Swiss Health Model Gains Admirers
ZURICH — Like every other
the Swiss system involves some
system is different from virtu-
country in Europe, Switzerland
trade-offs that U.S. consumers,
ally every other country in the
guarantees health care for all its
insurers and health care provid-
world,” said Regina Herzlinger,
citizens. But the system here does
ers might find hard to swallow.
a Harvard Business School pro-
not remotely resemble the model
The Swiss government care-
fessor who has studied the Swiss
of socialized medicine often cited
fully regulates drug prices and
approach.
by opponents of universal cover-
fees for lab tests and medical
“What I like about it is that
age in the United States.
devices. It also requires patients
it’s got universal coverage, it’s
Swiss private insurers are re-
to share some costs — at a higher
customer driven, and there are
quired to offer coverage to all citi-
level than in the United States —
no intermediaries shopping on
zens, regardless of age or medi-
so they have an incentive to avoid
people’s behalf,” she added. “And
cal history. And those people, in
unnecessary treatments. And
there’s no waiting lists or ration-
turn, are obligated to buy health
some doctors grumble that cost
ing like in the U.K. or Canada.”
insurance.
controls are making it harder
Since being made mandatory
That is why many academ-
these days for a physician to
in 1996, the Swiss system has be-
ics who have studied the Swiss
make a franc.
come a popular model for experts
health care system have pointed
The Swiss government also
seeking alternatives to govern-
to this nation of about 7.5 million
provides direct cash subsidies to
ment-run health care. The Swiss
as a model that delivers much of
people if health insurance equals
approach is also popular with pa-
what Washington is aiming to ac-
more than 8 percent of personal
tients like Frieda Burgstaller, 72,
complish — without the conten-
income, and about 35 to 40 percent
who says she likes the access that
tious option of a government-run
of households get some form of
the private system provides. “If
insurance plan.
subsidy. In some cases, employ-
the doctor says it has to be done,
By many measures, the Swiss
ers contribute part of the insur-
it’s done,” said Burgstaller. “You
are healthier than Americans,
ance premium, but, unlike in the
don’t wait. And it’s covered.”
and surveys indicate that Swiss
United States, they do not receive
Still, along with lower costs and
people are generally happy with
a tax break for it. And unlike the
the freedom to choose doctors
their medical system. Switzer-
United States, where the Medi-
come bigger bills for individual
land, moreover, provides high
care program costs taxpayers
patients. On average, out-of-pock-
quality care at costs well below
about $500 billion a year, there is
et payments come to $1,350 annu-
what the United States spends
no special break here for the el-
ally. That is well above the $890
per person.
derly.
average for the United States.
And yet, as a potential model,
“Switzerland’s health care
NELSON D. SCHWARTZ
Life takes us in many strange directions and wonderful discoveries. It never turns out the way we thought it would.
Thursday, October 1, 2009
Thousands Of Jobs Will Be Lost As Saturn Comes To An End
Saturn’s end likely as Penske walks away
By Tom Braithwaite in Washington and Bernard Simon in Detroit
Published: October 1 2009 00:45 | Last updated: October 1 2009 00:45
Penske Automotive Group, the listed dealership chain, walked away from a deal to acquire General Motors’ Saturn unit on Wednesday in a decision that spells the end for the brand and threatens thousands of jobs.
Penske, founded by former racing car driver Roger Penske, said it was pulling out of the acquisition, which was agreed in June and due to close by Thursday, because of doubts about its ability to secure a long-term supply of vehicles.
EDITOR’S CHOICE
In depth: Car industry in crisis - Sep-29
GM bankruptcy documents - Jun-02
Audio slideshow: History of General Motors - Jun-01
GM had agreed to supply Saturn vehicles for a period but Penske was ultimately unable to conclude a follow-up deal with another manufacturer.
“This is very disappointing news and comes after months of hard work by hundreds of dedicated employees and Saturn retailers who tried to make the new Saturn a reality,” said Fritz Henderson, chief executive of GM, in a statement.
GM set up Saturn in the 1980s as a response to the challenge posed by Japanese imports. The brand operated relatively independently, and has sold more than 4m vehicles since 1990. However, its sales decline has been worse than the average at GM during the recession.
The sale of Saturn, part of a process to prune GM’s brands down to a core four, was expected to save 13,000 jobs at Saturn and its 350 dealerships. The cost of closing the brand will fall to GM, which is majority owned by the US government.
The bleak outlook for the dealers, who had been expected to be saved by Penske, comes as members of Congress are pressing both GM and Chrysler to reduce dealer closures that were already planned as part of the companies’ restructuring.
“I am pleased that both sides have put forward proposals and have agreed to work toward a solution,” Steny Hoyer, leader of the Democrats in the House of Representatives, said after a meeting that took place before the Saturn decision was announced.
Combined, the US and Canadian governments now own 72.5 per cent of GM and 10 per cent of Chrysler. The governments have lent the two companies a total of about $75bn and in spite of a pledge by the Obama administration to adopt a hands-off approach, Congress does not necessarily share that view when under pressure to save jobs.
“We all want to reach a non-legislative solution, which can only happen by reaching a deal that is reasonable and fair to both sides,” said Mr Hoyer.
By Tom Braithwaite in Washington and Bernard Simon in Detroit
Published: October 1 2009 00:45 | Last updated: October 1 2009 00:45
Penske Automotive Group, the listed dealership chain, walked away from a deal to acquire General Motors’ Saturn unit on Wednesday in a decision that spells the end for the brand and threatens thousands of jobs.
Penske, founded by former racing car driver Roger Penske, said it was pulling out of the acquisition, which was agreed in June and due to close by Thursday, because of doubts about its ability to secure a long-term supply of vehicles.
EDITOR’S CHOICE
In depth: Car industry in crisis - Sep-29
GM bankruptcy documents - Jun-02
Audio slideshow: History of General Motors - Jun-01
GM had agreed to supply Saturn vehicles for a period but Penske was ultimately unable to conclude a follow-up deal with another manufacturer.
“This is very disappointing news and comes after months of hard work by hundreds of dedicated employees and Saturn retailers who tried to make the new Saturn a reality,” said Fritz Henderson, chief executive of GM, in a statement.
GM set up Saturn in the 1980s as a response to the challenge posed by Japanese imports. The brand operated relatively independently, and has sold more than 4m vehicles since 1990. However, its sales decline has been worse than the average at GM during the recession.
The sale of Saturn, part of a process to prune GM’s brands down to a core four, was expected to save 13,000 jobs at Saturn and its 350 dealerships. The cost of closing the brand will fall to GM, which is majority owned by the US government.
The bleak outlook for the dealers, who had been expected to be saved by Penske, comes as members of Congress are pressing both GM and Chrysler to reduce dealer closures that were already planned as part of the companies’ restructuring.
“I am pleased that both sides have put forward proposals and have agreed to work toward a solution,” Steny Hoyer, leader of the Democrats in the House of Representatives, said after a meeting that took place before the Saturn decision was announced.
Combined, the US and Canadian governments now own 72.5 per cent of GM and 10 per cent of Chrysler. The governments have lent the two companies a total of about $75bn and in spite of a pledge by the Obama administration to adopt a hands-off approach, Congress does not necessarily share that view when under pressure to save jobs.
“We all want to reach a non-legislative solution, which can only happen by reaching a deal that is reasonable and fair to both sides,” said Mr Hoyer.
An Innocent Man Is Executed In Texas And The Governor Is Running A Giant Cover-Up
http://www.huffingtonpost.com/2009/09/30/cameron-todd-willingham-t_0_n_305653.html
Please copy and paste this link to your browser.
Please copy and paste this link to your browser.
Wednesday, September 30, 2009
The World's Greatest Financial Writer Talks About Banking
Why narrow banking alone is not the finance solution
By Martin Wolf
Published: September 29 2009 21:11 | Last updated: September 29 2009 21:11
The FT has a new series on the future of investment. But what, I wonder, is the future of finance itself? Who is confident that the financial system now emerging from the crisis is safer, or better at servicing the public’s needs, than the one that went into it? The answer has to be: few people. The question is how to remedy this dire situation.
What entered the crisis was, we now know, an ill-managed, irresponsible, highly concentrated and undercapitalised financial sector, riddled with conflicts of interest and benefiting from implicit state guarantees. What is emerging is a slightly better capitalised financial sector, but one even more concentrated and benefiting from explicit state guarantees. This is not progress: it has to mean still more and bigger crises in the years ahead.
My friend and colleague, John Kay, is aware of these dangers, as readers of his column know well. His answer, laid out in a pamphlet for the London-based Centre for the Study of Financial Innovation, is “narrow banking”*. Mr Kay rejects the notion that regulation can solve the problem created by state-guaranteed finance. Supervision, he notes, is always subject to regulatory capture. Moreover, banks “entered the crisis with capital generally in excess of regulatory requirements. These provisions proved not just inadequate but massively inadequate for the problems faced.” Worse, many of the dangers – notably the growth of off-balance-sheet finance – reflected attempts to circumvent regulation. Regulation, then, has not been the answer, but hitherto has been part of the problem.
So what is the answer? Division of banking into a “utility” and a “casino” is Mr Kay’s answer. The big idea is that insured deposits should be backed by “genuinely safe liquid assets” – known as 100 per cent reserve banking. In practice, these assets would be government bonds. This is the most rigorous form of narrow banking. But he is not clear on whether he would insist on this. It seems he might accept looser constraints.
For the sake of clarity, however, let us focus on 100 per cent reserve banking, an idea also discussed in Austrian economics. Is it workable? What might it imply? To answer, we need to understand how we entered our world of credit-based money.
Suppose someone came up with the following design for the core institutions of our financial system: they would be mainly financed by deposits, redeemable on demand; they would invest in a wide range of often illiquid and opaque assets; they would engage in complex trading activities; but they would have a wafer-thin equity cushion. Surely, people would conclude, this is fraudulent. They would be right. Such a structure can only endure because central banks act as lenders of last resort. The government’s ability to create money is put at the disposal of private interests. Right at the moment, the ability to borrow from the government at zero interest is a licence to print money.
In practice, however, we have gone much further than this. We have also explicitly guaranteed many deposits and implicitly guaranteed many more liabilities. Indeed, in the crisis, policymakers guaranteed all the liabilities of institutions deemed systemically significant. Today, the core financial institutions are, beyond doubt, a part of the state.
Mr Kay’s proposal is, in sum, to end the fraud: banks would be forced to hold assets as safe and liquid as their liabilities. We know there are other ways of making a system of fractional-reserve banks relatively safe: a stable domestic oligopoly achieves much the same thing. But that does seem highly regressive.
Is Mr Kay’s the answer? One obvious objection is that it would impose a massive upheaval in finance. But, given the crisis, such an upheaval is the least we should fear. Another objection (though, to some an advantage) is that, taken to its conclusion, it would eliminate monetary policy. Public debt held by banks would set the money supply.
A more profound issue is whether a financial system based on narrow banking could allocate capital efficiently.
Here there are two opposing risks. The first is that the supply of funds to riskier, long-term activities would be greatly reduced if we did adopt narrow banking. Against this, one might argue that, with public sector debt used to back the liabilities of narrow banks, investors would be forced to find other such assets.
The opposite (and greater) risk is that the fragility of banking would be re-invented, via “quasi-banks”. This is what has just happened, after all, with “shadow banking”. In the end, those entities, too, have been rescued. The big point is that a financial structure characterised by short-term and relatively risk-free liabilities and longer-term and riskier assets is highly profitable, until it collapses, as it is rather likely to do.
The answer to the second dilemma is to make banking illegal. That is to say, financial intermediaries, other than narrow banks, would have the value of their liabilities dependent on the value of their assets. Where assets could not be valued, there would be matching lock-up periods for liabilities. The great game of short-term borrowing, used to purchase longer-term and risky assets, on wafer-thin equity, would be ruled out. The equity risk would be borne by the funds’ investors. Trading entities would exist. But they would need equity funding.
Laurence Kotlikoff of Boston University and Edward Leamer of the University of California at Los Angeles are among those who have proposed such radical ideas. It is the simplest way I can see of avoiding the danger that narrow banking would shift the risks inherent in such activities elsewhere.
The most important point is that where we are now is intolerable. Today’s concentrations of state-insured private wealth and power must surely go. At present, the official sector believes tighter regulation, particularly higher capital requirements, can contain these risks. But this is likely to fail. If it does, we will need to be radical. Yet narrow banking would still not be enough. We would need to rule out quasi-banking. Otherwise, we would soon return to the world of fragility and bail-outs. Funds that replace banks would have to pass the risks directly on to the outside investors.
The authorities will not entertain such radical ideas right now. But the financial system is so inherently fragile that radical reform cannot be pronounced dead. It is only dormant.
* Narrow Banking: The reform of banking regulation, www.csfi.org.uk
martin.wolf@ft.com
By Martin Wolf
Published: September 29 2009 21:11 | Last updated: September 29 2009 21:11
The FT has a new series on the future of investment. But what, I wonder, is the future of finance itself? Who is confident that the financial system now emerging from the crisis is safer, or better at servicing the public’s needs, than the one that went into it? The answer has to be: few people. The question is how to remedy this dire situation.
What entered the crisis was, we now know, an ill-managed, irresponsible, highly concentrated and undercapitalised financial sector, riddled with conflicts of interest and benefiting from implicit state guarantees. What is emerging is a slightly better capitalised financial sector, but one even more concentrated and benefiting from explicit state guarantees. This is not progress: it has to mean still more and bigger crises in the years ahead.
My friend and colleague, John Kay, is aware of these dangers, as readers of his column know well. His answer, laid out in a pamphlet for the London-based Centre for the Study of Financial Innovation, is “narrow banking”*. Mr Kay rejects the notion that regulation can solve the problem created by state-guaranteed finance. Supervision, he notes, is always subject to regulatory capture. Moreover, banks “entered the crisis with capital generally in excess of regulatory requirements. These provisions proved not just inadequate but massively inadequate for the problems faced.” Worse, many of the dangers – notably the growth of off-balance-sheet finance – reflected attempts to circumvent regulation. Regulation, then, has not been the answer, but hitherto has been part of the problem.
So what is the answer? Division of banking into a “utility” and a “casino” is Mr Kay’s answer. The big idea is that insured deposits should be backed by “genuinely safe liquid assets” – known as 100 per cent reserve banking. In practice, these assets would be government bonds. This is the most rigorous form of narrow banking. But he is not clear on whether he would insist on this. It seems he might accept looser constraints.
For the sake of clarity, however, let us focus on 100 per cent reserve banking, an idea also discussed in Austrian economics. Is it workable? What might it imply? To answer, we need to understand how we entered our world of credit-based money.
Suppose someone came up with the following design for the core institutions of our financial system: they would be mainly financed by deposits, redeemable on demand; they would invest in a wide range of often illiquid and opaque assets; they would engage in complex trading activities; but they would have a wafer-thin equity cushion. Surely, people would conclude, this is fraudulent. They would be right. Such a structure can only endure because central banks act as lenders of last resort. The government’s ability to create money is put at the disposal of private interests. Right at the moment, the ability to borrow from the government at zero interest is a licence to print money.
In practice, however, we have gone much further than this. We have also explicitly guaranteed many deposits and implicitly guaranteed many more liabilities. Indeed, in the crisis, policymakers guaranteed all the liabilities of institutions deemed systemically significant. Today, the core financial institutions are, beyond doubt, a part of the state.
Mr Kay’s proposal is, in sum, to end the fraud: banks would be forced to hold assets as safe and liquid as their liabilities. We know there are other ways of making a system of fractional-reserve banks relatively safe: a stable domestic oligopoly achieves much the same thing. But that does seem highly regressive.
Is Mr Kay’s the answer? One obvious objection is that it would impose a massive upheaval in finance. But, given the crisis, such an upheaval is the least we should fear. Another objection (though, to some an advantage) is that, taken to its conclusion, it would eliminate monetary policy. Public debt held by banks would set the money supply.
A more profound issue is whether a financial system based on narrow banking could allocate capital efficiently.
Here there are two opposing risks. The first is that the supply of funds to riskier, long-term activities would be greatly reduced if we did adopt narrow banking. Against this, one might argue that, with public sector debt used to back the liabilities of narrow banks, investors would be forced to find other such assets.
The opposite (and greater) risk is that the fragility of banking would be re-invented, via “quasi-banks”. This is what has just happened, after all, with “shadow banking”. In the end, those entities, too, have been rescued. The big point is that a financial structure characterised by short-term and relatively risk-free liabilities and longer-term and riskier assets is highly profitable, until it collapses, as it is rather likely to do.
The answer to the second dilemma is to make banking illegal. That is to say, financial intermediaries, other than narrow banks, would have the value of their liabilities dependent on the value of their assets. Where assets could not be valued, there would be matching lock-up periods for liabilities. The great game of short-term borrowing, used to purchase longer-term and risky assets, on wafer-thin equity, would be ruled out. The equity risk would be borne by the funds’ investors. Trading entities would exist. But they would need equity funding.
Laurence Kotlikoff of Boston University and Edward Leamer of the University of California at Los Angeles are among those who have proposed such radical ideas. It is the simplest way I can see of avoiding the danger that narrow banking would shift the risks inherent in such activities elsewhere.
The most important point is that where we are now is intolerable. Today’s concentrations of state-insured private wealth and power must surely go. At present, the official sector believes tighter regulation, particularly higher capital requirements, can contain these risks. But this is likely to fail. If it does, we will need to be radical. Yet narrow banking would still not be enough. We would need to rule out quasi-banking. Otherwise, we would soon return to the world of fragility and bail-outs. Funds that replace banks would have to pass the risks directly on to the outside investors.
The authorities will not entertain such radical ideas right now. But the financial system is so inherently fragile that radical reform cannot be pronounced dead. It is only dormant.
* Narrow Banking: The reform of banking regulation, www.csfi.org.uk
martin.wolf@ft.com
Tuesday, September 29, 2009
China Makes A Move On Nigerian Oil
China seeks big stake in Nigerian oil
By Tom Burgis in Lagos
Published: September 28 2009 23:30 | Last updated: September 28 2009 23:30
In the pipeline: oil production in Nigeria is at about two-thirds of capacity after years of rebellion and lack of investment
EDITOR’S CHOICE
Nigeria feels pull from east and west - Sep-28
Energy Source: The unanswered questions - Sep-28
In depth: Africa and China - Oct-25
EU condemns Guinea violence - Sep-29
A Chinese state-owned oil company is in talks with Nigeria to buy large stakes in some of the world’s richest oil blocs in a deal that would eclipse Beijing’s previous efforts to secure crude overseas.
The attempt could pitch the Chinese into competition with western oil groups, including Shell, Chevron, Total and ExxonMobil, which partly or wholly control and operate the 23 blocks under discussion. Sixteen licences are up for renewal.
CNOOC, one of China’s three energy majors, is trying to buy 6bn barrels of oil, equivalent to one in every six barrels of the proven reserves in Nigeria, sub-Saharan Africa’s biggest crude producer and a major supplier to the US.
Details of the talks were revealed in a letter from the office of Umaru Yar’Adua, Nigeria’s president, to Sunrise, CNOOC’s representative, a copy of which was obtained by the Financial Times. The overall value of the Chinese offer is not disclosed, although some details suggest a figure of about $30bn. Some oil sector executives said the total on the table was $50bn.
A spokesman for Mr Yar’Adua said: “Negotiations are ongoing not only with Sunrise/CNOOC but also with all other stakeholders in the industry. The federal government has not taken any final position on the issue.”
Large deals run aground
The fate of NigComSat-1 has been emblematic of China’s recent dealings with Nigeria
Last November, 18 months after its launch, the controllers of Nigeria’s $257m Chinese-built satellite switched it off after a faulty power supply meant it risked colliding with other objects in orbit.
It was a public relations disaster for China at a time when it seemed to be stumbling in its efforts to gain a strategic foothold in Africa’s biggest energy producer.
In 2006, towards the end of the presidency of Olusegun Obasanjo, Chinese companies won four oil-drilling licences in exchange for pledges to build a hydroelectric power plant, a railway and a refinery.
Oil-for-infrastructure deals have flourished elsewhere for China, notably in Angola. In Nigeria they faltered, as Umaru Yar’Adua, the new president, ordered investigations into the pacts. The projects stopped before they had started.
There are 20,000 Chinese expatriates living in Nigeria, according to official estimates, and Chinese products have made inroads into the country’s teeming markets. But until now the big state-to-state deals that have typically paved the way for China’s entry into other resource rich African markets have mostly run aground.
The letter, dated August 13, said an initial offer was “unacceptable” but added: “Your interest in all the listed blocs will be considered if your revised offer is favourable.”
Details of how the Nigerian government would allocate equity in the blocks to CNOOC have yet to emerge and it is unclear whether this would involve forcing western groups to relinquish stakes.
“There are serious legal implications. You don’t want to go to court but if it gets to this then you have little choice,” an oil industry insider said.
China’s push to gain a significant foothold in Nigeria underlines the scale of its long-term ambitions to secure access to energy resources across the globe. Much of its investment has been for exploration, in contrast with the Nigerian blocks which are already producing or due to start pumping soon.
Tanimu Yakubu, the Nigerian president’s economic adviser, said China might not secure “anything close” to 6bn barrels from the negotiations, adding: “We want to retain our traditional friends.”
However, Mr Yakubu told the FT the Chinese “are really offering multiples of what existing producers are pledging [for licences] ... we love to see this kind of competition”.
The talks come with oil groups and the government at loggerheads over a planned overhaul of the energy sector, where underinvestment and unrest in the oil-producing Niger Delta have drastically curbed production.
Basil Omiyi, Shell’s country chair in Nigeria, said: “The blocs referred to are under active exploration, development and production, mostly by the majority government-owned joint venture operated by Shell.” CNOOC declined to comment.
Total, Chevron and the Nigerian National Petroleum Corporation did not respond to requests for comment.
By Tom Burgis in Lagos
Published: September 28 2009 23:30 | Last updated: September 28 2009 23:30
In the pipeline: oil production in Nigeria is at about two-thirds of capacity after years of rebellion and lack of investment
EDITOR’S CHOICE
Nigeria feels pull from east and west - Sep-28
Energy Source: The unanswered questions - Sep-28
In depth: Africa and China - Oct-25
EU condemns Guinea violence - Sep-29
A Chinese state-owned oil company is in talks with Nigeria to buy large stakes in some of the world’s richest oil blocs in a deal that would eclipse Beijing’s previous efforts to secure crude overseas.
The attempt could pitch the Chinese into competition with western oil groups, including Shell, Chevron, Total and ExxonMobil, which partly or wholly control and operate the 23 blocks under discussion. Sixteen licences are up for renewal.
CNOOC, one of China’s three energy majors, is trying to buy 6bn barrels of oil, equivalent to one in every six barrels of the proven reserves in Nigeria, sub-Saharan Africa’s biggest crude producer and a major supplier to the US.
Details of the talks were revealed in a letter from the office of Umaru Yar’Adua, Nigeria’s president, to Sunrise, CNOOC’s representative, a copy of which was obtained by the Financial Times. The overall value of the Chinese offer is not disclosed, although some details suggest a figure of about $30bn. Some oil sector executives said the total on the table was $50bn.
A spokesman for Mr Yar’Adua said: “Negotiations are ongoing not only with Sunrise/CNOOC but also with all other stakeholders in the industry. The federal government has not taken any final position on the issue.”
Large deals run aground
The fate of NigComSat-1 has been emblematic of China’s recent dealings with Nigeria
Last November, 18 months after its launch, the controllers of Nigeria’s $257m Chinese-built satellite switched it off after a faulty power supply meant it risked colliding with other objects in orbit.
It was a public relations disaster for China at a time when it seemed to be stumbling in its efforts to gain a strategic foothold in Africa’s biggest energy producer.
In 2006, towards the end of the presidency of Olusegun Obasanjo, Chinese companies won four oil-drilling licences in exchange for pledges to build a hydroelectric power plant, a railway and a refinery.
Oil-for-infrastructure deals have flourished elsewhere for China, notably in Angola. In Nigeria they faltered, as Umaru Yar’Adua, the new president, ordered investigations into the pacts. The projects stopped before they had started.
There are 20,000 Chinese expatriates living in Nigeria, according to official estimates, and Chinese products have made inroads into the country’s teeming markets. But until now the big state-to-state deals that have typically paved the way for China’s entry into other resource rich African markets have mostly run aground.
The letter, dated August 13, said an initial offer was “unacceptable” but added: “Your interest in all the listed blocs will be considered if your revised offer is favourable.”
Details of how the Nigerian government would allocate equity in the blocks to CNOOC have yet to emerge and it is unclear whether this would involve forcing western groups to relinquish stakes.
“There are serious legal implications. You don’t want to go to court but if it gets to this then you have little choice,” an oil industry insider said.
China’s push to gain a significant foothold in Nigeria underlines the scale of its long-term ambitions to secure access to energy resources across the globe. Much of its investment has been for exploration, in contrast with the Nigerian blocks which are already producing or due to start pumping soon.
Tanimu Yakubu, the Nigerian president’s economic adviser, said China might not secure “anything close” to 6bn barrels from the negotiations, adding: “We want to retain our traditional friends.”
However, Mr Yakubu told the FT the Chinese “are really offering multiples of what existing producers are pledging [for licences] ... we love to see this kind of competition”.
The talks come with oil groups and the government at loggerheads over a planned overhaul of the energy sector, where underinvestment and unrest in the oil-producing Niger Delta have drastically curbed production.
Basil Omiyi, Shell’s country chair in Nigeria, said: “The blocs referred to are under active exploration, development and production, mostly by the majority government-owned joint venture operated by Shell.” CNOOC declined to comment.
Total, Chevron and the Nigerian National Petroleum Corporation did not respond to requests for comment.
New Sanctions Against Iran
Insurers targeted in Iran sanctions push
By Daniel Dombey in Washington and Paul J Davies in London
Published: September 28 2009 19:25 | Last updated: September 28 2009 19:25
The US and its allies are stepping up efforts to push through sanctions on companies that provide Iran with insurance following last week’s revelation that Tehran is building an undeclared nuclear facility.
The move could affect the business of groups such as Lloyd’s of London and Munich Re, hit Iran’s supply of refined oil and bypass the UN Security Council, where both Russia and China have signalled their misgivings about sweeping new sanctions.
EDITOR’S CHOICE
Gideon Rachman: Iran tests the world’s collective will - Sep-28
Missile test increases tensions with west - Sep-29
Iran test-fires long range missile - Sep-28
In depth: Iran - Nov-19
Editorial: Time to confront Iran’s deceptions - Sep-27
Opinion: Confront Tehran now in pursuit of a nuclear-free world - Sep-27
A western diplomat, referring to curbing cover for Iran, said: “It is something that would have real impact and . . . would be achievable but as one of a package of measures.”
Pieter Van Tol, a partner at Lovells, the law firm, in New York, who advises insurers, said: “The insurance/reinsurance industry in general is quite nervous because the industry is being specifically named for the first time as a target.”
The US hopes the move, being discussed in Congress and between Washington and its partners, will limit Iran’s supplies of refined oil because of the importance of insuring valuable cargoes. Tehran’s reliance on petrol imports is considered the weak point in its economy by western officials who admit there are big obstacles to sanctions focused on refined oil – not least because China has stepped up petrol sales to Iran. By contrast, the big insurers at the centre of attention in Washington are European.
Aipac, the pro-Israeli lobby group, has identified groups such as Lloyd’s and Munich Re as providing services to shipments of refined petroleum to Iran.
The London insurance market said: “Lloyd’s covers less than 10 per cent of the shipping that carries refined oil to Iran. If new sanctions were put in place, we would immediately take action to make sure underwriters were compliant.”
Munich Re said it would review any new financial and trade sanctions.
Mr Van Tol said: “Given the inherent dangers involved in shipping to that part of the world, there are definitely limits to how much shipping companies can ‘go bare’, which is what they would be doing through self-insurance.
“The Chinese insurance/reinsurance industry is not very well advanced or capitalised . . . if the big players in the market drop out, it is not realistic to think that there is enough . . . capacity to fill the void in a significant way.”
Such measures are most likely to result from talks between the US and allies in the European Union, notably Britain and France, and from legislation being considered by Congress.
Although some US officials say the UN might impose sanctions on refined oil imports if talks with Tehran this week yield little, Russia and China are wary of measures of the sort used against Iraq in the 1990s that failed to topple Saddam Hussein but caused widespread human misery.
Instead, some diplomats anticipate new UN sanctions targeting named companies and banks linked to Iran’s missile and nuclear programme, while more sweeping action takes place elsewhere.
Even last year, the US had hoped Europe would move to limit insurance groups’ business with Iran and diplomats say talks have recently intensified.
One spur has been US legislation that Howard Berman, the chairman of the House of Representatives foreign affairs committee, says he will bring forward next month.
The legislation, which has the support of 318 of 435 House members and 76 of 100 senators, would not only target companies selling refined oil directly but also “any activity that could contribute to the enhancement of Iran’s ability to import refined petroleum resources, including providing ships or shipping services . . . underwriting or otherwise providing insurance or reinsurance for such activity [and] financing or brokering”.
Such a measure might not be enforced even if enacted – similar US sanctions in the 1990s caused tensions with the EU because of their extraterritorial reach. But lawyers say that just by virtue of being discussed such initiatives can have a chilling effect on companies.
By Daniel Dombey in Washington and Paul J Davies in London
Published: September 28 2009 19:25 | Last updated: September 28 2009 19:25
The US and its allies are stepping up efforts to push through sanctions on companies that provide Iran with insurance following last week’s revelation that Tehran is building an undeclared nuclear facility.
The move could affect the business of groups such as Lloyd’s of London and Munich Re, hit Iran’s supply of refined oil and bypass the UN Security Council, where both Russia and China have signalled their misgivings about sweeping new sanctions.
EDITOR’S CHOICE
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In depth: Iran - Nov-19
Editorial: Time to confront Iran’s deceptions - Sep-27
Opinion: Confront Tehran now in pursuit of a nuclear-free world - Sep-27
A western diplomat, referring to curbing cover for Iran, said: “It is something that would have real impact and . . . would be achievable but as one of a package of measures.”
Pieter Van Tol, a partner at Lovells, the law firm, in New York, who advises insurers, said: “The insurance/reinsurance industry in general is quite nervous because the industry is being specifically named for the first time as a target.”
The US hopes the move, being discussed in Congress and between Washington and its partners, will limit Iran’s supplies of refined oil because of the importance of insuring valuable cargoes. Tehran’s reliance on petrol imports is considered the weak point in its economy by western officials who admit there are big obstacles to sanctions focused on refined oil – not least because China has stepped up petrol sales to Iran. By contrast, the big insurers at the centre of attention in Washington are European.
Aipac, the pro-Israeli lobby group, has identified groups such as Lloyd’s and Munich Re as providing services to shipments of refined petroleum to Iran.
The London insurance market said: “Lloyd’s covers less than 10 per cent of the shipping that carries refined oil to Iran. If new sanctions were put in place, we would immediately take action to make sure underwriters were compliant.”
Munich Re said it would review any new financial and trade sanctions.
Mr Van Tol said: “Given the inherent dangers involved in shipping to that part of the world, there are definitely limits to how much shipping companies can ‘go bare’, which is what they would be doing through self-insurance.
“The Chinese insurance/reinsurance industry is not very well advanced or capitalised . . . if the big players in the market drop out, it is not realistic to think that there is enough . . . capacity to fill the void in a significant way.”
Such measures are most likely to result from talks between the US and allies in the European Union, notably Britain and France, and from legislation being considered by Congress.
Although some US officials say the UN might impose sanctions on refined oil imports if talks with Tehran this week yield little, Russia and China are wary of measures of the sort used against Iraq in the 1990s that failed to topple Saddam Hussein but caused widespread human misery.
Instead, some diplomats anticipate new UN sanctions targeting named companies and banks linked to Iran’s missile and nuclear programme, while more sweeping action takes place elsewhere.
Even last year, the US had hoped Europe would move to limit insurance groups’ business with Iran and diplomats say talks have recently intensified.
One spur has been US legislation that Howard Berman, the chairman of the House of Representatives foreign affairs committee, says he will bring forward next month.
The legislation, which has the support of 318 of 435 House members and 76 of 100 senators, would not only target companies selling refined oil directly but also “any activity that could contribute to the enhancement of Iran’s ability to import refined petroleum resources, including providing ships or shipping services . . . underwriting or otherwise providing insurance or reinsurance for such activity [and] financing or brokering”.
Such a measure might not be enforced even if enacted – similar US sanctions in the 1990s caused tensions with the EU because of their extraterritorial reach. But lawyers say that just by virtue of being discussed such initiatives can have a chilling effect on companies.
Robert Mugabe's Wife ANd Her Illicit Empire
How Grace's empire has fallen into ruin print friendly version
author/source:Cape Argus (SA)
published:Mon 28-Sep-2009
posted on this site:Tue 29-Sep-2009
Article Type : News
At least Robert Mugabe has ensured that the farms he took as part of his "land reform programme" are productive, if not profitable
Peta Thornycroft
Harare - While many of her countrymen remain hungry, Zimbabwe's First Lady Grace Mugabe has destroyed most of the choice white farms she has seized. Grace, the wife of President Robert Mugabe, has established a state-of-the-art dairy on one of the six or more farms she has acquired. And she is controversially selling milk to the Swiss-based company Nestlé. President Mugabe has also secretly grabbed five choice farms for himself, the Weekend Argus revealed yesterday. At least Robert Mugabe has ensured that the farms he took as part of his "land reform programme" are productive, if not profitable. But most of Grace's estates have fallen into ruin. Probably the previously most profitable of them, Zimbabwe's largest seed producing farm, Sigaro, in the rich Mazowe Valley near Harare, now produces no crops. Its infrastructure, packing sheds, a seed factory and a luxury home, burned down in 2007. The farm, among the top 10 most valuable in the country in 1999, lies fallow and it would take millions of rands to get it productive again. Next door to Sigaro, Gwebi Woods, a large export granadilla farm, owned by Washington Matsaire, CEO of Standard Chartered Bank, which Grace took early this year, was also burned down and lies fallow.
Even Foyle Farm, which she took in 2003, and where she has built her hi-tech dairy, is nowhere near as productive as it once was. It was Zimbabwe's top producer, yet today, despite the millions of rands of world class dairy equipment supplied and installed for Grace in June by Dairy Care, a South African company, it still produces only a sixth of the milk it did six years ago. Delaval, in Pinetown, KwaZulu-Natal which supplied Grace with the dairy equipment imported mainly from Germany, Sweden and Poland, said it was a top-of-the-range installation. Delaval spokesman Rykie Visser said he could not discuss the cost of Grace Mugabe's dairy equipment. "We keep that information confidential about all our customers," he said last Friday. Grace Mugabe's milk is bought by Nestlé Zimbabwe, part of the international group in Geneva, and while Switzerland is not a member of the EU it adopted its own measures against some Zanu PF leaders, including Grace Mugabe. The measures rule that Switzerland, like the EU, will not provide funds to anyone on its sanctions list. Other farms taken by Grace Mugabe, Leverdale and Gwina, in Banket, about 80km north of Harare were part of a farming operation run by the Nicolle family which produced 20 percent of Zimbabwe's wheat in winter. No wheat was planted this winter on these famed, rich red soils which have provided food for tens of thousands of Zimbabweans for decades.
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author/source:Cape Argus (SA)
published:Mon 28-Sep-2009
posted on this site:Tue 29-Sep-2009
Article Type : News
At least Robert Mugabe has ensured that the farms he took as part of his "land reform programme" are productive, if not profitable
Peta Thornycroft
Harare - While many of her countrymen remain hungry, Zimbabwe's First Lady Grace Mugabe has destroyed most of the choice white farms she has seized. Grace, the wife of President Robert Mugabe, has established a state-of-the-art dairy on one of the six or more farms she has acquired. And she is controversially selling milk to the Swiss-based company Nestlé. President Mugabe has also secretly grabbed five choice farms for himself, the Weekend Argus revealed yesterday. At least Robert Mugabe has ensured that the farms he took as part of his "land reform programme" are productive, if not profitable. But most of Grace's estates have fallen into ruin. Probably the previously most profitable of them, Zimbabwe's largest seed producing farm, Sigaro, in the rich Mazowe Valley near Harare, now produces no crops. Its infrastructure, packing sheds, a seed factory and a luxury home, burned down in 2007. The farm, among the top 10 most valuable in the country in 1999, lies fallow and it would take millions of rands to get it productive again. Next door to Sigaro, Gwebi Woods, a large export granadilla farm, owned by Washington Matsaire, CEO of Standard Chartered Bank, which Grace took early this year, was also burned down and lies fallow.
Even Foyle Farm, which she took in 2003, and where she has built her hi-tech dairy, is nowhere near as productive as it once was. It was Zimbabwe's top producer, yet today, despite the millions of rands of world class dairy equipment supplied and installed for Grace in June by Dairy Care, a South African company, it still produces only a sixth of the milk it did six years ago. Delaval, in Pinetown, KwaZulu-Natal which supplied Grace with the dairy equipment imported mainly from Germany, Sweden and Poland, said it was a top-of-the-range installation. Delaval spokesman Rykie Visser said he could not discuss the cost of Grace Mugabe's dairy equipment. "We keep that information confidential about all our customers," he said last Friday. Grace Mugabe's milk is bought by Nestlé Zimbabwe, part of the international group in Geneva, and while Switzerland is not a member of the EU it adopted its own measures against some Zanu PF leaders, including Grace Mugabe. The measures rule that Switzerland, like the EU, will not provide funds to anyone on its sanctions list. Other farms taken by Grace Mugabe, Leverdale and Gwina, in Banket, about 80km north of Harare were part of a farming operation run by the Nicolle family which produced 20 percent of Zimbabwe's wheat in winter. No wheat was planted this winter on these famed, rich red soils which have provided food for tens of thousands of Zimbabweans for decades.
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