Protests a. Green Web Alliance (Beijing) promoted a 2004 online campaign to protect the Beijing Zoo. It attracted the local media coverage and led to the shelving of plans for the Zoo’s relocation. b. Green Watershed protested against plans to build dams on Nujing River and helped halt the plan. As this list of activities suggests, ENGOs help form a vibrant public sphere that has had an important impact in China. ENGOs have helped lead an environmental awakening in China, especially among young people. In response to both public opinion and environmental necessities, the Chinese government has implemented policies designed to make China a world leader in wind power, electric cars, solar panels, and other green issues. ENGOs and the emerging public sphere in China provide a new model of an engaged public and offer hope as the world confronts environmental crises endangering the earth.

1) Environmental Information and Education a. Green Kunming established an environmental education group that provides draft teaching materials for experts, residents, and students. b. Friends of Nature (in Beijing) offers volunteerrun programs in elementary schools in more than 10 provinces and autonomous regions that offer teacher training programs in environmental issues. c. Global Village of Beijing (GVB) collaborated with the Ministry of Railways to reach out to passengers on long distance train journeys with environmental education messages. 2) Increase awareness/involvement through activities/volunteering a. GVB has been a major player in the “26 degree campaign” that encourages businesses, government offices, and families to save energy by setting their air conditioners to no lower than 26 degrees Celsius during the summer. b. People participate in tree planting, recycling, garbage collecting, and so forth. 3) Field work/research/connecting to the local people a. Pesticide Eco-Alternatives Center Yunnan China (PEAC) develops alternatives to pesticides and eliminates pollution caused by chemical sprays. b. The Center for Biodiversity and Indigenous Knowledge (CBIK) has worked to connect preservation of biodiversity with protection of indigenous cultures.

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Summit 2010

Nothing to Fear but a Lack of Fear: Climate Change and the Fear Deficit By George Loewenstein and Daniel Schwartz

Climate change is an almost perfect example of what economists call a “free rider problem.” Everyone would gain if everyone made relatively minor sacrifices. But the benefits of any one individual’s sacrifices are spread over millions of individuals, including those in future generations. No one is motivated to sacrifice and everyone suffers. Nations also fall into this trap if acting separately. End of story.

plaining the failure of coordination between nations, psychology is needed to make sense of the tepid demands from citizens to even try. In this essay, we discuss some of the psychological factors that have prevented the emergence of a groundswell of support for taking action on climate change. Climate change, we show, is not only a perfect example of a free-rider problem, but also of a threat that is unlikely to garner the level of attention it warrants.

Human psychology and the ‘fear deficit’

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Yet, the explanation for our collective paralysis toward climate change is not quite so simple. In times of war, playing on patriotism, fear and hatred, nations have managed to band together and elicit from citizens and soldiers sacrifices far more profound than those that would be required to reverse climate change. Now, humanity faces a threat comparable to that of hostile human enemies, but, so far, nations have failed to exact even the most modest sacrifices from citizens. Most of us care profoundly about our children, and even our children’s children; why are we so passive in the face of a problem that poses such a dire threat to current and future generations? While insights from economics go far toward ex-

The root of our collective complacency when it comes to climate change lies in our failure to experience a level of fear that is commensurate with the severity of the problem. When most people think about the negative consequences of emotions, they are apt to think of cases of excessive emotion – road rage, panic, immobilizing depression. Yet many, if not most, of the problems currently facing humanity stem from a deficit rather than excess of emotion. Consider, for example, the two stock market and housing bubbles and crashes that wreaked havoc on world economies in recent decades. In newspaper articles with headlines such as “Fear Again Grips Stock Investors,” media accounts have commonly attributed these events to a sudden, self-fulfilling, spike in fear. Yet a more thoughtful analysis could easily result in the opposite conclusion. While an excess of fear may well have deflated the two bubbles, it was an insufficiency of fear that allowed prices to get out of line with fundamentals in the first place. With climate change, a similar deficit of fear promises even more dire consequences. Why are we experiencing so little fear in the face of an imminent (in the time-frame of human history) threat to our collective existence? The answer to this question is aided by a rudimentary understanding of the psychology of emotions. While most people think of emotions as feeling states, psychologists are converging on a rather different understanding of emotions -- as all-encompassing ‘programs’ of our minds and bodies that prepared us to respond to recurrent situations of adaptive significance in our evolutionary past, such as fighting, escaping predators and reproducing. , Fear, according to this account of emotion, is an evolved response that fundamentally transforms us as people to deal with threatening situations that we encountered repeatedly in our evolutionary past. Fear activates specialized systems in our brains. Beyond the subjective feeling of fear, our hearing and sight become more acute; we become attuned to threatening things we otherwise would not have noticed, our memory sharpens, and there are myriad physiological

changes like gastric effects and adrenalin spikes. Although emotions, including fear, serve critical functions in human life, the emotion systems we are carrying around evolved in a very different environment than that of the present. Our appetitive system evolved long before high fat foods became virtually free, our sexual programming before the advent of internet pornography, and our pleasure-seeking system before the development of crystal meth. Likewise, our fear system evolved at a time when most of the people who mattered for our survival were in our immediate proximity and most of the hazards that threatened our survival were relatively immediate, such as predators, enemies and sudden changes in the natural environment. Our fear system is not well equipped to dealing with the most significant threats of the modern age that, like climate change, develop gradually and affect people we will never meet. Our fear system is adaptive. Hold any problem constant for some period of time, and fear subsides, even if the objective severity of the problem remains constant or even grows gradually. Our fear system is designed to motivate us to take action to eliminate imminent risks, but when risks such as climate change remain constant (or change imperceptibly) over time, our fear system takes it as a signal that the persistence of fear serves no function. Our fear system is largely oriented to the present. In part because our emotion system is so much more responsive to immediate than delayed outcomes, we ‘discount’ the future, which helps to explain why so many of us fail to diet or to save adequately for retirement. Climate change entails a trade-off between immediate sacrifices and long-term harms of exactly the type that humans often have difficulty with. Democratic governments may be in an even worse position than individuals. The always-upcoming elections might discourage them from putting strong effort into long-term solutions. Our fear system is also responsive to outcomes that are tangible and ill equipped to deal with situations in which the consequences of our behavior are imperceptible. We eat one potato chip (and then one more and one more) because any one potato chip has no impact on our weight, and we smoke the next cigarette because it is unlikely to be the one that kills us. This ‘drop-in-the-bucket effect’ comes into play in myriad ways when it comes to climate change. What difference would it make to turn the A/C down a few degrees? Of course drops in the bucket add up, and eventually the bucket overflows. Adaptation, time discounting and the drop-inthe-bucket effect are all features of our fear system that squelch what might otherwise be a healthy fearresponse to climate change. Moreover, each of these

tendencies interacts in a pernicious fashion with another psychological tendency: our highly developed ability to see what we want to see and believe what we want to believe. We are powerfully motivated (by time discounting) to not make immediate sacrifices for climate change, and our brains are remarkably adept at giving us various rationalizations for (not) doing so. “Climategate,” for example, provided welcome grist for skepticism by a public who didn’t want to believe in global warming in the first place. Since Climategate, belief that climate change is happening and is manmade has declined substantially in Britain, Germany and the United States. The fact that multiple independent reviews failed to turn up evidence of malice or fraud, or that ongoing research has not shaken scientists’ belief in the reality of the problem, has had comparatively little impact.

What can be done?

In a recent New Yorker article about Saul Griffith, an ecologically-oriented inventor, David Owen writes that “the world’s most urgent environmental need, he has come to believe, is not for some miraculous-seeming scientific breakthrough but for a vast, unprecedented transformation of human behavior.” Unfortunately, such a transformation is unlikely to occur. In the absence of such a transformation, policy makers must, therefore, work with people in all their psychological fallibility and complexity. As Rousseau famously commented, we need to “consider if, in political society, there can be any legitimate and sure principle of government, taking men as they are and laws as they might be.” Some behavioral economists have proposed ‘nudges’ to shift behavior in desired directions, and they have caught the ear of world leaders such as Barack Obama and David Cameron, both of whom count behavioral economists prominently among their advisors. While nudges are helpful, and propel behavior in desirable directions with minimal disruption of freedom of choice, they are unlikely to result in anything close to the changes in individual and firm behavior necessary to deal with the problem of climate change. For example,

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giving people information about other people’s electricity consumption, an idea that Cameron has endorsed enthusiastically, has by now been tested on a large-scale test, resulting in only a 3% reduction in electricity use. Although significant, this type of ‘nudge’ by itself is unlikely to make much of a dent in the problem of global warming. To have a serious impact on the problem of climate change there is no way to escape the necessity for policies that either change prices (e.g., a carbon tax or cap and trade) or involve regulation (e.g., far more stringent café standards on automobile fuel efficiency as well as new standards for residential and commercial construction). But how likely is it that such severe measures will be implemented, given the psychological barriers just discussed? This is another important domain in which behavioral economics can play a constructive role. A carbon tax, or cap and trade scheme, will result not only in dramatic rise in the price of energy-intensive activities and hence, hopefully, a reduction in energy use, but will also generate very substantial revenue streams. These revenue streams hold the potential, such as it exists, to make the medicine of price changes go down somewhat more smoothly. Revenue streams could be used to reduce other prices (ideally those associated with low emission activities) – or even to offer tax abatements. Behavioral economists should use their integrated understanding of economics and psychology to design ways of returning the revenue streams to people in ways that make taxes and regulations more palatable. In fact, the same psychological features that weigh against constructive action to deal with climate change can be exploited by policy-makers to increase the palatability of substantive interventions. , If people discount the future and ignore drops in the bucket, then use capital markets to deliver the dividend from future carbon tax revenues in a substantial lump sum, up front.

If people adapt to ongoing situations, it can be predicted that, perhaps after an initial uproar, they will adapt to a change in relative prices that bring prices into line with real costs, including environmental externalities. Humanity stands immobilized at the brink of disaster because climate change poses a perfect storm of not only economic but also psychological impediments to action. We may eventually experience a level of fear that is commensurate with the severity of the problem, but by that time it will probably be far too late to avoid catastrophe. In the absence of fear, citizens of nations are unlikely to accept measures that entail significant personal sacrifice. We need a skillful mixture of economics and psychology to devise fiscal and regulatory interventions that will change behavior and be widely accepted.

References 1 Weber, E. U. (2006). Experience-based and description-based perceptions of long-term risk: Why global warming does not scare us (yet). Climatic Change, 70, 103-120. Loewenstein, G., & Brest, P. (2009, July 12). Sunday forum: In defense of fear. Pittsburgh Post-Gazette. Retrieved from http://www.post-gazette.com/. Loewenstein, G. (2010). Insufficient emotion: Soul-searching by a former indicter of strong emotions. Emotion Review (online at http://emr.sagepub.com/cgi/rapidpdf/1754073910362598v1). Loewenstein, G. (2007). Defining Affect (Commentary on Klaus Scherer’s “What is an Emotion?”). Social Science Information , 46, 405-410. Cosmides, L., & Tooby, J. (2004). Evolutionary Psychology and the Emotions. In Handbook of Emotions, 2nd Edition M. Lewis & J. M. Haviland-Jones, Editors. NY: Guilford. McClure, S.M., Laibson, D.I., Loewenstein, G. & Cohen, J.D. (2004). Separate neural systems value immediate and delayed monetary rewards. Science, 304, 503-507. Rick, S. & Loewenstein, G. (2008). Intangibility in intertemporal choice. Philosophical Transactions of the Royal Society B: Biological Sciences, 363, 3813-3824. Loewenstein, G. (2006). The pleasures and pains of information. Science, 312, 704-706. Rosenthal, Elisabeth, “Climate fears turn to doubts among Britons.” New York Times, May 24, 2010, Page A1. Thaler, R. H., & Sunstein, C. R. (2008). Nudge: Improving decisions on health, wealth, and happiness. New Haven, CT: Yale University Press. http://www.ted.com/talks/david_cameron.html. Ayres, I., Raseman, S., & Shih, A. (2009). Evidence from two large field experiments that peer comparison feedback can reduce residential energy usage (NBER Working Paper 15386). Cambridge, MA: National Bureau of Economic Research. Alcott, H. (2009). “Social Norms and Energy Conservation.” Working Paper, MIT. Loewenstein, G., John, L.K., & Volpp, K.G. (forthcoming). Using Decision Errors to Help People Help Themselves. In Eldar Shafir (Ed.). Behavioral Foundations of Policy. New York: Russell Sage Foundation Press. Loewenstein, G., Brennan, T., & Volpp, K.G. (2007). Asymmetric paternalism to improve health behaviors. Journal of the American Medical Association. 298(20), 2415-2417.

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A Mecca for Militants - The Development of International Terrorism in Peshawar, Pakistan By Ashley Edgette, Hinckley Scholar, Hinckley Institute of Politics

Peshawar, Pakistan, a modern region of violence and militancy, has been a major proponent in one of the most problematic global issues of this era: international terrorism. Examining the environment in which this type of militancy began and how it incurred is vital to understanding how to assuage the issue as it stands today

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and how to further develop peaceful conditions in the future. The proxy war between Afghanistan and the USSR during the late 1970s was a major instigator in the proliferation of terrorism within the northwestern region of Pakistan. Although Pakistan was not directly involved in the war, the side effects from it in terms of the population, economy, social and political constructs were drastic. This time period is a microcosm of how crossnational and cultural conflicts affect surrounding regions and cause mass instability for a multitude of the populaces involved rather than just those in direct conflict. The call to Jihad brought more than 35,000 Muslim warriors to Peshawar from 1979 to 1989. With this influx came an abundance of domestic issues that permeate not only Peshawar but also Pakistan to this day. Criminal and sectarian violence began to rise, education became the site of militant training, Afghan refugees flocked across the border, and illegal trade exponentially grew during this time frame. Paranoia permeated Peshawar as militants and refugees flooded the city. The conflict that had begun earlier between Islamic sects was exacerbated by the culture of violence that spawned from CIA and jihadist influence. Citizens were no longer safe to walk the cobbled streets of their own city. A once pulsating marketplace now supported more black market trade than fresh produce and congregations of foreign mujahideens were more likely to be seen perusing the merchandise than mothers with their children. This instability stimulated the growth of anti-American sentiment within Peshawar. Out of frustration and a lack of personal safety Peshawar citizens began to form jihadist movements of their own based on the successes of the Afghan Mujahideens. Anti-Sunni, antiShi’a, anti-democratic and anti-Indian militancy sprang up all over Peshawar. The goals of these nascent terrorist organizations ranged from the liberation of Kashmir to the installation of a Pashto government in Afghanistan. Lashkar-e-Toiba (LeT), Jaish-e-Mohammed (JeM), Haratiat-ul-Mujahideen (HuM) and Harkat-al-Jihad-al-Islami (HJI) were just some of the terrorist organizations born during this period, reaping the benefits of governmentfunded militancy and CIA-based training. The education system within Peshawar had become radicalized by the militant upsurge in the city as well. Throughout the 1980s madrasas that promoted militancy and the Islamic jihad sprung up all along the Afghan-Pakistan border. This was catastrophic for the

northwestern frontier’s youth who saw madrasas as the only escape from their economically disadvantaged situation within the poverty-stricken region. The system served two causes: it brought starving youth from all over the Afghani and Pakistani countryside to Peshawar for a chance to be fed, clothed and housed for free, and it indoctrinated them with a militant mindset. Pakistan, Saudi Arabia and the CIA promoted this mindset as well as other nations that were actively supporting statesponsored militancy These madrasas became militant-recruiting centers where children were taught the Quran alongside radical theories of Islamic Jihad. The extremism fostered there was a major cause of the fundamentalist attitudes that permeate Peshawar to this day. An entire generation of Pakistani Muslim youth was taught that death in the name of Allah against the infidels was the greatest good they could hope to achieve. Because of this indoctrination Peshawar became a mass producer of suicide bombers, mujahideens, Taliban and Al Qaeda members for the next decade. The schools provided a haven for fundamentalist ideology as well as impoverished and displaced Afghani and Pakistani youth. Students were not the only Afghanis fleeing their homeland. Post-Soviet invasion, two million refugees entered the Peshawar region swelling the populations eight fold. The influx of refugees was hospitably received in the northwestern frontier region where there was a large populace of Pakistanis with Pashto heritage. The UN High Commission of Refugees (UNHCR) created 350 camps of 10,000 inhabitants in the Peshawar region. These camps overcrowded city centers, spread into the unregulated FATA region and caused innumerable infrastructural issues for the Pakistani and local Peshawar government. Peshawar citizens complained of inflated housing prices, a rise in the illegal trade of opium and an overall degradation of law within the city. In Peshawar, the refugees’ presence heightened the crime rate, the tension between sectarian groups and enrollment in madrasas, militant involvement and illegal trade. By the end of the 1980s the heroin trade and addiction had vastly increased in Peshawar. There were more than 1 million heroin addicts in Pakistan and labs had begun to spring up all over the city centers. The bulk of rising production came from ramshackle labs strung across the contentious Afghan-Pakistan border region. Using the instability of the FATA region as a trade route and base camp, growers, traders and smugglers worked within Peshawar in a rising grey market free of fear. This trade created an underground upsurge in the Peshawar economy in which conspicuous money, that could not enter the legitimate economy began to ex-

pand and circulate within illegal markets. Crime lords and militants lived off the fat of illegal trade while decent citizens could not afford to feed their families because most legitimate trade left the city. Peshawar had become known as a criminal supercenter. The degeneration through proximity in Peshawar exemplifies how interrelated economic, social and political systems can inflame instability and create conditions conducive to militancy. Acknowledging the demanding complexities of these situations when considering foreign policy may help avoid great violence. Peshawar reacted against the stifling flow of violence and the clash of civilizations that beleaguered the city. If the global community can begin to understand the interconnectedness of cities’ support systems in the context of global affairs, then the globe might no longer dread the nihilism of international terrorists. Peshawar is not singular in misfortune but rather a city among throngs of cities affected by global irresponsibility. In an age of global interaction, cultural conflict is becoming more prevalent and nowhere can it be seen in its true blood red more intensely than Peshawar. These new global dynamics of cultural intrusion must be acknowledged by foreign nations as they interact with one another or there may be a new precedent set in the bacterial evolution of global militancy. Ashley Edgette is a Salt Lake City native who will graduate from the University of Utah with degrees in political science and environmental studies and a minor in French. She plans to pursue a Ph.D. in city planning and policy.

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Summit 2010

Declining Biodiversity: Economic Discrepancies and Cooperative Solutions By Lauren Hansen, Hinckley Scholar, Hinckley Institute of Politics

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For the past century, free-trade and economic growth have overridden any claims that have been made for the preservation of the natural environment, all in the name of progress. However, this environmental abuse has recently been brought to the forefront with claims of global warming and species disappearing daily, never to return. Annual species extinctions have increased exponentially from six in 1950 to 10,000 in 1990, and the rise in globalization and extinction rates is not coincidental. Some, such as Richard Leakey and Roger Lewin, have gone as far as to call this the “sixth extinction,” comparable with the extinction of dinosaurs and other species at the end of the Cretaceous period. In this case though, species are being annihilated by the economic growth and overconsumption by humans rather than natural disasters such as volcanoes and meteors. There has been an accelerated decrease of species diversity, as well as cultural diversity, as modernization and globalization become more prominent goals for countries. Economic liberalism and globalization have become suspects for increases in the extinction of species across the globe. The case against unregulated trade and economic expansion has been made well by those who are opposed to these ideals, showing that environmental standards are often tossed aside for profits. There is an impact from the loss of biodiversity that affects the surrounding environment, and this should be considered along with any economic gains. Currently, there are a little over 1 million species known to our planet, with approximately 15,000 new species being discovered annually. Biodiversity is divided across different communities, climates, and habitats, but it is clear that communities and biota interact with each other in a way that intrinsically connects species to each other. The Gaia Hypothesis proposes that all ecosystems on the planet are interdependent and work together as a whole, and that individual ecosystems are maintained by the interactions of individuals within. This creates a different perspective concerning the importance of biodiversity. In order for the ecosystem to be truly viable, entire systems need to be appreciated rather than just individual species. Extinction is an accepted fact of life, and the natural background extinction rate is calculated to be one species in every four years. However, the rise of humans as the dominant species has been accompanied by a drastic increase in species extinction. Large extinctions of biota could be seen throughout the Pacific Islands as they were populated during the last 1,000 years. This trend continued with European colonization starting in the 17th Century as focus shifted to economic gains

through the exploitation of natural resources. This perception has continued, and today it is estimated that as high as 30,000 species go extinct every year.

Economic gains are undermining the simple beauty and value of biodiversity, placing an emphasis on shortterm profits instead. Habitat loss from deforestation and other economic practices that abuse land is considered to be one of the major factors in the increase of species extinction. The World Trade Organization has also forced the United States to go against environmental measures put in place for the protection of sea turtles, claiming these protective measures create discriminating trade practices. Multinational corpora-

tions outsourcing to countries with less stringent environmental controls create a situation where there is less incentive for environmental protection due to economic gains that can come from environmental degradation. This can then lead to overconsumption, which causes increases in acid rain and decreases in the availability of fresh water supplies.

Changes must take place in the system that allow for progress to be made in areas of environmental protection. Some have tried to do this by placing an economic value upon species and habitat. However, the commodification of species for medicinal use and other purposes can only be part of the solution, and will prove to be very costly if employed alone. Value also needs to be placed upon species’ worth to an ecological system seen as an organic whole.

While economic liberalism has created many of the environmental problems that exist today through unregulated fair trade, institutional liberalism offers some of the solutions through international agreements and cooperation. Some success has been found in these areas, especially with the Convention on International Trade in Endangered Species (CITES), the Montreal Protocol and incentive structures that offer economic benefits for sustainable development. Continued cooperation will be needed to prevent further degradation of the environment. No nation is exempt from CO2 emissions and other environmental concerns that reach across borders. Rather, nations need to work together for the preservation of habitat that is so essential for biodiversity, and international institutions provide essential forums for solutions to reach a collective good through cooperation. Much can still be done for the preservation of biodiversity. Ecotourism and biological corridors throughout Latin America have helped preserve habitat in speciesrich ecosystems that are still economically beneficial. Land trusts and conservation easements also allow for the preservation of habitat and offer economic advantages through tax incentives. The preservation of habitat is essential to the recovery and sustainability of a species, as has been shown by the successes of the Huai Kha Kheang and Thung Yai Wildlife Sanctuaries in Thailand in stabilizing declining tiger populations. Marine preserves off the coast of Belize have also allowed for thriving coral reefs and recovering fish populations in an area heavily affected by human activities. Once species and diversity are lost, they can never be recovered. Our world consists of “endless forms most beautiful and most wonderful,” with each species having distinct characteristics and genetics that can be found nowhere else. We are intrinsically, explicitly linked to the environment around us, and this is becoming more apparent as humanity becomes more connected through globalization. It is everyone’s responsibility to realize that changes must happen before it is too late and the species that are such an essential part of our existence are gone. Lauren Hansen graduated from the University of Utah with B.S. degrees in Political Science and Anthropology. She has served Hinckley Institute of Politics internships with the U.S. Mission to NATO, Utah’s Office of the Governor and Utah Open Lands.

G8/G20

Summit 2010

Recommendations for Malaria Control Policy in Sub-Saharan Africa By Jacob Lindsay, Hinckley Scholar, Hinckley Institute of Politics

(PMI) and operated under the umbrella of the United States Agency for International Development (USAID). The initial total of committed funds was $1.2 billion USD, spread out over five years, or approximately $240 million per year. This total is commendable, considering that USAID allocated only $10.9 million USD to malaria programs in 1997. The general goal of the PMI is to reduce current levels of malaria deaths by 50 percent in 15 Sub-Saharan countries.

What is The United States Global Heath Budget for 2010? By the time you finish reading this sentence a child in Africa will have died of malaria. As disheartening as this may be, the true tragedy of this death is that malaria is a treatable disease. Anti-malarial pills cost only $1 USD per treatment. Cheap secondary combatant methods such as mosquito spraying and the use of bed nets have also significantly lowered infection rates. The only step left in defeating this ancient disease is locating the funding to make these treatments universal. In this time of economic recession, funding for global health should be maintained. While celebrity-based aid agencies, private corporations and The Global Fund have made admirable efforts to fight malaria, the United States President’s Malaria Initiative must lead out in bringing an end to this terrible disease.

The Weight of Malaria

Economists at the Roll Back Malaria partnership have estimated that malaria is responsible for a yearly drain of 0.25-1.3 percent on the GDP of several African countries. This significant drain on resources prompted the United Nations to add “Combat HIV/AIDS, Malaria and Other Diseases” to its Millenium Development Goals in 2000. At that time the World Health Organization released a report estimating that the hypothetical elimination of malaria in 1965 would have increased the total GDP of Sub-Saharan Africa in 2000 by 32 percent, equal to $100 billion USD. Another estimate issued during this time stated that “40 percent of public health expenditures, 30-50 percentof inpatient admissions, and up to 50 percent of outpatient admissions” were malaria related.

The President’s Malaria Initiative

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On June 30, 2005, President George W. Bush announced a new program that expanded the funds dedicated to fighting malaria in Sub-Saharan Africa. This program was called the President’s Malaria Initiative

On May 9, 2009, President Barack Obama announced his budget allocations for global health initiatives for the 2010 fiscal year. The total global health budget for 2010 is $8.6 billion USD. This is an increase of approximately a half a billion dollars from 2009. The President’s Emergency Plan for Aids Relief (PEPFAR) program will receive approximately $6.6 billion USD. This is an increase of about $.165 billion USD, 3 percent over the 2009 budget. Funding for the PMI will be increased by $200 million USD in 2010 to a total of approximately $762 million USD. This is an increase of 36 percent over the 2009 budget.

A conscious decision to stimulate local production will spark additional development of African infrastructure.

Increase Cooperation between Non-profit Organizations Information about malaria prevention and treatment is not a secret; knowledge regarding the local application of that information, however, is tightly controlled. The quirks of any culture may prevent the implementation of a certain strategy. For instance, it is a common misconception in Equatorial Guinea that mosquito sprays make men sterile. Organizations are reticent to share this information with others because it gives them an edge in the acquisition and renewal of their grants. In the end, this competition causes a decline in the quality of services as organizations hoard information from their rivals. A change in organizational structure is necessary. Renewal of an organization’s grant should not be determined by individual performance only. Rather, all organizations operating in a particular region should be reviewed together. Performance goals should be set for the group of organizations at the beginning of the project. If the group as a whole meets its goals, all of the contracts should be renewed. This will provide the incentives necessary for the groups to share

their life-saving information, improving the overall quality of care for the native population. As groups begin to cooperate with one another and coordinate their activities in monthly meetings, redundancy costs from research and development can be decreased significantly.

Continued Support of Global Health bring Initiatives

During this time of economic recession there is the tendency to turn inward and forget about the suffering of others in distant countries. The Obama administration should be commended for its continued support of malaria control in Africa. The President’s Malaria Initiative has made admirable contributions to the campaign against the disease over the past decade, but continued policy revisions are still necessary. By improving these processes, the world might someday see the elimination of malaria. Jacob Lindsay graduated from the University of Utah in 2010 with a B.A. in international studies and an Honors B.A. in English literature. During the summer of 2009 he completed a Hinckley Institute of Politics internship in Washington, D.C., with the non-profit organization Medical Care Development International.

How Can PMI Use its Resources More Efficiently? During this time of global recession, everyone is looking to lower expenditures. Cutting the budget for global health, however, doesn’t mean just lost jobs; it means lost lives. As an alternative to diverting funds, PMI must set the standard for using malaria funding more efficiently and more effectively. As performance goals for the countries affected are met more often and at a lower overall cost, other funding agencies will be inclined to adopt these changes.

Focus on Smart Aid

When giving aid to Africa, foreign governments have a tendency to give finished products directly to the people. This puts many local producers out of a job. Manufacturing plants producing bed nets in America can easily undercut start-up groups in Africa. PMI administrators and leaders of associated non-profit organizations must remember that the funds combating malaria should not be used just to heal bodies. These resources should be used to also heal national economies. When considering the destination of funding for combating malaria, American organizers should give resources first to local producers. This includes the production of medication, bed nets, spraying equipment, chemicals and education to promote behavioral change.

G8/G20

Summit 2010

African Indexes Fall Short By Sheldon Wardwell, Hinckley Scholar, Hinckley Institute of Politics

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Much like rankings of sports teams or universities, a new trend in world politics is ranking how well governments perform. In Africa, two different ranking systems compete to measure this: the Mo Ibrahim Index of African Governance and Harvard’s Strengthening African Governance. Both indexes were originally one and the same, funded by Mo Ibrahim, a Sudanese telecoms entrepreneur, and ran at Harvard’s Kennedy School of Government. However, disagreements over control led the Harvard index to split off. Essentially, these publications provide countries with a report card for the world to see. The core “curriculum” includes six important public goods that people generally expect from government: safety and security, rule of law, transparency and corruption, participation and human rights, economic development and human development. Similar to a transcript, index rankings can have serious consequences on livelihood. Just as students may be rejected from a school or career by failing to display their abilities to perform, a country may be denied development aid and foreign investment. This is because of the fact that outside countries make decisions about allocating funds based on governance performance. With such value being placed on country performance, the accuracy of the indexes must be rigorously checked. Alarmingly, doing so reveals just how vulnerable the current grading method is to errors. A study on the 2009 indexes done at the Rwanda Governance Advisory Council (RGAC) revealed three major shortcomings. The first deals with evaluation frameworks. Although both indexes assess countries in the same areas, different indicators, grouping and weighting, cause significant discrepancies. For instance, the RGAC compared the results of each index when used to rank the five East African Community (EAC) countries on rule of law, transparency and corruption. The Mo Ibrahim index places them as, 1) Uganda, 2) Tanzania, 3) Burundi, 4) Rwanda, and 5) Kenya, while Harvard places them as, 1) Tanzania, 2) Uganda, 3) Kenya, 4) Rwanda and 5) Burundi. The variations result from different measuring frameworks. While Harvard uses three subcategories and seven indicators for this topic, Mo Ibrahim uses two subcategories and 12 indicators. The inconsistent results demonstrate how scores and ranks can become seemingly arbitrary with changes in framework. The second issue deals with data errors and unjusti-

fied data. For publications of such vast nature—published by institutions of limited resources, spanning 53 countries and employing several dozen indicators and sources—safeguarding against error is one of the greatest challenges. One example found in the RGAC study deals with the UN Sanctions Indicator. To measure whether a country is in gross violation of international law or not, countries are awarded either a “100” for “no sanctions” or “0” for “sanctions imposed.” In both 2009 indexes, Rwanda received a 0. The Mo Ibrahim Index claims in its methodology that “any country that had sanctions lifted in a year was awarded a score of 100. The latest available coding year was 2008. However, UN Security Council Resolution 1011(1995), the sanction against Rwanda, was entirely dismissed as of July 10, 2008. Harvard’s index arguably cleared itself by stating it used 2007 data for this indicator, at which time two paragraphs of the sanction remained. However, the remaining paragraphs were merely in place to stop the flow of weapons to nongovernmental groups in and around Rwanda, and were not reflective of a gross violation by the government. The mistake within the Mo Ibrahim index clearly sabotaged Rwanda’s overall evaluation score. With the correction, Rwanda’s rule of law, transparency and corruption sub-score goes from 47 to 55.3, shifting it from fourth place to second place within the EAC. The final issue deals with the use of obsolete data. As they are labeled 2009, one might assume the indexes would be using data from that year, or at least 2008. However, glancing into the reports reveals that most data is from 2007, two years prior to publication. This means that the rankings in the 2009 indexes are in reality the 2007 rankings. For a country like Rwanda, widely regarded as an African success story in recent years, the reporting of obsolete data often obscures improvements. This is the case with the Ratification of Core International Human Rights Conventions indicator, used by Harvard, which places Rwanda last within the EAC. Actual 2009 data, as identified by the Office of the United Nations High Commissioner for Human Rights (OHCHR), proves otherwise. Since 2007, considerable changes in the number of conventions ratified by EAC countries occurred and an additional international convention was written, bringing the total to eight. Rwanda

ratified three conventions during this period, raising its score and rank under this indicator from 66.7 (tied for last) to 100 (tied for first). Despite these shortcomings, however, the self-proclaimed “works in progress,” as the indexes admittedly call themselves, are an important asset to global politics. To further this impact in the future, the two indexes could coordinate on measurements and data collection to avoid confusion or seemingly arbitrary results. Perhaps, as methods continue to improve, they could ensure against data errors and speed up processing, reporting on countries in a timelier fashion, or in the least, calling data what it is.

Sheldon Wardwell graduated from the University of Utah in 2009 with a B.S. in Political Science and an International Relations Certificate. In the fall of 2009, Wardwell returned to East Africa for the second time, where he researched African Indexes as an intern for the Rwanda Governance Advisory Council. During this period Wardwell also travelled to South Sudan where he conducted interviews for an article he is co-authoring regarding the International Refugee Regime. Currently, Wardwell is working for a non-profit organization he founded and will be applying to law school to begin in 2011.

Table 1 UN Sanctions Indicator with Error Rwanda

Tanzania

Kenya

Uganda

Burundi

UN Sanctions

100

SC1: Rule of Law Sub-Score

42.1

61.3

57.6

73.7

61.5

Rule of Law, Transp. and Cor. Sub-Score

47.0

55.0

45.9

61.3

48.0

Rwanda

Tanzania

Kenya

Uganda

Burundi

UN Sanctions

100

SC1: Rule of Law Sub-Score

58.8

61.3

57.6

73.7

61.5

Rule of Law, Transp. and Cor. Sub-Score

55.3

55.0

45.9

61.3

48.0

Rwanda

Tanzania

Kenya

Uganda

Burundi

*Ratified Conventions (2007)

Associated Score

66.7

83.3

100

83.3

**Ratified Conventions (2009)

Associated Score

100

87.5

100

Table 2 UN Sanctions Indicator Adapted without Error

Table 3 Ratification of Core International HR Conventions

*From Harvard’s Strengthening African Governance Index 2009 report (out of 7) **Latest available data from www.ohchr.org as of November 16, 2009 (out of 8)

G8/G20

Summit 2010

Challenges for Global Health: Burdens of Disease and the Millennium Development Goals labor and delivery. Donor contributions to family planning services have decreased by 50 percent or more in many of these areas during the past 10 years. In many refugee camps, particularly in Bangladesh, Zambia and

been relatively aggressive in exercising their rights under TRIPS. Under TRIPS, there are two ways for developing nations to avoid these patent protections. “Voluntary” licenses may be negotiated with patent holders to allow the import or production of cheap generics, but negotiating these depends on the good will of the patent holder. “Compulsory” licenses may also be issued in cases of severe health emergencies; this strategy has

Chad, fewer than 20 percent of women have access to professionally trained attendants during childbirth. The third health-related Millennium Development Goal is to halt and reverse the spread of HIV/AIDS. Here, there is genuine success to celebrate. Improvements in prevention programs have reduced the spread of HIV and death rates have declined with increasing access to HIV treatment. South Africa, a country with high incidence rates of HIV and a well-known history of denial, has recently undertaken a dramatic new program of education, testing and treatment, highlighted by President Jacob Zuma’s public announcement of his own negative test. The 2009 Millennium Development Goals report notes, however, that rates of infection have continued to increase in Central Asia and Eastern Europe. A continuing source of controversy is the role of intellectual property protections in the price of antiretroviral drugs. Spurred by efforts of non-government organizations (NGOs) such as the William J. Clinton Foundation and Médecins sans Frontières, pharmaceutical companies have negotiated tiered pricing schedules for HIV drugs. Competition from generic manufacturers such as the Indian corporation Cipla also has driven prices downward. Since 2005, however, developing nations who are members of the World Trade Organization (WTO) have been required by TRIPS (the Agreement on Trade Related Aspects of Intellectual Property Rights) to issue patents, and pharmaceutical companies have

been employed by Thailand and Brazil, but not without threats of repercussions from pharmaceutical companies. Perhaps one of the greatest ironies in health status worldwide is the replacement of diseases of poverty by diseases of affluence. The World Health Organization (WHO) estimates that 220 million people worldwide have diabetes and that the number can be expected to double within the next 20 years. Over 80 percent of diabetes deaths occur in lower and moderate income countries. In 2006, the United Nations declared November 14 “World Diabetes Day” and encouraged member nations “to develop national policies for the prevention, treatment and care of diabetes in line with the sustainable development of their health-care systems.” Just recently, India was surpassed by China as the “world diabetes capital,” a dubious distinction indeed. Another recent and important development in world health is the entry into force of the new World Health Regulations in 2007. The regulations provide for broad responsibilities of public health surveillance, on the part of both developed and developing countries. Although SARS, avian influenza (H5N1) and last year’s swine flu (H1N1) have largely faded from public attention, concerns about rapid and world-wide spread of infectious diseases remain. When people may be infected and travel before they show symptoms of illness—as is true with influenza, for example—strategies of closing bor-

By Leslie Francis, Professor, University of Utah S.J. Quinney College of Law

Global challenges of health and health care remain enormous. Despite considerable progress in some respects—for example, the noteworthy increases in access to HIV treatment in areas of sub-Saharan Africa— overall burdens of disease remain concerningly high. Progress on Millennium Development Goals set by the United Nations for achievement by 2015 has been at best uneven. Rates of diseases of relative affluence such as diabetes are growing world-wide and polio is resurgent. The recently-implemented World Health Regulations hold promise, but resources to implement them remain problematic as the costs of health care rise. In September 2000, world leaders meeting at the United Nations adopted eight Millennium Development Goals to be achieved by 2015. The overall aim of the goals is the eradication of extreme poverty; three of the eight deal directly with health-related matters and the remainder address infrastructure questions such as education that indirectly contribute to the improvement of health. Millennium Goal 4 is to reduce the mortality rate of children under the age of five by two-thirds of its level in 1990. In 2006, for the first time, the absolute numbers of young child deaths dipped below 10 million and had reached 9 million by 2007. However, death rates remained stagnant or worsened in 27 countries, and declined too slowly in 62 countries to meet the Millennium Goal. Primary causes of child mortality remain malnutrition and infectious disease. Notable successes include the “Nothing But Nets” campaign to encourage the use of insecticide-treated bed nets against malaria, and the Measles Initiative, which through vaccination has reduced mortality from measles in Africa by over 90 percent. In Bangladesh in 2006, more than 33 million children were vaccinated against measles in just 20 days. A second health-related Millennium Development Goal is achieving universal access to reproductive care and reducing maternal mortality rates by three-quarters from 1990 levels. Sadly, maternal mortality rates have declined by a mere 1 percent annually since 1990, far below the approximately 5 percent needed to reach the Millennium target. In sub-Saharan Africa, progress has been especially slow. A chronic problem remains the lack of access to family planning services, especially in sub-Saharan Africa, poorer households in Latin American and the Caribbean and in the transition countries of south-eastern Europe. In these regions, pregnancy rates remain especially high among adolescents, a demographic group at greater risk for complications in

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ders may be too late, even for island nations such as Britain. Under the regulations, all states parties are required to report to the WHO public health emergencies of international concern. By 2012, all states parties are to have in effect “the capacity to respond promptly and effectively to public health risks and public health emergencies of international concern.” All measures are to be conducted transparently and without discrimination; the regulations recognize the importance of protecting human rights in their implementation. The regulations also require countries to collaborate in mobilizing the financial resources needed to meet these responsibilities. Despite implementation of the regulations, public health infrastructures remain minimal at best in many areas of the world. Too often, strategies for promoting health have targeted specific diseases rather than building health care capacities more generally. The eradication of smallpox represents a great success, but perhaps not a strategic ideal. The effort to eradicate polio, while tantalizingly close to realizing its goal, has more than once been thwarted by new outbreaks of disease, particularly in Nigeria. Recognizing the wisdom of broader public health strategies, the Gates Foundation has just announced a shift in its strategy against polio: disease-specific campaigns can only succeed if they are accompanied by overall improvements in health infrastructure. This is the hope—and the challenge—of the Millennium Development Goals. Leslie Francis, Ph.D., J.D., is a Distinguished Professor of Law and Philosophy and Alfred C. Emery Professor of Law at the University of Utah. With colleagues, she is the author of The Patient as Victim and Vector: Ethics and Infectious Disease (Oxford University Press, 2009). She currently serves as co-chair of the Security, Privacy, and Confidentiality Subcommittee of the U.S. National Committee on Vital and Health Statistics.

G8/G20

Summit 2010

Global Security—An Analysis Moving Forward By Amos N. Guiora, Professor, University of Utah S.J. Quinney College of Law

The contemporary challenges confronting decision makers on domestic and global issues alike are extraordinary. To name but a few, these include religious extremism, terrorism, piracy, economic uncertainty, nuclear threats, public health crises and ethnic and regional strife. Resource prioritization, cost-benefit analysis, per-

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ceived national interests and risk analysis are essential to determining when, how and whether to respond to each threat. Precisely because the stakes are so high, and the missteps fraught with danger, a sophisticated understanding of geo-politics is essential to developing strategic-based national security policy. While different nations may—and naturally do—disagree regarding strategic and tactical dilemmas, fundamental similarities are essential to minimizing risks. As the pages of history unequivocally demonstrate, conflict is an inevitable reality; however, world order is significantly enhanced by proactive conflict diffusion as distinct from reactive conflict resolution. This tension—proactive contrasted with reactive— is particularly acute with respect to global security and terrorism and specifically in how Iran’s nuclear threat is

addressed. Addressed as if negated because a nuclear Iran would significantly endanger global stability, that is invariably tenuous locally, regionally and internationally. While the dilemmas listed above also pose significant threats requiring international attention, they do not present existential danger that a nuclear Iran would.

While other nations possess nuclear capability, that does not justify the international community’s acquiescence. The fact other nation-states possess nuclear capability does not justify Iran’s development precisely because Iran was not threatened prior to development of its nuclear program. Chamberlin’s black umbrella in the face of Hitler’s threats is best kept in the closet of history. Simply put, the imminent threat posed by a nuclear Iran raises significant questions regarding lawful levels of preventive self-defense. International security is enhanced by nuclear disarmament; international instability is increased by nuclear armament. Time will tell whether President Barack Obama’s concerted efforts to reduce nuclear weapons on a global scale will significantly reduce the threat posed by nuclear armament and will act as a powerful catalyst in directly contributing to powerful, uniform and direct pressure on Iran to discontinue its nuclear development program. In the meantime, the world faces a very clear and direct challenge to security and stability. That is, while concrete, positive risk-minimization measures are taken with respect to nuclear weapons, Iran’s determination to become a nuclear power directly confronts, if not challenges, international security and stability. After all, Iran has consistently—and directly—threatened Israel and other Western nations, including the U.S.

According to the United Nations’ Charter (Article 51) “Nothing in the present Charter shall impair the inherent right of individual or collective self-defence if an armed attack occurs against a Member of the United Nations”. The critical—and controversial—word is “if”; simply put, according to the Charter, a nation state cannot exercise its right to self-defense until attacked. While the phrasing reflects both the horrors of World War II and a conscious, proactive effort to minimize con-

flict in an effort to enhance stability, the Iranian threat challenges the practical application of Article 51. The international community has expressed concern that Israel will act proactively to thwart Iran’s nuclear program, similar to its 1981 attack on Iraq’s nuclear facility and reported attack on Syria’s nascent nuclear program. The concern is justified, as Israeli decision makers have consistently articulated that a nuclear Iran presents a direct, existential threat to Israel’s security. Herein lies the tension with respect to global security: what is the limit of Iran’s right to join the international nuclear club as compared to Israel’s right to engage in proactive self-defense? The question is not merely academic nor ephemeral; President Ahmadinejad has directly threatened Israel, saying, “We ask the West to remove what they created 60 years ago and if they do not listen to our recommendations, then the Palestinian nation and other nations will eventually do this for them…. remove Israel before it is too late and save yourself from the fury of regional nations.” That threat potentially becomes “actionable” if Iran were to develop the bomb. However, the threat is not limited to Israel as fall-out of nuclear radiation directly endangers other countries in the region including Lebanon, Egypt, Jordan and Syria. In addition, as Ahmadinejad has threatened nations that support Israel selfdefense questions are appropriate to ask in European

capitals, much less in Washington, DC, because American assets are vulnerable internationally. Global security requires minimization of both present threats and future dangers. Managing the former demands international cooperation, commitment and resources; addressing the latter requires a clarion call to action with respect to an imminent threat. Although different regions are burdened with varying degrees of conflict and strife, the future, direct threat posed by an

additional nation developing nuclear capability, particularly when it has unequivocally articulated threats against the nations of the world, directly calls into question the essence of international order and law. Iran has consistently issued threats against nationstates that have not–directly or indirectly—articulated aggression against that country. Although the Iranian regime has been threatened with sanctions and possible military action, both are in response to Iran’s threats and imminent nuclear capability. That is, the sanctions/ military action discussion has been a result of threats articulated by Iran. However, as these articulated threats have not deterred Iran from continuing to develop its nuclear program, the fundamental question facing the international community is whether and when concrete, proactive measures will be implemented. That, after all, is the core of global security and self-defense. Amos Guiora is Professor of Law, SJ Quinney College of Law, the University of Utah. Guiora teaches International Law, Criminal Procedure, Global Perspectives on Terrorism and a Global Justice seminar; his latest book is “Freedom from Religion: Rights and National Security” (Oxford University Press, 2009).

G8/G20

Summit 2010

Promoting Peace in Iraq by Supporting the Rule of Law By James R. Holbrook, Professor, University of Utah S.J. Quinney College of Law

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The World Justice Project has published a working definition of the “rule of law” which includes four objectives: 1. The government and its officials are accountable under the law; 2. The laws are clear, publicized, stable and fair and protect fundamental rights, including the security of persons and property; 3. The process by which the laws are enacted, administered and enforced is accessible, fair and efficient; and 4. The laws are upheld, and access to justice is provided, by competent, independent and ethical law enforcement officials, attorneys or representatives and judges who are of sufficient number, have adequate resources and reflect the makeup of the communities they serve. From early 2009 through March 2010, the University of Utah’s S.J. Quinney College of Law (the “College of Law”) promoted these rule-of-law objectives in Iraq through the law school’s Global Justice Project: Iraq (GJPI). The GJPI project received funding from the U.S. Department of State to help build a more democratic and stable Iraq by doing the following: offering advisory and capacity-building assistance to the government of Iraq in constitutional and legislative development; facilitating the development of a national electoral framework; assisting with anti-corruption reform and education; assisting with the development of a comprehensive, interconnected legislative process system; supporting judicial

independence; and reviewing and proposing revisions to the Iraqi criminal procedure code. The GJPI project fielded a team of legal experts in Baghdad’s International Zone, backed by expert advisors and student researchers located in the United States and Europe. GJPI team members worked closely with the U.S. Embassy Baghdad’s Office of Constitutional and Legislative Affairs, its Anti-Corruption Coordination Office and its Office of International Narcotics and Law Enforcement to provide technical assistance and advice to the Iraqi judiciary and the government of Iraq and its law-making and anti-corruption institutions in their efforts to promote and strengthen the rule of law. The College of Law’s Dean Hiram Chodosh and Professor Chibli Mallat, both of whom were intimately involved with the project, worked with Iraqi officials and the international community in Baghdad to provide advice about federalism focused especially on the structure and composition of the Federation Council, a legislative body not yet created, called for by Article 65 of the Iraqi Constitution. Professor Haider Ala Hamoudi and Sara Burhan Abdullah worked with the Constitutional Review Committee of the Iraqi Council of Representatives to assist the Committee’s thorough-going review of and proposed revisions to the Iraqi Constitution. Jaye Sitton, Sean Gralton and Jeff Fischer worked with Iraqi legislators and government officials on bolstering the electoral legal framework of legislation and regulations. Muayyad Al-Chalabi worked with representatives of all the Iraqi law-making institutions to assess each institution’s internal legislative process system and to design the coordinated management criteria for an interconnected and interoperable system. Professor James Holbrook worked with representatives from the Iraqi State Shura Council on their efforts to make international commercial arbitration more robust in Iraq. Vincent Battle and Navin Beekary worked with experts from the U.S. Embassy Baghdad and from the Iraqi Commission on Integrity, the Iraqi Inspectors General, and the Iraqi Board of Supreme Audit to strengthen Iraq’s anti-corruption legislation. Barrister Andrew Allen worked with representatives of the Iraqi Chief Justice to review and update the country’s criminal procedure code. The GJPI project presented numerous workshops for Iraqi government officials, legislators and judges, including a workshop for Iraqi provincial authorities on the legal basis for relations between the provinces and the Iraqi federal government; workshops for the Presidency Council on federalism and unimplemented articles in the Iraqi Constitution of 2005; workshops for the Secretaries General of the Iraqi law-making institutions on co-

ordinated legislative process systems; a workshop on international commercial arbitration; an anti-corruption workshop for members of the Iraqi judicial, executive and legislative branches, the Iraqi anti-corruption institutions and the Iraqi media; and a workshop on legislative drafting focused on existing anti-corruption and related laws in Iraq. The GJPI project employed Iraqi administrators, interpreters, translators, retired judges and a law professor from Basra University to assist in implementing the project’s activities in Iraq. Dozens of technical papers and legal analyses were translated from English to Arabic and disseminated to Iraqi judges and government officials. Similarly, dozens of proposed Iraqi laws were translated from Arabic to English and then analyzed by project experts. Project experts are completing a book series (in English and Arabic), including a guide to Iraqi law and policy, Iraqi federalism, the Iraqi Constitution, anti-corruption and the Iraqi criminal procedure code. The GJPI project’s Web site, www.gjpi.org, is a publicly available information repository about the Iraqi legal framework. The project Web site includes laws in translation, analyses, news and information about legislation, court cases, organizations involved in legal work in Iraq and links to Iraqi and other sources of legislation. The project also created a parallel Arabic language Web site. All of this information is being transferred to a permanent database maintained by the University of Utah to preserve the material record of the project, to organize

and disseminate this information in a meaningful manner and to provide useful reference resources to Iraqi leaders, current and future researchers and to the global public. The College of Law’s GJPI project supported the rule-of-law commitment of Iraq’s government and judiciary and promoted peace in this post-conflict state by helping Iraqis build a more democratic and stable country. By working closely with Iraqi leaders and judges, the project also helped strengthen Iraq’s own rule-of-law capacity-building efforts. The path forward for Iraq remains challenging, and now Iraq controls this path. James R. Holbrook is Clinical Professor of Law at the University of Utah’s S.J. Quinney College of Law in Salt Lake City, Utah, where he teaches negotiation, mediation and arbitration. In 2009-2010, Professor Holbrook served as the Chief of Party in Baghdad and then as the Principal Investigator in Salt Lake City on the College of Law’s Global Justice Project: Iraq.

G8/G20

Summit 2010

Carbon capture and storage (CCS) in geological formations is a way to reduce emissions of carbon dioxide (“CO2“). CCS begins by separating CO2 from other gases, which may be done before or after fuel is combusted. Post-combustion capture is the more important technology because it can be used to capture CO2 from existing fossil-fueled facilities. After the CO2 is removed from the exhaust gas stream it must be converted from a gas to a supercritical fluid before it is transported to the injection site by pipeline. This reduces the efficiency of the electric generation process because of the energy required to liquefy CO2. CCS is projected to increase the cost of producing electricity by about 30 percent to 60 percent. A modern power plant utilizing CCS will need to transport more than 1.85 million cubic feet each day of liquid CO2 to an underground injection site, which is equivalent to the volume of a football field that is more than 32 feet deep. Many federal agencies have some responsibility for pipeline regulation, but new legislation is needed because it is not clear which agency has jurisdiction over CO2 transport. Pipeline construction can be expected to face “not in my backyard” (NIMBY) opposition. This issue was addressed in Montana, which grants owners of pipelines transporting carbon dioxide to use eminent domain to acquire private property. CO2 under high pressure is injected into underground geological formations at a depth of about 800 meters (2,625 feet). The Energy Independence Act and Security Act of 2007 requires the U.S. Geological Survey to determine the capacity for CO2 sequestration. Issues of concern to the Geological Survey include the effect of sequestration on mineral extraction and on surface activities as well as a site’s potential for injection-induced earthquakes. Sequestration will require dealing with the properties of supercritical CO2 including its relative buoyancy, its mobility within subsurface formations, the corrosive properties of the gases in water, the effect of the impurities in the flue gas and the large volume of material that will need to be injected. To have viable carbon storage will require many technical problems to be overcome, but it also will require implementation of a costeffective environmental protection program; ownership issues concerning carbon storage must be settled, and the issue of long-term liability needs to be resolved. While large-scale CCS has not yet occurred, the body of law concerning enhanced oil recovery (EOR) and the use of geological storage for natural gas can be used to help shape an appropriate legal regimen for CCS.

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Carbon sequestration in underground reservoirs requires a permit issued under the Safe Drinking Water Act (SDWA) that is administered by the Environmental Protection Agency (“EPA”) and by states that have been delegated enforcement authority. The Energy Independence and Security Act of 2007 gave EPA explicit authority under the SDWA to regulate injection and geologic sequestration of carbon dioxide. EPA’s proposed rule governing underground injection of carbon dioxide under the SDWA was promulgated July 25, 2008. The proposed rule creates a new category for wells used for CCS in addition to the five classes of wells that already require permits. Proposed Class VI regulations include requirements to ensure wells are appropriately sited and are constructed to prevent fluid movement. The confining zone for the injected CO2 must be free of faults or fractures, and the injection may not be above the lowest formation containing a source of drinking water. There are monitoring and reporting requirements including periodic reevaluation to verify the material injected is moving as predicted. The rule also includes financial responsibility requirements to assure the resources are available for well plugging, site care, closure, and emergency remedial response. Under the proposed rule, well operators remain responsible for post-injection site care many years following the cessation of injections. Migration that endangers underground sources of drinking water is subject to indefinite liability. EPA’s proposed rule affects state regulation, but states cannot easily be preempted because legal issues concerning sequestration involve property, tort, and contract law controlled by state law. U.S. Clean Air Act (‘CAA”) requirements increase the cost and the time required for permitting coal-fired electric power plants, which reduces the cost advantage of coal-fired electric generation and CCS will add to these costs. Separating CO2 from the gas stream could result in new or additional air pollution, which could trigger additional pollution control requirements. Because of the energy requirements for compressing CO2, a power plant will have to burn more fuel to achieve the same net generating capacity. This could increase emissions and potentially trigger construction permit requirements. CCS may be ruled to be the best available control technology (“BACT”) and therefore be mandated for new or modified electric power facilities. Alternatively, integrated gasification combined cycle (“IGCC”) technology, which makes it easier to sequester carbon, but is more costly, may be considered to be BACT.

The U.S. Resource Conservation and Recovery Act (RCRA) has stringent requirements for hazardous waste disposal. It is unlikely CCS would be considered hazardous waste disposal, but such a development cannot be ruled out. The Comprehensive Environmental Response, Compensation and Liability Act (CERCLA, a.k.a. Superfund) provides for the clean up of contamination by hazardous substances, which potentially could include sequestered electric power waste streams. CERCLA allows the federal government, state and local governments and private parties to recover the costs associated with a clean-up operation. Substances that are hazardous under the major environmental statutes are considered hazardous under CERCLA. EPA’s CAA endangerment finding for CO2 could potentially trigger CERCLA liability. Alternatively, hazardous contaminants in the CO2 waste stream could trigger CERCLA liability. For the foreseeable future costs will be the primary barriers to implementing CCS. But if sequestration is to become a viable method of dealing with the need to

reduce carbon emissions many legal issues will need to be addressed. Arnold Reitze is a Professor of Law at the S.J. Quinney College of Law at the University of Utah and a member of the University of Utah’s Institute for Clean and Secure Energy. He is the J.B. and Maurice C. Shapiro Professor Emeritus of Environmental Law at the George Washington University Law School. He has taught environmental and natural resource subjects for 42 years with an emphasis on air pollution and climate change. He has authored seven environmental law books including major treatises in the air pollution field and has authored or coauthored more than 50 law review articles, as well as numerous research studies for industry and government.

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Summit 2010

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Summit 2010

Prosecuting Terrorism Without the Language of War By Wayne McCormack, Professor, University of Utah S.J. Quinney College of Law

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Extremist rhetoric in the U.S. continues to beat the drums of a “war on terrorism.” This rhetoric makes western society more vulnerable to violent attack by fanning the flames of fundamentalism, and it comes at the cost of established norms and professional processes of the civilian justice system. Unfortunately, the only other option promoted in the popular debates has been that of domestic criminal law enforcement. It is probably true that the phenomenon of modern international terrorism is a bit much for the domestic criminal justice system to handle alone. Expecting FBI agents to track down criminals in the wilds of Tora Bora and bring them back to the U.S. for trial without military assistance might be stretching matters a bit. For some reason, the most obvious model, that of criminal sanctions under the law of nations combined with military operations other than war (MOOTW), has not received much attention despite its long-standing utility with regard to piracy and slavery. In the search for a model in which to place responses to terrorism, it is not necessary to handicap ourselves either by insisting on a single construct or by limiting our options to the

two of war and crime. The categories of war and crime are merely bookends enclosing a middle—MOOTW and the law of nations. Some observers contend that it is not important whether we refer to terrorism as war or crime, but I disagree. In recent history, the U.S. has had the Cold War, the War on Crime, the War on Drugs, the War on Poverty, and then the Global War on Terrorism. Nobody took seriously the message to shoot a pharmacist or a homeless person. The war metaphors in those instances were seen for what they were—metaphorical embellishments. But in the case of GWOT, people took it so seriously that we have had Guantanamo, torture, warrantless wiretaps and probably as-yet-unknown abuses. Terrorism (deliberate targeting of civilian populations) has been with us for at least 3,500 years, and indeed the laws of war were designed precisely to deal with some elements of it. Piracy and slavery were both recognized in the 18th Century as crimes that could be punished by any nation because they were against the norms of the international community. Indeed, guerilla warfare was seen in similar terms. Although the law of armed conflict (LOAC) had been developing for about 2,500 years, it was not codified until the Lieber Code of 1863. Lieber himself, along with other progenitors of LOAC such as Colonel Winthrop, railed against the propensities of guerilla fighters to turn into roving bands of criminals. In the post-colonial independence movement of the late 20th Century, it became quite common to speak of “asymmetric warfare” rather than “terrorism” and use the customary law of war to address asymmetric guerilla fighters. Both of these lines of analysis, asymmetric warfare and crimes erga omnes, are available as sources of law for dealing with the phenomenon of transnational political violence by non-state actors. In traditional law of armed conflict, war is a condition that exists between nation-states, not with individuals or even groups of individuals. The lowest level of warfare or armed conflict to which certain laws of war apply is an insurgency. For an insurgency to occur, the insurgent group would have to have the semblance of a government, an organized military force, control of significant portions of territory as its own and its own relatively stable population or base of support within a broader population. In the absence of these factors, a group engaged in unjustified violence is a criminal organization, not a belligerent with recognized status in international law. A valuable corollary can be found in the U.S. experience with racial terrorism and the so-called KKK statutes. The reason for supra-state intervention by international organizations into the affairs of a nation-state is the same as the reason for supra-state intervention by the U.S. federal government into the affairs of a U.S. state. It

is the presence of an organization (whether recognized as the state or not) with sufficient resources to carry out violent actions against a civilian population without the state being willing or able to control it. That ability affects the legitimacy of government and thus threatens the security of every state. The impacts, both physical and psychological, of organized violence may be even greater today than they were 150 years ago. Countering this realization, we must be aware that legal principles of the international community are rooted in a respect for the individual sovereignty of nations. Given that respect, international law does not need to intrude into the internal affairs of a nation to deal with ordinary street criminals. It is when a large, organized and well-funded group appears on the scene with the means to wreak widespread psychological and physical harm that the international interest is triggered. This leads to the international corollary of federally-defined offenses: either when the actor is clothed with some semblance of “state authority” or the conspiracy is sufficiently large to be a concern of the international community. Meanwhile, the Rome Statute of the International Criminal Court has embraced the emerging definitions of crimes against humanity that derived from LOAC. It is now recognized as a matter of international law that one commits a crime when engaging in “widespread and systematic” violence against civilians. Little more

is needed to now recognize an international crime that permits the use of military force in just the fashion that piracy and slavery did before. It’s not war. It’s not ordinary crime. It is jus gentium, a crime erga omnes, a violation of the “law of nations.” The paradigm of international criminality means that jus gentium, the “law of nations” should embrace terrorism along with piracy, slavery, genocide and torture as offenses erga omnes. Wayne McCormack is the E.Wayne Thode Professor of Law at the University of Utah. His long experience in constitutional law combined with coordinating the University’s involvement with the 2002 Olympics produced a new career in security planning and counterterrorism analysis. He has published widely in that field in the last several years.

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Engines of Change: Motorcycles and Social and Economic Changes in Southeast Asia By Jonathan A. Muir and Ralph B. Brown, Department of Sociology, Brigham Young University

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Sometimes even the simplest technological shifts can become the “engines” of great social and economic change. Beginning in the mid 1990s, many Southeast Asian countries experienced dramatic increases in the number and availability of inexpensive motorcycles, in effect, moving their respective populations from pedestrian economies to ones balanced on two motorized wheels. For example, in Indonesia, between 1987 and 2005, the number of motorcycles in the country increased from 5.5 million to approximately 29 million, with the most dramatic period of growth occurring from 1990 to 2005 at which time the number of documented motorcycles nearly tripled, representing a 370 percent increase (Badan Pusat Statistik—Office of Statistics, Indonesia). During approximately this same time period, the Indonesian population increased only 15 percent. Similar trends took place in Thailand and Vietnam. In Thailand, from 1999 to 2003 the total number of reg-

istered motorcycles increased from 13 million to 18 million and the motorcycle to car ratio increased from four motorcycles for every one car to five motorcycles for every one car (Thailand Ministry of Transport). And, in Vietnam, since 1990, motorcycles have increased by 1,000 percent while population has increased by 24 percent. Thus, in 2003, 95 percent of all registered vehicles in Vietnam were motorcycles (Hsu et al 203). Today, with few exceptions (Malaysia, Brunei, Singapore), motorcycles represent the primary means of personal transportation for both rural and urban populations throughout Southeast Asia. Much of this dramatic growth, especially over the past 10 to 15 years, can be attributed to the increased availability of less expensive Chinese models, generally costing less than half the price of more established Japanese brands. Access to one or more motorcycles enables all members of a household to have greater geographic mobility—giving them easier access to jobs, and consumption, and recreational and educational opportunities. And, most importantly, but far less obvious, the increased geographic mobility has created dramatic shifts in social mobility, especially for young women—a demographic group that research consistently shows, is the most important barometer of economic development as measured by increased Gross Domestic Product (GDP). Transitioning to a motorcycle economy has socially empowered Southeast Asia’s lowest social classes, especially young rural women, by shifting their economic status. Traditionally, young women, particularly in rural economies, are generally engaged in “secondary” economic activities—those activities like planting and caring for a garden, watching livestock and so forth, that save the household money versus making money. Given the opportunity, rural households will almost always opt to make money (“primary” economic activities) versus saving as an economic strategy if the opportunity costs are in their favor. But transportation costs for rural households have been a prohibiting factor. Consequently, young women have tended to stay at home while their male siblings left to make money. In such circumstances, pregnancies early in a young girl’s life have little effect on the economics of the rural household. Yet, one of the most important indicators of economic progress at the country level (versus the individual household) is to increase the average age of first pregnancy in girls. Research further demonstrates that the strongest instrument for postponing female pregnancy is education followed by the opportunity to earn an income. Our research dem-

onstrates that through motorcycles, young rural women can now access schools and jobs that once eluded them due to high transportation costs. For example, after controlling factors such as social economic status and location, our research shows motorcycle access is associated with a 555 percent increase in the odds of an Indonesian woman completing a college education. In this context, our research shows that rural women might indeed be postponing their first pregnancy until later in life versus in their early teens. When young women are actively engaged in earning money or preparing to earn money, their likelihood of getting pregnant early in life declines because having a child would greatly curtail their earning potential. Motorcycles now give rural Southeast Asian women access to educational opportunities and job markets that 20 years ago were too far away to make accessing them economically feasible. Our research further shows that in Cambodia, Thailand and Vietnam, 76 percent of women in the households interviewed depend on motorcycles to get to and from work. The average distance traveled to work by these women was approximately 5 kilometers, with the maximum distance traveled being 200 kilometers. Furthermore, statistical analysis on demographic data from the Demographic and Health Surveys for Indonesia show a strong positive associate between motorcycle ownership and increased educational attainment. More importantly, there is also a strong positive association between motorcycle ownership and an increase in age of first pregnancy. These data show that the average age at first birth for women in Indonesia increased from 20.4 to 22.5 when comparing age at first birth averages for women currently in their twenties with women currently in their forties. Clearly other factors must be considered as well, but our research shows that geographic mobility has an effect on opportunity costs associated with young women leaving the home to get more education and/or earn money. This in turn appears to have an effect on young women postponing their first pregnancies in an effort to keep their opportunity costs low. Thus, contrary to the assumption that greater mobility of young women would create a raise in their promiscuity, the economic advantages to geographic mobility seem to eclipse this, if the assumption has any merit at all. Sometimes the simplest technologies become the “engines” of great social and economic change. The advent of inexpensive Chinese motorcycles in Southeast Asia appears to be such a case. These motorcycles are literal “engines of change.” The question now, given the Southeast Asian experience, is will a similar strategy— adopting inexpensive motorcycles to reduce opportunity costs for young rural women to seek employment— might have a similar effect in other developing regions of the world like Sub-Saharan Africa?

Ralph B. Brown is a Professor of Sociology and Director of the International Development Minor at Brigham Young University. He is also the Executive Director and Treasurer of the Rural Sociological Society. His Ph.D. (1992) is in Rural Sociology from The University of Missouri-Columbia. His research has centered on community satisfaction and attachment in rural communities and on social change and rural development both in the United States and Southeast Asia. Current research foci include the social and economic impacts of the emerging motorcycle-economies of Southeast Asia, and declines in community and friendship attachments in “liquid modernity.”

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Summit 2010

Unbounded Nature: Making Roaded Landscapes More Permeable for Wildlife By Amy J. Wildermuth, Professor, University of Utah S.J. Quinney College of Law

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Summit 2010

Americans have an affinity for boundaries. We repeat Robert Frost’s misunderstood line “good fences make good neighbors” so often that it has become part of American cultural lore. Our belief in one’s right to exclude others from our land is so important that we have awarded punitive damages even though no actual harm was done by a trespass. This affection for boundaries, however, runs counter to nature’s unboundedness. Many wildlife species need room to roam. They cannot exist in fragmented landscapes, and the ecosystems that they are a part of suffer as the landscape becomes less and less permeable. To improve biodiversity, we must begin to examine these boundaries, and to consider how to make the landscape more permeable for wild species. Although we could not—and should not—wipe clean the entire set of boundaries that we have created, we must nevertheless begin to discuss our connections to bigger landscapes, and to imagine different visions of landscapes and ways of living on and in them. As we begin this project, it is clear that there are boundaries created by something we often do not think of as barriers but that are critical to the problem: the roads that dissect our landscape. In the United States alone, there are more than 4 million miles of highways. This network of roads, as the leading text on road ecology has noted, “provides unprecedented human mobility, greatly facilitates the movement of goods and stretches the boundary of social interaction.” It also, however, “slices nature to pieces . . . degrad[ing] and disrupt[ing] natural patterns and processes.” Interest in the impact of roads on the environment, and wildlife in particular, has been steadily increasing over the past few years. The new discipline of road ecology has brought an increased understanding of the devastating effects of roads on wildlife of all shapes and sizes, as well as people. The experts in this field have proposed and tested a wide variety of mitigation measures and have shown that many—although not all—of the ill effects of roads can be reduced through smart design at costs that are not, on balance, prohibitive. Not all mitigation measures, however, are alike. In fact, the most commonly used mitigation measures are often the least effective at reducing collisions, and they might even make conditions worse for wildlife and drivers alike. Mitigation measures fall into two categories: those that attempt to modify human behavior so more drivers avoid collision with wildlife on roads, and those that attempt instead to modify animal behavior, largely by keeping the animals off the road.

Efforts to modify human behavior typically involve either (1) the employment of warning signs or (2) the distribution of information in public awareness campaigns geared toward reducing wildlife collisions. Both of these techniques have fairly low effectiveness rates. At best, they are 20 percent effective based on studies of deer-vehicle collisions. Warning whistles (usually ultrasonic), highway lighting and lower speed limits are also employed in some areas but the effectiveness of these measures at preventing deer-vehicle collisions in studies is near 0 percent. Based on these research, ecologists have concluded that drivers pay little attention to warnings, whether posted along roads or distributed in other ways. Moreover, the more signs that are posted, the more familiar and invisible they become. In sum, attempts to modify human behavior are largely ineffective in reducing wildlife collisions. Attempts to modify animal behavior, however, are much more effective. There is, however, one exception in this group. The outlier—the wildlife behavior tool that

accomplishes the least—involves the use of large numbers of mirrors and reflectors posted along roadways. Ironically, these are one of the most frequently-used techniques in the United States. Although drivers often notice them, they are intended to draw animals’ attention and to keep them off the road. The most popular is the “Swareflex” reflector system, in which red reflectors are mounted at equal intervals along a road at headlight

height. Headlight beams that hit them are reflected to create the illusion of a moving lighted fence. The logic of this technique has been frequently questioned, often because it is not clear whether deer can see red. No matter what the reason for failure, studies have shown that mirror and reflector techniques reduce accident rates by about 10 percent. This puts these techniques on par with measures to modify human behavior. And just like attempts to modify driver behavior, although mirrors and reflectors have been used often, they are not particularly ineffective. Far more effective in reducing accidents are fences that physically keep wildlife off of roads, particularly when combined with one-way ramps or gates that provide exits for wildlife that do end up on the road. Measures to design and construct overpasses and underpasses are also more effective, allowing wildlife to move from one road side to another without crossing the road at grade level. Less effective but nonetheless workable are strategies that use highway personnel to harass animals in order to keep them away from the roads, as well as strategies that require vegetation around roads to be modified either by planting species that are unpalatable to local wildlife or by removing vegetation altogether. The removal of palatable vegetation reduces the appeal of roadsides and certain species are reluctant to move into wide open spaces. Underpasses and overpasses, when properly designed in terms of adequate space and sight lines for wandering animals, offer an additional benefit beyond

safe passage: They can mitigate habitat loss and habitat quality concerns when vegetated with native plants. Well-designed and planted travel corridors can themselves serve as useful habitats and reduce fragmentation. Moreover, like other well-designed wildlife habitats, these corridors sometimes supply further ecological benefits. Corridors that include reconstructed wetlands, for instance, can help manage stormwater flows, control siltation and otherwise help reduce pollution. Given the clear effectiveness of certain mitigation strategies, one wonders why these strategies have been implemented in only a handful of locations. But boundaries exist in our minds as well as on the land. Before we can redesign our landscapes, we need to understand and embrace biodiversity needs. We can then begin to imagine how the landscape might be reshaped to fit those needs. Effective wildlife mitigation measures for roads offer us a place to start. Amy J. Wildermuth is a Professor of Law in the Wallace Stegner Center for Land, Resources and the Environment at the University of Utah S.J. Quinney College of Law. She teaches and writes on civil procedure, administrative law, property and environmental law. Before joining the faculty at Utah, Professor Wildermuth clerked for Justice John Paul Stevens of the Supreme Court of the United States.

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Summit 2010

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Summit 2010

Living Responsibility

are ready for deployment within 72 hours after being called by OCHA. Each deployment involves about 1520 volunteers.

By Rainer Wend

ering tomorrow—customer needs in 2020 and beyond” and show that climate change will be the key driver for a revolution in new products and services. Eco-friendliness and conscientious consumption will increasingly determine purchasing behavior. The study also shows that the logistics industry is likely to set trends and establish new standards for cooperative efforts and environmentally friendlier business. The results are already part of Deutsche Post DHL’s long-term business strategy and CR strategy. We want to take a leading role in green activities, in humanitarian actions, as well as in education, taking advantage of our expertise and our worldwide presence. The Group’s commitment is therefore focused on environmental protection, disaster management and education in the form of three programs called: GoGreen, GoHelp and GoTeach.

Disaster Management with GoHelp

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What do customers expect from their service provider in the next 10 or 20 years? What are their needs and expectations? Customer behavior changes constantly and this trend will increase in the years to come with climate change, the Internet and ongoing globalization as key drivers. In addition, not just customers, but employees and investors as well will focus even more on the social behavior of major companies that do business around the world, impacting the environment and societies in which they operate. Corporate responsibility means combining business success with social and environmental responsibility. Deutsche Post DHL is the world’s leading mail and logistics company with some 500,000 employees around the world. For our Group, market leadership brings with it a special responsibility to use our core expertise in logistics and our worldwide presence to benefit society and to continuously minimize the company’s impact on the environment. For Deutsche Post DHL, corporate responsibility means living responsibility and the global player can rely on its employees and their know-how, talents and passion to do just that. “Living Responsibility” is therefore the motto for our corporate responsibility strategy. Our corporate responsibility (CR) approach is an integral component of our long-term business strategy because we believe that business success and corporate responsibility go hand-in-hand. As a global service provider and one of the biggest employers in the world, it is very important to know what the expectations of customers and employees are. This is why Deutsche Post DHL asked customers, experts and scientists last year about the major issues of the years to come. The results were published in the 2009 Delphi Study “Deliv-

Deutsche Post DHL is present almost everywhere in the world. With GoHelp the Group uses its global presence and its expertise in logistics. The program focuses on disaster management and entails a two-fold approach: disaster response and disaster preparedness. In cooperation with the United Nations, two programs provide support to countries in need free of charge. When a natural disaster hits our DHL Disaster Response Teams (DRTs) are mobilized. Initiated in 2005, the disaster response program has proven to be an important support in tackling logistical problems that arise at the airports closest to disaster zones. When earthquakes, cyclones or flooding have devastated a region, help usually comes from the international community with international aid workers and relief goods flying into regional airports. The regional airports are quickly congested by the food, medical supplies and tents arriving from all over the world—all of which are urgently needed in the field. Very often there is no set disaster plan on how to manage such situations. This is where the DHL Disaster Response Teams come in to solve the bottleneck, cooperating closely with the UN Office for the Coordination of Humanitarian Affairs (OCHA). The DRTs consist of approximately 200 employee volunteers worldwide who are specially trained to handle the challenges on the ground. The DRT members use their extensive logistics expertise to help manage the logistics of disaster relief goods arriving at the airports. Together with local authorities and airport staff, they take care of incoming relief goods, set up and manage professional warehousing, including the sorting and inventorying of goods. We have three DRTs in place, covering the world’s regions most vulnerable to natural disasters: DRT Americas in Panama, DRT Middle East/Africa in Dubai and DRT Asia Pacific in Singapore. The teams

The most recent DRT deployments were in the wake of the earthquake in Chile and only shortly before that in Haiti. A total number of 37 DHL volunteers went to Haiti only a few days after the earthquake hit the island. The teams helped handle over 2,000 tons of international relief aid from over 60 aircrafts in a period of 25 days, and ran an inter-agency warehouse, allowing more than 25 different aid organizations to benefit from our logistics expertise. The second GoHelp pillar of Deutsche Post DHL is called GARD (Get Airports Ready for Disaster). GARD focuses on disaster preparedness. It was launched together with the United Nations Development Programme (UNDP). Piloted in 2009, the program was built around the need to prepare governments, people and airports before a disaster strikes. GARD is a supportive initiative in making worldwide relief efforts more effective. While the DRTs use the company’s expertise in logistics, GARD is a training program for local airports in potential disaster areas designed to enable local authorities and airport staff to better cope with such situations. DHL trainers work with airport personnel on reviewing airport capabilities and capacities, understanding coordination requirements, and helping formulate contingency plans and coordination structures. Deutsche Post DHL has al-

ready successfully piloted the program at the Makassar and Palu airports in Indonesia.

Environmental Protection with GoGreen

GoHelp is just one pillar of our “Living Responsibility” approach. The GoGreen environmental protection program is a lighthouse example in the logistics industry. It was founded to minimize the environmental impact of the Group’s core business of logistics services and transportation (particularly road and air transport). With GoGreen Deutsche Post DHL has set itself ambitious targets with a focus on CO2 emissions as an important environmental factor in the logistics and transportation industry. By 2020 the Group aims to improve the carbon efficiency of its own business activities and those of its subcontractors by 30 percent. In other words, the carbon footprint per item shipped, ton kilometer transported or square meter of space used is to be cut by 30 percent compared to 2007 levels. Measures were developed to minimize these impacts. The approach includes optimizing the air and vehicle fleet, raising energy efficiency in buildings, implementing innovative technologies, developing green products and efficient solutions, encouraging the employees to reduce resource usage and CO2 emissions, and getting customers and subcontractors on board. Our employees play a crucial role in all our attempts to make our business as green as possible. Encouraging our 500,000 employees worldwide to join the effort by adopting climate-friendly practices is just as important as driving innovations and using alternative energy sources. An example shows the high commitment of our employees: With the “save fuel” initiative around 50,000 staff of the MAIL division have already helped save over 3.5 million liters of diesel and 3.7 million euros, as well as reducing CO2 emissions by 11,000 tons. They will save a further 2.9 million liters through net-optimization.

Support Education with GoTeach

The third program, GoTeach was established to reinforce the global engagement in the area of education. Education is a high-value asset and key to children’s futures. And it is key to the future of the company as

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the interests of its employees, customers and investors in benefitting the environment and society. The Group has developed a strategy that meets the balance between economic, environmental and social interests. The Group-wide programs are constantly communicated, transparently implemented and continuously evaluated. All this would be in vain however, without our employees and customers and without partnerships with non-profit organizations whose core competencies are to tackle the ecological and social challenges the world faces today.

well. As one of the world’s biggest employers Deutsche Post DHL is always looking for well-trained, capable staff with different levels of qualifications. With our GoTeach program, we encourage and develop initiatives that support education and help young individuals expand their personal development and skills. GoTeach also offers employees the opportunity to volunteer in educational projects.

Long-term Commitment

For Deutsche Post DHL, corporate responsibility means handling assets entrusted to the company in a respectful and sustainable manner as well as upholding

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CR approach at a Glance GoGreen – Minimizing the impact of the Group’s activities on the environment with the target to improve CO2 efficiency by 30 percent by 2020. GoHelp – Using core logistics expertise to provide effective emergency aid in areas affected by natural disasters in cooperation with the United Nations. GoTeach – Encouraging and developing initiatives that support people’s education and help expand their personal development and skills.

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Oil, Energy, Hindsight and Foresight By Lincoln L. Davies, Professor, S.J. Quinney College of Law, University of Utah

circumscribed nature, however, remains an open target for reform. A fundamental cause for environmental law’s limited scope is its disconnect with the field of energy law. From a commonsense perspective, one would think that these two areas of the law would be intertwined. In the real world, energy use and environmental effects are merely two sides of the same coin. Rationally, one would assume they would be in the law as well. But they are not. It is a deep paradox of the modern regulatory state, but energy law and environmental law serve cross purposes. They come from different histories. They employ different tools. As a result, they operate in separate spheres. Environmental law attempts to mitigate pollu-

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The recent disaster in the Gulf of Mexico will demand attention for years to come. As of May 2010, the oil leak caused by the Deepwater Horizon oil rig continues unabated, its effects already appear daunting and its ultimate aftermath is almost certain to be worse. There is precedent for how U.S. regulators are likely to deal with an incident of this magnitude. American environmental law has a long tradition of responding to—and being spurred on by—human-induced calamities. Early environmental regulation was a reaction to visible harm: factory smoke in nineteenth century Chicago, for instance. The “environmental moment” of the 1960s and 70s, when Congress passed the arsenal of modern environmental statutes now on the books, including Superfund, the Clean Water Act and the Endangered Species Act, also was a clear response to crises of the time: Love Canal, DDT the Cuyahoga River on fire. As a society, the United States tends to be reactive, not proactive, in how it copes with human effects on the environment. American laws reflect that. Oil is no exception. The law that will play a chief role in the Deepwater Horizon disaster, the Oil Pollution Act of 1990, was itself a direct reply to an environmental catastrophe: the Exxon Valdez tanker spill in Prince William Sound. There is a lesson in this. The Oil Pollution Act, like its predecessor laws, is inherently shortsighted. As a retort to a contemporary crisis, it does little to contemplate the technology of the future. As a reaction to a disaster, it is concerned more with immediate effects than root causes. As an answer to a specific problem, it zeroes in on the task at hand rather than contemplating the broader picture. The Oil Pollution Act, however, does not stand alone. The critiques applicable to it transfer to environmental law as a whole. Reasons for environmental law’s reactionary trajectory are multitudinous; many are moored in an intractable political calculus of the here and now. One driving force behind environmental law’s

tion and protect human health. Energy law, in contrast, promotes the very activities that induce pollution in the first place. The field’s core aim is an unrelenting pursuit of ample energy supplies at low prices, generally from archetype—fossil and nuclear—fuels. This disconnect between energy and environmental law explains the Deepwater Horizon disaster on

another level. It is the lesson of the spill that no one talks about. The ultimate cause of the catastrophe was not the explosion that led to it. It was not a regulatory failure in the oversight of offshore drilling. It was not that liability limits in the Oil Pollution Act are too low. It is that our thirst for fuel is insatiable, and that we will go to virtually any length to quench that thirst. Our laws largely reinforce the pursuit. Changing that pursuit is not a simple task. Bringing energy law and environmental law closer together will not be easy. Nor will it solve all our problems. The difficulty of the cause, however, is no excuse for a lack of trying. For a failure to merge energy and environmental law is merely a recipe for repeating the past. We must, then, at least try. Merging energy and environmental law will push regulation in directions it previously has not gone. A field of law that combines the aims, tools and mechanisms of both energy law and environmental law will be far more forward-thinking than either field is today. Most fundamentally, it will rely on foresight rather than hindsight; it will plan rather than react. Doing so will be an uphill battle. Planning our future energy policy cuts against the grain of the American ethos that markets rule, that picking winners and losers violates our competitive spirit. Of course, if we recognize our current energy policy for what it is, the admission that we already choose technological victors becomes obvious. We encourage nuclear power plant construction without first deciding how to deal with the waste; we turn over vast tracts of federal land to oil and gas extraction; we subsidize fossil fuel markets with military force. A merged version of energy-environmental law makes this admission and then tweaks, shifts and transforms the result. It accepts the premise that we should protect the public, but it tries to do that with inputs as well as outputs. It still looks hard at cost, but it considers the principle in the long-term as well as the short. It still ties energy to our national prosperity, but it sees that prosperity in a more balanced, equitable way. In a world where energy and environmental law are joined rather than disjointed, the Deepwater Horizon oil disaster is not an impossibility. We cannot revolutionize our energy world—or its governance system—overnight. Fossil fuels, including oil, will play an important role in our energy future no matter what shape it takes. But in a changed social and legal mindset where limited resources with immense potential environmental consequences are recognized more as crutch than as a vehicle, our reliance on these fuels will increasingly diminish in favor of a more sustainable energy course. In turn, the chance of another Exxon Valdez or Deepwater Horizon should appear more as a receding image in our rearview mirror than as an inevitable roadblock in our path. Lincoln Davies is Associate Professor of Law at the

University of Utah’s S.J. Quinney College of Law, where he teaches and writes on energy law and policy, environmental law, water law, administrative law and procedure. His most recent scholarly article, Power Forward: The Argument for a National RPS, will appear this summer in the University of Connecticut Law Review.

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Argentina Argentina’s Cristina Fernández de Kirchner became president of Argentina on December 10, 2007, after winning the general election in October. She replaced herhusband, Nestor Kirchner, who was president from May 2003 to December 2007. She is Argentina’s second female president, but the first to be elected. Prior to her current position, she was a senator for Beunos Aires province and Santa Cruz province. She was 64 first elected to the Senate in 1995, and in 1997 to the Chamber of Deputies. In 2001 she won a seat in the Senate again. Born on February 19, 1954, in La Plata, Buenos Aires, she studied law at the National University of La Plata. She and her husband were married in March 1975 and have two children. Argentina Polity Political party: Frente para la Victoria (FV)/Justicialist Party Head of State: President Cristina Fernandez de Kirchener Most recent election: 28 Oct 2007 Government: Lower House — Majority; Upper House — Majority Political system: Presidential Legislature: Bicameral, elected Chamber of Deputies, elected Senate Capital: Buenos Aires Official language: Spanish Economy Currency: Peso (P) GDP (official exchange rate): $324.8 billion (2008 est.) Predicted change: -2.5% (2009); 1.5% (2010) Composition by sector: 9.2%-agriculture; 34.1%-industry; 56.7%-services (2008 est.) Central Bank interest rate: NA Official reserve assets: $48,908.23 million (Oct. 2009) Foreign currency reserves: $43,752.38 (Oct. 2009) [in convertible foreign currencies] Securities: $5,116.79 million (Oct. 2009) IMF reserve position: $0.31 million (Oct. 2009) 69 Special Drawing Rights: $ 3,216.86 million (Oct. 2009) Gold: $1,829.02 million (Oct. 2009) [including gold deposits and, if appropriate, gold swapped] Financial derivatives: $ -54.47 million (Oct. 2009) Loans to nonbank residents: $130.66 million (Oct. 2009) Other reserve assets: $33.48 million (Oct. 2009) (IMF Commercial Bank prime lending rate: 28.00% (2009, 28 Nov. 2008) Stock of money: $33.93 billion (31 Dec. 2007)

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China Stock of quasi money: $45.92 billion (31 Dec. 2007) Stock of domestic credit: $72.55 billion (31 Dec. 2007) Household income or consumption by % share: 1.0%-lowest 10%; 35.0%-highest 10% (Jan.-Mar. 2007) Inflation rate (consumer prices): 22.0% (2008 est.) [based on nonofficial estimates] Investment (gross fixed): 23.2% of GDP (2008 est.) Current account balance: $7.6 billion (latest year, Q4 2008) Budget: $86.65 billion-revenues; $82.85 billion-expenditures (2008 est.) Budget balance: -0.8% of GDP (2009 forecast) Public debt: 48.5% of GDP (Q4 2008) [cumulative debt of all government borrowing] Exchange rates (per USD): 3.70 (6 May 2009); 3.18 (6 May 2008) Economic aid-recipient: $99.66 million (2005) Debt-external: $135.5 billion (31 Dec. 2008 est.) Stock of direct foreign investment: $69.1 billion-at home; $26.81 billion-abroad (2008 est.) Market value of publicly traded shares: $52.31 billion (31 Dec. 2008) Distribution of family income-Gini index: 49.0 (Jan-Mar. 2007) Unemployment rate: 7.8% (Sep. 2008) Labour force: 16.27 million (2008 est.) [urban areas only] 38th (world rank, 2008) Oil Production: 29th (world rank, 2008) Oil Consumption: 21st (world rank, 2008) Natural Gas Production: 18th (world rank, 2008) Natural Gas Consumption: Military 1.3% of GDP; 120th in world rank (2005) Military Expenditures: Markets MERV index: 2,352.760 (10 Jan 2010) % change on 31 Dec. 2008: +30.6 (local currency); +21.8 ($ terms) Trade balance: $13.6 billion (last 12 months, May. 2009) Trade to GDP ratio: 45.2 (2006-2008) Exports: $70.02 billion f.o.b. (2008 est.) Top export partners: Brazil (18.9%); E.U. (18.8%); China (9.1%); United States (7.9%); Chile (6.7%) (2008) Imports: $54.56 billion f.o.b. (2008 est.) Top import partners: Brazil (31.3%); EU (15.7%); China (12.4%); U.S. (12.2%); Paraguay (3.1%) (2008)

China’s Hu Jintao has been president of the People’s Republic of China since March 15, 2003. He replaced Jiang Zemin, who had held the position since 1989. Hu also serves as general secretary of the Communist Party of China’s (CPC) Central Committee and chair of the Central Military Commission. Before entering into politics he worked as an engineer. He joined the CPC in April 1964, and began working with the party in 1968. In 1992, he was elected to the Standing Committee of the Political Bureau of the CPC Central Committee and re-elected in 1997. He became vice-president of China in March 1998 and vice-chair of the Central Military Commission in 1999. In November 2002, Hu was elected general secretary of the CPC Central Committee. He was born in Jiangyan, Jiangsu, on December 21, 1942. In 1965 he received his engineering degree from Tsinghua University. He is married to Lui Yongqing and they have two children. Political party: Communist Party of China Most recent election: 15 Mar 2008 Government: Single House — Majority Political system: Presidential Legislature: Unicameral, elected National Congress Capital: Beijing Official language: Mandarin Currency: Yuan (¥) GDP (real): $4. 327 trillion (2008 est.) Predicted change: 6.1% (Q1 2009); 6.5% (2009) Composition by sector: 11.3%-agriculture; 48.6%-industry; 40.1%-services (2008 est.) Central Bank interest rate: 5.31% (22 Dec. 2008) Official reserve assets: NA Foreign currency reserves: 1, 953.7 billion (Mar. 2009) Securities: NA IMF reserve position: $1,286.78 million (Feb. 2009) Special Drawing Rights: NA Gold: $14,969.06 million (Nov. 2007) Financial derivatives: NA Loans to nonbank residents: NA Other reserve assets: NA Commercial Bank prime lending rate: 5.31% (31 Dec. 2008) Stock of money: $2.434 trillion (31 Dec. 2008)

Stock of quasi money: $4.523 trillion (31 Dec. 2008) Stock of domestic credit: $4.653 trillion (31 Dec. 2008) Household income or consumption by % share: 1.6%-lowest 10%; 34.9%-highest 10% (2004) Inflation rate (consumer prices): 6.0% (2008 est.) Investment (gross fixed): 40.2% of GDP (2008 est.) Current account balance: $400.7 billion (latest year, Q2 2008) Budget: $847.8 billion-revenues; $861.6 billion-expenditures (2008 est.) Budget balance: -3.5% of GDP (2009) Public debt: 15.7% of GDP (2008 est.) [cumulative debt of all government borrowing] 75 Exchange rates (per USD): 6.82 (May 2009); 6.99 (Mar. 2008) Economic aid-recipient: $1.331 billion (2007) [ODA] Debt-external: $420.8 billion (31 Dec. 2008 est.) Stock of direct foreign investment: $758.9 billion-at home (2007 est.); $149.33 billion-abroad (2008 est.) Market value of publicly traded shares: $2.794 trillion (31 Dec. 2008) Distribution of family income-Gini index: 47.0 (2007) Unemployment rate: 4.0% (2008 est.) Labour force: 807.3 million (2008 est.) 5th (world rank, 2008) Oil Production: 3rd (world rank, 2008) Oil Consumption: 11th (world rank, 2008) Natural Gas Production: 12th (world rank, 2008) Natural Gas Consumption: Military 4.3% of GDP; 25th in world rank (2006) Military Expenditures: Markets SSEA index: 3,397.15 (10 Jan. 2010) % change on 31 Dec. 2008: +42.3 (local currency); +42.4 ($ terms) SSEB index ($ terms): 255.75 (10 Jan. 2010) % change on 31 Dec. 2008: +52.0 (local currency); +52.0 ($ terms) Trade balance: $316.9 billion (latest year, Mar. 2009) Trade to GDP ratio: 73.4 (2006-2008) Exports: $1.435 trillion (2008 est.) Top export partners: E.U. (20.5%); U.S. (17.7%); Hong Kong, China (13.4%); Japan (8.4%); Japan (8.1%); South Korea (5.2%) (2008) Imports: $1.074 trillion (2008 est.) Top import partners: Japan (13.3%); E.U. (11.7%); South Korea (9.9%); Taipei, Chinese (9.1%); China (8.2%) (2008)

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101

Brazil Brazil’s Luiz Inácio Lula da Silva first assumed the office of the president on January 1, 2003, after being successfully elected in October 2002. He was re-elected in October 2006, extending his term until January 2011. “Lula” first ran for office in 1982 in the state of Sao Paulo, but it was not until 1986 that he was first elected to congress. He did not run for reelection in 1990. Instead, he became more involved in the Workers’ Party, where he continued to run for the office of the president. He was born in Caetés, Pernambuco, Brazil, on October 27, 1945. He received no formal education and began working in a copper pressing factory at the age of 14. He became heavily involved in the workers unions at a young age. He is married to Marisa Letícia and has five children. Political party: Workers’ Party (PT) Head of State: President Luiz Lula de Silva Most recent election: tenacious 29 Oct 2006 Government: Lower House — Minority; Upper House — Minority Political system: Presidential Legislature: Bicameral, elected Chamber of Deputies, elected Senate Capital: Brasilia Official language: Portuguese Economy Currency: Real (R) GDP (official exchange rate): $1.573 trillion (2008 est.) Predicted change: -13.6% (Q1 2009); -1.5% (2009) Composition by sector: 6.7%-agriculture; 28%-industry; 65.3%-services (2008 est.) Central Bank interest rate: 10.25% (29 Apr. 2009) Official reserve assets: $231,122.62 million (Oct. 2009) Foreign currency reserves: $220,508.37 million (Oct. 2009) [in convertible foreign currencies] Securities: $211,853.59 million (Oct. 2009) IMF reserve position: $645.14 million (Oct. 2009) Special Drawing Rights: $4,590.38 million (Oct. 2009) Gold: $1,123.69 million (Oct. 2009) [including gold deposits and, if appropriate, gold swapped Financial derivatives: $1.12 million (Oct. 2009) Loans to nonbank residents: $65.55 million (Oct. 2009) Other reserve assets: $4,188.38 million (Oct. 2009) Commercial Bank prime lending rate: 47.25% (31 Dec. 2008)

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72 Stock of money: $95.03 billion (31 Dec. 2008)

Stock of quasi money: $724.5 billion (31 Dec. 2008) Stock of domestic credit: $1.249 trillion (31 Dec. 2008) Household income or consumption by % share: 0.9%-lowest 10%; 44.8%-highest 10% (2004) Inflation rate (consumer prices): 5.7% (2008 est.) Investment (gross fixed): 19% of GDP (2008 est.) Current account balance: $-23.0 billion (latest year, Mar. 2009) Budget: NA Budget balance: -2.0% of GDP (2009 est.) Public debt: 38.8% of GDP (2008 est.) Exchange rates (per USD): 2.12 (6 May 2009); 1.67 (6 May 2008) Economic aid-recipient: $191.9 million (2005) Debt-external: $262.9 billion (31 Dec. 2008 est.) Stock of direct foreign investment: $294 billion-at home; $127.5 billion-abroad (2008 est.) Market value of publicly traded shares: $589.4 billion (31 Dec. 2008) Distribution of family income-Gini index: 56.7 (2005) Unemployment rate: 8.5% (Feb. 2008) Labour force: 100.9 million (2008 est.) Military 2.6% of GDP; 62nd in world rank (2006) Military Expenditures: Markets BVSP index: 70,262.7031 (10 Jan. 2010) % change on 31 Dec. 2008: +37.1 (local currency); +50.7 ($ terms) Trade balance: $27.0 billion (latest year, Apr. 2009) Trade to GDP ratio: 26.2 (2006-2008) Exports: $197.9 billion f.o.b. (2008 est.) Top export partners: E.U. (23.5%); U.S. (14%); Argentina (8.9%); China (8.3%); Japan (3.1%) (2008) Imports: $173.1 billion f.o.b. (2008 est.) Top import partners: E,U, (20.9%); U.S. (14.9%); China (11.6%); Argentina (7.7%); Japan (3.9%); (2008) 13th (world rank, 2008) Oil Production: 8th (world rank, 2008) Oil Consumption: 39st (world rank, 2008) Natural Gas Production: 32nd (world rank, 2008) Natural Gas Consumption:

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Australia Australia’s Kevin Rudd became prime minister of Australia on December 3, 2007, replacing John Howard, who had held the position since 1996. Before entering into politics, Rudd worked for the Department of Foreign Affairs, where he held posts in Stockholm, Sweden and, China. He also spent time as a political staffer and held positions that included chief of staff for the premier of Queensland and director general of the office of the Queensland cabinet. Rudd first ran for office in 1996, but was not successfully elected until 1998. Since then he has served in various positions including shadow minister of foreign affairs and leader of the opposition. He was born in Nambour, Queensland, on September 21, 1957. He earned a bachelor’s degree Asian studies at Australian National University in 1981, where he focused on Chinese language and history. He and his wife, Thérèse Rein, have three children.

Political party: Australian Labour Party Head of State: Prime Minister Kevin Rudd Most recent election: 24 Nov 2007 Government: Lower House — Majority; Upper House — Minority Political system: Parliamentary Legislature: Bicameral, elected House of Representatives, elected Senate Capital: Canberra Official language: English Economy Currency: Australian dollar (A$) GDP (official exchange rate): $1.013 trillion (2008 est.) Predicted change: -2.1% (Q1 2009); -0.7% (2009) Composition by sector: 2.5%-agriculture; 26.4%-industry; 71.1%-services (2008 est.) Central Bank interest rate: 3.00% (7 Apr. 2009) Official reserve assets: $44,768.56 million (Oct. 2009) Foreign currency reserves: $39,912.34 (Oct. 2009) [in convertible foreign currencies] Securities: $34,500.12 million (Oct. 2009) IMF reserve position: $1,143.96 million (Oct. 2009) Special Drawing Rights: $ 4,680.67 million (Oct. 2009) Gold: $2,661.04 million (Oct. 2009) [including gold deposits and, if appropriate, gold swapped]

G8/G20

Financial derivatives: $ -0.66 million (Oct. 2009) Loans to nonbank residents: $0.00 (Oct. 2009) Other reserve assets: $371.20 million (Oct. 2009) Commercial Bank prime lending rate: 8.91% (31 Dec. 2008) Stock of money: $298.5 billion (31 Dec. 2007) Stock of quasi money: $667.2 billion (31 Dec. 2007) Stock of domestic credit: $1.312 trillion (31 Dec. 2007) Household income or consumption by % share: 0.9%-lowest 10%; 38.2%-highest 10% (2004) Inflation rate (consumer prices): 4.4% (2008 est.) Investment (gross fixed): 27.6% of GDP (2008 est.) Current account balance: $-44.1 billion (latest year, Q4 2008) Budget: $350.3 billion-revenues; $332.4 billion-expenditures (2008 est.) Budget balance: -3.3% of GDP (2009) Public debt: 14.7% of GDP (2008 est.) Exchange rates (per USD): 1.34 (6 May. 2009); 1.06 (6 May. 2008) Economic aid-donor: $2.9899 billion (2006-2007 expected) [ODA] Debt-external: $799.8 billion (31 Dec. 2008 est.) Stock of direct foreign investment: $366.5 billion-at home; $197.2 billion-abroad (2008 est.) Market value of publicly traded shares: $1.298 trillion (31 Dec. 2007) Distribution of family income-Gini index: 30.5 (2006) Unemployment rate: 4.2% (Dec. 2008) Labour force: 11.25 million (2008 est.) 71 30th (world rank, 2008) Oil Production: 21st (world rank, 2008) Oil Consumption: 20th (world rank, 2008) Natural Gas Production: 26th (world rank, 2008) Natural Gas Consumption: Military 2.4% of GDP; 69th in world rank (2006) Military Expenditures: Markets All Ord. index: 4,981.400 (10 Jan. 2010) % change on 31 Dec. 2008: +4.9 (local currency); +11.2 ($ terms) Trade balance: $+5.2 billion (latest year, Mar. 2009) Trade to GDP ratio: 46.1(2006-2008) Exports: $189.9 billion (2008 est.) Top export partners: Japan (22.8%); China (14.6%); E.U. (10.5%); Korea, Republic of (8.3%); India (6.1%) (2008) Imports: $194.2 billion (2008 est.) Top import partners: E.U (21%); China (15.6%); U.S. (12%); Japan (9%); Singapore (7.2%) (2008)

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105

South Africa South Africa’s Jacob Zuma became president of South Africa on May 9, 2009, succeeding Petrus Kgalema Motlanthe, who had held the position since September 2008. Zuma joined the ANC in 1958 and started serving in the National Executive committee of the African National Congress (ANC) in 1977. In 1994, Zuma was elected National Chair of the ANC and chair of the ANC in KwaZulu-Natal. He was re-elected to the latter position in 1996 and selected as the deputy president of the ANC in December 1997. Zuma was appointed executive deputy president of South Africa in 1999. He held that position until 2005 and was elected ANC president at the end of 2007. He was born April 12, 1949, in Inkandla, KwaZulu-Natal Province. He has three wives and several children.

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Political party: African National Congress Chief of State: President Jacob Zuma Head of State: President Jacob Zuma Most recent election: 22 Apr 2009 Government: Lower House — Majority; Upper House — Majority Political system: Parliamentary Legislature: Bicameral, elected National Assembly, elected National Council of Provinces Capital: Pretoria Official language: Afrikaans, English 49,052,489; country comparison to the world: 24th (July 2009 est.) Population: 0.281%; country comparison to the world: 173rd (2009 est.) Population Growth Rate: NA Economy Currency: Rand (R) GDP (official exchange rate): $276.8 billion (2008 est.) Predicted change: 1.0% (Q4 2008); -1.8% (2009) 89 Composition by sector: 3.3%-agriculture; 33.7%-industry; 63.0%-services (2008 est.) Central Bank interest rate: 7.0% (7 Jan. 2009) Official reserve assets: $39,789.00 million (Oct. 2009) Foreign currency reserves: $32, 764.00 million (Oct. 2009) [in convertible foreign currencies] Securities: $1,518.00 million (Oct. 2009) IMF reserve position: $0.00 (Oct. 2009) Special Drawing Rights: $2,838.20 million (Oct. 2009) Gold: $4,186.90 million (Oct. 2009) [including gold deposits and, if appropriate, gold swapped] Financial derivatives: $0.00 (Oct. 2009) Loans to nonbank residents: $0.00 (Oct. 2009) Other reserve assets: $0.00 (Oct. 2009) Commercial Bank prime lending rate: 15.13% (31 Dec. 2008) Stock of money: $44.66 billion (31 Dec. 2008) Stock of quasi money: $124.1 billion (31 Dec. 2008)

Stock of domestic credit: $214.8 billion (31 Dec. 2008) Household income or consumption by % share: 1.3%-lowest 10%; 44.7%-highest 10% (2000) Inflation rate (consumer prices): 11.3% (2008 est.) Investment (gross fixed): 23.2% of GDP (2008 est.) Current account balance: $-12.0.0 billion (latest year, Q3 2009) Budget: $77.43 billion-revenues; $79.9 billion-expenditures (2008 est.) Budget balance: -5.0% of GDP (2009) Public debt: 31.6% of GDP (2008 est.) [cumulative debt of all government borrowing] Exchange rates (per USD): 7.33 (7 Jan 2010); 8.47 (May 2009); 7.52 (May 2008) Economic aid-recipient: $597.18 million (2007) Debt-external: $71.81 billion (31 Dec. 2008 est.) Stock of direct foreign investment: $120 billion-at home; $63.57 billion-abroad (31 Dec. 2008 est.) Market value of publicly traded shares: $491.3 billion (31 Dec. 2008) Distribution of family income-Gini index: 65.0 (2005) Unemployment rate: 24.5% (Sept 2009) Labour force: 17.79 million (2008 est.) [economically active] 41st (world rank, 2008) Oil Production: 30th (world rank, 2008) Oil Consumption: 53rd (world rank, 2008) Natural Gas Production: 54th (world rank, 2008) Natural Gas Consumption: Military 1.7% of GDP; 98th world rank (2006) Military Expenditure: Markets JSE AS index: 27,998.87 (6 Jan. 2010) % change on 31 Dec. 2008: +1.3 (local currency); -10.6 ($ terms) Trade balance: $-2.5 billion (latest year, Nov. 2009) Trade to GDP ratio: 62.1 (2005-2007) Exports: $86.12 billion f.o.b. (2008 est.) Top export partners: U.S. (11.1%); Japan (11.1%); Germany (8.0%); UK (6.8%); China (6.%); Netherlands (5.2%) (2008) 90 Imports: $90.57 billion f.o.b. (2008 est.) Top import partners: Germany (11.2%); China (11.1%); U.S. (7.9%); Saudi Arabia (6.2%); Japan (5.5%); UK (4.0%) (2008)

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India India’s Manmohan Singh was re-elected prime minister of India in May 2009. He was first elected in 2004 when he replaced Atal Bihari Vajpayee. Before entering into politics, Singh worked as an economist, including for the International Monetary Fund. He was governor of the Reserve Bank of India from 1982 to 1985. Singh was first elected to the upper house of Indian parliament in 1995. He was re-elected in 2001 and 2007 and held cabinet positions including minister of finance and minister for external affairs. Singh also served as minister of finance from November 2008 to January 2009. He was born in Gah, Punjab (now known as Chakwal district, Pakistan), on September 26, 1932. He received his bachelor’s and master’s degrees from Punjab University in 1952 and 1954. He also received an additional undergraduate degree from Cambridge University in 1957 and a PhD from Oxford University in 1962. He and his wife, Gursharan Kaur, have three children.

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Political party: Indian National Congress Head of Government: Prime Minister Manmohan Singh Most recent election: July 2007 Government:Lower House — Majority (coalition); Upper House — Majority Political system: Parliamentary Legislature: Bicameral, elected Assembly, indirectly elected Council of States Capital: Delhi Official language: Hindi Economy Currency: Indian rupee (Rs) GDP (official exchange rate): $1.207 trillion (2008 est.) Predicted change: 5.3% (Q4 2008); 5.0% (2009) Composition by sector: 17.2%-agriculture; 29.1%-industry; 53.7%-services (2008 est.) Central Bank interest rate: 4.75% (21 Apr. 2009) Official reserve assets: $284,391.00 million (Oct. 2009) Foreign currency reserves: $266,768.00 million (Oct. 2009) [in convertible foreign currencies] Securities: $150,662.00 million (Oct. 2009) IMF reserve position: $1,581.00 million (Oct. 2009) Special Drawing Rights $5,242.00 (Oct. 2009) Gold: $10,800.00 million (Oct. 2009) [including gold deposits and, if appropriate, gold swapped] Financial derivatives: $0.00 (Oct. 2009) Loans to nonbank

79 residents: $0.00 (Oct. 2009) Other reserve assets: $0.00 (Oct. 2009) Commercial Bank prime lending rate: 8.5% (31 Jan. 2009) Stock of money: $250.9 billion (31 Dec. 2007) Stock of quasi money: $647.3 billion (31 Dec. 2007) Stock of domestic credit: $769.3 billion (31 Dec. 2007) Household income or consumption by % share: 3.6%-lowest 10%; 31.1%-highest 10% (2004) Inflation rate (consumer prices): 7.8% (2008 est.) Investment (gross fixed): 39% of GDP (2008 est.) Current account balance: $-37.5 billion (latest year, Q4 2008) Budget: $126.7 billion-revenues; $202.6 billion-expenditures (2008 est.) Budget balance: -7.7% of GDP (2009) Public debt: 78.0% of GDP (2008 est.) [cumulative debt of all government borrowing] Exchange rates (per USD): 49.6 (7 May 2009); 41.4 (May. 2008) Economic aid-recipient: $903.19 million (2007) Debt-external: $229.3 billion (31 Dec. 2008 est.) Stock of direct foreign investment: $144.2 billion-at home; $61.77 billion-abroad (2008 est.) Market value of publicly traded shares: $650 billion (31 Dec. 2008) Distribution of family income-Gini index: 36.8 (2004) Unemployment rate: 9.1% (2008 est.) Labour force: 523.5 million (2008 est.) 23rd (world rank, 2008) Oil Production: 5th (world rank, 2008) Oil Consumption: 26st (world rank, 2008) Natural Gas Production: 19th (world rank, 2008) Natural Gas Consumption: Military 2.5% of GDP; 66th in world rank (2006) Military Expenditures: Markets BSE index: 17,672.09 (6 May 2010) % change on 31 Dec. 2008: +23.9 (local currency); +21.7 ($ terms) Trade Trade balance: $-109.0 billion (latest year, Mar. 2009) Trade to GDP ratio: 47.6 (2006-2008) Exports: $187.9 billion (2008 est.) Top export partners: E.U. (21.6%); U.S. (11.8%); UAE (10.5%); China (5.6%); Singapore (4.9%) (2008) Imports: $315.1 billion (2008 est.) Top import partners: E.U. (13.9%); China (10.0%); U.S. (7.8%); Saudi Arabia (7.3%); UAE (6.2%) (2008)

State Bank of India (Canada)

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State Bank of India (Canada), a wholly owned subsidiary of the State Bank of India, Mumbai, India (ranked third amongst Global Banks by Morgan Stanley for total shareholder return in 2008) has been operating in Canada since 1982, as a Schedule II Bank. Incorporated in Canada, it caters to the whole gamut of banking services to the Canadian public and South Asian community. Through its branches in Toronto, Mississauga, Scarborough and Brampton in GTA, Ontario and Vancouver, Surrey and Abbotsford in British Columbia, the State Bank of India (Canada) caters to all sections of the economy and plays a major role in fostering major trade flows between India and Canada through its Trade finance wing and extends financial and advisory support to Canadian and Indian MNCs. The Product Offerings include Deposits, Loans (Retail and Corporate), Mortgages (Residential and Commercial), Lines of Credit, Trade Finance, NRI Services and Remittances, Credit Card and Debit Card Facility with Internet Banking for the Retail Banking customer. State Bank of India, the parent of SBIC, is the largest commercial bank in India. With a rich heritage of over 200 years of banking history and trust, intertwined with the economy of India, network spread over 16,000 group branches, the State Bank of India has a visionary as a chairman, Mr. O.P. Bhatt, who has rightly been chosen for the QFC-Asian Banker Leadership Achievement Award for the Asia Pacific region for the year 2010 by Asia Money Magazine. Under his dynamic leadership, the Bank has won many laurels and the market share of SBI has registered significant increase, besides registering a whopping profit of $2.2 billion Canadian dollars (Indian Rs 91.66 billion) for 2009-10 (despite the slow down in the economy), underscoring the fact that the recession witnessed across the globe had minimal impact on the Bank. Deposits grew by 27 percent and Loan portfolio grew by 17 percent YOY. The State Bank of India has been ranked BEST BANK 2009 by the Banker magazine in London, for the second year in a row, and moved up to 150th spot in Forbes 2000 list of largest companies in the World. State Bank of India (Canada), opened three branches in the last three years and has been steadily increasing its product range and services to the public user. It launched its Credit Card product in October 2006, in partnership with MBNA Canada Bank, with Master card—Cirrus backing. In July 2008, it offered a Debit card product for its customers to facilitate drawing upon their funds through ATMs and POS transactions around the clock. The Bank has also started setting up ATMs in all its branches for convenience of its customers and a part of a large network. This has paved the way for many of its customers moving their principal account to SBIC. Mr. Arun Nagarajan, President and CEO has stated that SBI Canada is growing at a steady pace by servicing existing clients’ needs with staunch loyalty and at the

same time building new client relationships, paving the way for an increased growth and market share. The President of SBIC averred that the Money Transfer Product of State Bank of India (Canada), was one of the premier products, which facilitates credit to the beneficiary’s account in India, in Indian Rupees within one business day. Money in Indian Rupees could be sent at a nominal charge of $8 per transaction with very attractive exchange rates. The wide network of over 12,500 branches of the parent Bank, in core-banking platform in India and the fact that the amount is credited within one business day were strong contributory factors to the popularity of the product, which is widely used by IndoCanadians and business houses as well. For credit to other Bank account holders in India, it takes another day for the credit to reach their account. Faster remittances in Foreign Currency are also done by the Bank through its wide network of branches. For the retail customer, SBIC offers Savings/Checking Accounts, High Interest yielding Super Saver Account (a hybrid account with GIC and Checking account benefits), Term Deposits (GIC), Debit Card, Co–branded Credit card, Money Transfer Product, RRSP and also the recently introduced Tax Free Savings Account, which is popular with high interest offered. SBIC has different schemes for lending for business, commercial and individual customers. It offers competitive interest rates for Residential mortgages, CMHC insured mortgages; Commercial Mortgage for business requirements are also offered. Line of Credit and Commercial loans are also made available for the business community. Syndicated loan facilities are extended to large borrowers. SBIC offers a variety of trade finance opportunities with India and other global destinations leveraging Parent Bank’s network of 141 offices in 32 countries covering all time zones. With correspondent banking relationship through the parent bank with over 350 Banks across the world, SBIC is the perfect channel for cost effective and customized solutions. SBIC also has a strong association with Export Development Canada and works in close partnership with them to serve the interest of corporate customers. With an eye on capturing the market share, Mr. Arun Nagarajan has stated that SBIC is keenly exploring the opportunities for expansion in Canada in provinces like Alberta and Quebec where there are a lot of opportunities. The Bank has a dedicated team of staff drawn from various ethnic communities and also from the Parent Bank, with focus on customer service and loyalty. The Bank is well positioned to leverage the strength of the Parent Bank, provide Canadian business houses partnership opportunities for growth in Canada, facilitate business initiatives in India and across the globe, and be a harbinger of prosperity and development.

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Revelling in Royal Island Fit for Prime Ministers, Presidents and chancellors

cialities are served with care, as well as Asian-style meals and international cuisine – all with the emphasis firmly on the freshest produce from the sea and land. The bright coral rock pool and tropical fish add vibrancy to the setting of Maakana Restaurant where you can expect fine selection of the international

dining rooms in the suites seat eight comfortably and each bedroom is king-size. All rooms, including the lounge are beautifully decorated and furnished – a symphony of carved wood, marble and richly coloured textiles. But with surroundings as stunning as these, you will want to drag yourself away from the sumpNot only kings but also the grandmother of Boduthakurufaan, one of the great Maldivian heroes, made the island her home and was buried here. As a reminder of the island’s regal past, a stone bath used by royalty is still preserved on Horubadhoo. Treat yourself royally

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day and the Fun Pub where you’ll enjoy live music, a disco or create your own entertainment with Karaoke sessions.

both comfort and pleasure with every good feeling between the two! So you’re in for a treat with the Araamu Spa. The spa complex consists of five traditional-style wooden pavilions, five air-conditioned treatment rooms, steam and sauna rooms, sunken Jacuzzis and baths. The best and most relaxing treatments

Legend has it that the island of Horubadhoo was once home to the kings of the Maldives and it is therefore appropriate that the Royal Island Resort & Spa is located here

Pristine white sands, emerald and turquoise seas filled with brightly coloured fish and lush green vegetation – these are the hues of paradise. And you’ll find this and much more when you book a stay at Royal Island Resort & Spa. The resort has two suites – the Han’dhu and Iru Suites – that are fit for kings and queens. One suite is situated on the sunrise tip of the island while the other makes the most of the glorious sunsets. The

tuous interior to enjoy the spacious verandah, private beach leading to the lagoon, swimming pool and Jacuzzi. Those staying in Royal Island’s beach villas also enjoy the ultimate in luxury and privacy as they are dotted about the island amongst the palm trees, surrounded by lush vegetation. Uniquely in this part of the world, the villas are made from Merbau wood and are furnished and decorated in exquisite style. Each one faces the beach and is equipped with air-conditioning, satellite TV with in-house films, internet access and luxurious bathroom with delightful open-air shower. Pleasure palace To further increase your pampering, Royal Island’s spa is the ultimate in luxury. In the local Dhivehi language, the name Araamu means

from around the world can be enjoyed – make your choice from Thai, Indonesian, Indian, Swedish, Hawaiian or Maldivian treatments or take advantage of them all! The treatments themselves include the use of indigenous herbs, oils and flowers as well as renowned skincare products. Apart from the relaxing and beautifying treatments such as aromatherapy, mud wraps and body scrubs, the spa’s professional and friendly staff also offer therapies for arthritis, muscular problems, mi-

cuisine everyday to satisfy you palate. Raabondhi Restaurant offers the choice of eating indoors or outside while enjoying the delicious Mediterranean-inspired dishes on offer. Tempting snacks and creative cocktails are available at the poolside Palm Terrace, as well as afternoon tea, which reflects the island’s attachment to its colonial past.

graine and other ailments. A favourite with honeymooners, the Loabi Loabi Romance treatment involves massages and fragrant baths especially designed for couples. Dream dining The selection of fine dining opportunities means that guests of Royal Island Resort can feast like kings too. The best Maldivian spe-

Royal Island Resort also features three bars – the Boli Bar, designed for relaxation with snooker tables and a wide range of drinks; the Pool Bar for chilling during the

Time for a change All this relaxing, pampering and fine food will make you ready for some action and here the choice of activities will definitely tempt you away from the pools, bars and restaurants.

Take part in some morning or night fishing as each part of the day offers something different for keen anglers. Or try your hand at something a little more ambitious – big game fishing is also on offer and you could bag a large barracuda or sailfish. If you’d rather just watch the undersea world go by, try snorkelling on the coral reef or practise your diving skills with professional

with a delicious picnic to enjoy in perfect solitude under the stars. If you’d like to discover more about the Maldives, choose one of the resort’s Island Hopping or Hello Neighbour excursions where you’ll visit nearby islands and get to meet the locals. And, at the end of a perfect day, you can watch the sun go down in a blaze of colours while enjoying a cocktail on a sunset cruise in a traditional dhoani. What a royally good idea! For further information: please go to www.villahotels.com ‘All rooms are beautifully decorated and furnished – a symphony of carved wood, marble and richly coloured textiles – perfectly fit for kings and queens’ ‘In the local Dhivehi language, the name Araamu means both comfort and pleasure with every good feeling between the two’

instructors from the resort’s Delphis centre. If you’re a beginner, learn to dive in a small group, ensuring that you’ll get personal attention. Other fun water activities include sailing and catamaran cruising, wind and kite surfing, jet skiing and the exhilarating ‘Banana’riding. One night, choose to recreate your own Robinson Crusoe adventure and ask to sleep on the deserted island of Gemendoo. The resort will drop you and your loved one off

‘The selection of fine dining opportunities means that guests of Royal Island Resort can feast like kings too’

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Indonesia Indonesia’s Susilo Bambang Yudhoyono re-elected president in July 2008. He first became president on October 20, 2004, after winning the election in September, replacing the incumbent Megawato Sukarnoputri. Before entering into politics, he served as a lecturer and a military general. His first experience in politics came when he was appointed minister of mines and energy in 1999. He later served as co-ordinating minister for politics and security. He was born on September 9, 1949, in Pacitan, East Java. He received his doctorate in agricultural economics from the Bogor Institute of Agriculture in 2004. He and his wife, Kristiani Herawati, have two children.

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Political party: Democratic Party 80 Head of Government: President Susilo Bambang Yudhoyono Most recent election: 8 July 2009 Government: Lower House — Minority; Upper House — Political system: Presidential Legislature: Bicameral, elected House of People’s Representatives, elected House of Regional Representatives Capital: Jakarta Official language: Indonesian Economy Currency: Rupiah (Rp) GDP (official exchange rate): $511.8 billion (2008 est.) Predicted change: 5.2% (Q4 2008); -1.4% (2009) Composition by sector: 13.5%-agriculture; 45.6%-industry; 40.8%-services (2008 est.) Central Bank interest rate: 7.25% (May 2009) Official reserve assets: $64,528.45 million (Oct. 2009) Foreign currency reserves: $58,862.90 million (Oct. 2009) [in convertible foreign currencies] Securities: $57,439.61 million (Oct. 2009) IMF reserve position: $230.90 (Oct. 2009) Special Drawing Rights: $2,797.78 million (Oct. 2009) Gold: $2,442.10 million (Oct. 2009) [including gold deposits and, if appropriate, gold swapped] Financial derivatives: $0.00 (Oct. 2009) Loans to nonbank residents: $0.00 (Oct. 2009) Other reserve assets: $194.77 million (Oct. 2009) Commercial Bank prime lending rate: 13.6% (31 Dec. 2008) Stock of money: $41.71 billion (31 Dec. 2008) Stock of quasi money: $131.5 billion (31 Dec. 2008) Stock of domestic credit: $166.2 billion (31 Dec. 2008) Household income or consumption by % share:

Mexico 3.0%-lowest 10%; 32.3%-highest 10% (2006) Inflation rate (consumer prices): 11.1% (2008 est.) Investment (gross fixed): 23.6% of GDP (2008 est.) Current account balance: $7.3 billion (latest year, Mar 2009) Budget: $92.62 billion-revenues; $98.88 billion-expenditures (2008 est.) Budget balance: -2.9% of GDP (2009) Public debt: 29.3% of GDP (2008 est.) [cumulative debt of all government borrowing] Exchange rates (per USD): 10,410.0 (6 May 2009); 9,225.0 (May. 2008) Economic aid-recipient: $362.09 million (2007 est.) [ODA] Debt-external: $143.5 billion (31 Dec. 2008 est.) Stock of direct foreign investment: $63.46 billion-at home; $4.277 billion-abroad (2008 est.) Market value of publicly traded shares: $98.76 billion (31 Dec. 2008) Distribution of family income-Gini index: 39.4 (2005) Unemployment rate: 8.4% (Aug. 2008) Labour force: 112.0 million (2008 est.) 22nd (world rank, 2008) Oil Production: 17th (world rank, 2008) Oil Consumption: 13th (world rank, 2008) Natural Gas Production: Natural Gas Consumption: 24th (world rank, 2008) 81 Military 3% of GDP; 50th in world rank (2005) Military Expenditures: Markets JSX index: 2,645.79 (10 Jan. 2010) % change on 31 Dec. 2008: +32.7 (local currency); +38.9 ($ terms) Trade Trade balance: $7.3 billion (latest year, Mar. 2009) Trade to GDP ratio: 60.4 (2005-2007) Exports: $139.3 billion f.o.b. (2008 est.) Top export partners: Japan (20.2%); E.U. (11.3%); U.S. (9.5%); Singapore (9.4%); China (8.5%); (2008) Imports: $116 billion f.o.b. (2008 est.) Top import partners: Singapore (16.9%); China (11.8%); Japan (11.7%); E.U. (8.2%); Malaysia (6.9%); (2008)

Mexico’s Felipe Calderón Hinojosa became president of Mexico on December 1, 2006, replacing Vicente Fox, who held the position from 2000 to 2006. In his early twenties Calderón was president of the youth movement of the National Action Party. He later served as a local representative in the legislative assembly in the federal chamber of deputies. In 1995 he ran for governor of Michaocán. He served as secretary of energy from 2003 to 2004. Born in Morelia, Michoacán, on August 18, 1962, he received his bachelor’s degree in law from Escuela Libre de Derecho in Mexico City. He later received a master’s degree in economics from the Instituto Tecnológico Autónomo de México as well as a master’s degree in public administration from Harvard University. He and his wife, Margarita Zavala, have three children. Political party: National Action Party Chief of State: President Felipe Calderon Head of Government: President Felipe Calderon Most recent election: 2 Jul 2006 Government: Lower House — Minority; Upper House — Minority Political system: Federal Republic Legislature: Bicameral, elected Federal Chamber of Deputies, elected Senate Capital: Mexico City Official language: Spanish 111,211,789; country comparison to the world: 11th (July 2009 est.) Population: 1.13%; country comparison to the world: 120th (2009 est.) Population Growth Rate: Economy Currency: Mexican peso (PS) GDP (official exchange rate ): $1.088 trillion (2008 est.) Predicted change: -1.6% (Q4 2008); -4.4% (2009) Composition by sector: 3.8%-agriculture; 35.2%-industry; 61%-services (2008 est.) Central Bank interest rate: 6.0% (Apr. 2009) Official reserve assets: NA Foreign currency reserves: $88,867 million (Mar. 2009) Securities: NA IMF reserve position: SDR503.06 million (Apr. 2009) Special Drawing Rights: $496 million (Mar. 2009) Gold: 175 million (Mar. 2009) Financial derivatives: NA Loans to nonbank residents: NA

Other reserve assets: 637 Million (Mar 2009) Commercial Bank prime lending rate: 8.71% (31 Dec. 2008) Stock of money: $92.34 billion (31 Dec. 2008) Stock of quasi money: $147.4 billion (31 Dec. 2008) Stock of domestic credit: $287 billion (31 Dec. 2008) Household income or consumption by % share: 1.8%-lowest 10%; 37.9%-highest 10% (2006) Inflation rate (consumer prices): 6.2% (2008 est.) Investment (gross fixed): 22.1% of GDP (2008 est.) Current account balance: $-11.2 billion (latest year, Q3. 2009) Budget: $257.1 billion-revenues; $258.1 billion-expenditures (2008 est.) Budget balance: -4.0% of GDP (2009) Public debt: 35.8% of GDP (2008 est.) [cumulative debt of all government borrowing] Exchange rates (per USD): 12.78 (7 Jan 2010);14.2 (Mar. 2009); 10.7 (Mar. 2008) Economic aid-recipient: $78.95 million (2007) Debt-external: $200.4 billion (31 Dec. 2008 est.) Stock of direct foreign investment: $289.8 billion-at home; 45.39 billion-abroad (Dec 31 2008 est.) Market value of publicly traded shares: $232.6 billion (31 Dec. 2008) Distribution of family income-Gini index: 47.9 (2006) Unemployment rate: 5.3% (Nov. 2009 est.) Labour force: 45.32 million (2008 est.) 7th (world rank, 2008) Oil Production: 12th (world rank, 2008) Oil Consumption: 17th (world rank, 2008) Natural Gas Production: 13th (world rank, 2008) Natural Gas Consumption: Military 0.5% of GDP; 161st in world rank (2006) Military Expenditures: Markets IPC index: 32,952.82 (5 Jan. 2010) % change on 31 Dec. 2008: +6.8 (local currency); +11.7 ($ terms) Trade balance: $-6.5 billion (latest year, Nov. 2009) Trade to GDP ratio: 64.5 (2005-2007) Exports: $291.3 billion f.o.b. (2008 est.) Top export partners: U.S. (80.2%); Canada (2.4%); Germany (1.7%) (2008) Imports: $308.6 billion f.o.b. (2008 est.) Top import partners: U.S. (49.%); China (11.2%); Japan (5.3%); South Korea (4.4%); Germany (4.1%) (2008)

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Saudi Arabia Saudi Arabia’s King Abdullah bin Adbul Aziz Al Saud has been in power since August 2005. He replaced Fahd bin Abdul Aziz Al Saud, who had reigned since June 1982. As crown prince since 1987, King Abdullah had previously acted as de facto regent and thus ruler since January 1, 1996, after Fahd had been debilitated by a stroke. He was formally enthroned on August 3, 2005. He also serves as prime minister of Saudi Arabia and commander of the National Guard. King Abdullah is chair of the supreme economic 67 council, president of the High Council for Petroleum and Minerals, president of the King Abdulaziz Centre for National Dialogue, chair of the Council of Civil Service and head of the Military Service Council. He was born August 1, 1924, in Riyadh and has a number of wives and children.

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Political party: None Chief of State: King and Prime Minister Abdallah bin Abd al-Aziz Al Saud Head of State: King and Prime Minister Abdallah bin Abd al-Aziz Al Saud Most recent election: None Government: None Political system: Absolute monarchy Legislature: Monarchy Capital: Riyadh Official language: Arabic 28,686,633; country comparison to the world: 41st (July 2009 est.) Population: 1.848%; country comparison to the world: 69th (2009 est.) Population Growth Rate: NA Economy Currency: Riyal (SR) GDP (official exchange rate ): $469.4 billion (2008 est.) Predicted change: 4.2% (2008); -1.0% (2009) Composition by sector: 3.1%-agriculture; 61.9%-industry; 35.0%-services (2008 est.) Central Bank interest rate: NA Official reserve assets: NA Foreign currency reserves: NA Securities: NA IMF reserve position: SDR 1,136.61 million (Feb. 2009) Special Drawing Rights: NA Gold: NA Financial derivatives: NA Loans to nonbank residents: NA Other reserve assets: NA

Commercial Bank prime lending rate: NA Stock of money: $113.2 billion (31 Dec. 2008) Stock of quasi money: $134.3 billion (31 Dec. 2008) Stock of domestic credit: $66.94 billion (31 Dec. 2007) Household income or consumption by % share: NA Inflation rate (consumer prices): 9.9% (2008 est.) Investment (gross fixed): 19.4% of GDP (2008 est.) Current account balance: $134.0 billion (2008 est.) Budget: $293.7 billion-revenues; $136.0 billion-expenditures (2008 est.) Budget balance: -0.9% of GDP (2009) Public debt: 18.9% of GDP (2008 est.) [cumulative debt of all government borrowing] 88 Exchange rates (per USD): 3.75 (May 2009); 3.75 (May 2008) Economic aid: NA Debt-external: $82.13 billion (31 Dec. 2008 est.) Stock of direct foreign investment: $108.5 billion – at home; 18.07 billion – abroad (31 Dec. 2008 est.) Market value of publicly traded shares: $246.3 billion (31 December 2008) Distribution of family income-Gini index: NA Unemployment rate: 8.8 (local bank estimate 2008; other estimates vary significantly) Labour force: 6.74 million (2008 est.) [about 1/3 of the population aged 15-64 is non- national] 1st (world rank, 2008) Oil Production: 9th (world rank, 2008) Oil Consumption: 9th (world rank, 2008) Natural Gas Production: 11th (world rank, 2008) Natural Gas Consumption: Military 10% of GDP; 3rd in world rank (2005) Military Expenditures: Markets Tadawul index: 6,260.90 (6 Jan 2010) % change on 31 Dec. 2008: +20.8 (local currency); +20.9 ($ terms) Trade Trade balance: $212.0 billion (latest year, 2008) Trade to GDP ratio: 86.7 (2005-2007) Exports: $313.4 billion f.o.b. (2008 est.) Top export partners: U.S. (17.1%); Japan (15.2%); South Korea (10.1%); China (9.3%); India (7%); Singapore (4.4%) (2008) Imports: $108.3 billion f.o.b. (2008 est.) Top import partners: U.S. (12.2%); China (10.5%); Japan (7.7%); Germany (7.4%); South Korea (5.1%); Italy (4.8%); India (4.2%); UK (4.1%) (2008)

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Turkey Turkey’s Recep Tayyip Erdoğan became prime minister of Turkey on March 14, 2003, replacing Abdullah Gül, who had occupied the office since 2002. Before becoming prime minister, Erdoğan was mayor of Istabul from 1994 to 1998. He was born on February 26, 1954, in Rize, Turkey, and studied management at Marmar University’s faculty of economics and administrative sciences. He is married to Emine Erdoğan and has two children.

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Political party: Justice and Development Party (AKP) Chief of State: President Abdullah Gul Head of State: Prime Minister Recep Tayyip Erddogan Most recent election: 22 Jul 2007 Government: Single House — Majority Political system: Parliamentary Legislature: Unicameral, elected Grand National Assembly Capital: Ankara Official language: Turkish 76,805,524; country comparison to the world: 17th (July 2009 est.) Population: 1.312; country comparison to the world: 102nd (2009 est.) Population Growth Rate: Economy Currency: Turkish lira (YTL) GDP (official exchange rate ): $730.0 billion (2008 est.) Predicted change: -6.2.% (Q4 2008); -4.4% (2009) Composition by sector: 8.8%-agriculture; 27.5%-industry; 63.8%-services (2008 est.) Central Bank interest rate: 6.50% (7 Jan 2010) Official reserve assets: $75,905.47 million (Nov. 2009) Foreign currency reserves: $69,750.01 million (Nov. 2009) [in convertible foreign currencies] Securities: $65,330.62 million (Nov. 2009) IMF reserve position: $181.00 million (Nov. 2009) Special Drawing Rights: $1,559.00 million (Nov. 2009) Gold: $4,415.46 million (Nov. 2009) [including gold deposits and, if appropriate, gold swapped] Financial derivatives: $0.00 (Nov. 2009) Loans to nonbank residents: $0.00 (Nov. 2009) Other reserve assets: $0.00 (Nov. 2009) Commercial Bank prime lending rate: NA Stock of money: $53.25 billion (31 Dec. 2008) Stock of quasi money: $248.4 billion (31 Dec. 2008) Stock of domestic credit: $326.4 billion (31 Dec. 2008) Household income or consumption by % share: 1.9%-lowest 10%; 33.2%-highest 10% (2005) Inflation rate (consumer prices): 10.2% (2008 est.) Investment (gross fixed): 20.3% of GDP (2008 est.) Current account balance: $-11.4 billion (latest year, Oct.

2009) Budget: $160.5 billion-revenues; $173.6 billion-expenditures (2008 est.) Budget balance: -6.3% of GDP (2009) Public debt: 40% of GDP (2008 est.) [cumulative debt of all government borrowing] Exchange rates (per USD): 1.57 (6 May 2009); 1.25 (May 2008) Economic aid-recipient: $237.45 million (2007) Debt-external: $278.1 billion (31 Dec. 2008 est.) Stock of direct foreign investment: $128.7 billion-at home; $14.8 billion-abroad (31 Dec 2008 est.) Market value of publicly traded shares: $117.9 billion (31 Dec. 2008) Distribution of family income-Gini index: 43.6 (2003) Unemployment rate: 13.4% (Sept. 2009) Labour force: 24.06 million (2008 est.) [about 1.2 million Turks work abroad] 64th (world rank, 2008) Oil Production: 27th (world rank, 2008) Oil Consumption: 63rd (world rank, 2008) Natural Gas Production: NA Natural Gas Consumption: 23th (world rank, 2008) Military 5.3% of GDP; 17th world rank (2005) Military Expenditures: Markets ISE index: 68,929.90 (6 Jan 2010) % change on 31 Dec. 2008: +25.5 (local currency); +23.6 ($ terms) Trade balance: $-37.0 billion (latest year, Nov. 2009) Trade to GDP ratio: 48.5 (2005-2007) Exports: $140.7 billion f.o.b. (2008 est.) Top export partners: Germany (9.8%); UK (6.2%); Italy (5.9%); France (5%); Russia (4.9%)(2008) Imports: $193.9 billion f.o.b. (2008 est.) Top import partners: Russia (15.5%); Germany (9.3%); China (7.8%); U.S. (5.9%) Italy (5.5%); France (4.5%); Iran (4.1%) (2008)

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South Korea South Koreaâ&#x20AC;&#x2122;s Lee Myungbak became president on February 25, 2008, replacing Roh Moo-hyun, who had occupied the position since 2003. Lee joined the Hyundai Construction company in 1965 and eventually became chief executive officer of the Hyundai Group before being elected to the Korean National Assembly in 1992. In 2002 he was elected mayor of Seoul, a position he held until 2006. He was born in Kirano, Osaka, Japan on December 19, 1941. He received a degree in business administration from Korea University in 1965. Lee and his wife, Kim Yun-ok, have four children.

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Political party: Grand National Party Chief of State: President LEE Myung-bak Head of State: Prime Minister Chung Un-chan Most recent election: 9 April 2008 Government: Single House â&#x20AC;&#x201D; Majority Political system: Presidential Legislature: Unicameral, elected National Assembly Capital: Seoul Official language: Korean 48,508,972; country comparison to the world: 25th (July 2008 est.) Population: 0.266%; country comparison to the world: 178th (2009 est.) Population Growth Rate: Economy Currency: Won (W) GDP (official exchange rate): $929.1 billion (2008 est.) Predicted change: -4.3% (Q4 2009); -5.9% (2009) Composition by sector: 3%-agriculture; 39.5%-industry; 57.6%-services (2008 est.) Central Bank interest rate: 2.0% (7 Jan. 2010) Official reserve assets: $264,187.00 million (Oct. 2009) Foreign currency reserves: $259,436.00 million (Oct. 2009) [in convertible foreign currencies] Securities: $235,776.00million (Oct. 2009) IMF reserve position: $997.00 million (Oct. 2009) Special Drawing Rights: $3,791.00 million (Oct. 2009) Gold: $78.00 million (Oct. 2009) [including gold deposits and, if appropriate, gold swapped] Financial derivatives: $0.00 (Oct. 2009) Loans to nonbank residents: $0.00 (Oct. 2009) Other reserve assets: $-116.00 million (Oct. 2009) Commercial Bank prime lending rate: 7.17% (31 Dec. 2008) Stock of money: $80.66 billion (31 Dec. 2008) Stock of quasi money: $478.0 billion (31 Dec. 2008) Stock of domestic credit: $937 billion (31 Dec. 2008)

Household income or consumption by % share: 2.7%-lowest 10%; 24.2%-highest 10% (2007 est.) Inflation rate (consumer prices): 4.7% (2008 est.) Investment (gross fixed): 27.1% of GDP (2008 est.) Current account balance: $+41.9 billion (latest year, Nov. 2009) Budget: $227.5 billion-revenues; $216.7 billion-expenditures (2008 est.) Budget balance: -4.5% of GDP (2009) Public debt: 24.4% of GDP (2008 est.) [cumulative debt of all government borrowing] Exchange rates (per USD): 1,277.0 (May 2009); 1,026 (May 2008) Economic aid-donor: $699.06 million (2007) [ODA] Debt-external: $381.1 billion (31 Dec. 2008 est.) 91 Stock of direct foreign investment: $124.2 billion-at home (31 Dec 2008 est.); $74.6 billionabroad (30 June 2008) Market value of publicly traded shares: $494.6 billion (31 Dec. 2008) Distribution of family income-Gini index: 31.3 (2006) Unemployment rate: 3.5% (Nov. 2009) Labour force: 24.35 million (2008 est.) 69th (world rank, 2008) Oil Production: 11th (world rank, 2008) Oil Consumption: 68th (world rank, 2008) Natural Gas Production: 25th (world rank, 2008) Natural Gas Consumption: Military 2.7% of GDP; 58th world rank (2006) Military Expenditures: Markets KOSPI index: 1,705 (6 Jan. 2010) % change on 31 Dec. 2008: +23.9 (local currency); +22.2 ($ terms) Trade Trade balance: $+41.0 (latest year, Dec. 2009) Trade to GDP ratio: 85.7 (2005-2007) Exports: $433.5 billion f.o.b. (2008 est.) Top export partners: China (22.4%); U.S. (10.9%); Japan (6.6%); Hong Kong (4.6%) (2008) Imports: $427.4 billion f.o.b. (2008 est.) Top import partners: China (17.7%); Japan (14%); U.S. (8.9%); Saudi Arabia (7.8%); UAE (4.4%); Australia (4.1%) (2008)

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Time to End Rampant Mercantilism By Robert Atkinson, President, Information Technology and Innovation Foundation

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The global downturn has sharpened the debate over whether the current structure of globalization is sustainable. But the debate over globalization was there before and will be here after the crisis, unless we take steps now to create a new kind of globalization that shifts nations’ core economic strategies away from mercantilist, export-led strategies to innovation-based, domestic growth strategies. This is particularly important because with the ICT revolution, nations’ economic prosperity is increasingly based on how well they use ICT, not just how well they produce it. ICT is in fact driving growth in most G-20 nations today. Looking just at the economic impact of the commercial Internet, ITIF has estimated that the global economy is $1.5 trillion larger than it would be otherwise

and by 2020 will add roughly $3.8 trillion annually to the global economy—more than the total GDP of Germany. The economic benefits of IT are even larger (including not just the Internet but the use of computers and other ICT). ITIF has estimated that because of the impact of the IT revolution, the U.S. economy is approximately $2 trillion larger in terms of annual GDP than it would be otherwise. Why has ICT had such far-reaching and profound effects? The short answer is because ICT is what economists call a “general purpose technology.” As ICT (hardware, software and telecommunications) has gotten cheaper, better and easier to use, it has become pervasive in its use and its impacts, going far beyond the Internet and personal computers. ICT is embed-

ded in a vast array of products, and not just technology products. Indeed, in 2006, 70 percent of microprocessors did not go into computers but into cars, planes, HDTVs, etc., enabling their digital functionality and connectivity. Connecting these IT tools is a robust and growing wireless and wireline telecommunications network. The emergence of this power digital economic engine means that it is now possible to significantly raise productivity and growth in a whole host of sectors that were long considered “stagnant,” many of which like financial services, wholesale and retail trade, hospitality services, are not mostly traded internationally. Unfortunately, many nations today are overlooking these significant opportunities for ICTenabled growth, instead preferring to focus on growing their economies by increasing their exports and reducing their imports, particularly in the limited number of high tech industries. These nations operationalize this export-led strategy by a wide array of means, many of them with negative-sum, beggar-thyneighbor effects. These tactics include tariff and nontariff barriers to imports, subsidies to attract investment and promote exports, forced technology transfer and production offsets, theft of intellectual property, and tax policies, including border-adjustable value-added taxes, that subsidize exports. And many nations, especially China, turbo-charge these tactics by rampant and widespread currency manipulation designed to give their nation’s products and services a subsidy in the global marketplace. At the heart of these negative-sum policies is a misguided economic philosophy that many nations have mistakenly bought into: a mercantilism that sees exports in general, and high-value added exports in par-

ticular, as the Holy Grail to success. A generation ago many nations thought that import substitution was the Holy Grail. But as that was shown to be a failure, most switched to export-led growth strategies, through repressed domestic consumption, low labor costs, and policies to favor exports and limit imports. There are two major problems with this approach. First, even if this strategy might have worked for some smaller nations like Taiwan and South Korea in the past, it simply cannot work today. Neither markets in the United States or Europe—or even both combined—are large enough if nations like Brazil, China, India, Russia, and Japan continue to promote exports while limiting imports as their primary path to prosperity. But there is a more fundamental problem with this pervasive mercantilism. It is just bad economic policy for most of the nations pursuing it and certainly for the global economy as a whole. While it might lead to higher wealth in a few relatively small export-based industries, it does nothing to raise productivity in the rest of the economy. For example, while the Indian IT sector has created new opportunities for India, it accounts for only around three percent of national value-added. Productivity in India is just eight percent of U.S. rates, while Chinese productivity is but 14 percent. The productivity gap is better but still problematic in more developed nations. Despite some extremely productive and innovative multinational export-based firms, overall Japanese productivity is just 70 percent of U.S. rates and South Korea just 50 percent. Attract all the multinational chip factories or software support centers they want, without higher productivity levels across the board in all sectors, it will be extremely difficult for these nations to significantly raise their standards of living. These anemic levels of productivity in non-traded sectors do not occur by happenstance. They are a result in part of these nations focusing on mercantilist practices for their traded sectors. These policies win the favor of powerful constituents, including domestic producers seeking protection from competition, including foreign competitors (as small retailers have done in India to limit Wal-Mart from selling to consumers); businesses and consumers who don’t want to pay for products with high levels of intellectual content (e.g., software, music, movies and other content, and pharmaceutical products); workers and their unions seeking policies to protect their jobs from competition and automation; and government bureaucrats whose top-down control is challenged. In contrast, mercantilism only risks alienating some WTO officials, who normally turn a blind eye to such practices. As a result, over the last several decades the global economic system has become systematically distorted, with an increasing number of nations favoring beggar-

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thy-neighbor policies to attract and grow high wage industries. These policies lower, not increase global output. When a nation engages in mercantilist policies it is by definition distorting the location of economic activities compared to where it should locate. For example, if China forces Boeing to produce aviation parts in China as a requirement for letting Boeing sell jets in China, the odds are that this lowers global innovation and productivity, because absent this threat Boeing would produce parts in other factories with higher productivity. Likewise, when nations turn a blind eye to theft of intellectual property, they reduce revenues for the producers of that

IP, in turn reducing their ability to invest in innovation or higher productivity. And when nations keep their currency artificially low they contribute to production shifting from more productive and innovative plants to less productive and innovative ones. If export-led mercantilism is not the answer, what is? The answer is an economic policy grounded in what is increasingly known as â&#x20AC;&#x153;innovation economics.â&#x20AC;? Innovation economics is based on the view that the path to higher incomes is raising domestic productivity by all firms in all sectors. It is also based on the view that it is not the amount of capital (financial or human) that nations have that is most important, but how that capital is

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used. And it is based on the view that micro-economic factors (e.g., product and labor market competition, technology policies, etc.) are more important to growth than macro-economic ones. Under an innovation economics doctrine, the central task of global economic policy should be to encourage all nations to make raising domestic productivity a key priority. In particular, policies should seek to spur competition and the use of the best production toolsâ&#x20AC;&#x201C;often by increasing the use of ICT to raise the productivity of all sectors. For example, Indian retail banking is just nine percent as productive as U.S. levels and its retail goods sector productivity is just six percent. If India could raise productivity in these two sectors to just 30 percent of U.S. levels, it would raise its standard of living by over 10 percent. Doing this, however, means working to develop a global consensus that domestic productivity growth should be the key focus on economic policy in every nation. This can start by the nations who engage less in mercantilism (particularly the United States, Canada, and Europe) agreeing to cooperate to fight it. In particular, it is time for Europe and the United States to recognize that just as fighting communism was in our collective interest after WWII, today fighting mercantilism is in our collective interest in the 21st century. Joining the fight should be global bodies like the WTO, international development organizations like the World Bank and the IMF, and national or regional development organizations like the Agency for International Development, the Overseas Private Investment Corporation, and the European Bank for Reconstruction and Development. These organizations need to commit to not only stop promoting export-led growth as a key solution to development, they also need to tie their assistance to steps taken by developing nations to move away from negative-sum mercantilist policies, especially currency manipulation, thereby rewarding countries whose policies are focused on spurring domestic productivity, not on protecting the status quo. Globalization is a wonderful vision and can be an even more wonderful reality, but only if nations abandon negative-sum mercantilist policies and embrace innovation economics policies focused on raising productivity for all sectors, and making sure that all individuals can benefit from this growth. If that happens, developed and developing nations will benefit greatly.

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Global Macroeconomic Imbalances: G-20 Leaders Must Back Up Their Rhetoric with Deeds The financial crisis has taught us a painful lesson that global macroeconomic imbalances can wreak enormous damage on the world economy. Indeed, the centerpiece of last year’s G-20 Summit in Pittsburgh was agreement on a framework for balanced and sustainable growth to forestall a resurgence of imbalances as the economic recovery gets underway. At the recent IMFWorld Bank annual meetings, G-20 leaders gave the IMF a mandate to manage this framework by providing hard-nosed evaluations of their countries’ economies. Experience suggests that grand promises to implement policies that are in the collective global interest can’t be taken seriously without an effective enforcement mechanism. After all, we have seen how quickly these same leaders’ firm pledges to forswear trade protectionism bit the dust. The IMF has no real levers when it comes to the leading G-20 economies, especially since they are the major shareholders in the institution. Moral suasion and name-to-shame approaches don’t work well as the large economies tend to simply brush off external criticism of their policies. There is a simple approach that has real consequences, would be straightforward to implement, and allows G-20 countries to make enforceable policy commitments. It involves Special Drawing Rights, essentially an artificial currency created at the IMF and distributed to countries in rough proportion to their economic size. The total stock of SDRs is now close to $300 billion, a sizable chunk of money. The scheme would work as follows. The G-20, in consultation with the IMF, develops a simple and transparent set of rules for governments on policies that could contribute to global imbalances—for instance, that government budget deficits and current account balances (deficits or surpluses) should be kept below three percent of national GDP. Each country posts a commitment bond amounting to a minimum of 25 percent of its SDR holdings to back up its commitments to those objectives. Since it is not easy, even with the best of policies, to turn around the factors underlying imbalances within a short period, commitments to policy objectives would be made over a five year horizon. Intermediate targets could be set over a three year horizon. Failure to meet the targets would mean a forfeiture of the bond (or a part of the bond for missing interim targets). The actual cost would not be large. China, for instance, now has an allocation of seven billion SDRs and 25 percent of that would

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amount to less than $3 billion. Still, the symbolic effect of being levied an SDR penalty for running bad economic policies would be huge. By posting larger shares of their SDR holdings, countries could signal stronger commitments to their policy pledges to the international community. This would be a perfect setup for the U.S. to lead by example in bolstering the framework it initiated—by posting a large bond as a commitment to sharply reduce its budget deficit. Given the limited and uncertain tenure of some governments, such a commitment bond would also be a good way of binding future governments to sound policies. This approach would shift the discussion from contentious arguments about current policies to a focus on outcomes. For instance, China has consistently maintained that its current account surplus reflects structural problems in its economy and has nothing to do with its exchange rate policy. Who could quibble with methods so long as China commits to reducing its current account surplus and succeeds in putting its economy on a trajectory to get it below three percent of GDP in the next five years (perhaps with an interim target of five percent of GDP in the next 2-3 years)? What happens to SDRs that get docked if countries don’t hit their targets? These SDRs would be distributed among low income countries. To get incentives right, only those low-income countries that meet minimum standards in terms of their macro policies would be eligible for this redistribution. This way, the IMF could finally offer carrots to poor countries for good policies rather than just sticks for bad policies. Any SDR redistributions to small poor economies resulting from this scheme would be morally justified—instability caused by bad policies in the larger and richer economies tends to hurt these vulnerable and innocent bystanders disproportionately. The G-20 commitment to tackling global macroeconomic imbalances is laudable. G-20 leaders must now be willing to back up their rhetoric with deeds and be ready to pay the price for breaking their commitments.

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Institutional Development: How the G-20 May Help the World’s Poor Faced with a sputtering global economic recovery, an incomplete international financial regulatory system, and governance gaps in multilateral institutions, the Group of Twenty (G-20) looks set to have a busy 2010. Given this crowded agenda, the decision of Korean President Lee Myung-bak, the current chair of the G-20, to include development as an “integral part” of the G-20’s mission is particularly laudable.

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In asserting ownership of international development policy, the G-20 is usurping the G-8, who traditionally spearheaded this agenda. How might the G-20 tackle development differently from its predecessor? Before trying to answer this question, it’s useful to go back five years to the 2005 Gleneagles Summit, to better understand the G-8’s approach to development. There, amid much pomp and self-congratulation, the G-8 leaders agreed to a bold new compact: a doubling of global aid by 2010, with half of the increase in funds going to Africa, and the cancelation of debts owed by the most heavily-indebted developing countries. “We do not simply by this communiqué make poverty history,” conceded then British Prime Minister Tony Blair, the host of the summit and the major driver behind its focus on African development. “But we do show how it can be done. And we do signify the political will to do it.” In many ways, the Gleneagles Summit was the apotheosis of the G-8’s approach to global development, one moored to the principles of charity and forgiveness. Both the style and substance of the event reflected a perception of developing countries (and Africa in particular) that has struggled to move beyond the strange blend of paternalism, pathos, and guilt that has characterized the post-Cold War period. This resulted in the global development agenda we have today: one where political incentives prioritize the announcement

of commitments at press conferences above concern for what is ultimately achieved for the world’s poor. There was also too much stress on aid and not enough concern for creating an enabling global economic environment with rules supportive of development. Five years on, the Gleneagles Summit and the hoopla surrounding it appear both antiquated and naïve. Despite significant increases in aid volumes, the G-8 nations remain short of their targets, but at a certain level this failure is beside the point. Debt relief and higher aid flows have been superseded by new development priorities such as fragile states and protecting the vulnerable from a changing climate. Moreover, there is growing recognition that our understanding of what causes growth, and how we might “make poverty history,” remains incomplete. All the while, the development landscape has shifted immeasurably, with some emerging countries becoming key drivers of the global economy. This, then, is the complex drama into which the G-20 has now stepped. It is unreasonable to think that its members will instantaneously make development a top priority, or will overcome all of the political difficulties that plagued the G-8. But the G-20 will bring a fresh perspective to the development agenda, and on three key issues—how members see their roles in relation to the developing world, what they gain by acting as a group, and how they hold themselves accountable—we can expect to see changes which will pay dividends for the world’s poor.

From Patrons to Diverse Responsibilities

The G-8’s relationship with the developing world has evolved through a long and complicated history into its current form: that of enlightened guardians bestowing favor on those less fortunate. Though in recent years, there have been some efforts to recast this relationship; the underlying power balance has barely evolved. The G-20’s position vis-à-vis developing countries is less easily characterized, not least because of its more heterogeneous composition. Given the mix of advanced, newly industrialized, emerging and developing countries present at G-20 summits, each member will relate to poor countries and the process of development in its own way. Moreover, members will likely exhibit multiple personalities when tackling development issues. Australia, for example, attends as an aid donor, a concerned neighbor of failing states, and a keen rival in commodity markets dominated by developing countries; India at once participates as a champion of Global South solidarity, an economy that promises to be

one of the fastest growing in the world, and the home of the largest population of the world’s poor. Certain members may be asked to represent constituencies beyond their own borders: in a recent speech, South African Minister Trevor Manuel noted that at the G-20 his country has been called upon to speak variously for itself, for Africa, and for low-income countries in general. Such complexity is likely to make any G-20 debate over development less predictable. Yet the fact that G-20 membership is explicitly based on systemic significance—implying a responsibility to the developing world based on facts on the ground, rather than a

sense of noblesse oblige—could bring a hardheadedness to development debates that was often lacking at the G-8.

From Collection Plate to Collective Action

The purpose of G-8 discussions on development was generally to convince each member to contribute a little more than they otherwise would, in the style of a charitable fundraiser. Developing country guests were occasionally invited along to tug on the heartstrings of G-8 leaders, who in turn would get carried away in bidding wars, mimicking their corporate heroes. As such, G-8 meetings on development weren’t really multilateral exercises, but rather an effort to get each member to increase its bilateral assistance. For the G-20, conversely, the motivation for gathering is not simply to encourage each to be more generous, but to tackle challenges that necessitate cooperation and coordination. Approaching development through a collective action lens will likely alter the focus of multilateral assistance. Over the past 18 months, we have seen that global growth and financial stability are global public goods, as without them the economic prospects of any individual country falter, as are a clean atmosphere and a fair and open trading regime. The G-20’s approach to development can be expected to place greater empha-

sis on securing these external conditions for growth, which will indirectly support the economies of the developing world and pull individuals out of poverty.

From a Reliance on Conscience to Independent Monitoring

The G-8 has historically done without official accountability mechanisms to uphold the decisions its members reach at meetings. A little peer pressure or the burden of a guilty conscience were seen as sufficient levers, befitting the G-8’s small size and clubby style. The shortcomings of this approach were made evident last year as Italy’s flagrant failure to fulfill its Gleneagles targets were brushed over by its co-members. By contrast, the G-20 has embraced the principle of independent monitoring from the outset, acknowledging the need for an increased role for multilateral institutions to oversee the implementation of its accords. This is not simply to further the spirit of multilateralism, but a recognition that large, heterogeneous clubs require referees to enable collective action. Such a change will potentially deliver much needed improvements in the transparency and accountability of development policies, two challenges the G-8 continually struggled to address. It is perhaps too soon to assess how the G-20 will address development; after all, the body in its current form is only a little more than a year old, and its priorities and internal machinations have yet to fully emerge. But if anticipated correctly, this new approach to development would appear to offer plenty of promise. Ultimately, the extent to which the G-20 succeeds in promoting development compared to its erstwhile predecessor will largely depend on the political will of its members’ leaders; it is up to them to rise to this challenge.

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Protecting Haiti’s Children: Good Intentions or Child Trafficking?

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The January 12th earthquake that shook Haiti was a huge blow to the country’s delicate social and political balance. Like other large-scale natural disasters, the aftermath saw massive aid efforts mobilized from large and small nations, nonprofits and religious groups, all intending to help the ravished country. Despite the positive work many of these groups are doing, the recent media focus has been on the children. A group, which was associated with two Idahobased Baptist churches, was caught with 33 Haitian children, attempting to take them to the Dominican Republic on January 29th without proper paperwork. Questions were raised about the children’s status and whether they were truly orphans or just separated from their families. As of today, the Haitian judge overseeing the case has released eight of the 10 Americans; however, the group’s leader and one other member are still being held for questioning. This case highlights the important issue of child protection in humanitarian crisis. Where is the line between good intentions and human trafficking? Human trafficking is at once a horrific crime and a global phenomenon. Virtually every country in the world sends or receives human beings for exploitative purposes through global trafficking networks. The United Nations estimates that at any given moment 2.5 million people are in forced labor, including sexual exploitation, as a result of trafficking and that these people come from 127 countries and reside in 137 countries. The majority of people trafficked are children and youth with 1.2 million children under the age of 18 estimated to be trafficked each year. The United Nations defines human trafficking as the use of force, fraud, or other coercive methods, including abusing a position of vulnerability, to recruit, transfer or receive people for exploitative purposes. Tragically, calamitous events such as Haiti’s earthquake are breeding grounds for child traffickers, seeking to take advantage of chaos and weakened government law enforcement. Accusations of child kidnapping and trafficking were widespread following the 2004 tsunami in South Asia, where Indonesian officials took action to protect children from trafficking by posting guards around camps sheltering displaced people. It is often difficult to quickly discern the difference between well-intentioned but completely uniformed voluntary groups and child traffickers. In 2007, members of the French group, Zoe’s Ark, were accused of child abduction after attempting to fly 103 children out of Chad. At the time, UN officials said it was not clear that the children were actually orphans or that they were from the war-ravaged Darfur region of Su-

dan, as the group claimed; but rather they were Chadian children with living parents and relatives. The organization appears to be made up of well-intentioned volunteers wanting to assist needy children. But they were not professionally trained or experienced workers; nor did they have familiarity with the issues and an understanding of the best practices associated with supporting children’s needs in the midst of conflict and disasters in developing countries. In these difficult contexts, good intentions are not enough. These incidents overshadow the positive work many volunteers and aid groups do to help children in disaster situations, and highlight the importance of professional humanitarian workers who are especially trained to assess and respond to children’s needs without doing harm. Most importantly, these good intentions can cause serious emotional and psychological damage to the innocent children that just survived a major crisis by removing them from their families and communities. Research and past experience in helping children in humanitarian crises has shown that by far the best way to assist the majority of children, even orphans, is to ensure that they are living with extended relatives or caring adults in their own communities. In such humanitarian crises, where children’s well-being is at stake, aid agencies and volunteer groups are best advised by the principles set forth in the Inter-agency Guiding Principles on Unaccompanied and Separated Children, which was created in 2004 by a group of international United Nations and civil society humanitarian agencies. These guidelines address situations in which children are separated from their families, whether orphaned or accidentally lost, in the wake of crises and disaster. They articulate clear steps, including supporting family unity, to ensure that each child’s best interests are followed. Haiti’s recovery will take years. The desire to help children left without proper care is both noble and necessary; however, the urge to volunteer is best channeled through raising funds to support professional organizations with expertise in disaster response and child protection, such as the United Nations Children’s Fund, the International Rescue Committee, or Save the Children. Otherwise, well-intentioned volunteers can risk doing more harm than good.

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The Status Report: Obama and Global Financial Stability Leadership in Restoring Global Financial Stability: President Obama has shown leadership domestically and globally by undertaking decisive actions to pull the U.S. and global economies back from the edge of the abyss, challenges described by Eswar in a memo to the president-elect last January. But a rocky road lies ahead before we see the recovery entrenched and the global financial system back on the path to stability.

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Domestically, the administration deserves credit, given the nature and size of the economic crisis, for taking decisive and massive action to prevent the U.S. economy from sliding into a deeper recession and instead move towards a recovery. Some mistakes were certainly made in getting the financial system back on its feet, but the combination of direct intervention in the financial sector, low interest rates, monetary “easing” and strong fiscal stimulus was crucial in avoiding a more serious crisis. While temporary nationalization of the weakest financial institutions was an alternative that could have sent a stronger message that the cost of huge mistakes by private actors would have to be

more fully borne by shareholders and managers, this radical approach probably would have faced technical obstacles and resistance from Congress. Internationally, the global nature of the crisis necessitated a multilateral response and a more robust international policy architecture. This was where the Obama administration made major strides. It took the initiative to make the G-20 into a new, enlarged “steering group” for the global economy, recognizing that the

nancial capacity, which helped restore confidence in its ability to weather the crisis. Incorporating key emerging markets into an expanded Financial Stability Board will also have important implications for global financial regulation. However, the U.S. failed to deliver meaningful and decisive progress on a new global climate change framework despite pledging to raise substantial funds to help alleviate the climate financing needs of developing countries. Broadly speaking though, both the domestic and international actions designed to restore financial sta-

G-8 no longer reflected the nature and structure of the world economy. This was a bold and significant move to bring a major group of emerging market countries to the “head table” of global collective action. This reconfiguration while not just supported by the U.S. could not have become a reality without a strong U.S. push. President Obama and his Sherpa played key roles in making the London and Pittsburgh G-20 summits into more than just photo opportunities, laying the foundation for much more effective global collective action in a cooperative framework that includes China, India, Brazil and other key emerging markets. Obama championed a substantial strengthening of the IMF’s fi-

bility and limit the existing damage of an inherited financial crisis have been positive and successful. Still, huge challenges lie ahead. The consequences of policies undertaken during the crisis have cast a long shadow on the U.S. economy. Action now seems stalled on many fronts, creating a dangerous loss of momentum and progress on reforms to stabilize macro-economy and the financial system. Therefore, on the domestic front, the administration must back up its rhetoric on reigning in budget deficits with a clear plan. President Obama must begin preparing the U.S. body politic for tough measures to tackle the massive growing deficit and public debt, such as a value-added tax on consumption. The proposal to mobilize greater fiscal revenue from the financial sector could also contribute to an overall improvement in fiscal balance. The threat is real and long term in nature, the response must be comprehensive and effective, but it should not, and need not, be formulated in a panic mode. On the global stage, the U.S. seems to be less in the forefront of the international reform efforts as compared to where it was during a very pro-active period before the London meeting. In tackling global imbalances, the Obama administration must lead by example—mainly by policies that encourage a longterm increase in private savings and by bringing its fiscal deficit under control, as this is legitimately seen by

other countries as a destabilizing factor in international financial markets. The U.S. should find ways to add teeth to the G-20 proposal for a global framework for sustainable and balanced development, which the G-20 has asked the IMF to help facilitate. It is also important for the administration to push for bolder governance reforms at the World Bank and IMF, along with a capital increase for the World Bank and some other development banks, at minimal cost to the U.S. taxpayer. Finally, Obama’s focus on stimulating U.S. job growth is welcome and necessary. The message should be loud and clear that a global economy that does not deliver decent jobs and increases in median incomes of American citizens and citizens around the world cannot be considered as successful, even if it delivers rapid GDP growth. The fruits of growth will have to be much more equitably distributed than in the past decade. Ultimately, the huge potential benefits of global trade and investment flows can only be realized and receive political support if the large majority of citizens are actual beneficiaries of the globalization process.

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The Zedillo Commission Report on World Bank Reform: A Stepping Stone for the G-20 Summits in 2010 In October 2009, the high-level commission led by former Mexican President Ernesto Zedillo to review reform of the World Bank published its report “Repowering the World Bank for the 21st Century.” The Commission’s efforts coincided with one of the world’s worst financial and economic crises and came in the wake of a G-20 call for reform of the international financial institutions. The Zedillo Commission offered a unique opportunity to create the foundation for far-reaching reform of the World Bank as the premier global financial institution supporting sustainable global development and poverty reduction. The Commission’s report provides many sound recommendations that serve as an important building block for World Bank reform, but additional elements will be required for a comprehensive approach. According to the World Bank’s Web site “[t]he Commission was created by World Bank Group President Robert B. Zoellick in October 2008 to focus on the modernization of World Bank Group governance so the World Bank Group can operate more dynamically, effectively, efficiently, and legitimately in a transformed global political economy.” The report accordingly devotes most of its analysis and all of its recommendations to issues of governance. It offers no explicit recommendations on the World Bank’s mandate, operational challenges and modalities and its funding, although these topics are discussed at the outset in setting the stage for the analysis of governance reform. Governance and mandate issues are interconnected: member countries will only give the World Bank an ambitious mandate if it is underpinned by strong governance; and they will only make serious efforts to strengthen the Bank’s governance if the Bank makes a clear and significant contribution to address global challenges on their behalf. Since the Commission focused only on governance reform, a key element of World Bank reform remains to be addressed. A “grand bargain” may need to be implemented in order to turn the World Bank into a truly legitimate and effective global institution.

Reform of World Bank Governance

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The report rightly identifies governance weaknesses as having undermined the World Bank’s legitimacy and effectiveness. Its analysis of the governance weaknesses is informative, perceptive and comprehensive in coverage—considering not only IBRD and IDA, but also including IFC and MIGA in its ambit. It formulates

a concise and overall sound set of principles of good institutional governance and addresses the key governance issues in a broad sweep of recommendations while understandably leaving many details of implementation yet to be addressed. The main recommendations fall under four headings: 1. Reform of representation (chairs, vote, and voice): • The proposal to reduce the size of the Board to 20 chairs by consolidation of European seats, creating elected-only chairs and distributing board membership more evenly across constituencies is welcome. With the signing of the Lisbon Treaty, the Europeans should address their fragmented and excessive representation in many international bodies, including the World Bank. Otherwise, they will seriously undermine the Bank’s legitimacy. • The goal of a 50/50 voting structure for the Bank between developed and developing countries and a significant increase in the basic shares and hence votes is a welcome recommendation. It sets a clear goal for rebalancing of the ownership of the institution. • The proposed elimination of the U.S. veto is also welcome. A key question left unanswered is how this could be made palatable to the U.S. administration and Congress. 2. Restructuring governing bodies: • In principle, the proposal of a nonresident, ministerial-level board of executive directors is fine, yet likely unrealistic in practice: member governments are not likely to forego a resident-board approach; and if it were adopted, it is unlikely that ministers would spend the time required to serve in this capacity. Other options should be explored: reformed representation, a clearer strategic role for the Board, giving the Board its own leadership, and a stronger mandate for the Bank (see below) would help make a more effective and attractive institution. • The proposed delegation of approval of individual loans, which is currently reserved for the board to the management, will strengthen the Board’s focus on strategy and policy formulation process. This will also allow a reduction in the size of the board’s costly staff and make it easier to attract senior-level board representation. • The proposal to have the Board chaired by a government representative, rather than by the President is

also appropriate, but the traditional rules of selecting the Board’s leadership (the “Dean”) purely by seniority should also be abandoned. Instead, a process of election by the members should be introduced. 3. Changing leadership selection: It is appropriate to eliminate the U.S. prerogative in the World Bank, and the European prerogative in the IMF. Merit-based leadership selection, as recommended by the report, is more appropriate. While this principle appears to have been adopted at the G-20 summit before the Commission issued its recommendation, it remains to be implemented in practice. 4. Increasing the World Bank’s funding base: The report correctly identifies the need to increase the World Bank Group’s resource base, but says little about which resources should be increased, why and by how much. The justification for a capital increase needs to be articulated more clearly, the case for an early and ambitious replenishment of IDA needs to be made explicitly, and the potential role for the Bank in acting as a channel for global public goods funding (especially climate change funding) needs to be clearly laid out.

The World Bank’s Mandate

It is encouraging that the Commission portrays the

World Bank as an institution that has a continuing and enhanced role to play. The proposals for governance reform are intended to strengthen its legitimacy and capacity. The report also identifies important challenges in the current and future global environment, but presumably because of its limited terms of reference, it does not lay out a clear vision of the mandate and role of the Bank in the face of these challenges, nor does it closely link the governance reform proposals to the changing challenges and mandate of the Bank.

Three challenges stand out in particular:

• Supporting growth and poverty reduction in middle-income countries: The report identifies the challenge of the Bank to stay engaged with middleincome countries (MICs), but does not propose a clear rationale for this engagement, nor does it state what specific role the Bank should play in MICs, what needs to be done to play this role effectively, and how the proposed governance reforms would help it doing so. Enhanced representation of the MICs in the Bank’s governance would be one way to strengthen their trust in the institution and ensuring that the Bank adjusts its operational modalities in a way that is responsive to MICs’ needs. • Supporting the provision of global public goods: The report identifies global public goods (GPGs),

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ticipants are willing to compromise on some of their interests so as to achieve others. Had the Commission been given a broader remit, it could have explored the creation of a World Bank that can respond to: • The interests of developed countries by helping to ensure sustained growth and poverty reduction in the developing world, by responding to the critical need to address GPGs, and by providing leadership, with responsibility and accountability, in aid coordination in conflict-affected and fragile states; and, • The interests of developing countries by giving them a greater role in the Bank’s governance and hence greater trust in the institution in letting it play a key role to assure a stable, prosperous, and sustainable world economy. The developed countries would then be more likely willing to forego some of their traditional prerogatives in the governance of the institution; and the developing countries would likely be willing to give the World Bank a greater mandate in assisting them to respond to global challenges. As the G-20 leaders prepare for their 2010 summits in Canada and Korea, they should demand from their deputies and Sherpas, and from the World Bank’s such as environmental protection, response to epidemics, protection of global financial stability, etc., as an important challenge, but does not specify what role the Bank should play and what reforms are needed for it to play this role. And again no link is established with governance reform. MICs in particular have been resistant to a stronger Bank role in GPG funding. Giving them greater voice and vote in the Bank would likely lower their resistance. In terms of funding, it will be important to explore making the Bank the principal conduit for GPG funding. • Supporting the coordination of aid: The report flags the rise of new aid actors and the resulting fragmentation of the aid architecture, and lays out the great challenges that donors face in conflict-affected countries. However, it does not identify what role the Bank could and should play in helping to make the aid architecture function better or what specific role it should play in aid coordination. One option to consider is for the Bank to play a lead role in coordinating aid in conflict-affected and fragile states—and indeed, in all countries where governments cannot or will not play such a lead role.

Searching for a “Grand Bargain” in World Bank Reform

Reform of international institutions requires a careful balancing of multiple and, at times, diverging na-

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leadership, that they take a broader perspective of the reform agenda, drawing on what is a sound analysis of the governance challenges offered by the Zedillo Commission Report, but staking out a much more ambitious and far-reaching set of reform measures for the World Bank. By combining reforms in the World Bank’s governance and in its mandate, the leaders can create a package that responds to the valid interests of all participants, and to the urgent global developmental needs and to the challenges of global public goods.

tional interests. The U.S. has an interest in maintaining its prerogatives of selecting the World Bank president and wielding a veto when it deems appropriate. The Europeans want to maintain their strong presence on the Bank’s board and protect their prerogative of appointing the IMF’s Managing Director. The developed countries as a group have an interest in promoting an effective response to GPGs and in improving better coordination of aid in conflict-affected and fragile states. The middle-income countries want greater voice and vote in an institution that is designed to support them in their long-term development aspirations and during times of crisis. The low-income countries, which critically depend on the World Bank along with other donors for concessional assistance and crisis support, want a greater say about the conditions on which funding is made available to them and about the quality of technical advice and assistance they receive. It is clear that governance and mandate issues are closely related. Proposals for World Bank reform that do not explicitly consider how to balance these national interests across these two domains—governance and mandate—are not only incomplete but also face a great risk of stalemate and ultimately failure. By focusing only on governance, the Zedillo Commission was unable to explore how the many differing national interests could be brought under one hat in the form of a “grand bargain,” in which different par-

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BD Helps Strengthen Sub-Saharan Healthcare Through Improved Lab Performance

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IMPROVED COLLECTION AND MANAGEMENT OF MEDICAL TEST SAMPLES PLAYS A VITAL ROLE In sub-Saharan Africa health systems face fundamental limitations in staffing, funding, medical education, training, and access to vital medical technologies. Moreover, the region is burdened by a disproportionate share of infectious disease. Health pandemics such as HIV/AIDS, tuberculosis (TB) and malaria take millions of lives annually. In recent years, many institutions have been collaborating to help fortify healthcare systems in sub-Saharan Africa. Players include national health ministries, governments around the world, the United Nations and its affiliated entities, and many foundations and other nongovernmental organizations. But the corporate world is also playing a critical role. One example is the work of BD (Becton, Dickinson and Company) through its Global Health initiative, which lends support through knowledge transfer, training, management development, advocacy, funding, and volunteerism. Based in New Jersey, BD is a global medical technology company that develops and sells medical devices and instrument systems worldwide. Emphasizing sustainability and affordability, the company’s Global

Health Initiative provides training and technical assistance to local lab personnel. It also expands access to critical technologies and invests in new technologies suited for use in lesser-developed environments. “The corporate community can help strengthen healthcare systems in such developing regions as subSaharan Africa,” said Krista Thompson, Vice President and General Manager, Global Health, BD. “By working intelligently with various governmental and non-governmental institutions, the business world can provide resources that lead to sustainable, long-term improvements.”

On the training and technical assistance front, BD Global Health has been engaging in many collaborative efforts specifically aiming to improve sample collection and transport. Among other benefits, the proper collection and management of patient samples improves diagnostic capability, facilitates the monitoring of HIV/AIDS and TB patients, and helps to protect healthcare workers, themselves a scare and precious resource in the region. One such program is a collaboration for safer blood collection between BD and PEPFAR (The U.S. President’s Emergency Plan for AIDS Relief). Safe blood collection is more critical than ever in developing countries severely impacted by the HIV/AIDS pandemic. With increased access to HIV treatment, the need for screening tests has grown. This has greatly increased the number of times blood must be drawn. “Safe blood collection is an important component of the Emergency Plan’s comprehensive approach to

combating HIV/AIDS around the world,” said Ambassador Eric Goosby, the U.S. Global AIDS Coordinator who oversees PEPFAR. “Our ultimate goal is to build sustainable systems and empower individuals, communities, and nations to battle HIV/AIDS.” Health personnel receive training to improve blooddrawing procedures and specimen handling. The initiative also helps prevent needlestick injuries through surveillance and post-exposure management. The three year initiative recently began in Kenya and will add up to four additional countries. It aims to train up to 2,000 workers and support up to two million blood draws within each participating country. “Health personnel in sub-Saharan Africa face high risks of contracting HIV/AIDS and other diseases in work settings,” said Renuka Gadde, Director of Global Health, BD. “These valuable workers can perform their jobs more safely through the improvement of blood drawing and other procedures involving blood and

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sharp devices.” TB is the most common cause of death among HIVpositive patients, but diagnosis in people living with HIV/ AIDS can often produce incorrect results. Due to weak healthcare infrastructure, specimens from patients who are resistant to treatment frequently do not get referred for proper diagnosis. Additionally, due to the need for appropriate training, managing specimen quality and laboratory processes is difficult. In response, Uganda’s National TB Reference Laboratory developed a referral system whereby laboratory and postal workers learn safe specimen packaging, transportation and delivery. In conjunction with this initiative, BD and PEPFAR jointly introduced global posi-

Through the new specimen referral program, Ugandan health officials can better manage specimens, data and laboratory quality. The referral system allows TB samples to be tested with a level of sophistication exceeding that available in more modest lab sites in outlying areas. “Hundreds of our labs and sample collection centers are located in remote areas and lack sophisticated equipment,” said Moses Joloba, who leads the National TB Reference Laboratory in Uganda. “Our international collaborators have helped us institute measures that will lead to long-term efficiencies in Uganda’s healthcare infrastructure.” BD is also improving sample management by training lab personnel. Under a program conducted in collaboration with PEPFAR, a total of 96 Ugandan healthcare workers have received instruction on quality management in laboratory settings. Over the training period, lab worker test scores increased from an average of 35 percent prior to training to 88 percent. Also, under BD’s Good Laboratory Practices training program, more than 5,000 participants in 59 countries have received training in hundreds of workshops. The proper collection and delivery of medical samples may seem basic and mundane. But as the BD Global Health initiative demonstrates, even improvements in such fundamental practices as these can play a vital role in building a more promising healthcare outlook for the region. While the challenges remain formidable, sub-Saharan healthcare systems have been improving through public-private collaboration. Ample opportunities exist for greater corporate involvement in these vital efforts. The entire world shares a stake in their success.

tioning system (GPS) and geographical information system (GIS) technology to map TB microscopy sites and monitor laboratory quality improvements. Now encompassing more than 500 collection sites, the program has facilitated proper delivery of more than 900 specimens to date.

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Reaching the World’s Most Vulnerable Seven-year old Manisha, diagnosed with TB in 2008, doing her second grade homework. After nearly seven months of treatment through a community-based program, she was cured of TB in January 2009. The Lilly MDR-TB Partnership strives to improve care for the world’s most vulnerable people, like little Manisha. Photo: Subhash Sharma

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The Lilly MDR-TB Partnership is a public-private initiative that encompasses global health and relief organizations, academic institutions and private companies, and is led by Eli Lilly and Company. Its mission is to address the expanding crisis of multi-drug resistant tuberculosis (MDR-TB). Created in 2003, the Partnership mobilizes more than 20 global healthcare partners on five continents. Lilly is contributing US$ 120 million in cash, medicines, advocacy tools and technology to focus global resources on prevention, diagnosis and treatment of patients with MDR-TB; and an additional US$ 15 million to the Lilly TB Drug Discovery Initiative to accelerate the discovery of new drugs to treat TB.

Empowering Local Communities

The Partnership has implemented community-level programmes to raise awareness about MDR-TB, increase access to treatment, ensure correct completion of treatment and empower patients by eliminating the stigma of the disease. The Partnership also trains healthcare workers to recognize, treat, monitor and prevent the spread of MDR-TB.

A global Approach for Global Results

Because global change requires a global perspective, the Partnership works with policymakers around the world to raise awareness about the toll that TB takes on the global population and encourages new initiatives that curb the spread of MDR-TB.

Sustainable Access to Medicines

To increase the supply of high-quality, affordable medicines, Lilly has partnered with manufacturers in countries hardest hit by MDR-TB, providing both knowledge and financial assistance to create sustainable, local sources for MDR-TB drugs.

Helping Those in Need

The initiatives of the Lilly MDR-TB Partnership all have one thing in common: improved care for some of the world’s most vulnerable people, delivered in a sustainable manner that builds capacity within the communities where it is needed most.

New Drug Discovery Initiative

The Lilly TB Drug Discovery Initiative is a public-private partnership that will draw on the global resources of its partners, including access to chemical libraries of compounds, to pioneer research on much-needed faster-acting medicines to treat MDR-TB.

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“C20” – The Business Mirror of the G-20