Latest News Clips 2014.05.05

1. Ending Asia Trip, Obama Defends His Foreign Policy

The New York Times APRIL 28, 2014

President Obama and President Benigno S. Aquino III during a state dinner Monday night at Malacanang Palace in Manila. CreditStephen Crowley/The New York Times

MANILA — President Obama, stung by criticism of his response to turmoil from Eastern Europe to the Middle East, defended his approach to foreign policy as a slow but steady pursuit of American interests while avoiding military conflict, and he lashed out at those he said reflexively call for the use of force.

Standing next to the Philippine president, Benigno S. Aquino III, a visibly frustrated Mr. Obama said on Monday that his critics had failed to learn the lessons of the Iraq war.

On a day in which he announced new sanctions against Russia for its continued threats to Ukraine, Mr. Obama said his foreign policy was based on a workmanlike tending to American priorities that might lack the high drama of a wartime presidency but also avoided ruinous mistakes.

“You hit singles, you hit doubles; every once in a while we may be able to hit a home run,” Mr. Obama said at a news conference with Mr. Aquino. “But we steadily advance the interests of the American people and our partnership with folks around the world.”

Mr. Obama’s statement, delivered at the end of a weeklong trip to Asia, was a rare insight into a second-term president already sizing up his legacy as a statesman. By turns angry and rueful, his words suggested the distance he had traveled from the confident young leader who accepted a Nobel Peace Prize with a speech about the occasional necessity of war.

While he flatly rejected the Republican portrait of him as feckless in the face of crises like Syria, Mr. Obama seemed to be wrestling with a more nuanced critique, that aside from one or two swings for the fences — the nuclear negotiations with Iran, for example — his foreign policy had become a game of small ball.

2. The fuel of the future, unfortunately

A cheap, ubiquitous and flexible fuel, with just one problem

The Economist Apr 19th 2014 

WHAT more could one want? It is cheap and simple to extract, ship and burn. It is abundant: proven reserves amount to 109 years of current consumption, reckons BP, a British energy giant. They are mostly in politically stable places. There is a wide choice of dependable sellers, such as BHP Billiton (Anglo-Australian), Glencore (Anglo-Swiss), Peabody Energy and Arch Coal (both American).

Other fuels are beset by state interference and cartels, but in this industry consumers—in heating, power generation and metallurgy—are firmly in charge, keeping prices low. Just as this wonder-fuel once powered the industrial revolution, it now offers the best chance for poor countries wanting to get rich.

Such arguments are the basis of a new PR campaign launched by Peabody, the world’s largest private coal company (which unlike some rivals is profitable, thanks to its low-cost Australian mines). And coal would indeed be a boon, were it not for one small problem: it is devastatingly dirty. Mining, transport, storage and burning are fraught with mess, as well as danger. Deep mines put workers in intolerably filthy and dangerous conditions. But opencast mining, now the source of much of the world’s coal, rips away topsoil and gobbles water. Transporting coal brings a host of environmental problems.

The increased emissions of carbon dioxide from soaring coal consumption threaten to fry the planet, as the Intergovernmental Panel on Climate Change reminded everyone in a new report this week (see article). The CO₂makes the oceans acid; burning coal also produces sulphur dioxide, which makes buildings crumble and lungs sting, and other toxic chemicals. By some counts, coal-fired power stations emit more radioactivity than nuclear ones. They release tiny, lethal particulates. Per unit generated, coal-fired stations cause far more deaths than nuclear ones, and more even than oil-fired ones.

3. Plying Social Media, Chinese Workers Grow Bolder in Exerting Clout

The New York Times MAY 2, 2014

Signs supporting shoe factory workers were left outside a Nike shop in Hong Kong. The signs say “Blood and sweat factory.” CreditKin Cheung/Associated Press

DONGGUAN, China — The call to action, carried by social media to thousands of smartphones across this bleak factory town, roused the workers from their jobs making Nike and Adidas sneakers.

Their Taiwanese employer, Yue Yuen Industrial Holdings, the world’s largest manufacturer of branded athletic shoes, had for years underpaid the social security contributions that employees were counting on for retirement.

News of the shortfall, discovered and disseminated by a newly retired worker, stirred familiar resentments. But it was the company’s refusal to make amends that led to one of China’s largest strikes in recent memory, involving 40,000 workers who stayed off assembly lines for two weeks and cost Yue Yuen about $27 million in losses.

Last week, after government officials stepped in to resolve the impasse, the company announced it would make up the missing payments and start fully funding worker pensions as required by Chinese law.

Although played down by the state-run news media, the mass walkoutillustrates the growing might of Chinese workers amid a shrinking labor pool, a slowing economy and the Communist Party’s fears of social unrest. The strike also highlights the increasing potency of social media despite the government’s best efforts to limit news and information that might inspire workers to stand up to employers who can fire troublemakers at will — or call on the police to jail labor organizers.

“Chinese workers now have greater bargaining power, and they know how to use this power,” said Geoffrey Crothall, communications director atChina Labor Bulletin, an advocacy group in Hong Kong.

The proletariat may be a vaunted pillar of Mao’s Communist revolution, but the workaday reality for China’s low-wage army of factory workers long ago eclipsed their hallowed status. On paper, Chinese workers are afforded generous rights and protections, but since the introduction of market reforms in the 1980s, factory owners, many of them multinational companies from Taiwan, Japan and Hong Kong, have often set the terms of employment.

Independent trade unions are illegal in China, and government-backed unions are more interested in quickly defusing labor disputes than delivering on worker grievances. For years, a seemingly limitless supply of pliable young workers, many of them uneducated migrants from China’s rural hinterland, ensured that the factory owners could dictate wages and work hours.

But that power dynamic has begun to shift, fueled in part by increasing opportunities in the country’s expanding service sector and a shrinking work force. The mounting labor shortage has strengthened the hand of Chinese workers, who increasingly demand better work conditions, higher pay and perks like days off.

4. Trade and money laundering

Uncontained

Trade is the weakest link in the fight against dirty money

The Economist May 3rd 2014 

CUDDLY toys don’t have to be stuffed with cocaine or cash to be useful to traffickers. A few years ago American customs investigators uncovered a scheme in which a Colombian cartel used proceeds from drug sales to buy stuffed animals in Los Angeles. By exporting them to Colombia, it was able to bring its ill-gotten gains home, convert them to pesos and get them into the banking system.

This is an example of “trade-based money laundering”, the misuse of commerce to get money across borders. Sometimes the aim is to evade taxes, duties or capital controls; often it is to get dirty money into the banking system. International efforts to stamp out money laundering have targeted banks and money-transmitters, and the smuggling of bulk cash. But as the front door closes, the back door has been left open. Trade is “the next frontier in international money-laundering enforcement,” says John Cassara, who used to work for America’s Treasury department.

Adepts include traffickers, terrorists and the tax-evading rich. Some “transfer pricing”—multinationals’ shuffling of revenues to cut their tax bills—probably counts, too. Firms insist that tax arbitrage is legal, and that the fault, if any, lies with disjointed international tax rules. Campaigners counter that many ruses would be banned if governments were less afraid of scaring off mobile capital.