Wisconsin, currently
in the limelight for the new Republican Governor’s ‘union-busting’
proposals, is one of the few states in the Union with a supposedly fully-funded
pension system. But it has a looming budget problem. For while its current
deficit is a bagatelle compared to that of many other states, it is
expected to soar to US$800MM annually by 2013 for three reasons : rising
healthcare costs, the end of Federal stimulus funding, & the US$3.7BN
in tax cuts since 2003 by his then Democratic predecessor that
have ‘hollowed out’ the state’s revenue base.
The states are being
faulted for the cuts they have been made, & are proposing to make,
to spending on educational & healthcare. But they haven’t got
much choice; for on average over half their budgetary expenditures are
accounted for by these two activities (elementary/secondary education
& Medicaid 21% each, and higher education 10%). And since wage costs
account for the lion’s share of their spending in these areas, cutting
back means layoffs which in the short term will undermine whatever
employment growth may occur elsewhere in the economy, and longer term
undermine America’s global competitiveness. The answer, of course,
lies in getting a bigger bang for the taxpayers’ buck. In healthcare
this means doing what many corporations did in the 80's, eliminating
layers of back office workers & middle managers whose work is more
related to keeping each other busy than to delivering healthcare services.
And in education the solution lies in a wholesale shake-up of the system
towards performance measurement & the ditching dead-beat teachers
(there is a video circulating that shows a teacher sitting at his desk
reading a comic book while a couple of desks away two kids are doing
crack cocaine). A good example of the inefficiency in the system was
Washington D.C. where, when Michelle Rhee became School Superintendent
in 2007, only 8% of Grade 8 students performed at their grade level
despite having the third-highest spending per student in the nation
& its 302 sf space in its schools being twice the national average.
The Internet & social
networks contributed hugely to the ability of protesters to mobilize
their forces & coordinate their efforts, last year in Greece &
more recently in Tunisia, Egypt & elsewhere in the Middle East.
The Mubarak regime was successful in eliminating that ‘evil’ by
shutting down the Internet & other electronic media, but only for
five days before business considerations forced it to reconsider. The
same thing now appears to be happening in other despotic Middle Eastern
countries in the face of public protests. This, however, has created
a wave of activity in the global software community to find ways to
circumvent such government action in the future. In tank warfare it
has long been all but axiomatic that any & all efforts to make tanks
impervious to current anti-tank weapons are fairly quickly superseded
by the development of new anti-tank weapons that can overcome the hurdles
posed by the latest in tank design. The same will like hold true for
governments’ efforts to deny demonstrators the use of the electronic
media : it may buy them a temporary edge, but not for long.
The depth of social turmoil
in the Middle East can be gauged from the fact that two weeks ago 36
tribal leaders, the bedrock of the Jordanian regime, issued a joint
statement accusing King Abdullah’s wife, Queen Rania, of corruption
& of having been given land for her family that rightly “belongs
to the Jordanian people.”, despite the fact that criticism of the
Royal Family is punishable by a three-year imprisonment.
A recent issue of Gleanings
reflected on Canada’s hopelessly inadequate Arctic search & rescue
capability. But this is a symptom of a much bigger problem, a Canadian
Armed Forces acquisition system that is dysfunctional in part, but only
in part, due to politicians’ never-ending attempts to wring maximum
‘Canadian content’, regardless of cost, out of any major equipment
purchase programs, rather than buying it elsewhere more or less “off
the shelf” at market prices (in a truly transparent society, as I
argued 20 years ago with the then Governor of Kenya’s central bank,
the cost of such economic development funding should not be off-loaded
onto, & hidden in, other government department’s budgets).
While the “peg” media item talked about the dismal state of Canada’s
14 Cormorant helicopters, the Auditor-General recently said the latest
program for replacing the Forces’ 40-year old Sea King helicopters
(that were supposed to have been retired in 2000 & supposedly take
30+ hours of maintenance for every hour in the air), is now seven years
behind schedule. And the cake was taken a decade ago, when the Navy
talked Cabinet into buying four 15 year-old conventional (i.e. diesel-
rather than nuclear-powered) mothballed submarines from the Royal Navy
because ‘they were a good deal’. One of them, HMCS Victoria, in
the decade since its acquisition has been at sea for only 115 days (i.e.
a 3.2% utilization rate), & a sister ship, HMCS Chicoutoumi, experienced
an onboard fire on its delivery voyage from Britain in 2004 that killed
one crew member & has ever since been in dry dock (from which it
is not expected to emerge until next year, 2012, if then). And
when several years ago the Canadian Forces needed a heavy-lift Chinook
helicopter capability in Afghanistan, it had to depend on the Americans
& the Dutch to provide it (the latter using Chinooks bought from
Canada a decade earlier when the government of the day had ruled them
“excess to requirements”).
The waters around Prince
Edward Island are prime bluefin tuna-fishing grounds. But prices for
this popular species, that is hugely overfished, have been depressed.
The reason is simple : Ottawa has a quota for the catch for the fleet
as a whole, rather than for individual fishermen. So when the season
opens, there is a gold rush-like atmosphere as each fishermen tries
to catch as many as he can before the quota is filled. This gluts the
market & depresses the price. Talk about dumb!
On January 31st,
in his speech before receiving British Columbia’s $40,000 National
Award for Non-Fiction, writer John Vaillant said that both this award-winning
book, The Tiger : A True Story of Vengeance and Survival (about
a man-eating tiger & the man who hunts him) & his earlier celebrated
work, The Golden Spruce, focused on the fact that “There’s
this urgent need to shift the axis of our relationship to this planet
from a vertical one of dominance ... to a horizontal one of collaboration.”
This comment expresses more elegantly my observation for the last decade
that “During the 19th & 20th century Man thought he
could control Nature; but in the 21st century, if
we are to survive as a species, we’d better learn to work with
Nature.”
Unnoticed by most people,
an estimated $140MM was spent on mineral exploration in Canada’s Yukon
Territory in 2010 & the Yukon Geological Survey expects that to
more than double this year. Across the border in Alaska it is the same
story for the same reasons, favourable geology, a stable political environment,
decent infrastructure & a convenient location vis a vis Asia. The
search in the Yukon is mostly for gold- & in Alaska for copper-gold
deposits. In what could be called ‘The Yukon Gold Rush 2.0'
rumour has it that much staking North of Whitehorse has been done for
Chinese interests.
Cambridge, Mass.-based
Cogent Research 2011 Survey of Affluent Consumers found that one-third
of affluent Americans aged 55-64 years are now retired, but also that
these ‘First Wave Boomers’ had 12% fewer assets than they did four
years ago, an average of US$708,000 in investable assets vs. US$809,000
in October 2006.
According to Robert Dreyfuss,
a freelance investigative journalist writing in The Nation Sarah
Palin’s initial reaction to events in Egypt was as follows “Nobody
has, nobody yet complained to the American public what they know, and
surely they know more than the rest of us know whom it is who will be
taking the place of Mubarak, and no, not, not real enthused about what
it is that that’s being done on a national level and from D.C. in
regards to understanding all the situation there in Egypt. And in all
these areas that are so volatile right now, because obviously it’s
not just Egypt but the other countries too where we are seeing uprisings,
we know now more than ever, we need strength and sound mind there in
the White House. We need to know what it is that America stands for
so we know what it is that America will stand with. And we do not have
all that information yet.” (The Nation was founded in 1865 &
is America’s oldest continuously published weekly news magazine, even
though it has been a perennial money loser. And if this really is verbatim
what she said - quotation marks, like many other things, are no longer
as reliable as they used to be, she makes George W. Bush look like a
veritable wordsmith. And one would have to assume that her $100,000+
speaking engagements are little more than rip-off trained seal appearances
in which she merely reads & mouthes words other people’s words
(like a singer who lip-synchs).
GLEANINGS VERSION
II
No. 397SP - February
21st, 2011
WHY FOOD PRICES
AND FUEL COSTS ARE GOING UP (BBCNews)
· Good harvests
caused food prices to slide from their 2008 highs & global wheat
stockpiles to rise by 50+% in the 24 months to June 30th,
2010, from 74 to 110 days of consumption. But this year this trend reversed
itself, some prices now exceed their 2008 highs & USDA expects global
wheat production in the year ending June 30th, 2011 to decline
by 5.5% YoY to 646MM tonnes (i.e. 20MM tonnes less than consumption)
& the yearend carry-over to 98 days of consumption due to adverse
weather, floods or drought in Australia, Canada, & Russia &
the Ukraine, Pakistan & now China),
although a record rice harvest is expected in Asia & in East Africa
bumper maize crops have caused price declines of up to 50%.
· While the FAO
& the Economic Intelligence Unit says speculators aren’t to blame
for the price rises but merely made them worse, the World Development
Movement (WDM) is bound & determined to curb this “betting on
prices” by more regulation of the trade in futures contracts
which it says is ratcheting up prices to the detriment of the world’s
poor.
· Similarly, the
recent higher oil prices prior to events in Tunisia & Egypt, and
now elsewhere in the Middle East, are due to supply problems, investor
interest & rising demand (especially from China and other emerging
economies), further adding to the pressure on food prices since
higher fuel cost raise the cost of production & transportation.
Like short sellers,
speculators are less the problem than a symptom of other people’s
foibles.
INVESTORS STILL
HOARDING METALS (Bloomberg)
· After their worst
January in two decades investors in precious metals still have a US$102BN
bet on higher prices & are hoarding more gold than all but four
central banks & more silver than the US can mine in 12 years (so
what, the US is only the world’s 8th largest
silver producer, producing only one-third of No. 1., Peru, & less
than countries like Mexico, Chile &
Poland). The median forecast of analysts surveyed by Bloomberg
is for silver to be up 23%, & gold 20%, before yearend, and UBS
expects the second-highest sales ever of ETF gold products & the
strongest industrial demand for silver in 20 years as it finds
new industrial uses in making things like solar panels & plasma
screens.
Demand for silver
is strong. In January the US Mint sold 6.4MM Silver Eagles, the most
in any month since their introduction in 1986. And China’s imports
of silver in 2010 amounted to a net 123MM ounces, one-sixth of the total
annual newly-mined silver output (& it already holds the world’s
biggest silver hoard). And its price is still at an historic low vis
a vis gold & would have to rise several-fold from its present US$32.65
to match its inflation-adjusted peak price 30years ago.
IMF SAYS
‘AWE’ OF RICH COUNTRIES BLINDED IT TO CRISIS
(Reuters, Lesley Wroughton)
· Its internal watchdog,
the Independent Evaluation Office, said on February 9th the
IMF had failed to spot the financial crisis brewing because its economists
had assumed the advanced economies, given their expertise in monetary
& regulatory matters, would not spark a major financial crisis,
and had fallen hook, line & sinker for the argument of the US, UK
& others that their financial systems were sound & crisis-proof.
And its staff had been more at ease prescribing (free market?)
policies to emerging market countries (giving credence to allegations
by China about a lack of evenhandedness in its surveillance).
IMF economists, like
many other policy advisers, live in an ivory tower environment in which
all insiders regurgitate each others’ lies & misconceptions, and
nobody wants to rock the boat.
CNOOC PAYS $570M
TO BUY INTO US OIL SHALE (CD, Jim Polson & John Duce)
· It is paying US$570MM
(US$866/hectare) for a one-third stake in Chesepeake Energy’s 325,000
hectare land holding in the Niobrara oil & gas shale formation
underlying parts of Colorado & Wyoming, will pay two-thirds
of Chesepeake’s costs in developing the field up to US$697MM, and
will have the right to one-third of all of Chesepeake’s further land
acquisitions in the area. This comes on the heels of CNOOC’s
US$1.08BN acquisition, last November, of a one-third interest in Chesepeake’s
Eagle Ford shale gas project in Texas. According to Chesepeake CEO,
Aubrey McClendon, “This ... will provide the capital necessary to
accelerate drilling of this large domestic oil and natural gas resource”.
While in line with
Beijing’s strategy to turn unwanted US dollars
into real assets & secure long-term sources of supply of raw materials
for its rapidly growing economy, this will also gain it experience with
technology that it will bw able to use in deals with state-owned oil
companies that control 90% of the world’s known hydrocarbon reserves.
Meanwhile, after Chinese firms spent $13BN in the past year of so in
Canada, mostly in the Alberta oil sands, PetroChina started 2011 in
Canada with a bang by paying Encana $5.4BN for a 50% interest in its
250,000 hectare gas-prone lands in the BC’s Dawson Creek region (which
increases the likelihood more pipelines will be built to BC ports to
gain access for Alberta & BC oil & gas to the energy-hungry
markets of Asia at world market prices & reduce their role as a
captive supplier to the US.
U.S TO BUILD BILLION-DOLLAR
CENTRE TO STIMULATE DRUG CREATION
(NYT, Gardiner Harris)
· The US government
is concerned about the slowing pace of new drug development. So it has
decided to start a billion-dollar drug development centre to help create
them. Drug makers are paring back research & have neither the will
nor the resources (??) to develop new drugs. While their business
model, to spent 2x as much on marketing as on research, has become suspect,
the industry still supposedly spent US$46BN on research in 2009 compared
to which the US$1BN initial funding for the new National Centre for
Advancing Traditional Sciences is a drop in the bucket. It has been
compared to a home owner who tarts up his house to attract buyers in
a down market since the plan is have it do only enough research to catch
the industry’s eye. Health and Human Services Secretary Kathleen Sobelius
sent a letter to Congress outlining a plan to have it open its doors
next October, only 10 months after the idea first surfaced.
Anything sophisticated
that is moved so quickly from the conceptual- to the operating stage
is likely to turn into a major boondoggle. If ever there ever was a
case for the government not to get directly involved, this would be
it; so it’s amazing the Republicans haven’t jumped all over it.
In any case, the costly part of developing new drugs is not
finding it, but taking it through the government’s approval maze
(which can require a semi-trailer full of documentation).
MRS BUSH, ABSTINENCE
AND TEXAS (NYT, Gail Collins)
· Former
First Lady Barbara Bush in a recent Op-Ed piece in the Houston Chronicle
entitled We Can’t Afford to Cut Education pointed out that
Texas students rank 47th in the nation in literacy, 49th
in verbal SAT scores, and 46th in math. So the she asked
“In light of these statistics, can we afford to cut the number of
teachers, increase class sizes, eliminate scholarships for underprivileged
children and close several community colleges?” For the State Legislature
is looking to cut US$4.8BN from spending on education over the next
two years. And while budgets are tight everywhere, Gov. Rick Perry made
things worse in 2006 by reducing school property taxes on the theory
that a higher cigarette tax & a new business franchise tax would
make up the difference. Except they didn’t. Meanwhile, he won’t
hear of any new taxes & has declined US$830MM in federal aid for
education because it stipulates that it must
be used strictly for the kids (a provision inserted by some Democrat
law makers since he used the earlier US$3.2BN in stimulus money intended
for education to plug other holes in his budget.
· When underperforming,
overcrowded schools are not uncommon, when they are in Texas they become
of national importance; for it has the country’s highest birth rate
(in part due to the fecundity of the state’s growing numbers of
Latino mothers)& will soon be required to educate 10%
of the nation’s children. Another reason for the large number of children
is that Texas has the third-highest rate of teen pregnancies, &
is tops in repeat teen pregnancies, because young people, even college
students, cannot get contraceptives, except with their parents’ consent.
And, while the state gobbles up more federal funds than any other state
to teach sex education, it won’t allow anything to be taught other
than that abstinence is the only way to avoid unwanted preganacies.
So Gov. Perry c.s.
are voting with their feet (because less well-educated people are more
likely to vote Republican?), although one must wonder if their children
attend public schools).
NEW YORK CITY AIMS
TO TURN SEWAGE INTO ENERGY (NYT,
Mireya Navarro)
· Its sewage department
is seeking to become an environmental steward, and reduce its US$400MM
cost of sewage treatment & disposal, and the greenhouse gases it
produces. The biggest potential source of energy is the methane gas
produced by the city’s 14 sewage plants’ digesters: while half of
it is currently used to meet 20% of their energy requirements, thereby
keeping down its US$50MM electricity bill, the city now wants to turn
the other half, that is currently burnt off, into cash). And heating
fuel can be extracted from sludge & butanol, an alternative to gasoline,
produced by algae from waste water.
It’s always amazing
how financial pressures will overcome corporate lethargy & lead
to solutions where the common wisdom had hitherto taken the easy way
out by saying there were none.
WILL BOOMERS’
RETIREMENT BENEFIT AMERICA’S MINORITIES
(Korea Times, Jane
Han)
· Over the next
20 years an average 10,000 Americans will turn 65 each day. If you want
to land a good job in America, the coming years may be a good time to
do so. For as the 77MM Baby Boomers (i.e. one-quarter of Americans)
leave the work force they will take their skills with them & will
have to be replaced. This creates an opportunity for top notch foreign
workers. According to the Mass.-based Kitty & Michael Dukakis Center
for Urban & Regional policy “By 2018, with an expected return
to economic growth but no change in current labor participation rates
or immigration rates, there will likely be more jobs than people to
fill them”. According to the Bureau of Labor Statistics the greatest
needs will be in health care, education, accounting & computer services.
As Obama talks about
making America more competitive, fiscal pressures & Republican dogma
make states ‘scorch earth’ their education budgets, and even as
the country was already not educating enough mathematicians, engineers
& scientists. Still, the article may indulge in
‘straight-line thinking’ because people’s attitudes to retirement
are changing, as are employers’ attitudes to hiring
older employees (whether ‘needing’ or
‘wanting’ to work, they are more dependable, & cheaper in benefit
cost terms, than the up-and-coming generation). Canada’s medical schools
dropped their age constraints on admission long ago (a number of years
ago the UofA medical school even had a mother & daughter team among
its students). Canada’s Army accepts recruits in their 40's if they
can pass the physicals & can get at least six years in before age
55. Last year the Edmonton Transit hired a new driver aged 63. And in
one Safeway where I shop occasionally one check-out
‘girl’ is three years older than I (& dressed & coifed as
she is, unlikely to be doing it because otherwise she’d be eating
dog food).
WEIGHT GAINS LINKED
TO WALMART ARRIVAL
(Postmedia News, Shannon
Proudfoot)
· The March issue
of Urban Economics will carry a study by two economics professors,
Charles Courtemanche of the University of North Carolina at Greenboro
& Art Carden of Rhodes College, who studied health- & population
data between 1996 & 2005 (when 1,569 new Walmart ‘supercentres’
selling groceries and household goods opened in the US) &
concluded that one per 100,000 residents resulted in a per capita weight
gain of 0.75 kg as Walmart exerting more price pressure on processed
foods than on fruits & vegetables, and raised obesity rates by 2.3%,
and that women, low-income families & those living in less densely
populated areas are most likely to gain weight after their arrival.
This may be too simplistic.
What role was played, for instance, by the mega caloric content of the
various fast food chains’ “Whopper meals”? Many people, especially
young ones, apparently consume 60+% of their daily caloric intake after
4:00 p.m. (i.e. before the onset of their lowest energy-burning part
of the day) thereby training their bodies to store the excess energy
overnight as fat. It reminded me that in my youth the typical farm family
in Holland always had their “big meal” at noon which made sense
because most of their hardest work was done in the afternoon (at the
end of this year, after opening 40 new super centres in Canada this
year, Wal-Mart expects to have 333 stores in this country, half of which
will have grocery sections).
OTTAWA NIXES TIGHTER
RULES FOR ENGINEERED CROP EXPORTS
(G&M, James Bradshaw)
· Manipulating genes
to create genetically modified (GM) seeds has long provoked fiery debates
between those who say this is “playing God” & producing ‘Franken
Foods’ and the scientists involved who seek to stiff-arm them
by, as MPs were recently told at the University of Guelph, that GM farm
produce is a fact of agricultural life. And on February 9th
the Conservatives & Liberals in the Commons joined forces to defeat,
178-98, a bill that would have strengthened regulatory laws that govern
the export of GM farm products.
In the US 85% of all
soybeans, 75% of all canola & 40% of all corn fall in the GM category
even though North Dakota & Montana won’t allow GM wheat to be
planted. And the list of countries that have banned or restricted the
import, distribution, sale, utilization, field trials & commercial
planting of GM seeds includes : Algeria, Australia, Austria, Brazil,
China, Egypt, France, Germany, Greece, Italy, Japan, Luxemburg, New
Zealand, Norway, Philippines, Paraguay, Portugal, Saudi Arabia, Spain,
Sri Lanka, Thailand, UK, 13 Pacific island nations that between them
account for one-third of the world’s non-North American population.
Did our lawmakers miss an opportunity to develop a global niche market
for our farm products to protect Monsanto’s virtual monopoly on GM
seeds, or was this just another case of traditionalist thinking &
slavishly following any US lead?
SUBURBS LOSE OUT
TO THE BRIGHT LIGHTS OF DOWNTOWN
(G&M, Chris Atchison)
· In Canada the
recession of the early 90's drove companies into the suburbs where rents
& taxes were cheaper, and many employees welcomed the move. But
during the Great Recession era the opposite occurred as companies, led
by financial service firms & other service providers, started migrating
back to the downtown, in part, but only in part, by the appeal of strengthening
their brand by having it adorn the buildings they occupy.
It also befits the
wishes & desires of highly-motivated & desirable Generation
Y employees who increasingly prefer to live downtown
for convenience reasons.
FAILURE TO REPORT
UNDERMINES CANADA’S CLAIM TO THE ARCTIC
(G&M, Mark Hume)
· Prof. Daniel Pauly
& Senior Research Fellow Dirk Zeller of UBC’s Fisheries Centre
were astounded to find that the FAO has no reports from Canada about
its fish catches in the Arctic waters (which they feel would have strengthened
Canada’s Arctic claims). But Canada is not alone; both the US &
Russia have grossly underreported their catches : Prof Pauly believes
that from 1950 to 2006 a total of 950,000 tonnes of fish were taken
out of the Arctic waters, 75x the amount reported to the FAO.
In any dispute
as to who owns which, if any, part of the Arctic, answers to questions
like “Has Canada ever used it ... (and/or) used it regularly?” could
be important. And polls show a significant majority of Canadians surveyed
agreed with the statement “Security of the Canadian Arctic is extremely
important and we should be putting more military resources in that area
even if that means putting fewer resources on our military presence
in other parts of the world”
KITIMAT LNG PROJECT
GETS BOOST (G&M, Nathan VanderKlippe)
· A planned LNG
export terminal in North Eastern BC moved one step closer to reality
after two of the project backers, Apache Canada Ltd. & Houston-based
EOG Partners bought out Pacific Northern Gas, their 50% partner in a
proposed $1.2BN pipeline project to Kitimat. The 463 kilometre pipeline
would bring gas from (a major shale gas reservoir in the Montney/Horn
River region in) Northeastern BC to the town of Kitimat where it
would be compressed at a proposed $3.5BN liquifaction plant & exported
to Asia.
Getting outlets on
the Pacific Coast for moving Canadian oil & gas to Pacific Rim markets,
incl. California, so as to have an option to mindlessly pipelining it
‘South is critical to Alberta’s, & to a lesser extent BC’s,
future wellbeing, especially now that North America is chock-a-block
with shale gas & a huge price gap has opened up between the primary
global oil pricing benchmark, Brent crude, & North America’s,
West Texas Intermediate (WTI). But there are two problems : a raft of
First Nations that don’t like the idea of pipelines crossing
“their” lands and/or see an opportunity for some blackmailing profits
(& who should be told, to take a hike : national interests are more
important than theirs) & environmentalists who oppose any oil &
gas tanker traffic through the admittedly some time narrow waters off
the BC coast on principle, referencing the Exxon Valdez debacle in Alaska
two decades ago when most tankers were of the single hull variety, whereas
today double-hulled tankers are the standard.
BILLIONS IN SHIP
BUILDING CONTRACTS WILL MAKE WAVES FOR HARPER
(G&M, Steven Chase)
· The $35BN order
for new ships for Canada’s Navy & Coast Guard will be the biggest
new vessel acquisition program since WW II. It is loaded, however, with
political landmines since Ottawa
has ordained that the work will be split between only two shipbuilding
yards while there are three major contenders, one each in Vancouver,
Quebec & Halifax.
The plot has since
thickened because Ottawa has announced that yards bidding on the $28
BN “big” ship portion of the program must be
“financially sound” and the Davy Shipyard in Levis, Québec has
been in bankruptcy protection for the last year (& thus will have
to get busy & find itself a, likely foreign, partner with deep pockets
in a hurry. One can only wonder whether building these ships in Canada
really represents a judicious use of Canadian tax payers’ money. At
the outside it will involve the building of 40 ships, at an implied
cost of $1BN or so each. And yet the last US 100, 000+ dwt Nimitz class
carrier, the USS George W. H. Bush, that was delivered to the US Navy
two years ago, cost just US$6.2BN to build & 15,000 TEU container
ships of a similar-, & VLCC oil tankers with far bigger-, water
displacement can be built for US$200MM, or less ( & the total tonnage
of all the ships to be built under the program
is less than two, or possibly even one, such vessels. With recent peak
employment in Canada’s shipbuilding industry being little more 10,000,
this program seems to entail a very high cost job creation program,
and tax payers money would likely be used by giving all 10,000 of them
a big, fat pension as “goin-away money. Another likely far more cost
effective approach might be the construction of the hulls & basic
ship infrastructure contracted to foreign yards, and the finishing (hi-tech)
touches added in Canadian yards. The Army buys it materiel abroad, as
does the Air Force (up to a point); why should the Navy be treated any
different?
SOLDIER’S LINGUISTIC
EFFORTS BRIDGES BARRIERS (EJ, Ryan Cormier)
· Master Cpl. Shawn
Grove recently completed his third tour of duty in Afghanistan. During
his second tour, partly out of boredom, he started studying Pashto,
the local language in the Kandahar region, the Canadians’ area of
responsibility, in his day-to-day dealings with locals & on his
own in his spare time. So during his third he frequently surprised Afghan
civilians by addressing them in their own language &, not unsurprisingly,
found that this did for his relationship with, & the building of
confidence among, them.
This demonstrates,
as Greg Mortenson has done, that, contrary to the Common Wisdom, in
Afghanistan power doesn’t necessarily
“grow out of the barrel of a gun”. Democracy & security cannot
be imposed top-down, & certainly not with the West’s scant resources
there, but must come from the bottom up. Too bad, &
what a waste, that Master Cpl. Grove is planning to leave the Army.
He ought to be ‘commissioned from the ranks. For his linguistic ability
would come in handy in the next non-combat, training role of the CAF
in that country.
A WARNING TO CANADA
(G&M, Jessica Leeder)
· On February 7th
the Canadian Agri-Food Policy Institute, a non-partisan think tank headed
by a former Agriculture Canada Deputy Minister, issued a report saying
Canada had lost its status as a food-producing super power & dropped
from being the world’s third-largest to its seventh-largest food exporter.
Furthermore, that a drastic overhaul of its farm policy frame work is
needed to compete in world markets & produce more of its own people’s
food at a time that population growth & climate change are putting
unprecedented pressures on the global food supply system.
· Canadian food
imports have grown by 50%, & research in agriculture steadily declined,
in recent years at the very time global demand & prices of food
stuffs is ramping up. Part of the problem is on the farm : for two
decades farm incomes have stagnated & debt levels soared despite
$8BN in annual subsidies. And food processors have been squeezed by
retailers who find it more profitable to sell cheap imported products
& by consumers who, used to spending relatively little of their
income on food, demand low prices
· Food policy theorists
are split into two camps : those who believe that salvation lies in
improving the farm industrial system & those who seek a more radical
change to a system based on sustainability, respect for the environment
and prioritizing domestic needs.
From 2001 to 2008
Canada’s market share in the global food trade increased by 25% to
5.5% while Brazil’s rose 120% to 8.6%, Argentina’s doubled to 5.4%
& China’s rose 40% to 4.5%. In farm exports Canada’s track record
is typical of that for a resource-rich country, exporting primary products
& importing value-added ones (not unlike what happened in the US
in the 30's when freighter after freighter left the US West Coast loaded
to their Plimsoll Lines with scrap metal that built the war machine
that Japan a few years later deployed against the US in World War Two).
CHINA FACING FOOD
SUPPLY PRESSURES OVER NEXT 5 YRS (Xinhua)
· In 2010 China
produced 546MM tons of grain, 39MM tons of cooking oil & 78MM tons
of meat. According to Chen Xiaohua, China’s Vice Agricultural Minister
in the five year period ending in 2015 China each year will consume
an additional 4MM tons of grain, 800,000 tons of cooking oil & 1MM
tons of meat. To meet that demand the government plans to provide
more funding for agriculture, subsidize technology development for farmers,
and enhance agricultural market regulation & boost farmers’ income.
Meanwhile, North China’s
main wheat growing regions have seen little by way of rain for three
months. Although the official line is
“the winter wheat-growing areas in the North are frequently hit by
drought and the situation is less serious than in 2008/09", Beijing
declared an emergency over drought in the same region, incl. Henan Province,
the country’s top wheat-growing area).
ENERGY GIANTS TO
GIVE AGRICULTURE HIGH PRIORITY (CD, Huang Zhe)
· On February 6th
China National Petroleum Corp., China Petrochemical Corp. & CNOOC
were informed by the National Development & Reform Commission (China’s
economic planning body) they couldn’t sell fuel to other customers
until all farm-related orders had been filled since the country’s
farms will face pressure in the coming years to supply the nation’s
needs & ensuring enough fertilizer for crops is “a precondition
for the grain harvest ... and essential for stabilizing the prices of
agricultural products and managing inflation.”
Industrialization
& urbanization have eaten into China’s stock of arable land to
a point that Beijing believes it is approaching the minimum consistent
with national food security.
CHINESE RAILWAYS
CARRY 77.34 PASSENGERS (Xinhua)
· From January 19th
to February 2nd, the first 15 days of the 40-day Spring Festival
China’s railways moved 77.34MM passengers, 9.5% more than during the
year-earlier period. This included 4.80MM departures from Beijing, 5.69MM
from Shanghai & 8.39MM from Guangzhou (the latter up 15% YoY). And
on February 4th, Day Two of the Lunar New Year the flowback
started with the railways carrying 3.89MM passengers, up 11.3% YoY,
with the crest expected on Day Six, February 8th.
Not surprisingly,
people are more anxious to go home than back to their jobs (where they
often live under anything but ideal conditions).
CHINA LOOKING BEYOND
CANADA’S RESOURCE SECTOR
(G&M, Andy Hoffman)
· Chinese telecom
manufacturer Huawei Technologies Co. Ltd. last spring said it planned
to build a $50MM R&D facility in Ottawa to tap into its pool of
highly-skilled technology workers (incl. Many who used to work
for the now defunct, but once mighty, Nortel. And a survey of 1,300
Chinese SMEs (Small and Medium-sized Enterprises, those with < US$45MM
in annual revenues) found that 8% were planning to invest an average
$16MM in Canada over the next three years under Beijing’s “Go Global”
strategy (which encourages companies to invest abroad), much of it in
the manufacturing sector.
Its impact on Beijing’s
efforts to recycle unwanted dollars will be minimal; the real reasons
are to gain better access to North American market & to high-end
North American technology that will enable its domestic manufacturers
to move up the value-added manufacturing chain.
RED ALERT IN BRITAIN’S
FORESTS (DT, Christopher Middleton)
· In England &
Wales 1.4MM Japanese larches were cut down in the past 18 months &
1.2MM more are scheduled to bite the dust in the next three. The culprit
is a pathogen, Phytophthora Ramorum, thought to have originated in Asia,
that is killing them like Dutch elm disease did elms 40 years ago, only
more aggressively so. It first showed up nine years ago on a viburnum
bush in Essex, then ‘leaped species’ onto rhododendrons whence
it launched its attack on the larches. Until 2009 forestry officials
were fairly relaxed since only 100 infected larches had been found,
usually next to diseased rhododendrons. But now it is spreading among
Japanese larches 5x as fast as on rhododendrons
So far it hasn’t
affected other larches, but the fear is it may spread to other species.
ICELAND VOTES FOR
NEW ICESAVE DEAL (AF-P)
· On February 16th
its Parliament approved a new deal with the UK & Dutch governments
to reimburse them for the 3.9BN Euros (US$5.3BN) they had paid out to
their citizens for their losses in their IceSave account deposits in
the collapse of Iceland’s Landsbank in the fall of 2008 (Iceland reimbursed
its own-, but refused to reimburse foreign-, depositors).
While not yet a done
deal, it is a much better deal than what Icelanders soundly rejected
93-7 last year in a referendum; for it features a lower interest rate
and a longer term & upfront grace period (i.e. it is a much
‘softer’, longer term loan).
REMOTE ECUADOR
VILLAGES MAY HOLD SECRET TO LONGEVITY
(NYT, Nicholas Wade)
· Some people in
remote Ecuadorian villages have a rare condition, called the Laron Syndrome
or Laron-type dwarfism, that causes them to be very short in stature,
typically < 3½ feet (105 cms) but also makes them virtually completely
free of cancer & diabetes (the latter despite many of them being
obese). Ninety-nine of them have been studied for 24 years by Dr. Jaime
Guevera-Aguirre who spotted the cancer & diabetes anomaly (that
seems to be related to a mutation in the gene that produces growth
receptor hormones).
Most people would
likely prefer to be a normal size & take their chances with these
two diseases, especially since the risk of getting them can be ameliorated
by life style changes.
FOR A CHILD, IT’S
ALL ABOUT CONTROL (G&M, Carly Weeks)
· The Proceedings
of the National Academy of Sciences on Jasnuary 24th
published the results of a more than 30 year-long study by New Zealand
researchers on what makes kids successful as adults. The study suggests
that success hinges on a single factor : teaching kids self-control.
For it found that children who had strong self-control skills as three
year-olds, including conscientiousness, self-discipline & perseverance,
were less likely than those with low self-control scores at that
age later in life to abuse drugs, develop health problems, become
a single parent, experience financial difficulties or commit crimes.
Research over such
an extended period has more credibility than the kind of
quickie research done to test the safety of chemicals & food stuffs
(that seldom, if ever, takes even 30 months).
FORESTS COULD START
GROWING AGAIN (AF-P)
· FAO Assistant
Director General Eduardo Rojas-Briales, at the launch of the International
Year of Forests, said that despite trees still being cut down at an
“alarmingly high” rate in the Amazon & Africa, the world’s
forest area could start growing again in a few years. Its latest State
of the World’s Forests Report noted that, while the world’s 4,032BN
hectares of forests in 2010 was down from 4,085BN hectares a decade
earlier, the annual rate of deforestation had declined during the decade
from 8.3MM to 5.2MM hectares (both of them way down from the 50MM hectare
annual cut 30 years ago). China had launched a major reforestation program
to take its forested area from 120MM to 200MM hectares, the forests
areas of Europe & North America had increased in the past decade,
and South Korea & India had helped to boost Asia’s forested area
by one-third in the past decade. One the other hand, South America’s
forested area had dropped from 904MM to 864MM hectares & Rojas-Briales
criticized its governments for not using more of their recent economic
growth to help their forests. One problem, however, he said was that
many of the new trees are “junk” trees good only to dispose of greenhouse
gases.
He is both over- &
under-, doing it. By definition the new plantings will never be
“old growth” forests, at least not during our lifetimes but
that doesn’t make plantation trees
‘junk’ trees, if only because that wouldn’t make economic sense
for those planting them. And he makes no mention of the value of trees,
junk or otherwise, in reducing desertification, soil erosion & water
retention.
OYSTERS GOING EXTINCT
(Epoch Times, Jack Phillips)
· A study in
BioScience reported that researchers from the Nature Conservancy
& the University of California, Santa Cruz who had studied oyster
reefs in 44 ecoregions, comparing current populations with historical
records & catch data. They found that 85% of the world’s oyster
reefs have disappeared, that in Holland’s Wadden Sea & other regions
“more than 99% of the oyster reefs have been lost and are functionally
extinct”, & that 75+% of the world’s remaining oysters now come
from five regions in North America although, other than in the Gulf
of Mexico, “the conditions of reefs in these ecoregions is poor at
best.” It blames over-harvesting & the introduction of non-native
species.
Another study found
the over-harvesting of predator fish species like tuna & swordfish
has upset the balance of nature & led to an explosion in the numbers
of prey species like mackerel, herring & anchovies.