Google tests Chinese users’ loyalty

Tech-savvy Chinese in their 20s and 30s grew up in far greater affluence and openness than their parents. Many are pulled between patriotic pride and a yearning for more say over their own lives, even if they accept Communist Party control.

The Google dispute may become a telling test of how they balance loyalties to their country with their desire for unfettered expression and access to information, and this response could shape how Beijing handles the dispute.

 “The special feature of the Internet is that companies like Google see that expanding their profits is tied to expanding their freedom,” said Chen Yongmiao, a Chinese activist whose own website has been restricted by authorities.

“It’s a test. How much you support Google in China shows how much you want more freedom in China, even if you know Google is ultimately about profits.”

The world’s biggest search engine has pulled back from China and shut its Chinese Google.cn website over complaints of hacking and censorship.
Chinese officials have avoided directly taking on Google, but made plain they expect Internet companies in the country to enforce the laws, including censorship.

The centre of the resulting tug-of-war in attitudes is the Zhongguancun area in northwest Beijing, an area dense with university campuses, malls of high∞tech goods and computer labs, and also home to Google’s China headquarters.

Students, job-seekers and high-tech professionals in Zhongguancun saw Google’s stance through a prism of admiration and wariness that has echoed in online forums.
“I think it’s admirable for a company to sacrifice profits for the sake of an idea,” said Liu Wei, a 29-year-old accountant with heavy Clark Kent-style spectacles and neatly cropped hair.

“Why can’t we criticise our own government if we want to? Why can’t we choose what we read on the Internet?”

“That’s because China’s different!” interrupted his girlfriend Sun Jingying, a slight 26-year-old studying to become a chartered accountant.

“There are some things about this country we just have to accept,” she added, nonetheless stressing she would be sad if Google quit China. “I’d love to work for them,” she said.

The Obama administration has shown it wants to court this emerging generation of connected Chinese. China’s latest survey of Internet use found 60.4 percent of the nation’s online population of 384 million was aged 10 to 29.

During his visit to China last November, President Barack Obama used a webcast meeting with Chinese youth to amplify that message, telling them he was a “big supporter of not restricting Internet use”.

Despite censorship, China’s Internet can be a potent public forum, with bloggers and amorphous online groups hectoring the government over pollution and corruption.

Last year, the government abruptly abandoned a plan to force all new personal computers to come with a copy of “Green Dam” Internet-filtering software that had been derided by online critics as intrusive and ineffective.

But China’s youth can also bristle at what they see as Western bullying. The ruling Communist Party could seek to channel that volatile sentiment to blunt foreign pressure over control of the Internet.

“There are some who feel increasingly restricted and unfree, the ones who tend to support Google. But there are also many who have been heavily shaped by the official media and see the US government behind Google’s actions,” Li Yonggang, an expert on society and the Internet at Nanjing University in east China, said of the nation’s “post-80” generation.

 “If this becomes a more open fight between the Chinese and US governments, this nationalism could come to dominate if the government turns harder line.”

From Backlot to High-Tech Hub
Chengfu Street in Zhongguancun, where Google has its China headquarters, is testament to the country’s economic upheaval.

A little over a decade ago, this was a gritty neighbourhood of low brick homes and cheap restaurants near retreating farmland.

Now it bristles with high-tech offices and cafes and restaurants catering to office workers and students. Google’s office sits in steel and glass towers that also house a Deutsche Bank office, a gym and “Wall Street English” classrooms.

The students on nearby campuses who fill many high∞tech jobs in this area, however, are also products of an education that prizes pride in the nation’s achievements, obedience to the Communist Party, and vigilance against foreign pressure.

Many of them had scant understanding that Google has said China was the source of sophisticated hacking – China’s state-run media has reported little on that complaint – and others scoffed that Google would leave the country over the issue.
“If they can’t handle hackers and censorship, that’s their own problem,” said one Chinese computer hardware technician heading for a gym workout near the Google office. He gave his English name, Derek Huang.

“Each country has its own Internet restrictions, so it’s natural for us to have our own, and if we want to change them, that’s our own business,” he said.

Recent opinion surveys show that while Chinese in their 20s and 30s are more critical of their government than older cohorts and want more freedom, they tend to be strongly patriotic and cautious about political change. The United States attracts both admiration and disdain.

The Internet was crucial in spreading Chinese anger about Western protests over Tibet before the Beijing Olympic Games in 2008. In past years, too, the Internet has been a conduit of nationalist Chinese ire over Japan.

“Google was just acting out of commercial interests,” said Su Xin, a 25-year-old graduate student of aeronautic engineering. “I think we’ve got to accept some restrictions [on the Internet] for the sake of stability.”

But even some students who said they had little interest in politics said they felt jolted by the idea that Google could quit China over censorship complaints.

“If it leaves, I’ll feel it’s a big loss,” said Guo Xin, a 19-year-old student with a spike of hair dyed neon-orange. He said he used the Internet, and Google, to hunt down information about online games and movies.

“It’s not good restricting us too much. It cuts us off from the information you need in modern life,” he said.

Linux LiMo growing, Adobe joins

The market for software platforms on cellphones is led by Nokia’s Symbian operating system, but it has lost much ground over the last year to Apple Inc and Research in Motion, maker of the BlackBerry.

Computer operating system Linux is starting to win traction, with Google Inc using Linux to build its Android platform, and Nokia rolling out its top-of-the-range model N900 using Linux Maemo.

“There has been a step change for Linux in mobile,” Morgan Gillis, head of LiMo, said in an interview. “No other operating system now matches the vendor coverage of Linux – it is being commercially deployed by virtually all leading mobile device vendors from the largest downwards.”

LiMo, a non-profit foundation, hopes to benefit from its focus on giving greater say over software development to telecoms operators.

The role of top operators in the platform – Vodafone uses it in its 360 offering – is a key attraction for Adobe, whose Flash is among the world’s most widely used web-based computer programmes, and it has some 1.6 million developers.

Vodafone and other operators have strongly pledged for a smaller number of operating systems, as supporting them is a timely and costly exercise.

However, the number of large operating systems has in recent years increased, with new players like Apple and Google entering the mobile market.

In a latest twist Samsung Electronics – the world’s second largest handset maker and one of the key members of LiMo – unveiled in late 2009 its own smartphone platform.

Linux is the most popular type of free or so-called open source computer operating system which is available to the public to be used, revised and shared.

Linux suppliers earn money selling improvements and technical services, and Linux competes directly with Microsoft, which charges for its Windows software and opposes freely sharing its code.

Japanese electronics firms NEC and Panasonic, and Israeli firm Else have unveiled a total of seven new phones running on LiMo software.

The road ahead

How am I driving?

It’s a question you’ll often see on the back of a commercial vehicle, with a free∞phone number inviting other motorists to provide feedback.

Soon that phone call might not be necessary – an onboard computer will be monitoring the driver’s performance, and teaching the vehicle itself when to issue warning alerts.

Driver assistance technology has been around for a while, but a project developed by scientists from six European countries claims to move the field on significantly.

Rather than giving the driver information about how well he or she is doing, their computer system, called Drivsco, sends its information straight to the vehicle.

By monitoring how the driver performs in normal conditions – such as when going round bends or stopping for pedestrians – the computer models their normal behaviour.

Then if the same person is driving at night, for example, and deviates from the normal pattern, perhaps by taking an unusual line around a bend, the computer concludes that this is due to a lack of visibility and warns the driver that he or she is behaving unusually, or that there could be hazards ahead.
With some 42 percent of fatal traffic accidents occurring at night, the potential for this kind of technology to make the roads safer is clear.

Much of the technology used in the system has been developed by the Department of Computer Architecture and Technology of the University of Granada.

This includes an artificial vision system that receives input pictures and produces a first “interpretation of the scenario” in terms of depth, local movement, and image lines – all on one electronic chip.

The idea is that the system can be assembled in different types of vehicle in future.

The first tests have been promising and have proved the usefulness of the Drivsco concept, said professor Eduardo Ros Vidal, who leads the team at Granada.

“We do not intend to develop automatic driving systems, as it would be very difficult for insurance agencies and car companies to come to an agreement in the event of a crash,”

Advanced driving assistance systems could have clear safety benefits.

But will long-haul truckers listen to what the computer tells them? That remains to be seen.

India’s biosciences ready to fly

India’s poultry market might sound like a niche investment market. Think again. India’s bird industry itself is massive: an industry estimated to be worth around $3.1bn. Put it another way, that’s 30,000 million eggs and 1,000 million broilers. Food for thought indeed. This sector is also, more significantly for investors, poised for take-off.

Hester Biosciences boss Rajiv Gandhi started his poultry vaccination company back in the late 1980s in Mumbai. “Business was good. It quickly made sense to have my own proprietary company and then use distributors.” The business has grown fast since that time. The ex-Mumbai university graduate now employs more than 450 from his new base in Ahmedabad, 500km north of Mumbai. And impressively, his business has grabbed a massive 30 percent of the Indian market. Yet the potential for more growth is still massive.

Why the need to vaccinate? Simple. Vaccination prevents or reduces the effects of disease in poultry (and, of course, in other animals). Disease-causing organisms can be classified as viruses, mycoplasma, bacteria, fungi, protozoa, and parasites. Commercial poultry are usually vaccinated to protect them against a variety of these diseases.

In other words it’s a business that has sound long-term legs. Once largely a back-yard activity, India’s poultry sector is now a major commercial concern and quality has soared as a consequence. The vaccination industry is also a money-saver for the industry, protecting it from the unexpected – not to mention making a significant contribution to animal welfare itself.

Quality up to scratch
Gandhi predicts his own industry could grow by 15 to 20 percent during the next few years. Additionally, Hester Biosciences can leverage off that growth by expanding into the manufacture of animal diagnostic reagents. “Registrations for our poultry vaccines is on-going in over 10 countries,” which when completed, should convert into business he thinks.

India’s economy too is growing at a staggering pace that dwarfs all Western growth hopes in comparison. Recently it expanded at its fastest clip for more than two years: GDP soared by almost nine percent in the second quarter of 2010. Not chicken feed.

Meanwhile India’s own domestic population is increasingly buying white goods, specifically fridges and freezers. That means the chilled food market is also expanding quickly.

As any entrepreneur will tell you, keep your business model simple; make sure you and your investors understand it. It’s glaringly obvious advice but it’s also often ignored or lost on aspiring businessmen. But Rajiv Gandhi learnt the lessons early on.

International diversification
 “Our strategy of providing good quality at a reasonable price has been very successful. We pitch our products against all the competition, including international ones. It’s then up to us to prove that our products are technically superior. Then we negotiate on price and try to get the business.”

In fact, India’s poultry market has generally been very small-scale on the international stage, despite its huge potential. But strong bioscience and export-driven infrastructures are key to change here – and this change is what Gandhi is after.

Prudently, he is now diversifying the business into other livestock. The poultry industry has been hit periodically by bird flu worries. So it makes sound business sense to diversify. It also gives Hester Biosciences more opportunity to expand internationally.

This means, increasingly, strong links and partnerships with both Nepal and Africa. “Africa, in particular, is a very big market and has much potential for us,” he says.

Nepal on the other hand is also highly interesting for Hester – but not for its home market. Nepal is an increasingly useful conduit to China. “We want to exploit this link, definitely,” says Gandhi. “Currently we do not have enough leads with China, but that will change in future.”

He goes on: “Currently almost 100 percent of our sales are from inside India. We want to change this, obviously. Having a broader client base is also a hedge against the volatility of international markets.”

For now, the company is looking closely at cattle and sheep vaccines. This kind of diversification is also being backed strongly by the Indian government, which increasingly wants to encourage a high value, high∞tech bioscience industry – a fit for Hester.

Sound strategy
Gandhi has always made it a priority to keep overheads low – and to always improve the quality of Hester’s products.  “We’ve relocated to Ahmedabad where the costs are lower, particularly for real estate. It’s not too far from Mumbai,” Gandhi explains.

He has also been able to improve the quality of his products. “Our quality is just as good as any international company you care to name. It’s also a lot more cost-effective.” That’s because the poultry vaccination industry is devoid of all emotional ties. “All poultry vaccinations,” Gandhi goes on, “are basically a service or raw material to the poultry industry. The poultry farmer wants more eggs out of the bird. He wants a better yield. It’s a very simple business objective for us and the client: excellent quality at a reasonable price.”

Current unutilised excess capacity is also an unused – and large – strength for Hester in this growing market. “Discussions with international companies are on-going to manufacture animal vaccines for them for their own markets. There’s a lot of opportunity.”

Gandhi’s achievements are recognised by India’s premier ratings agency, CRISIL which ranks Hester Biosciences as ‘Stable’ B+ on three crucial points: Cash Credit Limits, Proposed long-term bank facility and Term Loan facilities. An impressive achievement.

Lean but not mean
“We’re a very lean company, says Gandhi. “We’re efficient, well-run and we make decisions fast. Our corporate governance is also of a very high order. We do a lot of training programmers around our workers.”

He goes on: “We go well beyond normal practices, such as conducting classes for families of our workers. The idea is to enhance the quality of life for our employees and also take Hester to a higher base.”

That’s also good news for the increasingly large ethical investment market – particularly in the West – whose investors entrust them to place their resources only in companies which operate to high ethical standards.

Gandhi remains confident that his business approach is focused squarely on the key growth drivers. Looking at the evidence, you would be hard-pressed not to disagree.

Company timeline
1983    
Started proprietary company Rajiv & Associates with the main business objective to distribute poultry health products around Mumbai

1986
Grew the company into a distribution house for poultry health products covering whole of India

1987
Became the number∞ one distributor for poultry vaccines in India

1994    
Setup a joint venture with MBL, USA to manufacture poultry vaccines in India

2007
Expanded Hester Biosciences’ manufacturing capacity to four times

Further information: www.hesterbiosciences.co.in

Brazil’s biofuels campaign

With its biofuels business increasingly dominated by giant corporations, Brazil is seeking to extend its biofuels sector to include farmers like Lucas Scariot, who makes around $10,000 per year from selling grain.

For the past three years, Scariot has sold soy beans at a premium over market prices to a biofuels company under a government programme aimed at supporting small farms and creating jobs in the countryside while cutting fuel imports.

This year Scariot planted canola for the first time in a field he usually leaves fallow during the winter, diversifying the region’s soy-dependent agricultural base and providing a new raw material for local biodiesel production.

“It’s good for the farmer because it gives us additional value for our crops,” said Scariot, a 22-year-old farmer and agronomy student who along with his father works 20 hectares – equal to about nine Manhattan city blocks – of verdant and hilly land in Brazil’s southernmost state of Rio Grande do Sul.

“And now we have incentives for new crops, because people are always talking about soy, soy, soy. We can’t just depend on that,” said Scariot, who also raises pigs and chickens at his farm house.

The programme is meant to boost production of biodiesel, which can be used in heavy vehicles like trucks, and reduce diesel imports the way the 30-year sugar cane ethanol programme has cut the use of motor gasoline.

But efforts to use new raw materials, including untested crops such as castor bean plants, have sparked criticism that it is sinking millions of dollars into inefficient biofuels production that mostly benefits the politically well-connected.

The programme offers tax breaks to 30 participating biofuels producers and helps them get better financing arrangements. Those companies in 2009 purchased raw materials from around 51,000 small farmers, a figure slated to reach 100,000 by the end of this year.

Those benefits attracted Oleoplan, a biodiesel producer with close to $450m in annual sales, that now buys more than a third of its raw materials from small farmers like Scariot.

“The results have been fantastic,” Oleoplan’s director Domingos Costella said at the company’s headquarters, where a maze of machinery – clouded in the overpowering smell of soy – grinds up hundreds of tonnes of the crop, extracts its oils and mixes it with other chemicals to create fuel.

“This is a way for us to secure more raw material while still keeping the small farmer in mind.” The company plans to nearly double fuel production by next year in part because of the additional supply. As part of the arrangement, Oleoplan provides technical assistance to farmers or farming cooperatives to help them boost crop yields and make more efficient use of fertiliser.

Brazil began biodiesel production in 2005 and in 2010 is expected to produce 2.4 billion litres. This year it began requiring all fossil diesel to be sold with a minimum five percent biodiesel mix.

Biodiesel backers say hiking that rate would cut carbon emissions and reduce state oil company Petrobras’s imports of diesel and distillate fuels, which last year reached 78,000 barrels per day – more than 10 percent of its diesel output.

Petrobras has found new ways to refine vegetable-based oils together with diesel in its petroleum refineries. While the country’s ethanol programme has won praise, it is also targeted by critics who say it contributes to rising food prices and makes use of quasi-slave labour. Authorities hotly deny the first accusation but have acknowledged the second.

The government last year put Cosan, the world’s largest sugar and ethanol group, on a list of companies that put workers in slave-like conditions, though it was quickly removed.

“We can create better jobs than the ones in the ethanol sector, and with biodiesel those jobs can go to family farmers,” said Arnoldo de Campos, coordinator of the programme for the ministry of agricultural development. The effort has faced furious criticism for falling into a common trap of biofuels innovation – betting on crops with hyped-up energy promises that ultimately fall short.

The programme recruited thousands of family farmers to grow castor bean plants, which sprout spiky green seeds that advocates insisted could produce large amounts of oil and grow on degraded soil with little water. But no producer participating in the programme has been able to commercially produce biofuels from the crop. Critics say this is because production costs and yields are too high to justify using it for fuel.

As a result, Brazil’s largest biodiesel maker had to shut two plants in the poor northeast after months of supporting castor bean cultivation, sparking outrage among farmers.

Acting with god working on our side

How’s this for a combination of innovation and partnership: a stem cell company not only making a commitment to investing in China but also winning the backing and support of the Vatican. As combinations go, that’s pretty unique.

Stem cell research is a fast-moving area that is increasingly forging its own niche within the healthcare sector. NeoStem has, in a very short time, garnered the backing of Goldman Small Cap Research Division.

“We view NeoStem,” said Goldman recently, “as a stock that offers a rare opportunity to participate in two of the most exciting and fastest-growing segments in all of the health care space: stem cells and the domestic pharmaceutical industry in China.”

Who, what, why?
But let’s rewind briefly: what is NeoStem? Very simply, it’s a pioneer in the collection and storage of adult stem cells and a leader in stem cell therapy development. “We specialise in adult stem cell technology,” says NeoStem CEO Robin Smith. “Currently there are almost 3,000 clinical trials studying the impact of using stem cells to repair tissue. Stem cells have been used for 30 years in the treatment of certain cancer and blood disorders. What’s exciting is the potential to use stem cell technology for things like heart disease, MS, lupus and macular degeneration.”

And that’s likely to be just the tip of the iceberg. Crucially, this technology has the support of the Vatican – a major milestone in overcoming ethical concerns about the technology. “Through educational initiatives with NeoStem,” Reverend Tomasz Trafny of the Pontifical Council for Culture recently told News∞Medical.net, “and sponsorship of scientific research programmes involving cutting∞edge adult stem cell science which does not hurt human life, we come one step closer to a breakthrough that can relieve needless human suffering.”

Trafny and the Vatican are particularly excited about NeoStem’s VSEL™ technology and believe that mutual collaboration between NeoStem and the Pontifical Council for Culture will lead to significant financial commitment to support it.

The power of two
Clearly this company is going places fast. The shift towards China is a major strategy shift that bodes well for the long term. “Stem Cells are governed by different regulatory environments and we want to encourage, support and advance stem cell therapy in all of them,” says Dr. Smith. “So by putting the two cultures together, we’re hoping to move adult stem cell therapy forward more quickly and more cost-effectively.”

“NeoStem,” says Dr. Smith, “is a terrific platform to build cutting∞edge cellular companies and Neostem will be looking at new technologies as well as acquisitions of revenue∞generating companies in the stem cell space.”

Plus there’s its impressive sales growth. NeoStem saw sales growth of a staggering 34,977.3 percent during the last fiscal year. It reported more than $35m in sales during the first half of 2010 and is expected to report more than $75m in sales this year. Impressive.

Crown jewels
But let’s dig deeper into this company. At the heart of NeoStem’s R&D lies its crown jewels: VSEL™ technology.  Recent biological research supports the notion that stem cells can play an increasingly important role in supporting the body after attack.

The significance of VSEL™ technology is that each person has a population of very primitive “embryonic like” stem cells that can be harvested for potential therapeutic use says Robin Smith. “This is possible because very small embryonic like stem cells are also released into the peripheral blood by using an FDA approved drug, which functions as a mobilising agent.”

VSEL™ are thought to share some properties with embryonic stem cells – and could be used, it’s increasingly thought, in cardiac repair for example, not to mention a huge range of other uses. Retinal degenerative diseases such as age-related macular degeneration (AMD) and Glaucoma are other examples of how VSEL™ technology could help repair tissue in the eye.

Investor support
Plainly huge strides have been made by a company that commenced trading in 2006 with just $3.75m of backing support. But support for NeoStem has been encouragingly solid, despite the worst the credit crunch could throw at it.

In 2007 and 2008 it raised a further $10.25m, listing on the US stock exchange and licensing its VSEL™ technology from the University of Louisville. Operations in China followed in 2009, helped by a partnership with Enhance Biomedical – a treatment network in the People’s Republic of China and Taiwan for stem cell therapeutics. It also managed to raise another $16m and was awarded a National Institutes Health Grant to study stem cell therapy for bone defects. A further $13m was raised this year.

“We’re growing very quickly, both abroad and in the US,” affirms Robin Smith. “This really is just the beginning for us and investors will see a lot more activity in the future.”

VSEL technology in depth
Very small embryonic like stem cells have many physical characteristics typically found in embryonic stem cells, including the ability to differentiate into specialised cells and tissue throughout the body, and which have the potential to improve the diagnosis and treatment of many common diseases and conditions, including neural, cardiac and ophthalmic disorders, as well as to stimulate bone regeneration and wound healing. The significance of VSEL™ technology is that each person has a population of very primitive embryonic-like stem cells that can be harvested for potential therapeutic use. This is possible because very small embryonic like stem cells are also released into the peripheral blood by using FDA approved drugs, which function as a mobilising agent.

On the right side of god?
Certainly the Vatican tie-up is a fascinating venture. NeoStem and The Vatican are planning a range of collaborative activities with the goal of increasing scientific research on adult stem cells. The field of regenerative medicine and the cultural relevance of such a shift in potential medical treatment options also brings to the table, of course, huge theological and ethical issues. But NeoStem and the Vatican have both agreed that examining the issues together has to be the way forward.

It’s hardly an area short of controversy. A senior Vatican official recently criticised the US Food and Drug administration for allowing clinical trials using stem cells derived from human embryos. However the Catholic Church does support stem cell use where extracted from the umbilical cord or other parts of the body. And it knows it would rather be part of the debate, rather than stand outside it – hence the joint initiative with NeoStem to expand research of adult stem cell therapies.

However NeoStem’s direction appears to be strongly supported by the Obama administration. The US state-funded stem cell institute is shortly to increase the amount of taxpayer dollars it invests in the technology. If definite research results can be demonstrated, then even more taxpayer dollars will flow. A recent decision by the US government to restrict funding for embryonic stem cell research should differentiate the company further.

***
Further information: www.neostem.com

US flu plan cuts red tape, rewards biotechs

The plan from the Health and Human Services Department directly addresses many of the complaints industry has made about obtuse regulations and convoluted processes for testing new drugs and vaccines.

The biggest winners may be small biotech companies, which often lead the scientific advances but lack the know-how or capacity to get drugs to market.

The report recommends HHS “support the development of at least three influenza vaccine candidates whose manufacture does not depend on virus grown in eggs or cells.”

Some small biotechs working in this direction include Novavax Inc, which uses virus-like particles to make its vaccine; Inovio Biomedical Corp, which is testing a DNA-based vaccine; and Vical Inc.

The plan also follows through on a pledge from National Institutes of Health director Dr Francis Collins to get his agency’s discoveries translated into medical use more quickly.

Promising concepts
“Promising concepts emerging from the research pipeline may not progress to the product candidate stage and into advanced development because their innovators, often academic investigators (eg, NIH grantees), may fail to recognise that their findings may have important product applications or because investigators lack the wherewithal to proceed to the next stage of concept development,” the plan reads.

The report suggests setting up cross-agency teams to actively seek out good ideas and make sure they get developed.

“Some of these great ideas are going to come from very small companies that don’t really have the capital and wherewithal to get a product from microscope to market,” HHS Secretary Kathleen Sebelius said.

Often, small biotechs rely on partnerships with big pharma to get their drugs developed.

In fighting flu, for instance, Gilead Sciences teamed up with Roche to develop the flu drug Tamiflu, while small Australian biotech Biota has a sometimes uncomfortable relationship with GlaxoSmithKline to make Relenza.

Biota, which sued Glaxo in 2004 alleging it did not market Relenza hard enough, is seeking partners to develop its new flu drug, laninamivir.

The main weapons against influenza, and most other infectious diseases, are vaccines. Flu is problematic because the vaccine must be changed every year to match the mutation-prone virus.

Dirty process
The vaccine is also made using eggs, an imprecise and dirty process. It took six weeks to make an H1N1 swine flu vaccine last year, during which time the pandemic peaked twice.

The US government has been pushing for cleaner, cell-based technology and strongly supported the opening last November of a new Novartis cell-based influenza vaccine plant in North Carolina.

Wary of uncertain vaccine supplies, HHS has contracted with five companies to make influenza immunisations for the US market – Novartis, Sanofi Aventis, CSL, AstraZeneca unit MedImmune and GlaxoSmithKline, but is keen to have more factories on US soil.

Many experts have cautioned that in a very serious pandemic, countries would be likely to seize any vaccines made within their own territories.

MedImmune may also stand to benefit. The H1N1 swine flu virus proved tricky to work with and did not grow well, but MedImmune’s process using a live but weakened virus produced prodigious amounts quickly.

However, it is delivered by nasal spray and the company did not have enough sprayers to make use of all the bulk vaccine it made.

The HHS report suggests working to use the weakened virus to make vaccines in the future, and helping companies get it into sprayers and syringes.

“HHS should immediately develop a network of existing facilities that are pre-qualified and under contract to fill and finish vaccine for US government-contracted vaccine manufacturers in a public health emergency,” it reads.

The rasping chill of the agent of change

The biotech business is a new opportunity for many generic players. Regulations are still in their embryonic stage in Europe. But increasing numbers of European governments are starting to realise the massive benefits of a buoyant biotech sector. Polpharma, like many other generic players, is now preparing itself to enter this dynamic, thriving area, and at some speed.

It’s certainly got the experience behind it to be a formidable operator. Polpharma’s roots go back to 1935. After a long period of state ownership it was privatised in 2000. Polpharma is now the number one generic player in Poland, with a local market share exceeding 13 percent and a burgeoning over the counter – and highly successful – business too.

One big change in the biotech industry is directly related to geographical growth patterns, which has led to emergence of new big pharma markets like China, Russia, Brazil, etc. – the so-called BRIC market. “Such emerging markets are experiencing higher growth rates,” says Krzysztof Jakubiak “and building a critical size there is becoming more competitive. On one hand it is very beneficial to be located in such markets, on the other hand we would need to face increased competition.”
 
Still, competition from low∞cost countries like India and China is not yet as visible in Europe as in USA. “We are constantly investing in production and commercial effectiveness to maintain our competitive advantages,” says Krzysztof Jakubiak. “We are also constantly looking at India and China for the opportunity to move part of the value chain to these countries too.”

Biotech is also an industry that has come of age. It’s an industry well and truly alive in universities, research institutions and other research institutions.

But, crucially, twinned to this is an increasingly entrepreneurial , business∞ savvy culture, helping start∞ups and biotech SMEs quickly get their products to market.

Polpharma in brief:
• Polpharma products are present in approximately 50 countries worldwide. 19 percent of the company’s turnover comes from its international operations.
• Polpharma has its main sales structures in Russia and representative offices in Lithuania, Ukraine, Kazakhstan, Belarus, Vietnam, Azerbaijan and Uzbekistan.
• Approximately 60 percent of the international sales of drugs are generated on the Russian market. Active pharmaceutical ingredients (API) are primarily exported to North America and the European Union.

Well integrated
Polpharma Group now boasts fully integrated production of finished dosage forms (FDF) and active pharmaceutical ingredients (API), as well as R&D activities and commercial operations. Total employment in Polpharma and associated companies numbers well above four thousand people. An impressive achievement since going into private ownership just a decade ago.
 
It also has an excellent regional presence in the CEE region through a network of commercial offices in all major markets in the region. “We are taking part in industry integration processes, developing strategic alliances with companies in Poland, Russia and Spain,” says Polpharma’s Krzysztof Jakubiak. “Through acquisitions in selected countries we want to accelerate our growth and our expansion in the region.”

He adds that the company is leveraging fragmentation of the market, working in different partnerships to expand their product portfolio, “and to commercialise our product in markets where we do not have our own presence.”

US opportunities and more
The new President Obama-led healthcare reform changes also create new possibilities of increasing Polpharma’s API sales to the US market. Its API production plant meets the strict FDA requirements and current Good Manufacturing Practice (cGMP) guidelines.

There are also other opportunities: the strategy for growth is targeting main goals such as organic growth in Poland and CEE markets with possible acquisitions in the most attractive markets to achieve a leading position in the region, says Krzysztof Jakubiak.  “We are also expanding our product portfolio which we commercialise directly in CEE and through out-licensing in the rest of Europe.”

All these developments means that Polpharma is not a company – like many biotech or small pharma operators – dependent on keeping going from one finance round to the next.

And although the Continent’s range of biotech players are small, a growing entrepreneurial culture and Brussels backing for this industry is also helping industry players like Polpharma to dig deep roots in increasingly nutritious soil.

In next-door Germany, bio-tech regions are common, meanwhile universities across Europe and government-funded research institutions also continue to support companies like Polpharma. A cultural sea change is under way, and Polpharma is at the heart of this change.  

R&D – the road ahead
Any R&D department has to be well organised and well funded if it is to be commercially effective. That’s definitely the case with Polpharma. Its R&D base consists of 300-plus specialists, able to deliver 30-40 projects per year. Its integrated regulatory structure is skilfully adept at managing the registration processes worldwide – a complex and fast-moving environment.

Its R&D scope covers API development, generics and generics+, special technologies – liquids, semi liquids, soft gelatin caps, FDF dossiers as well as out-licensing capabilities. “Beside internal developments, our R&D has a strong network of partners for different types of co∞developments and partnerships  such as opportunities in specialty generics and new drug delivery systems,” says Krzysztof Jakubiak.

“We want to expand our geographical presence in CEE and achieve a leading position on key markets in the region,” says Krzysztof Jakubiak. “We want to further expand our portfolio of generic products to cover all critical molecules and we want to have a foothold in a biotech business.”

Polpharma’s values are your values
Polpharma cares about patients’ well-being and promotes the principles of preventive health measures. It also assist physicians in fulfilling their vocation by supporting them in expanding their medical knowledge. It’s driven by fairness and professional ethics, respect for the needs of their employees, business partners, local communities and social organisations.

It’s also a company that observes the highest standards of due diligence and professionalism. Of course, it also fully supports the development of Polish science and numerous social undertakings. The meaning of its everyday activity is best described by the motto “People helping People”.

Technology and safety focus
Polpharma, as you would expect, utilises up-to-date modern technology, ensuring the safety of products, employees, and the environment. Manufacturing processes comply with all the environmental protection requirements of the European Union. The company has the following certificates: ISO 14001 (environment), OHSAS 18001 and PN-N-18001 (safety and hygiene at work). Polpharma’s annual capacity is approximately 200 million drug packages.

Operating from one of the largest and most modern drug manufacturing plants in Europe – Starogard Gdanski – the company manufactures solid drug forms, such as tablets, film-coated tablets, effervescent tablets, sugar coated tablets and capsules (the annual manufacturing capacity of solid forms is six billion units). A fully hermetic manufacturing process allows for protection from any possible contamination and protects employees from contact with chemicals.

Africa heralds biofuel pipeline success

Africa has more winter sun than any other continent on earth, while its expansive tracts of unused and underused land hold out the promise of the continent playing host to one of the world’s biggest biofuel industries.

Biomass in Tropical Africa is already the continent’s third main energy source, after hydrocarbons in the north and coal in the south, and it is the source of half the energy currently consumed on the continent.

There have been several attempts by African governments in the past to develop a renewable sector – particularly biofuels – since the first oil shock of the early 1970s – all of which have been very small scale but most of which are still in existence.

Many of these efforts failed to gather momentum, largely due to the combination of falling oil prices, lack of investment, and poor government policy direction. In recent years, however, rising oil prices, growing concerns about climate change, and Africa’s belated recognition that it stands to benefit considerably from the growth of the biofuel sector has changed that equation fundamentally.

Brazil, along with China and the EU, have been quick to identify Africa as a region with the ideal agro-climatic conditions, and the socio-economic potential, needed to become a large-scale global biofuel feedstock provider over the next decade, and are now beginning to direct investment flows to turn potential into reality.

Brazil, which is already the world’s largest producer of sugar cane-based ethanol, exporting some two billion litres a year to more than a dozen countries has been quietly laying the groundwork for a Brazil-Africa biofuel partnership to bring the continent into the “biofuel revolution.”

Through Petrobas, the state-owned oil company, Brazil has proposed a series of long-term investments across the continent, offering African governments access to Brazilian financial, technical and agronomic assistance needed to get their fledgling industries off the ground.

Of Petrobas’s total investment budget for 2009-13, only $2.8bn has been earmarked for investment in biodiesel and bioethanol, and only nine percent of that will be invested abroad. But the small size of the overseas investment budget should not disguise the scale of Brazil’s ambitions for the African biofuel sector.

Brazil’s African biofuels drive does not stem from any altruistic impulse. It is a hard headed calculation of its own national interests. Helping Africa to become a global provider of biofuel feedstock serves Brazil’s goal of making biofuels a rival to hydrocarbons by diversifying feedstock supplies and augmenting global demand. Achieving these objectives within the context of expanding South-South trade relations is just ideological icing on the cake.

The Brazilian biofuel development model, which is based on large numbers of mostly small-scale farmers producing feedstock for both the domestic and the export sectors, supported by state subsidies, is ideally suited to the African context where most of Africa’s population relies on subsistence or small-scale family farming.

Moreover, the United Nations Conference on Trade and Development, the international trade body, has endorsed the Brazilian biofuel industry as an appropriate model for Africa in terms of its impact on the environment, commerce and economic development which – crucially – is compatible with the goal of preserving food security.

Biofuel production need not necessarily threaten food production. It has the potential to provide millions of poor rural farmers an additional source of income, which they can use to buy seeds and fertiliser, offering the prospect of boosting food output not reducing it as the anti-biofuel Luddites are fond of insisting.

While Brazil is cultivating relations with scores of African states seeking to get their biofuel industries off the ground, two stand out in particular – Angola and Mozambique – which like Brazil, are both Portuguese-speaking countries, which it sees as likely to represent the frontier of biofuel development in Africa.

Both countries are emerging from the destruction of civil wars, and have large amounts of unused or underused arable land with relatively low population densities. Mozambique’s future lies with bioethanol, while Angola’s lies with biodiesel. Brazil is helping Maputo and Luanda with their plant science programmes, as well as offering assistance with plantation management and refining, distribution and marketing of the final product.

Mozambique and Angola are both eager to become industry leaders in their respective biofuel sectors, with their governments willing to embark on the necessary land tenure and market reforms needed to grow their industries comparatively quickly.

Moreover, Mozambique’s bioethanol from sugar cane, and Angola’s biodiesel from soya beans, is considerably more carbon friendly than the US corn-based biofuel industry, and could be filling up a car near you quicker than you probably realise.

Are US regulators dropping the ball?

Kremer’s lab is housed at the University of Missouri and is literally in the shadow of Monsanto Auditorium, named after the $11.8bn-a-year agricultural giant Monsanto Co. Based in Creve Coeur, Missouri, the company has accumulated vast wealth and power creating chemicals and genetically altered seeds for farmers worldwide.

But recent findings by Kremer and other agricultural scientists are raising fresh concerns about Monsanto’s products and the Washington agencies that oversee them. The same seeds and chemicals spread across millions of acres of US farmland could be creating unforeseen problems in the plants and soil, this body of research shows.

Kremer, who works for the US Department of Agriculture’s Agricultural Research Service (ARS), is among a group of scientists who are turning up potential problems with glyphosate, the key ingredient in Monsanto’s Roundup and the most widely used weedkiller in the world.

“This could be something quite big. We might be setting up a huge problem,” said Kremer, who expressed alarm that regulators were not paying enough attention to the potential risks from biotechnology on the farm, including his own research.

Concerns range from worries about how nontraditional genetic traits in crops could affect human and animal health to the spread of herbicide-resistant weeds.

Biotech crop supporters say there is a wealth of evidence that the crops on the market are safe, but critics argue that after only 14 years of commercialised GMOs, it is still unclear whether or not the technology has long-term adverse effects.

But whatever the point of view on the crops themselves, there are many people on both sides of the debate who say that the current US regulatory apparatus is ill-equipped to adequately address the concerns. Indeed, many experts say the US government does more to promote global acceptance of biotech crops than to protect the public from possible harmful consequences.

“We don’t have a robust enough regulatory system to be able to give us a definitive answer about whether these crops are safe or not. We simply aren’t doing the kinds of tests we need to do to have confidence in the safety of these crops,” said Doug Gurian-Sherman, a scientist who served on a FDA biotech advisory subcommittee from 2002 to 2005.

“The US response has been an extremely patronising one. They say ‘We know best, trust us,'” added Gurian-Sherman, now a senior scientist at the Union of Concerned Scientists, a nonprofit environmental group.

Call for change
The World Health Organisation has not taken a stand on biotech crops generally, simply stating “individual GM foods and their safety should be assessed on a case-by-case basis.”

And while many scientists around the world cite research they say shows health and environmental risks tied to GMOs, many other scientists say research proves the crops are no different than conventional types.

With a growing world population and a need to increase food production in poor nations, confidence in the regulatory system in the leading biotech crop country is considered critical.

“One of the things that we think is important to do is to have regular reviews and updates of our strategies for regulating products of biotechnology,” said Roger Beachy, a biotech crop supporter who was appointed last year as director of the National Institute of Food and Agriculture.

“We want to look carefully to see that they are logical and science-based but still maintain the confidence of the consumer to ensure that the projects that are developed and released have the highest level of oversight,” added Beachy.

So far, that confidence has been lacking. Courts have cited regulators for failing to do their jobs properly and advisers and auditors have sought sweeping changes.

Even Wall Street has taken note. In January, shares in Monsanto fell more than three percent amid a rush of hedging activity during a morning trading session after a report by European scientists in the International Journal of Biological Sciences found signs of toxicity in the livers and kidneys of rats fed the company’s biotech corn.

Monsanto has said the European study had “unsubstantiated conclusions,” and says it is confident its products are well tested and safe.

Indeed, farmers around the world seem to be embracing biotech crops that have been altered to resist bugs and tolerate weed-killing treatments while yielding more. According to an industry report issued in February, 14 million farmers in 25 countries planted biotech crops on 330 million acres in 2009, with the US alone accounting for 158 million acres.

Nuclear deterrence

On October 11th, 2001, one month after the terrorist assault on the World Trade Center and the Pentagon, President George W. Bush faced a terrifying prospect. At that morning’s daily presidential intelligence briefing, George Tenet, the director of central intelligence, informed the president of reports from a CIA agent code-named Dragonfire that al-Qaeda terrorists possessed a 10-kiloton nuclear bomb, evidently stolen from the Russian arsenal. According to Dragonfire, the weapon was in New York City.

The government dispatched a nuclear-emergency support team. Under a cloak of secrecy that excluded even Mayor Rudolph Giuliani, these experts searched for the bomb. On a normal workday, half a million people crowd the area within a half-mile radius of Times Square. A noon detonation in midtown Manhattan would kill them all. The wounded would overwhelm hospitals and emergency services. Firemen would fight a ring of uncontrolled blazes for days afterward.

In the hours that followed, Condoleezza Rice, then the national security advisor, analysed what strategists call the “problem from hell.” During the Cold War, the United States and the Soviet Union each knew that an attack against the other would elicit a retaliatory strike of commensurate or greater measure; but al-Qaeda had no such fear of reprisal.

Concerned that al-Qaeda could have smuggled a nuclear weapon into Washington as well, the president ordered Vice President Dick Cheney to leave the capital for an “undisclosed location,” where he would remain for weeks. Several hundred federal employees from more than a dozen government agencies joined the vice president at this secret site – the core of an alternative government.

Six months earlier, the CIA’s Counterterrorism Center had picked up chatter in al∞Qaeda channels about an “American Hiroshima.” The CIA knew that Osama bin Laden’s fascination with nuclear weapons went back at least to 1993, when he attempted to buy highly enriched uranium of South African origin. Al∞Qaeda operatives were alleged to have negotiated with Chechen separatists in Russia to buy a nuclear warhead, which the Chechen warlord Shamil Basayev claimed to have acquired from Russian arsenals. The CIA’s special task force on al-Qaeda had noted the terrorist group’s emphasis on thorough planning, intensive training, and repetition of successful tactics. The task force highlighted al-Qaeda’s preference for symbolic targets and spectacular attacks.

As CIA analysts examined Dragonfire’s report and compared it with other bits of information, they noted that the September attack on the World Trade Center had set the bar higher for future terrorist acts. Psychologically, a nuclear attack would stagger the world’s imagination. New York was, in the jargon of national-security experts, “target∞rich.”

As it turned out, of course, Dragonfire’s report was a false alarm. But what the case teaches us is this: the US government was unable to dismiss the possibility of such an attack on any scientific or logical grounds.

Preventing nuclear catastrophe
Given current policies and practices, a nuclear terrorist attack that devastates one of the great cities of the world is inevitable. In my judgment, if governments do no more and no less than they are doing today, the odds of such an event within a decade are more than 50 percent.

This estimate is, in effect, my best guess, since there is no methodology for predicting an unpredictable catastrophe. But my judgment is informed by having analysed issues of nuclear danger for more than three decades, during which I served as a special advisor to US secretary of defence, Caspar Weinberger in the Reagan administration and as assistant secretary of defence for policy and plans in the Clinton administration.

Others have offered more conservative but still dire assessments. My Harvard colleague Matthew Bunn has created a model that estimates the probability of a nuclear terrorist attack over a 10-year period to be 29 percent – identical to the average estimate from a poll of security experts commissioned by Senator Richard Lugar in 2005.

Still others are more pessimistic than I. Former secretary of defence William Perry, for one, has suggested that my work underestimates the risk. Richard Garwin, a designer of the hydrogen bomb (whom the Nobel laureate physicist Enrico Fermi called “the only true genius I had ever met”), told Congress in March 2007 that he estimated a “20 percent per year probability” of a nuclear explosion in an American or European city. And Warren Buffett, the world’s most successful investor and a legendary oddsmaker in pricing insurance policies for unlikely but catastrophic events, concludes that nuclear terrorism is “inevitable.” He has said, “I don’t see any way that it won’t happen.”

But there is some good news: nuclear terrorism is nonetheless preventable. There are feasible, affordable measures that, if taken, would reduce the likelihood of a successful nuclear terrorist attack
to nearly zero.

The centrepiece of a strategy to prevent nuclear terrorism must be to deny terrorists access to nuclear weapons or materials. To this end, my 2004 book, Nuclear Terrorism: The Ultimate Preventable Catastrophe, proposes a strategy for shaping a new international security order according to a doctrine of “Three No’s”:

• No loose nukes: all nuclear weapons and weapons∞usable material must be secured, on the fastest possible timetable, as tightly as the gold in Fort Knox.

• No new nascent nukes: no nation must develop new capabilities to enrich uranium or reprocess plutonium.

• No new nuclear-weapons states: we must draw a line under the current eight and a half nuclear powers and say unambiguously, “Stop. No more.”

In the last 17 years, efforts have been made to address the threat. The danger of “loose nukes” came into focus in 1991, during the Soviet Union’s collapse. After the failed coup attempt against Mikhail Gorbachev in August 1991, I composed a private memo to the chairman of the Joint Chiefs of Staff, Colin Powell, titled “Sounding the Alarm.” “Soviet disunion could create additional nuclear states, provoke struggles for control of Soviet nuclear weapons, and lead to a loss of control of strategic or nonstrategic nuclear weapons,” I wrote.

In the weeks that followed, President George H. W. Bush and Gorbachev agreed to what was later called the “unilateral declarations.” The United States removed all tactical nuclear weapons from its operational forces and challenged the Soviet Union to do likewise.

Gorbachev’s response was encouraging. With the aid of US funding, secured through the Cooperative Threat Reduction Program sponsored by Lugar and his Senate colleague Sam Nunn, thousands of the Soviet Union’s 21,700 tactical nuclear weapons stationed in 14 of the Soviet Union’s 15 constituent republics were returned to Russia. Moreover, 3,200 strategic nuclear weapons stationed in Belarus, Kazakhstan, and Ukraine, most atop missiles that targeted American cities, were eliminated. Today, there are no nuclear weapons in any of the former Soviet states except Russia.

By now, US-sponsored security upgrades have been completed for 80 percent of Russia’s nuclear material and warhead sites. As of June 2008, 7,292 strategic nuclear warheads had been deactivated (79 percent of the Nunn-Lugar target for 2012), and 708 intercontinental ballistic missiles had been destroyed (65 percent of the 2012 target), along with 30 nuclear submarines capable of launching ballistic missiles (86 percent of the 2012 target). Several of the 2012 targets have already been met, and 25 classified sites on 12 Russian bases have been secured two years ahead of schedule.

During the 2004 presidential campaign, in the first televised debate between President George Bush and Senator John Kerry, the moderator asked each candidate, “What is the single most serious threat to the national security of the United States?” In rare agreement, Kerry and Bush both cited nuclear terrorism. As the president said, “I agree with my opponent that the biggest threat facing the country is weapons of mass destruction in the hands of a terrorist network.” During the 2005 Bratislava summit, President Bush and Russian president Vladimir Putin for the first time accepted responsibility for addressing the threat and for ensuring that their governments secure loose nuclear material in their countries as quickly as possible. They assigned responsibility for securing nuclear materials to individuals (US energy secretary Samuel W. Bodman and his Russian counterpart, the head of the Russian Federal Atomic Energy Agency) and held them accountable by requiring regular progress reports.

But the missteps, missed opportunities, and wrong turns of the past two decades are weightier than the successes. The nuclear superpowers failed to take advantage of the end of the Cold War to dramatically reduce and restructure nuclear arsenals – or, at least, to honour their commitments under the 1968 Non-Proliferation Treaty (NPT) rigorously enough to persuade other states to honour theirs. India and Pakistan tested nuclear bombs and began deploying active nuclear arsenals. North Korea withdrew from the NPT, used technologies acquired under the treaty to produce plutonium for an estimated eight nuclear bombs, and tested a nuclear weapon. In 2005, an NPT review conference collapsed amid general intransigence. Most recently, Iran has defied three UN Security Council resolutions demanding that it suspend its nuclear enrichment activity.

Of everything on this list, the most worrying is nuclear proliferation in North Korea. That country is among the most dangerous potential sources of a nuclear bomb that Osama bin Laden, or someone like him, could use to destroy the heart of New York or Washington, DC. In 2004, Pyongyang had two bombs’ worth of plutonium. It has since developed an arsenal of around 10 bombs.

As the 2004 UN High-Level Panel on Threats, Challenges, and Change concluded, “We are approaching a point at which the erosion of the non-proliferation regime could become irreversible and result in a cascade of proliferation.”

After the United States invaded Afghanistan in the aftermath of 9/11, the Taliban government was toppled and al-Qaeda’s headquarters and leadership, including Osama bin Laden and his deputy Ayman al∞Zawahiri, were evicted from the country. But note the supreme irony: having entered office with a bearded madman in medieval Afghanistan plotting and training foot soldiers for a massive terrorist attack on the United States, President Bush will probably hand the reins to his successor as this same bearded madman plots even deadlier attacks on our country – but now he will be plotting them from training camps in Pakistan, a nuclear state.

No one who has examined the evidence has any doubt that al Qaeda is deadly serious about exploding a nuclear bomb. As former CIA director George Tenet reveals in his memoir, “The most senior leaders of al Qaeda are still singularly focused on acquiring WMD… The main threat is the nuclear one. I am convinced that this is where Osama bin Laden and his operatives desperately want to go.”

Consider the consequences if just one nuclear bomb exploded in just one US city. The immediate reaction would be to block all entry points to prevent another bomb from reaching its target, disrupting the global flow of raw materials and manufactured goods. Vital markets for international products would disappear, and financial markets would crash. Researchers at Rand, a think tank funded by the US government, have estimated that a nuclear explosion at the Port of Long Beach, CA, would cause immediate indirect costs of more than $1trn worldwide and that shutting down US ports would cut world trade by 7.5 percent.

The total, long-term economic effects would be much worse, however, and would reverberate well beyond the developed world. As former UN secretary-general Kofi Annan has warned, a nuclear terrorist attack would not only “cause widespread death and destruction” but “thrust tens of millions of people into dire poverty.” This would, he observed, create “a second death toll throughout the developing world.”

Preventing such a calamity will require policy leadership, institutional innovation, international cooperation, and hard work. The prospects for success can be enhanced by capitalising on a competitive advantage of the United States: technology. Al-Qaeda and other global terrorists are technologically challenged, and technologically advanced countries must exploit this asymmetry. If we do, our ability to secure, trace, and dismantle weapons of mass destruction will exceed terrorist organisations’ abilities to procure them.

Nuclear CSI: Unambiguous attribution
Could states be held as accountable for the nuclear weapons they create (and the material from which such weapons could be made) as they are for the nuclear warheads their governments choose to deploy? The US government considered this question during the Cold War – and answered it, though the answer offers cold comfort. Recall the most dangerous moment of the Cold War, the Cuban Missile Crisis of October 1962. The United States discovered the Soviet Union attempting to sneak nuclear-tipped missiles into Cuba. President John F. Kennedy confronted his Soviet counterpart, Nikita Khrushchev, and demanded that the missiles be withdrawn. As the crisis unfolded, American strategists worried that Khrushchev might transfer control of the nuclear arsenal in Cuba to a young, hot∞headed revolutionary named Fidel Castro.

After conducting careful deliberations, Kennedy issued an unambiguous warning to Khrushchev and the Soviet Union: “It shall be the policy of this nation to regard any nuclear missile launched from Cuba against any nation in the Western Hemisphere as an attack by the Soviet Union on the United States, requiring a full retaliatory response upon the Soviet Union.” Khrushchev well understood what Kennedy was talking about: the certain prospect of a full∞scale nuclear war.

In the years after the crisis, nuclear strategists considered the array of scenarios in which one or a small number of Soviet nuclear weapons might explode on American soil. In one such scenario, a single missile is launched against an American city in an attack the Soviet leader claims is “accidental” or “unauthorised.” For example, a Soviet leader calls the American president on the hotline to inform him that a Soviet missile commander has gone insane and, without authorisation, launched a single missile with a nuclear warhead against an American city. How should the president respond?

Grisly though the logic was, the canonical answer was a strategy of “an eye for an eye.” Herman Kahn, author of the controversial 1960 work On Thermonuclear War, described this approach as “graduated, or controlled deterrence… of provocative actions by a counteraction which is expected to be so effective that the net effect of the ‘aggressor’s’ action is to cause him to lose in position.” The US plan was to retaliate by delivering a nuclear warhead capable of destroying a counterpart Russian city. Pentagon planners developed lists of such unfortunately twinned cities in support of that policy.

Who knows whether an American president would have responded to the accidental destruction of Minneapolis by destroying Minsk. But Soviet leaders’ belief that a president might do so undoubtedly reinforced their determination that no accidental launches occur.

Modern deterrence
As one moves beyond Cold War logic to the crueller, more complex logic of nuclear terrorism, the question is whether personal accountability for terrorist use of a nuclear weapon manufactured by a given state can deter the state’s leader from selling weapons to terrorists. What’s more, the question of accountability applies equally well in cases where proliferation is not wilful. If leaders believe that they will be held accountable for their nuclear weapons even if those weapons are stolen, will they be better motivated to prevent theft?

The answer depends on two further questions. First, can we attribute the weapon to its source? Second, how will accountability be defined politically, and how can it be enforced?

As I wrote in MIT Technology Review in the summer of 2005, “The technological prerequisite for rethinking the unthinkable is nuclear forensics: the ability to identify a bomb’s source from radioactive debris left after it explodes.” A credible capacity to identify nuclear material definitively and quickly is essential. If the leader of a government – say, Kim Jong Il of North Korea – knew that the United States would be able to identify his “fingerprints” on a nuclear weapon he sold to terrorists, it should be a useful deterrent. Similarly, nuclear custodians, scientists, and others whose main motivation for helping terrorists is financial, not ideological, would probably be more hesitant to do so if they could be found out.

A post-9/11 study by the National Research Council (NRC), Making the Nation Safer: The Role of Science and Technology in Countering Terrorism, concludes that such detection is technically feasible: “The technology for developing [post-explosion nuclear attribution] exists but needs to be assembled, an effort that is expected to take several years.”

Nuclear Forensics: Role, State of the Art, Program Needs, a 2008 study by the Joint Working Group of the American Physical Society (APS) and the American Association for the Advancement of Science (AAAS) that is the best recent public report on the subject, concurs with the NRC’s judgment: “The underlying scientific disciplines… are understood adequately for the purpose of forensics.” Nevertheless, the report concludes that the current state of the art will not yield maximally effective deterrence. We lack a central global database of unique material signatures that countries can promptly access in the event of a nuclear detonation.

Even if such a database existed, states would not be fully prepared to take advantage of it in a day-after scenario. The APS and AAAS report that “neither equipment nor people are at the level needed to provide as prompt and accurate information for decision makers as is possible.”

The report suggests that two separate technological initiatives are critical to improving US forensic capability. The first is the development of equipment that can provide immediate, rough assessments in the field – portable instruments capable of what the APS and AAAS call “all-weather, all-scenario rapid response.”

The second is improvement of equipment for performing more detailed analysis of forensic samples. According to the report, the equipment in the US Department of Energy’s labs must be upgraded to “world standards.”

Assuming that there is an attack and we have identified the source, we come to the much more difficult question. What response is appropriate?

A global alliance
Establishing an accepted principle of nuclear accountability will be a major international undertaking. It should begin with the United States and Russia, each of which has a special obligation to address this challenge, since they created it – and since they still own 95 percent of all nuclear weapons. They should take the lead in establishing a new global alliance against nuclear terrorism.

The mission of the alliance should be to minimise the risk of such terrorism anywhere by taking every action physically, technically, and diplomatically possible to prevent nuclear weapons or materials from falling into the hands of terrorists.

Membership in the alliance would require an unambiguous commitment to the principle of assured nuclear security. States would have to guarantee that all nuclear weapons and materials in their territories were beyond the reach of terrorists or thieves. And states’ means of securing these materials would have to be sufficiently transparent that leaders of all member states could reassure their own citizens that terrorists would never get a nuclear bomb from another alliance member.

UN Security Council Resolution 1540 already obligates all member states to develop and maintain “appropriate, effective” measures to secure weapons and materials, but this obligation has unfortunately not been reinforced by specific, mandatory standards.

However, the Nunn-Lugar Expansion Act, adopted by Congress in 2003, authorised the Nunn-Lugar programme to operate outside the former Soviet Union to address proliferation threats. Moreover, the Bush administration has reportedly provided $100m in technology and related assistance to help Pakistan secure its vulnerable nuclear arsenal.

The Global Initiative to Combat Nuclear Terrorism announced by Presidents Bush and Putin at the St. Petersburg G8 summit in July 2006 was another step in the right direction. But the alliance against nuclear terrorism that I am proposing would go beyond declarations; it would require specific actions in exchange for specific benefits. The actions would include defining the security levels of weapons and weapons-usable materials, as well as assuring others that these levels of security had been achieved. Leaders of complying states would participate in an annual summit, and full alliance members would also be entitled to intelligence sharing, assistance with security technology, participation in interdiction exercises, and post-detonation medical and cleanup aid.

The leader of a country that joined the alliance would have to take responsibility for the country’s doing everything technically possible, as fast as possible, to prevent nuclear terrorism. Meanwhile, member states would be required to deposit samples of nuclear materials in an international library that would be available for use in identifying the source of any weapon or material that found its way into terrorists’ hands.

Members of the alliance would together clarify the practical meaning of accountability in the event that a weapon or material was used by terrorists against another state. If nuclear weapons or materials should be stolen, states that had satisfied the requirements for assured nuclear security, met the new standards in securing their materials, and made their safeguards sufficiently transparent to the other members would be judged less negligent. States that were unwilling to participate fully in the alliance would automatically raise suspicions.

Members of the alliance would also undertake to clarify the consequences of knowingly allowing nuclear materials to fall into terrorist hands. Those consequences would not necessarily involve military retaliation; alternatives such as exacting financial reparations would certainly be explored and might prove more realistic. Consequences would also be different for different violators, since threatening nuclear retaliation against Russia would not be credible.

Currently, the only state that could plausibly choose to sell a nuclear bomb to terrorists is North Korea. Since it may have 10 weapons, the sale of one or two would make little difference to its deterrent posture. An economically desperate mafioso state, North Korea has demonstrated a willingness to sell whatever it makes to whoever will pay.

To deter Kim Jong Il from selling a nuclear weapon to terrorists, the US government should act now to convince him that North Korea will be held accountable for every weapon of North Korean origin. Ideally, the United States would act in concert with Russia and China in taking a page from John F. Kennedy’s playbook during the Cuban Missile Crisis. The announced policy of nuclear accountability would warn Kim unambiguously that the explosion of any nuclear weapon of North Korean origin on the territory of alliance states or their allies would be met with a full retaliatory response ensuring that it could never happen again.

Success in the war on terrorism will require a combination of policy imagination and technological inventiveness. Visualising the alternative – a world of nuclear anarchy – should stimulate us to rethink nuclear unthinkables.

America ignores troubled backyard

Closer to home, the US has allotted $44m a month to help the governments of its closest neighbours – Mexico and Central America – assert their authority, fight corruption and set up functioning institutions.

The two cases raise questions about American priorities. If money were the only gauge, one might draw the conclusion that it is 147 times more important for Washington to bring security and good governance to Afghanistan than to America’s violence-plagued next-door neighbours – Mexico, Guatemala, Honduras and El Salvador.

In the Mexican border city of Ciudad Juarez alone, 6,000 people have died in the past two and a half years, a number that dwarfs the military death toll of Afghanistan since the war there began in 2001. Central America, according to a UN report, has become the region with the world’s highest murder rate, an average of about 1,300 a month.

Official statistics list 4,635 murders in El Salvador in 2009. Honduras notched up 5,265 and Guatemala 6,498. Mexico topped the 2009 list with almost 8,000. Since President Felipe Calderon declared war on his country’s drug trafficking organisations in December 2006, more than 25,000 people have been killed.

Most of the blood-letting is blamed on drug traffickers fighting each other and the state, and on armed disputes between rival criminal gangs. To help the governments in America’s backyard tramp down the violence, then President George W Bush signed into law, in June 2008, a three-year $1.6bn security cooperation agreement, the so-called Merida Initiative. (So named after the Mexican city where it was hatched).

What effect has it had, so far? Virtually zero, largely because very little of the assistance in training and equipment the US promised has been delivered. In July, a report by the Government Accountability Office, the research arm of congress, found that just nine percent of the agreed total had been “expended.”

“Deliveries of equipment and training have been delayed by challenges associated with insufficient number of staff to administer the programme, negotiations on interagency and bilateral agreements, procurement processes, changes in government, and funding availability,” the GAO said. In other words: things got stuck in red tape.

Bleak memories of past efforts

But even once all the aid – from helicopters and drug sniffing dogs to X-ray scanning devices and police training is dispensed – there is reason to doubt that the programme will make much of a difference either to the flow of drugs to the US or to the violence tearing at the fabric of society in Mexico and Central America.

Like most initiatives since Richard Nixon first declared “war on drugs” 39 years ago, Merida is heavy on equipment and geared more towards tactical victories in suppressing the cultivation and flow of drugs than on the long-term reforms that would make government institutions, most of all the justice systems, corruption-resistant.

The Merida initiative evokes memories of US-Mexican anti-drug efforts in the late 1990s, when Mexico was also torn by a wave of violence as rival cartels fought for dominance. Then as now, the military were seen as less prone to corruption and abuse than the police. Then as now, this is a questionable assumption.

In the 1990s, the US provided a large fleet of helicopters, fixed-wing aircraft and other equipment. It trained thousands of Mexican special forces to attack the drug networks. An army general, Jesus Gutierrez Rebollo, became Mexico’s drug czar. He was arrested a year later and tried for working for the drug lords he was supposed to fight.

That the latest programme does not quite capture the complex nature of the problem is apparent from its title: The Merida Initiative to Combat Illicit Narcotics and Reduce Organised Crime. Both illicit drugs and organised crime play a major role in the Mexican and Central American mayhem but they are not the only forces.

Common crime is up throughout the region – from robbery and rape to extortion, car theft and kidnapping for ransom. In a climate of criminal anarchy, life is cheap, arrests are rare, and impunity is the rule rather than the exception.

This is not how President Calderon tells it. According to him, 90 percent of the dead are connected to drug organisations – bad people killing bad people. One Mexican army general, Jorge Juarez Loera, echoed the thought and phrased it differently. Reporters covering the killings should refer to “one less criminal” instead of “one more murder victim.”

Charles Bowden, the author of Murder City, a gripping book on the decline of Ciudad Juarez into a killing field, scoffs at such assertions. “Most of the murder victims (in Juarez) are ordinary Mexicans who magically morph into drug cartel members before their blood dries where they fall dead, riddled with bullets.” Is there an end in sight?

Bowden’s reply: “I don’t see any way to put the lid back on.”