Author: Ben Debski

Cambodia’s civil engineering industry burgeons

Posted on by Ben Debski

Despite Cambodia’s history of poverty and civil war, the country has recently experienced a boom in the civil engineering industry. Several civil engineering projects are currently scheduled for development in Cambodia, and while the projects vary as to their funding and purpose, all of these efforts may help the developing nation establish a stronger infrastructure for the future.

Many of Cambodia’s current civil engineering projects were initiated to assist citizens by establishing a stable infrastructure of roads, utility providers, and other necessities. Due to the effects of over 30 years of conflict, basic life needs such as water, transportation, education, and healthcare remain in high demand among Cambodia’s people. Several civil engineering construction projects have been proposed to help meet these challenges. By providing these necessities, planners hope to improve the daily living conditions of residents, and eventually position Cambodia to develop a stable economy.

Some of the civil engineering projects that are currently under development in Cambodia include the North-western Rural Development Project, the Stung River Dam, and the Referral Hospital project.  The North-western Rural Development Project aims to expand the roadways in select Cambodian rural areas, including Battambang, Banteay Meanchey, Oddar Meanchey, and Siem Reap. This project will also construct schools, medical facilities, and markets in these regions and develop other facilities such as sanitation services and community buildings.
Another civil engineering project that aims to improve the lives of Cambodian citizens is the Stung River Dam construction, which is on track to be completed in 2013.  The project is backed by the Huadian Corporation, a Chinese electric conglomerate that develops power through the use of water, solar energy, and wind.  Huadian expects the dam to provide up to one billion kilowatt hours of energy each year.

The Referral Hospital project is being developed with the goal of improving the quality of healthcare services provided at the medical facility by adding multiple buildings, including an operating theatre, a maternity ward, a tuberculosis care unit, and administrative offices.  The ultimate goal of the Referral Hospital construction is to allow more Cambodians access to quality medical care.

Tracking Project Funding
The funding sources for these projects vary, but the majority of the funds are made available through lending institutions.  The North-western Rural Development Project received the bulk of its financing through loans obtained by the Asian Development Bank. Similarly, the Referral Hospital project is almost entirely financed through loans from the World Bank.

The Stung River Dam project, however, is being financed through a unique, multi-year operating agreement between the Huadian Corporation and the Cambodian government.  Under the terms of the agreement, Huadian agrees to pay for the initial construction in return for receiving the profits from the dam for the next 30 years. At the end of the 30-year period, Huadian will cede control of the finished dam back to Cambodia, providing the national government with an additional stream of income.

Yen intervention on the horizon

Posted on by Ben Debski

With the yen at historic highs against the US dollar, the spectre of intervention begins to loom. The government can make moves to ease the prospect of inflation, something the devastated nation certainly doesn’t need at this time. However, the yen recently began to ease against the dollar, diminishing “the possibility for further easing,” according to a currency strategist at Wells Fargo in New York.

The yen fluctuates in value relative to other world currencies. Currencies may be fixed (based on a fixed asset such as gold) or floating (changes in relation to other currencies), and each country decides how it will address its own currency. Countries have changed from fixed to floating in the past, often due to inflationary pressures or a need for political stability. Forcing a currency to remain pegged against a static asset can result in higher inflation, higher unemployment, and a lower value to the currency.

The yen is a floating currency and has historically had a close relationship to the yields of US Treasury securities. However other global factors, such as the European debt crisis, can and have had an impact on the valuation of the currency. For years, the yen has been measured against the dollar, but with the United States promising to keep interest rates “exceptionally low” through the end of 2014, this places additional pressure on the yen.

Japan has been a great investor in US assets, such as Treasury Certificates, and lower yields on those investments will bring less cash into Japan’s treasury coffers, providing far less return than has been seen in the past.  Add to that the need for capital to help recover from the Japanese earthquake and tsunami, and the pressure begins to mount for more robust investment.  Of course, that carries some risk – as investors in Greece have found out much to their dismay in the past few years.

Now that Greece’s rulers have rejected further austerities, it is likely the next round of bailout funds will not be delivered, pushing Greece further toward default. If and when it happens the upset this will cause the market will send investors looking toward more stable governments and currencies, the Japanese yen among them.

Asian stocks have been rising, in general, because they are seen as a safe haven. Angus Gluskie, Managing Director at White Funds Management in Sydney, has said, “Things aren’t great but it’s getting better,” regarding the outlook on Greek versus Asian exchanges. Additionally, Japan Tobacco recently raised its profit forecast and Japanese shipping companies are predicting improvement in earnings.

Kathy Lien, Director of Currency Research at GFT Forex in New York, has stated that, “The pressure to intervene in the yen is receding with each rally in dollar-yen,” and so long as the trend continues, the markets likely will be allowed to react naturally.  The yen has had the third-best performance among the ten developed-nations currencies, according to the Bloomberg Correlation-Weighted Indexes, meaning the outlook for the yen over the next 12 months remains positive.

Ukraine moves toward EU implementation

Posted on by Ben Debski

The relationship between the EU and Ukraine is currently regulated by the European Neighbourhood Policy, an instrument of European foreign policy designed to control relationships with countries bordering the EU.

The EU is increasingly seeking closer relations with Ukraine, which go beyond mere cooperation to a strengthening of political affiliations and even gradual economic integration.

The political dialogue between Ukraine and the EU dates back to 1994 when partnership and cooperation agreement was signed. The document focused on social and economic issues and on the need to improve civil rights, guarantee a free press, and improve public government.

Popular support for Ukraine integration into the EU
It seems that, although there was initially strong and increasing public support for Ukraine to join the EU and accept the euro as their national currency, this support has steadily waned over the last three or four years.

A poll conducted in 2004 by the University of Sussex found that 56 percent of Ukrainians supported EU membership, while 16 percent were against it. When the BBC did a similar poll in January of 2008, support for integration had increased to 63 percent, with 13 percent of respondents reporting that they were against the idea.

Since then, however, things have started to change. A GfK poll conducted during May of 2010 showed 53 percent support for EU membership, with 19 percent against. In November of 2011 the Razumkov Centre did a similar poll and reported that only 45 percent of respondents were in favour of EU membership. When the Kucheriv Democratic Initiatives Foundation conducted its own poll in December, they found that only 40 percent of respondents were in favour of joining the EU, while 32.9 percent of them opposed such a move.

The strongest support for EU membership seems to come from residents of western and central Ukraine and from citizens between the ages of 20 and 39.

Kostyantyn Yeliseyev, Ukraine’s ambassador to the EU, said in a July 2011 statement that politicians and business tycoons from the Russian speaking eastern regions of Ukraine were as much in favour of EU membership as their colleagues in the west of the country.

In fact, he went as far as saying, “If any politician today in Ukraine declared himself to be against European integration, he would be politically dead.”

Recent developments
When the current President of Ukraine, Viktor Yanukovych, took over from his predecessor in 2010, many observers expected him to adopt a more pro-Russian stance.

He has since made it very clear, however, that although Ukraine is not interested in joining NATO, he would like to see a free trade agreement with the EU. At the same time he fended off attempts by Moscow to draw Ukraine into a customs union with Belarus, Russia, and Kazakhstan.

In December of 2011 President Yanukovych hosted the 15th EU – Ukraine Summit. After talks with the President of the European Commission and the President of the European Council, Yanukovych said, “We are ready to start preparations for signing [of the Association Agreement] for its further implementation.”

He emphasised that the document would form the basis of Ukraine’s integration into the EU.

Pension funds unite forces

Posted on by Ben Debski

The US and European debt crises and the resulting economic woes of many countries have not left pension funds untouched. Smaller funds in particular are not always able to properly diversify their investment portfolios, which can seriously harm them if it turns out that the investments they made were less than sound.

Smaller funds are generally exposed to higher risk levels, since a group of employees becoming redundant at the same time can sometimes cause serious cash flow problems for such a fund.

In order to cut overheads and to provide them with a more stable environment, several small funds have merged in recent months.

The Kroger Co.
The Kroger Co. contributes to a number of United Food and Commercial Workers multi-employer funds. Four of these funds merged into a single fund on the 1st of January 2012.

According to a company spokesperson the move is expected to result in a reduction in the amount that Kroger has to pay in respect of pension contributions every year. Kroger also says that the move will help to guarantee the pension benefits of the company’s more than 65,000 employees.

The merger of the four pension funds will provide improved future returns, reduced administrative costs, and should provide more stability in terms of future benefits according to the spokesperson.

Australia First State Super and Health Super
Not so long ago Australia’s First State Super and Health Super funds merged to create the country’s fifth largest private pension fund. The move is expected to spark other similar consolidations as funds in the fourth largest wealth management market in the world try to reduce costs.

The new fund manages investments of more than $28bn. It has over 750,000 members.

The merger came after Australia proposed reforms to pension funds that aim to reduce management fees in the $1.2trn industry.

The initial announcement was made in November 2010, but it took many months to finalise all the administrative and legal details. The final merger took place in the latter part of 2011.

Minneapolis Police and Fire Pension Funds
In September of last year a vote by police pensioners ended a protracted battle between the city of Minneapolis and its fire and police pension funds – and it brought Mayor R.T. Rybak one step closer to his aim of getting a no-tax-increase budget approved.

At the meeting, over 90 percent of retired policemen voted to approve the merger of their 121-year old pension fund with a state pension fund. This followed after their fire fighter colleagues approved the deal a few days earlier.

The full pension which a fire fighter will receive under the new plan is $41,479 per year; this figure is based on a fire fighter who retires at the age 50 after 25 years of service. A police officer will get an annual pension of $44,742 per year under the same set of assumptions.

Part of the merger agreement was that these amounts will increase to $64,000 per year by 2015.

Funding pharmas

Posted on by Ben Debski

During the 1990s we saw an increase of nearly 100 percent in overall investment funding for pharmaceutical research in the US. This led to the development of various new drugs. After 2003 these investments started to taper off as a result of a reduction of government support for drug development. Mega mergers within the industry might also have caused a decline in private investments in this field.

The Journal of the American Medical Association said in a study published in 2010 that its researchers estimated that a total of $100bn was currently invested in biomedical research in the US. This was the biggest study to date, which attempted to quantify funding by private companies, the government and the industry.

According to the JANA study, the biggest source of funding during 2007 was industry, which represented 58 percent of the total amount. The federal government was the second biggest provider of funds with 33 percent of the total. The rest was made up by individual donors, advocacy organisations and foundations.

Authors, Jason de Roulet, E. Ray Dorsey, Joel P. Thompson, et al, wrote, “After a decade of doubling, the rate of increase in biomedical research funding slowed from 2003 to 2007.”

In February 2011 an article published in the New England Journal of Medicine entitled ‘”Biomedical Research and Health Advances” suggested that the industry’s share of total investment into biomedical research was even larger at present. The article suggests a figure of 65 percent, with the government contributing 30 percent and foundations, charities and individual donors making up the rest.

The Pharmaceutical Research and Manufacturers of America industry trade group and Burrill and Company released a report in March last year showing that in 2010, $67.4bn was invested in the research and development of new medicines by biopharmaceutical research companies.

Venture capitalists often invest in new pharmaceuticals, especially if a groundbreaking drug, which could provide huge returns on their investments, is being researched. Most venture capital companies, however, realise that a pharmaceutical investment is a long-term undertaking. In total, they invested a total of $21.8bn in 3,277 separate deals during 2010. This was an increase of 12 percent in the number of investment deals and 19 percent in the amount involved over the previous year.

Toucan Capital is a well-known venture capital company in the US, which has, in the past, invested in pharmaceutical businesses. Another major venture capital company that regularly invests in the pharmaceutical industry is Domain Associates; it was involved in 41 deals during the last 18 months.

Healthcare Ventures has raised around $1.6bn for investments in the pharmaceutical industry over the past 24 years. Polaris Venture Partners is a venture capital firm that has made several investments in pharmaceutical start-ups over the years.

The drawback of this approach is unfortunately the fact that venture capitalists inevitably take part of the company they are investing in, so ownership will no longer be exclusively in the hands of the original entrepreneur.

The New Economy’s 2012 Healthcare Awards are now open. To vote, click here.

Lake Ellsworth offers fresh discoveries

Posted on by Ben Debski

To date, scientists have discovered more than 145 sub-glacial lakes below the ice sheet of Antarctica. These lakes present a unique environment, since they have been isolated from the surface for such a long time. Life here has had to adapt to complete darkness, low levels of nutrients, isolation from the atmosphere and high water pressure. This has resulted in a totally unique biological habitat.

Studying, sampling and drilling these lakes without contaminating them or spreading contamination to other lakes represents a considerable technological and physical challenge. In this regard, investigating the lakes does not differ that much from the exploration of planets in the solar system.

One of the sub-glacial lakes, located in West Antarctica, is Lake Ellsworth, named after US explorer Lincoln Ellsworth. It lies under approximately 3.4 km of ice, is some 10 km in length and scientists estimate the depth to be about 150 metres. Ellsworth is a prime candidate for exploration, because it is possible that it harbours unique life forms and also because it is fairly easy to access.

The Natural Environment Research Council funded provisional geophysical exploration of the lake between 2007 and 2009. Small teams of scientists, who were positioned on the ice above Lake Ellsworth, used radar and seismic surveys to measure the depth of the water and map the lake’s outline. They were able to establish that the lake’s floor contain sediments, which might contain a record of ice sheet history.

This geophysical exploration convinced scientists that Lake Ellsworth was the perfect candidate for further investigation. On the basis of the initial findings the Natural Environment Research Council in the UK approved funding for a direct exploration project that will begin later in 2012.

Scientists will use a hot-water drill to ‘melt’ through the ice layer into the water below. They will then insert a sediment corer, which will recover sediment from the floor of the lake and a probe to test if there is any life in the water. The sediment will provide a valuable insight into the glacial history of the West Antarctic Ice Sheet and the evolution of life forms in the lake.

An advance party has already paved the way for the full team, which is due to arrive later in 2012. They have had to transport drilling equipment over a distance of over 250km across terrain covered with deep snow. On the way, the team had to cross the Ellsworth Mountain range. They had to use powerful tractors towing the bulky containers of equipment on skis and sledges and progress was slow, in fact it took them three days to reach the drilling site.

Professor Martin Siegert, the Programme Principal Investigator of the Lake Ellsworth Project said, “We are now one step closer to finding out if new and unique forms of microbial life could have evolved in this environment… extracted sediment samples could give us an important insight in to the ancient history of the West Antarctic Ice Sheet, including past collapses, which would have implications for future sea level rise.”

Developments abound at the NCSB

Posted on by Ben Debski

The University of Missouri is the home of the National Centre for Soybean Biotechnology.  This is mainly due to the university’s exemplary record of development in the areas of soybean genetics and other related subjects. The aim of the centre is to develop approaches that will be of benefit to both the soybean industry and academic research. The work that is carried out at the centre includes bioengineering technologies for the industry and help with improving the profitability of the soybean, by reducing problems with pests and improving the yield. Research is also being carried out on improving the tolerance to stress and providing educational resources for students at all levels. Outreach programmes will be put into place to ensure that both manufacturers and the general public are aware of the work that is being carried out and the latest practical developments resulting from this research.

Areas that are being covered include the Soybean Cyst Nematode, one of the plant’s most destructive pests. Yield production falls significantly when this pest is present and can lead to losses of up to $1bn for the industry each year. Also being researched is the Soybean Structural Genomics, which are the genes of the plant. These can be used to both clone the plant and create a genetic map. Root Hair Systems Biology is another area of research for the National Centre for Soybean Technology. This looks at the possible infections of the legume root hair, an area that has previously been very difficult to study.

Recent developments at the centre include a programme dedicated to the study of Biotic stress. This looks at the ways in which plant breeding is carried out and the discovery of genes and looks at how they can become resistant to disease. At the present time, 10 out of 100 possible diseases are particularly damaging for soybeans and a number of new approaches are being used to eradicate them. Soybean cyst nematode is one such disease, while others include frogeye leaf spot, soybean rust and reniform nematode.

Seed composition is an area of research that has been particularly successful. The aim here is to improve the uses of soybean in foods and industrial markets. A good example is the modification of the fatty acid profile of soybean oil so that it can be used in a wider range of products in the food industry. Improvements in the oil are expected to lead to healthier options becoming available.

Collaboration has been organised between scientists in the food industry from a number of plant research centres in the US. This new group will form the Association of Independent Plant Research Institutes and will discuss many issues that are related to the agriculture industry today. As members have access to more than 60 laboratories around the country and more than 400 staff members, they are able to offer information and research on a variety of topics. This includes the analysis of chemicals and proteins that are found in plants, as well as taking 3D images of the plant’s structures and proteins.

Nanotechnology takes on cancer

Posted on by Ben Debski

Nanotechnology has progressed a great deal in recent years and the US National Cancer Institute, (NCI), developed the Alliance for Nanotechnology in Cancer back in 2004. This was in order to bring together the various branches of research, which were being carried out in this field.  Interest in this type of research has grown since the formation of the alliance.

There are two areas in which nanotechnology can be applied to cancer. The first is the development of nanovectors. These are particles that can be filled with the drugs required and which then target the cancer. The second are nanosensor devices, which can detect the very early signs of cancer and determine risk. These two technologies, working together, can help to bring about early diagnosis of cancerous conditions and offer more effective treatments for sufferers.

The NCI currently has eight different centres in the US, known as Centers of Cancer Nanotechnology Excellence or CCNE for short. These are complimented by a number of smaller programmes and together they have recruited the top specialists in the field. Millions of dollars are being spent each year on research into nanotech prostate cancer treatments and nanotechnology in other types of cancer.

Nanotech prostate cancer research has shown excellent results in the initial stages. The nanoparticles have been coated with aptamers that help them find the tumour. Once the tumour is located they first bind to it before entering the cells and breaking up to release the medication. The particles are also coated to allow them to pass through the bloodstream without losing their contents prematurely. A chemical engineer, Robert Langer said, “extensive animal models show that this approach is both safe and efficacious”. Tests on the animal models have shown that one injection of such particles was enough to bring an end to the tumour.

This research has shown that there are challenges in encouraging the particles to reach the tumours. Research is also being carried out into the type of particles being used in nanotechnology. The shape and size of a particle will affect how it travels through the body and these factors can be manipulated in order to ensure that a safe passage to the desired area can be achieved. The body contains a number of biological barriers, such as vascular walls and membranes and these can affect how the particles travel. The teams researching this particular area of nanotechnology are hoping that it will eventually yield the optimal design of particle.

This type of research is being put into practice at the University of North Carolina. The team there is working on moulds, which allow the creation of particles that have the most suitable characteristics. The team is working on particle size and shape, which can be anything from a sphere to a disc, the composition of a particle, which may include solid matter, porous matter or organic matter and the compliance of a particle, which determines how flexible it can be. This team is also developing particles that can be loaded with a specific dosage of drugs for a particular treatment and are using natural particles as a model.

Distance MBAs gain appeal

Posted on by Ben Debski

There is no doubt that success in any field requires a strong understanding of the principles of that field. Formal education is the established method of acquiring specialised knowledge for many fields and provides a means of proving ones skills with officially recognised certificates and qualifications. While many people continue to opt for a traditional school course, either at college or university level, today, formally recognised qualifications can also be attained more flexibly than ever. This is particularly relevant for people who wish to offset the increasing costs of further education by working at the same time as they learn.

With recent downturns in the economy, more people are having to think carefully about their educational commitments. While further education provides improved job prospects and promotional possibilities, it also comes at a high monetary cost; student loans and grants are available to help cover the expense, but many individuals, particularly those who are returning to learning later in life, frequently prefer to keep a steady income as they earn their new qualifications. A full-time university course requires attendance at daily or weekly lectures, perhaps necessitating an inconvenient move for the prospective student who probably already has a job. Universities are well aware of this fact and an increasing number of more flexible options are now becoming available. Business degrees are no exception, as the wide pool of interested individuals ensures that relevant courses are very popular.

Distance learning is a very viable and popular method of studying for a qualification in business, even up to MBA level. Distance learning means that courses are conducted without the student needing to visit the university the course is given by. Students using flexible distance learning business courses can study from home and set their own hours for learning. This ensures that even a very busy student, who is working full time, should still be able to select a suitable workload for themselves; flexible distance learning degrees are part-time and can hold the same value as a degree earned by taking a full-time course.

Flexible business degrees are increasingly popular in the UK and worldwide. As the job market improves, businessmen and women looking to increase their base of knowledge and improve their career options can benefit from the increase in jobs available now, without compromising the ability to acquire further education. A large number of universities are offering business degrees on a distance-learning basis, including Kenan-Flagler University (North Carolina USA), IE (Madrid) and the UK’s Warwick Business School. The Warwick Business School, in particular, has many years of experience in providing distance-learning degrees. École des Hautes Études Commerciales de Paris, (HEC), also prominently provides distance learning degrees for business up to the MBA level, though it should be noted that these are not executive business degrees, but rather aimed at students with less experience in the business world. This makes distance-learning degrees a very useful choice for those wishing for a boost during the early part of their business careers.

Data protection invests in user

Posted on by Ben Debski

Modifications to European data protection rules will give users better control over their data and also reduce costs for businesses, according to the justice commissioner. In terms of a proposal by the European commission there will, in future, be a single set of data protection rules across the whole of the EU.

According to the commission the new legislation will mean increased accountability and responsibility for those who process personal data. Organisations and companies will be obliged to report any serious data breaches to their national supervisory authority as soon as possible.

Under the proposed legislation, national data protection authorities will have more power to ‘better enforce’ European Union rules in their home countries. They will also be able to fine companies that are in violation of EU data protection rules.

It is expected that these proposals will result in fines of up to €1m for those who fail to adhere to the proposed legislation.

Other important changes to data protection rules are as follows.

    •  The introduction of general data protection rules and principles for judicial and police cooperation in criminal cases. These rules will apply to both cross-border and domestic transfers of data.
    • Companies will only have to deal with one national data protection authority, the one in the country where their company is registered.
    • Individuals will enjoy easier access to their private data and will also be able to transfer this data from one service provider to another with greater ease.
    • Individuals will have the ‘right to be forgotten’, which is to say the right to have his or her data deleted if there is no legitimate reason for it to be retained.
    • EU rules will also apply to personal data being handled abroad by companies that are active in the European Union market.

According to EU justice commissioner Viviane Reding, it was vital for the rules to be amended. 17 years ago, she stated, only one percent of European citizens had access to the internet. She added, “The protection of personal data is a fundamental right for all Europeans… My proposals will help build trust in online services because people will be better informed about their rights and in more control of their information.”

Not everyone agrees with her, however. The Information Commission Office (ICO) said that although it welcomed the announcement in general, it felt that the EU proposals were unhelpfully and unnecessarily over prescriptive in some places. It said, in a statement, “The proposal also fails to properly recognise the reality of international transfers of personal data in today’s globalised world and misses the opportunity to adjust the European regulatory approach accordingly.”

The chief operating officer of Facebook, Sheryl Sandberg, did not criticise the proposals directly, but her remarks at the Digital Life Design Conference in Munich are considered to be a reference to these proposals. She said, “We are investing in technology, we are investing in basic education so that people can take advantage of these tools. We want to make sure we have the right regulatory environment, a regulatory environment that promotes innovation and economic growth.”

Sustainability consortium attracts criticism

Posted on by Ben Debski

The Northeastern Arizona Sustainability Consortium is an initiative with seemingly noble objectives. Several tribes, towns, corporations and institutions initially formed part of the initiative.

Towns: Eagar, Snowflake, Springerville, St. Johns, Taylor and Winslow.

Tribes: White Mountain Apache, Navajo and the Hopi.

Other institutions: Nacog, Northland Pioneer College and the White Mountains Land Trust

Non-voting partners: Building Communities Inc and Economic Development for Apache County.

Objectives of the consortium
The provision of more and better transportation choices including the development of reliable and safe transportation choices to reduce energy consumption and household transportation costs, improve air quality, reduce dependence on foreign oil, promote public health and reduce greenhouse gas emissions.

Promote affordable and equitable housing by expanding energy efficient and location efficient accommodation in order to increase mobility and lower the cost of housing and transportation.

Improving economic competitiveness

This is to be achieved by enhancing economic competitiveness by improving access to educational opportunities, employment centres and similar services to employees and also by improving business access to markets.

Leverage investment and coordinate policies by enhancing the unique characteristics of communities through investing in safe and healthy neighbourhoods.

Support existing communities by targeting federal funding towards projects that revitalise existing communities and improving the efficiency of public works programmes.

Controversy surrounding the consortium
Despite the consortium’s lofty objectives, it has met with increasing controversy recently, so much so that certain of the original members, including the town council of Eager, have refused to sign a contract with it. A degree of opposition has built up against the programme and consequently Navajo County and the majority of the cities and towns there have also decided to drop out.

Even after dropping out of the consortium several months ago the issue once more appeared on the agenda in early January at the council meeting of Eagar Town Council. The problem is an $820,000 grant for the development of a regional sustainability plan that was received by Apache County. This was originally intended to cover two counties, nine towns and three Native American tribes.

Karen Mackean is from Navajo County. She is also vice president of a group calling themselves White Mountain Conservatives. She said, at the town council meeting, that there were many people who wanted to know how the money from the grant was being used and whether it actually benefited local communities. According to her, a large portion of the money went to Hank Rogers, of the Economic Development of Apache County (EDAC), who administers the grant. She mentioned an amount of $200,000 in this regard. Consultant, Brian Cole, she went on to claim, was receiving a further $278,000.

Mackean also said that a further $60,000 to $80,000 could not be accounted for. That, she added, has made people ‘fed up’ with the federal government and how it was spending ordinary taxpayers’ money.

The council did not reach final decision about the issue and it is unclear, at present, what will happen in the near future.

Infrastructure in Asia desperate for funding

Posted on by Ben Debski

Infrastructure is critical to a country’s health and prosperity. As construction can cost millions or even billions, they are most often undertaken by government entities, but that is not always the case.  Especially during difficult economic conditions, smaller cities and towns may opt to charge the residents for the cost of improvements by levying a Local Improvement District or LID charge that is assessed for each household.

Asia’s economy is booming, but without infrastructure funding, the continent’s ability to get goods and services delivered will suffer. Because funding from the government cannot keep up with the required improvements, Asians are turning to other sources to help finance the approximately $200bn needed each year to draw business and tourism to the area.

China, for example, has utilised its banking system to provide infrastructural funding for large projects via domestic savings, obtaining loans at low rates from those banks large enough to broker them, or by combining multiple loans from a variety of smaller banks to create the required package. The infrastructure project is then not only fully funded, but the bank or banks involved add stability to their bottom line. India’s spending on infrastructure is rising, but remains at only about five percent of GDP. Its governmental ability to fund the massive amount of infrastructure improvements needed to keep the economic engine going is simply not sufficient. India has created a Special Purpose Vehicle (SPV), which raises long-term monies from both domestically and on international markets. The Indian government guarantees at least a portion of the investments in the SPV, reducing the default risk and therefore increasing the amount of capital that can be raised.

Another option that Asian countries are employing for infrastructure funding is Public-Private Partnerships (PPPs). However, the effectiveness of these creations can vary depending on the country because the company will demand some gain or profit from its investment. If the country has an uncertain or ineffective regulatory scheme, a bureaucratic system that is top-heavy or inefficient, or pricing policies that are not properly incentivised, a PPP will be difficult or impossible to establish.

Cross-border infrastructure needs are also being recognised, and these require even more innovative solutions than do intranational projects. Roads are an obvious cross-border project, but electrical grids and even cellular towers have been proposed. Funding options include a joint-investment bond fund that would be at least partially guaranteed by the involved governments, an Infrastructure Development Fund utilising pooled foreign exchange reserves, and an Infrastructure Financing Mechanism that would increase the financial reserves of the participating countries and strengthen trade and investment between them.

Asia is not the first global region to require infrastructure investment beyond that which the governments can provide. Luckily, it can look to the experiences and best practices of other countries to create a system that will benefit the country, businesses, and all citizens.