Author: scott

Flu “super antibody” may bring universal shot closer

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Scientists have found a flu “super antibody” called FI6 that can fight all types of influenza A viruses that cause disease in humans and animals and say their discovery could be a turning point in the development of future flu treatments.

Researchers from Britain and Switzerland used a new method aimed at beating “needle-in-a-haystack-type-odds” and managed to identify an antibody from a human patient which neutralises both main groups of influenza A viruses. Although it is an early step, they said, it is an important one and in time may pave the way for the development of a universal flu vaccine.

Vaccine makers currently have to change the formulations of their flu shots every year to make sure they protect against the strains of the virus circulating. This is a cumbersome process which takes time and money, so the goal is come up with a universal flu vaccine that could protect people from all flu strains for decades, or even for life.

“As we saw with the 2009 pandemic, a comparatively mild strain of influenza can place a significant burden on emergency services. Having a universal treatment which can be given in emergency circumstances would be an invaluable asset,” said John Skehel of Britain’s National Institute for Medical Research, who worked on the study with colleagues from the privately-owned Swiss firm Humabs.

Researchers in the US said last year they were having some degree of success with another possible approach to developing a universal flu shot, using a two-step system of a vaccine using DNA to “prime” the immune system and then using a traditional seasonal flu shot.

Smart Grid Awards 2011

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Transmission & Distribution Company of the Year
Schneider Electric

Demand Response Company of the Year
Luxoft

Command & Control Company of the Year
Schneider Electric

Smart Building Company of the Year
Smart Buildings

Smart City Company of the Year
TECOM Investments/Smart City

Systems Integrator Company of the Year
SAP America

Networking & Communications Company of the Year
Oracle Utilities

Smart Appliance Company of the Year
Whirlpool

East meets west: Chinese investment in Europe

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For cash-strapped Europe, China is an appealing source of financing. But the response to an attempt by a Chinese businessman to open a leisure resort in Iceland suggests growing suspicion and a potential backlash that could stifle this fruitful relationship.

Just as China’s first forays into investment within small African countries went largely unnoticed, so has its recent European expansion with infrastructure projects, company takeovers and sovereign debt purchases.

Poetry-writing, former government official turned millionaire businessman, Huang Nobu is the latest to follow, agreeing a $85.8m deal to buy a 300-sq-km remote Icelandic farm. While he maintains it is a purely commercial venture for a hotel, golf course and other leisure services, others suspect part of a broader Chinese strategy to build influence in the resource-rich Arctic.

Whatever the truth, experts say it fits with a larger pattern as China’s growing wealth and desire for diversification pulls it deeper into Europe. “It has almost been a case of sleepwalking into it,” says Alice Richard, China programme coordinator at the European Council on Foreign Relations (ECFR), which this year published a report on China in Europe that explicitly compares its approach there to that in Africa. “By and large, Europe has been looking at China almost exclusively from an economic standpoint, although that might be changing.”

Estimating the true scale of Chinese investment in Europe is difficult. Many firms operate through financial centres lacking in transparency, such as Hong Kong and Grand Cayman, making tracking them all but impossible. But there seems little doubt that the numbers are rising fast.

The ECFR says Chinese firms and banks committed some $64bn to European contracts in the six months to March. Much recent Chinese finance went to the troubled euro zone periphery – 30 percent to Portugal, Greece, Italy and Spain – and another 10 percent to central and eastern Europe. The major powers have all largely followed suit.

Recently, Britain and China voiced support for plans for London to become a major offshore trading centre for the yuan currency, a move that would further cement the city’s position as a global financial centre. Despite occasional rows over human rights and other issues, Berlin and Paris have also been keen to court Beijing.

Short-term view
But several of China’s projects, some strategists say, may in the long run prove to be more than just business. Vast port projects in Piraeus, Greece and Naples, Italy – the latter also the site of a major NATO base – worry some in European defence and foreign ministries.

Occasional deals, such as purchases of sensitive technology firms, for example have been turned down on national security grounds. But in general, Chinese investors have found Europe much easier territory than the United States, where rejection and suspicion have been somewhat more common – although not enough to stop mutual dependence rising swiftly.

“The problem is that western nations have taken a very short-term view when it comes to China. They view it as a good source of investment and ignore any longer term issues,” said Alan Mendoza, executive director of the Henry Jackson Society, a London-based think-tank looking at national security issues.
“It’s going to be very difficult to stop this, but it is worrying. We’ve already effectively ceded large chunks of Africa to the Chinese. There needs to be much more focus on what this means.”

China has also emerged as a major buyer of European sovereign debt, crucial to keeping euro zone borrowers afloat. While precise numbers are hard to come by, the ECFR says it estimates up to 25 percent of China’s reserves may now be euro denominated. In non-EU member Iceland, entrepreneur Huang may be feeling the effect of the heightened concern.

Iceland’s interior minister said the leisure resort deal would be looked at closely because of strategic concerns. Huang says he may yet pull out altogether. “It is part of the West’s misinterpretation of China,” remarked Huang. “Everything China does, no matter whether it’s done by the country or any individual, they would think of it as part of a ‘China threat’.”

Rising paranoia
But with Western powers becoming progressively nervous of Beijing’s rise – and with disputes over alleged intellectual property theft, computer hacking, currency strength and other issues simmering – it could become a growing issue. Chinese firms faced something of a popular and political backlash in Africa, and some warn a similar dynamic may be rising in Europe.

Earlier this year, Britain turned down an offer from a Chinese businessman to buy ageing aircraft carrier HMS Invincible for scrap or leisure use and is seen likely to reject a similar bid to purchase her sister ship Ark Royal. A Ukrainian carrier purchased ostensibly as a casino ended up in the service of China’s navy, and there have long been suspicions that any military kit bought by its firms is stripped for intelligence.

“This is an area in which the Chinese are particularly vulnerable and also frustrated,” says Nigel Inkster, a former deputy chief of Britain’s Secret Intelligence Service (MI6) and now head of transnational threats and political risk at London’s International Institute for Strategic Studies.

“There are often reasonable grounds for suspecting that what appears to be an ordinary commercial venture may be something altogether different, and it is very difficult for a Chinese corporate to prove that negative.”

Some worry an element of paranoia is entering the debate. “The value of this deal is actually very modest,” said Steve Tsang, professor of contemporary Chinese studies at Nottingham University, referring to the proposed Icelandic deal.

“It is easy to read too much into the capacity of the Chinese to plan strategically over the very long term and see Chinese businessmen as all agents of the Communist Party. I think it is proper for the Icelandic authorities to check carefully and do their due diligence but not for the rest of the world to get worried for a tourism deal.”

Boudou combats FX tax evaders

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Since the turn of the century, Argentine officials have increasingly modified foreign exchange controls to allow the nation greater management of how its currency is traded in the world market. In October of this year, a new round of restrictions were put in place, with the explanation that the measures will make it easier for the government to reduce the potential for tax evasion and also minimise the risk of criminals engaging in money laundering.

These two aims were clearly set out by finance minister, Amado Boudou, in a published statement soon after the imposition of the new restrictions. “This is an important measure to combat tax evasion and money laundering,” he said. “Those who have their accounts in order should remain calm, while those who engage in shady manoeuvres should be very nervous”.

The restrictions require banks and other financial institutions to verify financial information about clients before moving forward with any efforts of those clients to engage in any type of foreign exchange activity. Doing so makes it easier to ascertain if there are any indications of illegal laundering taking place or even if there is some attempt to shelter assets in a manner that would make it easier to avoid paying taxes on some of the client’s income. With the foreign exchange market in Argentina more or less unregulated, the ability to engage in what has been termed as ‘capital flight’ has some concerned about how
much money is flowing out of the country and what the flow is doing to undermine what is otherwise one of the most healthy economies in South America.

The legislation also has to do with the impact of illegal activities and capital flight on the reserves of Argentina’s central bank. With the resources of the bank decreasing, the
restrictions are seen as ways to help reverse the trend before that decline has a severe and  lasting effect on the economy. Felipe Hernandez, an analyst for RBS Securities, noted in a report released shortly after the latest round of restrictions were put in place that, “The administrative measures announced in the last two days show the government is  increasingly worried about decreasing central bank reserves,” indicating that the measures are seen as a way to both reduce criminal activity and benefit the central bank at the same time.

The restrictions have caused some alarm, in particular concerns about how they will impact the rank and file bank customer who simply wants to engage in foreign exchange in preparation for a trip or even as an investment opportunity. Miguel Pesce, vice president of the nation’s central bank, feels that the restrictions will have little to no effect on law abiding citizens. In an interview broadcast on Argentina’s Radio El Mundo, Pesce stated, “If the money that a person is changing has a legitimate origin, there’s nothing for them to worry about…There is a global fight against money laundering and Argentina is part of that.”

Palestine’s trade links in the US in jeopardy

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Palestinian Authority to struggle if US ceases funding, says Palestinian Monetary Authority Governor Jihad al-Wazir

For several months, measures to reduce aid to the Palestinian Authority have been on the minds of many lawmakers in the United States. In August, the measures were actually implemented, effectively cutting off roughly $200m in aid to the PA. In addition, measures were also put in place to freeze the distribution of a further $200m. While the attempt had been dismissed as political posturing on the part of a number of lawmakers under the guise of balancing the US budget, there was a general feeling that enough opposition to any cuts existed in Congress and the measure would be defeated; unfortunately, that was not the case.

Prior to the freeze, Palestinian Monetary Authority Governor Jihad al-Wazir commented on what the action would mean for the financial stability of the PA. “It would have a major impact on the economic situation in the West Bank, if the you lose $500m [in US aid] from financial support for development in the West Bank… really, the risk of a PA collapse is very real under the financial strain, without US assistance, without donor assistance in general.”

There has been speculation that the underlying reason for the measure was the intention of PA president Mahmoud Abbas to ask the United Nations to recognise Palestine as a state, sometime in September. The cut off of the funds came before the end of the governmental fiscal year, which was on 30th September and would also affect the potential for any funds to be disbursed during the upcoming fiscal year.

The response to the measure was swift, with a statement issued by the PA’s spokesperson, Ghassan Khatib. “It is another kind of collective punishment which is going to harm the needs of the public without making any positive contribution,” stated Khatib. “It is ironic to be punished for going to the United Nations”.

While the measure did not have the backing of many members of Congress, the process to overcome the freeze took time. Attempts by President Obama to work with Congress to lift the freeze were partially successful on November 7, when a decision was made to release $200m that had been set-aside as security funds for the Palestinian Authority. Still to be settled is the additional support, which is earmarked as economic funds and is still considered frozen at the present time.

Whether the remaining funds will be released is still a matter for debate. Regardless of the outcome, there is no doubt that the freezing of the aid has done nothing to enhance the image of the United States among other world powers. Approval of unilateral recognition of the PA by the UN also triggered a reduction in financial support by the US to UNESCO, owing to a 1994 law that prohibits the country from providing funds to any United Nations organisation that supports a unilateral recognition of statehood in Palestine. Depending on how lawmakers in the US move to deal with the new circumstances, the potential for economic collapse remains a real possibility in the PA, along with further damage to the international reputation of the United States.

Single molecule car hits the road

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It may sound like an April fools’ joke, but scientists have invented an electric car made from one single molecule.

Conceived with painstaking accuracy, the molecule has four branches that serve as the vehicle’s wheels, set in motion with the help of a microscopic metal tip giving off little electric bursts.

The currents give the car enough of a boost to move six billionths of a metre. Ferrari may not have a reason to fret, but the innovation is a notable breakthrough all the same.

From bust to boom

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Ever since the financial crisis eased its grip, the construction industry has been plagued with a seemingly unrecoverable post∞recession hangover. Staggering in its severity, the decline in construction between 2007 and 2009 resulted in losses amounting to over €448bn a year, according to Global Construction 2020 – a significant report published jointly by Oxford Economics and UK∞based consultancy Global Construction Perspectives. To put the figure in perspective, it exceeds the combined annual construction production of Germany and the UK.

Britain’s constructive nosedive 
Although the recession left no country unaffected by its forceful and menacing advance, some nations took more of a beating than others. Suffering a great deal longer after the recession had eased in the rest of the world, the UK seemed incapable of kicking the downward spiral for many years and is still struggling somewhat. So severe was the decline and its aftermath that business plummeted in December 2009 for the 22nd month only to recover a fraction at the beginning of 2010, and then stay more or less even until now with subtle fluctuations.

In June 2011, the Chartered Institute of Purchasing and Supply (CIPS) revealed that the UK construction industry had slowed down, and during that month the PMI (the construction purchasing managers’ index – a form of extortionate measurement monitoring business activity) dipped from 53.6 compared to 54 in May. Not causing too much of a stir, the figure roughly matched expectations, and most crucially, the index remains above the all-important 50 mark, the level that separates growth from contraction.

In terms of sector specifics, many commercial construction projects were ground to a halt during the 2007-2009 period, and the residential arena suffered as badly as its commercial counterpart. The UK hasn’t struggled solely in terms of construction though most industries have been adversely affected, the retail sector to mention one particularly bruised segment. The construction sector has been particularly plagued by the recession, and the local industry has experienced a dual aspect decline as client numbers have dramatically tumbled along with a sharp fall in new business.

Something that has to be taken into account when scrutinising the decline of the market, and particularly the domestic property market, is that the country is quite unique in that it enjoyed a significant spurt in activity in the years leading up to the recession.

During those better days, house prices famously rocketed around 20 percent a year in London, making it impossible for first time buyers to get on to the property ladder. Expected as it was that property prices couldn’t climb any higher, the boom to bust drama that occurred in 2007 still left the nation in shock and a vast number of properties were repossessed.

Fast forward to the present day, the only construction project worth mentioning is the major regeneration drive to revive and upgrade the east London suburb that is Stratford in preparation for next year’s Olympic Games. Aside from the creation of the Olympic Park itself, the area has been revamped to become a sustainable hub of shopping and business. To prove it, the shopping giant, Westfield’s is soon to open its second retail venture in Stratford City. Another London project that hasn’t escaped anyone’s gaze due to its sheer height is The Shard – a towering piece of commercial real estate conceived by the highly regarded architect, Sir Norman Foster.

Aside from the conception of these projects, the future of the UK construction industry looks somewhat bleak, as the government’s stifled budget will no doubt continue to affect the sector adversely for an extended period of time.

Eastern bureaucracy
Despite being renowned for its interior solutions, Japan’s construction industry suffered a massive blow even before the global crisis hit in 2005. Serving as the catalyst for the dramatic decline in the market was a new set of building regulations implemented following the falsification of earthquake safety data concerning dozens of hotels and apartment blocks. A blunder committed by the architect, Hidetsugu Aneha, the scandal created a media frenzy and the architect was made to publicly apologise. But no admissions of guilt could rectify the property crisis that » was set about as a result of this ill-advised move. The new regulations meant that properties had to be carefully checked even after gaining approval from ministry-licensed auditors to sell.

While architects accepted the need to reassure prospective buyers that their new homes could stand the impact of natural disaster such as earthquakes, they recognised the fact that the lengthy delays in issuing new permits was ultimately to blame for the dent in the regional property market. So extreme was the slump that ensued that the government was forced to step in and offer emergency aid. As part of the scheme, the economy ministry granted loan guarantees to about 150,000 companies, including surveyors and architects.

The global recession naturally worsened the state of Japanese construction, and the joint tsunami and earthquake disaster that struck in March 2011 accelerated the downward spiral further. Another contributing factor is the country’s declining population and restrictions on infrastructure expenditure stemming from government debt. Not surprisingly, recovery won’t happen anytime soon with experts claiming that it will pick itself up by 2020, yet the country’s construction activity will still be lower than it was back in 2003.

Easing American pain
One of the first countries to be struck down by the devastating recession was the US, and the crash has continued to have a serious effect on the construction market. Although there have been momentary peaks in spending, the pot hasn’t been properly replenished since before the credit crunch surfaced. Fighting over the small budget available, the competition between American construction companies is decidedly tough. Indicating the prolonged severity of the slump, 2010 represented the lowest point for the regional sector, and it’s been forecasted that the recovery progress won’t take place until 2013 at the very earliest.

Suffering the most out of the different segments, the residential construction area saw housing starts reaching their lowest point ever in 2009 since records began in 1959. When the industry was in more robust shape, residential construction accounted for 53 percent of total construction while the figure sat at 31 percent in 2010, with equally dramatic losses seen in both single-family and multi-family properties. In terms of states and their respective hardships, California was the worst hit in the country. The state saw a significant slump in construction with high unemployment figures to match.

Doomed as the US construction market may seem, the country is still considered one of the largest procurer of construction services in the world, and the government remains a strong contender in the line-up for the most promising candidates of new projects, be they building or civil undertakings. The housing sector, meanwhile, is predicted to advance with new impetus over the next few years to compensate for the dramatic losses that have pilled up since 2007.

Booming back
On the whole, the global construction sector has been making a decidedly sluggish recovery in the wake of the financial crisis. Indeed, the global slump that the world of construction suffered in 2007 was unprecedented. Improving slightly, the sector picked up marginally last year, mainly owing to the rise and urbanisation of developing countries but also due to the fact that green technologies have created a new industry in itself.

If a new crisis can be kept at bay, the future looks bright. Construction funds have started to flood in and are set to increase further. According to The Global Construction 2020 report, growth in global construction will outpace world GDP over the next 10 years, seeing global construction grow by 70 percent from the current figure of $7.2 trn, a sizable increase that will amount to $12trn by 2020. The reason behind the powerful growth is twofold and is fuelled both from the growth of the Asian market and the cyclical rebound in the US. Collectively, it’s estimated that these countries will generate over half of the $4.8trn growth. Thanks to these markets, construction has never seen such rapid growth above GDP, with the report claiming that a total of $97.7trn will be spent on construction globally over the next ten years.

The reason behind China and India’s spurt in business activity is clear, as the countries will drive growth in emerging markets with rising populations, rapid urbanisation and strong economic growth all key drivers for construction. Significantly, China overtook the US in 2010 to become the world’s largest construction market, boosted by stimulus spending. The country’s construction market will more than double in size over the decade, reaching $2.5trn by 2020, an amount that equates to as much as 21 percent of world construction. India, meanwhile, is predicted to overtake Japan to become the world’s third largest construction market by 2018. Boosting the positive outlook further, the US is poised to register a sharp rebound in construction with short term double digit growth in both residential and non residential building sectors.

It’s plain to see that construction will become one of the most important global growth industries of the next decade, and aside from the trailblazing nations of India, the US and China, other countries who are set to flex their construction muscles in the future are: Indonesia, Brazil, Canada, Australia and Russia.

Rise of the Aerotropolis
In the realm of new era town planning and construction, airports are set to form an integral part of urban life in the future, if not even serving as their very heart. So much so that a new term has been coined for hubs with airports at their centre – the Aerotropolis.

A leader in this new urban development, China is at the forefront of the trend. About 100 new airports are set to spring up in the country by 2020, and each one will be within close proximity to cities to make life more practical for its resident. It’s estimated that 1.5bn Chinese people will live within 90 minutes of an airport. A new book ‘Aerotroplis: The Way We’ll Live Next’, charts China’s new airport centric approach with the very pertinent premise being that the city of tomorrow will be built around airports as opposed to the other way around.

So why focus so intensely on the airport and its convenient, centrally located position? The benefits are obvious and in today’s market place, in which air travel is becoming ever more crucial, accessibility and speed can’t be underestimated. It’s not only travel happy businessmen and holiday makers that have been accounted for; trade is also an important factor since the value of air cargo is dramatically on the up.

Existing Aerotropolis’ which formats, town planners can model new variants include Dubai, Abu Dhabi and Doha, and South Korea’s New Songdo City- a manmade island popularly referred to as “pocket Manhattan”.

As innovations and new movements in the area of construction become ever more globalised – those poised to capitalise on the new era include leading architects, designers and planners. China is now well positioned to become something of a hotbed for new architectural ideas, practices and experiments.

New rules urged on hybrid animal-human experiments

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Scientific experiments that insert human genes or cells into animals need new rules to ensure they are ethically acceptable and do not lead to the creation of “monsters”, say a group of leading British researchers.

Researcher’s around the world are constantly pushing boundaries. Chinese scientists have already introduced human stem cells into goat foetuses and US researchers have studied the idea of creating a mouse with human brain cells – though they have not actually done so.

Such research needs special oversight, according to a report from Britain’s Academy of Medical Sciences on the use of animals containing human material.

Using animals with limited humanised traits is not new. Genetically engineered mice containing human DNA are already a mainstay of research into new drugs for aggressive diseases like cancer.

But Martin Bobrow, a professor of medical genetics at the University of Cambridge, who led the Academy’s working group, said there were three areas of particular concern. “Where people begin to worry is when you get to the brain, to the germ [reproductive] cells, and to the sort of central features that help us recognise what is a person, like skin texture, facial shape and speech,” he told reporters.

His report recommends that government should put in place a national expert body, working within the existing system for regulating animal research, to oversee such sensitive areas. British ministers said they welcomed the report and would consider its recommendations carefully.

South Korea fines Apple over data

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Apple’s South Korean unit has been fined 3m Won ($2,855) by the country’s communications regulator after the iPhone and iPad maker collected location data from users without proper authorisation.

The fine, though small, marks the first time Apple has been punished by a regulator over the controversial location data collection which has sparked criticism in the US and elsewhere.

The revelation back in April that Apple’s iPhones collected location data and stored it for up to a year – even when location software was supposedly turned off – has prompted renewed scrutiny of the nexus between location and privacy. Apple has since issued a patch to fix the problem.

Some 27,800 South Korean iPhone and iPad users are planning to launch a class action suit against Apple over the matter, while two separate US groups have sued Apple, alleging that certain software applications were passing personal information to third-party advertisers without consent.The Korea Communications Commission (KCC) ordered corrective measures on the South Korean operations of Apple and Google, saying it has found loopholes in systems supposed to protect location information. It ordered the technology giants to encrypt location data stored in smartphones.

Apple Korea could have had its business suspended or been fined three percent of its location information revenue for failing to encrypt location data, or been fined up to 10 million Won for collecting data without permission of its users, the KCC said.

Google, a fierce competitor of Apple has also faced a whole host of criticism over the recent reports that its Android-based phones track the location of users. However, Google said that location-sharing on its Android mobile platform was strictly opt-in. “We are currently reviewing the KCC’s decision,” Google Korea said in a statement. “We have been cooperating closely with the KCC to answer their questions, and look forward to continuing to working with them again in the future.”

Back in June, Apple paid a Korean lawyer one million won ($942) in a court ruling regarding its location data collection, the first payout from the US tech giant over the assortment of complaints.

Time and patience

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Global FDI, a key component of the world’s economic growth engine in good times, is slow to recover from the financial crisis. GDP growth has been back in positive territory for a while, world trade has returned to its pre-crisis levels, and the income that firms earn on their foreign investments is close to 2007 highs, but FDI flows still remain some 15 percent below their pre-crisis average and nearly 40 percent below their 2007 peak, according to the recent UNCTAD 2011 World Investment Report.

This is serious: the global thirst for private productive investment increases as public investment runs out of steam in one country after another. It is all the more serious as the investment drought is neither caused by a lack of funds nor by a lack of opportunity for multinational firms to invest. Could an improved and reenergised investment policy regime make a difference?

The reluctance of multinational firms to invest is not due to a lack of capital. Companies across the developed world are sitting on record amounts. US firms are holding an estimated $1.3trn in cash, EU and Japanese firms are holding even more, at around $2trn each. The increase of these cash holdings in the last two years has been astronomical: Federal Reserve data indicates that cash holdings by (non-bank) US companies rocketed after a steep drop in 2008 to almost twice the pre-crisis levels in 2010. These are untapped funds that could be gainfully employed to stimulate the global economy, create jobs and finance development.

Opposite directions
However, as reported in WIR11, many governments are sending mixed signals to investors. On the one hand, there are moves to liberalise investment regimes and promote foreign investment in response to intensified competition for FDI.

On the other, governments are increasingly regulating and restricting FDI in the context of industrial policies or motivated by less well-defined notions of national economic security. The two opposing policy directions can even be witnessed simultaneously in the same country.

Today’s dichotomy in national investment policymaking contrasts with the more clear-cut trends of previous decades. The 1950s to 1980s focused on regulation, the 1990s to early 2000s focused on liberalisation. In the last two years, out of a total of some 200 national investment policy measures identified by UNCTAD, a little under 70 percent supported liberalisation and promotion of foreign investment, against a 30 percent share of more regulatory/restrictive measures, the highest level since 1992. Such restrictive measures range from tighter implementation of entry requirements to more stringent application of national regulations, expropriation measures and nationalisations (some in connection with bailouts).

Meanwhile, the international investment regime is equally confusing. There are more than 6,000 international investment agreements (IIAs) today at the bilateral, sub-regional, regional, inter-regional and sectoral levels. The investment regime is multi-layered, multi-faceted and highly atomised. On average, three investment treaties are signed a week over the past few years. With thousands of treaties, numerous ongoing negotiations and multiple dispute-settlement mechanisms, the regime has become too large for states to handle, too complicated for firms to take advantage of, and too complex for stakeholders at large to monitor. At the same time, the regime is still too limited to cover the whole investment universe. In fact, according to UNCTAD estimates, some 80 percent of bilateral investment relationships accounting for 30 percent of global FDI stocks are not covered by any form of post-establishment protection. In terms of substance, common modalities of firms’ international operations, such as contract manufacturing, franchising or licensing are not accounted for, and many other substantive gaps remain.

Repairing the damage
Paradoxically, while almost all countries are actively engaged in IIAs, hardly any are satisfied with the regime. First, it is full of gaps, overlaps and inconsistencies between investment agreements, including among those signed by the same countries. The regime’s investor-state dispute settlement mechanism has also raised serious concerns with stakeholders. Second, the regime lacks clear obligations on the part of investors; it is weak in the development dimension and often unduly limits policy space for developing-country governments. Third, there are hardly any mechanisms for coordination between the IIA regime and other parts of the global economic governance system. The ‘interconnect’ between investment policies and other policies such as trade, finance, competition or environmental (eg: climate change) policies, is missing.

The world has a multilateral trade system (WTO) and a multilateral monetary system (IMF), however flawed, but no equivalent for international investment policymaking.

If undertaken in an inclusive and transparent manner, multilateral consensus building on investment methods can help to:
– Consolidate the myriad of international investment treaties to address systemic gaps and inconsistencies, and coordinate international investment policymaking – such coordination would also allay long-standing fears of a ‘race to the bottom’ of regulatory standards and a ‘race to the top’ of incentives and handouts.
Integrate the development dimension, maintaining proper balance between regulation and liberalisation in investment policies and ensuring sufficient policy space for developing countries to pursue development strategies or industrial policies.
– Establish a set of multilaterally agreed principles for sustainable investment (investment that makes a positive contribution to development and is socially and environmentally responsible) to guide investment policy making at national and international levels.

So far, discussions on the future of global economic governance lack an investment angle and the international community appears reluctant to pursue it – the failed attempts of the past to come to a multilateral agreement on investment are still a powerful deterrent. However, effective global coordination on international investment policies is desirable – if not indispensable – to encourage a new investment boom and to harness investment for future development in needed areas.

A mighty enterprise

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Justifiably, the wider population has been searching for a reason behind the summer riots in England’s capital. Can a solitary rationale or motive be found – other than opportunism – to allow for the mayhem that sprung up of a sudden and garnered support so briskly? At it’s simplest an act of aggression was made toward the police. The police reacted. A riot ensued. And what of it?

During the ongoing Arab Spring, it has been easy to condemn a power struggle that has festered for years, in which dictatorships suppressed and silenced their citizens for decades. In Britain, the executive is considered with scorn by many (particularly of late), but Westminster’s iron grip is perhaps more thought of as donning a poorly fitting glove. There is no single group of individuals pulling the country’s strings, enforcing a stringent civil code on a stifled mass. Because of that, the closest the West has seen to such civil unrest happened in Derry, in the early 1970s, or LA twenty years ago. Considering opportunists and with the backdrop of global economic decline, we must question an apparent widespread unequal distribution of wealth for London’s pandemonium.

The rise of the disparity in wealth might be traced to the early twentieth century, when the liberal enterprise grew significantly in popularity. At the same time an ideological battlefield stormed through Europe. Charismatic men spoke – from the realms of the extreme right and left to masses of relatively centralist citizens – promising glittering futures amidst the dystopia of the present. Calls from these few led to great waves of upheaval, two world wars, and a wealth of social frameworks that just wouldn’t sit well together. 

Fast forward to present day and the sociological and theoretical debates have taken a more prominent tone since 9/11. And thanks to one of the greatest and most successful liberal enterprises of the twentieth century, the internet, we don’t have a handful of voices capable of turning heads. We are at the mercy of millions, all of who are for a voice, demanding support on social networking sites. And, of course, these voices are continually encouraged to take part and speak up, thanks to strategic marketing and PR campaigns to further fuel this almighty enterprise.

Recently, police forces in England wholeheartedly defended the use of social networks, arguing that they are more useful to them than otherwise during a crisis. Bearing that in mind, the British government elected not to restrict the use of Facebook, Twitter or BlackBerry Messaging despite the calls from a number of politicans.Better to condone and anticipate the formation of an angry mob rather establishing an intelligent and workable forum to discuss the continual shifting of ideologies.

The decision rendered a parallel with the panopticon, a jail outlined by Jeremy Bentham in the eighteenth century. The structure of the jail was to allow the jailor to monitor inmates, without the captive knowing for certain whether or not he’s being watched. Much the same, those that post online know that someone is aware of their presence – the scrutiny of a sovereign body in the shape of a national moderator, the site itself, or even their peers. They just don’t know who watches, or the extent to which what they say is being monitored.

The very idea that society’s most popular forum may harbour such resentment and paranoia may be reason enough for the riots. Still, so long as the larger technology companies share voter interest in playing their part in freedom of speech and the government doesn’t upset potential investments the odd riot can’t hurt. Can it?

EU wins backing for tariffs on Chinese products

Posted on by scott

The European Union is set to launch extensive trade barriers on bicycles and ceramic tiles from China, which are the latest defensive measures designed to protect EU producers.

Plans by the EU Commission to launch five-year punitive import duties worth up to 69.7 percent on the bloc’s €275m imports of Chinese bathroom, kitchen and paving tiles received majority backing from trade diplomats from EU states, diplomats said. The duties aim to counteract what the EU says is illegal Chinese export pricing that hurts the profit margins of EU producers. They must come into effect by the middle of this summer.

Chinese bicycle and bicycle part exporters also face an extension until 2016 of existing anti-dumping duties worth up to 48.5 percent, after a Commission plan won approval from a majority of EU states. The duty extension, which begun in October, is likely to ruffle feathers in China, particularly since an extension had originally been planned to last only three years until 2014.

EU-Chinese trade relations have recently been strained by a World Trade Organisation ruling that gives China fresh power to challenge EU tariffs on goods Europe says are being dumped on its market. A separate WTO ruling against Chinese export curbs is likely to be appealed by Beijing.

European bicycle producers based largely in Germany and Italy made the case that their business was under sufficient threat from unfair Chinese competition to warrant a five-year extension.China exported nearly 700,000 bicycles and had total bicycle-related exports to the EU worth €430m in 2009.