G20/ B20 Cannes 2011

Table of Contents Welcome by Mayor Rahm Emanuel

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Message by Marcus Wallenberg

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Global Development

What’s in a Name? Defining Sustainability and Some Consequences of Definitions

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By Ralph Brown and David Braudt, Brigham Young University

Message by Jean Guy Carrier

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Editorial 16

Peak Oil and the Threat to Global Economic Expansion

Editor’s Note

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By Dr. Minqi Li, Associate Professor, Department of Economics at the University of Utah, and Hinckley Scholar, Hinckley Institute of Politics

Welcome by Mayor of Cannes

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Publisher’s Note

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Message by Gerard Worms

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A Trade Agenda for the Arab Spring: Global Integration and the Dangers of Neoliberalism

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Global Trade

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By Athanasios P. Mihalakas , Diplomatic Courier contributor

Yoshihiko Noda’s Vision for Japan

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By Hanna Trudo, Diplomatic Courier Correspondent

Global Finance

“A Fiscal Crisis? Oui et Non.”

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By Rami Turayhi, Diplomatic Courier Correspondent

Ties that Bind

40

Global Economy

The World’s Most Important Resource: The Employee Contributions to Global Economic Recovery

By Kenneth Weisbrode

An agenda for More Accountable and Ethical Free Markets

Transatlantic Regulation: What Unites Us Makes Us Stronger

By Alexandre Muns

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By Jonathan Evans, Member of the UK Parliament

G20 Agricultural Meeting: A Transformative Moment?

Putting Jobs First for Recovery

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By Marco Picardi, Centre for African Development and Security

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By Angelea Panos, Ph.D, Patrick Panos, Ph.D, Christina Steele Hanselman, MS, MBA, and Sterling Panos, MS, Hinckley Scholars, Hinckley Institute of Politics

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By James Howard, Director of Economic and Social Policy, International Trade Union Confederation

SAVING LIVES IN THE WORLD’S POOREST NATIONS

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By Ambassador Nancy Brinker

Commodities and Risk

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By Chrisella Sagers, Diplomatic Courier Correspondent

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Food Security

The Challenge for Food Security in Developing Countries

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By Kyle Rehn, Hinckley Scholar, Hinckley Institute of Politics

Malthus is Still With Us, But So is the Solution: Using Science to Solve the Food Crisis

By Robert F. Bennett, Former U.S. Senator and Resident Scholar at the University of Utah’s Hinckley Institute of Politics

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By Grégoire Sentilhes, President of the G20 YES 2011, President of NextStage

Human Security

The Global Challenge of Human Security

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By Dr. Cornelio Sommaruga Diplomatic Courier Contributor

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The IMF Repositions Itself with the Rise of Emerging Markets

By Oscar Montealegre Diplomatic Courier Correspondent

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Welcome by Mayor Rahm Emanuel City of Chicago

Message by Marcus Wallenberg Chairman of the ICC G20 Advisory Group

Resisting protectionist pressures is key to economic growth and job creation $4-7 trillion in growth and tens of millions of jobs at stake if G20 leaders don’t stand firm Over the past 60 years, trade liberalization has contributed to improving the standard of living of billions of people across the world by creating new economic opportunities and providing greater choice and lower prices to consumers. An open international trade and investment environment is fundamental to foster economic growth, job creation, and prosperity.

The global recession and financial crisis did not alter this fundamental reality. And further measures to more open trade will be a vital part of economic recovery. The OECD estimates that global GDP could increase by between US$4 and $7 trillion if countries were to halve their current trade barriers.

However, in times of crisis, governments come under nationalist pressures to pull up the draw bridge and adopt regressive measures to ‘protect’ domestic industries and jobs. This type of short-sighted, beggar-thy-neighbor backlash is bad for the global economy, bad for growth and bad for jobs.

So far G20 leaders have stated publicly that they support the multi-lateral trading system and encourage more open trade, even as the financial crisis began contaminating the larger global economy. At the 2008 Washington Summit, heads of state announced their commitment to refrain from raising new barriers to trade and investment for a period of one year. They have continued to denounce protectionism and extended the fight against short-sighted new trade barriers to the end of 2013. In November 2010, the G20 Seoul Summit statement acknowledged that uneven growth and widening imbalances fuel the temptation to diverge from global solutions into uncoordinated actions, but that such uncoordinated policy actions only lead to worse outcomes for all.

Despite the rhetoric, ICC is concerned that protectionism is on the increase – hurting the very companies that create jobs.

The latest WTO-OECD-UNCTAD report reveals G20 governments implemented more new trade restrictive measures in the last six months than in any other previously reported period. Of those measures, 30 consisted of new export restrictions – all in the face of the 2010 Seoul commitment to rollback any new protectionist measures.

The G20 Seoul Summit Leaders’ Declaration that “[w]hat we promise, we will deliver” has not borne true. In fact, the exact opposite is taking place.

Moreover, an ICC-commissioned study, released by the Peterson Institute for International Economics in 2010, found that every single G20 county has implemented protectionist trade measures since 2008. G20 countries applied discriminatory measures worth US$1.6 trillion, or 10% of all world trade, in 2008 alone.

A recently developed Open-Markets Index finds that all the nations of the G20 must do much more to develop more open markets. The world’s largest and fastest growing economies – the U.S. (ranked 39th) and China (ranked 57th) – both score particularly badly in terms of open markets.

The G20 has a key role in ensuring that Governments around the world work collectively to lower trade barriers and unlock jobs and growth. ICC, on behalf of large and small businesses from across the world, now calls on the G20 to back its rhetoric with action and honor its previous commitments.

The upcoming December WTO ministerial conference marks a critical opportunity for the G20 to deliver. A failure to reach agreement on a future work program in December would cause serious damage to the credibility of the WTO and the multilateral trading system. At the same time, G20 governments should re-engage substantively in negotiations among themselves and with other WTO members to produce better offers on agriculture, industrial goods, and services.

At stake is the US$4-7 trillion of growth identified by the OECD, and tens of millions of jobs that would be created and would turn around the employment crisis that has developed since 2008.

The G20 governments must hold their nerve, and renew their commitment to the trade policies that have delivered unparalleled growth, prosperity and freedom for the world over the past 60 years.

Message by Jean Guy Carrier ICC Secretary General

As world leaders gather in Cannes this week, business leaders have also come together to share policy priorities and to emphasize that G20 deliberations must be aligned with core business goals of open trade and investment, economic growth, and job creation. After all, the world business community is the engine that drives the economy and creates jobs.

In order to play a constructive role in representing business views to G20 governments, the International Chamber of Commerce has established the ICC G20 Advisory Group.

Our aim is to build an enduring platform for global business to provide input to the work of the G20 on an ongoing basis.

Our mandate derives from our somewhat historic responsibility as the voice of world business to convey policy priorities to government leaders. The first time we sat down with the G8 was in Houston, Texas in 1990, when American President and then G8 Summit host George H. W. Bush called on ICC to provide a list of business concerns. That tradition has continued for the past 21 years, up to the meeting with ICC’s Chairman and Korean President Lee just last year.

Now the larger more inclusive G20 is driving a similarly broader approach by business. And for that reason, ICC has strengthened our capabilities through our ICC G20 Advisory Group. The group is comprised of approximately 20 CEOs who are actively concerned with the G20 policy agenda and are keen to engage with peers, set priorities, and speak out on the issues most vital to business.

The principal objective of the group is to develop constructive policy recommendations – and this is where we have focused our efforts. In preparation for this year’s Summit, we mobilized ICC’s worldwide policy-making expertise and solicited contributions and priorities from companies and business organizations of all sizes and in all regions of the world. The result is a series of policy recommendations addressing trade, investment, financial regulation, corruption, commodity price volatility, green growth, and reforming the international monetary system.

ICC has also formed a joint task force with the World Economic Forum to more robustly canvas business input into the policy development process and convey the gravitas of global business views. More recently, ICC and WEF began coordinating efforts with the French Business Association, MEDEF, with the view that the B20 should reflect the opinions and recommendations coming from all different business task forces and present a consistent and coherent set of conclusions to the G20.

I would also like to announce that ICC has teamed with the CAT Company to sponsor this publication. We believe this partnership represents not only a union between two venerable organizations with long-running G8/ G20 track records, but also an effective combination of ICC’s policy expertise with CATCO’s world-class media delivery platform.

ICC and our member companies have high expectations for the G20 Summit here in Cannes – to provide much-needed stewardship to shore up the drifting world economy and create the confidence we need to invest.

Business can generate economic growth and create jobs, given the right conditions.

And finally, while our current focus is on Cannes, ICC is committed to generating solid policy work before, during, and after the G20 Summit events – from France to Mexico and beyond.

Côte d’Azur, je t’aime!

Why the Riviera is still a dream getaway for holidaymakers

Why do millions of people fall in love with the Côte d’Azur every year? The list is long, so where to start? Firstly, the nice weather and wonderful landscape, bien sûr. Then, the divine combination of mountains and sea, allowing people in winter to go sunbathing on the beach in the morning and skiing on the glistening snow in the afternoon. Each year, 10 million people come and go through Nice’s airport, France’s second busiest. On arrival they have one of the easiest, and cheapest, airportto-city transfers, with the bus ride to Nice centre taking half an hour and costing four euros. Another positive point, not to be underestimated, is the political stability of the region there’s the odd industrial strike as is the French way, but still it’s a bit calmer than it is in Tunisia or Egypt at the moment. The people who

responded to our survey praised the variety of the culture, gastronomy and sport on offer: “The quality of the leisure pursuits here is amazing,” said one respondent. “It’s much more than just a straight-forward beach holiday.” There is much to be enjoyed in soaking up the French way of life and the international atmosphere, dining in the local restaurants and trying the regional products - wine, olive oil, honey, truffles etc. There is an in¬dividuality that is in stark contrast to bland, mass package tourism that you find in some other popular holiday spots. Then you may bump into a celebrity: Bono in a bar, Angelina plus children, or Kate lazing on Philip Green’s yacht. Being able to reach Aix-en-Provence, Marseille, Monaco and Italy is a huge bonus for many. With one euro bus fares operating on most services in the

Alpes-Mar¬itimes, the region is also inexpensive to explore. All year round, it’s a wonderful place to be, as one man pointed out: “In January the mimosa is already in flower and

by February you can smell spring.

In July the days are endless, the evenings bright and warm and in August you can watch the shooting stars in the night sky. In October you can still eat outside and in December the sea is your own.” There are people who holiday in the south of France again and again, every year.

Why? “Because of the wonderful landscape and people, I am addicted to this region,” one regular told us, “Côte d’Azur je t’aime.”

EDITORIAL EDITOR-IN-CHIEF Ana Carcani Rold EXECUTIVE EDITORS Kirk L. Jowers Courtney H. McBeth MANAGING EDITOR Rochelle M. Parker Chrisella Sagers CONTRIBUTORS Rudiger von Arnim David Braudt Robert F. Bennett Ralph Brown Jonathan Evans Christina Steele Hanselman James Howard Minqi Li Athanasios P. Mihalakas Oscar Montealegre Alexandre Muns Angela Panos Patrick Panos Sterling Panos Marco Picardi Kyle Rehn Chrisella Sagers Gregoire Sentilhes Cornelio Sommaruga Hanna Trudo Rami Turayhi Kenneth Weisbrode GRAPHICS DIRECTOR Henri de Baritault COVER DESIGN Christian Gilliham LEGAL The G20 Summit Magazine is a yearly publication independent of political affiliations or agendas published

by The CAT Company. The articles in the G20 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.

The G20 Summit – Cannes, France After a successful meeting of the G8 in Deauville in May earlier this year, France will host another important meeting, this time for the G20, bringing together major advanced and emerging economies at a crucial time for the Eurozone and the global financial markets.

To tackle the financial and economic crisis that spread across the globe in 2008, the G20 members were called upon to further strengthen international cooperation. The representation of the G20 is formidable: the 20 nations represent more than three quarters of the world’s economic output, and unlike other similar forums—including the G8—the G20 is comprised of both developed and emerging nations. This is a large representation. The issues these countries are trying to tackle at the Cannes summit are even larger.

The G20 leaders have presented some economic initiatives and collaborations, among others the “Framework for Strong, Sustainable, and Balanced Growth” that was launched at the Pittsburgh Summit in 2009. But so far they have made limited progress and their efforts have proved far from enough. For sure, the issues are indeed daunting.

As the world’s population reached 7 billion this October, the issues of the day have expanded dramatically and demand an unprecedented collaboration between the private and public sectors. That is why the CEOs and business leaders attending high level meetings during the G20 summit represent an important body of stakeholders that can and will help the G20 leaders with the issues that the French Presidency has prioritized for this November: • Reforming the International Monetary System (IMS). France wants to reform the international monetary system to establish collective responses to deficiencies and to provide support for the sweeping changes that the global economy is experiencing, particularly given the rise of the major emerging countries.

• Strengthening financial regulation. As chair, in order to strengthen financial-sector oversight on a lasting basis, France wants to strengthen financial regulation in areas where it is still insufficient, for example with respect to regulation of the “shadow banking system” (i.e. the non-bank financial institutions whose practices are not regulated) and concerning financial market integrity and transparency.

• Combating commodity price volatility. At the September 2009 Pittsburgh Summit, the G20 examined the issue of excessive fluctuations in commodity prices for the first time, but few concrete measures have been taken to date. France would like to find collective solutions in order to reduce excessive commodity price volatility, particularly of agricultural commodity prices, which threatens food security around the world.

• Supporting employment and strengthening the social dimension of globalization. The French presidency has four priority objectives in this area: promoting employment, particularly for young people and disadvantaged individuals; stronger social protection; respect for social and labor rights; and improved coordination of strategies among international organizations.

• Fighting corruption. The G20’s efforts to fight corruption are part of a long-term overall strategy to clean up the business environment, to fight tax avoidance, and to strengthen the rule of law. The French presidency wants to ensure that the Anti-Corruption Action Plan adopted in Seoul will produce concrete results and real progress in 2011.

• Working on behalf of development. The French presidency wants to make specific efforts to support infrastructure development. It will bring discussions on development financing to G20 level, via innovative financing and in particular a tax on financial transactions.

The G20 leaders have other, more immediate issues as well. The Eurozone crisis; trade relations; and, billions in dollars committed have played out as recurring themes in Pittsburg, Toronto, and Seoul. It remains to be seen if the Cannes summit will rise above the predecessors or whether it will be consumed by the tasks of the day, which are mounting by the minute.

Ana C. Rold Editor-in-Chief

Welcome by Mayor of Cannes City of Cannes

Message by Gerard Worms

Publisher’s Note

Chairman of the International Chamber of Commerce

Chris Atkins

Dear G20 Summit Readers and Participants, I would like to take this opportunity to thank all those involved for their dedication in helping make this a successful 3rd issue of the G20 Summit publication.

In addition The CAT Company is the only enduring publishing company in the field, having been publisher and consultant to the G8 Summit magazine for fifteen consecutive years.

We are also pleased to announce our relationship with the International Chamber of Commerce’s ICC G20 Advisory Group—the voice of business for this summit and around the world.

As a result of the high quality of our publications, we are honored to be chosen as the publishers of the official APEC CEO Summit magazine for the APEC 2011 USA host committee this year.

I hope you enjoy our publication as much as we enjoyed producing it. We look forward to seeing you in Cannes for the G20 Summit and the APEC CEO Summit in Hawai’i this November.

Yours Sincerely

Chris Atkins Publisher and Founder, CAT Company Inc.

Publisher The CAT Company Inc G8 Summit Magazine Company Ltd Special Partnership Jeffrey P. Hardy Senior Policy Advisor ICC-G20 Advisory Group Coordinator International Chamber of Commerce The CAT Company Inc President Chris Atkins Global Advisory Board Chris Atkins Peter Atkins Jennifer Latchman Manuel C. (Manny) Menendez III Keith Foote Nyborg United States Ambassador (Ret.) Graphic Design and Art direction Henri de Baritault Founder intro60.com President of Sales Mike Nyborg Sales Executives John Armeni Ray Baker Guy Furl Doug Lambert Jessica Lane Lloyd Murray Rich Reale Japanese International Team Kunihito Ken Toma Kunio Toma Atsuya Wada Hinckley Institute of Politics - University of Utah Director Kirk Jowers Intern Manager Courtney McBeth Communication and Outreach Coordinator Rochelle McConkie Special Thanks To Ana Carcani Rold Diplomatic Courier Hinckley Institute of Politics intro60.com Hotel Martinez The Riviera Times DHL Verso Paper G20 Young Entrepreneur Summit

A few words about the ICC ICC’s work to play a constructive role in representing business views to the G20 is part of its historic mission to foster peace and prosperity through world trade. ICC was founded to assume this role and did so admirably following two disastrous world wars – from the League of Nations to Bretton Woods to the International Conference on Financing for Development. In this context, the work of the G7/G8 has been a natural focal point for ICC to ensure that government policy is aligned with core business goals of open trade and investment, economic growth and job creation.

It is our conviction that the G20 will develop over time into an indispensable instrument for forging effective international collaboration in an interdependent world – whose agenda will have a major impact on core business goals to expand global economic growth and employment. G20 decisions will increasingly impact the policy direction of national governments and international organizations.

For these reasons, we have an incumbent responsibility to ensure that the voice of world business is heard.

ICC is the world business organization, a representative body that speaks with authority on behalf of enterprises from all sectors in every part of the world.

With this responsibility in mind, we have endeavored to construct an inclusive process for preparing business views for the Cannes Summit. We drew from ICC’s thousands of member companies in over 120 countries; we engaged the expertise of ICC’s global network of national committees operating at the doorstep of national governments in 90 countries; and we reached out to the 2,000 experts from ICC’s policy commissions on trade, investment, financial services, information technologies, telecommunications, marketing ethics, the environment, transportation, competition law and intellectual property, among others. In addition, we conducted four regional policy consultations (in Mexico City, Hong Kong, Doha, and Zurich), aimed at providing local and regional businesses with a direct and unique opportunity to help shape ICC’s policy recommendations for input into the G20 process.

It’s our hope – our mission – that the G20 leaders are listening.

By virtue of its long history of authoritative involvement in international business policy, and as its Chairman, it’s my honor to represent the ICC here in Cannes.

New-generation i30 made world debut at 2011 Frankfurt International Motor Show - New-generation i30 builds on success of Hyundai’s best-selling model - Designed, engineered and manufactured in Europe, for Europe - Upgraded diesel engine: CO2 emissions under 100 g/km

At the 2011 Frankfurt International Motor Show (IAA), Hyundai has unveiled its new-generation i30, a vehicle the company expects will build on the success of the original model thanks to enhanced design, quality, performance and efficiency.

Designed and engineered at the Hyundai Motor Europe Technical Centre in Rüsselsheim, Germany, the new-generation i30 represents a further evolution of the unique Hyundai form language, ‘fluidic sculpture’ – the company’s distinctive design DNA – and offers a choice of four engines with a total of six power options and CO2 emissions below 100 g/km thanks to an upgraded, super-efficient 1,6-litre diesel unit.

The new-generation i30 will go on sale in Europe early in 2012 as a five-door hatchback. The newcomer will be produced in Europe at the company’s state-of-the-art manufacturing facility in Nošovice, Czech Republic.

Every new-generation i30 will be backed by the industry-best, fullytransparent Five Year Triple Care warranty from Hyundai. This awardwinning package provides five years of unlimited-mileage warranty, five years of roadside assistance, and five years of vehicle health checks.

A worthy successor to Hyundai’s best-seller The original i30 has defied the industry norm by recording increased annual sales with each passing year. Since launch in 2007, the i30 has recorded over 360.000

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European sales, including more than 115.000 units during 2010 – the highest-ever sales figure for an individual Hyundai model on sale in Europe in one year, putting the i30 at six in the C-segment rankings.

Hyundai expects the new-generation i30 to maintain this growth trend, contributing to future sales success, growing brand awareness and improving perceptions of Hyundai among European consumers.

The fortunes of the new-generation i30 will also be helped by a recovering market.

Industry analysts forecast the mainstream C-segment will grow by 7% over the next three years, reaching sales of 2,4 million vehicles per year by 2014. Hyundai is planning to sell on average over 120.000 units of the new i30 per year during the car’s lifecycle, capturing a larger market share of around 5% and challenging established competitors.

Allan Rushforth, Senior Vice President and COO of Hyundai Motor Europe, commented: “We expect the new-generation i30 to play a significant role in developing our sales and brand image in Europe, taking on the leading vehicles in the C-segment and joining the all-new i40 as a brand ambassador and quality benchmark for Hyundai.”

Style inspired by nature The ‘fluidic sculpture’ ethos utilises flowing lines inspired by nature and modern architecture to give a constant three-dimensional presence to Hyundai vehicles.

Since its introduction on the Hyundai ix-onic concept at the 2009 Geneva Motor Show, fluidic sculpture has been the form language for all new Hyundai models launched in Europe.

Thomas Bürkle, Chief Designer at Hyundai Motor Europe Technical Centre, commented: “When designing the new-generation i30, we used strong, fluid lines to sculpt a car which looks athletic and exudes a sense of constant motion, even when stationary. We gave the car a bold stance, transmitting a confident attitude through sporty characteristics and dynamic proportions. In this way, the car is very close to the all-new i40, and the Hyundai design DNA is easy to recognise on these models.”

The new-generation i30 also bears Hyundai’s signature frontal feature – the hexagonal-shaped grille.

“The hexagonal appearance is unique to Hyundai, and defines the i30 as a family member. The jewel-like front headlamps which flank the grille add a strong personality to the vehicle, as well as a sense of refinement and luxury,” Thomas Bürkle added.

Powering the new generation The new-generation i30 will be available with a choice of three gasoline and three diesel variants, with power outputs ranging from 90 to 135 ps. Both fuel types play a significant role in the European C-segment, with diesel representing 52% and gasoline 43% of total sales. Overall, Hyundai is expecting a 50:50 split between diesel- and gasoline-powered i30 sales.

Hyundai believes that its highlyefficient 1,6-liter variable geometry turbo (VGT) ‘U-II’ diesel unit will be the most popular engine in the range.

Generating 128 ps at 4.000 rpm, the upgraded engine will accelerate the new-generation i30 from standstill to 100 kph in 10.9 seconds, with a top speed of 197 kph.

The petrol engines, too, offer a balance between performance and economy. For example, the newgeneration i30 can be specified with Hyundai’s 1,6-liter ‘Gamma’ GDI (gasoline direct injection), a 1.591 cc unit that generates 135 ps and 164 Nm of torque.

Low emissions and real-world efficiency The addition of technologies developed under the company’s Blue Drive™ sub-brand optimizes efficiency and lowers emissions for the new-generation i30. These include: Integrated Stop & Go (ISG), low-rolling resistance tyres and an alternator management system.

With CO2 emissions below 100 g/ km and an engine delivery of 128 ps, the 1,6-litre diesel new-generation i30 will feature a best-in-class power to efficiency ratio.

Buyers will be offered a choice between manual and automatic six-speed transmissions, with both units providing a refined driving experience and enhanced fuel efficiency.

Interior quality and equipment from the class above Cabin refinement and specification on the new-generation i30 have been inspired by the high standards of the all-new i40. Behind the wheel, for example, drivers benefit from Hyundai’s new Flex Steer™ option. With three operating modes – Comfort, Normal and Sport – the system can be used to vary the level of steering assistance and feedback in order to suit driving conditions and make the journey more pleasurable.

A large TFT Supervision cluster is available in the same quality found on i40 – providing a wide range of essential information to the driver in high-resolution clarity. Located in the centre console, the navigation system is displayed via a 7-inch touch-screen.

The generous equipment levels on the new-generation i30 will enhance the Hyundai experience for passengers too. Dual-zone climate control will ensure a comfortable environment for all occupants during long journeys, and the addition of a panoramic sunroof provides increased natural light within the cabin. The panoramic sunroof has been designed to open fully or tilt open, offering passengers flexibility and functionality.

Customers will benefit from the new-generation i30’s roomier interior compared to the previous model.

The overall length (4300 mm) and width (1780 mm) have been increased, while the height has been reduced (1470 mm), generating sportier exterior proportions without compromising functionality. Cargo capacity in the new-generation i30 is 378 liters with the rear seats upright – an increase of 10% compared to the original model.

Five-star safety features The new-generation i30 features the latest active and passive safety technologies to ensure maximum

protection for its occupants.

Active safety features include ESP (Electronic Stability Program), ABS (anti-lock braking system), VSM (Vehicle Stability Management) and Emergency Stop Signal. In terms of passive safety, the new-generation i30 will be fitted with six airbags as standard – front, side and curtain - while a driver’s knee airbag is optional.

The safety features available on the new-generation i30 reinforce Hyundai’s excellent record on safety, and the company anticipates the new car will follow the outgoing model in attaining the maximum five-star score in Euro NCAP’s impact assessment programme.

Driving fleet growth Since going on sale in 2007, the original i30 has played an important role in expanding Hyundai’s sales and reputation in Europe’s fleet sector.

Hyundai expects the new-generation i30 to be even more popular with fleet managers and company car drivers than its predecessor.

Targeting sales of over 120.000 units in Europe during a full year for the new-generation i30, Hyundai forecasts approximately 50% of sales to come from the fleet sector.

Five Year Triple Care will be a valuable point of differentiation for the new-generation i30 in a highly competitive class. The five-year warranty has no mileage limit, roadside assistance is included for five years, and vehicle health checks are performed annually, providing peace of mind for fleet buyers and operators.

Compared to the original i30, total cost of ownership for the newgeneration model will be reduced, helped by improved fuel efficiency, lower CO2 emissions and a lower insurance classification.

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Technical specifications New-generation Hyundai i30 Diesel engines 1,4-litre 90 ps

Type / capacity

Power / torque

Bore x Stroke (mm)

Compression ratio

U-II, WGT, four-cylinder, DOHC 16-valve / 1396 cc 90 ps (66.0 kW) @ 4000 rpm / 220 Nm @1500~2750 rpm 75 x 79 17.0

1,6-litre 110 ps

Type / capacity

Power / torque

Bore x Stroke (mm)

Compression ratio

U-II, VGT, four-cylinder, DOHC 16-valve / 1582 cc 110 ps (81.0 kW) @ 4000 rpm / 260 Nm @ 1900~2750 rpm 77.2 x 84.5 17.3

New 1,6-litre 128 ps

Type / capacity

Power / torque

Bore x Stroke (mm)

Compression ratio

U-II, VGT, four-cylinder, DOHC 16-valve / 1582 cc 128 ps (94.0 kW) @ 4000 rpm / 260 Nm @ 1900~2750 rpm 77.2 x 84.5 17.3

Gasoline engines 1,4-litre 100 ps

Type / capacity

Power / torque

Bore x Stroke (mm)

Compression ratio 1,6-litre 120 ps

Type / capacity

Power / torque

Bore x Stroke (mm)

Compression ratio

Gamma 1.6 MPI, four-cylinder, DOHC 16-valve / 1591 cc 120 ps (88 kW) @ 6300 rpm / 156Nm @ 4850 rpm 77 x 85.44 10.5

1,6-litre 135 ps

Type / capacity

Power / torque

Bore x Stroke (mm)

Compression ratio

Gamma GDI, four-cylinder, DOHC 16-valve / 1591 cc 135 ps (99 kW) @ 6300 rpm / 164 Nm @ 4850 rpm 77x85.44 11

Transmissions

Manual

Automatic

Diesel Petrol 1,4 / 90 1,6 / 110-128 1,4 / 100 6-speed 6-speed 6-speed ---- 6-speed ----

Suspension and damping

Front

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Gamma 1.4, four-cylinder, DOHC 16-valve / 1396 cc 100 ps (73.2 kW) @ 5500 rpm / 137 Nm @ 4200 rpm 77 x 74.99 10.5

1,6 / 120-135 6-speed 6-speed

Fully independent subframe-mounted MacPherson struts, with coil springs and gas-filled shock absorbers. Anti-roll stabiliser bar.

Rear

Fully independent subframe-mounted multi-links, coil springs and gas-filled shock absorbers.

Steering

Type

Steering wheel turn

Motor-driven power steering, with Flex Steer™ 2,85 Turning circle 10,6 metres

Brakes

Front

Rear

15 / 16 inch ventilated discs 14 inch solid discs

Wheels and tyres

Standard

15 inch steel / 15 inch alloy 16 inch alloy 17 inch alloy

Dimensions (mm) Exterior

Overall length

Overall width

Overall height

Wheelbase

Front overhang

Rear overhang

4300 1780 (excluding door mirrors) 1470 2650 880 770

195 / 65 R15 tyres 205 / 55 R16 tyres 225 / 45 R17 tyres

Interior Front Rear

Leg room 1067 880

Head room 1018 963

Shoulder room 1420 1395 Capacities (litres)

Fuel tank

Luggage

About Hyundai Motor Company Established in 1967, Hyundai Motor Co. has grown into the Hyundai Motor Group which has ranked as the world’s fifth-largest automaker since 2007 and includes more than two dozen auto-related subsidiaries and affiliates. Hyundai Motor, which has six manufacturing bases outside of South Korea, sold approximately 3.6 million vehicles globally in 2010. Hyundai vehicles are sold in 186 countries through some 5,300 dealerships and showrooms.

Further information about Hyundai Motor and its products is available at www.hyundai.com.

53 litre 378 with rear seats upright

About Hyundai Motor Europe In 2010, Hyundai achieved record sales in Europe of 362.000 units, taking a best-ever 2,6% market share.

In May 2011, Hyundai achieved a landmark, passing 5.000.000 sales in Europe since imports began in 1977. The company designs, engineers and manufactures cars in Europe, specifically for European customers. This includes the i30, which performed as Hyundai’s top-selling model in 2010, with 120.000 units sold. Hyundai sells cars in 28 European countries across 2.500 outlets.

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Hyundai Motor Donates 10 Mobile Clinics to African Nations - Starting with Ethiopia, Hyundai will offer 10 mobile clinics to five African nations to provide free medical care to the underprivileged - Mobile internal medicine clinic and mobile digital X-ray clinic to provide in-depth medical examination and treatment - Donation is part of Hyundai’s worldwide CSR initiatives

(Seoul, Korea) Hyundai Motor Company will donate a total of 10 mobile clinics to African nations this year as part of the company’ s “Moving the World Together” Corporate Social Responsibility (CSR) initiative, which aims to contribute to society and be a better corporate citizen. The mobile clinics will be used to provide basic medical services to residents of impoverished and remote communities in Africa.

The mobile clinics, composed of a mobile internal medicine clinic and a mobile digital X-ray clinic, are specifically tuned to run on tough road conditions in many African nations.

Starting with Ethiopia, a total of 10 mobile clinics will be donated this year to five African nations (Ethiopia, Democratic Republic of the Congo, Nigeria, Ghana and Rwanda). Each

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country will receive two mobile clinics -- the internal medicine clinic and digital X-ray clinic.

The clinics will be operated in close partnership with the Korea Foundation for International Healthcare, local governments, local clinics and NGOs. The Korea Foundation for International Healthcare will provide consultation and training on the operation of the mobile clinics to local personnel.

To begin the initiative, Hyundai handed over two customized mobile medical clinics to the Ethiopian government at the Ethiopian Federal Ministry of Health, in Addis Ababa, the nation’s capital. The handover ceremony was attended

by Korea’s Minister of Foreign Affairs & Trade, Mr. Kim Sung-Hwan; Korean Ambassador to the Federal Democratic Republic of Ethiopia,

Mr. Chung Soonsuk; Minister of Ethiopian Federal Ministry of Health, Dr. Tedros Adhanom; President of Hyundai Motor Company, Mr. Chung Jin-Haeng; and Chairman of Hyundai Marathon Motor Engineering, Mr. Haile Gebreselassie, as well as media members and other guests.

To overcome challenging roads in remote regions of many African nations, the mobile clinics have been developed on Hyundai’s four-wheeldrive truck (HD120 chassis, GVW 12,520kg) to boost mobility with an engine displacement of 6,600 cubic centimeters. The truck has air suspension to protect delicate medical equipment and operates fully independently with its own power.

The mobile clinics are selfsufficient hospitals. The mobile

digital X-ray clinic is equipped with a digital X-ray machine and remote diagnostic systems. The mobile internal medicine clinic features the latest medical devices, such as digital ultrasonic and portable ECG (electrocardiogram), can conduct basic medical tests, such as malaria screening; and provide medical supplies.

Starting with Ethiopia, Hyundai Motor Company will send a total of 500 Happy Move volunteers from July to August to less-developed areas in Thailand, Brazil, India and China. The volunteers will be engaged in various volunteer programs such as environment restoration and provision of medical service.

In addition to the donation of vehicles, a total of 60 university students from the Happy Move Global Youth Volunteers program are engaging in volunteer activities July 5 - 16 in Addis Ababa, Ethiopia.

The services range from providing free health care, in collaboration with Open Doctors Society of Korea, to installing communal toilets to promoting a more hygienic environment in partnership with Habitat for Humanity International.

REFERENCE The Happy Move Global Youth Volunteers program is one of Hyundai Motor Company’s corporate social responsibility programs. It seeks volunteers from Korean universities to travel around the world to work in areas related to the environment, local welfare, medicine and culture.

Since its foundation in July 2008, Happy Move Global Youth Volunteers has sent 500 university student volunteers every summer

and winter to several countries, including India, Brazil, China, Slovakia, Turkey, Egypt and the Philippines.

From July to August of this year, volunteer students will spend about two weeks in their assigned country and work jointly with various NGOs, including Open Doctors Society, Habitat for Humanity International, Food for the Hungry International, International Workcamp Organization, and Ecopeace Asia to alleviate poverty, improve the health of residents, protect the environment, and strengthen local economies.

Among the projects, volunteers will build a children library and renovate a kindergarten in Thailand, work to prevent desertification of Inner Mongolia through the Hyundai Green Zone Project, build houses and provide free medical services in India, and carry out cultural exchange programs in Brazil.

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Hyundai Motor Named One of World’s Top Global Green Brands of 2011 - No. 4 among automakers, beating BMW, Ford and Mercedes

Interbrand, the global brand consultancy, ranked Hyundai as one of the world’s greenest brands, citing the automaker’s Blue Drive eco-friendly strategy and its industry leadership in zero-emissions hydrogen fuel-cell vehicle development.

Interbrand ranked Hyundai 11th among the agency’s 50 Best Global Green Brands, a new global report by the agency. Hyundai placed fourth among the seven automotive brands that made the survey.

“The company is so confident in its fuel efficiency that starting this year it is reporting monthly fleet fuel efficiency figures in the U.S.,” Interbrand wrote in the survey.

“Hyundai has recently seen strong improvements in energy, GHG emissions, water, waste, and toxic emissions.”

The survey, which questioned more than 10,000 respondents in 10 countries, examined each company’s environmental record and how the company is perceived by consumers.

Companies were judged based on their performance, their environmental impact, their sustainable growth strategy and their corporate social responsibility programs.

test fleets of its hydrogen fuel-cell electric vehicles and pure-electric vehicles, called BlueOn.

Hyundai Motor Signed MOU with Intel, C&S Technology To Develop In-Vehicle Infotainment Solutions - Hyundai and Intel to develop In-vehicle Infotainment (IVI) systems based on the Intel® Atom™ processor

Hyundai’s Blue Drive sub-brand, launched in 2008, encompasses all of the company’s eco-friendly technologies and products that contribute to higher fuel efficiency and lower emissions, including gasoline, diesel, electric, hybrid and hydrogen fuel-cell engines.

Hyundai rolled out the Avante LPi hybrid in 2009 and the Sonata hybrid in 2011.

Hyundai plans to bring plug-in hybrid vehicles to market soon, while the company is currently operating

Hyundai Motor Company signed a Memorandum of Understanding (MOU) with Intel Korea and C&S Technology, Ltd. to jointly develop solutions that provide both drivers and passengers with enhanced in-vehicle experiences such as location-based and social network services.

The signing ceremony was held at the JW Marriott Hotel in Seoul, attended by Mr. Woong-Chul Yang, Vice Chairman at Hyundai Motor, Mr. Ton Steenman, Vice President and General Manager at Intel’s Embedded and Communications Group (ECG), and Mr. Dong-Jin Kim, Chairman and CEO of Seoul-based C&S Technology.

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“The demand for smart cars is on the rise in Korea—a powerful IT country,” said Hyundai Vice Chairman Mr. Yang. “Hyundai will develop in-vehicle infotainment systems

that incorporate changes in digital lifestyles and maximize customer convenience in cooperation with Intel and C&S Technology.”

As part of the agreement, the three companies will determine product, technical and experiential requirements for next generation IVI platforms to be built in Hyundai Motor vehicles. They will jointly develop solutions based on the Intel® Atom™ processor and the C&S Automotive IO Hub that enable new, innovative services and content to be offered to both drivers and passengers in next-generation IVI systems.

“Intel is working with automakers and their suppliers around the world to develop intelligent and connected in-vehicle infotainment systems that provide safer, more interactive and personal experiences to drivers and passengers,” said Hee-Sung

Lee, Country Manager of Intel Korea. “Through our ongoing work with Hyundai Motor Company and the new collaboration with C&S Technology, we can develop solutions that deliver this type of experience.”

About Intel Santa Clara-based Intel (NASDAQ: INTC) is a world leader in computing innovation. The company designs and builds the essential technologies that serve as the foundation for the world’s computing devices.

Additional information about Intel is available at www.intel.com/pressroom and blogs.intel.com.

About C&S Technology, Ltd. C&S Technology specializes in automotive non-memory semiconductors. Please go to www.cnstec. com for more information.

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Yoshihiko Noda’s Vision for Japan

By Hanna Trudo, Diplomatic Courier Correspondent

national debt that swells two times larger than the size of the economy, or the dispersed Northeastern region that suffered the worst damages since World War II. But it’s up to the Democratic Party of Japan (DPJ) prime minister to choose adversity-triumph over low barometer expectations.

Newly sworn in Prime Minister Yoshihiko Noda, the former finance minister of Japan, might take solace in the old Japanese proverb, Money grows on the tree of persistence.

But persistence, as the proverb fails to point out, does not trump inadequacy in the face of natural, political and economic disasters.

A new maxim, Fresh leadership grows from the broken branches of catastrophe, might be more applicable to Japan today.

The past five leaders to cyclone through the country since 2006 have added to the already quaked national morale by making promises they could not keep, and scalding leader after leader with burdens of past mistakes.

Yoshihiko Noda, the 54-year-old Prime Minister number six, stepped in with a cup-half-full -- though chipped, and filled with luke warm expectations -approach to mitigate the aftermath of the 9.0 magnitude earthquake, tsunami and nuclear meltdown in March.

But Japan, an essential arm of the APEC community, might need something stronger – an unbreakable prime minister who exudes mirror-speech confidence, not selfdeprecatory quips of mediocrity.

The fiscally conservative leader must work against the grain of his in-and-out predecessors, and leverage his economic capabilities and past successes, to secure the longevity needed to promote political, economic and environmental reconstructive efforts.

The odds are stacked against him, but someone who under promises – a change from the tactics of past politicians – might be what Japan needs to overcome the inherited economic and nuclear challenges to come.

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The leadership opportunities are there, despite a

Prime Minister Noda’s predecessor, Naoto Kan, the DPJ leader who was in office for just 15 months, eventually ran out of get-out-of-March 11-disaster-free cards. Some media reported he made unprecedented, intensive relief efforts – he was broadcast on television wearing the same work clothes as Japanese engineers – but others reported widespread dissatisfaction, and said his low approval ratings were directly linked to his even lower responsiveness to disaster’s calamitous call.

In May, just a few months before former Prime Minster Kan stepped down, Japan donated $640,000 to help stimulate the Asian-Pacific economy – a contribution to the APEC Support Fund (ASF), started in 2004, that demonstrated lasting commitment to the region, despite devastating national circumstances.

During a meeting at the UN General Assembly on Sept. 21 in New York, Prime Minister Noda picked up the conversation as the new leader six months after the disasters – with the economy and relief efforts in the forefront. At the General Assembly, the prime minister said the Fukushima Daiichi nuclear plant’s reactors would be shutdown within a year, according to a White House press release. The prime minister also said he will hold a conference in 2012 with the International Atomic Energy Agency (IAEA) to analyze and discuss key takeaways from the meltdown.

If the Fukushima disaster is any indication of policies and preventative measures to come, Prime Minister Noda’s tenure will inevitably include nuclear safety reform as a top agenda item.

He committed to working alongside the U.S. and other allies, and with the IAEA, to assume a leadership role in meltdown responsiveness and prevention, and on nonproliferation and national security efforts.

The former finance minister has a lot to do with little support or self-confidence. His commitment to Japan, and to the international community, will be tested by his willingness to stimulate the APEC Support Fund, among other regional initiatives, as he navigates into his first months as the post-disaster prime minister.

“A Fiscal Crisis? Oui et Non.”

By Rami Turayhi, Diplomatic Courier Correspondent

American public will go a long way towards informing robust public debate about necessary next steps: the banking crisis that led to a near-economic collapse in 2008 was primarily financial in nature, whereas the consequences of that crisis have resulted in shortto medium-term fiscal problems at the local, state, and national level. There is meanwhile an additional long-term fiscal crisis that has been quietly chugging along for many years – indeed decades – now, and this particular problem is largely linked to long-term imbalances between tax revenues and spending on entitlement programs and defense.

In case you were wondering, there is a very good reason for some politicians to paint the 2008 crisis as a fiscal rather than financial one. By confusing these two terms and ideas together, self-described “fiscal hawks” in Washington can bolster their claims of out-of-control government spending by the Obama administration, conveniently shifting any blame away from themselves.

The argument goes something like this: the reason we are in this mess today is because of excessive government spending by the current administration, and the only way to turn the economy around is to therefore cut this same irresponsible spending.

A strange thing is happening in Washington. Many politicians, pundits, and commentators are starting to confuse two interrelated but substantively different ideas: fiscal crises and financial crises. While not everyone is guilty of this inadvertent or perhaps intentional mix-up, we are beginning to witness a recurrent pattern of attempts to paint the 2008 financial crisis as one that was primarily fiscal in nature. Confused yet? I don’t blame you.

Fiscal crises most commonly refer to ongoing institutional problems with managing debt loads, with the institution in this instance being the federal government.

Financial crises, on the other hand, typically connote systemic problems within the financial sector of an economy – stemming from some combination of bad corporate choices and government policies – that ultimately lead to an economic retraction of some sort.

Getting these two things straight in the minds of the

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This argument makes for a convenient cable television sound bite, but it unfortunately smacks more of theater than reality. The 2008 recession was in large part caused by an enormous financial collapse, and this financial recession was itself primarily the end result of years of haphazard financial deregulation and loose monetary policy coupled with myriad unsound financial business practices. Ironically, many of the same politicians who are today calling for federal fiscal discipline tend be the same ones who in years past promoted this very financial deregulation and increased federal spending on both mortgages and entitlements.

The financial deregulation in particular consisted of passing legislation that allowed or promoted loose credit standards at banks, increasingly irresponsible leverage ratios, and little or no regulation of complex derivatives and other esoteric financial products. In other words, it was the banking sector, and not the federal government, that was the primary driver of the recession, though the government played its part in enabling the banks’ worst practices over the past couple of decades. Indeed, had government been more involved in responsibly and smartly regulating these banks rather than supplying them with monetary cocaine, we would likely not have witnessed such a severe recession in 2008.

Global Finance That said, in response to this financial recession, both the Bush and Obama administrations embarked upon a series of unprecedented temporary fiscal stimulus measures in order to help boost consumer demand and keep our financial institutions afloat (think: TARP, tax cuts, Recovery Act spending, and the proposed Obama jobs bill). Most economists, though not all, tended to believe that this overwhelming government response was necessary to stave off an even more severe economic contraction, as many of them have argued that a lack of government stimulus in the face of similar recession led to the prolonging of both the Great Depression and the Japanese “lost decade.” Whether or not this economic theory withstands the test of time and continued trial and error in economic policymaking, the consequences of the massive government intervention in 2009 up through today include a series of short-term fiscal deficits that are alarming in their size and seeming longevity. Most projections continue to show sustained large budget deficits throughout this decade, in large part the result of stimulus spending and generous tax cuts (assuming a continuation of the Bush tax cuts) that are meant to help ease the United States out of the recent recession and into a more “normal” economic cycle.

It has therefore been easy for some politicians to latch on to this ballooning federal government spending and construe it as the primary reason for today’s – and tomorrow’s – fiscal messes, but the reality is much more complicated than that. In addition to the expected deficits that are a consequence of all of this post-recession government spending and the continued reduction of revenues from taxes, there are also enormous anticipated long-term deficits that stem from unfunded future liabilities in both healthcare and social security – the so-called “entitlements” – spending. Of course, this long-term entitlements problem is by no means a new thing; many honest politicians and policymakers alike have been shouting from the rooftops – oftentimes into a howling and indifferent public wind – about our long-term structural problems for decades. With increasingly more (unhealthy) Baby Boomers retiring en masse today expecting costlier technological fixes to keep the them alive in old age, entitlement funding shortfalls are only likely to get worse in coming years and decades: hence, the complementary long-term fiscal dilemma that we face.

Truly responsible politicians would not shortchange the American public by confounding these distinct economic problems. They would spell out appropriate solutions for each fiscal dilemma, and debate whether

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one methodology or another – i.e. tax cuts or increases, reduced government spending, or more likely some combination of these two – might best solve each of the fiscal problems. The financial crisis laid bare some of the shortfalls of rampant, lobbyist-driven deregulation: without adequate and well-designed regulatory safeguards, the market might become too efficient for its own good. Indeed, one could argue that, in the absence of government intervention, a complete financial collapse in 2008 – something much worse than what actually happened – would have been the natural free-market corrective to excessive risk-taking and greed on Wall Street. While theoretically correct, can we as a nation accept a system-wide economic collapse every decade or so in order to allow the market to work out behavioral economic shortfalls and kinks for itself? If this seems like a rhetorical question laced with sarcasm….well, that’s because it is, unless Americans are prepared to accept high double-digit unemployment numbers every decade or so.

If nothing else, I’d like to leave you with my simple, 3-sentence pocket formula for fiscal versus financial crises in the 21st century: (1) a financial collapse occurred in 2008, fueled in large part by financial deregulation, cheap borrowed money from abroad, and shoddy lending practices that took place over many years. (2) As a result of this financial collapse, the government spent a lot of money via both short-term stimulus and tax cuts and contributed to a short- to medium-term fiscal problem: persistent decade-long annual deficits. (3) Meanwhile, for years and years on a parallel track alongside all of this, we as a country have indulged ourselves with lavish entitlement spending on things that we have not really paid for and, assuming no realistic legislative fixes anytime soon, this funding shortfall will likely come back to bite us in the coming years and decades in the form a long-term fiscal crisis.

Got it? Good. Now, the next time a politician, pundit, or economic know-it-all tries to sound important by blaming everything on the wrong things, at least you’ll know who not to vote for, watch, or read. It’s about time for some honest accounting of the nation’s economic woes, lest we swallow the wrong tonic for our very real fiscal and financial ills.

“Rami Turayhi is a recent graduate of Columbia Law School. This article was adapted from an earlier Diplomatic Courier op-ed published by the author in July 2011.”

Ties that Bind

By Kenneth Weisbrode, Diplomatic Courier Contributor

of the institutions and public support that undergird it remain uncertain.

For over a century liberal orthodoxy has held that free trade promotes both peace and prosperity. No matter that there will always be “winners” and “losers” in any economic relationship, the freer the trade, the more prevalent “win-win” relationships is said to be. The last fifty years seem to have borne this out. A free trade regime never stopped a war in the way that the writers of an earlier generation like Norman Angell imagined.

Nevertheless, more people in the world emerged from poverty since the end of World War II than before, and this had much to do not only with freer trade but also with high levels of investment in certain parts of the world, particularly Asia.

Back in Europe meanwhile the economic dimensions of peace took on a somewhat different hue. It was called regional integration and involved the merger or combination of various sectors across national borders.

It began with the fusion of the French and German industries into the European Coal and Steel Community, which led to the Common Market and eventually to the European Union.

These stories are well known but still not well understood outside their respective regions. Could a European-style common market work elsewhere? There have been some attempts to plant the seeds of one in the Americas with NAFTA and the FTAA and similar arrangements, but a Western Hemisphere common market seems remote; the same is true for the most part in Africa and Asia. Nor would they make much economic or political sense, at least not in the same way that binding the Western European nations together did after two terrible wars and in the face of the Soviet threat.

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Yet even there the viability of the European project is being questioned more and more, and, in spite of globalization, protectionist pressures are mounting across the world. Free trade ideology remains strong, but the future

To some extent the eclipse of free trade is symptomatic of a broader retrenchment. Nowhere is it more apparent than in the Middle East and North Africa since last year. On the one hand there are these dramatic upheavals led by masses of citizens demanding justice, responsive government, and freer access to economic and social opportunities that exist elsewhere in the world. Many outsiders have interpreted their motivation as a manifestation of globalization, just as the interpreters of the upheavals of 1989 depicted it as the result of a desperate desire to join, or at least to live on equitable terms with, the West. But this does not appear to be happening in the Middle East and North Africa, at least any time soon. These places—even the most closed, authoritarian ones—are not immune to global forces, yet they nearly all are badly integrated with more prosperous, peaceful neighbors, namely Europe. This is as much Europe’s fault as their own.

The Mediterranean, which for centuries connected Europe and its neighborhood, has become a wall. Europe itself is shrinking – in ideology, tolerance and ambition – as its relationship to globalization has become more defensive. Its institutions are also strained to the point that their very survival is now being called into question, however remote that still seems. How then can Europe serve as a beacon for the reformers of the Middle East and North Africa as it did for others at the end of the twentieth century? The reformers say they have no need for a European (or any other) beacon, and who can blame them? The national flags one saw at so many of these demonstrations spoke for themselves.

However no reform movement can succeed in a vacuum. The spirit of regional integration must be preserved, augmented and extended in both a national and global context alongside similar steps to promote a stable security environment. This is what the late Manfred Woerner meant, for example, when he said that NATO had to go out of area or out of business: he didn’t necessarily mean that it had to swallow a bevy of new members or send expeditionary forces halfway across the world (although it ended up doing both); but rather that it had to think and act creatively, overcome old prejudices, adapt to new conditions, and meet new demands. The same holds true for other institutions.

Their own future – and that of the people they serve – is also at stake.

Transatlantic Regulation: What Unites Us Makes Us Stronger

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protect the system from failure. This is a natural result of a crisis caused by institutions being “too big to fail” and their lack of liquidity.

By Jonathan Evans, Member of the UK Parliament

Especially, in the U.S., UK and Switzerland there is considerable concern about the failure of Systemically Important Financial Institutions (SIFIs)—hardly surprising, given the size and concentration of SIFIs in those countries relative to their GDP. These countries, among others, are pushing for improvements to national resolution regimes.

Achieving a co-ordinated transatlantic regulatory environment will be important in guaranteeing the sustainability of the banking sector. The large cross-border banks in the EU and the U.S. will bear the brunt of proposals for SIFIs. It is vital, therefore, that the costs of regulation are not ratcheted up through duplication.

In this climate, we need to dismantle existing regulatory barriers, stop new ones emerging and, above all, prevent a flight into protectionism. By making the transatlantic regulatory environment more streamlined and integrated, the costs for consumers and producers on both sides of the Atlantic will be reduced and in turn the competitive potential of EU and U.S. companies will be improved.

The financial crisis of 2008 put into strict relief the fragility of global financial systems. Stories unfolded about impossibly complex products and, after the horse had bolted, people began to reflect on the wisdom of making credit so freely available and, in some cases, with little analysis of how the customers would cope if their circumstances changed.

An unsurprising result of this has been a long hard look at the supervisory and regulatory systems, especially in those countries worst affected by the crisis, and an impetus to reform to avoid a repeat of the mistakes of the late 2000s.

In Dodd-Frank the U.S. is aiming to bring in “one of the largest rule-making exercises in the history of the country,” said Jeremy Anderson, Global Chairman of KPMG Financial Services Practice in “Evolving Banking Regulation: A Marathon or a Sprint?”

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In Europe we are moving from “light touch” to more

intensive supervision. From January 2011, the Level 3 Committees have been merged to form the European Supervisory Agencies which have greater regulatory and legal powers than their predecessor bodies. Moreover on July 20, 2011, the European Union released the final text of its Capital Requirements Directive (CRD4) and this seeks maximum harmonisation between member states. This may create issues with the new regulatory structure being put forward in the UK. The UK is in the process of reorganising its financial regulation mechanisms under the Prudential Regulation Authority (PRA), the Financial Conduct Authority (FCA) and the Financial Policy Committee (FPC). Differently from the European model, these changes will separate prudential from market and conduct of business supervision.

Of course, Basel 3 is key to co-ordinating all action that is undertaken globally. At its heart, Basel 3 requires institutions to hold more and better capital and so

The U.S. is committed to full, on-time implementation of Basel 3. This is reflected in Dodd-Frank, which requires SIFIs to be subject to higher capital leverage and liquidity requirements and to meet enhanced requirements on disclosures, rigorous risk management, concentration of exposures and resolution plans.

The UK is equally signed-up to Basel 3 and a central part of the debate is whether big banks should be broken up. Business Secretary Cable is on record as being in favour of this course of action. The argument goes both ways: on one hand, big banks concentrate risk; on the other, they provide strength and stability to financial systems.

On a human level, the main focus has been consumers and the impact the crisis has had on them.

The concerns around consumers are two-fold: that many people do not properly understand the products they are buying; and that they are drawn into taking on levels of debt they cannot afford. Important features of the reforms since the crisis has been improving financial education and reducing incentives to mis-sell.

With its strong financial protection watchdog (the Consumer Protection Bureau), its “skin in the game” rule

and the Office of Financial Literacy, Dodd-Frank seeks to introduce these protections in the U.S. In Europe, the sale of banking, insurance and investment products will come under greater scrutiny as a result of new EU business conduct regulations. In the UK, the Retail Distribution Review is set to be introduced at the start of 2013. This will outlaw commission and demands that advice be paid for from customer fees.

Although these plans will make the environment safer for consumers, they are not without their risks.

Advisors may leave the market. Out of an unwillingness to pay fees, consumers may get less, not more advice.

The range of products on offer may become more limited and “vanilla.” Limited choice may, of course, be preferred by some consumers but it carries with it the risk of restricting the diversity and innovation that has in the past underpinned economic expansion.

The work being done to reduce the risks to the consumer and to the system is an important step forward in ensuring future financial stability. However, it is important that the balance between protecting investors and allowing the financial services industry to be commercially viable is finely struck. While reducing systemic risk we also have to recognise the changes may bring a systemic reduction in profits and this may in turn result in a fundamental reshaping of the sector.

The reforms still need to allow financial institutions to meet the diverse trading, investment and capital-raising needs of an essentially international and wholesale client base. Regulatory barriers have long been recognised as the most significant impediment to trade and investment between the EU and the USA. In reforming the financial sector it is, therefore, imperative that we take this opportunity establish good regulatory practice and not merely look for local solutions to global problems.

Jonathan Evans is the Member of the UK Parliament representing Cardiff North since May 2010.

He is Chairman of the All Party Parliamentary Group on Insurance and Financial Services and the All Party Parliamentary Group on Building Societies and Mutuals.

As a Member of the European Parliament (1999-2009) he was the Conservative Spokesman on Economic and Monetary Affairs and, between 2007 and 2009, he was a Member of the Advisory Board to the Transatlantic Economic Council. Between 1992 and 1997, Jonathan was the Member of Parliament for Brecon and Radnor during which time he served as the Corporate Affairs Minister at the Department of Trade and Industry.

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G20 Agricultural Meeting: A Transformative Moment?

By Marco Picardi, Centre for African Development and Security

This week’s first ever meeting of G20 agricultural ministers in Paris marks the birth of a new era of global collaboration on food policy. As food prices reached record highs earlier this year, and rapid urbanisation continues to change the complexion of global resource needs, this is an opportune moment for political action to determine a plan to tackle food insecurity.

The severity of rising prices in the developing world became clear in 2007-08 when food related riots broke out in three-dozen countries, leading to the violent ousting of heads of state in Madagascar and Haiti.

This has been underlined by the ongoing Middle East turmoil, where food prices played a key role in sparking revolutionary sentiment. It is well documented that a hike in the cost of bread – coupled with widening socio-economic inequality - was a key driver in Tunisia’s Jasmine revolution that then spurred regional uprisings based on similar grievances. These episodes confirm the emergence of food as a security issue.

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To mitigate future price volatility, agricultural envoys are discussing the collection of data on the stockpiles of major staples including corn, rice and wheat.

The information provided by this Agriculture Market Information System, would reduce the uncertainty faced by farmers and markets. This recommendation builds on an interagency report commissioned by the G20‘to protect the most vulnerable’, a somewhat incongruous demand for an organisation that does not include the voices of the poorest countries in its negotiations. And, it is precisely this incongruity of a gathering where big powers discuss their own actions, which adversely impact poor economies the most that will truly test the developmental will power of the G20 membership.

Foodstuffs have been squeezed due to pressures on both supply and demand. Yields already stretched due to climatic change are being further reduced by the consequences of land overexploitation and unsustainable irrigation practices that are depleting water tables, and thus causing soil erosion and desertification. In recent times, high oil prices have also affected production costs.

These supply side deficiencies have been matched by higher demand for crops from industry in industrial countries (for biofuels, subsidised by many G20

Food Security

members, and grain intensive livestock feed) and shifting global demographics (a rising population and the growing calorific expectations of growing affluence in emerging economies).

The imbalances between supply and demand have been compounded by the financial practices of both governments through quantitative easing and traders through artificial the manipulation of markets i.e. betting on foodstuffs in the same way as other soft commodities.

Emblematic of this was the 2010 purchase of 241,000 tons of West African cocoa by a London-based investment fund, which immediately drove global prices up to a thirty-year high.

This has spawned what Lester Brown, the president of the Earth Policy Institute, has termed a ‘new geopolitics of food’ whereby the trend of land acquisition to secure ‘parochial interests at the expense of the common good’ is increasing the spectre for conflict.

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In bypassing market insecurities and leasing tracts of productive land, rich net-importers of food are aiming to feed their own populations into the future.

The increasing incidence of foreign investments of this kind in countries such as Ethiopia, Mali, Kenya, DRC, Sudan, and Zimbabwe that suffer their own nourishment problems have sparked claims of a neo-colonial land grab. Although many of these deals can equally be understood as the outcome of dubious governance, it is questionable whether G20 nations such as South Korea and Saudi Arabia, protagonists in the pursuit of foreign

agricultural land, can be truly committed to curbing these practices.

With the inclusion of India and China, countries with development issues of their own, the G20 is an improvement on the G8, but this week’s conference hardly represents democratic engagement in the governance of global food. China and India are amongst the G20 members most vehemently against the proposed information database, as aside from the practical considerations they are concerned about losing competitive advantage control over prices.

The region with the highest prevalence of hunger, sub-Saharan Africa, only has one representative at the meeting (South Africa). It is here, where income to food purchase ratios are highest that price volatility hurts most as higher costs reduce the quantity and quality of food consumed thereby raising the threat of chronic malnutrition. In order to implement a truly transformative security architecture for food, countries of the G20 will have to overcome self-interest and consider the millions of poor people in countries not at the negotiation table.

Marco Picardi is a founding director of the Centre for African Development and Security (www. cads-cdsa.org) in London. Currently he is leading on a research project on urbanisation in Bukavu, Democratic Republic of Congo with the British Institute in East Africa. He holds an MA in International Studies and Diplomacy from the School of Oriental and African Studies, University of London.

The Challenge for Food Security in Developing Countries

By Kyle Rehn, Hinckley Scholar, Hinckley Institute of Politics

Photo Credit COLEACP PIP - Aurélien Chauvaud

Photo Credit COLEACP PIP - Aurélien Chauvaud

Food is a basic but essential need for every human.

Aside from water, nothing demands more attention to our cultural, social and psychological well-being than food.

Food is the good that keeps us alive. It is by the United Nations definition, a human right to live life.

Price volatility occurs when a consumer and producer are both suspect to prices that rise and fall by large amounts over a small period of time.

Despite this definition, it is unfortunate that 1 billion people are living with chronic hunger. Even worse, every day 20,000 people die from hunger-related causes. For future economic policy, this is troubling. Our attention is needed.

Addressing food insecurity in developing countries has never been an easy task. Confronting it over the next 40 years won’t be any easier either. With the world population expected to increase to 9 billion by 2050, this challenge becomes even that much more difficult; it is estimated that to meet the rising demand, agriculture production will need to increase by 100 percent for developing countries.

The comprehensive policies involving food security include agriculture, health trade, research, education and energy. Considering its impact in these significant categories, alleviating food insecurity will continue to be a core challenge to communities, cities, states and nations. Further, since developing countries are vulnerable to the biggest problems associated with this issue, it is crucial that they must build self-reliant and sustainable agriculture conditions so that they can improve their well-being for the future.

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To create sustainability and self-reliance, a viable economic policy option would be to encourage small-scale farming for developing countries.

Small-scale farming is effective for many reasons. For one, small-scale farming can combat price volatility.

Recently, Russia’s wheat embargo exposed the difficulty that arises when a country limits its exports and causes price volatility. For those countries that had been increasing their consumer demand for wheat, coincidently their dependency for wheat became evident as their consumers suffered due to the increased price for wheat. Without diversifying their agriculture, it forced these countries to become dependent on other countries for there nutrients. Consequently, with a dependency on imports, they then fell victim to price volatility that occurred in the wheat market.

Developing countries that rely on only a few agriculture goods for their imports can be subject to price volatility as well. The reason that developing countries are at risk to price volatility is because a primary amount of their employment and GDP is dependent on agriculture.

If prices were to increase or decrease for a particular agriculture commodity, then it would drastically affect the countries that depend on agriculture imports for their large scales of production.

Another area of price fluctuations causing a concern for the developing countries is the universal increased cost of oil. With oil prices increasing right now, it is also increasing the costs for transportation. Consequently, importing and exporting cargo ships are also more expensive. Plus, with this natural resource depleting, oil prices are going to continue to increase, which means that over the long run it is going to be that much more difficult for developing countries to rely on imports and exports for agriculture production.

Food Security Since oil prices are going to continue to rise, policies that encourage small-scale farming would allow agriculture producers in the developing countries to not have to rely on imports and face the financial burden of oil price increases. By encouraging small-scale farming, it would also allow developing countries to grow and diversify in the food areas that are most suspect to outside price volatility. Essentially small-scale farming is most effective in this category because it creates opportunities for farmers to at least produce within their means so that they can create more stability for themselves and their communities. Obviously if they can produce beyond their means then they should, but to ensure that communities, cities, states and nations avoid food insecurity then it is important that they reduce their chances of falling victim to outside price fluctuations in the import and export market.

Photo Credit COLEACP PIP - Christopher Saunders

With regards to small-scale farming, policies that encourage responsible use of the land are also things from which we all can benefit. That is why despite the opportunities to improve agriculture productivity and development, it is also important for environmental policies to coincide with the policies to alleviate food insecurities. Increasing land degradation and pollution at the expense of improving the efficiency and productivity of agriculture output is not the direction that is in the best interests of our entire well-being for the future.

Photo Credit COLEACP PIP - Christopher Saunders

Photo Credit COLEACP PIP - Aurélien Chauvaud

Further, to encourage small scale farming, it is also important that policies are implemented so that farmers can get the proper fertilizer, seeds, irrigation and farming equipment that they need. Without these basic essentials to building a good crop, those that are resource poor are faced with barriers that could alleviate them from poverty. Of the 1,400 million small-scale farmers that are in the developing countries, most of them farm in areas in which the soil is fragile and vulnerable to erosion.

Further, even if small-scale farmers are lucky enough to have fertile soil, often their crop remains threatened because of lack of access to the necessary pesticides and fertilizer that would improve their crop yield.

Thus, small scale farming policies must be implemented with the intention of sustaining the people and the environment for the long term.

With the necessary farming essentials, small-scale farmers can then increase their efficiency and production of the crops. When small-scale farmers are able to get more out of their land and labor, their families can eat better, earn more money, and lead healthier lives.

By having a healthier life, they then can become more active and more productive themselves.

Eliminating food insecurity will not happen overnight.

It is and will remain a difficult challenge. Despite this, small-scale farming is an effective solution that will combat price volatility and remove the dependency of outside market fluctuations. In bigger picture terms, this then creates sustainability and self-reliance in developing countries. Plus, most importantly for those dealing with chronic hunger, small-scale farming gives more opportunities to for people to “live life.”

Kyle Rehn recently graduated from the University of Utah with a Bachelor’s of Science degree in Economics.

In the spring he will be teaching economics at a high school in Accra, Ghana. While in Accra, he will also be preventing malaria with the department for Medical Care Development.

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Malthus is Still With Us, But So is the Solution: Using Science to Solve the Food Crisis

By Robert F. Bennett, Former U.S. Senator and Resident Scholar at the University of Utah’s Hinckley Institute of Politics

Food Security

There is some truth to what they are saying. I agree that world agricultural production must rise significantly, and soon, if everyone is going to be fed in the coming decades. However, human beings have not lost their ability to reason. Those of us who are non-Malthusians say, “Give us the facts and we can find a solution.”

and their families as a result of lowered exposure to harsh chemicals now in use.

Most significantly, for modern Malthusians, yield increases through use of GMOs and other modern

Food production requires land. Its availability and productivity are threatened in three ways: Changing land use patterns Land that was fertile agricultural soil now serves as base material for houses, factories, roads and other industrial uses, shrinking the amount of arable land available for growing food.

Climate change More droughts and changing patterns of rainfall are making previously fertile areas unproductive even if they are nowhere near a city.

Pests and diseases After plants have grown to full maturity, they are often killed by pests or diseases. In terms of yield, it is as if the land and water invested in their production didn’t exist.

How do we change these trends?

Thomas Malthus was an Englishman who became famous because of his prediction that the world population was growing so fast that it would soon outstrip the capacity of the earth to provide enough food to sustain it. Many of England’s highest officials believed him and laws were enacted to discourage couples from having children, particularly among the poor.

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In 1798, he wrote in the “Essay on the Principle of Population”: “The power of population is so superior to the power of the earth to produce subsistence for man that premature death must in some shape or other visit the human race. The vices of mankind are active and able ministers of depopulation. They are the precursors in the great army of destruction, and often finish the dreadful work themselves. But should they fail in this war of extermination, sickly seasons, epidemics, pestilence and plague advance in terrific array, and sweep off their thousands and tens of thousands. Should success be still incomplete, gigantic inevitable famine stalks in the rear and with one mighty blow levels the population with the food of the world.”

Two centuries later, none of that has come true. The world population is more than six times than it was when Malthus lived, and statistically, the world has more food per person now than it did then.

Malthus went wrong because he did not figure human ingenuity into his equation. Unlike animals, who will blindly ruin their own food supply by overgrazing it unless they are forced to move on by predators, humans can, and have, devised ways to make arable land ever more productive. We crossbred new crops that give higher yields, formulated fertilizers that restore barren soil and devised new ways to get water to places that never receive rain. Crops yields have multiplied much faster than population did.

Nonetheless, today’s trends give rise to new Malthusian prophecies: “We are running out of land on which to produce crops through drought and citification.

We are running out of water through waste and industrial and municipal use. We are still having too many babies.

Starvation and food riots are just around the corner.”

No industrial country is going to reverse urbanization; the poorer countries see themselves getting richer by embracing it. As for climate change, even if it is 100 percent the result of human activity, it will not be turned around in less than decades, if not centuries. Pest and disease control is by far the area with the greatest promise of improvement, and the science to exploit this opportunity is well along.

Just as the Human Genome Project has opened the door to miraculous health cures in the not too distant future, research on plant genomics (used to create genetically modified organisms, or GMOs) has done the same with respect to plant and disease control.

There are now insect-resistant crops, herbicide-tolerant crops, viral-resistant crops and drought-tolerant crops, all of which are perfectly safe to eat. They improve soil quality, reduce erosion and enhance biodiversity of beneficial insects. Land and water used to produce them is not wasted, as it is when pests and disease strike today. There are also health benefits to farmers

farming techniques are as high as 30 percent—more in some places.

In sum—the food challenge for our growing world population is enormous, but the science to solve it exists. Those politicians who call GMOs “Frankenfood” and ban their use turn their backs to that science to the peril of millions of their constituents in the decades ahead.

Former Senator Robert F. Bennett (UT) is the Hinckley Institute of Politics’ Resident Scholar. Mr. Bennett was elected to the U.S. Senate in 1992, where he served for 18 years, carrying his businessman-like approach with him to the Hill. He served as a senior member of the Senate Banking Committee and a member of the distinguished Joint Economic Committee, where he was at the center of national economic policy discussions. He also served as the ranking Republican on the Senate Rules Committee. Mr. Bennett is a graduate of the University of Utah.

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What’s in a Name?

Defining Sustainability and Some Consequences of Definitions

Global Development

By Ralph Brown and David Braudt, Brigham Young University

Sustainability as a concept is commonly used to describe the anticipated, if not hopeful, social, political, and economic outcomes of development paradigms.

Unfortunately, like so many other ubiquitous and uncritically examined terms used in the multi-disciplinary arena of international development, “sustainability” often takes on a host of meanings depending on the person, program, agency, or organization and their respective agendas; evidence for this is found in the writings of William Easterly, James C. Scott, and Jeffrey D. Sachs among others. At a minimum, and on a general level, “sustainability” could mean economic sustainability, political sustainability, organizational sustainability, or environmental sustainability—commonly referred to as “sustainable development.” Below are brief definitions of each of the above mentioned types of sustainability followed by a discussion of some potential effects each type may have on the approaches adopted by development project administrators.

Economic sustainability, possibly the most readily conceived form of sustainability to western minds, is the maintenance, reproduction and/or perpetuation of a given project through the use of market-based mechanisms and strategies. Political sustainability with regard to development projects has at least two forms: 1) the maintenance of political power and/or position by politicians through the use of particular projects or agendas; 2) any personal attachment to, or affinity toward a project(s) by politicians who remain in positions of sufficient power to perpetuate their project(s) of choice. The latter often occurs when a project becomes associated specifically with a single politician or political party. Organizational sustainability is the attempted avoidance of organizational mortality of a project—it is not allowed to “fail.” This can occur through: manipulation of organizational structure, perceived power in interorganizational relationships, authoritative leadership within a project space and neutral levels of centralization and internal communication. Environmental sustainability, or sustainable development as coined by the United Nations Commission on Environment and Development in 1987, is the conservation of natural, produced and human productivity from generation to generation.

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Due to individual paradigms and a lack of offered or requested information in project proposals the exact type of sustainability sought, idealized or understood can vary between project administrators, funding agencies and project recipients. Each type of sustain-

and may not receive the same levels of priority between project administrators, funding agencies and project recipients.

POLITICAL SUSTAINABILITY

The above defined bifurcated concept of political sustainability is subject to considerable subjective interpretation in so far as development projects, which are sustainable through political means, are generally sustainable due to the motivations and actions of particular political leaders. These motivations, while in the ideal democratic society should align with members of their constituency are not always substantiated by recipient groups in development circumstances.

ORGANIZATIONAL SUSTAINABILITY A lack of organizational mortality in the absence of a Platonic “just” ruler suffers from similar consequences as politically sustainable. Instead of a politician, the governing body or individual in control of a project is capable of dictating the direction of project aims and the methods employed in achieving those aims. Furthermore organizational longevity is often considered as a primary objective of organizations without any viable threat of organizational mortality. When the threat of organizational mortality is removed by fiat, organizations tend to lose their innovative edge.

ability described above has varying idiosyncrasies and while we list a few of the consequences relevant to each type considered, the following discussion is not meant as exhaustive or fully definitive. Furthermore, each type of sustainability may have both positive and negative attributes for different audiences.

ECONOMIC SUSTAINABILITY The concept of economic sustainability is bounded by quantitative reasoning and observation without overt consideration of subjectivity. The consideration of variables which cannot be reduced to hierarchical or value indicators is generally omitted, or given lesser importance, in project analyses or proposals which seek sustainability solely on economic grounds.

Additionally any evaluation of nonfinancial variables by project administrators, funding agencies and recipients is even more subjective than traditional market operators

ENVIRONMENTAL SUSTAINABILITY (SUSTAINABLE DEVELOPMENT) The use of sustainable development as a form of sustainability does not suggest as much about the possible longevity of a given project as much as it does about the effects of that project. Thus, while the previously considered forms of sustainability will often skew the projected aims/goals of development projects sustainable development is an aim/goal apart from any other desired achievement. This suggests that development projects which proclaim an adherence to the standards of “sustainable development” will be most affected by the degree of their adherence to these standards than by any other objectives. For example, a project which seeks to decrease rates of child morbidity while desiring to practice sustainable development will face different constraints when deciding how, and if, to build new hospitals in areas habituated by endangered flora and fauna. Furthermore, beyond the individual effects of sustainable development on the aims and goals of development projects, and due to its unique definition, development projects which pursue

sustainable development as a form of sustainability will be influenced, in one form or another, by at least one of the other methods of achieving longevity – sustainability – mentioned above.

Policy makers, practitioners, recipients, and academics all need to be aware of the multiplicative meanings associated with “sustainability” as a concept within development contexts. We have outlined a few definitional approaches to sustainability and a small number of the consequences which accompany each case. A better understanding of sustainability in all definitional aspects of the concept will allow for better public policy, private initiatives and communication between those who seek to help the underdeveloped world and those receiving the offered assistance.

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.

David B. Braudt is a Graduate Student of Sociology at Brigham Young University. His principal training in the social sciences is in Economics (2011) from Brigham Young University where he graduated with University Honors. His current research is on mechanisms of social change, with particular attention to rural communities in underdeveloped countries.

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Peak Oil and the Threat to Global Economic Expansion

By Dr. Minqi Li, Associate Professor, Department of Economics at the University of Utah, and Hinckley Scholar, Hinckley Institute of Politics

Global Development

non-OPEC, non-former Soviet Union oil production reached an all time high of 35.9 million barrels a day in 2002. By 2010, it has declined to 34.4 million barrels a day. New technologies may help to develop previously underdeveloped resources, such as tar sands oil, shale oil and deep water oil. However, these new oil resources may be associated with higher greenhouse gas emissions and other environmental costs. Moreover, it takes many years to plan and develop new oil production capacity.

Thus, the supply capacity that is expected to come on line in the next few years has been largely determined by the existing projects.

According to the Wikipedia page on “oil megaprojects,” the total additions of new crude oil production capacity from 2011 to 2015 amounts to 13 million barrels a day. The world’s existing oil fields are observed to deplete at an annual rate of 4-5 percent. Given that the world’s current crude oil production is about 75 million barrels a day, the depletion results in a reduction of world crude oil production capacity by 3 million barrels a day a year or 15 million barrels a day over five years.

Assuming that the production of other liquid fuels (such as natural gas liquids and biofuels) grows by 0.5 million barrels a day a year, the world oil production capacity (including crude oil and other liquid fuels) would grow by only 0.5 million barrels a day from 2010 to 2015. Taking into account the OPEC surplus capacity of 4 million barrels a day, world oil production could increase by 4.5 million barrels a day from 2010 to 2015.

In 2008, the world annual average oil price surged to $97 a barrel. In the following year, the global economy as a whole contracted by 0.6 percent, the first absolute contraction since the Second World War. The oil price shock was a major factor that contributed to the deepest global economic crisis in the modern time.

Despite substantial improvement in energy efficiency, the global economy remains highly dependent on a steady supply of cheap oil for normal functioning. Oil is an essential input in transportation, agriculture and chemical industries. According to the International Energy Agency, oil accounts for 96 percent of the world energy consumption in the transportation sector, 29 percent in the industrial sector and 15 percent in the residential and commercial sector. In addition, oil plays a small but sometimes important role in electricity generation.

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Figure 1 shows the historical relationship between world oil spending and world economic growth. Historically, whenever the world oil spending (the total

market value of the world oil consumption) as a percent of world GDP had risen by about 3 percentage points within a relatively short period of time, it was followed by deep global economic recessions. This happened in 1973-1974, 1978-1979 and 2003-2008.

The current world oil price is not far away from this dangerous territory. The world GDP now stands at about $70 trillion. World oil consumption is near 90 million barrels a day. Given these conditions, if the annual average oil price rises to $150 a barrel, world oil spending will rise to 7 percent of world GDP or 3 percentage points above the 2010 level. World oil price averaged $80 a barrel in 2010 and could average more than $100 a barrel in 2011. At this rate, world average annual oil price could exceed $150 a barrel in two or three years.

In recent years, there has been growing concern that world oil production could peak in the near future, imposing severe limits on global economic expansion.

The U.S. oil production peaked in 1970. The total

From 2000 to 2010, the global economy grew at an average annual rate of 3.5 percent and world oil

As the energy demand in the emerging economies rises rapidly, the world oil consumption growth could accelerate to 1.5 million barrels a day per year. To meet the rising energy demand from the emerging economies, world oil consumption may need to rise by 7.5 million barrels a day by 2015, implying a huge shortage of 3 million barrels a day. This could lead to a major surge in the oil price similar to what happened in 2008, plunging the global economy back into recession.

Oil may be substituted by biofuels. But given the current technology, the production of biofuels competes with food production for land and water resources and may have contributed to rising food prices, threatening the living standards of billions of poor people in the world. Currently, more than one-third of the total U.S. corn production is committed to the production of biofuels. It represents 5 percent of the world grain production but contributes to only 0.6 percent of world oil consumption.

Some oil uses may be substituted by electricity.

Electric cars, electric buses and electrified railways could replace much of the oil used for personal transportation.

But major infrastructure transformation will be required.

Electricity cannot or cannot easily substitute for oil for its use in trucks, ships, airplanes and chemical industries.

Electricity is a secondary source of energy. Currently about 70 percent of electricity is generated from fossil fuels that generate greenhouse gases. Nuclear electricity has serious safety and security concerns.

Renewable electricity is limited by various economic and technical factors.

In summary, under business as usual, the world is confronted with the threat of another major oil price shock in the next few years, which could plunge the global economy back into recession. To prevent the danger from materializing, the world’s governments need to take urgent actions to increase energy efficiency and develop new energy sources, while taking appropriate steps to avoid unintended side effects.

consumption grew at an average rate of 1.1 million barrels a day a year. Thus, the world oil consumption needs to grow at least by 1 million barrels a day a year to sustain reasonable global economic growth. At this rate, by 2015 the world will face an oil shortage of 0.5 million barrels a day.

Minqi Li received PhD in economics from University of Massachusetts Amherst in 2002. Since 2006 he has taught economics at University of Utah. He has published many articles and given many invited talks on topics such as peak oil, climate change and global economic crisis.

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A Trade Agenda for the Arab Spring: Global Integration and the Dangers of Neoliberalism

By Athanasios P. Mihalakas, Diplomatic Courier Contributor

As developments unfolded in the Middle East and North Africa (MENA) during the past 8 months, one thing has become abundantly clear: the political transformation will not survive without an economic transformation.

As many analyst have pointed out, an overwhelming motivation of the people who took to the streets with the ‘Arab Spring’ was the dismal economic and employment condition on the ground; high unemployment among the young, crony capitalism, inefficient welfare state, and even food shortages.

What has been less adequately reported, is that Tunisia and Egypt (along with Morocco and Jordan) has experience an intense economic transformation during the past couple of decades, away from “Arab Socialism” of the 60’s and 70’s, and towards western style capitalism in the 80’s and 90’s. Through the guidance and assistance of the IMF and the World Bank, Tunisia and Egypt have pursued neoliberal economic policies (entrepreneurial freedom, strong property rights, free markets, and free trade), which have led to great income inequalities and a concentration of wealth among the political elite. Walter Armbrust’s article, ‘A revolution against neoliberalism?’, make’s it abundantly clear that corruption in Tunisia, Egypt, and other MENA nations now in turmoil, was the result of conflation of politics and business under the pretext of privatization – that the revolving door between government and business, and the participation in private business of political leaders, bureaucratic officials (technocrats) and even military personnel and their enrichment from such preferential business deals was less a violation of the system and more ‘business as usual.’

The combination of authoritarian regimes (to suppress populist religious movements) and reliance on oil and gas exports for economic growth has produced weak and isolated economies conditioned on patronage and welfare and cut off from the global market. Non-theless, the new regimes emerging from the Arab Spring will have to tackle the many economic problems that are plaguing the region. How do you promote economic growth in politically transitioning nations, like the ones of the Arab Spring? Which economic model (good old-fashion ‘national’ socialism, western neoliberalism, or some hybrid – see authoritarian capitalism under China?) should be implemented in pursuit of economic growth, higher employment, and equal opportunities for all (a major demand of the people in the streets).

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Three levels of economic activity, where trade plays a role – Any strategy for instituting political reform in MENA will have to include a strong consideration for economic reform, and in particular integrating the region into the global economy. With the exception of natural resources (and Al Jazeera), most countries in the region have been net importers – relying heavily on foreign imports to cover even basic food needs. The Arab world stands alone and excluded from the benefits of global trade and economic integration. The nations emerging from the Arab Spring need to reenergize entrepreneurial activities at the local level, strengthen the regulation of national market, and facilitating exports through regional trade integration.

At the local level, commerce always existed, especially in the Arab world with its strong cultural affinity for exchange and bargaining. What small and medium size local merchants need to grow and flourish is the freedom from government regulation/intervention, AND the existence of an infrastructure system that only the government can create and maintain.

In order to jump-start local markets and promote economic activity at the lowest lever, the central government will have to transfer the administration and regulation of local markets to local authorities. This will allow for the more efficient operation of these local markets, and free the central government to tackle bigger issues. Therefore, the collection of taxes and promulgation of licenses and local regulations will have to be performed at the local level, with respect to these local markets and small/medium size companies.

On the other hand, the central government should concentrate its efforts in providing the necessary infrastructure (roads and transportation systems, power grids, telephone, internet), and venues/methods for adjudication and dispute resolution (courts and other legal services) – all very necessary for the proper functioning of a local economy. It is imperative that small entrepreneurs have the necessary access to adequate transportation, consistent energy and upgraded for the 21st century communication systems – something only the central government can guarantee.

At the national level, according to neoliberal economy theory, what applies for small companies and

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Global Trade of those nations that embrace democratic values and democratic forms of governance. The promotion and facilitation of a regional trade agreement should be at the forefront of any western economic initiative about the ‘Arab Spring.’ After the revolutions sort themselves out, the U.S. and the EU must incentivize the growth of existing regional trade agreements, or the creation of new ones.

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local markets should also apply nationally. However, it will be very challenging for a young democracy to both regulate and control large companies. After all, corruption at the top and exploitation of the public trust by the regimes of Tunisia and Egypt was in part what broke the proverbial camels back and send the people to the streets. In order for neoliberalism to succeed, it will have to apply to the large national companies and the national market as well, subjecting them to the same free market economics that the middle class had to leave by during the past 20 years.

but relies heavily on migrant workers from sub-Saharan Africa and Asia. The region needs a common regulatory system that allows for preferential working permits of Arab citizens wishing to move from non-oil producing countries (like Egypt, Syria, Tunisia, Morocco, Yemen, Jordan) to oil-producing countries, but does not extend citizenship rights. Such movement of workers could alleviate unemployment in some countries, grow production in others, and foster better understanding and cooperation among the otherwise culturally and religiously similar people of the MENA.

Therefore it is imperative that any liberalization at the national level or any privatization of national companies be done slowly, methodically and very-very carefully. Shock therapy like the one used in post-soviet Eastern Europe, and WB/IMF ‘one size fits all’ economic policies which advocate for complete and unconditional liberalization of the market, will lead to the perpetuation of cronyism and the further enrichment of the current elite. For example, the government should scrutinize not only the selling/privatization of large and inefficient government companies, but also operation/ management of large companies transitioning from national monopolies to market economies.

Although many analyst hope that the Arab Spring will usher a new era of peace and democratic values for the region, Leon Hadar doubts that and argues that the Middle East should follow the ASEAN model of regional integration. (see: The Middle East Needs an ASEAN) Mr. Hadar argues that ASEAN is a mosaic of various political systems and old and new civilizations in various stages of economic development, which were brought together not by a common ideology, religion, or culture, but rather by their mutual economic and political interests. A free-trade zone for the MENA region, based on the large and educated middle class of the region, could provide many opportunities to local companies for growth.

At the international level, there are two trade-related strategies for growth; first, regional integration that focuses on movement of workers, goods, and capital; and second, preferential access to western markets through financial assistance from the WB and the IMF.

A role for the West –

Free movement of workers is imperative for a region that has a lot of jobs to offer in the oil and gas industry,

On the other hand, the best thing the west can do for the MENA people right now is help them integrate into the global market… quickly but sustainably!

Western nations should link democratic development with access to western markets, and promise to deliver the benefits of preferential trade access to the people

In particular, President Obama announced in his recent Mideast speech, that “it’s important to focus on trade, not just aid; on investment, not just assistance.” President Obama outlined the U.S. goal of promoting a development model based on economic openness and competition, trade and integration to global markets, and financial stability that enables more employment opportunities for young people. Of all the ideas proposed by President Obama the most ambitious (and least defined) was the one about launching a comprehensive Trade and Investment Partnership Initiative in the Middle East and North Africa.” President Obama promised to “work with the EU to facilitate more trade within the region, build on existing agreements to promote integration with U.S. and European markets, and open the door for those countries who adopt high standards of reform and trade liberalization to construct a regional trade arrangement.”

The question of how can the Bretton Woods institutions (WTO, IMF, WB) help the ‘Arab Spring’ is hard to answer, considering that it was WB and IMF policies in the first place that led to imbalanced liberalization of the Tunisian and Egyptian economies, and the inevitable crony capitalism that has followed the application of neoliberalism in the Middle East and throughout the world.

Debt forgiveness or renegotiation of past debts by the post ‘Arab Spring’ governments should be at the heart of any IMF/WB strategy to help the region. The people who suffered so much under the rule of corrupt and incompetent dictators should not have to be burdened (at least not right now) with the debts and obligations of the past.

On the other hand, during their most recent summit (this past May), G-8 countries pledged $20 billion of their own money to go along with $20 billion offered by the IMF and the WB, to support development efforts in Tunisia and Egypt. However, it is unclear whether that represents new money, or the re-branding of existing aid commitments. Aid for economic development is always good, but what the Arab Spring does not needs right is yet another ‘government hand-out.’ The people need to feel empowered, both politically and economically – they need to grow sustainable economies, not ones depended on foreign aid or oil exports.

At the G-8 Summit of Deauville, the EU, the U.S., Japan, Russia and Canada, all pledged to take unilateral action to bolster further trade and investment integration within the region, through trade facilitation, reduction of tariff and non-tariff barriers, the promotion of direct investments and regulatory convergence, and improved mutual market access opportunities to encourage integration into the global economy, for Arab countries undertaking reforms to open their economies and create competitive conditions. Now they have to deliver on their promises. It is unfortunate that the current G-20 agenda for the November summit does not include anything specific on the Arab Spring.

Authoritarian Capitalism, China Style – Finally, one model that could work for the transitioning economies of MENA is China. Although politically authoritarian, during the past 30 years China has pursued an economic policy of liberalization at the local level with centralized control and supervision of strategic industries at the national level. Government control and direction of most of the biggest companies has led to cronyism, the enrichment of the political elite, and income inequalities. On the other hand, small and medium size companies have been allowed to operate and thrive at the local level, lifting millions of people from poverty and creating a sizable middle class. They were able to do that even under heavy capital control regulations by the central government, and the lack of access to financing and the major banks. (See: Entrepreneurship in China.)

Granted, China is a large country with many opportunities… but China was as economically depressed and underdeveloped as many on the MENA countries are today. What China had was a culture of opportunity (in Chinese, crisis and opportunity translate the same) and a belief that anyone could become successful!

These are assets that the people behind the ‘Arab Spring’ also posses.

Let a million ‘Arab’ flowers bloom – through trade and commerce!

Nasos Mihalakas is currently an associate professor with the University of New York at Tirana, teaching International and Commercial Law. During the past 9 years he has also worked for both a Congressional Commission advising Congress on the impact of trade with China on the U.S. economy, and for the U.S. Department of Commerce investigating unfair trade practices and foreign market access restrictions.

Contact: nasos.mihalakas@gmail.com

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The World’s Most Important Resource: The Employee Contributions to Global Economic Recovery

Global Economy

By Angelea Panos, Ph.D, Patrick Panos, Ph.D, Christina Steele Hanselman, MS, MBA, and Sterling Panos, MS, Hinckley Scholars, Hinckley Institute of Politics

Many employees experience a lack of a sense of safety, security and loyalty in today’s workplace. The effects of the global economic recession have led corporations to respond with layoffs, salary freezes, and cuts in pay, benefits and pensions. In turn, these efforts to protect their profitability have changed how employees feel about their relationship with their employer.

Lowered productivity, increased turnover and decreased morale are natural responses to these immediate “cost saving” strategies. After layoffs, the surviving employees are often burdened with overwhelming workloads and forced overtime (for salaried employees) without additional pay or compensation. A cycle of declining productivity, turnover and poor morale is created (see figure 1). While some employees hold to their jobs due to fear, a lack of hope and optimism in their future with the company decreases their loyalty. Furthermore, fear has a damaging effect on all levels of the organization from top leadership to the front line employees.

Network and Stromberg Consulting. “Fear of job loss can drive increased short-term productivity, but it is not sustainable for an organization in the long run.”

expenses during economic hard times. Yet, for the most loyal and dedicated employees, training is one of the most powerful interventions against burnout and low morale. An opportunity for further training is translated into “the company cares about my success” by an engaged employee.

Consider which benefits will assist the staff in their resiliency and recovery. Benefits such as training, employee assistance programs (EAP) and flexible schedules can improve morale and reduce fear. Involve employees who are informal “morale boosters” and have the trust of their peers. These “informal” morale builders can be a great source of support for their peers. They should be recruited from within all levels of the organization to assist in dispelling fear and to provide feedback to leadership on the needs of the employees.

Additionally, a decline in customer service occurs when employees’ have lowered security and morale.

Fearful employees are less enthusiastic about servicing customers and are unwilling to recommend their company’s products and services.

The above mentioned study by Braun Research also showed:

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Anxiety, insecurity and fear are having a deleterious impact on the employees’ abilities to perform effectively. First, decision making at the front-line levels is stalled or stifled by fear. One survey by Braun Research, conducted in 2009, showed that 25 percent of employees of U.S. companies believe that fear is delaying critical day-to-day business decisions.

Intelligent risk-taking and apt decision-making behaviors by workers are stunted when employees fear job loss.

Second, employees stop giving critical information and feedback to those in leadership positions that would be needed to pose organizations for economic revitalization. “Managers need to help employees cope with workplace anxiety,” said David Rockland, Ph.D., partner and managing director of Ketchum Global Research

• Only one-third of anxious employees would recommend their companies to others as an enjoyable place to work. This compares to those with little to no fear, of which almost half would recommend their companies to job seekers.

• Corporate reputations are being damaged, as employees who strongly fear that they might lose their jobs are more likely to have (and share) negative views about their company’s future.

• Fear impacts everyone regardless of geography, gender, age, or income level. When it comes to employee fears, U.K. and U.S. workers are very similar. Thus, drops in employee morale have been shown to rapidly spread through an organization beyond those who are directly impacted by restructuring.

Unfortunately, fear seems to beget more fear.

Cutting or eliminating training budgets are often one of the first moves that employers make to scale down

When bad news or cutbacks are announced, it is key that top management share a major portion of the pain. They must take action to show “we are all in this together.” Top management needs to consider giving up bonuses or taking salary reductions themselves.

Look for ways to even out and improve job loads after downsizing. Assist employees looking for new opportunities within the organization. Most employees gladly learn a new responsibility if it could lead to promotion or improved job security.

What Employers Can Do Even during times of layoffs, it is critical for employers to recognize employees as an important resource.

Employers should develop a comprehensive program to address and reduce the fears of employees. Communication from top leaders to front line employees is important. However, honesty and credibility in the communication is imperative, otherwise the employees will reject the messages and their anxiety will only increase.

Address rumors and catastrophic thinking that will likely be fueling fears. Additionally, take the opportunity to demonstrate appreciation and reward employees for their sustained efforts, loyalty, and seniority.

Finally, employees are a resource that should not be ignored by companies. A climate of fear is not conducive to company revitalization efforts. Being aware of the emotional realm of employees and responding to their needs can create an atmosphere of caring and safety.

In turn, employees at all levels will be engaged in doing their part to assist the growth and recovery efforts.

Dr. Angelea Panos is psychologist and adjunct professor at Argosy University. Patrick Panos is a psychologist and associate professor at University of Utah.

Christina Steele Hanselman is a retired Air Force Captain and currently works in management for NORAD. Sterling Panos is a IT business owner in Silicon Valley.

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An agenda for More Accountable and Ethical Free Markets

By Alexandre Muns

The plunge in stockmarkets in August prompted comparisons to the dark days in late September of 2008, when government intervention after Lehman Brothers’s bankruptcy and the imminent collapse of several financial institutions staved off financial meltdown. The painfully slow negotiation over the second bail-out of Greece, the dangerous months-long deadlock and last-minute deal to raise the U.S.’s debt ceiling and weak data pointing to continued anemic growth in the U.S. triggered the biggest one-day drop (August 4th) on Wall Street since 2008. Slow growth and weak job creation is the best that can be expected for the rest of 2011 in the U.S. and many developed countries – with notable exceptions such as Australia, Germany, Canada and Sweden.

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Governments and central banks in the U.S. and Europe have run out of monetary and fiscal ammunition

to jump-start their economies. The European Central Bank, riven by internal disagreements, can do little beyond renewing its program to buy bonds of peripheral euro-zone economies and providing liquidity to the most troubled banks. The new powers given to the European Financial Stability Facility cannot be employed until several EU member states’ parliaments ratify them. After the lacklustre results achieved by the stimulus program and two rounds of quantitative easing, there is little the Obama administration can do heading into the 2012 presidential campaign to spur growth and job creation beyond extending the payroll-tax cut and enacting other business-friendly tax deductions.

The uncertainty and volatility will continue in the coming months. The best governments in developed countries can do is to create an environment conducive

Global Economy to private-sector job creation while continuing to implement structural reforms and adjusting their entitlement programs to their demographic reality.

At the same time, and after the unprecedented downgrade by S & P of the U.S. government’s AAA credit rating, the G-8 and G-20 need to act on their agenda to curb and even prohibit the financial sector’s most speculative instruments and products. The SEC rightly banned abusive naked short-selling in 2008.

Moreover, it restricted short selling in the shares of 19 systemically-important financial firms. President Obama and Congress worked together to pass financial sector reform. Among other provisions, it sets up a commission that can limit investors’ contracts in raw materials futures. Germany took similar steps to forbid naked short-selling of its most important financial institutions and sovereign debt. France’s agenda for its presidency of the G-8 and G-20 calls for restrictions in the size of derivatives contracts, measures to diminish commodity and food price volatility and additional steps to crack down on fraudulent tax havens.

Credit-rating agencies, hedge funds, private-equity firms and practices such as short selling and derivatives should continue to play a constructive role in disciplining governments and markets. But they can only do so if their analysis and behavior is based on sound and credible data and they are also held accountable.

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After the credit-rating agencies’s undisputed neglicence and errors in awarding AAA ratings to mortgage-backed securities with subprime and toxic assets during the housing bubble, they have been too eager to downgrade peripheral euro-zone countries’ sovereign-debt ratings, often doing so only days after newly-

elected governments or bail-out programs were able to prove themselves. Despite its unsustainable debt burden and incomplete program to liberalize and reform its economy, it is difficult to share the credit-rating agencies’ assessment that Greece’s ability to pay its creditors is the worst in the world, behind that of developing countries embroiled in civil wars. Credit-rating agencies need to factor political and governance issues (in addition to macroeconomic and financial ones) into the equations they employ to determine a country’s rating. At the very least, they must be consistent. If they traditionally have focused only on financial and economic factors, S & P’s questionable downgrade of the U.S’s AAA credit rating is flawed, not only because of its $2 trillion error, but also because it explicitly referred to the weakening predictability in U.S. policymaking to justify its move. The G-8 and G-20 need to foster more competition in the creditrating sector and make the existing big three agencies more accountable.

The G-20 needs to approve the agreements reached by the Group of Governors and Heads of Supervision.

They call for additional loss absorbency requirements to be met with progressive common equity tier 1 capital requirements ranging from 1% to 2.5%. They also impose an additional 1% surcharge if a bank becomes significantly bigger. These requirements supplement the new 7% minimum core capital all banks will have to hold under new Basel III rules which will be phased in over six years from 2013.

More transparent and less speculative free markets can restore the public’s confidence in our public institutions. Free markets that function in a more accountable and ethical way can enhance traditional advanced countries’ ability to compete with democratic and non-democratic emerging countries from a position of economic and moral strength. If we uphold higher standards of transparency and accountability in our own markets, we will have more leverage to demand that emerging countries follow environmental and labor standards and crack down on corruption in their investments worldwide.

The financial crisis and great recession have already taken a devastating toll on the populations of both emerging and developing countries and developed ones. It is time they work together to ensure markets work for people and not the other way around.

Alexandre Muns Rubiol Professor of European Integration and International Economic Institutions Escola Superior de Comerç Internacional, Pompeu Fabra University

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Putting Jobs First for Recovery

By James Howard, Director of Economic and Social Policy, International Trade Union Confederation

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More than three years since the Great Recession began, the world economy is still not out of the woods.

Financial instability continues to roil markets. Sovereign debt markets in much of Europe as well as global equity markets are volatile, and depend on continued support from central banks. Elevated energy and food prices push up inflation in some developing countries and strain the purchasing power of households in some developed countries. Most worrying, however, is the weakening recovery in both the U.S. and Europe.

reserves, a country could withstand a storm. A trade surplus aids accumulation of reserves, which in turn is easier to achieve with an undervalued exchange rate.

The resulting growth of manufacturing exports and employment were certainly welcome to the developing countries concerned, too. The de-facto world reserve currency is the U.S. dollar. Hence, Asian manufacturing power houses (and Middle Eastern energy exporters) recycled their export earnings through Wall Street, to acquire reserve assets.

Growth in the U.S. has resumed at times, but was rarely strong and is now slowing. However, the employment rate—the share of the working age population that has a job—remains depressed. In Europe, the largest economies (especially Germany) rebounded relatively quickly, but sovereign debt crises of several other European countries keep the continent in its grips. The average EU unemployment rate—at about 9.5 percent, depending on which aggregation one looks at—masks wide disparities. The southern countries, Ireland, and Latvia and Lithuania all show double digit unemployment rates.

A protracted period of weak employment and income growth endangers careers and livelihoods for a whole generation. Unemployment erodes confidence, leads to loss of acquired skills, and imperils cohesion of communities and families.

As a result, longer term interest rates remained suppressed, and global finance was awash in funds.

These factors fed a lending frenzy. In the U.S., labour market policies kept average wages down, so that households took on too much debt, as did corporations.

In the Southern and Eastern parts of Europe, it was possible to borrow at core country interest rates; and the private sector, as well as some governments took on too much debt. The global bubble is therefore best characterized as a private sector debt bubble. When it burst, the global economy went into a tailspin. As panic spread, credit became expensive or unavailable for many businesses and consumers. As equity and real estate prices fell, everybody from banks to businesses to households realized that what they own and earn is insufficient to service their debt, further feeding panic.

The rest is history.

How did we get to this point? The proximate cause of the Great Recession was the bursting of a global financial bubble. The ultimate causes of that bubble can be seen in two salient trends—(1) deregulation of finance within and between countries, accompanied by an exacerbation of income inequalities, and (2) shortcomings of the architecture of the global financial system.

Much has been said about financial deregulation.

In the U.S., investment and commercial banks were allowed to merge, and the latter began to “play roulette with the family’s savings.” In Europe, introduction of the Euro was accompanied by significant deregulation, and European financial centers competed with each other and New York to attract business. This regulatory race to the bottom came at the expense of proper supervision of markets by public authorities. Globally, controls on capital flows were reduced. New, largely unregulated derivative markets exploded in size as securitization of debt became widespread.

What can be done to address the root causes of the crisis? First and foremost, the financial sector must be re-regulated and brought effectively under supervision of public authorities. Financial corporations that have become “too big to fail” need to be downsized.

Financial “prudential rules” that apply to banks, insurers, investment funds and pension funds need to promote long-term investments in the real economy. Speculative behaviour must be penalized, including through implementation of a Financial Transactions Tax that would also provide resources for sorely needed development, climate and social expenditures. Consumers must be protected against predatory credit lending practices.

Additionally, the evolving global financial architecture led developing countries to self-insure against capital flight. Crises in the late 1990s had shown that private capital could evaporate quickly. If, on the other hand, monetary authorities had accumulated official

Second, the architecture of the global financial system must be reformed. Diversification of reserves is a step in the right direction, and reduction of the need for self-insurance is another. To achieve the former, leading countries should foster the use of the IMF’s Special Drawing Rights (SDRs), an international money based on major currencies. To achieve the latter, international financial institutions need to be reformed. Developing countries’ IMF quotas need to increase at a faster pace, and harmful conditions of emergency assistance need to be eliminated so as to achieve recovery on a

pro-growth, pro-employment basis. Third, the EU needs to address shortcomings of its own internal financial structure, including through an effective, cross-border architecture of financial supervision.

Pursuit of these reforms, while necessary, will not immediately strengthen the economy. What can be done to boost recovery now? Despite the misplaced focus in both U.S. and Europe on austerity, renewed public investment would be most effective. The collapse in stock market prices in August 2011 delivered a wake-up call that should make that politically feasible once again. The G20 must put employment creation at the heart of its agenda, adopting employment targets in its Mutual Assessment Process that would be monitored by the ILO and a new G20 Working Group on Employment and Social Protection. Policy makers should make a commitment to a youth employment pact to be developed through national social dialogues, should target Green Jobs with associated investments and should implement a Social Protection Floor backed by the IMF. Furthermore, high growth export-dependent countries need to support domestic demand, including through improving social safety nets and promoting collective bargaining and higher wages. Such steps would foster recovery now, and help to put the world economy on a sounder footing.

James Howard (james.howard@ituc-csi.org) is Director of the Economic and Social Policy Department at the International Trade Union Confederation (ITUC), the world trade union organisation with a membership of 175 million workers in 151 countries. He received his Economics degree in the School of European Studies at the University of Sussex in 1986. His work at the ITUC covers a range of issues associated with globalisation, such as global economic cooperation to respond to the world economic crisis; international trade and the World Trade Organisation (WTO) including its impact on the observance of international labour standards; policies to favour sustainable economic development and decent work; analysis of the international financial institutions (IFIs), particularly the social dimensions of structural adjustment; and general world economic developments.

Rudiger von Arnim (rudiger.vonarnim@economics. utah.edu) is Assistant Professor at the University of Utah in Salt Lake City, UT, USA. He received the doctoral degree in Economics from the New School for Social Research in New York, NY, in 2008. His research focuses on international macroeconomics, trade and development, particularly the application of computer simulated models for policy analysis. Von Arnim has consulted the ILO’s International Institute of Labour Studies (IILS), Oxfam, UK, and the Inter-governmental group of Twenty Four (G24), among others.

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SAVING LIVES IN THE WORLD’S POOREST NATIONS

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RIU Hotels & Resorts in Los Cabos Where meetings combine with pleasure

By Ambassador Nancy Brinker

Non-communicable diseases threaten entire economies, especially in developing regions of the world, where cancer alone is expected to grow at an alarming 60 percent rate in countries with the fewest resources to deal with it.

shows, water sports, spa, a wide gastronomic offer and the Krystal Restaurant, that combines the latest concepts of avant-garde fusion cuisine. For events, the Riu Palace Cabo San Lucas has a conference room with a capacity for up 300 people and a professional RIU team that will meet and exceed the needs of groups and conventions.

The statistics are sobering: • 1.6 million women were diagnosed with breast cancer in 2021; half a million died.

• The burden is increasingly shifting to women in developing countries, who are dying of breast and cervical cancer in their reproductive years. In Tanzania, for example, 37 percent of women dying from breast cancer are under age 50, while globally the percentage is significantly lower, 22 percent.

• Cervical cancer is nearly five times more common among women who are HIV-positive, which is why cervical cancer is so common in developing nations.

• Up to 90 percent of women in sub-Saharan Africa have never had a pelvic exam.

• More than 85 percent of the global burden of cervical cancer occurs in developing countries, yet fewer than 5 percent of these women have access to screening.

For women with cancer in these countries, it’s as if the last quarter-century of remarkable medical advancement never happened – because it never advanced toward them. When they feel a lump in their breast, or experience the first signs of cervical cancer, they don’t know what it is or what to do. Often they’re too afraid to say anything, much less to look for help – which in many cases wouldn’t be available.

At Susan G. Komen for the Cure, we believe that where you live shouldn’t determine whether you live.

That is why we are bringing together the resources of governments, non-governmental organizations and private companies in an innovative global partnership.

This collaboration is called Pink Ribbon Red Ribbon, which we announced in September as a partnership of the George W. Bush Institute, the U.S. State Department, Susan G. Komen for the Cure, the United Nations Programme on HIV/AIDS (UNAIDS).

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The partnership leverages the platform and resources of the U.S. President’s Emergency Plan for Aids Relief (PEPFAR), established under President Bush and a cornerstone of President Obama’s Global Health Initiative, and will draw from lessons learned in the significant scale-up of HIV services in recent years.

Photos courtesy of Susan G. Komen for the Cure®

Next to the luxurious Riu Palace Cabo San Lucas is the Riu Santa Fe hotel. This 5-star resort is perfect for families and groups as it offers a great entertainment program during the day and night, fine cuisine in its five restaurants and six bars, three of which are located in the pools, a fitness center, Pacha nightclub, tennis courts, and the Renova Spa. For events, the Riu Santa Fe offers a large conference room with capacity

Integrating HIV and cervical cancer screening and treatment services, and expanding breast education and screening, is an effective and efficient method of responding to the diseases. Many of the same techniques that are mobilized for HIV prevention, treatment, care and support can be successfully combined to include these two common women’s cancers.

Pink Ribbon, Red Ribbon is designed so that participating countries can develop their own implementation programs. We will begin in Sub-Saharan Africa and expand to Latin America with the hope of making these programs available in any region of the world that needs it.

The goals are to reduce deaths from cervical cancer by an estimated 25 percent among women screened and treated through the initiative, significantly increase access to breast and cervical cancer screening and treatment programs, and create innovative models that can be scaled up and used globally.

We will take this fight to places where those who suffer from cancer often have no defenses, no advocates, and little understanding of what they are up against.

These women need us, and we must answer their call by expanding breast and cervical cancer prevention along with diagnosis and treatment programs.

Los Cabos, located in tip of the Baja California peninsula in Mexico, is one of the most beautiful and exclusive destinations in Mexico.

Thanks to its exceptional attractions as the beautiful beach sceneries, a varied life of leisure, water sports and the sight of gray whales, one of the most spectacular natural sights in the destination, RIU Hotels & Resorts opted for this exotic destination 7 years ago, opening its first hotel in Los Cabos: the Riu Palace Cabo San Lucas.

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In Los Cabos, the hotel chain has two incredible 24 Hours All Inclusive resorts which can be an ideal choice for holding all kinds of events, the Riu Palace Cabo San Lucas and Riu Santa Fe, which are located just 3.5 kilometres from downtown Cabo San Lucas.

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The elegant Riu Palace Cabo San Lucas belongs to the most sophisticated range of the hotel chain, the RIU Palace and is the best option for the most demanding clientele.

The luxurious hotel, which features 642 junior suites and suites, offers an elegant palatial architecture with sophisticated decor and beautiful facilities, 24 hour room service, several swimming pools for adults and children, live entertainment

An old African proverb says, “However long the night, the dawn will break.”

Let us join in raising both hopes and life expectancy among the world’s neediest people, so that dawn will break for them.

Ambassador Nancy Brinker is CEO and founder of Susan G. Komen for the Cure.

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G20 YES summit

By Grégoire Sentilhes, President of the G20 YES 2011, President of NextStage

Our over-indebted world and its financial institutions are in crisis. Stock markets are volatile to say the least, prone to unstable movements as rarely seen before. Our economic and political systems appear to be disembodied, disconnected from reality. Have our politicians, focused on short-term emergency resolutions, become out of touch?

global challenges that the world is facing.

All this is creating anxiety and pessimism on an unprecedented scale, when we need hope. That is particularly apt for young generations. Witness the Arab Spring, the Indignados in Spain, or demonstrations in Israel.

Protestors demand a future in which they can believe and true, shared growth in a society in which they feel included, both socially and economically. But economic recovery will only happen thanks to long-term vision.

Reducing countries’ deficits and setting up appropriate global governance will not suffice to pay off our debts if we do not give entrepreneurs the means to imagine new growth strategies, to invent new markets and to develop their activity.

The start of the 21st Century has been paradoxical.

Our times, streaked by crisis, are also characterized by major developments: an increase of life expectancy, a power switch from the Western world towards emerging countries, the pervasive role of the Internet, an inevitable change of energy models and strategies. Yet it is rather striking that the entrepreneur, one of the major players and drivers of the ‘real economy’, is virtually absent from all the proposals and plans to address the current crisis.

The capitalist system seems to have lost the lead to generate growth and innovation, embarked on a pendulum swing between financing cash-strapped governments with an ever-expanding social burden and multinational groups focused on their development, shrinking from their social responsibilities.

As Harvard Professor, Daniel Isenberg states in his famous article: “How to start an entrepreneurial revolution” (Harvard Business Review, June 2010), the quality and performance of the entrepreneurial ecosystem is the nations’ backbone and a critical long-term resource to create jobs, income growth and to promote values.

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Taking France as an example, where the 2011 G20 YES summit is taking place, entrepreneurs’ economic and social importance speaks for itself. In the last 15 years, SMEs have created 1.8m jobs there, 950,000 of which were created by 5 % of those enterprises that are developing the fastest. Local by nature, SMEs and entrepreneurs, many of which operate internationally, contribute to a well-balanced globalization. To understand Germany, India and China’s growth dynamics over the last 10 years, it is worth remembering that their economies have been spurred on by a tremendous entrepreneurial spirit. Only a capitalism of entrepreneurs based on “small-scale” action and initiative can tackle

But to enable entrepreneurs to create jobs, to innovate and invest, to grow their activity in the best possible conditions, it is essential to build a holistic entrepreneurial ecosystem with the support of appropriate policies, both on national and international levels.

The crisis is on three fronts –– financial, economic and social. Global leaders cannot afford to consider this issue from a theoretical standpoint anymore. This is a matter of paramount urgency that requires both strong political will and a plan giving entrepreneurs access to innovation and investment, with measures that can be implemented at the soonest.

It is precisely to address this issue that the 3rd edition of the G20 Young Entrepreneur Summit (G20 YES) has been set up. Taking place in Nice in the South of France (October 31st - November 2nd), the G20 YES 2011 will bring together 400 emblematic entrepreneurs of the world’s leading 20 economies. They have been tasked to deliver a series of proposals offering solutions to the crisis, developed on an international scope with the active support of Ernst & Young and of McKinsey and Company.

These proposals are based on a collective analysis of the best entrepreneurial practices in G20 nations, whose efficiency has been proven. Their aim is to enable the growth of a sustainable entrepreneurial ecosystem, both in developed and developing countries, as the cornerstone of global economic dynamism, competitiveness and prosperity.

The proposals will then be handed over officially to G20 country leaders in Cannes at their own summit a few days later.

The G20 YES intends to be realistic as well as practical, efficient, innovative and independent. In that, it reflects accurately the spirit of the entrepreneurs it involves. The ambition of the G20 YES is that we do not refer to the first three decades of the 21st Century as “the Dreadful Thirties”, but as “the Fertile Thirties”.

Grégoire Sentilhes President of the G20 YES 2011, president of NextStage

Drug-Resistant Tuberculosis A Global Emergency Requires an Innovative Response TB: A Global Overview

Tuberculosis (TB), often thought of as a disease of the past, continues to plague the world’s most vulnerable people. The World Health Organization (WHO) estimates there were 9.4 million new cases of TB globally in 2009; in the same year, 1.7 million people died of TB – equal to about 4,700 deaths each day.

The WHO estimates that of all new TB cases in 2009, about 3.3 percent of these were the drug-resistant form of TB, called multidrugresistant tuberculosis, or MDR-TB. These findings by the WHO mark the highest rates ever of MDR-TB. In some settings in the former Soviet Union, these rates peaked at about 28% of new TB cases.

These dire statistics are even more dismal considering that TB and MDR-TB are treatable and curable. The real problem lies in the fact that TB – in all its forms – is a complex disease, one which is not only a medical problem; it is also a social and economic problem.

A Multi-Pronged Approach to MDR-TB 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 MDR-TB. Created in 2003 to address the growing challenge of MDR-TB, the Partnership has adopted a 360-degree approach, and mobilizes over 25 global healthcare partners on five continents to share resources and knowledge to confront TB and MDR-TB. To drive the Partnership, 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 In order to prevent the spread of the disease and effectively care for those infected, the Lilly MDR-TB 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 in communities and workplaces.

The Partnership also trains healthcare workers to recognize, treat, monitor and prevent the further spread of MDR-TB. These training materials and courses have been designed to ensure that the knowledge learned is passed on to peers, furthering the quality of patient care.

A Global Approach for Global Results While community and countrybased activities empower local populations to fight MDR-TB, global change requires a global view.

With this in mind, the Partnership works with policymakers to raise awareness about the toll that TB takes on the global population and encourages new initiatives that curb the spread of MDR-TB. Additionally, the Partnership promotes adherence to the World Health Organization’s standards on TB treatment and supports national TB programs that have been developed using these standards.

Sustainable Access to Medicines One of Lilly’s many goals is to increase the supply of highquality, affordable medicines to the people who need them most.

To do this, Lilly has partnered with manufacturers in countries hardest hit by MDR-TB, providing both

Advertisement knowledge and financial assistance to create sustainable, local sources for MDR-TB drugs. These locally produced drugs enable access to medicines at affordable prices for MDR-TB patients, while supporting local economies and ensuring highquality manufacturing.

New Drug Discovery Initiative While access to medicine and care help patients significantly, MDR-TB treatment remains a long, isolated process. To encourage patients to complete treatment and avoid even more drug-resistant strains of TB, research and development are necessary to discover faster-acting medicines. To address this need, Lilly has created the Lilly TB Drug Discovery Initiative, which is a not-for-profit public-private partnership that will draw on the global resources of its partners, including medicinal libraries donated

by Lilly, to pioneer research.

A Public-Private Partnership for Those in Need Lilly and its Partners work together closely, sharing knowledge, expertise and research in the quest to contain and conquer MDR-TB, a disease that disproportionately affects impoverished populations.

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 manner that is sustainable and builds capacity within the communities where it is needed most.

www.lillymdr-tb.com Email: mdrtb@lilly.com Phone: +41 22 306 0333

The Global Challenge of Human Security

By Dr. Cornelio Sommaruga, Diplomatic Courier Contributor

After the first decade of the Twenty-First Century, we have come to recognize that the world has become a dangerous place, with terrorism and bloody local conflicts. Humanitarian efforts and human rights laws are largely ignored and systematically violated.

Social inequality, inside states and among states, has increased dramatically, and poverty in the poorest areas is deepening. Consequent increasing competition for scarce resources contributes to unstable political structures and favours eruption of conflicts. Fluctuations in world commodity prices can trigger dangerous destitution and civil strife. Indeed many of the apparently senseless violent conflicts and acts of terrorism in the world become markedly more transparent when such roots are explored.

Aid budgets have regrettably shrunk. Even advances in debt relief have sometimes been at the expense of aid budgets, and, as a result, resources were not necessarily freed and banks were given more advantages than the world’s poor. One has to underline again and again how

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much issues such as conflict, disease, abuse of power, violation of human dignity, illiteracy and malnutrition are bound up with abject poverty, a stat in which hundreds of millions of human beings live.

In such a state of the world, where there is no humanitarian space, it is not astonishing that there are many factors of human insecurity that create a climate of fear and hate. First of all, there is human insecurity generated by neo-liberal globalization. Despite the many positive aspects of globalization that has certainly benefited people in developing countries, financial mismanagement and market fundamentalism have created a large exclusion of people from the global mega-competition. Many human beings are often caught between criminal organizations and states; this is particularly the case for migrant workers and environmentally displaced persons. The label “illegal” is easily applied to them, because of the lacking international legal basis for a coherent global approach to these serious human problems.

Human Security There is a growing insecurity of indigenous peoples, be it in Latin or North America, in Australia, in Eastern Republics of the Russian Federation, in other independent republics of the former Soviet Union, and in several other regions. These people are not only subject to all sorts of discriminations, but they are also affected by government agricultural policies pushing poor peasants out of business to become itinerant agricultural labourers. Their very existence as distinct societies and cultures is often endangered.

There is also human insecurity generated by militarization, the growing impact of the military – and increasingly of the police – on the political economic power relations and on everyday life of the most non lucrative sectors of society. The globalization of military industrial technology relates people’s security to an increasingly powerful source of threat. Militarization triggers interventions in the name of “humanitarian aid”: this creates more insecurity!

It is also obvious that climate change, with a number of evident phenomena, is particularly feared and creating severe insecurity.

A clear reference has to be made to gender insecurity. Violence against women and children creates a high human insecurity for families and individuals.

The expansion of the global sex industry, accompanied by trafficking of women and children into industrialized countries from developing and Eastern countries constitutes violence against women and a double discrimination, both gender-based and racial. Despite a number of measures and declarations progress is extremely limited. This remains a preoccupying cause of insecurity in the world.

We have had nine years and more after 9/11 to recognise that the war in Afghanistan and the ensuing violation of human rights around the world (not excluding countries in other times committed to human rights, the aftermath of the war on Iraq, the persistent Israeli-Arab conflict with severe violations of international humanitarian law as well as the repeated corporate management financial scandals) are creating also in Western countries great insecurity. The clear statement of Common Article 3 of the Geneva Conventions, which sets precise limits to all sort of violence in a mode which is clearly more evident than the Bible, is ignored.

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We could go on mentioning other causes of insecurity, but at this juncture one could simply state this: when a hegemonic global system centralizes power, wealth and knowledge in the hands of a minority,

when there are few avenues of action to ensure at least a certain degree of accountability on the part of major powers, there is a widespread feeling of marginalization that can sometimes lead to disastrous consequences.

The invention of the Group of 20 has not improved the sense of marginalization.

All these factors, including the cultural insecurity often called “islamophobia”, bring individuals to desperation.

From there, the step to violence and terrorism is easy to be made.

A Change in Focus During the Cold War period, the notion of security was indeed in generally understood terms of the security of the State, the preservation of its territorial integrity, and sovereignty against military attacks.

The UNDP Human Development Report of 1993 for the first time indicated in an official document that the individual must be placed at the centre of international affairs. The report expressly says that “the concept of security must change – from an exclusive stress on national security to a much greater stress on people’s security; from security through armaments to security through human development; from territorial security to food, employment and environmental security”.

Even the G8 Foreign Ministers in a statement on Human Security issued in Cologne on June 10, 1999 said: “The G8 is determined to fight the underlying causes of the multiple threats to human security, and is committed to creating an environment where the basic rights, the safety and the very survival of individuals are guaranteed…. We regarded the spread of small arms, the danger posed by landmines, international terrorism and transnational crime, drugs and infectious diseases, poverty, economic distress and oppression to be among the most serious threats to mankind. …”

Recognizable here are elements of the root causes of violence and terrorism: such as the systematic violation of human rights and the denigration of human values, poverty, hunger, thirst, inequalities, injustice; as well as symptoms, such as arms proliferation and small arms transfers, including landmines, corruption, organized crime. All these elements must be addressed energetically and urgently for an effective answer to terrorism.

Ultimately human security emphasizes that the security agenda and the development agenda are merely different sides of the same coin.

Human Security As stated in the 2001 report “The Responsibility to Protect” by the International Commission on Intervention and State Sovereignty, there is a responsibility to prevent. The failure of prevention can have wide international consequences and costs. Conflict prevention – and this is also valid for terrorism – is not merely a national or local affair. In our Report, the Commission stated that “there remains a gap between rhetoric and financial and political support for prevention… Encouraging more serious and sustained efforts to address the root cause of the problems that put populations at risk, as well as more effective use of direct prevention measures,” remains crucial.

Prevention of violence is promotion of human security. There is a need to constantly emphasize human values and the ethical dimension of economic, social and political life. Political systems indeed give moral instructions through legislation; a nation’s law reflects its underlying moral norms, as a nation’s civics reflects its constitutional mores.

Quoting again the report on The Responsibility to Protect, I should like to refer to the concluding section, which says “If we believe that all human beings are equally entitled to be protected from acts that shock the conscience of us all, then we must match rhetoric with reality, principle with practice. We cannot be content with reports and declarations. We must be prepared to act.”

Our generation has an unprecedented chance to remake the world in a real form of humanitarian engagement. Matters needed to be addressed urgently are: Poverty: Inequality and poverty are increasing both within and between countries. Humanity possesses both the capital and the knowledge that everyone has enough.

Hunger and Thirst: The number of hungry and thirsty people has risen to more than a billion. Enough is produced every year to feed everyone on earth well, if justly distributed. Increasing production through sustainable agriculture – which restores soil and conserves water – can ensure that this continues to be the case.

Climate Change: The planet is warming fast, and rising sea levels and shifting rainfall will drive millions of people from their homes, slash harvests, and disrupt societies. Developing existing clean technologies will do much to produce the sustainable growth required to ensure a future of low carbon prosperity.

Resource Depletion: Over-exploiting land, water, fisheries, forests and other natural resources will result in scarcity and and growing conflict – and this threatens to get worse as the population rises to nine billion over the next few decades. Just an eighth of global defence spending would provide massively enlarged programmes to reduce suffering and the mentioned threats..

War and Conflict: World arms spending is rising rapidly, encouraged by deeply entrenched vested interests. There must be a new determination in resolving conflict.

Reconciliation, justice and forgiveness are interdependent: We must genuinely commit to human rights and International humanitarian law for all and address seriously injustice and oppression.

An Unprecedented Chance to Remake the World

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Let us repeat: the world is heading for growing suffering and eventual catastrophe as the climate irreversibly changes, agriculture is disrupted, hunger and division intensify, arms spending escalate and nuclear weapons proliferate. The world’s political establishment – in full contradiction with humanitarian politics seems unable to grasp both the urgency of the threat, and the potential of the opportunity, brought about by movements of conscience and concern.

To meet all these challenges a revolutionary world wide coalition of conscientious people is urgently needed. Such a revolution has to start with individuals; however it must be recognized that individual humanitarian engagement is not enough. A movement of people is required to bring about the global transformation that is so desperately needed. We have to unite efforts to multiply effectiveness.

The construction of a renewed humanitarian space depends on it.

Hyatt Regency Paris-Madeleine “Your Parisian Residence in the City of Light” important fashion streets, among them Faubourg Saint-Honoré, Rue Royale and Boulevard Haussmann, home to the department stores Printemps and Galeries Lafayette.

Hyatt Regency Paris-Madeleine is also near the city’s iconic attractions of Opéra Garnier, Place de la Madeleine, Place de la Concorde, the river Seine and the Champs-Elysées.

Glamorous, chic and sophisticated, Hyatt Regency ParisMadeleine offers 86 rooms and suites. The hotel specialises in a discreet personalised service, with particular attention paid to each guest’s individual preference.

La Chinoiserie La Chinoiserie, spectacularly redecorated by the talented French architect Pascal Desprez, sets the sophisticated tone for the entire hotel.

Hyatt Regency ParisMadeleine, a five-star boutique hotel, is nestled in a convenient and bustling area of the 8th district in the centre of Paris.

Situated on the typically Parisian Boulevard Malesherbes, this luxury hotel is close to the city’s most

Rich sofas and a contemporary decor influenced by tones of black and silver, and subdued illumination creates areas for discreet, personal gatherings enveloped in a soothing atmosphere, making this a special place to experience the personally created menu prepared with expertise by Chef Frédéric Charrier.

La Chinoiserie is the ideal location for a moment’s respite between shopping expeditions. A large number of celebrities have discovered the elegance of a club on the Left Bank of Paris here among the most prestigious addresses for luxury shopping. A place where, in the evenings, candlelight and an open fireplace create a magical atmosphere for joyful gatherings of friends or, perhaps, the most secret of rendezvous.

Café M & Champagne Bar Continuing in the spirit of glamour and professionalism, Pascal Desprez introduced a new decor and atmosphere to Café M with the elegant tones of a lounge bar, featuring natural wood, dark drapes, and accents of black and gold. During the evenings, Café M transforms into a champagne bar, offering an unrivalled selection of cocktails and champagnes.

Our barman, Alexis Martinez, has personally selected a menu that features the best champagnes from the biggest names in champagne production, and welcomes guests to discover the exclusivity of products from Selosse and Gratien, the most reputable Champagnes in Paris.

Banquet Rooms Meeting rooms and banqueting areas offer the perfect space for events.

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All rooms are designed by Pascal Desprez following the theme for the entire hotel. Any event, party or conference enjoys a streamlined decor and outstanding service, perfect for privacy and concentration.

All banqueting rooms are also equipped with the latest in technology and services. They also offer extensive banqueting menus designed by Chef Frédéric Charrier, and available for breakfast, lunch, dinner and cocktail occasions.

In each of hotel’s rooms, four lighting levels are monitored to personalise the atmosphere of guests’ events, from business meetings or audiovisual events to dinners and cocktails. A video projector is installed in the largest room, while all the other areas have plasma–screen TVs with network hook-up available.

Unlimited Internet access and mini bar facilities are at guests’ disposal, while, for their security and comfort, a safe and cloakroom are available.

The smallest room, Manhattan, reflects the hotel’s professionalism in terms of confidentiality and discretion. This room can cater to up to six people and enjoys natural light with a view of the boulevard.

M’Eating Performance concept Today, as performance is linked closely to the notion of speed, Hyatt Regency Paris-Madeleine has developed a “non-stop” meeting concept.

M’Eating Performance has been created to answer the growing needs of companies that approach hotels to organise their meetings, seeking first and foremost luxurious space, efficient service and benefits that meet their needs.

Business guests can experience this “non-stop” meeting special offer for just €105 per person, including bento boxes prepared by Chef Frédéric Charrier, a candy bar and a mini bar.

The bento boxes, prepared according to the season, feature mixed salads, sandwiches (Club sandwiches and wraps), a fruit salad and macaroons from Ladurée.

Practical, quick and modern, this makes guests’ lunches both delicious and energising!

In addition, the set-up displayed before the beginning of the meeting assures guests total autonomy, as well as flexibility and complete concentration.

Spa Kéraskin Esthetics Reinforcing its luxury positioning, Hyatt Regency Paris-Madeleine recently launched a unique Spa offer in collaboration with Kéraskin Esthetics.

As part of its efforts to provide guests with tailor-made services, the hotel has partnered with Kéraskin Esthetics to develop a special beauty offer featuring specific esthetic rituals that involve high performance and wellness.

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This new brand of excellence offers a menu of facials and full-body treatments, combining the best formulas of Advanced Research at L’Oreal and novel techniques for exceptional results and deep well-being.

Created two years ago, Kéraskin Esthetics has positioned itself as the leading brand in the market for esthetic treatments and confirms the success of today’s selective implantation.

As a result of the collaboration, customers have at their disposal a complete spa menu offering mixed facial care (New Youth), body treatments (Body Immersion) and express treatments. This turnkey service reflects the hotel’s desire to meet and exceed the expectations of increasingly demanding guests.

Treatments are provided at the Spa, which is open daily and offers a fully redecorated treatment room, a fitness room equipped with modern machines, a sauna, a steam room, two cloakrooms and a relaxation room.

The IMF Repositions Itself with the Rise of Emerging Markets

By Oscar Montealegre, Diplomatic Courier Correspondent

Prior the financial crisis of 2008, the IMF was on the verge of becoming obsolete. Countries were successfully finding financing through private capital markets with lower rates with no strings attached-contrary to IMF loans that require strict adherence to IMF’s conditions. Moreover, the IMF in terms of branding and public relations was being tarnished, with no apparent fix in sight.

Many countries in Asia blamed the IMF for their own economic crisis in 1997/98, and adopted precautionary strategies like stockpiling currency reserves to avoid ever having to request assistance from the IMF again.

Countries in Asia did not want to be stigmatized for being associated with the IMF. In Argentina, after economic default of 2003, the IMF became persona non grata, being blamed for the economic collapse that brought Argentina to its’ knees. In Ecuador, the IMF’s representative left after constant vilifications and provocations

by President Correra, not to mention Venezuela’s and Bolivia’s fervent displeasure with the IMF.

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But, as the old adage goes, where there is bad there is good. The Global Financial Crisis of 2008 did much damage across the world-especially to developed markets-however, it also resurrected the IMF, giving the institution a new life and an opportunity to re-stamp its’ legitimacy. Interestingly, the actors that pumped

new money into the IMF fund were not your usual suspects, i.e. the Unites States, Western Europe and Japan. Instead, Brazil, China and India were the main contributors, underscoring the new realization that the international financial and monetary system is being rebalanced, where the West is descending and the East and Co. is ascending.

In a very short timeframe, the G-7 became secondary to the G-20- an expansion that accurately represents the current state of our world economy. The strongest currency being the dollar-by default as it may be-has been lately challenged by both developed and developing markets. More and more policymakers and central bankers are touting the advancement of the SDR (Special Drawing Right), a basket of currencies (the dollar, the euro, the yen and pound and maybe one day include the yuan) that may one day be the world’s currency safe haven, with the purpose of relying less on the U.S. greenback. Pre-2008, when the U.S. would encounter economic turbulence, the ramifications were felt throughout the world. That is no longer the case, Asian and Latin American economies were resilient to the latest financial crisis, solidifying the theory that decoupling (where emerging markets are no longer dependent on the U.S., Europe and Japan) is real. The economic recovery in the West is weak, vulnerable, and can easily be eroded. In the East and Latin America,

Global Finance realm of diplomacy, conflict resolution and international relations. Consequently, despite their economic strength waning, the U.S. and Europe will dictate the narrative in international affairs if the emerging powers don’t act in line with their aspirations.

recovery already occurred, thrusting emerging markets as the engines that are currently driving the world’s economy; hence, confirming the rise of the emerging markets.

The emerging markets are gradually being given more influence; as a result, their added participation in international organizations such as the IMF has already yielded decisive outcomes. For instance the IMF’s special funds in the last three years have extended loans to countries such as Hungary, Greece, Ireland, Iceland, Ukraine, and Pakistan. Not only are the emerging markets moving their weight when it comes to GDP growth, but ideas and capital are stemming from Asia and Latin America as well. For instance, cash transfer schemes were first developed in Latin American and are now practiced in Asia and Africa. Unprecedented amount of capital inflows are entering emerging markets, - albeit risking the possibility of inflation and overheating asset bubbles- where emerging markets are gradually using this excess capital to finance projects abroad, purchase foreign private assets, and packaging loans needed by other countries.

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Just recently the IMF chose Christine Lagarde as its leader. The leaders of the emerging markets missed an opportunity to rally behind one candidate for the top spot at the IMF, enabling the IMF to better reflect the shifting balance of powers in the global economy. But here lies the problem with the emerging powers, when having to debate the U.S. and Europe on economic issues, solidarity exists, as a front to prevent U.S. and European interests. But when decisions on who will lead, or which country will take charge on a certain matter, fragmentation instead prevails. Many divisions and jealousies exist, for instance, China vs. India, Brazil vs. Mexico, Latin America vs. Asia, Russia vs. Asia, an endless menu of partings. If these divisions are not remedied, the emerging powers will struggle in the

Consequently, the IMF is going through a restructuring as well. Where before it was the lifeline for developing economies, such as in Mexico in the 1980s, Southeast Asian countries in the 90s and Uruguay in the early 200os. Today, clearly the outlook has changed, the IMF’s main concern is EU member Greece, and it is monitoring with an awfully close eye the likes of Ireland, Portugal, Italy and Spain-the latter two being fully developed economies. In addition, other institutions such as the Inter-American Bank (Latin America/Caribbean) and the ASEAN (Southeast Asia) are accumulating more clout, reinforcing the notion of the present shifting of economic powers.

Thus, is the new scenario now an ideological battle between East and West? Due to restructuring of the financial globally system, should the West be threaten by the East? It seems that international relations and geopolitical power can no longer be measured by political and military power. The main global indicator is now GDP. It is GDP that dictates who leads and who doesn’t. As a result, the West will have to accept this new normal. Vilifying emerging powers such as China has no favorable consequences; in fact, it moves countries further away from finding solutions. Economies in the West must adjust and fine new sectors where they can uphold a comparative advantage in the international marketplace.

The IMF now is in a precarious position, because it can change its’ framework of not just proving aid to countries in dire need or coordinating policies among countries. Instead the IMF has the opportunity to implement a global economic model that countries can refer to when debating domestic economic reforms.

Economics, trade and commerce is local and global, therefore domestic policymakers have to take into account international affairs when implementing fiscal and monetary policy. The IMF no longer needs to be just the lifeguard of the global economy, it can approach its’ new rejuvenation by creating a web-like matrix (in both lending and consulting) that represents the current global economic reality-interconnectedness. The idea of developed vs. developing markets will soon be outdated, and the IMF must prepare for this new reality where the emerging powers will soon warrant the same merit and significance as the West.

Commodities and Risk

By Chrisella Sagers, Diplomatic Courier Correspondent

foremost example of this has been China’s search for energy sources to fuel its red-hot economy in far-flung places such as Africa and Kazakhstan. Much of China’s foreign policy has been built around this search for energy and economic opportunity, and it has led to some potentially dangerous conflicts. The South China Sea is supposedly home to very rich oil deposits, but the waters are contested, claimed by multiple countries as their Exclusive Economic Zone (EEZ) due to the confusing legal boundaries laid out by United Nations Conventions on the Law of the Sea. Rising tensions over the claims to the sea, through which runs some of the busiest shipping lanes in the world, have led to military confrontations. If the issue of demand for commodities and volatility in the markets is not addressed on a global scale, this area could see an outbreak of war.

Sometime around Halloween this year, the world reached a population of 7 billion people. Somehow, each of those 7 billion people will need to have access to enough food and energy to survive. But as the population increases, so does the competition for these vital commodities, leading to skyrocketing prices.

This is a concern that will affect not only the poorest, but all the nations of the world.

In the richer half of the world, increased consumer demand in the richest countries leads to increased demand for energy to run machines in manufacturing countries. This drives up energy prices across the board, negatively affecting consumer-driven economies when household budgets are pinched by the rising cost of transportation, heating in the winter, and manufactured goods.

In order to protect their economies, countries begin to seek out the cheapest forms of energy. The

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In the poorest half of the world, volatile food prices contribute greatly to dangerous instability. The timing of the Arab Spring after a sharp rise in wheat prices was no mistake; the riots originally began as protests against the government for the failure to insulate the population against high food prices, and gained enough momentum to overthrow the unresponsive leaders. The West has attempted to save face by calling these movements “pro-democracy” efforts, without actually taking the steps to ensure that more such movements would not be sparked by continuing volatility in food prices.

The government of France has attempted to lay out a global framework to lessen commodity volatility during its leadership of this year’s G20, but simply discussing ideas is not enough. Oil prices continue to grow ever higher, and food prices are once again nearing the global high that they reached in 2008. This issue must be addressed in concrete terms on the global scale, before increasing volatility leads to more instability and violence.

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