Friday, November 29, 2013

Eurozone youth joblessness at record 24%; Rio Tinto cuts 1,000 jobs, cripples town; China's Moon-fixation

1 Eurozone youth joblessness at record 24% (Phillip Inman in The Guardian) The crisis facing the younger generation across the Eurozone worsened last month as youth unemployment hit a new record high of 24.4% with under-25s in Spain, Italy and Portugal finding it harder to get jobs. The grim news on employment came as the Netherlands was stripped of its prized AAA credit rating despite the country's recent exit from a year-long recession. Jeroen Dijsselbloem, the Dutch finance minister, said S&P's downgrade to AA+ was disappointing when the economy had returned to growth.

S&P's action leaves only three members of the eurozone with a top rating from all three agencies – Germany, Luxembourg and Finland. The Eurozone jobless data showed Spain's youth unemployment rate has now increased to 57.4%, only marginally below Greece's August high of 58% - which remains the highest rate of youth unemployment for any country in the eurozone's history. Italy's youth unemployment rate rose to 41.2%, from 40.5% the previous month. In Portugal, it rose to 36.5% from 36.2%.

The startling figures from southern Europe contrast with rates in the north where Germany has a 7.8% youth unemployment rate and the Netherlands an 11.6% rate. Italy's credit rating is perilously close to entering junk status and Rome is lobbying hard in Brussels for more time to cut the country's annual deficit. While the adult unemployment rate fell across the eurozone from 12.2 to 12.1%, 3.6m under-25s are now unemployed, an increase of 15,000 on the previous month.

2 Rio Tinto cuts 1,000 jobs, cripples town (Angela Macdonald-Smith in Sydney Morning Herald) Australia's struggling manufacturing sector has taken another hit with Rio Tinto deciding to mothball alumina production at its loss-making Gove site in Arnhem Land with the expected loss of about 1,000 jobs. The long-expected decision deals a severe blow to the fragile economy of the region around the remote town of Nhulunbuy, which is reliant on the bauxite and alumina operation at Gove for its existence.

The strong Australian dollar, low alumina prices and high energy costs have crippled the plant, with losses estimated at $1 billion for Rio since 2007, a period when the miner also invested $700 million at the site. Efforts to save the plant by shoring up gas to allow it to switch from hugely expensive fuel oil came to nought when Rio rejected the gas option this week. Rio chief executive Sam Walsh said ''Our aluminium business is facing challenging market conditions and tough decisions are needed, but those decisions are so much harder when our employees and local communities are affected as they are in Nhulunbuy.''

3 China's Moon-fixation (David Shukman on BBC) The Moon could be a "beautiful" source of minerals and energy, a top Chinese scientist has said. Exotic materials including helium-3 and the potential for solar power could prove invaluable for humankind, he says. The comments come from Prof Ouyang Ziyuan of the department of lunar and deep space exploration. 

Prof Ouyang was speaking ahead of the first Chinese attempt to land an unmanned spacecraft on the lunar surface.  It will be the first to make a soft touchdown on the Moon since an unmanned Russian mission in 1976. No humans have set foot on the lunar surface since America's Apollo missions ended in 1972. Prof Ouyang said the forthcoming venture would land in an ancient crater 400km wide called Sinus Iridum, thought to be relatively flat and clear of rocks, and explore its geology.

He explained that there were three motivations behind the drive to investigate the Moon. "First, to develop our technology because lunar exploration requires many types of technology, including communications, computers, all kinds of IT skills and the use of different kinds of materials. Second, in terms of the science, besides Earth we also need to know our brothers and sisters like the Moon, its origin and evolution and then from that we can know about our Earth. And third, in terms of the talents, China needs its own intellectual team who can explore the whole lunar and solar system - that is also our main purpose."

The Moon is also "so rich" in helium-3, which is a possible fuel for nuclear fusion, that this could "solve human beings' energy demand for around 10,000 years at least. "The Moon is full of resources - mainly rare earth elements, titanium, and uranium, which the Earth is really short of, and these resources can be used without limitation. But it's unnecessary to get them now because it's very costly." Prof Ouyang summed up his vision for the goal of lunar exploration: "There are so many potential developments - it's beautiful - so we hope we can fully utilize the Moon to support sustainable development for humans and society."

Thursday, November 28, 2013

Are employees assets or commodities?; Why India anti-corruption party is making waves; Syrian refugees top 3 million; Girls grapple with low self-esteem

1 Are employees assets or commodities? (James Adonis in Sydney Morning Herald) ‘Employees are our greatest asset’ is one of the most worn-out clich├ęs in the management lexicon. It’s also not true. Some of them, as any experienced leader would know, are liabilities. And unlike traditional assets such as property and cars, people have the liberty to walk away from their employer.

The concept of employees as assets – as commodities – was brought to light by Turning Left or Right, a new Australian book edited by Carlo Carli, Paul Collits and Tim Wilson. The book has serious errors in spelling, grammar and punctuation, but if you can get past the lazy editing, it’s quite a good read. The book poses twenty political questions with three different writers penning an essay in response to each one. Some put forward the views of the Left (which curiously contain the most typographical errors), others defend the Conservatives, and then there are those who advocate the classical liberal perspective.

So, are they just a commodity? According to the Left, yes. When 40 per cent of people can’t pursue a career or depend on a reliable income because of the uncertainty of their ongoing employment, they are merely commodities able to be disposed of by employers and businesspeople who happily take advantage. The viewpoint of the conservative is that workers cannot be commodities because they willingly choose that lifestyle for themselves. The majority of people prefer to be employees because they can't bear the pressure of being business owners or making big decisions as a leader of a large corporation. They are therefore content being employed by someone else.

The liberal, similar to the conservative, doesn’t think workers are commodities. A commodity, by definition, is an object that can be bought and sold, and so to extend that practice to humans would be tantamount to slavery. But labour, on the other hand, as a service offered by humans, can be legitimately seen as a commodity. And this provision of labour is best facilitated not by the unequal relationship that exists between an employer and an employee but by the one that exists between sole traders and their clients.

2 Why India anti-corruption party is making waves (Sanjoy Majumder on BBC) An upstart political party led by a leading anti-corruption crusader is creating waves in India by posing a threat to the country's mainstream parties, the Congress and the BJP. The Aam Admi or (Common Man's Party) is led by Arvind Kejriwal - a former civil servant. The party was born out of a strong anti-corruption movement that swept India two years ago. 

Pre-election surveys suggest that it could upset the calculations of the major contenders, the governing Congress Party and India's main opposition BJP, which see Delhi as critical to its ambitions of winning next year's national elections. The party's campaign runs on a shoestring budget. A cavalcade of tuk-tuks and scooters follow Mr Kejriwal's open jeep as it drives through some of Delhi's poorest neighbourhoods. Party workers emulate their leader and wear white caps with the words "I am a common person," emblazoned on the side.

"We've seen so many politicians who've promised so much and delivered so little," says one man. “I'm willing to give him [Arvind Kejriwal] a chance." Lawyers, students, journalists and housewives form its base - middle class Indians disillusioned with the country's politicians, stirred into action by the mass anti-corruption protests two years ago. Some believe it is the start of a massive change in Indian politics. "It's the early Facebook or Google of Indian democracy," says Rajan Makhija, a management consultant from Singapore.

But the party is not short of controversy. There are questions over the party's ability to transfer its idealism into sound policies. "They are political greenhorns, with no administrative or political experience," says political commentator Neerja Chowdhury. "It'll be a challenge for them to deliver."

3 Syrian refugees top 3 million (Johannesburg Times) The number of Syrians who have fled their country has surpassed three million, the UN said, appealing for "massive" support to help host countries cope with the growing influx. UN Refugee Agency (UNHCR) High Commissioner Antonio Guterres said that the agency had registered more than three million Syrian refugees across the Middle East in addition to thousands more who have fled Syria and have gone unregistered.

The donor-reliant UN agency has received $850 million from the international community to extend assistance to Syrian refugees across the region. Jordan alone needs $1.8 billion this year to assist the 600 000 refugees it hosts. There have been reports that host countries have begun restricting entry to the estimated 7,000 Syrians fleeing their homeland each day.

Syria's crisis started in March 2011 with pro-democracy protests, which soon developed into a devastating war after al-Assad's regime attempted to quell the demonstrations. The United Nations estimate that more than 100 000 people have been killed in the conflict.

4 Girls grapple with low self-esteem (James Meikle in The Guardian) A growing number of girls and young women say they are unhappy with the way they look and more 16- to 18-year-olds feel less positive about life generally, a report by the charity Girlguiding has suggested. Sexual harassment is commonplace, while young women are judged harshly for sexual behaviour that is seen as acceptable in boys and under media pressure to conform to stereotyped versions of beauty, the report says.

In an era of burgeoning social media use, online bullying and abuse is also widespread, though most girls deal with this on their own rather than telling their parents or someone in authority, according to the Girls' Attitude Survey. The overall proportion of those surveyed who were not happy with their looks rose to 33% this year, from 29% last year and 26% two years ago. At ages 14 to 16, 51% of girls are unhappy with their appearance, and even after that age, 52% are still unhappy.

The report says that some girls, influenced by the media and advertising, are spending substantial sums on beauty products. Among 11- to 16-year-olds, nearly eight in 10 say they shave or wax their legs, more than six in 10 wear make-up to school and four in 10 shave or wax their bikini line and/or wear a padded bra. Nearly two-thirds of 7- to 11-year-olds use nail polish, half wear makeup and one in three wears high heels, although they see this as just "being a girl" rather than trying look older.

Despite the overall bleakness of the findings, 55% of respondents would like to be a leader in their chosen job, 88% say both parents should be able to share time off after their baby is born and 70% want to combine having children and a career. The government's Body Confidence Campaign has been working with the media, advertising, retail and fashion industries to encourage diversity and reduce the harmful effects of gender stereotyping and objectification."

Wednesday, November 27, 2013

Fall of king coal hits Kentucky; Facebook, Google about to overtake TV; Pope Francis beats politicians at economics

1 Fall of king coal hits Kentucky (Kris Maher & Tom McGinty in The Wall Street Journal) Unprecedented pressures on the US coal industry and nearly two years of mine closures and layoffs are reshaping the heart of the Central Appalachian coalfields in ways that many experts believe could be permanent. While the coal industry overall is losing market share to abundant natural gas, mines in Central Appalachia have become increasingly uneconomical. Natural gas is cheaper, and so is coal mined in two other big coal basins centered in Wyoming and Illinois.

A Wall Street Journal analysis of Mine Safety and Health Administration data reveals that the picture is bleakest across a swath of 26 counties in Kentucky's eastern coalfields, where coal has been the lifeblood for more than a century. The number of coal-mining and related jobs in the region remained fairly steady between 2000 through 2011, fluctuating from one quarter to the next by an average of about 400 jobs, but never dipping below 11,400. Since 2011, the area has seen an unrelenting decline that left eastern Kentucky with just 8,000 mining jobs in the second quarter of this year.

The state's eastern coalfields had 161 active mines in the second quarter of this year, down from an average of 256 active mines for the four quarters of 2011, according to the analysis of the federal data. At the same time, competition among mines has heated up. It costs utilities about 40% more to generate the same amount of electricity using the region's coal compared with coal from Wyoming, according to industry analysts. In Central Appalachia, the region's coal seams are thinner, and so are mining companies' profit margins. It typically costs $60 to $70 to extract a ton of coal there, while the current price for coal from the region used by utilities, known as thermal coal, is under $65 a ton.

In interviews with more than two dozen unemployed miners, nearly all blamed President Barack Obama and the Environmental Protection Agency for their plight. They cited a series of regulations to tighten emissions rules for coal-burning power plants, which they said amounted to what has popularly been called a "war on coal."

2 Facebook, Google about to overtake TV (Aaron Taube in San Francisco Chronicle) Cable is losing subscribers and television advertising dollars are poised to move to digital media. A recent analyst note from Macquarie Capital should also be worrisome for those making money in the TV advertising ecosystem, but for a different reason. While the pay-TV industry is hurting from losing more subscribers than it ever has before, statistics show Facebook and Google are reaching more people than ever.

What one chart shows is that while television still holds the title of most pervasive mass medium by reaching 294 million Americans, Facebook and Google aren't too far behind at 200 and 235 million, respectively. Combined, they're actually bigger than TV — although of course there is plenty of overlap.

It's especially noteworthy given that US marketers are currently spending about 50% more money on television than they are on all digital media (digital gets 27.9% of ad dollars while TV gets 42.1%, per Macquarie). That's a significant "overspend" on TV.

3 Pope Francis beats politicians at economics (Heidi Moore in The Guardian) In the discussions of why the US is not recovering, economists often mention metrics like economic growth and housing. They rarely mention the metrics that directly tell us we are failing our economic goals, like poverty and starvation. Those metrics of income inequality tell an accurate story of the depth of our economic malaise that new-home sales can't. One-fifth of Americans, or 47 million people, are on food stamps; 50% of children born to single mothers live in poverty; and over 13 million people are out of work. Children are now not likely to do as well as their parents did as downward mobility takes hold for the first time in generations.

The bottom line, which Pope Francis correctly identifies, is that inequality is the biggest economic issue of our time – for everyone, not just the poor. Nearly any major economic metric – unemployment, growth, consumer confidence – comes down to the fact that the vast majority of Americans are struggling in some way. You don't have to begrudge the rich their fortunes or ask for redistribution. It's just hard to justify ignoring the financial problems of 47 million people who don't have enough to eat. Until they have enough money to fill their pantries, we won't have a widespread economic recovery. You can't have a recovery if one-sixth of the world's economically leading country is eating on $1.50 a day.

It's only surprising that it took so long for anyone – in this case, Pope Francis – to become the first globally prominent figure to figure this out and bring attention to income inequality. Income inequality is the issue that will govern whether we ever emerge from the struggling economy recovery and it determine elections in 2014. The support for Elizabeth Warren to rise above her seat in the US Senate, for instance, largely centers on her crusade against inequality. The White House's chirpy protestations that the economy is improving are not fooling anyone.

Tuesday, November 26, 2013

Iran deal brings oil down; Silicon Valley resembles 1999 again; Pope Francis for radical church reform; 'If not govts, people must act on climate crisis'; The rise of misconduct

1 Iran deal brings oil down (Russell Lynch & Ben Chu in The Independent) Oil price has tumbled sharply in the wake of Iran’s weekend agreement to curtail its nuclear programme in return for partial relief on sanctions, boosting selected shares and fuelling hopes of a recovery in the West. Brent crude sank as much as $3 a barrel to a four-week low of $108.05 on Monday after the White House announced a six-month deal offering Iran about $7bn in relief from sanctions in exchange for nuclear curbs.

The preliminary agreement leaves in place banking and financial measures that have hampered Iranian crude exports – as well as the EU ban on Iranian imports. Sanctions have cut Iranian oil sales by 60 per cent since the beginning of last year, costing the country more than $80bn in revenue. This has helped keep world oil prices above the $100 a barrel level, even though global demand has been weak. However Maria van der Hoeven, the head of the International Energy Agency, said it would be hard for Iran to quickly bring its oil output back up to former levels.

Thomas Pugh, an oil specialist at Capital Economics, reckoned Brent crude could finish this year below $100 a barrel and finish next year at $90, offering hints of relief in Western economies labouring under high oil prices for the past three years. American and European Union sanctions that prevent energy companies from investing in Iran will remain in place for now. These have slashed Tehran’s oil exports from 2.5 million barrels per day (bpd) to about one million bpd.

2 Silicon Valley resembles 1999 again (David Straitfeld in The New York Times) These are fabulous times in Silicon Valley. Mere youths, who in another era would just be graduating from college or perhaps wondering what to make of their lives, are turning down deals that would make them and their great-grandchildren wealthy beyond imagining. They are confident that even better deals await.

Snapchat, all of two years old, just turned down a multibillion-dollar deal from Facebook and, perhaps, an even bigger deal from Google. On paper, that would mean a fortyfold return on Benchmark’s investment in less than a year. Benchmark is the venture capital darling of the moment, a backer not only of Snapchat but the photo-sharing app Instagram (sold for $1 billion to Facebook), the ride-sharing service Uber (valued at $3.5 billion) and Twitter ($22 billion), among many others. Ten of its companies have gone public in the last two years, with another half-dozen on the way. Benchmark seems to have a golden touch. 

No one here would really mind another 1999, of course. As a legendary Silicon Valley bumper sticker has it, “Please God, just one more bubble.” But booms are inevitably followed by busts. Opinions differ here about exactly what stage of exuberance the valley is in. “Everyone feels like the valley has been in a boom cycle for quite some time,” said Jeremy Stoppelman, the chief executive of Yelp. “That makes people nervous.” John Backus, a founding partner with New Atlantic Ventures, says he believes it is more like 1996: Things are just ramping up.

3 Pope Francis for radical church reform (BBC) Pope Francis has called for power in the Catholic Church to be devolved away from the Vatican, in the first major work he has written in the role. He says he is open to suggestions to changes in the power of the papacy. He also warns that rising global economic inequality is bound to explode in conflict. In his "apostolic exhortation", Pope Francis said he preferred a Church that was "bruised, hurting and dirty because it has been out on the streets, rather than a Church which is unhealthy from being confined and from clinging to its own security".

However, the papal document reiterates the Church's opposition to the ordination of female priests, saying this is "not a question open to discussion". The document also touches on inter-faith relations, urging Christians to "embrace with affection and respect Muslim immigrants to our countries in the same way that we hope and ask to be received and respected in countries of Islamic tradition".

He also says he does not believe that the papacy "should be expected to offer a definitive or complete word on every question which affects the Church and the world". Pope Francis also expands on his concerns about economic inequality. "Today we also have to say "thou shalt not" to an economy of exclusion and inequality. Such an economy kills," he says, going on to castigate the "new idolatry of money". "I beg the Lord to grant us more politicians who are genuinely disturbed by the state of society, the people, the lives of the poor!" he goes on.

4 If not leaders, people must act on climate crisis (Kofi Annan in Khaleej Times) It is essential that governments start phasing out fossil fuel subsidies, which currently account for about $485 billion a year, and are far greater than the global investment in renewable energy. While cutting subsidies is an issue for developed and developing countries alike, it remains true that the Group of 20 countries accounted for 78 per cent of global carbon emissions from fuel combustion in 2010.

What now? If governments are unwilling to lead when leadership is required, people must. We need a global grass-roots movement that tackles climate change and its fallout. In Australia, one initiative aims at getting one million women to take small steps in their everyday lives to cut emissions. In India, there is a project to bring solar energy to slums, which also creates green jobs. In Guatemala, women farmers are planting trees to sequester carbon and improve cultivation techniques. In Mexico, the “ecocasa” programme is unlocking funds to build energy-efficient housing.

Despite these encouraging initiatives, citizens need to press their governments to come up with ambitious sustainable solutions, not just makeshift ones. Climate change must inform any new policy, whether in the development or the energy sector. It must determine the way we build our houses and the way we structure our economy. Green thinking cannot be the sole responsibility of a few environmentally minded activists, while the rest of us go on living as if there were no tomorrow.

Let me conclude on a note of cautious optimism: If science tells us that human activity is the main driver of global warming, then human action can also reverse it. But this must happen before the climate consequences become irreversible. Failing to act will be nothing short of catastrophic.

5 The rise of misconduct (David Shapiro in Johannesburg Times) If the risk of being caught is lower than it should be, the risk of misconduct shoots up. Developers unlawfully build shopping malls that collapse; criminals brazenly hijack vehicles in peak-hour traffic, while high-ranking ministers shamelessly thwart investigations into the alleged misuse of taxpayers' funds.

Misconduct is not confined to the developing world. In Greece, the cradle of modern civilisation, it was the doctors, lawyers and other intelligentsia who contributed to the treasury's ruin by swindling the taxman. And have you ever noticed how, in the aftermath of a flood, earthquake or other tragic upheaval, folk in generally law-abiding countries flagrantly plunder unprotected stores. I bet even in a nanny city like Sydney, the residents would park all over the place if the police went on strike for a few days. In South Africa, people seem intent on taking delinquency to anarchic levels.

South Africa has an abundance of opportunity. It is blessed with astonishing natural beauty, a developed (if somewhat decaying) infrastructure, a vibrant private sector, a first-world financial system, a friendly and eager population and neverending sunshine. But if it can't offer people security in their homes and safety on the roads, all that promise is worthless. The young will depart with their skills, the elderly with their wealth.