Portfolio | November 2013

Portfolio Exclusive to Emirates First Class and Business Class

RUNAWAY SUCCESS China’s Bullet Trains SINGAPORE REAL ESTATE An Underground Movement RENEWABLE ENERGY Germany’s Big Gamble

Frits van Paasschen Hospitality the Starwood Way

Issue 95 ■ November 2013

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This issue NOVEMBER 2013

Portfolio

Exclusive to Emirates First Class and Business Class

Cover Story 30 Mr. Hospitality Starwood’s approach to meeting the dynamic demands of a new golden era of luxury travel is simple, according to its President and CEO Frits van Paasschen: anticipate, innovate and adapt.

Features 38 Clean Energy Proves Complex

54 India’s Falling Economic Tide

Germany’s plan to rely on renewable energy is expected to

The recent decline has laid bare some chronic problems

cost about $735 billion. But that number is rising as new

underlying India’s economy.

challenges emerge.

44 A Runaway Success

58 Singapore Looks Underground The city-state of Singapore is one of the world’s most

China’s high-speed rail system has supported the country’s

crowded urban centres and it is running out of space. One

economic growth, boosted productivity and opened up new

proposed solution is to build underground.

markets.

50 Social Shopping On the Web Internet shopping is easy when you know what you want.

Now a new generation of e-commerce sites is targeting the browsing and social aspect of shopping.

38

44

58

7

Portfolio

8

Exclusive to Emirates First Class and Business Class

Essentials 65 Treasures of the Cinque Terre The five small coastal villages that make up the Cinque Terre are rightly listed on the UNESCO World Heritage List. Yet, it isn’t as touristy as many would assume.

70 Manaus’ Arena Amazonia Challenge Building a stadium for next year’s FIFA World Cup Brazil in Manaus, a city in the middle of the Amazon rain forest, has

65

faced some unique obstacles.

76 Moving a Way of Life Tsukiji, the world’s largest fish market and a popular tourist attraction, is being moved to an offshore island by the Tokyo authorities.

80 Ripe for Improvement Science is trying to engineer a tastier alternative to the bland supermarket tomato.

70

84 Tracking Theft for Profit The Art Loss Register database includes around 350,000 missing works and has recovered more than $250 million worth of art, earning fees from insurers and theft victims.

88 Other Business Portfolio takes a light-hearted look at the latest business news.

80

Departments 11 Notebook World business in a nutshell.

19 Observer Spotting and analysing business trends.

28 Column: Somini Sengupta Tech That Knows You

Published for Emirates by

Media One Towers, Dubai Media City, PO Box 2331, Dubai, UAE. Telephone: (+971 4) 4273000 e-mail: emirates@motivate.ae

Editor-in-Chief Obaid Humaid Al Tayer Managing Partner & Group Editor Ian Fairservice Editorial Director Gina Johnson Group Editor Guido Duken Junior Writer Mary Sophia Picture Researcher Hilda D’Souza Editorial Assistant Londresa Flores Art Director Tarak Parekh Designer Charlie Banalo Head of Production S Sunil Kumar Senior Production Manager C Sudhakar Group Sales Manager Jaya Balakrishnan Email: jaya@motivate.ae General Manager – Group Sales Anthony Milne Email: anthony@motivate.ae Sales Manager Melroy Noronha Email: melroy@motivate.ae

INTERNATIONAL MEDIA REPRESENTATIVES AUSTRALIA/NEW ZEALAND Okeeffe Media; Tel + 61 412 080 600, licia@okm.com.au BENELUX M.P.S. Benelux; Tel +322 720 9799, francesco.sutton@mps-adv. com CHINA Publicitas Advertising; Tel +86 10 5879 5885 GERMANY IMV Internationale Medien Vermarktung GmbH; Tel +49 8151 550 8959, w.jaeger@imv-media. com HONG KONG/MALAYSIA/THAILAND Sonney Media Networks; Tel +852 2151 2351, hemant@sonneymedia.com INDIA Media Star; Tel +91 22 4220 2103, ravi@ mediastar.co.in ITALY & SPAIN IMM International; Tel +331 40 1300 30, n.devos@imm-international.com JAPAN Tandem Inc.; Tel + 81 3 3541 4166, all@tandem-inc. com NETHERLANDS GIO Media; Tel +31 6 29031149, giovanni@gio-media.nl TURKEY Media Ltd.; Tel +90 212 275 51 52, mediamarketingtr@medialtd.com.tr UK Spafax Inflight Media; Tel +44 207 906 2001, nhopkins@spafax.com USA Totem Brand Stories; Tel +212 896 3846, faith.brillinger@totembrandstories.com

84 Emirates takes care to ensure that all facts published herein are correct. In the event of any inaccuracy, please contact The Editor. Any opinion expressed is the honest belief of the author based on all available facts. Comments and facts should not be relied upon by the reader in taking commercial, legal, financial or other decisions. Articles are by their nature general, and specialist advice should always be consulted before any actions are taken.

Printed by Emirates Printing Press, Dubai, UAE

Portfolio

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Notebook

11

getty images

BUSINESS NEWS IN BRIEF

The New Normal shunning Debt: In the five years

Five years aFter Us investment

five years before the Great Recession

bank Lehman Brothers collapsed,

began in December 2007 and in the five

before the crisis, household debt in the 10

triggering a global financial crisis

years that followed, through the end

countries jumped 34 per cent, according

and shattering confidence worldwide,

of 2012. The focus was on the world’s

to Credit Suisse. Then the financial crisis

families in countries as varied as the

10 biggest economies – the US, China,

hit, and people stopped borrowing. Debt

United States, Japan, the United

Japan, Germany, France, the UK, Brazil,

per adult in the 10 countries fell one per

Kingdom and Germany remain

Russia, Italy and India – which have half

cent in the 4½ years after 2007.

too distrustful to take chances with

the world’s population and 65 per cent of

their money.

global gross domestic product.

An Associated Press analysis of

retreat from stocks: A desire for

Hoarding Cash: Looking for safety for their money, households in the six biggest developed economies added $3.3 trillion,

households in the 10 biggest economies

safety drove people to dump stocks,

or 15 per cent, to their cash holdings in

shows that families continue to spend

even as prices rocketed from crisis lows

the five years after the crisis.

cautiously and have pulled hundreds

in early 2009. Investors in the top 10

of billions of dollars out of stocks, cut

countries pulled $1.1 trillion from stock

save more, people have reined in their

borrowing for the first time in decades

mutual funds in the five years after the

spending. Adjusting for inflation, global

and poured money into savings and

crisis, or 10 per cent of their holdings at

consumer spending rose 1.6 per cent a

bonds that offer low interest payments,

the start of that period. They put even

year during the five years after the crisis,

often too low to keep up with inflation.

more money into bond mutual funds –

according to PricewaterhouseCoopers.

$1.3 trillion – even as interest payments

That was about half the growth rate

on bonds plunged to record lows.

before the crisis. n

The AP analysed data showing what consumers did with their money in the November 2013

spending slump: To cut debt and

12

Notebook RecoRd foR chinese BuyeR

Numbers Game

JPMorgan Chase & Co’s deal to sell 1 Chase Manhattan Plaza to Fosun International would be the largest purchase

€18.8

million

of a New York building by a

payoff to

Chinese buyer, showing Asian

former Nokia CeO stephen

investors’ growing appetite for

elop triggered angry reactions

US real estate.

Shanghai-based Fosun,

in Finland. Nokia’s chairman risto siilasmaa admitted that

run by billionaire Guo

the Canadian will pocket €14.6

Guangchang, agreed to

million more than predecessor

buy the 60-storey lower

Olli-pekka Kallasvuo, who was dismissed from the position three years ago.

98.8%

of Dubai’s

618

rhinos have been killed in south africa this year so far, showing the scale of escalation of the illegal wildlife trade that has gone up from just 13 in 2007 to 668 in 2012. rhino poaching is a big concern for the country that is left with a population of just 18,000 white and 4,000 black rhinos.

Manhattan tower for $725 million, according to a statement filed to Hong Kong’s stock exchange.

water is

supplied by desalination plants. this highly energy-consuming operation is done in an efficient way by using natural gas and liquefied natural gas as the

The World In Figures

$1.7

billion is being drawn from the

Us treasury fund by the Us Federal housing administration

primary fuel according to the

to cover for a shortfall in its key

CeO of Dubai electricity and

mortgage programme, the first

Water authority, the state-

time in its 79-year history that

owned utility.

it has needed aid. the Fha

expanding US property

¥50

Chinese buyers are

needs the money due to the

investments, seeking yield

billion (yuan) is

high number of loan defaults

and a safe haven while the

set to be the

that occurred between 2007

government maintains curbs

and 2009.

on domestic purchases. This

biggest single investment in film

year, a group including Zhang

production facilities in China.

Wang Jianlin, the country’s third richest man, is spending the money on Oriental movie

¥1

trillion (yen) has been earmarked by tokyo

$30.6

million is

Xin, the billionaire co-founder

the record

of Soho China, took a stake in

price for a flawless 118-carat

midtown Manhattan’s General Motors Building.

electric power Company to pay

oval diamond offered by an

comprising of the world’s

for dismantling the damaged

unidentified asian collector

first underwater studio, an

nuclear reactors at its Fukushima

for the sparkling gem at the

countries in New York

amusement park and seven

Daiichi plant that was hit by an

sotheby’s auction in hong

property investment this

hotels is aspiring to snatch the

earthquake in march 2011. the

Kong. the previous record for

year with $1.37 billion of

guinness title for the world’s

company will raise the money

a white diamond was set in

acquisitions, not including

largest film city currently held by

by cutting costs and capital

may at Christie’s in geneva

Chase Manhattan Plaza,

hyderabad’s ramoji Film City

spending, instead of seeking

when a pear-shaped jewel sold

according to Real Capital. Next

in india.

public money.

for $26.7 million.

is Canada with $1.19 billion.

metropolis. the film studio

China leads all foreign

Portfolio

Notebook

14

IMF Cuts Global EConoMIC Growth ForECasts Revising down its forecasts

getty images

forecast remain to the downside,” the fund said in its World Economic Outlook.

The half-yearly analysis of global

for growth in both 2013 and

trends was critical of the way, across the

2014, the fund warned that the

board, how budget cuts had been handled

risks were that the performance

in Washington, noting that they had

could be even more lacklustre

contributed to weaker US growth.

and said the Federal Reserve,

Badly handled budget cuts in the United

“Global growth is still weak, its underlying dynamics are changing, and the risks to the

The IMF said the impulse to stronger

the American central bank,

global growth in 2014 was expected to

needed to take special care as

come mainly from the US, where activity

it contemplated reducing its

is predicted to move into a higher gear

colossal stimulus to the world’s

as the impact of higher taxes and lower

biggest economy.

spending eases and the Fed only slowly

The IMF now expects the global economy

withdraws its stimulus.

“In the euro area, business confidence

States and a slowdown in activity in big

to expand by 2.9 per cent in 2013 and

developing countries mean the global

3.6 per cent in 2014 – down by 0.3 and

indicators suggest that activity is close to

economy will expand more slowly than

0.2 points respectively on its last set of

stabilising in the periphery and already

expected this year, according to the

predictions made in July – despite signs of

recovering in the core economies”, the

International Monetary Fund.

recovery in the euro area.

IMF noted.

China Loosens Yuan Investment Rules Beijing will give London-based institutions

the yuan, rather than via the dollar. The

currency, but is treading cautiously due to

the right to invest directly into China using

pound will become the fourth currency

fears over volatility. The UK is already a

the yuan, giving the City an edge over other

to trade directly with the yuan, following

global hub for trading other currencies.

financial centres fighting for business.

the US and Australian dollars and the

Investors will be able to apply for licences to buy Chinese stocks and bonds – rather than having to go via Hong Kong – with

Britain accounts for 62 per cent of yuan

yen, though it is unclear when trading

trading outside China and Hong Kong.

will begin.

Daily trade in London has risen to around

China is seeking to internationalise its

$5 billion since it began last year.

an initial quota of 80 billion yuan, under the extension of the Renminbi Qualified Financial Institutional Investor scheme.

Chinese banks will also be able to apply to open wholesale branches in Britain, rather than using tightly regulated subsidiaries – encouraging them to expand their activity in the UK. Chinese banks have been pushing hard for the right to open branches and several warned the Treasury last year that they were moving much of their business imposed by their subsidiary status.

The UK and China have also agreed to allow direct trading between sterling and

afp/grapheast

to Luxembourg because of the restrictions

Portfolio

16

Notebook DUBAI EVENT: DUBAI AIRSHOW WEBSITE: DUBAIAIRSHOW.AERO DATE: 17-21 NOVEMBER 2013 VENUE: DUBAI WORLD CENTRAL The Dubai Airshow will be held at the brand new Dubai World Central airport located in Jebel Ali. The expansive, purposebuilt venue encompasses extensive static aircraft display areas, chalets, ample parking zones and catering facilities. The biennial Airshow is only open to registered trade visitors ensuring that exhibitors meet serious attendees, key buyers and decision makers.

Last year the event featured around 960 exhibitors from 122 countries and received a footfall of more than 56,548 international visitors and resulted in $63.3 billion worth of orders.

The show is constantly evolving and serves as a valuable platform for promoting new trends and issues in the region’s aviation industry. This year the Dubai Airshow is going green and will have dedicated zones offering an in-depth understanding of carbon trading, bio-fuels, emissions and green technologies.

EVENT: MENA 12TH FOREX SHOW WEBSITE: MEFOREXEXPO.COM DATE: 14-15 NOVEMBER 2013 VENUE: JUMEIRAH BEACH HOTEL This event is a meeting hub for international and regional brokerage houses, forex banks, and capital investment companies. It is a great opportunity for investors to learn about the most recent global developments and closely watch the progress of the market’s leading players. There will be a series of presentations, interactive panel discussions and insights into case studies. The event held in April earlier this year witnessed 1,600 visitors and $20 million in business deals signed off.

DUBAI

United Arab Emirates

EVENT: THE BIG ENTERTAINMENT SHOW WEBSITE: BIGENTERTAINMENT.AE DATE: 18-19 NOVEMBER 2013 VENUE: DUBAI INTERNATIONAL CONVENTION & EXHIBITION CENTRE The Big Entertainment Show is the largest event of its kind in the MENA region. It brings together key elements of the entertainment industry such as Licensing Dubai, My Content and Dubai World Game Expo all under one banner. It is where hundreds of manufacturing and trading companies will explore business opportunities in the field of TV, films, video games, interactive entertainment, animation, and brand licensing.

EVENT: MIDDLE EAST EXCLUSIVE WEBSITE: MIDDLEEASTEXCLUSIVE.COM DATE: NOVEMBER 18-20 2013 VENUE: DUBAI WORLD TRADE CENTRE As the region’s only show of its kind that is dedicated to the travel retail sector, this event is key to companies and brands that target the travel sector. There will also be a host of related events being held on the sidelines such as the Middle East Exclusive Golf Tournament, a gala dinner attended by both visitors and exhibitors, and other sponsored forums where suppliers get to network with key top-level buyers and executives in a relaxed and professional manner.

EVENT: THE BIG 5 – INTERNATIONAL BUILDING AND CONSTRUCTION SHOW 2013 WEBSITE: THEBIG5.AE DATE: NOVEMBER 25-28 2013 VENUE: DUBAI WORLD TRADE CENTRE Dedicated to building and construction, this event will draw a host of real estate developers, engineers, architects, contractors, investors and property owners. Attendees benefit from networking with 2,500 manufacturers and distributors from 65 countries and learning first hand of the 30,000 plus innovative construction products to be launched in the market. There will be live hands-on demonstrations and more than 130 free educational seminars providing information on product installation and technical updates.

Portfolio

Observer BUSINESS NEWS IN BRIEF

19

Ash Odedra, second right, goes over features of a nuclear reactor in Bellevue, Washington.

Turning Nuclear Waste Into Power TerraPower, a startup led by Bill Gates, is working on a new kind of reactor that will turn today’s nuclear waste into tomorrow’s power, reports Matthew Wald.

reactor is that it could eliminate several routes to weapons proliferation. Iran, for example, says its nuclear programme is for peaceful purposes, but it is enriching far more uranium than it needs for power generation. The United States has long said

In a drab one-storey buIldIng

building a prototype reactor could cost $5

that Iran is enriching uranium to develop

in Bellevue, Washington, set between an

billion – a reason Gates is looking for a home

a nuclear bomb.

indoor tennis club and a home appliance

for the demonstration plant in rich and

showroom, dozens of engineers, physicists

energy-hungry China. (Gates, of course, has

concentrations of three to five per cent

and nuclear experts are chasing a radical

plenty of money of his own. This year Forbes

uranium 235, an enriched fuel that leaves

dream of Bill Gates: a new kind of nuclear

listed him as the world’s second-richest

behind a pure, mostly natural waste,

reactor that would be fuelled by today’s

person, with a net worth of $67 billion.)

uranium 238. (A uranium bomb runs on

© 2013 New York Times News service

nuclear waste, supply all the electricity in the

“The hope is that we’ll find a country, with

Today’s nuclear reactors run on

more than 90 per cent uranium 235.) In

United States for the next 800 years and,

China being the most likely, that would be

today’s reactors, some uranium 238 is

possibly, cut the risk of nuclear weapons

able to build the demo plant,” Gates said last

converted to plutonium that is used as a

proliferation around the world.

year in a conversation with the energy expert

small, supplemental fuel, but most of the

Daniel Yergin. “If that happens, then the

plutonium is left behind as waste.

The people developing the reactor work for a startup, TerraPower, led by

economics of this are quite a bit better than

Gates and a fellow Microsoft billionaire,

the plants we have today.”

Nathan Myhrvold. So far, it has raised tens of millions of dollars for the project, but November 2013

Perhaps one of the most intriguing arguments supporters make about Gates’

In contrast, the TerraPower reactor makes more plutonium from the uranium 238 for use as fuel, and so would run almost entirely on uranium 238. It would need only a small

20

Observer whatever reasons, you are willing to make a long-term bet, that is not typical of what venture capitalists do,” said Burton Richter, a Nobel laureate in physics. “It’s hard to get a 20-year thing from the standard venture capital world,” he said, adding that financing projects like TerraPower’s was more typical of governments or sovereign wealth funds.

One-hour meetings with Gates about TerraPower sometimes turn into five-hour meetings, associates say.

In Bellevue, TerraPower is a spinoff of Intellectual Ventures, a company co-founded

by Myhrvold that focuses on inventing new products and techniques, among them improved seeds for subsistence farmers Ted Ellis, of TerraPower, checks his instruments after running tests.

and methods for keeping vaccines cold for weeks in places where there is no electricity.

amount of uranium 235, which would

acknowledge the enormous challenges but

But its critics call it a patent troll because it

function like lighter fluid getting a charcoal

say they are convinced that he and they are

buys large portfolios of technology patents

barbecue started.

chasing the solution not only to energy and

and uses them, they say, to sue software

weapons proliferation but also to climate

designers, smartphone makers and others.

The result, TerraPower’s supporters hope, is that countries would not need to enrich uranium in the quantities they do now,

change and poverty.

“If you could pick just one thing to lower

TerraPower employees work in a building that also houses Intellectual Ventures, which

undercutting arguments that they have

the price of – to reduce poverty – by far

includes a chamber for raising mosquitoes,

to have vast stores on hand for a civilian

you would pick energy,” Gates said as he

a test kitchen for developing new ways to

programme. TerraPower’s concept would

introduced the reactor idea in a speech in

prepare and preserve food, and hand-built,

also blunt the logic behind a second route to

2010. “Energy and climate are extremely

high-precision instruments for measuring

a bomb: recovering plutonium from spent

important to these people, in fact, more

tiny details of prototype nuclear fuel.

reactor fuel, which is how most nuclear

important to them than anyone else on the

TerraPower is not alone in pursuing

weapons are built. Since so much uranium

planet,” he added, referring to killer floods,

a reactor that will turn waste uranium

238 is available, there would be no reason to

droughts and crop failures driven by carbon

into energy, and if such a concept can be

use that plutonium, TerraPower says.

dioxide given off in energy production.

commercialised, Gates might not be the

He illustrated his talk with a photo of

first to do it. General Atomics, which has

weapons will still need lots of electricity, said

schoolchildren doing their homework under

decades of experience in nuclear power but

John Gilleland, chief executive of TerraPower,

street lamps.

is probably best known for producing the

Countries that do not have nuclear

and “we would like to see them build something that allows us to sleep at night.”

Doug Adkisson, TerraPower’s senior vice

Predator drone, is pursuing what it calls an

president for operations, said Gates had “a

“energy multiplier” reactor module on the

very humanitarian but very cold assessment”

same general principle. General Atomics,

term bet. Even optimists say it would take

about nuclear power and what it could do.

which is based in San Diego, would use

until at least 2030 to commercialise the

What drives him to nuclear power, he said,

helium, not sodium, however, potentially

technology. What the competition would

are the questions “What have you got, and

simplifying some problems.

look like then – wind, solar, natural gas or

what can you do to raise the living standard

some other technology – is not clear. If the

of a whole lot of people?”

No one disputes that this is a very long-

idea can be commercialised, it is not even clear that TerraPower could do it first.

The engineers working for Gates

Despite its difficulties, some outside experts applaud Gates for trying.

“If you’ve got a huge amount of money, for

“You just set it up, let it burn, and it goes,” said John Parmentola, the company’s senior vice president.

Like TerraPower, General Atomics is courting the Chinese. n Portfolio

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Brian P. McAndrews Pandora Media, an Oaklandbased US internet radio company, appointed Brian McAndrews as its chief executive officer on September 11. McAndrews took over from long-time CEO Joe Kennedy, who retired in March earlier this year. McAndrews also serves as Pandora’s president and board chairman.

The appointment comes at a crucial time as Pandora, the oldest and most successful streaming service, faces strong challenges.

The company, despite rising revenues from advertising sales and a robust 72 million listenership, has been reporting quarterly losses.

Pandora says this is due to high royalty payments to artists, which it hopes to renegotiate before the federal royalty board in January.

Decreasing the royalty rates will be the first big test for the 54-yearold CEO. McAndrews will focus on further strengthening Pandora’s market position at a point where it is already seeing rapid revenue growth. The company posted 58 per cent growth in revenues in the first quarter, while revenues rose to $128.5 million from $81.50 million year-on-year.

“Advertising support is a key part of the equation here. I think Pandora’s done a lot of great things and innovative things, particularly in the mobile space. I’m sure there are ways we can continue to optimise,” said McAndrews.

The competing edge in the internet radio sector is determined by the company’s ability to provide free music streaming. Recently, Apple rolled out an iTunes radio application on its mobile operating software, while Microsoft launched its free Xbox Music streaming service on the web. Nokia Music, Spotify and Google All Access are joining the fray with free music and radio apps.

Despite these challenges Pandora’s stock, which has more than doubled since the start of the year, rose a further six per cent on the news of McAndrews’ appointment. This echoes the confidence of Tim Westergren, Pandora’s founder and chief strategy officer, who said: “No one better understands the intersection of technology and advertising, which he clearly demonstrated during aQuantive’s meteoric rise.” This refers to McAndrews’ successful efforts at building Avenue A, a small digital agency, into the first digital network aQuantive. McAndrews later sold aQuantive to Microsoft for an estimated $6.3 billion in August 2007.

McAndrews, who graduated from the Stanford Graduate School of Business, has served as senior vice president at Microsoft and most recently was managing partner at Madrona Venture Group.

PC Shipments Continue Decline Worldwide personal-computer shipments have declined for the sixth consecutive quarter, according to market researcher Gartner. More telling is that PC shipments in the third quarter 2013 reached the lowest level since 2008.

Global unit sales fell 8.6 per cent to 80.3 million, and the figure could have been worse if shipments had not climbed 3.5 per cent in the US thanks to back-to-school demand.

“Consumers’ shift from PCs to tablets for daily content consumption continued to decrease the installed base of PCs both in mature as well as in emerging markets,” Mikako Kitagawa, an analyst at Gartner, said in a statement. “A greater availability of inexpensive Android tablets attracted first-time consumers in emerging markets, and as supplementary devices in mature markets.”

Beijing-based Lenovo held a 17.6 per cent market share worldwide, helped by a 2.8 per cent increase in shipments, Gartner said. Hewlett-Packard retained its No. 2 spot after a 1.5 per cent gain in unit sales, giving it a 17.1 per cent share. Dell came in third with an 11.6 per cent slice of the market, and a one per cent jump in third-quarter shipments. Taiwan’s Acer and Asustek Computer both posted shipment declines of more than 20 per cent.

While sales in the US may have “passed the worst declining stage,” according to Gartner’s Kitagawa, other regions posted double-digit percentage drops. Asia-Pacific shipments fell 11.2 per cent, while Europe, Middle East and Africa slid 13.7 per cent, Gartner said.

getty imAges

22

Portfolio

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Observer

24

London’s Foreign Buyers

Foreign-born buyers, including those living in the UK, made 69 per cent of new home purchases in London’s prime areas in the two years through June, while those living abroad bought 49 per cent of the homes, Knight Frank LLP said in a report.

About 28 per cent of those who bought central London homes worth £1 million ($1.6 million) or more in the year through June don’t live in the UK, the broker said.

Overseas investors are buying real estate in the UK capital to preserve wealth as political and economic tension roils their homes markets. Savills Plc and Knight Frank forecast in July that luxuryhome values in districts such as Mayfair, Belgravia and Knightsbridge would rise six per cent this year.

getty images

Most overseas buyers are from Europe, the Middle East and Russia, Knight Frank said. British residents bought 85 per cent People living outside the UK accounted

affluent investors sought a safe haven

to 90 per cent of all new homes sold in

for about half of all new home purchases

from turmoil in the Middle East and

Greater London in the two years through

in London’s best neighbourhoods as

Europe’s debt crisis.

June, the broker said.

Habtoor Group Launches $3 Billion Project Family-owned Dubai conglomerate Al Habtoor Group launched a $3 billion real

offer of shares last year.

Developers in Dubai are back to

canal. The Dubai government said in October that it would spend $545 million on building a canal through its downtown area.

The return of a bullish mood to the real estate market has caused home prices in

estate development in the emirate that

announcing mega-projects as the emirate

the emirate to surge over 22 per cent in the

would include 3,000 hotel and residential

recovers from its 2009-2010 debt crisis.

past year, according to consultants Jones

units, as well as a water-themed theatre.

Dubai firms have announced projects worth

Lang LaSalle.

The group, whose operations span the

nearly $40 billion in

hospitality, construction, education and

the first half of 2013,

automotive sectors, said it expected about

according to some

20,000 people would visit Al Habtoor City

estimates by local

every day.

media, including

Chairman Khalaf Al Habtoor told

plans to construct the

reporters that the group would use its own

world’s largest Ferris

resources to finance the project, which

Wheel and billion-

would be completed by 2016.

dollar theme parks.

Al Habtoor, which has a stake in a joint-

The Habtoor

venture construction firm with Australia’s

development would

Leighton Group, shelved plans to raise as

run alongside Dubai’s

much as $1.6 billion in an initial public

newly announced Portfolio

Observer The World

CompIled by Hilda d’souza

Top 10

Congo’s Hydroelectric Bidding

ToP WoRld BaNKs oF 2013 WiTH laRGEsT ToTal assETs rank

Bank

COUnTrY

TOTal asseTs, Us$Bn

1.

Industrial & Commercial Bank of China

China

2.

HSBC Holdings

UK

2,681.36

3.

Deutsche Bank

Germany

2,597.36

2,953.85 AFp/GRApHeAST

26

4.

Credit Agricole Group

France

2,582.42

5.

BNP Paribas

France

2,507.96

6.

Mitsubishi UFJ Financial Group

Japan

2,486.31

The Democratic Republic of Congo is open to more investors

7.

Barclays PLCl

UK

2,414.78

joining three groups of companies bidding to construct the $12

8.

JP Morgan Chase & Co

USA

2,389.35

9.

China Construction

billion Inga 3 hydropower project, Energy Minister Bruno Kapandji

Bank Corporation

China

2,361.60

Japan Post Bank

Japan

2,118.84

10.

technical adviser, told the conference.

ToP us BaNKs oF 2013 WiTH laRGEsT ToTal assETs Bank

1.

JP Morgan Chase & Co

Congo will choose a development group for the 4,800-megawatt project in June or July of next year, Max Munga, Kapandji’s

SouRCe: RelbAnkS.Com

rank

said at the iPad mining and infrastructure conference.

TOTal asseTs, Us$m

Construction on the Congo River may begin in October 2015 and

2,389,349

power generation could start in 2020. South Africa and Congo are set to sign a treaty this month that will guarantee 2,500 megawatts

2.

Bank of America

2,174,611

3.

Citigroup

1,881,734

4.

Wells Fargo & Company

1,436,634

from the project goes to South Africa.

Inga 3 will be the first step in the Grand Inga project, which may

5.

Goldman Sachs Group

959,000

6.

Morgan Stanley

801,000

eventually produce more than 40,000 megawatts of electricity,

7.

Bank of New York Mellon

355,942

making it the largest source of hydropower in the world. About 170

8.

US Bancorp

355,447

square kilometres around the Congo River will be flooded to create

9.

HSBC North America Holdings

305,349

10.

PNC Financial Services Group

300,812

a total of eight Inga hydropower plants, Munga said.

ToP EuRoPE BaNKs oF 2013 WiTH laRGEsT ToTal assETs rank

Bank

COUnTrY

TOTal asseTs, Us$Bn

Inga 1, built in 1972, and Inga 2, completed in 1982, have the capacity to produce about 1,775 megawatts, though they are being refurbished and operating below capacity.

1.

HSBC Holdings

UK

2,681

Congo will provide 1,300 megawatts of power from Inga 3 to

2.

Deutsche Bank

Germany

2,597

miners in Katanga province, with the remaining 1,000 megawatts for internal use outside of mining, Munga said. Congo is the world’s

3.

Credit Agricole Group

France

2,582

4.

BNP Paribas

France

2,507

5.

Barclays PLC

UK

2,414

eighth-largest copper producer and its miners currently have a power deficit of more than 300 megawatts, according to Kapandji.

6.

Royal Bank of Scotland Group

UK

1,979

7.

Banco Santander

Spain

1,637

8.

Societe Generale

France

1,592

capacity and because of mismanagement, only about half of that

9.

ING Group

Netherlands

1,508

energy is available, according to the World Bank. Only nine per cent

10.

Groupe BPCE

France

1,490

of Congo’s 70 million people have electricity.

The country only has about 2,400 megawatts of installed power

Portfolio

Commentary

28

Somini Sengupta

Tech That Knows You How does a macHine verify the

OneID to open his garage door at home.

can rally around. Companies affiliated

identity of a human being? Irises, heartbeats,

The Achilles’ heel of many new internet-

with Fido are already testing products,

fingertips and voices, for starters.

connected devices, Fenton said, is protecting

like fingerprint readers and software that

secure access.

recognises faces and voices. One day,

Authentication has been a problem since the early days of the web. Now come a batch

Biometric authentication tools, like

of high-tech alternatives as worries grow

fingerprint readers, have already been put

e-commerce site by speaking into a

about the security risks associated with

in devices like laptops, but they have not

computer and buy something with a gaze

traditional username and password systems.

always worked correctly. It remains to be

at a mobile PayPal app.

Apple’s new iPhones included for the first time a model with a fingerprint sensor that can be used instead of a passcode to

seen how well Apple’s fingerprint sensor will work and whether users will adopt it.

At the same time, biometric sensors raise

Facebook has arguably had the most success in becoming a one-stop identity verification service. Millions of websites

open the phone and buy products. The new

questions of security. When Apple’s sensor

allow users to log in with their Facebook

feature is part of a trove of authentication

was announced, a flurry of scepticism

credentials, which is also a way for Facebook

tools being developed for consumers.

and privacy concerns erupted online even

to get to know you better – and serve you

though Apple said users’ fingerprints

more tailored ads. The dangers are obvious.

involve the immutable properties humans

would be stored only on the phone – not

A thief with your Facebook credentials can

are encoded with, while others turn our

sent to online servers or made available to

pretend to be you across the web.

phones into verification devices.

app developers.

Some of these, like the fingerprint sensor,

Mozilla has been trying to popularise its Persona alternative to that single sign-

Among the most novel biometric authentication tools is a new wristband

on system. Mozilla makes sure your

developed by cryptographers at the

email provider verifies that the account

University of Toronto. It contains a

belongs to you. Then, for every site that

voltmeter to read a heartbeat.

accepts a Persona login, you can log in with the original verified email. Passwords are

“You put it on. It knows it’s you. It

not required.

communicates that identity securely to

Mozilla’s identity product is linked to only

everything around you,” said Karl Martin, one of its creators. Security is a primary

a small number of websites – “thousands”

selling point of the wristband, Nymi. While

is all a Mozilla spokesman would say –

a heart can be broken, Martin promises that

compared with several million sites that

a heartbeat cannot.

support a Facebook login.

Johnathan Nightingale, a vice president

These technologies arrive against the backdrop of mounting concerns

of engineering at Mozilla, said the

over security and privacy. Thousands of

emergence of internet-connected devices all around us brings a new urgency to the need

usernames and passwords have been stolen from various popular sites. In August, it was © 2013 new York TimeS newS Service

users might be able to log into a favourite

Another problem: Nymi, OneID and

to develop alternatives to passwords.

discovered that even passwords as long as

other startups in this field will struggle to

“The idea that all the things around us

55 characters could be broken.

attract consumers without high adoption

are going to be intelligent is great, but they

rates among sites.

don’t all have screens and keyboards and

The startup OneID, based in Redwood City, California, offers a single sign-on

A coalition of hardware and software

password managers,” he said. “They can’t

that can be used on various websites and

companies, calling itself the Fido Alliance,

always count on 12 uppercase letters, three

devices. In a video, an engineer at OneID,

is working on a set of specifications for

lowercase letters, two punctuation marks

Jim Fenton, demonstrated how he used

password alternatives that the industry

and a per cent symbol.” n Portfolio

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Profile

30

Portfolio

31

MR. HOSPITALITY STARWOOD’S APPROACH TO MEETING THE DYNAMIC DEMANDS OF A NEW GOLDEN ERA OF LUXURY TRAVEL IS SIMPLE, ACCORDING TO ITS PRESIDENT AND CEO FRITS VAN PAASSCHEN: ANTICIPATE, INNOVATE AND ADAPT, REPORTS GINA JOHNSON

November 2013

Profile

32

IT’S 1988 AND A YOUNG FRITS VAN Paasschen is embarking on a dusty

pilgrimage that will take him through some remote parts of China to Pakistan. He will travel on the roof of a bus through India, paying just 25 rupees a night for lodging and, when money is tight, he and his band of backpacking wanderlusters will sleep in parks in Switzerland. He relays the travails of a simpler life with a pure adventurer’s heart; a man ever aware of the power and privilege that the world of travel offers.

Things have changed somewhat in the past few decades. In the six years since his appointment as President and Chief Executive Officer of Starwood Hotels & Resorts Worldwide, van Paasschen has visited more than 550 Starwood properties – many of them from the company’s luxury portfolio – in 75 countries. He has also overseen a record 250 hotel openings in the past three years alone, with an additional 400 under development.

“Certainly, the wanderlust is taken care of,” he jokes.

The Starwood luxury story is one of

The Grand Staircase in the newly opened The St. Regis Abu Dhabi.

unprecedented success. With its nine

Paasschen brought 100 of his senior

precipitated the initial move to China

brands that include St. Regis, The Luxury

hoteliers to Dubai in March this year for

(the location of the previous executive

Collection, W Hotels – making up the

the inaugural General Managers Summit

migration two years earlier) was that I was

luxury portfolio – along with Westin,

to discuss what he describes as the new

sitting next to one of our senior executives

Le Meridien, Sheraton, Four Points by

Golden Era of Travel. His insistence that

from Europe and he said to me: ‘Do we

Sheraton, Aloft and Element, Starwood is

they not merely meet in Dubai, but create

have a lot going on in China?’ And I felt

now the world’s largest and most global

an operational base for a month for the

like I had been going on about China all

operator of high-end hotels with more

entire global Starwood HQ, underlines

of the time for a year and so I thought,

than 1,150 properties in 100 countries.

his tenacity for a deeper, more authentic

OK, I just have to get them there.”

Van Paasschen’s focus on the potential

understanding of new travel frontiers.

of emerging markets is at the core of his

“Some of the US-based leaders still

This, coupled with the ability to secure key strategic regional deals as well as a

expansion strategy. “If you had to close

thought of Al Jazeera as a mouthpiece

‘seeing is believing’ element, eventually

your eyes and wake up in 50 years you’d

for Al Qaeda before the summit. You

lead them to choose Dubai as the

invest in Hainan Island,” he states of the

underestimate sometimes, if you travel a

epicenter of emerging market potential.

only destination in China with year-

lot, that other people aren’t as aware of

round sunshine.

what’s going on,” says van Paasschen.

It’s with the future in mind that van

“In fact, one of the things that

Van Paasschen’s belief in the new status quo for luxury travel is the central message behind his robust expansion Portfolio

33

Designer and St. Regis Connoisseur Jason Wu represents a new generation of luxury traveller.

history of hospitality. Today, 90 per cent of the group’s luxury pipeline is outside mature markets with massive expansion in the Middle East and diverse locations such as Colombia, Egypt and Panama. In a private meeting with His Highness Sheikh Mohammed bin Rashid Al Maktoum, UAE Vice President and Ruler of Dubai, van Paasschen presented the fact that Dubai had the most Starwood hotels outside of New York. “He didn’t miss a beat when he said: ‘When are we going to pass New York?’,” laughs van Paasschen.

The first W hotel in mainland China opened this year with W Guangzhou, as did the first St. Regis hotel in Africa with the debut of the St. Regis Mauritius Resort.

In the traditional markets, notable projects plans of the group’s luxury portfolio in

such as designer Jason Wu, has been with

include the multimillion restoration of

particular. The statistics back that up.

an aim to upping the ‘cool factor’ of the

St. Regis New York, the reopening of the

once ultra-traditional brand.

Prince de Galle in Paris and the much-

Since 2009, Starwood’s luxury business

anticipated restoration of the iconic hotel

has increased its gross operating profit by

As the world’s wealth increases in

100 per cent to over $1 billion, making it a

line with a technology boom, so do the

significant player in the $1.5 trillion global

opportunities to redefine luxury in travel.

luxury industry in which travel (worth

Driving the change are statistics that there

travel trends, predicting the future

more than $300 billion) has been the

are more billionaires in the US than ever

profile of a luxury traveller has become a

dominant sector since 2011.

before, but Asia now equals (and will soon

slippery aspiration.

Along with the changing aspirations

surpass) the number of US billionaires.

The Gritti Palace in Venice.

Given the rapid change in luxury

“The people we’re talking about will

of the new global elite, the face of wealth

Since 2009, 17 new millionaires are

be well travelled. They will have been to

has skewed younger, become more diverse

created in Brazil every day.

Paris a dozen times. They will have been

and globally literate. One of the ways

With the flattening of the world’s

to Sri Lanka. The things you could never

Starwood has capitalised on this is rooted

economic and social structures, the last five

have imagined before are now increasingly

in its belief that luxury is now a style

years has seen Starwood nearly double its

common things. And they’re going to

symbol as opposed to a status symbol. The

luxury footprint. W and St. Regis are now

be looking for new places,” predicts van

introduction of St. Regis Connoisseurs,

the fastest growing luxury brands in the

Paasschen.

November 2013

Profile

34

consulting. He has said previously that he made a conscious decision to move away from his analytical approach to become more people-oriented. That has clearly worked. A fervent critic of business jargon, he has become known for his straight talk and genuine ability to listen. The image he projects is of an everyman who warmly greets hotel reception staff in the same way as he does a general manager.

A Dutch native, van Paaschen, 52, moved to the US when he was a boy, graduated with a Harvard MBA and is fluent in five languages. He is conversant in everything from ancient history to Shakespearean literature and is an overachiever by nature, but without a Frits van Paasschen with Guido de Wilde, Senior Vice President and Regional Director Starwood Hotels & Resorts Middle East meeting on their bikes in the Dubai desert.

“New luxury experiences in places such

“With most CEOs the expectation

shred of Wall Street bravado. An avid vegan and map collector, his drive is every bit as much about achieving personal goals as professional ones.

as Africa or the south of Chile are going to

is that they will fire questions at you –

come out of this.

‘What’s you’re occupancy, what are your

Paasschen a business strategies genius.

Starwood’s success story also makes van

room rates?’ – it’s all about finance. But

According to former Nike President Tom

on high-end travel has grown twice as fast

Frits, he’s a visionary… he takes the time

Clarke “He has the ability to take complex

as GDP since the economic crisis. And

to understand and connect with you. He

situations and produce two or three

the travel intensity for business is only

asks about your family and your life.”

actionable plans. A lot of bright people

“From a business perspective, spending

increasing. For example, General Electric

In some circles van Paasschen’s 2006

headquarters is in Connecticut and 80 per

appointment, without any previous hotel

cent of GDP growth is in markets outside

industry experience, was controversial.

his tenure is taking a behemoth institution,

of Europe, North America and Japan.

He had cut his teeth in senior executive

with more than 200,000 employees and

So we’re sending executives to try to sell

roles at Disney, Nike and in private equity

franchise partners, plus making it agile.

struggle with that.”

Key to the changes he has overseen during

jet engines in Dubai or to go to India or other places. I think that business travel is becoming increasingly global for a whole host of reasons, so we think in terms of this emerging travel because of the change in business demands.”

Despite dealing in aspects of luxury, van Paasschen is a humble man. There are no airs and graces, no ties, no designer accessories. He travels on the Starwood G4 Gulfstream for practicality (“it allows me to visit more countries than I have days”) toting not a briefcase but a backpack and, as an avid cyclist, a wellworn Trek road bike.

“He is very human,” says his long-time associate and GM of the newly opened Prince de Galle in Paris, Simon Rusconi.

The Redentore Terrazza Suite Terrace at the Hotel Gritti Palace, a Luxury Collection Hotel, Venice.

Portfolio

CORBIS/ARABIAN EYE

Profile

36

Van Paasschen is an accomplished athlete and committed vegan.

WOOBAR at W Guangzhou.

book list from Amazon or go tag yourself

“It’s a whole host of things,” explains

on Facebook, I don’t think it will be that

van Paasschen.

long before you walk into a hotel and have

“One is being very clear about the reasons we sell real estate and that is

them know who you are, know how old

because we want to focus on building a

your kids are, their interests, and do it in a

high-end, globalised hospitality brand.

way that’s not creepy.

“This is not like a Snowden-type CIA

It’s also about having a senior leadership team that spends time together. And then

thing, this is about knowing you like

it’s about actually creating global project

sparkling water when you sit down in a

capacity that comprises everything from

restaurant.”

having the discipline to launch a new

It is perhaps the simplicity in which

project to starting to standardise the

he sees complex situations that sets van

way we do things around the world to

Paasschen apart.

In discussing the impact of globalisation

pulling IT off the properties and creating a centralised system so you can update the

on luxury trends, van Paasschen offers a

whole thing all at once.

telling anecdote. He recalls the discovery of

“But the reality is we have so much

the earth’s spherical shape by the ancient

more to do. If I felt that we were agile, I

Greeks a millennium before Christopher

wouldn’t be pushing us to become agile.”

Columbus. The scholar Eratosthenes’ theory came about from the simple act of

Part of the future of luxury travel, van Paasschen believes, is being able to predetermine peoples’ needs.

“Now, our marketing team isn’t looking

W Guangzhou, the first of its kind in mainland China.

looking down a well. During the summer solstice he found that the midday sun blocked his shadow, noting that the sun’s

at doing print ads, they’re working on an

to execute, so you suddenly need the

angle of elevation at the same time of day,

ad for an iPhone, which means they need

operators in the room. So it’s a much more

in a different city, indicated a meridian arc.

to get the IT guys in the room. Now the

cross-functional culture of trying to get

IT guys and marketing team are trying

things done. If you can already pay for

discoveries are made in the least complex

to do something that the hotels are able

things on your iPhone, get a recommended

ways,” says Van Paasschen. n

“Sometimes the most important

Portfolio

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Energy

38

CLEAN ENERGY PROVES COMPLEX

Germany’s plan to rely on renewable energy is expected to cost about $735 billion. But that number is rising as new challenges emerge, report Melissa Eddy and Stanley Reid.

Germans are coming face to face with the costs and complexities of moving to renewable energy.

I

T IS AN AUDACIOUS undertaking with wide and deep

Businesses are more and more worried

“Often, I don’t go into my living room in order to save electricity,” said Olaf Taeuber,

support in Germany: shut down the

that their energy costs will put them at a

55, who manages a fleet of vehicles for a

nation’s nuclear power plants, wean

disadvantage to competitors in nations with

social services provider in Berlin. “You feel

the country from coal and promote a

lower energy costs. Some energy-intensive

the pain in your pocketbook.”

wholesale shift to renewable energy sources.

But the plan, backed by Chancellor

industries have begun to shun the country because they fear steeper costs ahead.

Taeuber relies on just a single fivewatt bulb that gives off what he calls a

Newly constructed offshore wind farms

“cozy” glow to light his kitchen when he

alike, is running into problems in

churn unconnected to an energy grid still

comes home at night. If in real need, he

execution that are forcing Germans to

in need of expansion. And despite all the

switches on a neon tube, which burns

come face to face with the costs and

costs, carbon emissions actually rose last

up all of 25 watts. Even so, with his bill

complexities of sticking to their principles.

year as reserve coal-burning plants were

growing rapidly, he found himself seeking

fired up to close gaps in energy supplies.

help recently to fend off a threat from

Angela Merkel and opposition parties © 2013 NEW YORK TIMES NEWS SERVICE

can no longer afford to pay the bill.

German families are being hit by rapidly increasing electricity rates, to the point where growing numbers of them

A new phrase, “energy poverty,” has entered the lexicon.

Berlin’s main power company to cut off his electricity.

Portfolio

Energy

39

He is one of a growing number of

and pro-business Christian Democrats,

and may eventually surpass even that of

Germans confronting the realities of trying

came up with her plan in 2011, in the

the Eurozone bailouts that have received

to carry out Merkel’s most ambitious

emotional aftermath of the Fukushima

far more attention during Merkel’s tenure.

domestic project and one of the most

nuclear disaster in Japan. It envisions

Yet as the transition’s unknowns have

sweeping energy transformation efforts

shutting down all of Germany’s nuclear

grown, so have costs for the state, major

undertaken by an industrialised country.

plants by 2022 and shifting almost

companies and consumers.

As the programme has the support of German political parties across the

entirely to wind and solar power by 2050.

The chancellor’s about-face not only

Part of the reason consumer prices have risen so sharply is that, for now,

spectrum, there was no highly visible

seized the energy initiative from her

the government has shielded about 700

backlash during the election campaign.

centre-left opponents, it also amounted to

companies from increased energy costs, to

But continuing to put the programme

a gamble that could prove to be her most

protect their competitive position in the

in place and maintaining public support

lasting domestic legacy – or a debacle whose

global economy. Industrial users still pay

for it will be among Merkel’s biggest

consequences will be felt for generations.

substantially more for electricity here than

challenges in her third term as chancellor.

Merkel, of the traditionally conservative November 2013

The plan is expected to cost about $735

do their counterparts in Britain or France,

billion, according to government estimates,

and almost three times as much as those in

Energy

40

tried on such a grand scale.

the United States, according to a study by

profits with the plan, and 11 per cent of

the German industrial giant Siemens. The

those in the chemical and metal industries

Cologne Institute for Economic Research

have had losses, the German Economic

are the vagaries of electrical power

said there had been a marked decline in

Institute reported.

generation that is dependent on sources

One of the first obstacles encountered

“We are now coming to a critical stage,

as inconsistent and unpredictable as the

and all the politicians are aware of this,” said

wind and the sun. No one has invented

Udo Niehage, Siemens’ point person for the

a means of storing that energy for very

losers. A third of electronics and

transition. “The costs are becoming high,

long, which means overwhelming gluts

automotive companies have increased

maybe too high, and you have to look at the

on some days and crippling shortages on

consequences for the competitiveness of our

others that require firing up old oil- and

industry in Germany.”

coal-burning power plants. That, in turn,

the willingness of industrial companies to invest in Germany since 2000.

Already there are winners and

No one has invented a means of storing that energy for very long, which means overwhelming gluts on some days and crippling shortages on others that require firing up old oil- and coalburning power plants.

That, in turn, undercuts the goal of reducing fossil-fuel emissions that have been linked to climate change.

Rivalling the costs are the logistical

undercuts the goal of reducing fossil-

challenges of eventually shifting 80 per

fuel emissions that have been linked to

cent of energy consumption to renewable

climate change.

sources, something that has never been

Last year, wind, solar and other

Olaf Taeuber has found his utility bills growing rapidly as Germany pursues its plan to shift to renewable energy.

Solar panels at a power plant in Templin.

Portfolio

Energy

42

“We worked 24-hour days and weekends,” said Irina Lucke, who spent

government to invest up to $27 billion

most of last year on the low sandy island

over the next decade to build roughly

of Borkum in the North Sea, supervising

2,739 kilometres of new high-capacity

the assembly of 30 soaring turbines for

power lines and to upgrade lines.

the largest offshore wind farm. It is

Schleswig-Holstein produces as much

was due to open in August.

as 12,000 megawatts of power with new

generate electricity until next year.

nonfossil-fuel sources provided 22 per

The largely rural northern state of

owned mostly by the utility EWE and Those turbines probably will not

Irina Lucke, managing director of EWE Offshore Service & Solutions GmbH, near a wind turbine in Oldenburg.

solar projects on land, compelling the

wind turbines and solar panels, but can consume only about a sixth of that.

Workers must still sweep the seafloor

“Schleswig-Holstein is a microcosm for

for abandoned World War II ordnance

all of Germany,” said Markus Lieberknecht

before a cable can be run to shore. “It’s

of the grid operator Tennet. “Where energy

really frustrating,” Lucke said. The delay

was previously brought into the state and

threatens to add $27 million to the $608

distributed to small communities, these

million cost of the wind park.

communities are now producing the power,

cent of the power for Germany, but the

Even without the energy the offshore

and we need to find a way to transmit it to

country increased its carbon emissions

turbines could produce, Germany’s power

the larger urban areas. Everything has been

over 2011 as oil- and coal-burning

grid has been strained by new wind and

stood on its head.” n

power plants had to close gaps in the evolving system, according to the German electricity association, BDEW. “It is great that we have achieved such a high percentage of renewable energy,” said Michael Hüther, director of the Cologne Institute for Economic Research. “But there are negative repercussions that we are now beginning to feel and must be addressed by the next government.”

Massive offshore wind farms that have been built in Germany’s less must then be transported to industries and sites in the south.

Where energy was previously brought into the state and distributed to small communities, these communities are now producing the power, and we need to find a way to transmit it to the larger urban areas. Everything has been stood on its head.

GETTY IMAGES

populated north generate energy that

Germany’s carbon emissions have risen as coal-burning power plants are fired up to supplement renewable energy.

An offshore wind farm off the coast of Germany in the North Sea. Portfolio

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Transport

44

A RUNAWAY SUCCESS China’s high-speed rail system has supported the country’s economic growth, boosted productivity and opened up new markets, reports Keith Bradsher.

THE CAVERNOUS RAIL STATION

under the 15-metre ceiling of white, gently

the country’s domestic airline industry.

in Changsha for China’s new high-speed

undulating steel that floats cloudlike

With traffic growing 28 per cent a year for

trains was nearly deserted when it opened

over the departure hall. An ambitious

the last several years, China’s high-speed

less than four years ago.

construction programme will soon nearly

rail network will handle more passengers

double the size of the 16-platform station.

by early next year than the 54 million

Not anymore. Practically every train is

© 2013 NEW YORK TIMES NEWS SERVICE

sold out, although they leave for cities all

Just five years after China’s high-speed

over the country every several minutes.

rail system opened, it is carrying nearly

Long lines snake back from ticket windows

twice as many passengers each month as

people a month who board domestic flights in the United States.

Li Xiaohung, a shoe factory worker,

Just five years after the rail system opened, it is carrying nearly twice as many passengers as the country’s domestic airline industry.

Portfolio

45

rides the 692-kilometre route from Guangzhou home to Changsha once a

now its just part of our lives,” Zhen said.

China’s high-speed rail system has

For example, Chinese workers are now more productive. A paper for the World

month to visit her daughter. Li used to

emerged as an unexpected success story.

Bank by three consultants this year found

see her daughter just once a year because

Economists and transportation experts

that Chinese cities connected to the

the trip took a full day. Now she comes

cite it as one reason for China’s continued

high-speed rail network, as more than

back in two hours 19 minutes.

economic growth when other emerging

100 are already, are likely to experience

economies are faltering. But it has not

broad growth in worker productivity. The

a founder of the stock market in

been without costs – high debt, many

productivity gains occur when companies

coastal Shenzhen, ride bullet trains to

people relocated and a deadly accident.

find themselves within a couple of hours’

meetings all over China to avoid airport

The corruption trials this summer of two

train ride of tens of millions of potential

delays. The trains hurtle along at 299.3

former senior rail ministry officials have

customers, employees and rivals.

kilometres an hour and are smooth, well

cast an unfavourable light on the bidding

lit, comfortable and almost invariably

process for the rail lines.

Business executives like Zhen Qinan,

punctual, if not early. “I did not think

The high-speed rail lines have, without

it would change so quickly. High-speed

a doubt, transformed China, often in

trains seemed like a strange thing, but

unexpected ways.

November 2013

“What we see very clearly is a change in the way a lot of companies are doing business,” said Gerald Ollivier, a World Bank senior transport specialist in Beijing.

Productivity gains to the economy

Transport

46

The Changsha high-speed rail station.

the Changsha Don Lea Ramie Textile Technology Co, an exporter of women’s dresses and blouses, said he used to travel twice a year to Guangzhou, the commercial hub of south-eastern China.

The journey, similar in distance to travelling from Boston to Washington, DC, required nearly a full day in each direction of winding up and down mountains by train or by car.

He now goes almost every month on the punctual bullet trains, which slice straight through the forested mountains and narrow valleys of southern Hunan province and northern Guangdong province in a little over two hours, traversing long tunnels and elevated concrete viaducts in rapid succession.

People queue for tickets at Changsha station.

“More frequent access to my client

appear to be of the same order as the

abundant supplies of young, highly

base has allowed me to more quickly

combined economic gains from the

educated workers, and having them take

pick up on fashion changes in colour

usual arguments given for high-speed

frequent day trips to factories in cities

and style. My orders have increased by

trains, including time savings for

with lower wages and land costs, like

50 per cent,” he said.

travellers, reduced noise, less air pollution

Tianjin and Changsha. Businesses are also

China’s success may not be easily

and fuel savings, the World Bank

customising their products more through

reproduced in the West, and not just

consultants calculated.

frequent meetings with clients in other

because few places can match China’s pace

cities, part of a broader move up the ladder

of urbanisation. China has four times the

toward higher value-added products.

population of the United States, and the

Li Qingfu, the sales manager at

great bulk of its people live in the eastern

Companies are opening research and development centres in more glamorous cities like Beijing and Shenzhen with

Portfolio

Transport

48

third of the country, an area similar in size to the United States east of the Mississippi.

“Except for Boston to Washington

CHINA’S HIGH-SPEED RAIL NETWORK

HOW CHINA RANKS BY REGION By total length* of tracks in km Other

DC, we don’t have the corridors of high

civil engineering at the University of

has been married to the world’s most ambitious subway construction

Zhengzhou

CHINA

China’s high-speed rail programme 200 miles

programme, as more than half the world’s large tunnelling machines chisel away underneath big Chinese cities. That has meant easy access to high-speed rail stations for huge numbers of people – although the subway line to Changsha’s

200 km

Xian Chengdu

Nanjing

Wuhan Chongqing

Shanghai

Completed

Scheduled completion: 2011-2015 2016-2020

Changsha

Guangzhou

Tourist attraction / World Heritage site

8,838

China 6,299 In operation

S. KOREA

California, Berkeley.

16,318

Asia

Beijing

Hami

said C. William Ibbs, a professor of

17,166

Europe

Shenyang

MONGOLIA

population density that China has,”

REUTERS

CONTEXT China's railway industry will open to private investment on an unprecedented scale, according to a document issued this weekend by the Ministry of Railways, which is struggling with mounting debts and a corruption scandal while attempting to resolve the country's infrastructure bottlenecks.

CRH380 Harmony bullet trains are seen at a highspeed train maintenance base in Wuhan, Hubei province.

4,339 2,901 Under Planned construction

TOP TEN HIGH-SPEED LINES Ranked by total length* of tracks in km China Spain France Japan Turkey Germany Italy USA Portugal Sweden

5,525 4,722 3,625 2,424 2,333 1,318 1,262 1,006 750

13,539

In operation Under construction Planned * As of Nov. 2011

Sources: Morgan Stanley Research, International Union of Railways

high-speed train station has been delayed after a deadly tunnel accident, a possible

9,495-kilometre high-speed rail network

side effect of China’s haste.

this summer. He said the country would

New subway lines, rail lines and urban districts are part of China’s heavy dependence on investment-led growth.

Despite repeated calls by Chinese leaders

suppliers as wages surge along the coast.

“We always used to have go down south

Graphic Date CHINA-INFRASTRUCTURE/ 22 meet / 05 / 12with European to Guangzhou to invest $100 billion a year in its train Story

CHINA-

system for yearsSize to come, 15 mainly x 10 cm on high-speed rail.Artist

Wen Foo

Reporter Lucy Hornby

clients,Research but nowW.they Foo come up to

Code Changsha moreECO often,” said Hwang Yin,

© Copyright Reuters 2012. All rights reserved. http://link.reuters.com/ryt68q

High-speed trains are not only

a sales executive at the Changsha Qilu Import and Export Co.

for a shift to more consumer-led growth,

allowing business managers from deep

it shows little sign of changing. China’s

inside China to reach bigger markets.

new prime minister, Li Keqiang, publicly

They are also prompting foreign

speed trains are getting very crowded

endorsed further expansion of the

executives to look deeper in China for

these days.” n

The only drawback: “The high-

Portfolio

Retail

50

SOCIAL SHOPPING ON THE WEB Internet shopping is easy when you know what you want. Now a new generation of e-commerce sites is targeting the browsing and social aspect of shopping, reports Jenna Wortham.

SHOPPING ONLINE IS EASIER

from shops around the web, and make

than shopping in a mall – as long as you

it easy to share with friends what items

know exactly what you want to buy. The

they like and buy. Most of the sites have

problem comes when you don’t know

adopted the interface of pinning images

what you want.

on a virtual bulletin board popularised

The web has yet to duplicate the realworld feel of a mall, where shoppers can pop in and out of multiple stores, easily

social networks.

Deena Varshavskaya, the founder and

browsing racks of clothing, display cases of

chief executive of the social shopping site

jewellery and shelves of housewares. And

Wanelo, which she started in late 2010,

online, friends can’t join you in a dressing

said sites like Amazon, eBay and Etsy had

room to help you avoid buying fashion

made people comfortable with buying

faux pas.

things online, both from giant retailers

But now, many entrepreneurs have

© 2013 NEW YORK TIMES NEWS SERVICE

by Pinterest, one of the most popular

and small sellers. But as more companies

their sights set on better replicating those

and shops migrated to the web, it became

experiences online, creating a category

harder to find cool, stylish and quirky

of e-commerce loosely known as social

items, giving entrepreneurs an opening.

shopping. Venture capitalists are opening

“The current state of commerce is very

their pocketbooks for these new startups,

fragmented,” she said. “Stores expect you

and even some of the biggest players in

to discover their site on your own and

e-commerce, like Amazon and eBay, have

know what’s relevant and interesting.”

introduced their own social features.

The social shopping sites essentially compile stylish goods of similar sensibility

The shopping sites do not sell one type of item or goods – instead, they mimic a

The web has yet to duplicate the realworld feel of a mall, where shoppers can pop in and out of multiple stores, easily browsing racks of clothing, display cases of jewellery and shelves of housewares.

bazaar where people can browse through Portfolio

51

Deena Varshavskaya is the founder and chief executive of Wanelo, an online clothing retailer.

bins at their leisure. The point, of course,

let their users find and follow their friends

she said. On the web, “shopping is an

is also to find a way to profit off the

and favourite brands or shops, which

isolated experience,” she said. “But you

millions of people who are looking for a

creates a feed akin to those on Instagram,

still want input.”

better way to shop online.

Twitter or Facebook. The feed is filled with

E-commerce sites with social features

new items that they might like to buy.

have had a spotty track record among

Fancy, Fab and Wantworthy. They each

Veronica Gledhill, 29, an editor at

users, either for questionable practices

vary slightly, but they share a common

fashion blog The Cut, said that sites like

or for paid promotions. Beacon, an early

DNA. After a user signs up, which is

Wanelo brought back the fun of trips

feature of Facebook’s advertising system

usually free, the sites show a collection

to the mall with her friends that she

that publicised some purchases on people’s

of items, either based on a curated

remembered from her youth.

Facebook pages, angered enough people

Among the sites are Polyvore, Svpply,

selection or what other members have recently bought and liked.

In addition, most social shopping sites November 2013

“The last time I went shopping with

that Facebook eventually removed the

friends was at the mall in my early

feature. Blippy, a startup that published

20s or maybe when I was a teenager,”

people’s purchases in a public feed, faded

not long after its debut in 2009.

But the latest social shopping sites, says Gene Alvarez, an analyst at Gartner, are meant to appeal to a younger generation of shoppers – users who like to see what’s trending among others with similar tastes. The rise of the visual web and popularity of image-heavy sites like Snapchat, Vine, Tumblr and Instagram, is also influencing the look of e-commerce sites as well, he said.

“Once they start following, they start purchasing,” he said about users. “It’s a recommendation, but it’s not automated. It’s a recommendation from a friend instead of an algorithm.” The power of that influence, Alvarez said, cannot be underestimated.

Wanelo, for example, lets a user tell friends about a great find by clicking a button to post the item on the site. When users decide to buy an item through the site, like one of its colourful shirts or shoes, they are rerouted to the company that is offering it for sale. Wanelo collects commission, essentially a finder’s fee.

A few years ago, investors were just beginning to grasp the promise of social to several dozen investors in 2012, Varshavskaya struggled to close a $2 million seed round of financing for her young company.

Hiroshi Mikitani, the founder and CEO of a Japanese e-commerce company and investment firm, believes the future of web commerce looks more like a marketplace.

GETTY IMAGES

shopping. When making her presentation

BUT THIS year, the company “had no trouble at all,” attracting the attention of investors, she said with a laugh. Although the startup says it was not actively raising money, venture capitalists still courted the company, sending cupcakes and gifts to sweeten the proposition. “They’d all been told about it from their daughters,” Varshavskaya said. In March, the company raised $11 million, to put the company’s valuation at $100 million.

Wanelo now has more than 10 million members – mostly women, the company says, and many teenagers, one of the most

GETTY IMAGES

Retail

52

coveted demographics for online retailing.

More than 200,000 companies and brands have signed up on Wanelo.

eBay bought the social commerce site Svpply last September.

Portfolio

53

Several other sites have also attracted significant investments, including Fancy, a sort of crowdsourced wish list of interesting things available for sale around the web. The company raised $53 million in July from American Express and a few celebrities, including actor Will Smith.

Major e-commerce sites have also been picking up on the trend. In August, Amazon introduced a feature called Amazon Collections that lets people see what other Amazon users have liked, saved to a wish list or bought recently. Last September, eBay bought one of the sleeker social commerce sites, Svpply.

Pinterest, the hugely popular social network that lets people share images from around the web on virtual boards, has clearly been an inspiration for many of the startups. But the company, valued at close to $3 billion, has said in the past that it was not interested in profiting off the items that people collected through the site. In recent months, though, Pinterest, has seemed to shift its stance. In May, the company introduced a feature called “Rich Pins” that lets merchants include information about where and how to buy

Madhavi Jagdish, a designer, at work at Wanelo.

E-commerce sites with social features have had a spotty track record among users, either for questionable practices or for paid promotions.

marketplace, where people can complete errands at the same time, like buy wine for a dinner party, right after they have picked out the dress.

“That’s what we need on the internet as well,” he said.

Mikitani, whose company led a $100 million investment in Pinterest in May, compared it to a trendy shopping district, but for the web. “You don’t need to go to

items through the site. firm, said that American companies

Tokyo or High Street,” he said. “Tens of

chief executive of Rakuten, a Japanese

were finally beginning to realise that the

thousands of merchants can provide that

e-commerce company and investment

future of commerce looks more like a

same shopping experience.” n

Hiroshi Mikitani, the founder and

Wanelo has more than 10 million members. Most of them are female and a large number are teenagers.

November 2013

Economy

54

INDIA’S FALLING ECONOMIC TIDE The recent decline has laid bare some chronic problems underlying India’s economy, reports Keith Bradsher.

I

NDIA HAD SEEMED

The real estate market is teetering after

Asia at an annual rate of almost 10 per

tantalisingly close to embarking on

soaring to vertiginous heights over the last

cent – and widen the country’s already

the same dash for economic growth

few years. Cranes on Mumbai’s skyline

large international trade deficit and

that has lifted hundreds of millions

perch nearly immobilised as developers

government budget deficit.

of people out of poverty in China and across East Asia. Its economy now stands

struggle for cash.

The things the emerging middle class

India’s government is now bracing the country for a swift increase in the price of

in disarray, with the prospect of worse to

coveted, Chevrolets, iPhones and foreign

diesel fuel and other imported necessities

come in the next few months.

vacations, have all jumped sharply in

priced in dollars. Diesel is the lifeblood

price in recent weeks. The price increases

of the Indian economy, from the trucks

of imported computer hard drives, said

threaten to worsen consumer price

that crawl along the country’s jammed,

sales dropped by a quarter in recent weeks.

inflation – already among the highest in

potholed roads to the backyard generators

Vinod Vanigota, a Mumbai wholesaler

The rupee, India’s currency, has been so volatile in recent days that he began revising his price lists every half-hour. Business activity at Chip Com Traders, where he is the managing director and co-owner, has slowed so sharply that trucking companies plead for business. “One of the companies called today and said, ‘Don’t you have a parcel of any sort for us to deliver today?’”

Vanigota said.

The economic decline has laid bare chronic problems, little remarked upon

Workers wind up wire at an aluminum workshop in India.

during the recent boom. An antiquated infrastructure, a sclerotic job market, exorbitant real estate costs and bloated state-owned enterprises never allowed manufacturing, especially manufacturing for export, to grow strong.

world’s 77 other internationally traded currencies as investors in affluent countries took their money home for higher returns.

AFP/GRAPH EAST

© 2013 NEW YORK TIMES NEWS SERVICE

The rupee fell further and faster in August against the dollar than any of the

It was down 20 per cent since May, a period in which the stock market followed suit and fell almost eight per cent.

The rupee has fallen 20 per cent against the dollar this year.

Portfolio

55

that struggle to compensate for the highcost yet unreliable electricity grid.

Some economists say that they hope India will have only a V-shaped economic downturn, with a rebound starting by early next year if a weak rupee rejuvenates India’s struggling exporters. “India is not Greece – we never binged on debt on a grand scale,” said Ajay Shah, a prominent economist at the National Institute of Public Finance and Policy in New Delhi.

The root of the problem is India’s failure to create a vibrant industrial base with the strength to export. As Western buyers scour Asia for alternatives to increasingly expensive Chinese factories, India and its enfeebled manufacturing sector are mostly ignored.

Soeb Bandukwala, a managing director of Ansons Electro Mechanical Works, a maker of water pumps and electric motors, wonders how a recovery can arrive, given India’s structural problems. He runs a business that has been in his family since 1967 and has grown to four factories. Yet he keeps each factory at fewer than 50 workers and has maintained some metal grinding machines and other equipment in use since the 1970s without replacement.

His worry is that if he exceeds 50 workers or surpasses certain benchmarks for total investment, he will become subject to extensive labour legislation.

“There is a fear, and the fear is the labour laws,” said Bandukwala, who is also a regional leader in the Confederation of Indian Industry.

INFRASTRUCTURE IS also a problem.

Ansons is only 56.3 kilometres from the port through which it exports machinery to Europe. Yet trucks require four to seven hours to reach the port because promised expressways have never been built. Speeds barely faster than walking at least help protect pumps and motors from harm. “If the speed is greater, damage will take place because of the potholes,” Bandukwala said.

Poor infrastructure has also driven up are high compared with China’s. Just in the last five years, China has opened 9,334.2 kilometres of high-speed rail routes and November 2013

GETTY IMAGES

costs for industrial real estate in India, which

Economy

56

An employee works on a motor at Ansons Electro Mechanical Works, which has kept its staff small to avoid regulations.

643,737.6 kilometres of highways of two

manufacturer, paid $1.3 million five years

a separate inspector each year before

or more lanes. That has allowed tens of

ago to buy the 1,858.1-square-metre top

issuing licenses for things as diverse as

thousands of factories to move to smaller

floor of a decrepit, four-storey factory

electricity use and water pollution. Many of

towns in the interior with much lower

building with blocked fire escapes on a

the inspectors demand bribes, said Vipul S.

land costs.

muddy alley on the outskirts of Mumbai,

Kamani, the managing director of Shakti.

India has been unable to open up its

and sold it for $2.7 million in August.

High real estate and electricity costs

interior the same way. At the same time,

The floor underneath the company’s

leave businesses with very little money to

rent control and other land regulations

60-employee factory sold for $410,000 in

pay workers and remain competitive in

make it extremely difficult to tear down

2003 and is now valued at $1.2 million.

the global markets for garments and other manufactured goods.

and replace even the most dilapidated

Roads and bridges to inland towns

buildings. So cities like Mumbai have

are not the only infrastructure problem.

ended up with dozens of square kilometres

Shakti Industries, which thins and

ARUN PRAJAPATI, 21, a migrant worker

of mould-stained, low-rise buildings with

cuts aluminium wires for jewellery

at a fabric fusing machine at Challenge,

spots of bright green fungus, interspersed

manufacturers, pays the equivalent of

said that he earned about $100 a month,

by the occasional skyscrapers that were

15 to 18 cents per kilowatt-hour for

just a fifth of what Chinese workers earn

somehow built. Remote, outer fringes of

electricity. In China, even after a round of

these days. He pays $9 a month for rent

factories and office buildings have

price increases coming in late September

and electricity for his sleeping space on the

sprouted on what was once farmland.

to pay for more clean energy, factory

floor of a three-metre-by-three-metre room

owners will pay half as much.

that he shares with five other migrant

The acute shortage of real estate less than a day’s drive from ports has

Shakti has only seven employees. Yet

workers in a nearby shanty. He spends $38

produced steep real estate prices and

it is regulated by more than a dozen

a month for a subsistence diet of roti bread,

rents. Challenge Overseas, a trousers

government agencies, each of which sends

lentils and, once a week, some chicken or

High real estate and electricity costs leave businesses with very little money to pay workers and remain competitive in the global markets for garments and other manufactured goods.

eggs. He sends his meagre savings to his widowed mother in their home village in central India.

“With expenses rising each month, things are only getting harder and harder,” he said.

“I am just trying to get through life.” n Portfolio

Real Estate

58

S

SINGAPORE LOOKS UNDERGROUND

little less land mass than New York City, is running out of room for its 5.4 million people.

The city-state has built upward – with

apartment buildings reaching as high as 70 storeys – reclaimed underused © 2013 NEW YORK TIMES NEWS SERVICE

The city-state of Singapore is one of the world’s most crowded urban centres and it is running out of space.

One proposed solution is to build underground, reports Calvin Yang.

INGAPORE, WITH A

properties for housing and pushed out coastlines for more usable land. But as one of the world’s most crowded cities, and with projections for 1.5 million more people in the next 15 years, Singapore’s options are as limited as its space.

So Singapore is considering a novel Portfolio

59

GETTY IMAGES

Singapore’s population is expected to grow by 1.5 million people in the next 15 years.

solution: building underground to create

prevented developers from building taller

tunnels are common features beneath

an extensive, interconnected city, with

projects. And there is a limit to how much

the urban landscape.

shopping malls, transportation hubs,

land can be reclaimed from the ocean – so

public spaces, pedestrian links and even

far it accounts for a fifth of Singapore’s

beginning work on a huge underground

cycling lanes.

space but it is vulnerable to rising sea

oil bunker called Jurong Rock Caverns.

levels caused by climate change.

When this is completed, it will free up

“Singapore is small, and whether we have 6.9 million or not, there is always

The squeeze has led to the closing of

a need to find new land space,” said

several old estates and military camps to

Zhao Zhiye, the interim director of the

make way for residential and industrial

Nanyang Centre for Underground Space

developments.

Now Singapore is going further,

about 60.7 hectares of land, an area equivalent to six petrochemical plants.

Another project on the drawing board is the Underground Science City, with 40

at Nanyang Technological University.

Building underground is not new

interconnected caverns for data centres

“The utilisation of underground space

in Singapore. About 12 kilometres of

and research and development labs that

is one option for Singapore.”

expressways and about 80 kilometres

would support the biomedical and life

of transit lines are below ground.

sciences industries. The science centre,

Underground drainage systems and utility

with an estimated 20.2 hectares to be

Height restrictions imposed on areas around air bases and airports have November 2013

GETTY IMAGES

Real Estate

60

Many of Singapore’s utilities are already found underground.

“of creating underground transport hubs, pedestrian links, cycling lanes, utility plants, storage and research facilities, industrial uses, shopping areas and other public spaces here.”

“The earlier we begin this process, the faster we will learn and the easier it would be for us to realise these plans,” he said.

But the idea of working and living underground has met with some scepticism from the public.

“Over the years, many of us have relocated from kampongs to high-rise living in government flats,” said Joseph The entrance to a mall, which has much of its retail space underground.

Tan, 69, a retired accountant, referring to traditional Malay villages. “Just when

situated 30 storeys below a science park in

IN A recent blog post, Khaw Boon

we have finally adjusted to living in these

western Singapore, would house as many

Wan, Singapore’s minister for national

residential buildings, there are plans for

as 4,200 scientists and researchers.

development, pointed to extensive

us to live below ground. At my age, I just

pedestrian passageways and shopping

hope to live comfortably.”

“A lot of facilities can go underground if you fully utilise the underground space,”

malls in Japan and Canada. He

Zhao said. “In the beginning there might

cited the possibilities in Singapore

David Ong, a former teacher, said the older generation might not feel at ease

be a psychological issue, but as long as we have proper lighting and proper ventilation, gradually people can overcome the idea of working and living underground.”

Subterranean projects can be three to four times as costly as surface projects because of higher construction costs and

Height restrictions imposed on areas around air bases and airports have prevented developers from building taller projects. And there is a limit to how much land can be reclaimed from the ocean as it is vulnerable to rising sea levels caused by climate change.

the need for extensive soil investigations.

Portfolio

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Real Estate

62

A mooncake fair at the underground portion of the shopping mall Ngee Ann City in Singapore.

with the concept of subterranean living, partly out of superstition.

“Why are the living going underground?” he asked. “Only the dead return to the ground.”

The trend towards burying infrastructure has led city planners to think grandly, as they consider whether more activities could occur below ground.

Some projects, like the excavation of underground tunnels and Jurong Rock Caverns, are already in full swing.

Khaw Boon Wan, Singapore’s minister for national development cited the possibilities in Singapore “of creating underground transport hubs, pedestrian links, cycling lanes, utility plants, storage and research facilities, industrial uses, shopping areas and other public spaces here.

Commuters board a subway train in Singapore.

At the city’s two oldest universities, Nanyang and the National University of

is still in its early stages.

Zhao, one of the researchers behind

Singapore, studies have identified suitable

Nanyang’s study on underground

areas to build sports facilities, libraries

development, said extensive studies needed

and lecture theatres below ground.

to be done. “It is a big investment if we

According to researchers from both

really want to go underground, and it

institutions, students may one day swim

requires comprehensive studies and careful

in an underground pool or watch a film

planning,” he added. “At the moment we

in a subterranean theatre.

manage fine, but if there is a need for space

But even with the current projects, subterranean development in Singapore

in future, we know that there is the option of going underground.” n Portfolio

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Essentials

The besT of leisure and lifesTyle

Treasures of The Cinque Terre

getty images

The five small coastal villages that make up the Cinque Terre are rightly listed on the UNESCO World Heritage List. Yet, it isn’t as touristy as many would assume, reports Liesl Schillinger.

The small town of Manarola.

November 2013

65

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Travel

Visitors on the beach in Monterosso al Mare.

t was a stroke of luck,

© 2013 New York Times News service

really, that my luggage was lost when I

the absence of my hiking sandals.

I had longed to visit the Italian coast

to visit first? Which next? And how to get there: Walk, boat or train? The missing

flew to Italy this summer to visit the jewel

for years, spurred in part by a Victorian

box villages of the Cinque Terre. These five

memoir by an intrepid traveller named

heart-stoppingly picturesque hamlets on

Margaret Fountaine, who wrote in Love

awaiting calls from the airline. Around

the Ligurian coast are dotted with pastel

Among the Butterflies of her hunt for

7 o’clock, we strolled down the hill to

houses nestled amid terraced hills that

Italy’s sublime views and handsome men.

Monterosso’s centro storico (town square)

drop to the jade and lapis waters of the

“No wonder these southern natures are

to see what serendipity might provide.

Mediterranean. All I had with me were my

quick and passionate when every scene

The sun still blazed, and the stone walls

eyes and feet. For the next few days, that

around them is such sensuous loveliness!”

along the Via Corone radiated the heat

would be all I needed. Unencumbered,

she rhapsodised.

of the 90-degree day. Pausing for an

I could leap lightly onto trains and

Planning this trip, my travelling

suitcase made the decision easy.

The first night we stayed in Monterosso,

aperitivo on the Bar Bagni Alga patio,

trails, feeling sorry for the heavily laden

companion and I had been stymied from

which overlooked festive ranks of green

travellers around me, even as I mourned

embarrassment of choice. Which village

and orange beach umbrellas and sun Portfolio

67

A resort on the hiking trail between Monterosso and Vernazza on the Cinque Terre coastline.

beds, we watched fearless teenagers fling themselves off high rock ledges and splash, whooping, into the sea.

Invigorated, we resumed our saunter to the old town, passed a bocce court where old men played unhurriedly and turned through an archway onto the Piazza Garibaldi, then into the Piazza Colombo, in search of the perfect meal.

There were simply too many options – bouquets of umbrellas tempted us from the paving stones, left and right; the scent of lobster and aglio e olio wafted up deliriously from alfresco tables. A November 2013

There were simply too many options – bouquets of umbrellas tempted us from the paving stones, left and right; the scent of lobster and aglio e olio wafted up deliriously from alfresco tables.

wine festival on the piazza distracted us, but after sampling half a dozen glasses of locally grown, sunny and playful vermentino, we followed a peach-coloured light to an inviting alleyway off the Via Roma and floated into the Ristorante Al Carugio. There, within minutes, we were waited on by the owner’s son, and soon dipped our forks into fettuccini with succulent mussels, netted from the waters of La Spezia, and tender trofie – the region’s signature pasta, shaped like minitorches, irresistibly slippery with pesto (a Ligurian invention, by the way).

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Travel

sights, to have a knowledgeable local guide.

heavy with fruit, olive boughs snooded

Miriam Rossignoli – not only a native

Then again, having crisscrossed the rugged

with orange netting. And then there was

Monterossan but also a photographer –

paths since she was in pigtails, Miriam

Vernazza, which is open for business again

offered to guide us the next day on a walk

dashed ahead of us like a mountain goat,

after a mudslide caused ¤100 million

along the Sentiero Azzurro, the coastal

completely unwinded, while we panted.

worth of damage in 2011.

of a pyramid, set flush against a verdant

The walk, which is supposed to take

more, Vernazza has the unique aspect that

mountain). The walk between Monterosso

under two hours, took us three. (I was

it has no car traffic and is only accessible

and Vernazza had been completely

relieved, later, chatting on a local train

by foot. If you’re not willing to walk to

repaired after a recent mudslide, Miriam

with a 17-year-old Texan named Claudia,

Vernazza you can take the train from

told us. But the path that usually connects

to learn that she’d also found the trek

Genova or La Spezia. This was once a rich

all five villages stopped at the next village

challenging: “I’m really happy I did it, but

town, and it has the only real harbour

over, Corniglia, high in the hills.

in the middle of it I wanted to kill myself,”

of the five Cinque Terre towns. Today it

By chance, a woman at a table near ours,

path between the villages (picture the steps

Besides having survived 1,000 years or

she said. Exactly.) And yet – the views!

is regarded as one of the truest “fishing

train, Miriam assured us, or by tour

Whenever we paused to catch our breath,

villages” on the Italian Riviera, and its

boat (except for Corniglia, which has

we drank in the landscape – cataracts

unhurried pace of life definitely seems to

no harbour). And though the Sentiero

splitting the piney hillsides, lemon trees

support that.

We could still visit all the towns by

Azzurro had been interrupted by rock slides south of Corniglia, stubborn hikers could still travel by foot between

A train pulls into Riomaggiore.

Monterosso and Riomaggiore on trails higher up the mountain. She urged us, at the very least, to visit the tiny village of Volastra, accessible by foot or by minibus from Manarola, where we could observe properly maintained orchards, olive groves and vineyards. The trailhead of the Sentiero Azzurro started right next to our hotel, she said. Could she pick us up the next morning and lead us to Vernazza?

Delighted, we accepted.

It is such a mercy, in a terra incognita,

getty images

when you’re afraid of missing the right

Alimentari are small stores that sell Italian delicacies.

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Corniglia Unlike the other localities of the Cinque Terre, Corniglia is not directly adjacent to the sea. Instead, it is on the top of a promontory about 100 metres high, surrounded on three sides by vineyards and terraces and the fourth side descends steeply to the sea. To reach Corniglia, it is necessary to climb the Lardarina, a long brick flight of steps composed of 33

A mixed grilled seafood dish at Enoteca Dau Cila in Riomaggiore.

flights with 382 steps or otherwise follow a vehicular road that, from the station,

Visitors swim off Manarola.

leads to the village.

Visitors get off a ferry at Vernazza.

riomaggiore This village, dating from the early thirteenth century, is known for its historic character and its wine, produced by the town’s vineyards. Riomaggiore is in the Riviera di Levante region and has shoreline on the Mediterranean’s Gulf of Genoa, with a small beach and a wharf framed by tower houses. Most of the action in Riomaggiore is on the main street, Via Colombo, where there is an assortment of cafes, bars, restaurants, and of course, gelaterie. manarola Manarola may be the oldest of the towns in the Cinque Terre, with the cornerstone of the church, San Lorenzo, dating from

Why, I wondered the next day, as we

1338. Manarola’s primary industries

walked to the Ristorante Miky on the Via

have traditionally been fishing and wine-

Fegina, passing couples strolling hand

making. In recent years, Manarola and its

in hand, had some of my well-travelled

neighbouring towns have become popular

friends warned me that I would find the

tourist destinations, particularly in the

noble Cinque Terre “touristy?” (This,

summer months. Tourist attractions in

mind you, from people who regularly go

the region include a famous walking trail

to Aspen and Las Vegas.) Yes, there were

between Manarola and Riomaggiore

tourists – but most of them dispersed

called Via dell’Amore, (Love’s Trail).

into twining passageways, pursuing their individual whims.

As we sat at a patio table at Miky,

Dawn breaks over Manarola.

November 2013

risotto, or the honeymoon couples who

marvelling at the fillet of Monterossan

leaned across their tables gazing moonily

red mullet with eggplant and walnut

at each other. We didn’t even mind the

caviar, we were not troubled by the happy

children who cavorted under the palms

families who sat near us, cracking delicate

across the Via Fegina, giggling over their

pizza crust over their fragrant bowls of

ice creams. Not in the least. n

70

Essentials

Sport

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71

Manaus’ arena

AmAzoniA ChAllenge Building a stadium for next year’s FIFA World Cup Brazil in Manaus, a city in the middle of the Amazon rain forest, has faced some unique obstacles, reports Sam Borden.

The mosT challenging aspecT

compares us a lot to other stadium

stadium in the middle of the Amazon

constructions,” he said through an

is debatable.

interpreter. “There is no comparison. There

Some might say it is figuring out how to get oversize cranes and hundreds of tons

The FIFA World Cup has never staged games in a rain forest, much less in the

surrounded by a rain forest that stretches for

middle of the Amazon. But that is the plan

about 5.4 million square kilometres. Others

for next summer, an ambition that invites

might mention the need to put most of those

plenty of hurdles.

What other major stadium project had to

floods the entire construction site. Then, of

drain an “unwelcome tributary of the French

course, there are those who might point to

River,” as Neto put it, that ran through its

the need to install the special chairs.

foundation? What other builder has to

Yes, the chairs. It may seem like a small

spend multiple days on each joint that is

concern – at least compared with the whole

soldered because the stifling humidity can

everything-being-flooded possibility – but

cause steel to buckle? What other job has to

one of the less obvious issues that comes

accommodate one of the most ecologically

with building a stadium in the jungle is

sensitive regions in the world?

what the searing equatorial sunlight in © 2013 New York Times News service

is nothing like this.”

of stainless steel and concrete into a city

materials together before the rainy season

November 2013

Neto sighed. “The Brazilian press

of building a FIFA World Cup football

Manaus can do to plastic.

The seats are supposed to be varying

Then, of course, there are the concerns about how many more millions of dollars will be spent on cost overruns, not to

shades of yellow and orange. “But if we don’t

mention what will happen to the stadium

use the right kind of material,” said Miguel

once the four World Cup games scheduled

Capobiango Neto, the coordinator of the

to be played here next year are completed.

construction project, “then the sun will melt

(One recent proposal suggested the stadium

the paint away. The seats will just turn white.”

could be converted to a prison.)

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72

Sport

supposed to cost about 500 million reais

the new target date at least theoretically

employees, the project has been bogged

(about $227 million) and be completed by

feasible. “The rainy season starts at the end

down by the delays, cost increases and design

July; now it will cost at least 600 million

of November,” Neto said. “Because of that,

changes that come with seemingly every

reais and is scheduled to be finished by

we must really rush to have the ceiling ready

significant piece of Brazilian infrastructure.

December, Neto said.

by then.”

Despite having as many as 1,400

In a polite but pointed statement, Hubert

As of the end of August, about 78 per

Nienhoff, the chief executive of gmp-

cent of the Arena Amazonia stadium was

He was not joking; from December

Architekten, the German firm that designed

complete, according to FIFA, making

through March, Manaus generally receives

the stadium, said that though the “precise planning and implementation that Germans are credited with” might be respected in Brazil, they are “not always compatible with the existing pragmatic day-to-day business” in the country.

His point was unmistakable. Left unsaid was this: The progress in Manaus was so sluggish that at one point late last year, Jerome Valcke, the secretary-general of football’s governing body, FIFA, said it was possible that games would not be played in the city if the stadium’s deadlines were not met.

That threat, according to local officials, prompted a construction surge, and with it a ballooning budget. The stadium was

Nacional supporters cheer during a game against Genus at SESI Stadium in Manaus.

getty images

FIFA secretary-general Jerome Valcke takes a tour of the Arena Amazonia during the 2014 FIFA World Cup Host City Tour in August.

Portfolio

exclusive to duty free

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Sport

as much as 114.3 centimetres of rain, almost twice as much as what Johannesburg, which hosted games during the 2010 World Cup, receives all year.

Of course, there are some who believe the four World Cup games set for Manaus should not be played here anyway. Critics of the stadium in Manaus, as well as the similar projects in Brasilia and in Cuiaba, note the lack of top-division football teams in those cities and call the expensive stadiums “white elephants.”

Organisers challenge that thinking, saying there are a number of options for

getty images

74

post-World Cup events and highlighting the stadium’s design as being intentionally multipurpose. Environmentally friendly

Manaus is a city of two million with a growing economy.

Vanessa Silva, 23, is involved with one

features like harvesting rainwater to use

city is a parade of stunning sights. Out

in the stadium’s toilets make the stadium

in the river, there is the famous Meeting

of the fan clubs of Nacional. She joined the

sustainable, the designers said, and concerts

of the Waters, the phenomenon where

raucous cheers in August during a 5-2 victory

and other exhibitions are among the

the Rio Negro and the Rio Solimoes rub

over Genus, another Amazonian team,

possibilities raised for future use.

up against each other but do not mix.

and said that most of her contemporaries

Along the banks, jungle lodges are carved

supported the building of the stadium.

Local officials are also quick to note

“Filling the stadium – I think it’s a big

the exposure the World Cup will bring to

snug against the forest. In the port,

the Amazon region, as Manaus is often

ships hauling sugar, fish, bananas and

dream, but I think it can happen,” she said.

used by tourists solely as a starting (or

watermelons weave in and out of the docks.

“We care about our teams here. We have a

returning) point for forays into the jungle.

“I think people would be surprised by

lot of younger fans following Nacional now,

While certainly isolated, Manaus is hardly

what’s here and what the people here

and this can be their stadium. This can be

antiquated; the city has a population of

do,” said Harold Wright, the director of

something in Manaus that we know as ours.”

about two million and a growing economy

the international relations office at the

that includes electronics, chemical and oil

University of the State of Amazonas.

moment in the spotlight. Assuming the

companies. The Free Economic Zone of

“Having the stadium is important to this

construction is completed in December, the

Manaus is also a significant industrial hub.

city. There’s also a lot more passion for

FIFA World Cup draw will take place shortly

football here than people realise.”

thereafter, and the locals will finally know

From a helicopter, this Amazonian

First, though, the stadium will have its

which teams and fans will travel to Manaus.

Once here, the visitors will find a sharp juxtaposition. The stadium, which is designed to look like an indigenous straw basket, will surely gleam while the city around it offers a mix of areas: the upscale Ponta Negra, for example, contrasted with a slew of gritty slums.

The glamour of Rio de Janeiro and the bustle of São Paulo are about 2,735 kilometres to the south. This is the Amazon. There are jungle lodges and electrical storms in this city. But if the flooding is avoided – and the special chairs arrive on time – there will also be football The Arena Amazonia was about 78 per cent completed at the end of August.

here next summer. n Portfolio

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76

The tuna auction is a morning ritual at Tsukiji fish market.

Moving a Way of Life Tsukiji, the world’s largest fish market and a popular tourist attraction, is being moved to an offshore island by the Tokyo authorities, reports Martin Fackler.

Each day bEforE dawn, thE

sea predators. In one corner, auctioneers

part of a broader face-lift Tokyo is planning

world’s largest fish market comes to life in

loudly hawk the huge frozen torsos of

before the 2020 Olympics.

frantic activity, a last holdout of an older,

prize tuna laid in rows on the floor.

quainter Japan.

Nearby, fishmongers in open-air stalls

change, the relocation will bring not

carve the tuna flesh into ruby-red bricks

only the loss of a historic, 78-year-old

for sale to sushi bars and grocers.

marketplace, but also another blow to

© 2013 New York Times News service

Workers in rubber boots slosh through 2.5-centimetre-deep water, while others dart by on motorised carts carrying

Soon it will be gone. Tokyo is planning to

For the many who have opposed the

a vanishing way of life. Tsukiji has been

plastic-foam boxes with every manner

spend $4.5 billion to relocate the market –

a place where merchants haggled face-

of creature that can be hauled from the

nicknamed Tsukiji for the neighbourhood

to-face, and where even the lowliest

sea, from dagger-shaped silver sardines

that surrounds it – to a modern, climate-

fishmonger displayed the obsession with

and spider-like crabs to the deflated

controlled distribution centre on a man-

freshness that helped Japan bring sushi

protoplasmic blobs of mysterious deep-

made island in three years. The move is

to the world. Its passing is part of a Portfolio

reuTers

Culture

77

broader transformation, away from the

wholesalers, who number about 700,

tiny mom-and-pop shops specialising in

switched its position and came out in favour

everything from tofu to rice cakes that

of the move, which is considered a done deal

Despite continuing concerns

have been increasingly replaced by big-

barring some last-minute reprieve.

about pollutants, many critics say they

box supermarkets and fast-food chains.

Officials say they want to redevelop the

After delays, Tokyo says it is on track to

treasure. Why throw this away?”

have already resigned themselves to the

complete the yearlong cleanup of the new

inevitable loss of the fish market. They are

market’s approximately 20.2 hectares of

site by March. Workers there now spend

now trying to figure out how to prevent

land – valued in the billions of dollars –

their days scraping off several metres of

the relocation from also causing the loss

into high-rise apartment buildings and

contaminated top soil to replace it with

of the more than 400 restaurants and

a tunnel that would connect Tokyo to

clean dirt. But critics fret that the cleanup

shops outside the market’s entrance.

the islands that will house new Olympic

will not convince sceptics that seafood

sites. They, and many who work at the

whose value lies partly in its pristineness

market,” this busy maze of stores also

market, also say the move is necessary to

is safe.

springs to life by 6 am, when throngs of

keep up with changing times, as the same

Despite continuing concerns about pollutants, many critics say they have already resigned themselves to the inevitable loss of the fish market.

sleepy Asian and Western visitors fill its

fast-food chains and supermarkets that have changed Tokyo’s urban landscape have increasingly shunned Tsukiji as too expensive and slow.

Opponents counter that the relocation is yet another example of the skewed priorities of Japan’s development-happy bureaucrats, who they say want to tear down what has become one of the city’s most popular tourist destinations to enrich big construction companies and real estate developers.

“Tsukiji was the beating heart of the

Known as the “jogai,” or “outside the

narrow passageways. Shop owners shout “irasshai” (welcome) to entice tourists into cramped stalls selling sushi knives, fish freezers and tuna.

Hiroyuki Ushioda, whose shop specialises in pickled mackerel and dried mullet roe, said he remained optimistic that the jogai had enough name recognition to thrive even without the market.

“I suppose it is inevitable that the market must change with the times, but

“The Tokyo government is using the Olympics as an excuse to distract people

that doesn’t mean the neighbourhood will disappear,” Ushioda, 33, said.

sushi culture that spread across the

from the contamination issue,” said Makoto

world,” said Kazuki Kosaka, a former

Nozue, 76, who has bought and sold tuna

now bracing for the loss of a market that

local assembly member who opposed

at the market for six decades. “Tsukiji is a

drew hundreds of thousands of visitors

the relocation. “And now it will be

globally known brand name and a cultural

a year and pumped some two trillion

Merchants said the neighbourhood was

redeveloped into condominiums.”

When moving Tsukiji was first proposed 14 years ago, it spurred widespread opposition, even leading to rare street protests. They were led by so-called middle wholesalers, the traditional middlemen who buy from big wholesalers and sell to restaurants and other retailers; they feared the new market would allow large corporate wholesalers to squeeze them out. In 2001, the plan appeared doomed after the discovery of toxic contaminants at the new site, which had housed a refinery for converting coal into natural gas. getty images

But city officials were undeterred, chipping away at opposition by offering subsidies to help pay for the move. Last year, the union representing the middle November 2013

The area around the market is a maze of passageways with small shops called “jogai’’.

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78

Culture

reuters

Tokyo authorities say that Tsukiji is too small for modern demand.

Some fear that the closure of Tsukiji will mean the end for the 400 restaurants clustered around it.

Tuna is carefully processed for sushi bars around Tokyo.

Without a new market built to handle more trucks, they say, there will be no way to reverse the steady decline in the amount of seafood going through Tsukiji: according to the city, the market handled 497,000 tons of seafood in 2011, down 15 per cent from 2006.

yen ($20 billion) annually into the local

governor of Tokyo, to push to get rid of the

economy, mostly from tourism and the

market, which he called “dirty, small and

market’s main business of distributing

unsafe.” City officials say one of the market’s

wholesalers union, Tadao Ban, said it

seafood. Uzumi Yoshida, deputy head of

biggest shortcomings is that it was built in

was that decline, and not the subsidies,

Chuo ward, the borough-like district in

1935 to handle trains, not today’s trucks,

that convinced the union it needed the

Tokyo that includes Tsukiji, said the ward

leading to congestion every morning as

new market to survive – and to keep alive

would spend $23 million to build a much

hundreds of vehicles line nearby streets

another tradition: the passing of business

smaller replacement market on what is

waiting for a loading berth to open.

to the next generation.

now a nearby parking lot in the hopes of persuading some of the middlemen to stay.

Without a new market built to handle

“Without the new market, we won’t

more trucks, they say, there will be no

have businesses left,” said Ban, 68, who

way to reverse the steady decline in the

inherited his tuna wholesale company

Yoshida admitted that it might be hard

amount of seafood going through Tsukiji:

from his father, and hopes to hand it

to retain the neighbourhood’s cramped,

according to the city, the market handled

down to his son. “I grew up in this market,

energetic atmosphere.

497,000 tons of seafood in 2011, down 15

and have spent my life here, but I also

per cent from 2006.

want to have a future dream to pass down

Even with the new, smaller market,

It was that chaos that first led Shintaro Ishihara, the charismatic and wilful former

The vice president of the middle

to my children.” n Portfolio

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80

Science

RIPE FOR IMPROVEMENT Science is trying to engineer a tastier alternative to the bland supermarket tomato, reports Kenneth Chang.

S

CIENCE IS TRYING to build a better

not only less tasty but less nutritious.

supermarket variety. In the greenhouse,

Enter Klee, who helped found the

Klee pulls one such hybrid tomato off a

Institute for Plant Innovation a decade

vine, and it does taste sweeter. But a hybrid

At a laboratory

ago and has been on a quest for a more

also loses some of the qualities highly

in Gainesville at the

flavourful and nutritious mass-market

valued by commercial growers – it is not as

tomato ever since.

fecund, not as resistant to disease, not as

supermarket tomato.

University of Florida’s Institute for Plant

It is easy to find a better tasting and

easily grown, not as pretty. As growers are

from nearby greenhouses and plop

more nutritious tomato. Go to a farmer’s

paid by the pound, a better-tasting but less

them into glass tubes to extract flavour

market or grow one in the backyard. It is

productive tomato holds little economic

compounds – the essence of tomato, so

also easy to breed a plant that produces

appeal, and thus was the supermarket

to speak. These flavour compounds are

something tastier than a supermarket

tomato doomed to blandness.

identified and quantified by machine.

tomato – cross a sweet heirloom with the

Innovation, researchers chop tomatoes

Klee’s goal is to tweak the tomato DNA

People taste and rate the hybrid tomatoes grown in the university’s fields.

“I’m 98 per cent confident we can make a tomato that tastes substantially better,” said Harry Klee, a professor of horticultural sciences. He hopes that the fruits of his labour will be available to commercial growers within four or five years and in supermarkets a couple of years after that.

He thinks he can make seeds for better tomatoes available to home gardeners even sooner, within a year or two.

© 2013 NEW YORK TIMES NEWS SERVICE

The insipid-tomato problem is well known both to salad lovers and scientists.

For example, a gene mutation that tomato breeders love because it turns the fruit a luscious red also happens to make it blander. Refrigeration, transportation and other factors also take their toll. Over the decades, the average tomato has become

Harry Klee, a professor of horticultural sciences, with tomato plants at the University of Florida where he and his team are identifying genes crucial to tomato flavour.

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81

Cherry Roma tomatoes were at the top of the charts, followed by heirloom varieties like Matina, Ailsa Craig and Bloody Butcher. Other heirlooms like Marmande and Oaxacan Pink ranked at the bottom, below the supermarket tomatoes.

– through traditional breeding, not genetic engineering – to add desired flavours while not compromising the traits needed for it to thrive commercially. “I figure that with approximately five key genes we could very significantly improve flavour,” he said.

Three genes that control the production

A new generation of plants is grown from tomato leaves at a University of Florida laboratory.

of key flavour compounds have already been located, he said. The next step is to identify versions of the genes that lead the tomato plant to produce more of them.

THE CHEMISTRY of tomato flavour has three primary components: sugars, acids and what are known as volatile chemicals – the flavour compounds that waft into the air carrying the fruit’s aroma. There are more than 400 volatiles in a tomato, and Klee and his collaborators set out to first determine which ones are the most important in making a tasty tomato.

This involved grinding up a lot of tomatoes, looking at what was in them, and asking a lot of people to taste them (unpulverised), gathering comments like “a bland firm watermelon,” “soft and sloppy,” and “Sweet! Finally a sample with some sweetness.”

Heirloom tomatoes taste better than the supermarket varieties as they have a higher sweetness level.

The supermarket tomato – even when grown with care and picked ripe – did not

types just do not grow well in Florida.

The taste analysis produced several

excel. “The best it will do is middle-of-the-

surprises. Some compounds, abundant in

who include Linda Bartoshuk, director

pack,” Klee said. Cherry Roma tomatoes

many tomato varieties and thus thought

of human research at the university’s

were at the top of the charts, followed by

to be major contributors to flavour, turned

Centre for Smell and Taste, used statistics

heirloom varieties like Matina, Ailsa Craig

out to be irrelevant, while others, in scant

to correlate people’s preferences with the

and Bloody Butcher. Other heirlooms like

quantities, had major influences. With the

presence, or absence, of particular flavour

Marmande and Oaxacan Pink ranked

new knowledge, “you can’t help but get a

compounds, to devise a chemical recipe

at the bottom, below the supermarket

better tomato,” Bartoshuk said.

for the ideal tomato.

tomatoes, though perhaps these particular

From there, Klee and his collaborators,

November 2013

The most important attribute was

82

Essentials

Science

Klee does not expect the improved tomato to taste as good as the best heirlooms.

Supermarket tomatoes would still be grown in large quantities, picked green and shipped long distances before being gassed with ethylene to ripen. leaders in the sequencing of the tomato genome published last year. He said Klee has been deciphering the molecular machineries in tomatoes that produce the flavour compounds, and that is not an easy task. “One, there is a lot of them,” Giovannoni said, “and two, a lot of them are really not understood, how some of these produce these compounds hasn’t been known.”

Klee does not expect the improved tomato to taste as good as the best heirlooms. Supermarket tomatoes would still be grown in large quantities, picked green and shipped long distances before being gassed with ethylene to ripen.

In addition, the tomatoes are often mishandled en route.

Refrigeration, Klee notes, destroys Plant geneticists say a project to develop tastier mass-produced tomatoes is just one step in pushing people towards more healthy eating.

sweetness. The sweeter the tomato, the

The sweetness-enhancing compounds,

the flavour compounds in even the best tomato. “I might be able to get 75 per cent of the best tomato in one that can be grown in greater quantities”, he said.

higher the rating. The biggest surprise,

however, are present in much smaller

though, was that it was not just sugar that

quantities, so getting a plant to produce

made a tomato sweet. Some of the flavour

more of those is a much more achievable

that Klee can do what he thinks he can as

compounds enhanced the perception of

goal, Klee said. (The compounds also

quickly as he predicts. “I don’t think the

sweetness. That is the key to Klee’s plans.

offer promise for sweetening other foods

taste of tomatoes is going to be fixed by

Tomato breeders have already tried to

without adding the calories of sugar.)

molecular biologists,” said David Francis,

Some traditional breeders are sceptical

a professor at the Ohio State University

maximise sugar, but the plants are bred to produce a lot of big tomatoes all at once,

“HIS WORK is really groundbreaking,”

who has bred and released several tomato

and then do not have energy and sunlight

said James Giovannoni, a professor of

varieties, “because flavour is a lot more

through photosynthesis to make enough

plant biology at Cornell who studies

complicated than manipulating one or

sugar to go around.

the ripening of fruit and was one of the

two genes.” n Portfolio

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Essentials

84

Art

AFP/GrAPHeAsT

The Art Loss Register helped Stockholm’s Museum of Modern Art recover Le Jardin

by Matisse.

tracking theft for Profit

© 2013 New York Times News service

The Art Loss Register database includes 350,000 missing works and has recovered more than $250 million worth of art, report Kate Taylor and Lorne Manly.

E

art investigation around the world.

arly in the morning of

Jardin – remained a mystery until the

May 11, 1987, someone smashed

work was found last year and made a

through the glass doors of the

celebratory trip home in January. But law

Oxford-educated former risk consultant

Museum of Modern Art in

The brainchild of Julian Radcliffe, an

enforcement played no role. The return

who speaks of once spying for British

Stockholm, removed a Matisse from a wall

was facilitated by the Art Loss Register,

intelligence, the Register helps fill a gaping

and fled.

a London-based company that over the

void: Billions of dollars worth of art is

All it took was daring and a sledgehammer.

last two decades has evolved into a little

stolen every year, according to an FBI

The whereabouts of the painting – Le

noticed, but increasingly integral part of

estimate, but law enforcement has too few Portfolio

Essentials Art

Judy Goffman Cutler, co-founder of the National Museum of American Illustration, was accused by the Art Loss Register of selling a stolen painting.

Among the incidents that have drawn criticism, the Register misled a client who wanted to check the provenance of a painting before he purchased it, telling him it was not stolen when in fact it was, so that he would buy it and unwittingly help the company collect a fee for its retrieval.

unregulated market.

Radcliffe’s company operates in the

of murky provenance has given rise to

and informers for leads on stolen works,

dim recesses of the art world where the

many businesses that promise to help

a practice that troubles some in law

prevalence of theft, fakery and works

clients navigate this lucrative but largely

enforcement, who say that it can incite

resources to prioritise finding it.

For Radcliffe, whose other company helps recover stolen construction equipment, this presented a natural opportunity.

Since it began 22 years ago the Register has developed one of the most extensive databases of stolen art in the world, enabling it to recover more than $250 million worth of art, earning fees from insurers and theft victims.

Along the way, the company has drawn criticism from those who say its hardball tactics push ethical, and sometimes legal, boundaries. Even so, the Register continues to count law enforcement agents among its supporters.

“To me, they’re very important, a very useful tool,” said Mark Fishstein, the New York City Police Department’s “art cop.”

November 2013

But for the Register, despite its officialsounding name and pivotal role as a monitor, profits have not come easily and the company’s future looks increasingly cloudy, threatening a core player in the recovery of stolen art. Radcliffe said that he hopes the Register will break even this year, but that it has lost money for the last six and has stayed afloat only thanks to his cash infusions.

Among the incidents that have drawn criticism, the Register misled a client who wanted to check the provenance of a painting before he purchased it, telling him it was not stolen when in fact it was, so that he would buy it and unwittingly help the company collect a fee for its retrieval.

It has been known to pay middlemen

85

Essentials

Art

thefts. And the company often behaves like

staff of about 10, the company uses an

a bounty hunter, charging fees of as much as

Indian company to search the world for

20 per cent of a work’s value for its return.

matches between the database and items for

have any information about this painting?’

sale at auction houses and art fairs.

they would give me 30 documents,” said

“They do serve a purpose – they’re the only private database,” said Robert Wittman,

Theft victims pay to list their items with

helped train the FBI’s Art Crime Team.

“If I went to the ALR and said, ‘Do you

James McAndrew, a former federal agent

a private art investigator who formerly led

the Register, which also charges dealers,

who tracked stolen art. “They’d have all that,

the FBI’s Art Crime Team. “When they get

collectors and insurers fees to search the

where the cop on the beat would not even

into trouble is when they overstep that role

database to see whether a work is clean.

know to ask.”

and try to act as if they’re the police.”

A few countries, like Italy, place a high priority on art theft, but they are

To law enforcement, the Register’s

A tall, pale and wraith-like figure,

resources are clearly helpful. Police search

Radcliffe, 65, has a taste for cloak-and-

the database free, and the company has

dagger theatricality. Pressed last year, for

the exception.

New York City and Los Angeles, hubs of the art trade, each have one detective dedicated to art crime. The FBI has assigned 14 agents with special training to investigate art crimes, though most have other duties as well. Scotland Yard’s arts and antiques unit has three officers.

“It’s not violent crime,” said Saskia Hufnagel, a research fellow at the Australian Research Council Center of Excellence in Policing and Security. “There are no victims, at least ones the public would consider victims. A lot of the loss is covered by insurance.”

The auThoriTies are also hobbled by limited and incomplete data.

AFP/GRAPHEAST

86

Cezanne’s Pitcher and Fruits disappeared for 20 years after being stolen in 1977.

The database managed by Scotland Yard lists some 57,500 stolen objects.

Interpol’s database of stolen art includes about 40,000 works. The FBI’s database has fewer than 8,000 objects on it, partly because the bureau relies on local police to fill in the blanks.

“It is not an absolutely complete database,” said Bonnie MagnessGardiner, who manages the FBI’s art theft programme. “We get what they choose to send us.”

Each database lists items based on individual protocols and most police agencies don’t communicate with one another; thus, someone checking whether a work is stolen would have to speak to multiple agencies. The Register, by comparison, reports that its database includes more than 350,000 stolen, looted or missing works. In addition to an in-house

Norman Rockwell’s oil painting Russian Schoolroom set off a long legal wrangle over its ownership.

Portfolio

87

example, to divulge more about a case in the Balkans, he said: “Maybe the answer is to take you out there one day and introduce you to some of the people concerned and see what happens.”

Then he laughed sardonically.

Certainly his efforts and others have led to a good number of successful recoveries by the Register, including the return of a valuable Cézanne, one of seven works stolen from a home in Stockbridge, Massachusetts, in 1978.

It was found more than 20 years later after Lloyd’s of London contacted the Register with a query: A Panamanian company was trying to insure a Cézanne painting for transport. Was it stolen?

The database reflected that it was, so

Years later, when some of the other works appeared on the market, the seller was unmasked as Robert Mardirosian, a retired lawyer from Massachusetts who had once represented the thief and came into possession of the paintings when the thief was killed in 1979.

retired lawyer from Massachusetts who had once represented the thief and came into possession of the paintings when the thief was killed in 1979. He then created the Panamanian shell corporation to hide behind, according to court records.

In 2008, Mardirosian was convicted of possessing stolen property and forced to return the paintings.

Radcliffe acknowledges that to pull off this coup he resorted to some sleight of hand. When the additional paintings surfaced and Sotheby’s asked him whether they were stolen, he lied, saying they were not. This allowed them to be shipped to Sotheby’s in London, where they were seized.

Radcliffe said he has only lied twice about whether paintings were stolen or

Radcliffe approached its owner, Michael

not, and is not apologetic, likening the

Bakwin. His art had been located. Was he willing to pay a recovery fee? Bakwin agreed,

Sotheby’s for $29.3 million. The Register

tactic to police misleading a suspect during

and Radcliffe negotiated a settlement with

pocketed a $1.6 million fee.

an investigation.

the Panamanian company. Bakwin got his

Years later, when some of the other

“When you’re doing a sting operation,

works appeared on the market, the seller

for example,” he said, “you don’t say, ‘By the

Pitcher and Fruits, a few months later at

was unmasked as Robert Mardirosian, a

way, I’m lying to you’”. n

AFP/GRAPHEAST

Cézanne back in 1999. He sold the work,

Seven masterpieces worth up to ¤200 million were stolen in 2012 from the the Kunsthal museum in Rotterdam.

November 2013

Essentials

Other Business

Record Coffee Buzz

Confusion Boosts Tweeter Home Shares Excitement for Twitter’s coming IPO is running so high that some investors mistook the nearly worthless stock of long-dead electronics retailer Tweeter for the “tweeting” site, sending shares

at five cents, a 669 per cent rise.

up more than 1,000 per cent.

More than 11.7 million shares had

Tweeter Home Entertainment Group, a specialty consumer electronics

traded by midday.

The volume was the most active

company that went bankrupt in 2007,

trading day for the company since May

saw its most active day of trading on

10, 2007, when 13.05 million shares

October 4 in more than six years even

were traded as the company reported

though it has nothing to do with the

quarterly results and said it may choose

social media site.

to file Chapter 11 bankruptcy.

The stock closed October 3 at a

Twitter Inc publicly filed its IPO

price of less than a penny a share,

documents on October 3, setting the

but hit a high of 15 cents a share the

stage for one of the most-anticipated

next day before paring gains to trade

debuts in over a year.

The Colombian city of Tunja claimed to have set a world record in October after 13,800 people gathered in a town square for a cup of coffee.

This feat was designed to promote coffee in a nation that grows the beans but consumes little.

REUTERs

88

the eastern province of Boyaca and the farmer-

Giant Puffer Causes Huff

funded National Federation of Coffee Producers

A Chinese viewing tower in the

to power the world’s No. 2

in the world’s biggest producer of smooth-tasting

shape of a giant, copper puffer

economy. Beijing acknowledges

‘washed’ arabicas. The organisers said they have

fish has raised online ire about

the problem and wants

submitted evidence of the event held in Boyaca’s

bizarre and extravagant targets

consumption to overtake

capital to Guinness World Records.

of state investment.

investment as a driver of growth.

The event was organised by local authorities in

The Guinness website says the largest ever

Encased in 8,920 copper plates

The People’s Daily, the Chinese

“coffee party” was in Jugendpark, Cologne,

and built at a cost of around 70

government’s main mouthpiece,

Germany, in August 2009, at which 8,162

million yuan ($11.4 million), the

acknowledged that the construction

participants were served an iced coffee drink.

tower on an island in Yangzhong

had polarised opinion. “Once this

county, eastern Jiangsu province,

giant puffer made its appearance,

finest coffees, helped by cooler temperatures high

hovers 15 storeys above ground.

it caused a heated debate online,”

in the Andes, per capita consumption is less than

Public records show Jiangsu’s local

it said.

half of the United states and about a quarter of

government bodies are the most

that of scandinavia.

indebted in the country.

Though Colombia produces some of the world’s

The government has often been criticised for wasteful investment

Yangzhong aims to promote the tower as the world’s biggest metal construction in terms of volume, the People’s Daily said.

Portfolio

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